Good morning, and welcome to Titanium Transportation Group Q2 2025 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, August 12, 2025. A replay of this call will be made available until midnight on August 26, 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.

Good morning. Thank you, operator, and thank you all for joining us this morning. Yes, it seems that our service had a little bit of some issues, and I know that their techs are working on 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 consolidated revenue by 3.5% year-over-year to $119.1 million and generated $10 million 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 $65.6 million. EBITDA came in at $3.2 million, 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 $54.4 million in revenue during the quarter. EBITDA was $7.6 million 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 $12.4 million in the quarter and subsequently closed and divested the North Bay property generating $2.6 million in gross cash proceeds. With this decision, combined with operating cash flow of $10.8 million and a quarter end cash balance of $16.4 million. 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 persists, but we are seeing some signs of stabilization in certain regions. Given that approximately 2/3 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 Titanium'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 for this leader, CFO.

Thanks, Ted, and good morning, everyone. Titanium continued to demonstrate operational resilience in the second quarter. On a consolidated basis, Titanium generated revenue of $119.1 million, up 3.5% year-over-year. EBITDA was $10 million, down slightly from $10.2 million in Q2 2024 with EBITDA margin at 9.3%. Logistics remain our primary growth engine in the quarter. Revenue in the segment increased by 16.8% year-over-year to $65.6 million, supported by a 19% increase in volumes. EBITDA came in at $3.2 million 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 continued to scale effectively, particularly in the U.S. freight brokerage segment. As new offices ramp and customer engagement deepens, we expect improved profitability and sustained volume growth. Truck Transportation delivered a meaningful improvement in Q2. Revenue was $54.4 million, and EBITDA came in at $7.6 million, 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 $10.8 million, up from $9.4 million in Q2 2024, reflecting stronger underlying cash conversion. At quarter end, we had $16.4 million in cash and we repaid $10.1 million in loans and finance leases, further reinforcing our commitment to deleveraging. As a result, our net debt-to-equity ratio improved from 1.86% to 1.66% quarter-over-quarter. We also completed the divestiture of our North Bay assets subsequent to the close of Q2, generating $2.6 million 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, Ted.

Thank you. Overall, our asset-light model in both the U.S. and Canadian logistics platforms and disciplined approach to capital allocation continues 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 share of backdrop, for next quarter, we are estimating a revenue range of $115 million to $120 million 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 Instructions].

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...

Another one is saying that it says customer not available when they're calling that line.

Understood. So my understanding is that the local numbers will be working and 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. And we can even pause near the end of the Q&A, make sure we can give some more time for folks to queue up.

Okay. That's great.

Excellent. Our first question comes from Benoit Poirier with Desjardins Capital Markets. [Operator Instructions] Our next question comes from Steve Hansen with Raymond James.

Operator, we're having a problem clearly.

Yes.

We are, yes, just a moment. I'm going to try one more line and then we'll move on from there. We do have a question from Gianluca Tucci with Hayward Securities.

He dropped. He just e-mailed us.

Understood.

Maybe we just ask -- we just answer those questions just for the recording.

First question?

I'll read it. I'll read it. So the first question from Gianluca is 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 think that the -- yes, it's not -- I wouldn't say it's market confidence at this point in time. I think that the numbers are rather subdued, to be honest with you. And it's more along the lines of we're just seeing more of the same. Like Q2 was okay, but it had a really weird curve. So I kind of want to address that. There is definitely a tariff impact. It had an inverted curve, meaning 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 our guess as to what kind of Q3 is going to look like is more a matter of more of the same, that's what we're seeing, which is a fairly flat economic environment without a lot of excitement. So it's a little bit of a sure and steady, but certainly nothing spectacular.

All right. Next question from Gianluca, just trying to get the analysts back in. On our fleet, have you had any rightsizing given the conditions out there? And if so, what's left to be done from a rightsizing perspective.

We have done some rightsizing, especially in our U.S. fleet, adapting to the market for sure. In terms of what's left, maybe 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. I think it's just -- we're adapting to the marketplace that we're in.

Okay. Last question. Great growth in Logistics, are you considering accelerating the pace of new office locations given the success here?

