UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of July, 2021

Commission File No. 001-39224

TFI INTERNATIONAL INC.

(Translation of registrant’s name into English)

8801 Trans-Canada Highway, Suite 500

Saint-Laurent, Québec

H4S 1Z6 Canada

(Address of principal executive office)  

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☐            Form 40-F  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

EXHIBIT INDEX

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.

Earnings Press Release

Exhibit 99.1

For Immediate Release

TFI International Announces 2021 Second Quarter Results

– Record results and strong profitability driven by all four business segments –

– Operational focus on “freight that fits” drives record margins –

– Acquisition of UPS Freight makes stronger-than-anticipated immediate positive impact –

Montreal, Quebec, July 26, 2021 – TFI International Inc. (NYSE and TSX: TFII), a North American leader in the transportation and logistics industry, today announced its results for the second quarter ended June 30, 2021. All amounts are shown in U.S. dollars.

“The second quarter was historically significant for TFI International, with the closing of our UPS Freight acquisition and record performance across the board,” stated Alain Bédard, Chairman, President and Chief Executive Officer.  “With all four of our business segments reaching new heights, it is increasingly clear that our strategy to navigate the unprecedented events of the past year has created a platform for growth and profitability that is the strongest in our company’s history, benefitting from our continued sharp focus on ‘freight that fits’ to capitalize on favorable pricing and volume trends.  Particularly gratifying is the performance of TForce Freight which has exceeded our operating ratio targets far ahead of schedule, and we have only just begun our work.  I wish to thank our entire team for their hard work and remarkable efforts, and officially welcome aboard our new TForce Freight colleagues who have seamlessly come under the TFI umbrella and are already making stronger-than-expected contributions.  As we move into the second half of the year, we remain dedicated to strong execution and the generation of robust cash flow to further enhance shareholder value.”

SECOND QUARTER RESULTS

Total revenue of $1.84 billion was up 130% and, net of fuel surcharge, revenue of $1.65 billion was up 123% compared to the prior year period.

Operating income from continuing operations grew 226% to $310.3 million from $95.1 million the prior year period, primarily driven by business acquisitions, a bargain purchase gain of $122.9 million, strong execution across the organization, increased quality of revenue, an asset-right approach, cost efficiencies and Canadian Emergency Wage Subsidy contributions of $5.0 million. This growth was achieved despite a $5.9 million loss recognized on the mark-to-market of the deferred share units (“DSUs”) and $7.0 million of transaction related costs incurred in the acquisition of UPS Freight in the quarter.

Net income from continuing operations grew 398% to $251.1 million from $50.5 million the prior year period, and net income from continuing operations of $2.63 per diluted share was up relative to $0.57 the prior year period.  Adjusted net income, a non-IFRS measure, was $137.2 million, or $1.44 per diluted share, up 104% from $67.2 million, or $0.76 per diluted share, the prior year period.

SIX-MONTH RESULTS

For the first six months of 2021, total revenue of $2.99 billion was up 73% and, net of fuel surcharge, revenue of $2.71 billion was up 73% compared to the prior year period.

Net income from continuing operations was $318.0 million, or $3.33 per diluted share, compared to $106.2 million, or $1.21 per diluted share a year ago. Adjusted net income was $210.9 compared to $119.8 million.

During the first half of 2021, revenue grew 35% for Package and Courier, 204% for Less-Than-Truckload, 23% for Truckload and 101% for Logistics, relative to the prior year period.  Operating income was higher across all segments in Q2 in comparison to the prior year.

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Earnings Press Release

CASH FLOW

Net cash from continuing operating activities was $298.6 million during Q2 compared to $168.1 million the prior year period. The 78% increase was due to stronger operating performance, favorable contributions from working capital of recently acquired companies, and contributions from business acquisitions net of an unfavorable contribution from additional tax payments of $48.3 million driven by an increase in 2021 operating results. The Company returned $58.4 million to shareholders during the quarter, of which $21.4 million was through dividends and $37.0 million was through share repurchases.

