Earnings call transcript: Titanium Transportation Q2 2025 results show resilience

Titanium Transportation Group reported its Q2 2025 earnings, showcasing stable financial performance amidst a challenging market environment. The company achieved a consolidated revenue of $119.1 million, marking a 3.5% year-over-year increase. However, EBITDA slightly declined to $10 million from $10.2 million in the same quarter last year. Despite the mixed results, the company remains focused on technological advancements and operational efficiency.

Key Takeaways

• Consolidated revenue increased by 3.5% year-over-year.
• EBITDA slightly decreased to $10 million.
• Logistics segment revenue surged by 16.8%.
• New logistics offices opened in Dallas and Virginia.
• Debt reduced by $12.4 million during the quarter.

Company Performance

Titanium Transportation Group demonstrated resilience in the face of a soft freight environment and macroeconomic uncertainties. The company’s asset-light logistics model and focus on technological integration have positioned it well in the market. While EBITDA saw a modest decline, the company’s logistics segment experienced significant growth, underscoring its strategic focus on expanding logistics services.

Financial Highlights

• Revenue: $119.1 million, up 3.5% year-over-year
• EBITDA: $10 million, down from $10.2 million in Q2 2024
• Operating cash flow: $10.8 million, up from $9.4 million in Q2 2024
• Debt reduction: $12.4 million

Outlook & Guidance

Looking ahead, Titanium Transportation provided guidance for Q3 2025, with revenue expected to range between $115 million and $120 million. The company anticipates an EBITDA margin of 8.5% to 9.5%. Management emphasized the importance of market stabilization and operational efficiency, with a continued focus on debt reduction.

Executive Commentary

CEO Ted Daniel stated, "Titanium is built for resilience, and more importantly, we’re built for what comes next." He highlighted the company’s commitment to leveraging its strong foundations for long-term success. COO Marilyn Daniel noted, "Perseverance is the word that trucking companies must kind of focus on for the time being," reflecting the industry’s current challenges.

Risks and Challenges

• Persistently soft freight environment: Could impact revenue growth.
• Tariff uncertainty: May affect international operations and costs.
• Macroeconomic conditions: Could influence overall market demand.
• Fleet rightsizing: Necessary adjustments could lead to temporary disruptions.
• Market capacity: No significant reduction observed, impacting pricing power.

Titanium Transportation Group’s strategic initiatives and focus on technology and efficiency are expected to support its growth ambitions, even as the company navigates a complex market landscape.

Full transcript - Titanium Transportation Group Inc (TTR) Q2 2025:

Operator: Good morning, ladies and gentlemen. This is your operator speaking. I apologize, but there will be a slight delay with today’s conference. Just to ensure that everyone is able to dial in to the call. So please hold on to the line.

You will hear that hold music, and we appreciate your patience. Thank you. Good afternoon. Good morning, ladies and gentlemen. This is your operator speaking.

I apologize, but we are having some technical difficulties with the dial in line. So if your line does drop from this call, please do dial back in to the conference call. In the meantime, you will be on music hold. We appreciate your patience. Please stand by.

Thank you. Good morning, and welcome to Titanium Transportation Group q two twenty twenty five conference call. On today’s call, we have Ken 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 SEDAR.

Please note that this call is being recorded today, Tuesday, 08/12/2025. A replay of this call will be made available until midnight on 08/26/2025. The details of the replay can be found on Titanium’s Web site under the Investors section. I would now like to turn the call over to Titanium’s President and CEO, Ted Daniel. Please go ahead.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Good morning. Thank you, operator, and thank you all for joining us this morning. Yeah. It seems that our service had a little bit of some some issues, and I know that their techs are are working on the the situation. So, hopefully, everyone is back in.

So let’s get started. Titanium delivered a better second quarter, navigating a persistently soft freight environment with discipline and a clear focus on sustainability, operational efficiency and balance sheet strength. We grew grew consolidated revenue by 3.5% year over year to to $119,100,000 and generated $10,000,000 in EBITDA, supported by continued strength in our logistics segments and improved operating performance in truck transportation. We’re pleased with the continued strength of our logistics segment, which grew revenue by nearly 17% year over year, supported by a 19% increase in U. S.

