Trimac Announces Second Quarter Results

CALGARY, Aug. 11 /CNW/ - Trimac Income Fund (TSX Symbol TMA.UN) (the "Fund") today released improved financial results of the Fund and Trimac Transportation Services Limited Partnership ("Trimac" or the "Partnership") for the second quarter ended June 30, 2010.

    
                                   Three months ended       Six months ended
                                         June 30,                June 30,
    Partnership                     2010        2009        2010        2009
    (millions of dollars)     -----------------------------------------------

    Transportation revenue          67.3        60.2       127.4      120.5
    Fuel surcharges                  6.0         3.7        11.4        8.4
                              -----------------------------------------------
    Total revenue                   73.3        63.9       138.8      128.9

    EBITDA(1)                        8.3         7.2        14.0       12.7
    Net earnings                     3.1         1.1         3.7        0.4



                                   Three months ended       Six months ended
                                         June 30,                June 30,
    The Fund                        2010        2009        2010        2009
                              -----------------------------------------------
    (millions of dollars,
     except per unit amounts
     and numbers of units)

    Distributable cash per
     unit(1)(2)                  $0.1814     $0.1905     $0.2997     $0.3011
    Distributions per unit(1)    $0.1200     $0.1200     $0.2400     $0.2400
    Basic earnings per unit      $0.0876     $0.0331     $0.1170     $0.0281
    Fully diluted earnings
     (loss) per unit             $0.0876     $0.0306     $0.1170    $(0.0143)
    Number of units used in
     computing basic earnings
     per unit                 12,604,908  12,584,679  12,604,908  12,584,679
    Number of units
     outstanding used in
     computing diluted
     earnings (loss) per
     unit                     26,275,939  25,532,452  26,275,939  25,532,452

    (1) EBITDA, distributable cash per unit and distributions per unit are
        not recognized measures under generally accepted accounting
        principles (GAAP) and do not have a standardized meaning prescribed
        by GAAP. Therefore, these amounts may not be comparable to similar
        measures presented by other issuers. Management considers EBITDA and
        distributable cash to be key measures that indicate the ability of
        the Fund to meet its capital and financing commitments.
    (2) Distributable cash available, which is not a recognized measure under
        GAAP, will fluctuate on a monthly basis due to seasonal cash flows,
        sustaining capital incurred, income taxes, and interest paid. See
        "Distributable Cash" for additional commentary.
    

Trimac's revenue, including fuel surcharges, for the three-month period ended June 30, 2010 ("current period") increased by $9.4 million or 14.7 percent as compared to June 30, 2009 ("prior period"). This increase was primarily the result of a $2.3 million increase in fuel surcharge revenue, incremental revenue of $1.1 million from the March 29, 2010 acquisition of GH Trucking, and increased volumes from new and existing customers. EBITDA increased by $1.1 million or 15.3 percent over the prior period to $8.3 million. As a percentage of revenue, EBITDA was 11.3 percent which is unchanged from the prior period. Net earnings increased by $2.0 million from the prior period of $1.1 million. This was primarily as a result of higher volumes referred to above, with the corresponding increase to EBITDA and reduced depreciation due to a change in the estimated useful life of certain rolling stock.

In commenting on the results for the second quarter, Jeffrey J. McCaig, Chairman and CEO of Trimac, said:

"We are very pleased with the recovery made in the second quarter. Capacity has tightened in the market and volumes have increased. As demonstrated with our consistent EBITDA and strong balance sheet, Trimac continues to be well positioned to balance capacity and costs with current and pending business activity."

Conversion to a Corporation

Since the original announcement of the SIFT Rules in October, 2006, the board of directors of Trimac Transportation Services Inc., as administrator of the Fund, have been regularly reviewing the merits of continuing to operate Trimac under the income trust structure. It is expected that the Fund will convert to a corporate structure on or about January 1, 2011, however, no definitive conversion plan has been approved by the board of directors and trustees of the Fund. The dividend policy of the corporation will be considered and finalized at the time of approval of the conversion plan by the board and trustees.

For comments regarding management's outlook for 2010 please see Trimac's Management's Discussion and Analysis for the period ended June 30, 2010.

Financial Highlights for the Partnership

    
                                   Three months ended       Six months ended
                                         June 30                 June 30
    (millions of dollars)           2010        2009        2010        2009
    -------------------------------------------------------------------------

    Revenues
      Transportation revenue        67.3        60.2       127.4       120.5
      Fuel surcharges                6.0         3.7        11.4         8.4
                              -----------------------------------------------
                                    73.3        63.9       138.8       128.9

      Direct costs                  54.3        45.9       104.0        94.8
      Selling and
     administrative                 10.7        10.8        20.8        21.4
                              -----------------------------------------------
                              -----------------------------------------------

    EBITDA(1)                        8.3         7.2        14.0        12.7
      Depreciation net of
       gains on disposal of
       capital assets(2)             4.1         5.0         8.2        10.0
                              -----------------------------------------------

    Operating earnings               4.2         2.2         5.8         2.7
      Interest expense (net)         1.1         1.0         2.0         2.0
                              -----------------------------------------------
                              -----------------------------------------------

    Earnings before taxes            3.1         1.2         3.8         0.7
      Income tax expense               -         0.1         0.1         0.3
                              -----------------------------------------------

    Net earnings                     3.1         1.1         3.7         0.4
                              -----------------------------------------------
                              -----------------------------------------------

    As a percentage of
     revenue
    --------------------------
      Direct costs                 74.1%       71.8%       74.9%       73.5%
      Selling and
       administrative              14.6%       16.9%       15.0%       16.6%
      EBITDA(1)                    11.3%       11.3%       10.1%        9.9%
      Depreciation(2)               5.6%        7.8%        5.9%        7.8%
      Operating earnings            5.7%        3.4%        4.2%        2.1%


                                                           As at       As at
                                                         June 30,   December
    (millions of dollars)                                   2010    31, 2009
                                                        ---------------------

    Total assets                                           147.7       140.1
    Total long-term liabilities                             58.0        45.3
    

The above selected financial and operating information have been derived from, and should be read in conjunction with, the unaudited interim consolidated financial statements of the Partnership.

