TFI International Inc. (TSX: TFII; OTCQX: TFIFF), a North American
leader in the transportation and logistics industry, today
announced its results for the fourth quarter and full year ended
December 31, 2019.
“TFI International had a record-setting 2019
that continued through the fourth quarter. We are pleased
with our strong results during what has been a challenging time for
the broader transportation industry, and believe our performance
despite current market conditions stems from our sharp focus on the
fundamentals of the business,” said Alain Bédard, Chairman,
President and Chief Executive Officer. “We produced record
fourth quarter operating income which jumped 20% the past year, and
once again produced robust net cash from operating
activities. Similar to the prior quarter, three of our four
segments produced higher operating income than a year earlier, with
double-digit increases for Truckload and Logistics. We were
also pleased to return $50 million to shareholders during the
quarter through dividends and share repurchases. In summary,
we’re pleased with our performance throughout 2019 and remain
committed to strong execution to create and unlock value in the new
year, returning excess capital to our valued shareholders whenever
possible.”
Financial highlights |
Quarters ended Dec. 31 |
|
Years ended Dec. 31 |
(in millions of dollars, except per share
data) |
2019 |
20182 |
|
2019 |
20182 |
Total revenue |
1,305.5 |
1,321.4 |
|
5,178.9 |
5,123.2 |
Revenue before fuel
surcharge |
1,166.5 |
1,162.3 |
|
4,613.6 |
4,508.2 |
Adjusted EBITDA from
continuing operations1 |
217.5 |
180.7 |
|
864.5 |
686.3 |
Operating income from
continuing operations |
124.3 |
103.3 |
|
511.6 |
430.5 |
Net cash from continuing
operating activities |
176.2 |
173.8 |
|
665.3 |
543.5 |
Adjusted net income from
continuing operations1 |
79.2 |
86.3 |
|
336.4 |
321.6 |
Adjusted EPS from continuing
operations - diluted1 ($) |
0.95 |
0.96 |
|
3.94 |
3.54 |
Net income from continuing
operations |
76.5 |
76.7 |
|
324.5 |
292.0 |
EPS from continuing operations
- diluted ($) |
0.92 |
0.85 |
|
3.80 |
3.22 |
Weighted average number of shares ('000s) |
81,551 |
87,410 |
|
83,390 |
87,966 |
1 This is a non-IFRS measure. For a reconciliation, please refer to
the “Non-IFRS Financial Measures” section below.2 The current
period results include the impacts from the adoption of the new
IFRS 16 Leases as discussed in note 3 of the audited consolidated
financial statements. As is permitted with this new standard,
comparative information has not been restated and, therefore, may
not be comparable. |
FOURTH QUARTER RESULTSTotal
revenue of $1.31 billion was down 1% and, net of fuel surcharge,
revenue of $1.17 billion was flat compared to the prior year
period.
Operating income grew 20% to $124.3 million from
$103.3 million the prior year period, primarily driven by
acquisitions, strong execution across the organization, increased
quality of revenue, an asset-light approach, and cost efficiencies,
as well as the adoption of IFRS 16.
Net income from continuing operations was $76.5
million, in line with net income of $76.7 million the prior year
period, and net income from continuing operations of $0.92 per
diluted share was up relative to $0.85 per diluted share the prior
year period. Adjusted net income, a non-IFRS measure, was
$79.2 million, or $0.95 per diluted share, as compared to $86.3
million, or $0.96 per diluted share, the prior year period.
Revenue grew 3% for Truckload and 11% for
Logistics, and declined 5% for Package and Courier and 14% for
Less-Than-Truckload, relative to the prior year period.
Operating income was higher for Less-Than-Truckload, Truckload and
Logistics, while operating income for Package and Courier declined
13% as the comparable prior-year period benefited from the Canada
Post strike.
FULL-YEAR RESULTSTotal revenue
of $5.18 billion was up from $5.12 billion in 2018. Net of
fuel surcharge, revenue reached $4.61 billion, up from $4.51
billion the prior year. Operating income totalled $511.6
million, or 11.1% of revenue before fuel surcharge, an increase of
19% compared to $430.5 million and 9.5% of revenue the prior
year.
Net income from continuing operations was $324.5
million, or $3.80 per diluted share, versus $292.0 million, or
$3.22 per diluted share a year earlier. Adjusted net income
from continuing operations, a non-IFRS measure, was $336.4 million,
or $3.94 per diluted share, compared to $321.6 million, or $3.54
per diluted share the prior year period.
During 2019, revenue grew 7% for Truckload and
4% for Logistics, and declined 1% for Package and Courier and 8%
for Less-Than-Truckload relative to 2018. Operating income
was up 28% for Less-Than-Truckload, 23% for Truckload and 40% for
Logistics, and down 4% for Package and Courier.
