Please standby your meeting is about to begin. Welcome to the Vitran Corporation, Second Quarter Results Conference Call. Your host for today are Rick Gaetz and Sean Washchuk. There will be a formal Q&A at the end of the call and instructions will be given on how to queue-up for a question. Please go ahead.

Thanks Chris. Good morning everyone. Welcome to Vitran's second quarter 2010 conference call. We're hosting the call today from warm and sunny Los Angeles as supposed to our normal hosting location of Toronto. As always I'm joined today by Sean Washchuk, Vitran's Chief Financial Office. I'm sure by now you've read the press release from late yesterday afternoon or early this morning regarding the results of our most recent quarter. I'm extremely pleased that we continue to make progress particularly in a couple of key areas which I will elaborate on in a few minutes. We continue to have a long way to go, but there is no denying that we have turned the corner. We have reported our best results in two years. I think there are several reasons to have some level of optimism going forward. But before I talk about the second quarter results, I'd like Sean to read the Safe Harbor clause and give you a brief financial overview of the quarter.

Thanks Rick. This call contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian Securities laws. Forward-looking statements may be generally identifiable by the use of the words; believe, anticipate, intend, estimate, expect, project, may, plan, continue, will, focus, should, endeavor or the negative of these words or other variations of these words or comparable terminologies. These forward-looking statements are based on current expectations and are naturally 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. Such forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause Vitran's actual results, performance or achievements to differ materially from those projected in the forward-looking statements. Factors that may cause such differences include, but are not limited to; technological change, increasing fuel costs, regulatory change, the general health of the economy, seasonal fluctuations, unanticipated changes in railroad capacity, exposure to credit risks, change in labor relations, geographic expansion, capital requirements, availability of financing, claims and insurance costs, environmental hazards and competitive factors. More detailed information about these and other factors are included in the annual form 10-K under “Item 1A - Risk Factors.” Many of these factors are beyond the company's control. Therefore, future events may vary substantially from what the company currently perceives. 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 call or to revise them to reflect the occurrence of future, unanticipated events. The second quarter of 2010 Vitran Corporation improved income 293% to $1.7 million compared to $400,000 in the second quarter of 2009, These results were achieved…

Thanks Sean. As I mentioned a few minutes ago and Sean just articulated, the quarter was one of continued improvement and just a few quick bullets. Revenue was up 13%, I'm going to expand on that in a minute. EDIT improved a 103% to $4.1 million, EPS as Sean indicated improved $0.19 year-over-year from a loss of $0.14 a year ago in the first half to a profit $0.05 this year in the first half and obviously $0.11 this quarter. We continue to see sequential year-over-year improvements in many segments or aspects of our business and I'll just elaborate just very briefly on the three pieces. But Sean mentioned our truck load business I think was a little disappointing, it's generated - it historically generated better operating ratios in 98%. It was impacted negatively by an unusually high accident number. And I just want to remind everybody that our self insurance level in the organization is of $350,000 per accident, and of course in the small truck load business when we bump-up against that, it has a significant impact on the results in the quarter. It continues to do the same thing. We're moving price, we're moving spot pricing. We're starting to have contract business come up for renewal and we're going to move those prices. But not withstanding that, a little disappointing in the quarter, but isolated to one event if you will. Our supply chain operation continues to perform very well. We have another really solid quarter generating earnings of $1.4 million for the second quarter in a raw and as Sean mentioned a very solid operating ratio in the low 93s. Efficiency in the part of our operation remain strong. We continue to perform very well on behalf of our retail customers. We have several lines in…

Thank you. (Operator Instructions). Our first question comes from David Ross. Please go ahead. David Ross - Stifel, Nicolaus & Co: Good morning gentlemen.

Hi, Dave. David Ross - Stifel, Nicolaus & Co: First question is just on kind of, the first quarter ended on a real positive note. You said I that I think operating ratio in the LTL group was 96.3 in March. Just wanted to know, with first quarter just unusual with strength in logistics, the strength in LTL and the strength in truck load, I mean you talked a little bit about the accident in truck load, I understand that. And then maybe a little bit of a slow down in logistics activity. But could you just talk about first quarter versus second quarter?

