Trimac Announces Fourth Quarter, Year-End Results
CALGARY, March 11 /CNW/ - Trimac Income Fund (TSX Symbol TMA.UN) (the "Fund") today released the financial results of the Fund and Trimac Transportation Services Limited Partnership ("Trimac" or the "Partnership") for the fourth quarter and for the fiscal year ended December 31, 2009.
Three months ended Year ended
December 31, December 31,
Partnership 2009 2008 2009 2008
-----------------------------------------------
(millions of dollars)
Transportation revenue 60.0 66.8 241.9 273.7
Fuel surcharges 4.9 11.3 18.0 53.0
-----------------------------------------------
Total revenue 64.9 78.1 259.9 326.7
EBITDA(1) 8.3 9.8 30.1 40.6
Net earnings 1.2 3.0 5.4 13.8
Three months ended Year ended
December 31, December 31,
The Fund 2009 2008 2009 2008
-----------------------------------------------
(millions of dollars,
except per unit amounts
and numbers of units)
Distributable cash per
unit(1)(2) $0.1888 $0.2525 $0.6657 $1.0733
Distributions per unit(1) $0.1200 $0.2313 $0.4800 $0.9252
Basic earnings per unit $0.0236 $0.1088 $0.1404 $0.4690
Fully diluted earnings per
unit $0.0227 $0.1088 $0.1389 $0.4690
Weighted average number of
units used in computing
basic earnings per unit 12,584,679 12,574,520 12,584,679 12,574,520
Number of units
outstanding used in
computing diluted
earnings per unit 25,916,731 24,980,735 25,916,731 24,980,735
(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 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 year ended December 31, 2009 ("current year") decreased by $66.8 million or 20.4 percent as compared to December 31, 2008 ("prior year"). This decrease was primarily the result of a $35 million reduction in fuel surcharge revenue, business losses, price erosion and lower volumes with existing customers due to the severe economic downturn in 2009. EBITDA decreased by $10.5 million or 25.9 percent from the prior year. As a percentage of revenue EBITDA was 11.6 percent, a slight decrease of 0.8 percent from the prior year. Trimac's revenue, including fuel surcharges, for the three-month period ended December 31, 2009 ("current period") decreased by $13.2 million or 16.9 percent from the three-month period ended December 31, 2008 ("prior period"). Contributing to this decrease was a $6.4 million reduction in revenue from fuel surcharges. In addition, revenue continued to be affected by the continuation of recessionary conditions. EBITDA decreased by $1.5 million or 15.3 percent from the prior period. Expressed as a percent of revenue, EBITDA for the current period was 12.8 percent, a slight increase from the prior period percentage of 12.5. Trimac implemented various cost reduction programs during the current year to maintain EBITDA, expressed as a percentage of revenue, comparable to the prior period.
In commenting on the results for the fourth quarter, Jeffrey J. McCaig, Chairman and CEO of Trimac, said:
"Despite a challenging environment in the fourth quarter of 2009, Trimac was able to maintain a strong balance sheet and finished the year with lower debt and expanded credit facilities to take advantage of growth opportunities that may arise when the economy improves.
Trimac's distributable cash payout ratio was 72.1 percent representing a yield of 15.3 percent based on the annual weighted average share price in 2009. This allowed us to invest $8.0 million in growth capital for future earnings and at the same time maintain leverage ratios at acceptable levels."
For comments regarding management's outlook for 2010 please see Trimac's Management's Discussion and Analysis for the year ended December 31, 2009. With respect to the changes to income tax rules that become effective January 1, 2011 that will result in the taxation of distributions from most income trusts, the Fund is considering available alternatives.
