CALGARY, March 12 /CNW/ - Trimac Income Fund (TSX Symbol TMA.UN) (the "Fund") today released the financial results of the Fund and Trimac Transportation Services Limited Partnership ("Trimac" or the "Partnership") for the fourth quarter and for the fiscal year ended December 31, 2008.
Three months ended Year ended
December 31 December 31
Partnership 2008 2007 2008 2007
---------------------------------------------
(millions of dollars)
Revenues 78.1 79.3 326.7 330.6
EBITDA(1) 9.8 9.3 40.6 40.9
Net earnings 3.0 2.2 13.8 17.4
Three months ended Year ended
December 31 December 31
Fund 2008 2007 2008 2007
---------------------------------------------
Distributable cash
per unit(1)(2) $0.2525 $0.2492 $1.0733 $1.1033
Distributions per unit(1) $0.2313 $0.2313 $0.9252 $0.9252
Basic and fully diluted
earnings per unit $0.1088 $0.0875 $0.4690 $0.4989
Weighted average number
of units outstanding
used in computing
basic earnings
per unit 12,574,520 12,534,193 12,574,520 12,534,193
Number of units
outstanding used in
computing diluted
earnings per unit 24,980,735 23,928,479 24,980,735 23,928,479
(1) EBITDA, distributable cash per unit and distributions per unit are
not recognized measures under generally accepted accounting
principles (GAAP) and do not have a standardized meaning prescribed
by GAAP. Therefore, these amounts may not be comparable to similar
measures presented by other issuers. Management considers EBITDA and
distributable cash to be key measures that indicate the ability of
the Fund to meet its capital and financing commitments.
(2) Distributable cash available will fluctuate on a monthly basis due to
seasonal cash flows, sustaining capital incurred and income taxes and
interest paid. See "Distributable Cash" for additional commentary.
In spite of the significant headwinds impacting the Canadian economy in 2008, Trimac's business model of diversification by customer, industry, product, and geography has once again delivered solid results. Revenue in the fiscal year ended December 31, 2008 ("current year") decreased by $3.9 million or 1.2 percent from the year ended December 31, 2007 ("prior year"). Trimac was able to maintain EBITDA, expressed as a percent of revenue, at 12.4 percent in 2008 despite competitive pressure and reduced levels of activity in chemical and woodchip product lines. The western division recorded its highest annual EBITDA since the initial public offering in 2005. In the eastern division a continuation of the weak economic environment in central Canada and the non-recurrence of a $5.2 million short-term contract in 2007 contributed to a reduction in EBITDA of $1.1 million during the year. Bulk Plus Logistics' (BPL) EBITDA was $0.3 million higher than in the prior year despite the non-recurrence of a $5.6 million short-term contract in 2007.
For the three-month period ended December 31, 2008 ("current period") revenue decreased by $1.2 million or 1.5 percent from that recorded during the three-month period ended December 31, 2007 ("prior period"). EBITDA increased by $0.5 million over the prior period.
Divisional highlights in the fourth quarter were as follows:
- Effective December 5, 2008 Trimac completed the acquisition of
Canamera Carriers Inc. ("CCI"). CCI operates out of Yorkton,
Saskatchewan and provides transportation and warehousing of
fertilizer throughout western Canada with annual revenues in its last
completed fiscal year of approximately $7.9 million.
- The western division increased EBITDA by $0.3 million or 4.6 percent
over the prior period.
- Despite lower revenue, the eastern division's EBITDA in the current
period increased by $1.0 million or 52.6 percent over the prior
period.
- BPL improved EBITDA by $0.2 million on similar revenue to the prior
period.
In commenting on the results for the fourth quarter and the year ended December 31, 2008, Jeffrey J. McCaig, Chairman, President and CEO of Trimac, said:
"Despite growing economic uncertainty and a challenging operating environment in central Canada, Trimac experienced solid results in the quarter and for the year. After adjusting for a one-time gain on sale of a non-strategic facility in the prior year, Trimac's earnings before tax improved by $1.3 million or 9.8 percent in the current year."
For comments regarding managements' outlook for 2009 please see Trimac's Management's Discussion and Analysis for the year ended December 31, 2008.
