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| News Release from Titan International, Inc.
June 29, 2008
Titan Reports All-Time Record Sales and
Income from Operations
Second
quarter highlights:
-
Sales
for second quarter 2008 of $269.1 million were the highest in the company's history,
an increase of 28 percent, compared to $210.3 million in the second quarter of
2007.
-
Gross
profit was $41.9 million for the second quarter of 2008, a 54 percent
improvement from $27.3 million in the second quarter of last year.
-
Income
from operations was an all-time quarterly record $24.4 million for the second
quarter of 2008, rising 85 percent, compared to $13.2 million in the second
quarter of 2007.
-
Net
income improved 168 percent to $13.3 million for the second quarter of 2008,
over the $5.0 million recorded in last year's quarter.
-
Basic
and diluted earnings per share were $.48 cents for the quarter, an increase of
167 percent compared to $.18 cents in the second quarter of 2007.
-
Titan's
stockholders' equity surpassed the $300 million mark and ended the second
quarter at $305.7 million, as compared to the year-end balance of $272.5
million.
Statement of Chief Executive Officer:
"The first half of 2008 saw higher commodity prices
drive a strong demand in the agricultural market," said Chairman and CEO
Maurice M. Taylor Jr. "This helped propel Titan to record sales levels for the
quarter and year-to-date. Despite high raw material costs, the company was able
to show improvement in gross profit by continuing to improve manufacturing
efficiencies and better align Titan sales prices with production cost.
"Titan has also benefited in the past months from a
preliminary ruling from the U.S. Department of Commerce, affirming that
exporters of Chinese-manufactured tires have been selling certain off-the-road
tires in the U.S.A. at less than normal value and received subsidies, resulting
in duties being imposed on certain imported tires. The International Trade
Commission had heard relevant testimony in July and may rule in the third
quarter. This may result in either upholding the Commerce Department's ruling,
modifying or overruling it.
"Titan believes that volume will increase in farm
tires as we move forward, and with excess production capacity of up to $400
million, we are very optimistic for the years ahead. Production of the ‘big
daddy' 63-inch tire has started with the first tire and wheel assemblies headed
to the oil sands in Canada. This production is a gradual ramp-up until full
production begins on January 2, 2009. It is still Titan's target to ship at least
900 of the 63-inch giant tires in the second half of 2008. Of these 900 giant
tires, Titan plans to ship at least 200-300 as complete tire and wheel
assemblies during the next two quarters. Titan will follow the 63-inch ‘big
daddy' tire production with the 57-inch ‘sweet mama' tire in the fourth quarter
of 2008," said Taylor.
"The effort of all Titan employees has been outstanding this past year
and I believe the shareholders are seeing the resulting improvement in our
financial performance. The company has come a long way, but Titan will keep
striving to improve and reach our ambitious goals for the year."
Year-to-date
highlights:
-
June
2008 year-to-date sales were an all-time record of $522.6 million, resulting in
a 20 percent increase from $436.6 million for the six-month period in 2007.
-
June
2008 year-to-date gross profit was $74.3 million, increasing 36 percent from
$54.4 million in 2007.
-
Income
from operations was $40.5 million for the first half of 2008, a 47 percent
increase, compared to $27.5 million year-to-date 2007.
-
Year-to-date
net income was $21.4 million in 2008, rising approximately $19 million as
compared to $2.5 million in 2007.
-
Fully
diluted earnings per share were $.77 cents for the first half of 2008, a $.67
cent improvement compared to the $.10 cents recorded in the first half of 2007.
Financial overview:
Sales: Titan recorded sales of $269.1 million for the second
quarter of 2008, which were 28 percent higher than the second quarter 2007
sales of $210.3 million. Net sales for the first half of 2008 were $522.6
million, up from the $436.6 million recorded in the first half of 2007, a 20
percent increase. The record sales levels for the second quarter and first half
of 2008 was attributed to exceptionally strong demand in the company's
agricultural market, which reported higher sales of 50 percent for the second quarter of 2008 and 38 percent for the first half of 2008 as compared to the
respective 2007 periods.
Gross profit: Gross profit for the second quarter of 2008 was $41.9
million, as compared to $27.3 million in the second quarter of 2007.
Year-to-date gross profit was $74.3 million for 2008, as compared to $54.5
million for 2007.
Income from operations: Income from operations for the second quarter of 2008 was $24.4
million, as compared to $13.2 million in the second quarter of 2007.
Year-to-date income from operations was $40.5 million in 2008, compared to
$27.5 million in 2007.
Pre-tax income: Income before taxes for the second quarter of 2008
was $22.2 million, as compared to $10.5 million in 2007. Year-to-date income
before taxes totaled $35.7 million in 2008, as compared to $5.5 million in
2007. The year-to-date total for 2007 included a $13.4 million noncash
convertible debt conversion charge.
Income taxes: Income taxes of $8.9 million were recorded for the
second quarter of 2008, compared to $5.5 million in 2007. Year-to-date, income
tax expense was $14.3 million for the six months ended June 30, 2008, compared
to $3.0 million in 2007.
Net income: Net income was $13.3 million for the second quarter of
2008, compared to $5.0 million in second quarter 2007. Year-to-date, net income
was $21.4 million in 2008 and $2.5 million year-to-date in 2007.
Earnings per share:
For the second quarter of
2008, basic and diluted earnings per share were $.48, as compared to $.18 in
2007. Year-to-date basic earnings per
share were $.78 and diluted earnings per share were $.77, as compared to
year-to-date basic and diluted earnings per share of $.10.