Cash used for the purchase of property and equipment was $60.5 million during Q2 2021 versus $20.8 million the prior year quarter, resulfing from a suspension of capital expenditures in Q2 2020.

On June 15, 2021, the Board of Directors of TFI International declared a quarterly dividend of $0.23 per outstanding common share payable on July 15, 2021, representing a 21% increase over the $0.19 quarterly dividend declared in Q2 2020.

CORRECTION OF PREVIOUSLY ISSUED PRESS RELEASE

The press release issued by the Company on July 13, 2021 included a reference to adjusted operating ratio, a non-IFRS measure, without reference to a directly comparable IFRS measure. The Company wishes to withdraw the press release issued on July 13, 2021 and to replace it with the following.

The operating income from the US LTL operating segment, which is comprised almost exclusively of the TForce Freight operations, was $170.8 million, which included a bargain purchase gain of $122.9 million. The adjusted operating ratio, a non-IFRS measure, was 90.1% compared to an expected adjusted operating ratio of 96-97% for the US LTL operating segment. Adjusted operating ratio does not have a directly comparable measure under IFRS. Although adjusted operating ratio is not a recognized financial measure, it is a widely recognized measure in the transportation industry, which TFI International believes provides a comparable benchmark for evaluating its performance.

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Earnings Press Release

TFI International calculates adjusted operating ratio as operating expenses from continuing operations before gain on sale of business, bargain purchase gain, and gain or loss on sale of land and buildings, assets held for sale, and intangible assets, net of fuel surcharge revenue, divided by revenue before fuel surcharge.

The reconciliation for the adjusted operating ratio for the three months ended June 30, 2021 is as follows:

CONFERENCE CALL

TFI International will host a conference call on Monday, July 26, 2021 at 6:00 p.m. Eastern Time to discuss these results.

Interested parties can join the call by dialing 1-877-223-4471. A recording of the call will be available until midnight, August 9, 2021, by dialing 1-800-585-8367 or 416-621-4642 and entering passcode 6087055.

ABOUT TFI INTERNATIONAL

TFI International Inc. is a North American leader in the transportation and logistics industry, operating across the United States, Canada and Mexico through its subsidiaries. TFI International creates value for shareholders by identifying strategic acquisitions and managing a growing network of wholly-owned operating subsidiaries. Under the TFI International umbrella, companies benefit from financial and operational resources to build their businesses and increase their efficiency. TFI International companies service the following segments:

TFI International Inc. is publicly traded on the New York Stock Exchange and the Toronto Stock Exchange under symbol TFII. For more information, visit www.tfiintl.com.

FORWARD-LOOKING STATEMENTS

The Company may make statements in this report that reflect its current expectations regarding future results of operations, performance and achievements. These are “forward-looking” statements and reflect management’s current beliefs. They are based on information currently available to management. Words such as “may”, “might”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “to its knowledge”, “could”, “design”, “forecast”, “goal”, “hope”, “intend”, “likely”, “predict”, “project”, “seek”, “should”, “target”, “will”, “would” or “continue” and words and expressions of similar import are intended to identify these forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected.

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Earnings Press Release

The Company wishes to caution readers not to place undue reliance on any forward-looking statements which reference issues only as of the date made. The following important factors could cause the Company’s actual financial performance to differ materially from that expressed in any forward-looking statement: the highly competitive market conditions, the Company’s ability to recruit, train and retain qualified drivers, fuel price variations and the Company’s ability to recover these costs from its customers, foreign currency fluctuations, the impact of environmental standards and regulations, changes in governmental regulations applicable to the Company’s operations, adverse weather conditions, accidents, the market for used equipment, changes in interest rates, cost of liability insurance coverage, downturns in general economic conditions affecting the Company and its customers, credit market liquidity, and the Company’s ability to identify, negotiate, consummate, and successfully integrate acquisitions.

