TFII TFI International

Alain Bedard Chairman, President & CEO
Scott Group Wolfe Research
Konark Gupta Scotia Bank
Allison Landry Credit Suisse
Kevin Chiang CIBC
Fadi Chamoun BMO Capital Markets
Tim James TD Securities
Jason Seidl Cowen
Cameron Doerksen National Bank Financial
Benoit Poirier Desjardins Capital
Walter Spracklin RBC
Sanjay Ramaswamy Bank of America
Call transcript
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Good morning, ladies and gentlemen. Thank you for standing by. Welcome to TFI International's First Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. to many and callers limited order follow-up be ask to as will one one question in Callers possible. Further will instructions be queue provided at for that time. entering the

year-end that to Before that statements of in subject please we risks call are forward-looking call over and amounts TFI a turn and anticipated. Also be contain the are those in differ materially changed presentation uncertainties its from advised that dollar to this nature could cause actual several and conference will currency Dollars. U.S. at a are to reminder, management, all results number as

Lastly, President Wednesday, I to April and of TFI Chief that to go turn everyone on I call XXXX. over this now Executive sir. will Officer conference would like Please XXth, the International. recorded Chairman, is ahead, Bedard, being conference remind Alain

Alain Bedard

Well, I'm very call. we and results. quarter the pleased this introduction after XXXX to released the thank operator, morning's much to closed, market first Yesterday everyone you for our welcome

So strong that TFI quarter Year, on marked our the of Exchange. International quarter the New the listing anniversary had a York to Stock one-year begin an New exceptionally

on are to During and benefits. height and the share. do returns beginning growth as excess flow, expand look goal a strength of look earnings good through both strong per times important value The International's accretive to capital, allows to profile successful disciplined long-term preserve to see and capital in of extend to long-term seek accretive free opportunities shareholder We the of increase bad. highly turn that TFI ultimate on getting efficiencies, another record manner, to our This and and strategy. as opportunities long we to position shareholders returning the part place and right possible. our business with selectively we relentless strategic identification we us M&A. the our the for is right. growth And always, acquisition opportunities optimize continued grow enhance in the business made whenever cash the financial focus we've invested a candidates our of strategic We moves in our acquisition of of our that and maintained In creating to on a we're pandemic, track fundamentals details with us strategically the

fortify to International As become you TFI Freight in agreement know, one strategic of acquisition propels our will an quarter. strengthen in this January, expansion the The one acquire five in our to company's largest across strategic carrier. track of on accelerate announced the we UPS. offering, transaction our history. transaction most UPS immediately the U.S. relationship LTL North with close It service to American This and our is ongoing

and solid in revenue Now year-over-year let's That first operating includes strong results quarter turn growth results. year-ago. income, both despite a very our to

Our prior-year's before again quarter compared was $X.X of revenue the much up -- the the quarter, most, a XX% despite first billion total for of robust the prior-year's quarter quarter for to the pandemic. being very first

one-times item, significant us to discuss and grew to million focus XX% I'll XX% despite basis on diluted $XXX EPS Just on $X.XX. adjusted profitability as operating to important our our the and expanded given income our

operating prior-year. XX% was the million, from over activities cash $XXX net Our up

attractive in the important consider invest As you and to to business us know, our expansion we strong opportunities. flow be out strategically allowing cash seek

beside first held to or our price in those rise mark-to-market shares the first a the cash due the directors $X.XX one-time Freight. DSUs acquisition total, our quarter, $X.XX related of In impact was our which adjusted during relates cost. the that's expense combined Regarding of EPS items, on of one-time the of share unit really impacted by $X.XX diluted transaction share per UPS to to

four expanded our look total segment at granular each of surcharge XX% $XX.X Courier, overall of Operating which contributed XX% income all before performance. represents segments ahead. Starting of our versus XX.X% in growth This this by following We're BXC fuel with revenue margin the up both million a now see Let's even sorry and to our our and growth more of P&C yields with mix continued and activity, operating strong and the an prior-year. for balanced Package of of pleased and take XX% strong to XXX the greater increase results revenue operating pandemic additional BXB point. BXB have an which on improved driven basis BXC opportunities year. was with rebound more

before surcharge of segment flat generated essentially total compared million $XXX prior-year Our revenue to the fuel LTL XX% of also revenue segment quarter.

contribution nearly XX% the operating consolidation a $XX.X strategic still important from XXX as wage operating of than pandemic, Canadian from benefited from than a XX.X% over year million. in operation, driving This margin feeling earlier, operating basis in to point income expanded us, While growth million demand increase LTL more less well the as a income subsidy. to to most is the effect the our strong in road $X.X our XX%

revenue. Next X% surcharge total XX% was represents Revenue $XX million higher to is reflecting operating segment Truckload was operating segment, up up fuel our income X% margin before of XX.X%. a which of slightly year-over-year, while

capacity grew business our tight Our Within pricing severe operation by spot driven as U.S. our as business a segment and Canadian in Truckload, before grew while, X% offset X%, growth well saw acquisition in and by XX%. operations this in our specialized fuel was surcharge, decline weather. markets revenue U.S. winter mainly strong

before over revenue, nearly the XX% $X.X well year. past Canada total a wage acquisition as subsidy. our from e-commerce XX% as had also Canadian revenue We Rounding the segments, by strength business in jumped driven overall benefits surcharge our of out represent fuel million segment Logistics

