0001193125-11-215609.txt : 20110809 0001193125-11-215609.hdr.sgml : 20110809 20110809102730 ACCESSION NUMBER: 0001193125-11-215609 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20110630 FILED AS OF DATE: 20110809 DATE AS OF CHANGE: 20110809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VITRAN CORP INC CENTRAL INDEX KEY: 0000946823 STANDARD INDUSTRIAL CLASSIFICATION: ARRANGEMENT OF TRANSPORTATION OF FREIGHT & CARGO [4731] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-32449 FILM NUMBER: 111019269 BUSINESS ADDRESS: STREET 1: 185 THE WEST MALL STREET 2: SUITE 701 CITY: TORONTO STATE: A6 ZIP: M9C 5L5 BUSINESS PHONE: 416-596-7664 MAIL ADDRESS: STREET 1: 185 THE WEST MALL STREET 2: SUITE 701 CITY: TORONTO STATE: A6 ZIP: M9C 5L5 10-Q 1 d10q.htm FORM 10-Q Form 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________________

Commission File Number: 001-32449

 

 

VITRAN CORPORATION INC.

(Exact name of registrant as specified in its charter)

 

 

 

Ontario, Canada   98-0358363
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)

185 The West Mall, Suite 701, Toronto, Ontario, Canada, M9C 5L5

(Address of principal executive offices and zip code)

416-596-7664

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨    Accelerated filer   x
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 16,330,041 common shares outstanding at July 21, 2011

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Item

       Page  
PART I  

Financial Information

  
1.  

Financial Statements

     3   
2.  

Management‘s Discussion and Analysis

     12   
3.  

Quantitative and Qualitative Disclosures About Market Risk

     20   
4.  

Controls and Procedures

     20   
PART II  

Other Information

  
1.  

Legal Proceedings

     21   
1. A  

Risk Factors

     21   
2.  

Unregistered Sale of Equity and Use of Proceeds

     21   
3.  

Defaults Upon Senior Securities

     21   
4.  

Removed and Reserved

     21   
5.  

Other Information

     21   
6.  

Exhibits and Reports on Form 8-K

     22   

 

2


Table of Contents

Part I. Financial Information

 

Item 1: Financial Statements

VITRAN CORPORATION INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

(In thousands of United States dollars except for per share amounts)

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Revenue

   $ 208,881      $ 169,713      $ 394,269      $ 326,856   

Operating expenses:

        

Salaries, wages and other employee benefits

     79,877        66,558        149,494        130,687   

Purchased transportation

     34,625        28,291        64,617        53,842   

Depreciation and amortization

     4,040        4,629        8,397        9,395   

Maintenance

     8,994        6,878        17,086        13,886   

Rents and leases

     9,175        7,078        17,256        13,850   

Purchased labor and owner operators

     20,259        15,442        38,584        29,801   

Fuel and fuel-related expenses

     36,074        22,049        66,204        42,850   

Other operating expenses

     16,145        14,831        31,470        29,022   

Other income

     (67     (1     (105     (145
                                

Total operating expenses

     209,122        165,755        393,003        323,188   
                                

Income (loss) from continuing operations before undernoted

     (241     3,958        1,266        3,668   

Interest expense, net

     1,311        1,920        2,653        4,023   
                                

Income (loss) from continuing operations before income taxes

     (1,552     2,038        (1,387     (355

Income tax expense (recovery)

     745        471        1,134        (645
                                

Net income (loss) from continuing operations

     (2,297     1,567        (2,521     290   

Discontinued operations, net of income taxes

     —          161        —          509   
                                

Net income (loss)

   $ (2,297   $ 1,728      $ (2,521   $ 799   
                                

Income (loss) per share:

        

Basic:

        

Net loss from continuing operations

   $ (0.14   $ 0.10      $ (0.15   $ 0.02   

Discontinued operations income

     —          0.01        —          0.03   

Net loss

   $ (0.14   $ 0.11      $ (0.15   $ 0.05   

Diluted:

        

Net loss from continuing operations

   $ (0.14   $ 0.10      $ (0.15   $ 0.02   

Discontinued operations income

     —          0.01        —          0.03   

Net loss

   $ (0.14   $ 0.11      $ (0.15   $ 0.05   

Weighted average number of shares:

        

Basic

     16,330,041        16,266,441        16,322,748        16,266,441   

Diluted

     16,330,041        16,365,410        16,322,748        16,359,079   
                                

See accompanying notes to consolidated financial statements

 

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VITRAN CORPORATION INC.

CONSOLIDATED BALANCE SHEETS

(In thousands of United States dollars)

 

     June 30, 2011     Dec. 31, 2010  
     (Unaudited)     (Audited)  

Assets

    

Current assets:

    

Accounts receivable

   $ 94,084      $ 72,212   

Inventory, deposits and prepaid expenses

     9,861        9,761   

Current assets of discontinued operations

     —          1,683   

Deferred income taxes

     114        110   
                
     104,059        83,766   

Property and equipment

     141,383        138,847   

Intangible assets

     7,037        8,268   

Goodwill

     14,650        14,453   
                
   $ 267,129      $ 245,334   
                

Liabilities and Shareholders’ Equity

    

Current liabilities:

    

Bank overdraft

   $ 511      $ 3,906   

Accounts payable and accrued liabilities

     86,858        68,955   

Income and other taxes payable

     519        154   

Current liabilities of discontinued operations

     201        2,410   

Current portion of long-term debt

     13,111        19,545   
                
     101,200        94,970   

Long-term debt

     66,362        49,838   

Other

     182        519   

Deferred income taxes

     1,470        1,160   

Shareholders’ equity:

    

Common shares, no par value, unlimited authorized, 16,330,041 and 16,300,041 issued and outstanding at June 30, 2011 and December 31, 2010, respectively

     99,743        99,658   

Additional paid-in capital

     5,094        4,838   

Accumulated deficit

     (13,422     (10,901

Accumulated other comprehensive income

     6,500        5,252   
                
     97,915        98,847   
                
   $ 267,129      $ 245,334   
                

Contingent liabilities (note 10)

See accompanying notes to consolidated financial statements.

 

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VITRAN CORPORATION INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(In thousands of United States dollars, except share amounts)

 

     Common shares      Additional
Paid-in
    Accumulated    

Accumulated

Other
Comprehensive

    Total
Shareholders’
 
     Shares      Amount      Capital     Deficit     Income (Loss)     Equity  

December 31, 2010

     16,300,041       $ 99,658       $ 4,838      $ (10,901   $ 5,252      $ 98,847   

Shares issued upon exercise of employee stock options

     30,000         85         (5     —          —          80   

Net loss

     —           —           —          (2,521     —          (2,521

Other comprehensive income

     —           —           —          —          1,248        1,248   

Share-based compensation

     —           —           261        —          —          261   
                                                  

June 30, 2011

     16,330,041       $ 99,743       $ 5,094      $ (13,422   $ 6,500      $ 97,915   
                                                  
     Common shares      Additional
Paid-in
    Retained     Accumulated
Other
Comprehensive
    Total
Shareholders’
 
     Shares      Amount      Capital     Earnings     Income (Loss)     Equity  

December 31, 2009

     16,266,441       $ 99,584       $ 4,264      $ 29,281      $ 2,658      $ 135,787   

Net income

     —           —           —          799        —          799   

Other comprehensive loss

     —           —           —          —          (189     (189

Share-based compensation

     —           —           296        —          —          296   
                                                  

June 30, 2010

     16,266,441       $ 99,584       $ 4,560      $ 30,080      $ 2,469      $ 136,693   
                                                  

 

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VITRAN CORPORATION INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands of United States dollars)

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Cash provided by (used in):

        

Operations:

        

Net income (loss)

   $ (2,297   $ 1,728      $ (2,521   $ 799   

Items not involving cash from operations:

        

Depreciation and amortization expense

     4,040        4,629        8,397        9,395   

Deferred income taxes

     64        115        59        (382

Share-based compensation expense

     119        143        261        296   

Gain on sale of property and equipment

     (67     (1     (105     (145

Income on discontinued operations

     —          (161     —          (509

Change in non-cash working capital components

     2,270        (2,413     (3,704     (6,071
                                

Continuing operations

     4,129        4,040        2,387        3,383   

Discontinued operations

     (1,342     267        (526     873   
                                
     2,787        4,307        1,861        4,256   

Investments:

        

Purchase of property and equipment

     (4,268     (1,116     (6,608     (3,981

Proceeds on sale of property and equipment

     265        116        329        826   

Acquisition of business assets

     —          —          (1,737     —     
                                
     (4,003     (1,000     (8,016     (3,155

Financing:

        

Change in revolving credit facility and bank overdraft

     5,438        837        14,615        8,659   

Repayment of long-term debt

     (3,000     (3,447     (6,000     (7,355

Repayment of capital leases

     (939     (1,124     (1,910     (2,397

Issue of common shares upon exercise of employee stock options

     —          —          80        —     
                                
     1,499        (3,734     6,785        (1,093

Effect of translation adjustment on cash

     (283     427        (630     (8
                                

Increase in cash and cash equivalents

     —          —          —          —     

Cash and cash equivalents, beginning of period

     —          —          —          —     
                                

Cash and cash equivalents, end of period

   $ —        $ —        $ —        $ —     
                                

Change in non-cash working capital components:

        

Accounts receivable

   $ (5,057   $ 1,493      $ (21,872   $ (10,503

Inventory, deposits and prepaid expenses

     1,791        1,629        (100     1,246   

Income and other taxes payable

     659        (1,105     365        (2,309

Accounts payable and accrued liabilities

     4,877        (4,430     17,903        5,495   
                                
   $ 2,270      $ (2,413   $ (3,704   $ (6,071
                                

See accompanying notes to consolidated financial statements.

 

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Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands of United States dollars except for per share amounts)

1. Accounting Policies

The interim consolidated financial statements have been prepared in accordance with the rules prescribed for filing interim financial statements and accordingly, do not contain all the disclosures that may be necessary for complete financial statements prepared in accordance with United States generally accepted accounting principles. The interim consolidated financial statements have been prepared in accordance with instructions to Quarterly Report on Form 10-Q. The interim consolidated financial statements should be read in conjunction with the Company’s 2010 Annual Report on Form 10-K. The interim consolidated financial statements follow the same accounting principles and methods of application as the most recent annual consolidated financial statements, except as noted in Note 2.

These interim unaudited consolidated financial statements reflect all adjustments which are, in the opinion of Management, necessary for a fair presentation of the results of the interim period presented. Operating results for the three and six months ended June 30, 2011 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2011.

2. New Accounting Pronouncements

Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“FASB ASC”) Update No. 2011-05 “Presentation of Comprehensive Income”, requires entities to present net income and comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and comprehensive income. FASB ASC Update No. 2011-05 will be adopted by the Company on January 1, 2012.

FASB ASC Update No. 2010-06 “Improving Disclosure about Fair Value Measurements”, requires enhanced disclosures about recurring and nonrecurring fair-value measurements including significant transfers in and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances and settlements on a gross basis of Level 3 fair-value measurements. FASB ASC Update No. 2010-06 was adopted January 1, 2010 except for the requirement to separately disclose purchases, sales, issuances and settlements of recurring Level 3 fair value measurements, which was adopted January 1, 2011.

3. Discontinued Operations

During 2010, the Company completed the sale of selected assets of Frontier Transport Corporation, Vitran’s truckload operation, previously a reportable segment.

The following table summarizes the operations for all periods presented to classify Frontier’s operations as discontinued operations:

 

     Three months
Ended
June 30, 2011
     Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
     Six months
Ended
June 30, 2010
 

Revenue

   $ —         $ 9,294      $ —         $ 18,082   

Income from discontinued operations

     —           184        —           672   

Income tax expense

     —           (23     —           (163
                                  

Net income from discontinued operations

   $ —         $ 161      $ —         $ 509   
                                  

 

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Table of Contents

The following table summarizes the assets and liabilities from discontinued operations:

 

     June 30,
2011
    Dec 31,
2010
 

Accounts receivable, net

   $ —        $ 1,596   

Other current assets

     —          87   

Deferred income taxes

     765        765   

Deferred income taxes valuation allowance

     (765     (765
                

Total assets from discontinued operations

   $ —        $ 1,683   
                
     June 30,
2011
    Dec 31,
2010
 

Accounts payable and accrued liabilities

   $ 201      $ 2,410   
                

Total liabilities from discontinued operations

   $ 201      $ 2,410   
                

4. Acquisition

On February 19, 2011, the Company acquired selected assets of Milan Express Inc.’s (“Milan”) Less-than-Truckload (“LTL”) business, a private carrier headquartered in Milan, Tennessee for $7.6 million. Milan added new coverage to Vitran’s network in the states of Alabama, Georgia, Mississippi, North Carolina and South Carolina. The total purchase price was allocated to the fair value of tractor, trailer and other capital assets acquired. The acquisition was financed by a $6.0 million operating lease from a third party. The remaining $1.7 million of the purchase price was financed by the Company’s revolving credit facility. An additional $0.1 million of cash consideration is due in 6 months from the closing date contingent on Vitran continuing to operate in three out of the five aforementioned states that were added to the Company’s existing network. The Company has recorded the $0.1 million as a liability as management believes the condition for payment will be met. The results of operations of Milan are included as part of the LTL segment in the consolidated results of the Company commencing on February 19, 2011.

5. Long-term Debt

On June 30, 2011, the Company amended its credit agreement in respect of certain financial maintenance tests with substantially the same terms. The interest rate margin increased by 300 to 400 basis points based on the method of borrowing with no interest rate floor. The amendment is effective June 30, 2011 to maturity on July 31, 2012. As at June 30, 2011, the Company is in compliance with these amended maintenance tests and Management expects to be in compliance for the next twelve months. On July 11, 2011, the Company expanded its revolving credit facility to provide up to $111.5 million, with the maturity remaining July 31, 2012.

At June 30, 2011 the Company had $10.0 million outstanding under the term facility, $62.6 million outstanding under the revolving credit facility, $3.5 million outstanding under a separate term credit facility and $3.9 million of capital lease obligations.

6. Foreign Currency Translation

The United States dollar is the functional currency of the Company’s operations in the United States. The Canadian dollar is the functional currency of the Company’s Canadian operations. Each operation translates foreign currency denominated transactions into its functional currency using the rate of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated into the functional currency of the operation using the period-end rate of exchange giving rise to a gain or loss that is recognized in income during the current period.

For reporting purposes, the Canadian operations are translated into United States dollars using the current rate method. Under this method, all assets and liabilities are translated at the period-end rate of exchange and all revenue

 

8


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and expense items are translated at the average rate of exchange for the period. The resulting translation adjustment is recorded as a separate component of shareholders’ equity. The revaluation of United States dollar denominated debt held by an entity with a Canadian functional currency, that hedges the net investment in the Company’s U.S. dollar denominated self-sustaining subsidiaries, is recorded to accumulated other comprehensive income. In a hedge of a net investment in self-sustaining foreign subsidiaries, the portion of the gain or loss on the hedging item that is determined to be an effective hedge is recognized in other comprehensive income and the ineffective portion is recognized in earnings.

7. Comprehensive Income (Loss)

The components of other comprehensive income (loss) (“OCI”) such as changes in foreign currency adjustments are required to be added to the Company’s reported net income to arrive at comprehensive income (loss). OCI (loss) items have no impact on the reported net income as presented on the Consolidated Statements of Income (Loss).