Financial Highlights for the Partnership
Three months ended Year ended
December 31 December 31
-----------------------------------------------
(millions of dollars) 2009 2008 2009 2008
-------------------------------------------------------------------------
Revenues
Transportation revenue 60.0 66.8 241.9 273.7
Fuel surcharges 4.9 11.3 18.0 53.0
-----------------------------------------------
64.9 78.1 259.9 326.7
Direct costs 46.9 57.8 188.8 240.8
Selling and
administrative 9.7 10.5 41.0 45.3
-----------------------------------------------
EBITDA(1) 8.3 9.8 30.1 40.6
Depreciation net of
gains on disposal of
capital assets 5.6 5.4 20.8 21.1
-----------------------------------------------
Operating earnings 2.7 4.4 9.3 19.5
Interest expense (net) 1.2 1.2 4.1 4.9
-----------------------------------------------
Earnings before taxes 1.5 3.2 5.2 14.6
Income tax expense
(recovery)(3) 0.3 0.2 (0.2) 0.8
-----------------------------------------------
Net earnings 1.2 3.0 5.4 13.8
-----------------------------------------------
-----------------------------------------------
As a percentage of
revenue(2)
--------------------------
Direct costs 72.3% 74.0% 72.6% 73.7%
Selling and
administrative 14.9% 13.4% 15.8% 13.9%
EBITDA(1) 12.8% 12.5% 11.6% 12.4%
Depreciation 8.6% 6.9% 8.0% 6.5%
Operating earnings 4.2% 5.6% 3.6% 6.0%
As at December 31
(millions of dollars) 2009 2008
-----------------------
Total assets 140.1 152.7
Total long-term
liabilities 45.3 47.2
The above selected financial and operating information has been derived from, and should be read in conjunction with, the 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) Direct costs, selling and administrative, and depreciation, expressed
as a percentage of revenue, were impacted by significant fluctuations
in fuel surcharge revenue between the prior and current period and
the prior and current year. For additional commentary regarding these
expenses please see Trimac's Management's Discussion and Analysis for
the year ended December 31, 2009.
(3) Results in 2009 include a $0.7 million reversal of a previously
recorded future tax liability resulting from a corporate
reorganization in the third quarter.
Distributable Cash for the Partnership
The table below illustrates distributable cash to unitholders beginning with net cash provided by the Partnership's operations.
(millions of dollars Three months ended Year ended
except unit amounts, December 31 December 31
certain percentages -----------------------------------------------
and number of units) 2009 2008 2009 2008
-------------------------------------------------------------------------
Net cash provided by
operations 4.7 11.9 26.7 36.7
Net change in non-cash
working capital(1) 2.3 (3.7) (1.0) (2.4)
-----------------------------------------------
Cash provided by
operations 7.0 8.2 25.7 34.3
Less adjustments for:
Net sustaining capital
expenditures (net of
proceeds)(2)(3) (2.0) (1.3) (6.7) (6.2)
Provision for long-term
unfunded contractual
operational
obligations(4) 0.4 - (0.1) 0.3
-----------------------------------------------
Total estimated cash
available for
distribution (before
public expenses) 5.4 6.9 18.9 28.4
Percentage of available
cash distributable to
unitholders(5) 49% 50% 49% 50%
-----------------------------------------------
Cash available for
distribution to
unitholders (before
public expenses) 2.6 3.3 9.2 14.3
Public expenses(6) (0.2) (0.1) (0.8) (0.8)
-----------------------------------------------
Distributable cash
from operations(2)(7) 2.4 3.2 8.4 13.5
Distributions declared
and payable 1.5 2.9 6.1 11.6
Distributable cash per
unit(2)(7) 0.1888 0.2525 0.6657 1.0733
Distributions declared
per unit(9) 0.1200 0.2313 0.4800 0.9252
Payout ratio(2)(7) 63.6% 91.6% 72.1% 86.2%
Weighted average number
of units outstanding 12,584,679 12,574,520 12,584,679 12,574,520
Net capital expenditures
Sustaining capital
expenditures(2) 2.3 2.1 8.4 9.4
Proceeds on disposal of
replaced assets (0.3) (0.8) (1.7) (3.2)
-----------------------------------------------
Net sustaining capital
expenditures(2)(3) 2.0 1.3 6.7 6.2
Growth capital
expenditures(2)(8) 2.3 0.9 8.0 6.5
-----------------------------------------------
4.3 2.2 14.7 12.7
-----------------------------------------------
-----------------------------------------------
(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. See "Liquidity and Capital
Resources - Capital Expenditures".
