- Increased revenues by 23% to $595.5 million - Increased EBITDA by 27% to $82.3 million - Increased pre-tax earnings 31% to $38.4 million
MONTREAL, Oct. 30 /CNW Telbec/ - TransForce Inc. ("TransForce" or "the Company") (TSX: TFI - T), the leader in the Canadian transportation and logistics industry, today announced significant growth in its key results for the third quarter of 2008, ended September 30, 2008.
"While industry conditions continued to be weak in the third quarter, TransForce maintained its disciplined growth strategy to increase revenues and its careful operating management to drive significant EBITDA growth," said Alain Bedard, Chairman, President and Chief Executive Officer of TransForce Inc. "Once again the skills and experience of our people have produced solid results for our shareholders."
Third Quarter Results
In the quarter, TransForce delivered significant year-over-year increases across key financial performance indicators.
For the three months ended September 30, 2008 the Company increased revenues by 23% to $595.5 million from $486.2 million in the same period of 2007. This increase was partly due to significant acquisitions in the past year that accounted for $45.6 million in additional revenue in the quarter.
TransForce increased third quarter EBITDA by 27% to $82.3 million from $65.1 million a year ago. (EBITDA is earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce's financial statements). Significant acquisitions contributed $8.1 million of EBITDA in the quarter. The remaining increase is from the Company's organic operations including cost containment efforts and efficiency gains.
The Company's earnings before income taxes were $38.4 million compared with $29.2 million in the third quarter of 2007. Included in the earnings before income taxes is a $2.0 million loss on interest rate swap contracts. The contracts have allowed the Company to fix the rate of interest on $185 million of variable rate debt at an effective rate of 5.58% at September 30, 2008.
Earnings per share were $0.31 per share compared with $0.33 in the same period of 2007. Earnings per share were affected by TransForce's conversion from an income trust to a corporation in the second quarter, and the corresponding change to income tax expense.
"With the economy and business environment facing challenges not seen in almost 80 years, many businesses are reviewing their strategies and looking for new efficiencies their operations. TransForce has always focused on a disciplined approach and this is reflected in the strong performance of our businesses under these conditions," said Mr. Bedard. "In the third quarter, each of our operating segments increased its revenues, which we consider a remarkable achievement in the current environment.
Year-to-Date Results
Through the first nine months of 2008, ended September 30, TransForce increased revenues to $1.72 billion from $1.45 billion in the same period of 2007. The Company also increased EBITDA to $206.1 million from $181.9 million in 2007. Excluding non-recurring items, relating to TransForce's conversion from an income trust to a corporation during the second quarter of 2008, EBITDA increased to $214.8 million in the period. Earnings before income taxes were $80.7 million compared with $78.6 million in the same period of 2007. Before non-recurring items, earnings before income taxes were $89.4 million through the first three quarters of 2008.
Earnings per share were $0.75 per share or $0.87 per share excluding non-recurring items, through the first three quarters of 2008, consistent with earnings per share of $0.88 in the same period of 2007.
"Our businesses continue to deliver results while adjusting to fluctuations in the financial markets, oil prices, exchange rates and various segments of the economy," said Mr. Bedard. "Through the first three quarters of 2008, four of our five operating segments increased revenues while maintaining their percentage of diversified contributions to TransForce revenues from the prior year. This, among other factors, enabled the Company to recently confirm its 2008 year-end EBITDA guidance of $275 million to $280 million as disclosed on March 27, 2008. While it's difficult to look forward with any certainty in this environment, the current trend towards a lower Canadian dollar and lower fuel costs should be positive for TransForce."
Management Conference Call
TransForce will host a conference call for investors to discuss the results of the third quarter later today, October 30, 2008, at 9:00 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 1-800-896-0105 A recording of the call will be available until midnight November 6, 2008, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21397316.
Financial Statements
The financial statements for the periods ended September 30, 2008 and 2007 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 five 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; - Specialized Truckload; and - Truckload.
TransForce shares (TFI - T) are listed on the Toronto Stock Exchange.