    
    (1) EBITDA (earnings before interest, taxes, depreciation and
        amortization) is not a recognized measure under GAAP, does not have a
        standardized meaning prescribed by GAAP and, therefore, may not be
        comparable to similar measures presented by other issuers. Management
        believes that EBITDA is a useful complementary measure of cash
        available for distribution before debt servicing expense, capital
        expenditures and income taxes.
    (2) Effective January 1, 2010 the Partnership has revised its estimate of
        useful life on certain of its trailers. The change was adopted
        prospectively and has resulted in lower depreciation expense of $0.6
        million during the current period and $1.2 million during the six
        month period ended June 30, 2010 ("current year").
    

Distributable Cash

The table below illustrates distributable cash to unitholders beginning with net cash provided by the Partnership's operations.

    
    (millions of dollars
     except unit amounts,          Three months ended       Six months ended
     certain percentages                 June 30                 June 30
     and number of units)           2010        2009        2010        2009
    -------------------------------------------------------------------------

    Net cash provided by
     operations                      5.9         8.5         5.0        13.5
    Net change in non-cash
     working capital(1)              1.2        (2.2)        6.8        (2.9)
                              -----------------------------------------------
    Cash provided by
     operations                      7.1         6.3        11.8        10.6
    Less adjustments for:
      Net sustaining capital
       expenditures (net of
       proceeds)(2)(3)              (2.2)       (0.7)       (3.3)       (1.9)
      Provision for long-term
       unfunded contractual
       operational
       obligations(4)                0.1        (0.3)          -        (0.2)
                              -----------------------------------------------
    Total estimated cash
     available for
     distribution (before
     public expenses)                5.0         5.3         8.5         8.5
    Percentage of available
     cash distributable to
     unitholders(5)                  48%         49%         48%         49%
                              -----------------------------------------------

    Cash available for
     distribution to
     unitholders (before
     public expenses)                2.4         2.6         4.1         4.2
    Public expenses(6)              (0.1)       (0.2)       (0.3)       (0.4)
                              -----------------------------------------------
    Distributable cash from
     operations(2)(7)                2.3         2.4         3.8         3.8
    Distributions declared
     and payable                     1.5         1.6         3.0         3.1

    Distributable cash per
     unit(2)(7)                   0.1814      0.1905      0.2997      0.3011
    Distributions declared
     per unit                     0.1200      0.1200      0.2400      0.2400
    Payout ratio(2)(7)             66.1%       63.0%       80.1%       79.7%

    Number of units
     outstanding              12,604,908  12,584,679  12,604,908  12,584,679

    Net capital expenditures
      Sustaining capital
       expenditures(2)               2.6         1.1         4.0         3.2
      Proceeds on disposal
       of replaced assets           (0.4)       (0.4)       (0.7)       (1.3)
                              -----------------------------------------------
      Net sustaining capital
       expenditures(2)(3)            2.2         0.7         3.3         1.9
      Growth capital
       expenditures(2)(8)            3.6         3.2         3.9         3.9
                              -----------------------------------------------
                                     5.8         3.9         7.2         5.8
                              -----------------------------------------------
                              -----------------------------------------------

    (1) Changes in non-cash operating assets and liabilities are not included
        in the calculation of distributable cash. Working capital investments
        are funded through a combination of cash flow not distributed and the
        use of credit facilities available to the Partnership.
    (2) Distributable cash from operations, sustaining capital expenditures,
        net sustaining capital expenditures, payout ratio, and growth capital
        expenditures are not measures recognized by GAAP, do not have
        standardized meanings prescribed by GAAP and may not be comparable to
        similarly named measures presented by other issuers.
    (3) Net sustaining capital expenditures refers to capital expenditures,
        net of proceeds on disposal of assets replaced, which are necessary
        to sustain current revenue levels.
    (4) Represents a provision for cash requirements relating to a long-term
        incentive plan and an executive pension liability.
    (5) Percentage is equal to the number of units outstanding of 12,604,908
        divided by fully diluted units of 26,275,939.
    (6) Represents expenses associated with the Fund's status as a reporting
        issuer.
    (7) Distributable cash available will fluctuate on a monthly basis due to
        seasonal cash flows, sustaining capital expenditures incurred, income
        taxes paid and interest costs on outstanding debt.
    (8) Cash used to fund growth capital expenditures does not affect
        distributable cash to unitholders where financing is available for
        these purposes. The Partnership funds growth capital from
        undistributed cash from operations, cash available from distributions
        on non-cash exchangeable shares and, to the extent available,
        existing lines of credit.
    

During the current period, the Partnership's cash provided by operations increased by $0.8 million and the provision for long-term unfunded executive compensation plans decreased by $0.4 million. This was offset, however, by a $1.5 million increase in net sustaining capital expenditures. The Fund's distributable cash from operations of $2.3 million in the current period was less than that recorded in the prior period by $0.1 million, as a result of its share of the aforementioned Partnership changes in cash provided by operations, sustaining capital expenditures and provisions for executive compensation plans. During the current year distributable cash from operations was $3.8 million, the same as in the six month period ended June 30, 2009 ("prior year") as increased cash provided by operations was used to support increases in net sustaining capital expenditures.

