UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549

FORM 10-Q

(MarkOne)

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 Quarterly ReportPursuant to Section  13 or 15(d) of the Securities Exchange Actof 1934

For the quarterly period ended June30, 2005

or

 TransitionReport Pursuant to Section  13 or 15(d) of the SecuritiesExchange Act of 1934

For the transition periodfrom                      to                    

CommissionFile Number  000-51368

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TBSINTERNATIONAL LIMITED(Exact name ofregistrant as specified in its charter)

|                                                             |  |                                  |  |  |  |  |
|-------------------------------------------------------------|--|----------------------------------|--|--|--|--|
| **Bermuda**                                                 |  | **98-0225954**                   |
| (Stateor other jurisdiction ofincorporation ororganization) |  | (IRS Employer IdentificationNo.) |
|                                                             |

|                                                           |  |  |
|-----------------------------------------------------------|--|--|
| **CommerceBuilding,Chancery Lane,Hamilton HM 12,Bermuda** |
| (Address of principalexecutiveoffices)                    |
|                                                           |

|                                                    |  |  |
|----------------------------------------------------|--|--|
| **(441)295-9230**                                  |
| (Registrant's telephonenumber, including areacode) |
|                                                    |

|                                                                                  |  |  |
|----------------------------------------------------------------------------------|--|--|
|                                                              |
| (Formername, former address and former fiscal year, if changed since lastreport) |
|                                                                                  |

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Indicate by check markwhether the registrant (1)  has filed all reports required to befiled by Section  13 or 15(d)  of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90days.                     YES      NO  

Indicate by check mark whether the registrant is an acceleratedfiler (as defined in Rule  12b-2 of the ExchangeAct). YES      NO  

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate thenumber of shares outstanding of each of the issuer's classes ofcommon stock, as of the latest practical date.

As of August 5,2005, the registrant had outstanding 14,290,496 Class A common shares,par value $0.01 per share, and 13,404,461 Class  B common shares,par value $0.01 per share.

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|                                                                                                                |  |        |        |        |  |  |
|----------------------------------------------------------------------------------------------------------------|--|--------|--------|--------|--|--|
| **PARTI:  FINANCIALINFORMATION**                                                                     |  |   |   |   |
| Item1.  FinancialStatements                                                                          |  |   |   |   |
|   ConsolidatedBalance Sheets as of December 31, 2004 and June 30,2005.                               |  |   | 3      |   |
|   ConsolidatedStatements of Income for the three and six months ended June 30, 2004and June 30, 2005 |  |   | 4      |   |
|   Consolidated Statements of Cash Flowsfor the six months ended June 30, 2004 and June 30,2005       |  |   | 5      |   |
|   ConsolidatedStatement of Changes in Shareholders' Equity for the six monthsended June 30, 2005     |  |   | 6      |   |
|   Notes to Consolidated FinancialStatements                                                          |  |   | 7      |   |
| Item2.  Management's Discussion and Analysis ofFinancial Condition and Results of Operations         |  |   | 18     |   |
| Item 3.  Quantitative and Qualitative Disclosure AboutMarket Risk                                    |  |   | 35     |   |
| Item 4.  Controls andProcedures                                                                      |  |   | 35     |   |
| **PART II:  OTHERINFORMATION**                                                                       |  |   |   |   |
| Item 1.  LegalProceedings                                                                            |  |   | 36     |   |
| Item 2.  UnregisteredSales of Equity Securities and Use of Proceeds                                  |  |   | 36     |   |
| Item 3.  Defaults Upon SeniorSecurities                                                              |  |   | 36     |   |
| Item 4.  Submission ofMatters to a Vote of Security Holders                                          |  |   | 36     |   |
| Item 5.  Other Information                                                                           |  |   | 36     |   |
| Item 6.  Exhibits                                                                                    |  |   | 36     |   |
| Signatures                                                                                                     |  |   | 38     |   |
|                                                                                                                |

2

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PartI.    FINANCIAL INFORMATION

Item 1.    FinancialStatements

TBS INTERNATIONAL LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS(UNAUDITED)

|                                                                                                                   |  |                 |             |             |  |        |             |        |  |  |
|-------------------------------------------------------------------------------------------------------------------|--|-----------------|-------------|-------------|--|--------|-------------|--------|--|--|
|                                                                                                              |  | December31,2004 |             | June30,2005 |
| **Assets**                                                                                                        |  |            |        |        |  |   |        |   |
| Currentassets                                                                                                     |  |            |        |        |  |   |        |   |
| Cash and cashequivalents                                                                                          |  | $               | 21,674,204  |        |  | $      | 50,617,141  |   |
| Charterhire receivable, net of allowance of $1,456,594 in 2004 and $1,064,346in2005                               |  |            | 17,310,426  |        |  |   | 19,130,885  |   |
| Claimsreceivable, net of allowance of $310,655 in 2004 and $0 in2005                                              |  |            | 380,258     |        |  |   | 397,425     |   |
| Due fromagents                                                                                                    |  |            | 449,488     |        |  |   | 500,223     |   |
| Otherreceivables                                                                                                  |  |            | 227,411     |        |  |   | 308,637     |   |
| Inventories                                                                                                       |  |            | 3,387,629   |        |  |   | 4,398,422   |   |
| Prepaidexpenses                                                                                                   |  |            | 3,866,215   |        |  |   | 3,358,261   |   |
| Advancestoaffiliates                                                                                              |  |            | 1,495,474   |        |  |   | 289,130     |   |
| Totalcurrentassets                                                                                                |  |            | 48,791,105  |        |  |   | 79,000,124  |   |
| Depositsfor vesselpurchases                                                                                       |  |            | 7,499,000   |        |  |   | 1,550,000   |   |
| Restrictedcash                                                                                                    |  |            |        |        |  |   | 750,000     |   |
| Vessels, net ofaccumulated depreciation of $24,463,462 in 2004 and $30,618,437 in2005                             |  |            | 100,366,040 |        |  |   | 212,098,970 |   |
| Otherfixed assets, net of accumulated amortization of $409,761 in 2004 and$560,247 in2005                         |  |            | 503,032     |        |  |   | 2,450,453   |   |
| Goodwill                                                                                                          |  |            |        |        |  |   | 7,834,446   |   |
| Totalassets                                                                                                       |  | $               | 157,159,177 |        |  | $      | 303,683,993 |   |
| **Liabilitiesand Shareholders'Equity**                                                                            |  |            |        |        |  |   |        |   |
| Currentliabilities                                                                                                |  |            |        |        |  |   |        |   |
| Debt, currentportion                                                                                              |  | $               | 12,446,561  |        |  | $      | 25,171,377  |   |
| Obligationsunder capital lease, currentportion                                                                    |  |            | 4,731,574   |        |  |   | 4,269,590   |   |
| Accountspayable                                                                                                   |  |            | 4,403,578   |        |  |   | 6,065,979   |   |
| Accruedexpenses                                                                                                   |  |            | 12,351,583  |        |  |   | 19,217,412  |   |
| Voyagesinprogress                                                                                                 |  |            | 2,650,551   |        |  |   | 2,429,347   |   |
| Advancesfromaffiliates                                                                                            |  |            | 2,641,485   |        |  |   | 3,332,871   |   |
| Totalcurrentliabilities                                                                                           |  |            | 39,225,332  |        |  |   | 60,486,576  |   |
| Debt,long-termportion                                                                                             |  |            | 26,064,647  |        |  |   | 62,412,853  |   |
| Obligationsunder capital lease, net of currentportion                                                             |  |            | 29,909,953  |        |  |   | 26,085,767  |   |
| Totalliabilities                                                                                                  |  |            | 95,199,932  |        |  |   | 148,985,196 |   |
| Commitmentsand Contingencies (Note12)                                                                             |  |            |        |        |  |   |        |   |
| **Shareholders'equity**                                                                                           |  |            |        |        |  |   |        |   |
| Commonshares, Class A, $.004 par value, 1,500,000 shares authorized, issuedand outstanding                        |  |            | 6,000       |        |  |   |        |   |
| Commonshares, Class B, $.004 par value, 1,500,000 shares authorized, issuedand outstanding                        |  |            | 6,000       |        |  |   |        |   |
| Commonshares, Class C, $.004 par value, 6,000,000 shares authorized,1,000,000 shares issued andoutstanding        |  |            | 4,000       |        |  |   |        |   |
| Convertiblepreference shares, $.004 per share, 1,500,000 shares authorized,1,000,000 shares issued andoutstanding |  |            | 4,000       |        |  |   |        |   |
| Common shares,New Class A, $.01 par value75,000,000 authorized, 14,127,016 sharesissued andoutstanding            |  |            |        |        |  |   | 141,270     |   |
| Common shares,New Class B, $.01 par value 30,000,0000 authorized, 13,567,941 sharesissued andoutstanding          |  |            |        |        |  |   | 135,680     |   |
| Warrants                                                                                                          |  |            | 800,000     |        |  |   | 20,747      |   |
| Additionalpaid-incapital                                                                                          |  |            | 24,357,936  |        |  |   | 87,818,994  |   |
| Retainedearnings                                                                                                  |  |            | 36,781,309  |        |  |   | 66,582,106  |   |
| Totalshareholders'equity                                                                                          |  |            | 61,959,245  |        |  |   | 154,698,797 |   |
| Totalliabilities and shareholders'equity                                                                          |  | $               | 157,159,177 |        |  | $      | 303,683,993 |   |
|                                                                                                                   |

Theaccompanying notes are an integral part of these consolidated financialstatements.

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TBS INTERNATIONAL LIMITED ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OFOPERATIONS(UNAUDITED)

|                                                               |  |                            |            |                          |  |        |            |         |  |        |            |         |  |        |             |         |  |  |
|---------------------------------------------------------------|--|----------------------------|------------|--------------------------|--|--------|------------|---------|--|--------|------------|---------|--|--------|-------------|---------|--|--|
|                                                          |  | ThreeMonths Ended June 30, |            | Six Months Ended June30, |
|                                                          |  | 2004                       |            | 2005                     |  | 2004   |            | 2005    |
| **Revenue**                                                   |  |                       |       |                     |  |
| Voyagerevenue                                                 |  | $                          | 38,965,741 |                     |  | $      | 43,984,528 |    |  | $      | 69,271,647 |    |  | $      | 90,119,864  |    |
| Timecharterrevenue                                            |  |                       | 10,618,515 |                     |  |   | 16,450,918 |    |  |   | 24,737,505 |    |  |   | 31,224,645  |    |
| Otherrevenue                                                  |  |                       | 218,209    |                     |  |   | 85,256     |    |  |   | 259,850    |    |  |   | 85,256      |    |
| Totalrevenue                                                  |  |                       | 49,802,465 |                     |  |   | 60,520,702 |    |  |   | 94,269,002 |    |  |   | 121,429,765 |    |
| **Operatingexpenses**                                         |  |                       |       |                     |  |
| Voyage                                                        |  |                       | 14,408,926 |                     |  |   | 18,017,171 |    |  |   | 26,427,142 |    |  |   | 36,321,893  |    |
| Vessel                                                        |  |                       | 17,688,083 |                     |  |   | 16,484,292 |    |  |   | 32,262,482 |    |  |   | 36,183,231  |    |
| Depreciationand amortization of vessels and other fixedassets |  |                       | 1,780,497  |                     |  |   | 3,926,296  |    |  |   | 3,379,421  |    |  |   | 6,305,461   |    |
| Managementfees                                                |  |                       | 1,016,686  |                     |  |   | 1,299,180  |    |  |   | 1,987,687  |    |  |   | 2,565,756   |    |
| Generalandadministrative                                      |  |                       | 1,813,258  |                     |  |   | 5,007,805  |    |  |   | 3,922,385  |    |  |   | 6,470,483   |    |
| Totaloperatingexpenses                                        |  |                       | 36,707,450 |                     |  |   | 44,734,744 |    |  |   | 67,979,117 |    |  |   | 87,846,824  |    |
| Incomefromoperations                                          |  |                       | 13,095,015 |                     |  |   | 15,785,958 |    |  |   | 26,289,885 |    |  |   | 33,582,941  |    |
| **Other(expenses) and income**                                |  |                       |       |                     |  |
| Interestexpense                                               |  |                       | (1,008,951 | )                   |  |   | (2,130,081 | )  |  |   | (2,076,820 | )  |  |   | (3,804,065  | )  |
| Otherincome                                                   |  |                       | 11,476     |                     |  |   | 101,562    |    |  |   | 17,370     |    |  |   | 171,921     |    |
| Totalother expenses,net                                       |  |                       | (997,475   | )                   |  |   | (2,028,519 | )  |  |   | (2,059,450 | )  |  |   | (3,632,144  | )  |
| Netincome                                                     |  |                       | 12,097,540 |                     |  |   | 13,757,439 |    |  |   | 24,230,435 |    |  |   | 29,950,797  |    |
| Amountallocated to participating preferredshareholders        |  |                       | 4,032,513  |                     |  |   | 3,090,377  |    |  |   | 4,910,132  |    |  |   | 7,291,456   |    |
| Netincome available for commonshareholders                    |  | $                          | 8,065,027  |                     |  | $      | 10,667,062 |    |  | $      | 19,320,303 |    |  | $      | 22,659,341  |    |
| **EarningsPer Share**                                         |  |
| Net income per commonshare                                    |  |                       |       |                     |  |
| Basic                                                         |  | $                          | 0.79       |                     |  | $      | 0.62       |    |  | $      | 1.90       |    |  | $      | 1.45        |    |
| Diluted                                                       |  | $                          | 0.40       |                     |  | $      | 0.52       |    |  | $      | 0.95       |    |  | $      | 1.11        |    |
| Weightedaverage common sharesoutstanding                      |  |                       |       |                     |  |
| Basic                                                         |  |                       | 10,187,795 |                     |  |   | 17,196,186 |    |  |   | 10,187,795 |    |  |   | 15,655,166  |    |
| Diluted                                                       |  |                       | 20,385,775 |                     |  |   | 20,555,062 |    |  |   | 20,385,775 |    |  |   | 20,470,887  |    |
|                                                               |

Theaccompanying notes are an integral part of these consolidated financialstatements.

4

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TBS INTERNATIONAL LIMITED ANDSUBSIDIARIES

CONSOLIDATED STATEMENTS OFCASH FLOWS(UNAUDITED)

|                                                                                                                   |  |                         |             |         |  |        |              |         |  |  |
|-------------------------------------------------------------------------------------------------------------------|--|-------------------------|-------------|---------|--|--------|--------------|---------|--|--|
|                                                                                                              |  | Sixmonths ended June30, |
|                                                                                                              |  | 2004                    |             | 2005    |
| **Cashflows from operatingactivities**                                                                            |  |                    |        |    |  |   |         |    |
| Netincome                                                                                                         |  | $                       | 24,230,435  |    |  | $      | 29,950,797   |    |
| Adjustmentsto reconcile net income to net cash provided by operatingactivities                                    |  |                    |        |    |  |   |         |    |
| Depreciation andamortization                                                                                      |  |                    | 3,379,421   |    |  |   | 6,305,461    |    |
| Stockissued toemployees                                                                                           |  |                    |        |    |  |   | 1,069,000    |    |
| Changesin operating assets andliabilities                                                                         |  |                    |        |    |  |   |         |    |
| Decrease(increase) in charter hirereceivable                                                                      |  |                    | 1,786,660   |    |  |   | (1,623,780   | )  |
| Decrease(increase) in claimsreceivable                                                                            |  |                    | 5,253       |    |  |   | (17,167      | )  |
| Decrease(increase) in due fromagents                                                                              |  |                    | 216,037     |    |  |   | (50,735      | )  |
| Decrease inotherreceivables                                                                                       |  |                    | 87,521      |    |  |   | (1,767       | )  |
| Increaseininventories                                                                                             |  |                    | (1,838,499  | )  |  |   | (1,010,793   | )  |
| (Increase)decrease in prepaidexpenses                                                                             |  |                    | (58,290     | )  |  |   | 514,494      |    |
| Increasein accountspayable                                                                                        |  |                    | 46,382      |    |  |   | 1,510,852    |    |
| Increase inaccruedexpenses                                                                                        |  |                    | 3,824,907   |    |  |   | 5,856,100    |    |
| Increase(decrease) in voyages inprogress                                                                          |  |                    | 306,572     |    |  |   | (221,204     | )  |
| Decreasein advances from/to affiliates,net                                                                        |  |                    | 698,954     |    |  |   | 232,912      |    |
| Netcash provided by operatingactivities                                                                           |  |                    | 32,685,353  |    |  |   | 42,514,170   |    |
| **Cashflows from investingactivities**                                                                            |  |                    |        |    |  |   |         |    |
| Vesselsacquisition/capital improvementcosts                                                                       |  |                    | (7,485,177  | )  |  |   | (111,079,434 | )  |
| Depositsfor vesselpurchases                                                                                       |  |                    | (4,325,000  | )  |  |   | (1,550,000   | )  |
| Restrictedcash forlitigation                                                                                      |  |                    |        |    |  |   | (750,000     | )  |
| Payment forpurchase of TBS Shipping Services Inc and Roymar Ship Management Inc.,net of cash acquired of$801,594. |  |                    |        |    |  |   | (6,698,406   | )  |
| Netcash used in investingactivities                                                                               |  |                    | (11,810,177 | )  |  |   | (120,077,840 | )  |
| **Cashflows from financing activities**                                                                           |  |
| Dividendspaid                                                                                                     |  |                    |        |    |  |   | (150,000     | )  |
| Proceeds on sale ofTBS International Limited shares owned bysubsidiaries                                          |  |                    |        |    |  |   | 795,336      |    |
| Proceeds fromissuance of shares in initial public offering and exercise of series Awarrants, net of offeringcosts |  |                    |        |    |  |   | 61,074,419   |    |
| Repayment of debtprincipal                                                                                        |  |                    | (186,136    | )  |  |   | (11,226,978  | )  |
| Proceedsfrom debt                                                                                                 |  |                    |        |    |  |   | 60,300,000   |    |
| Proceeds fromrevolving debtfacility                                                                               |  |                    |        |    |  |   | 12,000,000   |    |
| Repayment ofrevolving debtfacility                                                                                |  |                    |        |    |  |   | (12,000,000  | )  |
| Reduction ofobligations under capitalleases                                                                       |  |                    | (5,629,136  | )  |  |   | (4,286,170   | )  |
| Netcash (used in) provided by financingactivities                                                                 |  |                    | (5,815,272  | )  |  |   | 106,506,607  |    |
| Netincrease in cash and cashequivalents                                                                           |  |                    | 15,059,904  |    |  |   | 28,942,937   |    |
| Cashand cash equivalents beginning ofperiod                                                                       |  |                    | 8,640,531   |    |  |   | 21,674,204   |    |
| Cashand cash equivalents end ofperiod                                                                             |  | $                       | 23,700,435  |    |  | $      | 50,617,141   |    |
| **Supplementalcash flow information**                                                                             |  |
| Cash paid forinterest                                                                                             |  | $                       | 2,104,792   |    |  | $      | 3,548,476    |    |
|                                                                                                                   |

Theaccompanying notes are an integral part of these consolidated financialstatements.