The foregoing list should not be construed as exhaustive, and the Company disclaims any subsequent obligation to revise or update any previously made forward-looking statements unless required to do so by applicable securities laws. Unanticipated events are likely to occur. Readers should also refer to the section “Risks and Uncertainties” at the end of the 2021 Q2 MD&A for additional information on risk factors and other events that are not within the Company’s control. The Company’s future financial and operating results may fluctuate as a result of these and other risk factors.

NON-IFRS FINANCIAL MEASURES

This press release includes references to certain non-IFRS financial measures as described below. These non-IFRS measures do not have any standardized meanings prescribed by International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS. The terms and definitions of the non-IFRS measures used in this press release and a reconciliation of each non-IFRS measure to the most directly comparable IFRS measure are provided below.

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Earnings Press Release

Adjusted EBITDA:

Adjusted EBITDA is calculated as net income before finance income and costs, income tax expense, depreciation, amortization, bargain purchase gain, and gain or loss on sale of land and buildings and assets held for sale. Management believes adjusted EBITDA to be a useful supplemental measure. Adjusted EBITDA is provided to assist in determining the ability of the Company to assess its performance.

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Earnings Press Release

Adjusted net income and adjusted earnings per share (adjusted “EPS”), basic or diluted

Adjusted net income is calculated as net income excluding amortization of intangible assets related to business acquisitions, net change in the fair value and accretion expense of contingent considerations, net change in the fair value of derivatives, net foreign exchange gain or loss, bargain purchase gain, and gain or loss on sale of land and buildings and assets held for sale,. Adjusted earnings per share, basic or diluted, is calculated as adjusted net income divided by the weighted average number of common shares, basic or diluted. The Company uses adjusted net income and adjusted earnings per share to measure its performance from one period to the next, without the variation caused by the impact of the items described above. The Company excludes these items because they affect the comparability of its financial results and could potentially distort the analysis of trends in its business performance. Excluding these items does not imply they are necessarily non-recurring.

For further information:

Alain Bédard

Chairman, President and CEO

TFI International Inc.

647-729-4079

abedard@tfiintl.com

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Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the second quarter ended

June 30, 2021

CONTENTS

Management’s Discussion and Analysis

GENERAL INFORMATION

The following is TFI International Inc.’s management discussion and analysis (“MD&A”). Throughout this MD&A, the terms “Company”, “TFI International” and “TFI” shall mean TFI International Inc., and shall include its independent operating subsidiaries. This MD&A provides a comparison of the Company’s performance for its three- and six-month periods ended June 30, 2021 with the corresponding three- and six-month periods ended June 30, 2020 and it reviews the Company’s financial position as of June 30, 2021. It also includes a discussion of the Company’s affairs up to July 26, 2021, which is the date of this MD&A. The MD&A should be read in conjunction with the unaudited condensed consolidated interim financial statements as of June 30, 2021 and the audited consolidated financial statements and accompanying notes as at and for the year ended December 31, 2020.

In this document, all financial data are prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) unless otherwise noted. All amounts are in United States dollars (U.S. dollars), and the term “dollar”, as well as the symbol “$”, designate U.S. dollars unless otherwise indicated. Variances may exist as numbers have been rounded. This MD&A also uses non-IFRS financial measures. Refer to the section of this report entitled “Non-IFRS Financial Measures” for a complete description of these measures.

The Company’s unaudited consolidated condenses interim financial statements have been approved by its Board of Directors (“Board”) upon recommendation of its audit committee on July 26, 2021. Prospective data, comments and analysis are also provided wherever appropriate to assist existing and new investors to see the business from a corporate management point of view. Such disclosure is subject to reasonable constraints for maintaining the confidentiality of certain information that, if published, would probably have an adverse impact on the competitive position of the Company.

Additional information relating to the Company can be found on its website at www.tfiintl.com. The Company’s continuous disclosure materials, including its annual and quarterly MD&A, annual and quarterly consolidated financial statements, annual report, annual information form, management proxy circular and the various press releases issued by the Company are also available on its website, or directly through the SEDAR system at www.sedar.com, or through the EDGAR system at www.sec.gov/edgar.shtml.

