##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTER ENDED SEPTEMBER 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM                     to
 Commission file number:
 
 VITRAN CORPORATION INC.
 Ontario, Canada
    
    (I.R.S. Employer(State of incorporation)
    
    Identification No.)
 185 The West Mall, Suite 701, Toronto, Ontario, Canada, M9C 5L5
 
 þ o
  o þ o
 o þ




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TABLE OF CONTENT
 ItemPagePART I Financial Information1. Financial Statements
    
    
    32. Managements Discussion and Analysis
    
    
    163. Quantitative and Qualitative Disclosures About Market Risk
    
    
    234. Controls and Procedures
    
    
    23PART II Other Information1. Legal Proceedings
    
    
    232. Changes in Securities and Use of Proceeds
    
    
    243. Defaults Upon Senior Securities
    
    
    244. Submission of Matters to a Vote of Security Holders
    
    
    245. Other Information
    
    
    246. Exhibits and Reports on Form 8-K
    
    
    24
 2




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##### 



Part I. Financial Information
 Item 1: Financial Statements
 VITRAN CORPORATION INC.
 CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 (In thousands of United States dollars except for per share amounts)
 Three months
    
    Three months
    
    Nine months
    
    Nine monthsEnded
    
    Ended
    
    Ended
    
    EndedSept 30, 2006
    
    Sept 30, 2005
    
    Sept 30, 2006
    
    Sept 30, 2005(US GAAP)
    
    (US GAAP)
    
    (US GAAP)
    
    (US GAAP)Revenue
    
    $
    121,512
    
    
    $
    116,226
    
    
    $
    360,280
    
    
    $
    315,217Operating expenses
    
    
    101,189
    
    
    
    96,061
    
    
    
    299,617
    
    
    
    262,947Selling, general and administrative expenses
    
    
    11,195
    
    
    
    10,399
    
    
    
    33,675
    
    
    
    29,011Other income
    
    
    (248
    )
    
    
    (6
    )
    
    
    (404
    )
    
    
    (33
    )Depreciation and amortization expense
    
    
    2,579
    
    
    
    1,954
    
    
    
    7,495
    
    
    
    4,802Total operating expenses
    
    
    114,715
    
    
    
    108,408
    
    
    
    340,383
    
    
    
    296,727Income from operations before undernoted
    
    
    6,797
    
    
    
    7,818
    
    
    
    19,897
    
    
    
    18,490Interest expense, net
    
    
    274
    
    
    
    171
    
    
    
    621
    
    
    
    209Income from operations before income taxes
    
    
    6,523
    
    
    
    7,647
    
    
    
    19,276
    
    
    
    18,281Income taxes
    
    
    1,638
    
    
    
    2,271
    
    
    
    4,992
    
    
    
    5,355Net income before cumulative effect of change in
accounting principle
    
    
    4,885
    
    
    
    5,376
    
    
    
    14,284
    
    
    
    12,926Cumulative effect of a change in accounting
principle (note 9)
    
    
    
    
    
    
    
    
    
    
    141
    
    
    
    Net income
    
    $
    4,885
    
    
    $
    5,376
    
    
    $
    14,425
    
    
    $
    12,926Earnings per share:Basic  net income before cumulative effect of a
change in accounting principle
    
    $
    0.38
    
    
    $
    0.43
    
    
    $
    1.12
    
    
    $
    1.04Basic  cumulative effect of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    0.01
    
    
    
    Basic  net income
    
    $
    0.38
    
    
    $
    0.43
    
    
    $
    1.13
    
    
    $
    1.04Diluted  net income before cumulative effect of
a change in accounting principle
    
    $
    0.38
    
    
    $
    0.42
    
    
    $
    1.10
    
    
    $
    1.01Diluted  cumulative effect of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    0.01
    
    
    
    Diluted  net income
    
    $
    0.38
    
    
    $
    0.42
    
    
    $
    1.11
    
    
    $
    1.01Weighted average number of shares:Basic
    
    
    12,744,936
    
    
    
    12,584,358
    
    
    
    12,710,225
    
    
    
    12,481,840Diluted
    
    
    12,966,835
    
    
    
    12,921,695
    
    
    
    12,956,661
    
    
    
    12,819,872
 See accompanying notes to consolidated financial statements
 3




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##### 



VITRAN CORPORATION INC.
 CONSOLIDATED BALANCE SHEETS
 (In thousands of United States dollars)
 Sept 30, 2006
    
    Dec. 31, 2005
    
    Dec. 31, 2005(CDN GAAPas previously(US GAAP)
    
    (US GAAP)
    
    reported)(Unaudited)
    
    (Audited)
    
    (Audited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    102,207
    
    
    $
    14,592
    
    
    $
    14,592Accounts receivable
    
    
    54,660
    
    
    
    46,587
    
    
    
    46,587Inventory, deposits, prepaid expenses
    
    
    9,277
    
    
    
    8,396
    
    
    
    8,396Future income taxes
    
    
    2,593
    
    
    
    1,442
    
    
    
    1,442168,737
    
    
    
    71,017
    
    
    
    71,017Capital assets
    
    
    82,133
    
    
    
    66,807
    
    
    
    66,807Intangible assets (note 6)
    
    
    2,749
    
    
    
    2,456
    
    
    
    2,456Goodwill (note 7)
    
    
    62,906
    
    
    
    61,448
    
    
    
    61,448$
    316,525
    
    
    $
    201,728
    
    
    $
    201,728Liabilities and Shareholders EquityCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    52,413
    
    
    $
    41,362
    
    
    $
    41,362Income and other taxes payable
    
    
    1,717
    
    
    
    1,124
    
    
    
    1,124Current portion of long-term debt (note 8)
    
    
    8,053
    
    
    
    5,845
    
    
    
    5,84562,183
    
    
    
    48,331
    
    
    
    48,331Long-term debt (note 8)
    
    
    90,015
    
    
    
    8,588
    
    
    
