8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)

November 3, 2009 (November 3, 2009)

QUALITY DISTRIBUTION, INC.

(Exact name of registrant as specified in its charter)

Florida	000-24180	59-3239073
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

4041 Park Oaks Boulevard, Suite 200

Tampa, Florida 33610

(Address of principal executive

offices including Zip Code)

(813) 630-5826

(Registrant’s telephone number,

including area code)

N.A.

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On November 3, 2009, Quality Distribution, Inc. issued a press release announcing its financial results as of and for the quarter ended September 30, 2009. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference.

The information in this Current Report on Form 8-K, including the exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description of Exhibits
99.1	Press Release of Quality Distribution, Inc. dated November 3, 2009

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	QUALITY DISTRIBUTION, INC.
	(Registrant)
Dated: November 3, 2009	By:	/S/    STEPHEN R. ATTWOOD
	Name:	Stephen R. Attwood
	Title:	Chief Financial Officer

3

EXHIBIT INDEX

Exhibit Number	Description of Exhibits
99.1	Press Release of Quality Distribution, Inc. dated November 3, 2009

4

EX-99.1

Exhibit 99.1

Quality Distribution, Inc. Announces Third Quarter Results: Positive Quarterly Net Income and Net Cash from Operations

TAMPA, FL – November 3, 2009 – Quality Distribution, Inc. (NASDAQ: QLTY) (“Quality”) today reported the results for its third quarter and the nine months ended September 30, 2009. Quality recorded net income for the third quarter of 2009 of $1.4 million, or $0.07 per diluted share, compared to net income of $0.7 million, or $0.04 per diluted share, for the same quarter in 2008. Quality generated $6.7 million of net cash from operating activities in the current quarter. Net loss for the nine months ended September 30, 2009 was $(185.1) million, or $(9.55) per diluted share, compared to net loss of $(0.9) million, or $(0.04) per diluted share, for the nine months ended September 30, 2008.

Revenue excluding fuel surcharge was down 13.5% for the third quarter of 2009, compared to the third quarter of 2008, and down 19.2% for the nine months ended September 30, 2009, compared with the nine months ended September 30, 2008, reflecting continued pressure from the current economic environment.

Applying a normalized tax rate of 39% and excluding adjustment items, Quality had adjusted net income per diluted share of $0.06 for the third quarter of 2009, compared to adjusted net income per diluted share of $0.10 for the third quarter of 2008. Net income for the third quarter of 2009 includes a pre-tax restructuring charge of $0.3 million. Net income for the third quarter of 2008 contains a $1.7 million pre-tax restructuring charge.

As previously announced, on October 10, 2009, Quality sold substantially all of the operating assets of its Quala Systems, Inc. (“QSI”) tank wash subsidiary for $13.0 million, of which $10.0 million was paid in cash and the remaining $3.0 million in a subordinated note. The QSI business that was sold generated approximately $21.0 million of revenue for the nine months ended September 30, 2009 from tank wash and related operations.

Gary Enzor, Chief Executive Officer, stated, “This is an exciting time for our company. We have made significant progress this year in transforming Quality’s platform to a leaner, stronger and more efficient model. Sequentially, our revenue excluding fuel surcharge was up approximately 7% this quarter and we continue to generate solid cash flows. We’re still cautious in terms of this economic environment in the near term; however, we believe we are well positioned to take on the challenges and opportunities that 2010 will bring.”

Also, on October 15, 2009, Quality announced the completion of the previously announced private exchange offer and retail tender offer of its subsidiaries’ 9% Senior Subordinated Notes and Senior Floating Rate Notes. Steve Attwood, Chief Financial Officer, commented further, “Restructuring our debt pushed all major debt maturities out to 2013, eliminating any questions about our economic viability. Our new debt structure, coupled with positive cash flow from operations, and current availability under our ABL facility in excess of $50.0 million, provide the company with the flexibility to take full advantage of opportunities that present themselves as we move forward into 2010.”

Quality will host a conference call for investors to discuss these results on Wednesday, November 4, 2009 at 1:00 p.m. Eastern Time. The toll free dial-in number is 877-548-7911; the toll number is 719-325-4826; the passcode is 4350413. A replay of the call will be available through December 3, 2009, by dialing 888-203-1112; passcode: 4350413. A webcast of the conference call may

be accessed in the Investor Relations section of Quality’s website at www.qualitydistribution.com or http://investor.shareholder.com/qualitydistribution/events.cfm. Copies of this earnings release and other financial information about Quality may be accessed in the Investor Relations section of Quality’s website at www.qualitydistribution.com. The Company regularly posts or otherwise makes available information on the Investor Relations section that may be important to investors.

