Vitran Corporation Inc.
TSX : VTN
NASDAQ : VTNC

Vitran Corporation Inc.

October 23, 2007 06:36 ET

Vitran Reports 2007 Third Quarter Operating Results

TORONTO, ONTARIO--(Marketwire - Oct. 23, 2007) - Vitran Corporation Inc. (TSX:VTN)(NASDAQ:VTNC) -



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REMINDER:
Vitran management will conduct a conference call and webcast today,
October 23, 2007 at 1:00 p.m. (ET), to discuss the Company's 2007
third quarter results.
Conference call dial-in: 800/255-2466
Live Webcast: www.vitran.com (select "Investor Relations")
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Vitran Corporation Inc. (TSX:VTN)(NASDAQ:VTNC), a North American transportation and logistics firm, today announced quarterly financial results for the 2007 third quarter ended September 30, 2007 (all figures reported in $U.S.).

Vitran achieved net income of $3.1 million, or $0.23 per diluted share, on revenue of $171.9 million for the three-month period. As previously announced, the Company incurred a one-time, $0.3 million write-off of previously capitalized syndication costs, net of taxes, as a result of refinancing its debt with a new five-year bank syndication agreement that commenced August 1, 2007. The write-off impacted Vitran's Q3 '07 EPS by $0.02. In the comparable 2006 quarter, Vitran recorded net income of $4.9 million, or $0.38 per diluted share, on revenue of $121.5 million.

"We are clearly disappointed with Vitran's third quarter results, as we came up short of our expectations due to a continuation of the highly competitive operating environment that impacted revenue growth and has put pressure on industry operating margins in recent quarters," stated Vitran President and Chief Executive Officer Rick Gaetz. "While we are pleased with our penetration into new markets, we must improve in our core regional markets," he continued.

"Despite the near-term economic challenges, the entire Vitran organization is focused on building our North American freight network and the solid corporate infrastructure that will be our backbone for achieving long-term growth. Our new hybrid operating system is now up and running successfully at PJAX and the Company's operational integration is moving ahead, as planned," concluded Mr. Gaetz.

During the nine-month period ended September 30, 2007, Vitran achieved net income of $12.0 million, or $0.88 per diluted share, on revenue of $496.2 million. The aforementioned one-time write-off of previously capitalized syndication costs impacted nine-month EPS by $0.02. In the comparable nine months of 2006, the Company had net income of $14.4 million, or $1.11 per diluted share, on revenue of $360.3 million.

Segmented Results

Income from operations at Vitran's LTL (less-than-truckload) segment was $5.7 million, with an OR (operating ratio) of 96.2, compared to Q3 '06 operating income of $6.6 million and an OR of 93.6. The LTL segment achieved a 56.5 percent increase in shipments, while tonnage rose 45.1 percent, during the period - due to the acquisition of PJAX. Revenue per hundredweight increased 0.7 percent, while revenue per shipment declined 6.6 percent, on a year-over-year basis.

The Logistics segment posted income from operations of $800,000 during Q3 '07, and its OR was 94.2. In Q3 '06, the logistics unit had operating income of $929,000, with an OR of 91.1. Income from operations at the Truckload segment rose to $420,000, compared to $354,000 in the year-ago quarter, and OR improved to 94.7, versus 95.7 in the prior year.

Management's 2007 EPS Guidance

While we are clearly unhappy with 2007 third quarter results, it is now obvious that we will not meet our annual guidance of $1.60 to $1.70 per share. We expect the challenging operating environment experienced in the third quarter to continue through the fourth quarter of 2007.

About Vitran Corporation Inc.

Vitran Corporation Inc. is a North American group of transportation companies offering less-than-truckload, logistics, truckload, and freight brokerage services. To find out more about Vitran Corporation Inc. (TSX:VTN)(NASDAQ:VTNC), visit the website at www.vitran.com.

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Forward-looking statements may be generally identifiable by use of the words "believe", "anticipate", "intend", "estimate", "expect", "project", "may", "plans", "continue", "will", "focus should" "endeavor" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on current expectations and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially from those expressed or implied by such forward-looking statements.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Vitran's actual results, performance or achievements to differ materially from those projected in the forward-looking statements. Factors that may cause such differences include, but are not limited to, technological change, increases in fuel costs, regulatory changes, the general health of the economy, seasonal fluctuations, unanticipated changes in railroad capacities, exposure to credit risks, changes in labour relations and competitive factors. More detailed information about these and other factors is included in the annual MD&A on Form 10K under the heading "General Risks and Uncertainties." Additional information regarding non-GAAP measures is also included on Form 10K. Many of these factors are beyond the Company's control; therefore, future events may vary substantially from what the Company currently foresees. You should not place undue reliance on such forward-looking statements. Vitran Corporation Inc. does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.



