Titanium Transportation Group Reports Second Quarter 2020 Financial Results

BOLTON, Ontario, Aug. 11, 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 June 30, 2020.  All amounts are in Canadian currency.

CEO Commentary

“Titanium reported solid second quarter results and performed better than expected in spite of the effects of COVID-19.  We were able to respond quickly and decisively, early in the quarter, to ensure the safety of our workforce and customers. Capitalizing on our investments in technology and infrastructure built over time, our dedicated team members were able to deliver an unwavering high level of service, which our customers have come to expect, despite the economic backdrop,” said Ted Daniel, President and Chief Executive Officer. “Our operating discipline and cost saving initiatives allowed us to fully absorb the additional operating costs related to COVID-19 while once again able to generate positive free cash flow and reduce our indebtedness during the quarter. As such, the strength of our balance sheet positions us to not only execute on our organic growth strategy, but also allows for potentially larger, more accretive M&A opportunities,” added Mr. Daniel. “As always, we remain steadfast to deliver sustainable, profitable growth and create long-term shareholder value.”

Q2 2020 Highlights

• EBITDA was $5.3 million for Q2 2020, reflecting a 9.0% increase compared to EBITDA of $4.9 million in Q2 2019.
• Titanium continued to strengthen its financial position in the second quarter of 2020 as a significant portion of the free cash flow generated in the quarter was deployed towards reducing indebtedness. Net debt reduced by $12.7 million in the six months ended June 30, 2020, and $21.2 million in the last twelve months.
• Net‑debt‑to‑equity ratio to 1.26:1, from 1.54:1 as at March 31, 2020. In comparison, net-debt-to-equity ratio was 1.87 on June 30, 2019.
• Consolidated revenue for Q2 2020 was $38.0 million, representing a 9.7% decrease in comparison to revenues of $42.0 million in Q2 2019.
• Operating Income was $1.8 million for Q2 2020, compared to $1.4 million reported in Q2 2019.
• Truck Transportation segment revenue was $24.4 million for Q2 2020, while EBITDA was $5.1 million and operating income came in at $1.8 million over the period.  This compares to revenue of $28.6 million, EBITDA of $4.5 million and operating income of $1.3 million in Q2 2019.
• Logistics segment revenue was $14.6 million in Q2 2020, while EBITDA/operating income was $0.6 million. This compares to Q2 2019 revenue and EBITDA/operating income of $14.9 million and $0.7 million, respectively.
• Free cash flow amounted to $10.9 million in Q2 2020, compared to $7.5 million in Q2 2019
• The Company maintains ample liquidity with cash and cash equivalents of approximately $1.7 million and $51.6 million undrawn under various credit facilities.
• Subsequent to quarter end, the Company opened its second brokerage office in the U.S., located in Nashville, Tennessee in July 2020.

Summary of Financial Results

1) EBITDA margin is calculated as EBITDA as a percentage of revenue before fuel surcharge.

Q2 2020 Summary

On a consolidated basis, Q2 2020 revenue was $38.0 million, representing a 9.7% decrease compared to the three-month period ended June 30, 2019. EBITDA for the quarter was $5.3 million, a 9.0% increase compared to Q2 2019. Operating income was $1.8 million, reflecting a 26.1% increase in comparison to Q2 2019.

Truck Transportation segment revenue for Q2 2020 was $24.4 million, reflecting a 14.7% decrease on a year-over-year basis. EBITDA for the segment was $5.1 million, representing a 13.9% increase in comparison to the Q2 2019. The decrease in revenues is primarily a result of a decrease in pricing and volume related challenges in the end markets the Company serves.

Logistics segmented revenue for Q2 2020 was $14.6 million, representing a 1.6% decline compared to Q2 2019. EBITDA for the segment was $0.6 million, a 9.5% decrease year over year. The Logistics segment experienced significant pressure both in rates and volumes during the quarter due to the challenging economic backdrop. The decline in the Canadian operations was largely offset by the U.S. logistics operations, which contributed $5.0 million in revenues for the three-month period ended June 30, 2020.

During the second quarter, free cash flow of $10.9 million was largely deployed towards reducing net indebtedness given the uncertain economic environment. Consequently, the Company’s net-debt-to-equity ratio was 1.26:1 as at June 30, 2020, down from 1.54:1 as at March 31, 2020.

As at quarter end, Titanium had a strong liquidity position, with approximately $1.7 million of cash, as well as $17.8 million under the revolving demand operating facility, $5.0 million under a non-revolving acquisition facility, $7.5 million under an accordion acquisition facility and $21.3 million under a finance leasing and loan facilities.

Conference Call

The Company will also hold a conference call on Wednesday, August 12, 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 August 26, 2020 by dialing 1-800-585-8367 (North America) or 1-416-621-4642 (International) and entering the Conference ID: 8588289.

About Titanium

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 PROFIT magazine as one of Canada's Fastest Growing Companies for eleven (11) 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.

“Net debt” is defined as bank indebtedness, loans payable and finance lease liabilities, net of cash, finance lease receivables and assets held of sale, both current and long-term portions.

“Net-debt-to-equity ratio” is defined as net debt divided by shareholders’ equity

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.

CONTACT INFORMATION

Titanium Transportation Group Inc.

Ted Daniel, CPA, CA

Chief Executive Officer

(905) 266-3011

For Investor Relations

Jayson Moss, CFA

(604) 375-3599