WEB NEWS Comments & Business Outlook
Second Quarter 2012 Results
Total revenue for the second quarter of 2012 was $212.7 million, an increase of 12.0% versus the same quarter last year.
Adjusted net income of $0.24 for second quarter 2012 vs $0.23 in the prior year period.
"Second quarter earnings and year-to-date performance improved from last year, and we anticipate improvement in the second half of the year as we realize further benefits from our recent acquisitions, improve utilization of start-up energy assets, and stabilize our chemical segment volumes via driver additions," said Gary Enzor, Chief Executive Officer.
Mr. Enzor continued, "The quarter was highlighted by several strategic acquisitions within our energy logistics business. The previously announced acquisitions of Trojan Vacuum, Wylie Bice and RM Resources, coupled with today's announcement of the Dunn's and Nassau transactions, have expanded the geographic reach of our energy logistics business considerably. We are now operating in five separate shale regions within the U.S., providing us with regional diversity, expanded customer relationships and increased flexibility towards maximizing our productivity."
Significant Recent Transactions
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 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. The transactions are expected to be accretive to earnings in 2012. Please see the press release issued today for additional information on these transactions.
As previously announced, on June 1, and June 11, 2012, the Company acquired the operating assets of Wylie Bice Trucking, LLC and the operating assets and rights of RM Resources, LLC, respectively, (collectively "Bice") for aggregate consideration of $81.4 million, plus potential additional consideration of $19.0 million to be paid in cash, subject to Bice achieving future operating and financial performance criteria.
Also, as previously announced, on April 1, 2012, the Company acquired the operating assets of Trojan Vacuum Services ("Trojan") for cash consideration of $8.7 million, plus potential additional consideration of $1.0 million to be paid in cash, subject to Trojan achieving future operating and financial performance criteria.
In conjunction with the recent transactions, the Company incurred acquisition-related costs of approximately $2.6 million during the second quarter of 2012, which are included within selling and administrative expenses. The second quarter of 2012 includes three months of operating results from the Trojan business and one month of operating results from the Bice business.
Acquisition Activity
TAMPA, Fla., June 4, 2012 (GLOBE NEWSWIRE ) -- Quality Distribution, Inc. ("Quality" or "QLTY") (Nasdaq:QLTY) announced that it has completed its previously announced acquisition of certain operating assets of Wylie Bice Trucking, LLC ("Bice"). Quality also anticipates completing the previously announced acquisition of the operating assets and rights of RM Resources, LLC ("RM") in the immediate future.
Headquartered in Killdeer, ND, Bice is a leading provider of transportation services to the unconventional oil and gas industry within the Bakken shale region, primarily hauling fresh water, flowback and production water, and oil for numerous energy customers. Bice operates two trucking terminals in North Dakota utilizing approximately 500 drivers, making it one of the largest haulers of fresh and disposal water and oil in the Bakken shale. Bice is principally an asset light business as the company primarily utilizes independent contractors who own their own equipment.
Research
Premium research note from our 52 week high blog on 2 / 27/2012
GPR of 5. After 2 years of losses and lack luster growth the company has been able to achieve 3 consecutive solid profitable quarters. The company has repositioned balance sheet, completed an acquisition to give it more geographical presence in its chemical storage tank business and has entered a strong growth market by securing its first contracts in the energy related transportation services. The logistic energy services includes the transportation of fresh water, disposal water and oil. The current energy boom taking place in North America will only increase the need for these services. We believe the stock should trade at a price of $17.5 which assumes a PE of 25 on soon to be released 2011 year end EPS results ( expected to be $0.70).
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Deal Flow
TAMPA, Fla., March 5, 2012 (GLOBE NEWSWIRE ) -- Quality Distribution, Inc. (Nasdaq:QLTY) ("Quality") announced today the launch of a public offering of approximately 5,000,000 shares of its common stock. Quality is offering for sale to the public 2,500,000 shares of its common stock and certain affiliates of Apollo Management, L.P. ("Apollo") are offering for resale to the public approximately 2,500,000 shares of Quality's common stock owned by them. Apollo will grant to the underwriters of the common stock offering an option to purchase up to 750,000 additional shares of common stock. Quality intends to use the net proceeds from the sale of shares in this offering for general corporate purposes, including potential acquisitions. Quality may also elect to redeem a portion of its second-priority senior secured notes due 2018. Pending such use of proceeds, Quality will reduce the amounts owing under its ABL facility. Quality will not receive any proceeds from the sale of the shares by the selling stockholders in this offering.
The offering will be made under Quality's registration statement on Form S-3 filed with the Securities and Exchange Commission. Goldman, Sachs & Co., J.P. Morgan Securities LLC, BofA Merrill Lynch and Credit Suisse Securities (USA) LLC are acting as joint bookrunning managers for the offering. The co-managers for the offering are SunTrust Robinson Humphrey, Inc., BB&T Capital Markets, a division of Scott & Stringfellow, LLC, RBC Capital Markets, LLC, Apollo Global Securities, LLC, Avondale Partners and Sterne, Agee & Leach, Inc.
Comments & Business Outlook
We will now start tracking QLTY's financial results. Please see our premium research note from 1/25/2012
Fourth quarter and year end 2011 results
Total revenue for the fourth quarter ended December 31, 2011 was $178.8 million, an increase of 7.8% versus the same quarter last year.
Adjusted net income per diluted common share for the fourth quarter 2011 was $0.15 vs $0.06 in prior year period
Total revenue for the year ended December 31, 2011 was $746.0 million, an increase of 8.6% versus the same period last year.
Adjusted net income per diluted common share for the full year 2011 was $0.70 vs $0.30 in prior year
The significant improvement in adjusted net income for the fourth quarter of 2011 versus the prior-year period was driven by a solid increase in operating income resulting from increased energy market revenue and profitability, enhanced earnings at Boasso, reduced maintenance expense and lower insurance costs. Additionally, interest expense declined 28.1% versus the prior year period, due primarily to the retirement of high-cost 2013 PIK Notes.
"I am very pleased with the Company's growth in earnings this quarter versus the fourth quarter of last year," said Gary Enzor, Chief Executive Officer. "The typical sequential decline in fourth quarter revenues was more than offset by improvements in certain cost areas, and by new and profitable energy logistics business. During the fourth quarter, we continued our expansion beyond the Marcellus Shale and began hauling oil in the Eagle Ford Shale. We are focused on exploring additional opportunities in these and other shale regions, including potential acquisitions, as we believe this market will continue to be a significant driver of our future growth."
