TransForce Inc. Announces Third Quarter Results
- Revenues of $451.4 million
- EBITDA of $62.0 million
- EPS of $0.19 per share
Montreal, October 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
third quarter, ended September 30, 2009.
“By focusing on cost containment and operating efficiency, we were able to maintain our EBITDA
margin, despite lower revenues resulting from current weak economic conditions; EBITDA as a
percentage of revenue was 13.7%, virtually unchanged from the third quarter of 2008,” said Alain
Bédard, Chairman, President and Chief Executive Officer of TransForce Inc. “We are carefully
managing those parts of our business that we can control. We reduced fixed costs and
administrative expenses by $13.8 million in the quarter which kept them to 16% of revenue. Our
efficiency continues to serve shareholders during this difficult period and positions us strongly for
the eventual economic recovery.”
Third Quarter Results
For the three months ended September 30, 2009, TransForce reported total revenues of $451.4
million, a 24% decrease from $595.5 million in the same period of 2008. Revenue excluding fuel
surcharge decreased 18% to $418.9 million. The year-over-year decrease in revenue is mainly the
result of the continuing low economic activity.
EBITDA (earnings before interest, taxes, depreciation and amortization and equivalent to operating
income on TransForce’s financial statements) decreased 25% to $62.0 million in the third quarter
from $82.3 million in the third quarter of 2008. EBITDA margin (EBITDA as a percentage of
revenue) was 13.7% in the quarter, consistent with 13.8% in the same period of 2008.
Cash flow from operations, before net changes in non-cash working capital balances related to
operations, was $51.9 million compared with $66.9 million in the third quarter of 2008.
TransForce’s earnings before income taxes were $25.2 million, compared with $38.4 million in the
third quarter of 2008.
Interest expense decreased to $8.2 million from $12.3 million in the same period of 2008, primarily
as a result of the Company’s actions to reduce debt, as well as lower interest rates.
Net income was $17.0 million, or $0.19 per share, compared with $26.5 million, or $0.31 per share,
in the third quarter of 2008.
During the quarter, TransForce paid out a dividend of $0.10 per share.
“Demand continues to be depressed across Canada, and particularly in Western Canada, where
continuing lower levels of activity in Alberta’s energy sector contributed to weaker results in
TransForce’s Less-Than-Truckload segment,” said Mr. Bédard. “Business improved somewhat in
September from what was an unusually slow August. Now we must monitor the effect of the
appreciating Canadian dollar on a recovery in the manufacturing sector.”
Acquisition of ATS Andlauer Retail Solutions Division
In September, TransForce announced that it had entered into an agreement to acquire the Retail
Solutions Division of ATS Andlauer Transportation Services Limited Partnership. The Retail Solutions
Division generates approximately $120 million in annual revenues. It relies on 165 owner-operators
for the bulk of its business and employs a total of 447 employees. The transaction is conditional on
the signing of a definitive agreement, normal closing and regulatory conditions.
Completion of $41.2 million Equity Financing and $8.3 Million Concurrent Private
In August, TransForce completed its previously announced bought-deal public offering by issuing
7,040,000 common shares, at a price of $5.85 per share, for gross proceeds to TransForce of $41.2
million. TransForce also completed its previously announced private placement with Jolina Capital
Inc., its principal shareholder, pursuant to which Jolina purchased, concurrent with the closing of
the bought-deal offering, a further 1,423,840 common shares from TransForce in order to maintain
its ownership level of the outstanding shares of TransForce of approximately 16.82%. Jolina
purchased the shares at the offering price of $5.85 per share, for proceeds to TransForce of $8.3
The net proceeds of the offering and concurrent private placement to Jolina will be used by
TransForce to reduce indebtedness and for general corporate purposes.
During the nine months ended September 30, 2009, total revenue decreased 21% to $1.4 billion
from $1.7 billion in 2008. Revenue excluding fuel surcharge decreased 15% to $1.3 billion from
$1.5 billion in the first three quarters of 2008.
EBITDA decreased by 19% to $166.3 million from $206.1 million in the first three quarters of 2008.
In a very challenging environment, the Company’s EBITDA ratio for the first nine months was
12.2%, an improvement from 12.0% in the year-earlier period.
Cash flow from operations, before net changes to non-cash working capital balances related to
operations, was $134.2 million, compared with $172.8 million in the first nine months of 2008.
Earnings before income taxes were $55.9 million through three quarters of 2009, compared with
$80.7 million in the same period of 2008.
Net income during the first nine months of 2009 declined to $38.1 million, or $0.43 per share, from
$64.9 million, or $0.75 per share, a year earlier.
“The people of TransForce have done an outstanding job of controlling costs and I thank them for
their dedicated efforts as we move through this challenging period. We have made significant
progress in cost containment and our streamlined structure and processes will remain in place,”
said Mr. Bédard. “While managing through the current recession, we continue to implement our
strategy for the future. We are on track to meet our debt repayment target for 2009. Our acquisition
strategy remains in place but we will only consider acquisitions that are immediately accretive for
Third Quarter Management Conference Call
TransForce’s Chairman, President and Chief Executive Officer Alain Bédard, will host a conference
call for investors to discuss the results of the third quarter and year-to-date 2009 on Friday,
October 23, 2009, at 9:00 a.m. Eastern Time.
To participate in the conference call, investors are invited to call 1-800-734-4208. A recording of
the call will be available until 12:00 a.m., October 31, 2009, by dialing 1-800-558-5253 or
416-626-4100 and entering passcode 21440036.
The financial statements for the periods ended September 30, 2009 and 2008 included below are
an integral part of this news release.