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
OF INCOME
(unaudited) Three Three Nine Nine
months months months months
(In thousands of ended ended ended ended
dollars, except September 30, September 30, September 30, September 30,
per unit amounts) 2008 2007 2008 2007
Revenues 511,708 442,950 1,495,299 1,320,072
Fuel surcharge
revenues 83,823 43,261 222,131 126,549
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Total revenues 595,531 486,211 1,717,430 1,446,621
Expenses
Operating expenses 425,177 347,914 1,244,375 1,034,302
Fixed costs,
general and
administrative
expenses 88,006 72,222 258,046 224,445
Incentive plan - 996 8,885 5,988
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Operating income
before the
following: 82,348 65,079 206,124 181,886
Depreciation of
fixed assets 26,653 24,590 78,473 72,045
Amortization of
intangible assets 4,102 2,815 12,029 8,274
Interest on
long-term debt 12,256 9,466 35,336 25,192
Unrealized loss
on Swap contracts 2,000 - 2,125 -
Gain on disposal
of fixed assets (1,038) (987) (2,566) (2,228)
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Income before
provision for
income taxes 38,375 29,195 80,727 78,603
Provision for
income taxes
Current 3,482 1,979 7,836 7,305
Future 8,393 (1,287) 8,013 (4,369)
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11,875 692 15,849 2,936
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Net income 26,500 28,503 64,878 75,667
Earnings per share
or unit
Basic 0.31 0.33 0.75 0.88
Diluted 0.31 0.33 0.75 0.88
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Outstanding
weighted average
number of
Shares 86,790,097 - 42,600,267 -
Units - 71,890,634 36,749,988 72,129,830
Tracking shares - 13,765,716 7,008,918 13,765,960
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Total 86,790,097 85,656,350 86,359,173 85,895,790
Outstanding
number of
Number of shares 86,790,097 - 86,790,097 -
Number of Trust
units of the Fund - 73,024,381 - 73,024,381
Number of Tracking
shares - 13,765,716 - 13,765,716
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Total 86,790,097 86,790,097 86,790,097 86,790,097
CONSOLIDATED BALANCE SHEETS As at As at
( in thousands of dollars) September 30, December 31,
2008 2007
(unaudited) (audited)
ASSETS
Current assets
Accounts receivable 358,920 288,126
Inventories 10,941 9,970
Prepaid expenses 16,209 11,872
Future income taxes 1,966 -
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388,036 309,968
-------------------------------------------------------------------------
Fixed assets 694,640 649,348
Goodwill 429,322 399,828
Intangible assets 75,921 68,619
Other assets 6,096 6,238
Future income taxes 6,166 8,540
-------------------------------------------------------------------------
1,600,181 1,442,541
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness 8,977 9,081
Accounts payable and accrued liabilities 232,760 204,907
Cash distributions payable to unitholders - 9,675
Dividends payable 9,250 2,191
Income taxes payable 5,706 5,721
Current portion of long-term debt 66,209 35,003
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322,902 266,578
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Long-term debt 723,707 651,636
Non-controlling interest - 2,562
Asset retirement obligations 6,875 5,521
Future income taxes 42,968 23,737
Equity
Share capital 519,404 -
Capital contributions and Tracking Share Units - 519,404
Units held by the fund for long-term incentive
plan - (11,751)
Deficit (15,675) (15,146)
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503,729 492,507
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1,600,181 1,442,541
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CONSOLIDATED
STATEMENTS OF
RETAINED
EARNINGS
(DEFICIT) Three Three Nine Nine
months months months months
(unaudited) ended ended ended ended
(in thousands September 30, September 30, September 30, September 30,
of dollars) 2008 2007 2008 2007
Retained earnings
(Deficit),
beginning of
period (29,156) 53,325 (15,146) 70,646
Net income for the
period 26,500 28,503 64,878 75,667
Distributions to
unitholders - (29,028) (43,541) (86,352)
Dividends (13,019) (3,625) (18,600) (10,786)
Incentive plan
contribution - - (3,266) -
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Retained earnings
(Deficit), end
of period (15,675) 49,175 (15,675) 49,175
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED
STATEMENTS OF Three Three Nine Nine
CASH FLOWS months months months months
(unaudited) ended ended ended ended
(in thousands September 30, September 30, September 30, September 30,
of dollars) 2008 2007 2008 2007
CASH FLOW FROM
OPERATING ACTIVITIES
Net income for
the period 26,500 28,503 64,878 75,667
Non-cash items:
Depreciation of
fixed assets 26,653 24,590 78,473 72,045
Amortization of
intangible assets 4,102 2,815 12,029 8,274
Incentive plan
expense - 996 8,885 5,988
Purchase of units
held by the fund
for the incentive
plan - (4,000) (400) (7,998)
Deferred financing
charges 390 166 954 476
Future income taxes 8,393 (1,287) 8,013 (4,369)
Unrealized loss on
Swap contracts 2,000 - 2,125 -
Gain on disposal
of fixed assets (1,038) (987) (2,566) (2,228)
Other 503 35 1,019 275
-------------------------------------------------------------------------
67,503 50,831 173,410 148,130
Net change in
non-cash working
capital balances
related to
operations (5,458) 912 (52,410) (12,037)
-------------------------------------------------------------------------
62,045 51,743 121,000 136,093
-------------------------------------------------------------------------
CASH FLOW FROM
FINANCING ACTIVITIES
Increase (decrease)
in bank advances
and overdraft (10,587) (9,082) (104) (17,367)
Increase in
long-term debt - 1,655 97,928 2,211
Repayment of
long-term debt (33,719) (9,206) (71,906) (40,091)
Increase (decrease)
in long term
revolver facility 10,328 22,500 20,161 175,900
Cash distributions
paid to unitholders - (29,028) (53,216) (85,987)
Dividends paid (4,340) (3,357) (11,541) (10,997)
-------------------------------------------------------------------------
(38,318) (26,518) (18,678) 23,669
-------------------------------------------------------------------------
CASH FLOW FROM
INVESTING ACTIVITIES
Additions to fixed
assets (31,141) (21,811) (66,817) (100,679)
Proceeds from
disposal of fixed
assets 6,124 5,121 17,263 15,109
Business acquisitions
(including bank
advances net of
cash) 1,041 (8,584) (52,948) (75,219)
Other assets, net 249 49 180 1,027
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(23,727) (25,225) (102,322) (159,762)
-------------------------------------------------------------------------
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 12,104 9,474 34,705 25,084
Income taxes 4,395 1,393 8,417 7,319
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%SEDAR: 00026947EF