Good morning and welcome to the Titanium Transportation Group Q4 2024 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 SEDAR. Please note that this call is being recorded today, Tuesday, March 18, 2025. A replay of this call will be made available until midnight on April 1, 2025. The details of the replay can be found on Titanium’s website under the Investors 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. The freight industry faced significant headwinds in 2024, with one of the most prolonged downturns in recent history, causing downward pressure from industry-wide reductions in freight rates, coupled with increased operational costs and economic uncertainty. Despite these challenges, Titanium grew its customer base and volume footprint, moving about 25,000 more loads in 2024 compared to 2023. For Titanium, 2024 was a year of disciplined execution as we navigated this negative pricing environment and remained focused on what we could control, managing costs and leveraging technology-driven solutions to enhance customer service while developing continued operational process efficiencies. Through this disciplined approach, we strengthened our balance sheet, optimized capital allocation, and paid down debt by approximately $53 million. In an increasingly volatile geopolitical environment, we view this financial discipline as critical in mitigating risks and positioning the company well for sustainability and future emerging opportunities. In the fourth quarter, we generated $114 million in revenue and $11.7 million in consolidated EBITDA, up from $10.3 million in Q3 of 2024. So, looking at the full year, the company delivered a consolidated revenue of $460 million, an increase of 5% year-over-year. We generated an EBITDA of $41.9 million with an EBITDA margin of 10.1% and cash flow from operations of $27.1 million. I would like to reiterate that these results, though not ideal, are the backdrop of consistently challenging market conditions and once again speak to the resilience of our business model and our team’s sales and operational performance. Turning now to our segmented results. Our trucking business delivered a revenue of $54.9 million in Q4 of ‘24. EBITDA came in at $7.6 million with an EBITDA margin of 15.8%. Annually, this segment generated $229.8 million in revenue, a 0.5% decrease over the fiscal year ‘23. EBITDA came in at $31.1 million with an EBITDA margin of 15.6%, consistent with our commentary over previous quarters. The decline in profitability can be attributed to soft contract pricing, reflecting a weak freight market. Logistics continued to drive growth during Q4 and the fiscal year 2024. In the fourth quarter of 2024, Logistics generated revenue of $62 million, up 18.4% compared to Q4 of ‘23, with EBITDA coming in at $5.6 million. EBITDA margins for Logistics during the quarter were 10% compared to 9.9% in Q4 of 2023. On an annual basis, Logistics generated revenue of $220 million, an increase of 10.6% over fiscal year 2023, with EBITDA of $15.3 million and an EBITDA margin of 7.2%. While profitability over the period was impacted due to market conditions as well as the timing of the integration of the Crane acquisition, we continue to support our customer base, remain committed to safety, and remain resilient in these challenging times. The Asset-light Logistics segment continued to be an area of expansion despite weaker margins, particularly in the U.S. freight brokerage market. During Q4 of 2024, we announced two new logistics offices in the U.S. in Virginia Beach, Virginia, and Irving, Texas. We expect these offices to be officially open in the coming quarter and will further strengthen our footprint in the U.S. marketplace. While the integration of the Crane acquisition continues to temporarily decrease margins, we remain confident that these assets are central to our U.S. domestic operations in 2025 and beyond, bolstering our freight management capabilities and driving long-term growth. Growing our U.S. business remains a key driver of Titanium’s next stage of growth. In the fourth quarter of 2024, U.S. logistics revenue grew by 16.1%, reflecting the benefits of our ongoing expansion. Our asset-light model in both Canada and the U.S. uses technology to provide the flexibility to navigate potential disruptions while reinforcing our financial position amid challenges such as tariffs, fuel costs, and market uncertainty. Complementing this strategy, we’re also focused on optimizing our fleet, driving operational efficiencies, and investing in technology. Our acquisition of Crane Transport has further strengthened our presence in the U.S. market and, despite contraction, helped us stabilize revenue in our Truck Transportation segment for 2024. Our young fleet continues to allow for lower maintenance costs, improved fuel efficiency, and reduced capital expenditures. This allows us to allocate more resources to operational improvements and strategic growth initiatives, enhancing cash flow to support both daily operations and long-term financial goals. By optimizing expenditures and strengthening liquidity, we’re reinforcing our balance sheet and positioning Titanium for sustainable financial performance. To further optimize our trucking operations, we are investing in technology to enhance route planning, improve truck utilization, and streamline processes. Leveraging data analytics enables us to monitor market conditions in real time, adjust operations proactively, and maintain a competitive edge in managing trade fluctuations while pivoting to customer needs and opportunities. So, as we start 2025, we are seeing renewed customer interest in a slowly improving rating environment despite the uncertainty of trade wars. Before I turn the call over to Alex, I’d like to add that given current market conditions and ongoing uncertainties impacting the transportation sector, Titanium Transportation has elected to withhold guidance at this time. We remain confident in the fundamentals of our business and our long-term strategic priorities. We will reassess providing guidance once there’s greater clarity in the geopolitical environment. With that, I’ll turn it over to Alex for more detailed discussions of our financial results for Q4 and the fiscal year 2024. Alex?

