Quality Distribution, Inc. Announces Third Quarter 2012 Results -- Quality Reports Third Quarter Revenue of $222.1 million -- -- Company Earns Third Quarter 2012 Net Income of $0.32 per Diluted Share -- -- Q3 2012 Adjusted Net Income of $0.17 per Diluted Share – -- Third Quarter Adjusted EBITDA Up 14.5% vs. Prior-Year Period -- TAMPA, Fla., Nov. 6, 2012 (GLOBE NEWSWIRE) -- Quality Distribution, Inc. (Nasdaq:QLTY) ("Quality" or the "Company"), a North American logistics and transportation provider with market leading businesses, today reported net income of $8.9 million, or $0.32 per diluted share, for the third quarter ended September 30, 2012, compared to net income of $6.2 million, or $0.25 per diluted share, in the third quarter ended September 30, 2011. Net income for the third quarter of 2012 included a $4.9 million non-cash benefit from releasing a portion of the Company's deferred tax valuation allowance. Adjusted net income for the third quarter of 2012 was $4.8 million, or $0.17 per diluted share, compared to adjusted net income of $4.9 million, or $0.20 per diluted share, for the same quarter in 2011. Both periods are calculated by applying a normalized tax rate of 39% and excluding other items not considered part of regular operating activities. Adjusted pre-tax income for the third quarter of 2012 included $3.5 million of costs related to the following: the previously disclosed termination of an independent affiliate relationship ($3.0 million), recent acquisition activity ($0.4 million), and severance charges ($0.1 million). Adjusted net income for the same period last year was derived by excluding debt issuance write-off costs of $1.4 million. A reconciliation of net income to adjusted net income is included in the attached financial exhibits. "Our third quarter proved to be a real challenge, with the highly unusual circumstance whereby all three of our segments reported lower than expected results. Based on what we see today, especially with the impact of Hurricane Sandy in the Northeast, our fourth quarter will be equally challenging," said Gary Enzor, Chief Executive Officer. "Despite these issues, we anticipate improved year-over-year performance in all of our segments in 2013. Given that we now have an excellent footprint in the energy space, our plans over the near-term are to optimize our existing and recently acquired operations, as well as generate free cash flow to reduce debt." Third Quarter Consolidated Results Total revenue for the third quarter of 2012 was $222.1 million, an increase of 11.4% versus the same quarter last year. Excluding fuel surcharges, revenue for the third quarter of 2012 increased 13.3% compared to the prior-year period. This revenue improvement was driven primarily by a $19.5 million increase from the Energy Logistics business, $2.5 million of growth from Intermodal, and a $0.5 million increase from the Chemical Logistics business. Operating income for the third quarter of 2012 was $11.6 million, a decrease of $3.7 million versus the prior-year period, driven primarily by the aforementioned independent affiliate conversion. Adjusting for this conversion, and the acquisition and severance costs mentioned above, third quarter 2012 operating income would have been approximately $15.2 million, or flat versus the prior-year third quarter. Operating margin declined primarily as a result of higher equipment lease expense and lower asset utilization within the Chemical and Energy segments, as well as higher depreciation and amortization expenses from the Company's recent asset acquisitions. Adjusted EBITDA for the third quarter of 2012 was $22.2 million, up 14.5% compared to the third quarter of 2011, driven primarily by income from Energy Logistics acquisitions consummated in 2012. A reconciliation of net income to adjusted EBITDA is included in the attached financial exhibits. Third Quarter Segment Results Chemical Logistics Revenues in the Chemical Logistics segment were $151.4 million in the third quarter of 2012, which was up slightly versus the third quarter of 2011. Excluding fuel surcharges, revenues increased $0.5 million. The Company believes that the leadership team within this segment was successful in protecting most of the revenue related to the affiliate conversion, and expects to gain revenue following the transition in the coming quarters. Operating income in the Chemical Logistics segment was $6.9 million, which was down $2.9 million versus the comparable prior-year period, primarily due to approximately $1.7 million of affiliate