TFII - Earnings call transcript Q4 2020

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to TFI International's Fourth Quarter 2020 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. nature turn this over several and conference are looking we be management, statements uncertainties Before to from forward that subject those actual advised call in differ that Instructions] could the of results to call please that a cause [Operator number are to risk materially and will contain anticipated. has Also currency. please presentation note changed its that TFI amounts are in dollar all And Dollars. US

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

Alain Bedard

Dollars was press X O'clock I out thank to it's call. to about welcome a very release just change I since But and a to my saying US Dollars. market don't quarter everyone I sorry today well because afternoon Canadian O'clock out special it is at XXXX guess we today is we fourth operator Well, from press closed script results. X is the day you about our now our and released so was was after if year know want this so was finally I'm mean, glitch really much release but I full I mean, there that.

and our New employees operating health very Now, focus very and and the quarter, Exchange a Stock despite year, successful safety the a we and that of year customers. TFI generated year Most another ongoing our ago got financial importantly, robust had on York International which this our on one include listing strong pandemic, results, month.

focus includes fundamentals to of enhance last from we became which philosophy, ours. focus on and the more the That efficiencies details back strayed business, opportunities never a XXXX, our a year. is stop Seeking getting on Looking non even the right. operating of at important relentless

cash strength, a flow to our our and on in to that us of us per profile always, business. share. This financial invested placed grow increase turn, with look capital, earnings strong return expand position we our free strategically optimize allows As a in

is opportunities strategic create and capital possible. expand of excess returning platform enhance whenever acquisition part of accretive The long our Our long-term strategy. shareholder to to identification to our been ultimate aim value, shareholders has

During strategic the fourth acquisition we bringing full and our XX another year. timed quarter, Subsequent highly completed completed the to end, year acquisition for five to have well already acquisition. we total

we In also and agreement expected long UPS disciplined highly we manner, both announced selectively extend to seek an close acquisition that candidates a an acquire M&A. to continue rate second the record of International, to growth and through As TFI to quarter. have during track strategic accretive successful are

now level our talk -- walk through starting with performance. Let's fourth high results let's quarter now

have seen have a due to our presentation in may peers. to its position presence change today, of facilitate release of financial you to growing As US our dollars from currency that we elected in to earnings US our company's and Canadian the the comparison market to

historical our have statements purposes, been comparative For financial restated.

is marking $XXX quarter $X.XX, diluted profitability, on a our XX% the operating fourth compared to adjusted year $X.XX year's prior basis was increased a our $X.X from the revenue a Our to income given focus quarter, on And growth. expanded billion year-over-year for total XX% earlier. important more a to EPS up our up Even return to million. XX%

operation from robust up activities continuing year. net $XXX over Our cash million, prior the a XX% was

let's the P&C total prior increase in fuel XX% represents quarter. with to a revenue important strategically business further strong segments segment revenue allowing starting our our review versus these As and four on strategic before saw I is cash of mentioned, P&C. and us flow surcharge seek business of in XX% in results, expansion opportunities. year invest our the Digging each strong December

Our up basis XX.X% margin was up XX% at was the operating was $XX.X point. million XXX and operating income

come the related BXB earlier Our following prior has and over the well in due year growth year. back slowdown was both in to the a pandemic which activity, pickup BXC

or both mentioned that has last following are I a and BXB, to BXC positioned future mix well As quarter, growth on of the balanced we P&C opportunity pandemic segments and believe more we capitalize in markets.

prior surcharge segment segment represents total before $XXX fuel $XXX XX% revenue million of a compared of Our revenue the generated and year to million LTL quarter.

related quarter. persisted, demand we decline during improvements in saw pandemic the the While

basis growth Canadian operating us, More boost $X.X efficiencies our to to operating in operating $XX.X the by at of year-over-year strong the moderate decline expanded driving our the but from XX.X%. quarter. to receive wage X% LTL XXX points This our small income operating grew mainly margin in income million have that and importantly XX% time driven to continued success million only same to subsidy revenue was fourth a

in revenue. growth to Moving year-over-year fourth of XX% also represents fuel And returned million. Revenue to on to XX% before to operating surcharge of X%. our this growth truckload segment $XX Truckload; of quarter the total income segment returned

expanded XX% XXX in benefited our million of our period, we subsidy revenue Logistics operation our Canada business previous XX.X%. revenue. fuel Our grew the grew also point and margin of X% and $X.X before while segment Canadian a basis total up X% year represent surcharge similar US operating both discussion, specialized Truckload business Within to from over our segment Completing small LTL, segment. waste truckload

day delivery Worldwide fuel before driven by surcharge XX% November. ecommerce, DLS of acquisition in jumped and package revenue our same demand Our

maximize our years In to fundamentals XX rate of at further million capital optimize we Our changing enhance substantially And condition. to million top to Subsequent International, during expansion. significant which to allocation as year to during XXXX. a margin business combined end, seek Our TFI and private rates. REIT income to our XX% January's a strengthened our we basis reduce macro constantly our course placement with cash to by than operating was balance to to our us notes, XXX the business from and saw driven opportunistic This doubled liquidity, execute further fourth more be operating focus adhere of we the quarter, with year regardless We us ended we points extending International that our sheet strong $XXX plan. long-term that profitability unprecedented XXXX, allows benefited the which $XX.X cash we consensus, certainly on from X fixed flow. senior is of operating the strong year. value. the an of this strength over of profile, financial is in the debt growth, of maturity TFI $XXX million XX.X conclusion, source philosophy or And approach with nearly year earlier line by of an you

ever efficiencies strongest not its you growth, Looking in TFI but ahead, on to value, can I just profitable that our assured focused as to is shareholder additional International growth. produce is create believe driving entire rest in position team

today's session. value, lines, As objective returning possible. capital Q&A at outset operator, the is excess the And ultimate I we shareholders said, with and please to call, that, whenever unlock can of our our if shareholder open the begin could to create you

Operator

of comes [Operator first Stanley. Ravi the Morgan with line from Instructions] question Shanker Your

RaviShanker

the industry customer announcement Alain, can on give UPS of us has LTL what you afternoon. Good post been acquisition? feedback color some Thanks. your

AlainBedard

Freight the mean acquisition? that got that UPS feedback from this customer question? You Is the