Distributions in the current period were paid using cash generated from operations including cash retained in the business relating to non-cash exchangeable shares. Due to the seasonal nature of the Partnership's business and the timing of sustaining capital purchases, the amount of distributable cash may vary from quarter to quarter. Trimac's Board of Directors approves the level of monthly distributions based upon estimated annual cash flows, less estimated cash required for debt service, cash taxes, other amounts (including sustaining capital expenditures, current expenses and provisions) and reserves to stabilize the monthly amount of distributions to unitholders as may be considered appropriate by the Board of Directors. Growth capital expenditures are funded from undistributed cash from operations, cash available from notional distributions on non-cash exchangeable shares, and, to the extent available, cash and existing lines of credit.

Distributable cash from operations is not a defined term under GAAP but is determined by the Partnership as net cash provided by operations for the period, adjusted to remove specific non-cash items, including changes in working capital, and reduced by sustaining capital expenditures, provisions for funding long-term liabilities, provisions for committed capital purchases in progress, and public costs.

Management believes that distributable cash from operations is a useful supplemental measure of performance as it provides investors with an indication of the amount of cash available for distribution to unitholders. Investors are cautioned, however, that distributable cash from operations should not be construed as an alternative to using net income as a measure of profitability or as an alternative to the statement of cash flows. In addition, the Fund's method of calculating distributable cash from operations may not be comparable to calculations used by other issuers.

Operating Results

Effective January 1, 2010, Trimac set up a separate industrial services division called National Tank Services (NTS). This division, which was previously included in the bulk trucking division, does routine repairs and maintenance and washrack services to rolling stock for both the Trimac fleet and for other non-related trucking companies. As these operations are an integral part of Trimac, it was determined that its operations should be separately reported. Prior period comparatives have been restated to present this division separately.

Revenue - Q2

    
    -------------------------------------------------------------------------
                                     Three months ended June 30
    -------------------------------------------------------------------------
    (millions of
     dollars)                   2010                          2009
    -------------------------------------------------------------------------
                               Fuel  Net Trans-              Fuel  Net Trans-
                    Total      Sur-   portation   Total      Sur-   portation
                   Revenue   charges   Revenue   Revenue   charges   Revenue
    -------------------------------------------------------------------------

    Bulk
     trucking
    ----------

    Western
     division         41.4       3.4      38.0      33.9       2.0      31.9
    Eastern
     division         26.2       2.6      23.6      24.5       1.7      22.8
    -------------------------------------------------------------------------

    Total bulk
     trucking         67.6       6.0      61.6      58.4       3.7      54.7
    -------------------------------------------------------------------------

    BPL                3.1         -       3.1       3.1         -       3.1
    -------------------------------------------------------------------------

    NTS                7.3         -       7.3       7.3         -       7.3
    less:interco.
     revenue          (4.7)        -      (4.7)     (4.9)        -      (4.9)
    -------------------------------------------------------------------------

    Other              0.0         -       0.0         -         -         -
    -------------------------------------------------------------------------

    Total revenue     73.3       6.0      67.3      63.9       3.7      60.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -----------------------------------------------------
                         Three months ended June 30
    -----------------------------------------------------
    (millions of
     dollars)         Gross Revenue        Net Revenue
    -----------------------------------------------------


                  Variance         %  Variance         %
    -----------------------------------------------------

    Bulk
     trucking
    ----------

    Western
     division          7.5     22.1%       6.1     19.1%
    Eastern
     division          1.7      6.9%       0.8      3.5%
    -----------------------------------------------------

    Total bulk
     trucking          9.2     15.8%       6.9     12.6%
    -----------------------------------------------------

    BPL                  -      0.0%         -      0.0%
    -----------------------------------------------------

    NTS                  -      0.0%         -      0.0%
    less:interco.
     revenue           0.2                 0.2
    -----------------------------------------------------

    Other              0.0                 0.0
    -----------------------------------------------------

    Total revenue      9.4     14.7%       7.1     11.8%
    -----------------------------------------------------
    -----------------------------------------------------
    

For the current period, total revenue increased by $9.4 million or 14.7 percent from the prior period. Fuel surcharges as a percentage of bulk trucking revenue totaled approximately 9.7 percent in comparison to 6.8 percent in the prior period, resulting in an increase in fuel surcharge revenue of $2.3 million. Revenue net of fuel surcharges increased by $7.1 million or 11.8 percent from the prior period. Increased revenue was primarily a result of increased volumes with existing and new customers.

The western division's revenue increased by $7.5 million or 22.1 percent. Fuel surcharge revenue was $1.4 million higher than the prior period. Revenue net of fuel surcharges increased by $6.1 million or 19.1 percent compared to the prior period. The revenue increase was due to incremental revenue of $1.1 million from the March 29, 2010 acquisition of the GH Trucking assets and the remainder was primarily due to increased volumes in all product lines except the industrial gas product line.

The eastern division's revenue increased by $1.7 million or 6.9 percent. Fuel surcharge revenue was $0.9 million higher than the prior period. Revenue net of fuel surcharges increased by $0.8 million or 3.5 percent compared to the prior period. Revenue increases came from the petroleum product line due to the addition of new business, the dry bulk product line due to increased volumes in cement hauling and the chemical product line due to increased volumes with existing customers.