The following are the components of other comprehensive income (loss), net of income taxes, for the three and six months ended June 30, 2011 and 2010:

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30,
2011
    Six months
Ended
June 30,
2010
 

Net income (loss)

   $ (2,297   $ 1,728      $ (2,521   $ 799   

Translation adjustment

     119        (1,708     1,007        (539

Interest rate swaps

     151        277        335        482   

Tax effect

     (42     (76     (94     (132
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

   $ 228      $ (1,507   $ 1,248      $ (189
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ (2,069   $ 221      $ (1,273   $ 610   
  

 

 

   

 

 

   

 

 

   

 

 

 

8. Computation of Loss per Share

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
     Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Numerator:

Net income (loss) from continuing operations

   $ (2,297   $ 1,567       $ (2,521   $ 290   

Net income from discontinued operations

     —          161         —          509   

Net income (loss)

   $ (2,297   $ 1,728       $ (2,521   $ 799   
  

 

 

   

 

 

    

 

 

   

 

 

 

Denominator:

         

Basic weighted-average shares outstanding

     16,330,441        16,266,441         16,322,748        16,266,441   

Dilutive stock options

     —          98,969         —          92,638   

Dilutive weighted-average shares outstanding

     16,330,441        16,365,410         16,322,748        16,359,079   
  

 

 

   

 

 

    

 

 

   

 

 

 

Basic income (loss) per share from continuing operations

   $ (0.14   $ 0.10       $ (0.15   $ 0.02   

Basic income per share from discontinued operations

     —          0.01         —          0.03   

Basic income (loss) per share

   $ (0.14   $ 0.11       $ (0.15   $ 0.05   

Diluted income (loss) per share from continuing operations

   $ (0.14   $ 0.10       $ (0.15   $ 0.02   

Diluted income per share from discontinued operations

     —          0.01         —          0.03   

Diluted income (loss) per share

   $ (0.14   $ 0.11       $ (0.15   $ 0.05   
  

 

 

   

 

 

    

 

 

   

 

 

 

Due to the net loss for the three and six months ended June 30, 2011, dilutive shares have no effect on the loss per share. For the three and six months ended June 30, 2010, dilutive shares excludes the effect of 773,900 anti-dilutive options.

 

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9. Assets Held for Sale

The Company has certain assets that are classified as assets held for sale. These assets are carried on the balance sheet at the lower of the carrying amount or estimated fair value, less cost to sell. Once an asset is classified held for sale, there is no further depreciation taken on the asset. At June 30, 2011, the net book value of assets held for sale was approximately $6.1 million (December 31, 2010—$4.5 million). This amount is included in property and equipment on the balance sheet.

10. Contingent Liabilities

The Company is subject to legal proceedings that arise in the ordinary course of business. In the opinion of Management, the aggregate liability, if any, with respect to these actions, will not have a material adverse effect on the consolidated financial position, results of operations or cash flows. Legal costs are expensed as incurred.

11. Income Taxes

At December 31, 2010, the Company established a valuation allowance of $39.6 million for deferred tax assets as required by FASB ASC 740-10. At June 30, 2011, the Company increased the valuation allowance by $2.4 million to $42.0 million.

12. Risk Management Activities and Fair Value Measurements

The Company is exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading purposes.

The Company formally documents all significant relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or anticipated transactions. The Company assesses all hedging relationships to determine whether the criteria for hedge accounting are met. To qualify for hedge accounting, the hedging relationship must be appropriately documented at inception of the hedge and there must be reasonable assurance, both at the inception and throughout the term of the hedge, that the hedging relationship will be effective. Effectiveness requires a high degree of correlation of changes in fair values or cash flows between the hedged item and the hedging instrument. Effectiveness is assessed on an ongoing basis through the term of the hedge in order to determine if hedge accounting remains appropriate.

Interest Rate Swaps

The Company is exposed to interest rate volatility with regard to existing variable rate debt. The Company has entered into variable-to-fixed interest rate swaps on variable rate term debt and revolving debt to limit its exposure to changing interest rates and future cash flows for interest. The interest rate swaps provide for the Company to pay an amount equal to a specified fixed rate of interest times a notional principal amount and to receive in return an amount equal to a variable rate of interest times the same notional amount. The swaps are accounted for as cash flow hedges. The effective portions of changes in fair value of the interest rate swaps are recorded in Accumulated Other Comprehensive Income and are recognized into earnings in the same period in which the hedged forecasted transaction affects earnings. Ineffective portions of changes in fair value are recognized into earnings as they occur. At June 30, 2011, the notional amount of the swaps was $10.0 million, with the average pay rate being 5.07% and the average receive rate being 0.25%. The swaps mature at various dates up to December 31, 2011.

The Company primarily applies the income approach for recurring fair value measurements and endeavours to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs.

FASB ASC 820-10-05 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Liabilities measured at fair value on a recurring basis include the following as of June 30, 2011:

 

     Fair Value Measurements Using      Liabilities  
(in thousands)    Level 1      Level 2      Level 3      At Fair Value  

Liabilities

           

Interest rate swaps

   $ —         $ 182       $ —         $ 182   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ —         $ 182       $ —         $ 182   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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The following table presents the fair value of derivative instruments for the three and six months ended June 30:

 

     Notional
Amount
     Fair Value      Balance Sheet
Location
     Gain in OCI
Three months ended
June 30, 2011
     Gain in OCI
Six months ended
June 30, 2011
 

Interest rate swaps

   $ 10,000       $ 182         Other liabilities       $ 151       $ 335   

Hedges of net investment in self-sustaining operations:

United States dollar denominated debt of $60.3 million held by an entity with a Canadian dollar functional currency is designated as a hedge against the Company’s exposure for a portion of its net investment in self-sustaining U.S. dollar denominated subsidiaries with a view to reducing the impact of foreign exchange fluctuations. The foreign exchange effect of both the U.S. dollar debt and the net investment in U.S. dollar denominated subsidiaries is reported in other comprehensive income. As at June 30, 2011, the Company’s net investment in U.S. dollar denominated subsidiaries totaled $279.8 million. No ineffectiveness has been recorded in earnings as the notional amounts of the hedging item equals the portion of the net investment balance being hedged.

13. Segmented Information

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Revenue:

        

LTL

   $ 178,362      $ 148,826      $ 337,351      $ 285,844   

SCO

     30,519        20,887        56,918        41,012   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 208,881      $ 169,713      $ 394,269      $ 326,856   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Operating income (loss) from continuing operations:

        

LTL

   $ (1,182   $ 3,856      $ (256   $ 3,233   

SCO

     2,337        1,401        4,427        2,764   

Corporate office and other

     (1,396     (1,299     (2,905     (2,329
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (241   $ 3,958      $ 1,266      $ 3,668   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Depreciation and amortization:

        

LTL

   $ 3,630      $ 4,188      $ 7,579      $ 8,517   

SCO

     368        410        734        816   

Corporate office and other

     42        31        84        62   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 4,040      $ 4,629      $ 8,397      $ 9,395   
  

 

 

   

 

 

   

 

 

   

 

 

 

14. Subsequent events

On July 11, 2011, the Company expanded its revolving credit facility to provide up to $111.5 million, with the maturity remaining July 31, 2012.

 

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Item 2. Management’s Discussion and Analysis of Results of Operation

The following discussion should be read in conjunction with our unaudited consolidated interim financial statements for the three and six months ended June 30, 2011 and the notes thereto as included in Item 1 of this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws concerning Vitran’s business, operations, and financial performance and condition.

Forward-looking statements may be generally identifiable by use of the words “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project”, “may”, “plans”, “continue”, “will”, “focus”, “should”, “endeavor” or the negative of these words or other variation on these words or comparable terminology. These forward-looking statements are based on current expectations and are subject to uncertainty and changes in circumstances that may cause actual results to differ materially from those expressed or implied by such forward-looking statements.

This Quarterly Report on Form 10-Q contains forward-looking statements regarding, but not limited to, the following:

 

   

the Company’s expectation that efficiencies within the U.S. LTL business unit will reduce salaries, wages and employee benefits expense as a percentage of revenue;

 

   

the Company’s expectation revenue per hundredweight and length of haul will increase in upcoming quarters as the freight environment improves and the LTL segment begins to cross-sell the newly acquired territory;

 

   

the Company’s intention to return one quarter of each employee’s 5% salary and wage reduction in each fiscal quarter in 2011;

 

   

the Company’s intention to reduce purchased transportation expense by replacing purchased linehaul expense with Company drivers and Company operated rolling stock;

 

   

the Company’s expectation that it will be able to reduce maintenance expense with the addition of new tractors;

 

   

the Company’s expectation that fuel and fuel-related expenses will decline with the addition of new tractors;

 

   

the Company’s expectation that the additional density from the Milan acquisition and the plan to cross-sell the newly acquired territory will improve financial results;

 

   

the Company’s expectation that operational improvements within the U.S. LTL business unit will have a positive impact in upcoming quarters;

 

   

the Company’s expectation that activity levels and pricing trends will improve year-over-year results;

 

   

the Company’s ability to maintain DSO below 40 days;

 

   

the Company’s intention to purchase a specified level of property and equipment and to finance such acquisitions with cash flow from operations and, if necessary, from the Company’s revolving credit facilities;

 

   

the Company’s ability to meet future debt covenants and develop successful financing alternatives;

 

   

the Company’s ability to generate future operating cash flows from profitability and managing working capital;

 

   

the Company’s ability to exceed prior year results in the SCO segment if trends in current activity levels within the segment persist;

 

   

the Company’s operational plan will improve service and efficiencies in the U.S. LTL business unit;

 

   

the Company’s ability to benefit from an improvement in the economic environment.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Vitran’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that may cause such differences include but are not limited to technological change, increase in fuel costs, regulatory change, changes in tax legislation, the general health of the economy, changes in labor relations, geographic expansion, capital requirements, availability of financing, foreign currency fluctuations, claims and insurance costs, environmental hazards, availability of qualified drivers and competitive factors. More detailed information about these and other factors is included in Item 1A – Risk Factors in the Company’s 2010 Annual Report on Form 10-K. Many of these factors are beyond the Company’s control; therefore, future events may vary substantially from what the Company currently foresees. You should not place undue reliance on such forward-looking statements. Vitran Corporation Inc. does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

 

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Unless otherwise indicated all dollar references herein are in U.S. dollars. The Company’s Annual Report on Form 10-K, as well as all the Company’s other required filings, may be obtained from the Company at www.vitran.com or from www.sedar.com or from www.sec.gov.

CONSOLIDATED RESULTS

The following table summarizes the Consolidated Statements of Income (Loss) for the three and six months ended June 30:

 

     For the three months ended June 30,   For the six months ended June 30,

(in thousands)

   2011     2010     2011 vs 2010   2011     2010     2011 vs 2010

Revenue

   $ 208,881      $ 169,713      23.1%   $ 394,269      $ 326,856      20.6%

Salaries, wages and employee benefits

     79,877        66,558      20.0%     149,494        130,687      14.4%

Purchased transportation

     34,625        28,291      22.4%     64,617        53,842      20.0%

Depreciation and amortization

     4,040        4,629      (12.7%)     8,397        9,395      (10.6%)

Maintenance

     8,994        6,878      30.8%     17,086        13,886      23.0%

Rents and leases

     9,175        7,078      29.6%     17,256        13,850      24.6%

Purchased labor and owner operators

     20,259        15,442      31.2%     38,584        29,801      29.5%

Fuel and fuel related expenses

     36,074        22,049      63.6%     66,204        42,850      54.5%

Other operating expenses

     16,145        14,831      8.9%     31,470        29,022      8.4%

Other income

     (67     (1   n/c     (105     (145   (27.8%)
                                        

Total Expenses

   $ 209,122      $ 165,755      26.2%   $ 393,003      $ 323,188      21.6%
                                        

Income (loss) from continuing operations

     (241     3,958      (106.1%)     1,266        3,668      (65.5%)

Interest expense, net

     1,311        1,920      (31.7%)     2,653        4,023      (34.1%)

Income tax expense (recovery)

     745        471      58.2%     1,134        (645   275.8%
                                        

Net income (loss) from continuing operations

     (2,297     1,567      (246.6%)     (2,521     290      (969.3%)
                                        

Net income from discontinued operations

     —          161      (100.0%)     —          509      (100.0%)
                                        

Net income (loss)

   $ (2,297   $ 1,728      (232.9%)   $ (2,521   $ 799      (415.5%)
                                        

Income (loss) per share:

            

Basic – continuing operations

   $ (0.14   $ 0.10        $ (0.15   $ 0.02     

Basic – net income (loss)

   $ (0.14   $ 0.11        $ (0.15   $ 0.05     

Diluted – continuing operations

   $ (0.14   $ 0.10        $ (0.15   $ 0.02     

Diluted – net income (loss)

   $ (0.14   $ 0.11        $ (0.15   $ 0.05     

Operating Ratio (1)

     100.1     97.7       99.7     98.9  
                                    

Revenue increased 23.1% to $208.9 million for the second quarter of 2011 compared to $169.7 million in the second quarter of 2010. Revenue in the LTL and SCO segments increased 19.9%, and 46.1%, respectively. Revenue for the second quarter of 2011 was impacted by a stronger Canadian dollar and an increase in fuel surcharge revenue, accounting for approximately $16.3 million of the consolidated revenue increase. Excluding the impact of fuel surcharge revenue and a stronger Canadian dollar, revenue for the comparative quarters improved 13.5%. For the six months ended June 30, 2011, revenue increased 20.6% to $394.3 million compared to $326.9 for the same six-month period in June 30, 2010. Consolidated revenue for the comparable six-month periods was also impacted by a stronger Canadian dollar and increase in fuel surcharge revenue accounting for $27.6 million of the total revenue increase. Detailed explanations for the fluctuations in revenue are discussed below in “Segmented Results”.

Salaries, wages and employee benefits increased 20.0% for the second quarter of 2011 compared to the same period a year ago. For the six-month period ended June 30, 2011, salaries, wage and employee benefits increased 14.4% compared to the same six-month period a year ago. This compares with a 16.5% increase in employee headcount compared to June 30, 2010. Employee headcount was expected to increase by approximately 600 individuals

 

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resulting from the acquisition of the Milan Express Inc. (“Milan”) LTL assets on February 19, 2011. However, headcount increased approximately 750 employees to handle the increase in business and to recover from the acquired backlog of freight at Milan. Furthermore, management committed to its US LTL business unit employees to return a quarter of the 2008 5% wage reduction at the commencement of each calendar quarter in 2011. As of June 30, 2011 two quarterly increases of 1.25% have been issued. Salary, wages and employee benefit expenses should outpace the prior year expenses, but as management improves efficiencies within the U.S. LTL business unit, it is expected to decline on a percentage of revenue basis.

Purchased transportation increased 22.4% and 20.0% for the three-month and six-month periods ended June 30, 2011 compared to the same periods in 2010 respectively. This was attributable to a 9.5% increase in shipments in the U.S. LTL business unit and a 6.2% increase in intermodal shipments in the Canadian LTL business unit that required additional railway transportation expense in the six-month comparative periods. Furthermore, the acquisition of Milan on February 19, 2011 required additional purchased transportation to service Vitran’s expanded footprint. The Company’s U.S. LTL business received 200 additional tractors near the end of the second quarter and expects to receive another 200 tractors before the end of July 2011 that may help reduce purchased transportation costs.