I think what we said in the first quarter call, we kind of urged everyone to be very careful not to take the March number and kind of extrapolate it. But, the March however was strong, but March was a 23 day month in the middle of a normally strong seasonal time, at the end of the first quarter. So, that was obviously we didn't have any 23 day month in the second quarter. So, as we would have expected the quarter, we made money every month in the quarter in Q2 and the earnings build as they did in Q1 from the first month of the quarter to the back month of the quarter. So, we are very happy with the continued progress. We're very happy with the positive LTL OR, we're very happy with the yield progression. There were some things David that impacted the second quarter results. Our purchase transportation costs were up about % from a year ago. And that's kind of just chasing the activity growth. We had higher equipment rental cost in the quarter. We brought in 400 new pieces of equipment toward the backend of the quarter. Actual all that equipment won't be in until the end of this month another couple of weeks. So, we kind of chased that one a little bit. But the equipments, kind of three quarters in now. So it came in the back third of the quarter. We top a little issues, none of them are to me are overly news worthy. But when you analyze the results say did we loose a little bit here, did we miss a little bit there. But we had -- you probably remember now the floods in Tennessee. So we lost our national facility, it was under water for 10 days, disrupted our operation obviously for a period of time particularly in the southern region kind of southwest, central territories. So, it costs us some money and was a significant occurrence. But those things happen from quarter-to-quarter. It's like having a bad week of weather in winter. As someone said to me it's an outdoor sport and some of those things happen from time-to-time. David Ross - Stifel, Nicolaus & Co: And then can you talk about the volume trends in the LTL business from month-to month. I think you said that April was tracking 17% year-over-year growth. But the tonnage obviously ended up a lot lower than that.

On shipment or tonnage, what was your question? David Ross - Stifel, Nicolaus & Co: Tonnage.

Tonnage I'll just look first in here. Sorry, I'll give you a -- so tonnage per day in April was a finished up kind of low teens. And then May and June were kind of 9% and 10% respectively, in that the range. So kind of hung in. There is no question that our tonnage numbers could have been higher, if we didn't have a very serious initiative in the organization to begin to be paid properly for the service that we provide. David Ross - Stifel, Nicolaus & Co: Then how is that trended into July?

Our yields up in July again. David Ross - Stifel, Nicolaus & Co: I mean tonnage.

Our tonnage numbers, our tonnage numbers are up modestly in July. So, it's kind of get to normal seasonal, July is typically a little softer. But our July numbers are -- our July tonnage numbers are up a little bit. David Ross - Stifel, Nicolaus & Co: And then like hall in LTL -

Half, they are half of 0.5%. Link of hall and LTL is stable from the first quarter, it's actually bang on, and it's been growing steadily every month for the past 18 months. It's just flat right now. But quite frankly it's flat because it appears that some of the more aggressive pricing that's going on is going on in the longer hall arena and that's where we were even more aggressive if you will from our internal price initiatives. David Ross - Stifel, Nicolaus & Co: I guess it's still (inaudible).

Right, yes. David Ross - Stifel, Nicolaus & Co: Excellent, thanks.

Okay. Thanks Dave.

Our next question comes from Art Hatfield. Art please go ahead.

Hey, Rick.

Good morning Art.

How are you doing?

Good, thanks.

Good. Hey, on your comments on yield, Rick.

Yes.

This 2.1%, is that ex-fuel?

Yes it is. Its ex-fuel, and it was an impact by length of hall or average shipment size. So it's a pretty solid number.

Okay. So it's a good solid. Do you expect that, you mentioned you expect that to continue to do well. Do you think that accelerates from here or you think that kind of 2% number is what you would be happy with?

I mean we would like it to accelerate from here. But I think in large part it depends on the macro environment and it depends on the overall environment and when I say the environment I think in both the economy and the industry it self. But from our perspective, we think that that number, we think that that number - we think we have a chance to repeat that number in Q2.

Okay.

Q3 I'm sorry.

Yeah. Got it. Yeah, you mentioned a kind of normal seasonality in Q3. Some of the other people that we talked to July has been a pretty decent month and I want to compare you to that only from the standpoint that are you seeing any indication that maybe some customers'. And you know customer mix may vary by carrier or mode of transportation. But you're seeing anything that would indicate to you that we're going to have a weaker or stronger than normal peak season this year?

No. July is off a little bit from June and that would be expected, that's kind of normal seasonality. It's better than it was a year ago. I can tell you in our supply chain business which deals with large retailers, there is some optimism. We're expecting a fairly busy Q3, there is optimism on their part as we kind of project and plan into the next quarter with them. So, I don't see anything at this point kind we are always conservative. But I don't think there is any reason to think that anything is going on other than what we seen here in the last six months.