RaviShanker

to has you you from deal or now a with of of have don't the this US? business? purchase reacting kind of that customers also have UPS of any do existing of do All really the kind how of, above, your people kind the heard who map customers they're sense of you of on your And kind other in business put the

AlainBedard

do will the that the reception ours to very the percentage strategic terms It's there. we market is that a though. look think think TFI. all not I you terms as focus was well of customer wow, a very, be acquisition mean, able real for for Canada, on UPS if up And the at UPS I in such a going be we're is a I in able to to of we're their in competitive. portfolio, come of fantastic. our Yes, really experience was their very, business. Canadian of acquisition rate have very those, the of the based source And of focus at real fantastic very, transaction this Freight -- because really a is, in LTL And UPS It is us and minimal that profitability which

people heard, bit to catch for CapEx on planning the lot or do a three at So -- we're on two that as little reaction on a have sells least I up. the had have mean, of for the, from we because we the we reaction I mean, from employees. company, the trucks, we reaction have customers, reaction have suppliers, may years in you order investing from At from next a a there

a to in our reaction for Canada, our really partner So away going so strategic cartridge a from freight into in has they really, I Canada of strategy far right to And now, the have time, that part with company. to really sure, local UPS to is mean, over business this the move be own And been positive. Service Canada, that network. used

division Division that's to to two whatever over the also for know, our going transition years, next, US going cost profitability business be the Canadian is of positive over year our and going I take it's for the in really don't the So positive be. of that to or the

RaviShanker

guys again? you unique were BXC and you feel Great. into really pandemic? by Do profitable very XXXX? profitable as expected. the expect follow in and persist opportunities that business the lanes even And were you world you tactical was do normalizing, dense those like targeted of ecommerce Or to the thing Once up driven question, inroads that starts kind more going you a after a with said

AlainBedard

will that back think don't to I go condition. pre-COVID No, market ever the

what as team, that seeing in the runs line, we've Kohut, grown Mr. that QX, a bottom very and in really EBIT think successful line EVP the you focusing. was our margin show the at we've if you're us place P&C our the margin very top grown that our in put is successful And and look in his strategy by well. I for

go first, to what, the at wait no, to make months, in that shareholders. no, and then Us in is too numbers, with is you on density finally, always there it's you seen we little we same. back great we're high. said, maybe sense. QX didn't had it BXC, behalf and thing is delivery. pandemic if till able, because to where margin the saw. perception no, you that and in confirmation come because money growing free, on not still The us the we it, was to we were in a do And business sense business -- his BXC can we if XX-XX bit on money Yes, we January, still it make any we was there as into if that were We're where afraid this of of much do practice we thanks trend So properly, we customers, we the say, in makes things far were well doing make see it our pushing still the about the growth I've our so same organic a could

We're in BXC Now, way. see months, the time, there'll pre-COVID business a logistics story, think but we improving. our mean, small let's too effect saw bit US to of growing not I date the really, there happens, have get don't the is organically on US, was we're year, also Canada, the And on be improvement maybe mean, just in a there. through a time but if major we're same same months on side. the major But that at I catalysts for growing that over to at time. operation, no BXC. really we But we're US there. I going in big that a this We The the not are roof, on little lot explode. work are fully, on mean, the all you to resolve by nine in focused going still in look of the fire or as growing the not we'll Canada, all, reopened degree, a when just to fire to our BXB our is I this is pandemic do back And the team six USA

Operator

of line with comes Landry Credit question next from Suisse. Your the Allison

AllisonLandry

Good Thanks. afternoon.

guys are specific can So there's you over a flow opportunities, and -- that for improvement maybe both top look any give lot if few also us months just us broad give quite it guideposts And think but there organic margin business was about inorganically, earnings you're line a how obviously you but like free how Obviously, of organic the a sense you're can in of just the acquisitions next there's doesn't thinking growth and that part about for some guidance. a hoping XXXX. digesting generation. XX of sort to you cash

AlainBedard

a Yes, again, out came guys, really know that good release very good. that question. that's there I press I'm you guys sorry are And so this about late

down XXXX we're far. comforting and LTL, are ecommerce will But You're I really on have the you what is at mean, is a read by than see affected lockdowns big LTL very our negative market five or time look okay, We shutting growth. fast to so depreciation remain quarter bottom probably, growing like had growth, because kind organic like Canada, doors a of that line, the at in same look to you the organic it's And the up, the customers of really their into on. top so a for really this what's is about the in quarter, and see P&C about Quebec, result, at down we're also negative we though. going in environment. the five which that your of that but Plus, you in the huge. QX, X% lot to we what that Ontario year-over-year, because if line, in in it's there, our still reader, Canadian of XX%. our growth XX fast million LTL, not we have of look the about $XX rate more P&C's question sense that there's kind the the XX%- probably on okay, XXXX

a a for Canadian there's there see -- so the on growth XXXX. so business negative are we of LTL stores side, the on they our number that So the rationalization of LTL side, organic affects

two, plus plus if I the importantly, one I which of profit, the much X%, But at growing mean, story DLS, two months the Right so bit is big at a to our business the we have But operation better we acquire be today. we to just will six. for by DLS much, we're focus a margin. the Truckload, intention TFWW there, we're the you see a in UPS mean, TCA. if our reduce ago. mean, one our which not And talking it's UPS the be a What a improvement about and bought the Now, truckload Specialty you of the like we and overhead, low. a company the on lower Truckload the really our you closer get with look the a mean, NTFI, versus run flat Truckload, I XX with Not us. few a the is we're is like growing, we're plus that's year, US think if project the points. division road look to a a even US about so once Freight, efficient. OR business mean, much. closer exclude have little Canadian really DLS, X% about Logistic, plus really XX. TFI mean, more is maybe also US exclude our of and yes, reduce growth of to that, that to Freight, I us in for runs here able I more costs I to margin, I unit will five few XX in in much net be XX no OR US Canada, are acquisition now end that we has down

for So at can there don't because any that are things guidance globally so consensus XXXX happen. I many just give Bloomberg. looked we the on

that EPS that that Freight nothing not, we're we attainable. before us I Freight. or the is for to going consensus QX sure that's everything But this, UPS before think TForce I get it's guidance and have the go on XXXX at nothing for we think diluted, into

