TAMPA, Fla., Aug. 7, 2008 (PRIME NEWSWIRE) -- Quality Distribution, Inc. (Nasdaq:QLTY) (the "Company" or "QDI") today reported the results for its second quarter and six months ended June 30, 2008. Total revenue for the quarter increased $29.2 million, or 15%, over the second quarter of 2007 from $194.7 million to $224.0 million. Of this increase, $21.8 million was generated from the Company's subsidiary, Boasso America Corporation ("Boasso") which was acquired effective December 18, 2007. Revenue, excluding fuel surcharge and the revenue from Boasso, decreased by $10.8 million, or 6.3% driven by softer volumes in the housing and auto markets, as well as general economic conditions.
Total revenue increased $59.7 million, or 16% from $372.8 million for the six months ended June 30, 2007 to $432.5 million for the six months ended June 30, 2008. Of the increase, $41.6 million was generated from Boasso. Excluding fuel surcharge and Boasso, revenue decreased by $11.4 million, or 3.5% due to the factors discussed above.
The Company recorded net income for the second quarter of 2008 of $0.4 million, or $0.02 per diluted share, as compared with net income for the same period last year of $2.3 million, or $0.12 per diluted share. The second quarter results include a pre-tax restructuring charge of $2.4 million, primarily related to the elimination of approximately 75 positions. As a result, the annual reduction in payroll related costs is expected to exceed $5.0 million. The second quarter results also contain a pre-tax gain on the sale of real property of $1.1 million. Applying a normalized tax rate of 39%, and excluding the restructuring charge and the property gain, would have resulted in net income of $1.3 million, or $0.07 per diluted share for the second quarter of 2008, as compared with net income of $2.7 million, or $0.14 per diluted share for the same prior year period.
For the six months ended June 30, 2008, the Company recorded a net loss of $1.6 million, or ($0.08) per diluted share, as compared with net income of $2.1 million or $0.11 per diluted share for the 2007 six-month period.
Gary Enzor, President and Chief Executive Officer, commented, "The personnel reductions we took in the second quarter were difficult, but necessary in light of these challenging economic times. I am pleased to report that we are making tangible progress on profitability initiatives designed to improve our top line, our profit margins and cash flow. Our insurance expense is trending favorably due to the success of our proactive safety initiatives and our borrowing availability was $46.0 million at June 30, 2008."
The Company will host a conference call for investors to discuss these results on August 8, 2008 at 11:00 a.m. Eastern Time. The toll free dial in number is 888-713-4485; the toll number is 913-312-0695; the passcode is 1127924. A replay of the call will be available until September 8, 2008, by dialing 888-203-1112; passcode; 1127924. Copies of this earnings release and other financial information about the Company may be accessed in the Investor Relations section of the Company's website at www.qualitydistribution.com.
Headquartered in Tampa, Florida, QDI, through its subsidiaries, Quality Carriers, Inc. and Boasso America Corporation, and through its affiliates and owner-operators, provides bulk transportation and related services. QDI also provides tank cleaning services to the bulk transportation industry through its QualaWash(r) facilities. QDI is an American Chemistry Council Responsible Care(r) Partner and is a core carrier for many of the Fortune 500 companies that are engaged in chemical production and processing.
The Quality Distribution, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=5285
This release contains certain forward-looking information that is subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995 and is subject to certain risks and uncertainties that could cause actual results to differ materially from those expected or projected in the forward-looking statements. Without limitation, these risks and uncertainties include the Company's substantial leverage; economic factors; downturns in customers' business cycles or in the national economy; the cyclical nature of the transportation industry; claims exposure and insurance costs; adverse weather conditions; dependence on affiliates and owner-operators; changes in government regulation including transportation, environmental and anti-terrorism laws; the Company's environmental remediation costs; fluctuations in fuel pricing or availability; increases in interest rates; potential disruption at U.S. ports of entry; changes in senior management; the Company's ability to achieve projected operating objectives and debt reduction in 2008; its ability to successfully integrate acquired businesses or integrate affiliate businesses converted to Company controlled operations; the Company's ability to achieve projected reductions in payroll related costs; and the Company's ability to attract and retain qualified drivers. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2007 and its quarterly reports on Form 10-Q, as well as other reports filed with the Securities and Exchange Commission. The Company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this release.
