Good morning, and welcome to Titanium Transportation Group's 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 today. Please note that this call is being recorded today, July 31st, 2023. 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. I'm pleased to share an exciting chapter in Titanium's growth history, the acquisition of Crane Transport for a total consideration of $3 million. As you would have seen in this morning's press release, Crane Transport is a family-owned business and operates out of Oakwood, Georgia, specializing in reliable Full Truckload freight transportation services. Crane generates approximately $60 million in annualized revenue and operates approximately 200 trucks based out of two terminals in Georgia and Alabama, their main terminal being Oakwood, Georgia, which is about 30 minutes from our logistics location in Atlanta. We believe that this strategic acquisition will provide Titanium with the necessary assets in the U.S., enabling customers to access a comprehensive freight management offering, driving accelerated growth in the logistics business. At Titanium, we have a proven history of strategic acquisitions contributing to sustainable long-term growth. Today's announcement is particularly significant as it marks our first U.S. asset-based transaction. This is a strategic move that not only expands our asset footprint, but strengthens our position in the market and enhances our capabilities to better serve current customers and help to acquire new ones. We see Crane Transport's full truckload business as highly synergistic with our existing network, immediately adding capacity and valuable new customer relationships and an excellent fit from a cultural point of view. The U.S. marketplace continues to present a significant growth opportunity for Titanium. The acquisition of Crane allows us to expand this presence further through a terminal in Alabama and our second terminal in Georgia. This contributes directly to our goal of building Titanium's business offerings in the US market. Additionally, Titanium will also acquire the real estate, two terminals, each with about 11 acres of land. The locations are strategically located in Freight Alley. Freight Alley is identified as North Carolina, South Carolina, Tennessee, Georgia, and Alabama. Interesting to note that within Freight Alley, transportation represents a significant portion of this region's economy. We expect the integration phase to last about 12 months and be accretive once completed. In addition to the acquisition, we would also like to take this opportunity to provide an update on our 2023 full year guidance. Based on the current economic environment and the company's outlook for the remainder of the year, Titanium is providing the following updates to its guidance, which include the partial year contribution from Crane. Consolidated revenue is expected to be between $450 million-$470 million, compared to the previous expectation of $500 million-$520 million. The change in revenue is being driven by a reduction in fuel surcharges due to decreases in fuel prices and modest volume, as well as transactional pricing contraction from recessionary market pressures. Adjusted EBITDA margin, 10.5%-12.5%, previously 9.5%-11.5%. To conclude, this acquisition is further evidence of Titanium executing on a strategic plan and building a strong foundation for future growth. With the addition of Crane Transport, we see multiple near-term opportunities to enhance profitability, including access to the interstate freight market, as well as long-term opportunities to optimize equipment and technology towards continued growth. Crane Transport is viewed as an excellent fit for Titanium from a strategic and cultural perspective. By leveraging the strengths of both companies, we aim to immediately add capacity, build upon valuable customer relationships, and benefit from the knowledge of existing experienced staff in the U.S. The Crane acquisition allows Titanium the opportunity to enter the U.S. interstate and will continue to build shareholder value. We look forward to embarking on this journey with Crane and unlocking new possibilities for growth and success. With that, I'll turn it over to the operator to open the line for questions. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touch-tone phone. Again, that's star followed by one on your touch-tone phone. If you would like to withdraw your request, please press star followed by two. Your first question comes from the line of Matthew Lee from Canaccord Genuity. Please go ahead. Hey, good morning, guys. Morning, Matt. Hey, Matt. Hey, maybe we can start with guidance here. you know, if the transaction is included for roughly half the year, your guidance really is closer to, like, $410 million-$430 million on revenue. can you maybe help me understand how that breaks down between fuel and volume? Let's just jump right into the gauntlet here. Let's start with this year's outlook for Titanium Proper. We've seen consistency with volume so far this year, and we've highlight that in the first quarter, that the volumes dropped about 10%. With that, it's still consistent in Q2, and we were originally looking forward to a Q3 and Q4 recovery, but it seems like that's going to be a little more delayed. We are anticipating 10% drop throughout the year. That's number one. Number two, we talked about fuel pricing before. Fuel pricing was estimated to be an increase for 2023, but that also turned out