TMG Taylor & Martin Grp., Inc.Common Stock

TransMontaigne Inc. (NYSE:TMG) today announced its financial results for the fiscal third quarter, which resulted in net earnings of $25.7 million, or earnings of $0.50 per share, compared with net income of $47.1 million, and earnings of $0.92 per share for the comparable quarter in 2005. For the nine months ended March 31, 2006 the Company reported net earnings of $11.4 million, or earnings of $0.22 per share, compared with $55.1 million in net earnings, and earnings of $1.08 per share, during the comparable period in 2005. During the third quarter, wholesale petroleum product prices increased from $1.70 per gallon to $1.86 per gallon. This significant increase in value contributed to an inventory procurement and management gain of $38.7 million, net of hedging costs. Highlights for the quarter include: -- Supply, distribution and marketing revenues of $2.4 billion resulted in net margins of $49.1 million, which includes the $38.7 million gain in inventory procurement and management and a $1.9 million charge due to FIFO inventory adjustments. -- Light oil marketing margins were $7.4 million, compared to $5.0 million for the comparable quarter in 2005. During the quarter, the wholesale value of product at our Southeast terminals approximated the cost of the product at the tailgate of the refineries plus the cost of transportation to our terminals, which resulted in breakeven marketing results at the Southeast terminals. -- Radcliff/Economy Marine Services, Inc. ("Radcliff") acquired August 1, 2005, contributed $1.0 million in marketing margins during the quarter. -- Terminal, pipelines, and tugs and barges generated $12.5 million in net margins, compared to $13.8 million for the comparable quarter in 2005. -- During the quarter, we entered into a new seven-year terminaling services agreement with a subsidiary of Valero Energy Corporation regarding approximately 1.0 million barrels of gasoline and distillate storage capacity throughout our River terminal facilities. The terminaling services agreement became effective April 1, 2006. During the quarter, we incurred approximately $1.8 million in repairs and maintenance at our River terminal facilities in preparation for the commencement of the Valero terminaling services agreement. -- Radcliff contributed $0.7 million of terminaling margins during the quarter. -- Selling general and administrative expenses increased by $2.2 million compared to the comparable quarter in 2005 due principally to Radcliff accounting for $0.3 million and TransMontaigne Partners' incremental General and Administrative Costs of $1.1 million. -- TransMontaigne Inc. has announced that its Board of Directors has authorized management to meet with representatives of Morgan Stanley Capital Group Inc. to negotiate a definitive merger agreement in accordance with the terms of Morgan Stanley's letter to TransMontaigne dated April 26, 2006, in which Morgan Stanley offered to acquire all of the outstanding capital stock of TransMontaigne Inc. for cash consideration of $10.50 per common share. As previously announced, on March 27, 2006, TransMontaigne entered into a merger agreement with SemGroup, L.P. and certain of its affiliated entities providing for the acquisition by SemGroup of all of the outstanding capital stock of TransMontaigne for cash consideration of $9.75 per common share. On May 8, 2006, we announced that our Board of Directors is prepared to accept the terms of a definitive merger agreement with Morgan Stanley under which Morgan Stanley will acquire all of our outstanding capital stock for cash consideration of $10.50 per share. SemGroup has until the close of business on Thursday, May 11, 2006, to provide our Board of Directors with a revised merger agreement that our Board of Directors determines is at least as favorable to our stockholders as the Morgan Stanley merger agreement. Until such time as TransMontaigne executes an agreement with Morgan Stanley, the merger agreement between TransMontaigne and SemGroup remains in effect. Donald H. Anderson, Chief Executive Officer said, "Increases in both crude oil prices and refinery margins (crack spreads) once again moved wholesale gasoline prices to higher levels. These higher prices encourage the rapid liquidation of refined product inventory which has the tendency to lower light oil marketing margins (net backs) throughout