Quality Distribution reports lower 3Q net income

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Quality Distribution Inc. on Thursday, Aug. 7, reported the results for its second quarter and six months ended June 30.

Total revenue for the quarter increased $29.2 million, or 15 percent, over the second quarter of 2007 from $194.7 million to $224.0 million. Of this increase, $21.8 million was generated from the company’s subsidiary, Boasso America Corp., which was acquired effective Dec. 18, 2007. Revenue, excluding fuel surcharge and the revenue from Boasso, decreased by $10.8 million or 6.3 percent, driven by softer volumes in the housing and automobile markets, as well as general economic conditions.

Total revenue increased $59.7 million or 16 percent from $372.8 million for the six months ended June 30, 2007, to $432.5 million for the six months ended June 30, 2008; of the increase, $41.6 million was generated from Boasso. Excluding fuel surcharge and Boasso, revenue decreased by $11.4 million or 3.5 percent, driven by softer volumes in the housing and automobile markets, as well as general economic conditions.

The company recorded net income for the second quarter of 2008 of $0.4 million as compared with net income for the same period last year of $2.3 million. The second-quarter results include a pretax restructuring charge of $2.4 million, primarily related to the elimination of about 75 positions; as a result, the annual reduction in payroll-related costs is expected to exceed $5.0 million. The second-quarter results also contain a pre-tax gain on the sale of real property of $1.1 million. Applying a normalized tax rate of 39 percent and excluding the restructuring charge and the property gain would have resulted in net income of $1.3 million for the second quarter of 2008 as compared with net income of $2.7 million for the same prior-year period.

For the six months ended June 30, the company recorded a net loss of $1.6 million as compared with net income of $2.1 million for the 2007 six-month period.

“The personnel reductions we took in the second quarter were difficult, but necessary in light of these challenging economic times,” said Gary Enzor, president and chief executive officer of Tampa, Fla.-based Quality Distribution. “I am pleased to report that we are making tangible progress on profitability initiatives designed to improve our top line, our profit margins and cash flow.”