Quality Distribution, Inc. Announces Second Quarter 2013 Results

Quality Distribution, Inc. Announces Second Quarter 2013 Results

      -- Quality Generates Second Quarter Revenues of $239.3 Million --

         -- Company Reports Net Loss of ($1.18) per Diluted Share --

  -- Net Loss Includes $55.7 Million Non-Cash Goodwill Impairment Charges --

         -- Q2 2013 Adjusted Net Income of $0.20 per Diluted Share --

-- Adjusted EBITDA at Energy Logistics Up Nearly 100% Sequentially vs. Q1 2013
                                      --

TAMPA, Fla., July 31, 2013 (GLOBE NEWSWIRE) -- Quality Distribution, Inc.
(Nasdaq:QLTY) ("Quality" or the "Company"), a North American logistics and
transportation provider with market leading businesses, today reported a net
loss of $31.1 million, or ($1.18) per diluted share, for the second quarter
ended June 30, 2013, compared to net income of $28.8 million, or $1.04 per
diluted share, in the second quarter ended June 30, 2012. Pre-tax, non-cash
goodwill impairment charges of $55.7 million in the Company's Energy Logistics
business impacted current-period results, and prior-period results included a
$22.8 million reversal of a deferred tax valuation allowance.

Under accounting guidelines, companies are required to conduct an annual
goodwill impairment test for each business segment, which Quality performs
during its second quarter. As a result of this review, management determined
that a write down of its Energy Logistics goodwill and other intangible assets
totaling $55.7 million was required. While the Energy Logistics operating
results improved in the second quarter of 2013, the charge is appropriate
because the Company's expectations of revenue and profitability at June 30,
2013 are lower than original estimates used when the three Energy Logistics
businesses were acquired in 2012.

Adjusted net income for the second quarter of 2013 was $5.3 million, or $0.20
per diluted share, compared to adjusted net income of $6.5 million, or $0.24
per diluted share, for the same quarter in 2012. Both periods are calculated
by excluding items not considered part of regular operating activities.
Results for 2012 were adjusted by applying a normalized tax rate of 39.0%;
beginning in 2013, the Company uses its effective tax rate when reporting
adjusted net income for the quarter, which was 36.5% in the second quarter of
2013. For consistency purposes, the Company intends to present prior period
adjusted results using normalized tax rates as originally reported.

Adjusted net income included the following pre-tax items, which the Company
does not consider to be part of its regular operating activities: for the
second quarter of 2013, impairment charges of $55.7 million and reorganization
costs of $1.5 million related to the Energy Logistics business, and affiliate
conversion costs of $0.2 million related to the Chemical Logistics business;
and for the second quarter of 2012, various expense adjustments totaling $4.3
million were related to the Chemical Logistics business. A reconciliation of
net (loss) income to adjusted net income for both periods is included in the
attached financial exhibits.

"Our second quarter results were in line with our expectations, particularly
in our Energy Logistics segment," stated Gary Enzor, Chief Executive Officer.
"Our Energy business achieved positive adjusted operating income and nearly
doubled its adjusted EBITDA over the first quarter of 2013. Our Chemical
Logistics business had a difficult year-over-year comparison this quarter as
the additional company-operated terminals we assumed during the 2012 third
quarter affiliate conversion operate at lower than standard affiliate margins.
However, by the end of this week, all of those converted terminals will be
re-affiliated. Our Intermodal business continues to produce very strong
results as we capitalize on solid demand and generate margin improvements."

Second Quarter 2013 Consolidated Results

Total revenue for the second quarter of 2013 was $239.3 million, an increase
of 12.5% versus the same quarter last year. Excluding fuel surcharges, revenue
for the second quarter of 2013 increased $26.8 million, or 14.8%, compared to
the prior-year period. This revenue improvement was driven by an $18.9 million
increase from the Energy Logistics business, resulting primarily from the
acquisitions completed in 2012, plus $5.2 million and $2.7 million of organic
growth from the Chemical and Intermodal Logistics businesses, respectively.