conversion, acquisition and severance charges. After adjusting for these charges, operating income was down $1.2 million, primarily related to higher equipment lease expense and lower asset utilization primarily in the Northeast region of the U.S. Intermodal Revenues in the Intermodal segment were $32.2 million, up $2.6 million or 8.8% versus the prior-year period. Excluding fuel surcharges, revenues increased 9.6% primarily due to continued higher demand for ISO container shipments, as well as the positive effects of the Greensville acquisition. Operating income in the Intermodal segment was $3.4 million, down $1.3 million versus the prior-period. This quarter-over-quarter decline was primarily due to higher than expected equipment repair costs, increased overtime charges, and medical benefit expenses. These third quarter impacts represent temporary items that are expected to improve going forward. Energy Logistics Revenues in the Energy Logistics segment were $38.5 million, up $19.8 million versus the prior year period. Revenue increases from the recent acquisitions of Bice, Trojan and Dunn's were partially offset by a steep decline in drilling activity from the Marcellus shale region. The decline in Marcellus revenue was driven primarily by lower natural gas prices, and partly by the independent affiliate conversion. Operating income in the Energy Logistics segment was $1.4 million, an increase of $0.4 million versus the prior year period as significant affiliate conversion costs nearly offset higher income from acquisitions. Excluding $1.8 million of affiliate conversion costs, operating income increased $2.3 million, driven by higher margins from the acquisitions. Operating margins were also adversely impacted by $2.1 million of increased depreciation and amortization expenses resulting from asset purchase accounting allocations and lower utilization. Excluding the previously mentioned affiliate conversion costs, EBITDA from the Energy Logistics segment for the third quarter was $5.6 million, up $4.4 million versus the prior-year period. Summary "This quarter was well below expectations as we encountered headwinds that adversely impacted the performance within each of our business segments," said Gary Enzor, Chief Executive Officer. "However, we did achieve positive year-over-year revenue in our Chemical Logistics business, representing a significant improvement versus our last several quarters. We also recently finalized the affiliate transition that caused a strain on resources and profitability during the last several months." Significant Recent Transactions Due to financial and operational difficulties encountered by one of our larger independent affiliates, the Company terminated its business relationship with this independent affiliate during the third quarter of 2012. This independent affiliate operated eight terminals within the Chemical Logistics segment and one terminal within the Energy Logistics segment. Four Chemical Logistics terminals were transitioned to other independent affiliates, with the remaining terminals transitioned to company operations. During this transition, operating results for the third quarter of 2012 were adversely impacted by $3.0 million of greater than expected operating costs and reduced profitability. Despite costs associated with the independent affiliate transition, Quality and certain other independent affiliates provided a smooth conversion of the business and retained the majority of the revenue. In connection with the business transition, on October 17, 2012 Quality acquired certain operating assets from this independent affiliate for approximately $17.1 million in cash. The Company expects to incur a moderate amount of additional expense in the fourth quarter related to the independent affiliate transition. On August 1, 2012, the Company completed the acquisition of the operating assets of Dunn's Tank Services, Inc., and the operating assets and rights of Nassau Disposal, Inc. (collectively "Dunn's"), for aggregate cash consideration of $34.3 million. Potential additional consideration of $3.6 million may be paid in cash, subject to Dunn's achieving certain future operating and financial performance criteria. Dunn's has trucking operations in both the Woodford and Utica shale, including two operating salt-water disposal wells in Oklahoma. In June 2012, the Company acquired the operating assets of Wylie Bice Trucking, LLC and the operating assets and rights of RM Resources, LLC, (collectively "Bice") for aggregate consideration of $81.4 