Depreciation and amortization expense declined 10.6% for the six months ended June 30, 2011 compared to the same period in 2010, and is primarily attributable to the sale of rolling stock and buildings throughout 2010.

Maintenance expense increased 30.8% and 23.0% for the three-month and six-month periods ended June 30, 2011 compared to the same periods in 2010 respectively. Maintenance expense for the Milan acquired fleet was higher than expected in the second quarter; therefore as a percentage of revenue, maintenance expense was 4.3% higher than the 4.1% for the second quarter of 2010. With the addition of the new tractors that were delivered late in the second quarter and early third quarter, it is management’s expectation that the Company will be able to reduce its maintenance costs as a percentage of revenue.

Rents and leases expense increased 29.6% and 24.6% for the three-month and six-month periods ended June 30, 2011 compared to the same periods in 2010 respectively. The increase is attributable to the leased equipment added in the Milan acquisition as well as the new short-term leased facilities in the new acquired territory. Rents and leases expense should continue to increase due to the aforementioned new tractors.

Purchased labor and owner operator expenses, primarily driven by the Canadian LTL business unit and the SCO segment, increased in the comparable three-month and six-month periods ended June 30, 2011 and 2010 due to an increase in LTL shipments and an increase in activity levels within the SCO segment.

Fuel and fuel-related expenses increased 63.6% and 54.5% for the three-month and six-month periods ended June 30, 2011 compared to the same periods in 2010 respectively. The average price of diesel increased approximately 31% and 28% in the comparative three-month and six-month periods respectively. Furthermore, the Company’s fuel consumption increased due to the increase in activity as indicated by the 9.5% increase in shipments and the expanded fleet and territory attributable to the Milan acquisition in the six-month period. Fuel and fuel-related expenses are expected to decline slightly due to the improved fuel economy attributable to the aforementioned acquisition of 400 new tractors.

The Company incurred interest expense of $1.3 million in the second quarter of 2011 compared to interest expense of $1.9 million for the same quarter a year ago. The Company’s interest rate spread on its syndicated revolving and term debt was 200 bps less than the second quarter of 2010. Furthermore, total balance sheet debt at June 30, 2011 is $9.1 million less than June 30, 2010.

During the fourth quarter of 2010 and in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“FASB ASC”) 740-10, the Company recorded a valuation allowance for all U.S. deferred tax assets. As required by this standard the Company increased the valuation allowance by $2.4 million, which would have been the tax recovery attributable to the Company’s U.S. based companies for the six months ended June 30, 2011. Consequently, the Company recorded a consolidated tax expense of $1.1 million for the first six months of 2011 compared to a recovery of $0.7 million for the first six months of 2010.

 

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Net loss for the 2011 second quarter was $2.3 million compared to net income of $1.7 million for the same quarter in 2010. This resulted in a loss per share of $0.14 for the second quarter of 2011 compared to basic and diluted earnings per share of $0.11 for the second quarter of 2010. The weighted average number of shares for the current quarter was 16.3 million shares basic and diluted compared to 16.3 million basic shares and 16.4 million diluted shares in the second quarter of 2010. For the six months ended June 30, 2011, the Company posted a net loss of $2.5 million compared to a net income of $0.8 million in the same six-month period a year ago. This resulted in a loss of 0.15 per share compared to a earnings per share of $0.05 basic and diluted for the 2010 six-month period. The weighted average number of shares for the six-month period of 2011 was 16.3 million shares basic and diluted compared to 16.3 million basic and 16.4 million diluted shares in the six-month period of 2010.

Segmented Results

Less-Than-Truckload (LTL)

The table below provides summary information for the LTL segment for the three and six months ended June 30:

 

     For the three months ended June 30,     For the six months ended June 30,  

(in thousands)

   2011     2010     2011 vs 2010     2011     2010     2011 vs 2010  

Revenue

   $ 178,362      $ 148,826        19.9   $ 337,351      $ 285,844        18.0

Income (loss) from operations

     (1,182     3,856        (130.7 %)      (256     3,233        (107.9 %) 

Operating ratio

     100.7     97.4       100.1     98.9  
                                                
     For the three months ended June 30,     For the six months ended June 30,  

(in thousands)

   2011     2010     2011 vs 2010     2011     2010     2011 vs 2010  

Number of shipments (2)

     1,114,263        1,013,792        9.9     2,126,784        1,960,111        8.5

Weight (000s of lbs) (3)

     1,684,381        1,522,355        10.6     3,210,920        2,953,951        8.7

Revenue per shipment (4)

   $ 160.07      $ 146.80        9.0   $ 158.62      $ 145.83        8.8

Revenue per hundredweight (5)

   $ 10.59      $ 9.78        8.3   $ 10.51      $ 9.68        8.6
                                                

Revenue in the LTL segment increased 19.9% to $178.4 million in the second quarter of 2011 compared to $148.8 million in the same period a year ago. The increase in revenue was influenced by fuel surcharge which represented 17.3% of revenue in the second quarter of 2011 compared to 12.6% of revenue in the second quarter of 2010. Therefore, revenue net of fuel surcharge for the second quarter of 2011 increased 13.4% compared to the second quarter of 2010. Revenue, net of fuel surcharge, was impacted by the additional business from the Milan acquisition on February 19, 2011 as indicated by the increase in shipments and tonnage of 9.9% and 10.6% respectively compared to the second quarter of 2010.

Revenue in the LTL segment increased 18.0% to $337.3 million for the six-month period ended June 30, 2011 compared to $285.8 million for the same six-month period a year ago. The increase in revenue was influenced by the fuel surcharge which represented 16.5% of revenue in the first six months of 2011 compared to 12.3% of revenue in the first six months of 2010. Shipments and tonnage increased 8.5% and 8.7% respectively, in the comparable six-month period primarily attributable to the acquisition of Milan.

Shipments per day in the U.S. LTL business unit increased 11.8% for the second quarter of 2011 compared to the second quarter of 2010. This can be primarily attributable to the acquisition of Milan on February 19, 2011. On sequential basis from March 31, 2011 compared to June 30, 2011 length of haul increased 1% and revenue per hundredweight increased 2.0%. Management expects the revenue per hundredweight and length of haul to increase in the upcoming quarters as the freight environment continues to firm and the LTL segment begins to sell the expanded territory. Although revenue increased in the U.S. LTL business unit in the comparable quarters, wages, and purchased transportation expense were higher than expected in the U.S. LTL business. This can be attributed to the challenge of working out of the backlog of freight created by the first quarter weather issues that were further intensified by the Milan acquisition which in and of itself was significantly backlogged with 2.5 days of freight. The U.S. LTL business unit made operational improvements through the quarter having a positive influence on the

 

15


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financial results as the second quarter unfolded, and management expects these changes to have a positive impact in the upcoming quarters.

The Canadian LTL business unit posted an excellent 2011 second quarter benefiting from a strong Canadian economy and a stable operation compared to the U.S. LTL business unit.

Lastly, management believes that with the additional density from Milan, continued momentum in the North American economy as well as the opportunity to cross sell into its newly acquired territory in the southern U.S., the LTL segment is well positioned to improve income from operations over the long term.

Supply Chain Operation (SCO)

The table below provides summary information for the Supply Chain Operation segment for the three and six months ended June 30:

 

     For the three months ended June 30,     For the six months ended June 30,  

(in thousands)

   2011     2010     2011 vs 2010     2011     2010     2011 vs 2010  

Revenue

   $ 30,519      $ 20,887        46.1   $ 56,918      $ 41,012        38.8

Income from operations

     2,337        1,401        66.8     4,427        2,764        60.2

Operating ratio

     92.3     93.3       92.2     93.3  
                                                

Revenue in the SCO segment improved 46.1% and income from operations increased by 66.8% for the second quarter of 2011 compared to the second quarter 2010. The improvement in income from operations is attributable to increased activity levels across all regions in the SCO segment as well as the addition of two dedicated facilities in the third quarter 2010, one in New Mexico and one in Utah, that were not included in the second quarter of 2010 results. These results represented a record quarter for the SCO segment and should the current trend in activity levels persist, results in the upcoming quarters should exceed the previous year’s quarterly results.

 

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LIQUIDITY AND CAPITAL RESOURCES

Cash flow from operations for the second quarter of 2011 generated $4.1 million compared to $4.0 million in the 2010 second quarter. Although the Company generated a net loss from continuing operations in the second quarter of 2011, this was offset by the improvement in non-cash working capital. Days sales outstanding (“DSO”) in the second quarter of 2011 were 39.0 days compared to DSO of 44.4 days for the second quarter of 2010.

The Company’s future operating cash flows are largely dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable, and wage and benefit accruals.

On February 19, 2011 the Company acquired selected assets of Milan, a private carrier headquartered in Milan, Tennessee for $7.6 million. Milan added new coverage to Vitran’s network in the states of Alabama, Georgia, Mississippi, North Carolina and South Carolina. The acquisition was financed by a $6.0 million operating lease from a third party. The remainder of the purchase price was financed by the Company’s revolving credit facility. An additional $0.1 million of cash consideration is due six months from closing contingent on Vitran continuing to operate in three out of the five new states that were added to the Company’s pre-existing network.

On June 30, 2011 the Company amended the terms and conditions of its existing bank syndicated credit facilities to increase its leverage ratio covenants. Pursuant to this amendment, interest rate spreads on currently drawn debt increased from 250 bps to 400 bps. On July 11, 2011 the Company added additional borrowing capacity of $11.5 million to the revolving credit facility maturing on July 31, 2012.

As at June 30, 2011, interest-bearing debt was $80.0 million consisting of $13.5 million of term debt, $62.6 million drawn under a revolving credit facility and $3.9 million of capital leases. At December 31, 2010 interest-bearing debt was $73.3 million consisting of $19.5 million of term debt, capital leases of $5.8 million and $48.0 million drawn under the revolving credit facility.

For the six months ended June 2011, the Company repaid $6.0 million of term debt, $1.9 million of capital leases and drew down $14.6 million on its revolving credit facility. The additional working capital from the Milan acquisition increased total balance sheet debt. At June 30, 2011, the Company had $8.6 million of available credit facilities, net of outstanding letters of credit and added an additional $11.5 million of capacity on its revolving credit facility to achieve its future operational and capital objectives. The Company was in compliance with its debt covenants at June 30, 2011.

The Company generated $0.3 million in proceeds on the divestiture of surplus equipment in the first six months of 2011. Capital expenditures, excluding acquisition capital expenditures, amounted to $6.6 million for the first six months of 2011 and were funded out of the revolving credit facility. The majority of the capital expenditures were for facilities in Knoxville, TN, Atlanta GA, Tifton, GA, Jackson, MS, Mobile, AL and Montgomery, AL. The table below sets forth the Company’s capital expenditures for the three and six months ended June 30, 2011 and 2010.

 

     For the three months
ended June 30,
     For the six months
ended June 30,
 

(in thousands of dollars)

   2011      2010      2011      2010  

Real estate and buildings

   $ 3,217       $ —         $ 4,620       $ 1,400   

Tractors

     331         151         763         434   

Trailing fleet

     494         499         621         1,039   

Information technology

     158         79         321         401   

Leasehold improvements

     6         —           64         12   

Other equipment

     62         387         219         695   
                                   

Total

   $ 4,268       $ 1,116       $ 6,608       $ 3,981   
                                   

Management estimates that cash capital expenditures, excluding real estate additions for the remainder of 2011, will be between $6.5 million and $8.0 million. The Company may enter into operating leases to fund the acquisition of specific equipment should the business levels exceed the current equipment capacity of the Company. The Company expects to finance its capital requirements with cash flow from operations, operating leases and, if required, its available credit facilities.

 

17


Table of Contents

The Company has contractual obligations for principal payments that include long-term debt consisting of term debt facilities, revolving credit facilities and capital leases for operating equipment. The Company utilizes off-balance sheet operating leases primarily consisting of tractor, trailing fleet and real estate leases. Operating leases form an integral part of the Company’s financial structure and operating methodology as they provide an alternative cost-effective and flexible form of financing.

The following table summarizes our significant contractual obligations and commercial commitments as of June 30, 2011:

 

(in thousands of dollars)           Payments due by period  

Contractual Obligations

   Total      2011      2012 & 2013      2014 & 2015      Thereafter  

Term credit facilities

   $ 13,500       $ 10,000       $ 3,500       $ Nil       $ Nil   

Revolving credit facilities

     62,582         Nil         62,582         Nil         Nil   

Capital lease obligations

     3,902         1,635         2,267         Nil         Nil   

Estimated interest payments (1)

     3,211         1,711         1,500         Nil         Nil   
                                            

Sub-total

     83,195         13,346         69,849         Nil         Nil   

Operating leases

     87,655         14,894         45,701         22,531         4,529   

Purchase obligations (2)

     16,100         16,100         Nil         Nil         Nil   
                                            

Total Contractual Obligations

   $ 186,950       $ 44,340       $ 115,550       $ 22,531       $ 4,529   
                                            

 

(1) The Company has estimated its interest obligation on its fixed and variable rate obligations. For fixed rate debt where variable-to-fixed interest rate swaps are in place, the fixed interest rate was used to determine the interest obligation until the interest rate swaps mature. For other fixed rate debt, the fixed rate was used to determine the interest rate obligation. For variable rate debt, the variable rate in place at June 30, 2011 was used to determine the total interest obligation.
(2) The Company has a contractual obligation for approximately $16.1 million for the purchase of tractors in 2011. The Company has commitments to finance the purchase with an operating lease.

In addition to the above-noted contractual obligations, as at June 30, 2011, the Company utilized the revolving credit facilities for standby letters of credit (“LOC”) of $21.5 million. The LOC’s are used as collateral for self-insured retention of insurance claims. Export Development Canada (“EDC”) provided guarantees up to $12.2 million on specific LOC’s to the Company’s syndicated lenders. As a result, the Company’s definition of funded debt in the associated credit agreement excludes LOC’s guaranteed by the EDC.

A significant decrease in demand for our services could limit the Company’s ability to generate cash flow and affect its profitability. The Company’s credit agreement contains certain financial maintenance tests that require the Company to achieve stated levels of financial performance, which, if not achieved, could cause an acceleration of the payment schedules. Should the current macro-economic environment further destabilize, the Company may fail to comply with the aforementioned debt covenants within the next twelve months. As a result, the Company may seek to amend the debt covenants in its existing syndicated credit agreement. Assuming no significant decline in business levels or financial performance, Management expects that existing working capital, together with available revolving credit facilities, will be sufficient to fund operating and capital requirements as well as service the contractual obligations.

OUTLOOK

The North American transportation environment continued to show positive economic signs in the second quarter of 2011. The SCO segment posted another record quarter and with a new dedicated contract coming on line by the end of September 2011, the SCO segment should outpace the prior year financial results. The most significant opportunity remains in the U.S. LTL business unit. Management is executing an operational plan that should improve the service and efficiency of the operation. Furthermore if the pricing environment remains positive and the Company has the opportunity to cross sell its customer into and out of its new territory within the southern states of North Carolina, South Carolina, Georgia, Alabama and Mississippi, financial results can improve. Management remains optimistic, should operational initiatives take hold, activity levels and pricing initiatives continue to improve, that Vitran’s financial results should continue to improve in 2011.

