TransForce Inc. Posts Solid 2011 Third Quarter Results

  • Third-quarter total revenue increase of 49% to $743.0 million
  • EBIT growth of 34% to $57.0 million
  • 49% increase in adjusted profit to $33.3 million
  • Net cash from operating activities, before net change in non-cash working capital, of $73.2 million
  • Long-term debt reduction of $50.7 million during the quarter

MONTREAL, Nov. 1, 2011 /CNW Telbec/ - TransForce Inc. (TSX: TFI), a North American leader in the transportation and logistics industry, today announced its results for the third quarter ended September 30, 2011.

"TransForce generated solid third quarter results despite persistent uncertainty about the North American economy. While revenue growth was driven by strategic acquisitions, TransForce delivered a strong 34% increase in the key EBIT metric due to greater operating efficiencies and improved asset utilization, a performance that speaks highly about the quality of our people. In Package and Courier, Dynamex is improving its profitability, but Loomis Express, which accounted for more than 10% of revenue, recorded a loss and we are proactively implementing cost reduction initiatives. Operating profitability of Less-Than-Truckload ("LTL") operations has improved despite currency headwinds and we are committed to continue optimizing asset utilization. Truckload ("TL") activities further progressed and we remain focused on capacity optimization and a disciplined market approach. Finally, Specialized Services yielded another very solid profit increase as demand was particularly robust in the energy sector," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.

 
Financial highlights Quarters ended Sept. 30,   Nine months ended Sept. 30,
(in millions of dollars, except per share data) 2011   2010   2011   2010
Total revenue 743.0   499.5   1,955.1   1,462.4
Revenue excluding fuel surcharge 667.2   460.8   1,757.7   1,345.8
Profit from operating activities (EBIT1) 57.0   42.4   130.7   101.4
Adjusted profit2 33.3   22.3   68.6   50.8
  Per share - diluted ($) 0.35   0.23   0.71   0.53
Profit for the period 19.3   24.7   60.5   67.9
  Per share - diluted ($) 0.20   0.26   0.63   0.71

1 Earnings before finance income and costs and income taxes.

2 Excluding the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss, and of items that are not in the Company's normal business.

THIRD-QUARTER RESULTS
Total revenue increased $243.5 million, or 49%, to $743.0 million. The acquisitions of Loomis Express on June 26, 2011, of Dynamex in February 2011 and of the assets of Speedy Heavy Hauling Inc. in August 2010, contributed revenue of approximately $205 million in the third quarter of 2011. Year-over-year revenue gains from TransForce's existing operations reached $38.4 million, or 8%.

Third-quarter EBIT amounted to $57.0 million, or 7.7% of total revenue, up from $42.4 million, or 8.5% of total revenue in the corresponding period a year earlier. The increase in monetary terms reflects the aforementioned acquisitions and constant initiatives to optimize asset utilization despite the negative year-over-year impact of the depreciation of the U.S. dollar versus the Canadian currency. The reduction as a percentage of total revenue mainly stems from lower margins for Dynamex and Loomis Express.

Profit for the period ended September 30, 2011 stood at $19.3 million, or $0.20 per share, fully diluted, versus $24.7 million, or $0.26 per share, fully diluted, in the third quarter of 2010 due to the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss, and of items that are not in the Company's normal business. However, adjusted profit, which excludes the aforementioned items, rose strongly to $33.3 million, or $0.35 per share, fully diluted, up 49% from $22.3 million, or $0.23 per share, fully diluted, last year.

As a result of improved operating profitability, net cash from operating activities, before net change in non-cash operating working capital, reached $73.2 million, representing an increase of 27% from $57.8 million a year earlier.

NINE-MONTH RESULTS
For the nine-month period ended September 30, 2011, total revenue reached $2.0 billion, up from $1.5 billion in the nine-month period ended September 30, 2010. EBIT rose 29% to $130.7 million, from $101.4 million. Adjusted profit increased 35% to $68.6 million, or $0.71 per share, fully diluted, from $50.8 million, or $0.53 per share, fully diluted. Profit for the period amounted to $60.5 million, or $0.63 per share, fully diluted, versus $67.9 million, or $0.71 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 19% to $185.5 million.

SEGMENTED RESULTS

                   
(in millions of dollars) Quarters ended Sept. 30,    Nine months ended Sept. 30,
  2011 2010   2011 2010
  $   $     $   $  
Total revenue                  
  Package and Courier 295.6   93.9     669.6   277.5  
  Less-Than-Truckload 137.7   132.2     382.4   397.7  
  Truckload 169.1   161.1     508.6   479.9  
  Specialized Services 153.4   127.1     435.6   348.3  
  Eliminations (12.8)   (14.8)     (41.1)   (40.9)  
Total 743.0   499.5     1,955.1   1,462.4  
                   
  $ % of Rev. $ % of Rev.   $ % of Rev. $ % of Rev.
Profit from operating activities (EBIT)                  
  Package and Courier 14.8 5.0 9.9 10.5   40.7 6.1 25.6 9.2
  Less-Than-Truckload 9.0 6.6 6.2 4.7   11.9 3.1 17.8 4.5
  Truckload 14.0 8.3 14.5 9.0   33.1 6.5 28.9 6.0
  Specialized Services 22.4 14.6 15.3 12.0   53.8 12.4 37.2 10.7
  Corporate (3.3)   (3.3)     (8.9)   (8.1)  
Total 57.0 7.7 42.4 8.5   130.7 6.7 101.4 6.9



STRONG CASH FLOW GENERATION LEADS TO SIGNIFICANT DEBT REDUCTION
During the third quarter, TransForce used its solid cash flow generation to reduce long-term debt by a net amount of $50.7 million. As a result, the Company's debt-to-equity ratio stood at 1.20 on September 30, 2011, down from 1.34 three months earlier. TransForce will continue to apply its excess cash flow to debt reduction in order to maintain the flexibility to pursue its carefully targeted acquisition strategy.

OUTLOOK
"As TransForce continues to evolve towards an asset-light business model, capital will be increasingly deployed in initiatives that add to our know-how and provide our operating companies with the best resources in terms of people and leading-edge technology. In so doing, we will remain proactive in distinguishing ourselves by delivering innovative, value-added solutions to our growing North American customer base and by generating a superior return on assets. TransForce will also maintain its active, yet highly disciplined and selective acquisition strategy, all the while ensuring that shareholder value creation is anchored as the guiding principle in our assessment of investment opportunities," concluded Mr. Bédard.

CONFERENCE CALL
TransForce will hold a conference call for analysts and portfolio managers on Tuesday, November 1, 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, November 8, 2011, by dialling 1-877-289-8525 or 416-640-1917 and entering passcode 4477740#.

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.

 

 

SOURCE TransForce Inc.

For further information:

Investors:
Alain Bédard
Chairman, President and CEO
TransForce Inc.
(514) 331-4200
abedard@transforcecompany.com
  Media:
Rick Leckner
MaisonBrison Communications
(514) 731-0000
rickl@maisonbrison.com

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