CALGARY, Aug. 12 /PRNewswire-FirstCall/ - Trimac Income Fund (TSX Symbol TMA.UN) (the "Fund") today released the financial results of the Fund and Trimac Transportation Services Limited Partnership ("Trimac" or the "Partnership") for the second quarter ended June 30, 2009.
Three months Six months
ended June 30, ended June 30,
Partnership 2009 2008 2009 2008
--------------------------------------------------
(millions of dollars)
Transportation revenue 59.6 68.7 119.0 135.3
Fuel surcharges 3.7 14.3 8.4 24.5
Total revenue 63.3 83.0 127.4 159.8
EBITDA(1) 7.2 9.4 12.7 16.4
Net earnings 1.1 2.6 0.4 3.2
Three months Six months
ended June 30, ended June 30,
The Fund 2009 2008 2009 2008
--------------------------------------------------
(millions of dollars,
except per unit amounts
and numbers of units)
Distributable cash
per unit(1)(2) $0.1906 $0.2468 $0.3011 $0.3595
Distributions per
unit(1) $0.1200 $0.2313 $0.2400 $0.4626
Basic earnings per unit $0.0331 $0.0914 $0.0281 $0.1297
Fully diluted earnings
(loss) per unit $0.0306 $0.0914 $(0.0143) $0.1224
Weighted average number
of units used in
computing basic
earnings per unit 12,584,679 12,564,362 12,584,679 12,564,362
Number of units
outstanding used in
computing diluted
earnings per unit 25,532,452 24,294,701 25,532,452 24,294,701
(1) EBITDA, distributable cash per unit and distributions per unit are
not recognized measures under generally accepted accounting
principles (GAAP) and do not have a standardized meaning prescribed
by GAAP. Therefore, these amounts may not be comparable to similar
measures presented by other issuers. Management considers EBITDA and
distributable cash to be key measures that indicate the ability of
the Fund to meet its capital and financing commitments.
(2) Distributable cash available will fluctuate on a monthly basis due to
seasonal cash flows, sustaining capital incurred, income taxes, and
interest paid. See "Distributable Cash" for additional commentary.
Trimac's revenue, including fuel surcharges, for the three-month period ended June 30, 2009 ("current period") decreased by $19.7 million or 23.7 percent from the three-month period ended June 30, 2008 ("prior period"). Contributing to this decrease was a $10.6 million reduction in revenue from fuel surcharges. As previously reported by Trimac, the impact of changes in fuel prices on profitability has generally been neutral. In addition, revenue continued to be affected by competitive pressures and reduced levels of activity in the construction, drilling, mining, automotive, and forestry industries. EBITDA decreased by $2.2 million or 23.4 percent from the prior period. Expressed as a percent of revenue, EBITDA was 11.4 percent in the current period, substantially the same as the 11.3 percent recorded in the prior period, as various cost reduction programs were successfully implemented to mitigate lower volumes.
Divisional results in the second quarter were as follows:
- Excluding revenue from fuel surcharges, western division
transportation revenue declined by $7.0 million or 17.5 percent and
EBITDA decreased by $1.6 million or 24.2 percent over the prior
period.
- Excluding revenue from fuel surcharges, eastern division
transportation revenue decreased by $0.8 million or 3.3 percent,
however, EBITDA improved by $0.2 million or 10.5 percent over the
prior period.
- Bulk Plus Logistics revenue decreased by $1.4 million or
30.4 percent. EBITDA decreased by $0.2 million or 25.0 percent as
compared to the prior period.
In commenting on the results for the second quarter, Jeffrey J. McCaig, Chairman and CEO of Trimac, said:
"Despite the continuation of a challenging operating environment throughout Canada, Trimac was able to hold its EBITDA margin compared to the second quarter of 2008. Trimac's ability to maintain its EBITDA margin was the result of the successful implementation of cost reduction programs as management acted proactively to mitigate the affects of lower volumes. Trimac's management is continuing to implement cost controls and pursuing additional profitable business in an attempt to further mitigate the impact of the current recession."
For comments regarding management's outlook for the remainder of 2009 please see Trimac's Management's Discussion and Analysis for the six-month period ended June 30, 2009.