5

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TBS INTERNATIONAL LIMITED. ANDSUBSIDIARIESCONSOLIDATED STATEMENT OFCHANGES IN SHAREHOLDERS' EQUITY(UNAUDITED)

|                                                                                                                    |  |             |            |                  |  |          |         |                         |  |                  |         |         |  |        |            |         |  |        |          |         |  |        |            |         |  |        |            |         |  |        |             |         |  |  |  |  |  |  |
|--------------------------------------------------------------------------------------------------------------------|--|-------------|------------|------------------|--|----------|---------|-------------------------|--|------------------|---------|---------|--|--------|------------|---------|--|--------|----------|---------|--|--------|------------|---------|--|--------|------------|---------|--|--------|-------------|---------|--|--|--|--|--|--|
|                                                                                                               |  | CommonShare |            | PreferenceShares |  | Warrants |         | AdditionalPaid-nCapital |  | RetainedEarnings |         | Total   |  |        |
|                                                                                                               |  | Shares      |            | Amount           |  | Shares   |         | Amount                  |  |
| Balanceat December 31,2004                                                                                         |  |        | 4,000,000  |             |  | $        | 16,000  |                    |  | $                | 4,000   |    |  |   | 2,666,658  |    |  | $      | 800,000  |    |  | $      | 24,357,936 |    |  | $      | 36,781,309 |    |  | $      | 61,959,245  |    |  |
| Conversionof preference shares to commonshares                                                                     |  |        | 2,000,000  |             |  |     | 8,000   |                    |  |             | (4,000  | )  |  |   |       |    |  |   |     |    |  |   | (4,000     | )  |  |   |       |    |  |   |        |    |  |
| Additionalshares issuable under anti-dilution provisions ofwarrantagreement                                        |  |        |       |             |  |     |    |                    |  |             |    |    |  |   | 1,132,172  |    |  |   |     |    |  |   |       |    |  |   |       |    |  |   |        |    |  |
| Redesignationand change in par value of common shares from $.004 to$.01                                            |  |        | (3,600,000 | )           |  |     |    |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   |       |    |  |   |       |    |  |   |        |    |  |
| StockSplit                                                                                                         |  |        | 12,881,692 |             |  |     | 128,817 |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   | (128,817   | )  |  |   |       |    |  |   |        |    |  |
| Changein number of shares issuable under warrants due to change in par valueof common shares and stocksplit        |  |        |       |             |  |     |    |                    |  |             |    |    |  |   | 4,488,305  |    |  |   |     |    |  |   |       |    |  |   |       |    |  |   |        |    |  |
| Exerciseof Series Awarrants                                                                                        |  |        | 5,413,265  |             |  |     | 54,133  |                    |  |             |    |    |  |   | (5,413,265 | )  |  |   | (388,812 | )  |  |   | 388,812    |    |  |   |       |    |  |   | 54,133      |    |  |
| Cancellationof Series Awarrants                                                                                    |  |        |       |             |  |     |    |                    |  |             |    |    |  |   | (1,687,590 | )  |  |   | (121,212 | )  |  |   | 121,212    |    |  |
| Cancellationof Series B & Cwarrants                                                                            |  |        |       |             |  |     |    |                    |  |             |    |    |  |   | (897,427   | )  |  |   | (269,229 | )  |  |   | 269,229    |    |  |   |       |    |  |   |        |    |  |
| Initialpublicoffering                                                                                              |  |        | 7,000,000  |             |  |     | 70,000  |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   | 65,030,000 |    |  |   |       |    |  |   | 65,100,000  |    |  |
| Stockofferingcosts                                                                                                 |  |        |       |             |  |     |    |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   | (4,079,714 | )  |  |   |       |    |  |   | (4,079,714  | )  |  |
| Stockissued to employees aspayroll                                                                                 |  |        |       |             |  |     |    |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   | 1,069,000  |    |  |   |       |    |  |   | 1,069,000   |    |  |
| Proceedson sale of TBS International Limited shares owned by subsidiaries inconnection with initial publicoffering |  |        |       |             |  |     |    |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   | 795,336    |    |  |   |       |    |  |   | 795,336     |    |  |
| NetIncome                                                                                                          |  |        |       |             |  |     |    |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   |       |    |  |   | 29,950,797 |    |  |   | 29,950,797  |    |  |
| Dividendspaid                                                                                                      |  |        |       |             |  |     |    |                    |  |             |    |    |  |   |       |    |  |   |     |    |  |   |       |    |  |   | (150,000   | )  |  |   | (150,000    | )  |  |
| Balanceat June 30,2005                                                                                             |  |        | 27,694,957 |             |  | $        | 276,950 |                    |  |             | — |    |  |   | 288,853    |    |  | $      | 20,747   |    |  | $      | 87,818,994 |    |  | $      | 66,582,106 |    |  | $      | 154,698,797 |    |  |
|                                                                                                                    |

Theaccompanying notes are an integral part of these consolidated financialstatements.

6

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

Note1 — Basis of Presentation:

TBS International Limited (the"Company") is an ocean transportationservices company that offers worldwide shipping solutions throughliner, parcel, bulk and vessel chartering services. Substantially allthe related corporations of the Company are foreign corporations andconduct their business operations worldwide. The accompanying unauditedconsolidated financial statements have been prepared in accordance withgenerally accepted accounting principles for interim financialinformation and with the instructions to Form  10-Q andArticle  10 of Regulation S-X. Accordingly, they do not includeall of the information and footnotes required by generally acceptedaccounting principles for complete financial statements. In the opinionof management, all adjustments (consisting of normal recurringaccruals) considered necessary for a fair presentation have beenincluded. Operating results for the six month period ended June 30,2005 are not necessarily indicative of the results that may be expectedfor the year ended December  31, 2005.

The balance sheetat December  31, 2004 has been derived from the audited financialstatements at that date, but does not include all of the informationand footnotes required by generally accepted accounting principles forcomplete financial statements.

For further information, refer tothe consolidated financial statements and footnotes thereto for theyear ended December  31, 2004 included in the Company'sfiling on Form 8-K filed on July 29, 2005. 

Note 2—  Initial Public Offering

On June 29, 2005, theCompany completed its initial public offering. In this offering, theCompany issued and sold 7,000,000 Class A common shares, par value$0.01 per share, for $10.00 per share. The proceeds to the Company,after underwriting fees but prior to deducting offering expenses,totaled $65,100,000. The amounts shown in the accompanying consolidatedstatement of shareholders' equity, as contributions to additionalpaid-in capital, represent payments received for the issuance of theshares in June 2005, in excess of their par value less offeringexpenses.

Note 3 —  New AccountingPronouncements

In May 2005, the Financial Accounting StandardsBoard ("FASB") issued SFAS No. 154,"  Accounting Changes and ErrorCorrections" ("SFAS 154"),which replaces Accounting Principles Board Opinion("APB") No. 20"  Accounting Changes", andSFAS No. 3 "  Reporting Accounting Changes inInterim Financial Statements". SFAS 154 changes therequirements for the accounting for and reporting of a change inaccounting principle, and applies to all voluntary changes inaccounting principles, as well as changes required by an accountingpronouncement in the unusual instance that it does not include specifictransition provisions. Specifically, SFAS 154 requires retrospectiveapplication to prior periods financial statements, unless it isimpracticable to determine the period-specific effects or thecumulative effect of the change. SFAS 154 does not change thetransition provisions of any existing pronouncement. SFAS 154 iseffective for the Company for all accounting changes and corrections oferrors made beginning January 1, 2006.

In April 2005, theFinancial Accounting Standards Board ("FASB")issued Interpretation No.  47, "Accounting forConditional Asset Retirement Obligations, an interpretation of FASBStatement No.  143". This interpretationclarifies that an entity is required to recognize a liability for thefair value of a conditional asset retirement obligation when incurredif the liability's fair value can be reasonably estimated. Italso clarifies when an entity would have sufficient information toreasonably estimate the fair value of an asset retirement obligation.Effective June 30, 2005, the Company has adopted the provisions ofFIN  47; the adoption of which did not have a material impact onthe Company's consolidated financial position, results ofoperations or cash flows.

In March 2005, the FASB issuedInterpretation No.  46(R)-5 ("FIN46(R)-5"), Implicit Variable Interests under FASBInterpretation No.  46 (revised December 2003),"Consolidation of Variable 

7

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

Interest Entities".FIN  46(R)-5 is effective for the first reporting periodbeginning after March  3, 2005; however, earlier application ispermitted for periods for which financial statements have not yet beenissued. Effective April 1, 2005, the Company has adopted the provisionsof FIN 46(R), the adoption of which did not have a material impact onthe Company's consolidated financial position, results ofoperations or cash flows.

In December 2004, the FASB issued SFASNo. 123R, Share-Based Payment ("SFAS 123R").SFAS No. 123R revises previously issued SFAS 123 Accounting forStock-Based Compensation, supersedes APB No. 25 Accounting for StockIssued to Employees, and amends SFAS Statement No. 95 Statement of CashFlows. SFAS 123R requires the Company to expense the fair value ofemployee share options and other forms of share-based compensation forthe annual periods beginning after June 15, 2005. The cost will berecognized over the period during which an employee is required toprovide services in exchange for the award. The share-based award mustbe classified as equity or as a liability and the compensation cost ismeasured based on the fair value of the award at the date of the grant.In addition, liability awards will be re-measured at fair value eachreporting period. The Company currently follows APB Opinion No. 25,Accounting for Stock Issued to Employees, in recognizing the expenseassociated with the restricted share awards and utilizes the intrinsicvalue method. Pro forma information is not presented as the applicationof APB Opinion No. 25, utilizing the intrinsic value method, andFinancial Accounting Standard No. 123, utilizing fair value basemethod, would results in the same amount. The Company is currentlyevaluating the impact of SFAS 123R but does not expect that it willhave a significant impact.

In December 2004, the FASB issuedSFAS No. 153, "Exchanges of Nonmonetaryassets", an amendment of APB No. 29,"Accounting for NonmonetaryTransactions" ("SFAS 153").The amendments made by SFAS 153 are based on the principle thatexchanges of nonmonetary assets should be measured based on the fairvalue of the assets exchanged. Further, the amendments eliminate thenarrow exception for nonmonetary exchanges of similar productive assetsand replace it with a broader exception for exchanges of nonmonetaryassets that do not have commercial substance. The statement iseffective for the Company beginning July 1, 2005 and shall be appliedprospectively. The effect of the adoption of SFAS 153 will beimmaterial to the Company's consolidated results of operations,cash flows or financial position.

Note 4 — Acquisition ofTBS Shipping Services Inc. and Roymar Ship Management, Inc.

Inconnection with its initial public offering, the Company acquired allof the outstanding shares of common stock of two of its affiliates: TBSShipping Services Inc. ("TBS ShippingServices") and Roymar Ship Management, Inc.("Roymar"). The transaction was accounted foras a purchase combination; accordingly, the results of operations ofTBS Shipping Services and Roymar have been included in the consolidatedfinancial statements since the date of acquisition. TBS ShippingServices provides the Company and its subsidiaries with vessel voyageoperational management, commercial, chartering, agency and brokerageservices. Roymar acts as technical ship manager for the Company and itssubsidiaries. The Company purchased all the stock of TBS ShippingServices and Roymar for $6.7 million, which represents the purchaseprice of $7.5 million less net cash acquired of $0.8 million. Theexcess of the purchase price paid over the net book value of theacquired companies was $7,834,446 which was recorded as goodwill.Current assets and liabilities were recorded at fair market value. Thefair market value of office equipment and furnishings approximatestheir carrying value. Pro forma information is not presented as theeffects of these acquisitions are not material to the Company'sconsolidated financial position, results of operations or operatingcash flows in any of the periods presented.

8

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

The following table summarizes theestimated fair values of assets acquired and liabilities assumed at thedate of acquisition:

|                         |  |                          |            |                            |  |        |           |         |  |        |            |         |  |  |
|-------------------------|--|--------------------------|------------|----------------------------|--|--------|-----------|---------|--|--------|------------|---------|--|--|
| Description             |  | TBSShippingServices Inc. |            | Roymar ShipManagement,Inc. |  | Total  |
| CurrentAssets           |  | $                        | 1,012,981  |                       |  | $      | 200,222   |    |  | $      | 1,213,203  |    |
| EquipmentandFurnishings |  |                     | 1,025,816  |                       |  |   | 381,562   |    |  |   | 1,407,378  |    |
| Goodwill                |  |                     | 6,147,380  |                       |  |   | 1,687,066 |    |  |   | 7,834,446  |    |
| Totalassetsacquired     |  |                     | 8,186,177  |                       |  |   | 2,268,850 |    |  |   | 10,455,027 |    |
| Liabilitiesassumed      |  |                     | (2,686,177 | )                     |  |   | (268,850  | )  |  |   | (2,955,027 | )  |
| Netassetsacquired       |  | $                        | 5,500,000  |                       |  | $      | 2,000,000 |    |  | $      | 7,500,000  |    |
|                         |

Note5 — Inventories

Inventories consist of thefollowing:

|                |  |                  |           |              |  |        |           |        |  |  |
|----------------|--|------------------|-----------|--------------|--|--------|-----------|--------|--|--|
| Description    |  | December31, 2004 |           | June 30,2005 |
| Fuel           |  | $                | 2,378,790 |         |  | $      | 3,015,126 |   |
| LubricatingOil |  |             | 514,360   |         |  |   | 877,288   |   |
| Other          |  |             | 494,479   |         |  |   | 506,008   |   |
| Totals         |  | $                | 3,387,629 |         |  | $      | 4,398,422 |   |
|                |

Note6 — Vessels and Other Fixed Assets

The Company acquiredsix vessels during the three-months ended June  30, 2005, and tenvessels during the six months ended June  30, 2005, includingexercising the purchase option under capital lease for the RockawayBelle. The vessels acquired comprised thefollowing:

|                                                                                                             |  |                 |             |                      |           |                |        |                                             |            |        |        |        |      |        |  |  |  |  |
|-------------------------------------------------------------------------------------------------------------|--|-----------------|-------------|----------------------|-----------|----------------|--------|---------------------------------------------|------------|--------|--------|--------|------|--------|--|--|--|--|
| Company                                                                                                     |  | Vessel          |             | DateVessel Delivered |           | Purchase Price |        | Estimated UsefulLife at time of acquisition |
| ChesterShippingCorp                                                                                         |  | TamoyoMaiden    |             |                 | 18-Jan-05 |           |        | $                                           | 8,000,000  |   |        |   | 12.0 |   |
| RectorShipping Corp                                                                                         |  | SiboneyBelle    |             |                 | 9-Feb-05  |           |        |                                        | 8,625,000  |   |        |   | 13.0 |   |
| AlbemarleMaritime Corp                                                                                      |  | MohawkPrincess  |             |                 | 16-Feb-05 |           |        |                                        | 12,000,000 |   |        |   | 7.0  |   |
| HansenShipping Corp                                                                                         |  | AinuPrincess    |             |                 | 23-Feb-05 |           |        |                                        | 8,625,000  |   |        |   | 13.0 |   |
|         VesselAcquisitions for the three months ended March 31,2005 |  |            | 37,250,000  |                 |           |           |   |                                        |
|                                                                                                        |  |            |             |                 |      |           |        |                                        |       |   |        |
| BristolMaritime Corp                                                                                        |  | TuscaroraBelle  |             |                 | 20-Apr-05 |           |        |                                        | 12,750,000 |   |        |   | 9.3  |   |
| HudsonMaritime Corp                                                                                         |  | ChesapeakeBelle |             |                 | 25-Apr-05 |           |        |                                        | 12,750,000 |   |        |   | 9.4  |   |
| GlenwoodMaritime Corp                                                                                       |  | MiamiMaiden     |             |                 | 26-Apr-05 |           |        |                                        | 12,240,000 |   |        |   | 9.4  |   |
| WindsorMaritime Corp                                                                                        |  | ShinnecockBelle |             |                 | 7-Jun-05  |           |        |                                        | 15,300,000 |   |        |   | 10.0 |   |
| KensingtonShipping Corp                                                                                     |  | MayaPrincess    |             |                 | 28-Jun-05 |           |        |                                        | 15,800,000 |   |        |   | 6.5  |   |
|         VesselAcquisitions for the three months ended June 30,2005  |  |            | 68,840,000  |                 |           |           |   |                                        |            |   |   |   |
|         VesselAcquisitions for the six months ended June 30,2005    |  | $               | 106,090,000 |                 |           |           |   |                                        |
|                                                                                                             |

OnApril 11, 2005 the Company exercised its purchase option under thecapital lease to purchase the vessel Rockaway Belle for$2,512,150. The vessel was subsequently financed for $6,900,000 basedon a market value of $10,500,000.

On April 22, 2005, the Companyexercised its option to purchase the Comanche Belle for $3.6million by giving the required five-month notice.

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

On April 26, 2005, the Company placed adeposit on the vessel M.V. Arrow in the amount of $1,550,000,which is 10% percent of the $15,500,000 purchase price. Thevessel which will be renamed the Biloxi Belle was delivered onJuly 12, 2005.

