Quality Distribution posts lower 3Q net income, higher total revenue

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Quality Distribution Inc. on Thursday, Nov. 6, reported results for its third quarter and nine months ended Sept. 30. The company recorded net income for the third quarter of 2008 of $0.7 million as compared with net income for the same period last year of $1.5 million. Results from the 2008 third quarter include a pretax restructuring charge of $1.7 million related primarily to the closure of tank wash and trucking terminals. Applying a normalized tax rate of 39 percent and excluding the restructuring charge would have resulted in net income of $1.9 million compared with net income of $2.1 million for the year-ago period.

For the nine-month period, the company recorded a net loss of $0.9 million compared with net income of $3.6 million for the 2007 nine-month period.

Total revenue for the third quarter of 2008 increased $22.6 million, or 11.7 percent, over the third quarter of 2007 from $192.2 million to $214.7 million. Of this increase, $22.7 million was generated from the company’s subsidiary, Boasso America Corp., which was acquired effective Dec. 18, 2007. Revenue, excluding fuel surcharges and the revenue from Boasso, decreased by $16.5 million, or 9.8 percent, driven by continued softening in the housing and auto markets, as well as general economic conditions.

Total revenue increased $82.2 million, or 14.6 percent, to $647.2 million for the nine-month period from $565.0 million; of the increase, $64.3 million was generated from Boasso. Excluding fuel surcharges and Boasso, revenue decreased by $27.9 million, or 5.6 percent, due to the factors discussed above.

“Despite the challenging freight environment and two hurricanes that impacted Gulf operations, we were able to deliver positive earnings in the quarter because we took decisive actions early in the year,” said Gary Enzor, president and chief executive officer of Tampa, Fla.-based Quality Distribution. “Our cost-reduction initiatives more than offset the impact of volume declines during the third quarter of 2008, and we will continue to expand these initiatives heading into 2009. We expect many of the actions we have already taken to have carryover benefits into next year and position us to drive earnings and cash availability despite market softness.”