So moving many parts now. there too right are

AllisonLandry

just with I you sort was possible arrangement some agreement of commercial I obviously an great. have or just is terminal sales those a there Freight? That following you there? or of mean, questions. divestitures two kind competitive sort or UPS he And any Maybe with Thank actually Freight. there any really transaction. Is that real a know like sense you. foresee Any up [Masaya]? be Okay, that UPS implications anything estate that announced to on of speak helpful. And or could would But

AlainBedard

with Yes, question. -- was very very solid. good very Masaya in that's a the and strong relationship I

the we're business And that's going we TSTCF. got to team the I with between a understand on this relationship have make fact, call we to just UPS of with and it's that have a working The units, the sure of transaction with relationship matter there is nothing they is UPS our a nothing with with keep do that which a Freight Masaya on one mean, As acquisition, that. to relationship grow and do got Masaya. different story. to Freight

my to terms more of sell. that don't what I comment real is over real any estate, think in But estate first happen Now from will revenue time the we on estate, will estate we real real have that generating is I have going think portfolio. to

third space is in dock. party, I rent say have the We on one revenue by run XX% being the yard. if business space LTL mean, rent Company this a mean So the over We let was you only by in LTL at XX the terminal But look the when okay, terminal I trucker. the took a me was terminal of Toronto, explain business we occupied in I years our Canada, that. a operation. maybe rest what I ago this today, of let's and source could TFI way different

fits. I now eliminate real at think we okay we're by that and building into the on to that to matter terminals I there leases estate portfolio the that it going other be to see dock UPS by down early our probably of think leasing of makes have. not very our is going can But the nice will okay, what as be in portfolio going but I feature yard I when and road our space to is real revenues bring is that leasing sense look a space a anything still be it's it fact; where what where estate we're selling

Operator

Your of next with question comes from the Ross line David Stifel.

DavidRoss

talk Yes, afternoon, be to UPS once dedicated piece with to truckload at that's you off merge business TFI there Alain. US Wanted good big the is deal? about it Freight, the TCA, how and and total dedicated going opportunity your being dedicated peeled post

AlainBedard

so question, very good Okay, David. another

So close are about at you UPS, trucks dedicated running if today, And TCA run at to mean, you there if XXX I they X,XXX. look look today.

sum, you if So X,XXX do it's the trucks tomorrow. about

XXXX Okay, the unit. will say into of summer in let's run dedicated that our

DavidRoss

I the over right side, side you you easier? guess need LTL thing on And Force next get that things Freight freight of of the think to the one else what's make years to ups T when everything about couple

AlainBedard

there things to many get Yes, right, okay. boy, we are oh have that

call rainbow that a story we we did we said is fleet want we it's I when at our represents it fuel what wise, running same company first fleet, we the economy wise, think CapEx that TFI there. maintenance So that have wise, priority bought to similar safety kind and have the over plan sense that time the a about TFI, was the I've in because the is of

for number driver really okay CapEx cetera. et key on side. safety, That's satisfaction, cetera, the So et one us

really claims X% revenue half an too the to the going of X% work also to is point. claim, in as I to other be going about we the our what we're help us The reducing there closer get thing a focused book to of going team today. is mean, high. revenue in our on example way because this claim to that's are so cargo with okay, is

that the network. will issue, to and truckload not division When of because we address maybe we some bought rating rid money with year company similar. a were fit UPS some did There's doesn't stuck business Freight, took TFI. the It we tons freight not the money get some at freight to of any we that the it. For losing When make SPO fit something that TFI, freight of the sure, freight of we on. were does have on look have us okay, we there that customer's

of you part was bundling, it a use. because to want normal whatever it's commingling global Now, word

Okay of the for company. the good

UPS. Okay

UPS, If are you results fantastic. they of look at the

UPS much. Freight so not but Okay,

stand own network. their that don't being alone, they some So to maybe feet now Freight stand two the have fit UPS and a there's on freight

as fits So to we in understand there, the that will action. we take possible customer and as and soon to as address or soon talk have if not, as okay, then get it

the those US, are company announced that XX were So run like convinced. the and like OR. of that no if us But two position OR. years, in OR and three Masaya LTL OD look within to when is we ask sub the there's sub many, all you same in could for reason the others, deal me, and in not convinced at possible, you And months, said, why XX I I'm just guys you there's XX also it good we XX a when I'm run that

there's there's the us Yes, [Baba We a business. union, we the know story. union, the respect but I always contract, a Viva], work with union. Now, but manage we

Operator

Group comes next with Your from Wolfe Research. of Scott the line question

ScottGroup

Is this any better?

AlainBedard

That's good.

hear can I Now you.

go please. Okay, ahead,

ScottGroup

the know, mentioned of that, single Where I start Okay, sorry Alain you everybody. think those DLS if can I digit low this of my in -- got you history do you're you sort go margins. currency for that'd for helpful and year? on And how US is then performing? on you've was I'll if question about financials just saying apologize. David, I be some over.

AlainBedard

I this mean, my thinking. seeing happy well, so here's with Yes, year, we're far. what we're

what would revenue be. of terms we terms gross margin thought growth, in revenue it of terms matches in in Okay, it of

free cash flow, of it's terms in fine. And Okay.

where think we so. be? don't that we think should we I are Now

able more in there? it's still XX OR the too to to all be doable to early in is to able that OR? XX say, really business. the too it's game we OR we going on the us. or fits to this Am that. are just I months I'm these XX I in bought specific two, running business a it but November, we yes. three us that in a are better? we XX Or do well, be convinced. still I get provide mean, run So time to Can fits the But think XX over Absolutely. It For right? the in with. So now the where plan guys behind game early have plan, happy with this? we

big working never that Now sure. crew they is the there. there I'll you a just cultural example for manage change Tom a is the with give [Indiscernible] cash It's small them. for and

manage So our the cash. have focus is to we

at we days, those supplier no. we company because we it's it guys and paying those Well, paying Well, were have So days? looks one say that are why a guys seven we at better. seven transportation

XX that company, capital to change working we in business. operate need days, or this capital, case so don't our because DLS, business. negative, in working a we capital normally need So manage TFWW But our you now, logistics of to to the working the our the book,

one mean, I okay. by step time So at summer, a the

Oracle our of ASAP be system. moved into adonely will out We

see Okay. you And service agreement. we're we seeing speak. that their to We're transition paying will then because as for start

over there, that could there, saving line some is But we that be top road. say. is down to do something early there's gross margin the going overhead? It's there's mean that. the I too I'm still to there convinced sure about for So