Financial Highlights
Three months ended Six months ended
June 30 June 30
--------------------------------------------------
(millions of dollars) 2009 2008 2009 2008
-------------------------------------------------------------------------
Revenues 63.3 83.0 127.4 159.8
Direct costs 45.3 61.8 93.3 120.1
Selling and
administrative 10.8 11.8 21.4 23.3
--------------------------------------------------
EBITDA(1) 7.2 9.4 12.7 16.4
Depreciation net of
gains on disposal
of capital assets 5.0 5.3 10.0 10.4
--------------------------------------------------
Operating earnings 2.2 4.1 2.7 6.0
Interest expense (net) 1.0 1.3 2.0 2.5
--------------------------------------------------
Earnings before taxes 1.2 2.8 0.7 3.5
Income tax expense 0.1 0.2 0.3 0.3
--------------------------------------------------
Net earnings 1.1 2.6 0.4 3.2
--------------------------------------------------
--------------------------------------------------
As a percentage of
revenue(2)
-----------------------
Direct costs 71.6% 74.5% 73.2% 75.2%
Selling and
administrative 17.1% 14.2% 16.8% 14.6%
EBITDA(1) 11.4% 11.3% 10.0% 10.3%
Depreciation 7.9% 6.4% 7.8% 6.5%
Operating earnings 3.5% 4.9% 2.1% 3.8%
As at As at
June 30, December 31,
(millions of dollars) 2009 2008
---------------------------
Total assets 146.8 152.7
Total long-term
liabilities 48.2 47.2
The above selected financial and operating information has been derived
from, and should be read in conjunction with, the unaudited interim
consolidated financial statements of the Partnership.
(1) EBITDA (earnings before interest, taxes, depreciation and
amortization) is not a recognized measure under GAAP, does not have a
standardized meaning prescribed by GAAP and, therefore, may not be
comparable to similar measures presented by other issuers. Management
believes that EBITDA is a useful complementary measure of cash
available for distribution before debt servicing expense, capital
expenditures and income taxes.
(2) Direct costs, selling and administrative and depreciation, expressed
as a percentage of revenue, were impacted by significant fluctuations
in fuel surcharge revenue between the prior and current period and
the prior and current year. For additional commentary regarding these
expenses please see page 8 and 9 of Trimac's Management's Discussion
and Analysis for the six-month period ended June 30, 2009.
Distributable Cash
The table below illustrates distributable cash to unitholders beginning
with net cash provided by the Partnership's operations.
(millions of dollars Three months ended Six months ended
except unit amounts, June 30 June 30
certain percentages --------------------------------------------------
and number of units) 2009 2008 2009 2008
-------------------------------------------------------------------------
Net cash provided by
operations 8.5 5.0 13.5 13.5
Net change in non-cash
working capital(1) (2.2) 2.8 (2.9) (0.1)
--------------------------------------------------
Cash provided by
operations 6.3 7.8 10.6 13.4
Less adjustments for:
Net sustaining capital
expenditures (net of
proceeds)(2)(3) (0.7) (1.3) (1.9) (3.8)
Provision for
long-term unfunded
contractual
operational
obligations(4) (0.3) 0.1 (0.2) 0.1
--------------------------------------------------
Total estimated cash
available for
distribution (before
public expenses) 5.3 6.6 8.5 9.7
Percentage of available
cash distributable to
unitholders(5) 49% 52% 49% 52%
--------------------------------------------------
Cash available for
distribution to
unitholders (before
public expenses) 2.6 3.4 4.2 5.0
Public expenses(6) (0.2) (0.3) (0.4) (0.5)
--------------------------------------------------
Distributable cash
from operations(2)(7) 2.4 3.1 3.8 4.5
Distributions declared
and payable 1.6 2.9 3.1 5.8
Distributable cash per
unit(2)(7) 0.1906 0.2468 0.3011 0.3595
Distributions declared
per unit(9) 0.1200 0.2313 0.2400 0.4626
Payout ratio(2)(7) 63.0% 93.7% 79.7% 128.7%
Weighted average number
of units outstanding 12,584,679 12,564,362 12,584,679 12,564,362
Net capital expenditures
Sustaining capital
expenditures(2) 1.1 2.3 3.2 5.7
Proceeds on disposal
of replaced assets (0.4) (1.0) (1.3) (1.9)
--------------------------------------------------
Net sustaining capital
expenditures(2)(3) 0.7 1.3 1.9 3.8
Growth capital
expenditures(2)(8) 3.2 2.3 3.9 4.8
--------------------------------------------------
3.9 3.6 5.8 8.6
--------------------------------------------------
--------------------------------------------------
(1) Changes in non-cash operating assets and liabilities are not included
in the calculation of distributable cash. Working capital investments
are funded through a combination of cash flow not distributed and the
use of credit facilities available to the Partnership.
(2) Distributable cash from operations, sustaining capital expenditures,
net sustaining capital expenditures, payout ratio, and growth capital
expenditures are not measures recognized by GAAP, do not have
standardized meanings prescribed by GAAP and may not be comparable to
similarly named measures presented by other issuers.
(3) Net sustaining capital expenditures refers to capital expenditures,
net of proceeds on disposal of assets replaced, which are necessary
to sustain current revenue levels. See "Liquidity and Capital
Resources - Capital Expenditures".
