- Revenues of $454.2 million - EBITDA of $59.8 million - EPS of $0.21 per share
MONTREAL, July 23 /CNW Telbec/ - TransForce Inc. ("TransForce" or "the Company") (TSX: TFI - T), the leader in the Canadian transportation and logistics industry, today announced its results for the second quarter, ended June 30, 2009.
"TransForce maintained its dividend and continued to navigate through the challenges posed by the difficult operating environment that persisted through the second quarter. Some areas of the Canadian economy, like the energy and manufacturing sectors, continue to exhibit lower activity and corresponding demand for our services," said Alain Bedard, President and Chief Executive Officer of TransForce Inc. "While volumes have declined, the Company has largely sustained its EBITDA margin by maintaining our focus on cost savings and efficiency. For example, during the quarter, we delivered significant reductions in operating expenses and general and administrative costs."
Second Quarter Results
For the three months ended June 30, 2009, TransForce reported revenues of $454.2 million compared with $595.6 million in the same period of 2008, a decrease of 24%. Revenues excluding fuel surcharges were $424.8 million compared with $514.1 million in the same period of 2008, a decrease of 17%. The year-over-year decrease in revenue is consistent with the continuing general economic downturn experienced since the beginning of 2009.
EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce's financial statements) was $59.8 million in the quarter, compared with $66.9 million in the second quarter of 2008.
Cash flow from operations, before net changes to non-cash working capital balances related to operations, was $49.2 million compared with $60.2 million in the second quarter of 2008.
TransForce's earnings before income taxes were $26.4 million compared with $24.9 million in the second quarter of 2008. A change in the fair value of interest rate contracts, an item unrelated to operations of the business, was responsible for $5.2 million of the increase in earnings before income taxes.
Income tax expense increased to $8.4 million in the second quarter of 2009 from $5.7 million in the same period of 2008. The Company now records income tax expense following its conversion from an income trust to a corporation in May of 2008.
Net income decreased to $18.0 million from $19.3 million in the second quarter of 2008. Excluding the after-tax effect of the non-recurring conversion-related costs of $9.9 million recorded in the second quarter of 2008, net income for the second quarter of 2008 was $29.2 million.
Earnings per share were $0.21 per share compared with $0.22 per share in the same period of 2008.
During the quarter, TransForce paid out a dividend of $0.10 per share.
"Debt reduction remains a priority and we are committed to our target of reducing debt by $100 million in 2009," said Mr. Bedard. "We are well on our way to achieving this goal, having lowered our debt level by more than $50 million during a challenging first half of the year."
Year-to-Date Results
During the six months ended June 30, 2009, TransForce revenues decreased by 19% to $906.5 million from $1.1 billion in the same period of 2008. Revenue excluding fuel surcharges decreased 14% to $847.0 million from $983.6 million in the same period of 2008. EBITDA decreased 16% to $104.3 million from $123.8 million in 2008. Excluding the gain of $4.5 million from the favorable ruling in a class-action settlement recorded in the first quarter of 2008 and non-recurring conversion-related costs of $8.7 million recorded in the second quarter of 2008, EBITDA during the first six months of 2008 was $128.0 million.
Cash flow from operations, before net changes to non-cash working capital balances related to operations, was $82.3 million compared with $106.0 million in the first six months of 2008.
Earnings before income taxes were $30.6 million compared with $42.4 million in the same period of 2008. Net income during the first six months of 2009 declined to $21.1 million from $38.4 million.
Earnings per share were $0.24 per share during the first six months of 2009 compared with $0.45 per share in the first six months of 2008.
"The economic environment continues to be challenging, with lagging demand," said Mr. Bedard. "While we are cautiously optimistic that a bottom may have been reached, we cannot predict the speed of an overall economic recovery. TransForce is focused on what it can control and our people continue to decrease overhead costs and align our businesses with market conditions."
Second Quarter Management Conference Call
TransForce will host a conference call for investors to discuss the results of the second quarter of 2009 on Thursday, July 23, 2009, at 9:00 a.m. Eastern Time. Participating from the Company will be Alain Bedard, Chairman, President and Chief Executive Officer, and Salvatore Vitale, Chief Financial Officer.
To participate in the conference call, investors are invited to call 1-800-908-0783. A recording of the call will be available until 12:00 a.m., July 31, 2009, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21431942.