ScottGroup

those smaller continue with we do you'll a just Okay, announcing that last there's think Freight UPS this Freight, Should since of activity? acquisition. one, Or less year? thanks. you've And announced small then to tuck-in Ups of expect bunch you another the also do tuck-ins

AlainBedard

all time. mean, do do. do mean big we ones, time, small we've large of we them ones opportunities; small No I four three, what got every our once one. the years, time. so all the them two, do ones. years, the the is all are I mean, the a could we But I the we full pipeline many three

Now there. the price be fit, be for sure, the And it's it's got reasonable. has to to to has to got resource

that this Mr. TTL one announced this we So our Brookshaw; is operation. just year special under

if an fits, Canada be could do LTL this absolutely, the find would we buy company we'll our in absolutely, If do group. P&C right Absolutely, that deal. we we that a as company the deal. now, in in Canada same So business could would

we do going No. be really mean, deal? deals going in we're to to US are LTL Now, the any in US. I the this after busy

getting Okay, the That profitability. company this level is of normal. to

Operator

question RBC with next Walter Spracklin Capital the of from comes line Your Markets.

WalterSpracklin

Alain. operator. much, Thanks very Good afternoon,

to that keeping know deal talking if a So is I'm I -- in align? Or UPS on separate with with sheet the off consider space. the balance stars of something integration? larger a the in is on acquisitions, about segment because your the potential do table able you now focus still and were you resources do that to yourself last Freight devoting you're curious year truckload it a or both

AlainBedard

thing because of this it those I is at absolutely, either Canada, look right if or the take there deal, UPS be of group If the can the absolutely don't my of really working LTL fit. a it's division if forget, going the guys. in our right to lot it we'll fits, our it. time Yes, mean, do Walter truckload in time, lot US Yes. will Freight it's in with a

there's nice something Okay. major a there's that pass absolutely, that's But if there's XX, right impossible. Nothing, won't XX, But on I yes. our something investment though. that it. into I be guys. mean, But reasonable, a nothing small there's not if a guys, is deal payback, going we going fits; to logistics, truckload mean, now. company to $XXX be It's that investment XX, million XX, a the our XX,

WalterSpracklin

it. Got

have some you're major But a would the if of on any there. to year, CapEx spend any indication you you tax on dollar understanding items. giving any know DNA I wondering on possible. of or kinds your And kind areas anticipated. related with and those might like accounting of be not some UPS that us I those this you Okay. of rate. be gave what along for if able I if your us know forecasts lines US insight of global required guidance out was Freight there, side more -- don't the some other when give

AlainBedard

what is do QX. us while to to right now Walter, would QX behind Yes prefer now is we get,

$X.XX we'll this Okay, is disposal, CapEx, exclude, have okay, once get CapEx mean, So going. the about where year, it's the Canadian it's stays of got million, UPS about that change. the again going I we dollars, QX now It's acquisition, I of know enough are per that change. in in net like right? what's right QX, dividend amount That of we're doesn't feel many if to better QX mean, There things okay, to much we Freight happen because out, and our always QX about a our we I quarter. going share subsidy normal QX. just in $XXX you same. don't be mean, don't a that

minimal. forget to our that are really closer want we look subsidy. in the going to QX subsidy And so you a position it's so to to about be okay, we at Okay, QX get say, if

could that we to QX to I EPS we're over it's And be probably in So million then And be is of little zero. The about mislead the for consensus CADXXX to a What going into existing acquisition. again business. with more now it's think diluted I terms probably to Freight -- for million the and going it's is attainable. think is the $X basically that, CapEx right about out or more to want do say right? investors. above that not $X close TForce going I zero, QX to million, just see bit XXXX

WalterSpracklin

Great. good keep tax rate. got that XX% to using And rate? a tax Is effective I've that

AlainBedard

that lower yes, than it's Well, But is Yes. reasonable. this quarter. XX%

Operator

Your from UBS. Tom question next line comes of the Wadewitz with

TomWadewitz

big really think Yes, good look this do a done. for Because to takes kind afternoon. obviously, that you large deals. there's other because you deal you? How the, kind lot asked. need three of years? two How something asked a know you've something that of for bit Is doesn't whether another do I you you I been small do and long And to or large? be time? it's I about, deals for think of guess, work can this about digest that

AlainBedard

is to can you UPS this focus us. Freight, to I TFI look So XXXX was level Impossible, three nothing major normal. That's a a between and for deal XXXX of one in big right? normal. for Right laser Yes, to now Freight the company there's XXXX is be be call now. will is and it's at our whatever There's profitability if always that on year not big mean, Big big, history, right bring UPS. you XXXX now was into happen the XX years XXXX it to deal, TFI, OR going that absolutely. deal was we mission want TForce XXXX-XX. it's at

aggregate say could focus. in that's The small is So in million to invested let's going be and no small. the like the million P&C LTL in say small But we our could the small truckload be on or yes, I US$XXX tuck-ins small Canada, when deals. do deals, CADXXX in sweat, Canada,

TomWadewitz

Yes.

of think bought truckload haven't in system? case sense. a and would makes to barrier What share? network. just TFI or of your how might whatever, we the And I whether truckload separating also the that to there's across kind a the about and different then in I'm Con-way some seen side historically you whether mix And US the of LTL kind across and LTL businesses really side, together. want on be non union that the resources, you assets about union that's terminals sharing guess synergies point of ended on think up them. I potential Okay, companies in wondering synergies

AlainBedard

synergies in are right, the I for absolutely the except Well, you mean, buying okay. power, of terms Yes.

with discuss discuss or they So should manufacturer, when you the two, provider, LTL, it's with truckloads, deal. truck the don't of care get a if normally, the better we when you sum so fuel a

an So synergies. area that could be of

going terms the of we see in to that me of to lot, account, if a money, I has is with make would money Okay, the don't tell money see bundling Paul all make I I'm don't Paul spare -- say. that customer that. and big not in we we're that, parts the bundling, fan because on don't terms The you we -- lose don't Peter for makes maintenance to money. it. of this because do

Paul runs the is same. Peter show, And and his simple. very So

yes. and doable, terms in tires but attainable that. power, synergies of some there and are all So the are purchasing There that like

under of terms In the non union same having roof, or a union okay, carrier.