 

18


Table of Contents

QUARTERLY RESULTS (unaudited)

 

(thousands of dollars

except per share amounts)

   2011
Q2
    2011
Q1
    2010
Q4 *
    2010
Q3
     2010
Q2
     2010
Q1
    2009
Q4
    2009
Q3
 

Revenue

   $ 208,881      $ 185,388      $ 171,576      $ 174,124       $ 169,713       $ 157,143      $ 156,170      $ 157,289   

Income (loss) from continuing operations

     (241     1,507        (2,735     4,069         3,958         (290     (2,119     2,184   

Net Income (loss) from continuing operations

     (2,297     (224     (40,208     1,868         1,567         (1,276     (2,480     131   

Income (loss) from continuing operations per share:

                  

Basic

   $ (0.14   $ (0.01   $ (2.47   $ 0.11       $ 0.10       $ (0.08   $ (0.15   $ 0.01   

Diluted

     (0.14     (0.01     (2.47     0.11         0.10         (0.08     (0.15     0.01   

Weighted average number of shares:

                  

Basic

     16,330,041        16,315,374        16,299,643        16,277,202         16,266,441         16,266,441        16,266,441        13,886,286   

Diluted

     16,330,041        16,315,374        16,299,643        16,359,468         16,365,410         16,266,441        16,266,441        14,001,903   
                                                                  

 

* In the fourth quarter of 2010, Vitran recorded a non-cash tax valuation allowance of $38.9 million negatively impacting net income (loss) from continuing operations.

Definitions of non-GAAP measures:

 

(1) Operating ratio (“OR”) is a non-GAAP financial measure which does not have any standardized meaning prescribed by GAAP. OR is the sum of total operating expenses, divided by revenue. OR allows management to measure the Company and its various segments’ operating efficiency. OR is a widely recognized measure in the transportation industry which provides a comparable benchmark for evaluating the Company’s performance compared to its competitors. Investors should also note that the Company’s presentation of OR may not be comparable to similarly titled measures by other companies. OR is calculated as follows:

 

     Three Months
Ended

June  30, 2011
    Three Months
Ended
June 30, 2010
    Six Months
Ended

June  30, 2011
    Six Months
Ended
June 30, 2010
 

Total operating expenses

   $ 209,122      $ 165,755      $ 393,003      $ 323,188   

Revenue

   $ 208,881      $ 169,713      $ 394,269      $ 326,856   
                                

Operating ratio (“OR”)

     100.1     97.7     99.7     98.9
                                

 

(2) A shipment is a single movement of goods from a point of origin to its final destination as described on a bill of lading document.

 

(3) Weight represents the total pounds shipped.

 

(4) Revenue per shipment represents revenue divided by the number of shipments.

 

(5) Revenue per hundredweight is the price obtained for transporting 100 pounds of LTL freight from point to point, calculated by dividing the revenue for an LTL shipment by the hundredweight (weight in pounds divided by 100) for a shipment.

 

19


Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to the impact of interest rate changes. The Company’s exposure to changes in interest rates is limited to borrowings under the term bank facilities and revolving credit facilities that have variable interest rates tied to the LIBOR rate. As a majority of the Company’s debt is tied to variable interest rates, the Company estimates that the fair value of the long-term debt approximates the carrying value.

 

(in thousands of dollars)          Payments due by period  
Long-term debt    Total     2011     2012 & 2013     2014 & 2013      Thereafter  

Variable Rate

           

Term bank facility

   $ 10,000      $ 10,000      $ Nil      $ Nil       $ Nil   

Average interest rate (LIBOR)

     4.25     4.25       

Term bank facility

     3,500        Nil        3,500        Nil         Nil   

Average interest rate (LIBOR)

     4.25       4.25     

Revolving bank facility

     62,582        Nil        62,582        Nil         Nil   

Average interest rate (LIBOR)

     4.25       4.25     

Fixed Rate

           

Capital lease obligations

     3,902        1,635        2,267        Nil         Nil   

Average interest rate

     6.15     6.15     6.15     
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total

   $ 79,984      $ 11,635      $ 68,349      $ Nil       $ Nil   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

The Company uses variable-to-fixed interest rate swaps on its term and revolving credit facilities with a notional amount of $10.0 million at June 30, 2011. The average pay rate on the swaps is 5.07% and the average receive rate is the three-month LIBOR rate, which is currently 0.25%. To value the interest rate swaps, a discounted cash flow model is utilized. Primary inputs into the model that will cause the fair value to fluctuate period-to-period include the fixed interest rates, the future interest rates, credit risk and the remaining time to maturity of the interest rate swaps. Management’s intention is to hold the interest rate swaps to maturity.

The Company is exposed to foreign currency risk as fluctuations in the United States dollar against the Canadian dollar can impact the financial results of the Company. The Company’s Canadian operations realize foreign currency exchange gains and losses on the United States dollar denominated revenue generated against Canadian dollar denominated expenses. Furthermore, the Company reports its results in United States dollars thereby exposing the results of the Company’s Canadian operations to foreign currency fluctuations. In addition, the Company’s United States dollar debt of $60.3 million is designated as a hedge of the investment in the United States’ self-sustaining foreign operations.

 

Item 4. Controls and Procedures

Disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Exchange Act, are controls and other procedures that are designed to ensure that information required to be disclosed by our Company is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our Company’s management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Our CEO and CFO are responsible for establishing and maintaining disclosure controls and procedures for our Company.

As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of Company management, including our CEO and CFO, of the effectiveness of the design, implementation and operation of its disclosure controls and procedures. Based on this evaluation, the Company’s CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective as of June 30, 2011.

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

20


Table of Contents

Part II. Other Information

 

Item 1. Legal Proceedings

The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of its business that have not been fully adjudicated. Many of these are covered in whole or in part by insurance. The Management of Vitran does not believe that these actions, when finally concluded and determined, will have a significant adverse effect upon Vitran’s financial condition, results of operations or cash flows.

 

Item 1A. Risk Factors

See Part 1A of the Company’s 2010 Annual Report on Form 10-K.

 

Item 2. Unregistered Sale of Equity and Use of Proceeds

None.

 

Item 3. Defaults Upon Senior Securities

None.

 

Item 4. Removed and Reserved

 

Item 5. Other Information

None.

 

21


Table of Contents
Item 6. Exhibits and Reports on Form 8-K

Exhibits

 

Exhibit

Number

  

Description of Exhibit

31.1    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated July 26, 2011
31.2    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated July 26, 2011
32.1    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated July 26, 2011
10.15    Amendment No. 8 to Credit Agreement dated June 30, 2011, by and among Vitran Corporation Inc. and certain subsidiaries, JPMorgan Chase Bank, N.A., as Agent and the Banks named therein

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    VITRAN CORPORATION INC.
      /s/SEAN P. WASHCHUK
      Sean P. Washchuk
Date: July 26, 2011      

Vice President of Finance and

Chief Financial Officer

(Principle Financial Officer)

 

22

EX-31.1 2 dex311.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 Certification of Chief Executive Officer pursuant to Section 302

Exhibit 31.1

CERTIFICATIONS

I, Richard E. Gaetz, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Vitran Corporation Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s Board of Directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 26, 2011

 

/s/    RICHARD E. GAETZ        

Richard E. Gaetz

President and

Chief Executive Officer

EX-31.2 3 dex312.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 Certification of Chief Financial Officer pursuant to Section 302

Exhibit 31.2

CERTIFICATIONS

I, Sean P. Washchuk, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Vitran Corporation Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s Board of Directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 26, 2011

 

/S/    SEAN P. WASHCHUK        

Sean P. Washchuk

Vice President, Finance and

Chief Financial Officer

EX-32.1 4 dex321.htm CERTIFICATIONS OF CEO AND CFO PURSUANT TO SECTION 906 Certifications of CEO and CFO pursuant to Section 906

Exhibit 32.1

CERTIFICATION

Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Vitran Corporation Inc., that, to his knowledge, the Quarterly Report of Vitran Corporation Inc. on Form 10-Q for the six months ended June 30, 2011, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of Vitran Corporation Inc.

 

   
Date:   July 26, 2011     By:   /s/    RICHARD E. GAETZ        
       

Richard E. Gaetz

President and

Chief Executive Officer

   
      By:   /s/    SEAN P. WASHCHUK        
       

Sean P. Washchuk

Vice President Finance and

Chief Financial Officer

EX-10.15 5 dex1015.htm AMENDMENT NO.8 TO CREDIT AGREEMENT DATED JUNE 30TH, 2011 Amendment No.8 to Credit Agreement dated June 30th, 2011

Exhibit 10.15

AMENDMENT NO. 8 TO CREDIT AGREEMENT

THIS AMENDING AGREEMENT is made as of the 30th day of June, 2011,

B E T W E E N:

JPMORGAN CHASE BANK, N.A.

(hereinafter referred to as the “Agent”)

- and -

THOSE BANKS WHOSE NAMES APPEAR ON THE SIGNATURE PAGES HERETO

(hereinafter collectively referred to as the “Lenders”)

- and -

VITRAN CORPORATION INC., VITRAN EXPRESS CANADA INC. AND VITRAN CORPORATION

(hereinafter collectively referred to as the “Borrowers”)

- and –

THE GUARANTORS WHOSE NAMES APPEAR ON THE SIGNATURE PAGES HERETO

(hereinafter collectively referred to as the “Guarantors”)

WHEREAS the Agent, the Lenders and the Borrowers entered into a Credit Agreement dated as of July 31, 2007 (the “Original Credit Agreement”);

AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into Amendment No. 1 to Credit Agreement dated as of January 21, 2008 (the “First Amendment”);

AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into Amendment No. 2 to Credit Agreement dated as of April 10, 2008 (the “Second Amendment”);

AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into Amendment No. 3 to Credit Agreement dated as of December 30, 2008 (the “Third Amendment”);

AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into Amendment No. 4 to Credit Agreement dated as of March 6, 2009 (the “Fourth Amendment”);

 


AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into Amendment No. 5 to Credit Agreement dated as of May 8, 2009 (the “Fifth Amendment”);

AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into Amendment No. 6 to Credit Agreement dated as of September 17, 2009 (the “Sixth Amendment”);

AND WHEREAS the Agent, the Lenders, the Borrowers and the Guarantors entered into Amendment No. 7 to Credit Agreement dated as of December 22, 2010 (the “Seventh Amendment”) (the Original Credit Agreement as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment and the Seventh Amendment is hereinafter referred to as the “Credit Agreement”);

AND WHEREAS the Borrowers have provided a written notice to the Agent dated as of June 24, 2011 (the “June 2011 Increase Notice”) requesting an increase in the Revolving Facility Available Amount and the Individual Commitments of the Lenders in an aggregate amount of US$15,000,000;

AND WHEREAS the Borrowers have requested certain amendments to the Credit Agreement, and the Agent and the Lenders have agreed to grant such amendments, subject to the terms and conditions set out in this Agreement;

NOW THEREFORE in consideration of the premises and the agreements herein set out and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

INTERPRETATION

 

1.1 Definitions.

Unless otherwise defined herein, capitalized terms used in this amendment agreement (this “Agreement”), including in the recitals hereto, shall have the meanings ascribed to such terms in the Credit Agreement.

 

1.2 References to Credit Agreement.

Upon execution of this Agreement, the Credit Agreement shall be deemed to have been amended as of the Amendment Effective Date (as that term is defined in Article IV hereof). The terms “hereof”, “herein”, “this agreement” and similar terms used in the Credit Agreement, shall mean and refer to, from and after the Amendment Effective Date, the Credit Agreement as amended by this Agreement.

 

1.3 Continued Effectiveness.

Nothing contained in this Agreement shall be deemed to be a waiver by the Agent or the Lenders of compliance by the Borrowers and Guarantors of any covenant or agreement contained in, or a waiver of any Default or Event of Default under, the Credit Agreement or applicable Guarantee

 

2.


and each of the parties hereto agree that the Credit Agreement as amended by this Agreement shall remain in full force and effect.

 

1.4 Benefit of the Agreement.

This Agreement shall enure to the benefit of and be binding upon the Borrowers, the Guarantors, the Agent and the Lenders and their respective successors and permitted assigns.

 

1.5 Invalidity of any Provisions.

Any provision of this Agreement which is prohibited by the laws of any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition in such jurisdiction without invalidating the remaining terms and provisions hereof and no such invalidity shall affect the obligation of the Borrower to pay the Secured Obligations in full.

 

1.6 Captions and Heading.

The inclusion of headings preceding the text of the sections of this Agreement and the headings following each Article in this Agreement are intended for convenience of reference only and shall not affect in any way the construction or interpretation thereof.

ARTICLE II

AMENDMENTS AND WAIVER

 

2.1 Amendments

Subject to satisfaction of the conditions precedent set forth in Article IV of this Agreement, the Credit Agreement is hereby amended as follows:

 

  (a) The definition of “Applicable Margin” in Section 1.1 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

 

       ““Applicable Margin” means the rates and fees per annum set out on Schedule A hereto.”

 

  (b) The definition of “Debt” in Section 1.1 of the Credit Agreement is hereby amended by deleting the last sentence in such definition.

 

  (c) Section 11.1(a) of the Credit Agreement is hereby amended by: (x) removing the word “and” from the end of paragraph (vi); (y) renumbering paragraph (vii) as paragraph (viii); and (z) inserting a new paragraph (vii) as follows:

 

    “(vii)    as soon as available, and in any event by no later than 8:00 p.m. (Toronto time) on Wednesday each week, a 13-week rolling consolidated cash flow report as of the close of business on the last Banking Day of the previous calendar week in the form attached hereto as Schedule Q, together with variance analysis commentaries for any actual receipt or disbursement

 

3.


  line item that deviates from forecast by more than 10%; and”.

 

  (d) Section 11.1(b) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(b) Debt to EBITDA Ratio. Vitran shall maintain the Debt to EBITDA Ratio (i) for the Fiscal Quarters ending June 30, 2011 and September 30, 2011 at less than or equal to 4.50 to 1, (ii) for the Fiscal Quarter ending December 31, 2011 at less than or equal to 4.25 to 1, and (iii) for each Fiscal Quarter thereafter at less than or equal to 4.00 to 1.”

 

  (e) Section 11.1(c) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(c) U.S. Borrower Debt to EBITDA Ratio. The U.S. Borrower shall maintain the U.S. Borrower Debt to EBITDA Ratio (i) for the Fiscal Quarters ending June 30, 2011 and September 30, 2011 at less than or equal to 3.50 to 1, (ii) for the Fiscal Quarter ending December 31, 2011 at less than or equal to 3.25 to 1, and (iii) for each Fiscal Quarter thereafter at less than or equal to 3.00 to 1.”

 

  (f) Section 11.1(d) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(d) EBITDAR to Interest Expenses and Rent Ratio. Vitran shall maintain the EBITDAR to Interest Expenses and Rent Ratio for each Fiscal Quarter at greater than or equal to 1.35 to 1.”

 

  (g) Section 11.1(e) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(e) Asset Coverage. The Borrowers shall, for each month, maintain the Monthly Asset Coverage Ratio at greater than or equal to 1.30 to 1.”

 

  (h) Section 11.1(f) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(f) U.S. Asset Coverage. The U.S. Borrower shall, for each month, maintain the Monthly U.S. Asset Coverage Ratio at greater than or equal to 1.30 to 1.”

 

  (i) Section 11.2(d) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

4.


