Titanium Transportation Group Reports First Quarter 2019 Financial Results

Truck Transportation Segment delivers record First Quarter Revenue and EBITDA; Logistics reflects normalized industry trends


BOLTON, Ontario, April 30, 2019 (GLOBE NEWSWIRE) -- Titanium Transportation Group Inc. ("Titanium" or the "Company") (TSX VENTURE:TTR), a leading provider of transportation and logistics services throughout North America, today reported its financial results for the three month period ended March 31, 2019. All amounts are in Canadian currency.

Q1 2019 Highlights

  • Revenue of $39 million and EBITDA $4.6 million, second strongest Q1 results in Company history
  • EBITDA margins were consistent with Q1 2018
  • Record trucking revenue of $28 million, up 7.9% and EBITDA of $4.4 million, up 21.3%
  • Truck Transportation EBITDA margin of 17%, a 180 bps increase
  • Logistics revenue decreased 40.9% to $12.1 million, reflecting industry trends
  • Logistics EBITDA of $0.6 million includes infrastructure investments for expansions
  • New location leased in Charlotte, NC to commence U.S. logistics operations
  • Net income of $0.5 million and net income per share of $0.01
  • Named one of the best workplaces in Canada’s trucking and logistics industry, by Trucking HR Canada -Top Fleet Employer’s Council

CEO Commentary

“We are pleased with the strong start to 2019 in our Truck Transportation segment which delivered another record quarter as we continued to build market share,” said Ted Daniel. “After an extraordinary 2018, our Logistics segment performance was largely reflective of changing market fundamentals, however remained significantly ahead of 2017 results.”

“The recent emergence of some sources of excess capacity in the market place have improved conditions for M&A in select market segments and Titanium continues its disciplined and focused approach to considering acquisition opportunities. Our strong balance sheet provides us with a solid foundation for continued growth.”

Summary of Financial Results

Consolidated ResultsQ1 2019Q1 2018% Change
Revenue$39.0M$45.5M(14.3%)
EBITDA$4.6M$5.4M(15.1%)
EBITDA margin(1)12.7%12.7% 
Net income$0.54M$1.08M 
Net income per share$0.01$0.03 
    
Truck Transportation   
Revenue$28.1M$26.0M+7.9%
EBITDA$4.4M$3.6M+21.3%
EBITDA margin(1)17.0%15.2% 
    
Logistics   
Revenue$12.1M$20.4M(40.9%)
EBITDA$0.57M$2.16M(73.5%)
EBITDA margin(1)5.1%11.1% 

1)              EBITDA margin is calculated as EBITDA as a percentage of revenue before fuel surcharge.

Q1 2019 Summary

The Truck Transportation segment continued to deliver strong results in the first quarter of 2019. However, these strong results were mitigated by the expected normalization of performance in the Logistics segment relative to the elevated levels of first half of 2018.

Notwithstanding the softer contribution from Logistics this quarter, both consolidated Revenue and EBITDA were the second strongest results for the first quarter in the Company’s history, reflecting the core underlying growth of both segments.

On a consolidated basis, total revenue was $39.0 million for the three-month period ended March 31, 2019, a 14.3% decrease over the three-month period ended March 31, 2018. Operating income was $1.3 million for the quarter, a 41.4% decrease over same period in 2018.

As previously announced, part of the Company's continuing growth strategy is the expansion of Titanium’s participation in the U.S. freight logistics industry. During the quarter, Titanium secured a strategic location in Charlotte, NC to serve as the head office of the Company's expansion into the U.S. freight logistics market. Along with infrastructure, Titanium has also recruited a team with considerable expertise in the U.S. logistics industry to service the new segment. The new initiative is expected to be operational in the second quarter of 2019 and is expected to contribute to operating earnings in the fourth quarter of 2019.

In addition to the specific initiatives related to the U.S. freight logistics industry, Titanium continues to sustainably invest in technology and people and remains focused on delivering organic growth over the medium term and through changing industry conditions. Notwithstanding more challenging industry conditions, Titanium continues to build market share in our core businesses.

The normalization of industry conditions and the recent emergence of sources of excess capacity in the market place have, in management’s view, improved the opportunities for accretive add-on acquisitions in select market segments.

Conference Call
The Company will also hold a conference call for analysts and investors on Wednesday, May 1, 2019, at 8:00 a.m. Eastern Time, to discuss fourth quarter financial results. Business media are invited to listen to the call. Interested parties can join the call by dialing 1-877-291-4570 (North America) or 1-647-788-4919 (International). A recording of the call will be available until midnight, March 20, 2019 by dialing 1-800-585-8367 (North America) or 1-416-621-4642 (International) and entering Conference ID3955918.

About Titanium Transportation Group
Titanium is a leading asset-based transportation and logistics company servicing Canada and the United States, with approximately 475 power units, 1,400 trailers and 600 employees and independent owner operators. Titanium provides truckload, dedicated, and cross-border trucking services, freight logistics, and warehousing and distribution to over 1,000 customers. Titanium is a recognized consolidator of asset-based transportation companies in Ontario, having completed ten asset-based trucking acquisitions since 2011. Titanium has also been ranked by PROFIT magazine as one of Canada's Fastest Growing Companies for ten (10) consecutive years.

NON-IFRS FINANCIAL MEASURES

The following financial measures do not have any standardized meaning under IFRS and may not be comparable to similar measures employed by other companies:

"Earnings before interest, income taxes, depreciation and amortization" ("EBITDA") is calculated as net income before depreciation, amortization, asset impairments, gains or losses on the sale of equipment, finance income and costs, gains or losses on foreign exchange, income tax expense, transaction costs, accelerated customer list amortization and goodwill impairment.

"EBITDA margin" is calculated as EBITDA as a percentage of revenue before fuel surcharge.

"Adjusted net income" is calculated as net income before items that are not in the normal course of business, such as accelerated customer list amortization and goodwill impairment.

Management of the Company believes that these financial measures are useful for investors and other readers, when used in conjunction with other IFRS financial measures, as they are measurers used internally by management to evaluate performance. However, these financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of financial performance prepared in accordance with IFRS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding Titanium's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to Titanium's future outlook and anticipated events, and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Titanium. Particularly, statements regarding future acquisitions, the availability of credit, performance, achievements, prospects or opportunities for Titanium or the industry in which it operates are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.

Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, Titanium undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

CONTACT INFORMATION

Titanium Transportation Group Inc.
Ted Daniel, CPA, CA
Chief Executive Officer
(905) 266-3011
investors@ttgi.com
www.ttgi.com