Headquartered in Tampa, Florida, Quality Distribution, Inc. through its subsidiaries, Quality Carriers, Inc. and Boasso America Corporation, and through its affiliates and owner-operators, provides bulk transportation and related services. Quality Distribution is a core carrier for many of the Fortune 500 companies that are engaged in chemical production and processing.

This release contains certain forward-looking information that is subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995 and is 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, additional risks and uncertainties regarding forward-looking statements include the effect of local and national economic, credit and capital market conditions on the economy in general, and on the industries in which we operate in particular; recent turmoil in credit and capital markets; access to available and reasonable financing on a timely basis; the availability of diesel fuel; adverse weather conditions; competitive rate fluctuations; our substantial leverage and restrictions contained in our debt arrangements and interest rate fluctuations in our floating rate indebtedness; the cyclical nature of the transportation industry due to various economic factors such as 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; changes in demand for our services due to the cyclical nature of our customers’ businesses; potential disruption at U.S. ports of entry; our dependence on affiliates and owner-operators and our ability to attract and retain drivers; changes in the future, or our inability to comply with, governmental regulations and legislative changes affecting the transportation industry; our material exposure to both historical and changing environmental regulations and the increasing costs relating to environmental compliance; our liability as a self-insurer to the extent of our deductibles, as well as our ability or inability to reduce our claims exposure through insurance due to changing conditions and pricing in the insurance marketplace; the cost of complying with existing and future anti-terrorism security measures enacted by federal, state and municipal authorities; increased unionization, which could increase our operating costs or constrain operating flexibility; changes in senior management; our ability to successfully manage workforce restructurings; our ability to successfully integrate acquired businesses and converted affiliates; and interests of Apollo, our largest shareholder, which may conflict with your interests. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors contained in the Company’s Annual Report on Form 10–K for the year ended December 31, 2008 and its Quarterly Reports on Form 10–Q, as well as other reports filed with the Securities and Exchange Commission. The Company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this release.

QLTYE

Contact:    Stephen R. Attwood

Senior Vice President and Chief Financial Officer

800-282-2031 ext. 7129

QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In 000’s) Except Per Share Data

Unaudited

	Three months ended September 30,						Nine months ended September 30,
	2009			2008			2009			2008
OPERATING REVENUES:
Transportation	$	120,444		$	144,774		$	343,554		$	445,798
Other service revenue		26,793			25,494			80,241			78,916
Fuel surcharge		15,568			44,473			38,528			122,490
Total operating revenues		162,805			214,741			462,323			647,204
OPERATING EXPENSES:
Purchased transportation		102,393			124,800			273,269			376,378
Compensation		19,040			27,519			61,791			83,518
Fuel, supplies and maintenance		16,129			30,031			49,591			93,199
Depreciation and amortization		5,055			5,207			15,694			15,435
Selling and administrative		5,592			8,699			19,614			26,515
Insurance costs		3,081			3,202			11,076			11,629
Taxes and licenses		1,023			1,583			3,096			4,042
Communications and utilities		1,977			3,104			6,785			10,109
Loss (gain) on disposal of property and equipment		279			(867	)		14			(2,832	)
Impairment charge		—			—			148,630			—
Restructuring costs		340			1,700			2,105			4,075
Total operating expenses		154,909			204,978			591,665			622,068
Operating income (loss)		7,896			9,763			(129,342	)		25,136
Interest expense		6,462			8,455			19,980			26,246
Interest income		(25	)		(128	)		(211	)		(333	)
Gain on early extinguishment of debt		—			—			(675	)		—
Other (income) expense		(8	)		15			(284	)		171
Income (loss) before income taxes		1,467			1,421			(148,152	)		(948	)
Provision for (benefit from) income taxes		41			704			36,951			(98	)
Net income (loss)	$	1,426		$	717		$	(185,103	)	$	(850	)
PER SHARE DATA:
Net income (loss) per common share
Basic	$	0.07		$	0.04		$	(9.55	)	$	(0.04	)
Diluted	$	0.07		$	0.04		$	(9.55	)	$	(0.04	)
Weighted average number of shares
Basic		19,458			19,387			19,373			19,377
Diluted		19,653			19,556			19,373			19,377

QUALITY DISTRIBUTION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In 000’s)

