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Quality Distribution posts higher 3Q profit, lower revenue
By CCJ Staff
Quality Distribution, Inc. on Tuesday, Nov. 3, reported the results for its third quarter and the nine months ended Sept. 30. Quality recorded net income for the third quarter of 2009 of $1.4 million compared to net income of $0.7 million for the same quarter in 2008. Quality generated $6.7 million of net cash from operating activities in the current quarter. Net loss for the nine months ended Sept. 30 was $185.1 million compared to net loss of $0.9 million for the nine months ended Sept. 30, 2008.
Revenue excluding fuel surcharge was down 13.5 percent for the third quarter of 2009, compared to the third quarter of 2008, and down 19.2 percent for the nine months ended Sept. 30 compared with the nine months ended Sept. 30, 2008, reflecting continued pressure from the current economic environment.
On Oct. 10, Quality sold substantially all of the operating assets of its Quala Systems Inc. tank wash subsidiary for $13 million, of which $10 million was paid in cash and the remaining $3 million in a subordinated note. The QSI business that was sold generated about $21 million of revenue for the nine months ended Sept. 30 from tank wash and related operations.
"This is an exciting time for our company," said Gary Enzor, chief executive officer of Quality Distribution, based in Tampa, Fla. "We have made significant progress this year in transforming Quality's platform to a leaner, stronger and more efficient model. Sequentially, our revenue excluding fuel surcharge was up approximately 7 percent this quarter, and we continue to generate solid cash flows. We're still cautious in terms of this economic environment in the near term. However, we believe we are well positioned to take on the challenges and opportunities that 2010 will bring."
On Oct. 15, Quality announced the completion of the private exchange offer and retail tender offer of its subsidiaries' 9 percent senior subordinated notes and senior floating rate notes. "Restructuring our debt pushed all major debt maturities out to 2013, eliminating any questions about our economic viability," said Steve Attwood, chief financial officer. "Our new debt structure, coupled with positive cash flow from operations, and current availability under our ABL facility in excess of $50 million, provide the company with the flexibility to take full advantage of opportunities that present themselves as we move forward into 2010." |
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