XX% to million $XX.X Our margin a was income up X.X%. operating of reflecting

TFI by execute our investments to source plan us International a growth turning Now in for and remains disciplined that balance growth sheet. M&A allows attractive opportunities. significant to organic of our making strength both It

from allows of a placement in end fixed rate. extend maturities $XXX eight and million substantially to of $X.X us of the January's quarter $XXX liquidity private than more million which cash flow also senior XX at Our strong between years with free notes, to benefiting billion

provide Lastly, which range and $X.XX our cash range outlook share to million of per I to the $X flow. year. of to for free A include $XXX $XXX of a earnings wish millions

as of refers XXXX. in to have our the despite with times quarterly the forth capital the cash And Freight the at to and anticipated flow. in plan expect no We addition, months for our others. the And funded operator, leveraged excess focusing this XX like Q&A. driving two past focus calculation lines could note that, Together, profitability Ultimately, to In shareholder and on debt game we can debt-to-EBITDA will quarter unlock by the value. we acquisition, covenants, closing of next value, of remains that accordance create below possible. set UPS our capital and the to leverage that rest the to and ratio been calculated remain pending fluid. returning our as on But maximize of throughout. TFI approach you to to allocation constantly But The and history In best MD&A. acquisition business is fundamentals we if stuck whenever future our make value to rest considered growth. for open we we you assure our summary, please company's and carefully International, position will with the UPS economic outlook no our we're to shareholders stronger. additional stick even goal what Today, in look in the up profitable shareholder matter create further our enhance holds. us efficiencies Freight Please the


[Operator Instructions]. And is of your Wolfe from Research. question the line first with Group Scott

Scott Group

through us not? and clarify guidance margin within including of walk just some each of you're Freight in UPS revenue and the just or expectations for you Can the the segments that guidance if

Alain Bedard

absolutely. Well Yes. Yes.

sure is included guidance. for Freight So UPS the in

for Freight mean profitability say let's seven Okay, But you months. remember, if is UPS very about of the I limited.


it's in there. yes, And so

Okay, sure. that's for

be the of our XX% what in thing Now of in of see QX, to year if probably far, kind the revenue in we but we anticipate And P&C I so up is at was okay the terms the about same in you mean look up, our same business, fashion. QX. rest

could it on at So you our of a we as in also organic LTL when see the take when operating our earnings. results, for look, rest at look there. you always was And look that year, P&C, Canadian the should shows Truckload. keep lot growth a for the we February and excluding of neighborhood kind believe situation that flat, we a volume. at that we're the you be a that more but than to is the religion because of QX we we see that Freight, bit money a on think of okay, the going you That's same revenue stay profitability little now UPS at about making a us. the acquisition of disappointment, tough Specialty profitability sense if chasing see improving, was same the story But Then the TFI. Truckload USTL, the in will look

more acquisition side, we with logistics TSC overhead plus cost efficient was the them, I summer. a by it DLS I through a better major we ourselves year the should previous basis, the for have We're probably be then, that from unlock the working still On say. the to reflect us. should the done And mean believe could last owner of that

contribution, this know why about rest to Now, $X.XX the today is what is on minimal. feel total Freight pretty of the of the we in is EPS for good which we all, Again, the in year. all this UPS $X about XXXX based

Okay. normally dollars we're would of UPS It be we investing also because reflects would US$XXX Fleet there million than normally do CapEx which into the again, more way a above right. is done, and more

have the terms two, leverage EPS stay think will And forecast it's thing UPS. right. cash like I X, even we X.XX we're is when our acquisition that and to free for X, more to with get still we -- also, maximum, under there on say But flow. the conservative, being So like is the X a not going under year important we to probably being of of two

versus and is us Freight the they're built really have to this. be transaction first also night. older going have about there aware we features fully with safety and I it do, I've are to UPS, UPS on truck of it's that we to But And XXXX, soon. equipment which we new really there what of camera, And to approach going good forward-facing help about us the experience at work many costs, will approach new our safety, cost, in the and one. will an our day maintenance these driver trucks bring a driving in mean, mean times, I to team the to want over his the trucks anticipate on on in, still this at we close because So Freight, mean, said that. help how is I we the UPS can XXXX, again, what we then plan, feel Paul, do are

So not situation we'll reduce efficient. rates believe our working always, for the step that there address team with And of reflect be that then the maybe first more we and sure, to rates market today. costs slowly

Scott Group


So I was that question about just to, my was second UPS Freight. wanted

has Now, deal, more your terms months maybe ago, as done margin anything three revenue you work and things the with changed at long-term about expectations, in you've customers have that. had closing since near retention, conversations like of

Thank thoughts Just there? any you.

Alain Bedard

it's we why, to strongly the a No, there. change, plan great feel a go. have mean be confirm I plan, XX want able the very months we management that is could that we is we've last and just support say when a They of we been that is within believe no year, the over we UPS a this we team confirmation. just okay, to What to few OR. do and that understand, And really. this have the where

that I we base, -- with three believe within this see don't that no we we years very could still years. very, OR the way XX and there's firmly the with very relationship we still we UPS, have why a feel strongly company customer any that three be potential reason Okay, a within also mean


next Your Bank. of line question is Scotia Konark Gupta with from the

Konark Gupta

CapEx think I clarification. on the will move So I first

aspect of You guess is said is net or of it gross business? I any a $XXX that number million;

Alain Bedard

Konark. Yes. it's of net Yes, disposal,

Konark Gupta

you. thank Okay,

Alain Bedard

like Canadian about U.S. dollar is XXX about that. something XXX, is

Konark Gupta

that. for thanks okay, Great,

my And so is position. UPS on first question the

good week, So saying quarter. pretty UPS a they reported think segment and obviously the I this were Freight had