The Company reported a consolidated operating loss for the second quarter of
2013 of $41.7 million, primarily due to $55.7 million of non-cash impairment
charges. Adjusting for the impairment charges, costs associated with the
reorganization of our energy business and affiliate conversion costs noted
above, second quarter 2013 operating income would have been $15.7 million, a
decrease of $2.0 million versus the prior-year second quarter on an adjusted
basis. Operating margins (on an adjusted basis) declined versus the prior-year
period primarily as a result of profit compression from the aforementioned
affiliate conversion, incremental depreciation and amortization expenses from
the Company's 2012 acquisitions, and lower asset utilization within the Energy
Logistics segment.

Adjusted EBITDA for the second quarter of 2013 was $23.5 million, up 1.9%
compared to the second quarter of 2012, driven primarily by the Energy
Logistics acquisitions consummated in 2012 and continued growth in the
Intermodal business. A reconciliation of net (loss) income to adjusted EBITDA
for both periods is included in the attached financial exhibits.

Second Quarter 2013 Segment Results

Chemical Logistics

Revenues in the Chemical Logistics segment were $157.3 million in the second
quarter of 2013, which were up 3.3% versus the second quarter of 2012.
Excluding fuel surcharges, revenues increased 4.2%, primarily due to increased
pricing and higher volumes. Chemical Logistics shipment demand continues to be
strong. Driver counts at quarter end were up 1.7% versus last year due to a
continued aggressive focus on recruiting and retention.

Operating income in the Chemical Logistics segment was $7.4 million, up $1.2
million versus the comparable prior-year period. After adjusting for $4.3
million of other expense items in 2012, and $0.2 million of affiliate
conversion costs in 2013, operating income was down $2.8 million. Better
pricing and higher volumes were offset by lower profit margins on terminals
the Company acquired during the affiliate conversion during the third quarter
of last year, elevated equipment lease expense, increased medical claims, and
incremental depreciation expense from the affiliate asset acquisition in the
fourth quarter of 2012.

Energy Logistics

Revenues in the Energy Logistics segment during the second quarter were $45.1
million, up $18.6 million versus the prior-year period, primarily due to the
acquisitions completed in 2012. Sequentially, revenues rose $4.0 million, or
9.8%, versus the first quarter of 2013, primarily due to a 14.1% increase in
revenues from the strong and growing Eagle Ford shale region, plus the
on-boarding of the new Marcellus affiliate. Sequential demand picked up
slightly in the Woodford shale region in Oklahoma, and second quarter revenues
were flat in the Bakken shale region versus the first quarter as reduced fresh
and disposal water transportation volumes were offset by an increase in oil
hauling business. 

The Energy Logistics segment reported an operating loss of $55.1 million in
the second quarter of 2013, compared with operating income of $2.9 million in
the prior-year period. The decrease was primarily due to the previously
mentioned impairment and reorganization charges of $55.7 million and $1.5
million, respectively. Adjusted for these items, operating income was $2.1
million, which was up $2.6 million on a sequential basis from the first
quarter of 2013, as operating profits increased in nearly all shales as
improvement plans have produced positive results. Despite the improvement,
segment results continue to be adversely impacted by high equipment
repositioning and disposal costs as aggressive asset rationalization programs
are implemented and refined. Energy Logistics adjusted EBITDA for the second
quarter of 2013 was $4.9 million, up $1.0 million versus the prior-year period
and up $2.5 million, or nearly 100%, compared to the first quarter of 2013.

Intermodal

Second quarter revenues in the Intermodal segment were $36.9 million, up $2.9
million or 8.6% versus the prior-year period. Excluding fuel surcharges,
revenues increased $2.7 million, or 9.1%, primarily due to strong storage,
rental and service revenue. Demand for ISO container shipments continues to be
favorable, which has led to increases in trucking volumes and a stable to
upward environment for pricing.

Operating income in the Intermodal segment was $6.0 million, up 37.1% versus
the prior-year period, driving operating margins to expand by 340 basis
points. This strong improvement stemmed primarily from increased storage and
service revenues, which carry high margins, as well as enhanced cost controls
and continued profitability increases in its Northeast region.

Summary

Enzor continued, "I am very pleased with the improvements in our Energy
business and our outlook for the remainder of the year.There are
opportunities for growth in our Chemical business that we can capitalize on
provided we can successfully recruit and retain drivers. We also expect our
Intermodal business to continue to deliver strong results."