Financial Highlights
Three months ended Year ended
December 31 December 31
--------------------------------------------
(millions of dollars) 2008 2007 2008 2007
-------------------------------------------------------------------------
Revenues 78.1 79.3 326.7 330.6
Direct costs 57.8 59.2 240.8 244.0
Selling and administrative 10.5 10.8 45.3 45.7
--------------------------------------------
EBITDA(1) 9.8 9.3 40.6 40.9
Depreciation net of gains
on disposal of capital
assets(2) 5.4 5.7 21.1 20.0
--------------------------------------------
Operating earnings 4.4 3.6 19.5 20.9
Interest expense (net) 1.2 1.1 4.9 4.7
--------------------------------------------
Earnings before taxes 3.2 2.5 14.6 16.2
Income tax expense
(recovery)(3) 0.2 0.3 0.8 (1.2)
--------------------------------------------
Net earnings 3.0 2.2 13.8 17.4
--------------------------------------------
--------------------------------------------
As a percentage of revenue
-----------------------------
Direct costs 74.0% 74.7% 73.7% 73.8%
Selling and administrative 13.4% 13.6% 13.9% 13.8%
EBITDA(1) 12.5% 11.7% 12.4% 12.4%
Depreciation(2) 6.9% 7.2% 6.5% 6.0%
Operating earnings 5.6% 4.5% 6.0% 6.3%
As at December 31,
(millions of dollars) 2008 2007
--------------------
Total assets 152.7 155.4
Total long-term liabilities 47.2 44.7
(1) EBITDA (earnings before interest, taxes, depreciation and
amortization) is not a recognized measure under GAAP, does not have a
standardized meaning prescribed by GAAP and, therefore, may not be
comparable to similar measures presented by other issuers. Management
believes that EBITDA is a useful complementary measure of cash
available for distribution before debt servicing expense, capital
expenditures and income taxes.
(2) Results in 2007 include a $2.9 million gain on the disposal of a non-
strategic facility in the second quarter.
(3) Results in 2007 include a $1.7 million reversal of a previously
recorded future tax liability resulting from a corporate
reorganization in the second quarter.
Distributable Cash
The table below illustrates distributable cash to unitholders beginning
with net cash provided by the Partnership's operations.
(millions of dollars Three months ended Year ended
except unit amounts, December 31 December 31
certain percentages --------------------------------------------
and number of units) 2008 2007 2008 2007
-------------------------------------------------------------------------
Net cash provided by
operations 11.9 3.3 36.7 32.7
Net change in non-cash
working capital(1) (3.7) 5.1 (2.4) 3.3
--------------------------------------------
Cash provided by operations 8.2 8.4 34.3 36.0
Less adjustments for:
Net sustaining capital
expenditures (net of
proceeds)(2)(3) (1.3) (1.6) (6.2) (3.0)
Provision for sustaining
capital commitments(4) - - - (3.9)
Provision for long-term
unfunded contractual
operational obligations(5) - (0.2) 0.3 (0.5)
--------------------------------------------
Total estimated cash
available for distribution
(before public expenses) 6.9 6.6 28.4 28.6
Percentage of available
cash distributable to
unitholders(6) 50% 52% 50% 52%
--------------------------------------------
Cash available for
distribution to unitholders
(before public expenses) 3.3 3.3 14.3 14.9
Public expenses(7) (0.1) (0.2) (0.8) (1.1)
--------------------------------------------
Distributable cash from
operations (2)(8) 3.2 3.1 13.5 13.8
Distributions declared
and payable 2.9 2.9 11.6 11.6
Distributable cash per
unit(2)(8) 0.2525 0.2492 1.0733 1.1033
Distributions declared
per unit 0.2313 0.2313 0.9252 0.9252
Payout ratio(2)(8) 91.6% 92.8% 86.2% 83.9%
Weighted average number
of units outstanding 12,574,520 12,534,193 12,574,520 12,534,193
Net capital expenditures
Sustaining capital
expenditures(2) 2.1 2.3 9.4 11.2
Proceeds on disposal
of replaced assets (0.8) (0.7) (3.2) (8.2)
--------------------------------------------
Net sustaining capital
expenditures(2)(3) 1.3 1.6 6.2 3.0
Growth capital
expenditures(2)(9) 0.9 1.3 6.5 4.8
--------------------------------------------
2.2 2.9 12.7 7.8
--------------------------------------------
--------------------------------------------
(1) Changes in non-cash operating assets and liabilities are not included
in the calculation of distributable cash. Working capital investments
are funded through a combination of cash flow not distributed and the
use of credit facilities available to the Partnership.
