Good morning, ladies and gentlemen, and welcome to Vitran Corporation Inc. Second Quarter 2013 Results Conference Call. At this time all lines are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. (Operator Instructions) This call is being recorded on Wednesday, July 31, 2013. I would now like to turn the conference over to your host, William Deluce, Interim President and CEO, and Fayaz Suleman, CFO. Please go ahead.

Good morning and welcome to Vitran's second quarter 2013 con call. I am joined today by Fayaz Suleman, our CFO. I would expect by now that you have had an opportunity to read the press release from earlier this morning. Before I provide some further commentary, Fayaz will read the safe harbor clause and give you a brief financial overview.

Thanks, Bill. Good morning, everyone. 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 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 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 involved known and unknown risks, 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, increases in fuel costs, regulatory change, the general health of the economy, seasonal fluctuations, unanticipated changes in railroad capacities, 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 MD&A and form 10-K under the heading “general risks and uncertainty”. 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. For the second quarter of 2013, Vitran’s revenue decreased 10% to $165.4 million compared to $183.8 million for the second quarter…

Thank you, Fayaz, the Canadian LTL business unit had solid results in the quarter as we have all come to expect obviously the financial results remained poor in the U.S. LTL business unit, but we continue to make positive progress. Impact in U.S. LTL business unit in the current quarter was the announced transition of our west coast operation to underlying relationship, this goes into effect next week. We expected a decline and shipments; however, we had a 300 shipment per day decline in June which was earlier than expected. We continue to focus on price and have had a 5% increase in yield year-over-year. We have also pushed out some business as we stand our ground on pricing increases as this is necessary and some loss of business due to this is expected. As we have previously spoken, the focus has moved to pricing and sales. We have re-ramped the sale process and put technology in place to assist our sale folks when they’re out in the market place, this evolution and evaluation on the sales force has cost us to turnover just under 50% of our sale force, this is good as we now feel we have strong performers in place however they are new and it will take some time to be productive on the sales side. This was necessary for us to succeed. Dock hand held technology will be going in over the next three months as we roll out to the larger terminals and then to the smaller ones thereafter. In July we opened the new terminal in Lexington Kentucky. This is to give us the ability to build more density in our network without adding a lot of additional cost due to the reduction in P&D miles where previously this market as an example was served from Louisville. This is one example of our ability to build those shipments in volume density as we build additional terminal density in our core geography. We will look going on and we are working hard on moving U.S. towards profitability. With that I will turn the call back to the operator and respond to any of your questions.

Thank you. (Operator Instructions) Your first question comes from Brad Delco from Stephens Inc, Brad please go ahead.

Hey guys, it is actually Ben on for Brad. So first, just looking at tonnage trends, can you give us some color on how tonnage trended throughout these month of the quarter ended July, and then given the easier comps or tonnage comps going forward, when do you expect tonnage to turn positive?

In terms of the tonnage, it went up, we had about, let’s look from here, April to March was up at 6%, May to April was up another 3% and then in June there was actually reduction that was because of the reduction in the West Coast business. In terms of easier comps, I mean we are looking out, as we are doing our forecast we are looking out at the quarters coming up, the months coming up, these guys are continuing to work hard, as we started, we turned over half our sales guys, and they are coming into a situation where we put some technology in place now for our sales guys, which will allow them just to get up to the speed and compete with others in our market place. They build out their relationships as they build on the relationships that are coming with them from the different organizations these sales guys have come from. We should expect to continue to see volumes growth and tonnage growth in the coming months or quarters. I mean, I cannot pinpoint for you exactly which market is going to turn positive, but we should continue to expect to see growth now, not at the last trade.

Okay and then on the SG&A line it look like SG&A line, it looks like SG&A decline, SG&A kind of outpaced or was closed to the decline in revenue. Can you give us some color on kind of the drivers around the decline in SG&A and why we ultimately see it come down by more given the revenue decline?

SG&A, I mean, which line are you referring to

The salaries and wages and benefits

The salaries and wages have benefit to us.

Salaries and wages, okay…

Sorry, your question is why the decline, why it didn't declined more?

Why it didn't coming down it kind of commensurate with the revenue decline, what are some of the drivers there or the pieces there?

We are continuing to carry the costs of the West. In California there is the Warren Act we have to meet. And so we decided to do when we decide to move into wide relationship in the last is we did, we gave our full 60 days in the list and we also gave our customers 60 days notice. The reason was, two reasons really, the Warren Act number one two of that. And number two just when we’ve got this consistent service now we do want to go to our customers and just shut it down on pick up their shipments on Friday not to get up on Monday. So want to give them the right notice and treat them the right way. So we’re still carrying some of that less cost but the business is obviously down so that’s why.

Okay, that’s good color. And then on the balance sheet, can you kind of give us your current comfort level with the balance? And maybe speak to some of the leverage you can pull to shore up liquidity if that is ultimately necessary?