Thank you, Ted. In the fourth quarter of 2024, on a consolidated basis, Titanium generated revenue of $113.8 million compared to $119.3 million in Q4 of 2023, inclusive of discontinued operations. We delivered EBITDA of $11.7 million, up sequentially from $10.3 million in Q3 of 2024, with an EBITDA margin of 11.6%, also a sequential growth from 9.8% in the previous quarter. For the full year, Titanium recorded a consolidated revenue of $460.3 million, an increase of 4.9% over fiscal 2023, again, inclusive of discontinued operations, with EBITDA of $41.9 million and an EBITDA margin of 10.3%. Diving deeper into segmented results, the Truck Transportation segment saw revenue of $54.9 million in Q4 2024 with EBITDA of $7.6 million and an EBITDA margin of 15.8%. On a full-year basis, this segment generated $229.8 million in revenue, a 0.5% decrease over fiscal year 2023, inclusive of discontinued operations. EBITDA came in at $31.1 million with an EBITDA margin of 15.6%. Despite pricing pressures caused by industry overcapacity and weakened end-market demand, contributions from Crane Transport helped stabilize revenue in our Truck Transportation segment. Given current market conditions, we recognized an asset impairment of $23.1 million in our Truck Transportation segment to reflect revised future cash flow projections. However, we remain confident that as industry fundamentals improve and pricing normalizes, cash flow in this segment will recover. Turning to the Logistics segment. As Ted highlighted, the segment continued to face pricing headwinds but delivered a strong performance with an impressive volume growth of 25% year-over-year. During Q4, Logistics generated revenue of $61.5 million, up 18.4% compared to Q4 2023, with an EBITDA coming in at $15.3 million. EBITDA margins for Logistics during the quarter were 10% compared to 11.7% in Q4 2023. On an annual basis, Logistics generated revenue of $234.9 million, an increase of 10.6% over fiscal 2023, with EBITDA of $15.3 million and an EBITDA margin of 7.2%. We are encouraged by the continued organic growth of this segment and remain focused on growing our freight brokerage business. In addition to navigating in a challenging economic environment, we maintain our focus on strengthening our balance sheet. As part of our shift to a more asset-light model, we strategically sold non-core assets, including older equipment and underutilized properties, generating $21 million in cash flow. As part of this strategic realignment, we ceased operations in Cornwall and North Bay and discontinued selected service offerings in Oakland. While all redundant assets were divested in 2024, except for the North Bay terminal, proceeds were directed toward debt reduction. This additional liquidity enabled us to pay down over $52 million in bank debt and acquisition loans, further reinforcing our financial position. Prioritizing debt reduction not only improves our financial flexibility and lowers interest expenses but also positions us to seize future growth opportunities as the market stabilizes. Through 2024, we will continue to emphasize debt repayment to ensure we have the capacity to navigate economic uncertainties and drive long-term profitability. In 2024, we returned $3.6 million to shareholders through dividends. As previously announced, we have temporarily suspended our dividend to maintain financial discipline and prioritize prudent capital allocation. We will continue to review the company’s budget and cash flow forecast, growth opportunity, and market conditions on a quarterly basis to determine when dividends will be reinstated in future quarters. As we move into 2025, we remain committed to a disciplined, improved capital allocation strategy, ensuring our financial position is well positioned for long-term success. I would now like to turn the call back over to Ted.

