Titan International Announces 23 Percent Increase in Revenue for Third Quarter 2013
PR Newswire Association LLC |
Third quarter highlights:
- Sales for third quarter 2013 were
$497.5 million up22.9 percent, compared to$404.7 million in the third quarter of 2012. - Gross profit decreased 6.9 percent for third quarter 2013 to
$62.5 million , or 12.6 percent of net sales, compared to$67.2 million in third quarter 2012, or 16.6 percent of net sales. - Third quarter income from operations was
$17.1 million compared to$36.2 million last year. - Adjusted net income for the third quarter was
$8.1 million , compared to$24.7 million in the third quarter of last year (see appendix below). - Adjusted earnings per share for the third quarter 2013 are
$0.15 and$0.15 for basic and fully diluted, respectively, compared to$0.59 and$0.49 for 2012, basic and fully diluted, respectively.
Statement of Chief Executive Officer:
Chairman and CEO,
"New agriculture wheels and tires: Titan's new agriculture wheels and tires are not only the best they've ever been, but we are showing the North American farmers how our new tires can make a 4-wheel tractor compete with a Quadtrac. This saves the farmer
"New radial LSW tires: In July, Titan's new 58/80/63 radial loader tire was approved by Caterpillar to be used on OEM and aftermarket on the Caterpillar 994 loader. This tire is thousands of dollars less than Bridgestone's 58/57 bias radial tire. If Titan's LSW 58/80/63 works on a Caterpillar 994, then all of our new radial LSW tires will work on the smaller loaders, which are used in mining and construction. The timing of this is perfect because everyone is looking to lower their costs and the LSW tires can accomplish this. Titan is also the only Company today who produces the wheels for the new LSW tires.
"Tire Reclamation: Titan Mining Services ("TMS") has started
"Depending on the country TTRC is operating in, the Company will receive carbon credits. In addition to the return on oil, carbon black and steel, TTRC will be paid a fee. The first system is planned to go to the oil sands in
"I know the first question is what would revenue be? The above gross revenue at today's prices should be
Outlook:
"The market in construction and mining tires has been soft the last few quarters and, with the lower cost of materials, tire prices will be dropping through the end of the year. The mining companies, I believe, will be dropping their tire inventory from 14 months to 6 months and then buying what they use going forward at lower prices. However, the smaller construction business should expand 20 to 25 percent in 2014 based on information from OEMs.
"With our new tire acquisition in
"You can see why I believe the glass is half full and how we are going to grow. In short, the agriculture market is still strong. Pricing is dropping due to lower cost materials. Our revenue should stay the same because our market share should grow. The construction tire and wheel business should grow double digits in 2014 if the OEM forecasts stay where they predict. As Titan focuses on all the specialty wheels and tires, we should see improvement in margins." Taylor concludes, "Titan will announce the management goals for 2014 sales and EBITDA the week of
Financial Summary:
Sales: Titan recorded sales of
Gross profit: Gross profit for the third quarter of 2013 was
Warranty Expense: The provision for warranty liability was
Selling, general and administrative expenses: Selling, general and administrative (SG&A) expenses for the third quarter of 2013 were
Income from operations: Income from operations for the third quarter of 2013, was
Interest expense: Interest expense was
Non-cash convertible debt charge: In the first quarter 2013, Titan agreed to convert approximately
Earnings per share: For the third quarter of 2013, basic and diluted earnings per share were
