TransForce Income Fund Announces Further Growth In Financial Results as well as New Financing Agreement
- Increased quarterly revenue 18% to $454 million
- Increased EBITDA 26.3% to $67.2 million
- Increased cash flow 28.4% to $57.4 million
- Two new acquisitions in Western Canada concluded
Montreal, October 24, 2006 — TransForce Income Fund (TSX: TIF.UN), the leader in the
Canadian transportation and logistics industry, today announced significant increases in all key
financial measures for the third quarter and nine months of 2006 which ended September 30.
TransForce increased its total revenue for the third quarter to $454 million from $384 million in the
same period last year. EBITDA (Earnings before interest, taxes, depreciation and amortization),
equivalent to operating income on TransForce’s financial statements, was $67.2 million for the
quarter, an increase of 26.3% from $53.2 million for the same period last year. Cash flow from
operating activities for the latest quarter increased by 28.4% to $57.4 million from $44.7 million in
the third quarter of 2005.
Distributable cash from ongoing operations was $60.4 million for the most recent quarter, compared
with $45.8 million in the third quarter of 2005. Net capital expenditure in the quarter was $11.1
million compared with $12.0 million a year earlier (excluding the $33.2 million in proceeds from the
disposal of a discontinued business and $9.3 million related to the sale of the Calgary terminal). In
the most recent quarter, scheduled debt repayment was $3.7 million compared with $4.1 million a
year ago. This resulted in distributable cash of $45.7 million for the quarter, compared with $32.5
million, excluding the asset sale proceeds, in the third quarter of 2005. Regular distributions from
ongoing operations to unitholders and dividends to tracking shareholders declared in the third
quarter of 2006 were $30.7 million compared with $22.8 million for the comparable period last
year. TransForce also paid a special distribution of $39.1 million in the year-ago quarter The
Fund’s payout ratio, or cash distributed as a percent of cash earned, was 68.9% in the third quarter
of 2006 compared with 76.9% for regular distributions and 89.1% for total regular and special
distributions in the same period of 2005.
“TransForce continues to deliver growth in revenues, EBITDA, cash flow and cash available for
distribution. This growth is the result of improvements at our existing operations and our ongoing
strategic acquisitions,” said Alain Bédard, Chairman of the Board, President and CEO of TransForce
Income Fund. “Unitholders are benefiting from strong operating management and our
diversification across different lines of businesses, different regions and different client bases.”
During the quarter, TransForce announced the acquisition of Byers Transportation System Inc., a
less-than-truckload carrier headquartered in Edmonton, Alberta. Byers is expected to add
approximately $70 million in annual revenue to TransForce, and serves more than 1,500
communities in Alberta, British Columbia, Northwest Territories and the Yukon, as well as through
partner connections to the United States. The Fund also acquired of Howard’s Transport Services
Inc. of Stony Plain, Alberta, a specialized oilfield services company founded in 1979 that moves a
variety of heavy equipment, including drill rigs. It generates annual revenues of approximately $20 million.
Subsequent to the end of the third quarter, TransForce announced the sale of the non-core
hazardous waste operations of Services Matrec Inc. for cash proceeds of $31.8 million. As a result,
the Fund also announced a special distribution of 0.0155 additional units per currently outstanding
unit in addition to its regular monthly cash distribution of $0.1275 per unit . Both distributions are
payable November 15, 2006 to unitholders and Tracking Share unitholders of record on October 31, 2006.
New Financing Agreement
TransForce is pleased to announce that it has concluded a new longer-term and more flexible
The new agreement, led by National Bank Financial, consists of a revolving facility in the amount of
C$250 million with a term of four years and a term facility of C$160 million with a term of seven
years. The new agreement also provides for an additional C$190 million in financing.
The new facilities provide more flexible conditions and will allow additional borrowing capacity to
repay certain outstanding secured indebtedness and to continue to pursue acquisitions. The new
credit facilities will be secured by the Fund’s accounts receivable and rolling stock.
“This agreement creates a new financial foundation for TransForce with terms and conditions that
are beneficial for our unitholders,” said Mr. Bédard. “We are particularly pleased that it
demonstrates confidence in the Fund’s long-term operations and financial condition.”
For the first nine months of 2006, TransForce generated revenue of $1.4 billion, compared with $1.1
billion for the same period of 2005.
EBITDA, equivalent to operating income, was $180.5 million for the first nine months of 2006, an
increase of 28.6% from the $140.4 million reported a year earlier. Cash flow from operating
activities was $152.3 million in the first three quarters of 2006, compared with $117.7 million for
the same period in 2005.
Distributable cash from ongoing operations for the first nine months of 2006 was $160.5 million, an
increase of 29.9% over the $123.6 million for the same period last year. Net capital expenditures
over the period were $31.6 million compared with $22.8 million a year earlier (excluding the $33.2
million in proceeds from the disposal of a discontinued business and $9.3 million related to the sale
of the Calgary terminal). Scheduled debt repayment totaled $13.3 million in the period compared
with $11.1 million for the first nine months of 2005. The result was total distributable cash of
$115.6 million for the period, compared with $92.4 million a year earlier, excluding the asset sale
proceeds. Total distributions declared over the first nine months of 2006 were $89.7 million
compared with $65.1 million, which excluded the $39.1 million special distribution. The Fund’s
payout ratio for the year to date is 79.4%, compared with 77.1% for regular distributions and
83.8% for total distributions in the first nine months of 2005.
Management Conference Call
TransForce will host a conference call for investors to discuss the results for the third quarter and
first nine months on October 24, 2006 at 9:30 am Eastern Time. Participating from the Fund will
be Alain Bédard, Chairman, President and Chief Executive Officer, and Salvatore Vitale Chief
To participate in the teleconference, investors are invited to call 1-800-732-9509. A recording of
the call will be available until midnight November 1, 2006 by dialing 1 800 558 5253 or 416 626
4100 and entering passcode 21306817. Media are invited to participate in listen-only mode and to
use the media contact listed below for further information.
The attached financial statements for the quarters ended September 30, 2005 and 2006 are an
integral part of this news release.