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Press release from CNW Group

TransForce Inc. Announces 2010 First Quarter Results

Friday, April 23, 2010

TransForce Inc. Announces 2010 First Quarter Results11:17 EDT Friday, April 23, 2010 << - Revenues increase 3% to $466 million - EBITDA increases 14% to $50.7 million - EPS before a $16.3 million non-cash gain increase from $0.04 to $0.11 >> MONTREAL, April 23 /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 first quarter ended March 31, 2010. The Company improved its performance on all measures including revenues, EBITDA and cash flow."These improved results directly reflect our disciplined efforts to contain costs and increase efficiencies," said Alain B�dard, Chairman, President and Chief Executive Officer of TransForce Inc. "EBITDA is up 14% over the same period last year while cash flow is up 30%. Over the past several months, we've made significant adjustments to address the pressures of the current economic environment and these moves are clearly benefitting the Company and our shareholders."The first quarter includes a $16.3 million non-cash gain associated with the Matrec subsidiary's acquisition of the remaining interest in the Lafleche Environmental Complex. Also there was an improvement in operating performance. This resulted in net income of $26.6 million compared with $3.1 million a year ago and earnings per share this quarter of $0.28 versus $0.04 for the same period last year.First Quarter ResultsFor the three months ended March 31, 2010, TransForce reported total revenues of $466.1 million, a 3% increase over $452.4 million for the same period of 2009. Revenue excluding fuel surcharge increased 2% to $429.2 million compared with $422.2 million in the first quarter of 2009. Before the acquisition of ATS, total revenues has a 3% decrease.TransForce's operating expenses increased in line with higher revenue; however, during the quarter TransForce continued to reduce its fixed costs and general and administrative expenses.In the first quarter, EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce's financial statements) increased 14% to $50.7 million from $44.5 million in the same quarter of 2009. EBITDA as a percentage of revenue was 10.9% in the quarter, up from 9.8% for the same period in 2009. Interest expense decreased to $8.4 million from $9.9 million a year earlier as a result of lower interest rates along with the Company's continued efforts to reduce debt.TransForce generated income before income taxes of $31.2 million in the first quarter (which included the non-cash gain on business re-evaluation) compared with $4.3 million in the same quarter of 2009. Net income in the quarter was $26.6 million, or $0.28 per share, compared with $3.1 million, or $0.04 per share, in the same quarter of 2009. Cash flow from operations increased 30% to $43.5 million in the first quarter from $33.3 million a year ago.TransForce paid out a dividend of $0.10 per share during the quarter."We are encouraged by the results for the first quarter, particularly since seasonality means the first three months of the year are normally the weakest. While we saw some signs of economic improvement in the first quarter, most of the improvement was due to the actions we have taken. We do not expect to see a sustained recovery or increased volumes for our industry until later in 2010," said Mr. Bedard. "Therefore, we will keep a close eye on our customers and carefully manage our costs in line with their activity to ensure we continue to be very well positioned to leverage revenue gains into higher EBITDA, cash flow and earnings."Completed Acquisition of Lafleche Environmental ComplexIn March, TransForce announced it had acquired the 50% of Lafl�che Environmental Inc.'s landfill and environmental complex not already owned by Matrec, its waste management subsidiary. The Company first invested in the Eastern Ontario facility in 2005, when Matrec was acquired, then subsequently increased its ownership to 50% in 2008. In addition to its valuable landfill operations, the Lafleche complex provides a range of environmental services including recycling, composting, soil treatment and waste water treatment, all aimed at diverting waste from landfill. On April 8, 2010 the Ontario Power Authority (OPA) awarded a contract to Lafl�che and its partner IGRS for the production of 4.5 Mw of green power (electricity) from the methane produced by the landfill. Licensed landfill sites are increasingly rare in Ontario and the Lafleche complex is working to minimize the materials sent to landfill.First Quarter Management Conference CallTransForce's Chairman, President and Chief Executive Officer Alain B�dard, will host a conference call for investors to discuss the results of the first quarter on Monday, April 26 , 2010, at 9:00 a.m. Eastern Time.To participate in the conference call, investors are invited to call 1-800-768-2878. A recording of the call will be available until midnight May 3, 2010, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21466040.Financial StatementsThe financial statements for the periods ended March 31, 2010 and 2009 included below are an integral part of this news release.ProfileTransForce 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 & oils and 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 StatementsExcept 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 ------------------------------------------------------------------------- (in thousands of dollars) As at As at (unaudited) March 31, December 31, 2010 2009 ------------------------------------------------------------------------- ASSETS Current