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 October 22, 2015 - 5:05 PM EDT
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TransForce Announces 2015 Third Quarter Results

- Revenue before fuel surcharge from continuing operations up 18% to $971.1 million - Operating income of $88.0 million, up 9% from $80.4 million last year - Adjusted net income from continuing operations(i) of $60.6 million, or $0.60 per diluted share(i), versus $58.1 million last year - Repurchase of nearly 2.6 million common shares for $62.0 million during the third quarter (i) This is a non-IFRS measure. For a reconciliation, please refer to the "Non-IFRS Measures" section below.

MONTREAL, QUEBEC--(Marketwired - Oct. 22, 2015) - TransForce Inc. (TSX:TFI)(OTCQX:TFIFF), a North American leader in the transportation and logistics industry, today announced its results for the third quarter ended September 30, 2015. TransForce is ceasing its U.S. rig moving operations and results for these activities are accordingly presented as discontinued operation in the Company's financial statements. Data for corresponding periods of the previous year have been restated.

"TransForce's relentless focus on high-return activities produced strong results. We recorded solid organic growth in the Waste Management and Logistics segments, while the acquisition of Contrans lifted revenue and operating income in the Truckload ("TL") segment. Certain economic challenges affected business activity in the Package and Courier ("P&C") and Less-than-Truckload ("LTL") segments whereas TL divisions servicing the oil and gas industry experienced another difficult quarter due to difficult market conditions. That persistent weakness led to the decision to cease our residual U.S. rig moving business. In keeping with TransForce's operating principles, remaining assets will be sold or redeployed to higher-return activities. This disciplined capital allocation and constant emphasis on maximizing free cash flow generation attest to our fundamental commitment of enhancing shareholder value," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.

Financial highlights Quarters ended Sept. 30 Nine months ended Sept. 30
(in millions of dollars, except per share data) 2015 2014 2015 2014
Total revenue from continuing operations 1,067.5 948.2 3,157.9 2,546.4
Revenue before fuel surcharge from continuing operations 971.1 823.8 2,846.9 2,221.4
Operating income from continuing operations1 88.0 80.4 245.2 192.4
Net cash from continuing operations 102.9 104.9 261.0 174.6
Free cash flow from continuing operations2, 3 60.7 101.7 185.9 183.2
Adjusted net income from continuing operations4 60.6 58.1 170.2 135.6
  Per share - diluted5 ($) 0.60 0.58 1.65 1.35
Net income from continuing operations 43.0 38.6 130.2 104.5
  Per share - diluted ($) 0.43 0.38 1.27 1.04
Net income 41.6 41.5 119.8 84.8
  Per share - diluted ($) 0.41 0.41 1.16 0.84
Weighted average shares outstanding ('000s) 99,209 98,627 101,016 98,438
         
(1) Earnings before finance income and costs, and income taxes.
(2) This is a non-IFRS measure. For a reconciliation, please refer to the "Non-IFRS Measures" section below.
(3) Net cash from continuing operations, less additions to property and equipment, plus proceeds from sale of property and equipment and assets held for sale.
(4) Excluding amortization of intangible assets related to acquisitions, net changes in the fair value of derivatives, net foreign exchange gain or loss, net income or loss from discontinued operation and items not in the Company's normal business, net of tax.
(5) Adjusted net income from continuing operations divided by the weighted average number of diluted common shares outstanding.

THIRD-QUARTER RESULTS

Total revenue from continuing operations reached $1.07 billion, up 13% over last year. Net of fuel surcharge, revenue from continuing operations increased 18% to $971.1 million. This increase reflects the acquisitions completed in the previous twelve months, as well as the effect of local currency appreciation on US-dollar denominated revenue. Before fuel surcharge and acquisitions, revenue was essentially stable, as lower P&C and LTL volume and reduced activity in TL divisions servicing the oil and gas industry was offset by organic growth in the Waste Management and Logistics segments. 
Operating income from continuing operations amounted to $88.0 million, or 9.1% of revenue before fuel surcharge, up 9% from $80.4 million, or 9.8% of revenue before fuel surcharge, a year earlier. The increase in operating income reflects the contribution from acquisitions and the effect of local currency appreciation on US-dollar denominated operating income, partially offset by lower gains on the disposition of property and equipment compared with last year and lower volume for existing operations.

