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TransForce Inc. Announces Second Quarter Results

  • Revenues of $454.2 million
  • EBITDA of $59.8 million
  • EPS of $0.21 per share


Montreal, July 23, 2009 – TransForce Inc. (“TransForce” or “the Company”) (TSX: TFI - T), the
leader in the Canadian transportation and logistics industry, today announced its results for the
second quarter, ended June 30, 2009.


“TransForce maintained its dividend and continued to navigate through the challenges posed by the
difficult operating environment that persisted through the second quarter. Some areas of the
Canadian economy, like the energy and manufacturing sectors, continue to exhibit lower activity
and corresponding demand for our services,” said Alain Bédard, President and Chief Executive
Officer of TransForce Inc. “While volumes have declined, the Company has largely sustained its
EBITDA margin by maintaining our focus on cost savings and efficiency. For example, during the
quarter, we delivered significant reductions in operating expenses and general and administrative costs.”


 

Second Quarter Results

For the three months ended June 30, 2009, TransForce reported revenues of $454.2 million
compared with $595.6 million in the same period of 2008, a decrease of 24%. Revenues excluding
fuel surcharges were $424.8 million compared with $514.1 million in the same period of 2008, a
decrease of 17%. The year-over-year decrease in revenue is consistent with the continuing general
economic downturn experienced since the beginning of 2009.


EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating
income on TransForce’s financial statements) was $59.8 million in the quarter, compared with
$66.9 million in the second quarter of 2008.


Cash flow from operations, before net changes to non-cash working capital balances related to
operations, was $49.2 million compared with $60.2 million in the second quarter of 2008.
TransForce’s earnings before income taxes were $26.4 million compared with $24.9 million in the
second quarter of 2008. A change in the fair value of interest rate contracts, an item unrelated to
operations of the business, was responsible for $5.2 million of the increase in earnings before
income taxes.


Income tax expense increased to $8.4 million in the second quarter of 2009 from $5.7 million in the
same period of 2008. The Company now records income tax expense following its conversion from
an income trust to a corporation in May of 2008.


Net income decreased to $18.0 million from $19.3 million in the second quarter of 2008. Excluding
the after-tax effect of the non-recurring conversion-related costs of $9.9 million recorded in the
second quarter of 2008, net income for the second quarter of 2008 was $29.2 million.


Earnings per share were $0.21 per share compared with $0.22 per share in the same period of 2008.


During the quarter, TransForce paid out a dividend of $0.10 per share.


“Debt reduction remains a priority and we are committed to our target of reducing debt by $100
million in 2009,” said Mr. Bédard. “We are well on our way to achieving this goal, having lowered
our debt level by more than $50 million during a challenging first half of the year.”


 

Year-to-Date Results

During the six months ended June 30, 2009, TransForce revenues decreased by 19% to $906.5
million from $1.1 billion in the same period of 2008. Revenue excluding fuel surcharges decreased
14% to $847.0 million from $983.6 million in the same period of 2008. EBITDA decreased 16% to
$104.3 million from $123.8 million in 2008. Excluding the gain of $4.5 million from the favorable
ruling in a class-action settlement recorded in the first quarter of 2008 and non-recurring
conversion-related costs of $8.7 million recorded in the second quarter of 2008, EBITDA during the
first six months of 2008 was $128.0 million.


Cash flow from operations, before net changes to non-cash working capital balances related to
operations, was $82.3 million compared with $106.0 million in the first six months of 2008.
Earnings before income taxes were $30.6 million compared with $42.4 million in the same period
of 2008. Net income during the first six months of 2009 declined to $21.1 million from $38.4 million.


Earnings per share were $0.24 per share during the first six months of 2009 compared with $0.45
per share in the first six months of 2008.


“The economic environment continues to be challenging, with lagging demand,” said Mr. Bédard.
“While we are cautiously optimistic that a bottom may have been reached, we cannot predict the
speed of an overall economic recovery. In fact, it would appear that some manufacturing sectors of
our economy may never return to historical levels. TransForce is focused on what it can control and
our people continue to decrease overhead costs and align our businesses with market conditions.”


 

Second Quarter Management Conference Call

TransForce will host a conference call for investors to discuss the results of the second quarter of
2009 on Thursday, July 23, 2009, 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 1-800-908-0783. A recording of
the call will be available until 12:00 a.m., July 31, 2009, by dialing 1-800-558-5253 or
416-626-4100 and entering passcode 21431942.

Financial Statements

The financial statements for the periods ended June 30, 2009 and 2008 included below are an
integral part of this news release.