TMG Taylor & Martin Grp., Inc.Common Stock

TransMontaigne Inc. (NYSE: TMG) today announced its financial results for the fiscal second quarter, which resulted in a net loss of $35.2 million, or a loss of $.73 per share, compared with net income of $4.2 million, and a gain of $.08 per share for the comparable quarter in 2004. For the six months ended December 31, 2005, the Company reported a $14.3 million net loss, or a loss of $.31 per share, compared with $8.1 million in net income, and a gain of $.16 per share, during the comparable period in 2004. During the second quarter, wholesale petroleum product prices declined from $2.10 per gallon to $1.70. This significant drop in value created a $65.9 million charge, net of hedges, in the Company's inventory procurement and management cost. That charge reversed the first quarter's $67.6 million gain in inventory procurement and management, net of hedges, created by the unprecedented rise in last quarter's product prices caused by hurricanes Katrina and Rita. Highlights for the quarter include: -- Supply, distribution and marketing revenues of $2.2 billion resulted in a $40.9 million net operating loss, which included the aforementioned $65.9 million charge in inventory procurement and management costs and a $4.9 million gain on FIFO inventory adjustments. -- Light oil margins were $13.0 million, compared to $12.7 million for the comparable quarter in 2004. During the quarter, the wholesale value of product at our terminals exceeded the cost of the product at the tailgate of the refineries plus the cost of transportation to our terminals, unlike the price disparities of the previous quarter. -- During December 2005, we renegotiated our largest Southeast light oil sales contract, representing approximately 60,000 barrels per day of demand for 2006. Under terms of the agreement, the customers will pay the lower of our rack spot posting, or the sum of bulk refining tailgate prices, plus transportation, terminaling, and marketing fees. This new agreement will reduce our exposure to future branded vs. unbranded price disparities while providing our customers pricing optionality between daily rack spot postings, or a daily calculated contract value. -- Radcliff/Economy Marine Services Inc. ("Radcliff") acquired August 1, 2005, contributed $2.1 million in marketing margins during the quarter. -- Terminal, pipelines, and tugs and barges generated $14.9 million in net operating margins, compared to $12.1 million for the comparable quarter in 2004. -- Radcliff contributed $0.9 million of terminaling margins during the quarter. -- Selling general and administrative expenses increased by $1.6 million compared to last year due principally to Radcliff accounting for $0.6 million and TransMontaigne Partners' incremental General and Administrative Costs of $0.7 million. Donald H. Anderson, Chief Executive Officer, said: "Our ending inventory valuations were roughly $.40 per gallon lower than last quarter's hurricane-influenced prices. That decline effectively eliminated the $68 million inventory gains from last quarter, resulting in a net $100 million inventory gain over the last two years. These inventory valuation changes obviously materially impact our reported results, but our primary focus remains on increasing our terminaling and marketing margins over the long haul. There is but only one time when the value of our base inventory is truly meaningful to our shareholders, and that is upon its final liquidation." CONFERENCE CALL TransMontaigne Inc. also announced that it has scheduled a conference call for Tuesday, February 14, 2006, at 2:00 p.m. (MST) regarding the above information. Analysts, investors and other interested parties are invited to listen to management's presentation of the Company's results and supplemental financial information by accessing the call as follows: 800-762-6067 A playback of the conference call will be available from 5:30 p.m. (MST) on Tuesday, February 14, 2006, until 11:59 p.m. (MST) on Tuesday, February 21, 2006, by calling: USA: 800-475-6701 International: 320-365-3844 Access Code: 818548 -0- *T The following selected financial information is extracted from the Company's Quarterly Report on Form 10-Q for the three months ended December 31, 2005, which was filed today with the Securities and Exchange Commission. TRANSMONTAIGNE INC. AND SUBSIDIARIES (000s, except per share data) Three Months Ended ----------------------- December December 31, 31, 2005 2004 ----------- ----------- Income Statement Data ---------------------- Revenues...................................... $2,218,100 $1,839,056 Net operating margins (deficiencies): Supply, distribution and marketing......... (40,897) 19,540 Terminals, pipelines, and tugs and barges.. 