Titanium is the last of Canada's publicly traded companies to report earnings for the second quarter, and like its peers, it was unable to match last year's record results.
Total consolidated revenue decreased 26% to $100.4 million, and net income decreased 55% to $3.37 million. Titanium's first asset-based U.S. acquisition was Crane Transport, the company's greatest acquisition to date.
"Despite ongoing economic uncertainty, we are pleased to report yet another profitable quarter, highlighted by $3.4 million in net income and continued growth within our trucking segment," said CEO Ted Daniel in a statement. This growth is a testament to the resilience of the Titanium business model, our outstanding team, and our focus on strategic investments in technology and accretive acquisitions in the face of challenging market conditions.
Crane Transport contributes approximately $60 million in annual revenue.
Daniel stated, "The acquisition of Crane Transport is the largest in our company's history and Titanium's third in the past three years." This strategic acquisition will enable us to expand our presence in the U.S. asset-based market and complement our existing freight brokerage services. Its fleet of approximately 200 trucks generates approximately $60 million annually in revenue. Titanium's ability to close this significant acquisition in the current economic climate without raising capital is further evidence of its prudent capital deployment strategy.
On a conference call with analysts, Daniel predicted that the North American economy will continue to be impacted by below-trend demand and elevated inventory levels for the remainder of the year.
Titanium maintained its recently revised annual revenue forecast of $450-$470 million. It remains on track to reach a total of ten U.S.-based logistics offices by the end of 2024 or the beginning of 2025, but Daniel noted that the company may not open any more this year as it focuses on integrating Crane. Marilyn Daniel, chief operating officer, stated that the progress of the transaction has exceeded initial expectations.
"The roster we've assembled in the United States is exceptional. We anticipate growing alongside them," she said.
When asked what macroeconomic indicators the company is monitoring that may indicate a market recovery, Ted Daniel stated that the decline in the price of used trucks indicates the removal of capacity from the market. Used truck prices reached all-time highs by mid-2022. Daniel stated that they are now at recessionary levels.
"Very low demand for used trucks coupled with a high supply is a clear indicator of macro-shrinkage," he said, particularly when coupled with continuing net revocations of operating authorities in the United States.
"How long it will take to reach a supplier market as opposed to a shipper's market is unknown," Daniel said.