Thank you, Alex. It is relevant to be mindful of current macroeconomic conditions, particularly the impact of tariffs on U.S.-Canada trade. A trade dispute could disrupt cross-border trucking volumes, influencing supply chains and trade flows. However, the transportation sector is still a vital and essential service industry. Titanium has positioned itself well with both Canadian and American asset fleet corporations, as well as Canadian and American asset-light corporations. In fact, only 1/3 of the company’s freight moves cross-border. The remaining 2/3 of our freight moves domestically within the individual countries under separate entities. This structure allows us the ability to adjust the weight of the business as it becomes necessary. Freight will continue to move on trucks, but the directions may change. We are already established and equipped to execute responsibly and effectively in both segments, in other words, maybe a little less North-South and a little more movement east-west. While the impact of imposed tariffs, if sustained, remains uncertain, the trucking industry continues to be the cornerstone of North American commerce. Trucks transport 85% of the freight that moves between the U.S. and Mexico and 67% of freight moving between the U.S. and Canada. I believe the sector will necessarily demonstrate resilience. Operating in this environment, Titanium’s strategic shift towards an asset-light model, combined with a young, efficient fleet and disciplined capital allocation, positions us to navigate evolving market conditions effectively. Additionally, our Truck Transportation and Logistics divisions are prepared to service any domestic freight should customers pivot toward temporary or long-term onshoring in response to trade restrictions. By reducing debt, enhancing cash flow, and maintaining operational agility, we’re well equipped to mitigate potential trade disruptions and external pressures. As we continue to focus our commitment to sustainable growth, operational excellence, and technology-driven efficiencies to navigate turbulent times in the industry, we recognize that there will be emerging opportunities in the future that will drive long-term value for our shareholders. With that, I’ll turn it over back to the operator to open the line for questions.

Thank you. [Operator Instructions] Your first question comes from David Ocampo with Cormark Securities. Your line is now open.

Thanks. Good morning, everyone.

Good morning, David.

Good morning, David.

Look, it does make sense while you guys are refraining from providing ‘25 guidance just given the changing tariff environment, and it changes almost daily sometimes. But thinking just a little bit more near term, especially since we’re almost through the Q1 here, I was hoping you guys could provide a little bit more insight into how the quarter is going. Have you noticed customers stalling or pulling forward volumes just to get ahead of tariffs? Just anything around that would be great as we look to model our Q1 numbers here?

Good morning. From a customer perspective, many of our customers are saying business as usual for the time being. We’ve only had a few customers that said in the long-term position, they may make a change. But really in the short term right now, they are looking at business as usual. They’ll do what makes sense. I don’t know, Ted, is there anything else you wanted to add to that?

I think your question was along the lines of volume, right, David?

Yes, volumes and pricing, if the Q4 trends are the same into Q1.

So they are not. I would definitely say Q1 seems to be a little bit more exciting and vibrant as compared to Q3, Q4 of 2024. It seems like there’s this sort of renewed demand. I would say it’s pretty sure and steady. We’re busy, which is kind of a nice change. So from a pricing perspective as well, what’s interesting is that we’re actually finally feeling some tightening in terms of the, call it, the elasticity of the rating environment. I would say that one of the difficulties that I know that we all face in the industry is that we’ve got commoditized rates in a service environment. It’s not your traditional bill of materials. What we’re seeing are rates now that are coming back to what makes a lot more sense, and that is actually very refreshing to me, and it does give me a certain amount of confidence and belief, and I have always said this before, mathematics has to make sense. Math will prevail, and it’s certainly starting to feel that way, which it’s good news.