  “(d) Investments. The Borrowers shall not, and shall not suffer or permit any of the Subsidiaries to (i) invest in any other entity or entities, singly or in the aggregate, by way of equity investment or otherwise or (ii) provide any financial assistance (by way of loan, guarantee or otherwise) to any other entity other than by way of investments in or financial assistance to any of the Obligors.”

 

  (j) Section 11.2(f) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(f) Dispositions of Assets. The Borrowers shall not, and shall not suffer or permit any of the Subsidiaries to, sell, assign, transfer, convey, lease (as lessor) or otherwise dispose of any of their respective assets including any disposition as part of a sale and leaseback transaction other than (i) the sale, lease or other disposition by the applicable Obligor of obsolete assets and assets sold in the ordinary course of business, in an aggregate amount not to exceed $3,000,000, (ii) the sale, lease or other disposition by the applicable Obligor of the properties listed on Part III of Schedule H hereto, (iii) the sale and leaseback of the terminal located at 1325 Central Avenue, University Park, Illinois 60466, and (iv) any other disposition of assets of any of the Companies which is expressly consented to in writing by all of the Lenders; provided that 50% of the proceeds from any sale, lease, sale and leaseback or other disposition of the assets described in paragraphs (ii) or (iii) above, net of (A) any costs and expenses directly related to such disposition, and (B) any Taxes paid or reasonably estimated to be paid in connection with such disposition, must be used to repay and permanently reduce the Revolving Facility.”

 

  (k) Section 11.2(g) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(g) Restrictions on Acquisitions. No Borrower nor any Subsidiary shall make any Acquisition.”

 

  (l) Section 11.2(p) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

  “(p) Dividends and Certain Other Restricted Payments. Vitran shall not make any Distribution to any Person. No U.S. Obligor shall pay a dividend to a Canadian Obligor without the prior written consent of the Agent.”

 

  (m) Section 11.2(s) of the Credit Agreement is hereby deleted in its entirety and replaced with the following paragraph:

 

5.


  “(s) Restriction on Capital Expenditures. The Borrowers shall not, and shall not suffer or permit any of the Subsidiaries to, make or commit to make any Capital Expenditures in any Fiscal Quarter in an aggregate amount in excess of (i) $3,500,000 for the Fiscal Quarter ending September 30, 2011, (ii) $4,100,000 for the Fiscal Quarter ending December 31, 2011, (iii) $500,000 for the Fiscal Quarter ending March 31, 2012, and (iv) $3,000,000 for the Fiscal Quarter ending June 30, 2012, provided that the amount of any unutilized permitted Capital Expenditures in the immediately preceding Fiscal Quarter may be carried forward and utilized during the next Fiscal Quarter (but not any other Fiscal Quarter).”

 

  (n) Schedule A to the Credit Agreement is hereby deleted in its entirety and replaced with Schedule A attached hereto.

 

  (o) The Credit Agreement is hereby amended by inserting a new schedule thereto as Schedule Q in the form of Schedule Q attached hereto.

 

2.2 Waiver

Section 2.6(b) of the Credit Agreement requires that the Borrowers specify in any Commitment Increase Notice a time period within which each Lender is requested to respond to such Commitment Increase Notice (which shall in no event be less than ten Banking Days from the date of delivery of such Commitment Increase Notice to the Lenders) (the “Time Period Response Requirement”). Subject to satisfaction of the conditions precedent set forth in Article IV of this Agreement, each of the parties hereto hereby agrees to waive the Time Period Response Requirement in connection with the June 2011 Increase Notice.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties.

Each of the Borrowers and the Guarantors hereby represents and warrants to the Agent and each Lender as follows (which representations and warranties shall survive the execution and delivery of this Agreement, acknowledging that the Agent and the Lenders are relying thereon without independent inquiry in entering into this Agreement):

 

  (a) Status and Power. Each Company is a corporation duly incorporated or amalgamated and organized and validly existing under the laws of its jurisdiction of incorporation or amalgamation. Each Company is duly qualified, registered or licensed in all jurisdictions where such qualification, registration or licensing is required for such Company to carry on its business, except where failure to do so could not reasonably be expected to have a Material Adverse Effect. Each Company has all requisite capacity, power and authority to own, hold under licence or lease its properties, to carry on its business and to otherwise enter into, and carry out the transactions contemplated by, the Loan Documents to which it is a party. None of the Obligors is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

6.


  (b) Authorization and Enforcement of Loan Documents. All necessary action, corporate or otherwise, has been taken to authorize the execution, delivery and performance by each Obligor of this Agreement. Each Obligor has duly executed and delivered this Agreement. This Agreement constitutes a legal, valid and binding obligation of each Obligor, enforceable against each Obligor by the Agent and the Lenders in accordance with its terms, except to the extent that the enforceability thereof may be limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization and other laws of general application limiting the enforcement of creditors’ rights generally and (ii) the fact that the courts may deny the granting or enforcement of equitable rights.

 

  (c) Compliance with Other Instruments. The execution, delivery and performance by each Obligor of this Agreement, and the consummation of the transactions contemplated herein, do not and will not conflict with, result in any breach or violation of, or constitute a default under the terms, conditions or provisions of the articles of incorporation (or amalgamation, as applicable) or by-laws of the Obligors, any Applicable Law or any agreement, lease, licence, permit or other instrument to which any Obligor is a party or is otherwise bound or by which any Obligor benefits or to which its property is subject and do not require the consent or approval of any Official Body or any other Person except as has been obtained. Each Obligor has complied with all Applicable Law in respect of this Agreement and the transactions contemplated herein.

 

  (d) Compliance with Laws. None of the Companies are in violation of any agreement, employee benefit plan, pension plan, mortgage, franchise, licence, judgment, decree, order, statute, rule or regulation relating in any way to itself, to the operation of its business or to its property or assets and which could reasonably be expected to have a Material Adverse Effect.

 

  (e) Default. No Default or Event of Default under the Credit Agreement has occurred or is continuing.

ARTICLE IV

CONDITIONS PRECEDENT

 

4.1 Conditions Precedent.

This Agreement shall not become effective until the Agent and the Lenders shall have received the following all in form and substance satisfactory to the Agent (the date on which such conditions precedent are satisfied is hereinafter referred to as the “Amendment Effective Date”):

 

  (a) this Agreement shall have been duly executed and delivered to the Agent and each of the Lenders by the Borrowers and the Guarantors;

 

  (b) the Agent shall have received payment of all fees required by it in connection with this Agreement and the fee letter dated as of the date hereof between the Borrowers and the Agent;

 

7.


  (c) each of the Lenders who increased its Individual Commitment pursuant to the June 2011 Increase Notice shall have received payment of a new money upfront fee in an amount equal to 270 bps of such increase in its Individual Commitment; and

 

  (d) the Agent shall have received all such other certificates, documents, opinions, and information that it reasonably requests.

ARTICLE V

CONSENT AND CONFIRMATION

 

5.1 Guarantors Consent

Each of the Guarantors hereby consents to the amendments to the Credit Agreement provided for in this Agreement and hereby confirms that its respective Guarantee remains in full force and effect with respect to the Secured Obligations under the Credit Agreement as amended by this Agreement.

ARTICLE VI

MISCELLANEOUS

 

6.1 Further Assurances.

Each of the parties hereto agrees to execute and deliver or cause to be executed and delivered all such instruments and to take all such action as the other party may reasonably request, and at the expense of such other party in order to more fully effectuate and accomplish the intent and purposes of and to carry out the terms of this Agreement.

 

6.2 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

6.3 Consent to Jurisdiction.

Each of the Borrowers and the Guarantors hereby irrevocably submit to the non-exclusive jurisdiction of the courts of the Province of Ontario in respect of any action, suit or proceeding arising out of or relating to this Agreement and hereby irrevocably agrees that all claims in respect of any such action, suit or proceeding may be heard and determined in any such Ontario court. Each of the Borrowers and the Guarantors hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each of the Borrowers and the Guarantors agree that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in another jurisdiction by suit on the judgment or in any other manner provided by law. Nothing in this Section 6.3 shall affect the right of the Agent (on behalf of the Lenders) to bring any suit, action or proceeding against the Borrowers and the Guarantors (or any one or more of them) or their respective assets in the courts of any other jurisdiction.

 

6.4 Time of the Essence.

Time shall be of the essence in this Agreement in all respects.

 

8.


6.5 Counterparts.

This Agreement may be executed and delivered in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Counterparts may be executed and delivered in original, facsimile or portable document format (pdf) form to the other parties hereto and the parties hereto agree to accept any such executed counterparts as original signed versions of this Agreement.

[signature pages to follow]

 

9.


IN WITNESS WHEREOF the parties have executed this Agreement on the date first set out above.

 

VITRAN CORPORATION INC.      VITRAN EXPRESS CANADA INC.
By:  

/s/ Richard E. Gaetz

     By:  

/s/ Richard E. Gaetz

Name:   Richard E. Gaetz      Name:   Richard E. Gaetz
Title:   President and Chief Executive Officer      Title:   Chief Executive Officer
VITRAN CORPORATION     

JPMORGAN CHASE BANK, N.A

as Agent

By:  

/s/ Richard E. Gaetz

     By:  

/s/ Jeffery Coleman

Name:   Richard E. Gaetz      Name:   Jeffrey Coleman
Title:   Chief Executive Officer      Title:   Vice President

JPMORGAN CHASE BANK, N.A.

Toronto Branch, as Canadian Lender

    

JPMORGAN CHASE BANK, N.A.

as U.S. Lender

By:  

/s/ Jeffery Coleman

     By:  

/s/ Jeffery Coleman

Name:   Jeffrey Coleman      Name:   Jeffrey Coleman
Title:   Vice President      Title:   Vice President

FIFTH THIRD BANK

as U.S. Lender

    

FIFTH THIRD BANK,

Canadian Branch, as Canadian Lender

By:  

/s/ William J. Krummen

     By:  

/s/ Peter B. Mack

Name:   William J. Krummen      Name:   Peter B. Mack
Title:   Vice President      Title:   Senior Vice President

WELLS FARGO BANK, N.A.

as U.S. Lender

    

WELLS FARGO FINANCIAL CORPORATION

CANADA

as Canadian Lender

By:  

 

     By:  

 

Name:        Name:  
Title:        Title:  

 

10.


PNC BANK, NATIONAL ASSOCIATION

as U.S. Lender

   

PNC BANK, Canada Branch

as Canadian Lender

By:

 

/s/ Brian Ciaverella

    By:  

/s/ Caroline Stade

Name:

  Brian Ciaverella     Name:   Caroline Stade

Title:

  Executive Vice President     Title:   Senior Vice President

BANK OF MONTREAL

Chicago Branch, as U.S. Lender

   

BANK OF MONTREAL

as Canadian Lender

By:

 

/s/ Barry W. Stratton

    By:  

/s/ Zoltan J. Szoldatits

Name:

  Barry W. Stratton     Name:   Zoltan Szoldatits

Title:

  Managing Director     Title:   Managing Director

BANK OF AMERICA, N.A.

as U.S. Lender

   

BANK OF AMERICA, N.A.

Canada Branch, as Canadian Lender

By:

 

 

    By:  

 

Name:

      Name:  

Title:

      Title:  

NATIONAL BANK OF CANADA

New York Branch, as U.S. Lender

   

NATIONAL BANK OF CANADA

as Canadian Lender

By:

 

/s/ Vincent Lima

    By:  

/s/ Manny Deol

Name:

  Vincent Lima     Name:   Manny Deol

Title:

  Vice President     Title:   Vice President

By:

 

/s/ Monique Battlergeau

    By:  

/s/ Ian Gillespie

Name:

  Monique Battlergeau     Name:   Ian Gillespie

Title:

  Vice President     Title:   Managing Director

 

11.


LAURENTIAN BANK OF CANADA

as Canadian Lender

     
By:  

/s/ Meena Karunaker

     
Name:   Meena Karunaker      
Title:   Manager      
By:  

/s/ Morris Greenberg

     
Name:   Morris Greenberg      
Title:   Assistant Vice President      
VITRAN LOGISTICS LIMITED     EXPÉDITEUR T.W. LTÉE
By:  

/s/ Richard E. Gaetz

    By:  

/s/ Richard E. Gaetz

Name:   Richard E. Gaetz     Name:   Richard E. Gaetz
Title:   Authorized Signatory     Title:   Authorized Signatory
CAN-AM LOGISTICS INC.     1833660 ONTARIO INC.
By:  

/s/ Richard E. Gaetz

    By:  

/s/ Richard E. Gaetz

Name:   Richard E. Gaetz     Name:   Richard E. Gaetz
Title:   Authorized Signatory     Title:   Authorized Signatory

ROUT-WAY EXPRESS LINES LTD./LES

SERVICES ROUTIERS EXPRESS ROUT LTÉE

    1098304 ONTARIO INC.
By:  

/s/ Richard E. Gaetz

    By:  

/s/ Richard E. Gaetz

Name:   Richard E. Gaetz     Name:   Richard E. Gaetz
Title:   Authorized Signatory     Title:   Authorized Signatory
VITRAN ENVIRONMENTAL SYSTEMS INC.     DONEY HOLDINGS INC.
By:  

/s/ Richard E. Gaetz

    By:  

/s/ Richard E. Gaetz

Name:   Richard E. Gaetz     Name:   Richard E. Gaetz
Title:   Authorized Signatory     Title:   Authorized Signatory

 

12.


0772703 B.C. LTD.         SOUTHERN EXPRESS LINE OF ONTARIO LIMITED

By:

  

/s/ Richard E. Gaetz

       

By:

  

/s/ Richard E. Gaetz

Name:

   Richard E. Gaetz        

Name:

   Richard E. Gaetz

Title:

   Authorized Signatory        

Title:

   Authorized Signatory
VITRAN EXPRESS, INC.         1277050 ALBERTA INC.

By:

  

/s/ Richard E. Gaetz

       

By:

  

/s/ Richard E. Gaetz

Name:

   Richard E. Gaetz        

Name:

   Richard E. Gaetz

Title:

   Authorized Signatory        

Title:

   Authorized Signatory
SHORTHAUL TRANSPORT CORPORATION         VITRAN LOGISTICS, INC.

By:

  

/s/ Richard E. Gaetz

       

By:

  

/s/ Richard E. Gaetz

Name:

   Richard E. Gaetz        

Name:

   Richard E. Gaetz

Title:

   Authorized Signatory        

Title:

   Authorized Signatory
LAS VEGAS/L.A. EXPRESS, INC.         VITRAN LOGISTICS CORP.

By:

  

/s/ Richard E. Gaetz

       

By:

  

/s/ Richard E. Gaetz

Name:

   Richard E. Gaetz        

Name:

   Richard E. Gaetz

Title:

   Authorized Signatory        

Title:

   Authorized Signatory

 

13.


