TFI International Announces 2019 First Quarter Results
- Record first quarter operating results
- Record operating income up 41% over the prior year period to $106.3 million
- Diluted EPS of $0.74 compares to $0.53 in Q1 2018, while Adjusted Diluted EPS1 increased 40% to $0.77
- First quarter net cash from operating activities of $160.7 million2
- $117.3 million returned to shareholders through dividends and share repurchases during the quarter
MONTREAL, April 23, 2019 (GLOBE NEWSWIRE) -- TFI International Inc. (TSX: TFII; OTCQX: TFIFF), a North American leader in the transportation and logistics industry, today announced its results for the first quarter ended March 31, 2019.
“The year is off to a strong start at TFI International, continuing our momentum that grew throughout 2018. We produced record first quarter results due to our relentless focus on strong execution and profitable growth, regardless of the economic cycle,” said Alain Bédard, Chairman, President and Chief Executive Officer. “The significant year-over-year increase in our quarterly operating income was driven by strong performance across all segments. We continue to believe that our investors value growing and tangible cash flow, which we delivered on again this quarter. In addition, we completed the acquisition of three attractive businesses during the quarter and were also able to return $117 million to shareholders through a combination of dividends and share repurchases. For the remainder of the year, as always, our focus will be on creating and unlocking shareholder value, and returning excess capital to shareholders whenever possible.”
| Financial highlights | Quarters ended March 31 | |
| (in millions of dollars, except per share data) | 2019 | 20182 |
| Total revenue | 1,230.8 | 1,196.5 |
| Revenue before fuel surcharge | 1,097.4 | 1,061.6 |
| Adjusted EBITDA1 | 188.9 | 129.0 |
| Operating income | 106.3 | 75.4 |
| Net cash from operating activities | 160.7 | 57.8 |
| Adjusted net income1 | 67.1 | 50.4 |
| Adjusted EPS - diluted1 ($) | 0.77 | 0.55 |
| Net income | 65.1 | 48.2 |
| EPS - diluted ($) | 0.74 | 0.53 |
| Weighted average number of shares ('000s) | 85,174 | 88,950 |
| 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 unaudited condensed consolidated interim financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable. | ||
FIRST QUARTER RESULTS
Total revenue of $1.23 billion was up 3%, and net of fuel surcharge, revenue of $1.10 billion was up 3%, compared to the prior year period.
Operating income grew 41% to $106.3 million from $75.4 million the prior year period, driven by strong execution across the organization, increased quality of revenue, and cost efficiencies.
Net income was $65.1 million, or $0.74 per diluted share, as compared to net income of $48.2 million, or $0.53 per diluted share, the prior year period. Adjusted net income, a non-IFRS measure, was $67.1 million, up 33% from $50.4 million the prior year period.
Diluted earnings per share (diluted “EPS”) of $0.74 compares to $0.53 in Q1 2018, with the increase primarily attributable to higher revenues and stronger operating margins. Adjusted diluted EPS, a non-IFRS measure, increased 40% to $0.77 from $0.55 in Q1 2018.
SEGMENTED RESULTS
During the first quarter of 2019, revenue grew across all segments except Logistic and Last Mile, which declined 5% relative to the first quarter of 2018.
Operating income was higher for all segments, driven by strong operating performance in addition to a sale of a property at Less-Than-Truckload, for a consideration of $16.5 million, generating a gain of $9.4 million.
