News Release from Titan International, Inc.
July 30, 2007 TITAN REPORTS 20% INCREASE IN SECOND QUARTER SALES QUINCY, Ill.—
Second quarter and
year-to-date highlights:
-
Sales
for second quarter 2007 were $210.3 million, up 20 percent, as compared to
$175.2 million in the second quarter of 2006.
-
Year-to-date
sales were an all-time record of $436.6 million, a 22 percent increase from
$357.8 million for the six-month period in 2006.
-
Gross
profit was $27.3 million for the second quarter, a 22 percent increase from the
$22.4 million in the second quarter of 2006.
-
Titan's
quarter-ending cash balance of $61.5 million is an increase of 58 percent over
the March 31, 2007, balance of $39.0 million.
-
Titan's
stockholders' equity surpassed the $300 million mark to end the second quarter
at $300.7 million, an all-time record and a rise of $113.5 million, or 61
percent, from the 2006 year-end balance of $187.2 million.
Statement of Chief Executive
Officer:
"The
second quarter has been very exciting for Titan. Our sales are up, as they
should be from last year's acquisition," said Chairman and CEO Maurice M.
Taylor Jr. "We are expanding our OTR (off-the-road) business and adding new OTR
products by expanding capacity in Freeport, Illinois. While this is happening in
Freeport, certain farm tires are being transferred to our Des Moines facility.
Titan's Board of Directors also approved the capital expenditures to produce
the super giant radial 57- and 63-inch mining tires. The unique thing about
this is that only two companies, Michelin (France) and Bridgestone (Japan),
produce 63-inch radial tires at this time. "So,
Titan has put together an engineering team headed by Ernest Rodia, chief
operating officer (Rodia retired from Goodyear in December 2003 as vice president
of global engineering and manufacturing technology), to not only develop the
63-inch tires, but also a new 73.5-inch 15 degree tire and wheel to improve
wear and performance. I believe that by producing these tires, Titan will show
our customer base that we are the best, and making the wheel with the tire is
what sets Titan apart from everyone else. We plan to produce sample 63-inch
tires in first quarter 2008. The 73.5-inch tire will follow. Wheels that large
are a real bear to produce, but since our mascot is a grizzly we should have no
problem with production," said Taylor.
"As
you can see, Titan has the cash on hand to fund all current projects, except
for acquisitions; therefore, we anticipate not borrowing money for the
above-mentioned capital projects. These are exciting times at Titan and we
believe our best is ahead. And yes, large tire sales in the farm market have
finally started to pick up, and we believe they will increase each month out
this year."
Financial overview:
Titan
International, Inc.'s net sales of $210.3 million for the second quarter of
2007 were 20 percent higher than the second quarter 2006 sales of $175.2
million. Net sales for the first half of 2007 were $436.6 million, up from the
$357.8 million recorded in the first half of 2006, a 22 percent increase.
Gross
profit for the second quarter of 2007 was $27.3 million, as compared to $22.4
million in the second quarter of 2006. Year-to-date gross profit was $54.5
million for 2007, as compared to $53.6 million for 2006.
Income from operations for the second quarter of 2007 was
$13.2 million, as compared to $11.7 million in the second quarter of 2006.
Year-to-date income from operations was $27.5 million in 2007, compared to
$28.9 million in 2006.
Income
before taxes for the second quarter of 2007 was $10.5 million, as compared to
$9.3 million in 2006. Year-to-date income before taxes totaled $5.5 million in
2007, as compared to $23.7 million in 2006. The year-to-date total for 2007
included a $13.4 million noncash convertible debt conversion charge.
Income
taxes of $5.5 million were recorded for the second quarter of 2007, compared to
$3.7 million in 2006. Year-to-date, income tax expense was $3.0 million for the
six months ended June 30, 2007, compared to $9.5 million in 2006.
Net
income was $5.0 million for the second quarter of 2007, compared to $5.6
million in second quarter 2006. Year-to-date, net income was $2.5 million in
2007 and $14.2 million year-to-date in 2006.
For
second quarter 2007, basic earnings per share were $.18, compared to $.28 at
June 30, 2006. Year-to-date basic earnings per share were $.10, compared to
$.72 year-to-date 2006.
Diluted earnings per share were $.18 for the second
quarter of 2007 compared to $.24 in 2006. Year-to-date diluted earnings per
share were $.10 for 2007 and $.60 for 2006.
Titan's quarter-end cash was $61.5 million at June 30,
2007, an increase of over $28 million from $33.4 million at year-end 2006.
Long-term debt was $200 million, decreasing from $291.3 million at year-end
2006.
The
company's stockholders' equity increased $113.5 million in the first half of
2007. Titan's equity balance reached $300.7 million at June 30, 2007, a
significant increase from the $187.2 million at December 31, 2006.
Giant OTR mining tires expansion:
In May 2007, Titan's Board of Directors approved
funding for the company to increase giant OTR (off-the-road) mining tire
production capacity to include 57- and 63-inch giant radial tires. This funding
should allow Titan to produce up to an estimated 6,000 giant radial tires a
year. Titan estimates this may increase sales as much as $240 million. Titan
currently plans to be in start-up production of these giant mining tires by the
end of the second quarter 2008.
