Pacer International on Tuesday, Oct. 28, reported financial results for the three- and nine-month periods ended Sept. 19.
Revenues for the quarter increased $66.9 million to $556.2 million compared to $489.3 million for the quarter ended Sept. 21, 2007. Net income increased from $13.4 million to $20.4 million, an increase of 52.2 percent. These results include the benefit of a nonrecurring $3.5 million tax reserve reduction related to the resolution of open tax positions. Income from operations was up $5.4 million to $28.7 million.
Intermodal segment income from operations increased $8.4 million, while logistics segment income from operations was $1.8 million, down $0.1 million but improving over the operating loss in the 2008 second quarter. Corporate costs grew $2.9 million to $7.3 million principally due to a performance incentive accrual coupled with $1.6 million related to the company’s SAP software project in the 2008 quarter, partially offset by reduced legal fees and the absence of severance expenses relating to its 2007 facility rationalization and severance program.
“We were pleased with our solid financial results and cash flow in the third quarter, a quarter in which the global economy began to experience a significant downturn,” said Michael Uremovich, chairman and chief executive officer of Concord, Calif.-based Pacer. “We are happy to report that our company remains on a solid financial foundation as we enter what is likely to be a tough economic period in the fourth quarter of this year and well into 2009.”
Uremovich said that in the quarter, Pacer continued to make progress on its key initiatives to significantly grow its door-to-door transportation services business with both its retail and wholesale customers, and to improve its logistics segment’s performance. “We are steadily increasing volume on the BNSF intermodal network, enhancing our customers’ route and service level choices in many lanes,” he said. “We implemented organizational changes to further integrate our pickup-and-delivery operations within our intermodal segment to improve service to our customers and increase the number of moves handled by our cartage operation. We also added resources to our truck brokerage operation to rapidly expand and improve highway service options for our shippers.”
For the nine-month period, revenues increased $154.7 million to $1,584.0 million compared to $1,429.3 million for the nine months ended Sept. 21, 2007. Net income increased from $33.7 million to $48.5 million. Income from operations was up $17.6 million to $76.8 million.
Intermodal segment income from operations increased $28.6 million, while logistics segment income from operations declined $4.2 million due to investments in the company’s truck brokerage unit, excess capacity, declining prices and higher transportation and fuel costs affecting its truck services and truck brokerage units. Corporate costs grew $6.8 million to $20.8 million due primarily to a performance incentive accrual coupled with $4.0 million related to the company’s SAP software project in the 2008 period, partially offset by reduced legal fees and the absence of severance expenses relating to its 2007 facility rationalization and severance program.