SEGMENTED RESULTS |
|
|
|
|
|
|
|
|
|
|
(in millions of
dollars) |
Quarters ended Dec. 31 |
|
|
|
|
Years ended Dec. 31 |
|
|
|
|
|
|
2019 |
|
|
|
20182 |
|
|
|
|
2019 |
|
|
|
20182 |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
Revenue1 |
|
|
|
|
|
|
|
|
|
|
Package and Courier |
168.0 |
|
|
177.3 |
|
|
|
628.3 |
|
|
633.0 |
|
|
|
Less-Than-Truckload |
199.7 |
|
|
232.0 |
|
|
|
832.2 |
|
|
902.3 |
|
|
|
Truckload |
544.8 |
|
|
528.2 |
|
|
|
2,199.5 |
|
|
2,064.6 |
|
|
|
Logistics |
262.6 |
|
|
235.6 |
|
|
|
988.6 |
|
|
953.7 |
|
|
|
Eliminations |
(8.7 |
) |
|
(10.8 |
) |
|
|
(35.1 |
) |
|
(45.5 |
) |
|
|
|
1,166.5 |
|
|
1,162.3 |
|
|
|
4,613.6 |
|
|
4,508.2 |
|
|
|
|
$ |
|
% of Rev.1 |
|
$ |
|
% of Rev.1 |
|
|
$ |
% of Rev.1 |
|
$ |
|
% of Rev.1 |
|
|
|
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
Package and Courier |
29.9 |
|
17.8 |
% |
34.4 |
|
19.4 |
% |
|
109.1 |
|
17.4 |
% |
113.2 |
|
17.9 |
% |
|
Less-Than-Truckload |
25.5 |
|
12.8 |
% |
23.5 |
|
10.1 |
% |
|
109.2 |
|
13.1 |
% |
85.1 |
|
9.4 |
% |
|
Truckload |
61.3 |
|
11.2 |
% |
52.3 |
|
9.9 |
% |
|
255.0 |
|
11.6 |
% |
207.7 |
|
10.1 |
% |
|
Logistics |
18.8 |
|
7.1 |
% |
2.9 |
|
1.2 |
% |
|
76.4 |
|
7.7 |
% |
54.5 |
|
5.7 |
% |
|
Corporate |
(11.2 |
) |
|
(9.7 |
) |
|
|
(38.1 |
) |
|
(30.0 |
) |
|
|
|
124.3 |
|
10.7 |
% |
103.3 |
|
8.9 |
% |
|
511.6 |
|
11.1 |
% |
430.5 |
|
9.5 |
% |
|
Note: due to
rounding, totals may differ slightly from the sum. |
1 Revenue before
fuel surcharge. 2 The current period results include the impacts
from the adoption of the new IFRS 16 Leases as discussed in note 3
of the audited consolidated financial statements. As is permitted
with this new standard, comparative information has not been
restated and, therefore, may not be comparable. |
CASH FLOWNet cash from
continuing operating activities was $665.3 million during 2019
versus $543.5 million the prior year. The 22% increase was
due to stronger operating performance and the impact of the
adoption of IFRS 16. The Company returned $336.4 million to
shareholders during the year, of which $80.7 million was through
dividends and $255.7 million was through share repurchases.
On December 17, 2019, the Board of Directors of
TFI International declared a quarterly dividend of $0.26 per
outstanding common share payable on January 15, 2020, representing
an 8% increase over the $0.24 quarterly dividend declared in Q4
2018.
CONFERENCE CALLTFI
International will host a conference call on Monday, February 10,
2020 at 5 p.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, February 24, 2020, by
dialing 1-800-585-8367 or 416-621-4642 and entering passcode
1594371.
ABOUT TFI INTERNATIONAL
TFI 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 Toronto Stock
Exchange (TSX: TFII) and the OTCQX marketplace in the U.S. (OTCQX:
TFIFF). For more information, visit http://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 from continuing
operationsAdjusted EBITDA from continuing operations is calculated
as net income or loss from continuing operations before finance
income and costs, income tax expense, depreciation, amortization,
impairment of intangible assets, bargain purchase gain, and gain or
loss on sale of land and buildings, assets held for sale and
intangible assets. Management believes adjusted EBITDA from
continuing operations to be a useful supplemental measure. Adjusted
EBITDA from continuing operations is provided to assist in
determining the ability of the Company to assess its
performance.