On July 6, 2005, the Company placed a deposit onthe vessel M.V. Tronador in the amount of $1,375,000,which is 10% percent of the $13,750,000 purchase price. Thevessel is expected to be delivered in August or early September 2005and the purchase is expected to be funded with the proceeds of theinitial public offering.

Depreciation and amortization ofvessels and other assets was $1,780,497 and $3,379,421, respectively,for the three and six months ended June  30, 2004 and $3,926,296and $6,305,461, respectively, for the three and six months endedJune  30, 2005. 

Note 7 — Financing

The Company's outstanding debt balances were asfollows:

|                                                                       |  |                               |  |                  |            |               |  |        |            |        |  |  |  |  |
|-----------------------------------------------------------------------|--|-------------------------------|--|------------------|------------|---------------|--|--------|------------|--------|--|--|--|--|
|                                                                  |  | InterestRate at June 30, 2005 |  | December 31,2004 |            | June 30, 2005 |
| Series A, FirstPreferred Ship Mortgage Notes, 10% due 2005 to2007     |  | —                       |  | $                | 3,887,439  |          |  | $      | 0          |   |
| GMACcredit facility loan, expires June 18, 2009                       |  | 6.789%and 6.811%              |  |             | 13,437,500 |          |  |   | 18,437,500 |   |
| Merrill Lynchcredit facility loan, expires September 1,2009           |  | 7.654%                        |  |             | 14,036,269 |          |  |   | 12,052,773 |   |
| TheRoyal Bank of Scotland credit facility loan, expires March 23,2010 |  | 4.95%                         |  |             | 7,150,000  |          |  |   | 6,895,000  |   |
| AIGcredit facility loan, expires March 10, 2010                       |  | 6.27%to6.33%                  |  |             | —    |          |  |   | 42,398,957 |   |
| Bankof America credit facility loan, expires June 10,2010             |  | 6.200%                        |  |             | —    |          |  |   | 7,800,000  |   |
| Debtbalance                                                           |  |                          |  | $                | 38,511,208 |          |  | $      | 87,584,230 |   |
|                                                                       |

Therepayment of debt over the next five years and thereafter is asfollows:

|                                             |  |        |            |        |  |  |
|---------------------------------------------|--|--------|------------|--------|--|--|
| 2005(July 1, 2005 – December 31,2005) |  | $      | 12,545,631 |   |
| 2006                                        |  |   | 24,196,705 |   |
| 2007                                        |  |   | 17,130,123 |   |
| 2008                                        |  |   | 15,368,885 |   |
| 2009                                        |  |   | 13,483,320 |   |
| Thereafter                                  |  |   | 4,859,566  |   |
|                                        |  | $      | 87,584,230 |   |
|                                             |

SeriesA, First Preferred Ship Mortgage Notes

In connection with asettlement with bondholders made December 19, 2003, the Company agreedto provide additional compensation to the existing bondholders whoaccepted a discounted amount from the face of the debt providingcertain earnings targets were exceeded. This agreement provided forpayment of 25% of adjusted earnings before interest, taxes,depreciation and amortization ("EBITDA")(defined below) in excess of $19,000,000 in 2004 and $21,000,000 in2005 to these existing bondholders pro rata. The total payment wascapped at the bondholders pro rata (94.77%) 

10

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

share of $4,102,500 or $3,887,439. AdjustedEBITDA was defined as EBITDA for the year, less EBITDA attributable tovessels purchased outright or treated as capitalized leases acquiredafter October 31, 2003. At December 31, 2004, there was an accrual of$3,887,431 recorded on the consolidated balance sheet. The amount waspaid on June 30, 2005.

GMAC Credit Facility

The creditfacility with GMAC was for the original amount of $22.5 million. TheCompany drew down $15.0 million in July 2004 to replenish theCompany's working capital in connection with the acquisition ofthree vessels and $7.5 million in February 2005 in connection with theacquisition of an additional vessel. Interest on loans under the creditfacility is at the "Adjusted 30-Day LIBOR,"as defined in the loan agreement, plus 3.7% and is payablemonthly in arrears. Payments of principal are due monthly over 60months from the draw down date, with half of the amount borrowed dueover the first 24 months and the balance payable over the remaining 36months. Loans under the credit facility are collateralized by FirstPreferred Ship Mortgages on the vessels Mohegan Princess,Tayrona Princess, Tuckahoe Maiden and Taino Maidenand assignment of freight revenue and insurance on such vessels.

The credit facility agreement contains certain financial covenantswhich require that the Company have fixed charge coverage and fundeddebt to earnings before interest, taxes, depreciation and amortization"EBITDA" ratios within defined limits. AtJune 30, 2005, the Company was in compliance with these covenants.

Merrill Lynch Credit Facility

The original amount of thecredit facility with Merrill Lynch was $15.0 million. The Company drewdown the full facility in August 2004, to replenish the Company'sworking capital in connection with the acquisition of two vessels.Interest is at 7.654% and is payable monthly. Payments ofprincipal are due monthly over 60 months, from the draw down date, with55% of the amount borrowed due over the first 24 months and thebalance payable over the remaining 36 months. The credit facility iscollateralized by the First Preferred Ship Mortgage Notes for theIroquois Maiden and Manhattan Princess and assignment offreight revenue and insurance on such vessels. The credit facilityrequires that the Company maintain positive working capital.

The Royal Bank of Scotland Credit Facility

The creditfacility with The Royal Bank of Scotland was for the original amount of$7.15 million. The Company drew down the full facility in December2004, to replenish the Company's working capital in connectionwith the acquisition of the vessel Wichita Belle. Interest is atLIBOR plus 1.5%, compounded monthly and paid quarterly. Paymentof principal is due in 20 quarterly installments of $255,000 commencingon June 30, 2005 (six months after drawdown). A balloon installment of$2,050,000 is payable with the last quarterly installment on March 23,2010. The credit facility is collateralized by a First Preferred ShipMortgage Notes on the vessel Wichita Belle and assignment offreight revenue and insurance. The credit facility requires that theCompany maintain a monthly average of $1,500,000 on deposit with thebank.

AIG Credit Facility

The original amount of thecredit facility with AIG was $45.0 million. The Company drew down $23.5million in March 2005 to replenish the Company's working capitalin connection with the acquisition of four vessels and $ 21.5 millionin April 2005 in connection with the acquisition of three vessels.Interest on loans under the credit facility is at the 90-Day LIBOR plus3.15% and is payable monthly in arrears. Payments of principalare due monthly over 60 months, from the draw down date, 

11

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

with 55% of the amount borrowed dueover the first 24 months and the balance payable over the remaining 36months. Loans under the credit facility are collateralized by FirstPreferred Ship Mortgages on the vessels: Siboney Belle, AinuPrincess, Tamoyo Maiden, Mohawk Princess, RockawayBelle, Tuscarora Belle and Miami Maiden andassignment of freight revenue and insurance of such vessels.

Thecredit facility agreement contains certain financial covenants whichrequire that the Company have fixed charge coverage, debt to EBITDA,EBITDA to debt service, debt to net worth ratios and working capitalratios within defined limits. The agreement also requires that theCompany maintain minimum cash and cash equivalent balances. At June 30,2005, the Company was in compliance with these covenants.

Bankof America Credit Facility

The credit facility with Bank ofAmerica is for $25.0 million. The Company drew down $7.8 million inJune 2005 for working capital use and the balance on July 21, 2005, toreplenish the Company's working capital in connection with theacquisition of the vessels Shinnecock Belle and MayaPrincess. Interest on loans under the credit facility is atadjusted LIBOR plus 2.75% or the base rate, as defined in theagreement, plus 1.25% as selected by the Company at the time ofthe drawdown and is payable monthly in arrears. Payments of principalare due quarterly over 20 quarters, with 50% of the amountborrowed due over the first eight quarters, 40% over the nexteight quarters and the balance payable over the remaining fourquarters. The loan under the credit facility is collateralized by FirstPreferred Ship Mortgage on the vessels Chesapeake Belle,Shinnecock Belle and Maya Princess and assignment offreight revenue and insurance.

The credit facility agreementcontains certain financial covenants which require that the Companyhave fixed charge coverage and debt to EBITDA ratios and net worthwithin defined limits. The agreement also requires that the Companymaintain minimum cash and cash equivalent balances. At June 30, 2005,the Company was in compliance with these covenants.

In addition,certain of the above credit facility agreements contain restrictivecovenants which among other things, require minimum collateralcoverage, restrict the payment of dividends and restrict leverage,investment and capital expenditures without consent of the lender.Certain agreements require mandatory prepayment or delivery ofadditional security in the event that the fair market value of theacquired vessels falls below limits specified in the loanagreements.

Citibank Revolving Credit Facility

On June14, 2005, two of the Company's subsidiaries, Newkirk NavigationCorp. and Frankfort Maritime Corp. entered into a $12.0 millionrevolving credit facility with Citibank, N.A., and, on June 17, 2005,borrowed an aggregate of $12.0 million on the facility. The term of therevolving credit facility commenced on June 17, 2005 (date of firstborrowing), and will end on May 31, 2006. Outstanding borrowings underthe revolving credit facility bear interest, at the borrower'soption at the time of borrowing, (i) either at the higher of a floatingbase rate determined by Citibank and an average three-month certificateof deposit rate plus 0.5%, or (ii) at a rate equal to LIBOR plus2.0%. The borrowers must pay a commitment fee of 0.25% onany amounts not drawn down under this facility. Interest on amountsoutstanding under the revolving credit facility is payable every threemonths. Advances may be prepaid at any time without penalty and must berepaid in full no later than May 31, 2006. The Company and two of itssubsidiaries are guarantors under this facility. The facility iscollateralized by First Preferred Ship Mortgages on the vesselsDakota Belle and the Shawnee Princess. On June 30, 2005the borrowing under the facility was repaid.

12

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

Note 8 — Equity Transactions:

Preference Shares

On June 29, 2005, in connection with theCompany's initial public offering, the holders of theCompany's convertible preference shares exercised their right toconvert their 1,000,000 issued and outstanding convertible preferenceshares into 2,000,000 Class C common shares. Conversion of thepreference shares into Class C common shares constituted payment infull of the preference shares.

Other Equity Transactions

On June 29, 2005, in connection with the Company's initialpublic offering, the Company consolidated its 1,500,000 old Class A,1,500,000 old Class B and 3,000,000 old Class C common shares (aftergiving effect to the conversion of the preference shares) on a2.5-for-1 basis to 600,000 old Class A, 600,000 old Class B and1,200,000 old Class C common shares, for the purpose of changing thepar value of the Company's common shares from $.004 per share to$.01 per share, and redesignated the Company's outstanding oldClass A (600,000 shares), old Class B (600,000 shares) and old Class Ccommon (1,200,000 shares) shares as 2,400,000 new Class B commonshares. Concurrent to the consolidation and redesignation of commonshares, the Company issued 2.167 new Class A common shares and 3.20additional new Class B common shares for each new Class B shareoutstanding.

Warrants

At December 31, 2004, 1,769,231Series A, 411,756 Series B and 485,671 Series C warrants wereoutstanding. The warrants were issued by the Company in connection withits emergence from bankruptcy, and were valued at $800,000 at the timeof issuance. The fair value was established based upon a cash flowmodel as determined by a third-party appraiser, and accepted by thebondholders, the U.S. Bankruptcy Court and the Company. The warrantagreement includes an anti-dilution provision which adjusts the numberof shares issuable upon exercise of the warrants whenever the Companyissues additional common shares or engages in similar transactions. TheSeries A warrants were exercisable if the first Preferred Ship MortgageNotes were not paid in full by February 8, 2005, and, when exercised,would represent approximately 27% of the total outstandingshares of the Company on a fully diluted basis. The Series B warrantswere exercisable if the preference shares were not paid in full byFebruary 8, 2006, and, when exercised, would represent approximately6% of the total outstanding common shares of the Company on afully diluted basis. The Series C warrants were exercisable only if theexercise conditions of the Series A and Series B warrants weresatisfied and, when exercised, would represent approximately 7%of the total outstanding common shares of the Company.

The firstPreferred Ship Mortgage Notes were paid on June 29, 2005 (afterFebruary 8, 2005) and accordingly, the Series A warrants becameexercisable. As noted above, in connection with the initial publicoffering, the holders of the Company's convertible preferenceshares exercised their right to convert the convertible preferenceshares into Class C Common shares. As the conversion of the preferenceshares constituted payment in full of the preference shares, theexercise condition for the Series B and Series C warrants becameincapable of being met as of June 29, 2005. As a result of theanti-dilution provisions of the warrant agreement, following theconversion of all the outstanding preference shares into Class C commonshares, the number of common shares issuable upon exercise of alloutstanding Series A warrants increased from 1,769,231 to 2,167,539Class C common shares. The issuance of 7,000,000 new Class A commonshares in connection with the initial public offering further increasedthe number of shares issuable upon exercise of all outstanding Series Awarrants from 2,167,539 to 2,901,403 Class C common shares. The numberof shares issuable under the Series A warrants were 2,515,368 new ClassA common shares and 4,874,357 new Class B common shares, after givingeffect to the common share conversion described above in Note 8 —Equity Transactions — Other Equity Transactions.

13

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

On June 29 2005, Series A warrants topurchase 2,125,392 Class C common shares, or 1,842606 new Class A and3,576,590 new Class B common shares, held by certain existingshareholders, were exercised. In addition, in connection with theinitial public offering, the 662,952 Series A warrants to purchase574,434 new Class A and 1,113,155 new Class B common shares held bythese shareholders were cancelled.

At June 30, 2005, there wereoutstanding exercisable warrants to purchase 98,328 new Class A and190,544 new Class B common shares, held by parties not affiliated withexisting shareholders. The warrants are exercisable for a period of tenyears following the date on which their exercise condition was met(February 8, 2005), at a price of $.01 per share.

Note 9— New Class A and New Class B Common Shares

The Companyhas two classes of common shares that are issued and outstanding -Class A and Class B. The Class A common shares and Class B commonshares have identical rights to dividends and surplus, and assets onliquidation; however, the holders of Class A common shares are entitledto one vote for each Class A common share on all matters submitted to avote of holders of common shares, while holders of Class B commonshares are entitled to one-half of a vote for each Class B commonshare.

The holders of Class A common shares can convert theirClass A common shares into Class B common shares, and the holders ofClass B common shares can convert their Class B common shares intoClass A common shares at any time. Further, the Class B common shareswill automatically convert into Class A common shares upon transfer toany person other than another holder of Class B common shares, in eachcase as long as the conversion will not cause the Company to become acontrolled foreign corporation, as defined in the Internal Revenue Codeor the Class A common shares cease to be regularly traded on anestablished securities market for purposes of Section 883 of theInternal Revenue Code.

Note 10 — 2005 Equity IncentivePlan

The Company adopted an Equity Incentive Plan in 2005,which authorizes the grant of "non-qualified"shares to employees, independent directors and affiliates. Under theincentive plan, in connection with its initial public offering, theCompany issued 100,000 restricted Class A common shares, vesting inequal installments over four years commencing one year after issuance,to its executive vice president and chief financial officer, 106,900restricted Class A common shares to employees of Roymar Ship ManagementInc. ("Roymar") and TBS Shipping ServicesInc. ("TBS Shipping Services") and 4,500restricted Class A common shares to its independent directors, allvesting one year after issuance. The aggregate value of restrictedClass A common shares issued to the chief financial officer, employeesand independent directors was approximately $2.1 million. Therestricted share award to the chief financial officer will result in acharge to compensation expense and an increase in paid-in capital of$250,000 in each of the next four years. In connection with sharesissued to Roymar and TBS Shipping Services employees, the Company usedthe net proceeds from the sale of 85,520 Class A common shares held byRoymar and TBS Shipping Services prior to the offering, orapproximately $0.8 million, to pay the federal, state and localemployment taxes and income withholding taxes associated with the issueof the 106,900 Class A common shares to employees of Roymar and TBSShipping Services. The share award to Roymar and TBS Shipping Servicesemployees resulted in a one-time charge to compensation expense of $1.9million and an increase to paid-in capital, which have been included inthe consolidated financial statements for the six months ended June 30,2005. Employees of Roymar and TBS Shipping Services have agreed that,without the Company's prior consent, they will not sell any ofthe shares issued to them for a two-year period. The restricted shareaward to the independent directors will result in a charge tocompensation expense and an increase in paid-in capital of $45,000.

14

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

Note 11 — Earnings PerShare

|                                                                              |  |                            |            |                          |  |        |            |        |  |        |            |        |  |        |            |        |  |        |
|------------------------------------------------------------------------------|--|----------------------------|------------|--------------------------|--|--------|------------|--------|--|--------|------------|--------|--|--------|------------|--------|--|--------|
|                                                                         |  | ThreeMonths Ended June 30, |            | Six Months Ended June30, |
|                                                                         |  | 2004                       |            | 2005                     |  | 2004   |            | 2005   |
| **Numerators:**                                                              |  |
| Netincome                                                                    |  | $                          | 12,097,540 |                     |  | $      | 13,757,439 |   |  | $      | 24,230,435 |   |  | $      | 29,950,797 |   |
| Netincome allocated to preferenceshares                                      |  |                       | 4,032,513  |                     |  |   | 3,090,377  |   |  |   | 4,910,132  |   |  |   | 7,291,456  |   |
| Netincome available for common shareholders (basic anddiluted)               |  | $                          | 8,065,027  |                     |  | $      | 10,667,062 |   |  | $      | 19,320,303 |   |  | $      | 22,659,341 |   |
| **Denominators:**                                                            |  |
| Basic-weightedaverage common sharesoutstanding                               |  |                       | 10,187,795 |                     |  |   | 17,196,186 |   |  |   | 10,187,795 |   |  |   | 15,655,166 |   |
|                                                                         |  |                       |       |                     |  |   |       |   |  |   |       |   |  |   |       |   |
| Restrictedshares issued toemployees                                          |  |                       | —    |                     |  |   | 2,296      |   |  |   | —    |   |  |   | 1,155      |   |
|                                                                         |  |                       |       |                     |  |   |       |   |  |   |       |   |  |   |       |   |  |   |   |   |
| Dilutiveeffect of Series A, B & Cwarrants                                |  |                       | 10,197,980 |                     |  |   | 3,356,580  |   |  |   | 10,197,980 |   |  |   | 4,814,566  |   |
| Diluted-weightedaverage common shares and potential common sharesoutstanding |  |                       | 20,385,775 |                     |  |   | 20,555,062 |   |  |   | 20,385,775 |   |  |   | 20,470,887 |   |
| **Incomeper commonshare:**                                                   |  |
| Basic                                                                        |  | $                          | 0.79       |                     |  | $      | 0.62       |   |  | $      | 1.90       |   |  | $      | 1.45       |   |
| Diluted                                                                      |  | $                          | 0.40       |                     |  | $      | 0.52       |   |  | $      | 0.95       |   |  | $      | 1.11       |   |
|                                                                              |

Asdescribed above in Note 8 — Equity Transactions —Preference Shares, the convertible preference shares were convertedinto Class C common shares on June  29, 2005 in connection withthe initial public offering. Prior to conversion, each convertiblepreference share was convertible into two Class C common shares. Ifdividends were declared on the common shares, the preference shareswould have been entitled to receive dividends based on the number ofClass C common shares that the preference shares were convertible into.The basic earnings per share calculation reflects the rights of therespective classes of shares to receive distributions of net income(net losses are not allocated to preference shares) using the"two-class method" described in FAS 128,"Earnings Per Share". The Company hasallocated the pro-rata share of net income to the convertiblepreference shares on a percentage of total weighted average commonshares outstanding plus the common-equivalent number of weightedaverage preferred shares outstanding.

