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Press release from CNW Group

TransForce Announces 2013 Fourth Quarter and Year-End Results

Wednesday, February 26, 2014

TransForce Announces 2013 Fourth Quarter and Year-End Results

17:05 EST Wednesday, February 26, 2014
  • 2013 total revenue of $3.1 billion, stable compared with last year
  • Adjusted net income of $120.0 million, or $1.26 per share, in 2013
  • Free cash flow of $224.9 million in 2013, or $2.43 per share, including $60.2 million in Q4
  • Debt reduction of $48.4 million during Q4

MONTREAL, Feb. 26, 2014 /CNW Telbec/ -TransForce Inc. (TSX: TFI) (OTCQX: TFIFF), a North American leader in the transportation and logistics industry, today announced its results for the fourth quarter and fiscal year ended December 31, 2013.

"Although the fourth quarter produced lower year-over-year results, factors affecting profitability were mostly related to harsh weather. In addition, initiatives to reduce our costs and our asset base in several divisions resulted in additional expenses of about $7.0 million. According to our plan, we proceeded with further facility rationalization and headcount reduction in the Package and Courier ("P&C") and Less-Than-Truckload ("LTL") segments. In theTruckload ("TL") segment, fundamentals remained weak and we continued to proactively adjust supply to demand. In the Energy sector, Canadian oil sands related activity and EL Farmer's pipe hauling business in the U.S. produced satisfactory results, but rig moving activity remained anaemic and we took aggressive measures to reduce our asset base in this business. Finally, waste management operations had a very profitable quarter driven by composting activities at the Lafleche environmental complex," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.

"At the end of 2013, we shut down our Canadian rig moving operations, given low prospects for generating a satisfactory return on assets in the foreseeable future, and we further scaled down corresponding U.S. activities due to much lower revenue. This situation resulted in a non-cash $63.1 million intangible asset impairment charge. We are orderly disposing of assets and proceeds will be used to invest in projects that generate a superior return and a solid cash flow," added Mr. Bédard.

Financial highlights Quarters ended Dec. 31, Years ended Dec. 31,
(in millions of dollars, except per share data)  2013   2012   2013   2012
Total revenue 792.6   778.4   3,109.7   3,140.3
Revenue excluding fuel surcharge 708.0   696.6   2,783.3   2,812.5
Income from operating activities (EBIT1,4) 43.5   64.1   209.4   247.1
Free cash flow2 60.2   80.2   224.9   256.0
Adjusted net income3 21.5   37.8   120.0   143.9
  Per share - diluted ($) 0.23   0.39   1.26   1.45
Net income4 12.3   36.1   101.7   154.2
  Per share - diluted ($) 0.13   0.37   1.08   1.55
Weighted average shares outstanding ('000s) 92,777   93,173   92,589   94,757
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, net foreign exchange gain or loss, and items not in the Company's normal business.
4 Before $63.1 million impairment of intangible assets (after tax $39.3 million)

Total revenue increased by 1.8%, to $792.6 million due to higher revenue in the P&C segment as a result of the Company's enhanced same-day delivery network in the U.S. Fourth-quarter EBIT before intangible asset impairment amounted to $43.5 million, or 5.5% of total revenue, versus $64.1 million, or 8.2% of total revenue in the same period a year earlier. The reduction reflects increased operating expenses due to harsh winter weather in December, expenses related to facility closures and severance in the P&C segment and LTL segments, as well as a loss in the Energy sector due to the winding down of Canadian rig moving operations and the scaling down of corresponding U.S. activities.

Adjusted net income, which excludes the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss and the asset impairment charge, was $21.5 million, or $0.23 per share, fully diluted, versus $37.8 million, or $0.39 per share, fully diluted, last year. Excluding the impairment charge, net income for the period was $12.3 million, or $0.13 per share, fully diluted, compared with $36.1 million, or $0.37 per share, fully diluted, in the fourth quarter of 2012. A solid free cash flow of $60.2 million, or $0.65 per share, allowed TransForce to reduce long-term debt by $48.4 million in the fourth quarter of 2013.