    8,588Future income taxes
    
    
    7,749
    
    
    
    5,007
    
    
    
    5,007Shareholders equity:Common shares, no par value, unlimited authorized,
12,744,936 and 12,647,636 issued and outstanding at
Sept. 30, 2006 and Dec. 31, 2005, respectively
    
    
    64,130
    
    
    
    63,604
    
    
    
    63,604Additional paid-in capital
    
    
    1,395
    
    
    
    956
    
    
    
    956Retained earnings
    
    
    85,978
    
    
    
    71,553
    
    
    
    72,310Cumulative translation adjustment
    
    
    
    
    
    
    
    
    
    
    2,932Accumulated other comprehensive income
    
    
    5,075
    
    
    
    3,689
    
    
    
    156,578
    
    
    
    139,802
    
    
    
    139,802$
    316,525
    
    
    $
    201,728
    
    
    $
    201,728
 
 See accompanying notes to consolidated financial statements.
 4




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##### 



VITRAN CORPORATION INC.
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 (In thousands of United States dollars)
 (Unaudited, US GAAP)
 AccumulatedAdditional
    
    
    
    
    
    other
    
    TotalCommon shares
    
    Paid-in
    
    Retained
    
    comprehensive
    
    ShareholdersShares
    
    Amount
    
    Capital
    
    Earnings
    
    income
    
    EquityDecember 31, 2005
    
    
    12,647,636
    
    
    $
    63,604
    
    
    $
    956
    
    
    $
    71,553
    
    
    $
    3,689
    
    
    $
    139,802Shares issued upon exercise of
employee stock options
    
    
    97,300
    
    
    
    526
    
    
    
    (47
    )
    
    
    
    
    
    
    
    
    
    $
    479Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,425
    
    
    
    
    
    
    $
    14,425Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,386
    
    
    $
    1,386Share based compensation
    
    
    
    
    
    
    
    
    
    
    627
    
    
    
    
    
    
    
    
    
    
    $
    627Cumulative
effect of a change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (141
    )
    
    
    
    
    
    
    
    
    
    $
    (141
    )September 30, 2006
    
    
    12,744,936
    
    
    $
    64,130
    
    
    $
    1,395
    
    
    $
    85,978
    
    
    $
    5,075
    
    
    $
    156,578
 AccumulatedAdditional
    
    
    
    
    
    other
    
    TotalCommon shares
    
    Paid-in
    
    Retained
    
    comprehensive
    
    ShareholdersShares
    
    Amount
    
    Capital
    
    Earnings
    
    income
    
    EquityDecember 31, 2004
    
    
    12,419,678
    
    
    $
    60,798
    
    
    $
    323
    
    
    $
    54,215
    
    
    $
    3,849
    
    
    $
    119,185Shares issued upon exercise of
employee stock options
    
    
    21,500
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    60Shares repurchased for
cancellation
    
    
    (59,800
    )
    
    
    (297
    )
    
    
    
    
    
    
    (600
    )
    
    
    
    
    
    $
    (897
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,926
    
    
    
    
    
    
    $
    12,926Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    $
    13Share based compensation
    
    
    
    
    
    
    
    
    
    
    474
    
    
    
    
    
    
    
    
    
    
    $
    474Shares issued upon acquisition
of subsidiary
    
    
    202,458
    
    
    
    2,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,800September 30, 2005
    
    
    12,583,836
    
    
    $
    63,361
    
    
    $
    797
    
    
    $
    66,541
    
    
    $
    3,862
    
    
    $
    134,561
 5




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##### 



VITRAN CORPORATION INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 (In thousands of United States dollars)
 Three months
    
    Three months
    
    Nine months
    
    Nine monthsEnded
    
    Ended
    
    Ended
    
    EndedSept 30, 2006
    
    Sept 30, 2005
    
    Sept 30, 2006
    
    Sept 30, 2005(US GAAP)
    
    (US GAAP)
    
    (US GAAP)
    
    (US GAAP)Cash provided by (used in):Net income
    
    $
    4,885
    
    
    $
    5,376
    
    
    $
    14,425
    
    
    $
    12,926Items not involving cash from operationsDepreciation and amortization expense
    
    
    2,579
    
    
    
    1,954
    
    
    
    7,495
    
    
    
    4,802Future income taxes
    
    
    1,019
    
    
    
    2,030
    
    
    
    1,591
    
    
    
    2,677Stock based compensation expense
    
    
    218
    
    
    
    181
    
    
    
    627
    
    
    
    474Gain on sale of capital assets
    
    
    (248
    )
    
    
    (6
    )
    
    
    (404
    )
    
    
    (33
    )Cumulative effect of a change in accounting principle
    
    
    
    
    
    
    
    
    
    
    (141
    )
    
    
    Change in non-cash working capital components
    
    
    551
    
    
    
    (3,961
    )
    
    
    997
    
    
    
    (6,658
    )9,004
    
    
    
    5,574
    
    
    
    24,590
    
    
    
    14,188Investments:Purchase of capital assets
    
    
    (9,216
    )
    
    
    (10,806
    )
    
    
    (20,745
    )
    
    
    (17,651
    )Proceeds on sale of capital assets
    
    
    509
    
    
    
    50
    
    
    
    2,063
    
    
    
    88Marketable securities
    
    
    
    
    
    
    3,193
    
    
    
    
    
    
    
    31,974Acquisition of subsidiary
    
    
    
    
    
    
    (1,693
    )
    
    
    
    
    
    
    (28,192
    )Acquisition of business assets
    
    
    
    
    
    
    
    
    
    
    (2,251
    )
    
    
    (8,707
    )
    
    
    (9,256
    )
    
    
    (20,933
    )
    
    
    (13,781
    )Financing:Revolving credit facility
    
    
    18,015
    
    
    
    5,074
    
    
    
    15,030
    
    
    
    5,074Proceeds from long-term debt
    
    
    70,500
    
    
    
    
    
    
    
    70,500
    
    
    
