Home | News | articles | Titan International Inc. Announces 3Q Results
102909
News Release from Titan International, Inc. October 29, 2009
Titan International Inc. Announces Third Quarter Results
Third quarter summary:
Sales for third quarter 2009 were $141.5
million, compared to $255.5 million in the third quarter of 2008.
Third quarter loss from operations was $(15.8)
million, compared to income from operations of $21.3 million last year.
Net loss for the third quarter was $(11.1)
million, compared to net income of $10.3 million in the third quarter of 2008.
Cash at September 30, 2009, was $45.4
million, an improvement of $24.7 million from the $20.7 million balance at June
30, 2009.
Inventory at September 30, 2009, was
$124.8 million, a reduction of $25.2 million from the $150.0 million balance at
June 30, 2009.
Statement of Chief
Executive Officer:
"I believe that the third quarter
was the bottom of the downtrend in the construction and farm markets," said
Chairman and CEO Maurice M. Taylor Jr. "While the earthmoving and construction segment
has been experiencing decline due to various factors in the construction,
infrastructure and housing markets in 2009, the agricultural segment has more
recently moved lower. I believe inventory reduction is over and business will
start to slowly grow during the next four quarters, but anyone who knows this
business knows it can turn on a dime.
"Trying economic times call for making
tough business decisions. As many of Titan's major customers implemented
extended shutdowns during the period, we in turn extended scheduled shutdowns
at our production facilities to manage lower demand and bring down inventory
levels. Though it did result in lower manufacturing efficiencies that directly
affected the bottom line, Titan was able to decrease inventories by $25
million. Titan also increased its cash balance during the quarter by $25
million.
"The only option any company really
has in this environment is for all employees to work harder than our
competitors and go after every opportunity for added business and increasing
market share. We know 2010 will be a better year than 2009," said Taylor.
Year-to-date summary:
September 2009 year-to-date sales were $581.1 million, compared to $778.1
million in 2008.
Income from operations was $11.2 million for the first nine months of
2009, compared to $61.8 million year-to-date 2008.
Year-to-date net income was $1.8 million in 2009, compared to $31.7
million in 2008.
Cash at September 30, 2009, was $45.4
million, an improvement of $9.8 million from the $35.6 million balance at
September 30, 2008.
Total debt at September 30, 2009, was $193.8 million, a reduction of
$31.2 million or 14 percent, when compared to $225.0 million at December 31,
2008.
Financial
overview:
Sales: Titan recorded sales of $141.5 million for the third
quarter of 2009, as compared to third quarter 2008 sales of $255.5 million. Net
sales for the first nine months of 2009 were $581.1 million, compared to $778.1
million recorded in the first nine months of 2008. The lower sales levels
resulted from reduced demand for the company's products, a consequence of the
worldwide recession and economic crisis.
Gross profit:
Gross loss for the third quarter
of 2009 was $(3.0) million or (2.1) percent of net sales, compared to gross
profit of $37.4 million or 14.6 percent of net sales for the third quarter of
2008. Year-to-date gross profit was $56.8 million or 9.8 percent of net sales
for 2009, as compared to $111.7 million or 14.4 percent of net sales for 2008.
Lower sales levels resulted from reduced demand for the company's products, as
many of Titan's major customers implemented extended shutdowns during the
period. In response, Titan extended scheduled shutdowns at its production
facilities during the third quarter of 2009. These extended shutdowns, in
conjunction with lower production levels when operating, drastically reduced
the company's manufacturing efficiencies. These lower efficiencies resulted in
the gross profit reduction.
Selling, general and administrative expenses: SG&A expenses for the third quarter of 2009 were
$11.3 million, compared to $13.8 million at this time in 2008, a reduction of
approximately $2.5 million. Year-to-date, SG&A was $39.4 million in 2009,
compared to $43.2 million in 2008, a reduction of approximately $3.8 million.
Income from operations: Loss from operations for the third quarter of 2009 was $(15.8) million,
as compared to income from operations of $21.3 million in the third quarter of
2008. Year-to-date income from operations was $11.2 million in 2009, compared
to $61.8 million in 2008.
Net income:
Net loss was $(11.1) million
for the third quarter of 2009, compared to net income of $10.3 million in third
quarter 2008. Year-to-date, net income was $1.8 million in 2009 and $31.7 million
in 2008.
