Quality Distribution Posts Big Loss on Charges

Bulk carrier Quality Distribution posted a net loss of $186.2 million in the second quarter, primarily due to impairment charges and a related tax allowance.

Revenue excluding fuel surcharge of $137.9 million was down 23% for the second quarter of 2009, compared to the second quarter of 2008, due to a soft market, the Tampa, Fla.-based company said. "Sequentially, revenue was flat and is slightly increasing thus far in the third quarter,” said CEO Gary Enzor.

The net loss includes a pre-tax restructuring charge of $1.2 million and a pre-tax non-cash impairment charge of $148.6 million. The size of the impairment is primarily due to the difference between the market value and book value of Quality's tangible fixed assets. The provision for income taxes includes a deferred tax asset valuation allowance of $42.5 million which was primarily related to the goodwill impairment charge.

“Quality's financial performance during the quarter continued to reflect a positive trend,” said Chief Financial Officer Steve Attwood. “Also, the write down of the deferred tax asset has no impact on our ability to offset the asset against tax liabilities related to future earnings."

Contact Thomas L. Gallagher at tgallagher@joc.com.