Vitran Corporation Inc.
TSX : VTN
NASDAQ : VTNC

Vitran Corporation Inc.

October 19, 2006 06:36 ET

Vitran Reports 2006 Third Quarter Results

TORONTO, ONTARIO--(CCNMatthews - Oct. 19, 2006) - Vitran Corporation Inc. (TSX:VTN)(NASDAQ:VTNC) -



REMINDER:
Vitran management will conduct a conference call and webcast today,
October 19, at 11:00 a.m. (ET), to discuss the Company's 2006 third
quarter results.
Conference call dial-in: 800/708-7127
Live Webcast: www.vitran.com (select "Investor Relations")


Vitran Corporation Inc. (TSX:VTN)(NASDAQ:VTNC), a North American transportation and logistics firm, today announced financial results for the 2006 third quarter ended September 30, 2006 (all figures reported in $U.S.).

Vitran achieved net income of $4.9 million, or 0.38 per diluted share, on revenue of $121.5 million for the three-month period ended September 30, 2006. In the comparable 2005 period, Vitran recorded net income of $5.4 million, or $0.42 per diluted share, on revenue of $116.2 million.

"As we stated in our update of Vitran's annual earnings guidance on September 27, the entire organization is committed to improving upon our financial results," stated Vitran President and Chief Executive Officer Rick Gaetz. "Higher than anticipated healthcare and workers' compensation expenses combined with a slowing economy in Vitran's North American operating regions negatively impacted third quarter results.

"We are very pleased with the recent acquisition of PJAX Freight System, which further extends Vitran's LTL network coverage, adding six key Atlantic Coast states to our growing U.S. geography. We are in the final stages of completing the information technology integration of the Vitran Express West region, which we acquired in early January, and anticipate realizing inter-regional sales opportunities going forward. Lastly, with the addition of PJAX, all of the Company's Canadian and U.S. LTL operations are expected to benefit from the Company's new, expanded footprint."

During the nine months ended September 30, 2006, Vitran achieved net income of $14.4 million, or $1.11 per diluted share, on revenue of $360.3 million. In the comparable 2005 period, the Company reported net income of $12.9 million, or $1.01 per diluted share, on revenue of $315.2 million.

Segmented Results

Income from operations at Vitran's LTL (less-than-truckload) segment was $6.6 million in the 2006 third quarter, and the LTL segment's OR (operating ratio) was 93.6 for the three-month period. In the prior year quarter, the LTL segment recorded income from operations of $7.7 million, and an OR of 92.0. LTL segment revenue per shipment increased 7.4 percent and revenue per hundred-weight improved by 6.3 percent. Tonnage rose 0.1 percent, and the number of shipments declined 0.1 percent during the quarter, indicative of the slowing economy and the residual impact of the now finalized integration of Vitran's Southwest region operations.

The Logistics segment achieved strong comparisons versus the 2005 third quarter, with income from operations increasing 68.6 percent during the 2006 three month period to $929,000, and OR improving significantly to 91.1, versus 94.8 in the year-earlier quarter. The Truckload segment recorded income from operations of $354,000, with an OR of 95.7 for the quarter, compared to operating income of $441,000 and a 95.1 OR for the same period a year ago.

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." 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.



(tables follow)


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


Sept. 30, 2006 Dec. 31, 2005
Assets
Current assets:
Cash and cash equivalents $ 102,207 $ 14,592
Accounts receivable 54,660 46,587
Inventory, deposits and prepaid
expenses 9,277 8,396
Future income taxes 2,593 1,442
--------- ---------
168,737 71,017

Capital assets 82,133 66,807
Intangible assets 2,749 2,456
Goodwill 62,906 61,448
--------- ---------
$ 316,525 $ 201,728
--------- ---------
--------- ---------

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 52,413 $ 41,362
Income and other taxes payable 1,717 1,124
Current portion of long-term debt 8,053 5,845
--------- ---------
62,183 48,331

Long-term debt 90,015 8,588
Future income tax liabilities 7,749 5,007

Shareholders' equity:
Common shares 64,130 63,604
Additional paid-in capital 1,395 956
Retained earnings 85,978 71,553
Accumulated other comprehensive income 5,075 3,689
--------- ---------
156,578 139,802
--------- ---------
$ 316,525 $ 201,728
--------- ---------
--------- ---------

(Consolidated 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 September 30, Ended September 30,

2006 2005 2006 2005
---- ---- ---- ----

Revenues $ 121,512 $ 116,226 $ 360,280 $ 315,217
Operating expenses 101,189 96,061 299,617 262,947
Selling, general and
administrative expenses 11,195 10,399 33,675 29,011
Other income (248) (6) (404) (33)
Depreciation and
amortization expense 2,579 1,954 7,495 4,802
---------- ---------- ---------- ----------
114,715 108,408 340,383 296,727

Income from operations
before undernoted 6,797 7,818 19,897 18,490

Interest expense, net 274 171 621 209

Income from operations
before income taxes 6,523 7,647 19,276 18,281

Income taxes 1,638 2,271 4,992 5,355
---------- ---------- ---------- ----------

Net income from continuing
operations $ 4,885 $ 5,376 $ 14,284 $ 12,926
---------- ---------- ---------- ----------

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

Net income $ 4,885 $ 5,376 $ 14,425 $ 12,926
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Income per share:

Basic
-----
Net income from continuing
operations $ 0.38 $ 0.43 $ 1.12 $ 1.04
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cumulative effect of a
change in accounting
principle $ -- $ -- $ 0.01 $ --
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 0.38 $ 0.43 $ 1.13 $ 1.04
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Diluted
-------
Net income from continuing
operations $ 0.38 $ 0.42 $ 1.10 $ 1.01
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cumulative effect of a
change in accounting
principle $ -- $ -- $ 0.01 $ --
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 0.38 $ 0.42 $ 1.11 $ 1.01
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Weighted average number
of shares
Basic 12,744,936 12,584,358 12,710,225 12,481,840
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------
Diluted 12,966,835 12,921,695 12,956,661 12,819,872
----------- ----------- ---------- -----------
----------- ----------- ---------- -----------

(Consolidated Statements of Cash Flows follows)




Vitran Corporation Inc.
Consolidated Statements Of Cash Flows
(Unaudited)
(In thousands of United States dollars, US GAAP)



Three Three Nine Nine
Months months months months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2006 2005 2006 2005

Cash provided by
(used in):
Operations:
Net income $ 4,885 $ 5,376 $ 14,425 $ 12,926
Items not involving
cash from operations
Depreciation and
amortization expense 2,579 1,954 7,495 4,802
Future income taxes 1,019 2,030 1,591 2,677
Stock based
compensation expense 218 181 627 474
Gain on sale of
capital assets (248) (6) (404) (33)
Cumulative effect of
a change in
accounting principle -- -- (141) --
Change in non-cash
working capital
components 551 (3,961) 997 (6,658)
---------- ---------- ---------- ----------
9,004 5,574 24,590 14,188
Investments:
Purchase of capital
assets (9,216) (10,806) (20,745) (17,651)
Proceeds on sale of
capital assets 509 50 2,063 88
Acquisition of
subsidiary -- (1,693) (2,251) (28,192)
Marketable securities -- 3,193 -- 31,974
---------- ---------- ---------- ----------
(8,707) (9,256) (20,993) (13,781)
Financing:
Revolving credit
facility 18,015 5,074 15,030 5,074
Proceeds from long-term
Debt 70,500 -- 70,500
Repayment of long-term
debt (9) (570) (1,961) (1,710)
Issue of Common Shares
upon exercise of
stock options -- 18 479 60
Repurchase of Common
Shares -- (65) -- (921)
---------- ---------- ---------- ----------
88,506 4,457 84,048 2,503
Effect of translation
adjustment on cash 87 498 (90) 524
Increase (decrease) in
cash position 88,890 1,273 87,615 3,434
Cash position, beginning
of period 13,317 9,536 14,592 7,375
Cash position, end of
period $ 102,207 $ 10,809 $ 102,207 $ 10,809
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Change in non-cash
working capital
components:
Accounts receivable $ (240) $ (5,886) $ (6,669) $ (9,717)
Inventory, deposits
and prepaid expenses (2,129) 534 (503) (921)
Income and other taxes
recoverable/payable 495 (1,565) 593 (1,649)
Accounts payable and
accrued liabilities 2,425 2,956 7,576 5,629
---------- ---------- ---------- ----------
$ 551 $ (3,961) $ 997 $ (6,658)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------


(additional financial information follows)




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


------------------------------------------------------------------------
For the For the
Quarter quarter
ended Sept. ended Sept.
30, 2006 30, 2005
------------------------------------------------------------------------
Revenue Inc. from Revenue Inc. from
Operations OR% Operations OR%
------------------------------------------------------------------------
LTL 102,858 6,585 93.6 LTL 96,658 7,734 92.0
------------------------------------------------------------------------
LOG 10,419 929 91.1 LOG 10,652 551 94.8
------------------------------------------------------------------------
TL 8,235 354 95.7 TL 8,916 441 95.1
------------------------------------------------------------------------


------------------------------------------------------------------------
For the For the
nine months nine months
ended Sept. ended Sept.
30, 2006 30, 2005
------------------------------------------------------------------------
Revenue Inc. from Revenue Inc. from
Operations OR% Operations OR%
------------------------------------------------------------------------
LTL 305,494 19,692 93.6 LTL 259,191 17,620 93.2
------------------------------------------------------------------------
LOG 30,082 2,081 93.1 LOG 29,144 1,531 94.7
------------------------------------------------------------------------
TL 24,704 1,294 94.8 TL 26,882 1,901 92.9
------------------------------------------------------------------------



LTL SEGMENT - Statistical Information
(Unaudited)

------------------------------------------------------------------------
For the quarter ended For the nine months ended
September 30, 2006 September 30, 2006
--------------------- -------------------------

------------------------------------------------------------------------
($U.S.) LTL Q. over Q. LTL Yr. Over Yr.
Division % Change Division % Change
------------------------------------------------------------------------
Revenue (000's) $ 102,858 6.4 $ 305,494 17.9
------------------------------------------------------------------------
No. of Shipments 659,602 (0.1) 2,011,252 8.1
------------------------------------------------------------------------
Weight (000's
lbs) 1,054,058 0.1 3,198,160 8.9
------------------------------------------------------------------------
Revenue per
shipment $ 155.94 7.4 $ 151.89 9.0
------------------------------------------------------------------------
Revenue per CWT $ 9.76 6.3 $ 9.55 8.3
------------------------------------------------------------------------


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