TFI International (TFII) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

February 6, 2023 5:00 p.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 Fourth Quarter 2022 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. Callers will be limited to one question and a follow-up. Again, that's one question and a follow-up, so that we can get to as many callers as possible. 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 Monday, February 06, 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, operator, for the introduction, and thank you, everyone, for joining us this afternoon. Today, after the market close, we released our fourth quarter 2022 results, which capped a successful year for TFI International. Despite obvious macro-related topline headwinds, we generated increased operating income versus the year-ago quarter. We expanded our overall operating margin by more than 200 basis points. And we produced free cash flow of $188 million, which is 56% higher than the year-ago quarter.

For the full-year, we produced adjusted diluted earnings per share of just over $8, an increase of 53% over the prior year. We also generated full-year free cash flow of $881 million, up 26%, despite our calculation fully reflecting higher working capital on the order of $147 million associated with higher fuel costs. We view our robust free cash flow as especially important during times of uncertainty, affording us the flexibility to capitalize on market turbulence through strategic investment.

Our adjusted net income expanded to $152 million, up from $149 million, while our adjusted diluted EPS climbed the full 10% to $1.72 despite a foreign exchange headwind of $0.09. Perhaps more important, the $188 million in free cash flow that were produced was up [sharply] from $121 million the prior year, further enhancing our flexibility to strategically deploy capital into acquisition and return the excess to shareholders when possible, which is, as I mentioned, are two of the overreaching principle.