(2) Distributable cash from operations, sustaining capital expenditures,
net sustaining capital expenditures, payout ratio, and growth capital
expenditures are not measures recognized by GAAP, do not have
standardized definitions prescribed by GAAP and may not be comparable
to similarly named measures presented by other issuers.
(3) Net sustaining capital expenditures refers to capital expenditures,
net of proceeds on disposal of assets replaced, which are necessary
to sustain current revenue levels. See "Capital Expenditures" on
page 8 of this press release.
(4) This represented the prior-year reversal of a $1.1 million reserve
established in the fourth quarter of 2006 for a facility capital
expansion that commenced in 2006. In addition, the Partnership had
reserved $5.0 million of proceeds on the disposal of a non-strategic
facility in June 2007 to be used to acquire replacement facilities in
a subsequent period.
(5) Represents a provision for cash requirements relating to a long-term
incentive plan and an executive pension liability. During the current
year, a partial reversal of $0.3 million previously provided for was
recorded.
(6) Percentage is equal to weighted average number of units outstanding
of 12,574,520 divided by fully diluted units of 24,980,735.
(7) Represents expenses associated with the Fund's status as a reporting
issuer.
(8) Distributable cash available will fluctuate on a monthly basis due to
seasonal cash flows, sustaining capital expenditures incurred, income
taxes paid and interest costs on outstanding debt.
(9) Cash used to fund growth capital expenditures does not affect
distributable cash to unitholders where financing is available for
these purposes. The Partnership funds growth capital from
undistributed cash from operations, cash available from distributions
on non-cash exchangeable shares and, to the extent available,
existing lines of credit.
During the current year the Partnership's cash provided by operations decreased by $1.7 million. This was largely offset by a decrease in the provision for unfunded long-term executive compensation plans of $0.8 million and a reduction in net sustaining capital expenditures of $0.7 million (including provisions for sustaining capital commitments). The Fund's distributable cash was $13.5 million in the current year, a decrease of $0.3 million from the prior year. For the current period, distributable cash from operations was $3.2 million, a $0.1 million increase over the prior period. The increase was due to a reduced level of net sustaining capital expenditures and a decrease in unfunded long-term executive plans. This was partially offset by reduced cash provided by operations.
Distributions in the current period were paid using cash generated from operations including cash retained in the business relating to non-cash exchangeable shares. Due to the seasonal nature of the Partnership's business and the timing of sustaining capital purchases, the amount of distributable cash may vary from quarter to quarter. Trimac's Board of Directors approves the level of monthly distributions based upon estimated cash flow on an annual basis, less estimated cash required for debt service, cash taxes, and other amounts (including sustaining capital expenditures, working capital and provisions), in order to stabilize the monthly amount of distributions to unitholders. Growth capital expenditures are funded from undistributed cash from operations, cash available from notional distributions on non-cash exchangeable shares, and, to the extent available, cash and existing lines of credit.
Distributable cash from operations is not a defined term under GAAP but is determined by the Partnership as net cash provided by operations for the period, adjusted to remove specific non-cash items, including changes in working capital, and reduced by sustaining capital expenditures, provisions for funding long-term liabilities, provisions for committed capital purchases in progress and public costs.
Management believes that distributable cash from operations is a useful supplemental measure of performance as it provides investors with an indication of the amount of cash available for distribution to unitholders. Investors are cautioned, however, that distributable cash from operations should not be construed as an alternative to using net income as a measure of profitability or as an alternative to the statement of cash flows. In addition, the Fund's method of calculating distributable cash from operations may not be comparable to calculations used by other issuers.
Operating Results
Revenue - Full Year
-------------------------------------------------------------------------
Year ended December 31
-------------------------------------------------------------------------
(millions of dollars) 2008 2007 Variance %
-------------------------------------------------------------------------
Bulk trucking
---------------------
Western division 197.8 193.3 4.5 2.3%
Eastern division 112.9 116.4 (3.5) -3.0%
-------------------------------------------------------------------------
Total bulk trucking 310.7 309.7 1.0 0.3%
-------------------------------------------------------------------------
Bulk Plus Logistics 15.9 20.9 (5.0) -23.9%
-------------------------------------------------------------------------
Other 0.1 - 0.1
-------------------------------------------------------------------------
Total revenue 326.7 330.6 (3.9) -1.2%
-------------------------------------------------------------------------
For the current year, total revenue decreased by $3.9 million or 1.2 percent from the prior year. Fuel surcharges as a percentage of base trucking revenue totaled approximately 18 percent in comparison to 12 percent in the prior year, resulting in an increase of $17.3 million. Trimac has fuel surcharge programs in place with substantially all of its customers and the effect of changes in fuel prices has generally been neutral to its results.