I'll start with the answer and Ted, you can go on. We're actually very pleased with our offices, a recent opening of our Dallas location in Irving and then also our West Virginia location starting to come into place -- sorry, West Virginia -- Virginia. 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 develop, we will continue to follow this trend of success in our U.S. office locations. I think at the moment, status quo, but certainly, in the future, this would be an area we continue to pursue.

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 we'd like to achieve, given the current market, we'd like to sort of fill the gaps at this point in time. We've got some offices that are -- a few offices that are running almost at capacity, so to speak. But then we've got others that are not at capacity. And so we first want to bridge those gaps. And then I think once we get that done and see more predictable growth in the overall macroeconomic, call it, geopolitical economics of the market. When things sort of stabilize, then we'll probably have the confidence to kind of restart the opening of another 1 or 2 offices at this point in time.

Okay. We have some questions from Desjardins.

Yes. Would you like me to pull from the queue as well?

Sure, let's try it if it's working.

We'll try it. Excellent. And so our next question comes from Benoit Porier with Desjardins Capital Markets.

Hello, Benoit?

And it does not look like he is taking. It's not working on our end. I do apologize for this.

All right. So we'll ask some questions from Benoit and team. All right. First question, in your Q2 press release, you stated that you were encouraged by sequential improvements and early signs of stabilization in certain regions. Can you provide more details?

Yes. I mean, at this point in time, stabilization, I would say, is really, at this point in time, a relative term, right? So we're going to -- we're basically living with the economy that we have. We've adjusted. We've made cost cuts where we need to. On the logistics front, you know what, we are definitely taking to some degree, offense is our best defense approach. We continue to go after new customers, new accounts and we're competitive from a technological perspective as well. We've got efficiencies and we've got the ability to quickly adapt and leverage our technology. And so I would say stabilization for us, to some degree, a little bit of a sure and steady as to where we're at today in terms of what consumers are able to purchase. We are not seeing growth in the market but we are adapting and just simply going after new business.

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 U.S., 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 2 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 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 remainder of the year. Third question. It 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.

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 all depends on what happens partially south of the border and economics and on both sides of the country, I suppose. A lot of it depends on things we are out of our control. So I predict a lot of the same. We're not seeing any quick pickups or any quick turnaround 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.

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 stabilization in certain regions. Can you provide a bit more color here? What markets and end markets have seen improvement, which are still challenged?

So yes, I would say, let's definitely -- yes, let's split that up. I mean it's -- guys, I really appreciate the positive on -- yes, stabilization, I think, is sort of a key term here. It's not -- I wouldn't -- like I don't want to 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 kind of don't know like a lot of us don't really know what's going to happen in a month from now because I think that economically, everybody is in that pattern. I think that we're all just trying to deal with what's going to happen next month basically is just the environment. And I think the consumers as well, to a large degree, are basically being a little bit conservative as well in that no one really knows what's going to happen. People are a little nervous. And so 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, yes, I think in terms of the fact that things are kind of sure and steady for what's kind of going on is not a bad thing. Cross-border, obviously, is struggling. Certain particular product lines are struggling. Do you want to add some more color to that, Mary?

I think the important message within here is that 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 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 how we remain effective. So elasticity at this time is very important in business, and that's kind of where we're watching for and paying attention to is being able to adapt to whichever direction economics takes us.

And the pricing environment continues to be challenging, I would say. That's kind of an ingredient in the situation.

The result of the economics...

Yes. You do have still some overcapacity and 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, is that the main issue right now, too much capacity or too little demand?

Right. So there, it's funny. I'm was kind of getting that, and that's not -- it seems ironic that's the next question. Yes, I think that given the fact that demand has overall, as I said, I think consumers are a little bit more conservative. There is a little bit less consumerism out there. And I believe that there is kind of a combination of both. What was interesting is I look at the FTR charts and stuff like that, and one of the ones that I do look at like a lot of people is the net entrances versus exits. And in Q2, there was actually -- there was no reduction in overall authorities, which is kind of interesting. So it's the same number of authorities in the U.S., which, of course, is the bigger market here. So in the U.S. there's the same number of authorities today as they were in theory, 3, 4 months ago. So there really hasn't been a shrinkage of capacity. And so you've got -- again, it's very small companies that are able to adapt. And naturally, they are within the technological umbrellas of the bigger brokers, such as Titanium. We provide that, call it, that technological service. And so really, I think that, that's kind of where we're seeing a certain interesting evolution. And that's kind of what we're seeing is that there isn't a little bit of a reduction in demand and supply hasn't shrank.

