Quality Distribution Inc. (QLTY)

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Quality Distribution, Inc. Announces First Quarter Results
Date : 05/07/2008 @ 5:21PM
Source : PR Newswire
Stock : Quality Distribution (MM) (QLTY)
Quote : 3.32 0.07 (2.15%) @ 9:52AM
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Quality Distribution, Inc. Announces First Quarter Results





TAMPA, Fla., May 7 /PRNewswire-FirstCall/ -- Quality Distribution, Inc. (NASDAQ:QLTY) (the "Company") today reported the results for its first quarter ended March 31, 2008. Total revenue for the quarter increased 17.1% over the first quarter of 2007 from $178.1 million to $208.5 million. Of this increase, $19.8 million was generated from the Company's subsidiary, Boasso America Corporation ("Boasso") which was acquired effective December 18, 2007. Revenue, excluding fuel surcharge and excluding the acquired Boasso revenue, was flat with last year as previously disclosed: $158.5 million in 2008 compared with $159.0 million in 2007. Revenue in March was impacted by fewer workdays due to the Easter holiday.

(Logo: http://www.newscom.com/cgi-bin/prnh/20041104/FLTH034LOGO )

The Company incurred a net loss for first quarter of 2008 of $1.9 million, or $0.10 per diluted share, as compared to a net loss for the same period of last year of $0.2 million, or $0.01 per diluted share. Applying a normalized tax rate of 39% would have resulted in a diluted loss per share of $0.07 for the first quarter of 2007.

The Company announced in April that it had eliminated approximately 60 positions, most of which were at its corporate office in Tampa, Florida. As a result, the annual reduction in payroll related costs is expected to be over $5 million, and the Company intends to record a pre-tax charge for severance, benefits and related costs of approximately $1.8 million in the second quarter.

Gary Enzor, President and Chief Executive Officer commented, "The decision to eliminate personnel was a difficult one, but one that was necessary given our recent financial results. The demand environment remains challenging, particularly in the construction and automotive sectors; however, there are extensive revenue opportunities available to us and we are aggressively pursuing them. At the same time, we will continue to identify further cost reduction opportunities and we are accelerating the implementation of a number of productivity initiatives. The initiatives are being implemented across a variety of functions to facilitate top-line growth and fundamentally improve the profitability of the company."

The Company will host a conference call for investors to discuss these results on May 8, 2008 at 11:00 a.m. Eastern Time. The toll free dial-in number is 888-677-8756; the toll number is 913-981-5589; the passcode is 8543263. A replay of the call will be available until June 7, 2008, by dialing 888-203-1112; passcode; 8543263. 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 http://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.

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 periodic 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

Contact: Timothy B. Page Senior Vice President and Chief Financial Officer 800-282-2031 ext. 7376


QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In 000's) Except Per Share Data Unaudited

Three Months Ended March 31, 2008 2007 OPERATING REVENUES: Transportation $149,259 $142,073 Other service revenues 26,745 16,968 Fuel surcharge 32,497 19,054 Total operating revenues 208,501 178,095 OPERATING EXPENSES: Purchased transportation 119,972 115,947 Compensation 28,604 19,669 Fuel, supplies and maintenance 30,133 16,124 Depreciation and amortization 4,896 4,175 Selling and administrative 9,248 6,466 Insurance claims 5,562 6,638 Taxes and licenses 1,217 781 Communications and utilities 3,616 2,632 (Gain) loss on disposal of property and equipment (544) 209 Total operating expenses 202,704 172,641

Operating income 5,797 5,454

Interest expense 9,151 7,677 Interest income (117) (199) Other expense 10 37 Loss before taxes (3,247) (2,061) Benefit from income taxes (1,328) (1,888) Net loss $(1,919) $(173)

PER SHARE DATA: Net loss per common share Basic $(0.10) $(0.01) Diluted $(0.10) $(0.01)

Weighted average number of shares Basic 19,064 19,348 Diluted 19,064 19,348


QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In 000's) Unaudited

March 31, December 31, 2008 2007 ASSETS Current assets: Cash and cash equivalents $2,695 $9,711 Accounts receivable, net 105,952 99,081 Prepaid expenses 11,502 8,150 Deferred tax asset, net 20,483 20,483 Other 6,532 6,258 Total current assets 147,164 143,683 Property and equipment, net 127,231 121,992 Goodwill 172,790 173,575 Intangibles, net 23,932 24,167 Non-current deferred tax asset, net 17,385 16,203 Other assets 13,356 14,356 Total assets $501,858 $493,976

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of indebtedness $1,895 $413 Current maturities of capital lease obligations 1,564 1,451 Accounts payable 16,604 17,428 Affiliates and independent owner-operators payable 17,568 12,597 Accrued expenses 30,167 25,957 Environmental liabilities 4,093 4,751 Accrued loss and damage claims 11,136 13,438 Income taxes payable - 555 Total current liabilities 83,027 76,590 Long-term indebtedness, less current maturities 348,156 343,575 Capital lease obligations, less current maturities 3,747 3,832 Environmental liabilities 6,418 6,418 Accrued loss and damage claims 16,657 18,474 Other non-current liabilities 16,116 15,954 Total liabilities 474,121 464,843 Minority interest in subsidiary 1,833 1,833 SHAREHOLDERS' EQUITY Common stock 362,039 361,617 Treasury stock (1,564) (1,564) Accumulated deficit (128,065) (126,146) Stock recapitalization (189,589) (189,589) Accumulated other comprehensive loss (16,647) (16,748) Stock subscriptions receivable (270) (270) Total shareholders' equity 25,904 27,300 Total liabilities, minority interest and shareholders' equity $501,858 $493,976


RECONCILIATION OF NET LOSS TO TAX EFFECTED NET LOSS AND RECONCILIATION OF NET

LOSS PER SHARE TO TAX EFFECTED NET LOSS PER SHARE For the Three Months Ended March 31, 2008 and 2007 (In 000's) Unaudited


Tax Effected Net Loss and Tax Effected Net Loss Per Share (as defined) is 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 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. Tax Effected Net Loss and Tax Effected Net Loss Per Share are not a measure of financial performance or liquidity under United States Generally Accepted Accounting Principles ("GAAP"). Tax Effected Net Loss and Tax Effected Net 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 ended March 31, Net Loss Reconciliation: 2008 2007

Net loss $(1,919) $(173)

Net loss per common share: Basic $(0.10) $(0.01) Diluted $(0.10) $(0.01)

Adjustments to net loss: Benefit from income taxes (1,328) (1,888) Loss before income taxes (3,247) (2,061)

Benefit from income taxes at 39% (1,266) (804) Tax effected net loss $(1,981) $(1,257)

Tax effected net loss per common share: Basic $(0.10) $(0.07) Diluted $(0.10) $(0.07) Weighted average number of shares: Basic 19,064 19,348 Diluted 19,064 19,348

http://www.newscom.com/cgi-bin/prnh/20041104/FLTH034LOGO

DATASOURCE: Quality Distribution, Inc.


CONTACT: Timothy B. Page, Senior Vice President and Chief Financial

Officer of Quality Distribution, Inc., 800-282-2031 ext. 7376


Web site: http://www.qualitydistribution.com/