The western division's revenue increased by $4.5 million or 2.3 percent as operations in British Columbia and the Prairie Provinces experienced year-over-year growth of 7 percent. The April 30, 2007 acquisition of Ken Angeli Trucking Ltd. and the June 1, 2007 acquisition of certain assets of Logistics Express, Inc. contributed $3.2 million of incremental revenue in 2008 over the prior year, while the December 5, 2008 acquisition of CCI contributed an additional $0.3 million in revenue during the current year. Revenue growth was partially offset by a $5.6 million or 21.9 percent decline in revenue within the woodchip product line and lower revenue in the chemical and tractor service product lines.
The eastern division's revenue decreased by $3.5 million or 3.0 percent as incremental revenue gains of $3.5 million from the November 6, 2007 acquisition of Stan Fergusson Fuels Ltd. (Fergusson) were offset by a non-recurring short-term contract that contributed $5.2 million of revenue in the first nine months of 2007 and reduced demand in the chemicals product line.
For the current year, BPL's revenue decreased by $5.0 million or 23.9 percent. Although increased revenue was achieved in Canadian and U.S. consulting operations due to new contracts secured, the gains were more than offset by lower freight brokerage and transload revenue due to the non-recurrence of a short-term contract in freight brokerage plus management's decision to terminate a transload facility management contract in May 2008.
Revenue - Q4
-------------------------------------------------------------------------
Three months ended December 31
-------------------------------------------------------------------------
(millions of dollars) 2008 2007 Variance %
-------------------------------------------------------------------------
Bulk trucking
---------------------
Western division 47.9 48.1 (0.2) -0.4%
Eastern division 26.4 27.4 (1.0) -3.6%
-------------------------------------------------------------------------
Total bulk trucking 74.3 75.5 (1.2) -1.6%
-------------------------------------------------------------------------
Bulk Plus Logistics 3.7 3.8 (0.1) -2.6%
-------------------------------------------------------------------------
Other 0.1 - 0.1
-------------------------------------------------------------------------
Total revenue 78.1 79.3 (1.2) -1.5%
-------------------------------------------------------------------------
Trimac's total revenue in the current period decreased by $1.2 million or 1.5 percent. Revenue increased in the compressed gas, petroleum, and edible product lines. In the current period, fuel surcharges as a percentage of base trucking revenue totaled approximately 16 percent in comparison to 13 percent in the prior period, which resulted in a increase of $2.1 million.
In the current period, revenue generated by the western division decreased by $0.2 million due primarily to revenue declines of $2.1 million in the woodchip, chemical, and tractor service product lines. Partially offsetting these declines was revenue growth related to fuel surcharges of $1.9 million.
The eastern division's revenue decreased by $1.0 million or 3.6 percent in the current period. Increased revenue in the compressed gas, petroleum, and edible product lines was offset by lower revenue with existing customers in the cementitious and chemicals product lines.
BPL's revenue decreased by $0.1 million in the current period. This decrease was due to the exiting of a transload management contract in May 2008 and was mitigated by gains in third-party logistics management and freight brokerage.
EBITDA - Full Year
-------------------------------------------------------------------------
Year ended December 31
-------------------------------------------------------------------------
(millions of % Rev.
dollars) 2008 % Rev. 2007 % Rev. Variance % change
-------------------------------------------------------------------------
Bulk trucking
------------------
Western division 29.5 14.9% 28.5 14.7% 1.0 3.5% 0.2%
Eastern division 8.9 7.9% 10.0 8.6% (1.1) -11.0% -0.7%
-------------------------------------------------------------------------
Total bulk trucking 38.4 12.4% 38.5 12.4% (0.1) -0.3% -0.1%
-------------------------------------------------------------------------
Bulk Plus Logistics 2.7 17.0% 2.4 11.5% 0.3 12.5% 5.5%
-------------------------------------------------------------------------
Other (0.5) - (0.5)
-------------------------------------------------------------------------
Total EBITDA 40.6 12.4% 40.9 12.4% (0.3) -0.7% 0.0%
-------------------------------------------------------------------------
EBITDA for the current year totaled $40.6 million, a $0.3 million decrease from the prior year. In the western division, a $1.0 million or 3.5 percent increase in the current year was due to increased revenue, reduced wages, and a reduction in repair costs, partially offset by higher fuel costs. The eastern division experienced a $1.1 million or 11.0 percent decrease in EBITDA due to competitive pricing pressure on business renewals, lower revenue due in part to the non-recurrence of a significant short-term contract, plant closures, lower economic activity, and business losses. BPL's EBITDA was $0.3 million higher than in the prior year as profitable new business contracts secured in the current year more than offset lower revenue. The improved results were negatively impacted by clean-up costs associated with a product spill at a customer transload facility in Canada.