(financial statements follow)



Vitran Corporation Inc.
Consolidated Balance Sheets
(in thousands of United States dollars, US GAAP)

Sept. 30, 2007 Dec. 31, 2006
(Unaudited)

Assets
Current assets:
Cash and cash equivalents $ 3,819 $ 1,454
Accounts receivable 81,419 66,051
Inventory, deposits and prepaid expenses 10,122 10,796
Income tax receivable 1,481 --
Deferred income taxes 3,776 1,720
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100,617 80,021

Property and equipment 163,195 145,129
Intangible assets 14,205 15,888
Goodwill 119,811 117,146
Other -- 150
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$ 397,828 $ 358,334
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 75,650 $ 67,916
Income and other taxes payable -- 1,275
Current portion of long-term debt 16,919 15,724
----------- -----------
92,569 84,915

Long-term debt 103,263 93,139
Other 3,003 --
Deferred income taxes 9,547 6,983

Shareholders' equity:
Common shares 77,484 76,913
Additional paid-in capital 2,159 1,607
Retained earnings 102,974 90,933
Accumulated other comprehensive income 6,829 3,844
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189,446 173,297
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$ 397,828 $ 358,334
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(Statements of Income follows)



Vitran Corporation Inc.
Consolidated Statements Of Income
(Unaudited)
(in thousands of United States dollars except per share amounts, US GAAP)

Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,

2007 2006 2007 2006

Revenues $ 171,927 $ 121,512 $ 496,207 $ 360,280
Operating expenses 145,457 101,189 414,693 299,617
Selling, general
and administrative
expenses 15,633 11,195 46,015 33,675
Other income (53) (248) (125) (404)
Depreciation and
amortization
expense 5,321 2,579 15,375 7,495
---------- ---------- ---------- ----------
166,358 114,715 475,958 340,383

Income from
operations before
undernoted 5,569 6,797 20,249 19,897

Interest expense,
net 2,325 274 6,504 621

Income from
operations before
income taxes 3,244 6,523 13,745 19,276

Income taxes 123 1,638 1,704 4,992
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Net income from
continuing
operations $ 3,121 $ 4,885 $ 12,041 $ 14,284
---------- ---------- ---------- ----------

Cumulative effect
of change in
accounting principle -- -- -- 141

Net income $ 3,121 $ 4,885 $ 12,041 $ 14,425
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Income per share:

Basic
-----
Net income from
continuing
operations $ 0.23 $ 0.38 $ 0.89 $ 1.12
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cumulative effect
of change in
accounting principle -- -- -- 0.01
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 0.23 $ 0.38 $ 0.89 $ 1.13
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Diluted
-------
Net income from
continuing
operations $ 0.23 $ 0.38 $ 0.88 $ 1.10
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cumulative effect
of change in
accounting principle -- -- -- 0.01
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 0.23 $ 0.38 $ 0.88 $ 1.11
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Weighted average
shares outstanding
Basic 13,475,685 12,744,936 13,459,180 12,710,225
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Diluted 13,668,819 12,966,835 13,660,723 12,956,661
---------- ---------- ---------- ----------
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(Statements of Cash Flows follows)



VITRAN CORPORATION INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of United States dollars, US GAAP)


Three months Three months Nine months Nine months
Ended Ended Ended Ended
Sept. 30, 2007 Sept. 30, 2006 Sept. 30, 2007 Sept. 30, 2006

Cash
provided
by (used
in):
Operations:
Net income $ 3,121 $ 4,885 $ 12,041 $ 14,425
Items not
involving
cash from
operations:
Cumulative
effect of
change in
accounting
principle -- -- -- (141)
Depreciation
and
amortization
expense 5,321 2,579 15,375 7,495
Deferred
income taxes (2,608) 1,019 (13) 1,591
Share-based
compensation
expense 261 218 720 627
Gain on sale
of property
and equipment (53) (248) (125) (404)
Change in
non-cash
working
capital
components 4,461 551 (1,302) 997
-------------- -------------- -------------- --------------
10,503 9,004 26,696 24,590

