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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good morning ladies and gentlemen, thank you for standing by. Welcome to the TransForce Income Fund First Quarter Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded Wednesday, April 30, 2008. I would now like to turn the conference over to Mr. John Lute. Please proceed, sir.
JOHN LUTE, IR, LUTE & CO.: Thank you, Jody, and good morning, everyone. Thank you for joining us today to discuss the results for the first quarter of 2008 for TransForce Income Fund. A news release detailing the results for the quarter, which ended March 31, 2008, was issued via Canada newswire earlier this morning.
Alain Bedard, the Chairman, President, and CEO of TransForce will review the highlights for the quarter, and then Sal Vitale, the Chief Financial Officer, will discuss the financial results in more detail. Following their comments, we will open the lines for questions from analysts. Analysts and portfolio managers are welcome to ask questions over the phone, and the operator will be providing instructions.
Business media and unit holders are welcome to listen to this call and media are free to use management's comments or responses to questions in any coverage. However, we would ask they do not quote the callers unless that individual has granted their consent. If any media want to ask follow-up questions, please contact me after this call. My number is 416-929-5883; it's also on the earnings release. Unit holder questions should be directed to Sal Vitale.
A recording of this call will be available until May 7, 2008, and that recording can be accessed using the dial-in and reservation numbers listed on the earnings release.
Before Alain begins, I need to read this statement. The following discussion will include a review of developments that affected TransForce's performance during the first quarter up to March 31, 2008, and may include forward-looking statements and estimates. Such comments will be affected by and involve known and unknown risks and uncertainties which may cause the actual results of the Fund to be materially different from those expressed or implied.
Now I'll turn the call over to Alain Bedard, the Chairman, President and Chief Executive Officer of TransForce Income Fund. Alain?
ALAIN BEDARD, CHAIRMAN & PRESIDENT & CEO, TRANSFORCE INCOME FUND: Thank you, John, and good morning, everyone, and thank you for joining us today. I'm sure that you all have the financial statements that accompanied our news release, so Sal and I will briefly recap the highlights and financial results in order to leave us as much time as possible for you to ask questions.
Well, 2008 has begun in much the same way that 2007 ended. TransForce faced another challenging quarter as the deteriorating economic conditions of 2007 spilled over into this year. Nonetheless, we once again increased our revenue compared with both the same period in 2007 and previous quarter, although the first quarter is usually our weakest of the year.
We also increased our EBITDA over last quarter and last year but in the current environment, it would really be a miracle if we did that from our same operation. We didn't. Although those operations are doing relatively well, our EBITDA growth was from recent acquisition -- CAN $4.9 million and from a one-time favorable class-action settlement for CAN $4.5 million.
The relative strength of the Canadian dollar to the U.S. currency continued to be a major factor affecting our business both directly on us and on the business activity of our clients. Also, harsh winters are nothing new for parts of North America. The weather, during the first three months of 2008 was particularly tough and affected the performance of some of our business.
During the quarter, we also witnessed continued high fuel costs. On the positive side, our new package and courier segment performed very well during the quarter with ICS adding significantly to the strong results. As I mentioned, acquisitions such as ICS were responsible for the year-over-year EBITDA growth, but I am pleased to point out that we saw organic growth in some segments as well.
Specialized services has demonstrated strength with healthy organic growth in our waste management logistics and personal services division. The story around oil field services is somewhat different, as this industry is currently going through a slow period. Drilling activity has declined in Western Canada compared to the same time last year, and the sector is adjusting to a new financial framework.
Energy prices continue to climb, however, and on the long-term outlook seems positive for these services.
Overall, the economy is still facing uncertainty as the fallout from the credit and housing market in the U.S. continues. Yet, as the last year has shown, TransForce knows how to thrive in both strong and weaker economic conditions, and we will continue to execute our growth strategy regardless of short-term economic fluctuations. Our operations are more diversified than ever. Our LTL segment accounts for 28% of revenue during the quarter while specialized services contributed 27%, Truckload 19; Specialized Truckload 13; and the new Package and Courier segment, 13.
Our ability to weather economic slowdowns and sectarial dips is enhanced by having operations in different sectors and different parts of the country. Our first quarter results once again demonstrate that this to be the case.
We will continue to pursue diversification as our industry consolidates and are currently looking for a number of potential acquisition opportunities, about 100 million worth of them.
At this point, I would like to ask Sal to review TransForce financial results for the quarter.
SAL VITALE, CFO, TRANSFORCE INCOME FUND: Thank you, Alain, and good morning. The first quarter of 2008 we grew our revenue to CAN $526.3 million, 13.2% over last year. EBITDA defined as operating income before interest, taxes, depreciation, amortization, was $56.9 million compared to CAN $52.7 million, an increase of 8%. Our cash flow from operating activities before a net change in non-cash working capital items was 45.7 compared to 45.1 last year.
As Alain mentioned earlier, we faced challenges posed by the weakening economy during the quarter, but we maintained our distributions to unit …