14,894 12,068 Operating income (loss)....................... (46,139) 14,079 Earnings (loss) before income taxes........... (53,464) 7,081 Net earnings (loss)........................... (35,195) 4,249 Net earnings (loss) attributable to common stockholders................................. (35,383) 3,314 Net earnings (loss) per common share--basic... (0.73) 0.08 Cash Flow Activities --------------------- Net cash provided by (used in) operating activities................................... 20,854 (113,082) Net cash provided by (used in) investing activities................................... 7,540 (171) Net cash provided by (used in) financing activities................................... (20,463) 107,535 *T -0- *T December June 31, 30, 2005 2005 ----------- ----------- Balance Sheet Data ------------------- Working capital................................ $274,743 $319,636 Long-term debt................................. 228,000 228,307 Non-controlling interests in TransMontaigne Partners...................................... 82,927 81,440 Series B redeemable convertible preferred stock......................................... 20,717 49,249 Common stockholders' equity.................... 340,888 326,484 *T -0- *T Selected income statement data for the three months ended December 31, 2005 and 2004, is as follows: Three Months Ended ------------------ December December 31, 31, 2005 2004 ------------------ Terminals, pipelines, tugs and barges: TransMontaigne Partners L.P. facilities........... $7,168 $4,313 Brownsville facilities............................ 1,425 1,204 Southeast facilities.............................. 4,324 5,798 River facilities.................................. 583 302 Other............................................. 1,394 451 --------- -------- Margins............................. 14,894 12,068 --------- -------- Marketing: Light oils--marketing margins: TransMontaigne Partners L.P. facilities........... 3,850 4,246 Southeast facilities.............................. 4,630 7,603 River facilities.................................. 1,670 759 Other............................................. 2,842 136 --------- -------- Light oil margins...................... 12,992 12,744 Heavy oils--marketing margins....................... 7,349 5,406 Supply chain management services margins (deficiencies)..................................... (191) 3,608 --------- -------- Margins.............................. 20,150 21,758 --------- -------- Total margins............................ 35,044 33,826 Selling, general and administrative expenses........ (13,354) (11,802) --------- -------- Total margins less S, G & A expenses..... 21,690 22,024 --------- -------- Inventory procurement and management: Gains from risk management of light oil volumes to be liquidated upon commencement of MSCG product supply agreement................... -- 9,618 (Decrease) in value of light oil volumes nominated under the MSCG product supply agreement prior to receipt of the product at our terminals............ (51,678) -- (Decrease) in value of base operating inventory..... (29,394) (36,847) Gains from risk management of base operating inventory and light oil volumes nominated under the MSCG product supply agreement...................... 27,095 -- Storage fees for light oil tank capacity............ (457) (2,200) Other financial and costing variances, net.......... (11,498) 12,232 Trading activities, net......................... -- 1,031 --------- -------- Inventory procurement and management............. (65,932) (16,166) --------- -------- Inventory adjustments: Gains recognized on beginning inventories-- discretionary volumes.............................. 18,452 24,158 Gains deferred on ending inventories--discretionary volumes............................................ (13,567) (10,210) --------- -------- Inventory adjustments............................ 4,885 13,948 --------- -------- Depreciation and amortization....................... (6,849) (5,727) Gain on disposition of assets, net.................. 67 -- --------- -------- Operating income (loss)...........................$(46,139) $14,079 ========= ======== *T -0- *T Selected income statement data for each of the quarters in the year ending June 30, 2006, is summarized below (in thousands): Three Months Ended Year ------------------------------ Ended September December March June June 30, 31, 31, 30, 30, 2005 2005 2006 2006 2006 --------------------------------------- Terminals, pipelines, tugs and barges: TransMontaigne Partners L.P. facilities................. $6,564 $7,168 -- -- $13,732 Brownsville facilities...... 1,398 1,425 -- -- 2,823 Southeast facilities........ 3,292 4,324 -- -- 7,616 River facilities............ 