Titanium achieves record revenue, but acquisition-related costs weigh on profit
Titanium Transportation achieved record revenue of nearly $400 million in 2021, lifted by acquisitions and a strong freight market.
But its profit slipped in the fourth quarter to $1.36 million, down 35% year over year, due to non-recurring costs related to the acquisition of ITS. Full year profit was $5.04 million, down 19.6% year over year.
“Our strong results demonstrate our ability to navigate and adapt through challenging conditions to serve our North America trucking and logistics customers. We completed the largest acquisition in our company’s history and successfully expanded into new U.S. markets, to achieve record top line revenue growth of about $400 million,” said Ted Daniel CEO, Titanium Transportation Group.
In the fourth quarter, Titanium achieved record consolidated revenue of $111.3 million, an increase of 69%. It also grew EBITDA to $8.9 million, up 34.5%>
During the quarter, we successfully completed the integration of ITS and made excellent progress improving margins and profitability as we realized operational efficiencies in trucking. Looking ahead to 2022, we expect our segment margins and profitability to return as we optimize our combined fleet. As logistics margins continued to further normalize during the quarter, we also focused on managing our pricing to address ongoing rising industry costs and enhance our technologies to allow us to efficiently scale our logistics expansions,” said Daniel.
“Looking ahead, we will continue to adapt to the evolving economy and challenging conditions with respect to inflationary pressures, ongoing challenges in the global supply chain and tighter labor markets.”
On a call with analysts, Daniel discussed inflationary pressures on the business and efforts to increase rates to offset them.
“The price of trailers in the past 12 to 18 months, have doubled,” he said. “The basic costs of purchasing the trailers doubled and in addition, we are in an environment of increasing interest rates. The increased price of fuel is going to impact the cost of the mechanic getting to work and he’s going to have to get a raise and the hourly rate of the shop is going to go up.”
Daniel said trucking has become “real estate on wheels” with limited capacity in trailers going to the highest payers.
“We’re making the decision now in terms of who gets the space,” he said. “We have no choice, we have to go for the rate increases. It’s more a matter of who’s willing to pay for space that just costs more money now to produce.”
Titanium continues to grow its U.S. brokerage business, adding a fifth location in Atlanta, and plans to open two more this year. It’s also still on the lookout for acquisition opportunities.
“I’m always looking,” said Daniel. “With our technology, we’re ready at this point in time. We have a very scalable business. Our team here is ready to roll up its sleeves and execute at any given moment.”
ITS and Bert & Sons have largely been integrated, the company says. Now the challenge is to update the fleet with lingering supply chain challenges. The company hopes to add 100 tractors and 250 trailers this year.
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