Quality Distribution Inc. announced Monday, April 14, that it has reduced its work force. Most of the reductions occurred at the company’s headquarters in Tampa, Fla., where about 17 percent of the positions were eliminated. The company eliminated about 60 positions and expects a reduction in payroll-related costs in excess of $5 million annually. In conjunction with this action, the company will take a pre-tax charge for severance-related costs of about $1.5 million in the second quarter.
“This was a very difficult decision, but one that was necessary in light of our recent financial performance,” says Gary Enzor, chief executive officer. “We made these reductions while giving full consideration to ensuring that we maintain our commitment to the highest standards for customer service and compliance. In addition to the announced staff reductions, we are focused on further cost reductions driven via procurement, increased loaded ratio and improved productivity.”
Enzor says that while Quality’s recent profitability has been below expectations, “the company made these changes to strengthen our market-leading position, and we remain committed to both top- and bottom-line growth. We believe we have the access to capital necessary to not only weather the current economic cycle, but also to pursue our growth plans. With the December 2007 refinancing of our senior credit facility, the company had in excess of $50 million available borrowing capacity at the end of the quarter, a greater level of availability than at any time in our history.”
Quality also announced that first-quarter revenues, excluding fuel surcharge, were about $177 million, an 11 percent increase over last year. “Excluding the impact of our acquisition of Boasso, which closed in December of 2007, revenue for the quarter was flat with last year, as we continued to be impacted by the softness in the housing markets, as well as 10 percent fewer work days in March this year as compared to last March,” Enzor says.