Titanium Transportation Group earned net income of $3.6 million in Q1, but deteriorating market conditions were reflected in a 22% decrease in revenue and 40% decline in net income.

The company’s logistics segment was hit hardest, with a 36% decrease in revenue, while truck transportation grew revenues 4.5% and EBITDA by 52.4%.

Revenue was $106 million, down from $136 million a year ago.

“Despite softening market conditions, Titanium delivered yet another profitable quarter, generating $15.3 million in cash flow from operating activities and $3.6 million in net income in the first quarter of 2023,” CEO Ted Daniel said in a release. “We are confident in our ability to maintain profitability while navigating through economic challenges, thanks to our superior customer and supplier solutions, internally developed Titanium Fusion portal, and experienced freight transportation team.”

Looking ahead, Daniel said continued headwinds are expected “due to various geopolitical and economic factors such as interest rates, high levels of inflation, and supply chain challenges.”

Despite tougher conditions, Titanium was able to boost its trucking segment EBITDA by 52% and margins by 690 basis points. On a conference call with analysts, Daniel attributed this to technologies that helped optimize its pricing strategy and navigation.

The company is sticking with its plans to open two more logistics offices in the U.S. this year, which would bring its total to eight. And it is maintaining its guidance of $500-$520 million in revenue this year – exclusive of acquisitions – despite the headwinds. Daniel said this will be possible due to a return of seasonality that should see an increase in demand as the year progresses, in addition to tightening capacity.

“It’s likely the North American economy will continue to face strong headwinds, which will undoubtedly cause turmoil within the transportation industry as well,” he acknowledged. “We are poised to not only navigate our core business through these challenges but also to capitalize on potential accretive [acquisition] opportunities.”

Multiple expectations on the M&A front are back to traditional norms, Daniel added.

The company is also pleased with the current equipment fleet. It has finished its tractor refresh with an average tractor age of less than 1.5 years, with trailers averaging 3.5 to four years and more coming through this year.