Capital expenditures: Titan's capital expenditures were
Deferred Tax Asset Valuation Allowance: During the quarter ended
Debt balance: Total long term debt balance was
Equity balance: The Company's equity was
Subsequent Events:
Voltyre-Prom Purchase
On
6.875 Percent Senior Secured Notes due 2020
On
7.875 Percent Senior Secured Notes due 2017 Tender Offer Settlement
On
7.875 Percent Senior Secured Notes due 2017 Redemption Call
On
Third Quarter Conference Call:
Titan will be hosting a conference call for the third quarter earnings announcement at
Safe harbor statement:
This press release includes forward-looking statements that involve risks and uncertainties, including risks as detailed in
Company description:
|
||||||||||||||||
Consolidated Condensed Statements of Operations (Unaudited) |
||||||||||||||||
Amounts in thousands except earnings per share data |
||||||||||||||||
Three months ended |
Nine months ended |
|||||||||||||||
|
|
|||||||||||||||
2013 |
2012 |
2013 |
2012 |
|||||||||||||
Net sales |
$ |
497,510 |
$ |
404,719 |
$ |
1,669,188 |
$ |
1,327,040 |
||||||||
Cost of sales |
435,004 |
337,558 |
1,423,276 |
1,084,430 |
||||||||||||
Gross profit |
62,506 |
67,161 |
245,912 |
242,610 |
||||||||||||
Selling, general and administrative expenses |
38,731 |
25,497 |
124,827 |
79,742 |
||||||||||||
Research and development expenses |
2,778 |
1,759 |
8,281 |
4,456 |
||||||||||||
Royalty expense |
3,942 |
3,739 |
10,960 |
8,740 |
||||||||||||
Supply agreement termination income |
— |
— |
— |
(26,134) |
||||||||||||
Income from operations |
17,055 |
36,166 |
101,844 |
175,806 |
||||||||||||
Interest expense |
(12,414) |
(6,187) |
(35,924) |
(18,699) |
||||||||||||
Convertible debt conversion charge |
— |
— |
(7,273) |
— |
||||||||||||
Gain on earthquake insurance recovery |
— |
— |
22,451 |
— |
||||||||||||
Other income |
8,722 |
2,439 |
7,712 |
6,163 |
||||||||||||
Income before income taxes |
13,363 |
32,418 |
88,810 |
163,270 |
||||||||||||
Provision for income taxes |
5,711 |
13,589 |
38,913 |
64,722 |
||||||||||||
Net income |
7,652 |
18,829 |
49,897 |
98,548 |
||||||||||||
Net loss attributable to noncontrolling interests |
(441) |
(750) |
(888) |
(506) |
||||||||||||
Net income attributable to Titan |
$ |
8,093 |
$ |
19,579 |
$ |
50,785 |
$ |
99,054 |
||||||||
Earnings per common share: |
||||||||||||||||
Basic |
$ |
.15 |
$ |
.46 |
$ |
.96 |
$ |
2.35 |
||||||||
Diluted |
$ |
.15 |
$ |
.39 |
$ |
.89 |
$ |
1.92 |
||||||||
Average common shares and equivalents outstanding: |
||||||||||||||||
Basic |
53,440 |
42,180 |
52,900 |
42,148 |
||||||||||||
Diluted |
59,391 |
53,326 |
59,444 |
53,315 |
||||||||||||
Dividends declared per common share: |
$ |
.005 |
$ |
.005 |
$ |
.015 |
$ |
.015 |
||||||||
Segment Information |
|||||||||||||||
Revenues from external customers (Unaudited) |
|||||||||||||||
Three months ended |
Nine months ended |
||||||||||||||
|
|
||||||||||||||
2013 |
2012 |
2013 |
2012 |
||||||||||||
Revenues from external customers |
|||||||||||||||
Agricultural |
$ |
273,301 |
$ |
246,578 |
$ |
907,797 |
$ |
831,376 |
|||||||
Earthmoving/construction |
168,964 |
103,135 |
586,806 |
318,244 |
|||||||||||
Consumer |
55,245 |
55,006 |
174,585 |
177,420 |
|||||||||||
$ |
497,510 |
$ |
404,719 |
$ |
1,669,188 |
$ |
1,327,040 |
|
|||||||
Consolidated Condensed Balance Sheets (Unaudited) |
|||||||
Amounts in thousands |
|||||||
|
|
||||||
Assets |
2013 |
2012 |
|||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
447,456 |
$ |
189,114 |
|||
Accounts receivable, net |
290,247 |
297,798 |
|||||
Inventories |
375,893 |
366,385 |
|||||
Deferred income taxes |
33,133 |
50,558 |
|||||
Prepaid and other current assets |
97,292 |
92,268 |
|||||
Total current assets |
1,244,021 |
996,123 |
|||||