Recent Events

As previously announced, on May 1, 2013 the Company affiliated its Energy
Logistics trucking operations in the Marcellus region, as three
company-operated terminals were converted to a new independent affiliate with
established operations in the area. In July 2013, operations within Energy's
brokerage command center ceased and services were transitioned to this new
independent affiliate.Quality expects to incur approximately $0.8 million of
cash and non-cash costs associated with this closure and transition during the
third quarter of 2013.

Balance Sheet and Cash Flow

On June 14, 2013, the Company amended its ABL Facility to provide for a new
$17.5 million term loan facility.Funding of this new facility coincided with
the redemption of $22.5 million of 9.875% Second-Priority Senior Notes on July
15, 2013.The redemption is expected to result in lower cash interest cost in
the second half of the year, and also result in a non-cash charge to write off
approximately $0.5 million of bond issuance costs.

Borrowing availability under the Company's ABL Facility was $72.2 million at
June 30, 2013. This represents an increase of $17.0 million versus December
31, 2012.Strong operating cash flows and the continued aggressive disposal of
idle or sub-optimal assets resulted in reduced borrowings under the Company's
ABL Facility.

Operating cash flows for the quarter ended June 30, 2013 were $9.8 million,
compared with $1.7 million for the prior-year period.The increase was
primarily due to higher cash flow from operations. Capital expenditures for
the quarter ended June 30, 2013 were $8.3 million, partially offset by $3.8
million of proceeds from sales of equipment and property. For the six months
ended June 30, 2013, capital expenditures, net of proceeds from sales were
$3.1 million compared with $10.9 million for the comparable prior-year six
month period, representing a year-over-year decrease in net capital
expenditures of $7.8 million.

"We continue to contain our capital spending and reduce our operating asset
base by disposing of idle or under-utilized equipment, and we remain on track
with our previous publicly stated goal of net capital expenditures of $10 to
$15 million in 2013," said Joe Troy, Chief Financial Officer. "Our intensive
efforts around asset utilization have produced numerous opportunities to
reposition or divest non-core or sub-optimal assets. While this has adversely
impacted near-term operating results,our business operations will be better
equipped going forward to generate sustainable levels of profitability and
returns on invested capital." 

Mr. Troy continued, "We generated strong free cash flow again this quarter,
and on a year-to-date basis we have used the majority of our free cash flow to
repay debt, which is in alignment with our stated goal of reducing the
leverage we took on for acquisitions made in 2012. We further improved the
balance sheet in July by redeeming high cost bonds with proceeds from lower
cost indebtedness, while maintaining substantial availability under our ABL
Facility. We will continue to aggressively manage our balance sheet and
overall business to drive value for our shareholders."

Quality will host a conference call for investors to discuss these results on
Thursday, August 1, 2013 at 10:00 a.m. Eastern Time. The toll free dial‑in
number is 888-599-8667; the toll number is 913-312-0683; the passcode is
7162917. A replay of the call will be available through August 31, 2013, by
dialing 888-203-1112; passcode: 7162917.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, 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.

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, capital and labor 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
transportation services as well as 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, 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) our ability to access anduse disposal wells and other disposal sites and
methods 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, 2012 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 Six months ended
                                        June 30,           June 30,
                                                                  
                                        2013      2012     2013      2012
                                                                  
OPERATING REVENUES:                                                
Transportation                           $174,647  $150,519 $338,641  $283,725
Service revenue                          32,705    30,034   66,159    58,019
Fuel surcharge                           31,944    32,180   63,918    62,904
Total operating revenues                 239,296   212,733  468,718   404,648
OPERATING EXPENSES:                                                
Purchased transportation                 150,380   142,309  293,252   274,186
Compensation                             25,501    18,516   51,971    35,147
Fuel, supplies and maintenance           26,328    18,445   53,346    32,911
Depreciation and amortization            6,729     4,622    13,422    8,413
Selling and administrative               8,155     10,089   15,634    16,599
Insurance costs                          4,373     4,139    8,870     7,358
Taxes and licenses                       1,308     624      2,251     1,372
Communications and utilities             922       907      2,017     1,744
Loss (gain) on disposal of property and  1,591     (362)    (1,498)   (364)
equipment
Impairment charges                       55,692    --       55,692    --
Total operating expenses                 280,979   199,289  494,957   377,366
                                                                  