During the three monthsended June 30, 2004 and 2005 and the six months ended June 30, 2004 and2005 the convertible preference shares, which were amended on March 30,2004 to permit conversion to common shares, would have added 5,093,898,4,981,944, 2,589,163 and 5,037,611 common shares on a weighted averagebasis, respectively, to diluted shares outstanding. These shares werenot included in the diluted earnings per share calculation because theeffect would have been anti-dilutive.

Effective June 29, 2005,the closing date of the Company's initial public offering, theCompany adopted new corporate Bye-laws which resulted in theconsolidation and redesignation of shares. The Company redesignated its1,500,000 Class A, 1,500,000 Class B and 3,000,000 Class C commonshares (after giving effect to the conversion of the preference shares)on a 2.5-for-1 basis to 600,000 old Class A, 600,000 old Class B and1,200,000 old Class C common shares, for the purpose of changing thepar value of the Company's common shares from $.004 per share to$.01 per share, and consolidated the Company's outstanding oldClass A, Class B and Class C common shares as 2,400,000 new Class Bcommon shares. Concurrently it issued approximately 2.167 new Class Acommon shares and 3.20 

15

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

additional new Class B common shares foreach new Class B share outstanding following the consolidation. Thechange in common shares have been retroactively adjusted for allfinancial statements presented for the purpose of calculating basic anddiluted earnings per share.

The Series A warrants wereexercisable for a total of 7,389,725 common shares as adjusted for theredesignated and consolidated shares described above and additionalshares that are exercisable pursuant to the warrant agreement. TheSeries A warrant exercise condition was satisfied on February 8, 2005,and the shares subject to these warrants have been treated asoutstanding for purposes of basic earnings per share for the periodbeginning February 8, 2005 because they are issuable for nominalconsideration upon exercise of the warrants. Dilutive effect of SeriesA, B and C warrants is reduced to the extent that common sharesissuable on the exercise of Series A warrants are already included inbasic weighted average common shares outstanding.

On June 29,2005, certain shareholders who also held Series A warrants exercisedtheir warrants to purchase 5,413,265 common shares; concurrently theycancelled Series A warrants to purchase 1,687,589 shares. At June 30,2005 exercisable warrants were outstanding to purchase 98,328 new ClassA and 190,544 new Class B common shares, that were held by parties notaffiliated with our existing shareholders. On June 29, 2005, 100,000and 4,500 restricted Class A common shares were issued to an officerand to outside directors, respectively.

Note 12 —Contingencies

Litigation

In connection with theacquisition of the vessel Sea Pantheon renamed TamoyoMaiden the Company is seeking damages for the cost of repairs andloss of hire related to ballast tank contamination discovered afterdelivery of the vessel. The Company, through its subsidiary, had anassociated vessel that is owned by the seller arrested to secure itsclaim. That vessel was released upon the seller providing a bankguarantee in the amount of $2.1 million. The seller alleged damages dueto the arrest of the associated vessel and the Company, as requiredunder English law, placed $750,000 as counter-security to provide forestimated arbitration/litigation, among other costs. English legalcounsel, who is pursuing the Company's claim for damages, hasadvised the Company that the counter claim is improper and is seeking areduction in the amount of the counter-security.

The Company isperiodically a defendant in cases involving personal injury and othermatters which arise in the normal course of business. While any pendingor threatened litigation has an element of uncertainty, the Companybelieves that the outcome of these lawsuits or claims, individually orcombined, will not materially adversely affect the consolidatedfinancial position, results of operations or cash flows of theCompany.

Note 13 — Business Segment

The Companyis managed as a single business unit that provides worldwide oceantransportation of dry cargo service to its customers through the use ofowned and chartered vessels. The vessels are operated as one fleet andwhen making resource allocation decisions, our chief operating decisionmaker evaluates voyage profitability data, which considers vessel typeand route economics, but gives no weight to the financial impact of theresource allocation decision on an individual vessel basis. TheCompany's objective in making resource allocation decisions is tomaximize its consolidated financial results, not the individual resultsof the respective vessels or routes.

16

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TBSINTERNATIONAL LIMITED AND SUBSIDIARIESNOTES TO UNAUDITEDCONSOLIDATED FINANCIAL STATMEMENTS

Revenue generated from voyage and timechartersare:

|                    |  |                            |            |                          |  |        |            |        |  |        |            |        |  |        |             |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|--------------------|--|----------------------------|------------|--------------------------|--|--------|------------|--------|--|--------|------------|--------|--|--------|-------------|--------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|               |  | ThreeMonths Ended June 30, |            | Six Months Ended June30, |  |
|               |  | 2004                       |            | 2005                     |  | 2004   |            | 2005   |  |
| Voyagerevenue      |  | $                          | 38,965,741 |                     |  | $      | 43,984,528 |   |  | $      | 69,271,647 |   |  | $      | 90,119,864  |   |  |
| Timecharterrevenue |  |                       | 10,618,515 |                     |  |   | 16,450,918 |   |  |   | 24,737,505 |   |  |   | 31,224,645  |   |  |
| Otherrevenue       |  |                       | 218,209    |                     |  |   | 85,256     |   |  |   | 259,850    |   |  |   | 85,256      |   |  |
| Totalrevenue       |  | $                          | 49,802,465 |                     |  | $      | 60,520,702 |   |  | $      | 94,269,002 |   |  | $      | 121,429,765 |   |  |
|                    |

TheCompany transports cargo around the world, including the U.S. andforeign countries. The amount of voyage revenue generated in foreigncountries is $33.6 million and $40.0 million for the three months endedJune 30, 2004 and 2005 and $60.0 million and $82.4 million for the sixmonths ended June 30, 2004 and 2005, respectively.

Revenue wasgenerated in the following principal foreign geographicareas:

|                    |  |                            |            |                          |  |        |            |        |  |        |            |        |  |        |            |        |  |  |
|--------------------|--|----------------------------|------------|--------------------------|--|--------|------------|--------|--|--------|------------|--------|--|--------|------------|--------|--|--|
|               |  | ThreeMonths Ended June 30, |            | Six Months Ended June30, |
| Country            |  | 2004                       |            | 2005                     |  | 2004   |            | 2005   |
| Brazil             |  | $                          | 11,348,202 |                     |  | $      | 12,826,754 |   |  | $      | 17,764,885 |   |  | $      | 27,213,915 |   |
| Japan              |  |                       | 5,446,966  |                     |  |   | 8,154,774  |   |  |   | 9,430,798  |   |  |   | 14,348,250 |   |
| Chile              |  |                       | 3,917,809  |                     |  |   | 5,202,679  |   |  |   | 8,510,436  |   |  |   | 11,205,549 |   |
| China              |  |                       | 1,180,013  |                     |  |   | 2,385,333  |   |  |   | 3,071,280  |   |  |   | 6,235,516  |   |
| Venezuela          |  |                       | 795,901    |                     |  |   | 1,578,616  |   |  |   | 4,404,465  |   |  |   | 4,188,674  |   |
| UnitedArabEmirates |  |                       | 3,143,816  |                     |  |   | 132,944    |   |  |   | 4,211,308  |   |  |   | 132,944    |   |
| Peru               |  |                       | 1,519,951  |                     |  |   | 4,707,108  |   |  |   | 3,492,151  |   |  |   | 8,982,876  |   |
| Korea              |  |                       | 1,420,553  |                     |  |   | 1,706,873  |   |  |   | 2,669,253  |   |  |   | 3,297,500  |   |
| Others             |  |                       | 4,805,265  |                     |  |   | 3,239,591  |   |  |   | 6,418,589  |   |  |   | 6,809,564  |   |
|               |  | $                          | 33,578,476 |                     |  | $      | 39,934,672 |   |  | $      | 59,973,165 |   |  | $      | 82,414,788 |   |
|                    |

Revenueis attributed to these countries based on the location where the cargois loaded. The difference between total voyage revenues and totalrevenue by country is revenue from the U.S. Time charter revenue bycountry cannot be allocated because the Company does not control theitinerary of the vessel.

One customer accounted for 10.8%and 12.1% of charter hire receivables at December 31, 2004 andJune 30, 2005, respectively. One customer accounted for 7.8% and10.2% of voyage and time charter revenue for three months endedJune 30, 2004 and 2005, respectively. One customer accounted for8.8% and 13.6% of voyage and time charter revenue for thesix months ended June 30, 2004 and 2005,respectively.

17

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Item2.    Management's Discussion and Analysis of FinancialCondition and Results of Operations

This Quarterly Report onForm  10-Q contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Thesestatements are only our management's current expectations. Theyare based on our management's beliefs and assumptions and oninformation currently available to our management. Forward-lookingstatements include, among other things, the information concerning ourpossible or assumed future results of operations, business strategies,financing plans, competitive position, potential growth opportunitiesand the effects of future regulation and competition. Forward-lookingstatements include all statements that are not historical facts and canbe identified by the use of forward-looking terminology such as thewords "anticipates,""believes,""estimates,""expects,""future,""intends," "plans"and similar terms.

Forward-looking statements involve risks,uncertainties and assumptions. Although the Company does not makeforward-looking statements unless it believes it has a reasonable basisfor doing so, it cannot guarantee their accuracy. Actual results maydiffer materially from those expressed in these forward-lookingstatements due to a number of uncertainties and risks, including therisks described in this prospectus and other unforeseen risks. Youshould not rely on any forward-looking statements.

Overview

We are an ocean transportation servicescompany that offers worldwide shipping solutions through liner, parcel,bulk and vessel chartering services. We offer our services globally inmore than ten countries to over 300 customers through a network ofaffiliated service companies.

Our financial results are largelydriven by the followingfactors:

|              |                                                                    |
|--------------|--------------------------------------------------------------------|
| •  | macroeconomic conditions in thegeographic regions where weoperate; |

|              |                                                                             |
|--------------|-----------------------------------------------------------------------------|
| •  | general economic conditions inthe industries in which our customersoperate; |

|              |                                                                                                                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | changes in our freight andsub-time charter rates — rates we charge for vessels we charterout — and, in periods when our voyage and vessel expensesincrease, our ability to raise our rates to pass such cost increasesthrough to our customers; |

|              |                                                                                                          |
|--------------|----------------------------------------------------------------------------------------------------------|
| •  | the extent towhich we are able to efficiently utilize our controlled fleet andoptimize its capacity; and |

|              |                                                                                                                                                                               |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the extent towhich we can control our fixed and variable costs, including those forport charges, stevedore and other cargo-related expenses, and fuel andcommission expenses. |

We completed our initial public offering onJune 29, 2005. Our historical consolidated financial statements showour results of operations as a private company. After completion of theoffering, we became a public company and we estimate that theincremental costs of complying with our new public company reportingobligations will be approximately $2.0 million per year.

Recent Events

On August 1, 2005, the underwriters ofthe public offering exercised their option to purchase from sellingshareholders 352,500 shares at a per share price of $10.00 less theunderwriting discount. No proceeds were received by the Company.

On July 28, 2005, the Company announced that it would reallocate itsbasic earnings per share in its financial statements for fiscal 2004and for the first quarter of 2004 and 2005 between its convertiblepreference and common shares and adjust the number of fully dilutedshares used in the computation of its historical earnings per share forfiscal 2004 and for the first quarter of 2004 and 2005. The Companyannounced that its audited financial statements for the year endedDecember 31, 2004 and unaudited interim financial statements for theperiods ended March 31, 2005 and 2004 contained these errors inallocating earnings between its convertible preference and commonshares and in the company's fully diluted earnings per sharecalculations and accordingly such previously issued financialstatements have been restated on Form 8-K filed on July 29, 2005 andshould no longer be relied upon. These errors were limited topreviously reported earnings per share and did not impact previouslyreported revenues, expenses, net income, cash flows, assets,liabilities or shareholders' equity.

18

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The Company announced on July 7, 2005 thatit expanded its fleet of vessels by taking delivery of a multipurposetweendecker and reaching an agreement to purchase a bulk carrier. TheM.V. Taurus, which will be renamed the Maya Princess, isa 37,500 dwt multipurpose tweendecker that was built in 1983. It waspurchased for $15.8 million under an agreement signed on May 4, 2005and delivered in Antwerp, Netherlands on June 28, 2005. The acquisitionof the Maya Princess was previously disclosed in theprospectus.

The M.V. Tronador, which will be renamed theMaori Maiden, is a 37,700 dwt bulk carrier that was built in1984. TBS agreed on June 30, 2005 to pay $13.8 million for the M.V.Tronador, which will be the first vessel purchased by the Companyusing the proceeds from the offering. The Company expects delivery ofthe M.V. Tronador by mid-September, 2005.

The Companyalso announced that it entered into a $25.0 million credit facilitywith the Bank of America, N.A. on June 30, 2005 and drew down $7.8million under the facility on the same day. The new facility will beused for working capital and to fund the purchase of additionalvessels. The remaining balance on the facility of $17.2 million wasdrawn down on July 21, 2005 to replenish the Company's workingcapital in connection with the acquisition of the vessels ShinnecockBelle and Maya Princess.

Results ofOperations

Components of revenue and expense

We reportour revenue as voyage revenue, reflecting the operations of our vesselsthat are not chartered out, and charter revenue, reflecting theoperations of our vessels that have been chartered out to thirdparties. Voyage revenue and expenses for each reporting period includeestimates for voyages in progress at the end of the period. Estimatedprofits from voyages in progress are recognized on a percentage ofcompletion basis by prorating the estimated final voyage revenue andexpenses using the ratio of voyage days completed through period end tototal voyage days. When a loss is forecast for a voyage, the fullamount of the anticipated loss is recognized in the period in whichthat determination is made. Revenue from time charters in progress iscalculated using the daily charter hire rate, net of daily expensesmultiplied by the number of voyage days on-hire through period end.

Voyage revenue consists of freight charges paid to oursubsidiaries for the transport of customers' cargo. The keyfactors driving voyage revenue are the number of vessels in the fleet,the days on hire and the freight rates. The following table sets forththese factors for each of the three and six months ended June 30, 2004and2005.

|                       |  |                            |       |                          |  |        |       |        |  |        |       |        |  |        |       |        |  |  |
|-----------------------|--|----------------------------|-------|--------------------------|--|--------|-------|--------|--|--------|-------|--------|--|--------|-------|--------|--|--|
|                  |  | ThreeMonths Ended June 30, |       | Six Months Ended June30, |
|                  |  | 2004                       |       | 2005                     |  | 2004   |       | 2005   |
| Numberof vessels(1)   |  |                       | 16    |                     |  |   | 17    |   |  |   | 15    |   |  |   | 18    |   |
| Freightvoyage days(2) |  |                       | 1,453 |                     |  |   | 1,536 |   |  |   | 2,720 |   |  |   | 3,152 |   |
| Dayson hire(3)        |  |                       | 1,470 |                     |  |   | 1,602 |   |  |   | 2,755 |   |  |   | 3,333 |   |
| FreightRates (4)      |  |
| For allcargoes        |  | $                          | 41.01 |                     |  | $      | 62.49 |   |  | $      | 41.21 |   |  | $      | 61.36 |   |
| Excludingaggregates   |  | $                          | 53.92 |                     |  | $      | 63.80 |   |  | $      | 50.59 |   |  | $      | 61.97 |   |
|                       |

|  |
|--|
|  |  |
|  |

|     |                                                                                      |
|-----|--------------------------------------------------------------------------------------|
| (1) | Weighted average number of vessels in the fleet,not including vessels chartered out. |

|     |                                                                                           |
|-----|-------------------------------------------------------------------------------------------|
| (2) | Number of days that our vessels were earningrevenue, not including vessels chartered out. |

|     |                                      |
|-----|--------------------------------------|
| (3) | Not including vessels chartered out. |

|     |                                                            |
|-----|------------------------------------------------------------|
| (4) | Weighted average freight rates measuredin dollars per ton. |

To a significant degree, freight ratesare set by the market and depend on the relationship between the demandfor ocean freight transportation and the availability of appropriatevessels.

19

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During the first three months of 2004 and2005, demand for dry bulk ocean shipping increased significantly, duelargely to the expansion of economies in East Asia, especially China.Freight rates are subject to volatility depending on the relationshipbetween supply and demand.

