ATS Andlauer Income Fund
TSX : ATS.UN

ATS Andlauer Income Fund

November 06, 2006 17:08 ET

ATS Andlauer Income Fund Reports Solid Results for Third Quarter 2006

TORONTO, ONTARIO--(CCNMatthews - Nov. 6, 2006) - ATS Andlauer Income Fund (the "Fund") (TSX:ATS.UN) announced today solid results for the third quarter ended September 30, 2006.

The Fund was established on August 22, 2005 and indirectly acquired certain of the net assets of the Canadian transportation solutions business (the "Business") of ATS Andlauer Transportation Services Inc. (the "Vendor") through the acquisition of an indirect 80.1% interest in ATS Andlauer Transportation Services Limited Partnership ("ATS Andlauer LP") on September 30, 2005.

To provide more meaningful information to the reader, this press release refers to the unaudited consolidated operating results of the Fund for the three and nine month periods ending September 30, 2006 compared to the unaudited pre- acquisition operating results of the Business for the three and nine month periods ending September 30, 2005. Readers are cautioned that the operating results presented for the three and nine month periods ended September 30, 2005 are not the results of the Fund.

SELECTED FINANCIAL AND OPERATING INFORMATION

For the three and nine months ended September 30, 2006 compared to the pre- acquisition results of the Business for the three and nine months ended September 30, 2005



Three months ended Nine months ended
September 30, September 30,
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2006 2005 2006 2005
Pre- Pre-
Acquisition Acquisition
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(unaudited) (unaudited) (unaudited) (unaudited)
($ thousands) ($ thousands)
Earnings Statement
Highlights
Revenue 42,540 43,025 124,889 120,914
Cost of sales 26,712 26,189 78,137 75,477
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Gross margin 15,828 16,836 46,752 45,437
Gross margin percentage 37.21% 39.13% 37.43% 37.58%
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Income before
non-controlling
interest 3,974 3,598 8,806 7,486

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EBITDA and Adjusted
EBITDA 5,622 6,083 13,786 12,995
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The Fund experienced a slight decrease in revenues of 1.13% to $42.5 million for the three month period ended September 30, 2006 compared with pre-acquisition revenues of the Business of $43.0 million for the three month period ended September 30, 2005. The decrease was a result of lower revenue relating to air freight forwarding due to uncharacteristically high entertainment weekend volumes in the third quarter 2005 compared to the third quarter 2006; however, this decrease was off-set by an increase in revenue relating to ground transportation quarter over quarter. Total gross margin was $15.8 million for the three month period ended September 30, 2006, a decrease of 5.99% from the pre-acquisition gross margin of $16.8 million for the same period in 2005 due to lower high premium weekend volumes quarter over quarter. On a year-to-date basis for 2006 the Fund delivered a 3.29% increase in revenues of $124.9 million compared with pre-acquisition revenues of $120.9 million for the same period in 2005. Total gross margin decreased by 0.15% on a year-to-date basis.



SUMMARY OF MOST RECENTLY COMPLETED CONSOLIDATED QUARTERLY RESULTS

($ thousands, except per
share amounts) September 30, June 30, March 31, December 31,
2006 2006 2006 2005
(Q3 06) (Q2 06) (Q1 06) (Q4 05)
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Revenue 42,540 40,775 41,574 51,053
Gross margin 15,828 15,289 15,635 20,913
EBITDA 5,622 4,096 4,068 9,369
Income before
non-controlling interest 3,974 2,436 2,396 7,750
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Income per Unit
Basic 0.342 0.210 0.206 0.666
Diluted 0.342 0.210 0.206 0.666
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Cash and cash equivalents 32 1,024 441 264
Total assets 124,628 123,058 128,238 132,409
Total current liabilities 12,229 12,165 11,893 19,047
Long-term debt 3,749 3,000 7,364 3,948
Unitholders' equity 85,401 84,780 85,705 86,054
Non-controlling interest 23,249 23,113 23,276 23,360

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"Results were predictably slightly lower compared to the third quarter in 2005 however, the continued focus on the management of our operations has still resulted in yet another solid quarter for ATS and a third consecutive increase to monthly distributions for unit holders", commented Michael Andlauer, President and Chief Executive Officer.

