Mr. Alain Bedard reports
TFI INTERNATIONAL ANNOUNCES 2018 THIRD QUARTER RESULTS
TFI International Inc. has released its results for the third quarter ended Sept. 30, 2018.
Highlights:
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Record operating income for the second consecutive quarter;
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Operating income up 107 per cent over the same period last year to $125.1-million;
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Operating margin up 540 basis points over the same period last year to 11.1 per cent, driven by margin improvement in all four segments;
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Fourth consecutive quarter of sequential operating margin improvement in U.S. truckload, reaching 7.6 per cent;
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Net cash from operating activities from continuing operations up 29 per cent to $166.6-million;
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Raising quarterly dividend to 24 cents from 21 cents.
"Our second straight quarter of record operating results was driven by strength across all segments, reflecting our unwavering commitment to driving profitable growth and operating efficiencies," commented Alain Bedard, chairman, president and chief executive officer of TFI International. "Our operating income of $125.1-million more than doubled from a year earlier. While margins improved at all our segments, we are especially pleased with truckload, where our operating margins reached 14.5 per cent in Canada and 7.6 per cent in the U.S., capping four consecutive quarters of sequential improvement in the U.S. Equally important, our net cash from operating activities from continued operations grew nearly 30 per cent, further enhancing our ability to create shareholder value by strategically allocating resources and capitalizing on our unique positioning within the North American transportation and logistics industry."
FINANCIAL HIGHLIGHTS
(in millions of dollars, except per-share data)
Quarter ended Sept. 30, Nine months ended Sept. 30,
2018 2017 2018 2017
Total revenue $1,287.6 $1,176.6 $3,801.8 $3,644.5
Revenue before fuel surcharge 1,127.4 1,070.6 3,345.9 3,309.3
Adjusted EBITDA 190.0 128.2 505.6 383.5
Operating income 125.1 60.5 312.9 177.0
Net cash from operating activities
from continuing operations 166.6 128.9 369.7 256.5
Adjusted net income 94.5 48.8 235.0 137.9
Adjusted EPS -- diluted 1.04 0.53 2.58 1.48
Net income 86.7 98.8 215.3 37.8
EPS -- diluted 0.96 1.07 2.37 0.41
Third quarter 2018 results
For the third quarter of 2018, TFI International's revenue totalled $1.29-billion, up 9 per cent when compared with the same period last year. The company's revenue net of fuel surcharge totalled $1.13-billion in the quarter, up 5 per cent when compared with the same period last year.
Operating income grew by 107 per cent to $125.1-million from $60.5-million in the same period last year, driven by strong execution across the organization, increased quality of revenue and cost-efficiencies.
Net income totalled $86.7-million, or 96 cents per diluted share, compared with net income of $98.8-million, or $1.07 per diluted share, in the same period last year. The decline was mainly attributable to a gain on sale of property of $59.7-million, net of tax, in Q3 2017. Adjusted net income, which excludes amortization of intangible assets related to business acquisitions, net change in the fair value of derivatives, net foreign exchange gain or loss, gain or loss on sale of property and impairment of intangible assets, net of tax, amounted to $94.5-million, up 93 per cent from $48.8-million in the same period last year.
Nine-month period ended Sept. 30, 2018, results
For the first nine months of 2018, total revenue reached $3.8-billion, up from $3.64-billion in the first nine months of 2017. Net of fuel surcharge, revenue reached $3.35-billion, up from $3.31-billion last year. Operating income totalled $312.9-million, or 9.4 per cent of revenue before fuel surcharge, an increase when compared with $177-million and 5.3 per cent of revenue in the same period last year.
Net income totalled $215.3-million, or $2.37 per diluted share, up significantly from $37.8-million, or 41 cents per diluted share, in the same period last year. The increase of $177.5-million is mainly attributable to stronger operating income and the impairment of intangible assets of $138.4-million, net of tax, recorded in 2017, offset by lower gain on sale of property of $54.8-million, net of tax, recorded in 2018, compared with last year. Adjusted net income was $235-million, up from $137.9-million in the same period last year.
SEGMENTED RESULTS
(in millions of dollars)
Quarter ended Sept. 30, Nine months ended Sept. 30,
2018 2017 2018 2017
Revenue
Package and courier $ 154.6 $ 150.8 $ 455.7 $ 449.3
Less-than-truckload 227.5 217.0 670.3 673.4
Truckload 520.6 485.1 1,536.4 1,493.1
Logistics and last mile 234.7 229.8 718.1 730.6
Eliminations (10.0) (12.1) (34.7) (37.1)
Total 1,127.4 1,070.6 3,345.9 3,309.3
Operating income (loss)
Package and courier 28.0 23.6 78.8 65.0
Less-than-truckload 25.5 14.1 59.4 39.7
Truckload 60.5 16.7 143.8 55.2
Logistics and last mile 16.8 13.3 51.6 40.8
Corporate (5.6) (7.2) (20.7) (23.7)
Total 125.1 60.5 312.9 177.0
Note: Due to rounding, totals may differ slightly from the sum.
Cash flow and financial position
Net cash from operating activities from continuing operations totalled $166.6-million during the third quarter of 2018, up 29 per cent from $128.9-million in the same period last year. The company returned $23.9-million to shareholders, of which $18.4-million was through dividends and $5.6-million was through share repurchases. TFI International's long-term debt-to-equity ratio stood at 0.95 as of Sept. 30, 2018, down from 1.06 as of Dec. 31, 2017.
In the first nine months of 2018, the net cash from operating activities from continuing operations amounted to $369.7-million, up 44 per cent, compared with $256.5-million in the same period last year.
The board of directors of TFI International has approved a 24-cent quarterly dividend, a 14-per-cent increase over its previous quarterly dividend of 21 cents per share, effective as of the next regular dividend payment.
Conference call
TFI International will host a conference call on Monday, Oct. 22, 2018, at 5 p.m. ET to discuss these results. Interested parties can join the call by dialling 1-877-223-4471. A recording of the call will be available until 12 a.m. ET on Nov. 5, 2018, by dialling 1-800-585-8367 or 416-621-4642 and entering the passcode 9585705.
About TFI International Inc.
TFI International 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 an expanding 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 and last mile.
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