Time charter revenueconsists of a negotiated daily hire rate for the duration of avoyage. The key factors driving time charter revenue are the number ofdays vessels are chartered out and the daily charter hire rates. Thefollowing table sets forth these factors for each of the three and sixmonths ended June 30, 2004 and2005.

|                            |  |                            |        |                          |  |        |        |        |  |        |        |        |  |        |        |        |  |  |
|----------------------------|--|----------------------------|--------|--------------------------|--|--------|--------|--------|--|--------|--------|--------|--|--------|--------|--------|--|--|
|                       |  | ThreeMonths Ended June 30, |        | Six Months Ended June30, |
|                       |  | 2004                       |        | 2005                     |  | 2004   |        | 2005   |
| Numberof vessels(1)        |  |                       | 7      |                     |  |   | 10     |   |  |   | 8      |   |  |   | 9      |   |
| TimeCharter days(2)        |  |                       | 599    |                     |  |   | 901    |   |  |   | 1,374  |   |  |   | 1,649  |   |
| Dailycharter hire rates(3) |  | $                          | 17,727 |                     |  | $      | 18,258 |   |  | $      | 18,004 |   |  | $      | 18,935 |   |
|                            |

|  |
|--|
|  |  |
|  |

|     |                                                  |
|-----|--------------------------------------------------|
| (1) | Weightedaverage number of vessels chartered out. |

|     |                                            |
|-----|--------------------------------------------|
| (2) | Number of days vessels earned charterhire. |

|     |                                     |
|-----|-------------------------------------|
| (3) | Weighted average charterhire rates. |

Charter hire revenues are set, to a significantdegree, by the market and depend on the relationship between the demandfor ocean freight transportation and the availability of appropriatevessels.

Voyage expenses consist primarily ofstevedoring, port costs, commissions, fuel and lashing materials. Thecosts are paid by our subsidiaries.

Vessel expenses arevessel operating expenses — crewing, stores, lube oil, repairsand maintenance including drydock reserves, registration taxes andfees, insurance and communication expenses — for vessels wecontrol, charter hire fees we pay to owners for use of their vesselsand space charters (relets). The costs are paid by oursubsidiaries.

Depreciation and amortization expense,through June 30, 2004, was computed on the basis of 25-year usefullives for our vessels compared to 30-year useful life effective January1, 2005.

Management fees have been paid to Roymar forthe technical management of controlled vessels and to TBS ShippingServices for the operation of vessels. We also have paid commissions onfreight and time charter hire to TBS Shipping Services and commissionson freight and port agency fees to TBS Commercial Group. Thesemanagement fees and commissions were fixed under agreements that wereoriginally negotiated during our Chapter 11 proceeding withrepresentatives of the holders of our then-outstanding First PreferredShip Mortgage Notes and have been approved by our board of directors.In connection with our initial public offering, Roymar and TBS ShippingServices became subsidiaries of the Company.

TBS CommercialGroup will continue as an affiliated service company. Renewal of thecurrent management agreements with TBS Commercial Group and approval ofany new management agreements or amendments to the current managementagreements with TBS Commercial Group will be subject to approval by thecompensation committee of our board of directors.

Lack ofhistorical operating data for vessels before their acquisition

Since January 1, 2004, we have acquired, or entered into memorandaof agreement to acquire, 15 vessels. Consistent with shipping industrypractices, other than inspection of the physical condition of thevessels and examinations of classification society records, there is nohistorical financial due diligence process when we acquire vessels.Accordingly, we do not obtain the historical operating data for thevessels from the sellers because that information is not material toour decision to make acquisitions, nor do we believe it would behelpful to potential investors in our common shares in assessing ourbusiness or profitability.

20

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Most vessels are sold under a standardizedagreement, which, among other things, provides the buyer with the rightto inspect the vessel and the vessel's classification societyrecords. The standard agreement does not give the buyer the right toinspect, or receive copies of, the historical operating data of thevessel and does not provide for financial information or historicalresults for the vessels to be made available to the buyer. Prior to thedelivery of a purchased vessel, the seller typically removes from thevessel all records, including past financial records and accountsrelated to the vessel. In addition, the technical management agreementbetween the seller's technical manager and the seller isautomatically terminated and the vessel's trading certificatesare revoked by its flag state following a change in ownership.

Consistent with shipping industry practice, we treat the acquisitionof a vessel, whether acquired with or without charter, as theacquisition of an asset rather than a business. Due to the differencesbetween us and the prior owners of these vessels with respect to theroutes we operate, the shippers and consignees we serve, the cargoes wecarry, the freight rates and charter hire rates we charge and the costswe incur in operating our vessels, we believe that our operatingresults will be significantly different from the operating results ofthe vessels while owned by the prior owners.

EITF 98-3 statesthat "for a transferred set of activities and assets to bea business, it must contain all of the inputs and processes necessaryfor it to continue to conduct normal operations after the transferredset is separated from the transferor, which includes the ability tosustain a revenue stream by providing its output tocustomers." The purchase of a vessel alone cannot operateor generate revenue or constitute a business operation without thesignificant inputs and processes that we provide, as describedbelow:

|              |                                                                     |
|--------------|---------------------------------------------------------------------|
| •  | We provide our own captains,senior officers and crew to thevessels. |

|              |                                                                                                                                                                                                                                                                                   |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | The vessels are managed by anew manager, Roymar. All of the functions of vessel management, fromtechnical ship management to crewing, vessel maintenance anddrydocking, are conducted by Roymar, in a manner different from theprior manager, according to our exactingstandards. |

|              |                                                                                                                                                                                                                                                                                                                                              |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | The necessary commercialactivities maintaining customer relationships, providing local teams ofcommercial agents and port captains, offering transportation managementskills and logistics solutions are provided by our subsidiary TBSShipping Services and our affiliate TBS Commercial Group in a mannerdifferent from the former owners. |

|              |                                                                                                       |
|--------------|-------------------------------------------------------------------------------------------------------|
| •  | Thevessels will operate under our trade name and carry our distinctiveIndian tribe naming convention. |

The revenue-producing activityof the vessels purchased in 2004 and 2005 will be generated fromcarrying cargoes for our customers on the routes we serve. Thirteen ofthe 15 vessels since purchase have been, or upon purchase will be,operated by different parties than their former owners, servingdifferent customers, carrying different cargoes, charging differentrates, covering different routes and in all respects engaging indifferent business with different revenues, costs and operatingmargins.

In short, it is our skill and expertise in operatingthe assets, not the vessels alone, that constitute the business ofocean transportation and allows for revenue to be generated.

21

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Three months ended June 30, 2004compared to three months ended June 30,2005

|                             |  |                                |        |                                |  |                    |         |                         |  |             |        |         |  |        |       |         |  |        |        |         |  |        |       |         |  |  |
|-----------------------------|--|--------------------------------|--------|--------------------------------|--|--------------------|---------|-------------------------|--|-------------|--------|---------|--|--------|-------|---------|--|--------|--------|---------|--|--------|-------|---------|--|--|
|                        |  | ThreeMonths EndedJune 30, 2004 |        | Three MonthsEndedJune 30, 2005 |  | Increase(Decrease) |
|                        |  | InThousands                    |        | As a % of Total Revenue        |  | InThousands        |         | As a % of Total Revenue |  | InThousands |        | %       |
| Voyage revenue              |  | $                              | 38,966 |                           |  |               | 78.3    |                    |  | $           | 43,985 |    |  |   | 72.7  |    |  | $      | 5,019  |    |  |   | 12.9  |    |
| Timecharter revenue         |  |                           | 10,618 |                           |  |               | 21.3    |                    |  |        | 16,451 |    |  |   | 27.2  |    |  |   | 5,833  |    |  |   | 54.9  |    |
| Otherrevenue                |  |                           | 218    |                           |  |               | 0.4     |                    |  |        | 85     |    |  |   | 0.1   |    |  |   | (133   | )  |  |   | (61.0 | )  |
| Totalrevenue                |  |                           | 49,802 |                           |  |               | 100.0   |                    |  |        | 60,521 |    |  |   | 100.0 |    |  |   | 10,719 |    |  |   | 21.5  |    |
| Voyageexpense               |  |                           | 14,409 |                           |  |               | 28.9    |                    |  |        | 18,017 |    |  |   | 29.8  |    |  |   | 3,608  |    |  |   | 25.0  |    |
| Vesselexpense               |  |                           | 17,688 |                           |  |               | 35.5    |                    |  |        | 16,484 |    |  |   | 27.2  |    |  |   | (1,204 | )  |  |   | (6.8  | )  |
| Depreciationandamortization |  |                           | 1,780  |                           |  |               | 3.6     |                    |  |        | 3,926  |    |  |   | 6.5   |    |  |   | 2,146  |    |  |   | 120.6 |    |
| Managementand agency fees   |  |                           | 1,017  |                           |  |               | 2.0     |                    |  |        | 1,299  |    |  |   | 2.1   |    |  |   | 282    |    |  |   | 27.7  |    |
| Generaland administrative   |  |                           | 1,813  |                           |  |               | 3.6     |                    |  |        | 5,009  |    |  |   | 8.3   |    |  |   | 3,196  |    |  |   | 176.3 |    |
| Incomefrom operations       |  |                           | 13,095 |                           |  |               | 26.4    |                    |  |        | 15,786 |    |  |   | 26.1  |    |  |   | 2,691  |    |  |   | 20.5  |    |
| Other(expenses) and income  |  |
| Interest expense            |  |                           | (1,009 | )                         |  |               | (2.0    | )                  |  |        | (2,130 | )  |  |   | (3.5  | )  |  |   | (1,121 | )  |  |   | 111.1 |    |
| Otherincome                 |  |                           | 12     |                           |  |               | — |                    |  |        | 101    |    |  |   | 0.2   |    |  |   | 89     |    |  |   | 827.3 |    |
| Netincome                   |  | $                              | 12,098 |                           |  |               | 24.4    |                    |  | $           | 13,757 |    |  |   | 22.8  |    |  | $      | 1,659  |    |  |   | 13.7  |    |
|                             |

Voyagerevenue

The increase in our voyage revenue for the three monthsended June 30, 2005 over the comparable period in 2004 is primarilyattributable to the average freight rate increase of $21.48 per ton or52.4% from $41.01 per ton in the second quarter of 2004 comparedto $62.49 per ton for the second quarter of 2005.

Excludinghigh-volume, low-freighted aggregates bulk cargo, average freight ratesincreased $9.88 per ton or 18.3% from $53.92 per ton for thethree months ended June 30, 2004 compared to $63.80 per ton for thecomparable period in 2005. The increase in average freight ratesresulted to a significant degree from the increased demand for rawmaterials from East Asian economies, most notably China. Countries inLatin America have been a primary source of those raw materials,especially agricultural products and metal concentrates. Ourestablished shipping routes from Latin America, and our long-standingpresence in Latin America through our affiliated service companies,positioned us well to take advantage of this increased demand.

The following table shows revenues attributable to our principalcargoes:

|                      |  |                                 |        |                                 |  |                    |       |                               |  |             |        |        |  |        |       |        |  |        |        |         |  |        |       |         |  |  |
|----------------------|--|---------------------------------|--------|---------------------------------|--|--------------------|-------|-------------------------------|--|-------------|--------|--------|--|--------|-------|--------|--|--------|--------|---------|--|--------|-------|---------|--|--|
|                 |  | ThreeMonths Ended June 30, 2004 |        | Three Months EndedJune 30, 2005 |  | Increase(Decrease) |
| Description          |  | InThousands                     |        | As a % of Total VoyageRevenue   |  | In Thousands       |       | As a % of TotalVoyage Revenue |  | InThousands |        | %      |
| Steel products       |  | $                               | 16,085 |                            |  |               | 41.3  |                          |  | $           | 18,428 |   |  |   | 41.9  |   |  | $      | 2,343  |    |  |   | 14.6  |    |
| Metalconcentrates    |  |                            | 3,652  |                            |  |               | 9.4   |                          |  |        | 7,170  |   |  |   | 16.3  |   |  |   | 3,518  |    |  |   | 96.3  |    |
| Fertilizers          |  |                            | 3,454  |                            |  |               | 8.9   |                          |  |        | 2,766  |   |  |   | 6.3   |   |  |   | (688   | )  |  |   | (19.9 | )  |
| Otherbulk cargo      |  |                            | 10,174 |                            |  |               | 26.1  |                          |  |        | 10,562 |   |  |   | 24.0  |   |  |   | 388    |    |  |   | 3.8   |    |
| Agriculturalproducts |  |                            | 3,719  |                            |  |               | 9.5   |                          |  |        | 2,631  |   |  |   | 6.0   |   |  |   | (1,088 | )  |  |   | (29.3 | )  |
| Automotiveproducts   |  |                            | 1,251  |                            |  |               | 3.2   |                          |  |        | 1,031  |   |  |   | 2.3   |   |  |   | (220   | )  |  |   | (17.6 | )  |
| Other                |  |                            | 631    |                            |  |               | 1.6   |                          |  |        | 1,397  |   |  |   | 3.2   |   |  |   | 766    |    |  |   | 121.4 |    |
| Voyagerevenue        |  | $                               | 38,966 |                            |  |               | 100.0 |                          |  | $           | 43,985 |   |  |   | 100.0 |   |  | $      | 5,019  |    |  |   | 12.9  |    |
|                      |

22

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Time charter revenue

The increasein time charter revenue is attributable to an increase in the averagedaily charterhire rate and an increase in the charter out vessel days.The $531 per day or 2.9% increase in our average per day charterhire rate from $17,727 for the three months ended June 30, 2004compared to $18,258 for the comparable period in 2005 is attributableto both the increase in demand for ocean transportation of freight toaccommodate growing economies in East Asia and Africa and the relativescarcity of dry bulk carriers to meet that demand. The chartered vesseldays increased 302 days or 50.4% from 599 days for the threemonths ended June 30, 2004 compared to 901 days for the comparableperiod in 2005.

Voyage expense

Voyage expense consistsof costs attributable to specific voyages. The number of voyage days isa significant determinant of voyage expense, as is increases in bunkerfuel costs, commission expense and port call expense. The followingtable shows the change in the number of voyage days in the three monthsended June 30, 2004 compared to the comparable period in 2005.

|                    |  |                                |       |                                |  |                     |       |        |  |        |     |        |  |        |      |         |  |  |
|--------------------|--|--------------------------------|-------|--------------------------------|--|---------------------|-------|--------|--|--------|-----|--------|--|--------|------|---------|--|--|
|               |  | ThreeMonths EndedJune 30, 2004 |       | Three Months EndedJune 30,2005 |  | Increase (Decrease) |
| Freightvoyage days |  |                           | 1,453 |                           |  |                | 1,536 |   |  |   | 83  |   |  |   | 5.7  | %  |
| Timecharter days   |  |                           | 599   |                           |  |                | 901   |   |  |   | 302 |   |  |   | 50.4 | %  |
| Totalvoyage days   |  |                           | 2,052 |                           |  |                | 2,437 |   |  |   | 385 |   |  |   | 18.8 | %  |
|                    |

Theprincipal components of voyage expense were as follows:

|                                         |  |                                |        |                                |  |                    |       |              |  |                         |      |                  |  |              |        |        |  |                  |       |        |  |        |      |        |  |        |       |         |  |        |      |         |  |        |         |         |  |  |
|-----------------------------------------|--|--------------------------------|--------|--------------------------------|--|--------------------|-------|--------------|--|-------------------------|------|------------------|--|--------------|--------|--------|--|------------------|-------|--------|--|--------|------|--------|--|--------|-------|---------|--|--------|------|---------|--|--------|---------|---------|--|--|
|                                    |  | ThreeMonths EndedJune 30, 2004 |        | Three MonthsEndedJune 30, 2005 |  | Increase(Decrease) |
|                                    |  | InThousands                    |        | As a % of Voyage Expense       |  | Asa % of Revenue   |       | In Thousands |  | As a% of Voyage Expense |      | As a % ofRevenue |  | In Thousands |        | %      |  | As a% of Revenue |
| FuelExpense                             |  | $                              | 4,152  |                           |  |               | 28.8  |         |  |                    | 8.3  |             |  | $            | 6,237  |   |  |             | 34.6  |   |  |   | 10.3 |   |  | $      | 2,085 |    |  |   | 50.2 |    |  |   | 2.0     |    |
| Commissionexpense                       |  |                           | 3,160  |                           |  |               | 21.9  |         |  |                    | 6.3  |             |  |         | 3,761  |   |  |             | 20.9  |   |  |   | 6.2  |   |  |   | 601   |    |  |   | 19.0 |    |  |   | (0.1    | )  |
| Portcallexpense                         |  |                           | 3,072  |                           |  |               | 21.3  |         |  |                    | 6.2  |             |  |         | 3,758  |   |  |             | 20.9  |   |  |   | 6.2  |   |  |   | 686   |    |  |   | 22.3 |    |  |   | — |    |
| Stevedoreand other cargo-relatedexpense |  |                           | 2,501  |                           |  |               | 17.4  |         |  |                    | 5.0  |             |  |         | 2,740  |   |  |             | 15.2  |   |  |   | 4.5  |   |  |   | 239   |    |  |   | 9.6  |    |  |   | (0.5    | )  |
| Miscellaneousvoyageexpense              |  |                           | 1,524  |                           |  |               | 10.6  |         |  |                    | 3.1  |             |  |         | 1,521  |   |  |             | 8.4   |   |  |   | 2.5  |   |  |   | (3    | )  |  |   | (0.2 | )  |  |   | (0.6    | )  |
| Voyageexpense                           |  | $                              | 14,409 |                           |  |               | 100.0 |         |  |                    | 28.9 |             |  | $            | 18,017 |   |  |             | 100.0 |   |  |   | 29.7 |   |  | $      | 3,608 |    |  |   | 25.0 |    |  |   | 0.8     |    |
|                                         |

The25.0% increase in voyage expense for the three months ended June30, 2005 over the comparable period in 2004 is primarily attributableto the increase in fuel expenses, commission expense, port call expenseand stevedore and other cargo related expense. The 50.2%increase in fuel expense is primarily due to the increase in both theaverage price per metric ton ("MT") andconsumption from $215 per MT and 19,322 MT for the three months endedJune 30, 2004 compared to $284 per MT and 21,936 MT for the comparableperiod in 2005. The 19.0% increase in commission expense isprimarily due to the $27.1 million or 28.7% increase in totalrevenue from $94.3 million for three months ended June 30, 2004compared to $121.4 million for the comparable period in 2005. The19.0% increase in port call expense increase is primarily due tothe increase in the number of port calls from 199 port calls for threemonths ended June 30, 2004 compared to 221 port calls for thecomparable period in 2005.