Bulk Plus Logistics' (BPL) revenue remained unchanged as compared to the prior period. Revenues from increased volumes in the freight brokerage operations were mitigated by decreased revenues in the third party logistics operations.

NTS' revenue for the current period was also unchanged as compared to the prior period.

Revenue - YTD Q2

    
    -------------------------------------------------------------------------
                                     Six months ended June 30
    -------------------------------------------------------------------------
    (millions of
     dollars)                   2010                          2009
    -------------------------------------------------------------------------
                               Fuel  Net Trans-              Fuel  Net Trans-
                    Total      Sur-   portation   Total      Sur-   portation
                   Revenue   charges   Revenue   Revenue   charges   Revenue
    -------------------------------------------------------------------------

    Bulk
     trucking
    ----------

    Western
     division         77.6       6.6      71.0      70.5       5.0      65.5
    Eastern
     division         50.5       4.8      45.7      46.7       3.4      43.3
    -------------------------------------------------------------------------

    Total bulk
     trucking        128.1      11.4     116.7     117.2       8.4     108.8
    -------------------------------------------------------------------------

    BPL                5.2         -       5.2       6.4         -       6.4
    -------------------------------------------------------------------------

    NTS               14.5         -      14.5      15.3         -      15.3
    less:interco.
     revenue          (9.0)        -      (9.0)    (10.0)        -     (10.0)
    -------------------------------------------------------------------------

    Other              0.0         -       0.0         -         -         -
    -------------------------------------------------------------------------

    Total
     revenue         138.8      11.4     127.4     128.9       8.4     120.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -----------------------------------------------------
                          Six months ended June 30
    -----------------------------------------------------
    (millions of
     dollars)         Gross Revenue        Net Revenue
    -----------------------------------------------------


                  Variance         %  Variance         %
    -----------------------------------------------------

    Bulk
     trucking
    ----------

    Western
     division          7.1     10.1%       5.5      8.4%
    Eastern
     division          3.8      8.1%       2.4      5.5%
    -----------------------------------------------------

    Total bulk
     trucking         10.9      9.3%       7.9      7.3%
    -----------------------------------------------------

    BPL               (1.2)   -18.8%      (1.2)   -18.8%
    -----------------------------------------------------

    NTS               (0.8)    -5.2%      (0.8)    -5.2%
    less:interco.
     revenue           1.0                 1.0
    -----------------------------------------------------

    Other              0.0                 0.0
    -----------------------------------------------------

    Total revenue      9.9      7.7%       6.9      5.7%
    -----------------------------------------------------
    -----------------------------------------------------
    

For the current year, total revenue increased by $9.9 million or 7.7 percent from the prior year. Fuel surcharges as a percentage of bulk trucking revenue totaled approximately 9.8 percent in comparison to 7.7 percent in the prior year, resulting in an increase in fuel surcharge revenue of $3.0 million. Revenue net of fuel surcharges increased by $6.9 million or 5.7 percent from the prior year. Increased revenue was primarily a result of increased volumes with existing and new customers and pricing returning to appropriate levels.

The western division's revenue increased by $7.1 million or 10.1 percent. Fuel surcharge revenue was $1.6 million higher than the prior year. Revenue net of fuel surcharges increased by $5.5 million or 8.4 percent compared to the prior year. Increased revenue was due to incremental revenue of $1.1 million from the GH Trucking assets acquired, increased volumes and increased utility in the petroleum, woodchips, chemicals and resource commodity product lines.

The eastern division's revenue increased by $3.8 million or 8.1 percent. Fuel surcharge revenue was $1.4 million higher than the prior year. Revenue net of fuel surcharges increased by $2.4 million or 5.5 percent compared to the prior year. The increased revenues were attributable to higher revenues generated in the petroleum, dry bulk, chemical and edible product lines due to increased volumes and tightening capacity in the market.

For the current year, BPL's revenue decreased by $1.2 million or 18.8 percent. This decrease was primarily due to 2009 rate concessions and lower revenue in our third party logistics operations and lower volumes in the freight brokerage operations.

NTS' revenue for the current year decreased by $0.8 million or 5.2 percent. An increase in third party revenue of $0.2 million was offset by lower internal repairs and maintenance requirements for the western division.

EBITDA - Q2

    
    -------------------------------------------------------------------------
                                  Three months ended June 30
    -------------------------------------------------------------------------
    (millions of                                                      % Rev.
     dollars)             2010  % Rev.   2009  % Rev. Variance    %   change
    -------------------------------------------------------------------------

    Bulk trucking
    -------------

    Western division       4.8   11.6%    4.4   13.0%     0.4    9.1%  -1.4%
    Eastern division       2.5    9.5%    1.9    7.8%     0.6   31.6%   1.8%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total bulk trucking    7.3   10.8%    6.3   10.8%     1.0   15.9%   0.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BPL                    0.4   12.9%    0.5   16.1%    (0.1) -20.0%  -3.2%
    -------------------------------------------------------------------------

    NTS                    0.7    9.6%    0.7    9.6%       -    0.0%   0.0%
    -------------------------------------------------------------------------

    Other                 (0.1)          (0.3)            0.2
    -------------------------------------------------------------------------

    Total EBITDA           8.3   11.3%    7.2   11.3%     1.1   15.3%   0.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

EBITDA for the current period totaled $8.3 million, a $1.1 million or 15.3 percent increase over the prior period. The western division experienced a $0.4 million or 9.1 percent increase in the current period. The eastern division had increased EBITDA of $0.6 million or 31.6 percent. These increases were primarily the result of the increased revenue volumes. BPL's EBITDA was $0.1 million lower than in the prior period primarily due to price concessions in its third party logistics operations. NTS' EBITDA remained unchanged compared to the prior period.

