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Press release from CNW Group

TransForce Inc. Announces Solid 2010 Fourth Quarter and Annual Results

Thursday, February 24, 2011

TransForce Inc. Announces Solid 2010 Fourth Quarter and Annual Results16:15 EST Thursday, February 24, 20119.2% growth in fourth-quarter revenue before fuel surchargeEBITDA margin of 14.0% in the fourth quarter of 2010, up from 12.3% in 2009Fourth-quarter adjusted net income increase of 17.2%Solid financial situation to maintain TransForce's status as an active industry consolidatorMONTREAL, Feb. 24 /CNW Telbec/ - TransForce Inc. ("TransForce" or "the Company") (TSX: TFI), the leader in the Canadian transportation and logistics industry, today announced its results for the fourth quarter and full year ended December 31, 2010. As revenue continued to increase, EBITDA, the Company's most important performance metric, maintained its upward trend, reaching 14.0% of total revenue during the fourth quarter, up from 12.3% a year ago."A discipline of comprehensive cost management throughout our organization, increased geographic reach and additional value-added solutions to our growing customer base combined to generate a solid performance for TransForce in 2010. This was achieved despite a still recovering economy, which has not yet returned to pre-recession levels. Our strong financial situation allowed us to further grow our market leadership through acquisitions, culminating with the purchase announcement of Dynamex late in the fourth quarter. This latest transaction is highly strategic and is expected to be immediately accretive to TransForce's 2011 earnings," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.  Financial highlightsQuarters ended December 31 Years endedDecember 31(in millions of dollars, except per share data)20102009  20102009Total revenue539.7488.6 2,002.11,846.5Revenue before fuel surcharge494.3452.4 1,840.11,718.4EBITDA175.860.3 268.0226.5Adjusted net income220.917.8 73.246.5 Per share - diluted ($)0.220.19 0.760.52Net income (net loss)35.6(27.2) 104.610.9 Per share - diluted ($)0.37(0.29) 1.090.12 Weighted avg. number of shares outst. (basic, in thousands)95,31895,254 95,27793,0371 Earnings before interest, income taxes, depreciation, amortization, change in fair value of interest rate derivatives, goodwill impairment, remeasurement to fair value of existing interest in acquiree, gain on business acquisition and gain or loss on disposal of property, plant and equipment.2 Excluding the after-tax effect of changes in the fair value of derivatives and of items that are not in the Company's normal business.FOURTH-QUARTER RESULTSConsolidated total revenue increased 10.5% to $539.7 million. Excluding fuel surcharge, revenue rose 9.2% to $494.3 million mostly resulting from the acquisition of ATS Retail Solutions ("ATS") in November 2009 and of Speedy Heavy Hauling Inc. ("Speedy") in August 2010. Overall volume increased slightly, while pricing firmed up in the Package and Courier and Specialized Services segments.Fourth-quarter EBITDA amounted to $75.8 million, or 14.0% of total revenue, up significantly from $60.3 million, or 12.3% of total revenue, in the corresponding period a year earlier. This improvement reflects the Company's comprehensive asset optimization and cost management initiatives, as well as enhanced focus on value-added services, which more than offset the impact of a stronger year-over-year Canadian currency. TransForce also incurred non-recurring restructuring costs of $1.7 million related to employee termination in the fourth quarter of 2010.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, rose 17.2% to $20.9 million, or $0.22 per share, fully diluted, from $17.8 million, or $0.19 per share, fully diluted, last year. Net income stood at $35.6 million, or $0.37 per share, fully diluted, as opposed to a net loss of $27.2 million, or $0.29 per share, fully diluted, in the fourth quarter of 2009. Last year's results included a goodwill impairment charge of $45.0 million, or $0.47 per share, related to energy sector services.Reflecting improved profitability, cash flow from operating activities, before the net change in non-cash operating working capital, reached $66.9 million, representing an increase of 32.1% over $50.7 million a year earlier.SEGMENTED RESULTSPackage and Courier revenue before fuel surcharge totalled $108.5 million in the fourth quarter of 2010, versus $87.0 million in the prior year. The 24.7% increase is mainly attributable to the acquisition of ATS and the new contract for Canpar to supply courier services to the Government of Ontario. Reflecting improved efficiencies, segment EBITDA reached $21.4 million, up from $16.3 million a year ago.Less-Than-Truckload ("LTL") fourth-quarter revenue before fuel surcharge decreased 5.9% to $110.3 million, as weaker pricing, the appreciation of the Canadian dollar and route