Property, plant and equipment, net |
561,706 |
568,344 |
|||||
Goodwill |
22,534 |
24,941 |
|||||
Deferred income taxes |
7,241 |
8,383 |
|||||
Other assets |
112,259 |
112,444 |
|||||
Total assets |
$ |
1,947,761 |
$ |
1,710,235 |
|||
Liabilities and Equity |
|||||||
Current liabilities |
|||||||
Short-term debt |
$ |
104,884 |
$ |
145,801 |
|||
Accounts payable |
195,123 |
180,065 |
|||||
Other current liabilities |
153,476 |
141,214 |
|||||
Total current liabilities |
453,483 |
467,080 |
|||||
Long-term debt |
637,388 |
441,438 |
|||||
Deferred income taxes |
47,216 |
62,259 |
|||||
Other long-term liabilities |
98,632 |
107,096 |
|||||
Total liabilities |
1,236,719 |
1,077,873 |
|||||
Equity |
|||||||
Titan stockholders' equity |
|||||||
Common stock (no par, 120,000,000 shares authorized, 55,253,092 and 50,350,048 issued, respectively) |
— |
— |
|||||
Additional paid-in capital |
557,467 |
507,199 |
|||||
Retained earnings |
223,389 |
173,407 |
|||||
Treasury stock (at cost, 1,712,557 and 1,787,844 shares, respectively) |
(15,769) |
(16,445) |
|||||
Treasury stock reserved for deferred compensation |
(1,075) |
(1,075) |
|||||
Accumulated other comprehensive loss |
(75,640) |
(56,469) |
|||||
Total Titan stockholders' equity |
688,372 |
606,617 |
|||||
Noncontrolling interests |
22,670 |
25,745 |
|||||
Total equity |
711,042 |
632,362 |
|||||
Total liabilities and equity |
$ |
1,947,761 |
$ |
1,710,235 |
Supplemental Consolidated Statement of Income Information
Reconciliation of GAAP to Non-GAAP Financial Measures-Unaudited
Amounts in thousands except earnings per share data
The Company reports its financial results in accordance with generally accepted accounting principles in
The
The non-GAAP financial measure of adjusted net income assists investors with analyzing our business results as well as with predicting future performance. In addition, this non-GAAP financial measure is reviewed by management in order to evaluate the financial performance of each segment as well as the Company as a whole. We believe that the presentation of this non-GAAP financial measure will permit investors to assess the performance of the Company on the same basis as management.
As a result, one should not consider this measure in isolation or as a substitute for our results reported under GAAP. We compensate for these limitations by analyzing results on a GAAP basis as well as a non-GAAP basis, prominently disclosing GAAP results and providing reconciliations from GAAP results to non-GAAP results.
The table below provides a reconciliation of the non-GAAP financial measures with the most directly comparable GAAP financial measures for
Amounts in thousands except earnings per share data |
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
||||||||||||
2013 |
2012 |
2013 |
2012 |
||||||||||
Net income attributable to Titan |
|
|
|
|
|||||||||
Adjustments: |
|||||||||||||
|
- |
- |
139 |
- |
|||||||||
Europe VAT settlement ( |
- |
- |
1,306 |
- |
|||||||||
|
- |
- |
(22,451) |
- |
|||||||||
Italy DTA Valuation Allowance from change in deferred tax asset |
- |
- |
11,656 |
- |
|||||||||
Convertible debt conversion charge |
- |
- |
3,701 |
- |
|||||||||
Supply agreement termination income |
- |
- |
(17,248) |
||||||||||
Adoption of unrecognized tax benefit |
- |
2,360 |
- |
4,348 |
|||||||||
CEO incentive compensation |
- |
- |
- |
5,127 |
|||||||||
|
- |
2,790 |
- |
2,836 |
|||||||||
Adjusted Net Income |
|
|
|
|
|||||||||
Adjusted earnings per common share: |
|||||||||||||
Basic |
|
|
|
|
|||||||||
Diluted |
|
|
|
|
|||||||||
Average common shares outstanding: |
|||||||||||||
Basic |
53,440 |
42,180 |
52,900 |
42,148 |
|||||||||
Diluted |
59,391 |
53,326 |
59,444 |
53,315 |
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SOURCE
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