million, plus additional contingent consideration of $19.0 million, subject to Bice achieving certain future operating and financial performance criteria. In April 2012, the Company acquired the operating assets of Trojan Vacuum Services ("Trojan") for cash consideration of $8.7 million, plus additional contingent consideration of $1.0 million, subject to Trojan achieving certain future operating and financial performance criteria. In conjunction with these various transactions, the Company incurred acquisition-related costs of approximately $3.0 million during the first half of 2012 and $0.4 million during the third quarter of 2012, which are included within selling and administrative expenses. The Company's results for the third quarter of 2012 include three months of operating results from Bice and Trojan and two months of operating results from Dunn's. Results for the third quarter of 2011 do not include any of these operating results. Balance Sheet and Cash Flow On September 27, 2012, the Company increased the maximum borrowing capacity of its ABL Facility from $250 million to $350 million, utilizing the facility's accordion feature. Substantially all other terms remain unchanged, and the Company's immediate borrowing availability did not change as a result of the increase in capacity. Borrowing availability under the Company's ABL Facility was $68.4 million at September 30, 2012, a decrease of $13.9 million versus December 31, 2011 availability of $82.3 million. During the first quarter of 2012, net proceeds from the Company's sale of common stock were used to repay outstanding borrowings on the ABL Facility, and during the second and third quarters of 2012, borrowings were utilized primarily to fund the Trojan, Bice, and Dunn's acquisitions. The Company expects to have sufficient borrowing availability under its ABL Facility to support its on-going operations following the previously mentioned acquisitions. Operating cash flows for the quarter ended September 30, 2012 were $5.2 million, compared with $12.8 million in the quarter ended September 30, 2011. The decline was primarily due to the expected increase in working capital requirements from the growing Energy Logistics business. Net capital expenditures for the quarter ended September 30, 2012 were $9.0 million, most of which were targeted to growth opportunities. "Our Bice and Dunn's acquisitions have gotten off to a slower start than we had originally expected, as lower commodity pricing for natural gas and oil reduced drilling activity, thereby negatively impacting demand for transportation services primarily in the Bakken and Woodford shale regions. We also made significant capital investments and lease commitments for tractor and trailer assets in anticipation of higher levels of demand, which have not yet materialized and in turn hurt near-term productivity and profitability," said Joe Troy, Chief Financial Officer. Mr. Troy continued, "During the remainder of this year and into 2013, we will focus our efforts on asset utilization across each business unit, reposition assets into areas with the greatest growth potential and rationalize our fleet where warranted. We feel confident that each of our business units is taking the necessary actions to improve profitability, and the Company is well positioned to reduce leverage and generate improved earnings and free cash flow in 2013." Quality will host a conference call for investors to discuss these results on Wednesday, November 7, 2012 at 10:00 a.m. Eastern Time. The toll free dial‑in number is 888-206-4913; the toll number is 913-312-0823; the passcode is 6526348. A replay of the call will be available through December 8, 2012, by dialing 888-203-1112; passcode: 6526348. A webcast of the conference call may be accessed in the Investor Relations section of Quality's website at www.qualitydistribution.com. Copies of this earnings release and other financial information about Quality may also be accessed in the Investor Relations section of Quality's website. The Company regularly posts or otherwise makes available information within the Investor Relations section that may be important to investors. About Quality Headquartered in Tampa, Florida, Quality operates the largest chemical bulk logistics network in North America through its wholly-owned subsidiary, Quality Carriers, Inc., and is the largest North American provider of intermodal tank container and depot services through its wholly-owned subsidiary, Boasso America Corporation. Quality also provides logistics and transportation