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Company earningsNewsTruckload

Titanium Transportation has weaker third-quarter results, remains profitable

Canadian cross-border transportation and logistics company Titanium Transportation Group (TSXV: TTR) reported third-quarter 2019 net income of C$300,000 (a Canadian dollar equals US$0.76), roughly one-third of the level it produced in the same period of 2018.

Revenue in its truck division declined 5% year-over-year, with earnings before interest, taxes, depreciation and amortization (EBITDA) falling 9%. The company cited lower volumes and excess capacity as the reasons for the declines.

Titanium Transportation’s Key Performance Indicators

Logistics revenue declined 4%, but EBITDA dropped by nearly half on a year-over-year comparison. Volumes are more than 3% lower in the division. Titanium didn’t provide any information around revenue per load or net revenue margins, but it is likely that the bulk of the EBITDA decline was due to spot rates, which were in excess of 30% lower for some brokerages in the U.S. during the quarter. The logistics EBITDA margin was 370 basis points lower year-over-year, at 5.3%.

The Ontario-based company is continuing to grow its logistics division through expansion into the U.S. truck brokerage market. The company opened its first U.S.-based brokerage office in Charlotte, North Carolina, in May and previously announced its intention to open one or two more locations, with the next office expected to come online by first quarter 2020.

The company’s new brokerage operation contributed positively to EBITDA and net income in the third quarter, and Titanium expects the division to provide another contribution to financial results in the fourth quarter.

Titanium reported that it lowered its net debt by 14.4% compared with the end of 2018, bringing its net debt-to-equity ratio 20 basis points lower to 1.68 times.

“Our financial results are improving in a stagnant market and we generated our highest quarterly revenue in 2019, remained profitable and continued to reduce our financial leverage. The strength of our balance sheet permits us to pursue accretive tuck-in acquisitions and also consider larger M&A opportunities should they arise. As always, we remain disciplined and will only pursue accretive opportunities which will allow us to deliver sustainable, profitable growth and create long-term shareholder value, said Titanium’s president and CEO, Ted Daniel.

Titanium will host a call to discuss its third-quarter results with analysts on Nov. 6 at 8 a.m. EST.

Titanium Transportation Stock Price Chart – SONAR: STOCK.TTTGF

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.

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