to be not be the case. Fortunately, fuel price decrease also means that we are saving on fuel costs as well. It's largely a pass-through, so, what you see is that revenue drop, but our costs also drop. That's why you see there is a EBIT, there is a EBITDA margin increase instead. Yeah, we. Yeah. Yeah, we, we, we like to look at half our business as a broker and, you know, focus more so on margin rather than the revenue. Right. Perfect. Then in terms of the deal, accretion, you kind of mentioned that it'll be accretive post synergies, and I think that implies kind of $2 million-$3 million of synergies kind of created. Maybe help us understand where those are coming from. Yeah. I'm gonna say timing-wise, systems-wise, we are gonna look at the next five to six months. Then in the next five to six months, we'll have the systems integrated, and then the six months beyond that will be, you know, kind of all of the low-lying fruit in terms of all the details that, you know, are gonna be involved in executing on improvements in synergies, profitability, optimization, et cetera. There's two sectors really to the idea of an integration. One is the physical rebranding and all that, which will happen likely within the first six months. And then the optimization portion, portion of it, which is the real synergistic benefits that you have as a bigger group, that we'll go through, including optimization of lanes and routes with customers, which were definitely in consideration when we were viewing due diligence materials on, on Crane. We see that as being sort of in, in steps between the physical integration and optimization, which has historically been the way we've done all of our acquisitions and the results that we've seen. All right. That's awesome. Thanks again. Thank you. Thank you. I'm just gonna add on there that the assets really launch our ability to promote our logistics business as well, in the U.S. especially. Right, of course. Thank you. Your next question comes from the line of David Ocampo from Cormark Securities. Please go ahead. Thanks. Good morning, everyone. Good morning, David. Good morning. Maybe you guys can touch a little bit about the, the fleet. They have 200 trucks. Maybe you could talk about the age, if, if you need to spend any additional capital, to kind of get that, in line with, with what, the base Titanium trucks are, are doing today in terms of technology, whatever. Yeah. Of course, we're a little unique on the technology. I'm just gonna, you know, jump all over that. Technologically, we're far more advanced than Crane. They are a good company, but again, I mean, setting the bar as high as we do is, is, is a little, a little unique. In terms of their equipment, our equipment is uniquely new now. Remember that the average age of our truck is around 1.5 years, so that is a little bit, I think that's way above industry standard. Having said that, their average age of their trucks is actually quite reasonable. It, it is well within range, and we have almost no, there's almost no requirement for truck replacements at this time. Yeah, that's good to hear. Then, maybe you could provide a little bit more financial details around the margin profile of Crane. Is it kind of in that low, mid-teens, and you see it kind of gravitating up to kind of where you guys are today in that, that high-teen range over the next 12 months? It's just a better way for us backing into kind of the EBITDA multiple you guys paid for it as well. Yeah. They're definitely not at the, not at the same as Titanium Proper, which is about 18%-20%. They're about 14%-15% Adjusted EBITDA margin. There's room, like we said, there's room for synergies and there's room for improvement, and that's where our tech and our, and our operational focus is going to be and to integrate and then to create that synergies with the two companies. Got it. Ted, maybe you can walk us through the, the bidding process. Was it competitive? Does this essentially consume up most of your, your, your time, for the next 12 months, so, so we shouldn't expect any additional acquisitions on top of this? It, it was, it was marginally competitive. I, I wouldn't say it was terribly competitive. You know, it wasn't a bidding war circumstance, if that's what you're wanting. There were, there were, there was both buy side and sell side involved. You know, ultimately, you know, there were others that were interested, but, but ultimately, we were the best buyer for various reasons. We're a good fit and, you know, they're a good match for us. We're a good match for them. We have, we have a lot in common on, on, on a lot of different levels. We believe that, you know, there's a lot of... We have the ability to go in there and kind of, you know, modernize technology in terms of opportunity. I think there's a lot of companies out there that buy, that, it's not their, you know, it's not their style, it's not, you know, what they're good at. They have other strengths. We have the ability to go in and, you know, take, take an opportunity that's got low-lying fruit from a technological perspective and really use that for navigation and, you know, and optimization. That's perfect. That's all the questions I had for you guys. Thank you so much. Thank you, David. Thank you. Your next question comes from the line of Benoit Poirier from Desjardins Capital Markets. Please go ahead. Yeah. Good morning, everyone. Morning, Benoit. Congratulations. Yeah, congratulations for the announcement