TransForce Inc. Reports Strong Growth in Second Quarter Results
- Increased revenues by 20% to a record $595.6 million
- Increased EBITDA by 18% to $75.6 million before non-recurring items
- Increased pre-tax earnings 17% to $33.7 million before non-recurring items
- Increased earnings after tax 11% to $29.2 million before non-recurring items
- Completed conversion to corporate structure
Montreal, July 29, 2008 – TransForce Inc. (TSX: TFI - T), the leader in the Canadian
transportation and logistics industry, today announced significant growth in its key results for the
second quarter of 2008, ended June 30,
“Everyone at TransForce can be proud of our performance in the latest quarter,” said Alain Bédard,
Chairman, President and Chief Executive Officer of TransForce. “The difficulties facing our industry
are well known – from rising fuel costs and a high dollar to the slowdown in Canadian
manufacturing exports. Despite this challenging economic environment, our people were able to
maintain and grow the contribution from existing operations while we added more value for
shareholders through acquisitions.”
Second Quarter Results: Before Non-Recurring Items
In completing its conversion to a corporate structure on May 14, 2008 and the related termination
of its Incentive Plan, TransForce incurred certain one-time expenses in the second quarter totalling
$8.7 million pre-tax and $9.9 million after tax. TransForce is now taxed as a corporation. These
expenses are discussed in the Company’s Q2 08 MD&A. Accordingly, some results from the second
quarter of 2008 are reported both before and after including these non-recurring items.
In the quarter, TransForce delivered significant year-over-year increases across key financial
For the three months ended June 30, the Company increased revenues by 20% to a quarterly
record of $595.6 million, from $495.7 million in the same period of 2007. This increase was the
result of significant acquisitions, which contributed $48.3 million in new revenues. However our
existing businesses also grew revenues despite the difficult operating environment.
Before non-recurring items related to the conversion, TransForce increased second quarter EBITDA
by 18% to another new record of $75.6 million from $64.1 million a year ago. (EBITDA is earnings
before interest, taxes, depreciation and amortization and equivalent to operating income on
TransForce’s financial statements). The record high EBITDA was also the result of both acquisitions
and organic growth.
TransForce increased earnings both before and after taxes, in the second quarter. Earnings before
taxes rose by 17% to $33.7 million from $28.7 million a year earlier. Earnings after taxes increased
by 11% to $29.2 million from $26.3 million in the second quarter of 2007.
In the second quarter, TransForce increased earnings per share from continuing operations,
excluding non-recurring items, to $0.34 per share from $0.31 per share a year earlier.
“At a time when many businesses have been shrinking due to low demand, we are very pleased to
be able to report record revenues and strong bottom line growth in the second quarter,” said Mr.
Bédard. “Acquisitions contributed to our growth as expected from our established strategy. But
what is remarkable is that our existing businesses were able to generate growth. Our Package and
Courier segment was particularly strong as was the Specialized Services segment.”
Mr. Bédard added: “The strong results generated for shareholders in the latest quarter are the direct
result of TransForce’s ability to align technology, efficient processes, and the extraordinary efforts
and discipline of our management and employees in the face of the most difficult conditions our
industry has faced in many years. I have always said we have some of the best people in our
industry. It is when times are tough that the best prove themselves. On behalf of the Board and
TransForce shareholders, I thank the people of TransForce for their outstanding work.”
Second Quarter Results: After Non-Recurring Items
Including non-recurring items related to the conversion, quarterly EBITDA increased to $66.9
million from $64.1 million a year earlier. Second quarter earnings, before taxes, were $24.9 million
compared with $28.7 million in the same quarter of 2007. Earnings after taxes were $19.3 million
compared with $26.3 million in the same quarter last year. Second quarter earnings per share from
continuing operations were $0.22 compared with $0.31 a year ago.
Year-to-Date Results: Before Non-Recurring Items
While industry conditions were more difficult in the first half of 2008 than a year earlier, TransForce
improved it key performance measures in the first six months of this year.
TransForce increased revenues in the first half of 2008 by 16.8% to $1.1 billion from $960.4 million
in the first half of 2007.
Excluding non-recurring items, the Company also increased EBITDA to $132.5 million in the first six
months, up by 13.4% from $116.8 million in the first half of 2007.
Earnings before taxes increased by 3.4% to $51.1 million for the first half of the year from $49.4
million a year ago. Earnings after taxes also increased by 2.4% to $48.3 million from $47.2 million
for the first half of last year.
Earnings per share totaled $0.56 in 2008 compared with $0.55 per share in 2007.
Year-to-Date Results: After Non-Recurring Items
EBITDA, including non-recurring items, increased by 6% to $123.8 million in the first half of this
year, from $116.8 million a year ago. Earnings before taxes for the first half of 2008 were $42.4
million, compared with $49.4 million for the first six months of 2007. Earnings after taxes for the
first two quarters of 2008 were $38.4 million compared with $47.2 million in the same period of
2007. First-half earnings per share were $0.45 per share, compared with $0.55 per share during the
same period of 2007.
“Despite our strong results in the second quarter and first half of 2008, we expect economic and
business conditions to remain difficult for the rest of the year,’ said Mr. Bedard. “We will remain
focused on maintaining our discipline on costs and efficiency. Overall growth will come from
acquisitions. We continue to explore strategic acquisition opportunities and will likely have more to
announce before the end of the year.”
TransForce’s Board of Directors has declared today an interim dividend of $0.05 per share that will
be paid on August 15, 2008 to shareholders of record at the close of business on August 7, 2008.
The amount of this dividend is half of the proposed regular quarterly dividend. This reflects the
timing of TransForce’s conversion to a corporation in the middle of the second quarter of 2008.
The Board has also declared today its regular quarterly dividend in the amount of $0.10 per share
that will be paid on October 15, 2008, to shareholders of record at the close of business on
September 30, 2008.
Management Conference Call
TransForce will host a conference call for investors to discuss the results of the second quarter later
today, July 30, 2008 at 9:00 a.m. Eastern Time. Participating from the Company will be Alain
Bédard, Chairman, President and Chief Executive Officer, and Salvatore Vitale, Chief Financial Officer.
To participate in the conference call, investors are invited to call 1-800-952-1797
A recording of the call will be available until midnight August 6, 2008, by dialing
1-800-558-5253 or 416-626-4100 and entering passcode 21389118.
The financial statements for the periods ended June 30, 2008 and 2007 included below are an
integral part of this news release.