Operating (loss) income                  (41,683)  13,444   (26,239)  27,282
                                                                  
Interest expense                         7,884     7,180    15,607    14,369
Interest income                          (234)     (229)    (445)     (408)
Other (income) expense                   (271)     72       (7,243)   (164)
(Loss) incomebefore income taxes        (49,062)  6,421    (34,158)  13,485
Benefit fromincome taxes                (17,915)  (22,383) (12,155)  (22,019)
Net (loss) income                        $(31,147) $28,804  $(22,003) $35,504
                                                                  
PER SHARE DATA:                                                    
Net (loss) incomeper common share                                 
Basic                                    $(1.18)   $1.07    $(0.83)   $1.38
Diluted                                  $(1.18)   $1.04    $(0.83)   $1.34
                                                                  
Weighted average number of shares                                  
Basic                                    26,460    26,804   26,542    25,675
Diluted                                  26,460    27,600   26,542    26,516


QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In 000's)
Unaudited
                                                                
                                                       June 30,  December 31,
                                                       2013      2012
                                                                
                                                                
ASSETS                                                           
Current assets:                                                  
Cash and cash equivalents                               $2,442    $2,704
Accounts receivable, net                                129,650   113,906
Prepaid expenses                                        12,492    14,651
Deferred tax asset, net                                 20,866    16,609
Other current assets                                    8,309     9,694
Total current assets                                    173,759   157,564
                                                                
Property and equipment, net                             177,296   190,342
Assets held-for-sale                                    2,691     --
Goodwill                                                50,553    104,294
Intangibles, net                                        35,996    37,654
Non-current deferred tax asset, net                     21,720    11,713
Other assets                                            12,381    12,036
Total assets                                            $474,396  $513,603
                                                                
                                                                
LIABILITIES AND SHAREHOLDERS' DEFICIT                            
Current liabilities:                                             
Current maturities of indebtedness                      $2,371    $3,918
Current maturities of capital lease obligations         1,748     3,913
Accounts payable                                        12,051    9,966
Independent affiliates and independent owner-operators  17,851    14,243
payable
Accrued expenses                                        29,304    37,889
Environmental liabilities                               3,357     2,739
Accrued loss and damage claims                          8,108     7,326
Total current liabilities                               74,790    79,994
                                                                
Long-term indebtedness, less current maturities         401,616   408,850
Capital lease obligations, less current maturities      871       2,125
Environmental liabilities                               5,118     6,302
Accrued loss and damage claims                          10,262    9,494
Other non-current liabilities                           23,787    25,278
Total liabilities                                       516,444   532,043
                                                                
                                                                
SHAREHOLDERS' DEFICIT                                            
Common stock                                            439,187   437,192
Treasury stock                                          (10,313)  (5,849)
Accumulated deficit                                     (250,470) (228,467)
Stock recapitalization                                  (189,589) (189,589)
Accumulated other comprehensive loss                    (30,888)  (31,752)
Stock purchase warrants                                 25        25
Total shareholders' deficit                             (42,048)  (18,440)
Total liabilities and shareholders' deficit             $474,396  $513,603

                 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 independent affiliates and company-operated
    terminals, and equipment rental income;
  *Energy Logistics, which consists primarily of the transportation of fresh
    water, disposal water, and crude oil for the unconventional oil and gas
    frac shale energy markets, primarily through company-operated terminals
    and independent affiliates; 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 June 30, 2013             
                      Chemical          Energy                    
                      Logistics** (a)   Logistics (b)  Intermodal  Total
Operating Revenues:                                              
Transportation         $113,206          $42,572        $18,869     $174,647
Service revenue        16,922            2,500          13,283      32,705
Fuel surcharge         27,189            40             4,715       31,944
                                                                
Total operating        $157,317          $45,112        $36,867     $239,296
revenues
                                                                