(4) Represents a provision for cash requirements relating to a long-term
incentive plan and an executive pension liability.
(5) Percentage is equal to weighted average number of units outstanding
of 12,584,679 divided by fully diluted units of 25,532,452.
(6) Represents expenses associated with the Fund's status as a reporting
issuer.
(7) Distributable cash available will fluctuate on a monthly basis due to
seasonal cash flows, sustaining capital expenditures incurred, income
taxes paid and interest costs on outstanding debt.
(8) Cash used to fund growth capital expenditures does not affect
distributable cash to unitholders where financing is available for
these purposes. The Partnership funds growth capital from
undistributed cash from operations, cash available from distributions
on non-cash exchangeable shares and, to the extent available,
existing lines of credit.
(9) Effective January 2009, the monthly distribution per unit was reduced
from $0.0771 to $0.04.
During the current period the Partnership's cash provided by operations decreased by $1.5 million and the provision for unfunded long-term executive compensation plans increased by $0.4 million. This was partially offset by a reduction in net sustaining capital expenditures of $0.6 million. The Fund's distributable cash was $2.4 million in the current period, less than that recorded in the prior period by $0.7 million, resulting from its share of the aforementioned Partnership changes in cash provided by operations, provisions for executive compensation plans and sustaining capital. During the current year-to-date period distributable cash from operations was $3.8 million, a $0.7 million decrease compared to the prior year. The decrease was due to decreased cash provided by operations and an increase in the provision for unfunded executive compensation plans, partially offset by a reduced level of net sustaining capital expenditures.
Distributions in the current period were paid using cash generated from operations including cash retained in the business relating to non-cash exchangeable shares. Due to the seasonal nature of the Partnership's business and the timing of sustaining capital purchases, the amount of distributable cash may vary from quarter to quarter. Trimac's Board of Directors approves the level of monthly distributions based upon estimated cash flow on an annual basis, less estimated cash required for debt service, cash taxes, other amounts (including sustaining capital expenditures, working capital and provisions) to stabilize the monthly amount of distributions to unitholders as may be considered appropriate by the Board of Directors. Growth capital expenditures are funded from undistributed cash from operations, cash available from notional distributions on non-cash exchangeable shares, and, to the extent available, cash and existing lines of credit.
Distributable cash from operations is not a defined term under GAAP but is determined by the Partnership as net cash provided by operations for the period, adjusted to remove specific non-cash items, including changes in working capital, and reduced by sustaining capital expenditures, provisions for funding long-term liabilities, provisions for committed capital purchases in progress and public costs.
Management believes that distributable cash from operations is a useful supplemental measure of performance as it provides investors with an indication of the amount of cash available for distribution to unitholders. Investors are cautioned, however, that distributable cash from operations should not be construed as an alternative to using net income as a measure of profitability or as an alternative to the statement of cash flows. In addition, the Fund's method of calculating distributable cash from operations may not be comparable to calculations used by other issuers.
Operating Results
Revenue - Q2
-------------------------------------------------------------------------
Three months ended June 30
-------------------------------------------------------------------------
(millions of
dollars) 2009 2008 Gross Revenue Net Revenue
-------------------------------------------------------------------------
Tran- Tran-
spor- spor
Fuel ta- Fuel ta-
Total Sur- tion Total Sur- tion
Re- char- Re- Re- char- Re- Var- Var-
venue ges venue venue ges venue iance % iance %
-------------------------------------------------------------------------
Bulk
trucking
---------
Western
division 34.9 2.0 32.9 49.0 9.1 39.9 (14.1) -28.8% (7.0) -17.5%
Eastern
division 25.2 1.7 23.5 29.5 5.2 24.3 (4.3) -14.6% (0.8) -3.3%
-------------------------------------------------------------------------
Total bulk
trucking 60.1 3.7 56.4 78.5 14.3 64.2 (18.4) -23.4% (7.8) -12.1%
-------------------------------------------------------------------------
Bulk Plus
Logistics 3.2 - 3.2 4.6 - 4.6 (1.4) -30.4% (1.4) -30.4%
-------------------------------------------------------------------------
Other - - - (0.1) - (0.1) 0.1 0.1
-------------------------------------------------------------------------
Total
revenue 63.3 3.7 59.6 83.0 14.3 68.7 (19.7) -23.7% (9.1) -13.2%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For the current period, total revenue decreased by $19.7 million or 23.7 percent from the prior period. Fuel surcharges as a percentage of bulk trucking revenue totalled approximately 6.6 percent in comparison to 22.3 percent in the prior period, resulting in a decrease of $10.6 million. Trimac has fuel surcharge programs in place with substantially all of its customers and the impact of changes in fuel prices on profitability has generally been neutral over time. Revenue net of fuel surcharges decreased by $9.1 million or 13.2 percent from the prior period primarily as a result of lower volumes with existing customers.