SCHEDULE A

PRICING GRID

APPLICABLE MARGIN

 

Acceptance Fee
LIBOR Loan
Letters of Credit (other than EDC
Guaranteed L/Cs)*
(bp)

  

Prime Rate Loan
Base Rate Canada Loan
Base Rate New York Loan
(bp)

  

Standby Fee
(bp)

  

EDC Guaranteed

L/Cs*

(bp)

400.00

   300.0    50.0    62.5

 

* Letters of Credit will be subject to a fronting fee of 12.5 bps


LOGO

EX-101.INS 6 vtn-20110630.xml XBRL INSTANCE DOCUMENT 0000946823 us-gaap:CommonStockMember 2011-01-01 2011-06-30 0000946823 us-gaap:RetainedEarningsMember 2011-06-30 0000946823 us-gaap:AdditionalPaidInCapitalMember 2011-06-30 0000946823 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2011-06-30 0000946823 us-gaap:RetainedEarningsMember 2010-12-31 0000946823 us-gaap:AdditionalPaidInCapitalMember 2010-12-31 0000946823 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-12-31 0000946823 us-gaap:RetainedEarningsMember 2010-06-30 0000946823 us-gaap:AdditionalPaidInCapitalMember 2010-06-30 0000946823 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-06-30 0000946823 us-gaap:RetainedEarningsMember 2009-12-31 0000946823 us-gaap:AdditionalPaidInCapitalMember 2009-12-31 0000946823 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2009-12-31 0000946823 us-gaap:CommonStockMember 2011-06-30 0000946823 us-gaap:CommonStockMember 2010-12-31 0000946823 us-gaap:CommonStockMember 2010-06-30 0000946823 us-gaap:CommonStockMember 2009-12-31 0000946823 us-gaap:AdditionalPaidInCapitalMember 2011-01-01 2011-06-30 0000946823 us-gaap:AdditionalPaidInCapitalMember 2010-01-01 2010-06-30 0000946823 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2011-01-01 2011-06-30 0000946823 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-01-01 2010-06-30 0000946823 us-gaap:RetainedEarningsMember 2011-01-01 2011-06-30 0000946823 us-gaap:RetainedEarningsMember 2010-01-01 2010-06-30 0000946823 2011-04-01 2011-06-30 0000946823 2010-04-01 2010-06-30 0000946823 2010-01-01 2010-06-30 0000946823 2011-03-31 0000946823 2010-06-30 0000946823 2010-03-31 0000946823 2009-12-31 0000946823 2011-06-30 0000946823 2010-12-31 0000946823 2011-07-21 0000946823 2011-01-01 2011-06-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares false --12-31 Q2 2011 2011-06-30 10-Q 0000946823 16330041 Accelerated Filer VITRAN CORP INC 68955000 86858000 72212000 94084000 5252000 6500000 4838000 5094000 245334000 267129000 83766000 104059000 1683000 3906000 511000 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>4. Acquisition </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">On February&nbsp;19, 2011, the Company acquired selected assets of Milan Express Inc.'s ("Milan") Less-than-Truckload ("LTL") business, a private carrier headquartered in Milan, Tennessee for $7.6 million. Milan added new coverage to Vitran's network in the states of Alabama, Georgia, Mississippi, North Carolina and South Carolina. The total purchase price was allocated to the fair value of tractor, trailer and other capital assets acquired. The acquisition was financed by a $6.0 million operating lease from a third party. The remaining $1.7 million of the purchase price was financed by the Company's revolving credit facility. An additional $0.1 million of cash consideration is due in 6 months from the closing date contingent on Vitran continuing to operate in three out of the five aforementioned states that were added to the Company's existing network. The Company has recorded the $0.1 million as a liability as management believes the condition for payment will be met. The results of operations of Milan are included as part of the LTL segment in the consolidated results of the Company commencing on February&nbsp;19, 2011. </font></p> 873000 267000 -526000 -1342000 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>10. Contingent Liabilities </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company is subject to legal proceedings that arise in the ordinary course of business. In the opinion of Management, the aggregate liability, if any, with respect to these actions, will not have a material adverse effect on the consolidated financial position, results of operations or cash flows. Legal costs are expensed as incurred. </font></p> 16300041 16330041 16300041 16330041 99658000 99743000 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>7. Comprehensive Income (Loss) </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The components of other comprehensive income (loss) ("OCI") such as changes in foreign currency adjustments are required to be added to the Company's reported net income to arrive at comprehensive income (loss). OCI (loss) items have no impact on the reported net income as presented on the Consolidated Statements of Income (Loss). </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The following are the components of other comprehensive income (loss), net of income taxes, for the three and six months ended June&nbsp;30, 2011 and 2010: </font></p> <p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;">&nbsp;</p> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr><td width="58%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30, 2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30, 2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,<br />2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,<br />2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net income (loss)</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,297</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,728</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,521</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">799</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Translation adjustment</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">119</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,708</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,007</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(539</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Interest rate swaps</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">151</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">277</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">335</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">482</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Tax effect</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(42</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(76</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(94</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(132</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Other comprehensive income (loss)</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">228</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,507</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,248</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(189</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Comprehensive income (loss)</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,069</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">221</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,273</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">610</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr></table> 13886000 6878000 17086000 8994000 323188000 165755000 393003000 209122000 -382000 115000 59000 64000 110000 114000 1160000 1470000 9395000 4629000 8397000 4040000 <div> <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>12. Risk Management Activities and Fair Value Measurements </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company is exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading purposes. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company formally documents all significant relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or anticipated transactions. The Company assesses all hedging relationships to determine whether the criteria for hedge accounting are met. To qualify for hedge accounting, the hedging relationship must be appropriately documented at inception of the hedge and there must be reasonable assurance, both at the inception and throughout the term of the hedge, that the hedging relationship will be effective. Effectiveness requires a high degree of correlation of changes in fair values or cash flows between the hedged item and the hedging instrument. Effectiveness is assessed on an ongoing basis through the term of the hedge in order to determine if hedge accounting remains appropriate. </font></p> <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b><i>Interest Rate Swaps </i></b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company is exposed to interest rate volatility with regard to existing variable rate debt. The Company has entered into variable-to-fixed interest rate swaps on variable rate term debt and revolving debt to limit its exposure to changing interest rates and future cash flows for interest. The interest rate swaps provide for the Company to pay an amount equal to a specified fixed rate of interest times a notional principal amount and to receive in return an amount equal to a variable rate of interest times the same notional amount. The swaps are accounted for as cash flow hedges. The effective portions of changes in fair value of the interest rate swaps are recorded in Accumulated Other Comprehensive Income and are recognized into earnings in the same period in which the hedged forecasted transaction affects earnings. Ineffective portions of changes in fair value are recognized into earnings as they occur. At June&nbsp;30, 2011, the notional amount of the swaps was $10.0 million, with the average pay rate being 5.07% and the average receive rate being 0.25%. The swaps mature at various dates up to December&nbsp;31, 2011. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company primarily applies the income approach for recurring fair value measurements and endeavours to utilize the best available information.&nbsp;Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.&nbsp;The Company is able to classify fair value balances based on the observability of those inputs. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">FASB ASC 820-10-05 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).</font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Liabilities measured at fair value on a recurring basis include the following as of June&nbsp;30, 2011: </font></p> <p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;">&nbsp;</p> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr><td width="68%"> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="10" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Fair&nbsp;Value&nbsp;Measurements&nbsp;Using</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Liabilities</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr><td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>(in thousands)</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Level&nbsp;1</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Level&nbsp;2</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Level&nbsp;3</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>At&nbsp;Fair&nbsp;Value</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Liabilities</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Interest rate swaps</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">182</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">182</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total liabilities</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">182</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">182</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td></tr></table> <p style="margin-top: 12px; margin-bottom: 0px; font-size: 1px;">&nbsp;</p> <p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The following table presents the fair value of derivative instruments for the three and six months ended June&nbsp;30: </font></p> <p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;">&nbsp;</p> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr><td width="39%"> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Notional</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Amount</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Fair&nbsp;Value</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Balance&nbsp;Sheet<br />Location</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Gain in OCI</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months&nbsp;ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Gain in OCI</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months&nbsp;ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Interest rate swaps</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">10,000</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">182</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">Other&nbsp;liabilities</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">151</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">335</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr></table> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>Hedges of net investment in self-sustaining operations:</b> </font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">United States dollar denominated debt of $60.3 million held by an entity with a Canadian dollar functional currency is designated as a hedge against the Company's exposure for a portion of its net investment in self-sustaining U.S. dollar denominated subsidiaries with a view to reducing the impact of foreign exchange fluctuations. The foreign exchange effect of both the U.S. dollar debt and the net investment in U.S. dollar denominated subsidiaries is reported in other comprehensive income. As at June 30, 2011, the Company's net investment in U.S. dollar denominated subsidiaries totaled $279.8 million. No ineffectiveness has been recorded in earnings as the notional amounts of the hedging item equals the portion of the net investment balance being hedged. </font></p></div> <p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>9. Assets Held for Sale </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The Company has certain assets that are classified as assets held for sale. These assets are carried on the balance sheet at the lower of the carrying amount or estimated fair value, less cost to sell. Once an asset is classified held for sale, there is no further depreciation taken on the asset. At June&nbsp;30, 2011, the net book value of assets held for sale was approximately $6.1 million (December 31, 2010&#8212;$4.5 million). This amount is included in property and equipment on the balance sheet. </font></p> <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>3. Discontinued Operations </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">During 2010, the Company completed the sale of selected assets of Frontier Transport Corporation, Vitran's truckload operation, previously a reportable segment. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The following table summarizes the operations for all periods presented to classify Frontier's operations as discontinued operations: </font></p> <p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;">&nbsp;</p> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr><td width="63%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Revenue</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">9,294</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">18,082</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Income from discontinued operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">184</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">672</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Income tax expense</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(23</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(163</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net income from discontinued operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">161</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">509</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr></table> <p style="margin-top: 12px; margin-bottom: 0px; font-size: 1px;">&nbsp;</p> <p style="margin-top: 0px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The following table summarizes the assets and liabilities from discontinued operations: </font></p> <p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;">&nbsp;</p> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="82%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,<br />2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Dec 31,<br />2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Accounts receivable, net</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,596</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Other current assets</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">87</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Deferred income taxes</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">765</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">765</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Deferred income taxes valuation allowance</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(765</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(765</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total assets from discontinued operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,683</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr><td height="16"> </td> <td height="16" colspan="4"> </td> <td height="16" colspan="4"> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,<br />2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Dec 31,<br />2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Accounts payable and accrued liabilities</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">201</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,410</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Total liabilities from discontinued operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">201</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,410</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr></table> 0.05 0.11 -0.15 -0.14 0.05 0.11 -0.15 -0.14 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>8. Computation of Loss per Share </b></font></p> <p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;">&nbsp;</p> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr><td width="55%"> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="7%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30, 2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30, 2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30, 2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30, 2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="margin-top: 0px; text-indent: -1em; margin-bottom: 0px; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Numerator:</font></p> <p style="margin-top: 0px; text-indent: -1em; margin-bottom: 1px; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net income (loss) from continuing operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,297</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,567</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,521</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">290</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net income from discontinued operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">161</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">509</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Net income (loss)</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,297</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,728</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,521</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">799</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 1px solid;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Denominator:</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Basic weighted-average shares outstanding</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,330,441</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,266,441</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,322,748</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,266,441</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Dilutive stock options</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">98,969</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">92,638</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Dilutive weighted-average shares outstanding</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,330,441</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,365,410</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,322,748</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">16,359,079</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Basic income (loss) per share from continuing operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.14</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.10</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.15</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.02</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Basic income per share from discontinued operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.01</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.03</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Basic income (loss) per share</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.14</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.11</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.15</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.05</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Diluted income (loss) per share from continuing operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.14</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.10</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.15</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.02</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Diluted income per share from discontinued operations</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.01</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">&#8212;&nbsp;&nbsp;</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.03</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Diluted income (loss) per share</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.14</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.11</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(0.15</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">0.05</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td style="border-top: #000000 3px double;" valign="bottom">&nbsp;</td> <td>&nbsp;</td></tr></table> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Due to the net loss for the three and six months ended June&nbsp;30, 2011, dilutive shares have no effect on the loss per share. For the three and six months ended June&nbsp;30, 2010, dilutive shares excludes the effect of 773,900 anti-dilutive options. </font></p> -8000 427000 -630000 -283000 <font style="font-family: Times New Roman;" class="_mt" size="2"> </font> <div> <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>6. Foreign Currency Translation </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The United States dollar is the functional currency of the Company's operations in the United States. The Canadian dollar is the functional currency of the Company's Canadian operations. Each operation translates foreign currency denominated transactions into its functional currency using the rate of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated into the functional currency of the operation using the period-end rate of exchange giving rise to a gain or loss that is recognized in income during the current period. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">For reporting purposes, the Canadian operations are translated into United States dollars using the current rate method. Under this method, all assets and liabilities are translated at the period-end rate of exchange and all revenue and expense items are translated at the average rate of exchange for the period. The resulting translation adjustment is recorded as a separate component of shareholders' equity. The revaluation of United States dollar denominated debt held by an entity with a Canadian functional currency, that hedges the net investment in the Company's U.S. dollar denominated self-sustaining subsidiaries, is recorded to accumulated other comprehensive income. In a hedge of a net investment in self-sustaining foreign subsidiaries, the portion of the gain or loss on the hedging item that is determined to be an effective hedge is recognized in other comprehensive income and the ineffective portion is recognized in earnings. </font></p></div> 42850000 22049000 66204000 36074000 145000 1000 105000 67000 145000 1000 105000 67000 14453000 14650000 290000 1567000 -2521000 -2297000 -355000 2038000 -1387000 -1552000 0.02 0.10 -0.15 -0.14 0.02 0.10 -0.15 -0.14 509000 161000 0.03 0.01 0.03 0.01 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>11. Income Taxes </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">At December&nbsp;31, 2010, the Company established a valuation allowance of $39.6 million for deferred tax assets as required by FASB ASC 740-10. At June&nbsp;30, 2011, the Company increased the valuation allowance by $2.4 million to $42.0 million. </font></p> -645000 471000 1134000 745000 5495000 -4430000 17903000 4877000 10503000 -1493000 21872000 5057000 -2309000 -1105000 365000 659000 6071000 2413000 3704000 -2270000 -1246000 -1629000 100000 -1791000 8268000 7037000 -4023000 -1920000 -2653000 -1311000 130687000 66558000 149494000 79877000 13850000 7078000 17256000 9175000 245334000 267129000 94970000 101200000 2410000 201000 49838000 66362000 19545000 13111000 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>5. Long-term Debt </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">On June&nbsp;30, 2011, the Company amended its credit agreement in respect of certain financial maintenance tests with substantially the same terms. The interest rate margin increased by 300 to 400 basis points based on the method of borrowing with no interest rate floor. The amendment is effective June&nbsp;30, 2011 to maturity on July&nbsp;31, 2012. As at June&nbsp;30, 2011, the Company is in compliance with these amended maintenance tests and Management expects to be in compliance for the next twelve months. On July&nbsp;11, 2011, the Company expanded its revolving credit facility to provide up to $111.5 million, with the maturity remaining July&nbsp;31, 2012. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">At June&nbsp;30, 2011 the Company had $10.0 million outstanding under the term facility, $62.6 million outstanding under the revolving credit facility, $3.5 million outstanding under a separate term credit facility and $3.9 million of capital lease obligations. </font></p> -1093000 -3734000 6785000 1499000 -3155000 -1000000 -8016000 -4003000 4256000 4307000 1861000 2787000 3383000 4040000 2387000 4129000 799000 799000 1728000 -2521000 -2521000 -2297000 3668000 3958000 1266000 -241000 -189000 -189000 1248000 1248000 29022000 14831000 31470000 16145000 519000 182000 1737000 3981000 1116000 6608000 4268000 9761000 9861000 8659000 837000 14615000 5438000 826000 116000 329000 265000 80000 138847000 141383000 2397000 1124000 1910000 939000 7355000 3447000 6000000 3000000 -10901000 -13422000 326856000 169713000 394269000 208881000 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>2. New Accounting Pronouncements </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("FASB ASC") Update No.&nbsp;2011-05 "Presentation of Comprehensive Income", requires entities to present net income and comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and comprehensive income. FASB ASC Update No.&nbsp;2011-05 will be adopted by the Company on January&nbsp;1, 2012. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">FASB ASC Update No.&nbsp;2010-06 "Improving Disclosure about Fair Value Measurements", requires enhanced disclosures about recurring and nonrecurring fair-value measurements including significant transfers in and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances and settlements on a gross basis of Level 3 fair-value measurements. FASB ASC Update No.&nbsp;2010-06 was adopted January&nbsp;1, 2010 except for the requirement to separately disclose purchases, sales, issuances and settlements of recurring Level 3 fair value measurements, which was adopted January&nbsp;1, 2011. </font></p> <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>13. Segmented Information </b></font></p> <p style="margin-top: 0px; margin-bottom: 0px; font-size: 12px;">&nbsp;</p> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr><td width="56%"> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="5%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six&nbsp;months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Revenue:</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">LTL</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">178,362</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">148,826</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">337,351</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">285,844</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">SCO</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">30,519</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">20,887</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">56,918</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">41,012</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td></tr> <tr><td valign="top"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">208,881</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">169,713</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">394,269</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">326,856</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td></tr> <tr><td height="16"> </td> <td height="16" colspan="4"> </td> <td height="16" colspan="4"> </td> <td height="16" colspan="4"> </td> <td height="16" colspan="4"> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Operating income (loss) from continuing operations:</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">LTL</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,182</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,856</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(256</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,233</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">SCO</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,337</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,401</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,427</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">2,764</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Corporate office and other</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,396</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(1,299</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,905</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(2,329</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td></tr> <tr bgcolor="#cceeff"><td valign="top"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">(241</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">)&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,958</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">1,266</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,668</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td></tr> <tr><td height="16"> </td> <td height="16" colspan="4"> </td> <td height="16" colspan="4"> </td> <td height="16" colspan="4"> </td> <td height="16" colspan="4"> </td></tr> <tr><td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Three months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2011</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Six months</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>Ended</b></font><br /><font style="font-family: Times New Roman;" class="_mt" size="1"><b>June&nbsp;30,&nbsp;2010</b></font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 1em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Depreciation and amortization:</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">LTL</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">3,630</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,188</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">7,579</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">8,517</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr bgcolor="#cceeff"><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">SCO</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">368</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">410</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">734</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">816</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr><td valign="top"> <p style="text-indent: -1em; margin-left: 3em;"><font style="font-family: Times New Roman;" class="_mt" size="2">Corporate office and other</font></p></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">42</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">31</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">84</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">62</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 1px solid;">&nbsp;</p></td> <td>&nbsp;</td></tr> <tr bgcolor="#cceeff"><td valign="top"> </td> <td valign="bottom"><font class="_mt" size="1">&nbsp;&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,040</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">4,629</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">8,397</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td> <td valign="bottom"><font class="_mt" size="1">&nbsp;</font></td> <td valign="bottom"><font style="font-family: Times New Roman;" class="_mt" size="2">$</font></td> <td valign="bottom" align="right"><font style="font-family: Times New Roman;" class="_mt" size="2">9,395</font></td> <td valign="bottom" nowrap="nowrap"><font style="font-family: Times New Roman;" class="_mt" size="2">&nbsp;&nbsp;</font></td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">&nbsp;&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td> <td valign="bottom">&nbsp;</td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td valign="bottom"> <p style="border-top: #000000 3px double;">&nbsp;</p></td> <td>&nbsp;</td></tr></table> 296000 296000 143000 261000 261000 119000 16266441 16266441 16300041 16330041 <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>1. Accounting Policies </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">The interim consolidated financial statements have been prepared in accordance with the rules prescribed for filing interim financial statements and accordingly, do not contain all the disclosures that may be necessary for complete financial statements prepared in accordance with United States generally accepted accounting principles. The interim consolidated financial statements have been prepared in accordance with instructions to Quarterly Report on Form 10-Q. The interim consolidated financial statements should be read in conjunction with the Company's 2010 Annual Report on Form 10-K. The interim consolidated financial statements follow the same accounting principles and methods of application as the most recent annual consolidated financial statements, except as noted in Note 2. </font></p> <p style="margin-top: 12px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">These interim unaudited consolidated financial statements reflect all adjustments which are, in the opinion of Management, necessary for a fair presentation of the results of the interim period presented. Operating results for the three and six months ended June&nbsp;30, 2011 are not necessarily indicative of the results of operations that may be expected for the year ending December&nbsp;31, 2011. </font></p> 135787000 2658000 4264000 99584000 29281000 136693000 2469000 4560000 99584000 30080000 98847000 5252000 4838000 99658000 -10901000 97915000 6500000 5094000 99743000 -13422000 30000 80000 -5000 85000 <p style="margin-top: 18px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2"><b>14. Subsequent events </b></font></p> <p style="margin-top: 6px; margin-bottom: 0px;"><font style="font-family: Times New Roman;" class="_mt" size="2">On July&nbsp;11, 2011, the Company expanded its revolving credit facility to provide up to $111.5 million, with the maturity remaining July&nbsp;31, 2012. </font></p> 154000 519000 16359079 16365410 16322748 16330041 16266441 16266441 16322748 16330041 29801000 15442000 38584000 20259000 53842000 28291000 64617000 34625000 EX-101.SCH 7 vtn-20110630.xsd XBRL TAXONOMY EXTENSION SCHEMA 00100 - Statement - Consolidated Statements Of Income (Loss) link:presentationLink link:calculationLink link:definitionLink 00200 - Statement - Consolidated Balance Sheets link:presentationLink link:calculationLink link:definitionLink 00400 - Statement - Consolidated Statements Of Cash Flows link:presentationLink link:calculationLink link:definitionLink 00090 - Document - Document And Entity Information link:presentationLink link:calculationLink link:definitionLink 00205 - Statement - Consolidated Balance Sheets (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00300 - Statement - Consolidated Statements Of Shareholders' Equity link:presentationLink link:calculationLink link:definitionLink 10101 - Disclosure - Accounting Policies link:presentationLink link:calculationLink link:definitionLink 10201 - Disclosure - New Accounting Pronouncements link:presentationLink link:calculationLink link:definitionLink 10301 - Disclosure - Discontinued Operations link:presentationLink link:calculationLink link:definitionLink 10401 - Disclosure - Acquisition link:presentationLink link:calculationLink link:definitionLink 10501 - Disclosure - Long-Term Debt link:presentationLink link:calculationLink link:definitionLink 10601 - Disclosure - Foreign Currency Translation link:presentationLink link:calculationLink link:definitionLink 10701 - Disclosure - Comprehensive Income (Loss) link:presentationLink link:calculationLink link:definitionLink 10801 - Disclosure - Computation Of Loss Per Share link:presentationLink link:calculationLink link:definitionLink 10901 - Disclosure - Assets Held For Sale link:presentationLink link:calculationLink link:definitionLink 11001 - Disclosure - Contingent Liabilities link:presentationLink link:calculationLink link:definitionLink 11101 - Disclosure - Income Taxes link:presentationLink link:calculationLink link:definitionLink 11201 - Disclosure - Risk Management Activities And Fair Value Measurements link:presentationLink link:calculationLink link:definitionLink 11301 - Disclosure - Segmented Information link:presentationLink link:calculationLink link:definitionLink 11401 - Disclosure - Subsequent Events link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 8 vtn-20110630_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE EX-101.DEF 9 vtn-20110630_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE EX-101.LAB 10 vtn-20110630_lab.xml XBRL TAXONOMY EXTENSION LABEL LINKBASE EX-101.PRE 11 vtn-20110630_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE GRAPHIC 12 g194623g76v71.jpg GRAPHIC begin 644 g194623g76v71.jpg M_]C_X0`817AI9@``24DJ``@``````````````/_L`!%$=6-K>0`!``0```!D M``#_X00B:'1T<#HO+VYS+F%D;V)E+F-O;2]X87`O,2XP+P`\/WAP86-K970@ M8F5G:6X](N^[OR(@:60](EG)E4WI.5&-Z:V,Y9"(_/B`\ M>#IX;7!M971A('AM;&YS.G@](F%D;V)E.FYS.FUE=&$O(B!X.GAM<'1K/2)! 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Consolidated Balance Sheets (USD $)
In Thousands
Jun. 30, 2011
Dec. 31, 2010
Assets    
Accounts receivable $ 94,084 $ 72,212
Inventory, deposits and prepaid expenses 9,861 9,761
Current assets of discontinued operations   1,683
Deferred income taxes 114 110
Total Current Assets 104,059 83,766
Property and equipment 141,383 138,847
Intangible assets 7,037 8,268
Goodwill 14,650 14,453
Total assets 267,129 245,334
Liabilities and Shareholders' Equity    
Bank overdraft 511 3,906
Accounts payable and accrued liabilities 86,858 68,955
Income and other taxes payable 519 154
Current liabilities of discontinued operations 201 2,410
Current portion of long-term debt 13,111 19,545
Total Current Liabilities 101,200 94,970
Long-term debt 66,362 49,838
Other 182 519
Deferred income taxes 1,470 1,160
Shareholders' equity:    
Common shares, no par value, unlimited authorized, 16,330,041 and 16,300,041 issued and outstanding at June 30, 2011 and December 31, 2010, respectively 99,743 99,658
Additional paid-in capital 5,094 4,838
Accumulated deficit (13,422) (10,901)
Accumulated other comprehensive income 6,500 5,252
Shareholders' equity total 97,915 98,847
Liabilities and shareholders' equity total $ 267,129 $ 245,334
XML 14 R4.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Consolidated Balance Sheets (Parenthetical) (USD $)
Jun. 30, 2011
Dec. 31, 2010
Consolidated Balance Sheets    
Common stock, no par value    
Common stock, shares issued 16,330,041 16,300,041
Common stock, shares outstanding 16,330,041 16,300,041
XML 15 R1.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Document And Entity Information
6 Months Ended
Jun. 30, 2011
Jul. 21, 2011
Document And Entity Information    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2011
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2011  
Current Fiscal Year End Date --12-31  
Entity Registrant Name VITRAN CORP INC  
Entity Central Index Key 0000946823  
Entity Filer Category Accelerated Filer  
Entity Common Stock, Shares Outstanding   16,330,041
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XML 17 R12.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Foreign Currency Translation
6 Months Ended
Jun. 30, 2011
Foreign Currency Translation  
Foreign Currency Translation

