Trimac Announces its 2013 Results

Highlights for the fourth quarter included:

  • Revenue for the quarter before fuel surcharges increased 5.3 percent to $97.0 million from $92.1 million
  • Adjusted EBITDA in the quarter increased 6.7 percent to $12.8 million from $12.0 million
  • Relocated & expanded our Regina shop operations to over 11,000 square feet offering full-service maintenance
  • Acquired a shop in Guelph, Ontario which provides repair, maintenance and trailer fabrication services
  • The existing $125.0 million credit facility was amended and restated.  The facility can now be extended to $150.0 million, subject to lender approval and expires July 31, 2017
  • Trimac has been recognized for the fourth year in a row as one of 20 companies across North America to be awarded the 2014 "Best Fleets to Drive For" award

CALGARY, March 7, 2014 /CNW/ - Trimac Transportation Ltd. (TSX: TMA) ("Trimac" or the "Company"), Canada's leader in bulk trucking, announces the release of its financial results for the year ("current year") and three months ended December 31, 2013 ("current quarter").

For the year ended December 31, 2013 total revenue grew by $35.3 million (or 9.0 percent) to $426.3 million.  Improvements were experienced in all segments.  In the bulk trucking segment growth was experienced in resource commodities and petroleum hauling due to the roll-on of the new business awarded in 2012, as well as some new business awarded in the current year to haul resource, petroleum and pressurized commodities. Dry bulk commodities also increased due to higher demand from existing customers.  This improvement also included $19.6 million of incremental revenue before fuel surcharges from the 2012 acquisitions.  National Tank Services' third party revenue increased $1.8 million as a result of higher volumes with existing customers while Bulk Plus Logistics' revenue improved $1.6 million primarily due to increased volumes in its transload operations and new business in its freight brokerage operations.

Total revenue improved $5.4 million for the current quarter to $109.4 million from the $104.1 million reported for the three months ended December 31, 2012 ("prior quarter") while revenue before fuel surcharges improved by 5.3 percent to $97.0 million in the current quarter.  These improvements were primarily in the bulk trucking segment where petroleum hauling increased as a result of higher volumes from existing customers and new campaign hauls, while dry bulk commodities and chemical hauling also improved due to higher volumes with its customers.  Resource and pressurized commodities experienced growth during the quarter as a result of some new business awards and increased volumes with existing customers; however, these gains were partially offset by some business losses that were incurred during the quarter.    Although revenue volumes for uranium industry were down during the quarter due to low uranium prices, NRT experienced higher revenue volumes with existing customers.  National Tank Services and Bulk Plus Logistics also experienced improved revenues of $0.4 million each during the current quarter. 

Operating expenses, which includes direct costs net of fuel surcharges revenue and selling and administrative costs, for the year increased $30.8 million (or 10.3 percent) to $329.0 million.    Due to the improved revenue volumes, operating expenses increased for driver and leased operator remuneration, maintenance and facility costs.  Productivity inefficiencies attributable to plant shutdowns, lower demand with certain customers, weather related construction delays, higher maintenance costs on new equipment, and severe weather conditions also contributed to the rise in operating expenses.  Selling and administration costs associated with the corporate office move and salary increases due to inflation adjustments also negatively impacted operating expenses in the current year while reduced advertising and training costs partially offset these increases.  Also included in operating expenses was $16.4 million relating to the 2012 acquisitions.

Operating expenses for the current quarter increased 5.1 percent over the prior quarter to $84.2 million.  As a percentage of revenue before fuel surcharges operating expenses remained relatively flat at 86.8 percent compared to the prior quarter of 87.0 percent.  Higher operating expenses due to the revenue growth included increased driver and leased operator remuneration, maintenance, equipment and licensing costs, as well as higher facility costs.  Higher administration costs due to annual inflation adjustments and higher insurance costs also contributed to the increase while reduced training and advertising costs partially offset these increases.

Adjusted EBITDA increased 6.8 percent for the year while operating earnings only increased 2.3 percent to $22.4 million due to increased depreciation expense which included $1.2 million of depreciation relating to the 2012 acquisitions.

For the current quarter, operating earnings and pre-tax earnings increased $1.0 million over the prior quarter.  This increase was primarily the result of the higher revenue volumes.

Pre-tax earnings for the current year decreased $0.8 million as a result of a $0.5 million expense recorded for a revaluation of a forward contract relating to Trimac's obligation to acquire the remaining 40 percent of Fortress Trucking Limited and a $0.5 million adjustment for an onerous lease contract, offset by a net gain on the market value of the derivatives.

Earnings per share remained flat at 52 cents for both the current and prior years while earnings per share for the current quarter increased to 13 cents from 10 cents in the prior quarter.

"These results and our 2014 "Best Fleets to Drive For" award for the fourth year running  are thanks to the dedication, commitment and support of our team of professional drivers and support staff," commented Edward V. Malysa, President and Chief Operating Officer of Trimac.