The western division's revenue decreased by $14.1 million or 28.8 percent. Fuel surcharge revenue was $7.1 million lower than the prior period. Revenue net of fuel surcharges decreased by $7.0 million or 17.5 percent compared to the prior period. Incremental revenue of $1.6 million from the December 5, 2008 acquisition of Canamera Carriers Inc. (Canamera) and increased revenue in the edible product line was offset by net business losses and reduced volumes with existing customers. This reduction in volumes impacted the majority of the western division's product lines and was due to a severe slowdown in the economy.
The eastern division's revenue decreased by $4.3 million or 14.6 percent. Fuel surcharge revenue was $3.5 million lower than the prior period. Revenue net of fuel surcharges decreased by $0.8 million or 3.3 percent compared to the prior period. Increased revenue from the industrial gas product line was offset by net business losses and decreased volumes with existing customers. These decreased volumes were primarily the result of continued economic weakness in central Canada, predominantly in the construction, chemical, and automotive industries.
For the current period, Bulk Plus Logistics' (BPL) revenue decreased by $1.4 million or 30.4 percent. This decrease was primarily due to the exiting of a transload facility management contract in May 2008 and to decreased freight brokerage volumes in Canada and the U.S.
Revenue - YTD Q2
-------------------------------------------------------------------------
Six months ended June 30
-------------------------------------------------------------------------
(millions of
dollars) 2009 2008 Gross Revenue Net Revenue
-------------------------------------------------------------------------
Tran- Tran-
spor- spor
Fuel ta- Fuel ta-
Total Sur- tion Total Sur- tion
Re- char- Re- Re- char- Re- Var- Var-
venue ges venue venue ges venue iance % iance %
-------------------------------------------------------------------------
Bulk
trucking
---------
Western
division 72.9 5.0 67.9 94.7 15.7 79.0 (21.8) -23.0% (11.1) -14.1%
Eastern
division 48.1 3.4 44.7 56.6 8.8 47.8 (8.5) -15.0% (3.1) -6.5%
-------------------------------------------------------------------------
Total bulk
trucking 121.0 8.4 112.6 151.3 24.5 126.8 (30.3) -20.0% (14.2) -11.2%
-------------------------------------------------------------------------
Bulk Plus
Logistics 6.4 - 6.4 8.5 - 8.5 (2.1) -24.7% (2.1) -24.7%
-------------------------------------------------------------------------
Other - - - - - - - -
-------------------------------------------------------------------------
Total
revenue 127.4 8.4 119.0 159.8 24.5 135.3 (32.4) -20.3% (16.3) -12.0%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For the current year, total revenue decreased by $32.4 million or 20.3 percent from the prior year. Fuel surcharges as a percentage of bulk trucking revenue totalled approximately 7.5 percent in comparison to 19.3 percent in the prior year, resulting in a decrease of $16.1 million as a result of lower fuel prices. Revenue net of fuel surcharges decreased by $16.3 million or 12.0 percent from the prior year primarily as a result of business losses and lower volumes with existing customers.
The western division's revenue decreased by $21.8 million or 23.0 percent. Fuel surcharge revenue was $10.7 million lower than the prior year. Revenue net of fuel surcharges decreased by $11.1 million or 14.1 percent compared to the prior year. Incremental revenue of $3.0 million from the December 5, 2008 acquisition of Canamera Carriers Inc. (Canamera) and increased revenue in the edible product line was more then offset by net business losses and reduced volumes with existing customers. This reduction in volumes was primarily due to the economic recession.
The eastern division's revenue decreased by $8.5 million or 15.0 percent. Fuel surcharge revenue was $5.4 million lower than the prior year. Revenue net of fuel surcharges decreased by $3.1 million or 6.5 percent compared to the prior year. Increased revenue from the industrial gas product line was offset by net business losses and decreased volumes with existing customers. These decreased volumes were primarily the result of continued economic weakness in central Canada, predominantly in the construction, chemical, and automotive industries.
For the current year, Bulk Plus Logistics' (BPL) revenue decreased by $2.1 million or 24.7 percent. This decrease was primarily due to the exiting of a transload management contract in May 2008 and decreased freight brokerage volumes in Canada and the U.S.