I am just looking back and I'm hoping this is right. But how should we think about Q3 this year from a comparative standpoint which -- how did the months flow for toughest, easiest comparisons for you?

How did the -- sorry how did months flow?

Say for instance if you look for July or Q3, 2010 is July an easy comp for you or is it a more difficult comp relative to the other months?

Well we started to improve clearly at the end of the -- early in the second quarter a year ago. So, I would say as we go forward to comps may get a little lighter tighter, but at the same time we feel -- I don't know how. At the same time we feel a little better about where we are taking our business.

Okay.

It bit of a sloppy answer.

But it's a tough environment once, you got things you're

Yeah.

And you were doing last year. One last thought, and I miss this. Sean if you can, what did you say about cap expense for this year?

About another $6 million to $9 million.

I guess theoretically that would still kind of put you below a normal replacement level, is that fair to say?

Well yeah. We've also acquired some equipment with through operating leases. So Art, I can tell you between last November ‘09 to July of 2010 we will have brought in about 1,500 pieces of equipment. So we've been pretty aggressive.

Work aspects. Okay. So you're not -- you're no longer in a shrinking type of mentality?

No. No.

Okay. So, you're back to at least normalized price but not overly aggressive on the gross side?

Yeah. I mean, quite frankly our equipment rental cost was little higher than we wanted to be in the second quarter. Again, just kind of moving parts, but we had 400 new piece of equipment that were coming in late Q2 and early Q3 here.

And final question, are you a net higher right now?

Yes.

You find in it easy or difficulty in people?

I would say more difficult than easy.

Okay.

It's probably a good thing.

Yeah. Fair enough. Okay. Thanks for your time.

Thank you.

Okay. Our next question comes from Jack Waldo. Jack, please go ahead.

Good morning guys.

Good morning, Jack.

Hey Rick, one question and it's something that is historically been the case, would you guy model like when things start to pick up, your margin improvement between the first and second quarter on the LTL side was what 300 and odd basis points.

Yeah. I think 310 basis points.

It kind of lags what we've seen from some of the other guys that have reported, is there - how do you think about that is, I mean is it just a function of them having easier comps or is there a something different about maybe your Canadian operation begin less asset intensive that that kind of hampers the margin improvement early on in the cycle?

I don't know. I mean I think there is only that's reported. But, I kind of look at it and say, 300 is pretty good quarter-to-quarter improvement in over solidly in the black which is an important step right now in this LTL arena it appears. So could it have been 400 if things went a little better in a couple of areas, sure. But, 310 basis points for us, we felt pretty good about that frankly.

What - are you seeing any signs of weakness in the economy?

No. I just kind of had this, that question asked a little differently a second ago. But, there is a normal kind of July softening that happens every year. So it's not a surprise. We anticipated, expected it. We are also, we're - as I said earlier, we are - our large retailers in our supply chain operation feel pretty good about Q3. So, there is no big alarms out there. I think on of things that will impact our growth rate a little bit is our desire to I think intelligently and properly move the price part to a level that makes sense for a customer and for our long0term ability to provide them expanded services.

And your logistics division came in a little bit less than what we expected and you actually saw your operating ratio decline a 110 basis points year-over-year.

Yeah.

And was actually worse than the first quarter, what happened there?

Nothing happened. It's just kind of moving parts with the business and activity in different facilities. We had very solid quarter, another $1.4 million quarter which matched our record first quarter. In all it was a while was off here. We kind of cycled -- we cycled all the new openings other than San Antonio through the year now. But, was a good quarter. We expect that business to continue to grow and the operating income level to continue to expand for the rest of the year. But we're excited about the irons and the fire, I mentioned earlier. We're going to open a new facility here on August 1st and the second one on September 1st and we hope to have more news before the end of the year on that segment of our business.

And then on the Frontier division your commentary suggested, well that Frontier performance was different, little bit worse than historically been the case and the operating ratio or at least for the second quarter was as bad as I can remember, what happened there?

Essentially our accident -- it was impacted by an accident that had bumped up against our self insure limit.

Got you.

It's such a small business that and unusually difficult accent quarter can impact the numbers there.

And is that something that you expect -- sorry to kind of return the heads historically level.

Yeah. Borrowing anything else, borrowing anything unusual, we would expect it to recover.

Got you, okay. Last question, Sean what you expect for the tax rate for the second half of this year? And could you also remind us where you're debt covenants lye?