assets: Accounts receivable 269,528 262,219 Inventories 8,938 9,116 Prepaid expenses 16,879 9,480 Income tax receivable 840 751 ------------------------------------------------------------------------- 296,185 281,566 ------------------------------------------------------------------------- Property, plant and equipment 638,438 667,315 Intangible assets 189,463 146,946 Goodwill 428,534 418,951 Other assets 7,291 6,774 Future income taxes 4,304 4,104 ------------------------------------------------------------------------- 1,564,215 1,525,656 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank indebtedness 10,196 6,826 Accounts payable and accrued liabilities 194,901 187,934 Dividends payable 9,525 9,525 Current portion of long-term debt 394,021 403,763 ------------------------------------------------------------------------- 608,643 608,048 ------------------------------------------------------------------------- Long-term debt 296,282 304,166 Asset retirement obligations 14,514 10,794 Deferred gain on sale and leaseback 9,013 - Future income taxes 84,869 69,233 ------------------------------------------------------------------------- Shareholders' equity: Share capital 567,551 567,551 Contributed surplus 1,350 900 Deficit (18,007) (35,036) ------------------------------------------------------------------------- 550,894 533,415 ------------------------------------------------------------------------- 1,564,215 1,525,656 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND DEFICIT ------------------------------------------------------------------------- (In thousands of dollars, Three months Three months except per share amounts) ended March ended March (unaudited) 31, 2010 31, 2009 ------------------------------------------------------------------------- Revenue 429,205 422,249 Fuel surcharge revenue 36,889 30,131 ------------------------------------------------------------------------- 466,094 452,380 Expenses: Operating expenses 330,375 322,553 Fixed costs, general and administrative expenses 85,044 85,320 ------------------------------------------------------------------------- Operating income before the following 50,675 44,507 Depreciation of property, plant and equipment 24,571 26,147 Amortization of intangible assets 6,565 4,775 Interest on long-term debt 8,432 9,888 Change in fair value of interest rate swap contracts (3,159) (295) Remeasurement to fair value of existing interest in acquiree (16,279) - Gain on disposal of property, plant and equipment (684) (271) ------------------------------------------------------------------------- Income before provision for income taxes 31,229 4,263 Provision for income taxes: Current 3,020 2,076 Future 1,655 (924) ------------------------------------------------------------------------- 4,675 1,152 ------------------------------------------------------------------------- Net income and comprehensive income 26,554 3,111 Deficit, beginning of period (35,036) (9,554) Dividends (9,525) (8,679) ------------------------------------------------------------------------- Deficit, end of period (18,007) (15,122) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share: Basic 0.28 0.04 Diluted 0.28 0.04 ------------------------------------------------------------------------- Weighted average number of shares outstanding 95,253,937 86,790,097 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------------------------------------------- (in thousands of dollars) Three months Three months (unaudited) ended March ended March 31, 2010 31, 2009 ------------------------------------------------------------------------- CASH FLOW FROM OPERATING ACTIVITIES: Net income for the period 26,554 3,111 Non-cash items: Depreciation of property, plant and equipment 24,571 26,147 Amortization of intangible assets 6,565 4,775 Stock-based compensation 450 - Amortization of deferred financing charges 390 390 Future income taxes 1,655 (924) Gain on disposal of property, plant and equipment (684) (271) Remeasurement to fair value of existing interest in acquiree (16,279) - Others 233 112 ------------------------------------------------------------------------- 43,455 33,340 Net change in non-cash operating working capital (15,495) 20,157 ------------------------------------------------------------------------- 27,960 53,497 ------------------------------------------------------------------------- CASH FLOW FROM FINANCING ACTIVITIES: Increase (decrease) in bank advances and overdraft 3,370 442 Repayment of long-term debt (12,045) (13,061) Increase (decrease) in long term revolver facility (9,896) (18,794) Dividends paid (9,525) (8,679) ------------------------------------------------------------------------- (28,096) (40,092) ------------------------------------------------------------------------- CASH FLOW FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (9,797) (10,909) Proceeds from disposal of property, plant and equipment 36,055 3,487 Business acquisitions (including bank advances net of cash) (29,103) (5,741) Others 2,981 (242) ------------------------------------------------------------------------- 136 (13,405) ------------------------------------------------------------------------- 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 8,328 9,468 Income taxes 2,947 3,428 ------------------------------------------------------------------------- ------------------------------------------------------------------------- >> %SEDAR: 00026947EFFor further information: Investors: Alain B�dard, Chairman, President and CEO, TransForce Inc., (514) 331-4200, abedard@transforce.ca; Media: John Lute, Lute & Company, (416) 929-5883, jlute@luteco.com