(4) Represents a provision for cash requirements relating to a long-term
incentive plan and an executive pension liability.
(5) Percentage is equal to weighted average number of units outstanding
of 12,584,679 divided by fully diluted units of 25,916,731.
(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.
(9) Effective January 2009, the monthly distribution per unit was reduced
from $0.0771 to $0.04.
During the current year the Partnership's cash provided by operations decreased by $8.6 million, net sustaining capital expenditures increased by $0.5 million and the provision for long-term unfunded executive compensation plans increased by $0.4 million. The Fund's distributable cash from operations of $8.4 million in the current year was less than that recorded in the prior year by $5.1 million. This was 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 period distributable cash from operations was $2.4 million, a $0.8 million decrease compared to the prior period. The decrease was mostly due to decreased cash provided by operations and a higher level of 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 cash flow on an annual basis, 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 for the Partnership
Revenue - Full Year
-------------------------------------------------------------------------
Year ended December 31
-------------------------------------------------------------------------
(millions of
dollars) 2009 2008
-------------------------------------------------------------------------
Fuel Net Trans- Fuel Net Trans-
Total Sur- portation Total Sur- portation
Revenue charges Revenue Revenue charges Revenue
-------------------------------------------------------------------------
Bulk
trucking
----------
Western
division 149.3 10.6 138.7 197.8 35.3 162.5
Eastern
division 98.2 7.4 90.8 112.9 17.7 95.2
-------------------------------------------------------------------------
Total bulk
trucking 247.5 18.0 229.5 310.7 53.0 257.7
-------------------------------------------------------------------------
Bulk Plus
Logistics 12.4 - 12.4 15.9 - 15.9
-------------------------------------------------------------------------
Total
revenue 259.9 18.0 241.9 326.7 53.0 273.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-----------------------------------------------------
Year ended December 31
-----------------------------------------------------
(millions of
dollars) Gross Revenue Net Revenue
-----------------------------------------------------
Variance % Variance %
-----------------------------------------------------
Bulk
trucking
----------
Western
division (48.5) -24.5% (23.8) -14.6%
Eastern
division (14.7) -13.0% (4.4) -4.6%
-----------------------------------------------------
Total bulk
trucking (63.2) -20.3% (28.2) -10.9%
-----------------------------------------------------
Bulk Plus
Logistics (3.5) -22.0% (3.5) -22.0%
-----------------------------------------------------
Total
revenue (66.8) -20.4% (31.8) -11.6%
-----------------------------------------------------
-----------------------------------------------------
For the current year, total revenue decreased by $66.8 million or 20.4 percent from the prior year. Fuel surcharges as a percentage of bulk trucking revenue totalled approximately 7.3 percent in comparison to 17.1 percent in the prior year, resulting in a decrease of $35 million. Revenue net of fuel surcharges decreased by $31.8 million or 11.6 percent from the prior year, primarily as a result of business losses, price erosion, and lower volumes with existing customers.
The western division's revenue decreased by $48.5 million or 24.5 percent. Fuel surcharge revenue was $24.7 million lower than the prior year. Revenue net of fuel surcharges decreased by $23.8 million or 14.6 percent compared to the prior year. Incremental revenue of $7.3 million from the December 5, 2008 acquisition of Canamera Carriers Inc. (Canamera) was more than offset by net business losses and reduced volumes with existing customers. This reduction in volumes was primarily due to the economic recession.
The eastern division's revenue decreased by $14.7 million or 13 percent. Fuel surcharge revenue was $10.3 million lower than the prior year. Revenue net of fuel surcharges decreased by $4.4 million or 4.6 percent compared to the prior year. Increased revenue from the edible product line was offset by net business losses and decreased volumes with existing customers in the remaining product lines. These decreased volumes were primarily the result of continued economic weakness in central Canada, predominantly in the petroleum and chemical product lines.
For the current year, BPL's revenue decreased by $3.5 million or 22 percent. This decrease was primarily due to the exiting of a transload management contract in May 2008 and decreased freight brokerage volumes in Canada and the U.S.