Sure. We relative in a debt covenants right now, moving forward they decline slightly. It's a four and a half time's leverage ratio for Q3 which we expect to meet. We're currently at 3.9. So we've improved earnings into the third quarter that shouldn't be a problem. And on the tax rate, we're between 95 and 97 OR it's around 20% tax rate work for the quarter. And it gets incrementally higher when we move from 93 to 95, we start approach 30% around 93.

And when is your next, when is the next stage down on your leverage ratio?

At three and a half time left.

It goes flat at three and a half times?

No.

No. we have two more drop downs one at a three and a half times levered and one at three times levered. So we can still move our interest expense or our interest rates spreads down.

And when does the three times leverage kick in? All I'm saying that move down the interest rate. What about the de-covenant ratio?

Oh, the covenant moves to I think its --

Three in a quarter in the first quarter of ‘11.

Okay, got you. Okay. Looks -- thank you very much.

Okay. Thanks, Jack.

Okay. Our next question comes from Neal Deaton. Please go ahead. Neal Deaton - BB&T Capital Markets: Hi, guys.

Hi Neal. Neal Deaton - BB&T Capital Markets: Hope you're doing well. Jack asked just a minute ago but I just want to follow-up sort along it. With regard to the insurance and claims based on the rack and are the big claim and truck loads. Have you all got in that pretty much taking care and put to bed or you're going to have to like increase your insurance reserves going for the handle any on going ramp.

No, no. Everything is -- you have taken care of it as you know about it. So everything is, everything is orderly at this point. Neal Deaton - BB&T Capital Markets: Okay. So the OR should circle back down then?

Should circle back down. Neal Deaton - BB&T Capital Markets: Okay. And then did I hear you correctly earlier to say that July months of a tonnage is up 5%. I'm assuming that the sequentially.

Yes Neal Deaton - BB&T Capital Markets: Okay. And then reminds us if you --

Oh! I'm sorry, year-over-year. Neal Deaton - BB&T Capital Markets: Its year-over-year, okay.

Yeah. Neal Deaton - BB&T Capital Markets: And then if you would, you got labor expenses coming back in the back half of this year related to salary cuts and things like that you'll, you know that were cost saving as a year ago but you're going to bump up against.

I don't know, I don't know. It's a good question, there is -- we would like to move wages a little bit between now and the end of the year, there is no question about that. It would be our desire. But it's quite frankly Neal it is absolutely a function of yield which becomes a function of margin. And as we continue to move yield along we will, as we continue to recover yield we'll start to consider leaking some of that back end. New world order it is what it is. But we would like to give our U.S. employees a bump and we will as we continue to move yield. Neal Deaton - BB&T Capital Markets: Okay. So it's really --

It's the whole back bone to, I am extremely pleased that our initiative since February to move yield on a sequential basis every month right through July and I don't know if you recall, but we said in the first quarter, we're not smart enough to take another 1,000 basis points of operating income or earnings improvement. We're not smart enough to get another thousand basis points of expense out of our business. If we were going to return from low 100 OR to low 90 OR it wasn't an accomplishment for many more saving. It was only lots of initiative between growth and operating initiative we have in our company. But there is nothing more vital than charging a fair price for the service we offer and that's why we just its -- real simple math for us. If you make legit for $10 and sell it for 9 it's hard to kind of get a return for any of our shareholders. And that's why we embarked on the initiative in February and we are going to keep moving it forward and we will share some of that at one point. There is no schedule for it, fair question. Neal Deaton - BB&T Capital Markets: Okay. It's to b determined?

Yeah. Neal Deaton - BB&T Capital Markets: And then we forgot the two new facility that you are going to be managing, how did they compare in size and scope to the once like in LA and San Antonio? Are they roughly the same size?

That would be a little bigger than San Antonio opening late last year. They won't be the size of LA. But just to give you a sense the combined facilities will probably -- probably represent another 7% or 8% revenue on our supply chain business. So nice little bumps. Neal Deaton - BB&T Capital Markets: Another 7% or 8% of where you've been running?

Yeah. Neal Deaton - BB&T Capital Markets: Okay. And then just a maintenance question, the last time it was discussed deprecation and amortization, you all expected to be roughly flat to down a little bit. A little lower than we expected this quarter, you still expect to be down slightly year-over-year?

Yeah. I think it will be in the same range it was this quarter about $4.8 million. Neal Deaton - BB&T Capital Markets: Okay. That's helpful, thanks guys.

