TransForce lifts revenues on acquisitions, profits on operating efficiency gains



TransForce Inc (TSE:TFI) announced Tuesday its revenues rose 31%, but still slipped under analysts' expectations, while its earnings for the second quarter beat Street estimates, after several recent acquisitions helped boost profits.

For the three months ending June 30, the Quebec-based transportation and delivery company posted net income of $26.2 million, or $0.27 per share, up 54% from $17 million, or $0.148 per share, a year ago.

Adjusted for the after-tax effects of fair value derivatives changes, and other one-time items, profits totaled $28 million, or $0.29 per share, up 20% from $23.3 million, or $0.24 per share, a year ago.

Revenues for the quarter were $650.8 million, a 31% hike over $496.9 million a year ago. Excluding fuel surcharges, revenues were $581.5 million, compared to $455.9 million, up 28%, in the same period last year.

Analysts had anticipated $667.9 million in revenues. TransForce, however, beat estimates of 24 cents in earnings.

"TransForce achieved a solid performance in the second quarter," said president and CEO, Alain Bédard.

"Revenue growth was driven by recent acquisitions and our relentless focus on operating efficiencies."

Revenues from its package and courier division, which more-than-doubled to $335.3 million in the quarter, were helped by the US$248 million acquisition of Dynamex Inc in February, and the creation of Loomis Express to oversee the domestic operations of DHL Canada, which TransForce bought in April, for an undisclosed amount under $25 million.

Together, Dynamex and Speedy Heavy Hauling Inc, which TransForce purchased in August, 2010, added approximately $140 million in revenues for the second quarter.

The drop in revenues to $121.6 million from $138.4 million in the less-than-truckload segment, which includes brands like Canadian Freightways and Click Express, was more than offset by the truckload segment's 6% hike in revenues to $175 million, and the specialized services portion's 27% increase to $142.7 million in the quarter.

"As economic signals remain mixed, particularly in the U.S., TransForce will seek to maximize efficiencies and profitability from its recent acquisitions while focusing on cash flow generation and debt reduction," Bédard said of the company's outlook, for which it didn't give specific forecasts.

"In parallel, we intend to remain active, yet highly disciplined and selective when acquiring businesses in our key market segments."

In other news, TransForce, whose stock on the Toronto Stock Exchange rose 0.86% to trade at $14.14 per share as of 9:46 am EDT, announced the completion of its acquisition of Concord Transportation Inc., which has annual revenues of over $35 million.

A portion of the deal was paid for by the issuance of 134,228 common shares of TransForce, at $14.90 per share, or approximately $2.0 million.


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