Volumes. Logistics revenue was $65,600,000 EBITDA came in at $3,200,000 with EBITDA margins at 5.4%. This validates the scalability of our asset light high ROIC model and reinforces our continued conviction in this particular growth strategy. Our newer logistics offices, including Dallas, Texas, are scaling well, and we remain focused on building density in U. S.

Key regions. We continue to see high quality customer wins in these markets. While we’re not announcing future offices at this time, we’ll continue to evaluate future opportunities where we see clear potential. Truck transportation returned to positive operating income this quarter, driven by disciplined pricing, up 7% year over year and improved network efficiency. Trucking generated $54,400,000 in revenue during the quarter.

EBITDA was 7,600,000.0 with an EBITDA margin of 15.7%. That said, volume was down about 15% year over year due to our exit from nonproductive service lanes last year, an intentional move to strengthen the quality of our revenue. On the capital allocation front, we remain aggressive in strengthening the balance sheet. We reduced debt by $12,400,000 in the quarter and subsequently closed and divested the North Bay property, generating $2,600,000 in gross cash proceeds. With this decision, combined with operating cash flow of $10,800,000 and a quarter end cash balance of 16,400,000.0, we’re building meaningful financial flexibility in a very unpredictable economic environment.

From a macro perspective, the environment remains mixed. Market volatility and tariff uncertainty persist, but we are seeing some signs of stabilization in certain regions. Given that approximately two thirds of our freight volume is domestic, we are partially insulated from cross border friction. At the same time, our operating model is agile and allows us to pivot quickly as trade dynamics continue to evolve. Technology remains a focal point as we navigate a new transportation landscape.

Our information systems team is in tune with developments in AI and see this as an area that will impact future competitiveness. Furthermore, let me stress the confidence I have in Titan’s fundamentals. We are operating with discipline and purpose, and we’re making the right strategic investments to persevere through this historically unprecedented downturn in the freight industry. We’re focused and disciplined through this cycle to emerge stronger and more competitive in a more normalized freight environment. Titanium is structurally better positioned than it was a year ago, and we remain confident in our ability to navigate this environment as a more efficient, scalable operator.

As market conditions normalize, we expect our diversified platform, scalable logistics network and our ongoing investments in technology to drive long term growth. With that, I’ll turn it over to Alex for a more detailed discussion of our financial results this quarter. Take it away, Seamus Leader, CFO. Thanks, Pat, and good morning, everyone. Titanium continued to demonstrate operational resilience in the second quarter.

On a consolidated basis, Titanium generated revenue of $119,100,000 up 3.5% year over year. EBITDA was $10,000,000 down slightly from $10,200,000 in Q2 twenty twenty four with EBITDA margin at 9.3%. Logistics remained our primary growth engine in the quarter. Revenue in the segment increased by 16.8% year over year to 65,600,000.0 supported by a 19% increase in volumes. EBITDA came in at 3,200,000.0 with a margin of 5.4%.

Margins were compressed by approximately 80 basis points due to ongoing volatility in spot pricing. But we’re encouraged by the continued momentum in volumes and customer acquisitions. Our asset light model offers the operational flexibility needed to adapt quickly to market shifts, and it continues to scale effectively, particularly in The US freight brokerage sector. As new offices, brands, and customer engagement deepens, we expect improved profitability and sustained volume growth. Truck transportation delivered a meaningful improvement in Q2.

Revenue was $54,400,000 and EBITDA came in at $7,600,000 with a strong margin of 15.7%. This segment returned to positive operating income driven by a 7% year over year increase in pricing and continued improvement in operating efficiency. These gains more than offset the 15% decline in volumes, which are reflective of our planned exit from unprofitable service lines last year. While the segment still record a modest net loss, we are confident that ongoing margin expansion will follow as market fundamentals stabilize. Operating cash flow for the quarter was $10,800,000 up from $9,400,000 in Q2 twenty twenty four, reflecting stronger underlying cash conversion.

