- Increased revenues to $526.3 million
- Increased EBITDA to $56.9 million
- Announced intention to convert from an income fund to a corporation
MONTREAL, April 30 /CNW Telbec/ - TransForce Income Fund (TSX: TIF.UN), the leader in the Canadian transportation and logistics industry, today announced improved results for the first quarter of 2008, ended March 31, 2008.
In the first three months of 2008, TransForce delivered increased revenues and EBITDA while operating in a very challenging economic environment. As customers continue to adjust to the relative strength of the Canadian dollar, demand has softened, decreasing volumes and putting downward pressure on pricing in most segments. Already high fuel costs continued to rise throughout the quarter. In addition, weather conditions were more extreme than usual during the first three months of the year, which caused delays and some loss of productivity.
Despite these challenges, the Fund increased revenues 13% to $526.3 million from $464.8 million in the first quarter of 2007. EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce's financial statements) also increased to $56.9 million from $52.7 million during the year-earlier period. Significant acquisitions contributed $4.9 million of EBITDA in the first quarter of 2008. The Fund also reported a non-recurring $4.5 million contribution to EBITDA in the quarter, resulting from a favourable class-action settlement from prior years which was confirmed by the Supreme Court of Canada.
Cash flow from operating activities, before the net change in non-cash working capital balances was $45.7 million, an increase from $45.1 million in the first quarter of 2007.
Distributable cash from operating activities was steady year-over-year with $45.1 million in distributable cash from operating activities generated in the first quarter of 2008 compared with $45.6 million generated in same period of 2007. The Fund's regular distribution payout ratio, or cash distributed as a percent of cash available for distribution, was 90.5%, a decrease from 102.2% in the first quarter of 2007.
"Although we are operating in the toughest economic climate in at least a decade, TransForce has generated growth across most of our segments. Our new Package & Courier segment performed well as did the logistics, waste management, and personnel services divisions in Specialized Services," said Alain Bedard, Chairman, President and Chief Financial Executive Officer of TransForce Income Fund. "Continued slower economic activity and higher fuel costs affected our Less-Than-Truckload and Truckload operations but these were able to report revenue growth, mostly as the result of acquisitions in the past year."
TransForce recently announced it is in advanced discussions regarding a number of potential strategic acquisitions, totalling more than $100 million, that could be realized in the short term. In addition, as a result of the pending changes to the tax treatment of the income fund sector, TransForce also announced its intention to ask unitholders to approve a conversion from an income fund structure to a growth-oriented corporation, which is better suited to achieving its goal of delivering value to our investors.
Management Conference Call
TransForce Income Fund will host a conference call for investors to discuss the results of the first quarter later today, April 30, 2008 at 9:00 a.m. eastern time. Participating from the Fund 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 1-800-633-8137. A recording of the call will be available until midnight May 7, 2008, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21381609.
Annual and Special Meeting of Unitholders
TransForce will hold its Annual and Special Meeting of Unitholders on May 12, 2008 at 3:00 p.m. at Sheraton Laval Hotel, 2440 Autoroute des Laurentides, Laval QC. At the meeting, unitholders will vote on the Fund's previously announced intention to convert from an income fund to a corporation.
Financial Statements
The financial statements for the periods ended March 31, 2008 and 2007 included below are an integral part of this news release.
Profile
TransForce Income Fund (www.transforce.ca) is the leader in Canada's transportation and logistics industry. Headquartered in Montreal, Quebec, the Fund's objective is to create value for unitholders through managing and investing in a growing network of wholly-owned, independent 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 five well-defined business segments:
- Less Than Truckload;
- Package and Courrier;
- Specialized Services, which includes its ancillary transportation
services such as logistics, warehousing & dedicated services, fleet
management & personnel services; oilfield & oilsand services, and;
waste management;
- Specialized Truckload; and
- Truckload.
TransForce's trust units (TIF.UN) are listed on the Toronto Stock Exchange
and are included in the S&P/TSX Composite Index.
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 Fund's website www.transforce.ca.
