• Revenues increased 11% to $499.5 million
• EBITDA increased 20% to $74.5 million
• Record EBITDA margin of 14.9%
• Adjusted EPS increased 71% to $0.24

MONTREAL, Oct. 28 /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 third quarter and first nine months ended September 30, 2010.  Despite continuing weak industry conditions, TransForce translated a moderate rise in revenues into greater increases in its most important performance measures such as EBITDA and adjusted net income and achieved its highest EBITDA margin in the last five years.

"The third quarter continued the trends established earlier in the year. The economic recovery is not as robust as some predicted but we kept firm control on our costs. In this difficult environment, we were pleased to see strong performance from the Package and Courier segment and the oilfield and oilsands services companies," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce Inc.  "Real improvement for the industry is slow in coming so we will maintain our highly disciplined approach which has produced good results for our shareholders."

In the third quarter, TransForce acquired substantially all the assets of Speedy Heavy Hauling, Inc. Those oilfield services assets are now part of Hemphill Speedy in the Company's Specialized Services segment.

TransForce also announced that its Package and Courier subsidiary Canpar won a minimum three-year contract to provide overnight courier services to the Government of Ontario. 

Third Quarter Results

For the three months ended September 30, 2010, TransForce reported total revenues of $499.5 million, an 11% increase over $451.4 million in the same period of 2009. Revenue excluding fuel surcharge increased 10% to $460.8 million, compared with $418.9 million a year ago.

TransForce increased operating income before depreciation by 21% to $69.2 million, compared with $57.2 million in the third quarter of 2009 as it held costs essentially flat while increasing revenue.

Third quarter EBITDA was $74.5 million, 20% higher than the $62.0 million reported a year earlier. As a percentage of revenue, EBITDA increased to 14.9% from 13.7% in the third quarter of 2009.

Adjusted net income, which excludes the after-tax effect of changes in the fair value of derivatives and of items that are not in the Company's normal business, increased by 77% to $23.2 million from $13.1 million in the third quarter of 2009. Adjusted earnings per share increased to $0.24 from $0.14 in the year-earlier period.

Cash flow from operations before net change in non-cash operating working capital was $59.4 million in the third quarter, compared with $52.8 million in the same quarter of 2009.

During the third quarter, TransForce's capital expenditures were $34.1 million. This included $21.5 million for rolling stock, $8.1 million related to properties, and $4.5 million for other equipment. The Company invested $19.3 million in the same quarter of last year.

The Company paid out a dividend of $0.10 per share during the quarter, unchanged from a year ago.

"Our diversification means that, overall, TransForce continues to improve its performance with Specialized Services adding 21% to revenues and the Package and Courier segment growing revenues by 39% from a year ago, while Truckload and Less-Than-Truckload are essentially unchanged," said Mr. Bédard. "Given industry conditions, these quarterly results are strong and we believe we can continue to improve in the future."

Results for First Nine Months

Total revenues for the nine months ended September 30, 2010 increased by 8% to $1.46 billion from $1.36 billion in the same period of 2009.  Excluding fuel surcharges, revenue was $1.35 billion compared with $1.27 billion a year ago. 

Revenue growth was stronger than the increase in operating expenses and fixed costs and general and administrative expenses in the first three quarters. This produced operating income before depreciation of $188.1 million, an 18% increase from the first nine months of 2009. 

EBITDA for the nine-month period was $192.2 million up 16% from $166.3 in the year-earlier period. EBITDA margin increased to 13.1% from 12.2% a year ago.

Adjusted net income was $52.4 million or $0.55 per share in the first nine months, compared with $28.7 million, or $0.33 per share, at the same point last year. This represents increases of 82% and 67% respectively.

For the first nine months, cash flow from operations before net change in non-cash operating working capital was $152.5 million compared with $140.6 million in the comparable period of 2009. The Company's free cash flow was $106.6 million or $1.12 per share for the nine months ended September 30, 2010. 

TransForce negotiated a new credit facility during the quarter and reduced interest expense by approximately $443,000 to $26.8 million for the first nine months. Despite incurring debt to complete acquisitions during the quarter, at September 30, 2010, TransForce's long-term debt was $704.0 million, slightly below the December 31, 2009 level.  However, long-term debt as a percentage of total capitalization at the end of the quarter was 55.01%, down from 57.03% at December 31, 2009.

TransForce paid out dividends of $0.30 per share during the first nine months, the same as a year earlier.

Third Quarter 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 periods ended September 30, 2010 on Friday, October 29, 2010, at 9:00 a.m. Eastern Time.

To participate in the conference call, investors are invited to call 1-800-920-2968.

A recording of the call will be available until midnight, November 5, 2010, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21482922.

Financial Statements

The partial financial statements for the three-month and nine-month periods ended September 30, 2010 and 2009 included below are an integral part of this news release.

For more detailed financial information, reconciliation of non-GAAP financial measures and integral financial statements, please see Management's Discussion and Analysis which can be found on SEDAR at www.sedar.com and on the Company's website www.transforce.ca.

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 oilfield & oilsand services, waste management, logistics, fleet management, and personnel services;
• 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.

CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)		As at September 30, 2010	As at December 31, 2009
ASSETS		(unaudited)	(audited)
Current assets:
	Accounts receivable	311,592	262,219
	Inventories	8,889	9,116
	Prepaid expenses	15,396	9,480
	Income tax receivable	-	751
		335,877	281,566
Property, plant and equipment		674,919	667,315
Intangible assets		179,452	146,946
Goodwill		432,520	418,951
Other assets		12,498	6,774
Future income taxes		4,758	4,104
		1,640,024	1,525,656
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Bank indebtedness	11,865	6,826
	Accounts payable and accrued liabilities	217,027	187,934
	Income tax payable	2,617	-
	Dividends payable	9,531	9,525
	Current portion of long-term debt	16,484	403,763
		257,524	608,048
Long-term debt		687,477	304,166
Asset retirement obligations		17,631	10,794
Deferred gain on sale and leaseback		8,853	-
Future income taxes		92,688	69,233
Shareholders' equity:
	Share capital	567,990	567,551
	Contributed surplus	2,470	900
	Retained earnings (Deficit)	5,391	(35,036)
		575,851	533,415
		1,640,024	1,525,656

CONSOLIDATED STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND RETAINED EARNINGS
(in thousands of dollars, except per share amounts)   (unaudited)		Three months ended Sept. 30, 2010	Three months ended Sept. 30, 2009	Nine months ended Sept. 30, 2010	Nine months ended Sept. 30, 2009
Revenue		460,751	418,901	1,345,816	1,265,912
Fuel surcharge revenue		38,707	32,451	116,594	91,986
		499,458	451,352	1,462,410	1,357,898
Expenses:
	Operating expenses	348,630	319,799	1,028,672	964,217
	Fixed costs, general and administrative expenses	81,653	74,358	245,629	234,646
Income before the following		69,175	57,195	188,109	159,035
Depreciation of property, plant and equipment		24,689	25,424	73,904	77,817
Amortization of intangible assets		7,045	4,756	20,514	14,280
Interest on long-term debt		9,672	8,249	26,769	27,212
Change in fair value of foreign exchange derivatives		(5,292)	(4,812)	(4,101)	(7,259)
Change in fair value of interest rate derivatives		2,192	(870)	3,589	(6,370)
Remeasurement to fair value of existing interest in acquiree		-	-	(16,279)	-
Gain on disposal of property, plant and equipment		(5,022)	(797)	(6,804)	(2,525)
Income before provision for income taxes		35,891	25,245	90,517	55,880
Provision for income taxes:
	Current	5,011	2,581	13,272	6,650
	Future	5,501	5,670	8,236	11,142
		10,512	8,251	21,508	17,792
Net income and comprehensive income		25,379	16,994	69,009	38,088
Deficit, beginning of period		(10,457)	(5,821)	(35,036)	(9,554)
Dividends		(9,531)	(9,525)	(28,582)	(26,886)
Retained earnings, end of period		5,391	1,648	5,391	1,648
Earnings per share:
	Basic	0.27	0.19	0.72	0.43
	Diluted	0.27	0.19	0.72	0.43
Weighted average number of shares outstanding		95,280,513	91,206,013	95,262,893	88,278,244

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars) (unaudited)		Three months ended Sept. 30, 2010	Three months ended Sept. 30, 2009	Nine months ended Sept. 30, 2010	Nine months ended Sept. 30, 2009
CASH FLOW FROM OPERATING ACTIVITIES:
Net income for the period		25,379	16,994	69,009	38,088
Non-cash items:
	Depreciation of property, plant and equipment	24,689	25,424	73,904	77,817
	Amortization of intangible assets	7,045	4,756	20,514	14,280
	Stock-based compensation	773	200	1,673	200
	Amortization of financing charges	855	390	1,635	1,170
	Future income taxes	5,501	5,670	8,236	11,142
	Gain on disposal of property, plant and equipment	(5,022)	(797)	(6,804)	(2,525)
	Remeasurement to fair value of existing interest in acquiree	-	-	(16,279)	-
	Others	174	131	569	378
		59,394	52,768	152,457	140,550
Net change in non-cash operating working capital		(5,321)	3,504	(30,419)	20,999
		54,073	56,272	122,038	161,549
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in bank advances and overdraft		(1,045)	(1,792)	5,039	(8,547)
Increase in long-term debt		561,035	-	547,808	-
Repayment of long-term debt		(542,144)	(80,625)	(562,040)	(144,687)
Dividends paid		(9,525)	(8,679)	(28,576)	(26,611)
Issuance of shares		336	47,616	336	47,616
		8,657	(43,480)	(37,433)	(132,229)
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment		(34,064)	(19,312)	(71,939)	(39,872)
Proceeds from disposal of property, plant and equipment		12,537	6,832	56,457	19,591
Business acquisitions (including bank advances net of cash)		(36,191)	138	(66,334)	(9,214)
Others		(5,012)	(450)	(2,789)	175
		(62,730)	(12,792)	(84,605)	(29,320)
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		-	-	-	-

%SEDAR: 00026947EF

For further information:

Investors:       Alain Bédard    Chairman, President and CEO     TransForce Inc.    (514) 331-4200    abedard@transforce.ca

Media: John Lute Lute & Company (416) 929-5883 jlute@luteco.com