Unaudited

	September 30, 2009			December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	2,831		$	6,787
Accounts receivable, net		80,728			81,612
Prepaid expenses		6,382			12,922
Deferred tax assets, net		6,774			14,707
Other		5,772			7,950
Total current assets		102,487			123,978
Property and equipment, net		131,802			148,692
Assets held-for-sale		4,927			—
Goodwill		27,289			173,519
Intangibles, net		18,859			22,698
Non-current deferred tax asset, net		—			22,636
Other assets		8,203			10,580
Total assets	$	293,567		$	502,103
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Current maturities of indebtedness	$	3,538		$	8,361
Current maturities of capital lease obligations		6,063			7,994
Accounts payable		9,646			16,126
Affiliates and independent owner-operators payable		11,052			7,649
Accrued expenses		22,937			25,357
Environmental liabilities		4,563			4,819
Accrued loss and damage claims		9,074			8,705
Total current liabilities		66,873			79,011
Long-term indebtedness, less current maturities		316,547			330,409
Capital lease obligations, less current maturities		12,862			15,822
Environmental liabilities		6,695			6,035
Accrued loss and damage claims		11,152			12,815
Other non-current liabilities		30,430			25,158
Total liabilities		444,559			469,250
Redeemable noncontrolling interest		1,833			1,833
SHAREHOLDERS’ (DEFICIT) EQUITY
Common stock		363,365			362,945
Treasury stock		(1,580	)		(1,580	)
Accumulated deficit		(299,137	)		(114,034	)
Stock recapitalization		(189,589	)		(189,589	)
Accumulated other comprehensive loss		(25,650	)		(26,488	)
Stock subscriptions receivable		(234	)		(234	)
Total shareholders’ (deficit) equity		(152,825	)		31,020
Total liabilities, redeemable noncontrolling interest and shareholders’ (deficit) equity	$	293,567		$	502,103

RECONCILIATION OF NET INCOME (LOSS) TO TAX EFFECTED AND ADJUSTED NET INCOME (LOSS)

AND RECONCILIATION OF NET INCOME (LOSS) PER SHARE TO TAX EFFECTED AND ADJUSTED NET

INCOME (LOSS) PER SHARE

For the Three Months and the Nine Months Ended September 30, 2009 and 2008

(In 000’s)

Unaudited

Tax Effected and Adjusted Net Income (Loss) and Tax Effected and Adjusted Net Income (Loss) per Share (as defined) are presented herein because they are important metrics used by management to evaluate and understand the performance of the ongoing operations of the Company’s business. Management uses a 39% tax rate for calculating the benefit from income taxes to normalize the Company’s tax rate to that of comparable transportation companies, and to compare Company periods with different effective tax rates. In addition, we adjust Net Income (Loss) for significant items that are not regularly recurring. These adjustments include restructuring charges related to a plan of restructure which began in the second quarter of 2008 and which we expect to conclude in 2010. Tax Effected and Adjusted Net Income (Loss) and Tax Effected and Adjusted Net Income (Loss) per Share are not measures of financial performance or liquidity under United States Generally Accepted Accounting Principles (“GAAP”). Tax Effected and Adjusted Net Income (Loss) and Tax Effected and Adjusted Net Income (Loss) per Share should not be considered in isolation or as a substitute for the consolidated statements of operations prepared in accordance with GAAP as an indication of the Company’s operating performance or liquidity.

Net Income (Loss) Reconciliation:	Three months ended September 30,				Nine months ended September 30,
	2009		2008		2009			2008
Net income (loss)	$	1,426	$	717	$	(185,103	)	$	(850	)
Net income (loss) per common share:
Basic	$	0.07	$	0.04	$	(9.55	)	$	(0.04	)
Diluted	$	0.07	$	0.04	$	(9.55	)	$	(0.04	)
Adjustments to net income (loss):
Provision for (benefit from) income taxes		41		704		36,951			(98	)
Gain on extinguishment of debt		—		—		(675	)		—
Restructuring costs		340		1,700		2,105			4,075
Impairment charges		—		—		148,630			—
Gains on property sales		—		—		—			(2,128	)
Adjusted income before income taxes		1,807		3,121		1,908			999
Provision for income taxes at 39%		705		1,217		744			390
Tax effected and adjusted net income	$	1,102	$	1,904	$	1,164		$	609
Tax effected and adjusted net income per common share:
Basic	$	0.06	$	0.10	$	0.06		$	0.03
Diluted	$	0.06	$	0.10	$	0.06		$	0.03
Weighted average number of shares:
Basic		19,458		19,387		19,373			19,377
Diluted		19,653		19,556		19,373			19,377