TFI International Inc. (NYSE and TSX: TFII), a North American
leader in the transportation and logistics industry, today
announced its results for the third quarter ended September 30,
2020.
“TFI International had an outstanding quarter as
we continue to navigate through an unprecedented year. Relentless
focus on our proven operating principles helped generate a 18%
year-over-year increase in operating income and a robust 27%
increase in free cash flow, all while continuing to protect our
customers and employees,” said Alain Bédard, Chairman, President
and Chief Executive Officer. “Regardless of fluctuating macro
conditions, we have the experience and financial strength to create
shareholder value through disciplined execution of our asset-light
business plan, and are pleased to announce today a 12% increase in
our quarterly dividend. We also acquired or agreed to acquire an
additional five businesses during the quarter that are each an
outstanding fit with our proven operating philosophy, and add to my
confidence in TFI’s continued success going forward.”
Financial highlights(in millions of
dollars, except per share data) |
Quarters ended September
30 |
|
Nine months
endedSeptember
30 |
|
2020 |
2019* |
|
2020 |
2019* |
Total revenue |
1,247.2 |
1,304.8 |
|
3,593.9 |
3,873.4 |
Revenue before fuel
surcharge |
1,155.0 |
1,165.8 |
|
3,293.0 |
3,447.2 |
Adjusted EBITDA1 |
252.3 |
221.6 |
|
685.0 |
645.5 |
Operating income from
continuing operations |
156.0 |
131.9 |
|
405.9 |
385.9 |
Net cash from continuing
operating activities |
189.6 |
187.1 |
|
609.2 |
489.1 |
Adjusted net income1 |
115.8 |
88.1 |
|
278.0 |
257.2 |
Adjusted EPS - diluted1
($) |
1.25 |
1.04 |
|
3.11 |
2.99 |
Net income from continuing
operations |
110.7 |
82.6 |
|
256.1 |
247.9 |
EPS from continuing operations
- diluted ($) |
1.19 |
0.98 |
|
2.87 |
2.88 |
Weighted average number of shares ('000s) |
90,954 |
82,707 |
|
87,693 |
84,013 |
* Recasted for changes in presentation, see note 20 in the
unaudited condensed consolidated interim financial statements.1
This is a non-IFRS measure. For a reconciliation, please refer to
the “Non-IFRS Financial Measures” section below. |
THIRD QUARTER
RESULTSTotal revenue of $1.25 billion was down 4% and, net
of fuel surcharge, revenue of $1.16 billion was down 1% compared to
the prior year period.
Operating income from continuing operations
increased by 18% to $156.0 million from $131.9 million the prior
year period, primarily driven by strong execution across the
organization, an asset-light approach, cost efficiencies,
contributions from business acquisitions, and contributions from
the Canadian Emergency Wage Subsidy of $22.4 million.
Net income from continuing operations was $110.7
million, an increase of 34% compared to $82.6 million the prior
year period, due to improved contributions from operations and a
reduction in interest expense as a result of lower debt. Net income
from continuing operations of $1.19 per diluted share increased
relative to $0.98 the prior year period. Adjusted net income, a
non-IFRS measure, was $115.8 million, or $1.25 per diluted share,
up from $88.1 million, or $1.04 per diluted share, the prior year
period.
Total revenue grew 7% for Logistics, driven by
business acquisitions and e-commerce, and 1% for Package and
Courier, declined 6% for Truckload and 17% for Less-Than-Truckload,
relative to the prior year.
The operating income in all segments improved
from the prior year period except for the Truckload segment, where
the comparative period benefited from $6.4 million of higher gains
on the sale of real estate relative to this year.
TFI acquired four companies in Q3 and two post
Q3. Additionally, TFI has agreed to purchase DLS Worldwide which is
expected to close in the fourth quarter, and terminated the
previously announced agreement to acquire APPS Transport.