FORWARD-LOOKING STATEMENTS

The Company may make statements in this report that reflect its current expectations regarding future results of operations, performance and achievements. These are “forward-looking” statements and reflect management’s current beliefs. They are based on information currently available to management. Words such as “may”, “might”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “to its knowledge”, “could”, “design”, “forecast”, “goal”, “hope”, “intend”, “likely”, “predict”, “project”, “seek”, “should”, “target”, “will”, “would” or “continue” and words and expressions of similar import are intended to identify these forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected.

The Company wishes to caution readers not to place undue reliance on any forward-looking statements which reference issues only as of the date made. The following important factors could cause the Company’s actual financial performance to differ materially from that expressed in any forward-looking statement: the highly competitive market conditions, the Company’s ability to recruit, train and retain qualified drivers, fuel price variations and the Company’s ability to recover these costs from its customers, foreign currency fluctuations, the impact of environmental standards and regulations, changes in governmental regulations applicable to the Company’s operations, adverse weather conditions, accidents, the market for used equipment, changes in interest rates, cost of liability insurance coverage, downturns in general economic conditions affecting the Company and its customers, credit market liquidity, and the Company’s ability to identify, negotiate, consummate and successfully integrate business acquisitions.

The foregoing list should not be construed as exhaustive, and the Company disclaims any subsequent obligation to revise or update any previously made forward-looking statements unless required to do so by applicable securities laws. Unanticipated events are likely to occur. Readers should also refer to the section “Risks and Uncertainties” at the end of this MD&A for additional information on risk factors and other events that are not within the Company’s control. The Company’s future financial and operating results may fluctuate as a result of these and other risk factors.

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Management’s Discussion and Analysis

SELECTED FINANCIAL DATA AND HIGHLIGHTS

Q2 Highlights

Refer to the section “Non-IFRS financial measures”.

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Management’s Discussion and Analysis

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Management’s Discussion and Analysis

CONSOLIDATED RESULTS

This section provides general comments on the consolidated results of operations. A more detailed analysis is provided in the “Segmented results” section.

2021 business acquisitions

In line with its growth strategy, the Company acquired Fleetway Transport Inc. (“Fleetway”) on February 1, 2021. Based out of Brantford, Ontario, Fleetway is a full service provider of truckload and heavy-haul transportation solutions and logistics services.     

On April 30, 2021, TFI International completed the acquisition of UPS Freight, the less-than-truckload (LTL) and dedicated truckload (TL) divisions of United Parcel Service, Inc. (NYSE: UPS). The LTL business representing approximately 90% of the acquired business operates independently under the new name of “TForce Freight”.  

On June 1, 2021, TFI International acquired Procam International (“Procam”). Based in Quebec, Procam provides bulk transportation services primarily in north eastern region.

Revenue

For the three months ended June 30, 2021, total revenue was $1,836.7 million, up 130%, or $1,038.2 million, from Q2 2020. The increase was mainly attributable to the contribution from business acquisitions of $823.1 million and from an increase in revenue before fuel surcharge of $164.4 million from existing operations and an increase in fuel surcharge revenue of $50.7 million. The average exchange rate used to convert TFI International’s revenue generated in CAD dollars increased this quarter (US$0.8019) compared to the same quarter last year (US$0.7325) resulting in a positive currency impact of $60.5 million.

Operating expenses from continuing operations

For the three months ended June 30, 2021, the Company’s operating expenses from continuing operations increased by $823.0 million, to $1,526.5 million from $703,4 million in Q2 2020. The increase is attributable to $649.6 million from business acquisitions and to an increase of $183.1 million in existing operating expenses corresponding to the increase in total revenues before business acquisitions.

For the three months ended June 30, 2021, material and services expenses, net of fuel surcharge, decreased by 0.9 percentage points of revenue before fuel surcharge compared to the same period last year due mainly to business acquisitions.

