TransForce Inc. Reports Strong Growth in Second Quarter Results



    
    - Increased revenues by 20% to a record $595.6 million
    - Increased EBITDA by 18% to $75.6 million before non-recurring items
    - Increased pre-tax earnings 17% to $33.7 million before non-recurring
      items
    - Increased earnings after tax 11% to $29.2 million before non-recurring
      items
    - Completed conversion to corporate structure
    

    MONTREAL, July 29 /CNW Telbec/ - TransForce Inc. (TSX: TFI - T), the
leader in the Canadian transportation and logistics industry, today announced
significant growth in its key results for the second quarter of 2008, ended
June 30.
    "Everyone at TransForce can be proud of our performance in the latest
quarter," said Alain Bédard, Chairman, President and Chief Executive Officer
of TransForce. "The difficulties facing our industry are well known - from
rising fuel costs and a high dollar to the slowdown in Canadian manufacturing
exports. Despite this challenging economic environment, our people were able
to maintain and grow the contribution from existing operations while we added
more value for shareholders through acquisitions."

    Second Quarter Results: Before Non-Recurring Items

    In completing its conversion to a corporate structure on May 14, 2008 and
the related termination of its Incentive Plan, TransForce incurred certain
one-time expenses in the second quarter totalling $8.7 million pre-tax and
$9.9 million after tax. TransForce is now taxed as a corporation. These
expenses are discussed in the Company's Q2 08 MD&A. Accordingly, some results
from the second quarter of 2008 are reported both before and after including
these non-recurring items.
    In the quarter, TransForce delivered significant year-over-year increases
across key financial performance indicators.
    For the three months ended June 30, the Company increased revenues by 20%
to a quarterly record of $595.6 million, from $495.7 million in the same
period of 2007. This increase was the result of significant acquisitions,
which contributed $48.3 million in new revenues. However our existing
businesses also grew revenues despite the difficult operating environment.
    Before non-recurring items related to the conversion, TransForce
increased second quarter EBITDA by 18% to another new record of $75.6 million
from $64.1 million a year ago. (EBITDA is earnings before interest, taxes,
depreciation and amortization and equivalent to operating income on
TransForce's financial statements). The record high EBITDA was also the result
of both acquisitions and organic growth.
    TransForce increased earnings both before and after taxes, in the second
quarter. Earnings before taxes rose by 17% to $33.7 million from $28.7 million
a year earlier. Earnings after taxes increased by 11% to $29.2 million from
$26.3 million in the second quarter of 2007.
    In the second quarter, TransForce increased earnings per share from
continuing operations, excluding non-recurring items, to $0.34 per share from
$0.31 per share a year earlier.
    "At a time when many businesses have been shrinking due to low demand, we
are very pleased to be able to report record revenues and strong bottom line
growth in the second quarter," said Mr. Bédard. "Acquisitions contributed to
our growth as expected from our established strategy. But what is remarkable
is that our existing businesses were able to generate growth. Our Package and
Courier segment was particularly strong as was the Specialized Services
segment."
    Mr. Bédard added: "The strong results generated for shareholders in the
latest quarter are the direct result of TransForce's ability to align
technology, efficient processes, and the extraordinary efforts and discipline
of our management and employees in the face of the most difficult conditions
our industry has faced in many years. I have always said we have some of the
best people in our industry. It is when times are tough that the best prove
themselves. On behalf of the Board and TransForce shareholders, I thank the
people of TransForce for their outstanding work."

    Second Quarter Results: After Non-Recurring Items

    Including non-recurring items related to the conversion, quarterly EBITDA
increased to $66.9 million from $64.1 million a year earlier. Second quarter
earnings, before taxes, were $24.9 million compared with $28.7 million in the
same quarter of 2007. Earnings after taxes were $19.3 million compared with
$26.3 million in the same quarter last year. Second quarter earnings per share
from continuing operations were $0.22 compared with $0.31 a year ago.

    Year-to-Date Results: Before Non-Recurring Items

    While industry conditions were more difficult in the first half of 2008
than a year earlier, TransForce improved it key performance measures in the
first six months of this year.
    TransForce increased revenues in the first half of 2008 by 16.8% to
$1.1 billion from $960.4 million in the first half of 2007.
    Excluding non-recurring items, the Company also increased EBITDA to
$132.5 million in the first six months, up by 13.4% from $116.8 million in the
first half of 2007.
    Earnings before taxes increased by 3.4% to $51.1 million for the first
half of the year from $49.4 million a year ago. Earnings after taxes also
increased by 2.4% to $48.3 million from $47.2 million for the first half of
last year.
    Earnings per share totaled $0.56 in 2008 compared with $0.55 per share in
2007.

