TransForce Inc. Announces 2009 Fourth Quarter and Annual Results
- Annual revenues of $1.8 billion, down 18% - Annual costs down 18% - EBITDA margin maintained above 12% - Total debt reduced by $100 million
MONTREAL, Feb. 25 /CNW Telbec/ - TransForce Inc. ("TransForce" or "the Company") (TSX: TFI - T), the leader in the Canadian transportation and logistics industry, today announced its results for the fourth quarter and full year, ended December 31, 2009.
"Continuing weak economic activity affected revenues in the fourth quarter. Our success in reducing costs maintained EBITDA margin at 12.3%," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce Inc. "We began our cost-reduction effort in 2007 in anticipation of the general economic slowdown and have remained focused on our controls since then. The economy is now expected to recover over the coming months and TransForce is well-positioned to turn higher activity into enhanced results for our shareholders."
Fourth Quarter Results
For the three months ended December 31, 2009, TransForce reported total revenues of $488.6 million, a 10.3% decrease from $544.5 million in the same period of 2008. Revenue excluding fuel surcharge decreased 6.8% to $452.4 million. The year-over-year decrease in revenue is mainly the result of the continuing low economic activity and its effect on volume of shipments.
TransForce's continued focus on efficiency reduced operating expenses and fixed costs, general and administrative expenses by 9.1% to $427.7 million in the quarter from $470.7 million a year earlier.
In the fourth quarter, EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce's financial statements) decreased 18.4% to $60.3 million from $73.8 million in the same quarter of 2008. EBITDA as a percentage of revenue ("EBITDA margin") was 12.3% in the quarter, down somewhat from 13.6% in the fourth quarter of 2008 but consistent with previous quarters in 2009.
Interest expense decreased to $7.8 million from $11.3 million a year earlier, primarily as a result of TransForce's continuing significant reduction of debt as well as lower interest rates.
At December 31, 2009, the Company recognized a goodwill impairment of $45.0 million, or $0.47 per share, ("non-recurring charge") in the oilfield services group of the Specialized Services segment. A write-down of goodwill is a non-cash charge on the consolidated statement of income and has no effect on TransForce's cash flows or consolidated EBITDA.
TransForce generated an income before income taxes and the non-recurring charge of $21.5 million in the fourth quarter compared with $18.5 million in the same quarter of 2008.
Net income before the non-recurring charge in the quarter was $17.8 million, or $0.19 per share, compared with $14.8 million, or $0.17 per share, in the same quarter of 2008. The Company's net loss for the quarter was $27.2 million, or $0.29 per share.
Cash flow from operations, before net change in non-cash operating working capital, was $50.7 million, an increase from $48.0 million in the fourth quarter of 2008.
TransForce paid out a dividend of $0.10 per share during the quarter.
"While some of our businesses are growing, such as the Matrec waste management operation, and others stayed stable, such as ICS and Canpar in the Package and Courier segment, for most of the Company, volumes remain low in every part of the country. Decreased demand for Truckload services tended to be less important than previous quarter, while the profitability decreased in the higher-cost Less-Than-Truckload segment due to the overcapacity in this industry resulting in price pressures, particularly in Western Canada where revenue in the oilfield segment has been hard hit as well. We have no control over volume, but we have responded well in adjusting our costs promptly. " said Mr. Bédard. "We have seen some signs of renewed activity but, overall, we expect the operating environment in 2010 to be only slightly better than 2009 with increases in the latter months. We are committed to our disciplined approach to managing costs now and when the economy recovers."
Completed Acquisition of ATS Andlauer Retail Solutions Division
In November, TransForce announced it had completed its previously announced agreement to acquire the Retail Solutions Division of ATS Andlauer Transportation Services Limited Partnership. The acquired division generates approximately $120 million in annual revenues and employs a total of 447 employees as well as 165 owner-operators. Its results are included in the Package and Courier segment.
Annual Results
For the full year ended December 31, 2009, total revenue decreased 18% to $1.8 billion from $2.3 billion in 2008. Revenue excluding fuel surcharge decreased 13% to $1.7 billion from $2.0 billion in the previous year.
TransForce's reduced its operating expenses and fixed costs, general and administrative expenses ("costs") by the same percentage as its revenue declined. The Company cut these costs by 18% to $1.6 billion for 2009 from $2.0 billion a year earlier.
EBITDA for 2009 was $226.5 million, a 19% decrease from $280.0 million in 2008. The Company's EBITDA margin for the year was virtually unchanged from the previous year at 12.3%.
Interest expense fell to $35.0 million from more than $46.6 million in 2008. Earnings before income taxes and the non-recurring charge were $77.3 million for 2009, compared with $99.2 million in the previous year.