Investments:
Purchase of
property and
equipment (5,458) (9,216) (16,878) (20,745)
Proceeds on
sale of
property and
equipment 74 509 312 2,063
Additional
payment
due to
acquisition
of subsidiary -- -- (6,921) --
Acquisition
of business
assets -- -- -- (2,251)
-------------- -------------- -------------- --------------
(5,384) (8,707) (23,487) (20,933)

Financing:
Change in
revolving
credit
facility 3,468 18,015 13,590 15,030
Proceeds
from
long-term
debt 70,500 70,500
Repayment
of long-term
debt (2,255) (9) (6,765) (1,961)
Financing costs (642) -- (642) --
Repayment of
capital leases (1,858) -- (5,172) --
Issue of common
shares upon
exercise of
stock options 196 -- 403 479
-------------- -------------- -------------- --------------
(1,091) 88,506 1,414 84,048

Effect of
translation
adjustment
on cash (1,256) 87 (2,258) (90)
-------------- -------------- -------------- --------------

Increase
(decrease)
in cash
position 2,772 88,890 2,365 87,615
Cash
position,
beginning
of period 1,047 13,317 1,454 14,592
-------------- -------------- -------------- --------------
Cash
position,
end of
period $ 3,819 $ 102,207 $ 3,819 $ 102,207
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------

Change in
non-cash
working
capital
components:
Accounts
receivable $ (2,004) $ (240) $ (15,368) $ (6,669)
Inventory,
deposits
and prepaid
expenses 233 (2,129) 1,316 (503)
Income and
other taxes
receivable/
payable 2,866 495 (3,121) 593
Other
liabilities 300 -- 2,389 --
Accounts
payable and
accrued
liabilities 3,066 2,425 13,482 7,576
-------------- -------------- -------------- --------------
$ 4,461 $ 551 $ (1,302) $ 997
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------

Supplemental
cash flow
information
------------

Capital lease
additions $ 4,561 $ -- $ 8,301 $ --

(additional financial information follows)



Supplementary Segmented Financial Information
(000's of $U.S.) (Unaudited)

------------------------------------- -------------------------------------
For the quarter ended For the quarter ended
Sept. 30, 2007 Sept. 30, 2006
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Revenue Inc. from OR% Revenue Inc. from OR%
Operations Operations
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LTL 150,283 5,687 96.2 LTL 102,858 6,585 93.6
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LOG 13,690 800 94.2 LOG 10,419 929 91.1
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TL 7,954 420 94.7 TL 8,235 354 95.7
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------------------------------------- -------------------------------------
For the nine months ended For the nine months ended
Sept. 30, 2007 Sept. 30, 2006
------------------------------------- -------------------------------------
Revenue Inc. from OR% Revenue Inc. from OR%
Operations Operations
------------------------------------- -------------------------------------
LTL 437,055 20,920 95.2 LTL 305,494 19,692 93.6
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LOG 34,579 1,976 94.3 LOG 30,082 2,081 93.1
------------------------------------- -------------------------------------
TL 24,573 1,119 95.4 TL 24,704 1,294 94.8
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LTL SEGMENT - Statistical Information
(Unaudited)

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Combined LTL (in US$) LTL Division Q. vs, Q. % change
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3rd Quarter 2007
Revenue ($ 000's) $ 150,283 46.1%
No. of Shipments 1,032,178 56.5%
Weight (000's lbs) 1,529,573 45.1%
Revenue per shipment $ 145.60 -6.6%
Revenue per CWT $ 9.83 0.7%

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Year-to-date 9 mo. vs. 9 mo. % change
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Revenue ($ 000's) $ 437,055 43.1%
No. of Shipments 3,071,284 52.7%
Weight (000's lbs) 4,553,748 42.4%
Revenue per shipment $ 142.30 -6.3%
Revenue per CWT $ 9.60 0.5%
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Contact Information

  • Vitran Corporation Inc.
    Richard Gaetz
    President/CEO
    (416) 596-7664
    or
    Vitran Corporation Inc.
    Sean Washchuk
    VP Finance/CFO
    (416) 596-7664
    Website: www.vitran.com
    or
    Jaffoni & Collins Incorporated
    Robert Rinderman
    (212) 835-8500
    or
    Jaffoni & Collins Incorporated
    Steven Hecht
    (212) 835-8500
    Email: VTNC@jcir.com