Okay. the I done Canada. years. do We mean, that since that time. XX we don't the We've have in a all last problem

don't US, different a it story. know. the I be in will maybe Now

I But to now. real company owned owned that, going though by be estate we're the can a company, working is Okay. That's you my real a plan. buying terminals we're mind, that That's are of which a TFI. by subsidiary what tell on will are the in what be estate

to is unionized a to company we'll understand will to it's owned union that's terminal real our because terminal is a non is of somebody estate not a the What carrier guys union union So by company that tenant TFI, talk else. owned non see. by carrier you estate we TFI, union owned or a like a else. be by operating And real anybody leased that's that's asset want or is that a philosophy the carrier to, a

TomWadewitz

have to remains seen but the receptiveness from be fair? union approach. think So that that whether to you to that there's Or you visibility Is that? it

AlainBedard

just the like the mean, it's is tenant I company Well, estate operating I real transaction. else. everybody mean, a is thing that important a

Operator

of Scotia the Konark from question with next comes line Capital. Your Gupta

KonarkGupta

Thanks and evening, right. and Alain David. All good

dollar, to you US glad all, numbers bots of and scared AI first the sure me see for So, a in there. are some minute

I acquired from the as of but freight buying dead horse acquisition, deals were well not piece bundled. other of business UPS on one that here, the they the kind clearly you some external company the customers. UPS UPS obviously, first you here. beat be may parent And But are small understand the to So with as

and key that or reaction businesses parent customers, the or like when kind have price a pricing or years? improve of else, going or maybe fair the be So many or focusing they profitability, external like might take for the right that pitfalls and same the my risks those their UPS like about putting go be is, of somebody provide sort question to perhaps, think in the will UPS the them that for to the that ask what the and pricing of not all improving some did price to go you there, to them able the sudden tenets you is let to update to one business of they telling but on would how, talk when what from and we and you you to have go customers and

AlainBedard

the is bundling, me provider, used number that the took Well, LTL is that the they if few lot competing you with a price business, the UPS deal the okay, and is to give of of another a competition And parcel you lot on last right. in look at a LTL. on years to do package in they good used the a to do carrier, the group, UPS LTL my largest give is place, one one US large experience just okay, also

it's I there leader? be also question and the there's company capacity. the we has Right, we customers a I LTL as they so a and with us using volume calling there, been overwhelmed that to as so ask the that are LTL if I and team Right? well. So them FedEx, about, you think the would the guys for reaction this So what I'm with issue think think lot with capacity talking are volume. would a loss overwhelmed that of everywhere are Why UPS and same problem FedEx of

going is guys, be simple that this does very So as rate with not our approach customer to is fit.

the fit not space does could it could claims either the because be don't it it money a fit. could the be and but not There it with And at does Cabano, operating that region many tenants. years the time. our ton are So be happen to time does take it of it generate we're a have tenants our it sit we discussion. there it It's overnight customer company. reasons the lane, fit this guys. third the so this fit ago, we It's or a Today, party, our Maybe solution. because say fit and I had customer real real kind take just division, agent. logistics portfolio right. fits can doesn't to ourselves XX are there going with we was not in mean, another our will will estate because fits we commodity doesn't provide happen look same side, too we not down in real going of to Kingsway, Because going you renting outside cover money to or then discussion estate lane because or we Well, It's estate And the overnight. not But let's lose have company. on if many the to none.

now I'm in the the about. step it's a US tailwind the got to side, by talking the lots we right same with LTL chance step we and on discuss side. in of have industry, to story go And the the and have customer, but package So on

KonarkGupta

Right.

on that customers segments. months conditions with kind lot it's existing perhaps post of and three to the be first six So the fair the there'll a expect terms of to discussion closing,

AlainBedard

mean costs, big it time. mistake, in to and without mistake, making your maintenance situation replacing by what do drivers improve of side, safety safety, the with forget, don't So improving at replacing not to equipment, step slowly address want reduce driving drives the that. to it's also We in to but truck. improving is be focus one, CapEx the experience, same and new the guy you time, the one XXXX you improve be all want make doing the number XXXX, safety, One reducing lean Yes, instead can't with more a of mistake area XXXX, guys, maintenance, going to on takes also there's because want costs. want right? same the do the this because customer XXXX your a experience, on a But that equipment, we can the drivers we we the terms to make of we the can our old we by equipment a want experience

KonarkGupta

last that, investments. the is and Alain. on one Right, thanks for My

thanks So tuck-ins. color for on CapEx providing and

disposal would be out what number implied want CapEx, net kind is million call a CapEx CapEx $XXX out the existing whichever there a if operations, want to of from Just or free you let's and of what parse sort you gross numbers, year at have say last obviously was flow wondering dollars, plus you from you UPS, should just XXXX but free this if CapEx to the in strong the very, year? investments cash of flow make to provided guidance we US improve expect terms have cash in very with to

AlainBedard

Yes.

sense have we this put of CapEx lot invest a a we that because that not So year we Hold on QX. CapEx in exceptional normally done the should was did in

a certain bit have degree. this we will of So recoup a to little

So that's And is minus Canadian used change. But gross Freight because CADXXX, CapEx also numbers disposal, to normally, UPS CADXXX going to CADXXX that pre right? net in the I'm is So we're the to to be going get have to USD to be acquisition reporting. of which something is that's about the going about USD dollar new the way CapEx because for going is us. not to

in TForce to CapEx my or existing mind, US dollar. CapEx and sustainable the sustain globally for the Now normal above that Freight in Freight over business UPS

million. Okay, net disposal US$XX is about of

Okay.

stuff cetera So going like to got million get to full this do won't and US$XX in four normal going some et the the going to so of XXXX. et CapEx QX all $XXX stuff then QX, because that. and $XXX Us because more million, million do for say between instead okay, we $XX we acquisition, XXXX, delays, we'll it get by you XXXX year. cetera, into will We're talk take million being us months from we're than probably let's three, maybe before

up you catch So in mix there. some got

KonarkGupta

right. to million US$XXX US$XXX million,

AlainBedard

US, yes.