At quarter end, we had 16,400,000 in cash, and we repaid $10,100,000 in loans and finance leases, further reinforcing our commitment to deleveraging. As a result, our net debt to equity ratio improved to 1.86 from 1.86 to 1.66 quarter over quarter. We also completed the divestiture of our North Face asset subsequent to the close of Q2, generating $2,600,000 in gross proceeds. Financial discipline remains a core pillar of our strategy and ensuring we have the flexibility to navigate through continued market uncertainty and act decisively when opportunities arise. We continue to expect minimal CapEx in 2025 given the young age of our fleet.

However, we are expecting some replacements for our U. S. Rolling stock throughout 2026. Our priority remains debt reduction, preserving optionality and positioning Titanium to reinvest in scalable high return opportunities, particularly in the logistics segment. Overall, our capital light growth strategy combined with disciplined cost control and operational execution is allowing us to strengthen our position even as external conditions remain mixed.

We remain committed to protecting margins, enhancing liquidity and driving long term shareholder value. With that, I’ll pass it back over to our CEO, Thank you. Overall, our asset light model in both U. S. And Canadian logistics platforms and disciplined approach to capital allocation continue to set us apart in a challenging environment.

We are not waiting for the market to recover. We are actively focused on our strong foundations and commitment to long term success. As conditions will eventually and gradually alleviate, we’re seeing early signs of stabilization in select regions. While a rebound is not yet in sight, we take actions to sharpen our operating model, deepen our U. S.

Presence and fortify our balance sheet, demonstrating our ability to adapt. Titanium is built for resilience, and more importantly, we’re built for what comes next. For the remainder of 2025, we’ll continue to operate with discipline, invest where it counts, and stay focused on delivering durable value. With that said, amid ongoing macroeconomic uncertainty, freight market volatility, and an unpredictable tariff backdrop. For next quarter, we are estimating a revenue range of $115,000,000 to $120,000,000 and EBITDA percentages of approximately 8.5% to 9.5%.

And with that, I’ll turn the call over to the operator for questions.

Operator: Thank you so much. Ladies and gentlemen, we will now begin the question and answer session. You will hear a prompt that your hand has been raised. Should you wish to remove your hand from the queue, please press star followed by 2. If you’re using a speakerphone, please lift the handset before pressing any keys.

Just a moment for your first question.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Operator, I think we’re still facing some issues with the call. Some of our people that are trying to ask questions are dropping off the call right now. So Right.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Another one is saying that the it says customer not available when they’re calling that line.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Understood.

Operator: So my understanding is that the local numbers will be working at the the toll free is the one to avoid. We do have a few questions in the queue. Perhaps we can start with those, and then hopefully, we can get those callers back in. We can even pause near the end of the q and a, make sure we can give some more time for folks to queue up.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Okay. That’s great. Okay.

Operator: Excellent. Our first question comes from Benoit Poirier with Desjardins Capital Markets. Your line is open.

Alex Fu, Chief Financial Officer, Titanium Transportation Group: Hello, Benoit? Hello? Benoit,

Operator: your line is open. You may have a local mute. I’ll return you to the queue. We’ll move on to the next question and come back to you. Our next question comes from Steve Hansen with Raymond James.

Your line is open.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Yeah. I think our Operator, we’re having a problem, clearly.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Yeah.

Operator: We are. Yes. Just a moment. I’m going to try one more line, and then we’ll we’ll move on from there. We do have a question from Gianluca Tucci with Hayward Securities.

Your line is open.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Dropped. Dropped.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Dropped. He just emailed us. Yeah. Understand. Maybe we’ll just ask we’ll just answer those questions just for the recording.

The first question I’ll I’ll read it. I’ll read it. Okay. So the first question from Gianluca, it’s nice to see guidance of some sort being reinstated. What are you seeing in the market that’s giving you some confidence in near term visibility?

I I I think that the yeah. It’s not it’s I wouldn’t say it’s market confidence at this point in time. You know, I think that, you know, the the numbers are rather, you know, subdued, to be honest with you, and and it’s it’s more along the lines of, you know, we’re we’re just seeing more of the same. Like, q two was okay, but it had a really weird curve. So I kinda wanna address that.

