TransForce Announces Consistent Results in Fourth Quarter



    - Increased revenues to $493.5 million
    - Generated EBITDA of $61.1 million
    - Completed acquisitions of ICS Courier and Thibodeau

    MONTREAL, Feb. 28 /CNW Telbec/ - TransForce Income Fund (TSX: TIF.UN),
the leader in the Canadian transportation and logistics industry, today
announced its results for the fourth quarter and for the year ended
December 31, 2007.

    Fourth Quarter Results

    In the fourth quarter of 2007, the Fund continued to deliver steady
results despite continued weakness in the economy. In the quarter, TransForce
increased revenues to $493.5 million from $456.8 million in the same period of
2006. EBITDA (earnings before interest, taxes, depreciation and amortization
and equivalent to operating income on TransForce's financial statements) was
$61.1 million compared with $65.8 million in the same period in 2006.
Significant acquisitions contributed $2.3 million of EBITDA in the fourth
quarter of 2007 compared with a year earlier. Cash flow from operating
activities, before net change in non-cash working capital balances was
$51.1 million compared with $55.9 million in the fourth quarter.
    Distributable cash from operating activities was $49.8 million in the
fourth quarter of 2007, compared with $60.7 million in the fourth quarter of
2006. TransForce's regular distribution payout ratio, or cash distributed as a
percent of cash available for distribution, was 155.9% in the quarter,
compared with 90.3% in the same period a year earlier.
    "High fuel costs and the strong Canadian dollar in the fourth quarter of
2007 continued to be challenging for our industry and for some of the
TransForce companies. However, our geographic and business line
diversification meant that unitholders were able to benefit from gains in our
parcel division as well as our waste management, logistics, fleet management
and personnel and leasing businesses," said Alain Bédard, Chairman, President
and Chief Executive Officer of TransForce Income Fund. "Through acquisition,
diversification and disciplined management, TransForce continued to create
value."

    2007 Results

    Despite the difficult economic environment, the Fund continued to produce
positive financial results in 2007. Revenue increased to $1.9 billion from
$1.8 billion in 2006. Significant acquisitions were responsible for
$124.1 million of the growth in revenue over 2006. TransForce also increased
EBITDA by 1% in 2007 to $243.0 million from $241.7 million in 2006.
    In 2007, the Fund paid a total of $128.7 million in regular distributions
to tracking shareholders and unitholders. Regular distributions declared as a
percentage of cash available for distribution was 97.0% in 2007, compared with
81.9% in 2006.
    "The downturn in economic activity is unfortunate but not unexpected and
we were prepared to respond effectively. While some businesses such as
cross-border Less-than-Truckload and Truckload have been negatively affected
by declines in trade activity, we have other businesses performing very well.
Because of our investments in a range of activities, TransForce is better
positioned than many for this environment and to continue to generate value
for unitholders," Mr. Bédard said. "TransForce is benefiting from its focus on
disciplined management and its diversification across geographies and market
segments. We do not expect a return to a more buoyant North American economy
in the short-term but remain convinced that our strategy and operating
management are working effectively.
    Mr. Bédard noted that overall business conditions may encourage further
outsourcing by client companies and that this would be a positive development
for the Fund's acquisitions in the logistics, dedicated fleet and personnel
services businesses.
    TransForce also announced that, as a result of the acquisition of
scheduled courier service ICS in 2007, it intends to separate its Parcel
businesses, Canpar and ICS, into a new business segment, distinct from
Less-Than-Truckload. It will begin reporting its operations in five segments
beginning with the first quarter of 2008.
    TransForce conducted its annual goodwill impairment at December 31, 2007
and found that the carrying amount of the Oilfield Services division's assets
exceeded their fair value. Accordingly, the Fund recognized a goodwill
impairment loss of $56.0 million in that division in the fourth quarter. While
management is confident in the long term fundamentals of the Canadian oil and
gas industry, the impairment is the result of lower natural gas prices, the
related decline in activity and downward price pressure, as well as the
Alberta government's changes to royalty levels for the oil and gas industry
served by the division. This charge had no effect on the Fund's cash
generation.