Revenue - Q4
-------------------------------------------------------------------------
Three months ended December 31
-------------------------------------------------------------------------
(millions of
dollars) 2009 2008
-------------------------------------------------------------------------
Fuel Net Trans- Fuel Net Trans-
Total Sur- portation Total Sur- portation
Revenue charges Revenue Revenue charges Revenue
-------------------------------------------------------------------------
Bulk
trucking
----------
Western
division 36.9 2.9 34.0 47.9 8.0 39.9
Eastern
division 25.1 2.0 23.1 26.4 3.3 23.1
-------------------------------------------------------------------------
Total bulk
trucking 62.0 4.9 57.1 74.3 11.3 63.0
-------------------------------------------------------------------------
Bulk Plus
Logistics 2.9 - 2.9 3.7 - 3.7
-------------------------------------------------------------------------
Total
revenue 64.9 4.9 60.0 78.1 11.3 66.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-----------------------------------------------------
Three months ended December 31
-----------------------------------------------------
(millions of
dollars) Gross Revenue Net Revenue
-----------------------------------------------------
Variance % Variance %
-----------------------------------------------------
Bulk
trucking
----------
Western
division (11.0) -23.0% (5.9) -14.8%
Eastern
division (1.3) -4.9% - 0.0%
-----------------------------------------------------
Total bulk
trucking (12.3) -16.6% (5.9) -9.4%
-----------------------------------------------------
Bulk Plus
Logistics (0.8) -21.6% (0.8) -21.6%
-----------------------------------------------------
Total
revenue (13.2) -16.9% (6.8) -10.2%
-----------------------------------------------------
-----------------------------------------------------
For the current period, total revenue decreased by $13.2 million or 16.9 percent from the prior period. Fuel surcharges as a percentage of bulk trucking revenue totalled approximately 7.9 percent in comparison to 15.2 percent in the prior period, resulting in a decrease of $6.4 million. Trimac has fuel surcharge programs in place with substantially all of its customers. Revenue net of fuel surcharges decreased by $6.8 million or 10.2 percent from the prior period primarily due to business losses, price erosion, and lower volumes with existing customers.
The western division's revenue decreased by $11 million or 23 percent. Fuel surcharge revenue was $5.1 million lower than the prior period. Revenue net of fuel surcharges decreased by $5.9 million or 14.8 percent compared to the prior period. Incremental revenue of $2.4 million from the December 5, 2008 acquisition of Canamera was offset by net business losses and reduced volumes with existing customers. This reduction in volumes impacted the majority of the western division's product lines and was due to continued recessionary conditions in the economy.
The eastern division's revenue decreased by $1.3 million or 4.9 percent. Fuel surcharge revenue was $1.3 million lower than the prior period. Revenue net of fuel surcharges were unchanged as compared to the prior period. Revenue in the petroleum, chemical and industrial gas product lines decreased during the current period while the edibles product line increased to offset the decrease in the other product lines.
For the current period, BPL's revenue decreased by $0.8 million or 21.6 percent. This decrease was primarily due to lower freight brokerage volumes in Canada and the U.S., in addition to decreased revenue generated by the Canadian and U.S. consulting operations.
EBITDA - Full Year
-------------------------------------------------------------------------
Year ended December 31
-------------------------------------------------------------------------
(millions of % Rev.
dollars) 2009 % Rev. 2008 % Rev. Variance % change
-------------------------------------------------------------------------
Bulk trucking
-------------
Western division 20.5 13.7% 29.5 14.9% (9.0) -30.5% -1.2%
Eastern division 7.7 7.8% 8.9 7.9% (1.2) -13.5% 0.0%
-------------------------------------------------------------------------
Total bulk trucking 28.2 11.4% 38.4 12.4% (10.2) -26.6% -1.0%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Bulk Plus Logistics 2.3 18.5% 2.7 17.0% (0.4) -14.8% 1.6%
-------------------------------------------------------------------------
Other (0.4) (0.5) 0.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total EBITDA 30.1 11.6% 40.6 12.4% (10.5) -25.9% -0.8%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA for the current year totaled $30.1 million, a $10.5 million or 25.9 percent decrease from the prior year. The western division experienced a $9.0 million or 30.5 percent decrease in the current year. This decrease was primarily the result of lower revenue volumes which were mitigated by lower direct costs, primarily due to various cost reduction programs implemented to reflect lower volumes. The eastern division had reduced EBITDA of $1.2 million or 13.5 percent as lower revenue was mitigated by a reduction in direct costs, which were also due to various cost reduction programs. BPL's EBITDA was $0.4 million lower than in the prior year primarily due to the exiting of a transload management contract in May, 2008 and decreased freight brokerage volumes in Canada and the U.S.