There is definitely a tariff impact. It had a a inverted curve inverted curve, meaning it it had a stronger April, May than it did in June. So it was definitely a downward slope, which is kind of interesting. And July was actually pretty soft. So I would say that that our our guess is to what, you know, kind of, you know, q three is gonna look like is more a matter of more of the same.

That’s what we’re seeing, which is, you know, fairly flat economic environment without a lot of excitement. So it’s, you know, a little bit of a, you know, sure and steady, but, you know, certainly nothing nothing spectacular.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Next question. Alright.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Next question from John Luca. Just trying to get the analyst back in. On our fleet, have you had any rightsizing given the conditions out there? And if so, what’s left to

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: be done from a rightsizing perspective? We have done some rightsizing, especially in our US fleet adapting to the market for sure. In terms of what’s left, a little bit. I don’t think anything significant is really left, but we definitely have had some rightsizing in the course of the quarter and even in the year overall just reacting to the marketplace. So I think it’s just we’re adapting to the marketplace that we’re that we’re in.

Okay.

Alex Fu, Chief Financial Officer, Titanium Transportation Group: Last question. Great growth

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: in logistics. Are you considering accelerating the pace of new office locations given the success here? I’ll start with

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: the answer, Ted, and you can go on. We’re actually very pleased with their offices, recent opening of our Dallas location in Irving in Irving and then also our West Virginia location started to come into play. Sorry. West Virginia. Virginia.

As we as we look forward, we have capacity in our brokerage offices at the moment, and we continue to grow with that. Certainly, in the future, should the right opportunities continue to to develop, we will continue to to follow this trend of of success in our US office location. I think at the moment, status quo. But certainly in the future, this would be an area we continue to pursue.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Yes. I can augment a little bit. I believe we have some growth capability and capacity with our existing locations. And so the organics that, you know, we’d like to achieve, again, given the current market, you know, we’d like to sort of fill, you know, fill the gaps at this point in time. We’ve got some offices that are a few offices that are running almost at at capacity, so to speak.

But then we’ve got others that are not at capacity. So we we first wanna wanna bridge those gaps. And and then I think once we get that done and see, you know, more, you know, more predictable growth in the overall, you know, macroeconomic, call it geopolitical economics of the market. When things sort of stabilize, then, you know, we’ll probably have the confidence to, you know, to re re kind of restart the opening of, you know, another one or two offices at this point in time. Okay.

Well, I we have some questions on Desjardins.

Operator: Yes. Would you like me

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: to pull from the queue as well and try the line today?

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Yeah. Yeah. Think it’s my shirt. Yeah. We’ll try it if it’s working.

We’ll try it. Excellent. Okay. Thank you. Good job.

Operator: And so our next question comes from Benoit Poirier with Desjardins Capital Markets. Your line is open.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Hello, Benoit? Benoit?

Operator: It does not look like he is staying here. It’s not working on our end. I do apologize for this.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Alright. So we’ll ask some questions from Benoit and team. Alright. First question. In your q two press release, you stated that you were encouraged by sequential improvements in early signs of stabilization in current regions.

Can you provide more details? Yeah. I mean, at this point in time, stabilization, I would say, is really at this point have a relative term. Right? So so we’re gonna you know, we’re we’re we’re basically living with the economy that we have.

We’ve adjusted. We’ve we’ve made cost cuts where we need to. You know, on the logistics front, you know what? We are definitely taking to some degree a offense is our best defense approach. You know, we continue to to go after new customers, new accounts, and we’re competitive from from a technological perspective as well.

You know, we’ve got we’ve got efficiencies, and we’ve got, you know, we’ve got the ability to quickly adapt and leverage our technology. And so I would say stabilization for us to some degree is a little bit of a, you know, sure and steady as to where we’re at today in terms of what consumers are able to purchase. We’re we are not seeing growth in the market, but we are adapting and and, you you know, just simply going after new business.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Next question? Yes.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Next question. Sorry. I got a bunch of analysts asking me. Let me just organize real quick. Okay.