The 0.8% increase in voyageexpense as a percentage of revenue from 28.9% for the threemonths ended June 30, 2004 compared to 29.7% for the comparableperiod in 2005 is primarily due to the increase in fuel expenseexpressed as a percentage of revenue of 2.0% offset by adecrease of 1.2% in all other voyage expense categories.

23

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Vessel expense

Vessel expenseconsists of costs we incur to own and maintain our fleet that are notallocated to a specific voyage, such as charter hire rates for vesselswe charter-in and drydocking, maintenance, insurance and crewingexpenses for vessels we control. The following table sets forth thebasic components of vessel expense:

|                            |  |                                |        |                                |  |                    |       |                           |  |             |        |        |  |        |       |        |  |        |        |         |  |        |       |         |  |  |
|----------------------------|--|--------------------------------|--------|--------------------------------|--|--------------------|-------|---------------------------|--|-------------|--------|--------|--|--------|-------|--------|--|--------|--------|---------|--|--------|-------|---------|--|--|
|                       |  | ThreeMonths EndedJune 30, 2004 |        | Three MonthsEndedJune 30, 2005 |  | Increase(Decrease) |
|                       |  | InThousands                    |        | As of % of Vessel Expense      |  | InThousands        |       | As of % of Vessel Expense |  | InThousands |        | %      |
| Chartered-in vesselexpense |  | $                              | 12,481 |                           |  |               | 70.6  |                      |  | $           | 4,996  |   |  |   | 30.3  |   |  | $      | (7,485 | )  |  |   | (60.0 | )  |
| Ownedvessel expense        |  |                           | 4,757  |                           |  |               | 26.9  |                      |  |        | 8,988  |   |  |   | 54.5  |   |  |   | 4,231  |    |  |   | 88.9  |    |
| Spacecharter expense       |  |                           | 450    |                           |  |               | 2.5   |                      |  |        | 2,500  |   |  |   | 15.2  |   |  |   | 2,050  |    |  |   | 455.8 |    |
| Vesselexpense              |  | $                              | 17,688 |                           |  |               | 100.0 |                      |  | $           | 16,484 |   |  |   | 100.0 |   |  | $      | (1,204 | )  |  |   | (6.8  | )  |
|                            |

Thedecrease in vessel expense for the three months ended June 30, 2005 isprimarily attributable to an increase in both the controlled vesselfleet and charter hire rates that we paid for chartered-in vessels,partially offset by a decrease in the number of days that wechartered-in vessels.

The 8.3% decrease in vessel expenseas a percentage of revenue for three months ended June 30, 2005 is afunction of an increase in revenue of $10.7 million coupled with a $7.5million decrease in chartered-in vessel cost offset by a $6.3 millionincrease in owned vessel expense and space charter expense

Depreciation and amortization

The $2.1 million or86.0% increase in depreciation and amortization expense from$1.8 million for the three months ended June 30, 2004 compared to $3.9million for the comparable period in 2005 reflects the growth of ourcontrolled fleet offset by the increase in the useful life of vesselsfrom 25 years in 2004 to 30 years effective January 1, 2005. The changein estimate on the three months ended June 30, 2005 increased our netincome by $4.7 million.

Management fees

We paidmanagement fees to our affiliated service companies: Roymar fortechnical management and TBS Shipping Services for operationalmanagement. In connection with our initial public offering, wepurchased all the stock of these two service companies and accordingly,their results of operation have been included in our consolidatedfinancial statements as of the date of their acquisition. Managementfees shown below include management fees through the date ofacquisition. After the acquisition, when these affiliated companiesbecame subsidiaries of the company, we continued to pay managementfees. However, the fees have been eliminated in these consolidatedfinancial statements.

|                           |  |                                |       |                                |  |                    |       |                           |  |             |       |        |  |        |       |        |  |        |     |        |  |        |      |        |  |  |
|---------------------------|--|--------------------------------|-------|--------------------------------|--|--------------------|-------|---------------------------|--|-------------|-------|--------|--|--------|-------|--------|--|--------|-----|--------|--|--------|------|--------|--|--|
|                      |  | ThreeMonths EndedJune 30, 2004 |       | Three MonthsEndedJune 30, 2005 |  | Increase(Decrease) |
|                      |  | InThousands                    |       | As a % of Management Fees      |  | InThousands        |       | As a % of Management Fees |  | InThousands |       | %      |
| Technical managementfees  |  | $                              | 451   |                           |  |               | 44.3  |                      |  | $           | 718   |   |  |   | 55.3  |   |  | $      | 267 |   |  |   | 59.2 |   |
| Operationalmanagementfees |  |                           | 566   |                           |  |               | 55.7  |                      |  |        | 581   |   |  |   | 44.7  |   |  |   | 15  |   |  |   | 2.7  |   |
| Totalmanagement fees      |  |                           | 1,017 |                           |  |               | 100.0 |                      |  |        | 1,299 |   |  |   | 100.0 |   |  |   | 282 |   |  |   | 27.7 |   |
|                           |

The$0.3 million or 59.2% increase in technical management feespaid, which we pay to Roymar for managing our controlled fleet, isattributable to a 10.4% cost of living increase in the monthlymaintenance fee per vessel to $12,029 that took effect on February 8,2004 and the growth of the controlled vessel fleet under Roymarmanagement from 13 vessels as of June 30, 2004 to 26 vessels as of thesame date in 2005.

24

----

We pay management fees to TBS ShippingServices for overseeing the operations of our voyages. The fees payablefor 2004 reflected an increase attributable to a 10.3% cost ofliving increase in the monthly operational management fee per vessel to$8,447 that took effect on February 9, 2004. Management fee daysincreased 322 days or 15.8% from 2,042 days for the three monthsended June 30, 2004 to 2,364 days for the comparable period in2005.

General and administrative expense

The $3.2million increase in general and administrative expense for three monthsended June 30, 2005 is primarily due to the bonus paid to the chieffinancial officer in the amount of $2.2 million, the cost of sharegrants to employees and related payroll taxes of $1.9 million, Roymarand TBS Shipping Services general and administrative expenses of $0.6million incurred by Roymar and TBS Shipping Services after they becamesubsidiaries of the Company offset by a $0.4 million decrease in baddebt expense due to the collection of accounts receivable that werefully reserved and a net decrease of $1.1 million in all other expensecategories.

Income from operations

The $2.7 millionincrease in income from operations for the three months ended June 30,2005 over the comparable period in 2004 is attributable in significantpart to increased freight rates and time charter rates. Operatingmargins for the three months ended June 30, 2004 and 2005 werecomparable at 26.4% and 26.1%, respectively. Included inincome from operations for the three months ended June 30, 2005 areone-time charges to compensation expense for a $2.2 million bonus paidto our chief financial officer and $1.9 million in additionalcompensation resulting from the issuance of our Class A common sharesto employees of our subsidiaries Roymar and TBS Shipping Services inconnection with our public offering.

Interest expense

The $1.1 million or 111.1% increase in interest expense forthe three months ended June 30, 2005 over the comparable period in 2004was due to borrowings drawn down on July 1, 2004, August 26, 2004,December 23, 2004, February 18, 2005, March 1, 2005, April 21, 2005,April 27, 2005 and June 30, 2005 in the amounts of $15.0 million, $15.0million, $7.2 million, $7.5 million, $23.5 million, $13.8 million, $7.7million and $7.8 million, respectively. In addition, we drew down $12.0million on June 17, 2005 against our revolving credit facility. On June30, 2005, borrowings under our revolving credit facility wererepaid.

25

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Six months ended June 30,2004 compared to six months ended June 30,2005

|                             |  |                              |        |                              |  |                    |         |                         |  |             |         |         |  |        |       |         |  |        |        |         |  |        |       |         |  |  |
|-----------------------------|--|------------------------------|--------|------------------------------|--|--------------------|---------|-------------------------|--|-------------|---------|---------|--|--------|-------|---------|--|--------|--------|---------|--|--------|-------|---------|--|--|
|                        |  | SixMonths EndedJune 30, 2004 |        | Six Months EndedJune30, 2005 |  | Increase(Decrease) |
|                        |  | InThousands                  |        | As a % of Total Revenue      |  | InThousands        |         | As a % of Total Revenue |  | InThousands |         | %       |
| Voyage revenue              |  | $                            | 69,272 |                         |  |               | 73.5    |                    |  | $           | 90,120  |    |  |   | 74.2  |    |  | $      | 20,848 |    |  |   | 30.1  |    |
| Timecharter revenue         |  |                         | 24,737 |                         |  |               | 26.2    |                    |  |        | 31,225  |    |  |   | 25.7  |    |  |   | 6,488  |    |  |   | 26.2  |    |
| Otherrevenue                |  |                         | 260    |                         |  |               | 0.3     |                    |  |        | 85      |    |  |   | 0.1   |    |  |   | (175   | )  |  |   | (67.3 | )  |
| Totalrevenue                |  |                         | 94,269 |                         |  |               | 100.0   |                    |  |        | 121,430 |    |  |   | 100.0 |    |  |   | 27,161 |    |  |   | 28.8  |    |
| Voyageexpense               |  |                         | 26,427 |                         |  |               | 28.0    |                    |  |        | 36,322  |    |  |   | 29.9  |    |  |   | 9,895  |    |  |   | 37.4  |    |
| Vesselexpense               |  |                         | 32,263 |                         |  |               | 34.2    |                    |  |        | 36,183  |    |  |   | 29.8  |    |  |   | 3,920  |    |  |   | 12.2  |    |
| Depreciationandamortization |  |                         | 3,379  |                         |  |               | 3.6     |                    |  |        | 6,305   |    |  |   | 5.2   |    |  |   | 2,926  |    |  |   | 86.6  |    |
| Managementand agency fees   |  |                         | 1,988  |                         |  |               | 2.1     |                    |  |        | 2,566   |    |  |   | 2.1   |    |  |   | 578    |    |  |   | 29.1  |    |
| Generaland administrative   |  |                         | 3,922  |                         |  |               | 4.2     |                    |  |        | 6,471   |    |  |   | 5.3   |    |  |   | 2,549  |    |  |   | 65.0  |    |
| Incomefrom operations       |  |                         | 26,290 |                         |  |               | 27.9    |                    |  |        | 33,583  |    |  |   | 27.7  |    |  |   | 7,293  |    |  |   | 27.7  |    |
| Other(expenses) and income  |  |
| Interest expense            |  |                         | (2,077 | )                       |  |               | (2.2    | )                  |  |        | (3,804  | )  |  |   | (3.1  | )  |  |   | (1,727 | )  |  |   | 83.1  |    |
| Otherincome                 |  |                         | 17     |                         |  |               | — |                    |  |        | 172     |    |  |   | 0.1   |    |  |   | 155    |    |  |   | 911.8 |    |
| Netincome                   |  | $                            | 24,230 |                         |  |               | 25.7    |                    |  | $           | 29,951  |    |  |   | 24.7  |    |  | $      | 5,721  |    |  |   | 23.6  |    |
|                             |

Voyagerevenue

The increase in our voyage revenue for six months endedJune 30, 2005 over the comparable period in 2004 is primarilyattributable to the average freight rate increase of $20.15 per ton or48.9% from $41.21 per ton in 2004 compared to $61.36 per ton in2005.

Excluding high-volume, low-freighted aggregates bulkcargo, average freight rates increased $11.38 per ton or 22.5%from $50.59 per ton for six months ended June 30, 2004 compared to$61.97 per ton for the comparable period in 2005. The increase inaverage freight rates resulted to a significant degree from the demandfor raw materials by East Asian economies, most notably China.Countries in Latin America have been a primary source of those rawmaterials, especially agricultural products and metal concentrates. Ourestablished shipping routes from Latin America, and our long-standingpresence in Latin America through our affiliated service companies,positioned us well to take advantage of this increased demand.

The following table shows revenues attributable to our principalcargoes:

|                      |  |                               |        |                                |  |                    |       |                                |  |             |        |        |  |        |       |        |  |        |        |         |  |        |       |         |  |  |
|----------------------|--|-------------------------------|--------|--------------------------------|--|--------------------|-------|--------------------------------|--|-------------|--------|--------|--|--------|-------|--------|--|--------|--------|---------|--|--------|-------|---------|--|--|
|                 |  | SixMonths Ended June 30, 2004 |        | Six Months Ended June 30,2005  |  | Increase(Decrease) |
| Description          |  | InThousands                   |        | As a % of Total Voyage Revenue |  | InThousands        |       | As a % of Total Voyage Revenue |  | InThousands |        | %      |
| Steel products       |  | $                             | 27,505 |                           |  |               | 39.7  |                           |  | $           | 37,799 |   |  |   | 41.9  |   |  | $      | 10,294 |    |  |   | 37.4  |    |
| Metalconcentrates    |  |                          | 8,382  |                           |  |               | 12.1  |                           |  |        | 14,420 |   |  |   | 16.0  |   |  |   | 6,038  |    |  |   | 72.0  |    |
| Fertilizers          |  |                          | 7,301  |                           |  |               | 10.5  |                           |  |        | 7,567  |   |  |   | 8.4   |   |  |   | 266    |    |  |   | 3.6   |    |
| Otherbulk cargo      |  |                          | 16,892 |                           |  |               | 24.4  |                           |  |        | 22,996 |   |  |   | 25.5  |   |  |   | 6,104  |    |  |   | 36.1  |    |
| Agriculturalproducts |  |                          | 5,763  |                           |  |               | 8.3   |                           |  |        | 3,507  |   |  |   | 3.9   |   |  |   | (2,256 | )  |  |   | (39.1 | )  |
| Automotiveproducts   |  |                          | 2,283  |                           |  |               | 3.3   |                           |  |        | 1,711  |   |  |   | 1.9   |   |  |   | (572   | )  |  |   | (25.1 | )  |
| Other                |  |                          | 1,146  |                           |  |               | 1.7   |                           |  |        | 2,120  |   |  |   | 2.4   |   |  |   | 974    |    |  |   | 85.0  |    |
| Voyagerevenue        |  | $                             | 69,272 |                           |  |               | 100.0 |                           |  | $           | 90,120 |   |  |   | 100.0 |   |  | $      | 20,848 |    |  |   | 30.1  |    |
|                      |

Timecharter revenue

The increase in time charter revenue isattributable to an increase in the average daily charterhire rate andchartered vessel days. The $931 per day or 5.2% increase in ouraverage per day charter hire 

26

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rate from $18,004 for the six months endedJune 30, 2004 compared to $18,935 for the comparable period in 2005 isattributable to both the increase in demand for ocean transportation offreight to accommodate growing economies in East Asia and Africa andthe relative scarcity of dry bulk carriers to meet that demand. Thechartered vessel days increased 275 days or 20.0% from 1,374days for the six months ended June 30, 2004 compared to 1,649 days forthe comparable period in 2005.

Voyage expense

Voyageexpense consists of costs attributable to specific voyages. The numberof voyage days is a significant determinant of voyage expense, andincreases in commissions and bunker fuel costs also affected voyageexpense. The following table shows the change in the number of voyagedays in the six months ended June 30, 2004 compared to the comparableperiod in 2005.

|                    |  |                              |       |                              |  |                     |       |        |  |        |     |        |  |        |      |         |  |  |
|--------------------|--|------------------------------|-------|------------------------------|--|---------------------|-------|--------|--|--------|-----|--------|--|--------|------|---------|--|--|
|               |  | SixMonths EndedJune 30, 2004 |       | Six Months EndedJune 30,2005 |  | Increase (Decrease) |
| Freightvoyage days |  |                         | 2,720 |                         |  |                | 3,152 |   |  |   | 432 |   |  |   | 15.9 | %  |
| Timecharter days   |  |                         | 1,374 |                         |  |                | 1,649 |   |  |   | 275 |   |  |   | 20.0 | %  |
| Totalvoyage days   |  |                         | 4,094 |                         |  |                | 4,801 |   |  |   | 707 |   |  |   | 17.3 | %  |
|                    |

Theprincipal components of voyage expense were asfollows:

|                                         |  |                              |        |                              |  |                    |       |              |  |                         |      |                  |  |              |        |        |  |                  |       |        |  |        |      |        |  |        |       |        |  |        |      |        |  |        |         |         |  |  |
|-----------------------------------------|--|------------------------------|--------|------------------------------|--|--------------------|-------|--------------|--|-------------------------|------|------------------|--|--------------|--------|--------|--|------------------|-------|--------|--|--------|------|--------|--|--------|-------|--------|--|--------|------|--------|--|--------|---------|---------|--|--|
|                                    |  | SixMonths EndedJune 30, 2004 |        | Six Months EndedJune30, 2005 |  | Increase(Decrease) |
|                                    |  | InThousands                  |        | As a % of Voyage Expense     |  | Asa % of Revenue   |       | In Thousands |  | As a %of Voyage Expense |      | As a % ofRevenue |  | In Thousands |        | %      |  | As a %of Revenue |
| FuelExpense                             |  | $                            | 7,714  |                         |  |               | 29.2  |         |  |                    | 8.2  |             |  | $            | 11,915 |   |  |             | 32.8  |   |  |   | 9.8  |   |  | $      | 4,201 |   |  |   | 54.5 |   |  |   | 1.6     |    |
| Commissionexpense                       |  |                         | 6,036  |                         |  |               | 22.9  |         |  |                    | 6.4  |             |  |         | 7,655  |   |  |             | 21.0  |   |  |   | 6.3  |   |  |   | 1,619 |   |  |   | 26.8 |   |  |   | (0.1    | )  |
| Portcallexpense                         |  |                         | 6,168  |                         |  |               | 23.3  |         |  |                    | 6.5  |             |  |         | 7,944  |   |  |             | 21.9  |   |  |   | 6.5  |   |  |   | 1,776 |   |  |   | 28.8 |   |  |   | — |    |
| Stevedoreand other cargo-relatedexpense |  |                         | 4,252  |                         |  |               | 16.1  |         |  |                    | 4.5  |             |  |         | 5,193  |   |  |             | 14.3  |   |  |   | 4.3  |   |  |   | 941   |   |  |   | 22.1 |   |  |   | (0.2    | )  |
| Miscellaneousvoyageexpense              |  |                         | 2,257  |                         |  |               | 8.5   |         |  |                    | 2.4  |             |  |         | 3,615  |   |  |             | 10.0  |   |  |   | 3.0  |   |  |   | 1,358 |   |  |   | 60.2 |   |  |   | 0.6     |    |
| Voyageexpense                           |  | $                            | 26,427 |                         |  |               | 100.0 |         |  |                    | 28.0 |             |  | $            | 36,322 |   |  |             | 100.0 |   |  |   | 29.9 |   |  | $      | 9,895 |   |  |   | 37.4 |   |  |   | 1.9     |    |
|                                         |

The37.4% increase in voyage expense for six months ended June 30,2005 over the comparable period in 2004 is primarily attributable tothe increase in commission expense, which was calculated at a rate ofapproximately 6.5% of freight booked based on revenue of $94.3million for the six months ended June 30, 2004 compared to $121.4million for the comparable period in 2005. Average freight ratesincreased 25.5% during the six months of 2005 compared toaverage freight rates for the comparable period in 2004. As indicatedin the preceding table, commission expense followed the rise in freightrates during the six months of 2005.

