Click here to close now.

Welcome!

News Feed Item

Contrans Announces Record Results

(TSX:CSS)

WOODSTOCK, ON, Feb. 26, 2014 /CNW/ -  

Financial Highlights

For the years ended December 31    
($CAD millions except share and per share amounts) 2013 2012
Revenue - total $ 572.3     $ 522.2    
  - fuel surcharges   (83.6)       (77.8)    
Revenue - services   488.7 100.0 %   444.4 100.0 %
Direct operating expenses - net of fuel surcharges (1)   392.7 80.4     351.5 79.1  
Gross margin   96.0 19.6     92.9 20.9  
General and administration expenses   49.0 10.0     47.6 10.7  
Gain on sale of equipment   (0.8) (0.2)     (1.2) (0.3)  
Net financing costs   7.2 1.5     6.9 1.6  
Earnings before income taxes   40.6 8.3     39.6 8.9  
Income tax expense   11.2 2.3     11.3 2.5  
Net earnings and comprehensive income $ 29.4 6.0 % $ 28.3 6.4 %
Earnings per share - Basic $ 0.87     $ 0.83    
  - Diluted $ 0.86     $ 0.83    
Weighted average shares outstanding  (000s) - Basic   33,799       33,894    
  - Diluted   34,130       33,925    
Total assets $ 389.7     $ 384.0    
Long-term debt and finance lease obligations   109.6       131.2    
Dividends declared per share   0.48       0.40    
Depreciation   27.1       22.6    
Amortization of intangibles $ 4.8     $ 4.2    
      (1)      See "Use of Non-GAAP Financial Measure" below.

"Contrans had an excellent year in 2013, the second year in a row in which new Company financial records were established" stated Stan Dunford, Contrans' Chairman of the Board of Directors and Chief Executive Officer. "This achievement featured healthy organic growth powered by several major awards of new business. The Company's performance would have been even better were it not for a series of challenging situations that reduced shipments of freight from some of our top customers. Lower commodity prices adversely affected business activity in the resource sector. In Quebec, the Charbonneau Commission inquiry into corruption in that province and a general construction strike hindered shipments of construction materials. Construction season throughout Canada had a late start in 2013 due to a prolonged winter that was followed by an unusually wet spring. In Ontario, a labour dispute at a major customer disrupted their freight shipments. The professionalism with which Contrans' managers responded to this set of challenges resulted in substantial revenue growth for the Company in 2013. Their efforts should be applauded."

"The Board of Directors believes that Contrans' shareholders deserve to participate in the Company's continued success by receiving a dividend increase" added Mr. Dunford. "Accordingly, after considering the Company's outstanding 2013 financial performance and its prospects for 2014, Contrans' Board of Directors recently concluded that increasing the rate of annual dividends from $0.50 to $0.60 would be appropriate. This would be nearly double the annual dividend rate of $0.32 per share that the Company paid to its shareholders in 2010."

"Contrans has been resilient through economic downturns due in part to the fact that the Company has not been heavily burdened with debt" Mr. Dunford further added. "Approximately $30 million of Contrans' term debt matured in December 2013 and was repaid. This payment was a particularly satisfying achievement for management as it reflected the Company's operating successes and its financial strength. Entering 2014, Contrans' balance sheet is very strong and the Company is well-positioned for continued growth."

"Contrans has continued to invest in trucks and trailers" noted Mr. Dunford. "Contrans' fleet of equipment is considered to be the most modern and efficient in the industry providing Contrans with a meaningful advantage over its competitors. An efficient fleet optimizes hauling capacity which, in turn, greatly enhances customer service. A modern fleet is more attractive and reliable than an older fleet making Contrans far more appealing to both owner-operators and to company drivers."

"Contrans has been built on principles designed to sustain the Company's health through economic downturns" Mr. Dunford pointed out. "Maintaining a conservative capital structure is fundamental to this objective. Contrans utilizes a variable cost structure that permits management to react swiftly to reduced business activity. Unlike a less-than-truckload carrier, Contrans does not have the burden of costs arising from maintaining a large network of terminals, cross-docking facilities and a fleet of local pick-up and delivery vehicles regardless of the amount of revenue being generated. Another important factor that has insulated Contrans against the effects of economic downturns is the quality and diversity of its customer base. The Company has earned the trust and respect of its customers by providing high levels of service and by providing a full range of the most modern and efficient equipment in the industry. Furthermore, Contrans has successfully grown in several niche markets where shippers are as sensitive to service as they are to price. These factors enabled Contrans to continue to grow both in size and in diversity in 2013. These strategies have enabled the Company to maintain its margins of profit in good times and in bad times with, quite remarkably, little variation. Contrans' track record speaks for itself. Our business model works."

"Contrans would not be what it is today without the contributions of its management team" concluded Mr. Dunford." The Company's long record of profitable growth, highlighted by consecutive record-setting years in 2012 and 2013, is testimony to their efforts. This, however, is not a group that has ever rested upon its laurels. Year after year, management has raised the standard of excellence that it sets for itself. Contrans' management is an inspired, experienced, high-performing team that is dedicated to adding long-term value for the Company and its shareholders."