EBITDA - Q4
-------------------------------------------------------------------------
Three months ended December 31
-------------------------------------------------------------------------
(millions of % Rev.
dollars) 2009 % Rev. 2008 % Rev. Variance % change
-------------------------------------------------------------------------
Bulk trucking
-------------
Western division 5.6 15.2% 6.8 14.2% (1.2) -17.6% 1.0%
Eastern division 2.7 10.8% 2.9 11.0% (0.2) -6.9% -0.2%
-------------------------------------------------------------------------
Total bulk trucking 8.3 13.4% 9.7 13.1% (1.4) -14.4% 0.3%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Bulk Plus Logistics 0.4 13.8% 0.7 18.9% (0.3) -42.9% -5.1%
-------------------------------------------------------------------------
Other (0.4) (0.6) 0.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total EBITDA 8.3 12.8% 9.8 12.5% (1.5) -15.3% 0.3%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA for the current period totaled $8.3 million, a $1.5 million or 15.3 percent decrease from the prior period. The western division experienced a $1.2 million or 17.6 percent decrease in the period, and the eastern division was lower than prior by $0.2 million or 6.9 percent. These decreases were primarily the result of lower revenue which was mitigated by lower direct costs, primarily due to various cost reduction programs implemented to address lower volumes. BPL's EBITDA was $0.3 million or 42.9 percent less than in the prior period as lower revenue was mitigated by a reduction in direct costs. The reduction in direct costs in the current period was the result of lower product claim costs as compared to the prior period.
Capital Expenditures
Three months ended Year ended
December 31 December 31
-----------------------------------------------
(millions of dollars) 2009 2008 2009 2008
-------------------------------------------------------------------------
Gross sustaining capital
expenditures 2.3 2.1 8.4 9.4
Less: proceeds on disposal
of capital assets (0.3) (0.8) (1.7) (3.2)
-----------------------------------------------
Net sustaining capital
expenditures 2.0 1.3 6.7 6.2
Growth capital
expenditures 2.3 0.9 8.0 6.5
-----------------------------------------------
Net capital expenditures 4.3 2.2 14.7 12.7
-----------------------------------------------
-----------------------------------------------
The Partnership's net capital expenditures, including growth and sustaining capital, totalled $14.7 million in the current year as compared to $12.7 million in the prior year. The increase of $2.0 million over the prior year was due to increased net sustaining capital expenditures of $0.5 million and higher growth capital expenditures of $1.5 million.
Gross sustaining capital purchases of $8.4 million included replacement tractors and trailers, which accounted for approximately 61 percent of the total gross sustaining capital purchases, with the balance applicable to facility upgrades, and other operating assets. Net sustaining capital expenditures were $0.5 million higher than in the prior year due to lower proceeds on disposal of capital assets. Proceeds on the disposal of capital assets were $1.5 million less than that recorded in the prior year due primarily to fewer equipment and building sales and lower selling prices in the current year.
Growth capital expenditures of $8.0 million in the current year consisted of trailer purchases that accounted for approximately 56 percent of growth capital expenditures, tractor purchases that accounted for approximately 8 percent of expenditures, a land purchase that accounted for approximately 19 percent of expenditures and the remainder for other operating assets. The trailer purchases consisted predominantly of chemical, grain and edible trailers to support future business in their product lines. 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.
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 10:00 a.m. Eastern Time on Friday, March 12, 2010. For North American participants, please dial 1-888-300-0053 or for international participants, please dial ++1-647-427-3420 at least 10 minutes prior to the start time of the call.
