Pacer posts lower 4Q net income on higher revenues

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Pacer International, a nonasset-based North America third-party logistics and freight transportation provider, on Monday, Feb. 11, reported financial results for the annual and three-month periods ended Dec. 28.

Revenues for the quarter increased $38.2 million to $540.2 million compared to $502.0 million for the quarter ended Dec. 29, 2006. Income from operations for both the company’s intermodal and logistics segments were up by $5.8 million and $0.1 million, respectively. Fourth-quarter corporate expenses included a $3.0 million bonus accrual compared to a $3.5 million bonus reversal in the 2006 fourth quarter; with this swing in fourth-quarter corporate expenses, consolidated income from operations declined by $1.9 million.

For the year, revenues increased $81.6 million, or 4.3 percent, compared to 2006. Intermodal volumes were up 6.1 percent for the company’s Stacktrain operation and 4.3 percent for its Rail Brokerage operation compared to last year. Income from operations declined $23.8 million from 2006 to $94.5 million for the year; this variance included several transactions that benefited 2006 but did not recur in 2007, including arbitration and other rate dispute settlements, according to Pacer. In addition, 2007 included a $6.0 million charge for severance and facility exit activities and a $3.0 million bonus accrual.

Intermodal segment income from operations declined $20.6 million from last year (including the arbitration settlement benefiting 2006). Logistics segment income from operations increased $2.5 million from last year, and corporate expenses were $5.7 million higher than last year due to severance charges and bonus accruals.

“We are generally pleased with our performance during 2007, given the difficult market conditions and our investment in positioning our company for the future,” said Mike Uremovich, chairman and chief executive officer of Concord, Calif.-based Pacer. “We refinanced our long-term debt to enhance our liquidity, and we entered into a software license agreement for an enterprise suite of applications that, when implemented, will provide better information management, enhance our customer services and communications, and reduce costs.”