Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the TFI International 2022 Annual and Special Meeting. At this time, all participants are in a listen-only mode. I would like to remind everyone that this call is being recorded on Thursday, April 28, 2022. I will now turn the call over to Alain Bédard, Chairman of the board, President and Chief Executive Officer of TFI International. Please go ahead, sir.
Well, thank you, and good afternoon, ladies and gentlemen. Welcome to the TFI International 2022 Annual and Special Meeting. Again, this year, in light of the COVID-19 pandemic, we have asked all shareholders not to attend the meeting in person and to vote by proxy prior to the meeting, which many of you have done. We have taken measures to conduct this meeting so as to protect the health and safety of all participants, including remote telephone participation by myself, by the scrutineers for the meeting and others. We are therefore making this meeting available by telephone. Shareholders will be able to ask questions in a few minutes after we have conducted the official business of the meeting. In order to ask your question, please follow the instruction from the operator at the conclusion of the official business. We thank you for your understanding. We'll now start the meeting.
I will act as chairman of the meeting and with the consent of the meeting, Josiane M. Langlois, who is present at the TFI's head office in Montreal to act as secretary. Also, with the consent of the meeting, I now ask Steve Gilbert and Pierre Girard of Computershare Trust Company of Canada to act as scrutineer for the meeting, to tabulate the number of shareholders and the number of shares represented at this meeting in person or by proxy, and to report thereon to me as chairman of the meeting. There are several routine matters to be dealt with at this meeting. To expedite matters, I've arranged for certain shareholders to make and second various motions.
The matter to be considered at these meetings are the presentation of the 2021 annual financial statements of TFI, the election of the directors, the appointment of TFI's auditor, a non-binding advisory vote approving the compensation of TFI's named executive officers, commonly known as Say on Pay, and a non-binding advisory vote on the frequency of our Say on Pay votes. The election of directors will be held by ballot. Unless a ballot is required by a registered shareholder or a proxyholder, all other votes at the meeting will be conducted by voice vote as permitted by the Canada Business Corporations Act. I'll now begin the official portion of this meeting. I call upon the scrutineers to present the report on attendance, and I direct that such report be annexed to the minutes of this meeting as scheduled.
Good afternoon, Mr. Chairman. We, the undersigned scrutineers from Computershare Trust Company of Canada, hereby report that there are at least seven shareholders and/or proxyholders present at this meeting, representing in person or by proxy 74,376,517 shares, being 80.79% of the total 92,057,998 outstanding shares of TFI International Inc. We will hand in a report signed by myself, Steve Gilbert, and by Pierre Girard, both the scrutineers. Thank you.
Well, thank you, Mr. Gilbert. The scrutineers' report show a quorum to be present. I declare the meeting to be regularly constituted. The meeting, the notice calling for this meeting and accompanying documents have either been mailed or made available electronically to all the shareholders of the corporation and to the corporation's auditors. With the consent of the meeting, we will dispense with the reading of the notice. Also, with the consent of the meeting, we will dispense with the reading of the minutes of the last meeting of shareholders held on April 27, 2021, and I direct that such minutes be taken as read and approved and that they be signed as being correct. The first item on the agenda is the presentation of the 2021 annual financial statements.
The annual report containing the consolidated financial statements of the corporation for the fiscal year ended December 31st, 2021, and the auditor's report thereon have been mailed to shareholders who requested them. They're also available electronically on SEDAR, EDGAR, and on the TFI International website. The next item of business is the election of the directors of TFI International. I would now like to introduce the 10 candidates for election this year, and they are Leslie Abi-Karam, André Bérard, William T. England, Diane Giard, Richard Guay, Debra Kelly-Ennis, Neil D. Manning, Joey Saputo, Rosemary Turner, and myself, Alain Bédard, Chairman of the board, President, and Chief Executive Officer of TFI International. I declare the meeting open for nomination, and I would ask Josiane Langlois to present her nominations.
