- Increased quarterly revenues 8% to $486.2 million
- Generated EBITDA of $65.1 million
MONTREAL, October 24, 2007- TransForce Income Fund (TSX: TIF.UN), the leader in the Canadian transportation and logistics industry, today announced results for the nine months and third quarter, ended September 30, 2007.
Despite a challenging operating environment, the Fund increased revenues by 8% to $486.2 million from $448.7 million in the third quarter of 2006. EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce’s financial statements) was $65.1 million in the quarter, consistent with $65.2 million in the same period last year. Cash flow from operating activities, before net change in non-cash working capital balances, was $50.8 million in the third quarter, compared with $57.4 million in the third quarter of 2006.
In the quarter, distributable cash from ongoing operations was $54.6 million, compared with $60.4 million in the same quarter of 2006. The Fund’s regular distribution payout ratio, or cash distributed as a percent of cash available for distribution, was 81.9% in the quarter, compared with 68.9% a year earlier.
“The disciplined application of our acquisition strategy meant we could deliver increased revenues and solid bottom line results for our unitholders while the North American industry continues to face difficult economic conditions. We have continued to add to our operations for future growth although this has meant an increase in interest expense for the shorter-term,” said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce Income Fund. “Our operations continue to adjust to a weak market. Parcel delivery has grown significantly while our Less Than Truckload segment has experienced lower volumes. In central Canada, the strength of the Canadian dollar has resulted in a continuing slowdown in the manufacturing and automotive sectors. This has lowered LTL and TL volumes while creating pricing pressures across the industry. In Western Canada, the oilfield services division is being affected by the decline in drilling activity that has worsened since the Alberta government’s announcement of possible changes to oil and gas royalties. The new royalty policy is to be announced shortly and, depending on its effect on the energy industry, we will take the appropriate action possibly including layoffs as others serving the drilling segment have done.”
TransForce increased revenues in the first nine months of 2007 to $1.447 billion, from $1.338 billion in the same period in 2006. The Fund also increased EBITDA to $181.9 million from $175.9 million in the first nine months of 2006. Cash flow from operating activities, before net change in non-cash working capital balances, was $148.1 million compared with $152.3 million in the same period of 2006.
Distributable cash from ongoing operations for the year to date up to September 30, 2007 was $155.4 million compared with $160.5 million in the same period of 2006. Total distributions declared in the first three quarters of the year were $96.3 million compared with $89.7 million in the same period of 2006. The Fund’s regular distribution payout ratio, or cash distributed as a percent of cash available for distribution, for the year-to-date is 86.1% compared with 79.4% in the same period of 2006.
“As expected, economic conditions continue to tighten as Canadian and U.S. markets adjust to the significant changes in currency values. We see the marketplace remaining challenging for the balance of 2007 and into the next year,” Mr. Bédard said. “TransForce is benefiting from its diversification across geographies and market segments as a result of our acquisition strategy, and our operating companies are adjusting to evolving market conditions. We will continue to execute our proven acquisition strategy and are well positioned to continue to create value for unitholders over the short and longer term.”
Management Conference Call
TransForce will host a conference call for investors to discuss the results for the second quarter of 2007 today, October 24 at 9:00 a.m. Eastern Time. Participating from the Fund will be Alain Bédard, Chairman, President and Chief Executive Officer, and Salvatore Vitale, Chief Financial Officer.
To participate in the teleconference, investors are invited to call 1-800-952-1797. A recording of the call will be available until midnight October 31, 2007, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21353199. Media are invited to participate in listen-only mode and to use the media contact listed below for further information.
The financial statements for the periods ended September 30, 2007 and 2006 included below are an integral part of this news release.