I there had that. profitability think for record they

the them the Just you or how the that now, does thoughts right acquiring saw wondering with up And margins? were how's your potentially push you your of in where kind that doing Freight them? UPS goals aspirations when sense

Alain Bedard

Very very thus good we're But question, Konark. conservative.

say going still something So I'm UPS company. not different management mean, from team. own the to they the I

talking I So when that what their they they they're know had best said about. they quarter, mean,

for there sure is So for condition trend improving market sure, is okay improving. the over also

let's So or ask XXXX than was, the of is XXXX say QX QX if me for better? question, you it in sure. of today the in company Okay,

a we not but something is but is right? then, we so right. Okay, after culture coming to come to Yes, up whatever, company still are very to every right trend that we're the we're after looking always better So yes, have This conservative, just has that X at improve day. on with QX doing TFI a guys not the trend. at going the this buying okay we're okay. improving based that, control now delivery, situation looking UPS a We today. the probably also revisit been to promise, out team Freight job, with no Freight after or mean, We're little say, that when over that are we I may we with over will at plan we and X.XX at we right X.XX in going QX, under think plan. bit the of all the fantastic a work is because UPS are the look we're now, control

Konark Gupta

I ask strong spot secondly, that the Alain. especially if the I can in the mentioned That's in the And makes -- Yes, pricing, you pricing good you Truckload sense. U.S. about on color, then, market think

Alain Bedard


Konark Gupta

here? Which is anyone to no surprise

Alain Bedard


Konark Gupta

pricing forward curious thoughts the of for are what seeing well? the mentioned the What overtime pretty and point. other seeing P&C pricing in rebounding? fuel in as side and demand segments, both? few as remains I how on your the I'm into going at Truckload well your pricing any think strong, and was the function yield about the next I in kind and think U.S. in here what you strong as P&C BXB you on trends wondering hear the are you And with quarters But are where this to thoughts like pretty pricing obviously BXC

Alain Bedard

our of Well, on saw a we the increase QX; price mean P&C, I X%. about

about volume X%. XX% price increased but Okay,

because Now, friends said our a or like price XX%, better to price about XX% UPS, did if it's was their international. us depending domestic than I guys those at XX% the increase job

the to which the adjust more So, level everybody okay helping to leadership is of I in way industry, price sense. UPS makes mean, a

morning Okay, been I've got than USTL EVP going if that really so he Pricing our handle talk sure, good. to our environment there's pricing can least you for environment P&C responsible for on for freight in I mean, it's USTL, like says the I every months. right, more at last four

sure in anticipate for this go listening, pressures put costs they on fuel was So because I they drivers. short U.S., maybe just are the will rates. higher

the station Okay, with filling for fuel. service

a So North We're short short, we're of situation afraid. American whereby it's drivers, right. not global

being up. are pushed rates the So

the Okay also and salary we in drivers, time same we adjusting at also the to have, as and our right. industry,

we the but available look haul that could for environment mean at okay USTL, So, there's it's freight right. you more phase now just a normal sure, right in the if freight I ourselves,

create handle. and we we're customers you I XX%, for happened because sum numbers big hard okay it's mean schools, that at, of really doing drivers. help or a the this that okay, COVID, GDP pressure, trying grow mean, XX maybe XX%, till we're educate in it we're see was you I okay. those of now to will same our for mean, like people Yes, right true issue mean. last was of and over X%, economy can. QX, a The Truckload mean, anticipate can division. sure. morning by is can are, that every wait got U.S. what I'm thing is story we say have to we to the XX% I school, we It's well. sure, But looking so I Canada be us months doing But the all QX And the huge best also the a demand. overbooked trying, So the X% I

big lockdown now in at very as Quebec, not right We Ontario, have I time, close. but lockdowns mean, bad, Canada, there big

taking have speed. BC, more some also rollout in Maritimes on is but we little issues vaccination Now in and the bit

that strong. four, going then still to activity So believe quarter, our Canadian to a roaring is really, we is be transitional but and really three maybe QX be going

So story. come this I really at with we the pricing the guidance our is when is the environment guidance, good. out free right. usual, logistics look same try mean, we why, EPS or as we And flow on beat I mean, cash to will


Suisse. Allison of question your of is line Credit line next open. Your is Landry from the Allison,

Allison Landry

Thanks, good Freight shortly presumably, small about Alain, you're about talking close of evaluating sort here. mean, we're on I UPS tuck-ins. morning, sorry, this another still to morning? the obviously just acquisition, so But call

you could end and looking of last give months? have what whether the markets sort the just the or sense us changed types businesses Just you're of pipeline then of over that a And opportunities few at?