| SEGMENTED RESULTS | |||||||||||||||||
| (in millions of dollars) | Quarters ended March 31 | ||||||||||||||||
| 2019 | 20182 | ||||||||||||||||
| $ | $ | ||||||||||||||||
| Revenue1 | |||||||||||||||||
| Package and Courier | 146.9 | 142.4 | |||||||||||||||
| Less-Than-Truckload | 208.0 | 203.6 | |||||||||||||||
| Truckload | 527.1 | 490.7 | |||||||||||||||
| Logistics and Last Mile | 224.3 | 236.6 | |||||||||||||||
| Eliminations | (8.9) | (11.6) | |||||||||||||||
| Total | 1,097.4 | 1,061.6 | |||||||||||||||
| $ | % of Rev.1 | $ | % of Rev.1 | ||||||||||||||
| Operating income (loss) | |||||||||||||||||
| Package and Courier | 21.0 | 14.3% | 20.6 | 14.5% | |||||||||||||
| Less-Than-Truckload | 27.6 | 13.3% | 11.4 | 5.6% | |||||||||||||
| Truckload | 50.7 | 9.6% | 36.3 | 7.4% | |||||||||||||
| Logistics and Last Mile | 15.2 | 6.8% | 15.0 | 6.3% | |||||||||||||
| Corporate | (8.3) | (7.9) | |||||||||||||||
| Total | 106.3 | 9.7% | 75.4 | 7.1% | |||||||||||||
| 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 unaudited condensed consolidated interim financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable. | |||||||||||||||||
CASH FLOW AND FINANCIAL POSITION
Net cash from operating activities was $160.7 million during Q1 2019, up 178% from $57.8 million the prior year quarter. This $102.9 million increase is attributable to positive changes in non-cash operating working capital for $52.3 million and to higher cash flow from operating activities before net change in non-cash operating working capital of $50.6 million attributable to stronger operating results and the replacement of lease expenses by depreciation of right-of-use assets and interests on lease liabilities as a result of the implementation of IFRS 16 Leases. IFRS 16 positively impacted cash from operating activities by a net amount of $23.8 million. The company returned $117.3 million to shareholders during the year, of which $20.7 million was through dividends and $96.6 million was through share repurchases.
CONFERENCE CALL
TFI International will host a conference call on Wednesday, April 24, 2019 at 8:30 a.m. Eastern Time 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 midnight, May 8, 2019, by dialing 1-800-585-8367 or 416-621-4642 and entering passcode 9897443.
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 and Last Mile.
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 .
FORWARD-LOOKING STATEMENTS
Except 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 MEASURES
This 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 before finance income and costs, income tax expense, depreciation, amortization, and gain or loss on sale of 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 generate cash from its operations.
| Adjusted EBITDA | Quarters ended March 31 | |||
| (unaudited, in millions of dollars) | 2019 | 2018* | ||
| Net income | 65.1 | 48.2 | ||
| Net finance costs | 20.5 | 13.9 | ||
| Income tax expense | 20.7 | 13.3 | ||
| Depreciation of property and equipment | 52.4 | 47.4 | ||
| Depreciation of right-of-use assets | 24.5 | - | ||
| Amortization of intangible assets | 15.8 | 15.8 | ||
| Gain on sale of assets held for sale | (10.1) | (9.5) | ||
| Adjusted EBITDA | 188.9 | 129.0 | ||
| Note: due to rounding, totals may differ slightly from the sum. * The current period results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the unaudited condensed consolidated interim financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable. | ||||
Adjusted net income and adjusted earnings per share (adjusted “EPS”), basic or diluted
Adjusted 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, and gain or loss on sale of assets held for sale, net of tax. 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 impacts 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 | Quarters ended March 31 | |||
| (unaudited, in millions of dollars, except per share data) | 2019 | 2018 | ||
| Net income | 65.1 | 48.2 | ||
| Amortization of intangible assets related to business acquisitions, net of tax | 11.3 | 11.2 | ||
| Net change in fair value and accretion expense of contingent considerations, net of tax | 0.1 | (0.4) | ||
| Net change in fair value of derivatives, net of tax | (0.0) | (0.1) | ||
| Net foreign exchange gain, net of tax | (0.5) | (0.2) | ||
| Gain on sale of land and buildings and assets held for sale, net of tax | (8.7) | (8.2) | ||
| Adjusted net income | 67.1 | 50.4 | ||
| Adjusted earnings per share - basic | 0.79 | 0.57 | ||
| Adjusted earnings per share - diluted | 0.77 | 0.55 | ||
| Note: due to rounding, totals may differ slightly from the sum. | ||||
Operating margin
Operating margin is calculated as operating income (loss) as a percentage of revenue before fuel surcharge.
Note to readers: Unaudited condensed consolidated interim financial statements and Management’s Discussion & Analysis are available on TFI International’s website at .
For further information:
Alain Bédard
Chairman, President and CEO
TFI International Inc.
(647) 729-4079