EBITDA - Q2
-------------------------------------------------------------------------
Three months ended June 30
-------------------------------------------------------------------------
(millions of % Rev.
dollars) 2009 % Rev. 2008 % Rev. Variance % change
-------------------------------------------------------------------------
Bulk trucking
-------------------
Western division 5.0 14.3% 6.6 13.5% (1.6) -24.2% 0.8%
Eastern division 2.1 8.4% 1.9 6.4% 0.2 10.5% 1.9%
-------------------------------------------------------------------------
Total bulk trucking 7.1 11.8% 8.5 10.8% (1.4) -16.5% 1.0%
-------------------------------------------------------------------------
Bulk Plus Logistics 0.6 18.8% 0.8 17.4% (0.2) -25.0% 1.4%
-------------------------------------------------------------------------
Other (0.5) 0.1 (0.6)
-------------------------------------------------------------------------
Total EBITDA 7.2 11.4% 9.4 11.3% (2.2) -23.4% 0.1%
-------------------------------------------------------------------------
EBITDA for the current period totaled $7.2 million, a $2.2 million or 23.4 percent decrease from the prior period. The western division experienced a $1.6 million or 24.2 percent decrease in the current period. This decrease was primarily the result of lower revenue which was mitigated by lower direct costs, primarily due to various cost reduction programs implemented to reflect lower volumes. The eastern division experienced increased EBITDA of $0.2 million or 10.5 percent as lower revenue was more then offset by a reduction in direct costs. BPL's EBITDA was $0.2 million lower than in the prior period as lower revenue was only partially offset by improved profitability.
EBITDA - Q2 YTD
-------------------------------------------------------------------------
Six months ended June 30
-------------------------------------------------------------------------
(millions of % Rev.
dollars) 2009 % Rev. 2008 % Rev. Variance % change
-------------------------------------------------------------------------
Bulk trucking
-------------------
Western division 8.9 12.2% 11.8 12.5% (2.9) -24.6% -0.3%
Eastern division 3.0 6.2% 3.1 5.5% (0.1) -3.2% 0.8%
-------------------------------------------------------------------------
Total bulk trucking 11.9 9.8% 14.9 9.8% (3.0) -20.1% 0.0%
-------------------------------------------------------------------------
Bulk Plus Logistics 1.4 21.9% 1.0 11.8% 0.4 40.0% 10.1%
-------------------------------------------------------------------------
Other (0.6) 0.5 (1.1)
-------------------------------------------------------------------------
Total EBITDA 12.7 10.0% 16.4 10.3% (3.7) -22.6% -0.3%
-------------------------------------------------------------------------
EBITDA for the year-to-date period totaled $12.7 million, a $3.7 million or 22.6 percent decrease from the prior year-to-date period. The western division experienced a $2.9 million or 24.6 percent decrease in the period, and the eastern division was lower than prior by $0.1 million or 3.2 percent. These decreases were primarily the result of lower revenue which was mitigated by lower direct costs, primarily due to various cost reduction programs implemented to address lower volumes. BPL's EBITDA was $0.4 million or 40.0 percent higher than in the prior year-to-date period as lower revenue was offset by improved profitability. Improved profitability resulted from reduced activity in the freight brokerage product line which has a higher percentage of direct operating costs than other product lines within BPL, as well as management's decision to exit a transload management contract in May 2008.
Capital Expenditures
Three months ended Six months ended
June 30 June 30
--------------------------------------------------
(millions of dollars) 2009 2008 2009 2008
-------------------------------------------------------------------------
Gross sustaining
capital expenditures 1.1 2.3 3.2 5.7
Less: proceeds on
disposal of capital
assets (0.4) (1.0) (13) (1.9)
--------------------------------------------------
Net sustaining capital
expenditures 0.7 1.3 1.9 3.8
Growth capital
expenditures 3.2 2.3 3.9 4.8
--------------------------------------------------
--------------------------------------------------
Net capital
expenditures 3.9 3.6 5.8 8.6
--------------------------------------------------
The Partnership's net capital expenditures, including growth and sustaining capital, totalled $3.9 million in the current period compared to $3.6 million in the prior period. The increase of $0.3 million over the prior period was due to increased growth capital expenditures of $0.9 million and reduced disposal proceeds of $0.6 million partially offset by decreased sustaining capital expenditures of $1.2 million.
Gross sustaining capital purchases of $1.1 million were made up primarily of replacement tractors and trailers, accounting for approximately 82 percent of the total, with the balance applicable to other operating assets. Net sustaining capital expenditures were $0.6 million lower than in the prior period due to reduced trailer purchases. Proceeds on the disposal of capital assets were $0.6 million less than that recorded in the prior period.
Increased growth capital spending of $0.9 million was primarily due to the purchase of $1.5 million of land adjacent to Saskatoon, Saskatchewan which will be used for a future terminal location. Growth capital expenditures of $3.2 million in the current period consisted of tractor and trailer purchases of approximately 53 percent with the remainder being used for the aforementioned land purchase. Growth capital purchases are funded from undistributed cash from operations, cash available from notional distributions on non-cash exchangeable shares and, to the extent required, available cash and existing lines of credit.