EBITDA - Q4
-------------------------------------------------------------------------
Three months ended December 31
-------------------------------------------------------------------------
(millions of % Rev.
dollars) 2008 % Rev. 2007 % Rev. Variance % change
-------------------------------------------------------------------------
Bulk trucking
------------------
Western division 6.8 14.2% 6.5 13.5% 0.3 4.6% 0.7%
Eastern division 2.9 11.0% 1.9 6.9% 1.0 52.6% 4.1%
-------------------------------------------------------------------------
Total bulk trucking 9.7 13.1% 8.4 11.1% 1.3 15.5% 1.9%
-------------------------------------------------------------------------
Bulk Plus Logistics 0.7 18.9% 0.5 13.2% 0.2 40.0% 5.8%
-------------------------------------------------------------------------
Other (0.6) 0.4 (1.0)
-------------------------------------------------------------------------
Total EBITDA 9.8 12.5% 9.3 11.7% 0.5 5.4% 0.8%
-------------------------------------------------------------------------
EBITDA for the current period increased by $0.5 million or 5.4 percent from the prior period. The western division's EBITDA increased by $0.3 million or 4.6 percent to $6.8 million in the current period, as lower revenue was more than offset by a reduction in selling and administration costs as a percentage of revenue. In the eastern division, EBITDA increased by $1.0 million or 52.6 percent in the current period. The increase in EBITDA was predominantly due to improved operating costs in the cementitious and compressed gas product lines. BPL achieved a $0.2 million increase in EBITDA over the prior period due in part to new business contracts secured in 2008.
Capital Expenditures
Three months ended Year ended
December 31 December 31
--------------------------------------------
(millions of dollars) 2008 2007 2008 2007
-------------------------------------------------------------------------
Gross sustaining capital
expenditures 2.1 2.3 9.4 11.2
Less: proceeds on disposal
of capital assets (0.8) (0.7) (3.2) (8.2)
--------------------------------------------
Net sustaining capital
expenditures 1.3 1.6 6.2 3.0
Growth capital expenditures 0.9 1.3 6.5 4.8
--------------------------------------------
Net capital expenditures 2.2 2.9 12.7 7.8
--------------------------------------------
--------------------------------------------
The Partnership's net capital expenditures, including growth and sustaining capital, totaled $12.7 million in the current year compared to $7.8 million in the prior year. The increase of $4.9 million over the prior year was made up of increased growth capital expenditures of $1.7 million and reduced proceeds on asset disposals of $5.0 million. This was partially offset by a $1.8 million decrease in gross sustaining capital purchases.
Gross sustaining capital purchases of $9.4 million were made up primarily of replacement tractors and trailers, accounting for approximately 81 percent of the total, with the balance applicable to other operating assets. Net sustaining capital expenditures were $3.2 million higher than in the prior year due to a $5.0 million reduction in proceeds on disposal of capital assets partially offset by reduced tractor purchases. The reduced proceeds on disposal were the result of a $5.9 million disposal of a non-strategic facility in the prior year partially offset by higher equipment sales of $0.9 million in the current year.
Increased growth capital spending of $1.7 million in the current year was driven by higher tractor and trailer purchases than in the prior period. Trailer purchases accounted for approximately 75 percent of all growth capital expenditures in the current period. Growth capital purchases are funded from undistributed cash from operations, cash available from notional distributions on non-cash exchangeable shares and, to the extent required, available cash and existing lines of credit.
Net annual capital expenditures relating to sustaining capital requirements will vary from year to year based on: the economic life of the capital assets; historical purchase dates; the mix of life cycles expiring in a given year; other factors affecting equipment cost; disposal proceeds of replaced assets; and, annual equipment utilization. Sustaining capital purchases are funded from the Partnership's net cash provided by operations in the year, cash available from notional distributions on non-cash exchangeable shares and, thereafter, to the extent required, available credit facilities.
