TransForce Announces 2014 Second Quarter Results

• Total revenue of $889.1 million, up 12.2% from $792.3 million last year
• EBIT^1,4 of $79.5 million, up $17.2 million or 27.6% year-over-year, EBIT margin improved to 8.9%
• Free cash flow⁴ generation of $97.4 million reflecting disciplined capital management
• Appointment of Alain Raquepas as Chief Financial Officer of TransForce

MONTREAL, July 24, 2014 /CNW Telbec/ - TransForce Inc. (TSX: TFI) (OTCQX: TFIFF), a North American leader in the transportation and logistics industry, today announced its results for the second quarter ended June 30, 2014.

"TransForce's solid second-quarter results reflect constant discipline in the execution of its business strategy and in capital management. While revenue growth mainly stems from acquisitions, the year-over-year EBIT^1,4 improvement in all operating segments attests to our relentless efforts to optimize asset utilization and operating efficiency. Free cash flow continues to benefit from the sale of excess assets and our focus on return on capital employed to generate superior returns, to the benefit of our shareholders," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.

Financial highlights		Quarters ended June 30,					Six months ended June 30,
(in millions of dollars, except per share data)		2014		2013			2014		2013
Total revenue		889.1		792.3			1,659.6		1,542.0
Revenue excluding fuel surcharge		779.1		709.9			1,458.9		1,380.9
Income from operating activities (EBIT^1,4)		79.5		62.3			112.7		106.8
Free cash flow^2		97.4		91.1			132.5		111.7
Adjusted net income^3		49.1		39.2			70.8		64.7
	Per share - diluted ($)	0.48		0.40			0.71		0.67
Net income^4		62.8		26.6			68.7		45.4
	Per share - diluted ($)	0.61		0.28			0.69		0.48
Weighted average shares outstanding ('000s)		98,590		92,561			97,307		92,702
^1 Earnings before finance income and costs and income taxes.
^2 Net cash from operating activities less additions to property and equipment plus proceeds from sale of property and equipment and assets held for sale.
^3 Excluding the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss, and items not in the Company's normal business.
^4 Before $27.8 million goodwill impairment (after tax $25.5 million) in Q2 2014.

SECOND-QUARTER RESULTS
Total revenue increased $96.8 million, or 12.2%, to $889.1 million, mostly reflecting a total contribution of $102.3 million from the acquisitions of Vitran, Clarke Transport and Clarke Road Transport. Excluding acquisitions, revenue declined due to the phase-out of rig moving activities, the non-renewal of unprofitable business from Velocity's customers in U.S. same-day services, and the disposition of certain ancillary activities. These factors were partially offset by a solid increase in Waste Management revenue and by the effect of the U.S. currency appreciation on U.S.-dollar denominated sales.

Reflecting proactive cost management measures to adjust supply to demand and the contribution from acquisitions, EBIT^1,4 amounted to $79.5 million, or 8.9% of total revenue, in the second quarter of 2014, up 27.6% from $62.3 million, or 7.9% of total revenue, in the corresponding period a year earlier. During the second quarter, TransForce improved its year-over-year EBIT margin in all business segments, especially in the Package and Courier segment.

Adjusted net income, which excludes the after-tax effect of changes in the fair value of derivatives, net of foreign exchange gain or loss and the asset impairment charge, increased 25.1% to $49.1 million, or $0.48 per share, fully diluted, up from $39.2 million last year, or $0.40 per share, fully diluted. During the second quarter, TransForce recorded a non-cash goodwill impairment charge of $27.8 million before income taxes ($25.5 million after taxes) associated to the rig moving services. Excluding this charge, net income for the second quarter of 2014 stood at $62.8 million, or $0.61 per share, fully diluted, versus $26.6 million, or $0.28 per share, fully diluted, in the second quarter of 2013.

TransForce generated a solid free cash flow of $97.4 million, or $0.99 per share, driven by proceeds from the sale of property and equipment amounting to $57.3 million and strong cash flow from operating activities. This free cash flow was mainly used to carry out TransForce's disciplined acquisition strategy ($44.8 million), reimburse long-term debt ($35.7 million) and repurchase common shares ($4.0 million) during the quarter.