RESULTS FROM OPERATIONS - CONSOLIDATED
Revenue
Acquisitions contributed approximately $20.7 million of incremental service revenue ("revenue") in 2013 and approximately $5.2 million of revenue in the fourth quarter of 2013 ("2013 Q4").  Revenue also increased in 2013 due to organic growth. In February 2013, Contrans commenced collecting residential waste in Edmonton, Alberta. This generated $4.3 million of revenue in 2013 (2013 Q4 - $1.2 million). On July 1, 2013, Contrans commenced transporting waste from Calgary, Alberta to Coronation, Alberta. This new contract contributed $4.1 million of revenue in 2013 (2013 Q4 - $2.0 million). Contrans was also awarded a contract to transport metallurgical coke from Hamilton, Ontario to Nanticoke, Ontario.  Work began in October 2013 and generated approximately $2.8 million of revenue in 2013 Q4.

Direct operating expenses
Acquisitions added approximately $17.0 million to direct operating expenses in 2013 (2013 Q4 - $4.3 million). In addition, Contrans' direct operating expenses increased in 2013 commensurate with increased revenue. Direct operating expenses were also affected by adverse business conditions including unusually poor winter and spring weather, disruptions to the construction industry and a labour dispute at a major customer. These conditions negatively impacted equipment utilization which, in turn, caused operating expenses, measured as a percentage of revenue, to increase.  In addition, the Company's fuel surcharge programs consistently lagged steadily increasing fuel prices in 2013. This lag was primarily responsible for fuel expenses increasing by approximately $2.5 million in 2013 compared to 2012 (2013 Q4 - $0.9 million increase).   Depreciation of tractors and trailers was $1.7 million higher in 2013 than in 2012 due to increased capital expenditures (2013 Q4 - $0.9 million higher).

General and administration expenses
Acquisitions added approximately $1.9 million of general and administration expenses in 2013 (2013 Q4 - $0.8 million).  Share-based, cash-settled compensation expense increased by $0.6 million in 2013 compared to 2012 (2013 Q4 - $0.2 million increase). This resulted primarily from the appreciation in the trading price of Contrans' shares from $10.00 at December 31, 2012 to $13.28 at December 31, 2013.   Professional fees were lower in 2013 compared to 2012 primarily as a result of $0.6 million of costs that were incurred in 2012 that related to a proposed elimination of Contrans' dual class share structure.

Net financing costs
Net financing costs increased by $0.4 million in 2013 compared to 2012 (2013 Q4 - $0.1 million increase). Financing costs increased in 2013 in line with average debt levels.  Finance income decreased in 2013 as Contrans used cash and sold short-term investments to fund business acquisitions and purchases of property and equipment.

Income tax expense
In 2012, the Ontario government reversed its decision to lower the provincial corporate tax rate to 10%.  Accordingly, Contrans recognized a charge to earnings in 2012 which increased the Company's effective tax rate for 2012.

CASH FLOW
Contrans incurred capital expenditures, including expenditures that were funded through finance leases, of $51.8 million in 2013 (2012 - $29.2 million).  Of this amount, $21.3 million was incurred to support growth initiatives in 2013 (2012 - $6.0 million). Contrans' 2013 capital expenditures also included $7.7 million of costs in the construction of its new terminal facility in Edmonton, Alberta.  This new facility opened in December, 2013. In addition, Contrans purchased a warehouse facility in 2013 near Montreal, Quebec for $4.4 million. This purchase was partially financed with a $3.0 million mortgage. This warehouse has enabled the Company to offer ancillary services to its freight transportation customers in Quebec.

Contrans' Board of Directors ("Board") has declared the following dividends:

Declaration Date Paid on Per share amount Total
January 16, 2013  February 15, 2013 $0.10 $3.4 million
April 16, 2013 May 15, 2013 $0.125 $4.2 million
July 16, 2013 August 15, 2013 $0.125 $4.2 million
October 17, 2013 November 15, 2013 $0.125 $4.2 million
January 15, 2014 February 14, 2014 $0.125 $4.2 million

The payment of dividends is subject to the discretion of Contrans' Board. Prior to declaring a dividend, the Board considers many factors, including Contrans' overall financial condition, its expected future financial performance, its anticipated capital requirements as well as its debt repayment obligations and the covenants that are contained in Contrans' loan agreements

Use of Non-GAAP Financial Measures
Management has included a non-GAAP financial measure, "Direct operating expenses - net of fuel surcharges", to supplement its interim financial statements. This non-GAAP financial measure does not have any standardized meaning prescribed under IFRS and therefore it may not be comparable to similar measures employed by other issuers. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Management believes that it is important to isolate the effects of fuel surcharges, a volatile source of revenue and direct operating expenses, when analyzing operating results. Accordingly, the percentages in the Financial Highlights table were calculated using revenue from services alone as the base.  In addition, direct operating expenses are stated after netting fuel surcharges against fuel expenses in the Financial Highlights table. Management believes that this facilitates a better comparison of operating costs and profit margins between periods.