A playback of the call will be available starting at 1:00 p.m. Eastern Time on Friday, March 12, 2010 until midnight March 19, 2010. To hear the playback dial 1-800-642-1687 or for international participants, please dial ++1-706-645-9291 and give the conference ID number: 56682401.
Trimac Income Fund
Consolidated Balance Sheet
-------------------------------------------------------------------------
(thousands of dollars)
As at As at
December 31, December 31,
2009 2008
$ $
---------------------------
Assets
Current assets
Cash 180 970
Interest receivable 241 241
Distributions receivable 172 719
Prepaid expenses 85 105
---------------------------
678 2,035
Investment in Trimac Transportation Services
Limited Partnership 63,136 67,412
Note receivable from Trimac Transportation
Services Inc. 35,438 35,438
---------------------------
99,252 104,885
---------------------------
---------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 60 74
Due to associated companies and partnerships 107 967
Distributions payable 504 970
---------------------------
671 2,011
Deferred compensation plan 144 50
---------------------------
815 2,061
Unitholders' equity 98,437 102,824
---------------------------
99,252 104,885
---------------------------
---------------------------
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) income 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
-------------------------------------------------------------------------
(thousands of dollars, except per unit amounts and number of units)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2009 31, 2008 31, 2009 31, 2008
----------------------- -----------------------
$ $ $ $
Share of adjusted (loss)
income of the
Partnership(1) (177) 721 (235) 3,806
Interest income 714 725 2,819 2,848
Administrative costs (240) (76) (817) (756)
----------------------- -----------------------
Net earnings 297 1,370 1,767 5,898
Other comprehensive
(loss) income - share
of Partnership other
comprehensive (loss)
income (5) 149 (112) 182
----------------------- -----------------------
Comprehensive income 292 1,519 1,655 6,080
Opening unitholders'
equity 99,656 104,215 102,824 108,079
Issue of additional units - - - 297
Distributions declared (1,511) (2,910) (6,042) (11,632)
----------------------- -----------------------
Closing unitholders'
equity 98,437 102,824 98,437 102,824
----------------------- -----------------------
----------------------- -----------------------
Basic earnings per
unit(2) $ 0.0236 $ 0.1088 $ 0.1404 $ 0.4690
Fully diluted earnings
per unit(2) $ 0.0227 $ 0.1088 $ 0.1389 $ 0.4690
Weighted average number
of units outstanding
used in computing basic
earnings per unit 12,584,679 12,574,520 12,584,679 12,574,520
Number of units
outstanding used in
computing diluted
earnings per unit 25,916,731 24,980,735 25,916,731 24,980,735
(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 recorded in the
consolidated financial statements of the Partnership to the amount
recorded by the Fund.
Three months ended Year ended
December 31, December 31,
2009 2008 2009 2008
$ $ $ $
-----------------------------------------------
Net earnings of the
Partnership 1,290 2,961 5,448 13,736
Add: Interest expense
on TTSI debt included
in Partnership
earnings 344 686 2,227 3,600
-------------------------------------------------------------------------
Adjusted Partnership
earnings 1,634 3,647 7,675 17,336
Less: Purchase price
allocation adjustments:
Increase in amortization
of capital assets and
loss on disposal of
capital assets (489) (575) (2,036) (2,318)
Amortization of
intangible assets (1,009) (1,006) (4,042) (4,039)
-------------------------------------------------------------------------
Adjusted Partnership
earnings after purchase
price adjustments 136 2,066 1,597 10,979
-----------------------------------------------
-----------------------------------------------
Share of adjusted
Partnership (loss)
earnings (177) 721 (235) 3,806
-----------------------------------------------
-----------------------------------------------
(2) Pursuant to an investor liquidity agreement, holders of TTSI
Exchangeable Shares have the right to effectively liquidate their
10,230,538 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 calculated amount of fully diluted
earnings per unit for the three month periods ended December 31, 2008
and for the year ended December 31, 2008 have not been reported as
they would have an anti-dilutive effect. The amount disclosed for
these periods as fully diluted earnings per unit is therefore equal
to the amount disclosed for basic earnings per unit.