You are invited to join management of the Partnership on a conference call at 10:00 a.m. Eastern Daylight Time on Friday, March 13, 2009. North American participants, please dial 1-888-300-0053; international participants, please dial ++1 647-427-3420, at least 10 minutes prior to the indicated time.
A playback of the call will be available from 1:00 p.m. Eastern Daylight Time on Friday, March 13, 2009 until midnight March 20, 2009. To hear the playback, please dial 1-800-695-9442 (international participants, please dial ++1 402-220-0607) and when prompted please enter the conference ID number 86722380.
Trimac Income Fund
Consolidated Balance Sheet
-------------------------------------------------------------------------
(thousands of dollars)
As at As at
December 31, December 31,
2008 2007
----------------------------
$ $
Assets
Current assets
Cash 970 404
Interest receivable 241 238
Distributions receivable 719 866
Prepaid expenses 105 64
----------------------------
2,035 1,572
Investment in Trimac Transportation
Services Limited Partnership 67,412 72,961
Note receivable from Trimac
Transportation Services Inc. 35,438 35,141
----------------------------
104,885 109,674
----------------------------
----------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 74 189
Due to associated companies and partnerships 967 439
Distributions payable 970 967
----------------------------
2,011 1,595
Deferred compensation plan 50 -
----------------------------
2,061 1,595
Unitholders' equity 102,824 108,079
----------------------------
104,885 109,674
----------------------------
----------------------------
The Fund commenced business operations on February 25, 2005 and earnings of the Fund's investment in Trimac have been accounted for using the equity method of accounting since commencement. Under this method, the Fund's share of earnings of Trimac, adjusted for the amortization of certain tangible and intangible assets arising from the use of purchase accounting is reflected in the statement of earnings of the Fund as "Share of earnings of Trimac Transportation Services Limited Partnership". The results of operations of the Fund are predominately dependent on the performance of the Partnership.
Trimac Income Fund
Consolidated Statement of Earnings, Comprehensive Income and
Unitholders' Equity
-------------------------------------------------------------------------
(thousands of dollars, except for per unit amounts and number of units)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
----------------------- -----------------------
$ $ $ $
Share of earnings of
Trimac Transportation
Services Limited
Partnership(1) 721 597 3,806 4,499
Interest income 725 708 2,848 2,807
Administrative costs (76) (207) (756) (1,053)
----------------------- -----------------------
Net earnings 1,370 1,098 5,898 6,253
Other comprehensive
income (loss) -
share of Partnership
other comprehensive
income (loss) 149 (5) 182 (88)
----------------------- -----------------------
Comprehensive income 1,519 1,093 6,080 6,165
Opening unitholders'
equity 104,215 109,887 108,079 113,403
Adoption of new
accounting standard - - - (35)
Issue of additional units - - 297 141
Distributions declared (2,910) (2,901) (11,632) (11,595)
----------------------- -----------------------
Closing unitholders'
equity 102,824 108,079 102,824 108,079
----------------------- -----------------------
----------------------- -----------------------
Basic and fully diluted
earnings per unit(2) $0.1089 $0.0875 $0.4690 $0.4989
Weighted average number
of units outstanding
used in computing basic
earnings per unit 12,574,520 12,534,193 12,574,520 12,534,193
Number of units
outstanding used in
computing diluted
earnings per unit 24,980,735 23,928,479 24,980,735 23,928,479
(1) The net earnings of the Partnership are allocated between TTSI and
the Fund based on the terms of the partnership agreement. The
following is a reconciliation of net earnings recorded in the
consolidated financial statements of the Partnership to the amount
recorded by the Fund.
