The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

TransForce Announces Great 2012 Second Quarter Results

Friday, July 27, 2012

TransForce Announces Great 2012 Second Quarter Results07:00 EDT Friday, July 27, 2012Total revenue increase of 25% to $812.0 millionEBIT of $68.6 million, up 39% from $49.3 million last yearStrong 45% increase in adjusted net income to $37.8 million, or $0.38 per shareAgreement to extend and increase the existing credit facility with improved termsMONTREAL, July 27, 2012 /CNW Telbec/ - TransForce Inc. (TSX: TFI), a North American leader in the transportation and logistics industry, today announced its results for the second quarter and six months ended June 30, 2012."TransForce achieved a strong 39% increase in its key EBIT metric despite market conditions that resulted in flat volume and limited pricing power. Approximately 50% of the EBIT increase reflects our ongoing drive to optimize efficiency and asset utilization, while the other half is from strategic acquisitions. In Package and Courier, margins are maintaining their gradual sequential increase, as we continue to aggressively implement profit enhancement measures to return to profitability levels achieved prior to the Dynamex and Loomis Express acquisitions. Our constant focus on maximizing return on assets and discipline with regards to capacity in the Less-Than-Truckload ("LTL") and Truckload ("TL") segments continues to pay off, as margins improved substantially despite slightly declining revenue. The acquisitions in the energy sector continue to drive our strong performance in both revenue and operating profitability,"said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.     Financial highlights Quarters ended June 30, Six months ended June 30,(in millions of dollars, except per share data) 2012 2011 2012 2011Total revenue 812.0 650.8 1,600.2 1,212.1Revenue excluding fuel surcharge 725.4 581.5 1,432.9 1,090.5Income from operating activities (EBIT1) 68.6 49.3 116.1 73.7Free cash flow2 58.0 (9.8) 96.3 36.2Adjusted net income3 37.8 26.0 62.5 35.3 Per share - diluted ($) 0.38 0.27 0.63 0.37Net income for the period 34.1 26.2 64.2 41.2 Per share - diluted ($) 0.34 0.27 0.65 0.431Earnings before finance income and costs and income taxes.2Net cash from operating activities less additions to property and equipment plus proceeds from sale of property and equipment.3Excluding the after-tax effect of changes in the fair value of derivatives,net foreign exchange gain or loss, and items that are not in the Company's normal business.SECOND-QUARTER RESULTSTotal revenue increased $161.2 million, or 25%, to $812.0 million mainly as a result of the acquisitions of Loomis Express, IE Miller and Quik X. Second-quarter EBIT rose 39% year-over-year, reaching $68.6 million, or 8.5% of total revenue, up from $49.3 million, or 7.6% of total revenue in the corresponding period a year earlier. All business segments delivered a higher year-over-year EBIT in monetary terms.Adjusted net income, which excludes the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss, and items that are not in the Company's normal business, increased 45% to $37.8 million, or $0.38 per share, fully diluted, up from $26.0 million, or $0.27 per share, fully diluted, last year.Net income for the period stood at $34.1 million, or $0.34 per share, fully diluted, versus $26.2 million, or $0.27 per share, fully diluted, in the second quarter of 2011.SIX-MONTH RESULTSFor the six-month period ended June 30, 2012, total revenue reached $1.6 billion, up 32% from $1.2 billion for the same period a year earlier. EBIT rose 58% to $116.1 million, or 7.3% of total revenue, up from $73.7 million, or 6.1% of total revenue, last year. Adjusted net income was $62.5 million, or $0.63 per share, fully diluted, up 77% from $35.3 million, or $0.37 per share, fully diluted, a year earlier. Net income for the period amounted to $64.2 million, or $0.65 per share, fully diluted, versus $41.2 million, or $0.43 per share, fully diluted, for the first six months of 2011.SEGMENTED RESULTS                    (in millions of dollars) Quarters ended June 30,   Six months ended June 30,    2012   2011   2012   2011    $   $   $   $  Total revenue                 Package and Courier 294.2   225.3   580.0   374.0   Less-Than-Truckload 164.3   121.6   330.3   244.7   Truckload 160.2   162.0   310.6   315.1   Specialized Services - Energy 109.8   70.9   230.1   149.2   Specialized Services - Others 94.1   84.8   175.0   157.4   Eliminations (10.6)   (13.8)   (25.8)   (28.3)  Total 812.0   650.8   1,600.2   1,212.1                     $ % of Rev. $ % of Rev. $ % of Rev. $ % of Rev.Income from operating activities (EBIT)                 Package and Courier 20.8 7.1 16.6 7.4 34.7 6.0 25.9 6.9 Less-Than-Truckload 9.2 5.6 5.3 4.4 15.2 4.6 2.9 1.2 Truckload 14.7 9.2 12.1 7.5 23.1 7.4 17.1 5.4 Specialized Services - Energy 13.2 12.0 5.9 8.3 28.1 12.2 12.7 8.5 Specialized Services - Others 14.3 15.2 11.8 13.9 23.4 13.4 20.7 13.1 Corporate (3.6)   (2.4)   (8.4)   (5.6)  Total 68.6 8.5 49.3 7.6 116.1 7.3 73.7 6.1CASH FLOW FROM OPERATIONS REMAINS ROBUSTNet cash from operating activities totalled $77.5 million in the second quarter of 2012, while free cash flow for the period amounted to $58.0 million, or $0.61 per share. This strong cash flow generation allowed TransForce to reduce loans and borrowings by $33.4 million during the quarter. Going forward, TransForce will continue to use its solid cash flow to partially finance its disciplined acquisition strategy and further reimburse loans and borrowings.AGREEMENT TO EXTEND AND INCREASE EXISTING CREDIT FACILITIESTransForce also announced it has reached an agreement to extend its existing credit facility to 2015. The facility will be unsecured and can be extended annually. The total available amount would be increased from $650 million to $800 million and the agreement would provide more advantageous terms and covenants for TransForce. This announcement remains subject to the signature of a formal agreement, which is expected to take place over the next few days. The refinancing was carried out with a bank syndicate led by National Bank Financial, RBC Capital Markets and Bank of America Merrill Lynch in their capacity as co-lead arrangers.RE-BRANDING OF ENERGY SECTOR SERVICES COMPANIES TO TFORCE ENERGY SERVICESTransForce also announced it is harmonizing the branding of its various Energy Services sector companies. The companies formerly known as KOS Oilfield Transportation and Howard's Transport Services in Canada, as well as Hemphill-Speedy Trucking and I.E. Miller in the US, will be known as TForce Energy Services."Our Energy Services sector has evolved from a collection of individual companies with specific strengths to an integrated, multi-disciplined business unit offering extraordinary solutions to clients across North America. We have brought the best of the best together to form North America's largest and most resourceful rig moving company and set the stage for further broadening our energy service offerings," added Mr. Bédard.OUTLOOK"The economic conditions are uncertain. However, as always, our priorities are to further improve operating efficiency and asset utilization, as well as generate a strong cash flow. TransForce will remain disciplined with regards to capital utilization, while seeking to maximize return on asset. We will create further shareholder value by focussing on our fundamental objectives of optimizing the profitability of existing businesses and of recent acquisitions," concluded Mr. Bédard.CONFERENCE CALLTransForce will hold a conference call for analysts and portfolio managers on Friday, July 27, 2012 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 1-888-231-8191. A recording of the call will be available until midnight, August 3, 2012, by dialling 1-855-859-2056 or 416-849-0833 and entering passcode 93190272.ABOUT TRANSFORCETransForce Inc. is a North American leader in the transportation and logistics industry. Operating across Canada and the United States, TransForce creates value for shareholders by identifying strategic acquisitions and managing a growing network of wholly-owned, operating subsidiaries. Under the TransForce umbrella, companies benefit from corporate financial and operational resources to build their businesses and increase their efficiency. TransForce companies service the following segments:Package and Courier; Less-Than-Truckload; Truckload, which includes specialized truckload and dedicated services;Specialized Services, which includes services to the energy sector, waste management, logistics and ancillary transportation services.TransForce Inc. (TFI) is publicly traded on the Toronto Stock Exchange (TSX). For more information, visit http://www.transforcecompany.com.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-IFRS MEASURESEBIT, adjusted net income and free cash flow are financial measures not prescribed by IFRS 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: Consolidated financial statements and Management's Discussion & Analysis are available on TransForce's website at www.transforcecompany.com. SOURCE: TRANSFORCE INC.For further information: Investors:  Alain Bédard Chairman, President and CEO TransForce Inc. (514) 331-4200 abedard@transforcecompany.com  Media: Rick Leckner MaisonBrison Communications (514) 731-0000 rickl@maisonbrison.com