EBITDA - Q2 YTD

    
    -------------------------------------------------------------------------
                                  Six months ended June 30
    -------------------------------------------------------------------------
    (millions of                                                      % Rev.
     dollars)             2010  % Rev.   2009  % Rev. Variance    %   change
    -------------------------------------------------------------------------

    Bulk trucking
    -------------

    Western division       8.7   11.2%    7.9   11.2%     0.8   10.1%   0.0%
    Eastern division       3.7    7.3%    2.8    6.0%     0.9   32.1%   1.3%
    -------------------------------------------------------------------------

    Total bulk trucking   12.4    9.7%   10.7    9.1%     1.7   15.9%   0.6%
    -------------------------------------------------------------------------

    BPL                    0.4    7.7%    1.4   21.9%    (1.0) -71.4% -14.2%
    -------------------------------------------------------------------------

    NTS                    1.2    8.3%    1.1    7.2%     0.1    9.1%   1.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Other                  0.0           (0.5)            0.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total EBITDA          14.0   10.1%   12.7    9.9%     1.3   10.2%   0.2%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

EBITDA for the current year totaled $14.0 million, a $1.3 million or 10.2 percent increase from the prior year. The western division experienced a $0.8 million or 10.1 percent increase in the period, and the eastern division was higher than prior by $0.9 million or 32.1 percent. These increases were the result of the higher revenue volumes, tighter capacity in the market and more appropriate pricing levels. BPL's EBITDA was $1.0 million or 71.4 percent lower than in the prior year-to-date period primarily due to lower revenue volumes in the freight brokerage product line and 2009 rate concessions in its third party logistics operations. NTS' EBITDA for the current year was $1.2 million or 9.1 percent over the prior year. This increase was primarily due to a reduction in direct costs.

Capital Expenditures - Q2

    
                                                           Three months ended
                                                                 June 30
    (millions of dollars)                                   2010        2009
    -------------------------------------------------------------------------

    Gross sustaining capital expenditures                    2.6         1.1
    Less: proceeds on disposal of capital assets            (0.4)       (0.4)
                                                        ---------------------
    Net sustaining capital expenditures                      2.2         0.7
    Growth capital expenditures                              3.6         3.2
                                                        ---------------------

    Net capital expenditures                                 5.8         3.9
                                                        ---------------------
                                                        ---------------------
    

The Partnership's net capital expenditures, including growth and sustaining capital, totaled $5.8 million in the current period as compared to $3.9 million in the prior period. The increase of $1.9 million compared to the prior period was due to increased net sustaining capital expenditures of $1.5 million and higher growth capital expenditures of $0.4 million. Gross sustaining capital expenditures were $1.5 million higher than the prior period which was primarily due to an increase of $1.0 million of replacement tractor and trailer expenditures and an increase of $0.5 million in washrack facility upgrades. Proceeds on disposal of capital assets remained unchanged from that recorded in the prior period. Increased growth capital expenditures were attributed to increased tractor and trailer expenditures of $1.9 million in the current period partially offset by a $1.5 million land purchase in the prior period.

Gross sustaining capital purchases of $2.6 million in the current period included replacement tractors which accounted for 28 percent of the total, trailers which accounted for 44 percent of the total, facility upgrades which accounted for 17 percent of total gross sustaining capital purchases and the balance applicable to other operating assets.

Growth capital expenditures of $3.6 million were mainly due to equipment purchases for new business awards. Growth capital purchases are funded from undistributed cash from operations, cash available from notional distributions on non-cash exchangeable shares and, to the extent required, available cash and existing lines of credit.

Capital Expenditures - YTD

    
                                                            Six months ended
                                                                 June 30
    (millions of dollars)                                   2010        2009
    -------------------------------------------------------------------------

    Gross sustaining capital expenditures                    4.0         3.2
    Less: proceeds on disposal of capital assets            (0.7)       (1.3)
                                                        ---------------------
    Net sustaining capital expenditures                      3.3         1.9
    Growth capital expenditures                              3.9         3.9
                                                        ---------------------

    Net capital expenditures                                 7.2         5.8
                                                        ---------------------
                                                        ---------------------
    

The Partnership's net capital expenditures, including growth and sustaining capital, totaled $7.2 million in the current year as compared to $5.8 million in the prior year. The increase of $1.4 million compared to the prior year was entirely due to increased net sustaining capital expenditures of $1.4 million. Gross sustaining capital expenditures increased by $0.8 million as compared to the prior year which was primarily due to an increase in replacement tractor and trailer expenditures of $0.3 million and an increase of $0.5 million of washrack facility upgrades. Proceeds on disposal of capital assets decreased by $0.6 million compared to the prior year due to fewer tractor and trailer disposals in the current year and proceeds of $0.3 million from a property sale in the prior year. Growth capital expenditures remained unchanged as compared to the prior year.

Gross sustaining capital purchases of $4.0 million in the current year included replacement tractors, trailers and facility upgrades. Growth capital expenditures of $3.9 million in the current year related primarily to equipment, facility upgrades and other operating assets.

Net annual capital expenditures relating to sustaining capital requirements will vary from year to year based on: the economic life of the capital assets; historical purchase dates; the mix of life cycles expiring in a given year; other factors affecting equipment cost; disposal proceeds of replaced assets; and annual equipment utilization. Sustaining capital purchases are funded from the Partnership's net cash provided by operations in the year, cash available from notional distributions on non-cash exchangeable shares and, thereafter, to the extent required, available credit facilities.

