Pacer posts 1Q net loss of $177.4M

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Pacer International Inc., an asset-light North American freight transportation and logistics services provider, on Wednesday, May 6, reported financial results for the three-month period ended March 31.

Revenues for the quarter decreased $144.2 million to $358.6 million compared to $502.8 million for the quarter ended April 4, 2008. Income from operations, which includes an estimated $200.4 million pretax noncash goodwill impairment charge (of which $31.4 million related to the company’s logistics segment and $169.0 million related to its intermodal segment), was a loss of $223.1 million compared to an income of $23.1 million.

Net income declined from $13.4 million to a net loss of $177.4 million; net income includes the impact of the goodwill impairment charge ($163.7 million after-tax). Net income, adjusted to exclude the estimated $200.4 million pretax logistics and intermodal segment goodwill impairment charges, decreased to a loss of $13.7 million from an income of $13.4 million.

“These disappointing first-quarter results have galvanized our company into taking additional actions to return Pacer to positive earnings,” said Michael E. Uremovich, chairman and chief executive officer of the Concord, Calif.-based company.

Uremovich said the following cost-cutting measures have been implemented since Jan. 1:

  • Work force reductions;
  • Salary reduction for all employees;
  • Suspension of the 401(k) match for 2009;
  • Suspension of merit increases for 2009;
  • Reductions in capital spending;
  • Suspension of the quarterly dividend; and
  • Elimination of any noncritical spending.
  • “These actions, while difficult, were necessary in the face of significantly lower demand from many of the key industries served by our intermodal and logistics operations,” Uremovich said. “Additionally, we implemented a restructuring initiative designed to simplify and streamline our organization in order to further reduce our cost structure while improving customer responsiveness and our focus on door-to-door service delivery. We are in extremely challenging times for our industry and company, but by remaining focused on our key initiatives and our customers, where there are improving signs of new business growth, we anticipate returning to positive cash flow and earnings during the second half of 2009.”