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Titanium posts stronger Q1 revenues

Management “cautiously optimistic” about remainder of the year

BOLTON, Ont. – First quarter earnings improved for Titanium Transportation Group, particularly in its logistics business, which benefited from the expansion of its sales force and the company’s move into a consolidated terminal.

The group posted Q1 revenue of $29.8 million, a 6% increase year-over-year. EBITDA was $2.9 million, a 17% increase. Net income for the quarter was $129,284 compared to a net loss of $185,129 during the first quarter of 2016. Titanium attributed the sharp increase in net income to growth and improvements in the logistics business, reduced corporate costs, and the non-recurrence of a foreign exchange loss in Q1 2016.

The logistics group saw revenue increase 33% to $9.5 million. Truck transportation revenue was $20.6 million, a 3% decrease year-over-year.

Ted Daniel, CEO of Titanium, said the company’s balance sheet is strong and it is ready to continue pursuing its mergers and acquisition strategy. It is considering both “tuck-in” and “transformative” acquisitions.

“Despite continuing softness in the transportation market, our logistics division exhibited strong organic growth in the quarter,” Daniel said. “This was driven by the growth and development of our in-house sales team after moving to our larger purpose-built head office location in the third quarter of 2016. From a strategic perspective, Titanium continues to remain focused on delivering the Company’s next phase of growth and is well positioned in a weak overall industry environment.”

On a conference call with analysts following release of Q1 results, Daniel said he’s “cautiously optimistic” about the year ahead. The first quarter is typically the company’s weakest, due to the higher fuel and repair costs incurred in the colder months.

However, Titanium management isn’t expecting the impending electronic logging device (ELD) mandate to save the industry from pricing pressures any time soon.

“I don’t think anybody really knows when that’s going to happen, in terms of seeing prices increases in the market,” Daniel said.

Operations manager Marilyn Daniel suggested there could be an impact, and some relief on pricing pressure, in the latter half of 2017 and into 2018.

“ELDs are a huge component, but there are other (factors),” she said. “We are anticipating an exit of some drivers from the industry who are in their senior years because of a lack of desire to use ELDs.”

Titanium said prices have been driven down by 5-10% over the past year, as shippers leverage excess capacity in the market.

Ted Daniel said Titanium is in a position to double in size and is in discussions with several acquisition targets. It has an additional $35 million in credit it can tap into to meet its growth objectives, but Daniel said acquisitions must be “accretive and synergistic.”

What kind of acquisitions does the company have in mind?

“I don’t believe in a good deal, I believe in a fair deal,” Daniel explained. “Because I don’t think you can have a situation where someone can buy a company and it’s a smoking deal and you have a winner and a loser. That is a formula for disaster. I believe, first and foremost, the right price is where everyone is a winner. The vendor is selling something that has good value and we are getting a good price and that way both of us are happy. We are integrators, so one think I’m looking for is, some overlap and expansion to our geography, some overlap and expansion on product lines, we like sticky customers where there is some value added in terms of the mix, and we like good corporate cultures.”

As far as organic growth is concerned, Daniel said Titanium has expanded its sales force by about 20% since moving into its new headquarters last year.

Last year’s acquisition of a Windsor terminal has been a success, management said, with revenue climbing to $775,000 in the first quarter compared to $630,000 in Q4 2016. The North Bay terminal is also in growth mode, Daniel said.


James Menzies

James Menzies

James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at or follow him on Twitter at @JamesMenzies.
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