Quality Distribution Inc. (QLTY, Financial) filed Quarterly Report for the period ended 2012-03-31.
Quality Distrib has a market cap of $318.4 million; its shares were traded at around $12.01 with a P/E ratio of 16.9 and P/S ratio of 0.4.
Chemical Logisticsrevenues decreased $2.9 million, or 1.9%, for the quarter ended March 31, 2012 compared to the same period for 2011 primarily due to a decrease in transportation revenue of $5.0 million. The decline was driven by reduced linehaul revenue resulting primarily from the lingering adverse impact of the implementation of electronic on-board recorders on driver counts. Although driver counts are rising slightly, we expect industry-wide tightness in driver capacity to impact our chemical logistics business in the second quarter of 2012. This decline was partially offset by an increase of $2.7 million of fuel surcharge revenue due to increased fuel prices. In addition, service revenue decreased by $0.6 million due primarily to decreased trailer rental revenue.
Intermodalrevenues increased $6.0 million, or 21.9%, for the quarter ended March 31, 2012 compared to the same period in 2011, partially due to the Greensville acquisition and partially due to higher volumes and depot revenue.
Independent affiliates and independent owner-operators typically supply their own tractors, which reduces our capital investment requirements. For the three months ending March 31, 2012, capital expenditures were $13.5 million and proceeds from sales of property and equipment were $2.7 million. Capital expenditures for 2012 included $8.2 million for equipment purchased to support our energy logistics business and proceeds from sales of property and equipment for 2012 included $1.4 million of energy equipment sales to independent affiliates. We generally expect our sustaining capital expenditures for our chemical logistics and intermodal businesses, net of proceeds from property and equipment sales, to be approximately 1% of operating segment revenues annually. We currently expect net capital expenditures in the second quarter to decline from first quarter levels for the remainder of 2012. We expect net capital expenditures to be approximately $20.0 to $25.0 million for the 2012 year, of which approximately $11.1 million is for equipment required to grow our energy logistics business. Some of our independent affiliates who are engaged with us in the energy market may at times purchase some portion of this equipment from us. Actual amounts could differ materially because of operating needs, growth needs, regulatory changes, covenants in our debt arrangements, other expenses, or other factors. We periodically make asset and/or stock acquisitions, which tend to require cash as part of the consideration. Some acquisitions will come with assets that we can pledge to our ABL Facility and increase our borrowing capacity. To the extent that such additional capacity is insufficient to complete the acquisitions, we would either need to raise additional capital or use our liquidity at the time to close the transaction.
Net cash provided by operating activities was $1.7 million for the three month period ended March 31, 2012, compared to $5.7 million provided by operating activities in the comparable 2011 period. The $3.9 million decrease in cash provided by operating activities was primarily due to an increase in other assets of $4.4 million primarily due to the issuance of a $2.6 million note to an independent affiliate in the current period versus a write-off of debt issuance costs and a reduction in deposits in prior year and an increase in accounts receivable of $1.0 million due to increased revenue.
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Quality Distrib has a market cap of $318.4 million; its shares were traded at around $12.01 with a P/E ratio of 16.9 and P/S ratio of 0.4.
Highlight of Business Operations:
Purchased transportation increased $7.2 million, or 5.7%, due to an increase of $8.3 million in costs related to servicing the energy logistics market and an increase of $2.4 million in costs related to our intermodal business offset by a decrease of $3.5 million in costs related to servicing the chemical logistics market. Total purchased transportation as a percentage of transportation revenue and fuel surcharge revenue decreased to 80.4% for the current quarter versus 82.5% for the prior-year quarter. Our independent affiliates generated 91.7% of our chemical logistics revenue and fuel surcharge revenue for the three months ended March 31, 2012 compared to 94.3% for the comparable prior-year period. This decrease resulted from the conversion of 2 independent affiliate trucking terminals to company operated terminals. During the 2012 and 2011 periods, we paid our independent affiliates approximately 85% of chemical logistics transportation revenue and paid independent owner-operators approximately 65% of chemical logistics transportation revenue. During the 2012 quarter, hauling for the energy market was performed by independent affiliates and other independent third-party carriers. In the energy market, we typically pay between 85% to 95% of the transportation revenue depending upon whether our independent affiliate or a third-party carrier does the hauling, which generated nearly 100% of our energy logistics revenue in 2012.Chemical Logisticsrevenues decreased $2.9 million, or 1.9%, for the quarter ended March 31, 2012 compared to the same period for 2011 primarily due to a decrease in transportation revenue of $5.0 million. The decline was driven by reduced linehaul revenue resulting primarily from the lingering adverse impact of the implementation of electronic on-board recorders on driver counts. Although driver counts are rising slightly, we expect industry-wide tightness in driver capacity to impact our chemical logistics business in the second quarter of 2012. This decline was partially offset by an increase of $2.7 million of fuel surcharge revenue due to increased fuel prices. In addition, service revenue decreased by $0.6 million due primarily to decreased trailer rental revenue.
Intermodalrevenues increased $6.0 million, or 21.9%, for the quarter ended March 31, 2012 compared to the same period in 2011, partially due to the Greensville acquisition and partially due to higher volumes and depot revenue.
Independent affiliates and independent owner-operators typically supply their own tractors, which reduces our capital investment requirements. For the three months ending March 31, 2012, capital expenditures were $13.5 million and proceeds from sales of property and equipment were $2.7 million. Capital expenditures for 2012 included $8.2 million for equipment purchased to support our energy logistics business and proceeds from sales of property and equipment for 2012 included $1.4 million of energy equipment sales to independent affiliates. We generally expect our sustaining capital expenditures for our chemical logistics and intermodal businesses, net of proceeds from property and equipment sales, to be approximately 1% of operating segment revenues annually. We currently expect net capital expenditures in the second quarter to decline from first quarter levels for the remainder of 2012. We expect net capital expenditures to be approximately $20.0 to $25.0 million for the 2012 year, of which approximately $11.1 million is for equipment required to grow our energy logistics business. Some of our independent affiliates who are engaged with us in the energy market may at times purchase some portion of this equipment from us. Actual amounts could differ materially because of operating needs, growth needs, regulatory changes, covenants in our debt arrangements, other expenses, or other factors. We periodically make asset and/or stock acquisitions, which tend to require cash as part of the consideration. Some acquisitions will come with assets that we can pledge to our ABL Facility and increase our borrowing capacity. To the extent that such additional capacity is insufficient to complete the acquisitions, we would either need to raise additional capital or use our liquidity at the time to close the transaction.
Net cash provided by operating activities was $1.7 million for the three month period ended March 31, 2012, compared to $5.7 million provided by operating activities in the comparable 2011 period. The $3.9 million decrease in cash provided by operating activities was primarily due to an increase in other assets of $4.4 million primarily due to the issuance of a $2.6 million note to an independent affiliate in the current period versus a write-off of debt issuance costs and a reduction in deposits in prior year and an increase in accounts receivable of $1.0 million due to increased revenue.
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