These non-GAAP financial measures do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures employed by other issuers. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

FORWARD-LOOKING STATEMENTS
Management's discussion and analysis contains certain forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements relate to future events or future performance and include, but are not limited to, changes in government regulations regarding weights and dimensions of highway equipment, the age and condition of the transportation fleet and the growth of Contrans' business. Often, but not always, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. Such statements reflect the current views and estimates of management with respect to future events, as of the date such statements are made, and they involve known and unknown risks and uncertainties which may cause actual events or results to differ materially from those expressed or implied by forward-looking statements. In evaluating these statements, readers should specifically consider factors such as the risks outlined under "Risk Factors" in Contrans' Annual Information Form, which is available at www.sedar.com. Although Contrans has attempted to identify important factors that could cause actual events, actions or results to differ materially from those described in the forward-looking statements, there may be other factors that cause such events, actions or results to differ. Contrans is under no obligation (and expressly disclaims any such obligation) to update forward-looking statements if circumstances or management's views or estimates change. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.

SOURCE Contrans Group Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Manufacturing has widely adopted standardized and automated processes to create designs, build them, and maintain them through their life cycle. However, many modern manufacturing systems go beyond mechanized workflows to introduce empowered workers, flexible collaboration, and rapid iteration. Such behaviors also characterize open source software development and are at the heart of DevOps culture, processes, and tooling.
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.
"We got started as search consultants. On the services side of the business we have help organizations save time and save money when they hit issues that everyone more or less hits when their data grows," noted Otis Gospodnetić, Founder of Sematext, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Containers are revolutionizing the way we deploy and maintain our infrastructures, but monitoring and troubleshooting in a containerized environment can still be painful and impractical. Understanding even basic resource usage is difficult – let alone tracking network connections or malicious activity. In his session at DevOps Summit, Gianluca Borello, Sr. Software Engineer at Sysdig, will cover the current state of the art for container monitoring and visibility, including pros / cons and liv...
The last decade was about virtual machines, but the next one is about containers. Containers enable a service to run on any host at any time. Traditional tools are starting to show cracks because they were not designed for this level of application portability. Now is the time to look at new ways to deploy and manage applications at scale. In his session at @DevOpsSummit, Brian “Redbeard” Harrington, a principal architect at CoreOS, will examine how CoreOS helps teams run in production. Attende...
"We have a tagline - "Power in the API Economy." What that means is everything that is built in applications and connected applications is done through APIs," explained Roberto Medrano, Executive Vice President at Akana, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
The cloud has transformed how we think about software quality. Instead of preventing failures, we must focus on automatic recovery from failure. In other words, resilience trumps traditional quality measures. Continuous delivery models further squeeze traditional notions of quality. Remember the venerable project management Iron Triangle? Among time, scope, and cost, you can only fix two or quality will suffer. Only in today's DevOps world, continuous testing, integration, and deployment upend...
IT data is typically silo'd by the various tools in place. Unifying all the log, metric and event data in one analytics platform stops finger pointing and provides the end-to-end correlation. Logs, metrics and custom event data can be joined to tell the holistic story of your software and operations. For example, users can correlate code deploys to system performance to application error codes. In his session at DevOps Summit, Michael Demmer, VP of Engineering at Jut, will discuss how this can...
"A lot of the enterprises that have been using our systems for many years are reaching out to the cloud - the public cloud, the private cloud and hybrid," stated Reuven Harrison, CTO and Co-Founder of Tufin, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
The most often asked question post-DevOps introduction is: “How do I get started?” There’s plenty of information on why DevOps is valid and important, but many managers still struggle with simple basics for how to initiate a DevOps program in their business. They struggle with issues related to current organizational inertia, the lack of experience on Continuous Integration/Delivery, understanding where DevOps will affect revenue and budget, etc. In their session at DevOps Summit, JP Morgenthal...
In his session at 16th Cloud Expo, Simone Brunozzi, VP and Chief Technologist of Cloud Services at VMware, reviewed the changes that the cloud computing industry has gone through over the last five years and shared insights into what the next five will bring. He also chronicled the challenges enterprise companies are facing as they move to the public cloud. He delved into the "Hybrid Cloud" space and explained why every CIO should consider ‘hybrid cloud' as part of their future strategy to achi...
In the midst of the widespread popularity and adoption of cloud computing, it seems like everything is being offered “as a Service” these days: Infrastructure? Check. Platform? You bet. Software? Absolutely. Toaster? It’s only a matter of time. With service providers positioning vastly differing offerings under a generic “cloud” umbrella, it’s all too easy to get confused about what’s actually being offered. In his session at 16th Cloud Expo, Kevin Hazard, Director of Digital Content for SoftL...