TransForce Inc. Announces 2010 First Quarter Results

    
    - Revenues increase 3% to $466 million
    - EBITDA increases 14% to $50.7 million
    - EPS before a $16.3 million non-cash gain increase from $0.04 to $0.11
    

MONTREAL, April 23 /CNW Telbec/ - TransForce Inc. ("TransForce" or "the Company") (TSX: TFI - T), the leader in the Canadian transportation and logistics industry, today announced its results for the first quarter ended March 31, 2010. The Company improved its performance on all measures including revenues, EBITDA and cash flow.

"These improved results directly reflect our disciplined efforts to contain costs and increase efficiencies," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce Inc. "EBITDA is up 14% over the same period last year while cash flow is up 30%. Over the past several months, we've made significant adjustments to address the pressures of the current economic environment and these moves are clearly benefitting the Company and our shareholders."

The first quarter includes a $16.3 million non-cash gain associated with the Matrec subsidiary's acquisition of the remaining interest in the Lafleche Environmental Complex. Also there was an improvement in operating performance. This resulted in net income of $26.6 million compared with $3.1 million a year ago and earnings per share this quarter of $0.28 versus $0.04 for the same period last year.

First Quarter Results

For the three months ended March 31, 2010, TransForce reported total revenues of $466.1 million, a 3% increase over $452.4 million for the same period of 2009. Revenue excluding fuel surcharge increased 2% to $429.2 million compared with $422.2 million in the first quarter of 2009. Before the acquisition of ATS, total revenues has a 3% decrease.

TransForce's operating expenses increased in line with higher revenue; however, during the quarter TransForce continued to reduce its fixed costs and general and administrative expenses.

In the first quarter, EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce's financial statements) increased 14% to $50.7 million from $44.5 million in the same quarter of 2009. EBITDA as a percentage of revenue was 10.9% in the quarter, up from 9.8% for the same period in 2009. Interest expense decreased to $8.4 million from $9.9 million a year earlier as a result of lower interest rates along with the Company's continued efforts to reduce debt.

TransForce generated income before income taxes of $31.2 million in the first quarter (which included the non-cash gain on business re-evaluation) compared with $4.3 million in the same quarter of 2009. Net income in the quarter was $26.6 million, or $0.28 per share, compared with $3.1 million, or $0.04 per share, in the same quarter of 2009. Cash flow from operations increased 30% to $43.5 million in the first quarter from $33.3 million a year ago.

TransForce paid out a dividend of $0.10 per share during the quarter.

"We are encouraged by the results for the first quarter, particularly since seasonality means the first three months of the year are normally the weakest. While we saw some signs of economic improvement in the first quarter, most of the improvement was due to the actions we have taken. We do not expect to see a sustained recovery or increased volumes for our industry until later in 2010," said Mr. Bedard. "Therefore, we will keep a close eye on our customers and carefully manage our costs in line with their activity to ensure we continue to be very well positioned to leverage revenue gains into higher EBITDA, cash flow and earnings."

Completed Acquisition of Lafleche Environmental Complex

In March, TransForce announced it had acquired the 50% of Laflèche Environmental Inc.'s landfill and environmental complex not already owned by Matrec, its waste management subsidiary. The Company first invested in the Eastern Ontario facility in 2005, when Matrec was acquired, then subsequently increased its ownership to 50% in 2008. In addition to its valuable landfill operations, the Lafleche complex provides a range of environmental services including recycling, composting, soil treatment and waste water treatment, all aimed at diverting waste from landfill. On April 8, 2010 the Ontario Power Authority (OPA) awarded a contract to Laflèche and its partner IGRS for the production of 4.5 Mw of green power (electricity) from the methane produced by the landfill. Licensed landfill sites are increasingly rare in Ontario and the Lafleche complex is working to minimize the materials sent to landfill.

First Quarter Management Conference Call

TransForce's Chairman, President and Chief Executive Officer Alain Bédard, will host a conference call for investors to discuss the results of the first quarter on Monday, April 26 , 2010, at 9:00 a.m. Eastern Time.

To participate in the conference call, investors are invited to call 1-800-768-2878. A recording of the call will be available until midnight May 3, 2010, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21466040.

Financial Statements

The financial statements for the periods ended March 31, 2010 and 2009 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 four well-defined business segments:

    
    - Less-Than-Truckload;
    - Package and Courier;
    - Specialized Services, which includes its ancillary transportation
      services such as logistics, fleet management & personnel services;
      oilfield & oils and services, and waste management;
    - Truckload, which includes specialized truckload and dedicated services.
    

TransForce Inc. shares are listed on the Toronto Stock Exchange under the symbol TFI.