Trimac Income Fund
Consolidated Statement of Cash Flows
-------------------------------------------------------------------------
(thousands of dollars)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2009 31, 2008 31, 2009 31, 2008
----------------------- -----------------------
$ $ $ $
Cash provided (used)
Operations
Net earnings 297 1,370 1,767 5,898
Add items not affecting
cash:
Share of adjusted loss
(income) from the
Partnership 177 (721) 235 (3,806)
Distributions from the
Partnership - 721 - 3,806
Deferred compensation
costs 26 (2) 94 50
----------------------- -----------------------
Cash provided by
operations 500 1,368 2,096 5,948
Net change in non-cash
working capital 66 33 (854) 369
----------------------- -----------------------
Net cash provided by
operations 566 1,401 1,242 6,317
----------------------- -----------------------
Investments
Distributions from the
Partnership 1,025 1,683 4,476 5,878
----------------------- -----------------------
Cash provided by
investing activities 1,025 1,683 4,476 5,878
----------------------- -----------------------
Financing
Distributions paid (1,510) (2,910) (6,508) (11,629)
----------------------- -----------------------
Cash used in financing
activities (1,510) (2,910) (6,508) (11,629)
----------------------- -----------------------
Increase (decrease)
in cash 81 174 (790) 566
Cash, beginning of period 99 796 970 404
----------------------- -----------------------
Cash, end of period 180 970 180 970
----------------------- -----------------------
----------------------- -----------------------
Supplemental information
Cash received from
interest (net) 706 717 2,819 2,845
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
-------------------------------------------------------------------------
(thousands of dollars)
As at As at
December 31, December 31,
2009 2008
$ $
---------------------------
Assets
Current assets
Cash 406 2,350
Accounts receivable 28,217 31,350
Materials and supplies 1,389 1,626
Due from related parties 1,479 3,088
Income taxes recoverable - -
Prepaid expenses 10,352 10,315
---------------------------
41,843 48,729
Capital assets 87,482 92,708
Intangible assets 2,701 3,495
Goodwill 6,182 6,182
Other 1,870 1,622
---------------------------
140,078 152,736
---------------------------
---------------------------
Liabilities
Current liabilities
Bank indebtedness 716 1,969
Accounts payable and accrued liabilities 27,072 29,282
Distributions payable 1,953 3,080
Income taxes payable 23 570
Due to related parties 1,095 1,223
Current maturities of long-term debt 18,667 18,666
---------------------------
49,526 54,790
Long-term debt 43,392 44,723
Future income taxes 507 1,207
Other long-term liabilities 1,439 1,253
---------------------------
94,864 101,973
Partnership equity 45,214 50,763
---------------------------
140,078 152,736
---------------------------
---------------------------
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
-------------------------------------------------------------------------
(thousands of dollars)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2009 31, 2008 31, 2009 31, 2008
----------------------- -----------------------
$ $ $ $
Revenue
Transportation revenue 59,959 66,784 241,849 273,685
Fuel surcharges 4,922 11,278 18,025 52,985
----------------------- -----------------------
64,881 78,062 259,874 326,670
----------------------- -----------------------
Operating costs and
expenses
Direct 46,873 57,761 188,741 240,778
Selling and
administrative 9,733 10,535 41,006 45,333
Depreciation and
amortization 5,537 5,442 21,018 21,880
Loss (gain) on sale of
assets, net 26 (56) (234) (774)
----------------------- -----------------------
Operating expense 62,169 73,682 250,531 307,217
----------------------- -----------------------
Operating earnings 2,712 4,380 9,343 19,453
Interest on long-term
debt 710 1,096 3,583 4,783
Other interest expense 483 72 537 114
----------------------- -----------------------
1,193 1,168 4,120 4,897
----------------------- -----------------------
Earnings before income
taxes 1,519 3,212 5,223 14,556
Income tax expense
(recovery)
Current 80 239 447 820
Future 149 12 (672) -
----------------------- -----------------------
229 251 (225) 820
