TAMPA, Fla., Nov. 6, 2008 (GLOBE NEWSWIRE) -- Quality Distribution, Inc. (Nasdaq:QLTY) (the "Company" or "QDI") today reported the results for its third quarter and nine months ended September 30, 2008. The Company recorded net income for the third quarter of 2008 of $0.7 million, or $0.04 per diluted share, as compared with net income for the same period last year of $1.5 million, or $0.08 per diluted share. The third quarter of 2008 results include a pre-tax restructuring charge of $1.7 million, primarily related to the closure of tank wash and trucking terminals. Applying a normalized tax rate of 39% and excluding the restructuring charge would have resulted in net income of $1.9 million, or $0.10 per diluted share, for the third quarter of 2008 as compared with net income of $2.1 million, or $0.11 per diluted share, for the same prior-year period.
For the nine months ended September 30, 2008, the Company recorded a net loss of $0.9 million, or ($0.04) per diluted share, as compared with net income of $3.6 million, or $0.19 per diluted share, for the 2007 nine-month period.
Total revenue for the third quarter of 2008 increased $22.6 million, or 11.7%, over the third quarter of 2007 from $192.2 million to $214.7 million. Of this increase, $22.7 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 $16.5 million, or 9.8%, driven by continued softening in the housing and auto markets, as well as general economic conditions.
Total revenue increased $82.2 million, or 14.6%, from $565.0 million for the nine months ended September 30, 2007 to $647.2 million for the nine months ended September 30, 2008. Of the increase, $64.3 million was generated from Boasso. Excluding fuel surcharge and Boasso, revenue decreased by $27.9 million, or 5.6%, due to the factors discussed above.
Gary Enzor, President and Chief Executive Officer, commented, "Despite the challenging freight environment and two hurricanes that impacted Gulf operations, we were able to deliver positive earnings in the quarter because we took decisive actions early in the year. Our cost reduction initiatives more than offset the impact of volume declines during the third quarter of 2008 and we will continue to expand these initiatives heading into 2009. We expect many of the actions we have already taken to have carryover benefits into next year and position us to drive earnings and cash availability despite market softness."
Steve Attwood, Chief Financial Officer, commented further, "Our liquidity improved significantly during the quarter as well. We are pleased our availability grew by $11 million to $57 million at the end of the quarter."
The Company will host a conference call for investors to discuss these results on November 7, 2008 at 11:00 a.m. Eastern Time. The toll free dial-in number is 888-656-7429; the toll number is 913-312-9322; the passcode is 2441293. A replay of the call will be available until December 7, 2008, by dialing 888-203-1112; passcode 2441293. 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.globenewswire.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; turmoil in the credit and capital markets; 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 statements as a result of developments occurring after the date of this release.
QLTYE
QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In 000's) Except Per Share Data
Unaudited
Three months ended Nine months ended
September 30, September 30,
------------------ -------------------
2008 2007 2008 2007
-------- -------- -------- ---------
OPERATING REVENUES:
Transportation $144,774 $148,900 $445,798 $442,656
Other service revenue 25,494 18,736 78,916 54,847
Fuel surcharge 44,473 24,545 122,490 67,483
---------------------------------------
Total operating revenues 214,741 192,181 647,204 564,986
---------------------------------------
OPERATING EXPENSES:
Purchased transportation 124,800 118,653 376,378 358,027
Compensation 27,519 22,302 83,518 62,558
Fuel, supplies and
maintenance 30,031 21,146 93,199 56,545
Depreciation and
amortization 5,207 4,468 15,435 12,960
Selling and administrative 8,699 7,442 26,515 21,314
Insurance claims 3,202 3,239 11,629 14,321
Taxes and licenses 1,583 1,105 4,042 2,729
Communications and utilities 3,104 2,952 10,109 8,081