Segment revenue % of   65.7%             18.9%          15.4%       100.0%
total revenue
Segment operating      $10,566           $4,845         $6,918      $22,329
income*
Depreciation and       3,009             2,892          828         6,729
amortization
Impairment charges     --                55,692         --          55,692
Otherexpense          141               1,376          74          1,591
Operating income       $7,416            $(55,115)      $6,016      $(41,683)
(loss)
                                                                
                                                                
                      Three Months Ended June 30, 2012             
                      Chemical          Energy                    
                      Logistics ** (c)  Logistics      Intermodal  Total
Operating Revenues:                                              
Transportation         $107,935          $24,929        $17,655     $150,519
Service revenue        16,977            1,247          11,810      30,034
Fuel surcharge         27,378            325            4,477       32,180
                                                                
Total operating        $152,290          $26,501        $33,942     $212,733
revenues
                                                                
Segment revenue % of   71.6%             12.4%          16.0%       100.0%
total revenue
Segment operating      $8,544            $3,914         $5,246      $17,704
income*
Depreciation and       2,746             1,017          859         4,622
amortization
Other income           (362)             --             --          (362)
Operating income       $6,160            $2,897         $4,387      $13,444
                                                                
                                                                
(a) Operating income in the Chemical Logistics segment during the three-month
period ended June 30, 2013 includes $0.2 million of affiliate conversion
costs.
(b)Operating income in the Energy Logistics segment during the three-month
period ended June 30, 2013 includes impairment charges of $55.7 million and
$1.5 million of energy reorganization costs.
(c)Operating income in the Chemical Logistics segment during the three-month
period ended June 30, 2012 includes $2.6 million of acquisition costs, $0.9
million of severance and lease termination costs and $0.8 million of legal and
claims settlement expenses.
                                                                
                                                                
                      Six Months Ended June 30, 2013               
                      Chemical          Energy                    
                      Logistics** (d)   Logistics (e)  Intermodal  Total
Operating Revenues:                                              
Transportation         $222,274          $79,502        $36,865     $338,641
Service revenue        33,315            6,421          26,423      66,159
Fuel surcharge         54,451            273            9,194       63,918
                                                                
Total operating        $310,040          $86,196        $72,482     $468,718
revenues
                                                                
Segment revenue % of   66.1%             18.4%          15.5%       100.0%
total revenue
Segment operating      $19,980           $7,559         $13,838     $41,377
income*
Depreciation and       5,893             5,893          1,636       13,422
amortization
Impairment charges     --                55,692         --          55,692
Other (income) expense (3,168)           1,596          74          (1,498)
Operating income       $17,255           $(55,622)      $12,128     $(26,239)
(loss)
                                                                
                                                                
                      SixMonths Ended June 30, 2012               
                      Chemical          Energy                    
                      Logistics ** (f)  Logistics      Intermodal  Total
Operating Revenues:                                              
Transportation         $213,582          $34,978        $35,165     $283,725
Service revenue        32,893            2,131          22,995      58,019
Fuel surcharge         53,692            326            8,886       62,904
                                                                
Total operating        $300,167          $37,435        $67,046     $404,648
revenues
                                                                
Segment revenue % of   74.2%             9.2%           16.6%       100.0%
total revenue
Segment operating      $19,976           $4,996         $10,359     $35,331
income*
Depreciation and       5,434             1,264          1,715       8,413
amortization
Other (income) expense (344)             22             (42)        (364)
Operating income       $14,886           $3,710         $8,686      $27,282
                                                                
                                                                
(d)Operating income in the Chemical Logistics segment during the six-month
period ended June 30, 2013 includes $2.6 million of gains on property
dispositions, $0.4 million of affiliate conversion costs, and $0.5 million of
severance costs.
(e) Operating income in the Energy Logistics segment during the six-month
period ended June 30, 2013 includes impairment charges of $55.7 million and
$1.5 million of energy reorganization costs.
(f)Operating income in the Chemical Logistics segment during the six-month
period ended June 30, 2012 includes $3.0 million of acquisition costs, $0.9
million of severance and lease termination cost and $0.8 million of legal and
claims settlement expenses.
                                                                