this morning. Could you talk maybe about the opportunities to strengthen your brokerage operation following the fact that you will now have about 200 trucks in the US? You've been talking about the ability to double or triple the size of a company once you have the proper foothold, and I'm just wondering whether this rationale is still, is still true in light of the acquisition of Crane. Hi, Benoit. Yes, you're, you're exactly on the money. That was a large motivation for us when targeting an acquisition in the US on the asset side, for sure. We have experienced that exact uptick in Canada and, and expecting an even bigger uptick in the States. It's by no chance that we also have a logistics office in Atlanta, which is about 30 minutes from, from acquisition in Oakwood, Georgia. Which makes it, which makes it very opportunistic for us in terms of being able to leverage our existing relationships and develop new ones. Customers today are looking for overall solutions, so being able to satisfy them from both an asset side and a brokerage side, especially in today's soft logistics market, is very important. This is a very strategic opportunity for us. Okay. could you maybe discuss about the customer base, whether it's similar with Titanium Transportation or there's a list of new customers, and, if, if there's any big concentration in one or a few so? That's the really exciting part. There is very little overlap. It is mostly new customers, ironically, in the same regions that we travel, but they're all, largely all new for us, which is also a, a key factor in this choice of acquisition. Okay, that's great. From a leverage standpoint, could you maybe provide some color about where your financial leverage will be following the acquisition and maybe your ability to perform another one in 2023, or probably it's time to digest and maybe a little pause will, will be needed in the, in the short term? In the short term, we'll be about 2.5. The very, very near term in the next two quarters, probably not going to be engaging in anything unless we raise capital. But we will be recovering that very quickly. Within three quarters, we'll probably back down to two to one or maybe even lower than that. We are, we are ready, within 1 year, we'll be ready for another one, if we find something. Right. Benoit. Yeah, this current stock price is not conducive to do a raise. You know, again, given our profitability, you know, if we have to wait to reload, then that's what we'll do. Okay. Just in terms of timing for, let's say, taking the opportunity to leverage your brokerage operation, how long does it take to start to engage discussion to really strengthen the logistics business in the US on, on the back of this acquisition? Are you asking a timing question? Oh, timing. Just to expand, let's say. I think it's a, it's a great opportunity to expand your brokerage and the operation, south of the border. I was just wondering about the, the timing. Is, is it kind of a, a more midterm? Is it longer term? I would be curious just to, to get more details on that. Yes, I don't think that, you're gonna see a, like an immediate, you know, sort of next month, kind of, an impact on logistics. I think that the focus is gonna be the next really three to six months to, to get all of the systems in place, you know, get sort of all the navigation tools, the technology, get everything sort of synchronized, get all implemented so that, you know, everything can run, you know, on our databases and so on. Once that's done, then, obviously my, you know, my sales team is going to. I mean, they're gonna go to town on this, quite frankly. You know, we, we believe that, you know, let's say that the, from a marketing perspective, I think this thing will, will really take off, you know, maybe kind of Q4 and onwards of, you know, sort of where we stand today. Right now the focus is get in there and get it going and then in the next three to six months, you know, get going on the offerings. Fairly quickly, we're not gonna wait too long. Perfect. That makes a lot of sense. Thank you very much for the details and congrats again. Thank you. Yeah, thank, thank you. Thanks, Benoit. Thank you. Your next question comes from the line of Gianluca Tucci from Haywood Securities. Please go ahead. Hey, guys. How are you doing? Congrats. Morning, Gianluca. Morning, Gianluca. Thank you. Congrats on the deal. In terms of the industries Crane serves and the types of customers, can you kind of highlight, like, you know, the top two industries, a top two customers, not by name, but by segment? Is there any overlap in the customer base? On, on the customer base, there's very, very little overlap. It's not mostly new. In terms of product lines, a lot of similarities. They're CPG, full truckload, DC to DC type, work. They are largely a van carrier like us, so a dry van carrier. They do have a good amount of refrigerated units on the trailer side and a handful- of flatbeds. They are in similar, similar industries to us, packaging materials, paper materials, consumer products, et cetera, some food-grade stuff. Very similar, product lines to us. Okay, that's good. Like, can you speak to the, the opportunities in adding all these additional logos to potentially cross-sell them into your asset-light business in the U.S. as well? Does Crane also have a logistics business? Not really. I mean, it's, in, in theory, they had a tiny little bit of an overflow concept. For the most part, it's not the same