consolidation more than offset a slight improvement in freight volume. EBITDA was negatively impacted by pricing, unfavourable currency movements as well as non-recurring expenses of $2.0 million for employee termination and integration costs related to the consolidation of certain operating companies. As a result, EBITDA declined to $7.1 million, versus $9.6 million last year.Truckload ("TL") revenue before fuel surcharge was $150.0 million in the fourth quarter of 2010, stable compared with the corresponding period in 2009. A better fleet utilization, including a reduction of approximately 100 power units in comparison with the year-earlier period, yielded a 3.6% increase in EBITDA to $16.8 million, up from $16.2 million last year.Specialized Services fourth-quarter revenue before fuel surcharge reached $141.1 million, up from $110.8 million a year earlier. This 27.3% increase stems mainly from the acquisition of Speedy and solid internal growth in energy sector services. EBITDA rose to $24.4 million, from $14.0 million a year ago, because of the aforementioned factors as well as a better service mix in waste management operations due to increased landfill and compost processing volumes.ANNUAL RESULTSTotal revenue was $2.0 billion in 2010 compared with $1.8 billion in 2009. Excluding fuel surcharge, revenue grew 7.1% to $1.8 billion mostly due to the ATS and Speedy acquisitions. EBITDA increased 18.3% to $268.0 million, or 13.4% of total revenue, up from $226.5 million, or 12.3% of total revenue, a year earlier. Adjusted net income stood at $73.2 million, or $0.76 per share, fully diluted, versus $46.5 million, or $0.52 per share, fully diluted, in the prior year. Net income was $104.6 million, representing $1.09 per share, fully diluted, compared with $10.9 million, or $0.12 per share, fully diluted, last year. Finally, cash flow from operating activities, before the net change in non-cash operating working capital, reached $219.4 million, up from $191.2 million a year earlier.SOLID FINANCIAL POSITIONDriven by a strong cash flow generation, TransForce reduced its long-term debt by $74.0 million in 2010. As at December 31, 2010, the ratio of total long-term debt, including the current portion of long-term debt and convertible debentures, to shareholders�� equity stood at 1.04 down from 1.33 at the end of 2009. In addition, as at December 31, 2010, the Company had $262.0 million available to be drawn under its revolving facility and has used this source of funds to finance the acquisition of Dynamex.OUTLOOK"TransForce will continue its successful program of controlling costs, improving operating efficiencies, as well as protecting and improving its operating margins," commented Mr. Bédard. "While we expect the economy to improve in 2011, we believe the progress will be slight.  Our market leadership, strong financial situation and skilled workforce position us for accelerated growth in a stronger economy. The Company's highly disciplined and selective approach to acquisitions will be maintained as we enlarge our geographic footprint and increase customer services.""The Dynamex acquisition presents several opportunities going forward. Our fastest growing segment is Package and Courier and the addition of Dynamex both strengthens existing services and creates meaningful opportunities in the U.S.  With our track record of successfully integrating acquisitions, the combination of the two companies should also yield significant synergies. TransForce is poised to benefit from revenue increases and to translate this into enhanced profitability and shareholder value," concluded Mr. Bédard.CONFERENCE CALLTransForce will hold a conference call for analysts and portfolio managers on Friday, February 25, 2011 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 1-800-732-1073. A recording of the call will be available until midnight, March 4, 2011, by dialing 1-877-289-8525 or 416-640-1917 and entering passcode 4404994#.ABOUT TRANSFORCETransForce Inc. (www.transforcecompany.com) 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:Package and Courier; Less-Than-Truckload;Truckload, specialized truckload and dedicated services;Specialized Services, which includes waste management, energy sector services, logistics, fleet management and personnel 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.NON-GAAP MEASURESEBITDA and adjusted net income are financial measures not prescribed by Canadian generally accepted accounting principles ("GAAP") 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.Note to readers:  Complete audited consolidated financial statements and Management's Discussion & Analysis are available on TransForce's website at www.transforcecompany.com.For further information: Investors:Media:Alain Bédard Chairman, President and CEO TransForce Inc. (514) 331-4200 abedard@transforcecompany.com   Rick Leckner MaisonBrison (514) 731-0000 rickl@maisonbrison.com