For the current year-to-date period, net capital expenditures totalled $5.8 million compared to $8.6 million for the prior year-to-date period. The $2.8 million decrease in net capital expenditures from the prior year was made up of a $2.5 million reduction in sustaining capital purchases and $0.9 million less growth capital. This was partially offset by a $0.6 million reduction in disposal proceeds. Sustaining capital purchases decreased when compared to the prior year-to-date period due to a reduction in trailer purchases which reflect the lower equipment utilization experienced in the current year.
Net annual capital expenditures relating to sustaining capital requirements will vary from year to year based on: the economic life of the capital assets; historical purchase dates; the mix of life cycles expiring in a given year; other factors affecting equipment cost; disposal proceeds of replaced assets; and, annual equipment utilization. Sustaining capital purchases are funded from the Partnership's net cash provided by operations in the year, cash available from notional distributions on non-cash exchangeable shares and, thereafter, to the extent required, available credit facilities.
You are invited to join management of the Partnership on a conference call at 9:30 a.m. Eastern Time on Thursday, August 13, 2009. North American participants, please dial 1-888-300-0053; international participants, please dial ++1 647-427-3420, at least 10 minutes prior to the indicated time.
A playback of the call will be available from 12:30 p.m. Eastern Time on Thursday, August 13, 2009 until midnight August 20, 2009. To hear the playback, please dial 1-800-678-0453 (international participants, please dial ++1 402-220-1458) and when prompted please enter the conference ID number 23382197.
Trimac Income Fund
Consolidated Balance Sheet
(unaudited)
-------------------------------------------------------------------------
(thousands of dollars)
As at As at
June 30, December 31,
2009 2008
$ $
------------------------
Assets
Current assets
Cash 22 970
Interest receivable 233 241
Distributions receivable 344 719
Prepaid expenses 42 105
------------------------
641 2,035
Investment in Trimac Transportation Services
Limited Partnership 64,654 67,412
Note receivable from Trimac Transportation
Services Inc. 35,438 35,438
------------------------
100,733 104,885
------------------------
------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 22 74
Due to associated companies and partnerships 7 967
Distributions payable 501 970
------------------------
530 2,011
Deferred compensation plan 93 50
------------------------
623 2,061
Unitholders' equity 100,110 102,824
------------------------
100,733 104,885
------------------------
------------------------
The Fund commenced business operations on February 25, 2005 and earnings of the Fund's investment in Trimac have been accounted for using the equity method of accounting since commencement. Under this method, the Fund's share of earnings of Trimac, adjusted for the amortization of certain tangible and intangible assets arising from the use of purchase accounting is reflected in the statement of earnings of the Fund as "Share of earnings of Trimac Transportation Services Limited Partnership". The results of operations of the Fund are predominately dependent on the performance of the Partnership.
Trimac Income Fund
Consolidated Statement of Earnings, Comprehensive Income and Unitholders'
Equity
(unaudited)
-------------------------------------------------------------------------
(thousands of dollars, except for per unit amounts and number of units)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
------------------------ ------------------------
$ $ $ $
Share of (loss) income
of Trimac
Transportation
Services Limited
Partnership(1) (90) 679 (652) 651
Interest income 707 706 1,389 1,416
Administrative costs (200) (236) (383) (438)
------------------------ ------------------------
Net earnings 417 1,149 354 1,629
Other comprehensive
(loss) income - share
of Partnership other
comprehensive (loss)
income (72) (4) (47) 20
------------------------ ------------------------
Comprehensive income 345 1,145 307 1,649
Opening unitholders'
equity 101,275 105,806 102,824 108,079
Issue of additional
units - 172 - 297
Distributions declared (1,510) (2,908) (3,021) (5,810)
------------------------ ------------------------
Closing unit holders'
equity 100,110 104,215 100,110 104,215
------------------------ ------------------------
------------------------ ------------------------
Basic earnings per
unit(2) $ 0.0331 $ 0.0914 $ 0.0281 $ 0.1297
Fully diluted earnings
(loss) per unit(2) $ 0.0306 $ 0.0914 $ (0.0143) $ 0.1224
Weighted average number
of units outstanding
used in computing
basic earnings per
unit 12,584,679 12,564,362 12,584,679 12,564,362
Number of units
outstanding used in
computing diluted
earnings (loss) per
unit 25,532,452 24,294,701 25,532,452 24,294,701
(1) The net earnings of the Partnership are allocated between TTSI and
the Fund based on the terms of the partnership agreement. The
following is a reconciliation of net earnings recorded in the
consolidated financial statements of the Partnership to the amount
recorded by the Fund.
