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Quality Distribution, Inc. Announces Preliminary Fourth Quarter 2012 Results



Quality Distribution, Inc. Announces Preliminary Fourth Quarter 2012 Results

TAMPA, Fla., Feb. 12, 2013 (GLOBE NEWSWIRE) -- Quality Distribution, Inc.
(Nasdaq:QLTY) ("Quality"), a North American logistics and transportation
provider with market leading businesses, today announced the following
estimated preliminary fourth quarter 2012 results:

  * For the three-month period ended December 31, 2012, Quality expects its
    total revenue to be approximately $215.0 million, operating income to be
    within the range of $9.9 million to $10.6 million, and adjusted EBITDA to
    be within the range of $20.0 million to $20.7 million. Expected adjusted
    EBITDA excludes the following: costs associated with the previously
    disclosed termination of an independent affiliate relationship of $1.3
    million, residual acquisition expenses of $0.6 million, the effects of
    Hurricane Sandy of $0.7 million, and acquisition earnout adjustments of
    ($2.6) million (a reconciliation of estimated operating income to
    estimated adjusted EBITDA is included in the attached financial exhibits);
     
  * For the three-month period ended December 31, 2012, Quality expects
    revenue from its chemical logistics business to be approximately $145.0
    million, revenue from its energy logistics business to be approximately
    $39.0 million and revenue from its intermodal business to be approximately
    $31.0 million;
     
  * For the three-month period ended December 31, 2012, Quality expects net
    income to be within the range of $0.19 and $0.21 per diluted share. After
    applying a normalized tax rate of 39%, and excluding the other items noted
    above, Quality expects adjusted net income to be within the range of $0.10
    to $0.12 per diluted share (a reconciliation of estimated net income to
    estimated adjusted net income is included in the attached financial
    exhibits);
     
  * Cash and total debt at December 31, 2012 were approximately $2.7 million
    and $418.8 million, respectively. Borrowing availability under the
    Company's asset-based revolving credit facility was $55.2 million at
    December 31, 2012;
     
  * For the three-month period ended December 31, 2012, gross capital
    expenditures were $4.9 million and sales of equipment were $6.0 million. 

This information is being provided in anticipation of the Company's
participation in the Stifel Nicolaus Transportation and Logistics Conference
and the BB&T 28^th Annual Transportation Conference on Wednesday, February 13,
2013. The Company plans to release its full fourth quarter and fiscal year
2012 financial results on Wednesday, February 20, 2013 (see details below).

On November 23, 2012, the Company initiated a program to repurchase up to $15
million of its common stock. During the fourth quarter of 2012, the Company
repurchased 0.6 million shares for approximately $3.7 million. From January 1,
2013 through February 11, 2013, the Company repurchased 0.5 million shares for
approximately $3.2 million.

"Our preliminary fourth quarter results were in line with the overall
expectations we shared during our third quarter conference call," stated Gary
Enzor, Chief Executive Officer. "Our revenues across the board were solid,
although margins in our Energy segment contracted more than anticipated as we
continue to address asset utilization issues and other challenges within
certain shale operations. We have restructured managerial responsibilities
within Energy, which we expect to deliver improvements over the coming
quarters."

"During the fourth quarter, we successfully contained capital spending while
simultaneously selling idle, excess and under-utilized equipment and real
estate," said Joe Troy, Chief Financial Officer. "Elevated asset sale
activity, combined with our free cash flow, provided sufficient resources to
repurchase shares under our open market program, which has continued into our
first quarter of 2013."

Quality intends to release its full fourth quarter and fiscal 2012 financial
results after the market closes on Wednesday, February 20, 2013. Quality will
host a conference call for equity analysts and investors to discuss these
results on Thursday, February 21, 2013 at 10:00 a.m. Eastern Time. The toll
free dial‑in number is 888-278-8459; the toll number is 913-312-1466; the
passcode is 1356467. A replay of the call will be available through March 23,
2013, by dialing 888-203-1112; the passcode is 1356467. A webcast of the
conference call may be accessed in the Investor Relations section of Quality's
website. Copies of the earnings release and other financial information about
Quality may also be accessed in the Investor Relations section of Quality's
website at www.qualitydistribution.com. The Company regularly posts or
otherwise makes available information within the Investor Relations section
that may be important to investors.

Reconciliation of Estimated Adjusted Net Income and Estimated Adjusted Net
Income per Share to Estimated Net Income

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, unusual legal and claims settlements, independent affiliate
conversion costs, hurricane effects and earnout adjustments.

The following table presents the calculation of Estimated Adjusted Net Income
and Estimated Adjusted Net Income per Share ranges for the periods presented:

                                                Three-months ended
 (in millions, except per share amounts)        December 31, 2012
                                                 Low       High 
Estimated net income                             $ 5.2     $ 5.9
                                                           
Estimated net income per common share:                     
 Basic                                          $ 0.19     $ 0.22
 Diluted                                        $ 0.19    $ 0.21 
                                                           
 Weighted average number of shares:                        
 Basic                                          27.3      27.3
 Diluted                                        27.8      27.8
                                                           
 
Reconciliation:                                            
                                                           
Estimated net income                              $ 5.2    $ 5.9
Adjustments to estimated net income:                       
 Benefit from income taxes                      (0.5)     (0.5)
 Acquisition costs                              0.6       0.6
 Affiliate conversion costs                     1.3       1.3
 Hurricane effects                              0.7       0.7
 Earnout adjustments                            (2.6)     (2.6)
                                                           
Estimated adjusted income before income taxes    4.7      5.4
 Provision for income taxes at 39%               1.8      2.1
 Estimated adjusted net income                   $ 2.9    $ 3.3
                                                           
Estimated adjusted net income per common share:            
 Basic                                          $ 0.11    $ 0.12
 Diluted                                        $ 0.10    $ 0.12
                                                           
Weighted average number of shares:                         
Basic                                           27.3      27.3
Diluted                                         27.8      27.8
                                                                 

Reconciliation of Estimated Adjusted EBITDA to Estimated Operating Income

Quality's Estimated Adjusted EBITDA for the reconciliation below is defined as
operating income before depreciation and amortization, employee non-cash
compensation, other expense items, acquisition costs, unusual legal and claims
settlements, independent affiliate conversion costs, hurricane effects and
earnout adjustments.   Estimated Adjusted EBITDA is not a measure of financial
performance or liquidity under United States Generally Accepted Accounting
Principles ("GAAP"). Estimated Adjusted EBITDA may not 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. Estimated Adjusted EBITDA is a
measure used by our management to facilitate internal comparisons to
competitors' results and the bulk transportation industry in general. We
believe that financial information based on GAAP for highly leveraged
businesses, such as ours, should be supplemented by Estimated Adjusted EBITDA
so investors better understand our financial information in connection with
their evaluation of our business.

The following table presents the calculation of Estimated Adjusted EBITDA for
the periods presented:

                                       

                                     Three-months ended
                                     December 31, 2012
   (in millions)                     Low       High
  Estimated operating income         $ 9.9     $ 10.6
                                                
   Reconciliation:                              
   Depreciation and amortization     6.6       6.6
   Employee non-cash compensation    0.9       0.9
   Other non-operating expense items 2.6       2.6
   Acquisition costs                 0.6       0.6
   Affiliate conversion costs        1.3       1.3
   Hurricane effects                 0.7       0.7
   Earnout adjustments               (2.6)     (2.6)
   Estimated Adjusted EBITDA         $ 20.0    $ 20.7

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.

CONTACT: Joseph J. Troy
         Executive Vice President and Chief Financial Officer
         800-282-2031 ext. 7195

Quality Distribution, Inc. Logo
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