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Pacer announces lower 3Q earnings, revenue
By CCJ Staff
Pacer International on Tuesday, Nov. 3, reported revenues decreased $139.1 million to $418.7 million for the 2009 third quarter compared to $557.8 million for the 2008 third quarter. Income from operations declined $28.6 million to an income of $0.7 million compared to an income of $29.3 million. Net income declined from $20.8 million to a net income of $0.6 million.
During the quarter, the company completed an amendment to its credit agreement, closed the sale of certain assets of its truck services unit and recorded a gain of $1.4 million on the transaction in Selling, General and Administrative Expenses. In addition, it continued its cost-cutting efforts during the quarter with a reduction of 253 people and recorded $2.0 million in severance expense.
“We are very pleased with our progress and return to profitability in the third quarter given that the transportation markets and overall economic conditions remained extremely challenging,” said Brian C. Kane, chief financial officer of Pacer, based in Concord, Calif. “We successfully amended and extended our credit facility and closed the sale of certain assets of Pacer Transport, our flatbed and heavy-haul truck services company, during the quarter. We also implemented a number of additional organizational initiatives that we believe will further improve our operational execution and the focus on our door-to-door integrated intermodal product while reducing our costs.
"Though we remain in challenging economic times, we are very encouraged by our financial and organizational progress during the third quarter, and by our new arrangements with Union Pacific, which will allow us to continue to deliver unparalleled value to our customers,” Kane said. The deal with Union Pacific extends and expands terms for big-box shipments under an agreement that would have expired in 2011. Union Pacific paid Pacer $30 million under the new agreement.
For the year to date, revenues decreased $423.2 million to $1,154.0 million compared to $1,577.2 million for the nine-month period in 2008. Income from operations, which includes a $200.4 million pretax noncash goodwill impairment charge of which $31.4 million related to Pacer's logistics segment and $169.0 million related to its intermodal segment, was a loss of $234.2 million compared to income of $75.3 million. Excluding the first-quarter impairment charge, income from operations was a loss of $33.8 million. Included in income from operations in the 2009 period is $4.3 million for severance expense.
Net income declined from $47.6 million to a net loss of $184.1 million. Net income includes the impact of the $161.2 million aftertax goodwill impairment charge. Excluding the impairment charge, net income was a loss of $22.9 million. |
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