TransForce Announces Solid 2011 Fourth Quarter and Annual Results

• Fourth-quarter total revenue increase of 36% to $735.5 million
• EBIT growth of 30% to $55.7 million
• 63% increase in adjusted profit to $33.9 million
• Free cash flow growth of 25% to $74.3 million

MONTREAL, Feb. 29, 2012 /CNW Telbec/ - TransForce Inc. (TSX: TFI), a North American leader in the transportation and logistics industry, today announced its results for the fourth quarter and fiscal year ended December 31, 2011.

"Driven by strategic acquisitions, TransForce concluded 2011 with record revenue and a solid increase in our key EBIT metric. In the fourth quarter, profitability improved largely due to improved operating efficiencies and enhanced asset utilization, although a hesitant economy caused overall volume to decline slightly. In Package and Courier, advances were made in the performance of Loomis Express, which reduced its loss, and we continue to proactively implement cost reduction measures to further enhance profitability. EBIT for Less-Than-Truckload ("LTL") operations also rose, as we increasingly benefit from a rationalized asset base. Capacity optimization initiatives had a positive effect on Truckload ("TL") profitability, but revenue was affected by temporary volume decreases in the fourth quarter. Finally, services to the energy sector posted strong results driven by greater density and the acquisition of IE Miller," said Alain Bédard, Chairman, President and Chief Executive Officer of TransForce.

Financial highlights		Quarters ended Dec. 31,			Years ended Dec. 31,
(in millions of dollars, except per share data)		2011	2010		2011	2010
Total revenue		735.5	539.9		2,690.5	2,002.3
Revenue excluding fuel surcharge		659.9	494.4		2,417.6	1,840.3
Profit from operating activities (EBIT^1)		55.7	42.8		186.4	144.2
Adjusted profit^2		33.9	20.8		102.5	71.5
	Per share - diluted ($)	0.34	0.21		1.06	0.75
Profit for the period		41.7	34.8		102.2	102.7
	Per share - diluted ($)	0.41	0.36		1.06	1.07

^1	Earnings before finance income and costs and income taxes.
^2	Excluding the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss, and of items that are not in the Company's normal business.

FOURTH-QUARTER RESULTS
Total revenue increased $195.6 million, or 36%, to $735.5 million. The acquisitions of IE Miller on November 30, 2011, of Loomis Express on June 26, 2011, and of Dynamex in February 2011, contributed revenue of nearly $202 million in the fourth quarter of 2011. Excluding these acquisitions, revenue declined by $6 million due mainly to the Company's ongoing discipline with regards to capacity and slightly lower volume.

Fourth-quarter EBIT amounted to $55.7 million, or 7.6% of total revenue, up from $42.8 million, or 7.9% of total revenue in the corresponding period a year earlier. The increase in monetary terms reflects the aforementioned acquisitions and successful measures to optimize asset utilization, while the reduction as a percentage of total revenue mainly stems from lower margins for Dynamex and Loomis Express.

Adjusted profit, which excludes the after-tax effect of changes in the fair value of derivatives, net foreign exchange gain or loss, and of items that are not in the Company's normal business, rose 63% to $33.9 million, or $0.34 per share, fully diluted, up sharply from $20.8 million, or $0.21 per share, fully diluted, last year. Profit for the quarter stood at $41.7 million, or $0.41 per share, fully diluted, versus $34.8 million, or $0.36 per share, fully diluted, in the fourth quarter of 2010.

Free cash flow, consisting of net cash from operating activities less additions to property and equipment plus proceeds from sale of property and equipment, amounted to $74.3 million, or $0.78 per share, up 25% from $59.6 million, or $0.63 per share, a year ago.

YEAR-END RESULTS
For the year ended December 31, 2011, total revenue grew 34% to $2.7 billion, up from $2.0 billion in 2010. Excluding acquisitions, total revenue increased 4%. EBIT rose 29% to $186.4 million, or 6.9% of total revenue, from $144.2 million, or 7.2% of total revenue a year earlier. Adjusted profit increased 43% to $102.5 million, or $1.06 per share, fully diluted, from $71.5 million, or $0.75 per share, fully diluted. Profit for the period amounted to $102.2 million, or $1.06 per share, fully diluted, versus $102.7 million, or $1.07 per share, fully diluted. Of note, profit for the prior-year period included non-recurring gains of $25.2 million. Finally, free cash flow grew 25% to $202.7 million, or $2.12 per share.

SEGMENTED RESULTS   

(in millions of dollars)		Quarters ended Dec. 31,					Years ended Dec. 31,
		2011		2010			2011		2010
		$		$			$		$
Total revenue
	Package and Courier	301.4		118.3			971.0		395.7
	Less-Than-Truckload	124.6		127.1			506.9		524.8
	Truckload	154.6		159.9			624.9		610.4
	Specialized Services - Energy	91.7		65.8			321.4		211.6
	Specialized Services - Others	82.6		84.2			326.8		316.2
	Eliminations	(19.4)		(15.4)			(60.5)		(56.4)
Total		735.5		539.9			2,690.5		2,002.3
		$	% of Rev.	$	% of Rev.		$	% of Rev.	$	% of Rev.
Profit from operating activities (EBIT)
	Package and Courier	19.8	6.6	15.4	13.0		60.6	6.2	41.0	10.4
	Less-Than-Truckload	3.1	2.5	0.5	0.4		15.0	3.0	18.3	3.5
	Truckload	11.4	7.4	10.9	6.8		41.0	6.6	36.5	6.0
	Specialized Services - Energy	10.0	10.9	1.9	2.9		33.4	10.4	13.8	6.5
	Specialized Services - Others	12.3	14.9	11.9	14.1		46.1	14.1	40.5	12.8
	Corporate	(0.9)		2.2			(9.7)		(5.9)
Total		55.7	7.6	42.8	7.9		186.4	6.9	144.2	7.2

EXCESS CASH FLOW APPLIED TO REDUCE DEBT
Reflecting acquisitions, the Company's debt-to-equity ratio reached 1.26 on December 31, 2011, up from 1.02 a year earlier. Investments in business acquisitions of $373.5 million made during 2011 were financed by loans and borrowings ($229.3 million) and the solid cash flow generated over the period. TransForce will continue to apply its excess cash flow to debt reduction in order to maintain the flexibility to pursue its carefully targeted acquisition strategy.

OUTLOOK
"We believe the 2012 economic environment will resemble that of 2011 with conditions continuing to improve, but at a measured pace. While even this moderate recovery should strengthen our results, further improvements in efficiencies and the leveraging of our enhanced density will build additional shareholder value. We will deliver on this commitment by adhering to our operating principles and by executing our strategy with the same discipline and rigour that have made TransForce a North American leader in the transportation and logistics industry. Most importantly, these actions will generate cash flow to further reduce debt," concluded Mr. Bédard.

CONFERENCE CALL
TransForce will hold a conference call for analysts and portfolio managers on Wednesday, February 29, 2012 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 1-800-731-5319. A recording of the call will be available until midnight, March 7, 2012, by dialling 1-877-289-8525 or 416-640-1917 and entering passcode 4507547#.

ABOUT TRANSFORCE
TransForce Inc. is a North American leader in the transportation and logistics industry. Operating across Canada and the United States, 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 services to the energy sector, waste management, logistics and ancillary transportation services.

TransForce Inc. (TFI) is publicly traded on the Toronto Stock Exchange (TSX). 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 profit 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.

Note to readers:

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

 

 

Investors:
Alain Bédard
Chairman, President and CEO
TransForce Inc.
[phone]
[e-mail]

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