TransForce Inc. Delivers Significant Growth in Third Quarter Results



    
    - Increased revenues by 23% to $595.5 million
    - Increased EBITDA by 27% to $82.3 million
    - Increased pre-tax earnings 31% to $38.4 million
    

    MONTREAL, Oct. 30 /CNW Telbec/ - TransForce Inc. ("TransForce" or "the
Company") (TSX: TFI - T), the leader in the Canadian transportation and
logistics industry, today announced significant growth in its key results for
the third quarter of 2008, ended September 30, 2008.
    "While industry conditions continued to be weak in the third quarter,
TransForce maintained its disciplined growth strategy to increase revenues and
its careful operating management to drive significant EBITDA growth," said
Alain Bédard, Chairman, President and Chief Executive Officer of TransForce
Inc. "Once again the skills and experience of our people have produced solid
results for our shareholders."

    Third Quarter Results

    In the quarter, TransForce delivered significant year-over-year increases
across key financial performance indicators.
    For the three months ended September 30, 2008 the Company increased
revenues by 23% to $595.5 million from $486.2 million in the same period of
2007. This increase was partly due to significant acquisitions in the past
year that accounted for $45.6 million in additional revenue in the quarter.
    TransForce increased third quarter EBITDA by 27% to $82.3 million from
$65.1 million a year ago. (EBITDA is earnings before interest, taxes,
depreciation and amortization and equivalent to operating income on
TransForce's financial statements). Significant acquisitions contributed
$8.1 million of EBITDA in the quarter. The remaining increase is from the
Company's organic operations including cost containment efforts and efficiency
gains.
    The Company's earnings before income taxes were $38.4 million compared
with $29.2 million in the third quarter of 2007. Included in the earnings
before income taxes is a $2.0 million loss on interest rate swap contracts.
The contracts have allowed the Company to fix the rate of interest on
$185 million of variable rate debt at an effective rate of 5.58% at September
30, 2008.
    Earnings per share were $0.31 per share compared with $0.33 in the same
period of 2007. Earnings per share were affected by TransForce's conversion
from an income trust to a corporation in the second quarter, and the
corresponding change to income tax expense.
    "With the economy and business environment facing challenges not seen in
almost 80 years, many businesses are reviewing their strategies and looking
for new efficiencies their operations. TransForce has always focused on a
disciplined approach and this is reflected in the strong performance of our
businesses under these conditions," said Mr. Bédard. "In the third quarter,
each of our operating segments increased its revenues, which we consider a
remarkable achievement in the current environment.

    Year-to-Date Results

    Through the first nine months of 2008, ended September 30, TransForce
increased revenues to $1.72 billion from $1.45 billion in the same period of
2007. The Company also increased EBITDA to $206.1 million from $181.9 million
in 2007. Excluding non-recurring items, relating to TransForce's conversion
from an income trust to a corporation during the second quarter of 2008,
EBITDA increased to $214.8 million in the period. Earnings before income taxes
were $80.7 million compared with $78.6 million in the same period of 2007.
Before non-recurring items, earnings before income taxes were $89.4 million
through the first three quarters of 2008.
    Earnings per share were $0.75 per share or $0.87 per share excluding
non-recurring items, through the first three quarters of 2008, consistent with
earnings per share of $0.88 in the same period of 2007.
    "Our businesses continue to deliver results while adjusting to
fluctuations in the financial markets, oil prices, exchange rates and various
segments of the economy," said Mr. Bédard. "Through the first three quarters
of 2008, four of our five operating segments increased revenues while
maintaining their percentage of diversified contributions to TransForce
revenues from the prior year. This, among other factors, enabled the Company
to recently confirm its 2008 year-end EBITDA guidance of $275 million to
$280 million as disclosed on March 27, 2008. While it's difficult to look
forward with any certainty in this environment, the current trend towards a
lower Canadian dollar and lower fuel costs should be positive for TransForce."

    Management Conference Call

    TransForce will host a conference call for investors to discuss the
results of the third quarter later today, October 30, 2008, at 9:00 Eastern
Time. Participating from the Company will be Alain Bédard, Chairman, President
and Chief Executive Officer, and Salvatore Vitale, Chief Financial Officer.
    To participate in the conference call, investors are invited to call
1-800-896-0105 A recording of the call will be available until midnight
November 6, 2008, by dialing 1-800-558-5253 or 416-626-4100 and entering
passcode 21397316.