SIX-MONTH RESULTS
Total revenue amounted to $1.66 billion in the first six months of 2014, up 7.6% from $1.54 billion in the first six months of 2013, mainly driven by acquisitions. EBIT^1,4 reached $112.7 million, or 6.8% of total revenue, versus $106.8 million, or 6.9% of total revenue, last year. Adjusted net income stood at $70.8 million, or $0.71 per share, fully diluted, up from $64.7 million, or $0.67 per share, fully diluted, a year ago. Finally, net income excluding the impairment charge was $68.7 million, or $0.69 per share, fully diluted, compared with $45.4 million, or $0.48 per share, fully diluted, last year.

SEGMENTED RESULTS
Effective April 1, 2014, the composition of reportable segments has been modified to better reflect changes in the structure of the Company's internal organisation. The newly adopted presentation continues to show separately the operating segments that are managed independently as they require different technology and capital resources. In addition, the current presentation reflects the nature of services for all of the operating segments whereas prior segment presentation for the Specialized Services - services to the energy sector was mainly based on the type of customer.

(in millions of dollars)			Quarters ended June 30,															Six months ended June 30,
			2014							2013								2014						2013
			$							$								$						$
Total revenue
		Package and Courier	323.4							327.8								630.0						632.4
		Less-Than-Truckload (LTL)	248.5							168.8								430.2						320.9
		Truckload (TL)	207.5							171.0								397.8						335.3
		Waste Management	48.9							40.0								83.7						72.2
		Other segments	76.3							100.4								150.0						210.2
		Eliminations	(15.6)							(15.6)								(32.2)						(28.9)
Total			889.1							792.3								1,659.6						1,542.0
			$					% of Rev.		$				% of Rev.				$			% of Rev.			$			% of Rev.
Income from operating activities (EBIT)
		Package and Courier	27.3					8.4		23.4				7.1				40.3			6.4			40.8			6.4
		Less-Than-Truckload	20.1					8.1		12.3				7.3				24.5			5.7			25.0			7.8
		Truckload	20.2					9.7		15.4				9.0				30.7			7.7			25.9			7.7
		Waste Management	12.1					24.6		9.7				24.3				19.0			22.7			16.2			22.5
		Other segments	6.9					9.0		2.7				2.7				10.4			6.9			5.1			2.4
		Corporate	(7.0)							(1.2)								(12.0)						(6.2)
Total			79.5					8.9		62.3				7.9				112.7			6.8			106.8			6.9

Note: due to rounding, totals may differ slightly from the sum of individual segmented revenue or EBIT.

APPOINTMENT OF ALAIN RAQUEPAS AS CHIEF FINANCIAL OFFICER OF TRANSFORCE
TransForce is pleased to announce the appointment of Mr. Alain Raquepas as Chief Financial Officer. Mr. Raquepas brings extensive experience in financial management and will play an important role in the management of TransForce's capital. Mr. Raquepas is a Chartered Accountant and holds a Bachelor of Commerce degree from HEC Montreal as well as a law degree from the Université de Montreal.

OUTLOOK
"We are encouraged by the progress made in regards to productivity and overall efficiency improvements in all of our segments. This performance reflects the talent and dedication of our team, given an economy that remains flat in Canada and is slowly improving in the United States. Further savings can still be achieved by optimizing our way of doing business and better adapting supply to demand in all markets. These achievements will ensure TransForce makes an optimal use of its capital and maximizes cash flow generation," concluded Mr. Bédard.

CONFERENCE CALL
TransForce will hold a conference call for analysts and portfolio managers on Friday, July 25, 2014 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 1-888-231-8191. A recording of the call will be available until midnight, August 1, 2014, by dialling 1-855-859-2056 or 416-849-0833 and entering passcode 63452988.

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, which includes specialized truckload and dedicated services;
• Specialized Services, which includes waste management, logistics services and rig moving 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
EBIT, adjusted net income, adjusted earnings per share and free cash flow 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.

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

SOURCE: TransForce Inc.

Investors:
Alain Bédard
Chairman, President and CEO
TransForce Inc.
[phone]
[email protected]

Media:
Rick Leckner
MaisonBrison Communications
[phone]
[email protected]