- Fourth quarter diluted EPS from continuing operations of $0.92 up from $0.85 in Q4 2018, while Adjusted Diluted EPS from continuing operations1 of $0.95 compares to $0.96 the prior year fourth quarter
- Net cash from continuing operating activities was $176.2 million2, as compared to $173.8 million in Q4 2018
- Full-year 2019 net cash from continuing operating activities up 22% to $665.3 million2
- Returned $336.4 million to shareholders through dividends and share repurchases in 2019
Montreal, Quebec, February 10, 2020 – 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 $50 million to shareholders during the quarter through dividends and share repurchases. In summary, we’re pleased with our performance throughout 2019 and remain committed to strong execution to create and unlock value in the new year, returning excess capital to our valued shareholders whenever possible.”
| Financial highlights (in millions of dollars, except per share data) |
Quarters ended Dec. 31 | Years ended Dec. 31 | ||
|---|---|---|---|---|
| 2019 | 20182 | 2019 | 20182 | |
| Total revenue | 1,305.5 | 1,321.4 | 5,178.9 | 5,123.2 |
| Revenue before fuel surcharge | 1,166.5 | 1,162.3 | 4,613.6 | 4,508.2 |
| Adjusted EBITDA from continuing operations1 | 217.5 | 180.7 | 864.5 | 686.3 |
| Operating income from continuing operations | 124.3 | 103.3 | 511.6 | 430.5 |
| Net cash from continuing operating activities | 176.2 | 173.8 | 665.3 | 543.5 |
| Adjusted net income from continuing operations1 | 79.2 | 86.3 | 336.4 | 321.6 |
| Adjusted EPS from continuing operations – diluted1 ($) | 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 RESULTS
Total 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 RESULTS
Total 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) | |||||
| Total | 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) | |||||
| Total | 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 FLOW
Net 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 CALL
TFI 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.
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 from continuing operations
Adjusted 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 (unaudited, in millions of dollars) |
Quarters ended Dec. 31 | Years ended Dec. 31 | ||
|---|---|---|---|---|
| 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 diluted
Adjusted 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.