You are invited to join us on a conference call at 9:30 a.m. Eastern Time on Thursday, August 12, 2010. For North American participants, please dial 1-866-321-8231 or for international participants, please dial ++1-416-642-5213 at least 10 minutes prior to the start time of the call.

A playback of the call will be available starting at 1:30 p.m. Eastern Time on Thursday, August 12, 2010 until midnight August 19, 2010. To hear the playback dial 1-888-203-1112 or for international participants, please dial ++1-647-436-0148 and give the conference ID number: 6485470.

    
    Trimac Income Fund
    Consolidated Balance Sheet
    (Unaudited)
    -------------------------------------------------------------------------
    (thousands of dollars)

                                                       As at         As at
                                                      June 30,   December 31,
                                                       2010          2009
                                                             $             $
                                                  ---------------------------
    Assets

    Current assets
    Cash                                                    47           180
    Interest receivable                                    235           241
    Distributions receivable                               332           172
    Prepaid expenses                                        34            85
                                                  ---------------------------

                                                           648           678

    Investment in Trimac Transportation Services
     Limited Partnership                                61,353        63,136
    Note receivable from Trimac Transportation
     Services Inc.                                      35,719        35,438
                                                  ---------------------------
                                                  ---------------------------

                                                        97,720        99,252
                                                  ---------------------------
                                                  ---------------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities                45            60
    Due to associated companies and partnerships            36           107
    Distributions payable                                  506           504
                                                  ---------------------------

                                                           587           671

    Deferred compensation plan                             158           144
                                                  ---------------------------
                                                  ---------------------------

                                                           745           815

    Unitholders' equity                                 96,975        98,437
                                                  ---------------------------
                                                  ---------------------------

                                                        97,720        99,252
                                                  ---------------------------
                                                  ---------------------------
    

The Fund commenced business operations on February 25, 2005 and earnings of the Fund's investment in Trimac Transportation Services Limited Partnership ("Partnership") have been accounted for using the equity method of accounting since commencement. Under this method, the Fund's share of earnings of the Partnership, adjusted for the amortization of certain tangible and intangible assets arising from the use of purchase accounting is reflected in the statement of earnings of the Fund as "Share of adjusted loss of the Partnership". The results of operations of the Fund are predominately dependent on the performance of the Partnership.

    
    Trimac Income Fund
    Consolidated Statement of Earnings, Comprehensive Income and Unitholders'
    Equity
    (Unaudited)
    -------------------------------------------------------------------------
    (thousands of dollars, except per unit amounts and number of units)


                          Three months Three months  Six months   Six months
                             ended        ended        ended        ended
                            June 30,     June 30,     June 30,     June 30,
                              2010         2009         2010         2009
                           ------------------------  ------------------------
                                    $            $            $            $
    Share of adjusted
     earnings (loss) of
     the Partnership(1)           558          (90)         392         (652)
    Interest income (net)         709          707        1,408        1,389
    Administrative costs         (162)        (200)        (325)        (383)
                           ------------------------  ------------------------

    Net earnings                1,105          417        1,475          354

    Other comprehensive
     loss - share of
     Partnership other
     comprehensive loss          (190)         (72)        (193)         (47)
                           ------------------------  ------------------------

    Comprehensive income          915          345        1,282          307

    Opening unitholders'
     equity                    97,294      101,275       98,437      102,824
    Issue of additional
     units                        281            -          281            -
    Distributions declared     (1,515)      (1,510)      (3,025)      (3,021)
                           ------------------------  ------------------------

    Closing unitholders'
     equity                    96,975      100,110       96,975      100,110
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Basic earnings per
     unit(2)                   0.0876       0.0331       0.1170       0.0281

    Fully diluted earnings
     (loss) per unit(2)        0.0876       0.0306       0.1170      (0.0143)

    Number of units
     outstanding used in
     computing basic
     earnings per unit     12,604,908   12,584,679   12,604,908   12,584,679

    Number of units
     outstanding used in
     computing diluted
     earnings (loss)
     per unit              26,090,257   25,304,697   26,090,257   25,304,697
    

(1) The net earnings of the Partnership are allocated between TTSI and the Fund based on the terms of the partnership agreement. The following is a reconciliation of net earnings in the unaudited interim consolidated financial statements of the Partnership to the amount recorded by the Fund.

    
                                Three months ended          Six months ended
                                      June 30                   June 30
                                 2010         2009         2010         2009
                                    $            $            $            $
                           --------------------------------------------------
    Net earnings of the
     Partnership                3,112        1,056        3,723          373

      Add: Interest expense
       on TTSI debt included
       in Partnership
       earnings                   340          679          676        1,350
                           --------------------------------------------------
    Adjusted Partnership
     earnings                   3,452        1,735        4,399        1,723

      Less: Purchase price
       allocation
       adjustments:

      Increase in
       amortization of
       capital assets and
       loss on disposal of
       capital assets            (261)        (463)        (538)      (1,075)

      Amortization of
       intangible assets         (667)      (1,012)      (1,565)      (2,022)
                           --------------------------------------------------
    Partnership earnings
     (loss) after purchase
     price adjustments          2,524          260        2,296       (1,374)
                           --------------------------------------------------
                           --------------------------------------------------

    Share of Partnership
     earnings (loss)              558          (90)         392         (652)
                           --------------------------------------------------
                           --------------------------------------------------
    

(2) Pursuant to an investor liquidity agreement, holders of TTSI Exchangeable Shares have the right to effectively liquidate their 10,169,852 shares of TTSI and receive units in the Fund. Following the full exercise of such liquidation rights, the Fund would own 100 percent of the Partnership. The number of units used in the calculation of diluted earnings per unit assumes full liquidation at the beginning of the period. The calculation of fully diluted earnings per unit for the three month and six month periods ended June 30, 2010 has not been disclosed as it would have an anti-dilutive effect.