And then just thinking more big picture on just your assets side of the business. Do you feel like your mix right now as it stands today between owner ops is the right mix, or is it going to tilt more one way or the other as we move through 2025 and maybe even into 2026?

We value our fleet and all our drivers, as you know. But we have shifted to a heavier owner-operator versus company driver mix. That’s been a target for us through 2024 and into 2025. So, we will continue in that direction.

Marilyn, would that change your margin outlook in any way, or does it just make the returns on invested capital that much better since you don’t have the assets on your side?

I will turn that to Alex or Ted.

Yes. Well, okay, I think there are two sides to it. Obviously, it might. I mean when you have got an owner-operator on your P&L, yes that does change the margin profile a little bit. But on the other hand, it also changes your debt profile, alright. So, I think there is two sides to that coin. There are also – there are differences in the operational environment as well. I would say that we are very happy with the size of the fleet that we have right now. There is good demand out there, and our customers are very happy with the service that we are providing them. So, we are happy with the level of company trucks that we have, our growth will be however, without putting too much strain on the balance sheet, our growth will be more so from an owner-operator environment.

Go ahead David.

No…

From a macro standpoint, yes, you are right. The EBITDA margin will probably drop because the owner-operator takes up more of the margin. But like Ted said, the debt profile improves so that EPS should improve as an ending point.

Got it. And then last one for me before turning the call over. Logistics put up a very strong quarter. I mean volume growth has been an ongoing theme for 2024. But I guess the biggest surprise is just the quarter-over-quarter inflection on margins. Was there anything one-time in there, Alex, that’s worth calling out, or do you think this is a level that’s sustainable going forward?

So, 10% is high. There are some year-end adjustments in there. But we have seen a pretty significant improvement in the margin profile for – especially for American Logistics. Not to say that that’s going to be a trend going forward. But it seems like the busy season, so to speak, for logistics was there this year compared to previous years. Is it fully there, no. But like Ted alluded to earlier, it is a promising sign to see some sort of uptick in the rating environment for sure.

Okay. That’s perfect Alex. Thanks a lot guys.

Thank you, David.

Your next question comes from Yuri Zoreda with Canaccord. Your line is now open.

Thank you and good morning.

Good morning Yuri.

Could you talk a little more about where your focus is on to March 2025 headwinds and just on 2025 overall? And if you can, and this is related to your last answer, perhaps a little bit as well, on how you are thinking about margins in 2025 versus 2024, which also had it seems like more of a headwind from an integrated Crane.

I will tackle the margin component to the question, and I will leave the other part to Ted and Marilyn. For 2025, we are expecting the first half to be rather muted and sort of the same as 2024. However, that’s given there is no more movement in the tariff environment and the trade environment. That’s difficult to anticipate, so I will leave that out. But from just our business in a bubble, so to speak, we are expecting 2025 to be rather muted in the first half. And in the second half, we expect some signs of improvement. So, margins after the second quarter should improve. Again, given that there is no movement in the geopolitical environment. I will now pass it off to Ted and Maryland for the first part of the question.

I am not sure I understood entirely the first question. The question, it’s a bit of an unknown in terms of 2025. I think overall, we have more confidence in 2025. And as Alex mentioned, in the first half of the year, we expect to be rather muted, and we do expect to see an uptick in the second half of the year. We are getting that feed from our customers as well. There is a lot of uncertainty right now, and there is adjustments being made on the customer level in terms of how they are managing the uncertainties right now. So, we look forward to seeing sort of how 2025 shapes up, but we see renewed confidence in the market.