Earnings per share: For the third quarter
of 2009, basic and diluted loss per share was $(.32), as compared to basic and
diluted earnings per share of $.30 in 2008. Year-to-date basic and diluted
earnings per share were $.05 as compared to year-to-date basic earnings per
share of $.92 and diluted earnings per share of $.91 in 2008.
Capital expenditures: Titan's capital expenditures for the first nine
months of 2009 were $36.5 million, compared to $60.1 million for the first nine
months of 2008. Included in these capital expenditures were approximately $22
million in 2009 and $47 million in 2008 of expenditures related to the giant
OTR (off-the-road) project.
Debt balance: Total debt was reduced to $193.8
million at September 30, 2009, from $225.0 million at year-end 2008. Short-term
debt was zero at September 30, 2009, a reduction of $25.0 million from year-end
2008.
Equity balance: The company's stockholders' equity
increased $7.6 million to $286.8 million at September 30, 2009, from $279.2
million at December 31, 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 filed with the Securities and Exchange
Commission on October 29, 2009.
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, 2008. 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) applications.
Titan International Inc. Consolidated Condensed
Statements of Operations (Unaudited)
Amounts in thousands except
earnings per share data.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2009
2008
2009
2008
Net sales
$141,496
$255,463
$581,083
$778,102
Cost of sales
144,526
218,040
524,304
666,389
Gross
profit (loss)
(3,030)
37,423
56,779
111,713
Selling, general & administrative expenses
11,272
13,789
39,425
43,155
Royalty expense
1,464
2,371
6,123
6,786
Income
(loss) from operations
(15,766)
21,263
11,231
61,772
Interest expense
(3,997)
(3,734)
(11,819)
(11,426)
Other income (expense)
644
(358)
2,700
2,559
Income
(loss) before income taxes
(19,119)
17,171
2,112
52,905
Income tax provision (benefit)
(8,006)
6,868
274
21,162
Net
income (loss)
$(11,113)
$10,303
$1,838
$31,743
Earnings (loss) per common share:
Basic
$(.32)
$.30
$.05
$.92
Diluted
(.32)
.30
.05
.91
Average common shares outstanding:
Basic
34,746
34,499
34,692
34,373
Diluted
34,746
34,883
35,251
34,798
Segment Information Revenues from
external customers (Unaudited)
Amounts in thousands
Three Months Ended
Nine Months Ended
September 30,
September 30,
2009
2008
2009
2008
Agricultural
$105,426
$179,162
$453,098
$538,263
Earthmoving/Construction
30,732
71,287
113,085
221,591
Consumer
5,338
5,014
14,900
18,248
Total
$141,496
$255,463
$581,083
$778,102
Titan International Inc. Consolidated Condensed
Balance Sheets (Unaudited)
Amounts in thousands
September 30,
December 31,
Assets
2009
2008
Current
assets:
Cash
and cash equivalents
$45,360
$61,658
Accounts
receivable
80,205
126,531
Inventories
124,833
147,306
Deferred
income taxes
12,042
12,042
Prepaid
and other current assets
23,898
21,662
Total
current assets
286,338
369,199
Property,
plant and equipment, net
260,360
248,442
Goodwill
11,702
11,702
Deferred
income taxes
4,039
7,256
Other
assets
26,155
18,183
Total
assets
$588,594
$654,782
Liabilities
& Stockholders' Equity
Current
liabilities:
Short-term
debt
$0
$25,000
Accounts
payable
25,064
65,547
Other
current liabilities
40,933
46,088
Total
current liabilities
65,997
136,635
Long-term
debt
193,800
200,000
Other
long-term liabilities
42,001
38,959
Stockholders'
equity
286,796
279,188
Total
liabilities & stockholders' equity
$588,594
$654,782
Titan 2009 third
quarter conference call:
Titan
International Inc. will hold its earnings conference call for the third quarter
that ended September 30, 2009, at 9 a.m. Eastern Time on Thursday, October 29,
2009.
To
participate in the conference call, dial (800)
230-1766 five minutes prior to the scheduled time. International callers dial
(612) 288-0337.
A replay of the call will
be available shortly after the call and until November 5, 2009. To access the
replay, dial (800) 475-6701 and enter access code 118351. International callers
dial (320) 365-3844. For more information, visit www.titan-intl.com.
