TFL International’s revenue increases 14% in 2022


TFI International Inc. announced its results for the fourth quarter and full year ended December 31, 2022. Main highlights of the results are:

  • Fourth quarter operating income of $216.9 m increased 1% over the prior year quarter
  • Fourth quarter net income of $153.5 m increased 6% compared to Q4 2021, while adjusted net income of $151.8 m increased 2%
  • Fourth quarter diluted earnings per share (diluted “EPS”) of $1.74 increased 14% compared to Q4 2021, while adjusted diluted EPS of $1.72 increased 10%
  • Fourth quarter net cash from operating activities grew to $248.3 m, up 30% over the prior year period and free cash flow grew to $188.3 m, up 56% y-o-y
  • Full year diluted EPS of $9.02 increased from $7.91 in 2021, while adjusted diluted EPS of $8.02 increased from $5.23
  • The Board of Directors approved a $0.35 quarterly dividend, an increase of 30%

“TFI International successfully capped 2022 with strong fourth quarter results, generating slightly higher operating income on significantly improved operating margins, a 53% increase in the full-year adjusted diluted EPS and a 26% increase in the full-year free cash flow, despite macro volatility, fuel-related working capital outlays, and the sale of CFI assets last summer that served to strengthen our overall business mix and returns. As laid out at our recent Investor Day, our unique positioning includes business line diversity, exposure to attractive niche markets and numerous self-help initiatives that are producing remarkable success during turbulent economic times. Most importantly, our relative stability, margin expansion and free cash flow reflect the tireless efforts of our people, who are diligently adhering to our longstanding operating principles regardless of external factors. Capitalizing on this attractive competitive positioning and our sharp focus on the fundamentals, we continue to strategically allocate capital toward attractive acquisitions, with our acquisition pipeline remarkably strong and the majority of these closings expected in the first half of the year. During the quarter, our Board of Directors approved a 30% increase to our quarterly dividend and we continued to repurchase shares, both reflecting our favourable outlook. We enter 2023 in the best position in TFI International’s history and are eager to create additional shareholder value in the year ahead.” says Alain Bédard, Chairman, President and CEO.

Total revenue of $1.96 bn compared to $2.14 bn in the prior year period and revenue before fuel surcharge of $1.62 bn compared to $1.89 bn in the prior year period. The decline is primarily due to the sale of CFI’s Truckload, Temp Control and Mexican non-asset logistics business (“CFI”) in August 2022, which had sales of $139.2 m in Q4 2021, as well as to reduced volumes in US LTL operations driven by a combination of weaker end market demand as well as the Company’s intentional elimination of unprofitable freight.

Operating income grew 1% to $216.9 m from $215.0 m the prior year period with a 200 basis point operating margin improvement, despite $12.4 m of operating income included in the fourth quarter of 2021 from CFI. Net income grew 6% to $153.5 m from $144.1 m in the prior year period, and net income of $1.74 per diluted share was up relative to $1.52 in the prior year period. Adjusted net income, a non IFRS measure, was $151.8 m , or $1.72 per diluted share, up from $148.6 m, or $1.57 per diluted share, the prior year period.

Total revenue declined for all segments relative to the prior year period with decreases of 3% for Package and Courier, 6% for Less Than-Truckload, 14% for Truckload and 11% for Logistics. In contrast, operating income was higher for Package and Courier by 2%, for Truckload by 16% and for Logistics by 4%, and lower for Less-Than-Truckload by 15% in the fourth quarter in comparison to the prior year. Truckload operating income in the prior year period included a $12.4 m contribution from CFI which was partially offset by an increased contribution of $9.7 m from the sale of real estate in the quarter. Operating income in the Less-Than-Truckload segment, more specifically U.S. LTL, decreased due to the lower freight volumes as well as to non-recurring costs related to exiting the transition service agreement with UPS. On February 1, 2023, the financial system supporting the U.S. LTL operations was migrated from UPS to a standalone system managed by TFI.

Total revenue was $8.81 bn for 2022 versus $7.22 bn in 2021. Revenue before fuel surcharge of $7.36 bn was up 14% compared to the prior year. Operating income totalled $1,146.0 m, or 16% of revenue before fuel surcharge, an increase of 17% compared to $979.2 m and 15% of revenue before fuel surcharge in the prior year. The increase is mainly attributable to the contributions from acquisitions, including a gain on sale of business of $73.7 m.

Net income was $823.2 m, or $9.02 per diluted share, compared to $754.4 m, or $7.91 per diluted share a year earlier. Adjusted net income and Adjusted diluted EPS, non-IFRS measures, were $731.7 m, or $8.02 per diluted share, compared to $498.3 m, or $5.23 per diluted share the prior year. During 2022, total revenue grew 1% for Package and Courier, 43% for Less-Than-Truckload, 13% for Truckload and 6% for Logistics relative to the prior year. Operating income was up 24% for Package and Courier, 59% for Truckload, down 18% for Less-Than-Truckload, mainly due to the inclusion of the bargain purchase gain in 2021, and down 2% for Logistics.

Net cash flow from operating activities was $971.6 m during 2022 compared to $855.4 m the prior year. The 14% increase was due to stronger operating performance and contributions from acquisitions. The Company returned $665.3 m to shareholders during the year, of which $97.3 m was through dividends and $568.0 m was through share repurchases. On December 15, 2022, the Board of Directors of TFI International declared a quarterly dividend of $0.35 per outstanding common share paid on January 16, 2023, representing a 30% increase over the $0.27 quarterly dividend declared in Q4 2021.

Source: TFI International