Form 10-Q:
For
additional information and Management's Discussion and Analysis of Financial
Condition and Results of Operations, see the company's Form 10-Q to be filed with the
Securities and Exchange Commission on July 30, 2007.
Safe harbor statement:
This
press release includes forward-looking statements that involve risks and
uncertainties, including risks as detailed in Titan International, Inc.'s
periodic filings with the Securities and Exchange Commission, including the
annual report on Form 10-K for the year ended December 31, 2006. The company
cautions that any forward-looking statements included in this press release are
subject to a number of risks and uncertainties and the company undertakes no
obligation to publicly update or revise any forward-looking statements.
Company description:
QUINCY,
Ill.-Titan International, Inc. (NYSE: TWI), a holding company, owns
subsidiaries that supply wheels, tires and assemblies for off-highway equipment
used in agricultural, earthmoving/construction and consumer (including all
terrain vehicles and trailers) applications.
Titan International, Inc.
Consolidated Condensed
Statements of Operations (Unaudited)
For
the three and six months ended June 30, 2007 and 2006
|
Amounts in thousands,
except earnings per share data.
|
Three Months Ended
|
Six Months Ended
|
|
|
June 30,
|
June 30,
|
|
|
2007
|
2006
|
2007
|
2006
|
|
Net sales
|
$210,333
|
$175,194
|
$436,611
|
$357,771
|
|
Cost of sales
|
183,022
|
152,752
|
382,109
|
304,215
|
|
Gross
profit
|
27,311
|
22,442
|
54,502
|
53,556
|
|
|
|
|
|
|
|
Selling, general & administrative expenses
|
12,683
|
9,493
|
23,967
|
21,774
|
|
Royalty expense
|
1,452
|
1,214
|
3,016
|
2,839
|
|
Income
from operations
|
13,176
|
11,735
|
27,519
|
28,943
|
|
|
|
|
|
|
|
Interest expense
|
(4,430)
|
(3,709)
|
(10,179)
|
(7,432)
|
|
Noncash convertible debt conversion charge
|
0
|
0
|
(13,376)
|
0
|
|
Other income
|
1,731
|
1,313
|
1,546
|
2,149
|
|
Income
before income taxes
|
10,477
|
9,339
|
5,510
|
23,660
|
|
|
|
|
|
|
|
Provision for income taxes
|
5,515
|
3,736
|
3,031
|
9,464
|
|
|
|
|
|
|
|
Net
income
|
$4,962
|
$5,603
|
$2,479
|
$14,196
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
Basic
|
$.18
|
$.28
|
$.10
|
$.72
|
|
Diluted
|
.18
|
.24
|
.10
|
.60
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
Basic
|
27,213
|
19,695
|
24,031
|
19,639
|
|
Diluted
|
27,749
|
26,081
|
24,499
|
26,003
|
Segment
Information
Revenues
from external customers (Unaudited)
|
Amounts in thousands
|
Three Months Ended
|
Six Months Ended
|
|
|
June 30,
|
June 30,
|
|
|
2007
|
2006
|
2007
|
2006
|
|
Agricultural
|
$124,104
|
$116,267
|
$259,400
|
$240,694
|
|
Earthmoving/Construction
|
72,342
|
29,005
|
147,460
|
60,806
|
|
Consumer
|
13,887
|
29,922
|
29,751
|
56,271
|
|
Total
|
$210,333
|
$175,194
|
$436,611
|
$357,771
|
Titan International, Inc.
Consolidated
Condensed Balance Sheets (Unaudited)
|
Amounts in thousands
|
|
|
|
June 30,
|
December 31,
|
|
Assets
|
2007
|
2006
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$61,524
|
$33,412
|
|
Accounts
receivable
|
117,595
|
73,882
|
|
Inventories
|
135,454
|
154,604
|
|
Deferred
income taxes
|
27,705
|
29,234
|
|
Prepaid
and other current assets
|
17,531
|
18,801
|
|
Total
current assets
|
359,809
|
309,933
|
|
|
|
|
|
Property,
plant and equipment, net
|
182,678
|
184,616
|
|
Investment
in Titan Europe Plc
|
62,663
|
65,881
|
|
Goodwill
|
11,702
|
11,702
|
|
Other
assets
|
16,945
|
12,994
|
|
Total
assets
|
$633,797
|
$585,126
|
|
|
|
|
|
Liabilities & stockholders'
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$0
|
$98
|
|
Accounts
payable
|
43,543
|
25,884
|
|
Other
current liabilities
|
50,680
|
36,942
|
|
Total
current liabilities
|
94,223
|
62,924
|
|
|
|
|
|
Long-term
debt
|
200,000
|
291,266
|
|
Deferred
income taxes
|
26,798
|
27,924
|
|
Other
long-term liabilities
|
12,104
|
15,835
|
|
Stockholders'
equity
|
300,672
|
187,177
|
|
Total
liabilities & stockholders' equity
|
$633,797
|
$585,126
|
Contact: Courtney Leeser
Communications Coordinator
(217) 221-4489 |