Three months ended Six months ended
June 30 June 30
2009 2008 2009 2008
$ $ $ $
--------------------------------------------------
Net earnings of the
partnership 1,056 2,615 373 3,209
Add: Interest expense
on TTSI debt included
in Partnership
earnings 679 1,019 1,350 2,037
-------------------------------------------------------------------------
Adjusted Partnership
earnings 1,735 3,634 1,723 5,246
Less: Purchase price
allocation
adjustments:
Increase in
amortization of
capital assets and
loss on disposal of
capital assets (463) (601) (1,075) (1,230)
Amortization of
intangible assets (1,012) (1,011) (2,022) (2,022)
-------------------------------------------------------------------------
Partnership earnings
(loss) after purchase
price adjustments 260 2,022 (1,374) 1,994
-------------------------------------------------------------------------
Share of Partnership
(loss) earnings (90) 679 (652) 651
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(2) Pursuant to an investor liquidity agreement, holders of TTSI
Exchangeable Shares have the right to effectively liquidate their
10,230,538 shares of TTSI and receive units in the Fund. Following
the full exercise of such liquidation rights, the Fund would own 100
percent of the Partnership. The number of units used in the
calculation of diluted earnings per unit assumes full liquidation at
the beginning of the period.
Trimac Income Fund
Consolidated Statement of Cash Flows
(unaudited)
-------------------------------------------------------------------------
(thousands of dollars)
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
------------------------ ------------------------
$ $ $ $
Cash provided (used)
Operations
Net earnings 417 1,149 354 1,629
Add items not affecting
cash:
Share of loss (income)
from Trimac
Transportation
Services Limited
Partnership 90 (679) 652 (651)
Deferred compensation
costs 37 26 43 26
------------------------ ------------------------
Cash provided by
operations 544 1,147 1,049 1,655
Net change in non-cash
working capital (153) 30 (941) 199
------------------------ ------------------------
Net cash provided by
operations 391 1,177 108 1,854
------------------------ ------------------------
Investments
Distributions from
Trimac Transportation
Services Limited
Partnership 1,018 1,765 2,434 4,233
------------------------ ------------------------
Cash provided by
investing activities 1,018 1,765 2,434 4,233
------------------------ ------------------------
Financing
Distributions paid (1,512) (2,906) (3,490) (5,808)
------------------------ ------------------------
Cash used in financing
activities (1,512) (2,906) (3,490) (5,808)
------------------------ ------------------------
(Decrease) increase in
cash (103) 36 (948) 279
Cash, beginning of
period 125 647 970 404
------------------------ ------------------------
Cash, end of period 22 683 22 683
------------------------ ------------------------
------------------------ ------------------------
Supplemental information
Cash received from
interest (net) 715 718 1,397 1,421
The financial statements included in this news release do not contain the
notes to the statements. Financial statements with note disclosure are filed
with securities regulators.
Trimac Transportation Services Limited Partnership
Consolidated Balance Sheet
(unaudited)
-------------------------------------------------------------------------
(thousands of dollars)
As at As at
June 30, December 31,
2009 2008
$ $
------------------------
Assets
Current assets
Cash 5,479 2,350
Accounts receivable 28,209 31,350
Materials and supplies 1,403 1,626
Due from related parties 1,764 3,088
Income taxes recoverable 128 -
Prepaid expenses 10,126 10,315
------------------------
47,109 48,729
Capital assets 88,905 92,708
Intangible assets 3,014 3,495
Goodwill 6,182 6,182
Other 1,599 1,622
------------------------
146,809 152,736
------------------------
------------------------
Liabilities
Current liabilities
Bank indebtedness 2,926 1,969
Accounts payable and accrued liabilities 26,877 29,282
Distributions payable 3,496 3,080
Income taxes payable - 570
Due to related parties 2,243 1,223
Current maturities of long-term debt 18,666 18,666
------------------------
54,208 54,790
Long-term debt 45,551 44,723
Future income taxes 1,223 1,207
Other long-term liabilities 1,395 1,253
------------------------
102,377 101,973
Partnership equity 44,432 50,763
------------------------
146,809 152,736
------------------------
------------------------
Commitments and contingencies
The Partnership provides bulk trucking services throughout Canada and
complementary logistics services in Canada and the United States. Effective
January 1, 2005, the Partnership purchased substantially all of the assets of
Trimac Transportation Services Inc. ("TTSI") relating to its Canadian bulk
trucking business and its North American logistics business. TTSI and certain
of its subsidiaries conducted the business operations of the Partnership prior
to January 1, 2005.
