News Column

Trimac Announces its Second Quarter Results

August 4, 2014



ENP Newswire - 04 August 2014

Release date- 01082014 - Calgary, Alberta - Trimac Transportation Ltd. (TSX: TMA), Canada's leader in bulk trucking, announces the release of its financial results for the three and six months ended June 30, 2014.

For the current quarter revenue before fuel surcharges increased $4.8 million from the $90.4 million reported for the three months ended June 30, 2013 ('prior quarter'). These improvements were primarily in the bulk trucking and National Tank Services segments.

Higher volumes with existing customers in petroleum hauling, dry bulk and pressure commodities contributed to the bulk trucking segment's revenue growth, as well as rate increases with various customers. In addition, new business and some campaign hauling in pressure and dry bulk commodities and in Northern Resource Trucking also contributed to the revenue improvements while a business loss in resource commodities partially reduced the revenue gains. National Tank Services' third party revenue increased $0.8 million during the current quarter primarily due to higher volumes with existing customers while Bulk Plus Logistics' revenue decreased $0.2 million during the current quarter primarily due to lower volumes in its freight management operations.

For the current year revenue before fuel surcharges improved $7.5 million to $191.1 million compared to the $183.6 million reported for the six months ended June 30, 2013 ('prior year'). Revenue growth was experienced in the bulk trucking and National Tank Services segments. The bulk trucking segment experienced revenue growth from new business, higher volumes from existing customers and some campaign hauls, as well as rate increases with various customers.

These improvements were partially offset by some business losses in pressure and resource commodities. National Tank Services' third party revenue growth was attributable to higher volumes from existing customers and some new business while Bulk Plus Logistics' revenue decreased $0.1 million primarily due to lower revenue volumes.

Operating expenses, which includes direct costs net of fuel surcharge revenue (net direct costs) and selling and administrative costs, for the current quarter increased, as a result of the revenue growth, 4.4 percent over the prior quarter to $83.7 million. As a percentage of revenue before fuel surcharges operating expenses decreased to 87.9 percent compared to the prior quarter of 88.7 percent primarily due to reduced selling and administrative costs in the current quarter.

In the bulk trucking segment revenue growth resulted in increased driver and leased operator remuneration, higher permits and toll costs, and higher maintenance costs. Additional maintenance costs also contributed to the rise in operating expenses while reduced training and insurance costs partially mitigated the increase as well as lower salary, office, management incentive and rental costs.

These reductions relate to administration streamlining and nonrecurring expenses relating to the corporate office move in May, 2013. National Tank Services' operating expenses increased $1.9 million primarily due to higher wage costs from additional mechanics, while Bulk Plus Logistics' operating expenses decreased $0.1 million due to organizational restructuring.

For the current year, operating expenses as a percentage of revenue before fuel surcharges decreased slightly from 88.5 percent to 88.3 percent. Operating inefficiencies from severe winter weather in the first quarter drove operating expenses up in the bulk trucking segment causing unscheduled maintenance requirements, escalating fuel costs and higher accident costs.

Revenue growth and start up costs for the new business awarded in the bulk trucking segment also contributed to the increase in operating expenses, which included increased driver and leased operator remuneration and higher maintenance, permits and tolls and facility costs. Reduced training and cleaning costs partially offset this increase as well as lower selling and administrative costs resulting from our administration restructuring that was previously mentioned. National Tank Services' operating expenses were higher due to higher revenue volumes and increased wage costs and Bulk Plus Logistics' operating expenses were higher primarily due to a change in their business mix.

EBITDA increased 12.7 percent in the current quarter to $11.5 million, while operating earnings grew 45.7 percent to $5.1 million. These increases were primarily due to the revenue growth and reduced selling and administrative costs and lower depreciation expense. For the year EBITDA increased 5.7 percent to $22.3 million and operating earnings increased 20.0 percent to $9.6 million.

Earnings per share for the current quarter increased to 11 cents from 7 cents in the prior quarter. For the current year earnings per share increased to 22 cents from 18 cents in the prior year.

'Trimac is focused on operational excellence to lower our operating costs, improve asset utilization and increase both market share and profitability. We expect revenue growth in the back half of 2014 to be similar to the first half of the year,' commented Edward V. Malysa, President and Chief Operating Officer.

Declaration of Quarterly Dividend

The Board of Directors today declared a dividend of $0.07 per share on the Class A shares, payable on October 15, 2014 to shareholders of record at the close of business on September 30, 2014. This dividend is designated as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act (Canada) and any provincial legislation pertaining to eligible dividends.

Forward Looking Statements

Certain information included in this news release constitutes 'forward looking statements'. Trimac cautions that, by their nature, these forward looking statements are based on suppositions, risks, and uncertainties as well as on management's best possible evaluation of future events. Trimac cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty.

Such forward looking statements are not guarantees of future performance and the actual results or performance of Trimac or the transportation industry may be materially different from the outlook or any future results or performance implied by such statements.

Non GAAP Financial Measures

Net direct costs, adjusted EBITDA, adjusted net income, cash generated from operations, operating ratio before interest and tax, adjusted free cash flow and earnings per share adjusted are financial measures not prescribed by IFRS and are not likely to be comparable to similar measures presented by other issuers. Management considers these non GAAP measures useful in evaluating the performance of Trimac's operations.

These measures should be considered in addition to, not a substitute for, the financial performance measures prepared in accordance with IFRS.

Profile

Trimac is Canada's largest provider of bulk trucking services with operations from coast to coast. In addition, through its National Tank Services division, Trimac performs repairs, maintenance, trailer fabrication and tank trailer cleaning services for both the Trimac fleet and for third party commercial customers.

Trimac also provides third party transportation logistics services in Canada and the United States through its wholly owned subsidiary Bulk Plus Logistics. Shares of Trimac Transportation Ltd. are traded on the Toronto Stock Exchange under the symbol TMA.

For more detailed information, please visit our website at www.trimac.com or SEDAR at www.sedar.com and review our MD&A and the unaudited condensed consolidated interim financial statements for the Company.

Contact:

Edward V. Malysa

President & Chief Operating Officer

Trimac Transportation Ltd.

Tel: 403 298 5100

Fax: 403 298 5146

Scott D. Calver

Vice President

Trimac Transportation Ltd.

Tel: 403 298 5100

Fax: 403 298 5146


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Source: ENP Newswire


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