Pacer International Inc., a non-asset based North America third-party logistics and freight transportation provider, on Tuesday, Oct. 30, reported financial results for the three- and nine-month periods ended Sept. 21.
Revenues for the quarter increased $31.1 million, or 6.8 percent, to $489.3 million compared to $458.2 million for the quarter ended Sept. 22, 2006, with increases from both operating segments. Income from operations declined $8.3 million from the 2006 quarter to $23.3 million for the 2007 quarter. This variance includes normal course transactions that did not recur in the comparable quarter, including a $7.4 million benefit in the 2006 quarter for arbitration and other rate dispute settlements, and a $2.4 million expense in the 2007 quarter for severance costs.
Intermodal segment income from operations declined $13.4 million from last year (including the arbitration settlement benefiting the 2006 quarter), logistics segment income from operations increased $1.4 million from last year, and corporate expenses were $3.7 million lower than last year due to a $3.5 million bonus accrual in the 2006 quarter.
“We have seen continued improvement in intermodal volumes for our stacktrain operation up 8.7 percent with increases in all three lines of business, and for our rail brokerage operation up 11.1 percent as compared to last year,” said Mike Uremovich, chairman and chief executive officer of Concord, Calif.-based Pacer International. “There remains, however, excess capacity — particularly in our domestic intermodal business that has led to lower pricing, margins and income.”
For the nine months ended Sept. 21, revenues increased $43.5 million, or 3.1 percent, to $1,429.3 million compared to $1,385.8 million for the nine months ended Sept. 22, 2006. Income from operations declined $22.1 million from the 2006 period to $59.2 million for the 2007 period. Intermodal segment income from operations declined $26.6 million from last year, logistics segment income from operations increased $2.4 million from last year, and corporate expenses were $2.1 million less than last year.
“Pacer will continue to focus on reducing costs related to overhead,” Uremovich said. “For the nine months ended September 21, 2007, we closed four facilities and reduced employee headcount by 116 through our severance efforts. As previously reported, our management team is charged with identifying and implementing process improvements, facility rationalization and other savings opportunities in order for Pacer to become a more effective and efficient organization. We are moving forward with a system enhancements project, which will allow us to improve cross-business unit product integration and customer interfaces.”