services to the unconventional oil and gas industry including crude oil, proppant sand, fresh water, and production fluids, through its wholly-owned subsidiaries QC Energy Resources, Inc. and QC Environmental Services, Inc. Quality's network of independent affiliates and independent owner-operators provides nationwide bulk transportation and related services. Quality is an American Chemistry Council Responsible Care® Partner and is a core carrier for many of the Fortune 500 companies that are engaged in chemical production and processing. The Quality Distribution, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5285 This press release contains certain forward-looking information that is subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Forward-looking information is any statement other than a statement of historical fact. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expected or projected in the forward-looking statements. Without limitation, risks and uncertainties regarding forward-looking statements include (1) the effect of local, national and international economic, credit and capital market conditions on the economy in general, on our ability to obtain desired debt financing and on the particular industries in which we operate, including excess capacity in the industry, the availability of qualified drivers, changes in fuel and insurance prices, interest rate fluctuations, and downturns in customers' business cycles and shipping requirements; (2) our substantial leverage and our ability to make required payments and comply with restrictions contained in our debt arrangements or to otherwise generate sufficient cash flow from operations or borrowing under our ABL Facility to fund our liquidity needs; (3) competition and rate fluctuations, including fluctuations in prices and demand for commodities such as natural gas and oil; (4) our reliance on independent affiliates and independent owner-operators; (5) a shift away from or slowdown in production in the shale regions in which we have energy logistics operations; (6) our liability as a self-insurer to the extent of our deductibles as well as changing conditions and pricing in the insurance marketplace; (7) increased unionization, which could increase our operating costs or constrain operating flexibility; (8) changes in the future to, or our inability to comply with, governmental regulations and legislative changes affecting the transportation industry generally or in the particular segments in which we operate;(9) federal and state legislative and regulatory initiatives, which could result in increased costs and additional operating restrictions upon us or our oil and gas frac shale energy customers; (10) the use of disposal wells and other disposal sites in our energy logistics business; (11) our ability to comply with current and future environmental regulations and the increasing costs relating to environmental compliance; (12) potential disruptions at U.S. ports of entry; (13) diesel fuel prices and our ability to recover costs through fuel surcharges; (14) our ability to attract and retain qualified drivers;(15) terrorist attacks and the cost of complying with existing and future anti-terrorism security measures; (16) our dependence on senior management; (17) the potential loss of our ability to use net operating losses to offset future income; (18) potential future impairment charges; (19) the interests of our largest shareholder, which may conflict with your or our interests; (20) our ability to successfully identify acquisition opportunities, consummate such acquisitions and successfully integrate acquired businesses and converted affiliates and achieve the anticipated benefits and synergies of acquisitions and conversions, the effects of the acquisitions and conversions on the acquired businesses' existing relationships with customers, governmental entities, affiliates, owner-operators and employees, and the impact that acquisitions and conversions could have on our future financial results and business performance and other future conditions in the market and industry from the acquired businesses; (21) our ability to execute plans to profitably operate in the transportation business and disposal well business within the energy logistics market;(22) our success in entering new markets; (23) adverse weather conditions; (24) our liability for our proportionate share of unfunded vested benefit liabilities, particularly in the event of our withdrawal from any of our multi-employer pension plans; and (25) changes in planned or actual capital expenditures due to operating needs, changes in regulation, covenants in our debt arrangements and other expenses, including interest expenses. Readers are urged to carefully review and consider the various disclosures regarding these and other risks and uncertainties, including but not limited to risk factors contained in Quality Distribution, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Reports on Form 10-Q, as well as other reports filed with the Securities and Exchange Commission. Quality disclaims any obligation to update any forward-looking statement, whether as a result of developments occurring after the date of this release or for any other reasons. QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In 000's) Except Per Share Data Unaudited Three months ended Nine months ended September 30, September 30, 2012 2011 2012 2011 OPERATING REVENUES: Transportation $160,079 $140,974 $443,804 $395,052 Service revenue 31,550 28,138 89,569 82,518 Fuel surcharge 30,449 30,186 93,353 89,631 Total operating revenues 222,078 199,298 626,726 567,201 OPERATING EXPENSES: Purchased transportation 143,036 142,023 417,222 400,437 Compensation 22,522 15,014 57,669 45,412 Fuel, supplies and maintenance 24,085 13,114 56,996 36,556 Depreciation and amortization 6,039 3,600 14,452 10,470 Selling and administrative 8,258 5,910 24,857 15,945 Insurance costs 4,374 3,316 11,732 11,541 Taxes and licenses 807 638 2,179 1,737 Communications and utilities 980 595 2,724 2,054 Loss (gain) on disposal of property and 360 (198) (4) (848) equipment Restructuring credit -- -- -- (521) Total operating expenses 210,461 184,012 587,827 522,783 Operating income 11,617 15,286 38,899 44,418 Interest expense 7,673 7,096 22,042 22,218 Interest income (194) (117) (602) (434) Write-off of debt issuance costs -- 1,395 -- 3,181 Other (income) expense (112) 257 (276) 250 Income before income taxes 4,250 6,655 17,735 19,203 (Benefit from) provision for income (4,613) 468 (26,632) 1,248 taxes Net income $8,863 $6,187 $44,367 $17,955 PER SHARE DATA: Net income per common share Basic $0.32 $0.26 $1.69 $0.78 Diluted $0.32 $0.25 $1.64 $0.74 Weighted average number of shares Basic 27,368 23,372 26,243 22,942 Diluted 28,089 24,643 27,057 24,255 QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In 000's) Unaudited September 30, December 31, 2012 2011 ASSETS Current assets: Cash and cash equivalents $2,928 $4,053 Accounts receivable, net 125,080 90,567 Prepaid expenses 13,805 7,849 Deferred tax asset 8,738 4,048 Other current assets 10,380 3,858 Total current assets 160,931 110,375 Property and equipment, net 179,782 125,892 Goodwill 102,320 31,344 Intangibles, net 38,752 18,471 Non-current deferred tax asset 18,682 ---- Other assets 12,584 16,313 Total assets $513,051 $302,395 LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Current maturities of indebtedness $4,264 $4,139 Current maturities of capital lease obligations 4,507 5,261 Accounts payable 13,301 7,571 Independent affiliates and independent 18,601 9,795 owner-operators payable Accrued expenses 46,710 25,327 Environmental liabilities 4,740 3,878 Accrued loss and damage claims 6,806 8,614 Total current liabilities 98,929 64,585 Long-term indebtedness, less current maturities 393,721 293,823 Capital lease obligations, less current 2,629 3,840 maturities Environmental liabilities 4,513 6,222 Accrued loss and damage claims 8,977 9,768 Other non-current liabilities 24,026 30,342 Total liabilities 532,795 408,580 SHAREHOLDERS' DEFICIT Common stock 436,222 393,859 Treasury stock (1,944) (1,878) Accumulated deficit (234,176) (278,543) Stock recapitalization (189,589) (189,589) Accumulated other comprehensive loss (30,282) (31,381) Stock purchase warrants 25 1,347 Total shareholders' deficit (19,744) (106,185) Total liabilities and shareholders' deficit $513,051 $302,395 QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES SEGMENT OPERATING RESULTS (In 000's) Unaudited The Company has three reportable business segments for financial reporting purposes that are distinguished primarily on the basis of services offered: * Chemical Logistics, which consists of the transportation of bulk chemicals primarily through a network of 28 independent affiliates, and equipment rental income; * Energy Logistics, which consists primarily of the transportation of fresh water, disposal water, proppant sand and crude oil for the unconventional oil and gas frac shale energy markets, primarily through company-operated terminals and one independent