    Repayment of long-term debt
    
    
    (9
    )
    
    
    (570
    )
    
    
    (1,961
    )
    
    
    (1,710
    )Issue of common shares upon exercise of stock options
    
    
    
    
    
    
    18
    
    
    
    479
    
    
    
    60Repurchase of common shares
    
    
    
    
    
    
    (65
    )
    
    
    
    
    
    
    (921
    )88,506
    
    
    
    4,457
    
    
    
    84,048
    
    
    
    2,503Effect of translation adjustment on cash
    
    
    87
    
    
    
    498
    
    
    
    (90
    )
    
    
    524Increase in cash position
    
    
    88,890
    
    
    
    1,273
    
    
    
    87,615
    
    
    
    3,434Cash position, beginning of period
    
    
    13,317
    
    
    
    9,536
    
    
    
    14,592
    
    
    
    7,375Cash position, end of period
    
    $
    102,207
    
    
    $
    10,809
    
    
    $
    102,207
    
    
    $
    10,809Change in non-cash working capital components:Accounts receivable
    
    $
    (240
    )
    
    $
    (5,886
    )
    
    $
    (6,669
    )
    
    $
    (9,717
    )Inventory, deposits and prepaid expenses
    
    
    (2,219
    )
    
    
    534
    
    
    
    (503
    )
    
    
    (921
    )Income and other taxes payable
    
    
    495
    
    
    
    (1,565
    )
    
    
    593
    
    
    
    (1,649
    )Accounts payable and accrued liabilities
    
    
    2,425
    
    
    
    2,956
    
    
    
    7,576
    
    
    
    5,629$
    551
    
    
    $
    (3,961
    )
    
    $
    997
    
    
    $
    (6,658
    )
 See accompanying notes to consolidated financial statements.
 6




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##### 



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 (In thousands of United States dollars except for per share amounts)
 1. Accounting Policies
    2 New Accounting Pronouncements
   7




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##### 



3. Foreign Currency Translation
     4. Deferred Share Units
  5. Acquisition
   Current assets
    
    $
    1,776Capital assets
    
    
    2,127Identifiable intangible assets:Covenants not-to-compete (3-year useful life)
    
    
    45Customer relationships (8-year useful life)
    
    
    540Goodwill
    
    
    1,1645,652Current liabilities
    
    
    3,155Total purchase price
    
    $
    2,497
 8




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##### 



Three months
    
    Nine monthsEnded
    
    EndedSept 30, 2005
    
    Sept 30, 2005Pro forma revenue
    
    $
    120,297
    
    
    $
    339,581Pro forma net income
    
    $
    5,467
    
    
    $
    14,481Pro forma diluted earnings per share
    
    $
    0.42
    
    
    $
    1.13
 6. Intangible Assets
 Sept 30, 2006
    
    December 31, 2005Customer relationship
    
    $
    2,840
    
    
    $
    2,300Covenants not-to compete
    
    
    285
    
    
    
    2403,125
    
    
    
    2,540Accumulated amortization
    
    
    (376
    )
    
    
    (84
    )$
    2,749
    
    
    $
    2,456
 7. Goodwill
 GoodwillBalance at December 31, 2005
    
    $
    61,448Foreign exchange on CDN$ denominated goodwill
    
    
    294Acquisition of business assets
    
    
    1,164Balance at September 30, 2006
    
    $
    62,906
  9




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##### 



8. Long-term debt:
 Sept 30, 2006
    
    Sept 30, 2005Term bank credit facility (a)
    
    $
    80,000
    
    
    $
    12,747Revolving credit facility (b)
    
    
    18,015
    
    
    
    5,074Capital lease (c)
    
    
    53
    
    
    
    8498,068
    
    
    
    17,905Less current portion
    
    
    8,053
    
    
    
    5,283$
    90,015
    
    
    $
    12,622
 (a)
    
    The term bank credit facility is secured by accounts receivable and general security
agreements of the Company and of all its subsidiaries.During September 2006 the Company amended its credit agreement to provide an $80 million term
credit facility maturing September 30, 2009. The Company had $9.5 million bearing interest at
7.27%, outstanding under the term facility and drew an additional $70.5 million bearing
interest at 9.62%. The provisions of the term facility impose certain financial maintenance
tests.(b)
    
    During September 2006 the Company also amended its revolving credit facility to provide
up to $60 million, maturing September 30, 2009. The Company made an initial drawdown of
$18.0 million bearing interest at 9.62%. The provisions of the revolving facility impose
certain financial maintenance tests.(c)
    
    The Company has financed certain equipment by entering into a capital leasing
arrangement expiring in 2007. The capital lease bears interest at approximately 6.79%.
  Year ending December 31:2006
    
    $
    2,0082007
    
    
    8,0452008
    
    
    8,0002009
    
    
    80,015$
    98,068
 9. Stock Option Plan
  10




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##### 



2006Options granted
    
    
    102,500Risk-free interest rate
    
    
    4.19
    %Dividend yield
    
    
    Volatility factor of the future expected market price of the
Companys common shares
    
    
    33.22
    %Expected life of the options
    
    6 years
  10 Comprehensive income (loss)
   Three months
    
    Three months
    
    Nine months
    
    Nine monthsEnded
    
    Ended
    
    Ended
    
    EndedSept 30, 2006
    
    Sept 30, 2005
    
    Sept 30, 2006
    
    Sept 30, 2005Net income
    
    $
    4,885
    
    
    $
    5,376
    
    
    $
    14,425
    
    
    $
    12,926Translation adjustment (1)
    
    
    (32
    )
    
    
    1,669
    
    
    
    1,386
    
    
    
    13Other comprehensive income
    
    $
    (32
    )
    
    $
    1,669
    
    
    $
    1,386
    
    
    $
    13Comprehensive net income
    
    $
    4,853
    
    
    $
    7,045
    
    
    $
    15,811
    
    
    $
    12,939
 (1)
    