For the fiscal year ended December 31, 2013, total revenue reached $3.1 billion, stable compared with last year. EBIT before asset impairment amounted to $209.4 million, or 6.7% of total revenue, compared with $247.1 million, or 7.9% of total revenue, last year.Adjusted net income totalled $120.0 million, or $1.26 per share, fully diluted, versus $143.9 million, or $1.45 per share, fully diluted, in the prior year. Net income before the impairment charge was $101.7 million, or $1.08 per share, fully diluted, down from $154.2 million, or $1.55 per share, fully diluted, a year ago.

Free cash flow remained solid at $224.9 million, or $2.43 per share, including proceeds from the sale of property and equipment of $64.1 million, as TransForce continues to optimize its asset base to maximize return. Free cash flow was mainly used to reimburse debt ($100.6 million), finance business acquisitions ($57.3 million), pay dividends ($48.1 million)and repurchase common shares ($19.2 million) during the year.


(in millions of dollars) Quarters ended Dec. 31,     Years ended Dec. 31,  
  2013   2012     2013   2012  
  $   $     $   $  
Total revenue                  
  Package and Courier 329.2   302.9     1,276.5   1,170,1  
  Less-Than-Truckload 161.0   162.8     637.4   652.8  
  Truckload 143.5   150.9     576.4   609.2  
  Specialized Services - Energy 89.4   96.6     347.3   425.8  
  Specialized Services - Others 84.9   84.6     333.7   344.1  
  Eliminations (15.4)   (19.4)     (61.7)   (61.7)  
Total 792.6   778.4     3,109.6   3,140.3  
  $ % of Rev. $ % of Rev.   $ % of Rev. $ % of Rev.
Income from operating activities (EBIT)                  
  Package and Courier 18.8 5.7 26.3 8.7   80.1 6.3 78.3 6.7
  Less-Than-Truckload 1.9 1.2 10.7 6.6   38.9 6.1 36.7 5.6
  Truckload 9.9 6.9 12.5 8.3   39.5 6.9 50.5 8.3
  Specialized Services - Energy (0.8) (0.9) 7.1 7.4   8.4 2.4 47.9 11.2
  Specialized Services - Others 16.4 19.3 12.8 15.1   55.8 16.7 51.0 14.8
  Corporate (2.8)   (5.3.)     (13.3)   (17.2)  
Total 43.5 5.5 64.1 8.2   209.4 6.7 247.1 7.9
Note: due to rounding, totals may differ slightly from the sum of individual segmented revenue or EBIT.

1 Before impairment of intangible assets.

"Looking ahead, TransForce will benefit from greater density following the acquisitions of Clarke Transport and Clarke Road Transport, as well as from the pending acquisition of Vitran. However, we expect market conditions to remain mostly unchanged in 2014. As this challenging environment limits organic growth, TransForce will pursue its ongoing initiatives to streamline its asset base and cost structure. More efficient networks in the P&C and LTL segments should also produce a higher return on assets and a strong free cash flow generation that will be applied to debt reduction and to carry out our disciplined acquisition strategy. Through a firm commitment to its operating principles and precise execution of its proven strategy, TransForce will remain a lasting source of value creation for its shareholders," concluded Mr. Bédard.   

TransForce will hold a conference call for analysts and portfolio managers on Thursday, February 27, 2014 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 on March 6, 2014, by dialling 1-855-859-2056 or 416-849-0833 and entering passcode 40215223.

TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. 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 and logistics services.

TransForce Inc. is publicly traded on the Toronto Stock Exchange (TSX: TFI) and the OTCQX marketplace in the U.S. (OTCQX: TFIFF). For more information, visit

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.

EBIT, adjusted net income, adjusted earnings per share 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. These measures do not have any standardize meaning under IFRS and could be calculated differently by other companies. These measures should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.

Note to readers:  Consolidated financial statements and Management's Discussion & Analysis are available on TransForce's website at

SOURCE TransForce Inc.

For further information:

Alain Bédard
Chairman, President and CEO
TransForce Inc.
(514) 331-4200

Rick Leckner
MaisonBrison Communications
(514) 731-0000

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