CONSOLIDATED STATEMENTS OF INCOME Three months Three months
(unaudited) ended ended
(In thousands of dollars, March 31, 2008 March 31, 2007
except per unit amounts)
Revenues 469,510 426,997
Fuel surcharge revenues 56,748 37,761
-------------------------------------------------------------------------
Total revenues 526,258 464,758
Expenses
Operating expenses 386,687 332,821
Fixed costs, general and
administrative expenses 81,245 76,753
Incentive plan 1,447 2,496
-------------------------------------------------------------------------
Operating income before the following: 56,879 52,688
Depreciation of fixed assets 25,053 22,813
Amortization of intangible assets 4,021 2,618
Interest on long-term debt 11,440 7,082
Gain on disposal of fixed assets (1,051) (568)
-------------------------------------------------------------------------
Income (loss) before provision
for income taxes 17,416 20,743
Provision for income taxes
Current 1,810 2,520
Future (3,488) (2,640)
-------------------------------------------------------------------------
(1,678) (120)
-------------------------------------------------------------------------
Net income 19,094 20,863
Earnings per unit
Basic 0.22 0.24
Diluted 0.22 0.24
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Outstanding weighted average
number of
Units 72,178,418 72,328,760
Tracking shares 13,765,716 13,766,316
-------------------------------------------------------------------------
Total 85,944,134 86,095,076
Units outstanding
Number of Trust units of the Fund 73,024,381 73,023,781
Number of Tracking shares 13,765,716 13,766,316
-------------------------------------------------------------------------
Total 86,790,097 86,790,097
CONSOLIDATED BALANCE SHEETS As at As at
(in thousands of dollars) March 31, 2008 December 31, 2007
(unaudited) (audited)
ASSETS
Current assets
Accounts receivable 323,324 288,126
Inventories 11,638 9,970
Prepaid expenses 22,839 11,872
-------------------------------------------------------------------------
357,801 309,968
-------------------------------------------------------------------------
Fixed assets 686,506 649,348
Goodwill 420,290 399,828
Intangible assets 81,579 68,619
Other assets 6,315 6,238
Future income taxes 8,540 8,540
-------------------------------------------------------------------------
1,561,031 1,442,541
-------------------------------------------------------------------------
LIABILITIES AND UNITHOLDERS' EQUITY
Current liabilities
Bank indebtedness 15,187 9,081
Accounts payable and accrued
liabilities 220,699 204,907
Cash distributions payable
to unitholders 9,675 9,675
Dividends payable on Tracking
Share Units of TFI Holdings Inc. 1,509 2,191
Income taxes payable 2,542 5,721
Current portion of long-term debt 39,314 35,003
-------------------------------------------------------------------------
288,926 266,578
-------------------------------------------------------------------------
Long-term debt 755,210 651,636
Non-controlling interest - 2,562
Asset retirement obligations 6,295 5,521
Future income taxes 30,300 23,737
Unitholders' equity
Capital contributions and
Tracking Share Units 519,404 519,404
Units held by the fund for
long-term incentive plan (9,859) (11,751)
Deficit (29,245) (15,146)
-------------------------------------------------------------------------
480,300 492,507
-------------------------------------------------------------------------
1,561,031 1,442,541
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS Three months Three months
OF RETAINED EARNINGS (DEFICIT) ended ended
(unaudited) March 31, 2008 March 31, 2007
(in thousands of dollars)
Retained earnings (Deficit),
beginning of period (15,146) 70,646
Net income for the period 19,094 20,863
Distributions to unitholders (29,027) (28,297)
Dividends on Tracking Share
Units of TFI Holdings Inc. (3,721) (3,535)
Incentive plan contribution (445) -
-------------------------------------------------------------------------
Retained earnings (Deficit),
end of period (29,245) 59,677
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF Three months Three months
CASH FLOWS ended March 31, ended March 31,
(unaudited) 2008 2007
(in thousands of dollars)
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) for the period 19,094 20,863
Non-cash items:
Depreciation of fixed assets 25,053 22,813
Amortization of intangible assets 4,021 2,618
Incentive plan expense 1,447 2,496
Purchase of units held by the
fund for the Incentive plan - (679)
Deferred financing charges 234 150
Future income taxes (3,488) (2,640)
Gain on disposal of fixed assets (1,051) (568)
Other 439 80
-------------------------------------------------------------------------
