0000950170-24-016307
SEC filingTFI International's 2023 revenue declined 14.6% to $7.52 billion, driven by a weak freight market, while operating income fell 33.9% to $757.6 million, reflecting lower volumes and pricing.
TFI International's full-year 2023 results reflect a challenging freight environment. Total revenue declined 14.6% to $7.52 billion from $8.81 billion in 2022. Revenue before fuel surcharge decreased 12.8% to $6.42 billion, driven by a $1.43 billion decline from existing operations and the impact of the sale of CFI (which contributed $415.2 million in 2022), partially offset by $550.9 million from business acquisitions.
Operating income fell 33.9% to $757.6 million from $1.15 billion in 2022. The decline was broad-based across segments, with the Less-Than-Truckload segment experiencing a 34% drop to $310.4 million, largely due to a $48.0 million reduction in gains on asset sales. The Truckload segment saw operating income decrease 35% to $237.4 million, impacted by the sale of CFI and weaker market conditions. Net income decreased 38.7% to $504.9 million from $823.2 million, and diluted earnings per share fell to $5.80 from $9.02.
As of December 31, 2023, TFI International had total assets of $6.28 billion, up from $5.51 billion at the end of 2022, primarily due to business acquisitions. Total liabilities increased to $3.69 billion from $3.04 billion, driven by higher long-term debt. Shareholders' equity grew to $2.59 billion from $2.46 billion.
Long-term debt increased to $1.88 billion from $1.32 billion, reflecting $575.0 million in new debt issuances during the year, including $500.0 million in unsecured senior notes in October 2023. The Company's debt-to-equity ratio rose to 0.73 from 0.53, and the debt-to-capitalization ratio increased to 0.42 from 0.35. The Company maintained compliance with its financial covenants, with a funded debt-to-EBITDA ratio of 1.49 (requirement < 3.50) and an EBITDAR coverage ratio of 5.65 (requirement > 1.75).
Cash and cash equivalents increased to $335.6 million from $147.1 million. The Company had $106.2 million in outstanding letters of credit and $915.3 million available under its revolving credit facilities.
Net cash from operating activities increased 4.3% to $1.01 billion from $971.6 million in 2022, driven by a $254.1 million favorable change in non-cash working capital, primarily from a decrease in accounts receivable. This was partially offset by lower net income and an unfavorable impact from provisions of $59.7 million.
Free cash flow decreased 11.9% to $775.9 million from $880.9 million, primarily due to reduced proceeds from asset sales. The free cash flow conversion rate was 82.5%, down from 87.7% in the prior year.
Capital expenditures totaled $361.6 million, up slightly from $350.8 million in 2022. The Company generated $73.3 million from the sale of property and equipment and $50.3 million from the sale of assets held for sale.
Management noted that the North American economic growth forecast remains subdued and uncertain due to elevated interest rates, high inflation, geopolitical conflicts, and labor shortages. Despite reduced freight volumes industrywide, the Company's diversity across end markets and transportation modes helped support results.
Key strategic priorities include:
The Company agreed to acquire Daseke, Inc. for approximately $1.1 billion enterprise value, expected to close in Q2 2024, which will add a leading flatbed and specialized transportation company to the Truckload segment.
Segment Performance:
Share Repurchases: The Company repurchased 2,609,900 common shares at a weighted average price of $110.36 per share for a total of $288.0 million. A new normal course issuer bid was initiated on November 2, 2023, authorizing the repurchase of up to 7,161,046 shares.
Dividends: The Company declared $124.3 million in dividends ($1.45 per share) in 2023, a 25% increase from $1.16 per share in 2022. The quarterly dividend was increased to $0.40 per share in Q4 2023.
Acquisitions: The Company acquired twelve businesses in 2023, including JHT Holdings, Inc. for $309.3 million, which contributed $225.3 million in revenue and $18.0 million in net income since acquisition.