NINE-MONTH
RESULTSFor the first nine months of 2020, total
revenue was $3.59 billion, versus $3.87 billion in the first nine
months of 2019. Net of fuel surcharge, revenue was $3.23 billion,
as compared to $3.45 billion the prior year. Operating income from
continuing operations totalled $405.9 million, or 12.3% of revenue
before fuel surcharge, up from $385.9 million or 11.2% of revenue
before fuel surcharge the prior year.
Net income from continuing operations was $256.1
million, or $2.87 per diluted share, versus $247.9 million, or
$2.88 per diluted share, a year ago. Adjusted net income was $278.0
million up from $257.2 million the prior year.
For the first nine months of 2020, total revenue
grew 11% for Logistics, driven by business acquisitions and
e-commerce, and declined 9% for Truckload, 7% for Package and
Courier and 20% for Less-Than-Truckload, relative to the prior
year.
Operating income was higher for the Truckload,
Logistics and Less-Than-Truckload segments, while operating income
for Package and Courier declined.
SEGMENTED RESULTS |
(in millions of dollars) |
Quarters ended September
30 |
Nine months
ended September
30 |
|
2020 |
|
|
2019* |
|
|
|
2020 |
|
|
|
2019* |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Revenue1 |
|
|
|
|
|
|
|
|
Package and Courier |
163.2 |
|
|
154.8 |
|
|
442.2 |
|
|
460.3 |
|
|
Less-Than-Truckload |
177.4 |
|
|
205.4 |
|
|
516.0 |
|
|
632.5 |
|
|
Truckload |
544.7 |
|
|
557.2 |
|
|
1,549.4 |
|
|
1,654.7 |
|
|
Logistics |
279.8 |
|
|
256.8 |
|
|
813.5 |
|
|
726.0 |
|
|
Eliminations |
(10.1) |
|
|
(8.4) |
|
|
(28.2) |
|
|
(26.3) |
|
|
|
1,155.0 |
|
|
1,165.8 |
|
|
3,293.0 |
|
|
3,447.2 |
|
|
|
$ |
|
% ofRev.1 |
$ |
|
% ofRev.1 |
|
$ |
|
% ofRev.1 |
|
$ |
|
% ofRev.1 |
|
Operating income (loss) |
|
|
|
|
|
|
|
|
Package and Courier |
28.5 |
|
17.5% |
28.2 |
|
18.2% |
|
66.6 |
|
15.1% |
|
79.2 |
|
17.2% |
|
Less-Than-Truckload |
35.0 |
|
19.7% |
25.8 |
|
12.6% |
|
86.1 |
|
16.7% |
|
83.7 |
|
13.2% |
|
Truckload |
74.6 |
|
13.7% |
75.8 |
|
13.6% |
|
207.1 |
|
13.4% |
|
193.7 |
|
11.7% |
|
Logistics |
29.9 |
|
10.7% |
13.8 |
|
5.4% |
|
78.6 |
|
9.7% |
|
57.6 |
|
7.9% |
|
Corporate |
(12.0) |
|
|
(11.6) |
|
|
(32.5) |
|
|
(28.4) |
|
|
|
156.0 |
|
13.5% |
131.9 |
|
11.3% |
|
405.9 |
|
12.3% |
|
385.9 |
|
11.2% |
|
Note: due to
rounding, totals may differ slightly from the sum.* Recasted for
changes in presentation, see note 20 in the unaudited condensed
consolidated interim financial statements. |
|
1 Revenue before
fuel surcharge. |
|
CASH FLOWNet cash from
continuing operating activities was $189.6 million during Q3 2020
versus $187.1 million the prior year quarter. The Company returned
$119.3 million to shareholders during the year, of which $66.7
million was through dividends and $52.6 million was through share
repurchases. The company also paid down net debt of $495.8 million
during the year from proceeds generated from operations and the
share issuances.
