“Our results for the second quarter of 2001 reflect continued weakness in the demand for new and used automobile transport service,” said Gerald Riordan, URSI’s CEO. “Operating income from our transport divisions declined from $2.1 million for the second quarter of 2000 to $1.4 million for the second quarter of 2001. The impact of the market slow down was offset, in part, by the results of our turnaround initiatives, cost reductions and consolidations.”
The net loss for the second quarter of 2000 includes a non-cash impairment charge of $129.5 million related to the recorded value of USRI’s long-lived assets and the recoverability of goodwill. Additionally, the company recorded a write-off of $5.6 million and established a valuation allowance of $4.0 million, related to the reliability of its deferred tax asset.
He added that in the towing and recovery divisions’ turnaround initiatives, which included the divestiture of certain under-performing divisions, cost reductions and operating improvements all had a positive effect. URSI’s towing and recovery operating income increased from $334,000 for the second quarter of 2000 (excluding the 2000 non-cash impairment charges of $48.3 million) to $940,000 for the second quarter of 2001.
Formed in July 1997, URSI operates a network of 30 divisions in 20 states. Its services include towing, impounding and storing motor vehicles, conducting lien sales and auctions of abandoned vehicles, repossession services and transporting new and used vehicles and heavy construction equipment.