TransForce Inc. announced that its revenues for the quarter ended June 30, 2013 declined to $792.3 million from $812 million during the same quarter of 2012. Net income declined from $34.1 million to $26.6 million.
For the six months ended June 30, 2013, total revenue reached $1.5 billion, versus $1.6 billion a year earlier. Net income was $45.4 million, down from $64.2 million during the same period in 2012.
Alain Bédard, Chairman, President and Chief Executive Officer commented “On the operating front, margins from existing Package and Courier operations further improved, as additional efficiency gains more than offset a loss at Velocity Express (“Velocity”), while overall volume held steady. In the LTL segment, successful measures to rationalize our asset base and reduce costs resulted in a higher year-over-year EBIT before gains on the disposal of property and equipment. A weak economy negatively impacted the Truckload (“TL”) segment and we vigilantly allocated resources to reflect demand variations. Finally, services to the Energy sector remained considerably affected by the severe decline in drilling activity in North America and we have taken proactive measures to better align supply to new demand levels,” added Mr. Bédard.
TransForce has entered into an agreement, subject to customary closing conditions, to acquire 100 per cent of the issued and outstanding shares of JCF Inc. and its subsidiary, E.L. Farmer & Company (together referred to as “E.L. Farmer”). Founded in 1910, E.L. Farmer is headquartered in Odessa, Texas. Operating mainly in all regions of Texas, E.L. Farmer is an asset-light dedicated provider of pipe storage and hauling services for the oilfield industry. The transaction is expected to generate annual revenues of approximately $70.0 million and is expected to be completed in the third quarter.
Mr. Bédard further commented that “In the United States, we are progressing well with the integration of our same-day Package and Courier operations and the market for these services is growing, but softness persists in the energy sector and we do not see any short-term significant improvement. Meanwhile, industry conditions remain difficult in Canada across all business segments and we do not expect the situation to improve for the remainder of 2013. As these conditions limit organic growth, key drivers for revenue and profit growth remain efficiency improvement, asset rationalization and a disciplined acquisition strategy, like the proposed E.L. Farmer acquisition. Accordingly, we will deploy resources in initiatives that will allow us to maximize return on assets and generate a strong cash flow.”