TFI International (TFII) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 1, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to TFI International's Second Quarter 2023 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. [Operator Instructions] Further instruction for entering the queue will be provided at that time.

Please be advised that this conference call will contain statements that are forward-looking in nature and subject to a number of risks and uncertainties that could cause actual results to differ materially. Also, I would like to remind everyone that this conference call is being recorded on Tuesday, August 1, 2023.

I will now turn the call over to Alain Bedard, Chairman, President and Chief Executive Officer of TFI International. Please go ahead, sir.

Alain Bedard

Well, thank you for the introduction, operator. And thank you everyone for joining us this morning. Yesterday, after market close, we've released our second quarter 2023 results. During these tough times for the freight market with lower volumes industrywide, it was critical that we by, by a long-term operating principles and we did just that.

We again, demonstrated the quality of our operation and our team's ability to quickly react to changing market conditions, by focusing intensely on the fundamentals of the business at all times.

Speaking of our team, I'm pleased to announce that just yesterday, our TForce Freight unionized employees ratified a new agreement with an 81% vote in favor which we view as favorable outcome for everyone involved.

Throughout our organization, we recognize the importance of profitability and cash flow. This is what allowed us to produce solid results during a difficult quarter with solid operating ratio across all four of our business segments. In turns, this focus on profitability and cash flow, as I've mentioned many times, allows us to steadily invest in the business, take a disciplined and strategic approach to M&A, and as always, return excess capital to shareholders whenever possible.

We produced just over $200 million in net cash from operating activities during the second quarter, with free cash flow of $138 million, despite the industry wide weaker freight environment, and other factors I'll outline in the moment. Our operating income during the second quarter was $192 million, reflecting an operating margin of 20.4, this compares to the prior year's quarter of three not $391 million with a margin of 19.7.