type of brokerage that we do. Our, our brokerage is a full-blown independent, you know, brokerage, without really any cross-pollination. It, it is, it is a little different that way. Really, the, the brokerage component for them is kind of, call it, immaterial. In terms of the brokerage opportunity, in the U.S., remember, it's, it's a humongous market. You know, having our first acquisition in the U.S. with the ability to do interstate on assets now changes completely our ability to offer a much larger, more robust, solution to customers in, you know, the largest economy in the world, which is absolutely phenomenal. We're incredibly excited about that ability. And that's where we believe that this is gonna have, exponential potential over the next one to two years. Very good. Alex, in terms of your updated guidance, does this change your CapEx plans for the next 12 months from this point, your CapEx spend guidance? Actually, it's interesting you ask that question. Ted mentioned earlier, their fleet's actually relatively good. Unless we walk in there and, and something's wrong, there shouldn't be any CapEx changes. Like we said before, I'll just re-alert, re-illustrate in here, is that we are looking for trailers. Our trucks are good. Our trailers, we're looking for as much as we can. If we can get more build slots, we'll end up buying more than the $30 million that we're looking for, given that there's any build slots at all. On top of that, there will be a little bit of tech spend onto the Crane fleet because we do have to update their satellites and, and some of the systems in there, in the place. We'll count that as integration cost, and it is real, but it is part of CapEx cost. There's going to be a tiny bit of that. Yeah, their fleet overall is in pretty good, pretty good shape. W e're, we're very happy with the fact that there's some, some really good foundations with this company to work with. Okay, that's good. For 2023, still $30 million is a good number to use for CapEx? Well, $30 million, for the next 12 months. For next 12 months. Okay. Gotcha. Okay. In terms of the, the options that you did mention that technically they're, they're a bit behind where Titanium is. You mentioned over the next five, six months to update that from the Crane perspective. Like, from the technology perspective alone, how much of a margin lift do you think that'll provide to Crane's business? The technology is the tool. Over the next 5 months, you know, we're gonna be executing on the tool. Then once the tools are in place, you know, let's say January onwards, because really January for me would be kind of a natural target. You know, given that it's also a fiscal year-end, right? It's a good time to switch systems. Then now you've got the tools that we rely on, that we've developed over the years, in order to now navigate to where we would like to see margins. You know, if you assume they're kind of in the low to mid-teens right now in terms of their percentage, EBITDA, even if we can get that up to 18, that's actually a 50% improvement in their margin, and that would really cut our current multiple by, you know, 1/3 to 1/2 of what we actually paid, and that's highly accretive to shareholder value from that perspective. We believe that you know, the next four or five months will be the execution of implementing tools, and then in a matter of really three to six months beyond that would be the execution of 80%- 90% of all the low-lying fruit. Okay, guys. Very good. I do like this, and congrats again. Talk to you soon, guys. Thank you. Sure, appreciate it. Thank you. Thank you. Again, ladies and gentlemen, should you have a question, please press star followed by the number one on your touch-tone phone. Your next question comes from the line of Benoit Poirier from PI Financial. Please go ahead. Hey, good morning. Congratulations, guys. Morning, Ben. How are you? Just on the impact of the company on the financial statements. It's going to be integrated, I guess, little less than two quarters? In fiscal, in 2023, right? No, we were expecting it to be approximately 12 months. Yeah, integration physical within the next 6 months. Your branding and your establishment of systems and technology, TMS systems, et cetera, will be within six months. The actual integration, we expect it, the optimization part of it will take about 12 months. So is, basically, in terms of the operation, kind of latter part of next year will be sort of at full speed, at kind of optimal levels? Correct. Okay. Then, when is the closing? When is the transaction actually, actually hitting financial? Like, is it as of today? Like, it's been closed. Yes, it's as of today. Okay. Okay, another question is, as, as a trucking company, I'm assuming, they also have sort of the, the contract revenue plus the, plus the fuel surcharge as well. Like, I... Is the revenue generation any different from yours in that regard? No, it's similar. We are running similar product line with, different customers, but similar, revenue generation. Okay. T hat's all for me. Thank you. Thank you. Thank you. Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. Ted Daniel for any closing remarks. Thank you, operator. That concludes our conference call for today. For more details, please refer to the transaction press release on our website or reach out to the investor relations team. Have a great day, and thank you for joining us this morning. Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.