40 583 -- -- 623 Other....................... (765) 1,394 -- -- 629 --------- --------- ----- ---- -------- Margins....... 10,529 14,894 -- -- 25,423 --------- --------- ----- ---- -------- Marketing: Light oils--marketing margins (deficiencies): TransMontaigne Partners L.P. facilities................. 7,030 3,850 -- -- 10,880 Southeast facilities........ (16,714) 4,630 -- -- (12,084) River facilities............ 1,024 1,670 -- -- 2,694 Other....................... 1,080 2,842 -- -- 3,922 --------- --------- ----- ---- -------- Light oil margins (deficiencies).. (7,580) 12,992 -- -- 5,412 Heavy oils--marketing margins. 3,460 7,349 -- -- 10,809 Supply chain management services margins............. 1,180 (191) -- -- 989 --------- --------- ----- ---- -------- Margins (deficiencies) (2,940) 20,150 -- -- 17,210 --------- --------- ----- ---- -------- Total margins........ 7,589 35,044 -- -- 42,633 Selling, general and administrative expenses...... (11,554) (13,354) -- -- (24,908) --------- --------- ----- ---- -------- Total margins less S, G & A expenses...... (3,965) 21,690 -- -- 17,725 --------- --------- ----- ---- -------- Inventory procurement and management: Increase (decrease) in value of light oil volumes nominated under the MSCG product supply agreement prior to the receipt of product at our terminals..... 79,084 (51,678) -- -- 27,406 Increase (decrease) in value of base operating inventory.. 46,424 (29,394) -- -- 17,030 Gains (losses) from risk management of base operating inventory and light oil volumes nominated under the MSCG product supply agreement (28,755) 27,095 -- -- (1,660) Storage fees for light oil tank capacity................ (457) (457) -- -- (914) Other financial and costing variances, net............... (28,654) (11,498) -- -- (40,152) Trading activities, net....... -- -- -- -- -- --------- --------- ----- ---- -------- Inventory procurement and management............... 67,642 (65,932) -- -- 1,710 --------- --------- ----- ---- -------- Inventory adjustments: Gains recognized on beginning inventories--discretionary volumes...................... 2,369 18,452 -- -- 2,369 Gains deferred on ending inventories--discretionary volumes...................... (18,452) (13,567) -- -- (13,567) --------- --------- ----- ---- -------- Inventory adjustments...... (16,083) 4,885 -- -- (11,198) --------- --------- ----- ---- -------- Depreciation and amortization. (6,581) (6,849) -- -- (13,430) Gain on disposition of assets, net.......................... 1,118 67 -- -- 1,185 --------- --------- ----- ---- -------- Operating income (loss).... $42,131 $(46,139) -- -- $(4,008) ========= ========= ===== ==== ======== *T -0- *T Selected income statement data for each of the quarters in the year ended June 30, 2005, is summarized below (in thousands): Three Months Ended Year ------------------------------------ Ended September December March June June 30, 31, 31, 30, 30, 2004 2004 2005 2005 2005 ---------------------------------------------- Terminals, pipelines, tugs and barges: TransMontaigne Partners L.P. facilities.......... $4,306 $4,313 $5,655 $5,977 $20,251 Brownsville facilities.......... 850 1,204 1,230 1,249 4,533 Southeast facilities. 5,011 5,798 5,442 4,254 20,505 River facilities..... 651 302 1,145 747 2,845 Other................ 1,247 451 335 (184) 1,849 --------- -------- -------- -------- --------- Margins 12,065 12,068 13,807 12,043 49,983 --------- -------- -------- -------- --------- Marketing: Light oils--marketing margins: TransMontaigne Partners L.P. facilities.......... 2,700 4,246 1,666 1,322 9,934 Southeast facilities.......... 993 7,603 2,744 2,849 14,189 River facilities..... 759 759 525 791 2,834 Other................ 36 136 60 79 311 --------- -------- -------- -------- --------- Light oil margins.. 4,488 12,744 4,995 5,041 27,268 Heavy oils--marketing margins............... 2,570 5,406 2,980 2,164 13,120 Supply chain management services margins...... 3,040 3,608 6,067 783 13,498 --------- -------- -------- -------- --------- Margins. 10,098 21,758 14,042 7,988 53,886 --------- -------- -------- -------- --------- Total margins...... 22,163 33,826 27,849 20,031 103,869 Selling, general and administrative expenses.............. (10,433) (11,802) (9,885) (10,729) (42,849) --------- -------- -------- -------- --------- Total margins less S, G & A expenses..... 11,730 22,024 17,964 9,302 61,020 --------- -------- -------- -------- --------- Inventory procurement and management: Gains (losses) from risk management of light oil volumes to be liquidated upon commencement of MSCG product supply agreement............. -- 9,618 (181) -- 9,437 Increase (decrease) in value of light oil volumes nominated under the MSCG product supply agreement prior to the receipt of product at our terminals............. -- -- 36,632 (9,497) 27,135 Increase (decrease) in value of base operating inventory... 