    The cumulative translation adjustment represents the unrealized translation gains and
losses from the translation of the Canadian dollar functional currency to the United States
dollar reporting currency.
 11




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##### 



11. Computation of Earnings per Share
 Three months
    
    Three months
    
    Nine months
    
    Nine monthsEnded
    
    Ended
    
    Ended
    
    EndedSept 30, 2006
    
    Sept 30, 2005
    
    Sept 30, 2006
    
    Sept 30, 2005Numerator:Net income
    
    $
    4,885
    
    
    $
    5,376
    
    
    $
    14,425
    
    
    $
    12,926Denominator:Basic weighted-average shares outstanding
    
    
    12,744,936
    
    
    
    12,584,358
    
    
    
    12,710,225
    
    
    
    12,481,840Dilutive stock options
    
    
    221,899
    
    
    
    337,337
    
    
    
    246,436
    
    
    
    338,032Dilutive weighted-average shares outstanding
    
    
    12,966,835
    
    
    
    12,921,695
    
    
    
    12,956,661
    
    
    
    12,819,872Basic earnings per share before cumulative effect
of a change in accounting principle
    
    $
    0.38
    
    
    $
    0.43
    
    
    $
    1.12
    
    
    $
    1.04Effect of a change in accounting principle
    
    $
    
    
    
    $
    
    
    
    $
    0.01
    
    
    $
    Basic earnings per share
    
    $
    0.38
    
    
    $
    0.43
    
    
    $
    1.13
    
    
    $
    1.04Diluted earnings per share before cumulative
effect of a change in accounting principle
    
    $
    0.38
    
    
    $
    0.42
    
    
    $
    1.10
    
    
    $
    1.01Effect of a change in accounting principle
    
    $
    
    
    
    $
    
    
    
    $
    0.01
    
    
    $
    Diluted earnings per share
    
    $
    0.38
    
    
    $
    0.42
    
    
    $
    1.11
    
    
    $
    1.01
  12. Contingent Liabilities
  13. Segmented Information
 Three months ended
    
    Less-than-
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate Office
    
    ConsolidatedSept 30, 2006
    
    truckload
    
    Logistics
    
    Truckload
    
    Total
    
    and Other
    
    TotalsRevenue
    
    $
    102,858
    
    
    $
    10,419
    
    
    $
    8,235
    
    
    $
    121,512
    
    
    $
    
    
    
    $
    121,512Operating, selling, general and
administrative expenses
    
    
    94,293
    
    
    
    9,379
    
    
    
    7,651
    
    
    
    111,323
    
    
    
    1,061
    
    
    
    112,384Other income
    
    
    (247
    )
    
    
    
    
    
    
    (1
    )
    
    
    (248
    )
    
    
    
    
    
    
    (248
    )Depreciation and amortization
    
    
    2,227
    
    
    
    111
    
    
    
    231
    
    
    
    2,569
    
    
    
    10
    
    
    
    2,579Income (loss) from operations
    
    $
    6,585
    
    
    $
    929
    
    
    $
    354
    
    
    $
    7,868
    
    
    $
    (1,071
    )
    
    
    6,797Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,638Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,885
 Three months ended
    
    Less-than-
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate Office
    
    ConsolidatedSept 30, 2005
    
    truckload
    
    Logistics
    
    Truckload
    
    Total
    
    and Other
    
    TotalsRevenue
    
    $
    96,658
    
    
    $
    10,652
    
    
    $
    8,916
    
    
    $
    116,226
    
    
    $
    
    
    
    $
    116,226Operating, selling, general and
administrative expenses
    
    
    87,215
    
    
    
    10,007
    
    
    
    8,343
    
    
    
    105,565
    
    
    
    895
    
    
    
    106,460Other income
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )
    
    
    (6
    )
    
    
    
    
    
    
    (6
    )Depreciation
    
    
    1,712
    
    
    
    94
    
    
    
    135
    
    
    
    1,941
    
    
    
    13
    
    
    
    1,954Income (loss) from operations
    
    $
    7,734
    
    
    $
    551
    
    
    $
    441
    
    
    $
    8,726
    
    
    $
    (908
    )
    
    
    7,818Interest income, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,271Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,376
 12




---



##### 



13. Segmented Information (continued)
 Nine months ended
    
    Less-than-
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate Office
    
    ConsolidatedSept 30, 2006
    
    truckload
    
    Logistics
    
    Truckload
    
    Total
    
    and Other
    
    TotalsRevenue
    
    $
    305,494
    
    
    $
    30,082
    
    
    $
    24,704
    
    
    $
    360,280
    
    
    $
    
    
    
    $
    360,280Operating, selling, general and
administrative expenses
    
    
    279,663
    
    
    
    27,702
    
    
    
    22,791
    
    
    
    330,156
    
    
    
    3,136
    
    
    
    333,292Other income
    
    
    (406
    )
    
    
    
    
    
    
    2
    
    
    
    (404
    )
    
    
    
    
    
    
    (404
    )Depreciation and amortization
    
    
    6,545
    
    
    
    299
    
    
    
    617
    
    
    
    7,461
    
    
    
    34
    
    
    
    7,495Income (loss) from operations
    
    $
    19,692
    
    
    $
    2,081
    
    
    $
    1,294
    
    
    $
    23,067
    
    
    $
    (3,170
    )
    
    
    19,897Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    621Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,992Net income before cumulative effect
of a change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,284Effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    14,425
 Nine months ended
    
    Less-than-
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate Office
    
    ConsolidatedSept 30, 2005
    
    truckload
    
    Logistics
    
    Truckload
    
    Total
    
    and Other
    
    TotalsRevenue
    
    $
    259,191
    
    
    $
    29,144
    
    
    $
    26,882
    
    
    $
    315,217
    
    
    $
    
    
    
    $
    315,217Operating, selling, general and
administrative expenses
    
    
    237,513
    
    
    
    27,336
    
    
    
    24,588
    
    
    