Financial Statements
The financial statements for the periods ended June 30, 2009 and 2008 included below are an integral part of this news release.
Profile
TransForce Inc. (www.transforce.ca) is the leader in Canada's transportation and logistics industry. Headquartered in Montreal, Quebec, TransForce creates value for shareholders through managing and investing in a growing network of wholly-owned operating subsidiaries. TransForce provides a comprehensive and unique combination of capabilities, resources and geographical coverage in both domestic and trans-border markets. Its companies currently operate in four well-defined business segments:
- Less-Than-Truckload; - Package and Courier; - Specialized Services, which includes its ancillary transportation services such as logistics, warehousing & dedicated services, fleet management & personnel services; oilfield & oilsand services, and; waste management; - Truckload, which includes specialized truckload services.
TransForce Inc. shares are listed on the Toronto Stock Exchange under the symbol TFI.
Forward-Looking Statements
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of TransForce. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for TransForce's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.
For further details, please see the Financial Statements below. The Financial Statements and Management's Discussion and Analysis can also be found on SEDAR at www.sedar.com and on the Company's website www.transforce.ca.
CONSOLIDATED STATEMENTS Three Three Six Six
OF INCOME months months months months
(unaudited) ended ended ended ended
(In thousands of dollars, June 30, June 30, June 30, June 30,
except per share amounts) 2009 2008 2009 2008
Revenues 424,762 514,081 847,011 983,591
Fuel surcharge revenues 29,404 81,560 59,535 138,308
-------------------------------------------------------------------------
Total revenues 454,166 595,641 906,546 1,121,899
Expenses
Operating expenses 319,418 432,511 641,971 819,198
Fixed costs, general and
administrative expenses 74,968 88,795 160,288 170,040
Incentive plan - 7,438 - 8,885
-------------------------------------------------------------------------
Operating income before the
following: 59,780 66,897 104,287 123,776
Depreciation of fixed
assets 26,604 26,767 53,158 51,820
Amortization of intangible
assets 4,391 3,906 8,759 7,927
Interest on long-term debt 9,075 11,640 18,963 23,080
Change in fair value
interest rate Swap
contracts (5,205) 125 (5,500) 125
Gain on disposal of
business (134) - (134) -
Gain on disposal of fixed
assets (1,323) (477) (1,594) (1,528)
-------------------------------------------------------------------------
Income before provision for
income taxes 26,372 24,936 30,635 42,352
Provision for income taxes
Current 1,993 2,544 4,069 4,354
Future 6,396 3,108 5,472 (380)
-------------------------------------------------------------------------
8,389 5,652 9,541 3,974
-------------------------------------------------------------------------
Net income 17,983 19,284 21,094 38,378
Earnings per share
Basic 0.21 0.22 0.24 0.45
Diluted 0.21 0.22 0.24 0.45
-------------------------------------------------------------------------
Outstanding weighted
average number of
Shares 86,790,097 40,056,967 86,790,097 20,139,139
Units - 38,864,714 - 55,429,540
Tracking shares - 7,412,309 - 10,571,461
-------------------------------------------------------------------------
Total 86,790,097 86,333,990 86,790,097 86,140,140
Shares outstanding
Number of Shares 86,790,097 86,790,097 86,790,097 86,790,097
-------------------------------------------------------------------------
Total 86,790,097 86,790,097 86,790,097 86,790,097
CONSOLIDATED BALANCE SHEETS As at As at
June 30, December
(in thousands of dollars) 2009 31, 2008
(unaudited) (audited)
ASSETS
Current assets
Accounts receivable 264,335 302,801
Inventories 10,328 11,296
Prepaid expenses 19,010 14,285
Income tax receivable 2,805 519
Future income taxes 1,076 1,666
-------------------------------------------------------------------------
297,554 330,567
-------------------------------------------------------------------------
Fixed assets 688,951 718,713
Goodwill 438,495 435,851
Intangible assets 122,710 128,672
Other assets 6,196 6,258
Future income taxes 355 1,846
-------------------------------------------------------------------------
1,554,261 1,621,907