All right. 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 second half of 2025 plans for future expansion?

I think we addressed that question just a little bit already. 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 the success of these terminals into the second half of the year and expect them to contribute.

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 Q3 and Q4 of last year. So you will see a continued 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 pass it over to Ted and Marilyn.

Just kind of on that same side of Alex, in terms of the pricing environment, I don't think I have a lot more to add to that...

I think pricing hasn't really gone up much. It's still somewhat challenging, and we're experiencing that in the RFQs.

Capacity is still there. I will say that our customers are telling us that they are looking again at customer service as they do chase the pricing 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 transparencies and integration 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 focused on customer service and abilities as we go forward, and I hope that will prevail as we move into the second half of this year and looking forward to next year. Next question?

Can we expect to see a revenue mix shift to over pre-COVID logistics levels, logistics revenue above 60%? And what does the ideal mix look like?

Yes. So pre-COVID was before we bought ITS and before we bought Crane, and those were rather 2 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 our trucking company. It's a really good foundation. Yes, it is a low ROIC business, but it does 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 in the malleability 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 actually really a key component in our kind of our unique approach to how we continue to grow the company. So yes, trucking grew. And then we will eventually continue to outpace in brokerage, our assets because the asset is very levered and it is a much slower growth division. So brokerage will continue to grow and eventually on a proportionate basis will just eventually become a much bigger division over time.

All right. Great color. For Alex's last question.

You make a great analyst.

You touched on strategic opportunities. Can you speak to some of those type of opportunities?

What's the question?

So we touched on some strategic opportunities that may come up in the future. What would be those opportunities.

Continued growth in our logistics sector, both Canadian and the U.S. 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 and they have a few more. So first one, CapEx was nonexistent in the second half or second quarter with average fleet around 2 years, how long do you expect this run rate to be sustainable before your normal replacement cycle must recommence? So I would start with some of the comments I made on the call earlier, we do expect that we will have some 2026 rolling stock replacement, particularly from the Crane side and the U.S. Trucking side, there are trucks that will come up for renewal. And to keep the fleet going, we have to buy some new trucks to the tune of about anywhere from $5 million to $10 million. Right now, we're still assessing how much of the customers 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.

Yes, that makes sense. I mean no need to panic. It's not going to be like January of 2026. We're talking Q2 a little bit in Q2, yes, a little bit in Q3, a little Q4, so kind of spread out. Yes.

Have you seen any considerable changes in the Canadian market when it comes to Driver Inc. regulations enforcement? Or this honest player exiting the market? or has the situation remained largely unchanged since the beginning of the year?

I'm going to say largely unchanged. I wish I had a different answer.

The diplomatic answer has to come now.

Yes. 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 no touch zone for the moment. So unfortunately, no real progress there. It continues to affect the industry.

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&A?

So let's put that in terms of -- let's rank it, 1, 2 and 3. Capital -- sorry, debt repayment, #1, absolutely, 100%. And that is a big, bold gigantic #1, and we're just going to keep pounding away our debt heavily. I would say that acquisitions will definitely be a #2. If we have to go through this ranking kind of exercise. And I believe, though, that, that is not a close second. I think that acquisitions, in this case, is going to have to be extremely opportunistic in the sense that it's going to have to really, really, really make sense. And so then that would be a #2. And we have to really stay focused on what we do best, and that's why it's going to be very -- it's going to be looked at very critically and whether or not it absolutely checks off all the boxes. So then, obviously, #3 would be dividends, but that would be kind of a very distant third only because it would be, well, you know what, we just absolutely exhausted all the other priorities. And now 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 this point in time from a capital allocation perspective.

Operator, we have addressed all the questions sent by our analysts. We are ready to move on.

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

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 all the analysts for adapting and pivoting using technology and sending us their questions via e-mails. And hopefully, our service provider here, they've addressed their technological issues. . So please call us. 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 2025, 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.

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.