Vitran Corp. Inc. Reports Operating Results (10-Q)
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 $113.1 million; its shares were traded at around $8.38 with and P/S ratio of 0.2. Highlight of Business Operations: Maintenance expense declined 13.4% to $7.5 million for the three-month period ended September 30, 2009 compared to $8.7 million for the three-month period ended September 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. 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. Lastly, during the third quarter of 2009, the U.S. LTL business unit amalgamated maintenance departments and initiated a consolidated purchasing program that resulted in a decrease in maintenance expense in the current quarter and should contribute further savings in future periods.
Rents and leases expense declined 17.7% to $6.6 million for the three-month period ended September 30, 2009 compared to $8.0 million for the three-month period ended September 30, 2008. The $1.4 million decline in rents and leases expense for the comparable three and nine-month periods is a result of aforementioned decline in facility lease costs in the U.S. LTL business unit as well as the expiration of operating leases on approximately 750 units of rolling stock at the end of the 2009 second quarter.
The Company incurred interest expense of $2.6 million in the third quarter of 2009 compared to interest expense of $2.2 million for the same quarter a year ago. The Companys interest rate spread on its syndicated revolving and term debt was 350 bps greater than the third quarter and nine-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 $0.9 million increase in interest expense for the comparable nine-month period.
Income tax recovery for the third quarter of 2009 was $0.5 million compared to a recovery of $0.2 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. Management believes the Company will generate sufficient taxable income to use these losses in the future.
Net income for the 2009 third quarter was $0.3 million compared to net income of $2.1 million for the same quarter in 2008. This resulted in basic and diluted income per share of $0.02 for the third quarter of 2009 compared to basic and diluted income per share of $0.15 for the third quarter of 2008. The weighted average number of shares for the current quarter was 13.9 million basic and 14.0 million diluted shares compared to 13.5 million basic and 13.6 million diluted shares in the third quarter of 2008. For the nine months ended September 30, 2009, the Company incurred a net loss of $1.6 million compared to net income of $7.8 million in the same nine-month period a year ago. This resulted in a net loss per share of $0.12 basic and diluted compared to earnings per share of $0.58 basic and earnings per share of $0.57 diluted for the 2008 nine-month period. The weighted average number of shares for the nine month period of 2009 was 13.6 million basic and diluted shares compared to 13.5 million basic and 13.6
Revenue in the LTL segment decreased 20.5% to $384.5 million for the nine-month period ended September 30, 2009 compared to $483.8 million for the same nine-month period a year ago. The decrease in revenue was influenced by fuel surcharge which represented 9.7% of revenue in the first nine months of 2009 compared to 18.4% of revenue in the first nine months of 2008. Shipment and tonnage declines of 8.4% and 11.8%, respectively, in the comparable nine-month period impacting revenue excluded fuel surcharge.
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