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Bank indebtedness 5,762 12,517
Accounts payable and accrued liabilities 201,818 218,763
Dividends payable on Tracking Share Units
of TFI Holdings Inc. - 571
Dividends payable 8,679 8,679
Current portion of long-term debt 59,419 69,028
-------------------------------------------------------------------------
275,678 309,558
-------------------------------------------------------------------------
Long-term debt 694,353 738,986
Asset retirement obligations 10,625 8,204
Future income taxes 60,022 55,309
Shareholders' equity
Share capital 519,404 519,404
Deficit (5,821) (9,554)
-------------------------------------------------------------------------
513,583 509,850
-------------------------------------------------------------------------
1,554,261 1,621,907
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS Three Three Six Six
OF DEFICIT months months months months
(unaudited) ended ended ended ended
June 30, June 30, June 30, June 30,
(in thousands of dollars) 2009 2008 2009 2008
Deficit, beginning of
period (15,122) (29,245) (9,554) (15,146)
Net income for the period 17,983 19,284 21,094 38,378
Distributions to unitholders - (14,514) - (43,541)
Dividends on Tracking Share
Units of TFI Holdings Inc. - (1,860) - (5,581)
Dividends on common shares (8,682) - (17,361) -
Incentive plan contribution - (2,821) - (3,266)
-------------------------------------------------------------------------
Deficit, end of period (5,821) (29,156) (5,821) (29,156)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS Three Three Six Six
OF CASH FLOWS months months months months
(unaudited) ended ended ended ended
June 30, June 30, June 30, June 30,
(in thousands of dollars) 2009 2008 2009 2008
CASH FLOW FROM OPERATING
ACTIVITIES
Net income for the period 17,983 19,284 21,094 38,378
Non-cash items:
Depreciation of fixed
assets 26,604 26,767 53,158 51,820
Amortization of intangible
assets 4,391 3,906 8,759 7,927
Incentive plan expense - 7,438 - 8,885
Purchase of units held by
the fund for the Incentive
plan - (400) - (400)
Deferred financing charges 390 330 780 564
Future income taxes 6,396 3,108 5,472 (380)
Change in fair value of
interest rate Swap
contracts (5,205) 125 (5,500) 125
Gain on disposal of
business (134) - (134) -
Gain on disposal of fixed
assets (1,323) (477) (1,594) (1,528)
Other 135 77 247 516
-------------------------------------------------------------------------
49,237 60,158 82,282 105,907
Net change in non-cash
working capital balances
related to operations 2,543 (10,696) 22,995 (46,952)
-------------------------------------------------------------------------
51,780 49,462 105,277 58,955
-------------------------------------------------------------------------
CASH FLOW FROM FINANCING
ACTIVITIES
Increase in bank advances
and overdraft (7,197) 4,377 (6,755) 10,483
Increase in long-term debt - 97,928 - 97,928
Repayment of long-term debt (20,745) (12,841) (33,806) (38,187)
Increase (decrease) in long
term revolver facility (11,462) (82,016) (30,256) 9,833
Cash distributions paid to
unitholders - (24,189) - (53,216)
Dividends paid (9,253) - (17,932) -
Dividends paid on Tracking
Share Units - (2,798) - (7,201)
-------------------------------------------------------------------------
(48,657) (19,539) (88,749) 19,640
-------------------------------------------------------------------------
CASH FLOW FROM INVESTING
ACTIVITIES
Additions to fixed assets (9,795) (22,546) (21,050) (35,676)
Proceeds from disposal of
fixed assets 9,272 3,659 12,759 11,139
Business acquisitions
(including bank advances
net of cash) (3,611) (10,840) (9,352) (53,989)
Proceeds from disposal of
business 1,053 - 1,053 -
Other assets, net (42) (196) 62 (69)
-------------------------------------------------------------------------
(3,123) (29,923) (16,528) (78,595)
-------------------------------------------------------------------------
Net change in cash and
cash equivalent during
the period - - - -
Cash and cash equivalent,
beginning of the period - - - -
-------------------------------------------------------------------------
Cash and cash equivalent,
end of the period - - - -
-------------------------------------------------------------------------
Supplemental cash flow
information:
Cash paid during the
period for:
Interest 9,023 11,157 18,491 22,601
Income taxes 2,927 - 6,355 4,022
-------------------------------------------------------------------------
%SEDAR: 00026947EF
