Pacer nearly doubles 3Q net income

user-gravatar Headshot
Updated Nov 4, 2010

Pacer Stacktrain

Pacer International Inc., an asset-light North American freight transportation and logistics services provider, on Wednesday, Nov. 3, reported financial results for the three- and nine-month periods ended Sept. 30. For the third quarter, operating income increased by $2.6 million or 371.4 percent, while revenues were $364.8 million; excluding the impact of the transition of the east-west big box business and sale of the truck services unit in August 2009, revenues improved by $20.0 million or 5.9 percent. Net income increased $0.5 million to $1.1 million from $0.6 million.

“Pacer’s intermodal volumes were negatively impacted in the quarter by the effects of Hurricane Alex in Mexico,” said John J. Hafferty, chief financial officer of Pacer, based in Dublin, Ohio. Hafferty said Alex, which made landfall on June 30, caused severe flooding, track damage and bridge impairment, resulting in the closure of the primary line of Pacer’s rail carrier for more than four weeks in July, with lingering network congestion and equipment availability delays throughout the company’s network into August.

“We estimate that the disruption of rail service caused by Hurricane Alex reduced intermodal operating income by $3.5 million to $4 million,” he said. “However, we were pleased to see continued improvements in our operating income, net income, cash flow and SG&A. We intend to continue to manage our costs effectively and anticipate that our volume will return to expected levels in the fourth quarter.”

Year-to-date operating income increased by $241.3 million, while revenues decreased $24.5 million or 2.1 percent; excluding the impact of the transition of the east-west big box business and the sale of the truck services unit in August 2009, revenues increased by $194.7 million or 21.4 percent. Net income increased to $2.0 million from a loss of $184.1 million. Excluding the impact of the goodwill impairment charge in 2009 and severance charges in both periods, adjusted net income increased $23.2 million to adjusted income of $3.8 million from an adjusted loss of $19.4 million.

“Over the past year, we have transformed two separate intermodal networks into one integrated operating platform,” said Daniel W. Avramovich, chairman and chief executive officer. “Now, with the deployment of the new operating system, we fully expect to see further improvements in our network efficiencies and container turn times. We are also expanding our international ocean and freight forwarding operations to capture more freight at origin points in order to take full advantage of our ability to provide integrated global door-to-door transportation and logistics solutions for our customers.”