Yes, it’s definitely feeling more bullish this year, which is kind of interesting. And in spite of the whole, I guess call it, volatility with the tariffs coming in and coming out, coming in, coming the whole thing. I mean it’s interesting in that, we are seeing a tighter environment that seems to be supporting a kind of, call it, busier environment, which is good news. And so I think that part of that, as well, is the fact that there is some tightening in capacity. And I always do believe in the power of the consumers and that they will continue to drive this economy even if there is a consumer recession. At the end of the day, people still need to eat, and they need to exist. And essentially, we are delivering products that require people to consume. And that’s why I believe in the resilience of the industry and the resilience of the products that we are providing.

Thank you. Thanks. That’s helpful. And the second one from me, in terms of balance sheet management and what seems to be another complex year, how comfortable are you with your balance sheet now? And are there any other levers you could move or that you will be thinking of moving?

Yes. I mean as far as you know, we are in the process of rationalizing redundant assets. So, North Bay is listed, and that will contribute some additional cash. The balance sheet is in pretty decent shape. We are happy with it. But obviously, our goal is to continue to grow our asset-light model. So, from that perspective, you are going to see, obviously, over time, on a relative basis, you are going to see not one necessarily shrink, but one grow more than the other. So, I believe that at this point in time, what you are going to see over time is the balance sheet will change only because of the growth of certain product lines, obviously, right. As Virginia and Texas come online in Q2, you are going to see, again, increased revenues and cash flows that will pay down the debt. And I think that from that perspective, I would like to see it come down quite a bit.

Thanks. Thank you for the questions. I will jump back in the queue.

Thank you.

Your next question comes from Gianluca Tucci with Haywood. Your line is now open.

Hey. Good morning guys.

Good morning.

Good morning Gianluca.

Hi. Good morning. To start off at a high level, Ted, are you seeing customers rework supply chains in the near-term with all this noise going on at a macro perspective? I am just curious about what customers are doing right now to play defense.

No, customers actually aren’t. They are just dealing with the situation. If I speak to all the different parts of our business, the feedback that we are getting from most of our customers is either – and for the most of it it’s business as usual. That is what we are getting. That is the majority of our answers, business as usual. If they have to adjust their pricing a little bit, they are going to adjust their pricing, and that’s how life is going to work. It’s going to be another increase to inputs, and it’s going to get transferred into the formulas. It’s like any other input on the bill of materials. If that’s the way it’s going to be, well, add it into the math, and it’s going to just cost a little bit more to buy that case of Coca-Cola or whatever the case may be.

Great. Okay, And well, that’s encouraging to hear. And on the brokerage side of the business, is it still the plan to open up a couple of offices this year? Can you update us as to the roadmap of your brokerage business?

Yes. So, we are absolutely excited to open Virginia and Texas. Those in-fills are expected to occur or to be completed by Q2 of this year. So, very soon because it’s already mid-March, and so that’s really exciting. We have already got management ready to go for those locations. And then we are going to grow them, and we are going to grow our existing offices. If we are looking at any other new announcements this year, again, I think that’s going to depend on whether or not the environment warrants any additional offices beyond the existing nine that we currently have. That’s really just going to be an economic decision, right.

Yes. Okay. That’s good to hear, Ted. And perhaps a question for Alex, your wages in casual labor really declined sequentially. Is this a new run rate for you guys at this level here for that line item?

No. As we talked about, there is some year-end adjustment. So, that number would not be the runway. It would be hard to be the average of the full year.

Got it. Okay. Thanks for that. And then just on your CapEx plans, it kind of seems like your CapEx cycle is still in the rearview mirror. But can you update us, Alex, on any plans to refresh the rolling stock or anything like that for this year?

No, our fleet is pretty young, and we are quite happy where we are at right now. We do – so, there are no plans to buy anything. But if we do buy something, it’s because the market has made us buy more. That’s a good sign.