affiliate; and * Intermodal, which consists of Boasso's intermodal ISO tank container transportation and depot services supporting the international movement of bulk liquids. Three Months Ended September 30, 2012 Chemical Energy Intermodal Total Logistics** (a) Logistics (b) Operating Revenues: Transportation $107,773 $35,144 $17,162 $160,079 Service revenue 17,414 3,043 11,093 31,550 Fuel surcharge 26,252 299 3,898 30,449 Total operating $151,439 $38,486 $32,153 $222,078 revenues Segment revenue % of 68.2% 17.3% 14.5% 100.0% total revenue Segment operating $9,718 $4,041 $4,257 $18,016 income* Depreciationand 2,795 2,359 885 6,039 amortization Other expense (income) 68 302 (10) 360 Operating income $6,855 $1,380 $3,382 $11,617 Three Months Ended September 30, 2011 Chemical Energy Intermodal Total Logistics ** Logistics Operating Revenues: Transportation $107,693 $18,341 $14,940 $140,974 Service revenue 16,981 306 10,851 28,138 Fuel surcharge 26,428 -- 3,758 30,186 Total operating $151,102 $18,647 $29,549 $199,298 revenues Segment revenue % of 75.8% 9.4% 14.8% 100.0% total revenue Segment operating $12,080 $1,224 $5,384 $18,688 income* Depreciationand 2,518 287 795 3,600 amortization Other income (145) -- (53) (198) Operating income $9,707 $937 $4,642 $15,286 (a) Operating income in the Chemical Logistics segment during the three-month period ended September 30, 2012 includes $1.7 million of costs associated with the independent affiliate conversion, acquisition and severance costs. (b) Operating income in the Energy Logistics segment during the three-month period ended September 30, 2012 includes $1.8 million of costs associated with the independent affiliate conversion. Nine Months Ended September 30, 2012 Chemical Energy Intermodal Total Logistics ** (x) Logistics (y) Operating Revenues: Transportation $321,355 $70,122 $52,327 $443,804 Service revenue 50,307 5,174 34,088 89,569 Fuel surcharge 79,944 625 12,784 93,353 Total operating $451,606 $75,921 $99,199 $626,726 revenues Segment revenue % of 72.1% 12.1% 15.8% 100.0% total revenue Segment operating $29,694 $9,037 $14,616 $53,347 income* Depreciationand 8,229 3,623 2,600 14,452 amortization Other (income) expense (276) 324 (52) (4) Operating income $21,741 $5,090 $12,068 $38,899 Nine Months Ended September 30, 2011 Chemical Energy Intermodal Total Logistics ** Logistics Operating Revenues: Transportation $330,623 $20,333 $44,096 $395,052 Service revenue 50,567 383 31,568 82,518 Fuel surcharge 79,079 -- 10,552 89,631 Total operating $460,269 $20,716 $86,216 $567,201 revenues Segment revenue % of 81.1% 3.7% 15.2% 100.0% total revenue Segment operating $37,195 $1,542 $14,782 $53,519 income* Depreciationand 7,750 328 2,392 10,470 amortization Other income (1,346) -- (23) (1,369) Operating income $30,791 $1,214 $12,413 $44,418 (x) Operating income in the Chemical Logistics segment during the nine-month period ended September 30, 2012 includes $6.3 million of costs associated with the independent affiliate conversion, acquisition and severance costs and legal and claims settlement expenses. (y) Operating income in the Energy Logistics segment during the nine-month period ended September 30, 2012 includes $1.8 million of costs associated with the independent affiliate conversion. * Segment operating income reported in the business segment tables above excludes amounts such as depreciation and amortization, gains and losses on disposal of property and equipment and restructuring costs. ** Most corporate and shared services overhead costs, including acquisition costs, are included in the Chemical Logistics segment. RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME, EBITDA AND ADJUSTED EBITDA AND RECONCILIATION OF NET INCOME PER SHARE TO ADJUSTED NET INCOME PER SHARE For the Three Months and Nine Months Ended September 30, 2012 and 2011 (In 000's) Unaudited Adjusted Net Income and Adjusted Net Income per Share, EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under United States Generally Accepted Accounting Principles ("GAAP"). Adjusted Net Income and Adjusted Net Income per Share, EBITDA and Adjusted EBITDA are presented herein because they are important metrics used by management to evaluate and understand the performance of the ongoing operations of Quality's business. For Adjusted Net Income, management uses a 39% tax rate for calculating the provision for income taxes to normalize Quality's tax rate to that of competitors, and to compare Quality's reporting periods with different effective tax rates. In addition, in arriving at