Net income from continuing operations amounted to $43.0 million, or $0.43 per diluted share, versus $38.6 million, or $0.38 per diluted share, a year ago. Adjusted net income from continuing operations, which excludes amortization of intangible assets related to acquisitions, net changes in the fair value of derivatives, net foreign exchange gain or loss, and items not in the Company's normal business, net of tax, reached $60.6 million, or $0.60 per diluted share, up from $58.1 million last year, or $0.58 per diluted share. Including the loss from discontinued operation, net income stood at $41.6 million, or $0.41 per diluted share, versus $41.5 million last year, or $0.41 per diluted share.

Net cash from continuing operations stood at $102.9 million, while free cash flow from continuing operations amounted to $60.7 million, or $0.61 per share, in the third quarter of 2015. The discontinued operation provided a further free cash flow of $19.7 million resulting from the ongoing sale of excess assets. This free cash flow was returned to shareholders through the repurchase of $62.0 million in common shares and dividend payments of $17.1 million during the third quarter.

NINE-MONTH RESULTS

For the first nine months of 2015, total revenue from continuing operations amounted to $3.16 billion, up 24% from $2.55 billion a year earlier. Net of fuel surcharge, revenue from continuing operations rose 28% to $2.85 billion. Operating income from continuing operations increased 27% to $245.2 million, or 8.6% of revenue before fuel surcharge, versus $192.4 million, or 8.7% of revenue before fuel surcharge, last year. Net income from continuing operations reached $130.2 million, or $1.27 per diluted share, up from $104.5 million, or $1.04 per share, a year ago. Adjusted net income from continuing operations stood at $170.2 million, or $1.65 per diluted share, versus $135.6 million, or $1.35 per diluted share, last year. Including the loss from discontinued operation, net income was $119.8 million, or $1.16 per diluted share, compared with $84.8 million, or $0.84 per diluted share, in the previous year. TransForce generated free cash flow from continuing operations of $185.9 million in the first nine months of 2015, equivalent to $1.84 per share. 

SEGMENTED RESULTS FROM CONTINUING OPERATIONS    

(in millions of dollars) Quarters ended Sept. 30       Nine months ended Sept. 30  
  2015       2014       2015       2014  
  $       $       $       $  
Revenue*                            
  Package and Courier   318.2       296.9       909.7       862.0  
  Less-Than-Truckload   192.1       197.8       573.5       550.5  
  Truckload   362.0       249.1       1,070.5       596.3  
  Waste Management   57.9       54.4       154.8       137.5  
  Logistics   58.9       40.8       190.0       122.3  
  Eliminations   (17.9 )     (15.2 )     (51.6 )     (47.3 )
Total 971.1       823.8       2,846.9       2,221.4  
                               
  $ % of Rev.*   $   % of Rev.*   $   % of Rev.*   $   % of Rev.*  
Operating Income (Loss)                              
  Package and Courier 22.4 7.0   24.4   8.2   63.7   7.0   64.7   7.5  
  Less-Than-Truckload 12.2 6.3   21.8   11.0   35.0   6.1   46.3   8.4  
  Truckload 37.3 10.3   26.2   10.5   104.0   9.7   58.1   9.7  
  Waste Management 15.3 26.4   11.8   21.6   34.7   22.4   30.6   22.2  
  Logistics 6.0 10.1   3.7   9.0   22.6   11.9   12.6   10.3  
  Corporate (5.1 )    (7.4 )     (14.8 )     (19.9 )    
Total 88.0 9.1   80.4   9.8   245.2   8.6   192.4   8.7  
                               
Note: due to rounding, totals may differ slightly from the sum.
* Revenue before fuel surcharge

OUTLOOK

"As the North American economic landscape remains mostly unchanged, we continue to expect organic growth to be restrained in TransForce's main operating markets. As such, adjustments to our 2015 anticipated results strictly reflect the exclusion of the previous negative contribution from discontinued operation. We expect continuing operations to generate total revenue of approximately $4.3 billion, earnings before interest, income tax, depreciation and amortization ("EBITDA") from continuing operations of between $520 million and $540 million (previously $510 million and $530 million), and basic adjusted earnings per share ("EPS") from continuing operations in the range of $2.07-$2.22 (previously $1.97-$2.12). TransForce remains focussed on maximizing free cash flow generation and we expect a total free cash flow of approximately $300 million, consisting of $250 million from continuing operations and $50 million from discontinued operation. Our decentralized structure provides our managers with the ability to rapidly adapt supply to demand and to deploy resources in high-return activities," concluded Mr. Bédard. 