The 1.9% increase invoyage expense as a percentage of revenue from 28.0% for the sixmonths ended June 30, 2004 compared to 29.9% for the comparableperiod in 2005 is primarily due to the increase in fuel expenseexpressed as a percentage of revenue of 1.6% and an increase inmiscellaneous voyage expense expressed as a percentage of revenue of0.6% offset by a decrease of 0.3% in all other voyageexpense categories.

The 54.5% increase in fuel expense isattributable to an increase in both the average price per andconsumption from $202 per MT and 38,169 MT for the six months endedJune 30, 2004 compared to $264 per MT and 45,132 MT for the comparableperiod in 2005. The 28.8% increase in port call expense isattributable to the increase in freight voyages from 45 voyages for thesix months ended June 30, 2004 compared to 74 voyages for thecomparable period in 2005. The increase in stevedore and othercargo-related expenses for the six months ended June 30, 2005 resultedfrom an increase in voyage activity. As a percentage of voyage revenue,cargo booked under full or partial free-in free-out terms —shipments in which the shipper pays the costs of loading and unloading— increased from 

27

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82.8% to 85.2% of voyagerevenue for the six months ended June 30, 2004 and 2005, respectivelyand cargo booked under full liner terms — shipments in which webear the costs of loading and unloading — decreased from17.2% to 14.8% of voyage revenue for the six months endedJune 30, 2004 and 2005, respectively.

Vessel expense

Vessel expense consists of costs we incur to own and maintain ourfleet that are not allocated to a specific voyage, such as charter hirerates for vessels we charter-in and drydocking, maintenance, insuranceand crewing expenses for vessels we control. The following table setsforth the basic components of vessel expense:

|                            |  |                              |        |                              |  |                    |       |                          |  |             |        |        |  |        |       |        |  |        |        |         |  |        |       |         |  |  |
|----------------------------|--|------------------------------|--------|------------------------------|--|--------------------|-------|--------------------------|--|-------------|--------|--------|--|--------|-------|--------|--|--------|--------|---------|--|--------|-------|---------|--|--|
|                       |  | SixMonths EndedJune 30, 2004 |        | Six Months EndedJune30, 2005 |  | Increase(Decrease) |
|                       |  | InThousands                  |        | As a % of Vessel Expense     |  | InThousands        |       | As a % of Vessel Expense |  | InThousands |        | %      |
| Chartered-in vesselexpense |  | $                            | 22,172 |                         |  |               | 68.7  |                     |  | $           | 17,372 |   |  |   | 48.0  |   |  | $      | (4,800 | )  |  |   | (21.6 | )  |
| Ownedvessel expense        |  |                         | 8,812  |                         |  |               | 27.3  |                     |  |        | 16,310 |   |  |   | 45.1  |   |  |   | 7,498  |    |  |   | 85.1  |    |
| Spacecharter expense       |  |                         | 1,279  |                         |  |               | 4.0   |                     |  |        | 2,501  |   |  |   | 6.9   |   |  |   | 1,222  |    |  |   | 95.7  |    |
| Vesselexpense              |  | $                            | 32,263 |                         |  |               | 100.0 |                     |  | $           | 36,183 |   |  |   | 100.0 |   |  | $      | 3,920  |    |  |   | 12.2  |    |
|                            |

Theincrease in vessel expense for the six months ended June 30, 2005 isprimarily attributable to an increase in the controlled vessel fleet,partially offset by a reduction in charter hire due to a decrease inthe number of days that we charter-in vessels.

The 4.4%decrease in vessel expense as a percentage of revenue in 2004 resultedfrom a greater increase in revenue (freight rates) than in vesselexpenses.

Depreciation and amortization

The $2.9million increase in depreciation and amortization expense from $3.4million for the six months ended June 30, 2004 compared to $6.3 millionfor the comparable period in 2005 reflects the growth of our controlledfleet offset by the change in the useful life of vessels from 25 yearsin 2004 to 30 years effective January 1, 2005. The change in estimateon the six months ended June 30, 2005 increased our net income by $7.0million.

Management fees

We paid management fees to ouraffiliated service companies: Roymar for technical management and TBSShipping Services for operational management. In connection with ourinitial public offering, we purchased all the stock of these twoservice companies and accordingly, their results of operation have beenincluded in our consolidated financial statements as of the date oftheir acquisition. Management fees shown below include management feesthrough the date of acquisition. After the acquisition when theseaffiliated companies became subsidiaries of the company, we continuedto pay management fees; however, the fees have been eliminated in theseconsolidated financialstatements.

|                            |  |                              |       |                              |  |                    |       |                           |  |             |       |        |  |        |       |        |  |        |     |        |  |        |      |        |  |  |
|----------------------------|--|------------------------------|-------|------------------------------|--|--------------------|-------|---------------------------|--|-------------|-------|--------|--|--------|-------|--------|--|--------|-----|--------|--|--------|------|--------|--|--|
|                       |  | SixMonths EndedJune 30, 2004 |       | Six Months EndedJune30, 2005 |  | Increase(Decrease) |
|                       |  | InThousands                  |       | As a % of Management Fees    |  | InThousands        |       | As a % of Management Fees |  | InThousands |       | %      |
| Technical managementfees   |  | $                            | 867   |                         |  |               | 43.6  |                      |  | $           | 1,413 |   |  |   | 55.1  |   |  | $      | 546 |   |  |   | 63.0 |   |
| Operationalmanagement fees |  |                         | 1,121 |                         |  |               | 56.4  |                      |  |        | 1,153 |   |  |   | 44.9  |   |  |   | 32  |   |  |   | 2.9  |   |
| Totalmanagement fees       |  | $                            | 1,988 |                         |  |               | 100.0 |                      |  | $           | 2,566 |   |  |   | 100.0 |   |  | $      | 578 |   |  |   | 29.1 |   |
|                            |

The63.0% increase in technical management fees paid, which we payto Roymar for managing our controlled fleet, is attributable to a10.4% cost of living increase in the monthly maintenance fee pervessel to $12,029 that took effect on February 8, 2004 and the growthof the controlled vessel fleet under Roymar management from 13 vesselsas of June 30, 2004 to 26 vessels as of June 30, 2005.

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We pay management fees to TBS ShippingServices for overseeing the operations of our voyages. The fees payablefor 2004 reflected an increase attributable to a 10.3% cost ofliving increase in the monthly operational management fee per vessel to$8,447 that took effect on February 9, 2004. Management fee day'sincreased 17.2% from 4,094 days for the six months ended June30, 2004 to 4,800 days for the comparable period in 2005.

General and administrative expense

The $2.5 million or65.0% increase in general and administrative expense for sixmonths ended June 30, 2005 is primarily due to the bonus paid to thechief financial officer in the amount of $2.2 million, the cost ofshare grants to employees and related payroll taxes of $1.9 million,Roymar and TBS Shipping Services Inc general and administrativeexpenses post acquisition of $0.6 million offset by a decrease in baddebt expense due to the collection of accounts receivable that wasfully reserved $0.4 million and a net decrease of $1.8 million in allother expense categories.

Income from operations

The$7.3 million increase in income from operations for the six monthsended June 30, 2005 over the comparable period in 2004 is attributablein significant part to increased freight rates and time charter rates.Operating margins for the six months ended June 30, 2004 and 2005 werecomparable 27.9% and 27.7%, respectively. Included inincome from operations for the six months ended June 30, 2005 areone-time charges to compensation expense for a $2.2 million bonus paidto our chief financial officer and $1.9 million in additionalcompensation resulting from issuing shares to employees of oursubsidiaries, Roymar and TBS Shipping Services, in connection with ourpublic offering.

Interest expense

The 83.1%increase in interest expense for the six months ended June 30, 2005over the comparable period in 2004 was due to long term mortgageborrowings drawn down on July 1, 2004, August 26, 2004, December 23,2004, February 18, 2005, March 1, 2005, April 21, 2005, April 27, 2005and June 30, 2005 in the amounts of $15.0 million, $15.0 million, $7.2million, $7.5 million, $23.5 million, $13.8 million, $7.7 million and$7.8 million respectively. In addition, we drew down $12.0 million onJune 17, 2005 against our revolving credit facility. On June 30, 2005,borrowings under the revolving credit facility wererepaid.

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Liquidityand Capital Resources

Our principal sources of funds, prior toour initial public offering, have been operating cash flows, issuanceof long-term debt securities and long-term bank borrowings. Ourprincipal use of funds has been capital expenditures to establish andgrow our fleet, maintain the quality of our ships, comply withinternational shipping standards and regulations, fund working capitalrequirements and make principal repayments on outstanding loanfacilities and capital lease obligations.

Our practice has beento acquire ships using a combination of funds received from operatingcash flows, debt secured by mortgages on our ships and long termcapital lease arrangements. We expect to use our operating cash flows,proceeds from our issuance of common shares and borrowings to fundacquisitions. Our business is capital intensive and its future successwill depend on our ability to maintain a high-quality fleet through theongoing maintenance of our currently owned ships and the acquisition ofnewer ships. These acquisitions will be principally subject tomanagement's expectation of future market conditions as well asour ability to acquire appropriate ships on favorable terms.

Weexpect to rely on operating cash flows as well as long-term borrowingsand our equity offerings to implement our growth plan. We believe thatour current cash balance as well as operating cash flows and availableborrowings under our credit facilities will be sufficient to meet ourliquidity needs for the next year.

Changes in Cash and CashEquivalents

Cash and cash equivalents at December 31, 2004 andJune 30, 2005 were $21.7 million and $50.6 million, respectively. Theincrease in cash and cash equivalents from December 31, 2004 to June30, 2005 was the result of $42.5 million in net cash provided byoperating activities and $106.5 million in net cash provided byfinancing activities, offset by $120.1 million in net cash used ininvesting activities.

Cash Flows from Investing Activities

Net cash used in investing activities was $11.8 million and $120.1million during the six months ended June 30, 2004 and 2005,respectively. For the six months ended June 30, 2004, investingactivities were comprised of vessel acquisitions and capitalimprovements of $7.5 million and deposits on vessels to be deliveredafter June 30, 2004 of $4.3 million. For the six months ended June 30,2005, investing activities were comprised of vessel acquisitions andcapital improvements of $111.1 million, deposits on vessels to bedelivered after June 30, 2005 of $1.6 million, $6.7 million cash paid,after deducting cash acquired, for all the stock of TBS ShippingServices and Roymar and $750,000 security paid in connection with aclaim relating to the acquisition of the vessel Tamoyo Maiden(formerly the Sea Pantheon).

Beginning in the last halfof 2004, we began acquiring vessels to increase our controlled fleet– the vessels that we own or charter-in with an option topurchase. During the six months ended June 30, 2005, we acquired ninevessels, excluding the Rockaway Belle on which we exercised ourpurchase option. We paid $111.1 million during the six months which wascomprised of $98.6 million paid upon delivery of vessels, take overcosts of $9.9 million incurred in connection with the acquisition ofthe vessels and vessel capital improvements of $2.6 million. In 2004,we had previously paid deposits of $7.5 million on these vessels. Wemade a deposit of $1.6 million for the Biloxi Belle (formerlythe M.V. Arrow) during the period. The vessel had a purchaseprice of $15.5 million and was delivered July 13, 2005. In connectionwith our initial public offering we purchased all the stock of TBSShipping Services and Roymar for $6.7 million, which represents thepurchase price of $7.5 million less net cash acquired of $0.8million.

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The net assets acquired and liabilitiesassumed is as follows:

|                         |  |              |            |                  |  |        |           |         |  |        |            |         |  |  |
|-------------------------|--|--------------|------------|------------------|--|--------|-----------|---------|--|--------|------------|---------|--|--|
|                    |  | TBSShipping  |            | RoymarShip       |  |   |
| Description             |  | ServicesInc. |            | Management, Inc. |  | Total  |
| CurrentAssets           |  | $            | 1,012,981  |             |  | $      | 200,222   |    |  | $      | 1,213,203  |    |
| EquipmentandFurnishings |  |         | 1,025,816  |             |  |   | 381,562   |    |  |   | 1,407,378  |    |
| Goodwill                |  |         | 6,147,380  |             |  |   | 1,687,066 |    |  |   | 7,834,446  |    |
| Totalassetsacquired     |  |         | 8,186,177  |             |  |   | 2,268,850 |    |  |   | 10,455,027 |    |
| Liabilitiesassumed      |  |         | (2,686,177 | )           |  |   | (268,850  | )  |  |   | (2,955,027 | )  |
| Netassetsacquired       |  | $            | 5,500,000  |             |  | $      | 2,000,000 |    |  | $      | 7,500,000  |    |
|                         |

AtJune 30, 2005 we had signed memorandum of agreements for theacquisition two of vessels: the Biloxi Belle (formerlythe M.V. Arrow) and the Maori Maiden (formerly theM.V. Tronador) which has a purchase price of $15.5 million andis expected to be delivered mid-September, 2005. The M.V.Tronador acquisition will be the first vessel purchased using theproceeds from the offering.

Cash Flows from FinancingActivities

Net cash used in financing activities was $5.8million during the six months ended June 30, 2004 made up of repaymentsof obligations under capital leases and debt principal. For the sixmonths ended June 30, 2005 net cash provided by financing activitieswas $106.5 million consisting of: $61.9 million of net proceeds fromthe issuance of Class A common shares in our initial public offeringand $60.3 million long-term bank borrowings to finance the purchase ofvessels, reduced by 15.5 million of repayments of obligations undercapital leases and debt principal, including the payment of thepurchase option of $2.5 million under the capital lease for theRockaway Belle. We borrowed $12.0 million, on a temporary basis,under our revolving credit facility on June 17, 2005 to fund ourworking capital. We temporarily used a portion of the net proceeds ofour public offering to repay these borrowings under the revolvingcredit facility.

Charter Hire Receivables

Our netcharter hire receivables balance at June 30, 2005 and December 31, 2004was $19.1 million and $17.3 million, respectively. Our gross charterhire receivables balance at June 30, 2005 and December 31, 2004 was$20.2 million and $18.8 million, respectively.

In accordancewith our reserve policy, we take a percentage of outstandingreceivables, based on prior years' experience, as a generalreserve — usually between 2% and 3% of thereceivables balance. Our management also identifies specificreceivables that it believes we will have difficulty collecting andcreates additional reserves for those balances. The additional reservestotaled $0.6 million and $1.1 million and our aggregate reservestotaled $1.1 million and $1.5 million at June 30, 2005 and December 31,2004, respectively.

Inventories

Our inventory accountbalance at June 30, 2005 and December 31, 2004 was $4.4 million and$3.4 million, respectively. The inventory consists primarily of fueland lubricating oil, which increased as our controlled vesselsincreased from 18 at the year ended December 31, 2004 to 27 for the sixmonths ended June 30, 2005.

Prepaid Expenses

Ourprepaid expense account balance at June 30, 2005 and December 31, 2004was $3.4 million and $3.9 million, respectively. Prepaid charter hireexpense decreased $1.0 million or 73.1% to $0.4 million as ofJune 30, 2005 offset by a $0.5 million or 21.0% increase inprepaid insurance and vessel expense to $2.9 million as of June 30,2005.

Our operation of ocean-going ships carries an inherentrisk of catastrophic marine disasters and property losses caused byadverse severe weather conditions, mechanical failures, human error,war, 

31

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terrorism and other circumstances or events.Our current insurance coverage includes protection and indemnityinsurance coverage for tort liability, which is provided by mutualprotection and indemnity associations, hull and machinery insurance foractual or constructive loss from collision, fire, grounding and enginebreakdown, war risk insurance for confiscation, seizure, capture,vandalism, sabotage and other war-related risks and loss of hireinsurance for loss of revenue for ships being off hire.