    289,437
    
    
    
    2,521
    
    
    
    291,958Other income
    
    
    (14
    )
    
    
    
    
    
    
    (19
    )
    
    
    (33
    )
    
    
    
    
    
    
    (33
    )Depreciation
    
    
    4,072
    
    
    
    277
    
    
    
    412
    
    
    
    4,761
    
    
    
    41
    
    
    
    4,802Income (loss) from operations
    
    $
    17,620
    
    
    $
    1,531
    
    
    $
    1,901
    
    
    $
    21,052
    
    
    $
    (2,562
    )
    
    
    18,490Interest income, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    209Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,355Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    12,926
 14. United States and Canadian accounting policy differences:
  13




---



##### 



(a) Consolidated reconciliation of net income and shareholders equity
  Net Income
    
    Net incomeThree months ended
    
    Nine months ended
    
    Shareholders equity2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005Balance as at Sept 30 based on United States GAAP
    
    $
    4,885
    
    
    $
    5,376
    
    
    $
    14,425
    
    
    $
    12,926
    
    
    $
    156,578
    
    
    $
    134,561Effect of a change in accounting principle (1)
    
    
    
    
    
    
    
    
    
    
    (141
    )
    
    
    
    
    
    
    (141
    )
    
    
    Foreign exchange adjustment (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    858
    
    
    
    858Unrealized
foreign exchange loss on derivative instrument
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101
    )
    
    
    (101
    )Accumulated
other comprehensive income adjustment (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (757
    )
    
    
    (757
    )Balance as at Sept 30 based on Canadian GAAP
    
    $
    4,885
    
    
    $
    5,376
    
    
    $
    14,284
    
    
    $
    12,926
    
    
    $
    156,437
    
    
    $
    134,561
 (1)
    
    The adoption of SFAS 123(R)  Share Based Payments as described in note 9 only applies
to United States GAAP. Therefore, the effect of a change in accounting principle does not
impact Canadian GAAP net income.(2)
    
    The Company had foreign exchange gains of $0.9 million that did not represent a
substantially complete liquidation of a foreign operation. Under Canadian GAAP these gains
were recognized upon the transfer into income of the related cumulative translation
adjustment. Under United States GAAP, there is no reduction of the cumulative translation
adjustment account. Retained earnings under Canadian GAAP is increased by $0.9 million with
a corresponding decrease to the cumulative translation adjustment.(3)
    
    The concept of Comprehensive Income is not currently a requirement under Canadian GAAP.
The CICA has issued a new accounting standard Comprehensive Income which the Company will
adopt effective January 1, 2007.Earnings per share
 Three months
    
    Three months
    
    Nine months
    
    Nine monthsEnded
    
    Ended
    
    Ended
    
    EndedSept 30, 2006
    
    Sept 30, 2005
    
    Sept 30, 2006
    
    Sept 30, 2005Earnings per share under Canadian GAAPBasic
    
    $
    0.38
    
    
    $
    0.43
    
    
    $
    1.12
    
    
    $
    1.04Diluted
    
    $
    0.38
    
    
    $
    0.42
    
    
    $
    1.10
    
    
    $
    1.01
 Three months
    
    Three months
    
    Nine months
    
    Nine monthsEnded
    
    Ended
    
    Ended
    
    EndedSept 30, 2006
    
    Sept 30, 2005
    
    Sept 30, 2006
    
    Sept 30, 2005Weighted average number of shares:Basic
    
    
    12,744,936
    
    
    
    12,584,358
    
    
    
    12,710,225
    
    
    
    12,481,840Potential exercise of stock options
    
    
    221,899
    
    
    
    337,337
    
    
    
    246,436
    
    
    
    338,032Diluted
    
    
    12,966,835
    
    
    
    12,921,695
    
    
    
    12,956,661
    
    
    
    12,819,872
 14




---



##### 



(b) Stock-based compensation
   Three months
    
    Three months
    
    Nine months
    
    Nine monthsEnded
    
    Ended
    
    Ended
    
    EndedSept 30, 2006
    
    Sept 30, 2005
    
    Sept 30, 2006
    
    Sept 30, 2005Net income, as reported under Canadian GAAP
    
    $
    4,885
    
    
    $
    5,376
    
    
    $
    14,284
    
    
    $
    12,926Pro forma net income
    
    $
    4,873
    
    
    $
    5,365
    
    
    $
    14,250
    
    
    $
    12,893Pro forma basic earnings per share
    
    $
    0.38
    
    
    $
    0.43
    
    
    $
    1.12
    
    
    $
    1.03Pro forma diluted earnings per share
    
    $
    0.38
    
    
    $
    0.42
    
    
    $
    1.10
    
    
    $
    1.01
 15. Subsequent event
  16. Comparative figures
  15




---



##### 



Item 2. Managements Discussion and Analysis of Results of Operation
 This MD&A 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 on these words or comparable terminology. 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.
 This MD&A and the documents incorporated by reference herein contain forward-looking statements
regarding, but not limited to, the following:
 
    
    the Companys objective to expand or acquire within the LTL operation;
    
    the Companys objective to achieve profitable revenue growth in the LTL segment;
    
    the Companys intention to improve results from yield improvement and operating efficiencies in the LTL segment;
    
    the Companys intention to develop profitable accounts in the Logistics segment;
    
    the Companys expectation that results will stabilize for the Truckload segment;
    
    the Companys intention to purchase a specified level of capital assets and to finance
such acquisitions with cash flow from operations and, if necessary, from the Companys
unused credit facilities;
    
    the Companys intention to realize contributions from LTL cross-selling initiatives; and
    
    the Companys intention to complete the Vitran Express West information technology integration in 2006.
 Such forward-looking statements involve known and unknown risks, uncertainties and other factors
that may cause Vitrans actual results, performance or achievements to differ materially from 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, changes in labour 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 is included in the annual MD&A on
Form 10K under the heading General Risks and Uncertainties. Many of these factors are beyond the
Companys control; therefore, future events may vary substantially from what the Company currently
foresees. You should not place undue reliance on such forward-looking statements. Vitran
Corporation Inc. does not assume the obligation to revise or update these forward-looking
statements after the date of this document or to revise them to reflect the occurrence of future
unanticipated events, except as may be required under applicable securities laws.
 Unless otherwise indicated all dollar references herein are in U.S. dollars. The Companys Annual
Report on Form 10-K, as well as all the Companys other required filings, may be obtained from the
Company at www.vitran.com or from www.sedar.com or from
www.sec.gov.
 16