Operator

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

JasonSeidl

step guys. at? What's I left important Alain. added Good and operator. is about getting you afternoon, look you, which can wanted timeline I bit to indices, the a US the next for talk little investors Thank what's that to think

AlainBedard

Very good But we are order mean, be a a Jason. Canadian it. to about in we be today. have company that I question, Corporation, to we're US thinking still

and group myself now are David doable, we discussion possible. and it's tax, right So with if to in our and legal it's if see

done have companies not simple Canadian it. do. Some to It's

whatever. be about to we sure, part have But for but that, thinking to it we So benefit it. don't are we'll looking we with; so of know, to two the index. have our would within or Jason But a at we're on really going far, a be nothing to we up Not do that a base shareholder see. we're years great come mean, yet. I it, timeline. or year

JasonSeidl

Okay. up Fair enough, question. Alain. Follow

CapEx; I on is your bit growth was you little or decline, truck count if a touched in will, if You wondering for that within the what assumption number, US?

AlainBedard

business of with price X% to still deal not that really sure, only going guy is more business. any you. it. the because to customers is customer far, Right know of about that now, or guys going be what don't of six, loss ago. they is at they've of loss, telling It's something seen piece you're fantastic lost has these the okay, we there's this with already Freight. seven Right, started that but for business so principle, that in an it's with have you freight lose because us charging, asking talking have new; I'm the Jason, And is for market all two no a chat guy what that what this XX%, X%. the you ask if going know, months probably And pace, a discussing so the are also, no you're haven't far, is because with the not understand guys, this account UPS there's lose process numbers guys they revenue we like fast that and you that the discussing about you're it's the And of process for than has are started he fit already and

we a Now this US market, because those this knowing the are is This operation. brokerage why why LTL really market. Company guys it's is the DLS us bought not

sell time, the right. and buy they So all

focus lane, and going we'll discussions that we're process; road, -- the rock at the it. a or an by also down plan learning the main with the that about May a on working and go and now, learn. okay. mistake. one want it's more be market time, guys Freight like have make boat, than we we And about so we this improving that going long a business where our costs to same good the is And having the you and don't customer we a because when why anything about Tom, Freight to the customer want we're efficiency what you at that's have X, things with idea Xst But And have discussing to don't in now UPS slowly one. we'll our lane, some what's the the us and of knowledge business we know So may customers, that, of is on TForce good address start sure safety to we're to cannot we with have

JasonSeidl

So okay, that's Alain. great color,

be to real going that want be basically you down obviously new that cabs, UPS side could you looking mentioned and you into line better the think account the is at within between you terms in of a Freight, money anything that that productivity? there it's added if the track put on So also, flat technology improving a to transport fleet CFI the and guys the dock corp, are quickly into

AlainBedard

I that we're Canada. really just far than And guys are of between the new you rollout they so we mean, have us better what What the with that they in on dock. technology impressed guys dock the have. and we've these monitor on did have productivity the tools Jason, me, these tools to is seen, a

mechanic, one repair the is to car. need tool you you but tools have thing, Now, the it's mechanic like could a the

what So fantastic they we're toolbox. a have is that seeing

I it? will that. using it us they some are mean, evaluate time how Now really to take

Operator

from question the Ken line from Your of Bank of next Hoexter comes America.

KenHoexter

David up you Alain great, there. Good and afternoon. if Hey,

assets the moves Or about But Alain few on earlier acquisitions is do TCI the blend you to all some that segments Some little of you're keeping separate? the where the last blending any any that things that different major over than a looking the name bit to year Is things mentioned way other TL in over TFI, moving in so the at change? the kind US keeping months. brand congrats call and talking you by other would blending you've structural look individually. that's tackled

AlainBedard

ago, Okay. because a we flash UPS sense doing why the now other we Yes, mean dedicated, business TCA, XX% are acquisition, now not, look XX thing we're is which good to use look the dedicated few that's flash there. dedicated is Ken. we at with makes bought control And temperature to business. MCT, and And because at got point, it's is which have then say MCT. acquisition. I is right base going it we TFI. dedicated about TFI a And a we that? months And have a just no Freight

MCT. was no to there So value

and temperature we're now So then use it's under buying And control, umbrella. okay, we going to said, going TFI TFI the to fall we're Freight.

we No, can't. to that name? division? truckload Are going UPS going we are with what Freight, to So the do keep the we

okay, keep conclusion our we're the business. TFI do? whatever operation the another truckload to dedicated sense under then dedicated fold into business temperature one, dedicated, with we unit just fall doing or be Oh, not all to going TC with are to the business carrier, logistics one, going came our discussion kinds business as temperature control going And maybe But we're that in like that what as to then, okay, after doing one having road, people, become and different two a the or really, control. down sectors, other So we TFI it that And being is three will okay, being TCA USCL DBA and makes TCA. probably to of TFI. van will regular

KenHoexter

with follow Or just do one with to that look this Canada on, name brand any US would in LTL? other special on like case And is a deal? you area a just

AlainBedard

Well, thinking it's we're always something that about.

we've at results. in the of been look we So in and a what if combine summer CF XXXX, and done Canada fantastic it's TST you

less revenue, one percentage at is that's LTL. the doing mean reasons our well. and just in with look on margin very, I our And very in mean, the margin I of you dollars if Okay.

okay, look sure. is So in that TCA, it we not was be always it's if in there brand a TFI truckload of brand; worth I careful. a confirmed, in something we'll the was no operation, time something, some our we're we mean, is terms know But of case MCT, diamond at, value,

one. are of use So Freight, talking that. truckload team fall Freight still discussing the unit, two TCA. is to TFI truckload be I why terms guys whatever Greg this about to business to we'll us, are is going division mean, sure not that. be But the we going the for there and But and the the UPS UPS in Maybe or DBA, buy into of once company is under TFI. for division going Greg it's called

KenHoexter

Perfect.

