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Vitran Corp. Inc. has a market cap of $223.3 million; its shares were traded at around $13.73 with and P/S ratio of 0.4. 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: Income tax recovery for the first quarter of 2010 was $1.0 million compared to a recovery of $2.7 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 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 loss for the 2010 first quarter was $0.9 million compared to a net loss of $2.4 million for the same quarter in 2009. This resulted in a loss per share of $0.06 for the first quarter of 2010 compared to a loss per share of $0.17 for the first quarter of 2009. The weighted average number of shares for the current quarter was 16.3 million compared to 13.5 million shares in the first quarter of 2009. The weighted average share count increased due to the issuance of 2.7 million shares in a private placement on September 21, 2009.
Cash flow from operations for each of the first quarters of 2010 and 2009 consumed $0.1 million. Albeit net loss in the first quarter of 2010 improved $1.4 million, this gain was offset by the change in non-cash working capital, driven by the significant increase in revenue and correspondently accounts receivable in the first three months of 2010. Days sales outstanding (“DSO”) in the first quarter of 2010 was 42.3 days compared to DSO of 45.7 days for the first quarter of 2009.
As at March 31, 2010, interest-bearing debt was $92.8 million consisting of $26.6 million of term debt, $57.3 million drawn under a revolving credit facility and $8.9 million of capital leases. At March 31, 2009 interest-bearing debt was $114.9 million consisting of $47.6 million of term debt, capital leases of $14.2 million and $53.1 million drawn under the revolving credit facility. The majority of the decline in debt is attributable to the issuance of 2.7 million common shares at $8.50 per common share under a private placement on September 21, 2009. Net proceeds from the equity offering were $21.3 million after fees, expenses and commission.
During the first quarter of 2010, the Company repaid $3.9 million of term debt, $1.3 million of capital leases and drew down $7.8 million on its revolving credit facility. At March 31, 2010, the Company had $16.5 million of available credit facilities, net of outstanding letters of credit. The Company was in compliance with its debt covenants at March 31, 2010. Due to lower than expected total funded debt and the improvement in earnings, the Company has reduced its leverage ratio at March 31, 2010 and has earned a 50bps reduction on its syndicated interest rate spreads starting in the second quarter of 2010.
The Company generated $0.7 million in proceeds and gains on sale of $0.1 million on the divestiture of surplus equipment and a facility in Cleveland, Ohio in the first quarter of 2010. Capital expenditures amounted to $2.9 million for the first three months of 2010 and were primarily funded out of the proceeds from the sale and the revolving credit facility. The capital expenditures in the first quarter of 2010 were primarily for the purchase of a facility in Grand Rapids, Michigan, rolling stock and information technology expenditures. In the first quarter of 2009 the majority of capital expenditures were for land in Winnipeg, Manitoba, rolling stock and information technology expenditures. The table below sets forth the Company’s capital expenditures for the three months ended March 31, 2010 and 2009.
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