Alain Bedard

very is this good Yes, question, Allison.

terms looking So in our are M&A. I two U.S. in mean, smaller well. we're at four three maybe now, full of transactions. pipeline But or at is the transaction always these three or about we're looking in Canada, right as ones small

there is probably pipeline of nothing, of us our and always for So not XXXX. again, in But nothing the XXXX, full. in UPS size

So to doing highly that keep are that shareholders. we're small absolutely. we're tuck-ins going on and profitable for nice do we And these our

UPS priority many blood. times, UPS our of a focus will all there big sure, that cost in be do Freight. the to reduce to I we for okay, tuck-ins, And going Now approaching be our I small the have like mean, big management the ours. lean carrier at time. But and that a it's main to be the cost, we is working on team, with said, M&A,

Allison Landry

over cash is think of could expecting you half? help Or to any sort just of you just us through cadence Are the first sort follow-up the sort the in half next guide, few relatively stable? be flow there free -- second of difference a quarters? the maybe in sort of the And Okay. versus of terms

Alain Bedard

difference a were paid between some No. those we've lot be three by delay -- remitted of months and we But the QX the okay nine remitted by to next taxes have the were affected in XXXX have all payment fact the that XXXX that The first that company, because that is months allowed that were COVID. reason we of for taxes QX. only of let's a say, was to

cash our anticipate affected So this next us the in months. free thing little will is why okay, we for that. similar only in the anything has nine bit CapEx. But don't a by flow be months, been next The nine major

ballpark for million Okay chip $XXX sure said to But in the depending sure, on CapEx this I shortage, like mean investing the to situation, time. I to call, net not we're going that's everything's if be timing, a on going $XXX because million figure. the about year of we're no, on USD the come


of Your from next question with is Kevin the line CIBC. Chiang

Kevin Chiang

outlook here. my I cash for Hi, Alain, thanks flow. free taking maybe ask If could question for the longer-term

margin out kind next is flow margins of free looking cash of cash of So -- about like that's $X improve was UPS, lot of about cash years? free flow at in the free at level margin a highlighted $XXX million a through where this billion, year, a revenue mid free business, and double-digit number look I us your if low looked if a this the X% three, sense have of you here lifting this but with elevated you've I to heavy could target you could consensus CapEx guidance for When operations. four give flow profitability out flow business, think obviously I your a a you're margin, cash double-digit

Alain Bedard

company, the have this handicapped year, little with okay, absolutely. I a CapEx we with million. cash coming absolutely. Freight the on $XXX right. environment, should at normally, bit in bit UPS see do have be XXXX we'll of acquisition. I mean, Well, flow down for that improvement that Kevin. a all exceptional would also double-digit in we been normal acquisition, do to XXXX okay, also CapEx a road, say this to UPS this the that mean free catch-up this I in normally Freight little okay, a it's But mean, I

intensity, that Our UPS going time, could we big change Freight, see believe less. to capital more okay, Also, of you'll that do at change. mix, because with that's the we

of more volume. estate, real of terms We Okay. right mean, quite less. assets, could stable of the the UPS that now kinds in The do of believe business at Freight in the terms I stuff, in we terms in with is terms all of

things So could we on management the But less. team more UPS we the like well, do call. with think believe I are that said going

we're cash free believe going to of So absolutely as over I a flow be time, a that percent double-digit revenue.

guys return Kevin, important I'm you at look the also thing, Now, will take sure invested the a capital. that on

looking which Okay, we're XX is first a trailing at months.

if look And operation, you that, our now. every that double-digit, every, right. except have publishing we're we all division at I Okay, USTL running are mean

at XX% our I getting So, XX%. LTL I the is is mean, P&C mean if P&C look fantastic. I just are above you is this our -- mean, XX% P&C, wow, above our

truckload is right. XX.X%, Our is specialty our close to logistics XX%,

So combined XX.X% forget, based on aftertax. intangible about that. not as something like assets. is capital the invested It is right. don't on hard assets, assets includes Return the this just XX%, all all well, And also the

when look Freight adding UPS you is good. is -- fantastic company So, a to and mean, at This I this mix. the

going at for low. capital invested Okay, return be Freight UPS to on sure is

But telling Okay, there's I'm too work you, And on estate. year to much too I much it asset, – mean, real one. going there's we're

Kevin Chiang

color. helpful that's Okay,

Alain Bedard

right. revenue, the By

Kevin Chiang

I in market. Canadian helpful maybe question, Canadian LTL and That's ROIC I consolidating competitors sure. the color, this irrational. this one quarter, is know your the of you've my disclosure parts to Okay, market talked appreciate being past, about second just of the

high-level at just anything behavior of competitors seeing with that any there? more little in of wondering, change one a your what's in industry given this bit out a happened just maybe So suggests marketplace, behavior in terms you're if rational

Alain Bedard

right. is company believe buy we the Well, see finally We that I'm doing it's, can't other all something. them happy that to

really happy we have the mean, with it's industry. And we with together. a We company. I a we're mean, mean, But great respect can't it's Group. have that. a all, for good we buy high So them the other I work for right. very thing relationship other I the fine.

So the that have LTL of first in U.S. Why Canada. is up about, night else it's LTL. can because showing all, lot day even and is don't a of industrial something Well, we and LTL they good somebody doing versus that? in

that's a are mostly is number So or there's big retail. problem. too way small And making that It's X%. many companies above two X%

company there. that And profitability. of improve companies So see that's we're will points. be have be focus do they good the the going now. been the Group now, happy two to the I'm to a because will right happy buying those over all for to other make to two Absolutely, to sure, so their is focus has two industry. companies never job for part And that's Right, this


Your next with Fadi is BMO the question of Chamoun from line Capital Markets.

Fadi Chamoun

Good Thank Alain. you. morning,

Alain Bedard

Good morning, Fadi.

