BOLTON, Ont. – Titanium Transportation posted record quarterly revenue in the third quarter, benefiting from strong performance by the U.S. logistics operations and improving rates in the U.S.
Revenue surged 23.2% to $52.6 million year-over-year, while net income was $2.7 million, up from $300,000 in Q3 2019. Truck transportation revenue was $27.5 million, a 0.6% year-over-year increase, while logistics revenue surged 55.5% to $26 million. EBITDA was up 22% in the truck transportation segment and 138.5% in the logistics operations.
“Despite the continued uncertain economic backdrop, reflecting in large part the impact of the Covid-19 pandemic, Titanium reported strong third quarter financial results. In fact, we posted our highest quarterly revenues in the company’s history,” said Ted Daniel, president and CEO.
“Our operating discipline, focused on cost control and leveraging our in-house, purpose-built technology, allowed us to once again report a profitable quarter. The strength of our balance sheet and significant financial flexibility positions us to execute on our growth opportunities, which includes the potential to capitalize on larger, more transformative M&A opportunities, should the right ones arise. As always, we remain steadfast in our commitment to deliver sustainable, profitable growth and create long-term shareholder value.”
Titanium is eyeing continued expansion in the U.S., where its two logistics operations in Nashville, Tenn., and Charlotte, N.C., have exceeded expectations. Marilyn Daniel, chief operating officer of Titanium, noted the company is beginning to see capacity tighten in the U.S. Covid-related travel restrictions have hampered the opening of more U.S. locations, but Daniel said Titanium hopes to have another three U.S. offices running by the end of 2021.
“We are actively working on a third location,” said Ted Daniel, adding the U.S. operations “have produced results beyond our internal projections.”
In Canada, and also in the U.S., Titanium remains on the lookout for a “transformative” acquisition, and Daniel said it has enough “dry powder” to complete one. This despite initiating its first dividend, which will pay shareholders two cents a share per quarter. Titanium is working with Left Lane Associates to identify a suitable candidate for an acquisition.
“Our M&A pipeline is very active. We are in discussions with a number of prospects,” said Daniel. “We are in an ideal position to undertake a transformational acquisition or multiple tuck-in acquisitions.”
In the third quarter, the company spent $4.2 million on new trailers and has ordered 70 new power units – a mix of Volvos and Peterbilts – for delivery next year. Offering both models expands the driver pool Titanium can draw from, Ted Daniel told Trucknews.com. Both makes are loaded with safety technologies, added Marilyn Daniel. Such safety spec’s have helped shield Titanium from sharp insurance premium increases encountered by many Canadian fleets this year.
The company is also encouraged by contract rate discussions, which are showing signs of stability, or slight increases, headed into next year.
Ted Daniel said rate increases of 3-5% are expected, adding “There is some concern on the part of customers to lock in.”
He also expects Canada’s electronic logging device (ELD) mandate to tighten Canadian capacity when it takes effect next June.
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