TFI International Inc.
(TFII-T) C$122.30
Q4/21 First Look Event
TFI reported Q4/21 results after market close yesterday. Adjusted diluted EPS of $1.57 was ahead of our forecast of $1.24 and consensus of $1.23. Adjusted EBITDA of $319 million compared with TD/consensus at $271 million/$268 million.
Impact: POSITIVE
We view the 18% higher-than-forecast adjusted EBITDA and 26% higher adjusted EPS as significant differences versus our forecast and consensus. With consolidated revenue just 2% higher than our forecast (0.1% higher ex-fuel surcharges), margins in every segment drove the stronger-than-expected earnings. Despite the labour and other challenges facing ground cargo transportation, we believe Q4/21 results once again demonstrate that industry conditions generate a net benefit for TFI's financial results. There is a conference call at 8:30 a.m. ET today, after which we will provide additional analysis and any required update to our forecasts.
Package and Courier: Revenue ex-fuel surcharges decreased 3% y/y to $150 million, in line with our $149-million forecast. Adjusted EBITDA increased 21% y/y to $43.5 million (29.0% margin), above our $31.9-million forecast. Tonnage declined in line with revenue, while pricing metrics were relatively stable.
Less-than-Truckload: Revenue ex-fuel of $823 million was in line with our forecast, with a stronger-than-expected contribution from the TForce Freight acquisition offset by weaker-than-forecast Canada revenue. Adjusted EBITDA was $141 million (17.2% margin), above our $120-million forecast, with the TForce Freight operating ratio slightly ahead of our forecast.
Truckload: Revenue ex-fuel increased 16% y/y to $506 million, in line with our $510- million forecast. All segments contributed to the growth, with U.S. volume metrics lower than forecast, and Canadian higher. Adjusted EBITDA increased 10% y/y to $111.9 million (22.1% margin), above our $105.8-million forecast.
Logistics: Revenue ex-fuel increased 33% y/y to $428 million, slightly above our $413-million forecast. We believe that growth was driven by continued strength in e-commerce-related activities in Canada. Adjusted EBITDA increased 19% y/y to $42.5 million (9.9% margin), above our $32.3-million forecast.
FCF (TFI definition) was $121 million, in line with our $124-million estimate, and down from $135 million in Q4/20. The y/y decline was due to greater cash requirements for working capital and higher capital expenditures, partially offset by significant growth in cash from operations.