TFI International Inc. (NYSE and TSX: TFII), a North American
leader in the transportation and logistics industry, today
announced its results for the second quarter ended June 30, 2020.
“Leveraging a longstanding adherence to our
operating principles, TFI International performed exceptionally
well during the second quarter in light of the unprecedented
disruption from COVID-19, all while continuing to protect the
wellbeing of our employees and customers. I wish to thank each of
the hardworking and dedicated members of the TFI family for driving
our resilience and for providing our customary impeccable service
levels during these challenging times,” said Alain Bédard,
Chairman, President and Chief Executive Officer. “With our solid
financial footing, our rapid response to the pandemic and a
heightened focus on the fundamentals of our business, we were able
to substantially grow our net cash from operating activities over
the prior year period. In addition, we continued our tradition of
thoughtful and disciplined M&A, with the acquisition of three
attractive businesses. While we saw notable improvement in
operating conditions as the quarter progressed and were pleased to
partially reverse several of our decisive cost reduction actions
implemented early in the quarter, TFI remains vigilant and agile
with a highly capable workforce. Longer term, we believe that
positive developments during the second quarter in terms of our
increased e-commerce activity and our own enhanced operating
synergies will benefit our continued creation of shareholder value
down the road.”
|
Financial highlights |
Quarters ended June 30 |
Six months ended June 30 |
|
(in millions of dollars, except per share
data) |
2020 |
2019* |
2020 |
2019* |
| Total revenue |
1,106.2 |
1,337.8 |
2,346.7 |
2,568.6 |
| Revenue before fuel
surcharge |
1,025.3 |
1,183.9 |
2,137.9 |
2,281.3 |
| Adjusted EBITDA1 |
232.1 |
236.3 |
432.6 |
423.9 |
| Operating income from
continuing operations |
131.5 |
149.0 |
249.9 |
253.9 |
| Net cash from continuing
operating activities |
227.9 |
141.4 |
419.6 |
302.1 |
| Adjusted net income1 |
92.1 |
102.0 |
161.6 |
169.1 |
| Adjusted EPS - diluted1
($) |
1.04 |
1.18 |
1.85 |
1.94 |
| Net income from continuing
operations |
69.7 |
100.2 |
145.4 |
165.3 |
| EPS from continuing operations
- diluted ($) |
0.79 |
1.16 |
1.66 |
1.90 |
|
Weighted average number of shares ('000s) |
87,411 |
84,183 |
86,063 |
84,676 |
|
* 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. |
SECOND QUARTER RESULTSTotal
revenue of $1.11 billion was down 17% and, net of fuel surcharge,
revenue of $1.03 billion was down 13% compared to the prior year
period.
Operating income from continuing operations
declined by 12% to $131.5 million from $149.0 million the prior
year period, primarily driven by a decline in volumes due to
COVID-19 and a bargain purchase gain recognized in the prior year
period offset by contributions from business acquisitions, strong
execution across the organization, an asset-light approach, and
cost efficiencies.
Net income from continuing operations was $69.7
million, a decrease of 30% compared to $100.2 million the prior
year period, and net income from continuing operations of $0.79 per
diluted share was down relative to $1.16 the prior year period.
Adjusted net income, a non-IFRS measure, was $92.1 million, or
$1.04 per diluted share, as compared to $102.0 million, or $1.18
per diluted share, the prior year period.
SIX-MONTH RESULTSFor the first
six months of 2020, total revenue was $2.35 billion, versus $2.57
billion in the first six months of 2019. Net of fuel surcharge,
revenue was $2.14 billion, as compared to $2.28 billion the prior
year. Operating income from continuing operations totalled $249.9
million, or 11.7% of revenue before fuel surcharge, compared to
$253.9 million or 11.1% of revenue before fuel surcharge the prior
year.
Net income from continuing operations was $145.4
million, or $1.66 per diluted share, versus $165.3 million, or
$1.90 per diluted share, a year ago. Adjusted net income was $161.6
million compared to $169.1 million the prior year.
During the first half of 2020, revenue grew 14%
for Logistics, driven by business acquisitions and e-commerce, and
declined 8% for Truckload, 9% for Package and Courier and 21% for
Less-Than-Truckload, relative to the prior year.
Operating income was higher for the Truckload
and Logistics segments, while operating income for Package and
Courier and Less-Than-Truckload declined.