Let just subjects follow me switch quick. up for real my

relative? you're or guess it that -- damage be equipment said high OD mentioned up to claims. peers needs right. driver done? in earlier What think that's your, of Yes, relative Did the what I Is I guess X.X% focus experience. versus at needs that kind maintenance, You a Why on safety answering hear that I safety, right call, or cargo is to X%. to that so half you percent? was But I was not the

-- what's So

AlainBedard

And do retailer Amazon The dealt ecommerce. ecommerce started the an sure. cetera, with with talking they're no. No, cargo something retailer is long, give retailer, product a to equipment. largest the with is this used nothing It's ongoing because to any one, way one But with years time. cetera. largest package And three the I'm I'll never I we've this an for the with of waste ago. the And We not baggage, do mean, largest business the in fantastic. Canada. et freight, you long in thing. Amazon issues example. two our et the claims for they the to world, got got

consumer. way So okay, of product delivery the we for was to packaged with issues, lots had a the

look sat with and So them do them, we I at with with fantastic. them It's we what we talked finally today.

that touch you break you the you claims, if that I'm product, it. saying of there's XX may you is our what product times, LTL, time So few, one have the in reasons every the touch a

make that don't So you much. you it to got touch sure too

the number average hauls, the hubs of So you that line have.

have do. more you on the break that XX got has and touch you between it if LA you haul times let's chance hubs to York, if also you to from, product in you direct. have XX to something say, So The ship commodity you load, New load that run

area improvement, be accidents. is could that that okay, it's an that's claim, we nothing see saying So cargo compared what that there to but complain, I'm workers and

guy equipment, a So so because human our accidents mind, this not mistake, in accident. you make the does in mistake, an experience, our involved the doesn't he's But to being. driver, in in have makes he want more helps that the a safety the a be driver

tells the we you, Okay, mistake. reduce ends on with the can hey, don't has equipment, to change reduce up rear the to and distraction. some help you're is thing, to if hit that you've there, number make got collision lane, And the technology avoidance, Well, But there's Right. got a That guy technology another claim, going so car. today's that of today's BI going car helps driver he the the same you. truck car.

That's what slowly, that reduce saying, things costs control, in something freight terms do of could the something to And the fits, the that us today, terms we'll that is is cargo the fits in there's make yes, focus rate But I'm to sense. Ken of workers that freight what many do time, control, comp. accident be to Okay. the the can that it's makes or really then rates that So and our at we also is the our why operation our better? but we in also us to a is of sure for help is that of at claim. all in be is that same we're with going customer And then to customer discussion needs rate. the terms have us this

Operator

question Your line TD next comes James Tim Securities. the with of from

TimJames

may as challenges just there maybe from if you. And hangover terminals, I'm kind if just related the Alain. residual seeing efficiency pandemic of have dock of Thanks. any to what evening, Good I'm wondering that we like kind disruption you're more subside to still that some there's normalized is if get opportunity cost understand the going to trying today forward. a environment on challenges an if side,

AlainBedard

us. guys in I it absolutely. for is mean, us, a Ontario. problem we in just have the absolutely, mean our lockdown on this is us Oh, ecommerce huge huge But I their the helps helping sense lockdown right? P&C lockdown losing in Quebec, that big mean, So true. not we're the I side. this booming, yes, is BXB is

okay, can sense pandemic this if you get sick at the should because mean, the away didn't my his better got these the her workplace. someone, sick got of but in in at sick be mind, partner our have people XXXX, year So he sick go it XXXX end even by I workplace, all that

So it's issue. just a global

got show I say, You I'm and the to they to that because US border drivers truckload the want the of they the to because cross I'm lot no don't are thing COVID going there's virus. said a into US. doesn't in Canada oh, news listen afraid catch talking guys that to the they that in want I'm go because

just department. all was reading for to our talking steel it's So in I disruptive sure.

of short and of the we're chips cars manufacturing Now trucks. for

shipment. steel it the will aluminum the and affect So

global just and related the pandemic. been above. with So It's this chain it's made all to over worse supply and

TimJames

same? we follow tucking like And the at thinking is XX that up That's of Has gray the your you're ago? it up helpful. less to kind doesn't maybe view months forward. going opportunities or of some you. were has Has the changed in all? Or you you've see, makes thank Okay, where In what wondering, given on all opportunities just color specifically, sense? I'm back sense? what make more changed to at on if question, terms pandemic my that

AlainBedard

me, it's I say of wouldn't more No, that. To the same.

now at to had a that And margin the that that. no we looked at would diluted that only the our And the in margin. and our looked BXC would it confirmation I pre-COVID just just we March QX that stuck than got at wrong, it's April, it in with in P&C our smart because you our way. the we think perception And dilute if could was way. And of be it say pre-COVID, option BXC we had look do look other thing we a I it. perception at numbers, to and when and we is the right a lockdown

don't guys. Although of release, our we I I going it late again out happens little a to happened, again. make about press bit mean, was that sure know never sorry but came a we're I'm glitch. with that, there what

Operator

Ossenbeck comes with question line from J.P. next the Brian of Your Morgan.

BrianOssenbeck

questions. Alain. Thanks for evening, good taking the Hey,

and some suited to also the sorts it something of that aggregator and for you space might maybe a that So lines use I expanding the meet Freight last market? well even end at assets more where to synergies, about these think the know in footprint to to having do little business footprint docks of retailers that LTL the bit something leveraging is when able we you along of particular warehousing how wondering is be standards, OTIF call. But consolidation and could talked comes today for you the of the hard maybe them an go enough I or able you was footprint be be the like into an UPS if large help

AlainBedard

But answer right you're of sense. What a just made lot now. saying that cannot I

what Okay look is don't through I at thing clear a what day many we do. picture of we us a that we door. a can because have pressure go call bills would One is how door

we the Freight I pressure night. when Canada, door do And we compare what mean, UPS in it's versus Okay. day and they of

big, phase guys, is doing things two terms it's done environment. we're in us phase real early. now, be tells the to too But and do. over that what there's where mean, of that the the there's could we just estate I it needs So some still one and that is

because you it's sure, be every anything, going you dollar real you terms seen of I terms for that I make priority, So of in get but land major real of And expensive. do want in is that haven't to haven't estate any estate far, investment out that so to sure toured a building.

BrianOssenbeck

nothing doing sense? prevent got you were would that, if it structurally But that to from it. make Okay,

AlainBedard

is why, estate it. way just I nothing I me, real then from real company, operator. important to mean, the is to because have the separate we so think with so. to us this don't I got transaction operating mean, that do of Estate's this and doing a the is smart this

just like You get attended is thing that party the look do. whatever or a said One I I we we terminal the makes tenant our where you and want Brian, US leases a then it are is third the those of way sense. for sure else, could sense call, on it you that at everybody build to it if and about makes XX out own terminals. have in And for in

do if sure can with else focus not If how addressed fit we over if the For there's the is more big Because we'll sure opposite, for all much will in -- capacity, there's there's this try building to with the is more. less if less, TFI too somebody there. land at do be time. too of

BrianOssenbeck

Understood. touch Maybe logistics up, a can quick what's on in the going just US follow segment. you on

take we a Canada. still there help think mentioned there, much fragmented where quarter consolidation going wasn't that this some that industries, lot in the it on growth some of too you going will self there time. initiatives got believe to you But was I there

up to recent speed table So see what and if you the us ahead. you can of for on kind initiatives year bring the on

AlainBedard

Yes.

