ATS Andlauer Income Fund Announces First Quarter Results for 2008
Fri May 9, 8:51 AMTORONTO, ONTARIO--(Marketwire - May 9, 2008) - ATS Andlauer Income Fund (the "Fund") (TSX: ATS-UN.TO) announced today results for the first quarter ended March 31, 2008 with revenue of $48.7 million and EBITDA of $4.0 million. The payout ratio for the first quarter was at 98%.
"Our operating results reflect the impact of some of the same challenges being faced by our industry, such as upward pressure on labour costs combined with lower volumes and pricing pressure from our customers due to a sluggish economy," said Michael Andlauer, President and Chief Executive Officer. "There is no doubt that a harsher winter weather and rising fuel costs were also major contributors to the less than stellar first quarter results. However even in light of these results, I am confident that we are well positioned to weather this period of slow economic time with better controlled costs and increased capacity capabilities which will allow us to aggressively grow in the industries in which we have chosen to specialize. We continue to develop innovative solutions that generate more value for our customers and when combined with our strong balance sheet remain optimistic about 2008 ", stated Michael Andlauer, President and Chief Executive Officer.
Three months ended
March 31,
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2008 2007
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(unaudited) (unaudited)
($ thousands, except per
Unit amounts)
Earnings Statement Highlights
Revenue 48,713 44,414
Gross margin(1) 17,007 16,504
Gross margin percentage(1) 34.91% 37.16%
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Income before non-controlling interest 2,046 3,143
EBITDA(1) 4,018 4,807
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Income per Unit
Basic 0.178 0.271
Diluted 0.177 0.271
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Balance Sheet Highlights
Total assets 124,568 124,293
Total liabilities 46,178 39,694
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Distribution Highlights
Distributions declared per Unit 0.2922 0.2922
Payout ratio 98% 80%
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(1) See Non-GAAP Measures
Revenue for the three months ended March 31, 2008 was $48.7 million compared to $44.4 million for the same period in 2007, an increase of $4.3 million or 9.68%. Excluding fuel surcharge revenue for the period increased by $2.5 million or 6.16% compared to the same period in 2007. Ground revenue increased by $3.1 million from $35.3 million in 2007 to $38.4 million in 2008, while air revenues declined by $0.6 million from $5.3 million in 2007 to $4.7 million in 2008. Total fuel surcharge revenue increased by $1.8 million from $3.8 million in 2007 to $5.6 million in 2008. Net of attrition, and excluding fuel surcharge, the Pharmaceutical and Healthcare vertical posted significant revenue growth of $3.0 million in the quarter which included $1.3 million from healthcare related initiatives which commenced during the last half of the prior year, while Consumer Products grew by $0.5 million, and the Entertainment vertical declined by $1.0 million. Cost of sales increased from $27.9 million for the three months ended March 31, 2007 to $31.7 million for the three months ended March 31, 2008; cost of sales as a percentage of revenue increased from 62.84% for the three months ended March 31, 2007 to 65.08% for the three months ended March 31, 2008. Linehaul costs as a percentage of revenue declined by approximately 1.12% which was more than offset by a 2.81% increase in pickup and delivery costs as a percentage of revenue. The increase in pick up and delivery costs was a result of increased fuel costs, higher delivery costs associated with a healthcare related dedicated delivery initiative which commenced during the last half of the prior year, higher fleet related costs associated with the movement of ambient freight and upward pricing pressure on delivery rates year over year in Western Canada, in particular Alberta. Overall, handling costs as a percentage of revenue increased by 0.55%. This increase was a result of higher labor wage rates, particularly in Western Canada, as well as additional handling costs incurred due to waiting for trailers delayed because of harsh winter weather conditions. Gross margin declined from 37.16% for the three months ended March 31, 2007 to 34.91% for the same period in 2008. Pricing pressure and increased fuel costs (which are offset by revenue surcharges included in total revenue with no attached margin), negatively impacted overall growth in margins despite healthy advances in revenue. Income before non-controlling interest for the three month period ended March 31, 2008, was $2.0 million compared to an income of $3.1 million for the same period in 2007. EBITDA was $4.0 million for the three months ended March 31, 2008, down from $4.8 million in the same period in 2007, representing a decrease of 16.40% . As a percentage of revenue, EBITDA was 8.25% for the three months ended March 31, 2008, compared to 10.82% in the same period in 2007. EBITDA for the period ended March 31, 2008 was directly impacted by declining margins due to pricing pressure in the retail and entertainment verticals and increased delivery costs in Alberta. EBITDA was also directly impacted by certain costs that were not present in the