For the three months ended June 30, 2021, personnel expense increased 165% to $500.2 million from $188.8 million in Q2 2020. The increase can be attributed to the impact from business acquisitions of $258.2 million, a reduction in the contribution from the Canadian Emergency Wage Subsidy Program of $22.6 million, a mark-to-market loss on director share units (”DSUs”) of $5.9 million as the share price increased from USD $74.74 per share to USD $91.19, and an increase due to increased volumes in Q2 2021 as compared to the same prior year period.

Other operating expenses, which are primarily comprised of costs related to office and terminal rent, taxes, heating, telecommunications, maintenance and security and other general administrative expenses, increased by $63.3 million for the three months ended June 30, 2021 as compared to the same period last year, attributable primarily to the impact from business acquisitions of $57.3 million. In addition, transaction fees of $7.0 million were recognized in relation to the acquisition of UPS Freight.

For the six-month period ended June 30, 2021, the Company’s operating expenses from continuing operations increased by $1,032.9 million from $1.54 billion in 2020 to $2.57 billion in 2021. The increase is mainly attributable to $853.0 million from business acquisitions. Excluding the acquisitions the operating expenses as a percentage of total revenue decreased from 89.1% to 88.8%. The decrease is due to operating improvements, better fleet utilization and lower material and service expenses in the Company’s existing operations despite a mark-to-market loss on DSUs of $14.3 million, a reduction in the contribution from the Canadian Emergency Wage Subsidy Program of $16.2 million, and transaction costs of $8.0 million.

Operating income from continuing operations

For the three months ended June 30, 2021, TFI International’s operating income from continuing operations rose by $215.2 million to $310.3 million as compared to $95.1 million in the same quarter in 2020. The operating income includes a positive impact from a bargain purchase gain of $122.9 million. The operating margin from continuing operations as a percentage of revenue before fuel surcharge of 18.8% compared to 12.8% in Q2 2020. This increase is due primarily to the bargain purchase gain on the acquisition of UPS Freight, organic growth from operating improvements and through acquisitions, and is partially offset by mark-to-market loss on the DSUs of $5.9 million, acquisition related transaction costs of $7.0 million, and a reduction in the contribution from the Canadian Emergency Wage Subsidy Program of $22.6 million. All reportable segments reported margin increases except for the Truckload segment. Notably, the Less-Than-Truckload segment reported a margin increase of 9.7 percentage points.

For the six months ended June 30, 2021, TFI International’s operating income from continuing operations rose by $229.6 million to $412.0 million as compared to $182.4 million in the same period in 2020. The operating margin from continuing operations as a percentage of revenue before fuel surcharge of 15.2% compared to 11.6% in the same prior year period.

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Management’s Discussion and Analysis

Finance income and costs

Interest expense on long-term debt

Interest expense on long-term debt for the three-month period ended June 30, 2021 was $2.9 million higher than the same quarter last year. The increase is mainly attributable to a higher average debt level of $1.46 billion for Q2 2021 compared to an average debt level of $1.04 billion in Q2 2020. This was offset slightly by a decrease in the average interest rate of 3.18% for the three months ended June 30, 2021 as compared to 3.32% the same period in the prior year.

Net foreign exchange gain or loss and net investment hedge

The Company designates as a hedge a portion of its U.S. dollar denominated debt held against its net investments in U.S. operations. This accounting treatment allows the Company to offset the designated portion of foreign exchange gain (or loss) of its debt against the foreign exchange loss (or gain) of its net investments in U.S. operations and present them in other comprehensive income. Net foreign exchange gains or losses recorded in income or loss are attributable to the translation of the U.S. dollar portion of the Company’s credit facilities not designated as a hedge and to the translation of other financial assets and liabilities denominated in currencies other than the functional currency. For the three-month period ended June 30, 2021, a gain of $5.1 million of foreign exchange variations (a gain of $4.4 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge. For the three-month period ended June 30, 2020, a gain of $9.9 million of foreign exchange variations (a gain of $8.6 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge.