39,956 (36,847) 39,871 (4,408) 38,572 Gains (losses) from risk management of base operating inventory and light oil volumes nominated under the MSCG product supply agreement...... -- -- -- 5,154 5,154 Storage fees for light oil tank capacity..... (2,245) (2,200) (857) (395) (5,697) Other financial and costing variances, net................... (2,204) 12,232 6,286 (4,241) 12,073 Trading activities, net................... (1,003) 1,031 -- -- 28 --------- -------- -------- -------- --------- Inventory procurement and management........ 34,504 (16,166) 81,751 (13,387) 86,702 --------- -------- -------- -------- --------- Inventory adjustments: Gains recognized on beginning inventories-- discretionary volumes............... 3,712 24,158 10,210 21,530 3,712 Gains deferred on ending inventories-- discretionary volumes............... (24,158) (10,210) (21,530) (2,369) (2,369) --------- -------- -------- -------- --------- Inventory adjustments........ (20,446) 13,948 (11,320) 19,161 1,343 --------- -------- -------- -------- --------- Depreciation and amortization.......... (5,807) (5,727) (6,274) (6,407) (24,215) Gain (loss) on disposition of assets, net................... (3,599) -- 2,993 735 129 --------- -------- -------- -------- --------- Operating income.... $16,382 $14,079 $85,114 $9,404 $124,979 ========= ======== ======== ======== ========= *T -0- *T Selected income statement data for each of the quarters in the year ended June 30, 2004, is summarized below (in thousands): Three Months Ended Year ------------------------------------ Ended September December March June June 30, 31, 31, 30, 30, 2003 2003 2004 2004 2004 --------------------------------------------- Terminals, pipelines, tugs and barges: TransMontaigne Partners L.P. facilities........... $4,875 $4,941 $4,923 $4,885 $19,624 Brownsville facilities 617 798 861 1,067 3,343 Southeast facilities.. 4,971 4,805 4,722 3,848 18,346 River facilities...... 1,396 965 605 585 3,551 Other................. 1,178 2,160 476 429 4,243 --------- -------- -------- -------- -------- Margins. 13,037 13,669 11,587 10,814 49,107 --------- -------- -------- -------- -------- Marketing: Light oils--marketing margins (deficiencies): TransMontaigne Partners L.P. facilities........... $803 $958 $3,548 $5,137 $10,446 Southeast facilities.. (861) 2,670 4,128 3,100 9,037 River facilities...... 1,237 828 1,078 2,025 5,168 Other................. 902 1,234 2,037 1,656 5,829 --------- -------- -------- -------- -------- Light oil margins... 2,081 5,690 10,791 11,918 30,480 Heavy oils--marketing margins................ 1,440 3,424 5,416 3,376 13,656 Supply chain management services margins....... 2,351 4,070 2,783 (580) 8,624 --------- -------- -------- -------- -------- Margins.. 5,872 13,184 18,990 14,714 52,760 --------- -------- -------- -------- -------- Total margins.. 18,909 26,853 30,577 25,528 101,867 Selling, general and administrative expenses............... (9,525) (10,157) (10,452) (7,398) (37,532) --------- -------- -------- -------- -------- Total margins less S, G & A expenses...... 9,384 16,696 20,125 18,130 64,335 --------- -------- -------- -------- -------- Inventory procurement and management: Increase (decrease) in value of base operating inventory.............. (3,994) 12,573 18,723 3,303 30,605 Storage fees for light oil tank capacity...... (2,522) (2,495) (2,385) (2,309) (9,711) Other financial and costing variances, net.................... 6,133 5,135 (2,067) (15,694) (6,493) Trading activities, net.................... 2,131 457 (2,582) (829) (823) --------- -------- -------- -------- -------- Inventory procurement and management......... 1,748 15,670 11,689 (15,529) 13,578 --------- -------- -------- -------- -------- Inventory adjustments: Gains recognized on beginning inventories-- discretionary volumes................ 10,176 5,242 24,984 12,911 10,176 Gains deferred on ending inventories-- discretionary volumes................ (5,242) (24,984) (12,911) (3,712) (3,712) --------- -------- -------- -------- -------- Inventory adjustments........ 4,934 (19,742) 12,073 9,199 6,464 --------- -------- -------- -------- -------- Depreciation and amortization........... (5,537) (5,932) (5,738) (5,808) (23,015) Lower of cost or market write-downs on product linefill and tank bottom volumes......... (32) (17) (11) -- (60) (Loss) on disposition of assets, net............ -- (805) -- (173) (978) --------- -------- -------- -------- -------- Operating income.... $10,497 $5,870 $38,138 $5,819 $60,324 ========= ======== ======== ======== ======== *T -0- *T Our light oil marketing volumes in average barrels per day for each of the quarters in the years ended June 30, 2006, 2005 and 2004 are as follows: Three Months Ended Year --------------------------------- Ending September December March June June 30, 31, 31, 30, 30, 2005 2005 2006 2006 2006 ------------------------------------------ Light oils--marketing volumes: TransMontaigne Partners' facilities.............. 75,962 81,672 -- -- 78,817 Southeast facilities..... 137,586 126,015 -- -- 131,801 River facilities......... 10,592 7,697 -- -- 9,145 Other.................... 24,688 23,801 -- -- 24,244 ---------- --------- ------ ----- -------- 248,828 239,185 -- -- 244,007 ========== ========= ====== ===== ======== *T -0- *T Three Months Ended Year ------------------------------------ Ended September December March June June 30, 31, 31, 30, 30, 2004 2004 2005 2005 2005 --------- -------- -------- -------- -------- Light oils--marketing volumes: TransMontaigne Partners' facilities........... 63,256 59,565 68,725 72,297 65,961 Southeast facilities.. 142,928 131,418 143,751 146,395 141,123 River facilities...... 9,800 9,800 7,091 11,816 9,627 Other................. 38,104 21,875 19,901 17,369 24,312 --------- -------- -------- -------- -------- 254,088 222,658 239,468 247,877 241,023 ========= ======== ======== ======== ======== *T -0- *T Three Months Ended Year ------------------------------------ Ended September December March June June 30, 31, 31, 30, 30, 2003 2003 2004 2004 2004 --------------------------------------------- Light oils--marketing volumes: TransMontaigne Partners' facilities........... 62,392 65,456 70,108 71,117 67,268 Southeast facilities........... 161,070 157,366 164,297 160,209 160,736 River facilities...... 22,498 16,372 16,072 20,469 18,853 Other................. 54,459 44,750 50,367 46,748 49,081 --------- -------- -------- -------- -------- 300,419 283,944 300,844 298,543 295,938 ========= ======== ======== ======== ======== *T -0- *T Our light oil marketing margins in points ($0.0001) per gallon for each of the quarters in the years ended June 30, 2006, 2005 and 2004 are as follows: Three Months Ended Year --------------------------------- Ending September December March June June 30, 31, 31, 30, 30, 2005 2005 2006 2006 2006 --------------------------------- ------ Light oils--marketing margins: TransMontaigne Partners' facilities................ 240 122 -- -- 179 Southeast facilities....... (314) 95 -- -- (119) River facilities........... 250 561 -- -- 381 Other...................... 113 309 -- -- 209 --------- --------- ------ ------ ------ All facilities--weighted average................ (79) 118 -- -- 18 ========= ========= ====== ====== ====== *T -0- *T Three Months Ended Year -------------------------------- Ended September December March June June 30, 31, 31, 30, 30, 2004 2004 2005 2005 2005 ---------- -------- ------ ----- ------ Light oils--marketing margins: TransMontaigne Partners' facilities................. 110 184 64 48 98 Southeast facilities........ 18 150 51 51 66 River facilities............ 200 200 196 175 192 Other....................... 2 16 8 12 8 ---------- -------- ------ ----- ------ All facilities--weighted average................. 46 148 55 53 74 ========== ======== ====== ===== ====== *T -0- *T Three Months Ended Year ------------------------------- Ended September December March June June 30, 31, 31, 30, 30, 2003 2003 2004 2004 2004 --------------------------------------- Light oils--marketing margins: TransMontaigne Partners' facilities................. 33 38 132 189 101 Southeast facilities........ (14) 44 66 51 37 River facilities............ 142 131 176 259 178 Other....................... 43 71 106 93 77 --------- -------- ------ ----- ------- All facilities--weighted average................. 18 52 95 104 67 ========= ======== ====== ===== ======= *T TransMontaigne Inc. is a refined petroleum products marketing and distribution company based in Denver, Colorado, with operations in the United States, primarily in the Gulf Coast, Florida, East Coast and Midwest regions. The Company's principal activities consist of (i) terminal, pipeline, tug and barge operations, (ii) marketing and distribution, (iii) supply chain management services, and (iv) managing the activities of TransMontaigne Partners L.P. The Company's customers include refiners, wholesalers, distributors, marketers, and industrial and commercial end-users of refined petroleum products. Corporate news and additional information about TransMontaigne Inc. is available on the Company's web site: www.transmontaigne.com Forward-Looking Statements This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. This information may involve risks and uncertainties that could cause actual results to differ materially from the forward- looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.