    Financial Statements

    The financial statements for the periods ended September 30, 2008 and
2007 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 five well-defined business segments:

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

    TransForce shares (TFI - T) are listed on the Toronto Stock Exchange.

    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
     STATEMENTS
     OF INCOME
    (unaudited)              Three         Three          Nine          Nine
                            months        months        months        months
    (In thousands of         ended         ended         ended         ended
     dollars, except  September 30, September 30, September 30, September 30,
     per unit amounts)        2008          2007          2008          2007

    Revenues               511,708       442,950     1,495,299     1,320,072
    Fuel surcharge
     revenues               83,823        43,261       222,131       126,549
    -------------------------------------------------------------------------
    Total revenues         595,531       486,211     1,717,430     1,446,621

    Expenses
    Operating expenses     425,177       347,914     1,244,375     1,034,302
    Fixed costs,
     general and
     administrative
     expenses               88,006        72,222       258,046       224,445
    Incentive plan               -           996         8,885         5,988
    -------------------------------------------------------------------------
    Operating income
     before the
     following:             82,348        65,079       206,124       181,886
      Depreciation of
       fixed assets         26,653        24,590        78,473        72,045
      Amortization of
       intangible assets     4,102         2,815        12,029         8,274
      Interest on
       long-term debt       12,256         9,466        35,336        25,192
      Unrealized loss
       on Swap contracts     2,000             -         2,125             -
      Gain on disposal
       of fixed assets      (1,038)         (987)       (2,566)       (2,228)
    -------------------------------------------------------------------------
    Income before
     provision for
     income taxes           38,375        29,195        80,727        78,603
    Provision for
     income taxes
    Current                  3,482         1,979         7,836         7,305
    Future                   8,393        (1,287)        8,013        (4,369)
    -------------------------------------------------------------------------
                            11,875           692        15,849         2,936

    -------------------------------------------------------------------------
    Net income              26,500        28,503        64,878        75,667

    Earnings per share
     or unit
      Basic                   0.31          0.33          0.75          0.88
      Diluted                 0.31          0.33          0.75          0.88
    -------------------------------------------------------------------------

    Outstanding
     weighted average
     number of
      Shares            86,790,097             -    42,600,267             -
      Units                      -    71,890,634    36,749,988    72,129,830
      Tracking shares            -    13,765,716     7,008,918    13,765,960
    -------------------------------------------------------------------------
      Total             86,790,097    85,656,350    86,359,173    85,895,790

    Outstanding
     number of
    Number of shares    86,790,097             -    86,790,097             -
    Number of Trust
     units of the Fund           -    73,024,381             -    73,024,381
    Number of Tracking
     shares                      -    13,765,716             -    13,765,716
    -------------------------------------------------------------------------
    Total               86,790,097    86,790,097    86,790,097    86,790,097


    CONSOLIDATED BALANCE SHEETS                          As at         As at
    ( in thousands of dollars)                    September 30,  December 31,
                                                          2008          2007
                                                    (unaudited)     (audited)

    ASSETS
    Current assets
    Accounts receivable                                358,920       288,126
    Inventories                                         10,941         9,970
    Prepaid expenses                                    16,209        11,872
    Future income taxes                                  1,966             -
    -------------------------------------------------------------------------
                                                       388,036       309,968
    -------------------------------------------------------------------------
    Fixed assets                                       694,640       649,348
    Goodwill                                           429,322       399,828
    Intangible assets                                   75,921        68,619
    Other assets                                         6,096         6,238
    Future income taxes                                  6,166         8,540
    -------------------------------------------------------------------------
                                                     1,600,181     1,442,541
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Bank indebtedness                                    8,977         9,081
    Accounts payable and accrued liabilities           232,760       204,907
    Cash distributions payable to unitholders                -         9,675
    Dividends payable                                    9,250         2,191
    Income taxes payable                                 5,706         5,721
    Current portion of long-term debt                   66,209        35,003
    -------------------------------------------------------------------------
                                                       322,902       266,578
    -------------------------------------------------------------------------
    Long-term debt                                     723,707       651,636
    Non-controlling interest                                 -         2,562
    Asset retirement obligations                         6,875         5,521
    Future income taxes                                 42,968        23,737