Cash used for the purchases of property and
equipment was $50.5 million during Q3 2020 versus $103.3 million
the prior year quarter. In Q2, management initially suspended all
capital expenditures to which it had not already committed, but
reinstated most capital expenditures at the end of Q2. The lead
time to obtain equipment limited the capital expenditures in
Q3.
On September 15, 2020, the Board of Directors of
TFI International declared a quarterly dividend of $0.26 per
outstanding common share payable on October 15, 2020, representing
an 8% increase over the $0.24 quarterly dividend declared in Q3
2019.
The Board of Directors of TFI has approved a
$0.29 quarterly dividend, a 12% increase over its previous
quarterly dividend of $0.26 per share, effective as of the next
regular dividend payment.
REVERSAL OF CERTAIN
COST SAVING MEASURESTFI has rolled back certain
cost saving measures implemented at the onset of the COVID-19
pandemic that had spanned all operating companies and its entire
workforce. In the third quarter TFI has reinstated a full five-day
work week for 486 employees and rehired 176 employees full-time who
had been furloughed.
CONFERENCE CALLTFI
International will host a conference call on Friday, October 23,
2020 at 8:30 a.m. Eastern Time to discuss these results. Interested
parties can join the call by dialing 1-877-223-4471. A recording of
the call will be available until midnight, November 6, 2020, by
dialing 1-800-585-8367 or 416-621-4642 and entering passcode
5794241.
ABOUT TFI INTERNATIONALTFI
International Inc. is a North American leader in the transportation
and logistics industry, operating across the United States, Canada
and Mexico through its subsidiaries. TFI International creates
value for shareholders by identifying strategic acquisitions and
managing a growing network of wholly-owned operating subsidiaries.
Under the TFI International umbrella, companies benefit from
financial and operational resources to build their businesses and
increase their efficiency. TFI International companies service the
following segments:
- Package and
Courier;
- Less-Than-Truckload;
- Truckload;
- Logistics.
TFI International Inc. is publicly traded on the New York Stock
Exchange and the Toronto Stock Exchange under symbol TFII. For more
information, visit www.tfiintl.com.
FORWARD-LOOKING
STATEMENTSExcept for historical information provided
herein, this press release may contain information and statements
of a forward-looking nature concerning the future performance of
TFI International. These statements are based on assumptions 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 TFI International'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 FINANCIAL MEASURESThis
press release includes references to certain non-IFRS financial
measures as described below. These non-IFRS measures do not have
any standardized meanings prescribed by International Financial
Reporting Standards (IFRS) and are therefore unlikely to be
comparable to similar measures presented by other companies.
Accordingly, they should not be considered in isolation, in
addition to, not as a substitute for or superior to, measures of
financial performance prepared in accordance with IFRS. The terms
and definitions of the non-IFRS measures used in this press release
and a reconciliation of each non-IFRS measure to the most directly
comparable IFRS measure are provided below.
Adjusted EBITDA Adjusted EBITDA is calculated as
net income or loss from continuing operations before finance income
and costs, income tax expense, depreciation, amortization, bargain
purchase gain, and gain or loss on sale of land and buildings and
assets held for sale. Management believes adjusted EBITDA to be a
useful supplemental measure. Adjusted EBITDA is provided to assist
in determining the ability of the Company to assess its
performance.