Total cash distributions for the quarter were $3.3 million or 0.2823 per trust unit resulting in a cash distribution payout ratio of 60% and for the nine months ending September 30, 2006, total cash distributions amounting to $9.4 million or $0.8049 per trust unit were declared resulting in a cash distribution payout ratio of 71%. The Fund has increased its monthly distributions three times since the beginning of the year for a cumulative increase of 20.25% . The latest increase was approved subsequent to the quarter end and will be effective for the next distribution to be paid November 15, 2006 to unitholders of record as at October 31, 2006. On an annualized basis, distributions will increase from the prospectus estimate of $0.975 to $1.1688 per trust unit.

The Fund's income before non-controlling interest increased by 10.45% to $4.0 million in the three month period ending September 30, 2006, compared with the pre-acquisition income before non-controlling interest of $3.6 million for the same period 2005. On a year-to-date basis income before non-controlling interest increased by 17.63% . Fully diluted income per Unit was $0.342 for the three month period ended September 30, 2006 and $0.758 for the nine month period ending September 30, 2006.

The Fund is an open-ended trust that holds, indirectly, securities of ATS Andlauer Transportation Services Limited Partnership ("ATS Andlauer LP"). ATS Andlauer LP is a leading single source transportation solutions provider in Canada, providing integrated trucking, courier, air freight and value added transportation and distribution services to consumer product companies. It operates facilities in 23 centres across Canada and serves approximately 1,400 diversified customers.

The Fund's units trade on the Toronto Stock Exchange under the symbol ATS.UN.

The Financial Statements and Management's Discussion and Analysis for the period ended September 30, 2006, along with additional information relating to the Fund, including all public filings, are available on www.sedar.com and on the Fund's website at www.atsincomefund.ca.

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 the Fund. These statements are based on suppositions and uncertainties as well as on management's evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Fund's 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. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Fund's operations or financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Fund's website (www.ats.ca). Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release, and the Fund undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities law.

NON-GAAP MEASURES

Gross margin is a non-GAAP measure that represents the contribution of operating activities to earnings. It is considered a key measure by management as it reflects the ability of the Fund to generate earnings necessary to fund overhead costs, capital investment and distributions.

EBITDA is a non-GAAP measure that management considers a key measure as an indicator of the ability of the Fund to meet its capital and financing commitments. EBITDA is not a recognized measure under GAAP and does not have a standardized meaning under GAAP. It was necessary to adjust EBITDA of the 2005 pre-acquisition results to facilitate the comparability with the current period. EBITDA and Adjusted EBITDA may not be comparable to similar measures presented by other issuers.

Adjusted EBITDA is a non-GAAP measure that represents EBITDA adjusted for certain non-recurring items that management believes facilitate the comparison of historical periods. Non-recurring items are transactions or events that management believes are unusual in the context of a publicly-traded issuer in the transportation services industry and are not expected to reoccur within the foreseeable future and include management salaries and fees (paid to owner- managers and related parties) and other non-recurring items.

Cash distribution payout ratio is a non-GAAP measure that compares distributions paid to available distributable cash which management considers an indicator of the Fund's conservatism and its ability to make distributions to unitholders at current rates in the future.


Contact Information

  • ATS Andlauer Transportation Services GP Inc.
    Michael Andlauer
    President & Chief Executive Officer
    (416) 798-1379 ext 200
    or
    ATS Andlauer Transportation Services GP Inc.
    Brian Mascarenhas
    Vice President & Chief Financial Officer
    (416) 798-1379 ext 200
    or
    ATS Andlauer Transportation Services GP Inc.
    Suite 600, 190 Attwell Drive
    Etobicoke, Ontario M9W 6H8
    Website: www.atsincomefund.ca