|
SEGMENTED RESULTS |
|
|
|
|
|
|
|
|
|
| (in millions of
dollars) |
Quarters ended June 30 |
|
Six months ended June 30 |
|
|
2020 |
|
2019* |
|
2020 |
|
2019* |
| |
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
| Revenue1 |
|
|
|
|
|
|
|
|
|
|
Package and Courier |
139.5 |
|
|
158.5 |
|
|
|
279.0 |
|
|
305.5 |
|
|
|
Less-Than-Truckload |
158.4 |
|
|
219.1 |
|
|
|
338.6 |
|
|
427.1 |
|
|
|
Truckload |
471.2 |
|
|
570.4 |
|
|
|
1,004.7 |
|
|
1,097.5 |
|
|
|
Logistics |
265.0 |
|
|
244.9 |
|
|
|
533.7 |
|
|
469.2 |
|
|
|
Eliminations |
(8.8 |
) |
|
(9.0 |
) |
|
|
(18.1 |
) |
|
(17.9 |
) |
|
|
|
1,025.3 |
|
|
1,183.9 |
|
|
|
2,137.9 |
|
|
2,281.3 |
|
|
| |
$ |
|
% of Rev.1 |
$ |
|
% of Rev.1 |
|
$ |
|
% of Rev.1 |
$ |
|
% of Rev.1 |
| Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
Package and Courier |
22.6 |
|
16.2 |
% |
29.9 |
|
18.9 |
% |
|
38.1 |
|
13.7 |
% |
50.9 |
|
16.7 |
% |
|
Less-Than-Truckload |
33.4 |
|
21.1 |
% |
30.3 |
|
13.8 |
% |
|
51.1 |
|
15.1 |
% |
57.9 |
|
13.6 |
% |
|
Truckload |
69.5 |
|
14.8 |
% |
67.2 |
|
11.8 |
% |
|
132.5 |
|
13.2 |
% |
118.0 |
|
10.8 |
% |
|
Logistics |
22.7 |
|
8.6 |
% |
28.7 |
|
11.7 |
% |
|
48.6 |
|
9.1 |
% |
43.8 |
|
9.3 |
% |
|
Corporate |
(16.8 |
) |
|
(7.1 |
) |
|
|
(20.4 |
) |
|
(16.7 |
) |
|
|
|
131.5 |
|
12.8 |
% |
149.0 |
|
12.6 |
% |
|
249.9 |
|
11.7 |
% |
253.9 |
|
11.1 |
% |
| 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 $227.9 million during Q2 2020
versus $141.4 million the prior year quarter. The 61% increase was
due to stringent working capital management and the deferral of
certain tax payments due to economic stimulus measures initiated in
response to COVID-19. The Company returned $96.5 million to
shareholders during the first half of the year, of which $43.8
million was through dividends and $52.6 million was through share
repurchases. The company also paid down net debt of $492.5 million
during the first half of the year from proceeds generated from
operations and the share issuance.
Cash used for the purchases of property and
equipment was $27.3 million during Q2 2020 versus $69.8 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.
On June 15, 2020, the Board of Directors of TFI
International declared a quarterly dividend of $0.26 per
outstanding common share payable on July 15, 2020, representing an
8% increase over the $0.24 quarterly dividend declared in Q2
2019.
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 and has reinstated
a full five-day work week for 594 employees and rehired 793
employees full-time who had been furloughed.
CONFERENCE CALLTFI
International will host a conference call on Tuesday, July 28, 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, August 11, 2020, by
dialing 1-800-585-8367 or 416-621-4642 and entering passcode
9527458.
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
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 |
Quarters ended June 30 |
|
Six months ended June 30 |
|
|
(unaudited, in millions of dollars) |
2020 |
|
2019* |
|
2020 |
|
2019* |
|
|
Net income from continuing operations |
69.7 |
|
100.2 |
|
145.4 |
|
165.3 |
|
|
Net finance costs |
17.6 |
|
21.5 |
|
36.8 |
|
40.6 |
|
|
Income tax expense |
44.2 |
|
27.3 |
|
67.7 |
|
48.0 |
|
|
Depreciation of property and equipment |
58.1 |
|
55.8 |
|
115.2 |
|
108.2 |
|
|
Depreciation of right-of-use assets |
27.3 |
|
25.9 |
|
52.9 |
|
50.5 |
|
|
Amortization of intangible assets |
15.4 |
|
16.5 |
|
31.0 |
|
32.3 |
|
|
Bargain purchase gain |
- |
|
(10.8 |
) |
(5.6 |
) |
(10.8 |
) |
|
Gain on sale of land and buildings and assets held for sale |
(0.1 |
) |
(0.1 |
) |
(10.8 |
) |
(10.2 |
) |
|
Adjusted EBITDA |
232.1 |
|
236.3 |
|
432.6 |
|
423.9 |
|
|
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 June 30 |
|
Six months ended June 30 |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
Net income |
69.7 |
|
87.7 |
|
145.4 |
|
152.8 |
|
|
Amortization of intangible assets related to business acquisitions,
net of tax |
10.9 |
|
11.8 |
|
22.0 |
|
23.1 |
|
|
Net change in fair value and accretion expense of contingent
considerations, net of tax |
0.0 |
|
0.0 |
|
0.1 |
|
0.1 |
|
|
Net change in fair value of derivatives, net of tax |
(0.2 |
) |
0.0 |
|
0.2 |
|
- |
|
|
Net foreign exchange (gain) loss, net of tax |
0.0 |
|
0.7 |
|
(1.2 |
) |
0.2 |
|
|
Bargain purchase gain |
- |
|
(10.8 |
) |
(5.6 |
) |
(10.8 |
) |
|
Gain on sale of land and buildings and assets held for sale, net of
tax |
(0.2 |
) |
(0.0 |
) |
(9.4 |
) |
(8.8 |
) |
|
Net loss from discontinued operations |
- |
|
12.5 |
|
- |
|
12.5 |
|
|
U.S. Tax Reform |
11.9 |
|
- |
|
10.1 |
|
- |
|
|
Adjusted net income |
92.1 |
|
102.0 |
|
161.6 |
|
169.1 |
|
| Adjusted earnings per
share - basic |
1.05 |
|
1.21 |
|
1.88 |
|
2.00 |
|
|
Adjusted earnings per share - diluted |
1.04 |
|
1.18 |
|
1.85 |
|
1.94 |
|
| 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
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