----------------------- -----------------------
Net earnings 1,290 2,961 5,448 13,736
Other comprehensive
(loss) income - net
change in cumulative
translation adjustments (32) 439 (450) 533
----------------------- -----------------------
Comprehensive income 1,258 3,400 4,998 14,269
Opening partnership
equity 44,675 51,921 50,763 55,186
Distributions declared (719) (4,558) (10,547) (18,692)
----------------------- -----------------------
Closing partnership
equity 45,214 50,763 45,214 50,763
----------------------- -----------------------
----------------------- -----------------------
Accumulated other
comprehensive (losses)
income (included in
partnership equity)
-------------------------
Opening balance (154) (175) 264 (269)
Other comprehensive
(loss) income (32) 439 (450) 533
----------------------- -----------------------
Closing balance (186) 264 (186) 264
----------------------- -----------------------
----------------------- -----------------------
Trimac Transportation Services Limited Partnership
Consolidated Statement of Cash Flows
-------------------------------------------------------------------------
(thousands of dollars)
Three Three
months months Year Year
ended ended ended ended
December December December December
31, 2009 31, 2008 31, 2009 31, 2008
----------------------- -----------------------
$ $ $ $
Cash provided (used)
Operations
Net earnings 1,290 2,961 5,448 13,736
Add back (deduct) items
not affecting cash:
Depreciation and
amortization 5,537 5,442 21,018 21,880
Loss (gain) on sale
of assets, net 26 (56) (234) (774)
Future income tax
expense (recovery) 149 12 (672) -
Other non-cash items (32) (228) 108 (585)
----------------------- -----------------------
Cash provided by
operations 6,970 8,131 25,668 34,257
Net change in non-cash
working capital (2,248) 3,661 1,039 2,397
----------------------- -----------------------
Net cash provided by
operations 4,722 11,792 26,707 36,654
----------------------- -----------------------
Investments
Purchases of capital
assets (4,473) (3,038) (16,321) (15,912)
Proceeds on sale of
capital assets 229 898 1,660 3,235
----------------------- -----------------------
Net capital
expenditures
delivered (4,244) (2,140) (14,661) (12,677)
Increase (decrease) in
accounts payable and
accrued liabilities
relating to investing
activities 780 (36) 778 (563)
Decrease in accounts
receivable relating
to investing activities - (1) 5 9
----------------------- -----------------------
Net cash expended on
capital expenditures (3,464) (2,177) (13,878) (13,231)
----------------------- -----------------------
Acquisition of
transportation
businesses - net of cash - (3,218) - (3,218)
Other (29) 154 (516) 228
----------------------- -----------------------
Cash used in investing
activities (3,493) (5,241) (14,394) (16,221)
----------------------- -----------------------
Financing
Increase in long-term debt 593 (1,386) 17,337 21,052
Repayments of long-term
debt - (1,824) (18,667) (20,491)
Distributions paid (2,834) (4,858) (11,674) (20,375)
----------------------- -----------------------
Cash used in financing
activities (2,241) (8,068) (13,004) (19,814)
----------------------- -----------------------
(Decrease) increase in
cash (1,012) (1,517) (691) 619
Cash (bank indebtedness),
beginning of period 702 1,898 381 (238)
----------------------- -----------------------
(Bank indebtedness) cash,
end of period (310) 381 (310) 381
----------------------- -----------------------
----------------------- -----------------------
Supplemental information
Income taxes paid 34 93 994 375
Interest paid 579 461 4,422 5,349
(Bank indebtedness) cash
consists of the following:
Cash 406 2,350
Bank indebtedness (716) (1,969)
-----------------------
(310) 381
-----------------------
-----------------------
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.
For further information: Jeffrey J. McCaig, Chairman & Chief Executive Officer, Trimac Transportation Services Inc., Telephone: (403) 298-5100, Facsimile: (403) 298-5258; Edward V. Malysa, Executive Vice President & Chief Operating Officer, Trimac Transportation Services Inc., Telephone: (403) 298-5100, Facsimile: (403) 298-5146; Investor Relations: [email protected]
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