Fadi Chamoun

does for business parcel kind to you capital across want in So that the typically more candidate other I'm potentially is Canada all your USTL. to position in ROIC and wondering, sit sit where you U.S. obviously wondering obviously, want question where this terms most conventional, so capital pretty that It's strong the is segment allocation [ph] you? grow of being mean Is this and TL the the for in, priorities on. you something pretty a capital segment except divestiture? much allocation of the a other priority? very than competitive just player division segments, and on the just top something about U.S. talked of Just in does I the put of

Alain Bedard

not if part first than TFI your for I Fadi, mean, in what right. capital, line in to is less because, generate understand the be question know this tricky You of you a you're XX% sure, get that everybody to going

our this Our Freight. P&C our and why we're first, UPS logistics well. is buying absolutely LTL And come they as

think our we if what to to been always in U.S. right our I it we're something capital, I we'll grow special now, time. this XX.X% and mark. our the okay we because and that, above has TTL probably mean we're TTL return grow invested you keep because to over the through I mean, just look do M&A, focus do and right at is could mean, going now on better not, fine, and I have special XX Now, XX%, is like are we better

Now event, best. the And on than if at look X%, the elsewhere the X.X%, okay, you return the regular less best in invested in you terms capital U.S., of look of the it’s the great. is company it's at best not

not but away the of from Okay, we're best best. the that far

Orr also best goal believe too our So is That's okay team the have and truckload we best division. closer another I get the that acquisition under strongly to us A slowly doing UPS the gives small of Greg and good. the of Freight not

a best. management combination, of by a to closer of us should now the X working Okay, we're to okay, team in and okay, going we plan TFI the run have X.X help be OR the end UPS they get and do probably a XX our of XXXX, TCA, this Truckload that or best and with division

market. that forget don't our Truckload Now, introduction to the

give ago, so the us that one there U.S. years some the day that the in USTL listed to six behind market, goal a Five is was could Okay. in ago size U.S. we years to

selling Canadian, okay UPS in like of matter acquisition, QX, not time. Freight be the in a with I our business than I most mean, Now right? fact, revenue domestic U.S. more U.S. the will of we're over we'll we and see have of mean, XX revenue, we'll So I XX:XX, mean, companies. U.S. be domestic. then as probably

done we've done before. that We've waste but with that division. our Okay,

the and working So, over but capital. it's of closer for of cards invested the to in the team there the to with best his not on is trying in do terms to Greg now. What we're return get best

Fadi Chamoun

I supply the Okay, continue. how that's significant organic seeing and like, is obviously, seen that My which the wondering if capacity growth, for I of side, any predominantly signaling of I you're handling I'm the how expansion network having network this very there? this kind a this side type -- mean, follow-up of in great. right growth, mean, this And time, to we're will recall is this of growth for in kind network P&C now? kind need you just are coming or And in is going handling you environment be from this don't of are on long sortation kind of things? there's

Alain Bedard

that question, sure, Yes, I very, mean mean busy. is been I Toronto very very, It's very Fadi. hub, for good okay never busy.

Okay. is what going right the working we're see plan next be. now on And the to to step

So there. we're capacity getting over close to

we Vancouver? a do we're why looking more? in more more we is this What So, do that year-ago. in what can revenue can we opened just we Montreal? Calgary at in So center, up sorting can what do Okay, Calgary,

there in volume XX% doing at center, was We of have the you there. BXB first XX%, And QX, would erode BXC our we're look do But that for something to is But that there we this terms margin. Toronto why mix could with fine. for about But So right mean busy. it from now. changing skeptical growing great. more. pandemic we're the we're at really were sure, our if we to I JC sure, in will do The

year, good. If you feel look we at again this our QX

we TFIS, also our Loomis have We ICS, could like capacity do operation. division some within more like

see still will in right. and XXXX. could we in to closer mean, But e-commerce XXXX we our or then growth crunch, XX% into a I So, XX% get capacity

is this going we're how resolve that. working see So why to to now we're


Tim James, TD Securities.

Tim James

Alain. Good morning,

Alain Bedard

morning. Good

Tim James

it? when and the how maybe relative opportunity of was the compelling I DLS the kind on -- your think the you your shaping up integration quite with talk about and to how that's update of progress how you just is which set, us acquired -- is that, expectations, don't Why acquisition,

Alain Bedard

going Yes, what really what's about now. we're DLS happy on

said terms looking to believe In with impressive, standalone transition we're financial revenue in their I SAP. going our doing. I we we that summer, that on I like close running instead quite I of is pretty growth, agreement how of revenue team surprised the by earlier mean, I to the the March; I be the Oracle month in we're mean and growth right. this a okay, call last our mean of But mean, see was was terms

intelligence et market because okay, really it's on the domestic what the the acquisition, can U.S. et I it is, a what us so mean, fantastic rates cetera. LTL So me, market, are, value understand, cetera, gives we that to

the over million have right I that a $XXX an or pretty possible could team a And dollar feel billion model. a running and that right on years And is we business growing mean based we we within above but about and that. million now, we're three now. do fantastic So, it absolutely. that, agent $XXX I The about we're next there way good feel two

Company the as margin the we're working, Transportation the also guys sure working on We're our is reducing with running the X, And soon but margin then Donnelly. with great X.XX margin providing going slim. can as for on are working of some overhead now, a right our costs and unhook be work it customers to Now we and solution. from

DLS domestic now they LTL. in example, or For focusing Transborder we involved on call never -- were were shipments. what WW the WW DLS They just

important very is or into LTL Mexico Canada us For into Transborder to us. the

now of of plan, see So now right, and it the they U.S. to one and because they're working a between market put the us, on can those have is this Mexico. is guys greatest the Transborder LTL grow that, Canada how and to

us. ground, it strategic that about and Freight acquisition, really And feel feel there, gives it's now now this with Freight. team us So we the the to could assets on acquisition, grow could then we this UPS UPS okay, with good the working

which That's solid we as really can have be XX% I we XX%. a I there. the grow the Really, estate probably about have and we if assets; have the goal. not we our the company, it. But will it, the and we that very team solid to to a soon control months is year, this could efficient. grow first goal bear of there be over do the lean real really, saying really we have But As costs. have the assets or And there. us I'm just of to take mean future good that in good the feel cost market XX maybe to very foundation, feel all