45,749 45,133
Net change in non-cash working
capital balances related to
operations (36,256) (10,200)
-------------------------------------------------------------------------
9,493 34,933
-------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
Increase in bank advances
and overdraft 6,106 451
Increase in long-term debt - 556
Repayment of long-term debt (13,663) (8,803)
Increase in long term revolver facility 91,849 90,500
Cash distributions paid to unitholders (29,027) (27,932)
Dividends paid on Tracking Share Units (4,403) (4,282)
-------------------------------------------------------------------------
50,862 50,490
-------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
Additions to fixed assets (13,130) (60,075)
Proceeds from disposal
of fixed assets 7,480 4,924
Business acquisitions
(including bank advances net of cash) (54,832) (30,926)
Other assets, net 127 654
-------------------------------------------------------------------------
(60,355) (85,423)
-------------------------------------------------------------------------
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 11,444 7,055
Income taxes 4,022 3,392
-------------------------------------------------------------------------
Distributable cash Three months Three months
(in thousands of dollars, ended March 31, ended March 31,
except per unit amounts) 2008 2007
OPERATING ACTIVITIES
Cash flow from operating activities 9,493 34,933
Add (deduct):
Purchase of units held by the
fund for long-term incentive plan - 679
Net change in non-cash working capital 36,256 10,200
Deferred financing charges (234) (150)
Other (439) (80)
-------------------------------------------------------------------------
Distributable cash from
operating activities 45,076 45,582
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Sustaining capital expenditures (note 1) (13,130) (17,993)
Proceeds from disposal of fixed assets 7,480 4,924
-------------------------------------------------------------------------
Distributable cash from investing
activities (5,650) (13,069)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Scheduled debt repayment (note 2) (3,060) (1,451)
-------------------------------------------------------------------------
Distributable cash from financing
activities (3,060) (1,451)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total distributable cash 36,366 31,062
Regular distribution declared (note 3)
Distribution declared to Tracking
shareholders 3,357 3,267
Distribution declared to Unitholders 29,027 28,297
-------------------------------------------------------------------------
Total distribution declared 32,384 31,564
-------------------------------------------------------------------------
Distributable cash surplus 3,982 (502)
-------------------------------------------------------------------------
Regular distribution declared per unit
Distribution declared to Tracking
shareholders 0.2439 0.2373
Distribution declared to Unitholders 0.3975 0.3875
Distributable cash earned per unit
Tracking shareholders 0.2986 0.2478
Unitholders 0.4392 0.3792
-------------------------------------------------------------------------
Payout ratio - regular distribution 90.5% 102.2%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Note 1: Sustaining capex
On July 1, 2005, the Fund concluded the sale of its Calgary terminal.
The Fund will relocate this terminal to a new facility in Calgary. As
part of this relocation, the Fund has invested nothing for the period
ended March 31, 2008 in the new Calgary facility ($3.6 million - 2007).
This investment has been excluded from distributable cash. Also the
Fund invested nothing as part of terminal lease buyout for the period
ended March 31, 2008 ($38.5 million - 2007). This has also been
excluded from distributable cash.
Note 2: Scheduled debt repayment excludes:
1) Debt payments made on debt acquired as part of business
acquisitions. This totals $10.6 million for the period ended March
31, 2008 ($7.4 million - 2007),
2) Term loan due on September 30, 2013 of $160 million, the revolving
term loan due on September 30, 2010 of $478 million and single
payment due on July 15, 2009 of $27.9 million to CIT Financial Ltd
for its 5 year term loan
The total scheduled debt payable as at March 31, 2008 totals
$29.7 million ($27.5 million - 2007)
Note 3: Tracking shareholders dividend
Dividend declared to Tracking shareholders net of income taxes excludes
a holdback portion which is due and payable to Tracking shareholders no
later than March 31 of the following fiscal year in which the dividend
was declared.
%SEDAR: 00018303EF