* Segment operating income reported in the business segment tables above
excludes amounts such as impairment charges, depreciation and amortization and
gains and losses on disposal of property and equipment.
** 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 (LOSS) PER SHARE TO ADJUSTED NET INCOME PER SHARE
       For the Three Months and Six Months Ended June 30, 2013 and 2012
                                  (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 2012 Adjusted Net Income, management uses a 39.0% 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.For 2013 Adjusted Net Income, management uses its actual
effective tax rate of 36.5% for the three months ended June 30, 2013 and 35.6%
for the six months ended June 30, 2013 for calculating the provision for
income taxes rather than using a normalized tax rate as it has in prior
periods. This reflects the Company's expectation of a more stable effective
tax rate in 2013 and going forward. For consistency purposes, the Company
intends to present prior period adjusted results using normalized tax rates as
originally reported. 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, legal and claims
settlements, affiliate conversion costs, energy reorganization costs,
impairment charges, earnout adjustments, and gains on disposition of
properties.

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, legal and claims settlements,
affiliate conversion costs, energy reorganization costs, impairment charges,
earnout adjustments, and gains on disposition of properties, 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 Six months ended
Net(Loss) IncomeReconciliation:        June 30,           June 30,
                                        2013      2012     2013      2012
                                                                  
Net (loss) income                        $(31,147) $28,804  $(22,003) $35,504
                                                                  
Net (loss) incomeper common share:                                
Basic                                    $(1.18)   $1.07    $(0.83)   $1.38
Diluted                                  $(1.18)   $1.04    $(0.83)   $1.34
                                                                  
Weighted average number of shares:                                 
Basic                                    26,460    26,804   26,542    25,675
Diluted                                  26,460    27,600   26,542    26,516
                                                                  
Reconciliation:                          $(31,147) $28,804  $(22,003) $35,504
                                                                  
Net (loss) income                                                  
                                                                  
Adjustments to net (loss) income :                                 
Benefit from income taxes                (17,915)  (22,383) (12,155)  (22,019)
Acquisition costs                        --        2,563    --        2,972
Severance and lease termination costs    46        934      632       934
Legal and claims settlements             --        762      --        762
Affiliate conversion costs               181       --       438       --
Energyreorganization costs              1,462     --       1,462     --
Gain on property dispositions            --        --       (2,577)   --
Impairment charges                       55,692    --       55,692    --
Earnout adjustment                       --        --       (6,800)   --
Adjusted income before income taxes      8,319     10,680   14,689    18,153
Provision for income taxes at 36.5% and
35.6%,for the three and six months
ended June 30, 2013, respectively and    3,036     4,165    5,229     7,080
39.0% for the three and six months ended
June 30, 2012
Adjusted net income                      $5,283    $6,515   $9,460    $11,073
                                                                  
Adjusted net income per common share:                              
Basic                                    $0.20     $0.24    $0.36     $0.43
Diluted                                  $0.20     $0.24    $0.35     $0.42
Weighted average number of shares:                                 
Basic                                    26,460    26,804   26,542    25,675
Diluted                                  27,052    27,600   27,084    26,516

                                     Three months ended  Six months ended
EBITDA and Adjusted EBITDA:           June30,            June 30,
                                     2013       2012     2013      2012
                                                                
Net (loss) income                     $(31,147) $28,804 $(22,003) $35,504
                                                                
Adjustments to net (loss) income :                               
Benefit from income taxes             (17,915)   (22,383) (12,155)  (22,019)
Depreciation and amortization         6,729      4,622    13,422    8,413
Interest expense, net                 7,650      6,951    15,162    13,961
EBITDA                                (34,683)   17,994   (5,574)   35,859
                                                                
Acquisition costs                     --         2,563    --        2,972
Severance and lease termination costs 46         878      483       878
Legal and claims settlements          --         762      --        762
Affiliate conversion costs            181        --       438       --
Energy reorganization costs           1,462      --       1,462     --
Gain on property dispositions         --         --       (2,577)   --
Impairment charges                    55,692     --       55,692    --
Earnout adjustment                    --         --       (6,800)   --
Non-cash stock-based compensation     773        845      1,780     1,518
                                                                
Adjusted EBITDA                       $23,471    $23,042  $44,904   $41,989
                                     

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

Quality Distribution, Inc. Logo