Adjusted Net Income and Adjusted Net Income per Share, the Company adjusts for significant items that are not part of regular operating activities. These adjustments include acquisition costs, severance and lease termination costs, unusual legal and claims settlements, independent affiliate conversion costs, restructuring credits and the write-off of debt issuance costs. EBITDA is a component of the measure used by Quality's management to facilitate internal comparisons to competitors' results and the bulk transportation, chemical and energy logistics and intermodal industries in general. We believe that financial information based on GAAP for businesses, such as Quality's, should be supplemented by EBITDA so investors better understand the financial information in connection with their evaluation of the Company's business. This measure addresses variations among companies with respect to capital structures and cost of capital (which affect interest expense) and differences in taxation and book depreciation of facilities and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. Accordingly, EBITDA allows analysts, investors and other interested parties in the bulk transportation, logistics and intermodal industries to facilitate company-to-company comparisons by eliminating some of the foregoing variations. EBITDA as used herein may not, however, be directly comparable to similarly titled measures reported by other companies due to differences in accounting policies and items excluded or included in the adjustments, which limits its usefulness as a comparative measure. To calculate EBITDA, Net Income is adjusted for provision for (benefit from) income tax, depreciation and amortization and net interest expense. To calculate Adjusted EBITDA, we calculate EBITDA from Net Income, which is then further adjusted for items that are not part of regular operating activities, including acquisition costs, severance and lease termination costs, unusual legal and claims settlements, independent affiliate conversion costs, restructuring credits and the write-off of debt issuance costs, and other non-cash items such as non-cash stock-based compensation. Adjusted Net Income and Adjusted Net Income per Share, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for the consolidated statements of operations prepared in accordance with GAAP, or as an indication of Quality's operating performance or liquidity. Three months ended Nine months ended September 30, September 30, Net Income Reconciliation: 2012 2011 2012 2011 Net income $8,863 $6,187 $44,367 $17,955 Net income per common share: Basic $0.32 $0.26 $1.69 $0.78 Diluted $0.32 $0.25 $1.64 $0.74 Weighted average number of shares: Basic 27,368 23,372 26,243 22,942 Diluted 28,089 24,643 27,057 24,255 Reconciliation: Net income $8,863 $6,187 $44,367 $17,955 Adjustments to net income: (Benefit from) provision for income (4,613) 468 (26,632) 1,248 taxes Acquisition costs 398 -- 3,370 -- Severance and lease termination costs 125 -- 1,059 -- Legal and claims settlements -- -- 762 -- Affiliate conversion costs 3,031 -- 3,031 -- Write-off of debt issuance costs -- 1,395 -- 3,181 Restructuring credit -- -- -- (521) Adjusted income before income taxes 7,804 8,050 25,957 21,863 Provision for income taxes at 39% 3,044 3,140 10,123 8,527 Adjusted net income $4,760 $4,910 $15,834 $13,336 Adjusted net income per common share: Basic $0.17 $0.21 $0.60 $0.58 Diluted $0.17 $0.20 $0.59 $0.55 Weighted average number of shares: Basic 27,368 23,372 26,243 22,942 Diluted 28,089 24,643 27,057 24,255 Three months ended Nine months ended September 30, September 30, EBITDA and Adjusted EBITDA: 2012 2011 2012 2011 Net income $8,863 $6,187 $44,367 $17,955 Adjustments to net income: (Benefit from) provision for income (4,613) 468 (26,632) 1,248 taxes Depreciation and amortization 6,039 3,600 14,452 10,470 Interest expense, net 7,479 6,979 21,440 21,784 EBITDA 17,768 17,234 53,627 51,457 Acquisition costs 398 -- 3,370 -- Severance and lease termination costs 125 -- 1,003 -- Legal and claims settlements -- -- 762 -- Affiliate conversion costs 3,031 -- 3,031 -- Write-off of debt issuance costs -- 1,395 -- 3,181 Restructuring credit -- -- -- (521) Non-cash stock-based compensation 856 747 2,374 2,205 Adjusted EBITDA $22,178 $19,376 $64,167 $56,322 CONTACT: Joseph J. Troy Executive Vice President and Chief Financial Officer 800-282-2031 ext. 7195 Quality Distribution, Inc. Logo
Quality Distribution, Inc. Announces Third Quarter 2012 Results
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