Titanium Transportation Group Inc.

Good morning and welcome to Titanium Transportation Group's first quarter 2023 earnings conference call. On today's call, we have Ted Daniel, President and Chief Executive Officer, Alex Fu, Chief Financial Officer, and Marilyn Daniel, Chief Operating Officer. Before we begin, I would like to remind everyone that certain statements made on this call today may be forward-looking. In that regard, Please refer to the risk factors and cautionary provisions outlined in the press release issued by the company yesterday, as well as the filings made by Titanium on Cedar. Please note that this call is being recorded today, May 16th, 2023. A replay of this call will be made available until midnight on May 30th, 2023. The details of the replay can be found on Titanium's website under the investor section. I would now like to turn the call over to Titanium's President and CEO, Ted Daniel. Please go ahead, sir.

Good morning. Thank you, Operator, and thank you all for joining us. Despite challenging economic conditions, I'm pleased to share that Titanium delivered another profitable quarter, generating $106 million in revenue and $12.6 million in consolidated EBITDA. The market trends we saw in the latter half of 2022, including increased levels of inflation, supply chain challenges, rising interest rates, and geopolitical turmoil, continued in the first quarter of 2023. These trends also impacted the transportation industry. We observed a softening demand for freight services stemming from changes in consumer spending habits and some balancing of overstocked inventory from the prior year. At Titanium, We have always believed that during difficult times we should be opportunistic and continue to pave the road for future growth. I believe the success we achieved in 2022 and the first quarter of 2023 is a direct result of the opportunistic investments in assets, technology, and people that we made in prior cycles. Although 2023 may not be a year of rapid growth, We believe the economic environment will present disciplined and experienced operators, such as ourselves, opportunities to make prudent investments, which will translate into sustainable long-term growth for our shareholders. On a consolidated basis, we generated revenue of $106 million, EBITDA of $12.6 million, and EBITDA margin of 13.8%. an increase of 230 basis points from Q1 of 2022. This demonstrates our continued ability to execute on our growth strategy and commitment to improved efficiency, delivering strong and consistent margin growth. Looking at our trucking segment, we delivered revenue of 51.6 million, up 4.5% year over year, and 52% EBITDA growth. We were able to utilize our technology-driven navigation tools to optimize our pricing strategy, which resulted in a year-over-year increase in segmented revenue. We do not expect the growth trend to continue into the remainder of the year, but anticipate continued control of our operating costs to maintain high levels of profitability in this segment. The results in the trucking segment also demonstrate the benefits of the investments we've made in our technology and our team as we continue to leverage our newest best in class customer and supplier digital solutions. Our newly developed supplier solution tools and vetting systems allow us to add thousands of partner carriers to our logistics database and service network. Our logistics segment, which tends to be more sensitive to market conditions, face substantial pricing pressure and demand normalization during quarter one of 2023. We generate a revenue of 56.2 million and EBITDA of 4.6 million. While we do not expect the quality of revenue to return to the elevated levels in early 2022, we're comfortable with the margin performance that we're currently able to achieve. We continue to see significant opportunity for our growth in the U.S. marketplace. During Q1, we announced our sixth U.S. location in Fayetteville, Arkansas, as part of our goal of building Titanium's business offerings in the U.S. market. We expect to continue to secure additional U.S. locations, allowing us to grow our footprint and customer base with the addition of another two locations in 2023. Seven years ago, we outlined a bold strategy to achieve $500 million in revenue. Over the past few years, we scaled our trucking and the logistics business in Canada and expanded into U.S. markets. While continuing to execute on strategic acquisitions. We ended 2022 with $496 million in revenue, achieving the goal we set in 2016. As we look forward, we are confident that titanium can become a billion-dollar business and we're focused on executing on our strategy while navigating the current economic environment. Our technology-intensive platform is empowering us to deliver efficiencies in optimizing pricing, routing and load volumes in an environment of emerging pricing pressure and softening volume demand. For the second quarter of this year, we cautiously expect a more tempered marketplace. Against this backdrop, we expect to continue to leverage technology to navigate evolving market conditions, and with a strong balance sheet and cash position, we remain prepared for opportunities resulting from this economic situation. We maintain our 2023 full-year revenue guidance range of $500 million to $520 million, an EBITDA margin of 9.5% to 11.5%. With that, I'll turn it over to Alex for a more detailed discussion of our financial results for the quarter. Alex? Thanks, Ted.

No problem. In the first quarter of 2023, on a consolidated basis, titanium generated a revenue of $106 million, compared to $136 million in Q1 2022. We delivered EBITDA of $12.6 million compared to $13.9 million in Q1 2022, with EBITDA margin of 13.8% and increase of 230 basis points. Diving deeper into the segment performances, the truck transportation segment saw revenues of $51.6 million, an increase of 4.5%, and EBITDA of $8.7 million, an increase of 52.4%. with an EBITDA margin of 20.3%. The continued improvement in operating margins in the truck transportation segment is consistent with our expectations, following the integration of a sizeable acquisition as we continue to deliver operating improvements and synergies. The logistics segment generated revenues of 56.2 million, compared to 87.9 million in the comparable period. EBITDA was 4.6 million, compared to $9.2 million in the comparative period, with an EBITDA margin of 9.3% compared to 11.5% in the same period. Titanium's balance sheet and solid capital position continue to provide a strong foundation for our operations and allow us to consider potential acquisition opportunities. During Q1, we bought back $72 billion 1,275 common shares under our NCIB and we're actively evaluating potential acquisitions opportunities. Given the strength of our capital position and our confidence in the earnings outlook, we maintain our dividend, declaring a dividend of 2 cents per common share. I would now like to turn the call back over to Ted.