Titanium Transportation Group Inc.

for standing by. Good morning and welcome to Titanium Transportation Group Q1 2025 conference call. On today's call, you have Ted Daniel, President and Chief Executive Officer, Alex Su, 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 page 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 Tidor. Please note that this call is being recorded today, Wednesday, May 14, 2025. A replay of this call will be made available until midnight on May 26, 2025. The details of this place can be found on the Titanium's website under the Investor section. I would now like to turn it over to Titanium's President and CEO, Pat Daniel. Please go ahead, sir.

Good morning.

Thank you, Operator, and thank you all for joining us. Titanium, for Q1 2025, delivered solid momentum and disciplined execution, despite the seemingly never-ending freight recession and chaos of tariffs that were implemented and then retracted or adjusted, creating customer uncertainties. but gaming was able to deliver a 7.5% year-over-year consolidated revenue growth in the first quarter. This performance reflects our continued focus on things we can control, like operating efficiencies, prudent capital management, strong customer value-added service, and tech integrations, as well as the adoption of AI-inspired initiatives. In addition... we continue to see value in our safety and security protocols. On a consolidated basis, the 7.5% growth for Q1 generated $121.4 million in revenue and an $8.8 million EBITDA, a margin of 8.2%. Both our Canadian and U.S. logistics segments were a key driver of this growth, with revenue up more than 17% year over year. The company's accurate light, high ROIC logistics model continues to scale effectively, supported by our continued tech developments and customer integrations, as well as the successful expansion of our U.S. freight brokerage network. The new offices that we announced in 2024 and during the first quarter of 2025 are already demonstrating promising early returns, and we're encouraged by the strong customer uptake in those regions. In Q1, our brokerage asset-light segment now represents over 54% of our top-line revenue, demonstrating our commitment to growing our asset-light high ROIC and high free cash flow conversion division. Another way of looking at titanium is that we have become a transportation company that is now less than half asset-based. As we continue with this focus, I note that today, Only about half our trucks are company-owned, further demonstrating our shift to a more asset-light model in our trucking segment, helping to de-lever our balance sheet. During Q1, we also maintained a disciplined approach to capital allocation, reducing debt by $10.7 million in the quarter and allocating proceeds from redundant asset divestitures to pay down debt and strengthen our balance sheet. As a result, cash flow from operating activities more than doubled to $15 million, and cash on hand increased by $14 million during the quarter, underscoring our focus on difficult execution and strong cash flow generation. While the economic situation remains uncertain and the freight industry remains in a recessive state, we see the company's results against this backdrop as a statement to our resilient team. Now turning our segmented results. The trucking segment delivered revenue of $56.1 million in Q1. EBITDA came in at $6.6 million with an EBITDA margin of 13.3%. Logistics continued to drive growth during the first quarter of the year, generating revenue of $66.1 million, an increase of 17.6% when compared to the same quarter last year. with EBITDA coming in at $3.3 million and EBITDA margins for this segment during the quarter were 5.6%. While profitability over the period was impacted due to competitive contract rates and increased costs, we continue to be pleased with the strong, consistent volume growth in this segment and have been focused on scaling this asset-like segment as we prepare for an inevitable improvement in market conditions with particular focus on the U.S. great brokerage market. During Q1 2025, we added our newest logistics office in the U.S. in Dallas, Texas, further strengthening our footprint in the U.S. market. Growing our U.S.-based brokerage remains a key driver of Hygienium's next stage of growth. Our asset-like model provides the flexibility to navigate potential disruptions while reinforcing our financial position amid challenges such as tariffs, fuel costs, and market uncertainty. Our model allows growth in both domestic USA and Canada as well as cross-border opportunities. While macro uncertainty persists, including tariff-related risks and global trade tensions, titanium rains well insulated approximately two-thirds of our total volume is domestic and not directly exposed to cross-border or tariff-related disruptions. That said, we remain vigilant. Prolonged trade disputes could temporarily increase economic uncertainty, contribute to inflationary pressures, and eventually affect border supply chains. To mitigate these risks, we're closely monitoring global trade developments and remain agile in our operational planning Our team is ready to respond to shifting customer needs and market dynamics to maintain service continuity and operational stability. Our commitment to technology, solutions, and adoption of AI enhancements allows us to progress as market conditions improve and opportunities for growth present themselves. In closing, let me say this with absolute confidence. Titanium's fundamentals are strong, and our team is executing with discipline and purpose. Despite near-term industry challenges, we're confident in titanium's ability to scale effectively, strengthen operational resilience, and seize new opportunities. As the industry stabilizes, our diversified services, operational efficiencies, and strategic growth initiatives will ensure we remain competitive and well-positioned for long-term success. Amid ongoing macroeconomic uncertainty, trade market volatility and an unpredictable tariff backdrop We'll continue to withhold formal guidance at this time. Understandably, during these unpredictable times, we remain focused on fundamentals of the business and prioritizing operational execution, margin preservation, and free cash flow generation. When the cycle turns, TyJane will be in an even better position with a lean, more asset-light cost structure, a strengthened ownership, and a broader, more diversified business model, both within the U.S. in Canada, as well as CROG Border. And with that, I'll turn it over to my trusted CFO sitting next to me here, Alex, for a more detailed discussion of our financial results for the court. Alex, take it away. Thanks, Ted. In the first quarter of 2025, on a consolidated basis, titanium generated revenue of $121.4 million compared to $112.9 million in Q1 of 2024. a growth of 7.5% year-over-year.