6. Foreign Currency Translation

The United States dollar is the functional currency of the Company's operations in the United States. The Canadian dollar is the functional currency of the Company's Canadian operations. Each operation translates foreign currency denominated transactions into its functional currency using the rate of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated into the functional currency of the operation using the period-end rate of exchange giving rise to a gain or loss that is recognized in income during the current period.

For reporting purposes, the Canadian operations are translated into United States dollars using the current rate method. Under this method, all assets and liabilities are translated at the period-end rate of exchange and all revenue and expense items are translated at the average rate of exchange for the period. The resulting translation adjustment is recorded as a separate component of shareholders' equity. The revaluation of United States dollar denominated debt held by an entity with a Canadian functional currency, that hedges the net investment in the Company's U.S. dollar denominated self-sustaining subsidiaries, is recorded to accumulated other comprehensive income. In a hedge of a net investment in self-sustaining foreign subsidiaries, the portion of the gain or loss on the hedging item that is determined to be an effective hedge is recognized in other comprehensive income and the ineffective portion is recognized in earnings.

XML 18 R17.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Income Taxes
6 Months Ended
Jun. 30, 2011
Income Taxes  
Income Taxes

11. Income Taxes

At December 31, 2010, the Company established a valuation allowance of $39.6 million for deferred tax assets as required by FASB ASC 740-10. At June 30, 2011, the Company increased the valuation allowance by $2.4 million to $42.0 million.

XML 19 R8.htm IDEA: XBRL DOCUMENT  v2.3.0.11
New Accounting Pronouncements
6 Months Ended
Jun. 30, 2011
New Accounting Pronouncements  
New Accounting Pronouncements

2. New Accounting Pronouncements

Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("FASB ASC") Update No. 2011-05 "Presentation of Comprehensive Income", requires entities to present net income and comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and comprehensive income. FASB ASC Update No. 2011-05 will be adopted by the Company on January 1, 2012.

FASB ASC Update No. 2010-06 "Improving Disclosure about Fair Value Measurements", requires enhanced disclosures about recurring and nonrecurring fair-value measurements including significant transfers in and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances and settlements on a gross basis of Level 3 fair-value measurements. FASB ASC Update No. 2010-06 was adopted January 1, 2010 except for the requirement to separately disclose purchases, sales, issuances and settlements of recurring Level 3 fair value measurements, which was adopted January 1, 2011.

XML 20 R14.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Computation Of Loss Per Share
6 Months Ended
Jun. 30, 2011
Computation Of Loss Per Share  
Computation Of Loss Per Share

8. Computation of Loss per Share

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
     Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Numerator:

Net income (loss) from continuing operations

   $ (2,297   $ 1,567       $ (2,521   $ 290   

Net income from discontinued operations

     —          161         —          509   

Net income (loss)

   $ (2,297   $ 1,728       $ (2,521   $ 799   
                                 

Denominator:

         

Basic weighted-average shares outstanding

     16,330,441        16,266,441         16,322,748        16,266,441   

Dilutive stock options

     —          98,969         —          92,638   

Dilutive weighted-average shares outstanding

     16,330,441        16,365,410         16,322,748        16,359,079   
                                 

Basic income (loss) per share from continuing operations

   $ (0.14   $ 0.10       $ (0.15   $ 0.02   

Basic income per share from discontinued operations

     —          0.01         —          0.03   

Basic income (loss) per share

   $ (0.14   $ 0.11       $ (0.15   $ 0.05   

Diluted income (loss) per share from continuing operations

   $ (0.14   $ 0.10       $ (0.15   $ 0.02   

Diluted income per share from discontinued operations

     —          0.01         —          0.03   

Diluted income (loss) per share

   $ (0.14   $ 0.11       $ (0.15   $ 0.05   
                                 

Due to the net loss for the three and six months ended June 30, 2011, dilutive shares have no effect on the loss per share. For the three and six months ended June 30, 2010, dilutive shares excludes the effect of 773,900 anti-dilutive options.

XML 21 R19.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Segmented Information
6 Months Ended
Jun. 30, 2011
Segmented Information  
Segmented Information

13. Segmented Information

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Revenue:

        

LTL

   $ 178,362      $ 148,826      $ 337,351      $ 285,844   

SCO

     30,519        20,887        56,918        41,012   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 208,881      $ 169,713      $ 394,269      $ 326,856   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Operating income (loss) from continuing operations:

        

LTL

   $ (1,182   $ 3,856      $ (256   $ 3,233   

SCO

     2,337        1,401        4,427        2,764   

Corporate office and other

     (1,396     (1,299     (2,905     (2,329
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ (241   $ 3,958      $ 1,266      $ 3,668   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
    Six months
Ended
June 30, 2010
 

Depreciation and amortization:

        

LTL

   $ 3,630      $ 4,188      $ 7,579      $ 8,517   

SCO

     368        410        734        816   

Corporate office and other

     42        31        84        62   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 4,040      $ 4,629      $ 8,397      $ 9,395   
  

 

 

   

 

 

   

 

 

   

 

 

 
XML 22 R15.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Assets Held For Sale
6 Months Ended
Jun. 30, 2011
Assets Held For Sale  
Assets Held For Sale

9. Assets Held for Sale

The Company has certain assets that are classified as assets held for sale. These assets are carried on the balance sheet at the lower of the carrying amount or estimated fair value, less cost to sell. Once an asset is classified held for sale, there is no further depreciation taken on the asset. At June 30, 2011, the net book value of assets held for sale was approximately $6.1 million (December 31, 2010—$4.5 million). This amount is included in property and equipment on the balance sheet.

