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Quality Distribution, Inc. Announces Fourth Quarter And Year End 2010 Results

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (LOSS), EBITDA AND ADJUSTED EBITDA AND RECONCILIATION OF NET INCOME (LOSS) PER SHARE TO ADJUSTED NET INCOME (LOSS) PER SHARE For the Three Months and the Year Ended December 31, 2010 and 2009 (In 000's) Unaudited

Adjusted Net Income (Loss) and Adjusted Net Income (Loss) 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 (Loss), Adjusted Net Income (Loss) 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 Adjusted Net Income (Loss), management uses a 39% 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. In addition, in arriving at Adjusted Net Income and Adjusted Net Income per Share, we adjust for significant items that are not part of regular operating activities. These adjustments include restructuring charges related to a plan of restructure which began in the second quarter of 2008 and which we concluded in the fourth quarter of 2010, an impairment charge and gain on early extinguishment of debt, gain on sale of tank wash assets, write-off of debt issuance costs, write-off of unconsummated stock offering costs, excess interest from our recent debt refinancing, and other refinancing costs.

EBITDA is a component of the measure used by our management to facilitate internal comparisons to competitors' results and the bulk transportation industry in general. We believe that financial information based on GAAP for highly leveraged businesses, such as ours, should be supplemented by EBITDA so investors better understand our financial information in connection with their evaluation of our business. This measure is especially important given the recent trends of increased merger and acquisition activity and financial restructurings within the industry, which has led to significant 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 industry 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 (Loss) is adjusted for provision for (benefit from) income tax, depreciation and amortization and interest expense. To calculate Adjusted EBITDA, we calculate EBITDA from Net Income (Loss), which is then further adjusted for significant items that are not part of regular operating activities, including the restructuring charges related to a plan of restructure which began in the second quarter of 2008 and which we concluded in 2010, an impairment charge, gain on early extinguishment of debt, gain on sale of tank wash assets, write-off of debt issuance costs, write-off of unconsummated stock offering costs, other refinancing costs and other non-cash items such as non-cash stock-based compensation, to arrive at Adjusted EBITDA. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) 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.

Net (Loss) Income Reconciliation:  Three months ended December 31,  Year ended December 31, 
  2010 2009 2010 2009
Net (loss) income  $ (10,681)  $ 4,569  $ (7,406)  $ (180,534)
         
Net (loss) income per common share:        
Basic  $ (0.51) $0.23  $ (0.36)  $ (9.28)
Diluted  $ (0.51) $0.21  $ (0.36)  $ (9.28)
         
Weighted average number of shares: 20,918 19,679 20,382 19,449
Basic 20,918 21,322 20,382 19,449
Diluted        
         
Adjustments to net (loss) income:        
(Benefit from) provision for income taxes  (268)  298 411 * 37,249
Gain on sale of tank wash assets  --   (7,130) --  (7,130)
Gain on extinguishment of debt  --   (1,195) --  (1,870)
Write-off of debt issuance costs  7,391  20 7,391  20
Costs associated with unconsummated stock offering  735  --  735  -- 
Refinancing costs  --   2,323 --  2,323
Restructuring costs  3,190  1,391 7,779  3,496
Excess interest from debt refinancing  1,728  --  1,728  -- 
Impairment of goodwill and intangibles  --   --  --  148,630
Adjusted income before income taxes 2,095 276 10,638 2,184
Provision for income taxes at 39%  817 108 4,149 852
Adjusted net income  $1,278 $168 $6,489 $1,332
         
Adjusted net income per common share:        
Basic $0.06 $0.01 $0.32 $0.07
Diluted $0.06 $0.01 $0.30 $0.07
Weighted average number of shares:        
Basic 20,918 19,679 20,382 19,449
Diluted 22,020 21,322 21,684 20,352
         
EBITDA and Adjusted EBITDA:  Three months ended December 31,  Year ended December 31, 
  2010 2009 2010 2009
Net (loss) income $(10,681) $4,569 $(7,406) $(180,534)
         
Adjustments to net (loss) income:        
(Benefit from) provision for income taxes   (268) 298 411 * 37,249
Depreciation and amortization 3,765 4,524 16,004 20,218
Interest expense, net 9,982 8,278 35,548 28,047
EBITDA 2,798 17,669 44,557 (95,020)
         
Gain on sale of tank wash assets --  (7,130) --  (7,130)
Gain on extinguishment of debt --  (1,195) --  (1,870)
Write-off of debt issuance costs 7,391  20 7,391  20
Costs associated with unconsummated stock offering 735  --  735  -- 
Refinancing costs --  2,323 --  2,323
Restructuring costs 3,190  1,391 7,779  3,496
Impairment of goodwill and intangibles --  --  --  148,630
Non-cash stock-based compensation 568  681 2,273  1,101
         
Adjusted EBITDA $14,682 $13,759 $62,735 $51,550
         
* This amount represents a $37.3 million increase to deferred tax expense related to a net adjustment to the balance of the valuation allowance which occurred as a result of change in realizability of the related net deferred tax asset in future years.  
CONTACT: Joan Rodgers
         Director of Investor Relations
         800-282-2031 ext. 7235

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