CONFERENCE CALL

TransForce will hold a conference call for analysts and portfolio managers on Friday, October 23, 2015 at 9:00 a.m. Eastern Time, to discuss these results. Business media are also invited to listen to the call. Interested parties can join the call by dialling 1-877-223-4471. A recording of the call will be available until midnight, October 30, 2015, by dialling 1-800-585-8367 or 416-621-4642 and entering passcode 7218057.

ABOUT TRANSFORCE

TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce creates value for shareholders by identifying strategic acquisitions and managing a growing network of wholly-owned operating subsidiaries. Under the TransForce umbrella, companies benefit from corporate financial and operational resources to build their businesses and increase their efficiency. TransForce companies service the following segments:

  • Package and Courier; 
  • Less-Than-Truckload; 
  • Truckload;
  • Waste Management;
  • Logistics and Other Services.

TransForce Inc. is publicly traded on the Toronto Stock Exchange (TSX:TFI) and the OTCQX marketplace in the U.S. (OTCQX:TFIFF). For more information, visit http://www.transforcecompany.com.

FORWARD-LOOKING STATEMENTS

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of TransForce. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for TransForce's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

NON-IFRS MEASURES

Adjusted net income, adjusted earnings per share, free cash flow from continuing operations and free cash flow from continuing operations per share are financial measures not prescribed by IFRS and are not likely to be comparable to similar measures presented by other issuers. Management considers these to be useful information to assist investors in evaluating the Company's profitability, liquidity and ability to generate funds to finance its operations. These measures do not have any standardize meaning under IFRS and could be calculated differently by other companies. These measures should be considered in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS.

Adjusted net income from continuing operations Quarters ended Sept. 30    Nine months ended Sept. 30  
(unaudited, in thousands of dollars, except per share data) 2015   2014   2015 2014  
Net income 41,630   41,548   119,791 84,751  
Amortization of intangible assets related to acquisitions, net of tax 8,076   7,541   23,648 17,674  
Net change in fair value of derivatives, net of tax 8,649   (8 ) 13,402 1,618  
Net foreign exchange (gain) loss, net of tax (1,202 ) 4,581   542 5,183  
Accelerated accretion expense on conversion of debentures, net of tax -   2,931   - 7,018  
Reclassification to income of accumulated unrealized gain on investment in equity securities, net of tax -   -   - (5,420 )
Transaction costs on business combinations, net of tax -   4,502   - 5,030  
Tax on multi-jurisdiction distributions 2,012   -   2,435 -  
Discontinued operation, net of tax 1,391   (2,993 ) 10,381 19,734  
Adjusted net income from continuing operations 60,556   58,102   170,199 135,588  
Adjusted EPS from continuing operations - basic 0.61   0.59   1.68 1.38  
Adjusted EPS from continuing operations - diluted 0.60   0.58   1.65 1.35  
               
Free cash flow from continuing operations Quarters ended Sept. 30   Nine months ended Sept. 30  
(unaudited, in thousands of dollars, except per share data) 2015   2014   2015   2014  
Net cash from continuing operations 102,900   104,872   260,962   174,624  
Additions to property and equipment1 (54,081 ) (22,422 ) (147,649 ) (67,466 )
Proceeds from sale of property and equipment 11,906   19,205   52,069   76,003  
Proceeds from sale of assets held for sale -   -   20,557   -  
Free cash flow from continuing operations 60,725   101,655   185,939   183,161  
Free cash flow from continuing operations per share2 0.61   1.03   1.84   1.86  
                 
(1) 2014 figures have been restated to include additions that did not affect cash.
(2) Free cash flow from continuing operations divided by the weighted average number of common shares outstanding.

Note to readers: Consolidated financial statements and Management's Discussion & Analysis are available on TransForce's website at www.transforcecompany.com.

Investors:
Alain Bedard
Chairman, President and CEO
TransForce Inc.
(647) 729-4079
abedard@transforcecompany.com

Media:
Rick Leckner
MaisonBrison Communications
(514) 731-0000
rickl@maisonbrison.com


Source: Marketwired (October 22, 2015 - 5:05 PM EDT)

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