Vitran Corp. Inc. has a market cap of $195.84 million; its shares were traded at around $12 with and P/S ratio of 0.31. VTNC is in the portfolios of Charles Brandes of Brandes Investment, Chuck Royce of Royce& Associates, PRIMECAP Management, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:The Company incurred interest expense of $1.9 million in the second quarter of 2010 compared to interest expense of $2.5 million for the same quarter a year ago. In addition to the Companys interest rate spread on its syndicated revolving and term debt being 50 bps less than a year ago, the Company reduced interest bearing debt with $21.3 million of proceeds from an equity offering in September 2009 resulting in a reduction in interest expense for the second quarter of 2010.
Income tax expense for the second quarter of 2010 was $0.5 million compared to a recovery of $0.9 million for the same quarter a year ago due to a decrease in loss before income tax expense in the current quarter. On a consolidated basis, the Company generated taxable income in the United States for the three-month period; however, for the six month period, the Company continued to recognize additional deferred tax assets. Due to the improvement in the 2010 second quarter results compared to the first quarter of 2010, the Company has reduced the rate of accumulation of loss carry-forwards and Management believes the Company will generate sufficient taxable income to use these losses in the future.
Net income for the 2010 second quarter was $1.7 million compared to net income of $0.4 million for the same quarter in 2009. This resulted in basic and diluted earnings per share of $0.11 for the second quarter of 2010 compared to basic and diluted earnings per share of $0.03 for the second quarter of 2009. The weighted average number of shares for the current quarter was 16.3 million basic and 16.4 million diluted shares compared to 13.5 million basic shares and 13.6 million diluted shares in the second quarter of 2009. For the six months ended June 30, 2010, the Company posted net income of $0.8 million compared to a net loss of $1.9 million in the same six-month period a year ago. This resulted in earnings per share of $0.05 basic and diluted compared to a loss per share of $0.14 for the 2009 six-month period. The weighted average number of shares for the six-month period of 2010 was 16.3 million basic and 16.4 million diluted shares compared to 13.5 million basic and diluted shares in the six-month period of 2009.
Revenue in the LTL segment improved 15.7% to $285.8 million for the six-month period ended June 30, 2010 compared to $247.0 million for the same six-month period a year ago. The increase in revenue was influenced by fuel surcharge which represented 12.3% of revenue in the first six months of 2010 compared to 9.2% of revenue in the first six months of 2009. Shipments and tonnage improved 8.3% and 10.9%, respectively, in the comparable six-month period impacting revenue excluding fuel surcharge.
The LTL segment made additional changes in early April 2009, re-engineering its linehaul and pick-up and delivery operations to reduce claims expenses, dock handling costs and linehaul expenses, as well as a 5% reduction in wages and salaries for all employees. These initiatives resulted in improvements in the 2010 second quarter and six-month income from operations to $3.9 million and $3.2 million respectively. Consequently, the operating ratio for the three-month and six-month periods ended June 30, 2010 improved to 97.4% and 98.9% respectively, compared to 99.1% and 100.6% for the same periods in 2009. Management believes that with the new integrated U.S. LTL operating model, the current pricing momentum and additional operating initiatives, the segment is well positioned to contribute income from operations over the long term.
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