    Outlook

    TransForce's strategic objective todate has been to be a leader and
consolidator in Canada's trucking and transportation logistics industry. In
this respect, TransForce has acquired more than 75 competitors over the last
5 years. There continues to be a significant opportunity for TransForce to
play a leading role in the consolidation of the Canadian transportation
industry, particularly in light of the current business and economic
environment. In this context, the Fund's Board of Trustees' objective is to
ensure that TransForce's financing capabilities and capital structure are
aligned with its strategic objective. The rules concerning Income Trusts as
announced by the Federal Government on October 31, 2006 may limit TransForce's
ability to continue with its strategic objectives especially as it relates to
the ability to raise funds and thereby effect acquisitions. As a result, the
Fund's Board of Trustees has directed management to investigate all
alternatives available to TransForce, including possible conversion to a
corporate structure. Any future decision by the Fund's Board of Trustees
concerning these alternatives will be announced in due course.

    Management Conference Call

    TransForce will host a conference call for investors to discuss the
results for the fourth quarter and 2007 year today, February 28, at 9:00 a.m.
eastern time. Participating from the Fund will be Alain Bédard, Chairman,
President and Chief Executive Officer, and Salvatore Vitale, Chief Financial
Officer.
    To participate in the teleconference, investors are invited to call
1-800-741-0104. A recording of the call will be available until midnight
March 6, 2008, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode
2175836. Media are invited to participate in listen-only mode and to use the
media contact listed below for further information.

    Financial Statements

    The financial statements for the periods ended December 31, 2007 and 2006
included below are an integral part of this news release.

    Profile

    TransForce Income Fund (www.transforce.ca) is the leader in Canada's
transportation and logistics industry. Headquartered in Montreal, Quebec, the
Fund's objective is to create value for unitholders through managing and
investing in a growing network of independent operating subsidiaries.
TransForce provides a comprehensive and unique combination of capabilities,
resources and geographical coverage in both domestic and trans-border markets.
Its companies operate in four well-defined business segments:

    
    - Less Than Truckload and Parcel Delivery;
    - Specialized Services, which includes its ancillary transportation
      services and fleet management & personnel services businesses;
    - Specialized Truckload; and
    - Truckload.

    TransForce's trust units (TIF.UN) are listed on the Toronto Stock Exchange
and are included in the S&P/TSX Composite Index.

    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 Fund's website www.transforce.ca.


    CONSOLIDATED STATEMENTS OF INCOME

                             Three         Three        Twelve        Twelve
    (unaudited)             months        months        months        months
    (in thousands of         ended         ended         ended         ended
     dollars, except   December 31,  December 31,  December 31,  December 31,
     per unit amounts)        2007          2006          2007          2006

    Revenue                447,029       418,600     1,767,101     1,627,483
    Fuel surcharge
     revenue                46,499        38,224       173,048       167,364
    -------------------------------------------------------------------------
    Total revenues         493,528       456,824     1,940,149     1,794,847

    Expenses
    Operating              354,206       319,844     1,388,508     1,277,084
    Fixed costs,
     general and
     administrative         76,937        67,093       301,382       268,724
    Long-term incentive
     plan                    1,266         4,085         7,254         7,370
    -------------------------------------------------------------------------
    Operating income
     before the
     following:             61,119        65,802       243,005       241,669
      Depreciation of
       fixed assets         24,548        22,191        96,593        82,884
      Amortization
       of Intangible
       assets                2,801           708        11,075         7,220
      Interest on
       long-term debt       11,053         5,446        36,245        17,867
      Other interest             -           620             -         5,796
      Goodwill
       impairment           56,000             -        56,000             -
      (Gain) loss on
       disposal of
       fixed assets         (3,065)         (553)       (5,293)       (5,186)
    -------------------------------------------------------------------------
    Income (loss)
     before provision
     for income taxes      (30,218)       37,390        48,385       133,088

    Provision for
     income taxes
    Current                  1,523         3,119         8,828         8,796
    Future                    (884)       (3,341)       (5,253)       (7,402)
    -------------------------------------------------------------------------
                               639          (222)        3,575         1,394
    Net income (loss)
     from continuing
     operations            (30,857)       37,612        44,810       131,694
    Earnings from
     discontinued
     operations                  -        17,441             -        19,317
    -------------------------------------------------------------------------
    Net income (loss)      (30,857)       55,053        44,810       151,011