Trimac Transportation Services Limited Partnership
Consolidated Statement of Earnings, Comprehensive Income and Partnership
Equity
(unaudited)
-------------------------------------------------------------------------
(thousands of dollars)
Three months Three months Six months Six months
ended ended ended ended
June 30 June 30 June 30 June 30
2009 2008 2009 2008
------------------------ ------------------------
$ $ $ $
Revenue
Transportation revenue 59,555 68,732 119,004 135,319
Fuel surcharges 3,758 14,289 8,441 24,453
------------------------ ------------------------
63,313 83,021 127,445 159,772
------------------------ ------------------------
Operating costs and
expenses
Direct 45,356 61,780 93,346 120,123
Selling and
administrative 10,746 11,783 21,367 23,266
Depreciation and
amortization 5,109 5,546 10,327 10,962
Gain on sale of assets,
net (84) (149) (274) (526)
------------------------ ------------------------
Operating expense 61,127 78,960 124,766 153,825
------------------------ ------------------------
Operating earnings 2,186 4,061 2,679 5,947
Interest on long-term
debt 1,001 1,279 1,985 2,440
Other interest expense 22 15 45 26
------------------------ ------------------------
1,023 1,294 2,030 2,466
------------------------ ------------------------
Earnings before income
taxes 1,163 2,767 649 3,481
Income tax expense
(recovery)
Current 102 172 263 298
Future 5 (20) 13 (26)
------------------------ ------------------------
107 152 276 272
------------------------ ------------------------
Net earnings 1,056 2,615 373 3,209
Other comprehensive
(loss) income - net
change in cumulative
translation adjustments (289) (13) (189) 57
------------------------ ------------------------
Comprehensive income 767 2,602 184 3,266
Opening partnership
equity 46,948 51,073 50,763 55,186
Distributions declared (3,283) (4,674) (6,515) (9,451)
------------------------ ------------------------
Closing partnership
equity 44,432 49,001 44,432 49,001
------------------------ ------------------------
------------------------ ------------------------
Accumulated other
comprehensive income
(losses) (included in
partnership equity)
----------------------
Opening balance 364 (199) 264 (269)
Other comprehensive
(loss) income (289) (13) (189) 57
------------------------ ------------------------
Closing balance 75 (212) 75 (212)
------------------------ ------------------------
------------------------ ------------------------
Trimac Transportation Services Limited Partnership
Consolidated Statement of Cash Flows
(unaudited)
-------------------------------------------------------------------------
(thousands of dollars)
Three months Three months Six months Six months
ended ended ended ended
June 30 June 30 June 30 June 30
2009 2008 2009 2008
------------------------ ------------------------
$ $ $ $
Cash provided (used)
Operations
Net earnings 1,056 2,615 373 3,209
Add back (deduct) items
not affecting cash:
Depreciation and
amortization 5,109 5,546 10,327 10,962
Gain on sale of
assets, net (84) (149) (274) (526)
Future income tax
expense (recovery) 5 (20) 13 (26)
Other non-cash items 150 (151) 164 (155)
------------------------ ------------------------
Cash provided by
operations 6,236 7,841 10,603 13,464
Net change in non-cash
working capital 2,251 (2,803) 2,922 61
------------------------ ------------------------
Net cash provided by
operations 8,487 5,038 13,525 13,525
------------------------ ------------------------
Investments
Purchases of capital
assets (4,266) (4,572) (7,096) (10,504)
Proceeds on sale of
capital assets 367 916 1,327 1,859
Decrease in accounts
payable and accrued
liabilities relating
to investing
activities (1,555) (321) (210) (388)
Decrease in accounts
receivable relating
to investing
activities - 51 5 14
Other (173) (5) (108) 34
------------------------ ------------------------
Cash used in investing
activities (5,627) (3,931) (6,082) (8,985)
------------------------ ------------------------
Financing
(Decrease) increase in
long-term debt (729) 3,833 828 6,452
Distributions paid (2,795) (5,050) (6,099) (10,607)
------------------------ ------------------------
Cash used in financing
activities (3,524) (1,217) (5,271) (4,155)
------------------------ ------------------------
(Decrease) increase in
cash (664) (110) 2,172 385
Cash (bank indebtedness),
beginning of period 3,217 257 381 (238)
------------------------ ------------------------
Cash, end of period 2,553 147 2,553 147
------------------------ ------------------------
------------------------ ------------------------
Supplemental information
Income taxes paid 296 200 961 221
Interest paid 346 166 2,087 2,350
Cash consists of the
following:
Cash 5,479 597
Bank indebtedness (2,926) (450)
------------------------
2,553 147
------------------------
------------------------
The financial statements included in this news release do not contain the
notes to the statements. Financial statements with note disclosure are filed
with securities regulators.
