Triumph Financial(US:TFIN)2022-04-21 18:50Financial Data and Key Metrics Changes - For Q1 2022, the company reported net income of $23.5 million, or $0.93 per diluted share, indicating a strong performance despite typical seasonality [5] - TriumphPay processed approximately $5.7 billion in payments, an 8.8% increase from the previous quarter and a 147.7% increase from Q1 2021 [8] - Triumph business capital's dollar volume of invoices purchased was $4.04 billion, a 62.2% increase over Q1 2021 [11] Business Line Data and Key Metrics Changes - TriumphPay processed about 4 million invoices, paying just under 127,000 distinct carriers, with an annual run rate payment volume exceeding $24 billion [8] - Triumph business capital purchased approximately 1.6 million invoices, down 3.9% from the prior quarter but up 34.9% from Q1 2021 [11] - The average transportation invoice size increased to $2,401, up $110 from Q4 2021 [11] Market Data and Key Metrics Changes - The company noted a modest pullback in volume but maintained elevated invoice prices, with April month-to-date average transportation invoice size around $2,300 [12] - There has not been a significant drop-off in freight tonnage, despite media narratives suggesting an imminent freight recession [13][14] Company Strategy and Development Direction - The company is focused on establishing a ubiquitous payments network for the trucking industry, narrowing its operational focus to transportation-related businesses [20] - Discussions are ongoing to sell 15 TBK Bank branches, reflecting a strategic shift towards transportation and simplifying the operating model [18][19] - The company plans to continue investing in technology and personnel to accelerate TriumphPay integration and development [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue targets despite potential market challenges, maintaining a revenue outlook of $240 million for Triumph Business Capital in 2022 [59] - The company anticipates that any market weakness could create opportunities for TriumphPay, as clients seek cost-saving solutions [16] - Management acknowledged the need to optimize expenses in the future but emphasized the importance of stability and feature development for TriumphPay at this stage [67] Other Important Information - The company added 15,000 new registered carriers in Q1, bringing the total to over 106,000 [11] - The company expects Q2 expenses to be around $85 million, including costs related to the disposal group [17] Q&A Session Summary Question: What percentage of invoice costs is related to fuel? - Management indicated that roughly 40% of the cost of an invoice is associated with fuel, but it is difficult to break it out specifically due to the nature of pricing in the spot market [27] Question: What is the expected ramp-up for fully automated conforming transactions? - Management noted that they ended Q1 with around 1,600 transactions per day and are moving towards 2,000 transactions per day as more Tier 1 clients come online [28][29] Question: How does the company view the potential for a freight recession? - Management stated that they do not foresee significant changes in their operations and would continue to serve customers effectively, even in a recession [40] Question: What is the strategy regarding the non-transportation factoring business? - Management explained that exiting the non-transportation segment allows them to focus on their core competencies in transportation, which they understand well [46] Question: How does the company plan to balance M&A and stock repurchases? - Management indicated that they prioritize investments that advance TriumphPay's goals but are open to stock repurchases if suitable opportunities do not arise [72]