Sure. I mean, we’ve been comfortable with the balance sheet. There is still 41.2 million of cash o the balance sheet while we’re going to use some more cash here in the quarters to support the U.S., yeah, for sure, that’s going to happen. Obviously our goal is, and what we are working towards every day, is to limit that. But we still have an ABL we can use out there and we still have equity in our real estate if needed to and if I start thinking out there and how to raise some liquidity there is still some rolling stock we have that we could leverage if we ever had to. So there is no lot’s of leverage we could pull if we get to that point. But today we feel comfortable that we should be able to continue to support the U.S. with the cash we have on our balance sheet and continue to invest in the technology, invest in the people and get this thing turned.

Your next question comes from Jason Seidl from Cowen and Company. Jason, please go ahead. Jason Seidl, your line is now open. Please go ahead. Our next question now is from David Ross from Stifel Inc. David, please go ahead.

Good morning gentlemen. Fayaz, you talked a little bit about the sequentially tonnage. Can you give us year-over-year tonnage comps, what April was this year versus a year ago, same with May and June?

So, April is tonnage year-over-year is down 7% and May… Can you hear me?

Yes, I can hear you.

May is down 10% and June is down about 15%.

Okay, and then July, is that same as June or is little bit better?

No July is trending about the same.

Okay and then how much I guess impact of the western closure on those numbers, how much of system tonnage was that? Was that 5% of U.S LTL volumes, 10%?

It's a good question; I don't have that in front of me.

And when you gave those numbers the 7, 10, 15 year-over-year, was that just for U.S. LTL or is that for system wide LTL tonnage?

System wide.

And for the quarter what was I guess the difference between the LTL tonnage in the U.S. and then Canada. I think you said in the press release Canada grew a little bit. So the U.S. tonnage would have been down a little bit more.

That's right.

There was Canadian tonnage growth of 30% year-over-year, 1%, 5%?

As you know we don't go into that level of detail, but it's up you can say it's definitely up in the mid single digits.

As far as service levels are concerned you mentioned your consistency, that service levels really be stabilized. When sis that happen in the quarter? And has that improved from I guess the levels of stabilization?

Well as you know we came out of a period last year where our service levels would not command any type of customer satisfaction. So on the U.S. side Chris and his guys have done a large amount of work at putting in place, the pieces that were necessary to improve service. So we really started to see service improvement on U.S. side at the tail end of '12 and started to see some momentum with service improvements through the first quarter and continuing in the second quarter. And we now have let's say an increasing run rate of improving service and we're seeing consistency on the service levels in the U.S. at this time. Canada continues to run at very acceptable service levels.

We're now in consistent service for about six months going onto seven months straight, which is just as important as having good service; you don't want to go up and down on your customer. So our customers are starting to see that, we're getting feedback that shows that we have people starting to see value in that service and that is consistent. It is going to take us some time here to turn that now into yielded volume growth.

And by service improvement is that both in on-time performance metrics and claims ratio? Or is one doing better than the other?

No both, on-time, for sure on-time 100% it is consistent in the mid 90s, 94, 95, 96. So we think we can get that couple points better for sure. For claims now we're starting to see that come down a little bit as well. And the third thing I would ask, that is just our customer service, just talking to our customers have you believe to call into a terminal our centralized customer service folks, and get someone on the line who is helpful. I mean we have revamped that whole aspect of our operation as well. And we have a really good guy leading that. And that in itself is just as important.

That sounds great. On the 1.8 million in severance that was in the $75.6 million number on the salaries and wages line. Is that accurate?

Yes, that’s right.

But then the additional proceeds of $1.8 million that was just a cash impact and wasn't in the income statement anywhere?

That’s right; it’s in the gain on its offset.

Okay, so it not in the OpEx.

No, it’s not. The severance cost is you correct.

: Willard Milby - BB&T Capital Markets: Good morning, guys. Thanks for taking my call. You reported an LTL OR of $107.4 million. I am getting $109.4 million; can you walk me through the math on that? Because isn't the whole business now just LTL specific?

Yes, it’s corporate cost. What’s the number you’re seeing excludes the corporate cost. Those just a core LTL base excluding our corporate office. Willard Milby - BB&T Capital Markets: Okay. But I guess my question is why would the corporate be separated if the core business is LTL now?

Corporate would include things like stock based compensation and that type of expense public company cost I guess and you know we use to separate that rate, so not that we are just LTL, you’re correct. It’s not separated but I guess we had some folks that asked us to continue to show what’s our pure LTL business look like, so that’s what we’re doing. Willard Milby - BB&T Capital Markets: Okay. Next question could we walk through the technology that has been added on in the past? Now you have just mentioned dock handhelds going on in the next three months. I think last year you had in-cab tablets about this time last year and I think we have got new line haul software and operational changes coming up soon, if not already anniversaried. Companies. Can you give me a sense of what is still on the to-do list from a technology standpoint and kind of a timeframe on that?

