Trimac Announces its First Quarter Results
- Trimac was awarded the National Tank Truck Carriers Grand Safety Award (> 90 million miles)
- Despite severe operating conditions, revenue before fuel surcharges increased 3.0 percent
- Adjusted free cash flow increased $3.2 million
- Credit facility was amended to allow for an increase up to $150.0 million and was extended to July, 2017
CALGARY, May 9, 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 three months ended March 31, 2014 ("current quarter").
"Although the cold weather we experienced during the quarter was one of the most challenging environments in the past several years, we were able to improve revenue including fuel surcharges by $4.7 million on a year-over-year basis to $110.6 million, however operating earnings were impacted slightly due to weather related inefficiencies, start up costs from new business and campaign work and some restructuring costs incurred to streamline our business," commented Edward V. Malysa, President and Chief Operating Officer. "Despite the challenging conditions, we continued to improve our asset utilization, as well as streamlining administration and eliminating excess capacity."
First Quarter Results
For the current quarter revenue before fuel surcharges increased $2.8 million from the $93.1 million reported for the three months ended March 31, 2013 ("prior quarter"). These improvements were primarily in the bulk trucking and National Tank Services segments. New business awarded in chemical hauling and dry bulk commodities contributed to the increase. In addition, higher volumes with existing customers and campaign hauls in petroleum and chemical hauling also contributed to the bulk trucking segments' higher revenue. Pressure commodities experienced growth from new business awarded during the current quarter however this growth was partially offset by a business loss. Cold weather and low customer demand partially reduced revenue gains in dry bulk commodities while resource commodities experienced a decline in revenue due to the cold weather, slow customer demand and customer plant maintenance shutdowns. National Tank Services' third party revenue increased $0.9 million during the current quarter primarily due to higher volumes with existing customers and some new business awarded. Bulk Plus Logistics' revenue showed a marginal improvement of $0.1 million from higher freight management revenue partially reduced by lower transload revenue.
Operating expenses, which includes direct costs net of fuel surcharge revenue (net direct costs) and selling and administrative costs, for the current quarter increased 3.6 percent over the prior quarter to $85.2 million. As a percentage of revenue before fuel surcharges operating expenses increased slightly to 88.8 percent compared to the prior quarter of 88.3 percent primarily due to the cold weather related operating inefficiencies which included unscheduled maintenance requirements and escalating fuel costs. Higher operating costs due to severe winter weather conditions negatively impacted direct costs in the quarter while selling and administrative costs remained flat.
Despite the severe operating conditions, EBITDA decreased slightly in the quarter by $0.2 million to $10.7 million. Operating earnings and earnings before income tax decreased by $0.1 million for the current quarter.
Earnings per share remained flat at 11 cents for both the current and prior periods.
Trimac Earns the NTTC Safety Award
Trimac is pleased to announce that it has won the National Tank Truck Carriers Grand Safety Award in the over 90 million miles category. Carriers are rated on their accident frequency, improvements in their safety record, programs for driver selection, training, and vehicle maintenance program, personnel safety program and record, and the carrier's contributions to the cause of general highway safety. In commenting on this award, Jeffrey J. McCaig stated, "This award was the result of Trimac's strong culture of safety and the professionalism of our professional drivers, independent contractors, mechanics and washrack technicians that make safety their number one priority each and everyday. Thank you for continuing to make safety our core value."
|Three months ended March 31|
(in millions of dollars, except per share data)
|Revenue before fuel surcharges||95.9||93.1||3.0%|
|Fuel surcharge revenue||(14.7)||(12.8)||14.8%|
|Net direct costs (1)||70.9||67.9||4.4%|
|Selling and administrative||14.3||14.3||0.0%|
|Total operating expenses||85.2||82.2||3.6%|
|Adjusted EBITDA (1)||10.7||10.9||-1.8%|
|Depreciation & amortization||6.3||6.4||-1.6%|
|Finance & other costs||1.0||1.0||0.0%|
|Earnings before income tax expense||3.4||3.5||-2.9%|
|Income tax expense||0.4||0.4||0.0%|
|Net income before revaluation of non-controlling interest||3.0||3.1||-3.2%|
|Adjusted net income (1)||3.0||3.3||-9.1%|
|Cash generated from operations (1)||10.6||11.2||-5.4%|
|Operating ratio before interest & tax (1)||95.3%||95.1%||0.2%|
|Adjusted free cash flow (1)||8.2||5.0||64.0%|
|Cash generated from operations per share (1)||0.38||0.40|
|Cash dividends declared per share||0.07||0.07|
|Earnings per share - adjusted (1)||0.11||0.12|
|Earnings per share (basic)||0.11||0.11|
|Share price - March 31||5.95||5.95|
|Net property, plant and equipment additions||6.8||9.7|
|(1) See "Reconciliation of Non-GAAP Financial Measures" section of management's discussion & analysis.|
We will continue to focus on productivity improvements for the remainder of 2014 by continuing to streamline administration, optimize payloads, reduce empty miles and eliminate excess capacity. The gradual strengthening of the U.S. economy along with the recent decline of the Canadian dollar has moderately increased activity levels in some of the industries we serve. Resource commodities exported from Canada and pipeline capacity issues will continue to create uncertain conditions in the oil and gas industry. Therefore, we expect some moderate growth for the remainder of 2014 albeit available capacity of drivers and mechanics continue to be the largest constraint we face today.
Declaration of Quarterly Dividend
The Board of Directors today declared a dividend of $0.07 per share on the Class A shares, payable on July 15, 2014 to shareholders of record at the close of business on June 30, 2014. This dividend is designated as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act (Canada) and any provincial legislation pertaining to eligible dividends.
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 months ended March 31, 2014 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.
Non-GAAP Financial Measures
Net direct costs, adjusted EBITDA, adjusted net income, cash generated from operations, operating ratio before interest and tax, adjusted free cash flow and earnings per share adjusted are financial measures not prescribed by IFRS and are not likely to be comparable to similar measures presented by other issuers. Management considers these non-GAAP measures useful in evaluating the performance of Trimac's operations. These measures should be considered in addition to, not a substitute for, the financial performance measures prepared in accordance with IFRS.
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, trailer fabrication 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 unaudited condensed consolidated interim financial statements for the Company.
You are invited to join us on a conference call (conference ID number 8015975) at 9:30 a.m. Eastern Time on Monday, May 12, 2014. For North American participants, please dial 1-800-820-0231 or for international participants, please dial ++1-416-640-5926 at least 10 minutes prior to the start time of the call. An audio playback of the call will be available starting Tuesday, May 13, 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.
Scott D. Calver
Vice President & Chief Financial Officer
Trimac Transportation Ltd.