Mr. Alain Bedard reports

TFI INTERNATIONAL ANNOUNCES 2022 FOURTH QUARTER AND FULL-YEAR RESULTS

TFI International Inc. has released its results for the fourth quarter and full year ended Dec. 31, 2022. All amounts are shown in U.S. dollars.

"TFI International successfully capped 2022 with strong fourth quarter results, generating slightly higher operating income on significantly improved operating margins, a 53-per-cent increase in the full-year adjusted diluted [earnings per share] and a 26-per-cent increase in the full-year free cash flow, despite macrovolatility, fuel-related working capital outlays, and the sale of CFI assets last summer that served to strengthen our overall business mix and returns," said Alain Bedard, chairman, president and chief executive officer. "As laid out at our recent investor day, our unique positioning includes business line diversity, exposure to attractive niche markets and numerous self-help initiatives that are producing remarkable success during turbulent economic times. Most importantly, our relative stability, margin expansion and free cash flow reflect the tireless efforts of our people, who are diligently adhering to our long-standing operating principles regardless of external factors. Capitalizing on this attractive competitive positioning and our sharp focus on the fundamentals, we continue to strategically allocate capital toward attractive acquisitions, with our acquisition pipeline remarkably strong and the majority of these closings expected in the first half of the year. During the quarter, our board of directors approved a 30-per-cent increase to our quarterly dividend, and we continued to repurchase shares, both reflecting our favourable outlook. We enter 2023 in the best position in TFI International's history and are eager to create additional shareholder value in the year ahead."

Fourth quarter results

Total revenue of $1.96-billion compared with $2.14-billion in the prior-year period and revenue before fuel surcharge of $1.62-billion compared with $1.89-billion in the prior-year period. The decline is primarily due to the sale of CFI's truckload, temp control and Mexican non-asset logistics business in August, 2022, which had sales of $139.2-million in Q4 2021, as well as to reduced volumes in U.S. LTL operations driven by a combination of weaker end market demand, as well as the company's intentional elimination of unprofitable freight.

Operating income grew 1 per cent to $216.9-million from $215.0-million in the prior-year period with a 200-basis-point operating margin (1) improvement, despite $12.4-million of operating income included in the fourth quarter of 2021 from CFI.

Net income grew 6 per cent to $153.5-million from $144.1-million in the prior-year period, and net income of $1.74 per diluted share was up relative to $1.52 in the prior-year period. Adjusted net income, a non-international financial reporting standard measure, was $151.8-million, or $1.72 per diluted share, up from $148.6-million, or $1.57 per diluted share, in the prior-year period.

Total revenue declined for all segments relative to the prior-year period with decreases of 3 per cent for package and courier, 6 per cent for less than truckload, 14 per cent for truckload, and 11 per cent for logistics. In contrast, operating income was higher for package and courier by 2 per cent, for truckload by 16 per cent, and for logistics by 4 per cent, and lower for less than truckload by 15 per cent in the fourth quarter in comparison with the prior-year. Truckload operating income in the prior-year period included a $12.4-million contribution from CFI, which was partially offset by an increased contribution of $9.7-million from the sale of real estate in the quarter. Operating income in the less-than-truckload segment, more specifically U.S. LTL, decreased due to the lower freight volumes, as well as to non-recurring costs related to exiting the transition service agreement with UPS. On Feb. 1, 2023, the financial system supporting the U.S. LTL operations was migrated from UPS to a stand-alone system managed by TFI International.

Full-year results

Total revenue was $8.81-billion for 2022 versus $7.22-billion in 2021. Revenue before fuel surcharge of $7.36-billion was up 14 per cent compared with the prior year.

Operating income totalled $1,146.0-million, or 16 per cent of revenue before fuel surcharge, an increase of 17 per cent compared with $979.2-million and 15 per cent of revenue before fuel surcharge in the prior year. The increase is mainly attributable to the contributions from acquisitions, including a gain on sale of business of $73.7-million.

Net income was $823.2-million, or $9.02 per diluted share, compared with $754.4-million, or $7.91 per diluted share, a year earlier. Adjusted net income and adjusted diluted EPS, non-IFRS measures, were $731.7-million, or $8.02 per diluted share, compared with $498.3-million, or $5.23 per diluted share, the prior year.

During 2022, total revenue grew 1 per cent for package and courier, 43 per cent for less than truckload, 13 per cent for truckload, and 6 per cent for logistics relative to the prior year. Operating income was up 24 per cent for package and courier, 59 per cent for truckload, down 18 per cent for less than truckload, mainly due to the inclusion of the bargain purchase gain in 2021, and down 2 per cent for logistics.

(1) This is a non-IFRS measure.

Cash flow

Net cash flow from operating activities was $971.6-million during 2022 compared with $855.4-million the prior year. The 14-per-cent increase was due to stronger operating performance and contributions from acquisitions. The company returned $665.3-million to shareholders during the year, of which $97.3-million was through dividends and $568.0-million was through share repurchases.

On Dec. 15, 2022, the board of directors of TFI International declared a quarterly dividend of 35 cents per outstanding common share paid on Jan. 16, 2023, representing a 30-per-cent increase over the 27-cent quarterly dividend declared in fourth quarter 2021.

Conference call

TFI International will host a conference call on Monday, Feb. 6, 2023, at 5 p.m. Eastern Time, to discuss these results. Interested parties can join the call by dialling 1-855-327-6837 or 1-631-891-4304. A recording of the call will be available until 11:59 p.m. Eastern Time on Monday, Feb. 20, 2023, by dialling 1-844-512-2921 or 1-412-317-6671.

About TFI International Inc.

TFI International is a North American leader in the transportation and logistics industry, operating across the United States and Canada 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 is publicly traded on the New York Stock Exchange and the Toronto Stock Exchange under the symbol TFII.

We seek Safe Harbor.