Titanium reports strong third quarter results and highest consolidated quarterly revenues in its history
BOLTON, Ontario, Nov. 10, 2020 (GLOBE NEWSWIRE) -- Titanium Transportation Group Inc. ("Titanium" or the "Company") (TSX VENTURE:TTR), a leading provider of transportation and logistics services throughout North America, today reported its financial results for the three month period ended September 30, 2020. All amounts are in Canadian currency.
Q3 2020 Highlights
Consolidated revenue for Q3 2020 was $52.6 million - a 23.2% increase over revenues of $42.7 million recorded in Q3 2019.
EBITDA was $6.7 million and Operating Income came in at $3.6 million for Q3 2020, reflecting a year-over-year 48.0% and 255.8% increase, respectively.
Adjusting for the impact of subsidies received from the Canadian Emergency Wage Subsidy (CEWS) program, Adjusted EBITDA was $5.5 million for Q3 2020, a 21.8% increase compared to Q3 2019.
Adjusted Operating Income was $2.5 million for Q3 2020, compared to $1.0 million reported in Q3 2019.
Logistics segment revenue was $26.0 million in Q3 2020, the highest in Company history, while Adjusted EBITDA/Operating Income was $1.4 million. The segment increased its revenue by 55.5%, from $16.7 million, and its EBITDA/Operating income by 70.1%, from $0.8 million, compared to Q3 2019. In July 2020, Titanium opened its second U.S. brokerage office, located in Nashville, Tennessee.
Truck Transportation segment revenue was $27.5 million for Q3 2020, while Adjusted EBITDA was $4.5 million and Adjusted Operating Income came in at $1.4 million over the period. This compares to revenue of $27.3 million, EBITDA of $4.2 million and Operating Income of $0.9 million in Q3 2019.
Total debt repayment for the year amounts to $14.7 million.
The Company maintains ample liquidity with cash and cash equivalents of approximately $2.9 million and $21.1 million undrawn credit facilities.
After the quarter end, Titanium Transportation Group was recognized by the 2020 Growth List as one of Canada’s fastest growing companies with five-year revenue growth of 133%.
“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 Chief Executive Officer. “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,” added Mr. Daniel. “As always, we remain steadfast in our commitment to deliver sustainable, profitable growth and create long-term shareholder value.”
Summary of Financial Results
Adjusted EBITDA margin(1)(2)
Adjusted Net Income(2)
Adjusted Net Income per share(2)
Net Income per share
Adjusted EBITDA margin(1)(2)
Adjusted EBITDA margin(1)(2)
EBITDA margin is calculated as EBITDA as a percentage of revenue before fuel surcharge.
Adjusts for the subsidies received under the Canadian Emergency Wage Subsidy program, which equated to $1.2 million on a consolidated basis ($0.62 million for the Truck Transportation segment and $0.57 million for the Logistics segment)
Q3 2020 Summary
On a consolidated basis, Q3 2020 revenue was $52.6 million, a 23.2% increase over the three-month period ended September 30, 2019. EBITDA for the third quarter was $6.7 million, a 48.0% increase year over year. Operating Income was $3.6 million for the period, a 255.8% increase compared to the three-month period ended September 30, 2019. Adjusting for the impact of subsidies received under the CEWS program, Adjusted EBITDA was $5.5 million, a 21.8% increase compared to Q3 2019, while Adjusting Operating Income was $2.5 million, an increase of 139.7% over the comparable period in the prior year.
Truck Transportation segment revenue for Q3 2020 was $27.5 million, a 0.6% increase on a year-over-year basis. Adjusted EBITDA for the segment was $4.5 million for the current quarter, compared to $4.2 million in Q3 2019, a 7.3% increase year over year. The year-over-year increase in Adjusted EBITDA can be primarily attributed to volume growth, coupled with cost management measures.
Logistics segment revenue for the third quarter of 2020 was $26.0 million compared to revenues of $16.7 million in Q3 2019. Adjusted EBITDA for the segment was $1.4 million, a 70.1% increase compared to Q3 2019. The segment witnessed an increase in volumes, specifically in the U.S., and an accompanying increase in rates as the economic recovery began to take hold during the quarter. Additionally, the opening of the Nashville, Tennessee office during the third quarter positively benefited the segment’s operating results.
During the third quarter, the Company replaced aged equipment by purchasing rolling stock of $4.2 million. Given the strong profitability generated in the third quarter of 2020, the Company maintained net-debt-to-equity ratio at 1.26:1 compared to the period ending June 30, 2020.
As at quarter end, Titanium had a strong liquidity position, with approximately $2.9 million of cash, as well as $21.1 million under the revolving demand operating facility, $5.0 million under a non-revolving acquisition facility, and $7.5 million under an accordion acquisition facility, for a total of $36.5 million in available liquidity.
The Company will also hold a conference call on Wednesday, November 11, 2020, at 8:00 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 dialing 1-877-291-4570 (North America) or 1-647-788-4919 (International). A replay of the conference call can be accessed until midnight on November 25, 2020 by dialing 1-800-585-8367 (North America) or 1-416-621-4642 (International) and entering the Conference ID: 3140499.
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 ten asset-based trucking acquisitions since 2011. Titanium has also been ranked by Canadian Business (formerly PROFIT magazine) as one of Canada's Fastest Growing Companies for twelve (12) consecutive years.
NON-IFRS FINANCIAL MEASURES
The following financial measures do not have any standardized meaning under IFRS and may not be comparable to similar measures employed by other companies:
"Earnings before interest, income taxes, depreciation and amortization" ("EBITDA") is calculated as net income before depreciation, amortization, asset impairments, gains or losses on the sale of equipment, finance income and costs, gains or losses on foreign exchange, income tax expense, transaction costs, accelerated customer list amortization and goodwill impairment.
"EBITDA margin" is calculated as EBITDA as a percentage of revenue before fuel surcharge.
“Free cash flow” is calculated as cash flow from operations plus proceeds from finance lease receivables and proceeds from disposition of property and equipment, less acquisition of property and equipment.
"Adjusted net income" is calculated as net income before items that are not in the normal course of business, such as accelerated customer list amortization and goodwill impairment.
Management of the Company believes that these financial measures are useful for investors and other readers, when used in conjunction with other IFRS financial measures, as they are measurers used internally by management to evaluate performance. However, these financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of financial performance prepared in accordance with IFRS.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding Titanium's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to Titanium's future outlook and anticipated events, and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Titanium. Particularly, statements regarding future acquisitions, the availability of credit, performance, achievements, prospects or opportunities for Titanium or the industry in which it operates are forward-looking statements. In some cases, forward-looking information can be identified by terms such as "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "project", "predict", "forecast", "potential", "continue", "likely", "schedule", or the negative thereof or other similar expressions concerning matters that are not historical facts.
Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.
The forward-looking statements made in this press release are dated, and relate only to events or information, as of the date of this press release. Except as specifically required by law, Titanium undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Titanium Transportation Group Inc.
Ted Daniel, CPA, CA
Chief Executive Officer