XML 23 R13.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Comprehensive Income (Loss)
6 Months Ended
Jun. 30, 2011
Comprehensive Income (Loss)  
Comprehensive Income (Loss)

7. Comprehensive Income (Loss)

The components of other comprehensive income (loss) ("OCI") such as changes in foreign currency adjustments are required to be added to the Company's reported net income to arrive at comprehensive income (loss). OCI (loss) items have no impact on the reported net income as presented on the Consolidated Statements of Income (Loss).

The following are the components of other comprehensive income (loss), net of income taxes, for the three and six months ended June 30, 2011 and 2010:

 

     Three months
Ended
June 30, 2011
    Three months
Ended
June 30, 2010
    Six months
Ended
June 30,
2011
    Six months
Ended
June 30,
2010
 

Net income (loss)

   $ (2,297   $ 1,728      $ (2,521   $ 799   

Translation adjustment

     119        (1,708     1,007        (539

Interest rate swaps

     151        277        335        482   

Tax effect

     (42     (76     (94     (132
                                

Other comprehensive income (loss)

   $ 228      $ (1,507   $ 1,248      $ (189
                                

Comprehensive income (loss)

   $ (2,069   $ 221      $ (1,273   $ 610   
                                
XML 24 R6.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Consolidated Statements Of Cash Flows (USD $)
In Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2011
Jun. 30, 2010
Jun. 30, 2011
Jun. 30, 2010
Operations:        
Net income (loss) $ (2,297) $ 1,728 $ (2,521) $ 799
Items not involving cash from operations:        
Depreciation and amortization expense 4,040 4,629 8,397 9,395
Deferred income taxes 64 115 59 (382)
Share-based compensation expense 119 143 261 296
Gain on sale of property and equipment (67) (1) (105) (145)
Income on discontinued operations   (161)   (509)
Change in non-cash working capital components 2,270 (2,413) (3,704) (6,071)
Continuing operations 4,129 4,040 2,387 3,383
Discontinued operations (1,342) 267 (526) 873
Net cash provided by (used in) operating activities 2,787 4,307 1,861 4,256
Investments:        
Purchase of property and equipment (4,268) (1,116) (6,608) (3,981)
Proceeds on sale of property and equipment 265 116 329 826
Acquisition of business assets     (1,737)  
Net cash provided by (used in) investing activities (4,003) (1,000) (8,016) (3,155)
Financing:        
Change in revolving credit facility and bank overdraft 5,438 837 14,615 8,659
Repayment of long-term debt (3,000) (3,447) (6,000) (7,355)
Repayment of capital leases (939) (1,124) (1,910) (2,397)
Issue of common shares upon exercise of employee stock options     80  
Net cash provided by (used in) financing activities 1,499 (3,734) 6,785 (1,093)
Effect of translation adjustment on cash (283) 427 (630) (8)
Increase in cash and cash equivalents        
Cash and cash equivalents, beginning of period        
Cash and cash equivalents, end of period        
Change in non-cash working capital components:        
Accounts receivable (5,057) 1,493 (21,872) (10,503)
Inventory, deposits and prepaid expenses 1,791 1,629 (100) 1,246
Income and other taxes payable 659 (1,105) 365 (2,309)
Accounts payable and accrued liabilities 4,877 (4,430) 17,903 5,495
Change in non-cash working capital components $ 2,270 $ (2,413) $ (3,704) $ (6,071)
XML 25 R9.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Discontinued Operations
6 Months Ended
Jun. 30, 2011
Discontinued Operations  
Discontinued Operations

3. Discontinued Operations

During 2010, the Company completed the sale of selected assets of Frontier Transport Corporation, Vitran's truckload operation, previously a reportable segment.

The following table summarizes the operations for all periods presented to classify Frontier's operations as discontinued operations:

 

     Three months
Ended
June 30, 2011
     Three months
Ended
June 30, 2010
    Six months
Ended
June 30, 2011
     Six months
Ended
June 30, 2010
 

Revenue

   $ —         $ 9,294      $ —         $ 18,082   

Income from discontinued operations

     —           184        —           672   

Income tax expense

     —           (23     —           (163
                                  

Net income from discontinued operations

   $ —         $ 161      $ —         $ 509   
                                  

 

The following table summarizes the assets and liabilities from discontinued operations:

 

     June 30,
2011
    Dec 31,
2010
 

Accounts receivable, net

   $ —        $ 1,596   

Other current assets

     —          87   

Deferred income taxes

     765        765   

Deferred income taxes valuation allowance

     (765     (765
                

Total assets from discontinued operations

   $ —        $ 1,683   
                
     June 30,
2011
    Dec 31,
2010
 

Accounts payable and accrued liabilities

   $ 201      $ 2,410   
                

Total liabilities from discontinued operations

   $ 201      $ 2,410   
                
XML 26 R10.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Acquisition
6 Months Ended
Jun. 30, 2011
Acquisition  
Acquisition

4. Acquisition

On February 19, 2011, the Company acquired selected assets of Milan Express Inc.'s ("Milan") Less-than-Truckload ("LTL") business, a private carrier headquartered in Milan, Tennessee for $7.6 million. Milan added new coverage to Vitran's network in the states of Alabama, Georgia, Mississippi, North Carolina and South Carolina. The total purchase price was allocated to the fair value of tractor, trailer and other capital assets acquired. The acquisition was financed by a $6.0 million operating lease from a third party. The remaining $1.7 million of the purchase price was financed by the Company's revolving credit facility. An additional $0.1 million of cash consideration is due in 6 months from the closing date contingent on Vitran continuing to operate in three out of the five aforementioned states that were added to the Company's existing network. The Company has recorded the $0.1 million as a liability as management believes the condition for payment will be met. The results of operations of Milan are included as part of the LTL segment in the consolidated results of the Company commencing on February 19, 2011.

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Risk Management Activities And Fair Value Measurements
6 Months Ended
Jun. 30, 2011
Risk Management Activities And Fair Value Measurements  
Risk Management Activities And Fair Value Measurements

12. Risk Management Activities and Fair Value Measurements

The Company is exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading purposes.

The Company formally documents all significant relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or anticipated transactions. The Company assesses all hedging relationships to determine whether the criteria for hedge accounting are met. To qualify for hedge accounting, the hedging relationship must be appropriately documented at inception of the hedge and there must be reasonable assurance, both at the inception and throughout the term of the hedge, that the hedging relationship will be effective. Effectiveness requires a high degree of correlation of changes in fair values or cash flows between the hedged item and the hedging instrument. Effectiveness is assessed on an ongoing basis through the term of the hedge in order to determine if hedge accounting remains appropriate.

Interest Rate Swaps

The Company is exposed to interest rate volatility with regard to existing variable rate debt. The Company has entered into variable-to-fixed interest rate swaps on variable rate term debt and revolving debt to limit its exposure to changing interest rates and future cash flows for interest. The interest rate swaps provide for the Company to pay an amount equal to a specified fixed rate of interest times a notional principal amount and to receive in return an amount equal to a variable rate of interest times the same notional amount. The swaps are accounted for as cash flow hedges. The effective portions of changes in fair value of the interest rate swaps are recorded in Accumulated Other Comprehensive Income and are recognized into earnings in the same period in which the hedged forecasted transaction affects earnings. Ineffective portions of changes in fair value are recognized into earnings as they occur. At June 30, 2011, the notional amount of the swaps was $10.0 million, with the average pay rate being 5.07% and the average receive rate being 0.25%. The swaps mature at various dates up to December 31, 2011.

The Company primarily applies the income approach for recurring fair value measurements and endeavours to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observability of those inputs.

FASB ASC 820-10-05 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Liabilities measured at fair value on a recurring basis include the following as of June 30, 2011:

 

     Fair Value Measurements Using      Liabilities  
(in thousands)    Level 1      Level 2      Level 3      At Fair Value  

Liabilities

           

Interest rate swaps

   $ —         $ 182       $ —         $ 182   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ —         $ 182       $ —         $ 182   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

The following table presents the fair value of derivative instruments for the three and six months ended June 30:

 

     Notional
Amount
     Fair Value      Balance Sheet
Location
     Gain in OCI
Three months ended
June 30, 2011
     Gain in OCI
Six months ended
June 30, 2011
 

Interest rate swaps

   $ 10,000       $ 182         Other liabilities       $ 151       $ 335   

Hedges of net investment in self-sustaining operations:

United States dollar denominated debt of $60.3 million held by an entity with a Canadian dollar functional currency is designated as a hedge against the Company's exposure for a portion of its net investment in self-sustaining U.S. dollar denominated subsidiaries with a view to reducing the impact of foreign exchange fluctuations. The foreign exchange effect of both the U.S. dollar debt and the net investment in U.S. dollar denominated subsidiaries is reported in other comprehensive income. As at June 30, 2011, the Company's net investment in U.S. dollar denominated subsidiaries totaled $279.8 million. No ineffectiveness has been recorded in earnings as the notional amounts of the hedging item equals the portion of the net investment balance being hedged.

XML 29 R11.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Long-Term Debt
6 Months Ended
Jun. 30, 2011
Long-Term Debt  
Long-Term Debt

5. Long-term Debt

On June 30, 2011, the Company amended its credit agreement in respect of certain financial maintenance tests with substantially the same terms. The interest rate margin increased by 300 to 400 basis points based on the method of borrowing with no interest rate floor. The amendment is effective June 30, 2011 to maturity on July 31, 2012. As at June 30, 2011, the Company is in compliance with these amended maintenance tests and Management expects to be in compliance for the next twelve months. On July 11, 2011, the Company expanded its revolving credit facility to provide up to $111.5 million, with the maturity remaining July 31, 2012.

At June 30, 2011 the Company had $10.0 million outstanding under the term facility, $62.6 million outstanding under the revolving credit facility, $3.5 million outstanding under a separate term credit facility and $3.9 million of capital lease obligations.

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Consolidated Statements Of Shareholders' Equity (USD $)
In Thousands, except Share data
Common Shares [Member]
Additional Paid-In Capital [Member]
Retained Earnings (Accumulated Deficit) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Total
Balance, value at Dec. 31, 2009 $ 99,584 $ 4,264 $ 29,281 $ 2,658 $ 135,787
Balance, shares at Dec. 31, 2009 16,266,441        
Net income (loss)     799   799
Other comprehensive income (loss)       (189) (189)
Share-based compensation   296     296
Balance, value at Jun. 30, 2010 99,584 4,560 30,080 2,469 136,693
Balance, shares at Jun. 30, 2010 16,266,441        
Balance, value at Dec. 31, 2010 99,658 4,838 (10,901) 5,252 98,847
Balance, shares at Dec. 31, 2010 16,300,041        
Shares issued upon exercise of employee stock options, value 85 (5)     80
Shares issued upon exercise of employee stock options, shares 30,000        
Net income (loss)     (2,521)   (2,521)
Other comprehensive income (loss)       1,248 1,248
Share-based compensation   261     261
Balance, value at Jun. 30, 2011 $ 99,743 $ 5,094 $ (13,422) $ 6,500 $ 97,915
Balance, shares at Jun. 30, 2011 16,330,041        

XML 32 R7.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Accounting Policies
6 Months Ended
Jun. 30, 2011
Accounting Policies  
Accounting Policies

1. Accounting Policies

The interim consolidated financial statements have been prepared in accordance with the rules prescribed for filing interim financial statements and accordingly, do not contain all the disclosures that may be necessary for complete financial statements prepared in accordance with United States generally accepted accounting principles. The interim consolidated financial statements have been prepared in accordance with instructions to Quarterly Report on Form 10-Q. The interim consolidated financial statements should be read in conjunction with the Company's 2010 Annual Report on Form 10-K. The interim consolidated financial statements follow the same accounting principles and methods of application as the most recent annual consolidated financial statements, except as noted in Note 2.

These interim unaudited consolidated financial statements reflect all adjustments which are, in the opinion of Management, necessary for a fair presentation of the results of the interim period presented. Operating results for the three and six months ended June 30, 2011 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2011.

XML 33 R16.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Contingent Liabilities
6 Months Ended
Jun. 30, 2011
Contingent Liabilities  
Contingent Liabilities

10. Contingent Liabilities

The Company is subject to legal proceedings that arise in the ordinary course of business. In the opinion of Management, the aggregate liability, if any, with respect to these actions, will not have a material adverse effect on the consolidated financial position, results of operations or cash flows. Legal costs are expensed as incurred.

XML 34 R20.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Subsequent Events
6 Months Ended
Jun. 30, 2011
Subsequent Events  
Subsequent Events

14. Subsequent events

On July 11, 2011, the Company expanded its revolving credit facility to provide up to $111.5 million, with the maturity remaining July 31, 2012.

XML 35 R2.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Consolidated Statements Of Income (Loss) (USD $)
In Thousands, except Share data
3 Months Ended 6 Months Ended
Jun. 30, 2011
Jun. 30, 2010
Jun. 30, 2011
Jun. 30, 2010
Consolidated Statements Of Income (Loss)        
Revenue $ 208,881 $ 169,713 $ 394,269 $ 326,856
Operating expenses:        
Salaries, wages and other employee benefits 79,877 66,558 149,494 130,687
Purchased transportation 34,625 28,291 64,617 53,842
Depreciation and amortization 4,040 4,629 8,397 9,395
Maintenance 8,994 6,878 17,086 13,886
Rents and leases 9,175 7,078 17,256 13,850
Purchased labor and owner operators 20,259 15,442 38,584 29,801
Fuel and fuel-related expenses 36,074 22,049 66,204 42,850
Other operating expenses 16,145 14,831 31,470 29,022
Other income (67) (1) (105) (145)
Total operating expenses 209,122 165,755 393,003 323,188
Income (loss) from continuing operations before undernoted (241) 3,958 1,266 3,668
Interest expense, net 1,311 1,920 2,653 4,023
Income (loss) from continuing operations before income taxes (1,552) 2,038 (1,387) (355)
Income tax expense (recovery) 745 471 1,134 (645)
Net income (loss) from continuing operations (2,297) 1,567 (2,521) 290
Discontinued operations, net of income taxes   161   509
Net income (loss) $ (2,297) $ 1,728 $ (2,521) $ 799
Basic:        
Net loss from continuing operations $ (0.14) $ 0.10 $ (0.15) $ 0.02
Discontinued operations income   $ 0.01   $ 0.03
Net loss $ (0.14) $ 0.11 $ (0.15) $ 0.05
Diluted:        
Net loss from continuing operations $ (0.14) $ 0.10 $ (0.15) $ 0.02
Discontinued operations income   $ 0.01   $ 0.03
Net loss $ (0.14) $ 0.11 $ (0.15) $ 0.05
Weighted average number of shares:        
Basic 16,330,041 16,266,441 16,322,748 16,266,441
Diluted 16,330,041 16,365,410 16,322,748 16,359,079
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