    Earnings (loss)
     per unit
    From continuing
     operations
      Basic                  (0.36)         0.44          0.52          1.55
      Diluted                (0.36)         0.44          0.52          1.55
    Net earnings (loss)
      Basic                  (0.36)         0.64          0.52          1.78
      Diluted                (0.36)         0.64          0.52          1.78
    -------------------------------------------------------------------------
    Outstanding
     weighted average
     number of
      Units             71,961,101    72,247,055    72,087,302    70,952,038
      Tracking shares   13,765,716    13,766,316    13,765,898    13,774,001
    -------------------------------------------------------------------------
      Total             85,726,817    86,013,371    85,853,200    84,726,039
    Units outstanding
    Number of Trust
     units of the Fund  73,024,381    73,023,781    73,024,381    73,023,781
    Number of Tracking
     shares             13,765,716    13,766,316    13,765,716    13,766,316
    -------------------------------------------------------------------------
    Total               86,790,097    86,790,097    86,790,097    86,790,097



    CONSOLIDATED BALANCE SHEETS

                                                         As at         As at
                                                   December 31,  December 31,
    (in thousands of dollars)                             2007          2006
                                                      (audited)     (audited)

    ASSETS
    Current assets
    Accounts receivable                                288,126       270,683
    Inventories                                          9,970         9,623
    Prepaid expenses                                    11,872        14,998
    -------------------------------------------------------------------------
                                                       309,968       295,304
    -------------------------------------------------------------------------
    Fixed assets                                       649,348       533,054
    Goodwill                                           399,828       320,716
    Intangible assets                                   68,619        52,642
    Other assets                                         6,238         8,688
    Future income taxes                                  8,540         5,315
    -------------------------------------------------------------------------
                                                     1,442,541     1,215,719
    -------------------------------------------------------------------------

    LIABILITIES AND UNITHOLDERS' EQUITY
    Current liabilities
    Bank indebtedness                                    9,081        20,223
    Accounts payable and accrued liabilities           204,907       177,846
    Cash distributions payable to unitholders            9,675         9,310
    Dividends payable on Tracking Share Units
     of TFI Holdings Inc.                                2,191         2,134
    Income taxes payable                                 5,721         4,765
    Current portion of long-term debt                   35,003        35,758
    -------------------------------------------------------------------------
                                                       266,578       250,036
    -------------------------------------------------------------------------
    Long-term debt                                     651,636       358,624
    Minority interest                                    2,562         2,002
    Asset retirement obligation                          5,521         3,660
    Future income taxes                                 23,737        22,147
    -------------------------------------------------------------------------

    Unitholder's equity
    Capital contributions                              519,404       519,404
    Contributed surplus                                      -           336
    Units held by the fund for long-term
     incentive plan                                    (11,751)      (11,136)
    Retained earnings (deficit)                        (15,146)       70,646
    -------------------------------------------------------------------------
    Unitholder's equity and Tracking Share Units       492,507       579,250
    -------------------------------------------------------------------------
                                                     1,442,541     1,215,719
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (DEFICIT)
    (unaudited)

                             Three         Three        Twelve        Twelve
                            months        months        months        months
                             ended         ended         ended         ended
    (in thousands      December 31,  December 31,  December 31,  December 31,
     of dollars)              2007          2006          2007          2006

    Retained earnings,
     beginning of
     period                 49,175        63,562        70,646        57,963
    Net income for
     the period            (30,857)       55,053        44,810       151,011
    Distributions to
     unitholders           (29,026)      (42,667)     (115,378)     (122,853)
    Dividends on
     Tracking Share
     Units of
     TFI Holdings Inc.      (3,626)       (5,302)      (14,412)      (15,475)
    Incentive plan
     contribution             (812)            -          (812)            -
    -------------------------------------------------------------------------
    Retained earnings
     (deficit), end
     of period             (15,146)       70,646       (15,146)       70,646
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (unaudited)
                             Three         Three        Twelve        Twelve
                            months        months        months        months
                             ended         ended         ended         ended
    (in thousands      December 31,  December 31,  December 31,  December 31,
     of dollars)              2007          2006          2007          2006