(Gain) loss on disposal of
property and equipment (867) 219 (2,832) 418
Restructuring costs 1,700 -- 4,075 --
---------------------------------------
Total operating expenses 204,978 181,526 622,068 536,953
---------------------------------------
Operating income 9,763 10,655 25,136 28,033
Interest expense 8,455 7,651 26,246 23,403
Interest income (128) (198) (333) (573)
Other expense (income) 15 (279) 171 (638)
---------------------------------------
Income (loss) before taxes 1,421 3,481 (948) 5,841
Provision for (benefit from)
income taxes 704 1,982 (98) 2,229
---------------------------------------
Net income (loss) $ 717 $ 1,499 $ (850) $ 3,612
=======================================
PER SHARE DATA:
Net income (loss) per common
share
Basic $ 0.04 $ 0.08 $ (0.04) $ 0.19
=======================================
Diluted $ 0.04 $ 0.08 $ (0.04) $ 0.19
=======================================
Weighted average number of
shares
Basic 19,387 19,357 19,377 19,353
Diluted 19,556 19,488 19,377 19,488
QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In 000's)
Unaudited
Sept. 30, Dec. 31,
2008 2007
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 23,443 $ 9,711
Accounts receivable, net 106,352 99,081
Prepaid expenses 9,607 8,150
Deferred tax assets, net 20,483 20,483
Other 6,970 6,258
--------- ---------
Total current assets 166,855 143,683
Property and equipment, net 154,178 121,992
Goodwill 173,143 173,575
Intangibles, net 23,124 24,167
Non-current deferred tax assets, net 17,095 16,203
Other assets 11,669 14,356
--------- ---------
Total assets $ 546,064 $ 493,976
========= =========
LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of indebtedness $ 7,213 $ 413
Current maturities of capital lease
obligations 7,892 1,451
Accounts payable 17,485 17,428
Affiliates and independent owner-operators
payable 16,349 12,597
Accrued expenses 30,008 25,957
Environmental liabilities 3,875 4,751
Accrued loss and damage claims 9,842 13,438
Income taxes payable -- 555
--------- ---------
Total current liabilities 92,664 76,590
Long-term indebtedness, less current
maturities 371,671 343,575
Capital lease obligations, less current
maturities 17,810 3,832
Environmental liabilities 6,636 6,418
Accrued loss and damage claims 13,831 18,474
Other non-current liabilities 13,652 15,954
--------- ---------
Total liabilities 516,264 464,843
Minority interest in subsidiary 1,833 1,833
SHAREHOLDERS' EQUITY
Common stock 362,760 361,617
Treasury stock (1,580) (1,564)
Accumulated deficit (126,996) (126,146)
Stock recapitalization (189,589) (189,589)
Accumulated other comprehensive loss (16,394) (16,748)
Stock subscriptions receivable (234) (270)
--------- ---------
Total shareholders' equity 27,967 27,300
--------- ---------
Total liabilities, minority interest and
shareholders' equity $ 546,064 $ 493,976
========= =========
RECONCILATION 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 Nine Months Ended September 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 Nine months
Net Income (Loss) ended ended
Reconciliation: September 30, September 30,
---------------- ----------------
2008 2007 2008 2007
------- ------- ------- -------
Net income (loss) $ 717 $ 1,499 $ (850) $ 3,612
Net income (loss) per common
share:
Basic $ 0.04 $ 0.08 $ (0.04) $ 0.19
==================================
Diluted $ 0.04 $ 0.08 $ (0.04) $ 0.19
==================================
Adjustments to net income (loss):
Provision for (benefit from)
income taxes 704 1,982 (98) 2,229
Restructuring costs 1,700 -- 4,075 --
Gains on property sales -- -- (2,128) --
----------------------------------
Income (loss) before income taxes 3,121 3,481 999 5,841
----------------------------------
Provision for (benefit from)
income taxes at 39% 1,217 1,358 390 2,278
----------------------------------
Tax effected and adjusted net
income (loss) $ 1,904 $ 2,123 $ 609 $ 3,563
==================================
Tax effected and adjusted net
income (loss) per common
share:
Basic $ 0.10 $ 0.11 $ 0.03 $ 0.18
==================================
Diluted $ 0.10 $ 0.11 $ 0.03 $ 0.18
==================================
Weighted average number of
shares:
Basic 19,387 19,357 19,377 19,353
Diluted 19,556 19,488 19,377 19,488