    Year-to-Date Results: After Non-Recurring Items

    EBITDA, including non-recurring items, increased by 6% to $123.8 million
in the first half of this year, from $116.8 million a year ago. Earnings
before taxes for the first half of 2008 were $42.4 million, compared with
$49.4 million for the first six months of 2007. Earnings after taxes for the
first two quarters of 2008 were $38.4 million compared with $47.2 million in
the same period of 2007. First-half earnings per share were $0.45 per share,
compared with $0.55 per share during the same period of 2007.
    "Despite our strong results in the second quarter and first half of 2008,
we expect economic and business conditions to remain difficult for the rest of
the year," said Mr. Bedard. "We will remain focused on maintaining our
discipline on costs and efficiency. Overall growth will come from
acquisitions. We continue to explore strategic acquisition opportunities and
will likely have more to announce before the end of the year."

    Dividend

    TransForce's Board of Directors has declared today an interim dividend of
$0.05 per share that will be paid on August 15, 2008 to shareholders of record
at the close of business on August 7, 2008. The amount of this dividend is
half of the proposed regular quarterly dividend. This reflects the timing of
TransForce's conversion to a corporation in the middle of the second quarter
of 2008.
    The Board has also declared today its regular quarterly dividend in the
amount of $0.10 per share that will be paid on October 15, 2008, to
shareholders of record at the close of business on September 30, 2008.

    Management Conference Call

    TransForce will host a conference call for investors to discuss the
results of the second quarter later today, July 30, 2008 at 9:00 a.m. 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
1-800-952-1797 A recording of the call will be available until midnight
August 6, 2008, by dialing 1-800-558-5253 or 416-626-4100 and entering
passcode 21389118.

    Financial Statements

    The financial statements for the periods ended June 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)
    (In thousands     Three months  Three months    Six months    Six months
     of dollars,             ended         ended         ended         ended
     except per
     share or              June 30,      June 30,      June 30,     June 30,
     unit amounts)            2008          2007          2008         2007

    Revenues               514,081       450,125       983,591      877,122
    Fuel surcharge
     revenues               81,560        45,527       138,308       83,288
    -------------------------------------------------------------------------
    Total revenues         595,641       495,652     1,121,899      960,410

    Expenses
    Operating expenses     432,511       353,567       819,198      686,388
    Fixed costs,
     general and
     administrative
     expenses               88,795        75,470       170,040      152,223
    Incentive plan           7,438         2,496         8,885        4,992
    -------------------------------------------------------------------------
    Operating income
     before the following:  66,897        64,119       123,776      116,807
      Depreciation of
       fixed assets         26,767        24,642        51,820       47,455
      Amortization of
       intangible assets     3,906         2,841         7,927        5,459
      Interest on
       long-term debt       11,765         8,644        23,205       15,726
      Gain on disposal
       of fixed assets        (477)         (673)       (1,528)      (1,241)
    -------------------------------------------------------------------------
    Income before
     provision for
     income taxes           24,936        28,665        42,352       49,408
    Provision for
     income taxes
    Current                  2,544         2,806         4,354        5,326
    Future                   3,108          (442)         (380)      (3,082)
    -------------------------------------------------------------------------
                             5,652         2,364         3,974        2,244

    -------------------------------------------------------------------------
    Net income              19,284        26,301        38,378       47,164

    Earnings per share
      Basic                   0.22          0.31          0.45         0.55
      Diluted                 0.22          0.31          0.45         0.55
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Outstanding weighted
     average number of
      Shares            40,056,967             -    20,139,139            -
      Units             38,864,714    72,174,911    55,429,540   72,251,410
    Tracking shares      7,412,309    13,765,854    10,571,461   13,766,084
    -------------------------------------------------------------------------
    Total               86,333,990    85,940,765    86,140,140   86,017,494
    -------------------------------------------------------------------------

    Shares outstanding
    Number of shares    86,790,097             -    86,790,097            -
    Number of units              -    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)                          June 30,  December 31,
                                                          2008          2007
                                                    (unaudited)     (audited)

    ASSETS
    Current assets
    Accounts receivable                                347,100       288,126
    Inventories                                         10,804         9,970
    Prepaid expenses                                    20,480        11,872
    -------------------------------------------------------------------------
                                                       378,384       309,968
    -------------------------------------------------------------------------
    Fixed assets                                       690,971       649,348
    Goodwill                                           428,685       399,828
    Intangible assets                                   79,673        68,619
    Other assets                                         6,500         6,238
    Future income taxes                                  8,540         8,540
    -------------------------------------------------------------------------
                                                     1,592,753     1,442,541
    -------------------------------------------------------------------------