Thank you, Mr. Chairman. I'm Josiane Langlois, and I am a shareholder and a proxy holder of TFI International. I nominate each of Leslie Abi-Karam, Alain Bédard, André Bérard, William England, Diane Giard, Richard Guay, Debra Kelly-Ennis, Neil Manning, Joey Saputo, and Rosemary Turner as directors of TFI International Inc. to hold office until the next annual meeting of the shareholders or until their successors are elected or appointed.
Well, thank you, Josiane. Are there any further nominations? Okay. As there are no further nominations, I declare the nominations closed. We will now vote. Because TFI International has a majority voting policy for the election of directors, we will vote by ballot in order for the vote to be accurately compiled. As all ballots were signed, submitted, and tabulated prior to this meeting by proxy holder, including myself and Josiane Langlois, I now call upon the scrutineers to present the results of the vote on the election of directors.
Mr. Chairman, as scrutineer, we report that the 10 nominees received votes in favor ranging from 94.05%-99.91% of all shares voted or withheld from voting.
Well, thank you, Mr. Gilbert. Based on those results, I declare that the 10 nominees have been elected as director of TFI International to hold office until the next annual meeting of shareholders or until their successors are elected or appointed. TFI International will issue a press release announcing the results and file a detailed report of voting results on SEDAR and EDGAR shortly after this meeting. The next item of business is the appointment of the auditors of TFI International, and I would ask Mr. David Saperstein to present a motion.
Oh, thank you, Mr. Bédard. I am David Saperstein, and I am a shareholder and a proxy holder of TFI International Inc. Be it resolved that KPMG LLP chartered professional accountants be, and they are hereby appointed auditor of TFI International Inc. To hold office until the next annual meeting of shareholders at such remuneration as may be fixed by the directors of TFI International and the directors be, and they are hereby authorized to fix such remuneration.
Okay. Thank you, Mr. Saperstein. I now ask Josiane Langlois to second the motion.
I second the motion.
Okay, all those in favor, please say yes.
Yes.
Yes.
Yes.
All those against, please say no. Good. I declare the motion carried. The next item of business is a non-binding advisory vote on executive compensation or say on pay, as set out in our management information circular dated March 18, 2022. I would ask Josiane Langlois to present the motion set out in our management information circular.
Resolved that on an advisory basis and not to diminish the role and responsibilities of the board, that the shareholders approve the compensation of the corporation's main executive officers as disclosed in the management information circular dated March 18, 2022, including the compensation discussion and analysis, the accompanying compensation table, and the relative narrative disclosure.
Thank you. I would ask David Saperstein to second the motion.
I second the motion.
Thank you. All those in favor, please say yes.
Yes.
Yes.
Yes.
All those against, please say no. Very good. I declare the motion carried. The next item of business is a non-binding advisory vote on the frequency of our say on pay vote. I will ask Josiane Langlois again to present the motion set out in our circular.
Resolved on an advisory basis and not to diminish the role and responsibilities of the board that the shareholders wish the corporation to include an advisory vote on the corporation's executive compensation every year, two years, or three years.
Well, the proxy form sent to shareholders provide an opportunity to choose among these three options. That is, holding a say on pay vote every one, two, or three years. TFI's board of directors recommended that shareholders vote on say on pay every year. I now call upon the scrutineers to present the results of the proxy vote on the frequency of say on pay.
Mr. Chairman, we report that of the 74,327,888 shares voted, 99.37% of the votes are in favor of the motion for every year.
0.08% voted for every two years, and 0.1% voted for every three years. Thank you.
Thank you. The board of directors will review the results of this advisory vote, and we thank all shareholders who expressed their view by voting. As we have completed the official business of the meeting, I now ask for a motion to terminate the meeting.
I move that the meeting be terminated.
Okay.
I second the motion.
All those in favor, please say yes.
Yes.
Yes.
Yes.
All those against, please say no. Thank you. I declare the motion carried and the official portion of the meeting terminated. The meeting is now open for questions. Operator, please proceed with the question period.