Three months ended Year ended
December 31 December 31
2008 2007 2008 2007
$ $ $ $
--------------------------------------------
Net earnings of the
partnership 2,961 2,288 13,736 17,442
Add: Interest expense on
TTSI debt included in
Partnership earnings 686 1,029 3,600 4,085
-------------------------------------------------------------------------
Adjusted Partnership
earnings 3,647 3,317 17,336 21,527
Less: Purchase price
allocation adjustments:
Increase in amortization
of capital assets and
loss on disposal of
capital assets(1) (575) (593) (2,318) (4,717)
Amortization of
intangible assets(2) (1,006) (1,010) (4,039) (4,039)
-------------------------------------------------------------------------
Partnership earnings after
purchase price adjustments 2,066 1,714 10,979 12,771
-------------------------------------------------------------------------
Share of Partnership earnings 721 597 3,806 4,499
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(2) Pursuant to an investor liquidity agreement, holders of TTSI
Exchangeable Shares have the right to effectively liquidate their
10,060,405 shares of TTSI and receive units in the Fund. Following
the full exercise of such liquidation rights, the Fund would own 100
percent of the Partnership. The number of units used in the
calculation of diluted earnings per unit assumes full liquidation at
the beginning of the period. The fully diluted earnings per unit is
equal to the basic earnings per unit as the impact on liquidating the
exchangeable units is anti-dilutive.
Trimac Income Fund
Consolidated Statement of Cash Flows
-------------------------------------------------------------------------
(thousands of dollars)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
----------------------- -----------------------
$ $ $ $
Cash provided (used)
Operations
Net earnings 1,370 1,098 5,898 6,253
Add (deduct) items not
affecting cash:
Share of earnings from
Trimac Transportation
Services Limited
Partnership (721) (597) (3,806) (4,499)
Distributions from
Trimac Transportation
Services Limited
Partnership 721 597 3,806 4,499
Deferred compensation
costs (2) - 50 -
----------------------- -----------------------
Cash provided by
operations 1,368 1,098 5,948 6,253
Net change in non-cash
working capital 33 101 369 92
----------------------- -----------------------
Net cash provided by
operations 1,401 1,199 6,317 6,345
----------------------- -----------------------
Investments
Distributions from Trimac
Transportation Services
Limited Partnership 1,683 1,920 5,878 5,430
----------------------- -----------------------
Cash provided by
investing activities 1,683 1,920 5,878 5,430
----------------------- -----------------------
Financing
Distributions paid (2,910) (2,901) (11,629) (11,594)
----------------------- -----------------------
Cash used in financing
activities (2,910) (2,901) (11,629) (11,594)
----------------------- -----------------------
Increase in cash 174 218 566 181
Cash, beginning of year 796 186 404 223
----------------------- -----------------------
Cash, end of period 970 404 970 404
----------------------- -----------------------
----------------------- -----------------------
Supplemental information
Cash received from
interest 717 700 2,845 2,806
The financial statements included in this news release do not contain the
notes to the statements. Financial statements with note disclosure are filed
with securities regulators.
Trimac Transportation Services Limited Partnership
Consolidated Balance Sheet
-------------------------------------------------------------------------
(thousands of dollars)
As at As at
December 31, December 31,
2008 2007
----------------------------
$ $
Assets
Current assets
Cash and term deposits 2,350 1,072
Accounts receivable 31,350 32,816
Materials and supplies 1,626 1,777
Due from related parties 3,088 2,685
Income taxes recoverable - 61
Prepaid expenses 10,315 9,637
----------------------------
48,729 48,048
Capital assets 92,708 97,467
Intangible assets 3,495 2,387
Goodwill 6,182 6,052
Other 1,622 1,398
----------------------------
152,736 155,352
----------------------------
----------------------------
Liabilities
Current liabilities
Bank indebtedness 1,969 1,310
Accounts payable and accrued liabilities 29,282 28,559
Distributions payable 3,080 4,765
Income taxes payable 570 -
Due to related parties 1,223 2,173
Current maturities of long-term debt 18,666 18,666
----------------------------
54,790 55,473
Long-term debt 44,723 42,338
Future income taxes 1,207 435
Other long-term liabilities 1,253 1,920
----------------------------
101,973 100,166
Partnership equity 50,763 55,186
----------------------------
152,736 155,352
----------------------------
----------------------------
The Partnership provides bulk trucking services throughout Canada and complementary logistics services in Canada and the United States. Effective January 1, 2005, the Partnership purchased substantially all of the assets of Trimac Transportation Services Inc. ("TTSI") relating to its Canadian bulk trucking business and its North American logistics business. TTSI and certain of its subsidiaries conducted the business operations of the Partnership prior to January 1, 2005.