Tim James

just business, in which on very of parts And most business. follow-up the out return one capital pointed on really strong, you. as the Thank here across is the you

or really don't better actually I but you it capital are it's future, you more on about, work your to more want still there So squeeze your higher on increasing to returns areas don't thought capital capital in any preference is higher? way, is the kind returns. push you or versus the of just your that put or off to now mean get adding business returns assets more capital where it how of mean, to the this odd say think I sounds

Alain Bedard

good Yes, that's a question. very

difficult best do on invested look think tax, XX% If return the a you P&C, our trades as -- at XX net that. that at Company the LTL the look I best, if if capital, of It's you XX, on okay. return to times an in U.S., than okay, you at one better the that I earnings. mean, at capital invested look capital, example, the

be mean, I neighborhood, they're that in Okay. XX% going to right.

if not it, ask would working XX% going to you it's it's could but I than on say, do I to better me, mean, you So going to your on difficult. we're be me, P&C. easy. be

Now, on what in it's LTL mean, doing at of over U.S. three to right. Canada, the we're two got years, period least I a be believe in I side, the that to that

is best at one the So XX%, at another you you the got of best because XX%. got

Canada, the market a which So not we’re of above in ourselves XX% as one the is as in good U.S.

acquisition. could this So do Freight because of LTL we believe that we better UPS

again to idea In terms try to less. the more is really the of do with Truckload,

is could so bought could of we Menlo, when So do we HBO. with our, more the we do CFI; do this the operation stayed that? had they we whatsoever, model; how with Menlo why with brokerage focus And is right? more no our was It this do Well, operation. brokerage owner/operator

asset-light up end there. with we as So no operation

it's we've So well growing. okay, doing CFI is Logistics, and built and

to help, because going capital, that's return it's So again better get all on a organic. invested

our a first yes, is invest priority. see is improve we lot under is M&A we Buying me opportunity, assets say, we back again, the a and we'll stock, Right to if It's we times with guys, going will team. And an do always feel as always well. stock to we on okay, that capital. our that. and pressure, working return the where well invest okay, why a balance, of should this it's our So be

a it's guys. balance, So


question Cowen. Seidl is next from with Your line Jason the of

Jason Seidl

your more of margins a business historically touch to wanted BXB because back time does coming lot as the your I guys often that market? have than more some start on back conservative over was and packages P&C see good margin you business

Alain Bedard

Yes, yes, absolutely Jason. yes. Well,

So still BXB our is for affected. sure

see by at major now. right started and of normal. Ontario, improvement about again, ICS some probably are to should because back which three things through ago. mostly okay BXB. just to We've lockdown Okay, end two, the it is Quebec weeks believe some then under be that But fell QX, We lately

P&C on on So and that not right ICS we now. BXB. have two division TFIS, our cylinders It's mostly because running are within all they're dependent

road So the Ontario, the more you're see down there's to Quebec, closer largest right situation in normal a in we're provinces, absolutely Canada, let's which is QX, population.

about in Yes, Loomis and would help of don't OE we QX at our So did about BXB the mix yes, with XX% at forget, did P&C. terms P&C operation, QX, a and operation. our what also we BXC margin CanPar probably in in right in QX, between our balance XX% us

to XXXX of that? if can do probably, So, in are back the things story LTL. better QX Let's we see with than normal same

Jason Seidl

the color. initiatives? the for operations, update of some I focus you about give just will your little different a on thanks an logistics can Okay, us

Alain Bedard

about talking Freight? that What's you UPS Jason, are

Jason Seidl


Alain Bedard

in Canada in got two see flat. projects, last terms which logistics, mile working sectors, getting say, U.S. to well, operation, I is we're there. mean, be the got starting bottom Oh, goal some just our our to our of let's XX really, logistics, next to we're okay, And double-digit we're in top-line, is yes. you've on doing the Logistics, to XX really months. definitely operation well a okay line closer opportunities, is but few our growth improving a within, We're EBIT there, basically

on really are also business the efficient. team on operation working more costs all our network. is to So and sales humming, working And our our our more is guys being adding

at WW And why margin our are X%. we of then the mean, terms look at are still, quite is is I in some also of those DLS one other they're players the say In at us best look organically, industry. Company, X%. we the well. guys And growing of X% at guy But the we or and we

for there guys, I So, on sure, but have we say, mean, well. have with the we to we as overheads. less more work to what do

okay, lot of closer between running we we and organic the because there at that growth XX, is sector, get over EBIT our So believe but time, logistics time time, with also growth, our you'll acquisition, same see a of could Over some well. eight. this to overall, seven as

seven over XX? get say we're to XX let's time we right now eight We So XX believe can months, to so. closer to within


Doerksen Your next question Bank Financial, is line I Cameron National from the of National with apologize. Financial.

Cameron Doerksen

pull-forward a maybe that some clarification a UPS was is case just on I'm to planned CapEx So of was for than wrong, indicating the at you're net of the that a but $XXX it's if I'm from lot what the higher think that of originally implies XXXX. of be Correct CapEx XXXX. ago. expected XXXX just what wondering there's the CapEx, me And million the I think spending I XXXX for sort because quarter into if going

could guess of means you if the XX over kind as to I CapEx just months what just opposed for So that next clarify XXXX?