For the six-month period ended June 30, 2021, a gain of $8.0 million of foreign exchange variations (a gain of $6.9 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge. For the six-month period ended June 30, 2020, a loss of $18.1 million of foreign exchange variations (a loss of $15.7 million net of tax) was recorded to other comprehensive income as it relates to the translation of the debt in the net investment hedge.

Net change in fair value of derivatives and cash flow hedge

The fair values of the Company’s derivative financial instruments, which are used to mitigate foreign exchange and interest rate risks, are subject to market price fluctuations in foreign exchange and interest rates.

The Company previously designated the interest rate derivatives as a hedge of the variable interest rate instruments. Therefore, the effective portion of changes in fair value of the derivatives was recognized in other comprehensive income. For the three- and six-month period ended June 30, 2021, the Company did not have any cash flow hedge positions. For the three-month period ended June, 2021, a gain of $0.3 million on change in fair value of interest rate derivatives was recognized, of which $0.1 million was designated as cash flow hedge and recorded to other comprehensive income as a change in the fair value of the cash flow hedge (a gain of $0.0 million net of tax).

For the six-month period ended June, 2021, a cumulatve loss of $3.8 million on change in fair value of interest rate derivatives was recognized, of which $3.5 million was designated as cash flow hedge and recorded to other comprehensive income as a change in the fair value of the cash flow hedge (a loss of $2.7 million net of tax).

Income tax expense

For the three months ended June 30, 2021, the Company’s effective tax rate was 14.5%. The income tax expense of $42.5 million reflects a $35.3 million favorable variance versus an anticipated income tax expense of $77.8 million based on the Company’s statutory tax rate of 26.5%. The favorable variance is mainly due to the tax exempt bargain purchase gain recorded on the acquisition of UPS Freight which resulted in a favorable variance of $32.9 million. The remaining favorable variance of $2.4 million is mainly due to favorable variations from tax deductions and tax exempt income of $4.4 million partially offset by a negative variation of $2.5 million for non deductible expenses.

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Management’s Discussion and Analysis

For the six months ended June 30, 2021, the Company’s effective tax rate was 16.5%. The income tax expense of $63.0 million reflects a $38.0 million favorable variance versus an anticipated income tax expense of $101.0 million based on the Company’s statutory tax rate of 26.5%. The favorable variance is mainly due to the tax exempt bargain purchase gain recorded on the acquisition of UPS Freight which resulted in a favorable variance of $32.9 million. The remaining favorable variance of $5.1 million is mainly due to favorable variations from tax deductions and tax exempt income of $8.7 million partially offset by a negative variation of $3.6 million for non deductible expenses.

Net income and adjusted net income

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

For the three months ended June 30, 2021, TFI International’s net income was $251.1 million as compared to $50.5 million in Q2 2020. The Company’s adjusted net income¹, a non-IFRS measure, which excludes items listed in the above table, was $137.2 million as compared to $67.2 million in Q2 2020, an increase of 104% or $70.0 million. Adjusted EPS, fully diluted, increased by $0.68 to $1.44 from $0.76 in Q2 2020.

For the six months ended June 30, 2021, TFI International’s net income was $318.0 million as compared to $106.2 million in Q2 2020. The Company’s adjusted net income¹, a non-IFRS measure, which excludes items listed in the above table, was $210.9 million as compared to $119.8 million in Q2 2020, an increase of 76% or $91.1 million. Adjusted EPS, fully diluted, increased by $0.84 to $2.21 from $1.37 in Q2 2020.

¹ Refer to the section “Non-IFRS financial measures”.

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Management’s Discussion and Analysis

SEGMENTED RESULTS

To facilitate the comparison of business level activity and operating costs between periods, the Company compares the revenue before fuel surcharge (“revenue”) and reallocates the fuel surcharge revenue to materials and services expenses within operating expenses. Note that “Total revenue” is not affected by this reallocation.

Selected segmented financial information

¹ Includes intersegment revenue.

² Segment revenue including fuel surcharge and intersegment revenue to consolidated revenue including fuel surcharge and intersegment revenue.