Thank you, ladies and gentlemen. To ask a question, you will need to press star one on your telephone. To withdraw your question, please press the pound or hashtag. Again, that's star one to ask a question. Please stand by while we compile the Q&A roster. Your first question comes from the line of Xiang Yu. Your line is open.
Hello. This is Xiang Yu, and I am very impressed by TFI under the current leadership. I wonder, the CEO have any and the board has a succession plan and how long the CEO plans to stay as the CEO going forward. Thank you.
Well, thank you. Thank you, sir. It's a very good question, and for sure, it's also a question that the board really looked at, and for sure we have a plan. To answer your second part of your question, the CEO is in there again for probably another five years. I would like to be part of that team at least for another five years. We got so much to do. We just acquired a fantastic company in the U.S. that is called TForce Freight now. We have lots to do over there. It's just, I mean, we're just scratching the surface as we speak now after a year that we bought it. It's a great team. I mean, we're having our Canadian folks helping our US team to perform better.
This is not gonna happen overnight. It's a big company, and it will take some time. With all these different challenges, my commitment to the board and to our shareholders and to our family members, because TFI is like a family, is I would like to stay at least for five years, unless the board says, "Alain, you should retire." They haven't said that yet, so I'm in.
Okay, thank you.
You're welcome.
I apologize in advance if I will be mispronouncing the last name, but the second on the queue is Wasil Wisotzky from Trident. Your line is open.
Yes. Hi, good afternoon. I have two questions, if I may. First, I'd like to ask about the pricing power that the company has in light of recent spike in inflation and the projection that that is going to last longer than our central banks have outlined previously. Essentially, can we pass on the increased cost of fuel and other expenses on to our customers? The second question is related to the use of excess cash going forward. I know that there's been an increase in debt, long-term debt, as a result of acquisitions. I'd like to know how capital will be allocated in terms of dividend increases, share repurchases, and/or long-term debt as you foresee it, say, over the next five years. Thank you very much.
Well, the first part of your question, I mean, I think that we're gonna be releasing our Q1 numbers after market close today, and I think that this will answer your question. I mean, for sure. I mean, at TFI, everybody's rolling up his sleeves. We know that inflation is with us not for six months, it will last. The supply chain system around the world has been affected badly by COVID, by this war now that we have in Europe and all that. It will take some time before our supply chain gets back to normal. In the meantime, for sure, we're gonna have to go through some inflation because the price of energy is gonna go high like it is now.
It may reduce depending on what happens in Europe, but still, the foreseeable future is that it will probably remain high. By looking at our Q1 results that we will publicize after market close today, I think it's gonna be a confirmation that the team at TFI is really doing a fantastic job. Okay. In terms of what are we gonna do with our cash flow? I mean, we said that TFI generates probably a little bit more than $700 million of free cash flow. Our priority number one and we stated is we have 20% of our free cash flow. Normally, about 20% has to go back to our shareholders in form of either dividend or buy back shares. That is number one. Number two is it's always been M&A, right?
We've said that every 2-3 years we do something upside. In between those 2-3 years, we do $200 million-$250 million of small, nice tuck-in deals that we've done, you know, year after year, and we're gonna keep doing the same thing this year, right? Then what's left is for reducing our debt. Our forecast, if nothing changes, is that our debt will be reduced by about $400 million by the end of 2022. Our net leverage is around 1.5x EBITDA. The forecast is that unless we do a lot of M&A, it's gonna go down to maybe 1.25. 1-1.25, depending on M&A and NCIB.
The last leg, okay, the fourth leg is NCIB. For sure, we were not very active in Q1 in terms of our NCIB. Based on today's price of CAD 100 for TFI share, CAD 100, okay, for sure, you will see us a little bit more active in Q2.
It appears that we have no further questions, so I'll now return back the call to Mr. Alain Bédard for closing remarks.
Well, thank you, operator. Ladies and gentlemen, thank you, operator, and thank you to our shareholders for your support of TFI International. This concludes our meeting. Thanks a lot.