WOODBRIDGE, Ont. — Titanium Transportation Group saw mixed results in the second quarter, with logistics revenue declining while truck transportation earnings increased.
Total revenue for the second quarter was $30 million, an 8% decrease over Q2 2015. EBITDA came in at $3.2 million, a 6% decrease over the same period last year. Truck transportation revenue was $21.4 million, a 6% increase over the second quarter of 2015 and EBITDA margins for the segment climbed to 16.3% from 13.1%.
However, logistics revenue saw a 28% decline to $8.9 million and EBITDA margins there fell from 13.1% to 4.8%, reflecting an oversupply of trucks in the market, according to the company.
Net income was negative at -$126,140 for the quarter and -$311,269 for the first six months of the year.
“Progress in the integration of recent acquisitions has resulted in record EBITDA levels and strong margins in the truck transportation division,” said CEO Ted Daniel. “The overall environment in logistics remains challenging; however, with our move later this month to our new Caledon facility, we will be able to significantly increase our sales team.”
Daniel pointed out in a conference call with analysts the balance sheet remains strong and the company is well funded to execute its growth strategy, which remains to make two acquisitions per year. Earlier this year the company purchased a Windsor terminal and assets, which have since been fully integrated, Titanium reports.
It anticipates fully integrating ProNorth by the third quarter of this year and Daniel said the company maintains a full pipeline of potential acquisition targets. The company is also sitting on about $4.2 million in older equipment it plans to sell.
When the company moves into its new Caledon headquarters, Daniel said it will be adding sales staff to its logistics team to grow revenues.
“Margins continue to be significantly affected by overcapacity in the truck transportation industry,” Daniel said of the logistics segment.
However on the truck transportation side, Daniel said an overcapacity situation actually contributes to Titanium’s success.
“There is overcapacity in the industry right now and I think that’s actually a benefit to Titanium,” he said. “ I find we tend to do very well in slightly tougher times…We have solid metrics, technologies and efficiencies…I love running this company to a large degree based on a strong balance sheet. That gives you a strong foundation to be able to run the business rather than constantly having to fight with creditors when you have a weak balance sheet. I think that is going to give us a competitive advantage over companies that are struggling with their balance sheets.”
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