    
    Trimac Income Fund
    Consolidated Statement of Cash Flows
    (Unaudited)
    -------------------------------------------------------------------------
    (thousands of dollars)

                          Three months Three months  Six months   Six months
                             ended        ended        ended        ended
                            June 30,     June 30,     June 30,     June 30,
                              2010         2009         2010         2009
                           ------------------------  ------------------------
                                    $            $            $            $
    Cash provided (used)

    Operations
    Net earnings                1,105          417        1,475          354
    Add items not affecting
     cash:
      Share of adjusted
       (earnings) loss from
       the Partnership           (558)          90         (392)         652
      Distributions from
       the Partnership            392            -          392            -
      Deferred compensation
       costs                       (3)          37           14           43
                           ------------------------  ------------------------
    Cash provided by
     operations                   936          544        1,489        1,049
    Net change in non-cash
     working capital               21         (153)         (29)        (941)
                           ------------------------  ------------------------
                           ------------------------  ------------------------
    Net cash provided
     by operations                957          391        1,460          108
                           ------------------------  ------------------------
                           ------------------------  ------------------------
    Investments
    Distributions from
     the Partnership              588        1,018        1,430        2,434
                           ------------------------  ------------------------
    Cash provided by
     investing activities         588        1,018        1,430        2,434
                           ------------------------  ------------------------
    Financing
    Distributions paid         (1,513)      (1,512)      (3,023)      (3,490)
                           ------------------------  ------------------------
    Cash used in financing
     activities                (1,513)      (1,512)      (3,023)      (3,490)
                           ------------------------  ------------------------
    Increase (decrease)
     in cash                       32         (103)        (133)        (948)
    Cash, beginning of
     period                        15          125          180          970
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Cash, end of period            47           22           47           22
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Supplemental information
    Cash received from
     interest (net)               715          715        1,414        1,397
    

The financial statements included in this news release do not contain the notes to the statements. Financial statements with note disclosure are filed with securities regulators.

    
    Trimac Transportation Services Limited Partnership
    Consolidated Balance Sheet
    (Unaudited)
    -------------------------------------------------------------------------
    (thousands of dollars)

                                                       As at         As at
                                                      June 30,   December 31,
                                                       2010          2009
                                                             $             $
                                                  ---------------------------

    Assets

    Current assets
    Cash                                                     -           406
    Accounts receivable                                 33,369        28,217
    Materials and supplies                               1,430         1,389
    Due from related parties                             1,696         1,479
    Income taxes recoverable                                68             -
    Prepaid expenses                                    10,505        10,352
                                                  ---------------------------
                                                  ---------------------------
                                                        47,068        41,843

    Capital assets                                      89,765        87,482
    Intangible assets                                    2,698         2,701
    Goodwill                                             6,182         6,182
    Other                                                1,955         1,870
                                                  ---------------------------

                                                       147,668       140,078
                                                  ---------------------------
                                                  ---------------------------

    Liabilities

    Current liabilities
    Bank indebtedness                                      311           716
    Accounts payable and accrued liabilities            24,582        27,072
    Distributions payable                                1,891         1,953
    Income taxes payable                                     -            23
    Due to related parties                               1,391         1,095
    Current maturities of long-term debt                18,667        18,667
                                                  ---------------------------
                                                  ---------------------------

                                                        46,842        49,526

    Long-term debt                                      55,332        43,392
    Interest rate hedge                                    708             -
    Future income taxes                                    525           507
    Other long-term liabilities                          1,407         1,439
                                                  ---------------------------
                                                  ---------------------------

                                                       104,814        94,864

    Partnership equity                                  42,854        45,214
                                                  ---------------------------
                                                  ---------------------------

                                                       147,668       140,078
                                                  ---------------------------
                                                  ---------------------------
    

The Partnership provides bulk trucking services throughout Canada and complementary logistics services in Canada and the United States. Effective January 1, 2005, the Partnership purchased substantially all of the assets of Trimac Transportation Services Inc. ("TTSI") relating to its Canadian bulk trucking business and its North American logistics business. TTSI and certain of its subsidiaries conducted the business operations of the Partnership prior to January 1, 2005.

    
    Trimac Transportation Services Limited Partnership
    Consolidated Statement of Earnings, Comprehensive Income and Partnership
    Equity
    (Unaudited)
    -------------------------------------------------------------------------
    (thousands of dollars)

                          Three months Three months  Six months   Six months
                             ended        ended        ended        ended
                            June 30,     June 30,     June 30,     June 30,
                              2010         2009         2010         2009
                           ------------------------  ------------------------
                                    $            $            $            $

    Revenue
    Transportation revenue     67,381       60,240      127,435      120,497
    Fuel surcharges             5,993        3,693       11,412        8,411
                           ------------------------  ------------------------
                           ------------------------  ------------------------
                               73,374       63,933      138,847      128,908
                           ------------------------  ------------------------

