Acquisitions pave TransForce’s way

MONTREAL — TransForce Income Fund, Canada’s largest group of for-hire carriers and logistics firms, says that its aggressive acquisition strategy led the company to improvements in the second quarter of 2006.

The Fund increased revenues by 9 percent to $495.7 million, from $455.6 million in the second quarter of 2006.

However, the numbers also show a challenging environment being faced by its existing operations.

Bedard says he expects the TL market
to remain challenging for this year.

Cash flow from operating activities, before net change in non-cash working capital balances, was $52.2 million, compared with $53.8 million in the
second quarter of 2006.

Distributable cash from ongoing operations was $55.2 million, compared with $57.2 million.

“We increased revenue and EBITDA through strategic acquisitions made in the past year as we continued to pursue opportunities to acquire good companies that will help TransForce create long-term value for unitholders,” said Alain Bédard, chairman, president and CEO of TransForce. “Overall, our existing operations have had to adjust to weaker market conditions, particularly in the truckload segment due to weaker demand and in oilfield services which were affected by lower drilling activity in Western Canada.”

During that quarter, TransForce acquired three companies that provided additional vehicles and drivers. The firms were folded into a Fleet Management & Personnel Services division, which is now part of the Specialized Services segment.

TransForce bought a handful of companies in 2006, including Howard’s Transport Services, a Stony Plain, Alta.-based oilfield services fleet; Edmonton-based Byers Transportation System and all its divisions; and
Alberta-based Kos Corp. Oilfield Transportation Ltd. and its affiliated companies.

This week, the company also announced a new courier company was joining its ranks. TransForce said it has aquired Century II Holdings Inc., whose wholly owned subsidiary Information Communication Services (ICS Courier) operates a fixed route courier business servicing in excess of 35,000 accounts in the insurance, optical, financial, travel, dental and legal business sectors across Canada.

“We expect the marketplace for most of our operating companies to continue to be challenging for the balance of the year with more competitive pressure and greater price sensitivity among our clients,” Mr. Bédard said.
“Throughout the TransForce group, we are taking the necessary steps to adjust to these conditions.”