Any additional details that explains the logistics segment margin compression despite volume growth, start up cost inefficiencies of new locations in Virginia and Texas in The US, Weak spot market? Weak spot market? What is the expectation for logistics margin for the rest of the year? So I’ll take that. The margin compression comes from two parts.

Yes. There is a little bit of cost that comes with opening up the new offices as we know, but the majority of the margin compression actually comes from the second half of the quarter. There’s there is a lot of volatility in the market, and pricing remains sort of steady slowly on the rise, but there is definitely cost increase from the supplier side. So we are expecting that to continue throughout the year, so we expect that margins will be compressed for the rest remainder of the year. Third question.

Looks like you have reached an inflection point with truck transportation margins given the sequential and year over year step up. What are some fair expectations for second half given the continued depressed state of the trucking market?

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: I wish there was a very easy answer for that, and there is not. We predict much of the same for the second half of the year. It it all depends on what happens partially south of the border and economics and on on both sides of the of the country, I suppose. A lot of it depends on things we we are out of our control. So I predict lot of the same.

We’re not seeing any any quick pickups or any quick turnarounds or anything like that. So on the truck transportation side, if anything, a slow improvement is what I would expect to see for the second half of the year.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Okay. So that concludes some of the questions from Desjardins. Thank you, Benoit. Moving on to Raymond James from Robert and Steve. Good to see signs of the stabilization in certain regions.

Can you provide a bit more color here? That’s my question. What markets and end markets have seen the improvement which are still challenged? So yeah. Would say let’s yeah.

Let’s let’s definitely yeah. Let’s split that up. I mean, it’s it’s guys, I I I really appreciate the the positive on, you know, on you know, yeah. Stabilization, I think, is sort of a a a key term here. You know, it’s not I wouldn’t like, I don’t wanna say it’s not positive.

It’s just not negative. Meaning, I think that we’re in kind of this holding pattern, I think, like many, many companies. And we kinda don’t know. Like, a lot of us don’t really know, you know, what’s gonna happen in a month from now because I think that economically, everybody is in that pattern. You know?

I think that that we’re all, you know, just trying to deal with, you know, what what’s gonna happen next month, basically, is is the environment. And I think the consumers as well to a large degree are basically being a little bit conservative as well in that, you know, no one really knows what’s gonna happen. People are a little nervous and and so they they should be. Right? That’s kind of the responsible thing to be, I suppose.

Right? Is be a little nervous. But I think from that point of view, yeah, I think in terms of the fact that things are kind of sure and steady for what’s kind of going on is is not a bad thing. Cross border, obviously, is struggling. Certain particular product lines are struggling.

You wanna add some more color to that, Mara?

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: I think the the important message within here is that, you know, perseverance is the word that trucking companies must kind of focus on for the time being as we persevere through these times. Transportation will exist and and find its point. It’s just it’s a slow progress to that. Our cross border activity certainly has seen an effect with tariffs, and our domestic has shifted a little bit. So we’re seeing some transition.

We’re living it at the moment and being responsive to sort of the marketplace is is how we remain effective. So elasticity at this time is is very important in business, and that’s kind of where we’re where we’re watching for and paying attention to is being able to adapt to whichever direction economics takes us.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: And then the pricing environment continues to be challenging, I would say. That’s that’s kind of an ingredient in the situation.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: The result of the economics

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: and stuff. You know, you you do have still some overcapacity in it that’s making it challenging. But, anyways, different subject. Okay. Second question.

How much capacity do you think have exited the broader market? And from a market perspective, if that’s the main issue right now, too much capacity or too little demand? Right. So there it is. It’s funny.

I was kind of getting that in the not seem ironic. That’s the next question. Yeah. So I think that, you know, given the the fact that demand has overall, as I said, I think consumers are a little bit more conservative. There is a little bit less less consumerism out there, and and I believe that there is kind of a combination of both.

What was interesting is, you know, I look at the FDR charts and stuff like that, and, you know, one of the ones that I do look at, like, lot of people is the the net, you know, the net entrances versus exits. And in q two, there was actually there was no reduction in overall authorities, which is kinda interesting. So it’s the same number of authorities in The US, which is, of course, is is the biggest the bigger market here. So in The US, there’s the same number of authorities today as there were in theory three, four months ago. So there really hasn’t been a shrinkage of capacity.