Trimac Transportation Services Limited Partnership
Consolidated Statement of Earnings, Comprehensive Income and Partnership
Equity
-------------------------------------------------------------------------
(thousands of dollars)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
----------------------- -----------------------
$ $ $ $
Revenue
Transportation revenue 66,784 70,084 273,685 294,935
Fuel surcharges 11,278 9,173 52,985 35,665
----------------------- -----------------------
78,062 79,257 326,670 330,600
----------------------- -----------------------
Operating costs and
expenses
Direct 57,761 59,168 240,778 243,999
Selling and administrative 10,535 10,763 45,333 45,691
Depreciation and
amortization 5,442 5,834 21,880 23,384
Gain on sale of
assets (net) (56) (81) (774) (3,394)
----------------------- -----------------------
Operating expense 73,682 75,684 307,217 309,680
----------------------- -----------------------
Operating earnings 4,380 3,573 19,453 20,920
Interest on long-term debt 1,096 1,157 4,783 4,687
Other interest 72 (44) 114 (10)
----------------------- -----------------------
1,168 1,113 4,897 4,677
----------------------- -----------------------
Earnings before income
taxes 3,212 2,460 14,556 16,243
Income tax expense
(recovery)
Current 239 (76) 820 469
Future 12 248 - (1,668)
----------------------- -----------------------
251 172 820 (1,199)
----------------------- -----------------------
Net earnings 2,961 2,288 13,736 17,442
Other comprehensive income
(loss) - net change in
cumulative translation
adjustments 439 (15) 533 (249)
----------------------- -----------------------
Comprehensive income 3,400 2,273 14,269 17,193
Opening partnership equity 51,921 57,848 55,186 57,064
Adoption of new accounting
standard - - - (81)
Distributions declared (4,558) (4,935) (18,692) (18,990)
----------------------- -----------------------
Closing partnership equity 50,763 55,186 50,763 55,186
----------------------- -----------------------
----------------------- -----------------------
Accumulated other
comprehensive (losses)
income (included in
partnership equity)
--------------------------
Opening balance (175) (254) (269) (20)
Other comprehensive
income (loss) 439 (15) 533 (249)
----------------------- -----------------------
Closing balance 264 (269) 264 (269)
----------------------- -----------------------
----------------------- -----------------------
Trimac Transportation Services Limited Partnership
Consolidated Statement of Cash Flows
-------------------------------------------------------------------------
(thousands of dollars)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
----------------------- -----------------------
$ $ $ $
Cash provided (used)
Operations
Net earnings 2,961 2,288 13,736 17,442
Add back (deduct) items
not affecting cash:
Depreciation and
amortization 5,442 5,834 21,880 23,384
Gain on sale of
assets (net) (56) (81) (774) (3,394)
Future income tax
expense (recovery) 12 248 - (1,668)
Other non-cash items (228) 49 (585) 187
----------------------- -----------------------
Cash provided by operations 8,131 8,338 34,257 35,951
Net change in non-cash
working capital 3,661 (5,059) 2,397 (3,289)
----------------------- -----------------------
Net cash provided by
operations 11,792 3,279 36,654 32,662
----------------------- -----------------------
Investments
Purchases of capital
assets (3,038) (3,549) (15,912) (15,987)
Proceeds on sale of
capital assets 898 652 3,235 8,187
Acquisition of
transportation assets
(note 11) (3,218) (4,100) (3,218) (7,364)
(Decrease) increase in
accounts payable and
accrued liabilities
relating to investing
activities (36) 384 (563) (117)
(Increase) decrease in
accounts receivable
relating to investing
activities (1) (55) 9 9
Other 154 (9) 228 (349)
----------------------- -----------------------
Cash used in investing
activities (5,241) (6,677) (16,221) (15,621)
----------------------- -----------------------
Financing
Increase in long-term
debt (1,386) (4,874) 21,052 2,744
Repayments of long-term
debt (1,824) 9,212 (20,491) -
Distributions paid (4,858) (4,898) (20,375) (19,324)
----------------------- -----------------------
Cash used in financing
activities (8,068) (560) (19,814) (16,580)
----------------------- -----------------------
(Decrease) increase in cash (1,517) (3,958) 619 461
Cash (bank indebtedness),
beginning of period 1,898 3,720 (238) (699)
----------------------- -----------------------
Cash (bank indebtedness),
end of period 381 (238) 381 (238)
----------------------- -----------------------
----------------------- -----------------------
Supplemental Information
Income taxes paid 93 234 375 1,070
Interest paid 461 95 5,349 4,689
The financial statements included in this news release do not contain the notes to the statements. Financial statements with note disclosure are filed with securities regulators.