Got it. Okay. That is helpful. And then just one final one perhaps for Marilyn, right, when you look at the two markets, Canada and the U.S., with all of this noise going on, are the economics differentiating right now, or like I am just curious what you are seeing in these two individual markets, with all this activity happening, is pricing stronger and like the state as opposed to Canada, or how are you kind of assessing the lay of the land right now?

Rather similar both sides of the border at the moment. We are very fortunate, I guess that our business model was set up the way it has with our exposure in the U.S. and Canada, both on asset-heavy and asset-light models. From the customer base, I am really not seeing a big difference in terms of rating between Canada and the U.S. We are seeing - sorry, carrier costs coming up a little bit on the logistics side, which gives me some renewed hope that the bottom is kind of coming up from where it was last year. But overall, very hard, it’s still early in the year. The sentiment in the U.S. versus Canada, as you know, is a little bit different. There is some renewed confidence that the U.S. marketplace will thrive in the environment being created by the Trump administration. And obviously, on our side, we have just because of the balance of trade, we have a little bit more worry from our population, I guess and our customer base, but not significant rate differences. It’s not like they could turn and say, yes, the U.S. market is showing faster growth in the rates versus the Canadian. They are rather similar.

I think that a really important point that Marilyn made was that the spot market has shown more upward pressure. Yes, so for sure, you are seeing an increase in the spot market which is actually – that’s a really interesting phenomenon at this point in time. We are definitely seeing some meaningful increases in spots. And that’s relevant because, particularly in the U.S., the business models tend to be more reliant on the spot market than the contractual environment that we see in Canada. So, we are a little bit more regionalized. And so we tend to have that kind of more sort of, I guess lack of a better term, call it, stable pricing. But we are definitely seeing upward pressure in the spot market, actually on both sides of the border.

That is very encouraging. Thanks for the time guys.

Thank you.

Thank you.

[Operator Instructions] Your next question comes from Steve Hansen with Raymond James. Your line is now open.

Good morning Steve.

Yes. Good morning guys. Thanks for the time. Ted, just curious on just thinking about the Canadian side of the border in particular, I mean are you seeing from a cross-border perspective, anything change in particular? I know you described some of the dynamics earlier, but like where are you seeing within your network any signs of weakness in particular? Just trying to sort of isolate in on where you are most focused on monitoring demand conditions.

We are not actually really seeing all that much because I think that the cross-border that we do is quite essential to really consumer fundamentals. Keep in mind that only about a third of our business is true cross-border, trans-border freight that goes back and forth. The other two-thirds, we are quite well entrenched in both the Canadian domestic and the U.S. domestic environments. So, I guess we are pretty steady and busy that way. It’s kind of interesting.

The other important part of it is that some of our customers may shift in their cross-border freight to more domestic freight. So, it’s a movement of – as mentioned earlier, it’s a movement of the direction of the freight, not so much the volume of the freight, especially in the markets that we are in and the industries that we serve. As you know, we are not dependent on any one sector. We never have been. So, it’s kind of beneficial to us at this time. Even when we look at some of the core CPG products that we are shipping cross-border, they may change and ship more domestically, and a lot of our customer base does have Canadian and U.S. operations.

Our biggest customer only makes up 6% of our top line. And by the way, that is primarily a domestic, U.S. domestic volume customer. So, even from that perspective, I think what we have set up is, call it, a very resilient, very flexible, agile model that allows us to be, I guess defensive on the one hand and offensive on the other, right, so.

Appreciate it. That’s very helpful.

Thank you.

Thank you.

There are no further questions at this time. I will now turn the call over to Ted for closing remarks.

Okay. Great. Thank you, operator and thank you all for joining us today. We appreciate your interest in our company. I look forward to providing an update on our progress and all of our priorities discussed today when we report our Q1 2025 results in May. If there are any further questions, please feel free to contact us. Thank you for joining us on the call today.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.