- Total revenue of $981 million, up 27% from $775 million last year
- EBIT1 of $82.8 million, up 40% year-over-year; EBIT margin rises to 8.4%
- Adjusted net income3 of $53.7 million or $0.53 per diluted share, up 51%
- Strong free cash flow2 of $104.6 million, or $1.06 per share
MONTREAL, Oct. 30, 2014 /CNW Telbec/ - TransForce Inc. (TSX: TFI), a North American leader in the transportation and logistics industry, today announced its results for the third quarter ended September 30, 2014.
"TransForce recorded a solid year-over-year growth during the third quarter essentially driven by our disciplined acquisition strategy. Acquisitions led to revenue and EBIT improvements in all operating segments, while relentless efforts to increase the return on capital employed once again resulted in a strong free cash flow generation. In a difficult economy, the TransForce team is proficient at creating shareholder value by exercising constant discipline in adapting supply to demand across all market segments in keeping with the Company's guiding principles and core values," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.
|Financial highlights||Quarters ended Sept. 30,||Nine months ended Sept. 30,|
|(in millions of dollars, except per share data)||2014||2013||2014||2013|
|Revenue excluding fuel surcharge||856.8||694.4||2,315.7||2,075.4|
|Income from operating activities (EBIT1,4)||82.8||59.0||195.5||165.8|
|Free cash flow2||104.6||53.0||237.1||164.7|
|Adjusted net income3,4||53.7||35.5||129.2||100.3|
|Per share - diluted ($)||0.53||0.37||1.29||1.04|
|Per share - diluted ($)||0.41||0.45||0.84||0.94|
|Weighted average shares outstanding ('000s)||98,627||92,177||98,438||92,527|
|1||Earnings before finance income and costs and income taxes.|
|2||Net cash from operating activities less additions to property and equipment plus proceeds from sale of property and equipment and assets held for sale.|
|3||Excluding the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss, and items not in the Company's normal business.|
|4||Before $27.8 million goodwill impairment (after tax $25.5 million) recorded in Q2 2014.|
"In the Package & Courier ("P&C") segment, we are gaining momentum in E-Commerce delivery solutions, while gradually replacing unprofitable customers with value-added business to improve returns. The regional rationalization in the Less-Than-Truckload ("LTL") segment continued in the third quarter with the disposal of three properties, but more needs to be realized in order to generate satisfactory returns. We are pleased with the progress in our Truckload ("TL") segment, as existing operations generated revenue growth and improved their EBIT margin by one percentage point, while Transport America, acquired in July, contributed strongly to the revenue increase," added Mr. Bédard.
Total revenue increased $206 million, or 27%, to $981 million, mostly reflecting a total contribution of $232 million from acquisitions realized in the previous twelve months. Excluding acquisitions, revenue declined due to the phase-out of rig moving activities and the sale of a business unit.
EBIT1 amounted to $82.8 million, or 8.4% of total revenue, in the third quarter of 2014, up 40% from $59.0 million, or 7.6% of total revenue, in the corresponding period a year earlier. This increase reflects a $13.1 million contribution from acquisitions as well as additional gains of $6.0 million on the disposition of properties. With the exception of the LTL segment, where EBIT decreased by $2.4 million on lower volume, all other segments recorded operating improvements from existing operations amounting to $10.3 million. During the quarter, the Company recorded $4.7 million of acquisition-related costs in connection with the Transport America transaction and the offer to purchase all Contrans shares, of which $3.2 million impacted EBIT.
Adjusted net income, which excludes the after-tax effect of changes in the fair value of derivatives, net of foreign exchange gain or loss, transaction costs on acquisitions and accelerated accretion on debentures' conversion, increased 51% to $53.7 million, or $0.53 per share, fully diluted, up from $35.5 million last year, or $0.37 per share, fully diluted. Net income for the third quarter of 2014 amounted to $41.5 million, or $0.41 per share, fully diluted, versus $44.0 million, or $0.45 per share, fully diluted, in the third quarter of 2013.
Driven by a higher cash flow from operating activities, improved working capital and the disposal of assets, TransForce concluded the third quarter with a strong free cash flow generation of $104.6 million, or $1.06 per share. This free cash flow was mainly used to partially finance the acquisition of Transport America and to repurchase common shares ($4.7 million) during the quarter.
Reflecting the contribution from acquisitions, total revenue rose 14% in the first nine months of 2014, reaching $2.64 billion versus $2.32 billion in the first nine months of 2013. EBIT1,4 reached $195.5 million, or 7.4% of total revenue, up from $165.8 million, or 7.2% of total revenue, last year. Adjusted net income amounted to $129.2 million, or $1.29 per share, fully diluted, up 29% from $100.3 million, or $1.04 per share, fully diluted, a year ago, while net income was $84.8 million, or $0.84 per share, fully diluted, compared with $89.4 million, or $0.94 per share, fully diluted, last year. Finally, free cash flow stood at $237.1 million, equivalent to $2.41 per share, compared with $164.7 million, or $1.78 per share, in the prior year.
|(in millions of dollars)||Quarters ended September 30,||Nine months ended September 30,|
|Package and Courier||332.0||315.8||962.0||948.2|
|$||% of Rev.||$||% of Rev.||$||% of Rev.||$||% of Rev.|
|Income from operating activities (EBIT)|
|Package and Courier||24.4||7.3||20.7||6.5||64.7||6.7||61.4||6.5|
Note: due to rounding, totals may differ slightly from the sum of individual segmented revenue or EBIT.
"As the Canadian economy is only modestly improving, with more signs of vitality in the United States, TransForce must continue to focus on maximizing profitability. We are making steady progress in certain segments, as evidenced by higher margins from existing operations, but more has to be done in terms of efficiency improvement, asset rationalization and acquisition optimization to generate superior returns to the benefit of our shareholders. Precise execution on these aspects will maximize cash flow generation that, in the short term, will be used to reimburse debt," concluded Mr. Bédard.
TransForce will hold a conference call for analysts and portfolio managers on Friday, October 31, 2014 at 9:00 a.m. Eastern Time, to discuss these results. Business media are also invited to listen to the call. Interested parties can join the call by dialling 1-888-231-8191. A recording of the call will be available until midnight, November 7, 2014, by dialling 1-855-859-2056 or 416-849-0833 and entering passcode 1891204.
TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce creates value for shareholders by identifying strategic acquisitions and managing a growing network of wholly-owned operating subsidiaries. Under the TransForce umbrella, companies benefit from corporate financial and operational resources to build their businesses and increase their efficiency. TransForce companies service the following segments:
- Package and Courier;
- Waste Management;
- Logistics and Other Services.
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.
EBIT, adjusted net income, adjusted earnings per share and free cash flow are financial measures not prescribed by IFRS and are not likely to be comparable to similar measures presented by other issuers. Management considers these to be useful information to assist investors in evaluating the Company's profitability, liquidity and ability to generate funds to finance its operations. These measures do not have any standardize meaning under IFRS and could be calculated differently by other companies. These measures should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.
Note to readers: Consolidated financial statements and Management's Discussion & Analysis are available on TransForce's website at www.transforcecompany.com.
SOURCE: TransForce Inc.
For further information:
Chairman, President and CEO