And so you’ve got, you know again, it’s very small companies that, you know, are able to adapt. And, you know, they they they are, you know, within the technological umbrellas of the bigger brokers such as, you know, titanium. And we can we provide that, call it, that technological service. And so, really, I think that that’s kind of, you know, where we’re seeing a certain interesting evolution. And and that’s kind of what we’re seeing is that that there isn’t a little bit of a reduction in demand, and supply hasn’t shrank.

Alright. Last question from Robert and Steve. Can you provide an update to how your new Virginia and Texas locations are progressing? Will these contribute to the 2025 plans for future expansion?

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: I think we we addressed that question just a little bit already. I I will reiterate that both our offices are up and functioning and contributing at this point. We’re very pleased with the success we’ve had on both of these openings. They have been very fluid and easy and with a great team in place on both locations. So we’re very optimistic as to the success of these terminals into the second half of the year and expect them to contribute.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: And that concludes the questions from Raymond James. We’ll move on to Paradigm. Alex from Paradigm, three questions as well. When can we expect to see more normalized revenue from the trucking segment from the eliminated nonprofitable revenue and pricing changes? So I’ll cover the first part.

Obviously, we have terminated some services as of q three and q four of last year. So you will see a continue disc discrepancy between continuing operations for the remainder of the year. Starting 2026, you start to see that disappear. In terms of the actual market environment, I’ll I’ll pass it over to Pat and Marilyn.

Alex Fu, Chief Financial Officer, Titanium Transportation Group: Go ahead.

Operator: Just kind of on

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: that same side of of of Alex in terms of the pricing environment. I I I don’t think I have a a lot more to add to that than he’s made if they come.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Yeah. The pricing hasn’t really gone up much. It’s still somewhat challenging, you know, and we we we’re experiencing that in the RFQs.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Capacity is still there. I I will say that our our customers are telling us that they are looking again at customer service as as they do chase the pricing as as what you would expect in these times. But customer service and ability to be technologically in tune with your customers. So having available tech for transparency and integrations is still a vital component as our own customers are looking for efficiencies within their own network. So we are seeing a little bit more communication, a little bit more focus on customer service and and abilities as we go forward, and I hope that will prevail as we move into the second half of this year and and looking forward to next year.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Next question. Can we expect to see revenue mix shift to over pre COVID logistics levels? Logistics revenue above 60%. And what does the ideal mix look like? Yeah.

So pre COVID was before we bought ITS and before we bought Crane, and those were rather two large acquisitions. So, yes, the goal is to increase. We are already at what I think this quarter, we’re at 54% dollar wise brokerage versus assets. So we like we like our trucking company. It’s it’s a really good foundation.

Yes. It is a low ROIC business, but that’ll give us a more holistic approach and holistic capability to be able to provide our customers with the overall solutions that they’re looking for. So the stability of having assets under certain circumstances for particular lanes and then being able to give them the flexibility and the the malleability of of brokerage services and be able to do both of those under one technological umbrella so that it’s completely transparent to the customer. So that’s that’s actually really a key, you know, key component in, you know, in our, you know, kind of our our our unique approach to how we we continue to grow the company. So so, yes, trucking grew, and then we will eventually continue to to outpace in brokerage our assets because the asset is is very levered, and it is a much slower growth division.

So brokerage will continue to grow, eventually, on a proportionate basis, we’ll just eventually become a much bigger vision over time. Alright. Great color. For Alex’s last question Did you want me to make a great analyst? You touched on strategic opportunities.

Can you speak to some of those type of opportunities? Sure. You’re looking

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: so close. What’s the question?

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: So we touched on some strategic opportunities that may come up in the future. Yeah. What would be those opportunities?

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Continued growth in our logistics sector, both at Canadian and The US side as well. Our growth in offices comes from our readiness with personnel as well, so opportunities sometimes arise in that way. And then other opportunities, of course, through acquisition is still within our appetite, especially as the market hopefully continues to stabilize. That would be a part of our future development and growth. So we still have a runway that way.