OtherCommitments

Our contractual obligations as of June 30, 2005 areshown in the followingtable:

|                                  |  |        |        |        |  |                 |         |           |  |           |        |                 |  |        |         |        |  |        |         |        |  |        |
|----------------------------------|--|--------|--------|--------|--|-----------------|---------|-----------|--|-----------|--------|-----------------|--|--------|---------|--------|--|--------|---------|--------|--|--------|
|                             |  |   |        | Total  |  | Lessthan 1 year |         | 1-3 years |  | 3-5 years |        | More than5years |
|                             |  |   |   |   |  |            |    |      |  |      |   |            |  |   |    |   |  |   |    |   |  |   |   |   |
| DebtObligations(1)               |  |   |   |   |  | $               | 87,584  |      |  | $         | 25,171 |            |  | $      | 51,822  |   |  | $      | 10,591  |   |  | $      | — |   |
| Capital leaseobligations         |  |   |   |   |  |            | 30,356  |      |  |      | 4,270  |            |  |   | 26,086  |   |  |   |    |   |  |   | — |   |
| OperatingLeaseobligations        |  |   |   |   |  |            | 12,669  |      |  |      | 12,669 |            |  |   |    |   |  |   | — |   |  |   | — |   |
| OtherPurchase obligations(2)     |  |   |   |   |  |            | 27,750  |      |  |      | 27,750 |            |  |   | — |   |  |   | — |   |  |   | — |   |
| Totalcontractual cashobligations |  |   |   |   |  | $               | 158,359 |      |  | $         | 69,860 |            |  | $      | 77,908  |   |  | $      | 10,591  |   |  | $      | — |   |
|                                  |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | As of June 30,2005, we had $87.6 million of indebtedness outstanding under loans toour subsidiaries that we guarantee, consisting of $18.4 under the $22.5million credit facility with a group of lenders led by GMAC CommercialFinance LLC, $12.1 million under the $15.0 million credit facility withMerrill Lynch Business Financial Services, Inc., $6.9 million under the$7.2 million credit facility with the Royal Bank of Scotland plc.,$42.4 million under the $45.0 million credit facility with AIGCommercial Equipment Finance, Inc and $7.8 million under the $25.0million credit facility with Bank ofAmerica. |

|     |                                                                                                                                               |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | We purchased, or entered intomemoranda of agreement to purchase, one vessel in the second half of2005 at an aggregate purchase price of$15.5. |

Dividend Policy

We have not declaredor paid and do not anticipate declaring or paying any cash dividends onour common shares in the foreseeable future. The provisions of some ofour debt instruments and related loan agreements prevent some of oursubsidiaries from paying dividends to International, which may restrictour ability to pay dividends on our common shares. The timing andamount of future cash dividends, if any, would be determined by ourboard of directors and would depend upon our earnings, financialcondition, cash requirements and obligations to lenders at thetime.

Pursuant to Bermuda law, we cannot declare or pay adividend, or make a distribution out of contributed surplus, if thereare reasonable grounds for believing that we are, or after the paymentwould be, unable to pay our liabilities as they become due, or that therealizable value of our assets would thereby be less than the aggregateof our liabilities, our issued share capital and our share premiumaccounts.

Because we are a holding company with no materialassets other than the stock of our subsidiaries, our ability to paydividends will depend on the earnings and cash flow of our subsidiariesand their ability to pay dividends to us. 

Significant Related Party Transactions

Pursuant toagency agreements, our operations have been planned, executed andsupervised by TBS Shipping Services, Roymar and TBS Commercial Groupand its subsidiaries in exchange for fees and commissions paid by us tosuch entities. After giving effect to the offering, James W. Bayley,Lawrence A. Blatte, Gregg L. McNelis, Captain Alkis N. Meimaris andJoseph E. Royce, collectively will beneficially own approximately64.3% of our issued and outstanding common shares. Each of

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these individuals is also a principal of, andtogether control, TBS Commercial Group. Lawrence A. Blatte, Gregg L.McNelis, Captain Alkis N. Meimaris and Joseph E. Royce have beenprincipals of, and together controlled, TBS Shipping Services andRoymar. We believe that the transactions described below are on termsno less favorable than those that could be obtained pursuant toarm's-length negotiations with independent third parties.

We have established long-term commercial and operationalrelationships with other commercial agency service companies that arelocated in various overseas ports in which we conduct our business. Themajority of these companies are wholly- or partly-owned direct orindirect subsidiaries of TBS Commercial Group. Under the arrangementswith these commercial agents, we generally pay a commission on freightrevenue booked by the agent, which commission is based upon marketrates, and on certain freights where they attend to the receivers ofthe cargo. Under the arrangements with the ship agents, we pay fees tothe agents for attending vessels while in port, which fees are alsobased on market rates for such services. For the three months endedJune 30, 2004 and 2005 and the six months ended June 30, 2004 and 2005,we paid TBS Commercial Group $1.2 million, $1.7 million, $2.1 millionand $3.0 million, respectively.

Globe Maritime Limited, owned byJames W. Bayley, acts as our chartering broker and charges commissionsfor arranging charters and the sale and purchase of vessels, whichcommissions are based upon market rates. For the three months endedJune 30, 2004 and 2005 and the six months ended June 30, 2004 and 2005,we paid Globe Maritime $16,630, $16,374, $39,514 and $32,922,respectively.

James W. Bayley owns 1% of the outstandinginterest of the parent entity of TBS North America Liner, Ltd. and40% of the outstanding voting shares of TBS North America Liner.The parent entity of TBS North America Liner owns 60% of theoutstanding voting shares and 100% of the outstanding non-votingshares of TBS North America Liner. International indirectly owns theother 99% of the outstanding interest of the parent entity ofTBS North America Liner.

TBS Shipping Services and Roymarmaintain an office in Yonkers, New York that is leased from ourfounder, chairman and chief executive officer, Joseph E. Royce. For thethree months ended June 30, 2004 and 2005 and the six months ended June30, 2004 and 2005, payments to Mr.  Royce under this leasetotaled $60,000, $60,000, $140,000 and $120,000, respectively.

International, TBS Shipping Services and TBS Commercial Group paidlegal fees to Lawrence A. Blatte, who is one of our principalshareholders and became a senior executive vice president ofInternational in March 2005. For the three months ended June 30, 2004and 2005 and the six months ended June 30, 2004 and 2005, payments fromInternational to Mr. Blatte for legal services totaled $31,343,$188,348, $86,535 and $369,023, respectively. For the three monthsended June 30, 2004 and 2005 and the six months ended June 30, 2004 and2005, payments from TBS Shipping Services and TBS Commercial Group toMr. Blatte for legal services totaled $0, $0, $0 and $150,000,respectively.

Our board has delegated authority to thecompensation committee to review and approve on an annual basis alltransactions with our executive officers, directors and affiliates.

Summary of Critical Accounting Policies

Thediscussion and analysis of our financial condition and results ofoperations is based upon our consolidated financial statements, whichhave been prepared in accordance with accounting principles generallyaccepted in the United States, or GAAP. The preparation of thosefinancial statements requires us to make estimates and judgments thataffect the reported amount of assets and liabilities, revenues andexpenses and related disclosure of contingent assets and liabilities atthe date of our financial statements. Actual results may differ fromthese estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significantjudgments or uncertainties, and potentially result in materiallydifferent results under different assumptions and conditions. Webelieve that there has been no change in or additions to our criticalaccounting policies.

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New Accounting Pronouncements

In May 2005, the Financial Accounting Standards Board("FASB") issued SFAS No. 154,"Accounting Changes and ErrorCorrections" ("SFAS 154"),which replaces Accounting Principles Board Opinion (  APB) No. 20, "Accounting Changes", andSFAS No. 3, "Reporting Accounting Changes in InterimFinancial Statements". SFAS 154 changes therequirements for the accounting for and reporting of a change inaccounting principle, and applies to all voluntary changes inaccounting principles, as well as changes required by an accountingpronouncement in the unusual instance that it does not include specifictransition provisions. Specifically, SFAS 154 requires retrospectiveapplication to prior periods financial statements, unless it isimpracticable to determine the period-specific effects or thecumulative effect of the change. SFAS 154 does not change thetransition provisions of any existing pronouncement. SFAS 154 iseffective for all our accounting changes and corrections of errors madebeginning January 1, 2006.

In April 2005, the FinancialAccounting Standards Board ("FASB") issuedInterpretation No.  47, "Accounting forConditional Asset Retirement Obligations, an interpretation of FASBStatement No.  143". This interpretationclarifies that an entity is required to recognize a liability for thefair value of a conditional asset retirement obligation when incurredif the liability's fair value can be reasonably estimated. Italso clarifies when an entity would have sufficient information toreasonably estimate the fair value of an asset retirement obligation.Effective June 30, 2005, we have adopted the provisions of FIN47; the adoption of which did not have a material impact on ourconsolidated financial position, results of operations or cashflows.

In March 2005, the FASB issued Interpretation No.46(R)-5 ("FIN  46(R)-5"), ImplicitVariable Interests under FASB Interpretation No.  46 (revisedDecember 2003), "Consolidation of Variable InterestEntities". FIN  46(R)-5 is effective for the firstreporting period beginning after March  3, 2005; however, earlierapplication is permitted for periods for which financial statementshave not yet been issued. Effective April 1, 2005, we have adopted theprovisions of FIN 46(R), the adoption of which did not have a materialimpact on our consolidated financial position, results of operations orcash flows.

In December 2004, the FASB issued SFAS No. 123R,Share-Based Payment ("SFAS 123R"). SFAS No.123R revises previously issued SFAS 123 Accounting for Stock-BasedCompensation, supersedes APB No. 25 Accounting for Stock Issued toEmployees, and amends SFAS Statement No. 95 Statement of Cash Flows.SFAS 123R requires us to expense the fair value of employee shareoptions and other forms of share-based compensation for the annualperiods beginning after June 15, 2005. The cost will be recognized overthe period during which an employee is required to provide services inexchange for the award. The share-based award must be classified asequity or as a liability and the compensation cost is measured based onthe fair value of the award at the date of the grant. In addition,liability awards will be re-measured at fair value each reportingperiod. We currently follow APB Opinion No. 25, Accounting for StockIssued to Employees, in recognizing the expense associated with therestricted share awards and utilizes the intrinsic value method. Proforma information is not presented as the application of APB OpinionNo. 25, utilizing the intrinsic value method, and Financial AccountingStandard No. 123, utilizing fair value base method, would results inthe same amount. We are currently evaluating the impact of SFAS 123Rbut do not expect that it will have a significant impact.

InDecember 2004, the FASB issued SFAS No. 153, "Exchangesof Nonmonetary Assets", an amendment of APB No. 29,"Accounting for NonmonetaryTransactions" ("SFAS 153").The amendments made by SFAS 153 are based on the principle thatexchanges of nonmonetary assets should be measured based on the fairvalue of the assets exchanged. Further, the amendments eliminate thenarrow exception for nonmonetary exchanges of similar productive assetsand replace it with a broader exception for exchanges of nonmonetaryassets that do not have commercial substance. The statement iseffective beginning July 1, 2005 and shall be applied prospectively.The effect of the adoption of SFAS 153 will be immaterial to ourconsolidated results of operations, cash flows or financialposition.

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Item 3.    Quantitative and QualitativeDisclosure about Market Risk

Risk Management:

We areexposed to various market risks, including changes in interest rates.The exposure to interest rate risk relates to our floating rate debt.At June 30, 2005, we had $75.5 million of floating rate debt withmargins over LIBOR ranging from 1.5% to 3.7% compared to$24.5 million as of December  31, 2004.  As an indicationof the extent of our sensitivity to interest rate changes, an increasein LIBOR of 100 basis points would have decreased our net income andcash flows for the six months ending June 30, 2005 by approximately$378,000 based upon our debt level at June 30, 2005.

ForeignExchange Rate Risk:

We consider the U.S. dollar to be thefunctional currency for all of our entities. Our financial results areaffected by changes in foreign exchange rates. Changes in foreignexchange rates could adversely affect our earnings. We generate all ofour revenues in U.S. dollars, but incur approximately 5.6% ofour operating expenses in currencies other than U.S. dollars. Foraccounting purposes, expenses incurred in currencies other than U.S.dollars are converted into U.S. dollars at the exchange rate prevailingon the date of each transaction. At June 30, 2005, approximately5.7% of our outstanding accounts payable was denominated incurrencies other than U.S. dollars.

Item 4.    Controls andprocedures

As of June 30, 2005, an evaluation was performedunder the supervision and with the participation of the Company'smanagement, including the Chief Executive Officer("CEO"), Chief Financial Officer("CFO"), and Chief Accounting Officer("CAO") of the effectiveness of the designand operation of the Company's disclosure controls and procedures(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).Based on that evaluation, the Company's management, including theCEO, CFO and CAO, concluded that the Company's current disclosurecontrols and procedures were effective as of June 30, 2005 includingtimely providing them with material information relating to the Companyrequired to be included in the reports the Company files or submitsunder the Exchange Act. There have been no significant changes in theCompany's internal control over financial reporting or in otherfactors that have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting duringthe period covered by this quarterly report.

AVAILABLEINFORMATION

The Company makes available free of charge throughits internet website http://www.tbsship.com, its Prospectus, quarterlyreports on Form 10-Q, current reports on Form 8-K and amendments tothese reports filed or furnished pursuant to Section  13(a) or15(d) of the Securities Exchange Act of 1934 (the"Exchange Act"), as amended, as soon asreasonably practicable after the Company electronically files suchmaterial with, or furnishes it to, the Securities and ExchangeCommission.

The Company also makes available on its website, itscorporate governance guidelines, its code of business conduct, andcharters of the Audit Committee, Compensation Committee and CorporateGovernance and Nominating Committee of the Board of Directors.

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PART II– OTHER INFORMATION

Item 1.    LegalProceedings

In connection with the acquisition of the vesselTamoyo Maiden the Company is seeking damages for the cost ofrepairs and loss of hire related to ballast tank contaminationdiscovered after delivery of the vessel. The Company, through itssubsidiary, had an associated vessel owned by the seller arrested tosecure its claim. The vessel was released upon the seller providing abank guarantee in the amount of $2.1  million. The seller allegeddamages due to the arrest of the associated vessel. The Company, asrequired under English law, placed $750,000 as counter-security toprovide for estimated arbitration/litigation, among other costs.English legal counsel, who is pursuing the Company's claim fordamages, has advised the Company that the counter claim is improper andis seeking a reduction in the amount of the counter-security.

The Company is periodically a defendant in cases involving personalinjury and other matters which arise in the normal course of business.While any pending or threatened litigation has an element ofuncertainty, the Company believes that the legal proceedings pendingagainst us, individually or in the aggregate, will not materiallyadversely affect the consolidated financial position, results ofoperations or cash flows of the Company.

Item2.    Unregistered Sales of Equity Securities and Use ofProceeds

Not applicable.

Item 3.    Defaults UponSenior Securities

Not applicable.

Item4.    Submission of Matters to a Vote of Security Holders

Notapplicable.

Item 5.    Other Information

Notapplicable.

Item 6.    Exhibits

(a)Exhibits

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |  |
|------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| 3.1  |  | Amendedand Restated Memorandum of Association of TBS InternationalLimited**                                                                                                                                                                                                                                                                                                                                                                                                    |
| 3.2  |  | Amended and Restated Bye-Lawsof TBS International Limited**                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.1 |  | 2005Equity Incentive Plan (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.2 |  | EmployeeShare Purchase Plan (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3 |  | RevolvingCredit Agreement, dated June 14, 2005, by and among Newkirk NavigationCorp., Frankfort Maritime Corp., TBS International Limited, TBSWorldwide Services Inc., Westbrook Holdings Limited and Citibank, N.A.(1)                                                                                                                                                                                                                                                        |
| 10.4 |  | Credit Agreement, dated June 30,2005, by and among Hudson Maritime Corp., Kensington Shipping Corp.,Windsor Maritime Corp., TBS International Limited, Transworld CargoCarriers, S.A., TBS Worldwide Services Inc., TBS Pacific Liner, Ltd.,TBS North America Liner, Ltd., TBS Ocean Carriers Ltd., TBS Middle EastCarriers, Ltd., TBS Eurolines, Ltd., TBS Logistics Ltd., WestbrookHoldings Ltd., Leaf Shipping Corp., Pacific Rim Shipping Corp. and Bankof America, N.A.** |
|      |

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|      |  |                                                                                                                                                                                                       |  |  |  |  |
|------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| 31.1 |  | Certification of theChief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of theSecurities and Exchange Act, asamended.**                                                                  |
| 31.2 |  | Certification of the ChiefFinancial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of theSecurities and Exchange Act, asamended.**                                                                  |
| 31.3 |  | Certification of the ChiefAccounting Officer pursuant to Rule 13a-14(a) and 15d-14(a) of theSecurities and Exchange Act, asamended.**                                                                 |
| 32   |  | Certification of ChiefExecutive Officer, Chief Financial Officer and Chief Accounting Officerpursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of2002.* |
|      |

|  |
|--|
|  |  |
|  |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| * | Pursuant to SECRelease No. 33-8212, this certification will be treated as"accompanying" this Quarterly Report on Form10-Q and not "filed" as part of such reportfor purposes of Section 18 of the Securities Exchange Act, as amended,or otherwise subject the liability of Section 18 of the SecuritiesExchange Act, as amended, and this certification will not be deemed tobe incorporated by reference into any filing under the Securities Actof 1933, as amended, or the Securities Exchange Act, as amended, exceptto the extent that the registrant specifically incorporates it byreference. |

|    |                |
|----|----------------|
| ** | Filed herewith |

|     |                                                                                                                   |
|-----|-------------------------------------------------------------------------------------------------------------------|
| (1) | Incorporated by reference to TBS InternationalLimited's Registration Statement on Form S-1 (File No. 333-123157). |

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SIGNATURES

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersignedthereunto dulyauthorized.

|                      |  |        |  |                                                                                                                                                                                                                                                                                                                   |  |  |  |  |  |  |
|----------------------|--|--------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--|
|                 |  |   |  | **TBSINTERNATIONALLIMITED**                                                                                                                                                                                                                                                                                       |
|                 |  |   |  | (Registrant)                                                                                                                                                                                                                                                                                                      |
|                 |  |   |  |                                                                                                                                                                                                                                                                                                              |
| Date:August 12, 2005 |  |   |  | /s/ Joseph ERoyce                                                 |
|                 |  |   |  | JosephE. RoycePresident and Chief ExecutiveOfficer                                                                                                                                                                                                                                                                |
|                 |  |   |  |                                                                                                                                                                                                                                                                                                              |
| Date:August 12, 2005 |  |   |  | /s/ Ferdinand V.Lepere                                                                                    |
|                 |  |   |  | FerdinandV. LepereSenior Vice President, Chief FinancialOfficer                                                                                                                                                                                                                                                   |
|                 |  |   |  |                                                                                                                                                                                                                                                                                                              |
| Date:August 12, 2005 |  |   |  | /s/ AnthonyGentile                                                          |
|                 |  |   |  | AnthonyGentileController, Chief AccountingOfficer                                                                                                                                                                                                                                                                 |
|                      |

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