Vitran Corporation Inc. is a North American group of transportation companies offering less-than-truckload logistics truckload and freight brokerage services. Vitran Corp. Inc. has a market cap of $134.9 million; its shares were traded at around $10 with a P/E ratio of 71.5 and P/S ratio of 0.2.
Highlight of Business Operations:Revenue decreased 19.0% to $158.7 million for the second quarter of 2009 compared to $196.0 million in the second quarter of 2008. Revenue in the LTL, Logistics, and Truckload segments decreased 21.7%, 3.9% and 0.8%, respectively. Revenue for the second quarter of 2009 was impacted by a weaker Canadian dollar and decline in fuel surcharge revenue, accounting for approximately $26.4 million of the consolidated revenue decline. For the six months ended June 30, 2009, revenue decreased 20.1% to $298.3 million compared to $373.5 million for the same six-month period in 2008. Consolidated revenue for the comparable six-month periods were also impacted by a weaker Canadian dollar and decline in fuel surcharge revenue accounting for approximately $48.4 million of the total revenue decline. Detailed explanations for the fluctuations in revenue are discussed below in “Segmented Results”.
Maintenance expense declined 4.7% to $7.8 million for the three-month period ended June 30, 2009 compared to $8.2 million for the three-month period ended June 30, 2008. The decline in maintenance expense can be attributed to the aforementioned reductions in rolling stock as well as the closure of 13 operating facilities due to the completion of the U.S. LTL operations integration in the fourth quarter of 2008. Furthermore, in April of 2009 the U.S. LTL business unit re-engineered its linehaul model and closed another 11 in market terminals contributing to further maintenance cost reductions.
The Company incurred interest expense of $2.5 million in the second quarter of 2009 compared to interest expense of $2.1 million for the same quarter a year ago. The Company s interest rate spread on its syndicated revolving and term debt was 300 bps greater than the second quarter and six-month period of 2008; however, the underlying decline in average LIBOR borrowings on the syndicated debt partially offset the increase in interest rate spread resulting in a $0.5 million increase in interest expense for the comparable six month periods.
Income tax recovery for the second quarter of 2009 was $0.9 million compared to an expense of $1.3 million for the same quarter a year ago due to an increase in loss before income tax expense in the current quarter. On a consolidated basis, the Company generated taxable losses in the United States, which have been recognized as deferred tax assets. Due to the improvement in the 2009 second quarter results compared to the first quarter of 2009, 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 2009 second quarter was $0.4 million compared to net income of $4.6 million for the same quarter in 2008. This resulted in basic and diluted income per share of $0.03 for the second quarter of 2009 compared to basic and diluted income per share of $0.34 for the second quarter of 2008. The weighted average number of shares for the current quarter was 13.5 million basic and 13.6 million diluted shares compared to 13.5 million basic and 13.6 million diluted shares in the second quarter of 2008. For the six months ended June 30, 2009, the Company incurred a net loss of $1.9 million compared to net income of $5.7 million in the same six-month period a year ago. This resulted in a net loss per share of $0.14 basic and diluted compared to earnings per share of $0.42 basic and diluted for the 2008 six-month period. The weighted average number of shares for the six-month period of 2009 was 13.5 million basic and diluted shares compared to 13.5 million basic and 13.6 million diluted shares in the six-month period of 2008.
Read the The complete ReportVTNC is in the portfolios of Charles Brandes of Brandes Investment, PRIMECAP Management.