Adjusted
EBITDA(unaudited
in millions of dollars) |
Quarters ended September
30 |
|
|
Nine months
ended September
30 |
|
|
2020 |
|
2019* |
|
|
2020 |
|
2019* |
|
Net income from continuing operations |
110.7 |
|
82.6 |
|
|
256.1 |
|
247.9 |
|
Net finance costs |
15.4 |
|
21.2 |
|
|
52.2 |
|
61.8 |
|
Income tax expense |
29.9 |
|
28.1 |
|
|
97.7 |
|
76.1 |
|
Depreciation of property and equipment |
56.4 |
|
56.6 |
|
|
171.5 |
|
164.8 |
|
Depreciation of right-of-use assets |
26.7 |
|
26.4 |
|
|
79.7 |
|
76.8 |
|
Amortization of intangible assets |
15.8 |
|
16.8 |
|
|
46.8 |
|
49.1 |
|
Bargain purchase gain |
- |
|
- |
|
|
(5.6 |
) |
(10.8 |
) |
Gain on sale of land and buildings and assets held for sale |
(2.6 |
) |
(10.1 |
) |
|
(13.4 |
) |
(20.2 |
) |
Adjusted EBITDA |
252.3 |
|
221.6 |
|
|
685.0 |
|
645.5 |
|
Note: due to rounding, totals may differ slightly from the
sum. |
* Recasted for change in presentation, see note 20 in the unaudited
condensed consolidated interim financial statements. |
Adjusted net income and adjusted earnings per
share (adjusted “EPS”), basic or dilutedAdjusted net income is
calculated as net income excluding amortization of intangible
assets related to business acquisitions, net change in the fair
value and accretion expense of contingent considerations, net
change in the fair value of derivatives, net foreign exchange gain
or loss, bargain purchase gain, gain or loss on sale of land and
buildings and assets held for sale, net of tax, net loss from
discontinued operations and U.S Tax Reform. Adjusted earnings per
share, basic or diluted, is calculated as adjusted net income
divided by the weighted average number of common shares, basic or
diluted. The Company uses adjusted net income and adjusted earnings
per share to measure its performance from one period to the next,
without the variation caused by the impact of the items described
above. The Company excludes these items because they affect the
comparability of its financial results and could potentially
distort the analysis of trends in its business performance.
Excluding these items does not imply they are necessarily
non-recurring.
Adjusted net income (unaudited, in
millions of dollars, except per share data) |
Quarters ended September
30 |
|
|
Nine months
ended September
30 |
|
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
Net income |
110.7 |
|
82.6 |
|
|
256.1 |
|
235.5 |
|
Amortization of intangible assets related to business acquisitions,
net of tax |
11.1 |
|
12.0 |
|
|
33.1 |
|
35.1 |
|
Net change in fair value and accretion expense of contingent
considerations, net of tax |
- |
|
- |
|
|
0.1 |
|
0.1 |
|
Net change in fair value of derivatives, net of tax |
(0.2 |
) |
- |
|
|
- |
|
- |
|
Net foreign exchange (gain) loss, net of tax |
(0.3 |
) |
0.4 |
|
|
(1.5 |
) |
0.6 |
|
Bargain purchase gain |
- |
|
- |
|
|
(5.6 |
) |
(10.8 |
) |
Gain on sale of land and buildings and assets held for sale, net of
tax |
(2.2 |
) |
(7.0 |
) |
|
(11.7 |
) |
(15.7 |
) |
Net loss from discontinued operations |
- |
|
- |
|
|
- |
|
12.5 |
|
U.S. Tax Reform |
(3.2 |
) |
- |
|
|
7.5 |
|
- |
|
Adjusted net income |
115.8 |
|
88.1 |
|
|
278.0 |
|
257.2 |
|
Adjusted earnings per share - basic |
1.27 |
|
1.07 |
|
|
3.17 |
|
3.06 |
|
Adjusted earnings per share - diluted |
1.25 |
|
1.04 |
|
|
3.11 |
|
2.99 |
|
Note: due
to rounding, totals may differ slightly from the
sum. |
Note to readers: |
Unaudited condensed consolidated interim financial statements and
Management’s Discussion & Analysis are available on TFI
International’s website at www.tfiintl.com. |
For further information:Alain
BédardChairman, President and CEOTFI International Inc.(647)
729-4079abedard@tfiintl.com
TFI (TSX:TFII)
Historical Stock Chart
From Mar 2024 to Apr 2024
TFI (TSX:TFII)
Historical Stock Chart
From Apr 2023 to Apr 2024