- Annual revenues of $1.8 billion, down 18%
- Annual costs down 18%
- EBITDA margin maintained above 12%
- Total debt reduced by $100 million
Montreal, February 25, 2010 –TransForce Inc. (“TransForce” or “the Company”) (TSX: TFI - T),
the leader in the Canadian transportation and logistics industry, today announced its results for the
fourth quarter and full year, ended December 31, 2009.
“Continuing weak economic activity affected revenues in the fourth quarter. Our success in reducing
costs maintained EBITDA margin at 12.3%,” said Alain Bédard, Chairman, President and Chief
Executive Officer of TransForce Inc. “We began our cost-reduction effort in 2007 in anticipation of
the general economic slowdown and have remained focused on our controls since then. The
economy is now expected to recover over the coming months and TransForce is well-positioned to
turn higher activity into enhanced results for our shareholders.”
Fourth Quarter Results
For the three months ended December 31, 2009, TransForce reported total revenues of $488.6
million, a 10.3% decrease from $544.5 million in the same period of 2008. Revenue excluding fuel
surcharge decreased 6.8% to $452.4 million. The year-over-year decrease in revenue is mainly the
result of the continuing low economic activity and its effect on volume of shipments.
TransForce’s continued focus on efficiency reduced operating expenses and fixed costs, general and
administrative expenses by 9.1% to $427.7 million in the quarter from $470.7 million a year earlier.
In the fourth quarter, EBITDA (earnings before interest, taxes, depreciation and amortization and
equivalent to operating income on TransForce’s financial statements) decreased 18.4% to $60.3
million from $73.8 million in the same quarter of 2008. EBITDA as a percentage of revenue
(“EBITDA margin”) was 12.3% in the quarter, down somewhat from 13.6% in the fourth quarter of
2008 but consistent with previous quarters in 2009.
Interest expense decreased to $7.8 million from $11.3 million a year earlier, primarily as a result of
TransForce’s continuing significant reduction of debt as well as lower interest rates.
At December 31, 2009, the Company recognized a goodwill impairment of $45.0 million, or $0.47
per share, (“non-recurring charge”) in the oilfield services group of the Specialized Services
segment. A write-down of goodwill is a non-cash charge on the consolidated statement of income
and has no effect on TransForce’s cash flows or consolidated EBITDA.
TransForce generated an income before income taxes and the non-recurring charge of $21.5 million
in the fourth quarter compared with $18.5 million in the same quarter of 2008.
Net income before the non-recurring charge in the quarter was $17.8 million, or $0.19 per share,
compared with $14.8 million, or $0.17 per share, in the same quarter of 2008. The Company’s net
loss for the quarter was $27.2 million, or $0.29 per share.
Cash flow from operations, before net change in non-cash operating working capital, was $50.7
million, an increase from $48.0 million in the fourth quarter of 2008.
TransForce paid out a dividend of $0.10 per share during the quarter.
“While some of our businesses are growing, such as the Matrec waste management operation, and
others stayed stable, such as ICS and Canpar in the Package and Courier segment, for most of the
Company, volumes remain low in every part of the country. Decreased demand for Truckload
services tended to be less important than previous quarter, while the profitability decreased in the
higher-cost Less-Than-Truckload segment due to the overcapacity in this industry resulting in price
pressures, particularly in Western Canada where revenue in the oilfield segment has been hard hit
as well. We have no control over volume, but we have responded well in adjusting our costs
promptly. ” said Mr. Bédard. “We have seen some signs of renewed activity but, overall, we expect
the operating environment in 2010 to be only slightly better than 2009 with increases in the latter
months. We are committed to our disciplined approach to managing costs now and when the
Completed Acquisition of ATS Andlauer Retail Solutions Division
In November, TransForce announced it had completed its previously announced agreement to
acquire the Retail Solutions Division of ATS Andlauer Transportation Services Limited Partnership.
The acquired division generates approximately $120 million in annual revenues and employs a total
of 447 employees as well as 165 owner-operators. Its results are included in the Package and
For the full year ended December 31, 2009, total revenue decreased 18% to $1.8 billion from $2.3
billion in 2008. Revenue excluding fuel surcharge decreased 13% to $1.7 billion from $2.0 billion in
the previous year.
TransForce’s reduced its operating expenses and fixed costs, general and administrative expenses
(“costs”) by the same percentage as its revenue declined. The Company cut these costs by 18% to
$1.6 billion for 2009 from $2.0 billion a year earlier.
EBITDA for 2009 was $226.5 million, a 19% decrease from $280.0 million in 2008. The Company’s
EBITDA margin for the year was virtually unchanged from the previous year at 12.3%.
Interest expense fell to $35.0 million from more than $46.6 million in 2008. Earnings before income
taxes and the non-recurring charge were $77.3 million for 2009, compared with $99.2 million in the
Before the non-recurring charge taken in the fourth quarter, net income was $55.9 million or $0.62
per share for 2009 compared with $79.7 million, or $0.92 per share, a year earlier. The Company’s
net income for 2009 was $10.9 million, or $0.12 per share.
Cash flow from operations, before net change in non-cash operating working capital, was $191.2
million compared with $218.7 million in the prior year.
The Company paid out dividends of $0.40 per share in 2009.
TransForce continued to pay down debt during 2009, reducing it by approximately $100 million and
bringing debt as percentage of total capitalization to 57% as of December 31, 2009 from more than
61% at the end of the previous year.
“The appreciable cash flow generated in 2009 has been judiciously used for the equipment, the
dividends and our long-term debt. The aggressive debt reduction not only gives TransForce greater
financial flexibility for the future, we believe it adds value for shareholders today – the equivalent of
$1.00 per share in increased enterprise value,” said Mr. Bédard. “Over the year, our management
team, supported by our people, has done an outstanding job being consistent and using their own
experience with our systems to control costs and maintain margins during this period of low
volumes and I thank them for their dedicated efforts”
Fourth Quarter and Annual Results 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 fourth quarter and full year of 2009 on Thursday,
February 25, 2010, at 9:00 a.m. Eastern Time.
To participate in the conference call, investors are invited to call 1-888-222-4213. A recording of
the call will be available until midnight March 4, 2010, by dialing 1-800-558-5253 or 416-626-4100
and entering passcode 21456986.
The financial statements for the periods ended December 31, 2009 and 2008 included below are an
integral part of this news release.