    Operating costs and
     expenses
    Direct                     54,313       45,976      104,018       94,809
    Selling and
     administrative            10,755       10,746       20,816       21,367
    Depreciation and
     amortization               4,147        5,109        8,234       10,327
    Gain on sale of assets,
     net of losses                (51)         (84)         (72)        (274)
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Operating expense          69,164       61,747      132,996      126,229
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Operating earnings          4,210        2,186        5,851        2,679

    Interest on long-term
     debt                         964        1,001        1,873        1,985
    Other interest expense         78           22          142           45
                           ------------------------  ------------------------
                                1,042        1,023        2,015        2,030
                           ------------------------  ------------------------

    Earnings before income
     taxes                      3,168        1,163        3,836          649

    Income tax expense
    Current                        47          102           95          263
    Future                          9            5           18           13
                           ------------------------  ------------------------
                                   56          107          113          276
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Net earnings                3,112        1,056        3,723          373

    Other comprehensive loss
      Net change in
       cumulative translation
       adjustments                (30)        (289)         (40)        (189)
      Market value adjustment
       on designated hedge       (708)           -         (708)           -
                           ------------------------  ------------------------
                                 (738)        (289)        (748)        (189)
                           ------------------------  ------------------------

    Comprehensive income        2,374          767        2,975          184

    Opening partnership
     equity                    43,148       46,948       45,214       50,763
    Distributions declared     (2,668)      (3,283)      (5,335)      (6,515)
                           ------------------------  ------------------------
    Closing partnership
     equity                    42,854       44,432       42,854       44,432
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Accumulated other
     comprehensive (losses)
     income (included in
     partnership equity)

    Opening balance              (196)         364         (186)         264
    Other comprehensive loss     (738)        (289)        (748)        (189)
                           ------------------------  ------------------------

    Closing balance              (934)          75         (934)          75
                           ------------------------  ------------------------
                           ------------------------  ------------------------



    Trimac Transportation Services Limited Partnership
    Consolidated Statement of Cash Flows
    (Unaudited)
    -------------------------------------------------------------------------
    (thousands of dollars)

                          Three months Three months  Six months   Six months
                             ended        ended        ended        ended
                            June 30,     June 30,     June 30,     June 30,
                              2010         2009         2010         2009
                           ------------------------  ------------------------
                                    $            $            $            $
    Cash provided (used)

    Operations
    Net earnings                3,112        1,056        3,723          373
    Add back (deduct) items
     not affecting cash:
      Depreciation and
       amortization             4,147        5,109        8,234       10,327
      Gain on sale of
       assets, net of losses      (51)         (84)         (72)        (274)
      Future income tax
       expense                      9            5           18           13
      Other non-cash items       (108)         150         (119)         164
                           ------------------------  ------------------------
    Cash provided by
     operations                 7,109        6,236       11,784       10,603

    Net change in non-cash
     working capital           (1,189)       2,251       (6,826)       2,922
                           ------------------------  ------------------------
    Net cash provided by
     operations                 5,920        8,487        4,958       13,525
                           ------------------------  ------------------------
                           ------------------------  ------------------------
    Investments
    Purchases of capital
     assets                    (6,249)      (4,266)      (7,904)      (7,096)
    Proceeds on sale of
     capital assets               392          367          681        1,327
                           ------------------------  ------------------------
                           ------------------------  ------------------------
      Net capital
       expenditures
       delivered               (5,857)      (3,899)      (7,223)      (5,769)
    Decrease in accounts
     payable and accrued
     liabilities relating
     to investing activities     (547)      (1,555)        (941)        (210)
    Decrease in accounts
     receivable relating
     to investing activities        8            -            8            5
                           ------------------------  ------------------------
      Net cash expended on
       capital expenditures    (6,396)      (5,454)      (8,156)      (5,974)
                           ------------------------  ------------------------
    Acquisition of
     transportation business        -            -       (3,340)           -
    Other                          (4)        (173)          (6)        (108)
                           ------------------------  ------------------------

    Cash used in investing
     activities                (6,400)      (5,627)     (11,502)      (6,082)
                           ------------------------  ------------------------

    Financing
    Increase in long-term
     debt                       3,765            -       11,940          828
    Repayments of long-term
     debt                           -         (729)           -            -
    Distributions paid         (2,670)      (2,795)      (5,397)      (6,099)
                           ------------------------  ------------------------

    Cash provided by
     (used in) financing
     activities                 1,095       (3,524)       6,543       (5,271)
                           ------------------------  ------------------------

    Increase (decrease)
     in net cash                  615         (664)          (1)       2,172
    (Bank indebtedness) cash,
     beginning of period         (926)       3,217         (310)         381
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    (Bank indebtedness) cash,
     end of period               (311)       2,553         (311)       2,553
                           ------------------------  ------------------------
                           ------------------------  ------------------------

    Supplemental information
    Income taxes paid             121          296          186          961
    Interest paid                 461          346        1,935        2,087

    Net cash consists of the
     following:
      Cash                                                    -        5,479
      Bank indebtedness                                    (311)      (2,926)
                                                     ------------------------
                                                           (311)       2,553
                                                     ------------------------
                                                     ------------------------
    

The financial statements included in this news release do not contain the notes to the statements. Financial statements with note disclosure are filed with securities regulators.

SOURCE Trimac Transportation Ltd.

For further information: For further information: Edward V. Malysa, Executive Vice President & Chief Operating Officer, Trimac Transportation Services Inc., Telephone: 403-298-5100, Facsimile: 403-298-5258; Scott D. Calver, Vice President & Chief Financial Officer, Trimac Transportation Services Inc., Telephone: 403-298-5100, Facsimile: 403-298-5146; Investor Relations: investors@trimac.com

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