Thank you, Alex, for your questions. We’ll jump back to Desjardins. They have a few more. So

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: first one, CapEx was nonexistent in the second half or second quarter. With average fleet around two years, how long do you expect this run rate to be sustainable before your normal replacement cycle must recommit? So I would start with some of the comments I made on the call earlier. We do expect that we will have some twenty twenty six rolling stock replacement, particularly from the crane side and The US trucking side, there are trucks that will come up for their for renewal. And to keep the fleet going, we have to buy some new trucks to the tune of about anywhere from 5 to $10,000,000.

Right now, we’re still assessing how much of the customers are are will continue on. So that’s why there will be some 2026. Looking forward to 2027, you’re right. We are going to recommence our replacement cycle even on the Canadian side. So we do expect that our normalized CapEx will recommence in 2027.

Yeah. No. It makes sense. No need to panic. It’s not gonna be, like, you know, January 2026.

I think we’re talking q two, a little bit in q two, yeah, a little bit in q three, a little q four, so kinda spread out. Yeah. Have you seen any considerable changes in the Canadian market when it comes to driver inc regulations K. Enforcement or dishonest player exiting the market? Or has the situation remained largely unchanged since the beginning of the year?

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: I’m gonna say largely unchanged. I wish I had a different answer.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: It’s a diplomatic answer. Has to come down. Yeah.

Marilyn Daniel, Chief Operating Officer, Titanium Transportation Group: Realistically, has there been a change? No. There has been some heightened media attention, tabloid attention to the focus on Driver Inc. We have not seen any significant changes. And I think, politically, it’s it’s a no touch zone for the moment.

So, unfortunately, no real progress there. It it continues to affect the industry.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Thanks, Marilyn. Final question. Does debt repayment remain your capital allocation priority through year end, or will you take another look at the dividend or m and a? So let’s put that in terms of let’s rank it one, two, and three. Capital sorry.

Debt repayment, number one, absolutely 100. And that is a big, full, gigantic number one, and we’re just gonna keep pounding away our debt heavily. I would say that acquisitions will definitely be a number two. If we have to, you know, go through this ranking, you know, kind of exercise. And I believe, though, that that is not a close second.

I think that acquisitions in this case is gonna have to be extremely opportunistic in the sense that it’s gonna have to really, really, really make sense. And and so then that would be a a number two. And we have to really stay focused on what we do best, and that’s why, you know, it’s it’s gonna be, you know, very it’s gonna be looked at very critically and whether or not it it absolutely checks off all the boxes. So then, obviously, number three would be dividends, but that would be, you know, kind of a very distant third only because it would be, well, you know what, we just, you know, absolutely exhausted all the other priorities. And, you know, well, there’s just nothing left, so let’s just pay out dividends.

So that’s kind of the way I look at the strategic direction of the company at

Alex Fu, Chief Financial Officer, Titanium Transportation Group: this point in time from a capital allocation perspective.

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Operator, we have addressed all the questions sent by our analysts. We’re ready to move on.

Operator: Excellent. At this time, since there are no further questions, Ted, do you have any closing remarks?

Ted Daniel, President and Chief Executive Officer, Titanium Transportation Group: Yes. I’d like to thank everybody today for joining us on the call. I want to thank all our listeners. I’m hoping they can hear me for their patience and and all the the analysts for adapting and pivoting using technology and sending us their questions via emails. And, hopefully, our service our our service provider here, they’ve addressed their technological issues.

So please call us. You know, if you have any further questions, feel free to call us after this call direct, and we’ll be happy to answer any additional questions that you may have. We appreciate everyone’s patience and interest in our company. I look forward to providing an update on our progress and all of our priorities that we’re discussing when we report our Q3 twenty twenty five, and those results will be out in early November. So again, if there’s any other questions, please, please don’t hesitate to call us given the challenges that we’ve had today.

Thank you very much for joining us, and I hope everyone has a great rest of their week.

Operator: Ladies and gentlemen, this concludes today’s conference call. We thank you so much for your participation and patience throughout the technical difficulties. You may now disconnect.

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