Yes. So for sure the dock handhelds are going in the next and then again you feel that that’s going to help us continue to improve our service level. On the sales side I guess Bill spoke briefly on that. We are growing to establish our sales folks and when we note sales measurement tools, sales dashboard tools, pipeline tracking tools all that stuff that an individual would need going out there to not only half our serous sales folks measured to sales team but also the sales team themselves going out there add them to as much as information as they can to go out and get on business and when they go and meet customers to existing customers and new customers showing them what if and existing customer, what the service levels have been for the last two weeks, three months, eight months, one year. How much of revenue they have done with us length of using. So that’s all going to be rolled out, those are which are mail things. And there is another optimization on the software for our table that will out in the next three to six months. We’ll continue to optimize the doc so that first phase to roll that out and in the second phase is to build all the measurement tools for supervisors and for terminal managers that will go hand-in-hand with that as well. So those are a few of the main things that are up and there is, I don’t have a list in front of me there is already 30 items that our IT groups are working on, on enhancements and other IT initiatives but those are the kind of the main ones. Willard Milby - BB&T Capital Markets: Okay. I know we have spoken on this in the past, but just thinking of Vitran as a completely different company from a year ago and further back, we really can't rely on seasonality when kind of looking at the OR here. Can you give us some help on forecasted rate of improvement, or just how you all see the OR are improving in the coming quarters, given the sales initiatives and the pullback from this Western line haul stuff is going to take away some of the shipments and tonnage? But just going forward can we get some help on the OR here?

The guys have, as Fayaz just mentioned have basically been putting in place the building blocks that are going to drive improvement in our system. We are seeing that improvement the trend is right and we are looking extensively at anything else that we can put in place to drive the rate of improvement but I can tell you that we are certainly forecasting improvement quarter-over-quarter. And I am going to just leave my comments at that. Willard Milby - BB&T Capital Markets: I will jump back in the queue.

Your next question is from Jason Seidel from Cowen & Company. Jason please go ahead. Jason Seidl - Cowen & Company: Sorry about that before; some phone issues here. I want to touch a little bit on the sales side. You mentioned there was a 50% turnover, Bill, in the sales force. How much of that did you plan and how many people just flat out might have left?

Well as you know we have new leadership in the States Chris have been in now a little over a year and when he came in he has to address a large number of areas and the sales force was one of the areas. The initiative to overhaul our sales under our new sales have been presented well it has been driven by Chris and our senior sales guys. So we have been pushing out people and replacing them and upgrading our overall sales force yes that has been very much an internal than an internally driven initiative. So some people actually left very few most have been replaced by our initiatives to upgrade and improve our sales group.

It’s a bit of a combination of both but the people had left us because we have changed the structure we have put in sales territories and where scientific measurement tools in place and forcing the issue and some people don’t like that right. So it’s a bit of both but all we are looking for is people to perform and do well and get out there and solve what we think is a pretty at this point a lot more improved company than where it was in the past so.

Sorry go ahead. Jason Seidl - Cowen & Company: I was going to say and as it relates to sort of the overall leadership can you guys give us an update on where you're at in terms of the search for the CEO and maybe tell us how many total candidates you've already been interviewing and I'm assuming, I mean last time you spoke to us you said you were looking both inside and out, I guess I'm a little surprised that you haven't found someone as yet.

That's a subject matter that's in the boardroom and in process, and the board hasn't come to any conclusions yet, but it's a matter that's in process that's all I can report at this point in time. Jason Seidl - Cowen & Company: And I guess if Chris is on this call, I would like to know a little bit more about the interline agreement because, Bill, I think you were saying that you are expecting some positive things from it. But in my experience, interline agreements are never structured to be that large in general. Could you maybe quantify how much in revenue you think you might be able to get on that by an annualized basis?

If I have to spend lots of time working with and up to the decision to go with that western rationalizations I'm going to ask Fayaz to come in.

Sorry, could you just repeat the question. Jason Seidl - Cowen & Company: You were touting it before as beneficial. I see it more of a cost move. Generally, interline agreements aren't really established to really tremendously grow revenue by both parties. So I was just curious how big do think this interline agreement could be from a top-line perspective and then maybe you can address some of the cost savings as well.

You're absolutely right, this wasn't a decision to drive revenue, this was a decision to take what we thought was unprofitable segment of our geography and still to have an option to our customers to serve that market, but this was definitely to, decision made to contribute to the bottom line, so I don't expect, this isn’t to drive revenue, there's not being to be a true amount of revenue coming of that underlying agreement. Jason Seidl - Cowen & Company: No, I'm just trying to figure when you're modeling on a go forward basis since it’s now kicking in, how much did you lose from the West Coast versus how much you might as a fraction you have gained back, I guess that's where I'm trying to get at.

Oh, I see what you're saying I mean, all I can say is time will tell, as you know, it's your point now that direct pricing now it’s going to mid line pricing which is going to be higher price point, we definitely don’t expect to keep 90% to 95% of the business, but if that's a ballpark than maybe we'll keep 5-10% of the business.

Thank you, there are no further questions.

Okay thanks everyone for your interest in Vitran and we look forward to reporting in the future. Thank you.