    Equity
    Share capital                                      519,404             -
    Capital contributions and Tracking Share Units           -       519,404
    Units held by the fund for long-term incentive
     plan                                                    -       (11,751)
    Deficit                                            (15,675)      (15,146)
    -------------------------------------------------------------------------
                                                       503,729       492,507
    -------------------------------------------------------------------------
                                                     1,600,181     1,442,541
    -------------------------------------------------------------------------


    CONSOLIDATED
     STATEMENTS OF
     RETAINED
     EARNINGS
    (DEFICIT)                Three         Three          Nine          Nine
                            months        months        months        months
    (unaudited)              ended         ended         ended         ended
    (in thousands     September 30, September 30, September 30, September 30,
     of dollars)              2008          2007          2008          2007

    Retained earnings
     (Deficit),
     beginning of
     period                (29,156)       53,325       (15,146)       70,646
    Net income for the
     period                 26,500        28,503        64,878        75,667
    Distributions to
     unitholders                 -       (29,028)      (43,541)      (86,352)
    Dividends              (13,019)       (3,625)      (18,600)      (10,786)
    Incentive plan
     contribution                -             -        (3,266)            -
    -------------------------------------------------------------------------
    Retained earnings
     (Deficit), end
     of period             (15,675)       49,175       (15,675)       49,175
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED
     STATEMENTS OF           Three         Three          Nine          Nine
     CASH FLOWS             months        months        months        months
    (unaudited)              ended         ended         ended         ended
    (in thousands     September 30, September 30, September 30, September 30,
     of dollars)              2008          2007          2008          2007

    CASH FLOW FROM
     OPERATING ACTIVITIES
    Net income for
     the period             26,500        28,503        64,878        75,667
    Non-cash items:
      Depreciation of
       fixed assets         26,653        24,590        78,473        72,045
      Amortization of
       intangible assets     4,102         2,815        12,029         8,274
      Incentive plan
       expense                   -           996         8,885         5,988
      Purchase of units
       held by the fund
       for the incentive
       plan                      -        (4,000)         (400)       (7,998)
      Deferred financing
       charges                 390           166           954           476
      Future income taxes    8,393        (1,287)        8,013        (4,369)
      Unrealized loss on
       Swap contracts        2,000             -         2,125             -
      Gain on disposal
       of fixed assets      (1,038)         (987)       (2,566)       (2,228)
      Other                    503            35         1,019           275
    -------------------------------------------------------------------------
                            67,503        50,831       173,410       148,130
    Net change in
     non-cash working
     capital balances
     related to
     operations             (5,458)          912       (52,410)      (12,037)
    -------------------------------------------------------------------------
                            62,045        51,743       121,000       136,093
    -------------------------------------------------------------------------

    CASH FLOW FROM
     FINANCING ACTIVITIES
    Increase (decrease)
     in bank advances
     and overdraft         (10,587)       (9,082)         (104)      (17,367)
    Increase in
     long-term debt              -         1,655        97,928         2,211
    Repayment of
     long-term debt        (33,719)       (9,206)      (71,906)      (40,091)
    Increase (decrease)
     in long term
     revolver facility      10,328        22,500        20,161       175,900
    Cash distributions
     paid to unitholders         -       (29,028)      (53,216)      (85,987)
    Dividends paid          (4,340)       (3,357)      (11,541)      (10,997)
    -------------------------------------------------------------------------
                           (38,318)      (26,518)      (18,678)       23,669
    -------------------------------------------------------------------------

    CASH FLOW FROM
     INVESTING ACTIVITIES
    Additions to fixed
     assets                (31,141)      (21,811)      (66,817)     (100,679)
    Proceeds from
     disposal of fixed
     assets                  6,124         5,121        17,263        15,109
    Business acquisitions
     (including bank
     advances net of
     cash)                   1,041        (8,584)      (52,948)      (75,219)
    Other assets, net          249            49           180         1,027
    -------------------------------------------------------------------------
                           (23,727)      (25,225)     (102,322)     (159,762)
    -------------------------------------------------------------------------

    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              12,104         9,474        34,705        25,084
      Income taxes           4,395         1,393         8,417         7,319
    -------------------------------------------------------------------------
    
    %SEDAR: 00026947EF




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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