    LIABILITIES AND
     SHAREHOLDERS' EQUITY
    Current liabilities
    Bank indebtedness                                   19,564         9,081
    Accounts payable and accrued liabilities           227,640       204,907
    Cash distributions payable to unitholders                -         9,675
    Dividends payable on Tracking Share of
     TFI Holdings Inc.                                     571         2,191
    Income taxes payable                                 5,168         5,721
    Current portion of long-term debt                   55,783        35,003
    -------------------------------------------------------------------------
                                                       308,726       266,578
    -------------------------------------------------------------------------
    Long-term debt                                     752,883       651,636
    Non-controlling interest                                 -         2,562
    Asset retirement obligations                         6,372         5,521
    Future income taxes                                 34,524        23,737

    Equity
    Share Capital                                      519,404             -
    Capital contributions and Tracking Shares                -       519,404
    Units held by the fund for long-term
     incentive plan                                          -       (11,751)
    Deficit                                            (29,156)      (15,146)
    -------------------------------------------------------------------------
                                                       490,248       492,507
    -------------------------------------------------------------------------
                                                     1,592,753     1,442,541
    -------------------------------------------------------------------------

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

    Retained
     earnings
     (Deficit),
     beginning
     of period             (29,245)       59,677       (15,146)       70,646
    Net income
     for the period         19,284        26,301        38,378        47,164
    Distributions to
     unitholders           (14,514)      (29,027)      (43,541)      (57,324)
    Dividends on
     Tracking Share
     Units of TFI
     Holdings Inc.          (1,860)       (3,626)       (5,581)       (7,161)
    Incentive plan
     contribution           (2,821)            -        (3,266)            -
    -------------------------------------------------------------------------
    Retained earnings
     (Deficit),
     end of period         (29,156)       53,325       (29,156)       53,325
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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


    CASH FLOW FROM
     OPERATING
     ACTIVITIES
    Net income
     for the period         19,284        26,301        38,378        47,164
    Non-cash items:
      Depreciation
       of fixed assets      26,767        24,642        51,820        47,455
      Amortization of
       intangible assets     3,906         2,841         7,927         5,459
      Incentive
       plan expense          7,438         2,496         8,885         4,992
      Purchase of
       units held
       by the entity
       for the
       Incentive plan         (400)       (3,319)         (400)       (3,998)
      Deferred
       financing charges       330           160           564           310
      Future income taxes    3,108          (442)         (380)       (3,082)
      Gain on disposal
       of fixed assets        (477)         (673)       (1,528)       (1,241)
      Other                     77           160           516           240
    -------------------------------------------------------------------------
                            60,033        52,166       105,782        97,299

    Net change in
     non-cash
     working capital
     balances related
     to operations         (10,571)       (2,749)      (46,827)      (12,949)
    -------------------------------------------------------------------------
                            49,462        49,417        58,955        84,350
    -------------------------------------------------------------------------

    CASH FLOW FROM
     FINANCING
     ACTIVITIES
    Increase (decrease)
     in bank advances
     and overdraft           4,377        (8,736)       10,483        (8,285)
    Increase in
     long-term debt         97,928             -        97,928           556
    Repayment of
     long-term debt        (12,841)      (22,082)      (38,187)      (30,885)
    Increase (decrease)
     in long term
     revolver facility     (82,016)       62,900         9,833       153,400
    Cash distributions
     paid to unitholders   (24,189)      (29,027)      (53,216)      (56,959)
    Distributions paid
     on Tracking
     Share Units            (2,798)       (3,358)       (7,201)       (7,640)
    -------------------------------------------------------------------------
                           (19,539)         (303)       19,640        50,187
    -------------------------------------------------------------------------
    CASH FLOW FROM
     INVESTING ACTIVITIES
    Additions to
     fixed assets          (22,546)      (18,793)      (35,676)      (78,868)
    Proceeds from
     disposal of
     fixed assets            3,659         5,064        11,139         9,988
    Business acquisitions
     (including bank
      advances net
      of cash)             (10,840)      (35,709)      (53,989)      (66,635)
    Other assets, net         (196)          324           (69)          978
    -------------------------------------------------------------------------
                           (29,923)      (49,114)      (78,595)     (134,537)
    -------------------------------------------------------------------------

    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             11,157         8,555        22,601        15,610
       Income taxes              -         2,534         4,022         5,926
    -------------------------------------------------------------------------
    
    %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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