---



##### 



OVERVIEW
    CONSOLIDATED RESULTS
  For the three months ended Sept 30
    
    For the nine months ended Sept 30(in thousands)
    
    2006
    
    2005
    
    2006 vs 2005
    
    2006
    
    2005
    
    2006 vs 2005Revenue
    
    $
    121,512
    
    
    $
    116,226
    
    
    
    4.5
    %
    
    $
    360,280
    
    
    $
    315,217
    
    
    
    14.3
    %Operating expenses
    
    
    101,189
    
    
    
    96,061
    
    
    
    5.3
    %
    
    
    299,617
    
    
    
    262,947
    
    
    
    13.9
    %SG&A expenses
    
    
    11,195
    
    
    
    10,399
    
    
    
    7.7
    %
    
    
    33,675
    
    
    
    29,011
    
    
    
    16.1
    %Other expenses (income)
    
    
    (248
    )
    
    
    (6
    )
    
    
    4033.2
    %
    
    
    (404
    )
    
    
    (33
    )
    
    
    1124.2
    %Depreciation and amortization
    
    
    2,579
    
    
    
    1,954
    
    
    
    32.0
    %
    
    
    7,495
    
    
    
    4,802
    
    
    
    56.1
    %Income from operations
    
    
    6,797
    
    
    
    7,818
    
    
    
    (13.1
    %)
    
    
    19,897
    
    
    
    18,490
    
    
    
    7.6
    %Interest expense, net
    
    
    274
    
    
    
    171
    
    
    
    60.2
    %
    
    
    621
    
    
    
    209
    
    
    
    197.1
    %Net income
    
    
    4,885
    
    
    
    5,376
    
    
    
    (9.1
    %)
    
    
    14,425
    
    
    
    12,926
    
    
    
    11.6
    %Earnings per share:Basic net income
    
    $
    0.38
    
    
    $
    0.43
    
    
    
    
    
    
    $
    1.13
    
    
    $
    1.04Diluted net income
    
    $
    0.38
    
    
    $
    0.42
    
    
    
    
    
    
    $
    1.11
    
    
    $
    1.01Operating Ratio (1)
    
    
    94.4
    %
    
    
    93.3
    %
    
    
    
    
    
    
    94.5
    %
    
    
    94.1
    %
  17




---



##### 



.
   18




---



##### 



SEGMENTED RESULTS
 Less-Than-Truckload (LTL)
  For the three months ended Sept 30
    
    For the nine months ended Sept 30(in thousands)
    
    2006
    
    2005
    
    2006 vs 2005
    
    2006
    
    2005
    
    2006 vs 2005Revenue
    
    $
    102,858
    
    
    $
    96,658
    
    
    
    6.4
    %
    
    $
    305,494
    
    
    $
    259,191
    
    
    
    17.9
    %Income from operations
    
    
    6,585
    
    
    
    7,734
    
    
    
    (14.9
    %)
    
    
    19,692
    
    
    
    17,620
    
    
    
    11.8
    %Operating ratio
    
    
    93.6
    %
    
    
    92.0
    %
    
    
    
    
    
    
    93.6
    %
    
    
    93.2
    %Number of
shipments (2)
    
    
    659,602
    
    
    
    666,063
    
    
    
    (0.1
    %)
    
    
    2,011,252
    
    
    
    1,859,940
    
    
    
    8.1
    %Weight (000s
of lbs) (3)
    
    
    1,054,058
    
    
    
    1,052,753
    
    
    
    0.1
    %
    
    
    3,198,160
    
    
    
    2,937,149
    
    
    
    8.9
    %Revenue per
shipment (4)
    
    $
    155.94
    
    
    $
    145.14
    
    
    
    7.4
    %
    
    $
    151.89
    
    
    $
    139.35
    
    
    
    9.0
    %Revenue per
hundredweight (5)
    
    $
    9.76
    
    
    $
    9.18
    
    
    
    6.3
    %
    
    $
    9.55
    
    
    $
    8.82
    
    
    
    8.3
    %
   Logistics
  For the three months ended Sept 30
    
    For the nine months ended Sept 30(in thousands)
    
    2006
    
    2005
    
    2006 vs 2005
    
    2006
    
    2005
    
    2006 vs 2005Revenue
    
    $
    10,419
    
    
    $
    10,652
    
    
    
    (2.2
    %)
    
    $
    30,082
    
    
    $
    29,144
    
    
    
    3.2
    %Income from operations
    
    
    929
    
    
    
    551
    
    
    
    68.6
    %
    
    
    2,081
    
    
    
    1,531
    
    
    
    35.9
    %Operating Ratio
    
    
    91.1
    %
    
    
    94.8
    %
    
    
    
    
    
    
    93.1
    %
    
    
    94.7
    %
  19




---



##### 



Truckload (TL)
  For the three months ended Sept 30
    
    For the nine months ended Sept 30(in thousands)
    
    2006
    
    2005
    
    2006 vs 2005
    
    2006
    
    2005
    
    2006 vs 2005Revenue
    
    $
    8,235
    
    
    $
    8,916
    
    
    
    (7.6
    %)
    
    $
    24,704
    
    
    $
    26,882
    
    
    
    (8.1
    %)Income from operations
    
    
    354
    
    
    
    441
    
    
    
    (19.7
    %)
    
    
    1,294
    
    
    
    1,901
    
    
    