³ Refer to the section “Non-IFRS financial measures”

⁴ As a percentage of revenue before fuel surcharge.

⁵ Additions of rolling stock and equipment, net of proceeds from the sale of rolling stock and equipment and assets held for sale excluding property.

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Management’s Discussion and Analysis

Package and Courier

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

¹ Refer to the section “Non-IFRS financial measures”.

*  Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

Revenue

For the three months ended June 30, 2021, revenue increased by $44.4 million or 44%, from $100.8 million in 2020 to $145.2 million in 2021. This increase in revenue is attributable to a 13.7% increase in revenue per package (excluding fuel surcharge) combined with a 26.7% increase in packages. Increase in revenue per package is attributable to a 24.2% increase in revenue per pound (excluding fuel surcharge) partly offset by a 9.2% decrease in average weight per package. The increase in packages is mostly attributable to lower volumes in the first half of the quarter ended in June 2020 due to the COVID-19 pandemic and the associated shutdowns. The decrease in weight per package is mainly attributable to the decrease in retail volume brought upon by the COVID-19 pandemic restrictions specifically in the beginning of the quarter as there was a slight shift back to higher retail volume towards the end of the quarter. Despite the reopening of markets in the back half of the second quarter, market capacities continue to be tight, resulting in increased pricing and an ongoing shift towards higher quality freight, leading to strong yield improvement as reflected by the increase in revenue per pound and revenue per package.  

For the six-months ended June 30, 2021, revenue increased by $71.8 million or 35%, from $205.0 million in 2020 to $276.8 million in 2021. This increase is mostly related to higher e-commerce volume that remains strong since the beginning of the COVID-19 situation.

Operating expenses

For the three months ended June 30, 2021, materials and services expenses, net of fuel surcharge revenue, increased $17.3 million or 38%, partly due to a $22.6 million increase in subcontractor costs and a $2.2 million increase in external labor and partially offset by higher fuel surcharge revenue.  Increase in external labor was mostly required to manage higher volume in our Quebec and Ontario sorting facilities.  Personnel expenses increased $12.3 million or 44%, partly from administrative salaries that increased $2.7 million year over year, primarily caused by a workforce reduction in the second quarter of 2020 along with a reduction of $3.2 million in Canada Emergency Wage Subsidy when compared to the second quarter of 2020.   Express operations were also impacted by a $5.5 million increase in direct labor cost, mostly from a $2.3 million increase in pickup & deliveries cost combined with a $2.6 million increase in sorting costs, required to handle the additional volume. Other operating expenses increased $1.3 million or 24%, primarily due to higher real estate and IT costs.

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Management’s Discussion and Analysis

For the six-months ended June 30, 2021, materials and services expenses, net of fuel surcharge revenue, increased $32.3 million due to a $34.0 million increase in sub-contractor costs required to handle additional volume. Personnel expenses, as a percentage of revenue decreased 180 basis points, from 30.1% in 2020 to 28.3% in 2021. Other operating expenses increased $2.2 million in the first six months of 2021, mainly due to a $1.3 million increase in real estate cost combined with a $0.8 million increase in IT and telecommunication cost.

Operating income

Operating income for the three months ended June 30, 2021, increased by $13.2 million or 80% compared to the second quarter of 2020 and the operating margin was 20.3% in the second quarter of 2021, a strong improvement when compared to 16.3% for the same period in 2020.  This year-over-year increase in the second quarter operating income was driven primarily by strong organic revenue growth, combined with our constant focus on improving the quality of freight, which resulted in operating leverage. The impact of business reopenings and shift in customer composition is being closely monitored to focus on driving yield and margin in preparation of the next peak season.

The return on invested capital¹ increased an 610 basis points, from 16.9% in the trailing twelve months ended in June 30, 2020, to 23.0% in the trailing twelve months ended June 30, 2021.  This is primarily due to the increase in operating income over the same period.

For the six-month period ended June 30, 2021, Operating income increased by $19.9 million to $47.9 million driven by organic growth and a constant focus on improving the quality of freight.

Less-Than-Truckload