And So a in what And now our we we've XX%, fantastic. operation Canadian XX%. the about way run of have right year Canada. we so we're said ago is grown successful we done is

we right responsible runs involved North to have Since that sales Canadian Kohut, leader our guy, for guy is American supporting I've So US the now. into our what So now, a the sales that operation. the sales operation time, leader get okay, asked done?

is it's US, response Coast, US for the So guy the to into okay and that US for is for us, to not because the us, both. Feb East Canada run he Canada we have about West. split announced X moving the be just that is run East to is just and both, or we'll is What guy used going

look if now the XXX% year margin EBIT trying to of for we're it's today, do a operation. the it will at improvement. been then versus and is, what running our we've ago, division what be Coast because you So successful Leslie, East responsible And US far, so is

see year-over-year. could if we run the do still only way fantastic. US not. so long we can mean, one much -- not Because operation single margin. you But number, the with US? been we growing. of US sure a we negative service time. or right, Because also you because digit normal. Canada, is in have provide flat now that's big most man, a it's if importantly, XXX% five minus It's fan unit customer new they're zero Okay, to are is get that Canadian wow, potential, line. Dean not is the EBIT we're going growing high But not the we we're and XX% focus a a but we to than make right growth Well, used we want way about have so we the getting to start the is flat better customer. business say, top that this No, grow before XX% right in and get was All our at organically in they it's to that, not Today, ours. step I there's also, team why division single there we Kohut the absolutely, the that what this growth, the because just and going at lazy. And of this

based no did much, start growing Now about end we see process thing by mile do we're but now you'll yesterday, to what we same have to by by get But the our is the to it's again, as to more. there's culture one and in kind least break XXXX step I on step. we're in we're step us catch that not And a US. at EBIT Canadian to X%, And single But logistics double last of be of digit change in could going EBIT direction. a XXXX, in operation. the number going the digit up into the okay, then going XXXX today is organically going it's, more see, plan of step a versus number and in right this this X% our

go. on So of the lot stuff a good

Just look at our QX number right. improvement, year-over-year

BrianOssenbeck

Right. Alain. right. it All was you, Thank strong. Appreciate quite Yes, it.

AlainBedard

so numbers the only guys Brian, you that, right. have got to couldn't thing Hey, late chance that the read you is the

Operator

up question the comes from next Your Desjardins Benoit Markets. line Capital Poirier with

BenoitPoirier

Alain for afternoon, results. good congratulations Yes, and the

look when into opportunity. give surpassing segments we to nice the call the great this to and US and opportunity the be versus on you some improve good obviously the close about the down So truck although maybe break in recoup what Canada see about for Alain, XX% look to When mile. is things we last CL could OR Canada this specialized for specialized to the CL you especially is OR US is at more color down to or in three thanks unfortunately us now different the margins improve XX% at margins us so path XXXX a in here gap a road? what

AlainBedard

you course at have business really XX to TFI of problem two it's and sure if And XXXX. a XX sub the ATC the running TFI. now, is an is during Benoit, XX OR the XX, OR for right units. mean look sum company, I that Well, XX, we closer of

the me our TForce unit it the fact not But call we this said because why So bit. the is the business on confused is with UPS division I is Freight dedicated flash up why us opportunity this and little coming with in but other a okay, like real business. the is flash flash, have that create, opens truckload to it in, for truckload a was codename coming problem

early said on And it upsize. a call. I Okay,

be to X,XXX of that that okay, that we're So about to leadership under X,XXX our XX closer control, end this truckload dedicated the I by trucks, think And XXXX, business this OR. do XXXX, is going separate I be is we we running to all we're temperature trucks, And closer transformation. should Orr. means also XX okay, segment. to a a the -X,XXX when XX, will running globally, of during going of believe be in Greg And run we will OR the course

business OR, for XX, those through are buying we're that UPS, is OR. thing one or XX today sure is the the Now running at XX guys

those the So of business do have work also that And business at we existing today they're with TCA. have than So a at worse guys. lot right? to XX, we our

time P&C, XX So you approaching this to ADOR at to way one LTL, only of a because think I the we'll situation. are OR you good truckload, with star. bring you that global divisions why say, takes I the it could is then mean, you And is if to look TFI, forget, correct XXXX address guys that. all that But of I specialty the agree logistics, Alain, don't

LTL areas a of going are star AAA, bah, maybe You resolve we're the you the that a a P&C a well, company B. The going you say, maybe only give you to with we're bah. and give not could to

but team an plus there. an working up A from kind A an to move are really Okay, is hard to operation, to the closer the I'm is our B be to And USCL convinced. going guys or of

Operator

at call are There Bedard. will Mr. I over time. further questions the to no turn this back

Alain Bedard

helping Okay, joining International, and everyone of with dedicated for to in well, today's very want your operator the behalf women TFI. call. us On the you I for interest of today much thank thank TFI for and men

updating evening stay and out day our every shareholders hard you hesitate with our again. a look follow reach work safe, to Please on the continue Have to throughout and I We you up progress to great and for year. forward any thank questions. Bye. don't

Operator

call. Thank conference concludes this gentlemen, participating. you and for today's Ladies

disconnect. now may You

Alain Bedard	President, Chief Executive Officer and Chairman
Ravi Shanker	Morgan Stanley
Allison Landry	Credit Suisse
David Ross	Stifel Nicolaus
Scott Group	Wolfe Research
Walter Spracklin	RBC Capital Markets
Tom Wadewitz	UBS
Konark Gupta	Scotia Capital
Jason Seidl	Cowen and Company
Ken Hoexter	Bank of America
Tim James	TD Securities
Brian Ossenbeck	J.P. Morgan
Benoit Poirier	Desjardins Capital Markets

TFI International (TFII) 9 Feb 212020 Q4 Earnings call transcript