    (31.9
    %)Operating Ratio
    
    
    95.7
    %
    
    
    95.1
    %
    
    
    
    
    
    
    94.8
    %
    
    
    92.9
    %
  LIQUIDITY AND CAPITAL RESOURCES
     For the three months ended Sept 30
    
    For the nine months ended Sept 30(in thousands, unaudited)
    
    2006
    
    2005
    
    2006
    
    2005Real Estate and buildings
    
    $
    3,543
    
    
    $
    7,588
    
    
    $
    10,300
    
    
    $
    7,588Tractors
    
    
    883
    
    
    
    1,819
    
    
    
    1,715
    
    
    
    2,397Trailing fleet
    
    
    4,548
    
    
    
    1,189
    
    
    
    6,995
    
    
    
    6,618Information technology
    
    
    36
    
    
    
    158
    
    
    
    566
    
    
    
    810Leasehold improvements
    
    
    130
    
    
    
    7
    
    
    
    186
    
    
    
    106Other equipment
    
    
    76
    
    
    
    45
    
    
    
    983
    
    
    
    132Total
    
    $
    9,216
    
    
    $
    10,806
    
    
    $
    20,745
    
    
    $
    17,651
 20




---



##### 



off-balance sheet
 (in thousands of dollars)
    
    
    
    
    
    
    
    
    
    Payments due by periodContractual Obligations
    
    Total
    
    2006
    
    2007& 2008
    
    2009& 2010
    
    ThereafterLong-term debt (9.34% interest)
    
    $
    80,000
    
    
    $
    2,000
    
    
    $
    16,000
    
    
    $
    62,000
    
    
    $NilRevolving credit facility (9.62% interest)
    
    
    18,015
    
    
    Nil
    
    
    Nil
    
    
    
    18,015
    
    
    NilCapital lease obligations
    
    
    53
    
    
    
    8
    
    
    
    45
    
    
    Nil
    

    
    NilSub-total
    
    
    98,068
    
    
    
    2,008
    
    
    
    16,045
    
    
    
    80,015
    
    
    NilOperating leases
    
    
    28,987
    
    
    
    3,525
    
    
    
    18,022
    
    
    
    5,923
    
    
    
    1,517Total Contractual Obligations
    
    $
    127,055
    
    
    $
    5,533
    
    
    $
    34,067
    
    
    $
    85,938
    
    
    $
    1,517
   OUTLOOK
    21




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##### 



QUARTERLY RESULTS
 U.S. GAAP(thousands of dollars
    
    2006
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2005
    
    
    2005
    
    
    2005
    
    
    2004except per share amounts)
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4Revenue
    
    $
    121,512
    
    
    $
    123,641
    
    
    $
    115,127
    
    
    $
    112,975
    
    
    $
    116,226
    
    
    $
    105,050
    
    
    $
    93,941
    
    
    $
    96,523Income from operations
    
    
    6,797
    
    
    
    8,128
    
    
    
    4,972
    
    
    
    6,937
    
    
    
    7,647
    
    
    
    7,013
    
    
    
    3,659
    
    
    
    4,737Net Income
    
    
    4,885
    
    
    
    5,776
    
    
    
    3,764
    
    
    
    5,012
    
    
    
    5,376
    
    
    
    4,796
    
    
    
    2,754
    
    
    
    4,365Earnings per share:Basic
    
    $
    0.38
    
    
    $
    0.45
    
    
    $
    0.30
    
    
    $
    0.40
    
    
    $
    0.43
    
    
    $
    0.39
    
    
    $
    0.22
    
    
    $
    0.35Diluted
    
    
    0.38
    
    
    
    0.45
    
    
    
    0.29
    
    
    
    0.39
    
    
    
    0.42
    
    
    
    0.38
    
    
    
    0.22
    
    
    
    0.34Weighted average number of shares:Basic
    
    
    12,744,936
    
    
    
    12,732,644
    
    
    
    12,652,075
    
    
    
    12,618,416
    
    
    
    12,584,358
    
    
    
    12,447,300
    
    
    
    12,411,968
    
    
    
    12,417,594Diluted
    
    
    12,966,835
    
    
    
    12,964,761
    
    
    
    12,934,751
    
    
    
    12,930,661
    
    
    
    12,921,695
    
    
    
    12,778,285
    
    
    
    12,754,930
    
    
    
    12,771,235
 Canadian
GAAP(7)(thousands of dollars
    
    2006
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2005
    
    
    2005
    
    
    2005
    
    
    2004except per share amounts)
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4Revenue
    
    $
    121,512
    
    
    $
    123,641
    
    
    $
    115,127
    
    
    $
    112,975
    
    
    $
    116,226
    
    
    $
    105,050
    
    
    $
    93,941
    
    
    $
    96,523Income from operations
    
    
    6,797
    
    
    
    8,128
    
    
    
    4,972
    
    
    
    6,937
    
    
    
    7,647
    
    
    
    7,013
    
    
    
    3,659
    
    
    
    4,737Net Income
    
    
    4,885
    
    
    
    5,776
    
    
    
    3,623
    
    
    
    5,012
    
    
    
    5,376
    
    
    
    4,796
    
    
    
    2,754
    
    
    
    4,365Earnings per share:Basic
    
    $
    0.38
    
    
    $
    0.45
    
    
    $
    0.29
    
    
    $
    0.40
    
    
    $
    0.43
    
    
    $
    0.39
    
    
    $
    0.22
    
    
    $
    0.35Diluted
    
    
    0.38
    
    
    
    0.45
    
    
    
    0.28
    
    
    
    0.39
    
    
    
    0.42
    
    
    
    0.38
    
    
    
    0.22
    
    
    
    0.34Weighted average number of shares:Basic
    
    
    12,744,936
    
    
    
    12,732,644
    
    
    
    12,652,075
    
    
    
    12,618,416
    
    
    
    12,584,358
    
    
    
    12,447,300
    
    
    
