BOLTON, Ont. – Titanium Transportation Group posted Q3 earnings this week, growing revenue and EBITDA over the same quarter last year.
Revenue for the quarter was $29.8 million, up 10% over Q3 2015, while EBITDA for the quarter was $3.2 million, a 12% increase over the same period last year. Truck transportation revenue was $21 million, a 16% increase year-over-year while logistics revenue was down 3%, at $9.1 million. Net income for the quarter was $129,780 but year to date the company has recorded a net loss of $181,489.
Titanium recently moved into a new 71,500 sq.-ft. headquarters in Bolton, consolidating five terminals.
“The overall economic environment remains challenging; however, we are experiencing improvements in both segments that will translate into improved profitability and significant growth in the future,” said Ted Daniel, CEO of Titanium.
In a conference call with analysts, Daniel said financial results were better than expected given weak economic conditions and an overcapacity situation he doesn’t see changing anytime soon.
“I’m not seeing any improvements in terms of the overcapacity issue in this economy,” he said.
Daniel said Titanium is focused on cost control, increasing efficiency and is well positioned financially with $43 million in undrawn credit facilities and an extremely young fleet, which has recently been refreshed. However, it doesn’t look like any big acquisitions are in the works, though Daniel wouldn’t rule out making a deal.
“I think the most important thing right now is to concentrate on making sure we build our business, that we build every aspect of Titanium as it is today. It is unlikely we’re going to do another acquisition in 2016 but we do have a number of leads we’re looking at,” Daniel said. The company could be more active on the acquisitions front in 2017, he suggested.
He noted valuations are attractive, but that can also make it more difficult to make a deal.
“These conditions, with the overcapacity, makes it harder to do a deal for both parties,” he said. “On one hand, you’re looking at a company that wants to get as high a price as they can, but at the same time, it’s not that we want to get the lowest possible price, but we’re also dealing with the fact, mathematically sometimes we’re working under a certain framework and it’s tough to be able to please everybody. The environment itself is making it a little tougher.”
With the move into a larger facility, Daniel said Titanium will grow its logistics division. He also said the company’s recently acquired Windsor terminal will present new opportunities for growth.
“Windsor is actually very strategic, and a short-, medium- and long-term decision,” he said. “It is a border town and they’re building a second bridge there. Our location is eight minutes from the Ambassador Bridge. As well, we have a 30,000 sq.-ft. warehouse, so we have plans for that as well. And they were only a van company and we plan to expand it into van and flatbed, because we expect industrial growth over time in Windsor.”
Asked about his outlook for 2017, Daniel’s expectations were somewhat constrained.
“We believe it’s going to be a developmental year. A year of sure but steady. I think the overcapacity issue is not going to resolve in 2017 but that it’s really going to give us an opportunity to focus on how to do things even better, more efficiently, more creatively, and really look at our innovation and go from there,” he said.