Alain Bedard

see, what were supplier do XXXX. trucks is you able with to Yes, get we the X,XXX yes, so Cameron, to into

sure a those lot on put all get trucks supplier we the So pressure XXXX. make of that to these we into guys,

pressure these guys. So saying you're trucks. right were get within XX months, the we But put we now okay, at on that X,XXX should first, we okay

to over seven be So it's going being is be months months going of to months. over next XX XX the instead

May, Let's say over sometime in we take May. in

We only right. So months. to builder, the believe we for they're according us in building July have seven if starting

how I already cost to it's out, order is cetera. we So cetera, much know et the because everything is going mean, us out, et

We end those the it's all should we before So get that of X,XXX believe XXXX. trucks ongoing.

change is this little months. bit a it's why to seven a you're over now; over So going versus going Yes. It's right. XX be of months

Cameron Doerksen


rate you're run more for normalized in what's in expect? the of investment is CapEx this XXXX, kind So maybe what we does question guess the XXXX? huge that making guess, XXXX, imply? I should I if

Alain Bedard

because I cannot only CapEx to the of in the catch-up XXXX we one be same think Cameron it's going more in do year.

be think expect should in you same XXXX going as the to is I XXXX. model, So your that

because now, X the X.X and to fleet four to right to bring closer Okay, want we right. of age five the to

XXXX probably be are catch-up. should normal like more normally years And of So XXXX. and XXXX exceptional like,

Cameron Doerksen

on. wondering what's about it, going if got I I I think makes you on important in sense. to more and just a that's can it's hire U.S. in for U.S. I'm expectation I drivers? squeeze more Okay, the to well I'm maybe or drivers the your guess could ability to if going known question comment I'm But LTL, driver is -- And become you. issues. just the wondering kind that in just what challenging just for keep it find obviously, mean, of challenging LTL in is less

Alain Bedard

package an with we LTL or not courier guys have issues our in I and is absolutely no ones LTL. issue. I a it's turnover LTL. same. mean, U.S. and mean, Canada, an that look at big mean, not the the issue. for I truckload, I it's the not Canada mean statistics mean, It's mean, finding but I the retiring. are I not replacing it's issue and the U.S., LTL we not whatsoever drivers In

Cameron Doerksen

the appreciate thought. as that I time. I very Okay, Thanks was much.

Alain Bedard

Cameron. you, Thank


Capital. is Your of question from Benoit the Desjardins Poirier with line next

Benoit Poirier

whether to ability on can and strong potentially and a the the fundamentals. inflation pricing impacting question, what the driver pass-through the come But it's obviously, on back margin? the just wage wage question Yes, previous you to shortage on margin, those about direction on the very your say inflation

Alain Bedard


easy, the is than I now, drivers. freight more right pass-through mean there's So because

an over price now, of just X%, contract And XXXX. course the X%, X%, spot to And with been not right issue. renewed through the drivers rate is the we’re has roof. XX% the salaries So so XX%, it's adjusting the

truckload just about of right MCT now. ago, and sub-XX in XXX And in OR the a And we team months his in those over really, with drivers, drivers operated six XXXX. will bought believe division So doing well that look of to Orr UPS take we XXX, at, we this really this division QX had which division XXX I mean, if is soon. Greg we're reefer that really, division. XXX okay, you and

Okay. be And is great to for It's we XX because those a huge a a a the OR those truckers. we're fairly adding now. market, going this running drivers, in okay, asset right that believe, okay win. market we mean I believe XXX is are firmly that XXX, guys a

can So we at say freight, hauling these they're believe being used that we I market. could rates probably Because use better this that -- is that, are those a way today. in abandon that guys If drivers the right. don't and freight the reflect

on the very truckload this but turn on cost we But much side. mostly the too, is okay focus on fast believe pricing the there. we we can also that the world, division pricing then market, So on faster focus faster truckload the yes, cost LTL. LTL reaction cost a is of the and our because is LTL, can than around big is but turnaround, truckload more currently division truckload more

Benoit Poirier

pretty you maybe it's X, Okay, healthy, take the to that's tuck-in into leverage opportunity for and account and to With the does color, cash XXXX given color the low about it if great X.XX Alain. pursue of the any to into share -- your ratio for remainder respect capital and take to M&A buyback?

Alain Bedard

to M&A right there's there share X.XX leverage X, going Right no between the thing our except buyback. in now minimal there. when say is And be I to UPS now, there's

in some did we QX. so Okay,

do in and QX, QX, of stock. we the may the valuation Okay, depending some QX on

in XX mind. been company I've We for a mean than more this have involved with we know, years. I target sure, For

So where we going. we're know

stock, be minimal. on buyback. So the we the I in back we in mean, weakness active see is XXX,XXX absolutely. QX, what I we think, if I will mean, which shares bought

and is in plan shares closer year? going Okay, between but leverage the in X.XX rest can our much we to buy another to to of -- the anyway. mean, be Absolutely, million I now is going X our and


of the from Spracklin is with next Your question RBC. Walter line

Alain Bedard

Walter. morning, Good

Walter Spracklin

grow healthy your into in a that is near-term. come So at that in to got the fairly, And strategy going to I the you're think back to sense I just P&C. one clip fairly you've capacity capacity, like a good

that alternatives down you You capacity it question growth heavily perhaps I the you mentioned systemic question you that EBITDA division? once period start up with get has know of double adding longer-term? after in limits, more do to that opportunity, at to and higher capacity a My invest or Alain this in year you've you your look to an to answer growth obviously, that around division, thinking longer-term, challenges longer-term have hit regards is for by acquisition lack through there. prior we're your year, other indicated changed some driven next you'll next how Do after