Adjusted EBITDA from continuing
operations |
Quarters ended Dec. 31 |
|
|
Years ended Dec. 31 |
|
(unaudited, in millions of dollars) |
2019 |
|
20181 |
|
|
2019 |
|
20181 |
|
Net income from continuing operations |
76.5 |
|
76.7 |
|
|
324.5 |
|
292.0 |
|
Net finance costs (income) |
22.3 |
|
(0.0 |
) |
|
85.6 |
|
48.3 |
|
Income tax expense |
25.4 |
|
26.6 |
|
|
101.5 |
|
90.2 |
|
Depreciation of property and equipment |
59.0 |
|
52.4 |
|
|
223.8 |
|
198.5 |
|
Depreciation of right-of-use assets |
25.8 |
|
- |
|
|
102.6 |
|
- |
|
Amortization of intangible assets |
16.8 |
|
15.5 |
|
|
65.9 |
|
62.1 |
|
Impairment of intangible assets |
- |
|
12.6 |
|
|
- |
|
12.6 |
|
Bargain purchase gain |
- |
|
- |
|
|
(10.8 |
) |
- |
|
Gain on sale of land and buildings |
- |
|
(0.3 |
) |
|
- |
|
(0.5 |
) |
Gain on sale of assets held for sale |
(8.4 |
) |
(1.5 |
) |
|
(28.6 |
) |
(15.6 |
) |
Gain on sale of intangible assets |
- |
|
(1.2 |
) |
|
- |
|
(1.2 |
) |
Adjusted EBITDA from continuing operations |
217.5 |
|
180.7 |
|
|
864.5 |
|
686.3 |
|
Note: due to rounding, totals may differ slightly from the
sum. |
1 The current period results include the impacts from the adoption
of the new IFRS 16 Leases as discussed in note 3 of the audited
consolidated financial statements. As is permitted with this new
standard, comparative information has not been restated and,
therefore, may not be comparable. |
Adjusted net income from continuing operations
and adjusted earnings per share from continuing operations
(adjusted “EPS”), basic or dilutedAdjusted net income from
continuing operations 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, impairment of intangible assets,
bargain purchase gain, gain or loss on sale of land and buildings,
assets held for sale and intangible assets, and loss from
discontinued operations, net of tax. Adjusted earnings per share
from continuing operations, basic or diluted, is calculated as
adjusted net income from continuing operations divided by the
weighted average number of common shares, basic or diluted. The
Company uses adjusted net income from continuing operations and
adjusted earnings per share from continuing operations 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 from continuing
operations(unaudited, in millions of dollars,
except per share data) |
Quarters ended Dec. 31 |
|
|
Years ended Dec. 31 |
|
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
Net income |
74.8 |
|
76.7 |
|
|
310.3 |
|
292.0 |
|
Amortization of intangible assets related to business acquisitions,
net of tax |
12.0 |
|
11.0 |
|
|
47.1 |
|
44.0 |
|
Net change in fair value and accretion expense of contingent
considerations, net of tax |
0.1 |
|
(9.3 |
) |
|
0.2 |
|
(8.9 |
) |
Net change in fair value of derivatives, net of tax |
- |
|
(0.0 |
) |
|
- |
|
(0.3 |
) |
Net foreign exchange (gain) loss, net of tax |
(0.4 |
) |
1.2 |
|
|
0.2 |
|
0.5 |
|
Impairment of intangible assets, net of tax |
- |
|
9.1 |
|
|
- |
|
9.1 |
|
Bargain purchase gain |
- |
|
- |
|
|
(10.8 |
) |
- |
|
Gain on sale of land and buildings and assets held for sale, net of
tax |
(9.1 |
) |
(1.6 |
) |
|
(24.8 |
) |
(13.9 |
) |
Gain on sale of intangible assets, net of tax |
- |
|
(0.9 |
) |
|
- |
|
(0.9 |
) |
Net loss from discontinued operations |
1.7 |
|
- |
|
|
14.2 |
|
- |
|
Adjusted net income from continuing
operations |
79.2 |
|
86.3 |
|
|
336.4 |
|
321.6 |
|
Adjusted earnings per
share from continuing operations - basic |
0.97 |
|
0.99 |
|
|
4.03 |
|
3.66 |
|
Adjusted earnings per share from continuing operations -
diluted |
0.95 |
|
0.96 |
|
|
3.94 |
|
3.54 |
|
Note: due to rounding, totals
may differ slightly from the sum. |
|
|
|
|
|
Note to readers: |
|
Audited consolidated financial statements and Management’s
Discussion & Analysis are available on TFI International’s
website at http://www.tfiintl.com. |
For further information:Alain BédardChairman,
President and CEOTFI International Inc.(647)
729-4079abedard@tfiintl.com
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