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 BALANCE SHEETS
    -------------------------------------------------------------------------
    (in thousands of dollars)                            As at         As at
    (unaudited)                                       March 31,  December 31,
                                                          2010          2009
    -------------------------------------------------------------------------
    ASSETS

    Current assets:

      Accounts receivable                              269,528       262,219
      Inventories                                        8,938         9,116
      Prepaid expenses                                  16,879         9,480
      Income tax receivable                                840           751
    -------------------------------------------------------------------------
                                                       296,185       281,566
    -------------------------------------------------------------------------
    Property, plant and equipment                      638,438       667,315
    Intangible assets                                  189,463       146,946
    Goodwill                                           428,534       418,951
    Other assets                                         7,291         6,774
    Future income taxes                                  4,304         4,104
    -------------------------------------------------------------------------
                                                     1,564,215     1,525,656
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:

      Bank indebtedness                                 10,196         6,826
      Accounts payable and accrued liabilities         194,901       187,934
      Dividends payable                                  9,525         9,525
      Current portion of long-term debt                394,021       403,763
    -------------------------------------------------------------------------
                                                       608,643       608,048
    -------------------------------------------------------------------------
    Long-term debt                                     296,282       304,166
    Asset retirement obligations                        14,514        10,794
    Deferred gain on sale and leaseback                  9,013             -
    Future income taxes                                 84,869        69,233
    -------------------------------------------------------------------------
    Shareholders' equity:

      Share capital                                    567,551       567,551
      Contributed surplus                                1,350           900
      Deficit                                          (18,007)      (35,036)
    -------------------------------------------------------------------------
                                                       550,894       533,415
    -------------------------------------------------------------------------
                                                     1,564,215     1,525,656
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND DEFICIT
    -------------------------------------------------------------------------
    (In thousands of dollars,                     Three months  Three months
     except per share amounts)                     ended March   ended March
    (unaudited)                                       31, 2010      31, 2009
    -------------------------------------------------------------------------
    Revenue                                            429,205       422,249
    Fuel surcharge revenue                              36,889        30,131
    -------------------------------------------------------------------------
                                                       466,094       452,380

    Expenses:

      Operating expenses                               330,375       322,553
      Fixed costs, general and administrative
       expenses                                         85,044        85,320
    -------------------------------------------------------------------------
    Operating income before the following               50,675        44,507
    Depreciation of property, plant and equipment       24,571        26,147
    Amortization of intangible assets                    6,565         4,775
    Interest on long-term debt                           8,432         9,888
    Change in fair value of interest rate swap
     contracts                                          (3,159)         (295)
    Remeasurement to fair value of existing
     interest in acquiree                              (16,279)            -
    Gain on disposal of property, plant and
     equipment                                            (684)         (271)
    -------------------------------------------------------------------------
    Income before provision for income taxes            31,229         4,263
    Provision for income taxes:
      Current                                            3,020         2,076
      Future                                             1,655          (924)
    -------------------------------------------------------------------------
                                                         4,675         1,152
    -------------------------------------------------------------------------
    Net income and comprehensive income                 26,554         3,111

    Deficit, beginning of period                       (35,036)       (9,554)

    Dividends                                           (9,525)       (8,679)
    -------------------------------------------------------------------------
    Deficit, end of period                             (18,007)      (15,122)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share:

      Basic                                               0.28          0.04
      Diluted                                             0.28          0.04
    -------------------------------------------------------------------------

    Weighted average number of shares outstanding   95,253,937    86,790,097
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------------------------------------------
    (in thousands of dollars)                     Three months  Three months
    (unaudited)                                    ended March   ended March
                                                      31, 2010      31, 2009
    -------------------------------------------------------------------------
    CASH FLOW FROM OPERATING ACTIVITIES:

    Net income for the period                           26,554         3,111

    Non-cash items:

      Depreciation of property, plant and
       equipment                                        24,571        26,147
      Amortization of intangible assets                  6,565         4,775
      Stock-based compensation                             450             -
      Amortization of deferred financing charges           390           390
      Future income taxes                                1,655          (924)
      Gain on disposal of property, plant and
       equipment                                          (684)         (271)
      Remeasurement to fair value of existing
       interest in acquiree                            (16,279)            -
      Others                                               233           112
    -------------------------------------------------------------------------
                                                        43,455        33,340
    Net change in non-cash operating working
     capital                                           (15,495)       20,157
    -------------------------------------------------------------------------
                                                        27,960        53,497
    -------------------------------------------------------------------------
    CASH FLOW FROM FINANCING ACTIVITIES:

    Increase (decrease) in bank advances and
     overdraft                                           3,370           442
    Repayment of long-term debt                        (12,045)      (13,061)
    Increase (decrease) in long term revolver
     facility                                           (9,896)      (18,794)
    Dividends paid                                      (9,525)       (8,679)
    -------------------------------------------------------------------------
                                                       (28,096)      (40,092)
    -------------------------------------------------------------------------
    CASH FLOW FROM INVESTING ACTIVITIES:

    Additions to property, plant and equipment          (9,797)      (10,909)
    Proceeds from disposal of property, plant and
     equipment                                          36,055         3,487
    Business acquisitions (including bank advances
     net of cash)                                      (29,103)       (5,741)
    Others                                               2,981          (242)
    -------------------------------------------------------------------------
                                                           136       (13,405)
    -------------------------------------------------------------------------
    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                                         8,328         9,468
        Income taxes                                     2,947         3,428
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

%SEDAR: 00026947EF

SOURCE TransForce Inc.

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

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