Before the non-recurring charge taken in the fourth quarter, net income was $55.9 million or $0.62 per share for 2009 compared with $79.7 million, or $0.92 per share, a year earlier. The Company's net income for 2009 was $10.9 million, or $0.12 per share.
Cash flow from operations, before net change in non-cash operating working capital, was $191.2 million compared with $218.7 million in the prior year.
The Company paid out dividends of $0.40 per share in 2009.
TransForce continued to pay down debt during 2009, reducing it by approximately $100 million and bringing debt as percentage of total capitalization to 57% as of December 31, 2009 from more than 61% at the end of the previous year.
"The appreciable cash flow generated in 2009 has been judiciously used for the equipment, the dividends and our long-term debt. The aggressive debt reduction not only gives TransForce greater financial flexibility for the future, we believe it adds value for shareholders today - the equivalent of $1.00 per share in increased enterprise value," said Mr. Bédard. "Over the year, our management team, supported by our people, has done an outstanding job being consistent and using their own experience with our systems to control costs and maintain margins during this period of low volumes and I thank them for their dedicated efforts"
Fourth Quarter and Annual Results Management Conference Call
TransForce's Chairman, President and Chief Executive Officer Alain Bédard will host a conference call for investors to discuss the results of the fourth quarter and full year of 2009 on Thursday, February 25, 2010, at 9:00 a.m. Eastern Time.
To participate in the conference call, investors are invited to call 1-888-222-4213. A recording of the call will be available until midnight March 4, 2010, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21456986.
Financial Statements
The financial statements for the periods ended December 31, 2009 and 2008 included below are an integral part of this news release.
Profile
TransForce Inc. (www.transforce.ca) is the leader in Canada's transportation and logistics industry. Headquartered in Montreal, Quebec, TransForce creates value for shareholders through managing and investing in a growing network of wholly-owned, operating subsidiaries. TransForce provides a comprehensive and unique combination of capabilities, resources and geographical coverage in both domestic and trans-border markets. Its companies currently operate in four well-defined business segments:
- Less-Than-Truckload; - Package and Courier; - Specialized Services, which includes its ancillary transportation services such as logistics, fleet management & personnel services; oilfield & oilsand services, and waste management; - Truckload, which includes specialized truckload and dedicated services.
TransForce Inc. shares are listed on the Toronto Stock Exchange under the symbol TFI.
Forward-Looking Statements
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of TransForce. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for TransForce's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.
For further details, please see the Financial Statements below. The Financial Statements and Management's Discussion and Analysis can also be found on SEDAR at www.sedar.com and on the Company's website www.transforce.ca.
CONSOLIDATED BALANCE SHEETS ------------------------------------------------------------------------- As at As at December 31, 2009 December 31, 2008 (in thousands of dollars) (audited) (audited) ------------------------------------------------------------------------- ASSETS Current assets Accounts receivable 262,219 302,801 Inventories 9,116 11,296 Prepaid expenses 9,480 14,285 Income tax receivable 751 519 Future income taxes - 1,666 ------------------------------------------------------------------------- 281,566 330,567 Property, plant and equipment 667,315 715,261 Goodwill 418,951 435,851 Intangible assets 146,946 132,124 Other assets 6,774 6,258 Future income taxes 4,104 1,846 ------------------------------------------------------------------------- 1,525,656 1,621,907 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Bank indebtedness 6,826 12,517 Accounts payable and accrued liabilities 187,934 218,763 Dividends payable 9,525 9,250 Current portion of long-term debt 403,763 69,028 ------------------------------------------------------------------------- 608,048 309,558 Long-term debt 304,166 738,986 Asset retirement obligations 10,794 8,204 Future income taxes 69,233 55,309 Shareholders' equity Share capital 567,551 519,404 Contributed surplus 900 - Deficit (35,036) (9,554) ------------------------------------------------------------------------- 533,415 509,850 ------------------------------------------------------------------------- 1,525,656 1,621,907 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME ------------------------------------------------------------------------- (Three months: unaudited) Three months ended Year ended December 31, December 31, (In thousands of dollars, except per share amounts) 2009 2008 2009 2008 ------------------------------------------------------------------------- Revenue 452,445 485,244 1,718,357 1,980,543 Fuel surcharge revenue 36,183 59,255 128,169 281,386 ------------------------------------------------------------------------- 488,628 544,499 1,846,526 2,261,929 Expenses: Operating expenses 351,872 384,859 1,308,830 1,629,234 Fixed costs, general and administrative expenses 