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Press release from CNW Group

TransForce Announces 2013 First Quarter Results

Thursday, April 18, 2013

TransForce Announces 2013 First Quarter Results

17:16 EDT Thursday, April 18, 2013
  • Total revenue of $749.7 million, compared with $788.2 million last year
  • EBIT margin stable at 5.9% of total revenue
  • Adjusted EPS of $0.26 per share, up from $0.25 per share a year ago
  • Further profitability improvement in the Package and Courier segment

MONTREAL, April 18, 2013 /CNW Telbec/ - TransForce Inc. (TSX: TFI), a North American leader in the transportation and logistics industry, today announced its results for the first quarter ended March 31, 2013.

"First-quarter results reflect persistent softness in certain key sectors of the North American economy and more normal seasonal demand patterns in 2013 compared with last year. Still, our constant drive to maximize efficiency allowed for stable EBIT margin and adjusted net income, key performance metrics for TransForce, during the quarter," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.

 
Financial highlights Quarters ended March 31, 
(in millions of dollars, except per share data)             2013   2012 
Total revenue 749.7   788.2
Revenue excluding fuel surcharge 671.0   707.5
Income from operating activities (EBIT1) 44.6   47.4 
Free cash flow2 26.5   38.3 
Adjusted net income3 24.4   24.7 
  Per share - diluted ($) 0.26   0.25 
Net income 18.9   30.2 
  Per share - diluted ($) 0.20   0.31 
Weighted average shares outstanding ('000s) 92,842   95,589

1 Earnings before finance income and costs and income taxes.
2 Net cash from operating activities less additions to property and equipment plus proceeds from sale of property and equipment.
3 Excluding the after-tax effect of changes in the fair value of derivatives and net foreign exchange gain or loss.

"On the operating front, Package and Courier margins further improved driven by continuous efficiency gains that more than offset a loss at Velocity Express, while overall volume of existing operations was marginally lower. Market conditions remain challenging in the Less-Than-Truckload ("LTL") market and the higher year-over-year EBIT stemmed from a gain on the disposal of a property, as we remain proactive in implementing measures to rationalize our asset base. While lower revenue in the Truckload ("TL") segment reflects our constant focus on optimizing supply management, margins held steady excluding a gain on asset disposal last year. Finally, as anticipated, services to the Energy sector revenue were impacted by lower year-over-year drilling activity," added Mr. Bédard.

FIRST-QUARTER RESULTS
Total revenue decreased $38.4 million, or 4.9%, to $749.7 million mainly due to lower revenue in services to the Energy sector and in LTL, partially offset by a revenue contribution of $24.9 million from Velocity Express, acquired on February 1, 2013. First-quarter EBIT amounted to $44.6 million, or 5.9% of total revenue, versus $47.4 million, or 6.0% of total revenue in the corresponding period a year earlier.  

Adjusted net income, which excludes the after-tax effect of changes in the fair value of derivatives and net foreign exchange gain or loss, was $24.4 million compared with $24.7 million last year. Considering the repurchase of 3.4 million common shares in the last twelve months, adjusted EPS, fully diluted, increased to $0.26 from $0.25 a year ago. Net income for the period stood at $18.9 million, or $0.20 per share, fully diluted, versus $30.2 million, or $0.31 per share, fully diluted, in the first quarter of 2012.

Net cash from operating activities stood at $20.6 million, versus $47.5 million a year earlier, mainly due to a $21.4 million increase in income tax paid during the first quarter of 2013. Free cash flow for the first quarter of 2013 amounted to $26.5 million, or $0.29 per share. Reflecting its objective to maximize return on assets, TransForce further disposed of excess assets, resulting in the sale of property, plant and equipment totalling $21.7 million during the quarter.

SEGMENTED RESULTS

 
(in millions of dollars)  Quarters ended March 31, 
  2013   2012  
  $   $  
Total revenue        
  Package and Courier 304.1   285.8  
  Less-Than-Truckload 148.9   166.0  
  Truckload 141.0   150.4  
  Specialized Services - Energy 91.9   120.4  
  Specialized Services - Others 76.8     80.8  
  Eliminations (13.1)   (15.2)  
Total 749.7   788.2  
         
  $ % of Rev. $ % of Rev.
Income from operating activities (EBIT)        
  Package and Courier 17.2 5.7 13.9  4.8 
  Less-Than-Truckload 12.1 8.1 6.0  3.6 
  Truckload 6.5 4.6 8.4  5.6 
  Specialized Services - Energy 3.3 3.6 14.9  12.4 
  Specialized Services - Others 10.4 13.5 9.1  11.2 
  Corporate (5.0)   (4.8)  
Total 44.6 5.9 47.4  6.0 

Note: due to rounding, totals may differ slightly from the sum of individual segmented revenue or EBIT.

OUTLOOK
"As we do not see significant improvement in business conditions before the end of the year, TransForce will continue to focus on unlocking synergies from significant acquisitions made since 2011 and on maximizing return on assets in all segments. Achieving optimal efficiencies will further drive cash flow generation, which we will use to carry out our selective acquisition strategy, invest in cutting edge technology, repurchase shares and reimburse long-term debt. Above all, execution of TransForce's operating strategy will remain firmly guided by the fundamental principle that all initiatives must create long-term value for shareholders," concluded Mr. Bédard.

CONFERENCE CALL
TransForce will hold a conference call for analysts and portfolio managers on Friday, April 19, 2013 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, April 26, 2013, by dialling 1-855-859-2056 or 416-849-0833 and entering passcode 32411765.

ABOUT TRANSFORCE
TransForce 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 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.

NON-IFRS MEASURES
EBIT, adjusted profit 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

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