Okay. Thanks Neal

(Operator Instructions). Okay. The next question comes from David Ross. David, please go ahead. David Ross - Stifel, Nicolaus & Co: Yes, I had some quick follow-ups. You talked about the large retailers doing pretty good about the third quarter. Can you give a little bit of color on their supply chain strategies. Have they already shipped a lot inventory over for the fall peak season? Or back to full season, they feel good where their inventories are now and they are not ordering as much anymore? Or they still do you think going to be bringing more?

Yeah. We expect to very active in August and September, David. David Ross - Stifel, Nicolaus & Co: Okay. That's given their current levels on the distribution side or kind of inbound container flow?

Both, I mean, gosh, most of it its supply chains are getting so sophisticated now that you know the product that the time line is so much tighter. So all the product we handle sadly is all product coming in on three, four containers, domestic, domestically generated goods. So, so if we're expecting a big August and September it's all about to get on the water. David Ross - Stifel, Nicolaus & Co: Okay. And the on the LTL business are you seeing any packets of regional strength in the upper Midwest doing better than the Northeast or is cross-border continuing.

No honestly its feels the same everywhere. There's no big obviously it's an example of after market auto motors little better this year than it was a year ago because it was shut down a year ago. But it all feels about the same. David Ross - Stifel, Nicolaus & Co: And the last question Sean, on the pricing side, you all talked about you are not hauling for free and you don't do practice, we practice some other carriage to who say the same thing and the results have shown that yields are continuing to move up. Is there anybody out there is not playing along or is looking there an opportunity to grab market share or are you seeing everybody is fairly rational these days?

Well I think it's certainly more rational. But I think you can go away and kind of look at yields and growth rates and kind of draw some analogies in the -- draw some conclusions out of other players in the industry. But I think there's clearly an under indefinitely, an understanding that we've been doing providing a -- pretty good services for unacceptable return. David Ross - Stifel, Nicolaus & Co: Excellent. Thank you very much.

Okay. Take care.

The next question comes from Jason Seidel. Jason, please go ahead.

Hey Rick, hey Sean, how are you guys?

Good, Jason. How are you doing?

Not too bad. Listen you can make it for 10 and you're selling it for 9 I don't think you're going to make it up in volume.

That's kind of general, we're looking for a dumb guy from (inaudible) I think that's I can prove the conclusion.

The dumb guy can South Jersey here. Listen Rick I guess I'll start of with, you talked about you would like to see the same sequential improvement in your yields in 3Q over 2Q. How's that going to look for your operating margin improvements sequentially. I mean you did 310 basis points in 1Q to 2Q, would you be disappointed if we couldn't get half that (inaudible)?

Fair comment, yes. Yeah, that's a fair comment.

That helps me out a lot. Okay. I want to talk a little bit about you mentioned your expecting be busy because of peak season, obviously you guys tend to put a lot of your low traffic on the whales, how's CN and CP telling you that the rail network forward is going to be do you have any issues other than maybe what's going on in the quarter, Mountrail and maybe you can give us update on that.

Yeah I don't strike at the port of Mountrail wont impact us. It may slow a little bit of it may tie up of little bit of equipment longer than you would like to but it wont have any impact on us, from a financial perspective. The railways like U.S. railways are like busier, I mean a good thing good news. But our fleet is flowing pretty well on the railways as one of the larger players in the Canadian market I think we -- excuse a pretty solid relationship with both.

Okay. That's fair enough. Talk a little bit of that acquisitions you mentioned that I think you mentioned in more favorable this time you had and quite some time.

Yeah. In the last six months we said more dialogue with players as the pen of the warm begins to turn here I think which is understandable and we are cautious with it if both on our expectations for going forward is to acquire both on the LTL and supply chain side. Depending on the size of the deal we do it earlier than later. But we are going to be responsible to the balance sheet and be comfortable at the earning improvements are both sustainable and repeatable if you will, if we can you want we can continue to repeat the improvements. So we're going to be cautious, but we are going to be engaged.

Now I do assume some of the same players that you talked to in the past or the new people coming in the frame?

Some new, some different.

Perfect. Well listen guys, that's all I got I appreciate the time as always.

Thank you.

The next question comes from Neal Deaton. Neal, please go ahead. Neal Deaton - BB&T Capital Markets: Actually Jason just asked the question about acquisition that what I wanted a little clarification on weather you are looking more supply chain or LTL it sounds like both. So thanks.

Thanks Neal

There are no further questions at the time.

Thanks Chris. With that again we thank everyone for your interest today in joining us and we hope to have continued improved results to speak to you about in the third quarter. Thank you.