Alain Bedard

reason what strategic and question. buying very we right not assets. our go it know our good in that's the a if we waste because You time, could It anymore, was Walter, sold low because us. division you And grow was valuation was it back to so dilutive

But want have So finally it. we didn't to to we that. do do

what just at So really, okay, our our we're as doing we we'll do time. point to really possibility, in P&C, management the And you in look you said, mean, we're waste company we sold and come at a do I the where, XXXX Toronto, looking really But right. then, already at so okay, well.

markets. is the Well, we're other now. at Toronto. this in us. we sure, tight So right is question And for why capacity Toronto for in we're this is, the And have hub big looking getting

you possible? M&A? come that right. else, could is we'll there a some point there you there partnership then do could on do Is to Is somebody So with something is some -- M&A there that

you competition and any okay, help there is us a and major for same them if them take, deal at example, could we hubs, do our So help some with that time. the of at way

Atlanta, So closing we're be soon. way we it discussion be friends I that that our don't having than just with could think this it's should -- that transaction more on forget in this

I'm $XXX we investing we're we of we're with we this will $XXX of Is I what because low And very $XXX do? patient. relationship of relationship anything it, right? do that with expand at We those looking not million we have more every Time opportunities working returns. them? a I with And fan in could we big okay. returns, do, the think could that a guys million can could can million, not tell. and question, invest But no Canada to but there need

well, take issues, other So years, if the opportunities, try going going other the guy XX tells to return me to find to right. is we're

Walter Spracklin

a that mentioned makes sense, administrative And I tax we cash taxes rate, your somewhat know going here look quickly were rate in at there in lower -- there cash that's Alain. than tax most forward, what lot movement That we effective of build tax the a Absolutely. is you just effective your or rate rates but tax some of should effective? and your should

Alain Bedard

some a discussion there the say tax. what's Yes. There's tax I Biden tax to cash, Walter they But not don't that what see around that big with XX% you the mark, would happen with I in that. say, now specialist, going U.S. would I'm or know right rate the may on we change

now, they it's right know think We if do work could I may have a because what That reasonable. deficit So change. Trudeau in XX%, I think huge with that even mean, I there. don't Mr. Canada. you

changes But XXXX. going to there's don't there. maybe major XXXX. have for to for some So be anything I anticipate see We'll


of last come from question will Ramaswamy the America. your Sanjay Bank And of line of

Sanjay Ramaswamy

in. squeezing thanks Great, me for

U.S. of to a was I mentioned that Alain, you Truckload, obviously, XQ disappointment. regards mean, with a Just bit

So revenue X%. per around total mile were up

double-digit guys more spot function maybe look less been mid-teens, asking be your contracts ranges and color to helpful. would in And of, you, is of have talking a you a just the peers exposure, there market just have some of more it the some of

Alain Bedard


lost, in fast some TCA, with getting our I one April in there acquisition QX about word to that the a we issues is and XXX if that quite UPS replace event just believe at So the dedicated I QX. also through us we're look demand you really QX, and But was some into truckload drivers of happened think what also forward, look QX, and enough, mean And we that our we've at going division right. is able division one-time that and in was we the QX if fact for in in there. this weren't

we in of UPS So get OR XXXX, the have this we're through Truckload we believe reducing that consolidation go in going overhead, overhead that of also will an top the on XX, division sum top saving from that or on the our effect the to CFI, overhead, XX, there us to of TCA, of a more than guy. bring and for to the going there's back be around XX sub-XX sure, you being if that a XX some up to

Sanjay Ramaswamy

on really count how Freight and I do we moving kind room that? think there follow-up the the the terms helpful. that ex And year-on-year; guys that volume come to of down was in that mainly there? around to acquisition one X,XXX of XXXX -- or environment, businesses. Is of employee we the mean, we going have, about that's employee noting continually of Yes, just XXX see you coming through are LTL it down the that kind UPS count about think employees despite sequentially was in think how that I

Alain Bedard

It's do sure one can less. is for too people, thing that there. we've say a what all technology, we asset, is it's better less can tools. TFI, religion we and have ask less how we yourself means believe That's been what better time. to do less more early to do Well, with over But you more doing with means less and you every the day

both okay Okay, very LTL very there's because market in the and Truckload, some U.S., over look competition very, in the some with LTL there. in transportation we Canada the we're P&C, good and fierce competing, at company

guys. cry And call like from with the the is in a UPS should far where the said mean to yesterday be. I on have good. we're these division I we management compete still right although mean, did QX, better that trend we So now,

over But the company, probably, we have going Okay, to to once accelerate. we're fine. take

been improvement that's Okay, the right taking now. change and place the


does turn closing back Alain remarks. I'll conclude any that And over the to for session. call Q&A Bedard our

Alain Bedard

for to Okay, joining on thank want call. well, And operator. us thank you, everyone I this morning's

months team working every remain you next ahead. day. on of the at we're each behalf our International, you quarter to on hard safe look behalf TFI your we that your on progress in appreciate and So forward and I and the updating hope support

you your day. As the additional to always, please with reach bye. enjoy rest I Thanks, don't that questions. you out hope hesitate again of Thank and


today's Thank you. This does conclude conference call.

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