    CASH FLOW FROM
     OPERATING ACTIVITIES
    Net income for the
     period                (30,857)       55,053        44,810       151,011
    Non-cash items:
      Depreciation of
       fixed assets         24,548        22,191        96,593        84,740
      Amortization of
       intangible
       assets                2,801           708        11,075         7,220
      Goodwill
       impairment           56,000             -        56,000             -
      Long-term
       incentive plan
       expense               1,266         4,085         7,254         7,370
      Deferred financing
       fees                    261             -           737             -
      Purchase of units
       held by the fund
       for long-term
       incentive plan       (1,019)       (4,863)       (9,017)      (13,417)
      Future income
       taxes                  (884)        2,102        (5,253)       (1,076)
      Gain on disposal
       of discontinued
       business                  -       (22,884)            -       (22,884)
      Gain on disposal
       of fixed assets      (3,065)         (553)       (5,293)       (5,192)
      Other                  2,017            68         2,292           403
    -------------------------------------------------------------------------
                            51,068        55,907       199,198       208,175
      Net change in
       non-cash working
       capital balances
       related to
       operations           23,249        16,014        11,212        (9,250)
    -------------------------------------------------------------------------
                            74,317        71,921       210,410       198,925
    -------------------------------------------------------------------------

    CASH FLOW FROM
     FINANCING ACTIVITIES
    Increase in bank
     advances and
     overdraft               6,225      (151,643)      (11,142)      (27,816)
    Increase in
     long-term debt            (99)        9,432         2,112         9,432
    Repayment of
     long-term debt        (12,754)     (125,160)      (52,845)     (192,789)
    Increase (decrease)
     in new long term
     revolver facility      86,700       281,500       262,600       281,500
    Cash distributions
     paid to
     unitholders           (29,026)      (27,648)     (115,013)     (111,191)
    Dividends paid on
     Tracking Share
     Units                  (3,358)       (5,083)      (14,355)      (16,109)
    Issuance of trust
     units                       -             -             -       143,760
    -------------------------------------------------------------------------
                            47,688       (18,602)       71,357        86,787
    -------------------------------------------------------------------------

    CASH FLOW FROM
     INVESTING ACTIVITIES
    Additions to fixed
     assets                (34,287)      (46,615)     (134,966)     (115,464)
    Proceeds from
     disposal of
     discontinued
     business                    -        29,491             -        29,491
    Proceeds from
     disposal of fixed
     assets                  7,706         5,039        22,815        25,404
    Business
     acquisitions
     (including bank
     advances net of
     cash)                 (97,678)      (41,792)     (172,897)     (228,010)
    Other assets, net        2,254           558         3,281         2,867
    -------------------------------------------------------------------------
                          (122,005)      (53,319)     (281,767)     (285,712)
    -------------------------------------------------------------------------

    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            10,953         6,773        36,037        24,054
        Income taxes         1,971         2,513         9,290         9,910
    -------------------------------------------------------------------------



    Distributable cash
    (in thousands of
     dollars, except
     per unit amounts)
                             Three         Three        Twelve        Twelve
                            months        months        months        months
                             ended         ended         ended         ended
                       December 31,  December 31,  December 31,  December 31,
                              2007          2006          2007          2006

    OPERATING ACTIVITIES
    Cash flow from
     operating
     activities             74,317        71,921       210,410       198,925
    Add (deduct):
      Purchase of units
       held by the fund
       for long-term
       incentive plan        1,019         4,863         9,017        13,417
      Net change in
       non-cash working
       capital             (23,249)      (16,014)      (11,212)        9,250
      Deferred
       financing
       charges                (261)            -          (737)            -
      Other                 (2,017)          (68)       (2,292)         (403)
    -------------------------------------------------------------------------
      Distributable
       cash from
       operating
       activities           49,809        60,702       205,186       221,189
    -------------------------------------------------------------------------


    INVESTING ACTIVITIES
    Sustaining capital
     expenditures
     (note 1)              (26,096)      (22,823)      (76,061)      (74,807)
    Proceeds from
     disposal of
     investment                  -        29,491             -        29,491
    Proceeds from
     disposal of
     fixed assets            7,706         5,039        22,815        25,404
    -------------------------------------------------------------------------
    Distributable
     cash from
     investing
     activities            (18,390)       11,707       (53,246)      (19,912)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Long term Incentive
     plan disbursement      (8,531)       (7,734)       (8,531)       (7,734)
    Scheduled debt
     repayment (note 2)     (2,670)       (1,937)       (9,448)      (15,191)
    -------------------------------------------------------------------------
    Distributable cash
     from financing
     activities            (11,201)       (9,671)      (17,979)      (22,925)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total distributable
     cash                   20,218        62,738       133,961       178,352

