Mr. Ted Daniel reports
TITANIUM TRANSPORTATION GROUP REPORTS SECOND QUARTER 2019 FINANCIAL RESULTS
Titanium Transportation Group Inc. has released its financial results for the three-month period ended June 30, 2019. All amounts are in Canadian currency.
Q2 2019 highlights:
Consolidated revenue for Q2 2019 was $42.0-million, representing the second-highest Q2 revenue in the company's history. This compares with record Q2 2018 revenue of $51.8-million.
EBITDA (earnings before interest, income taxes, depreciation and amortization) (a non-IFRS (international financial reporting standards) measure) was $4.9-million for Q2 2019, representing a 12.4-per-cent EBITDA margin, compared with $7.1-million in the second quarter of 2018 and a 14.8-per-cent EBITDA margin.
- Operating income was $1.4-million for Q2 2019, representing a 3.7-per-cent operating margin, compared with $3.7-million and a 7.7-per-cent operating margin in Q2 2018.
- Titanium continued to strengthen its financial position during the second quarter of 2019. The company lowered its net-debt-to-equity ratio to 1.87, from 2.03 in Dec. 31, 2018, and repaid $8.9-million in debt in the first half of 2019.
Truck transportation segment revenue for Q2 2019 was $28.6-million, representing a 4.0-per-cent decrease year over year. EBITDA was $4.5-million or a 16.8-per-cent margin. Operating income was $1.3-million, representing a 4.8-per-cent operating margin, for the second quarter. This compares with Q2 2018 EBITDA of $5.1-million or an 18.5-per-cent EBITDA margin, and operating income of $1.8-million or a 6.4-per-cent operating margin.
- Logistics segment revenue was $14.9-million for Q2 2019, compared with $23.2-million in the same period in 2018. EBITDA/operating income was $700,000, representing a 4.8-per-cent margin, for the second quarter. This compares with EBITDA/operating income of $2.5-million and an 11.4-per-cent margin in Q2 2018.
Chief executive officer commentary
"Despite a more challenged operating environment, we remained profitable in the second quarter of 2019 and continued to build long-term shareholder value," said Ted Daniel, president and chief executive officer. "Significant overcapacity and lower spot rates in the marketplace have improved the landscape for opportunistic and accretive M&A," added Mr. Daniel. "Our strong balance sheet will not only allow us to weather the cyclicality in the transportation and logistics industry but allows us to capitalize on opportunities as they arise."
SUMMARY OF FINANCIAL RESULTS
(in millions of dollars,
except per-share amounts and as noted)
Q2 2019 Q2 2018 YTD 2019 YTD 2018
Revenue $42.0 $51.8 $81.0 $97.3
EBITDA $4.9 $7.1 $9.5 $12.5
EBITDA margin (1) 12.4% 14.8% 12.6% 13.8%
Net income $0.5 $2.2 $1.0 $3.3
Net income per share $0.01 $0.06 $0.03 $0.09
Revenue $28.6 $29.7 $56.6 $55.7
EBITDA $4.5 $5.1 $8.9 $8.7
EBITDA margin (1) 16.8% 18.5% 16.9% 17.0%
Revenue $14.9 $23.2 $26.9 $43.6
EBITDA $0.7 $2.5 $1.2 $4.7
EBITDA margin (1) 4.8% 11.4% 4.9% 11.2%
(1) EBITDA margin is calculated as EBITDA as a percentage
of revenue before fuel surcharge.
Q2 2019 summary
Due to softer market conditions, the truck transportation segment and logistics segment experienced negative year-over-year growth in comparison with elevated levels in the first half of 2018.
Notwithstanding a more challenged operating environment, Titanium reported its second-strongest consolidated Q2 revenue in its history. This compares with the second quarter and full year 2018 when the company reported record revenues.
On a consolidated basis, total revenue was $42.0-million for the three months ended June 30, 2019, an 18.9-per-cent decrease from the three months ended June 30, 2018. EBITDA for Q2 2019 was $4.9-million, reflecting a 31.9-per-cent decrease in comparison with Q2 2018. Operating income was $1.4-million in the second quarter of 2019, representing a 61.3-per-cent decrease over the comparable period in 2018.
As previously announced, part of the company's continuing growth strategy is the expansion of Titanium's participation in the U.S. freight logistics industry. During the quarter, a new brokerage location in Charlotte, N.C., began operations in May, 2019, and has already exceeded internal revenue projections. This office has formally become the company's U.S. headquarters and, as such, serves as the hub for the company's expansion into the U.S. brokerage and logistic industry.
Over all, Titanium continues to sustainably invest in its people and technology to deliver best-in-class service to its customers. Given the company's strategic growth priorities, its aim is to capitalize on the current challenging North American transportation and logistics industry through disciplined organic volume growth and accretive acquisitions.
The continuation of excess capacity in the marketplace has, in management's view, improved the opportunities for accretive add-on acquisitions in select market segments.
Share repurchase program
On May 17, 2019, the company began a normal course issuer bid (NCIB) to purchase up to 1,839,267 of its common shares, representing 5 per cent of its issued and outstanding common shares. The NCIB will terminate on May 16, 2020, or on an earlier date in the event that the maximum number of common shares sought in the NCIB have been repurchased. Purchases pursuant to the NCIB are expected to be made through the facilities of the TSX Venture Exchange or such other permitted means, including through alternative trading systems in Canada, at prevailing market prices or as otherwise permitted by the policies of the TSX-V.
During the six months ended June 30, 2019, the company repurchased 248,200 common shares at a weighted average purchase price of $1.29 and for a total purchase price of $319,360.
The company will also hold a conference call on Wednesday, Aug. 14, 2019, at 8 a.m. Eastern Time, to discuss these results. Business media are also invited to listen to the call. Interested parties can join the call by dialling 1-877-291-4570 (North America) or 1-647-788-4919 (international). A replay of the conference call can be accessed until midnight on Aug. 28, 2019, by dialling 1-800-585-8367 (North America) or 1-416-621-4642 (international) and entering the conference ID No. 6754546.
About Titanium Transportation Group
Titanium is a leading asset-based transportation and logistics company servicing Canada and the United States, with approximately 475 power units, 1,400 trailers, and 600 employees and independent owner operators. Titanium provides truckload, dedicated and cross-border trucking services, freight logistics, and warehousing and distribution to over 1,000 customers. Titanium is a recognized consolidator of asset-based transportation companies in Ontario, having completed 10 asset-based trucking acquisitions since 2011.
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