Cash
balance: The company's June 2008 cash balance was $69.4 million, compared
to $58.3 million at December 31, 2007.
Capital
expenditures:
Titan's capital expenditures for the first half of 2008 were $38.9 million,
which included approximately $30 million of expenditures related to the Giant
OTR Project.
Debt balance: Long-term debt was unchanged at $200 million
at June 30, 2008, and year-end 2007. The company's short-term debt remains at a
zero balance.
Equity balance: The company's stockholders' equity increased
to $305.7 million at June 30, 2008, from the $272.5 million at the 2007
year-end.
Cash flow:
Titan was able to generate $11.1 million of cash in 2008 even with $38.9
million of capital expenditures, of which approximately $30 million related to
the Giant OTR Project. The year-to-date cash flow was achieved with no change
in the company's debt balances.
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 July
29, 2008.
Giant OTR Project:
In May 2007, Titan's Board of
Directors approved funding for the company to increase giant OTR mining tire
production capacity to include 57-inch and 63-inch giant radial tires (the
"Giant OTR Project"). 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 on an annual basis. The company began start-up
production of these giant mining tires in July 2008.
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, 2007. 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)
For
the three and six months ended June 30, 2008 and 2007
|
Amounts in thousands,
except earnings per share data.
|
Three Months Ended
|
Six Months Ended
|
|
|
June 30,
|
June 30,
|
|
|
2008
|
2007
|
2008
|
2007
|
|
Net sales
|
$269,114
|
$210,333
|
$522,639
|
$436,611
|
|
Cost of sales
|
227,168
|
183,022
|
448,349
|
382,109
|
|
Gross
profit
|
41,946
|
27,311
|
74,290
|
54,502
|
|
|
|
|
|
|
|
Selling, general & administrative expenses
|
15,289
|
12,683
|
29,366
|
23,967
|
|
Royalty expense
|
2,268
|
1,452
|
4,415
|
3,016
|
|
Income
from operations
|
24,389
|
13,176
|
40,509
|
27,519
|
|
|
|
|
|
|
|
Interest expense
|
(3,708)
|
(4,430)
|
(7,692)
|
(10,179)
|
|
Noncash convertible debt conversion charge
|
0
|
0
|
0
|
(13,376)
|
|
Other income
|
1,497
|
1,731
|
2,917
|
1,546
|
|
Income
before income taxes
|
22,178
|
10,477
|
35,734
|
5,510
|
|
|
|
|
|
|
|
Provision for income taxes
|
8,872
|
5,515
|
14,294
|
3,031
|
|
|
|
|
|
|
|
Net
income
|
$13,306
|
$4,962
|
$21,440
|
$2,479
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
Basic
|
$.48
|
$.18
|
$.78
|
$.10
|
|
Diluted
|
.48
|
.18
|
.77
|
.10
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
Basic
|
27,486
|
27,213
|
27,449
|
24,031
|
|
Diluted
|
27,819
|
27,749
|
27,805
|
24,499
|
Segment
Information
Revenues
from external customers (Unaudited)
|
Amounts in thousands
|
Three Months Ended
|
Six Months Ended
|
|
|
June 30,
|
June 30,
|
|
|
2008
|
2007
|
2008
|
2007
|
|
Agricultural
|
$185,615
|
$124,104
|
$359,101
|
$259,400
|
|
Earthmoving/Construction
|
76,471
|
72,342
|
150,304
|
147,460
|
|
Consumer
|
7,028
|
13,887
|
13,234
|
29,751
|
|
Total
|
$269,114
|
$210,333
|
$522,639
|
$436,611
|
Titan International, Inc.
Consolidated
Condensed Balance Sheets (Unaudited)
|
Amounts in thousands
|
|
|
|
June 30,
|
December 31,
|
|
Assets
|
2008
|
2007
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$69,385
|
$58,325
|
|
Accounts
receivable
|
139,438
|
98,394
|
|
Inventories
|
118,083
|
128,048
|
|
Deferred
income taxes
|
17,780
|
25,159
|
|
Prepaid
and other current assets
|
21,469
|
17,839
|
|
Total
current assets
|
366,155
|
327,765
|
|
|
|
|
|
Property,
plant and equipment, net
|
221,951
|
196,078
|
|
Investment
in Titan Europe Plc
|
40,782
|
34,535
|
|
Goodwill
|
11,702
|
11,702
|
|
Other
assets
|
19,540
|
20,415
|
|
Total
assets
|
$660,130
|
$590,495
|
|
|
|
|
|
Liabilities & Stockholders'
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$70,975
|
$43,992
|
|
Other
current liabilities
|
50,407
|
43,788
|
|
Total
current liabilities
|
121,382
|
87,780
|
|
|
|
|
|
Long-term
debt
|
200,000
|
200,000
|
|
Deferred
income taxes
|
16,230
|
14,044
|
|
Other
long-term liabilities
|
16,854
|
16,149
|
|
Stockholders'
equity
|
305,664
|
272,522
|
|
Total
liabilities & stockholders' equity
|
$660,130
|
$590,4
|
Titan 2008 second
quarter conference call:
Titan International Inc. will hold its earnings conference
call for the second quarter that ended June 30, 2008, at 9 a.m. Eastern Time on
Wednesday, July 30, 2008.
To participate in the conference call, dial (877) 722-5040 five minutes prior to
the scheduled time.
A
telephonic replay will be available until August 6, 2008. To register for the
replay or for more information, visit http://www.titan-intl.com/content/conference-call . Contact: Titan Communications, (217) 221-4489
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