our pipeline supplied Southeast terminaling network. As has been previously reported, the Company has received two competing offers for 100% of the Company's common stock. The Company's Board is continuing to evaluate both offers." Conference Call TransMontaigne Inc. also announced that it has scheduled a conference call for Thursday, May 11, 2006 at 3:30 p.m. (MDT) 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: (888) 400-7916 Ask For: TransMontaigne Inc. A playback of the conference call will be available from 7:00 p.m. (MDT) on Thursday, May 11, 2006 until 11:59 p.m. (MDT) on Thursday, May 18, 2006 by calling: USA: 800-475-6701 International: 320-365-3844 Access Code: 828139 The following selected financial information is extracted from the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2006, which was filed today with the Securities and Exchange Commission. -0- *T TRANSMONTAIGNE INC. AND SUBSIDIARIES (000s, except per share data) Three Months Ended ----------------------- March 31, March 31, 2006 2005 ----------- ----------- Income Statement Data ---------------------- Revenues $2,456,697 $2,169,441 Net margins: Supply, distribution and marketing 49,111 84,473 Terminals, pipelines, and tugs and barges 12,474 13,807 Operating income 51,437 85,114 Earnings before income taxes 44,024 78,442 Net earnings 25,724 47,065 Net earnings attributable to common stockholders 24,204 36,721 Net earnings per common share--basic 0.50 0.92 Cash Flow Activities --------------------- Net cash provided by operating activities $12,442 $255,101 Net cash provided by (used in) investing activities (2,682) 5,446 Net cash (used in) financing activities (13,365) (248,639) *T -0- *T March 31, June 30, 2006 2005 ----------- ----------- Balance Sheet Data ------------------- Working capital $321,116 $319,636 Long-term debt 245,508 228,307 Non-controlling interests in TransMontaigne Partners 82,566 81,440 Series B redeemable convertible preferred stock 20,608 49,249 Common stockholders' equity 367,020 326,484 *T -0- *T Selected income statement data is as follows (in thousands): Three Months Ended --------------------- March 31, March 31, 2006 2005 --------------------- Terminals, pipelines, tugs and barges: TransMontaigne Partners L.P. facilities $7,395 $5,655 Brownsville facilities 1,644 1,230 Southeast facilities 3,765 5,442 River facilities (835) 1,145 Other 505 335 ---------- ---------- Margins 12,474 13,807 ---------- ---------- Marketing: Light oils--marketing margins: TransMontaigne Partners L.P. facilities 5,231 1,666 Southeast facilities 187 2,744 River facilities 1,170 525 Other 800 60 ---------- ---------- Light oil margins 7,388 4,995 Heavy oils--marketing margins 2,445 2,980 Supply chain management services margins 2,469 6,067 ---------- ---------- Margins 12,302 14,042 ---------- ---------- Total margins 24,776 27,849 Selling, general and administrative expenses (12,142) (9,885) ---------- ---------- Total margins less S, G & A expenses 12,634 17,964 ---------- ---------- Inventory procurement and management: (Losses) from risk management of light oil volumes to be liquidated upon commencement of MSCG product supply agreement -- (181) Increase in value of light oil volumes nominated under the MSCG product supply agreement prior to receipt of the product at our terminals 24,314 36,632 Increase in value of base operating inventory 13,967 39,871 (Losses) from risk management of base operating inventory and light oil volumes nominated under the MSCG product supply agreement (7,409) -- Storage fees for light oil tank capacity (457) (857) Other financial and costing variances, net 8,268 6,286 Trading activities, net -- -- ---------- ---------- Inventory procurement and management 38,683 81,751 ---------- ---------- Inventory adjustments: Gains recognized on beginning inventories-- discretionary volumes 13,567 10,210 Gains deferred on ending inventories-- discretionary volumes (15,441) (21,530) ---------- ---------- Inventory adjustments (1,874) (11,320) ---------- ---------- Merger related expenses (1,350) -- Depreciation and amortization (7,273) (6,274) Gain on disposition of assets, net 10,617 2,993 ---------- ---------- Operating income $51,437 $85,114 ========== ========== *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 Sept. 30, Dec. 31, March 31, June 30, June 30, 2005 2005 2006 2006 2006 ------------------------------------------------ Terminals, pipelines, tugs and barges: TransMontaigne Partners L.P. facilities $6,993 $7,666 $7,395 -- $22,054 Brownsville facilities 1,398 1,425 1,644 -- 4,467 Southeast facilities 3,292 4,324 3,765 -- 11,381 River facilities 40 583 (835) -- (212) Other (1,194) 896 505 -- 207 --------- --------- --------- -------- -------- Margins 10,529 14,894 12,474 -- 37,897 --------- --------- --------- -------- -------- Marketing: Light oils--marketing margins (deficiencies): TransMontaigne Partners L.P. facilities 9,258 5,915 5,231 -- 20,404 Southeast facilities (16,714) 4,630 187 -- (11,897) River facilities 1,024 1,670 1,170 -- 3,864 Other (1,148) 777 800 -- 429 --------- --------- --------- -------- -------- Light oil margins (7,580) 12,992 7,388 -- 12,800 Heavy oils--marketing margins 3,460 7,349 2,445 -- 13,254 Supply chain management services margins 1,180 (191) 2,469 -- 3,458 --------- --------- --------- -------- -------- Margins (deficiencies) (2,940) 20,150 12,302 -- 29,512 --------- --------- --------- -------- -------- Total margins 7,589 35,044 24,776 -- 67,409 Selling, general and administrative expenses (11,554) (13,354) (12,142) -- (37,050) --------- --------- --------- -------- -------- Total margins (deficiencies) less S, G & A expenses (3,965) 21,690 12,634 -- 30,359 --------- --------- --------- -------- -------- 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) 24,314 -- 51,720 Increase (decrease) in value of base operating inventory 46,424 (29,394) 13,967 -- 30,997 Gains (losses) from risk management of base operating inventory and light oil volumes nominated under the MSCG product supply agreement (28,755) 27,095 (7,409) -- (9,069) Storage fees for light oil tank capacity (457) (457) (457) -- (1,371) Other financial and costing variances, net (28,654) (11,498) 8,268 -- (31,884) Trading activities, net -- -- -- -- -- --------- --------- --------- -------- -------- Inventory procurement and management 67,642 (65,932) 38,683 -- 40,393 --------- --------- --------- -------- -------- Inventory adjustments: Gains recognized on beginning inventories-- discretionary volumes 2,369 18,452 13,567 -- 2,369 Gains deferred on ending inventories-- discretionary volumes (18,452) (13,567) (15,441) -- (15,441) --------- --------- --------- -------- -------- Inventory adjustments (16,083) 4,885 (1,874) -- (13,072) --------- --------- --------- -------- -------- Merger related expenses -- -- (1,350) -- (1,350) Depreciation and amortization (6,581) (6,849) (7,273) -- (20,703) Gain on disposition of assets, net 1,118 67 10,617 -- 11,802 --------- --------- --------- -------- -------- Operating income (loss) $42,131 $(46,139) $51,437 -- $47,429 ========= ========= ========= ======== ======== *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 Sept. 30, Dec. 31, March 31, June 30, June 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 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 Sept. 30, Dec. 31, March 31, June 30, June 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 Sept. 30, Dec. 31, March 31, June 30, June 30, 2005 2005 2006 2006 2006 ------------------------------------------------ Light oils--marketing volumes: TransMontaigne Partners' facilities 84,838 90,126 92,073 -- 89,012 Southeast facilities 137,586 126,015 117,744 -- 127,115 River facilities 10,592 7,697 8,748 -- 9,012 Other 18,803 15,347 23,502 -- 19,218 --------- --------- --------- -------- -------- 251,819 239,185 242,067 -- 244,357 ========= ========= ========= ======== ======== *T -0- *T Three Months Ended -------------------------------------- Year Ended Sept. 30, Dec. 31, March 31, June 30, June 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 Sept. 30, Dec. 31, March 31, June 30, June 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 Sept. 30, Dec. 31, March 31, June 30, June 30, 2005 2005 2006 2006 2006 ------------------------------------------------ Light oils--marketing margins: TransMontaigne Partners' facilities 282 170 150 -- 199 Southeast facilities (314) 95 4 -- (81) River facilities 250 561 354 -- 372 Other (158) 131 90 -- 19 All facilities-- weighted average (78) 141 81 -- 45 *T -0- *T Three Months Ended Year -------------------------------------- Ended Sept. 30, Dec. 31, March 31, June 30, June 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 Sept. 30, Dec. 31, March 31, June 30, June 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.