QLTYG
QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In 000's) Except Per Share Data
Unaudited
Three months ended Six months ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
OPERATING REVENUES:
Transportation $151,765 $151,683 $301,024 $293,756
Other service revenues 26,677 19,143 53,422 36,111
Fuel surcharge 45,520 23,884 78,017 42,938
-------- -------- -------- --------
Total operating revenues 223,962 194,710 432,463 372,805
-------- -------- -------- --------
OPERATING EXPENSES:
Purchased transportation 131,606 123,427 251,578 239,374
Compensation 27,395 20,587 55,999 40,256
Fuel, supplies and
maintenance 33,035 19,275 63,168 35,399
Depreciation and
amortization 5,332 4,317 10,228 8,492
Selling and administrative 8,568 7,406 17,816 13,872
Insurance claims 2,865 4,444 8,427 11,082
Taxes and licenses 1,242 843 2,459 1,624
Communications and
utilities 3,389 2,497 7,005 5,129
(Gain) loss on disposal
of property and equipment (1,421) (10) (1,965) 199
Restructuring costs 2,375 -- 2,375 --
-------- -------- -------- --------
Total operating expenses 214,386 182,786 417,090 355,427
-------- -------- -------- --------
Operating income 9,576 11,924 15,373 17,378
Interest expense 8,640 8,075 17,791 15,752
Interest income (88) (176) (205) (375)
Other (income) expense 146 (396) 156 (359)
Income (loss) before
taxes 878 4,421 (2,369) 2,360
Provision for (benefit
from) income taxes 526 2,135 (802) 247
Net income (loss) $ 352 $ 2,286 $ (1,567) $ 2,113
PER SHARE DATA:
Net income (loss) per
common share
Basic $ 0.02 $ 0.12 $ (0.08) $ 0.11
Diluted $ 0.02 $ 0.12 $ (0.08) $ 0.11
======== ======== ======== ========
Weighted average number
of shares
Basic 19,375 19,354 19,372 19,351
Diluted 19,519 19,480 19,372 19,478
QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In 000's)
Unaudited
June 30, Dec. 31,
2008 2007
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 2,718 $ 9,711
Accounts receivable, net 110,166 99,081
Prepaid expenses 11,946 8,150
Deferred tax asset, net 20,483 20,483
Other 8,065 6,258
--------- ---------
Total current assets 153,378 143,683
Property and equipment, net 135,344 121,992
Goodwill 173,141 173,575
Intangibles, net 23,550 24,167
Non-current deferred tax asset, net 17,095 16,203
Other assets 12,554 14,356
--------- ---------
Total assets $ 515,062 $ 493,976
========= =========
LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of indebtedness $ 4,797 $ 413
Current maturities of capital
lease obligations 2,619 1,451
Accounts payable 14,765 17,428
Affiliates and independent
owner-operators payable 16,897 12,597
Accrued expenses 27,648 25,957
Environmental liabilities 3,210 4,751
Accrued loss and damage claims 8,612 13,438
Income taxes payable -- 555
--------- ---------
Total current liabilities 78,548 76,590
Long-term indebtedness, less
current maturities 365,947 343,575
Capital lease obligations, less
current maturities 8,266 3,832
Environmental liabilities 6,418 6,418
Accrued loss and damage claims 12,507 18,474
Other non-current liabilities 14,895 15,954
--------- ---------
Total liabilities 486,581 464,843
Minority interest in subsidiary 1,833 1,833
SHAREHOLDERS' EQUITY
Common stock 362,343 361,617
Treasury stock (1,580) (1,564)
Accumulated deficit (127,713) (126,146)
Stock recapitalization (189,589) (189,589)
Accumulated other comprehensive loss (16,559) (16,748)
Stock subscriptions receivable (254) (270)
--------- ---------
Total shareholders' equity 26,648 27,300
--------- ---------
Total liabilities, minority
interest and shareholders' equity $ 515,062 $ 493,976
========= =========
RECONCILIATION OF NET INCOME (LOSS) TO TAX
EFFECTED AND ADJUSTED NET INCOME (LOSS) AND RECONCILIATION OF NET
INCOME (LOSS) PER SHARE TO TAX
EFFECTED AND ADJUSTED NET INCOME (LOSS)
PER SHARE For the Three Months and Six Months
Ended June 30, 2008 and 2007
(In 000's)
Unaudited
Tax Effected and Adjusted Net Income (Loss) and Tax Effected and
Adjusted Net Income (Loss) Per Share (as defined) are presented
herein because they are important metrics used by management to
evaluate and understand the performance of the ongoing operations
of the Company's business. Management uses a 39% tax rate for
calculating the provision for (benefit from) income taxes to
normalize the Company's tax rate to that of comparable
transportation companies, and to compare Company periods with
different effective tax rates. In addition, we adjust Net Income
(Loss) for significant items that are not regularly recurring.
Tax Effected and Adjusted Net Income (Loss) and Tax Effected and
Adjusted Net Income (Loss) Per Share are not measures of
financial performance or liquidity under United States Generally
Accepted Accounting Principles ("GAAP"). Tax Effected and
Adjusted Net Income (Loss) and Tax Effected and Adjusted Net
Income (Loss) Per Share should not be considered in isolation or
as a substitute for the consolidated statements of operations and
cash flow data prepared in accordance with GAAP as an indication
of the Company's operating performance or liquidity.
Three months Six months
Net Income (Loss) ended ended
Reconciliation: June 30, June 30,
---------------- -----------------
2008 2007 2008 2007
------- ------- ------- -------
Net income (loss) $ 352 $ 2,286 $(1,567) $ 2,113
Net income (loss) per
common share:
Basic $ 0.02 $ 0.12 $ (0.08) $ 0.11
====================================
Diluted $ 0.02 $ 0.12 $ (0.08) $ 0.11
====================================
Adjustments to net income
(loss):
Provision for (benefit from)
income taxes 526 2,135 (802) 247
Restructuring costs 2,375 -- 2,375 --
Gains on property sales (1,161) -- (2,128) --
------------------------------------
Income (loss) before income
taxes 2,092 4,421 (2,122) 2,360
------------------------------------
Provision for (benefit from)
income taxes at 39% 816 1,724 (828) 920
------------------------------------
Tax effected and adjusted
net income (loss) $ 1,276 $ 2,697 $(1,294) $ 1,440
====================================
Tax effected and adjusted
net income (loss) per
common share:
Basic $ 0.07 $ 0.14 $ (0.07) $ 0.07
====================================
Diluted $ 0.07 $ 0.14 $ (0.07) $ 0.07
====================================
Weighted average number
of shares:
Basic 19,375 19,354 19,372 19,351
Diluted 19,519 19,480 19,372 19,478