    Regular
     distribution
     declared (note 3)
    Distribution
     declared to
     Tracking
     shareholders            3,358         3,221        13,339        12,733
    Distribution
     declared to
     Unitholders            29,026        27,790       115,378       107,976

    Special
     distribution
     declared
    Distribution
     declared to
     Tracking
     shareholders                -         1,861             -         1,861
    Distribution
     declared to
     Unitholders                 -        14,877             -        14,877

    Total distribution
     declared
    Distribution
     declared to
     Tracking
     shareholders            3,358         5,082        13,339        14,594
    Distribution
     declared to
     Unitholders            29,026        42,667       115,378       122,853
    -------------------------------------------------------------------------
    Total distribution
     declared               32,384        47,749       128,717       137,447
    -------------------------------------------------------------------------
    Distributable cash
     surplus               (12,166)       14,989         5,244        40,905
    -------------------------------------------------------------------------

    Regular
     distribution
     declared per unit
    Distribution
     declared to
     Tracking
     shareholders           0.2439        0.2340        0.9690        0.9246
    Distribution
     declared to
     Unitholders            0.3975        0.3825        1.5800        1.5125

    Special
     distribution
     declared per unit
    Distribution
     declared to
     Tracking
     shareholders                -        0.1352             -        0.1352
    Distribution
     declared to
     Unitholders                 -        0.2069             -        0.2069


    Total distribution
     declared per unit
    Distribution
     declared to
     Tracking
     shareholders           0.2439        0.3692        0.9690        1.0598
    Distribution
     declared to
     Unitholders            0.3975        0.5894        1.5800        1.7194
    -------------------------------------------------------------------------

    Distributable cash
     earned per unit
    Tracking
     shareholders           0.1692        0.4992        1.0790        1.4310
    Unitholders             0.2549        0.7622        1.6287        2.1851
    -------------------------------------------------------------------------

    Payout ratio -
     regular
     distribution            155.9%         90.3%         97.0%         81.9%
    Payout ratio -
     Total
     distribution            155.9%         77.3%         97.0%         78.7%
    -------------------------------------------------------------------------


    Note 1: Sustaining capex

    On July 1, 2005, the Fund concluded the sale of its Calgary terminal. The
Fund will relocate this terminal to a new facility in Calgary. As part of this
relocation, the Fund has invested $4.8 million and 15.8 million for the three-
and twelve-month periods ended December 31, 2007 respectively in the new
Calgary facility ($8.6 million - 2006), This investment has been excluded from
distributable cash. Also the Fund invested $3.4 million and 43.2 million for
the three- and twelve-month ended December 31, 2007 respectively as part of a
lease buyout for five terminals. ($32.0 million - 2006) This has also been
excluded from distributable cash.


    Note 2: Scheduled debt repayment excludes:

    1) Debt payments made on debt acquired as part of business acquisitions.
       This totals $10.1 million and 43.4 million for the three- and
       twelve-month period ended December 31, 2007 ($89.9 million - 2006),
    2) Term loan due on September 30, 2013 of $160 million, the revolving
       term loan due on September 30, 2010 of $384.1 million and single
       payment due on July 15, 2009 of $27.9 million to CIT Financial Ltd for
       its 5 year term loan.

       The total scheduled debt payable as at December 31, 2007 totals
       $37.5 million ($28.0 million - 2006)

    Note 3: Tracking shareholders dividend

    Dividend declared to Tracking shareholders net of income taxes excludes a
holdback portion which is due and payable to Tracking shareholders no later
than March 31 of the following fiscal year in which the dividend was declared.
    
    %SEDAR: 00018303EF




For further information:

For further information: Investors: Alain Bédard, Chairman, President
and CEO, TransForce Income Fund, (514) 331-4200; Media: John Lute, Lute &
Company, (416) 929-5883, jlute@luteco.com

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