- 31% increase in second-quarter total revenue
- EBIT growth of 21% to $49.3 million
- Second-quarter adjusted profit rose 20% to $28.0 million
- Net cash from operating activities, before net change in non-cash working capital, up 11% to $67.3 million
- Acquisition of expedited cross border carrier Concord Transportation Inc.
MONTREAL, Aug. 2, 2011 /CNW Telbec/ - TransForce Inc. (TSX: TFI), a North American leader in the transportation and logistics industry, today announced its results for the second quarter ended June 30, 2011.
"TransForce achieved a solid performance in the second quarter. Revenue
growth was driven by recent acquisitions and our relentless focus on
operating efficiencies yielded another solid increase in the key EBIT
metric despite a hesitant economy. With the addition of Dynamex and the
creation of Loomis Express through the acquisition of DHL Express
Canada's domestic operations, we are positioned to further leverage the
strength of our expanded Package and Courier network. The
Less-Than-Truckload ("LTL") market remains challenging and we continue
to proactively implement measures to further optimize asset
utilization. Such initiatives were beneficial to our Truckload ("TL")
activities, as profitability further increased despite stable revenue.
Finally, stronger demand from the energy sector remains a key
performance driver in the Specialized Services segment," said Alain
Bdard, Chairman, President and Chief Executive Officer of TransForce.
| Financial highlights | Quarters ended June 30, | Six months ended June 30, | ||||||
| (in millions of dollars, except per share data) | 2011 | 2010 | 2011 | 2010 | ||||
| Total revenue | 650.8 | 496.9 | 1,212.1 | 963.0 | ||||
| Revenue excluding fuel surcharge | 581.5 | 455.9 | 1,090.5 | 885.1 | ||||
| Profit from operating activities (EBIT1) | 49.3 | 40.9 | 73.7 | 59.0 | ||||
| Adjusted profit2 | 28.0 | 23.3 | 40.2 | 29.2 | ||||
| Per share - diluted ($) | 0.29 | 0.24 | 0.42 | 0.31 | ||||
| Profit for the period | 26.2 | 17.0 | 41.2 | 43.1 | ||||
| Per share - diluted ($) | 0.27 | 0.18 | 0.43 | 0.45 | ||||
1 Earnings before finance income and costs and income taxes.
2 Excluding the after-tax effect of changes in the fair value of
derivatives and of items that are not in the Company's normal business.
SECOND-QUARTER RESULTS
Total revenue increased $153.9 million, or 31%, to $650.8 million. The
acquisition of Dynamex on February 22, 2011 and of the assets of Speedy
Heavy Hauling Inc. ("Speedy") in August 2010, jointly contributed
revenue of approximately $140 million in the second quarter of 2011.
Second-quarter EBIT totalled $49.3 million, or 7.6% of total revenue, up from $40.9 million, or 8.2% of total revenue in the corresponding period a year earlier. The increase in monetary terms mostly reflects the aforementioned acquisitions, ongoing cost management and asset optimization initiatives, while the reduction as a percentage of total revenue stems from reduced profitability for the LTL segment, Dynamex's lower margins, and the year-over-year impact of the depreciation of the U.S. dollar versus the Canadian currency.
Adjusted profit, which excludes the after-tax effect of changes in the fair value of derivatives and of items that are not in the Company's normal business, rose 20% to $28.0 million, or $0.29 per share, fully diluted, from $23.3 million, or $0.24 per share, fully diluted, last year. Finally, profit for the period ended June 30, 2011 stood at $26.2 million, or $0.27 per share, fully diluted, versus $17.0 million, or $0.18 per share, fully diluted, in the second quarter of 2010.
As a result of improved operating profitability, net cash from operating activities, before net change in non-cash operating working capital, reached $67.3 million, representing an increase of 11% from $60.4 million a year earlier.
SIX-MONTH RESULTS
For the six-month period ended June 30, 2011, consolidated total revenue
was $1.2 billion, up from $963.0 million in the six-month period ended
June 30, 2010. EBIT rose 25% to $73.7 million, from $59.0 million.
Adjusted profit increased 37% to $40.2 million, or $0.42 per share,
fully diluted, from $29.2 million, or $0.31 per share, fully diluted.
Profit for the period stood at $41.2 million, or $0.43 per share, fully
diluted, versus $43.1 million, or $0.45 per share, fully diluted. Of
note, profit for the prior-year period included a non-recurring gain of
$15.7 million. Finally, net cash from operating activities, before net
change in non-cash operating working capital, grew 15% to $112.3
million.