same period in 2007, including strategic increases in sales and senior management personnel, and increased operating costs, from both a fixed and variable perspective, due to the utilization of two facilities in Toronto. Depreciation and amortization and interest expense increased in the period due to acquisition of equipment under capital lease. SUMMARY OF MOST RECENTLY COMPLETED CONSOLIDATED QUARTERLY RESULTS ($thousands, except Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, per Unit 2008 2007 2007 2007 2007 2006 2006 2006 amounts) (Q1 08) (Q4 07) (Q3 07) (Q2 07) (Q1 07) (Q4 06) (Q3 06) (Q2 06) ---------------------------------------------------------------------------- Revenue 48,713 59,041 46,383 44,037 44,414 50,789 42,540 40,775 Gross margin 17,007 22,752 15,713 15,327 16,504 19,462 15,828 15,289 EBITDA(1) 4,018 9,105 4,020 3,627 4,807 7,964 5,622 4,096 Income (loss) before non- controlling interest 2,046 7,368 2,313 (1,788) 3,143 6,196 3,974 2,436 ---------------------------------------------------------------------------- Income (loss) per Unit Basic 0.178 0.593 0.200 (0.154) 0.271 0.534 0.342 0.210 Diluted 0.177 0.592 0.199 (0.154) 0.271 0.533 0.342 0.210 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Cash 1,684 2,391 1,477 833 753 265 32 1,024 Total assets 124,568 132,798 120,796 122,143 124,293 129,650 124,628 123,058 Total current liabi- lities 15,642 22,180 16,407 13,882 13,408 18,048 12,229 12,165 Long-term debt 5,537 5,745 - 1,928 3,183 3,349 3,749 3,000 Future income taxes 3,188 3,182 3,715 3,730 - - - - Unitholders' equity 78,390 79,614 78,821 80,531 84,599 85,097 85,401 84,780 Non- controlling interest 21,811 22,077 21,853 22,072 23,103 23,156 23,249 23,113 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) See Non-GAAP MeasuresTotal cash distributions for the quarter were $3.4 million or $0.292 per trust unit resulting in a cash distribution payout ratio of 98% compared to a payout ratio of 80% in the prior year. On an annualized basis, distributions have increased from the prospectus estimate of $0.975 to $1.1688 per trust unit. The Fund is an open-ended trust that holds, indirectly, securities of ATS Andlauer Transportation Services Limited Partnership ("ATS Andlauer LP"). ATS Andlauer LP is a leading single source transportation solutions provider in Canada, providing integrated trucking, courier, air freight and value added transportation and distribution services to consumer product companies. It operates facilities in 23 centres across Canada and serves approximately 1,400 diversified customers. The Fund's units trade on the Toronto Stock Exchange under the symbol ATS.UN. The Financial Statements and Management's Discussion and Analysis for the period ended March 31, 2008, along with additional information relating to the Fund, including all public filings, are available on www.sedar.com and on the Fund's website at www.atsincomefund.ca. FORWARD LOOKING STATEMENTS Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Fund. These statements are based on suppositions and uncertainties as well as on management's evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Fund's services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Fund's operations or financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( www.sedar.com) or at the Fund's website ( www.atsincomefund.ca). Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release, and the Fund undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities law. NON-GAAP MEASURES Gross margin and gross margin percentage are non-GAAP measures that represent the contribution of operating activities to earnings. They are considered key measures by management as they reflect the ability of the Fund to generate earnings necessary to fund overhead costs, capital investment and distributions. EBITDA is a non-GAAP measure that management considers a key measure as an indicator of the ability of the Fund to meet its capital and financing commitments. EBITDA is not a recognized measure under GAAP and does not have a standardized meaning under GAAP and therefore may not be comparable to similar measures presented by other issuers. Distributable cash refers to cash available for distribution to unitholders in accordance with the distribution policies of the Fund described in the prospectus. Distributable cash of the Fund is a measure generally used by Canadian open-ended trusts as an indicator of financial performance and Management believes that prospective investors may consider the cash distributed by the Fund relative to the price of the Units when assessing an investment in Units. The Fund's method of determining distributable cash is derived from EBITDA, which in turn is derived from net income, a measure recognized under GAAP and is also reconciled to cash from operating activities. Cash distribution payout ratio is a non-GAAP measure that compares distributions paid to available distributable cash which management considers an indicator of the Fund's conservatism and its ability to make distributions to unitholders at current rates in the future. ContactsMichael Andlauer
ATS Andlauer Transportation Services GP Inc.
President & Chief Executive Officer
(416) 798-1379
Brian Mascarenhas
ATS Andlauer Transportation Services GP Inc.
VP Finance & Chief Financial Officer
(416) 798-1379
Website: www.atsincomefund.ca
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