    12,411,968
    
    
    
    12,417,594Diluted
    
    
    12,966,835
    
    
    
    12,964,761
    
    
    
    12,934,751
    
    
    
    12,930,661
    
    
    
    12,921,695
    
    
    
    12,778,285
    
    
    
    12,754,930
    
    
    
    12,771,235
 Definitions of non-GAAP measures:
 (1)
    
    Operating ratio (OR) is a non-GAAP financial measure which does not have any
standardized meaning prescribed by GAAP. OR is the sum of operating expenses, selling,
general and administrative expenses, other expenses (income), and depreciation and
amortization expense, divided by revenue. OR allows management to measure the Company and
its various segments operating efficiency. OR is a widely recognized measure in the
transportation industry which provides a comparable benchmark for evaluating the Companys
performance compared to its competitors. Investors should also note that the Companys
presentation of OR may not be comparable to similarly titled measures by other companies.
OR is calculated as follows:
 For the three months ended Sept 30
    
    For the nine months ended Sept 30(in thousands)
    
    2006
    
    2005
    
    2006
    
    2005Operating expenses
    
    $
    101,189
    
    
    $
    96,061
    
    
    $
    299,617
    
    
    $
    262,947Selling, general and administrative expenses
    
    
    11,195
    
    
    
    10,399
    
    
    
    33,675
    
    
    
    29,011Other income
    
    
    (248
    )
    
    
    (6
    )
    
    
    (404
    )
    
    
    (33
    )Depreciation and amortization expense
    
    
    2,579
    
    
    
    1,954
    
    
    
    7,495
    
    
    
    4,802$
    114,715
    
    
    $
    108,408
    
    
    $
    340,383
    
    
    $
    296,727Revenue
    
    $
    121,512
    
    
    $
    116,226
    
    
    $
    360,280
    
    
    $
    315,217Operating ratio (OR)
    
    
    94.4
    %
    
    
    93.3
    %
    
    
    94.5
    %
    
    
    94.1
    %
 (2)
    
    A shipment is a single movement of goods from a point of origin to its final
destination as described on a bill of lading document.(3)
    
    Weight represents the total pounds shipped.(4)
    
    Revenue per shipment represents revenue divided by the number of shipments.(5)
    
    Revenue per hundredweight is the price obtained for transporting 100 pounds of LTL
freight from point to point, calculated by dividing the revenue for an LTL shipment by the
hundredweight (weight in pounds divided by 100) for a shipment.(6)
    
    Revenue per total mile represents revenue divided by the total miles driven.(7)
    
    Please see Note 14 to the Interim Consolidated Financial Statements for differences
between United States and Canadian GAAP.
 22




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##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  (in thousands of dollars)
    
    
    
    
    
    
    
    
    
    Payments due by periodLong-term debt
    
    Total
    
    2006
    
    2007& 2008
    
    2009& 2010
    
    ThereafterVariable RateTerm bank credit
    
    $
    80,000
    
    
    $
    2,000
    
    
    $
    16,000
    
    
    $
    62,000
    
    
    $NilAverage interest rate
    
    
    9.34
    %
    
    
    9.34
    %
    
    
    9.34
    %Revolving bank credit
    
    $
    18,015
    
    

    $
    Nil

    
    
    $
    Nil
    


    
    $
    18,015
    
    
    $NilAverage interest rate
    
    
    9.62
    %
    
    
    
    
    
    
    
    
    
    
    9.62
    %Fixed RateCapital lease obligation
    
    
    53
    
    
    
    8
    
    
    
    45
    
    
    Nil
    
    NilAverage interest rate
    
    
    6.79
    %
    
    
    6.79
    %
    
    
    6.79
    %Total
    
    $
    98,068
    
    
    $
    2,008
    
    
    $
    16,045
    
    
    $
    80,015
    
    
    $Nil
  Item 4. Controls and Procedures
 a)
    
    As of October 18, 2006, the Chief Executive Officer and the Chief Financial Officer
evaluated the effectiveness of the Companys disclosure controls and procedures in
accordance with Rule 13a-15 under the Exchange Act for the quarter ended September 30,
2006. Based on their evaluation, the Companys Chief Executive Officer and the Chief
Financial Officer concluded that Vitrans disclosure controls and procedures enable Vitran
to record, process, summarize and report in a timely manner the information that we are
required to disclose in our Exchange Act reports.b)
    
    There were no changes in our internal control over financial reporting that occurred
during the period covered by this report that have materially affected, or are reasonably
likely to materially affect, the Companys internal control over financial reporting.
 Part II. Other Information
 Item 1. Legal Proceedings
  23




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##### 



Item 1A. Risk Factors
  Item 2. Changes in Securities and Use of Proceeds
  Maximum numberTotal number of
    
    of Common SharesNumber of
    
    Average price paid
    
    Common Shares as
    
    that may yet beCommon Shares
    
    per Common Share
    
    part of a publicly
    
    purchased under thePeriod
    
    purchased
    
    (CAD)
    
    announced plan
    
    planJul. 1 to Jul. 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    632,381Aug 1 to Aug 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    632,381Sept 1 to Sept 30, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    632,381Total
    
    
    
    
    
    
    
    
    
    
    
 Item 3. Defaults Upon Senior Securities
 Item 4. Submission of Matters to a Vote of Security Holders      
 Item 5. Other Information
 Item 6. Exhibits and Reports on Form 8-K
  ExhibitNumber
    
    Description of Exhibit31
    
    
    Certifications pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002, dated October 18, 2006.32
    
    
    Certifications pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, dated October 18, 2006.
 SIGNATURE
  VITRAN CORPORATION INC./s/SEAN P. WASHCHUKSean P. WashchukDate: October 18, 2006
    
    Vice President of Finance andChief Financial Officer(Principal Financial Officer)/s/ FAYAZ D. SULEMANFayaz D. SulemanDate: October 18, 2006
    
    Corporate Controller(Principal Accounting Officer)
 24