SEGMENTED RESULTS
| (in millions of dollars) | Quarters ended June 30, | Six months ended June 30, | |||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| $ | $ | $ | $ | ||||||
| Total revenue | |||||||||
| Package and Courier | 225.3 | 94.0 | 374.0 | 183.6 | |||||
| Less-Than-Truckload | 121.6 | 138.4 | 244.7 | 265.5 | |||||
| Truckload | 175.0 | 165.6 | 339.5 | 318.8 | |||||
| Specialized Services | 142.7 | 112.8 | 282.2 | 221.2 | |||||
| Eliminations | (13.8) | (13.9) | (28.3) | (26.1) | |||||
| Total | 650.8 | 496.9 | 1,212.1 | 963.0 | |||||
| $ | % of Rev. | $ | % of Rev. | $ | % of Rev. | $ | % of Rev. | ||
| Profit from operating activities (EBIT) | |||||||||
| Package and Courier | 16.6 | 7.4 | 11.1 | 11.8 | 25.9 | 6.9 | 15.8 | 8.6 | |
| Less-Than-Truckload | 5.3 | 4.4 | 9.8 | 7.1 | 2.9 | 1.2 | 11.7 | 4.4 | |
| Truckload | 13.0 | 7.4 | 11.3 | 6.8 | 19.1 | 5.6 | 14.4 | 4.5 | |
| Specialized Services | 16.8 | 11.8 | 10.1 | 9.0 | 31.4 | 11.1 | 21.9 | 9.9 | |
| Corporate | (2.4) | (1.4) | (5.6) | (4.8) | |||||
| Total | 49.3 | 7.6 | 40.9 | 8.2 | 73.7 | 6.1 | 59.0 | 6.1 | |
FINANCIAL POSITION REMAINS SOLID
TransForce continues to focus on cash flow generation to maintain the
flexibility to pursue its carefully targeted acquisition strategy.
During the second quarter, a solid cash flow generation allowed for
liquidities required for the acquisition of DHL Express Canada's
domestic business and ongoing capital investments to support growth
initiatives. However, the labour conflict at Canada Post at the end of
June had a negative impact on the collection of accounts receivable,
which slightly increased working capital and indebtedness at the end of
the second quarter. The situation normalized during the first few weeks
of the third quarter.
ACQUISITION OF CONCORD TRANSPORTATION
TransForce also announced today that effective August 1, 2011 it has
acquired the shares of Toronto-based Concord Transportation Inc., an
expedited carrier specializing in cross border transportation
solutions. With three decades of cross border experience, Concord
provides full coverage throughout North America in the premium
transport of LTL and truckload freight. Its logistics division adds
additional resources to meet the time and budget constraints of
customers and further supplements their own fleet operations.
Concord has a network of offices in Ontario and British Columbia as well as in Illinois, California and Washington and enjoys partnerships with ATS Retail Solutions, a TransForce company, and several other US carriers. An asset light company with annual revenues in excess of $35 million, Concord has 96 employees and has agreements with approximately 130 independent contractors.
A portion of the consideration was paid by the issuance of 134,228 common shares from the treasury of TransForce Inc. at the price of $14.90 per share.
OUTLOOK
"As economic signals remain mixed, particularly in the U.S., TransForce
will seek to maximize efficiencies and profitability from its recent
acquisitions while focusing on cash flow generation and debt reduction.
In parallel, we intend to remain active, yet highly disciplined and
selective when acquiring businesses in our key market segments. To
carry out its strategic plan, TransForce recently strengthened its
management team with the appointment of five Executive Vice Presidents
and, together with its talented and dedicated employees, the entire
organization is firmly committed to providing innovative, value-added
solutions to its growing customer base. More importantly, shareholder
value creation remains the focal point of all strategic growth
initiatives," concluded Mr. Bdard.
CONFERENCE CALL
TransForce will hold a conference call for analysts and portfolio
managers on Tuesday, August 2, 2011 at 9:00 a.m. Eastern Time, to
discuss these results. Business media are also invited to listen to the
call. Interested parties can join the call by dialling 1-800-731-5319.
A recording of the call will be available until midnight, August 9,
2011, by dialing 1-877-289-8525 or 416-640-1917 and entering passcode
4455398#.
ABOUT TRANSFORCE
TransForce Inc. is a North American leader in the transportation and
logistics industry. Operating across Canada and the United States,
TransForce creates value for shareholders by identifying strategic
acquisitions and managing a growing network of wholly-owned, operating
subsidiaries. Under the TransForce umbrella, companies benefit from
corporate financial and operational resources to build their businesses
and increase their efficiency. TransForce companies service four
well-defined reportable segments:
- Package and Courier;
- Less-Than-Truckload;
- Truckload, which includes specialized truckload and dedicated services;
- Specialized Services, which includes waste management, energy sector services, logistics and ancillary transportation services.
TransForce Inc. (TFI) is publicly traded on the Toronto Stock Exchange (TSX). For more information, visit http://www.transforcecompany.com.
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.
NON-IFRS MEASURES
EBIT and adjusted profit are financial measures not prescribed by IFRS
and are not likely to be comparable to similar measures presented by
other issuers. Management considers these to be useful information to
assist investors in evaluating the Company's profitability, liquidity
and ability to generate funds to finance its operations.
| Note to readers: | Condensed consolidated interim financial statements and Management's Discussion Analysis are available on TransForce's website at www.transforcecompany.com. |