75,806 85,801 310,252 343,847 Incentive compensation plan 700 - 900 8,885 ------------------------------------------------------------------------- Operating income before the following 60,250 73,839 226,544 279,963 Depreciation of property, plant and equipment 24,740 27,457 102,557 104,826 Amortization of intangible assets 5,765 5,047 20,045 18,180 Interest on long-term debt 7,784 11,261 34,996 46,597 Change in fair value of interest rate swap contracts 824 11,715 (5,546) 13,840 Loss (gain) on disposal of business 15 - (119) - Gain on disposal of property, plant and equipment (338) (91) (2,729) (2,657) ------------------------------------------------------------------------- Income before the following 21,460 18,450 77,340 99,177 Goodwill impairment 45,000 - 45,000 - ------------------------------------------------------------------------- Income (loss) before provision for income taxes (23,540) 18,450 32,340 99,177 Provision for income taxes: Current 2,405 3,167 9,055 11,003 Future 1,214 483 12,356 8,496 ------------------------------------------------------------------------- 3,619 3,650 21,411 19,499 ------------------------------------------------------------------------- Net income (loss) and comprehensive income (27,159) 14,800 10,929 79,678 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share: Basic (0.29) 0.17 0.12 0.92 Diluted (0.29) 0.17 0.12 0.92 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of shares outstanding 95,253,937 86,790,097 90,036,501 86,467,788 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (DEFICIT) ------------------------------------------------------------------------- (Three months: unaudited) Three months ended Year ended December 31, December 31, (in thousands of dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- Retained earnings (deficit), beginning of period 1,648 (15,675) (9,554) (15,146) Net income (loss) for the period (27,159) 14,800 10,929 79,678 Distributions declared to unitholders - - - (43,541) Dividends (9,525) (8,679) (36,411) (27,279) Incentive compensation plan - - - (3,266) ------------------------------------------------------------------------- Deficit, end of period (35,036) (9,554) (35,036) (9,554) ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------------------------------------------- (Three months: unaudited) Three months ended Year ended December 31, December 31, (in thousands of dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- CASH FLOW FROM OPERATING ACTIVITIES: Net income (loss) for the period (27,159) 14,800 10,929 79,678 Non-cash items: Depreciation of property, plant and equipment 24,740 27,457 102,557 104,826 Amortization of intangible assets 5,765 5,047 20,045 18,180 Incentive compensation plan 700 - 900 8,885 Purchase of units held by the fund for the incentive plan - - - (400) Amortization of deferred financing charges 390 390 1,560 1,344 Future income taxes 1,214 483 12,356 8,496 Loss (gain) on disposal of business 15 - (119) - Gain on disposal of property, plant and equipment (338) (91) (2,729) (2,657) Goodwill impairment 45,000 - 45,000 - Others 357 (36) 735 360 ------------------------------------------------------------------------- 50,684 48,050 191,234 218,712 Net change in non-cash operating working capital (2,427) 39,145 18,572 (11,140) ------------------------------------------------------------------------- 48,257 87,195 209,806 207,572 ------------------------------------------------------------------------- CASH FLOW FROM FINANCING ACTIVITIES: Increase (decrease) in bank advances and overdraft 2,856 3,540 (5,691) 3,436 Increase in long-term debt 950 (208) 950 97,720 Repayment of long-term debt (9,493) (12,234) (85,122) (84,140) Increase (decrease) in long term revolver facility 42,040 852 (27,018) 21,013 Cash distributions paid to unitholders - - - (53,216) Dividends paid (9,525) (8,679) (36,136) (20,220) Issuance of shares - - 47,616 - ------------------------------------------------------------------------- 26,828 (16,729) (105,401) (35,407) ------------------------------------------------------------------------- CASH FLOW FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (20,150) (35,236) (60,022) (100,685) Proceeds from disposal of property, plant and equipment 3,494 6,904 23,085 24,167 Business acquisitions (including bank advances net of cash) (57,881) (40,846) (67,095) (93,794) Proceeds from disposal of business 101 - 1,154 - Others (649) (1,288) (1,527) (1,853) ------------------------------------------------------------------------- (75,085) (70,466) (104,405) (172,165) ------------------------------------------------------------------------- Net change in cash and cash equivalent during the period - - - - Cash and cash equivalent, beginning of the period - - - - ------------------------------------------------------------------------- Cash and cash equivalent, end of the period - - - - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplemental cash flow information: Cash paid during the period for: Interest 8,283 11,429 34,941 46,134 Income taxes 3,816 7,860 10,395 16,277 ------------------------------------------------------------------------- -------------------------------------------------------------------------
%SEDAR: 00026947EF
For further information: Investors: Alain Bédard, Chairman, President and CEO, TransForce Inc., (514) 331-4200, [email protected]; Media: John Lute, Lute & Company, (416) 929-5883, [email protected]
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