Financial Highlights

  Three months ended Dec 31 Year ended Dec 31

(in millions of dollars, except per share data)
2013 2012   Variance 2013 2012   Variance
Financial Results                      
  Revenue before fuel surcharges     97.0          92.1   5.3%          378.0      344.1   9.9%
                       
  Direct costs     82.6 77.9   6.0% 319.7 292.5   9.3%
  Fuel surcharge revenue     (12.5) (11.9)   5.0% (48.3) (46.9)   3.0%
  Net direct costs (1)     70.1 66.0   6.2% 271.4 245.6   10.5%
  Selling and administrative   14.1 14.1   0.0% 57.6 52.6   9.5%
  Total operating expenses   84.2 80.1   5.1% 329.0 298.2   10.3%
  Adjusted EBITDA (1)     12.8 12.0   6.7% 49.0 45.9   6.8%
  Depreciation & amortization   6.6 6.8   -2.9% 26.6 24.0   10.8%
  Finance & other costs     1.1 1.1   0.0% 4.4 3.1   41.9%
  Earnings before income tax expense   5.1 4.1   24.4% 18.0 18.8   -4.3%
  Income tax expense     1.6 1.3   23.1% 4.6 4.6   0.0%
  Net income before revaluation of non-controlling interest 3.5 2.8   25.0% 13.4 14.2   -5.6%
  Net income      3.5 2.8   25.0% 14.6 14.2   2.8%
  Operating earnings     6.2 5.2   19.2% 22.4 21.9   2.3%
  Adjusted net income (1)     3.5 2.9   20.7% 14.4 14.2   1.4%
  Cash generated from operations (1)   12.7 12.8   -0.8% 49.4 46.5   6.2%
  Operating ratio before interest & tax (1) 93.4% 94.4%   -1.1% 93.9% 93.4%   0.5%
  Adjusted free cash flow (1)   8.6 6.6   30.3% 25.3 25.3   0.0%
  Share Information                     
    Cash generated from operations per share  0.45 0.45     1.76 1.70    
    Cash dividends declared per share 0.07 0.07     0.28 0.27    
    Earnings per share - adjusted (1)  0.13 0.10     0.51 0.52    
    Earnings per share (basic) 0.13 0.10     0.52 0.52    
      Share price - Dec 31   5.33 5.45     5.33 5.45    
  Other Information                    
    Net property, plant and equipment additions 4.1 11.0     31.4 42.2    
    Acquisitions    - -     - 21.6    

 (1) See "Reconciliation of Non-GAAP Financial Measures" section of management's discussion & analysis. 

Outlook

Our focus in 2014 will be on productivity improvements such as streamlined administration, payload optimization, loaded miles and elimination of excess capacity.  Given the current global economic conditions for resource commodities exported from Canada and pipeline capacity issues in the oil and gas industry there remains some uncertainty regarding growth in the Canadian economy this year.  There are some positive factors such as the weakening Canadian dollar.  This may increase exports to the U.S. in some of the industries we serve however available capacity of drivers, mechanics and equipment will be a constraint on the trucking industry's ability to capture significant growth.  Our experienced management team has developed strategic actions to attract the skilled professional drivers and mechanics required and combined with our focus on productivity enhancements and lowering operating costs we are well positioned to continue our profitable growth in 2014.

Declaration of Quarterly Dividend

The Board of Directors today declared a dividend of $0.07 per share on the Class A shares, payable on April 15, 2014 to shareholders of record at the close of business on March 31, 2014.

Forward-Looking Statements

Certain information included in this news release constitutes "forward-looking statements".  Trimac cautions that, by their nature, these forward-looking statements are based on suppositions, risks, and uncertainties as well as on management's best possible evaluation of future events. Trimac cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and the actual results or performance of Trimac or the transportation industry may be materially different from the outlook or any future results or performance implied by such statements.  Please see "Forward-Looking Statements" in Trimac's MD&A for the three and nine months ended September 30, 2013 for a discussion of the material factors that could cause actual results to differ from the forward-looking information contained herein and the material factors and assumptions that were applied in preparing such forward-looking information.

Profile

Trimac is Canada's largest provider of bulk trucking services with operations from coast to coast.  In addition, through its National Tank Services division, Trimac performs repairs, maintenance and tank-trailer cleaning services for both the Trimac fleet and for third party commercial customers. Trimac also provides third party transportation logistics services in Canada and the United States through its wholly owned subsidiary Bulk Plus Logistics.  Shares of Trimac Transportation Ltd. are traded on the Toronto Stock Exchange under the symbol TMA.

For more detailed information, please visit our website at www.trimac.com or SEDAR at www.sedar.com and review our MD&A and the audited consolidated financial statements for the Company.

You are invited to join us on a conference call (conference ID number 8372820) at 10:00 a.m. Eastern Time on Monday, March 10, 2014.  For North American participants, please dial 1-866-321-8231 or for international participants, please dial ++1-416-642-5213 at least 10 minutes prior to the start time of the call.  An audio playback of the call will be available starting Tuesday, March 11, 2014 on our website at http://www.trimac.com/page/eventscalendar.

SOURCE Trimac Transportation Ltd.

For further information:

Edward V. Malysa 
President & Chief Operating Officer
Trimac Transportation Ltd.
Telephone:  403-298-5100 
Facsimile:  403-298-5146 

Scott D. Calver 
Vice President & Chief Financial Officer
Trimac Transportation Ltd.
Telephone:  403-298-5100
Facsimile:  403-298-5146