Quality Distribution on Wednesday, Aug. 8, reported the highest total revenues and highest transportation revenues in its history. The total revenue for the quarter was $194.6 million, a 2.3 percent increase over second-quarter revenues of $190.3 million last year. Transportation revenues increased 1.6 percent from the prior-year quarter, primarily resulting from an increase in prices. Total revenue for the six months ended June 30 increased to $372.7 million from $369.0 million last year, with transportation revenues increasing by 0.7 percent.
Operating income for the quarter ended June 30 was $11.9 million versus $5.5 million for the first quarter of this year, an increase of 115 percent on revenue growth of 9.3 percent. The company said the improved margins were a result of a decrease in insurance expense in the quarter and a general improvement in operating margins in both its trucking and tank wash businesses, as both began to recover from a weak fourth 2006 and first 2007 quarter.
Net income for the quarter ended June 30 was $2.2 million, as compared with net income of $5.5 million in the second quarter of last year. Net income for the six months ended June 30 was $2.1 million, as compared with net income of $10.0 million last year. The company said its reported earnings per share was impacted adversely by a higher-than-normal effective tax rate in the second quarter of 48.8 percent.
The company announced on Aug. 2 that it has entered into an agreement to acquire 100 percent of the outstanding stock of Boasso America Corp. for about $60 million, subject to purchase price adjustments. Boasso, headquartered in Chalmette, La., is a provider of ISO tank container and depot services. This acquisition will add six additional locations in Chalmette, Houston, Charleston, S.C., Chicago, Detroit and Jacksonville, Fla., to the company’s network of tank container service centers. For its most recent fiscal year ended March 31, Boasso had revenues in excess of $70 million. Quality Distribution expects the acquisition to be immediately accretive to earnings and to close during the fourth quarter.
“Demand began to recover in the second quarter, and based on feedback from our customers, we anticipate that the second half of this year will show an improvement over the first half of this year,” said Gary Enzor, president and chief executive officer of Tampa, Fla.-based Quality Distribution. “We are also pleased to announce the signing of a purchase agreement to acquire Boasso. This acquisition significantly increases our presence in the chemical import/export market, a market that has historically grown at rates in excess of three times the overall market for bulk tank transportation and is a business that has operating margins that are typically higher than those of our core businesses.”
As previously announced, effective May 1, Quality Distribution acquired the assets of Brite Clean, a tank wash operation with annual revenues of about $12 million, and facilities located in Carteret, N.J., Bensalem, Pa., Houston and Chicago.
“The Brite Clean acquisition we concluded on May 1st of this year has had an immediate positive impact on our earnings, as we were able to consolidate several existing facilities with the new Brite Clean locations,” said Timothy Page, chief financial officer. “Additionally, we have undertaken a number of initiatives to improve margins in both our trucking and tank wash businesses and expect to see improving margins in the second half of this year and going forward.”
