Titan International, Inc. (TWI) announces second quarter revenue and performance results.

QUINCY, Ill., July 29, 2015 /PRNewswire/ — Titan International, Inc. (TWI) announces second quarter revenue and performance results.

Second quarter highlights:

  • Sales for the second quarter of 2015 were $376.1 million, down 28.2 percent, compared to $523.7 million in the second quarter of 2014.

  • Gross profit for the second quarter of 2015 was $51.1 million, or 13.6 percent of net sales, compared to $20.8 million, or 4.0 percent of net sales for the second quarter of 2014.

  • Income from operations for the second quarter of 2015 was $7.5 million, or 2.0 percent of net sales, compared to a loss of $(29.5) million, or (5.6) percent of net sales, for the second quarter of 2014.

  • Adjusted net income for the second quarter was $1.0 million, compared to $1.7 million in the second quarter of 2014 (see Appendix attached).

  • Adjusted basic earnings per share for the second quarter 2015 and 2014 were $0.02 and $0.03 respectively, and adjusted fully diluted earnings per share were $0.02 and $0.03 respectively (see Appendix attached).

Statement of Chief Executive Officer:

CEO and Chairman, Maurice Taylor comments, "This past quarter, like the first, proves that what the management team has done in 2014 and thus far in 2015 is paying off. Titan's agriculture, mining, construction and consumer businesses are all down. Overall sales are off over 25 percent year over year, yet we have been able to improve our operating margin rate performance. Titan's liquidity remained stable during the quarter, with both cash and debt balances similar to Q1. This demonstrates we are on the right track.

"A significant challenge during the past several years has been trying to drive market adoption of the innovative LSW® solution. After creating 'pull' through with the big farmers, large contractors, and mining companies, we are establishing traction and gaining momentum with the OEMs. Titan is converting new customers every day to the LSW® technology. While our markets remain soft and our customers seek greater efficiencies, LSW® will become a more prominent solution of choice, as it improves every facet of equipment performance. Our LSW® Goodyear farm tire offering continues to expand as farmers discover its benefits: low soil compaction, fuel savings and reduced road lope/power hop.  We believe the LSW® tires can run with the lowest air pressure of any tire produced today. I personally plan to visit the large farms in South America later this year to demonstrate the value that the LSW® technology delivers. I'm excited to have the opportunity to meet with and sell directly to super farms, huge contractors and mining companies as this remains an integral part of our adoption strategy.

"We are in discussions with equipment dealers to offer a program by which traditional tires/wheels are exchanged for new LSW® technology. We believe this program will potentially drive customer loyalty and ultimately improve their bottom line. A movement is building whereby our end customers will purchase their equipment without tires/wheels, and acquire the LSW® technology separately, for the equipment enhancements and potential tax benefits.

"Titan has a number of positive initiatives coming on stream in the next six months. Titan will be producing top of the line ATV Goodyear® tires, new underground mining tires/wheels and new super single tires in conjunction with 3-piece wheels for ease of dismounting. We are exploring plans to expand our wheel plant in Turkey; and establish a new wheel presence in Brazil to accompany our existing tire business. Equipment is being shipped and construction has begun in the oil sands for Titan Tire Reclamation. We expect to be operating by April 1, 2016.

"As I've mentioned during the past few quarters, when things get tough, Titan keeps moving. Historically, Titan has successfully navigated through these difficult cycles. The new leadership team is maturing and gaining further 'seasoning' while managing through these difficult markets. I am confident this new management team will ultimately lead and drive this company to new heights."

Financial Summary:

Sales:  Net sales for the quarter ended June 30, 2015, were $376.1 million compared to $523.7 million in 2014, a decrease of 28 percent.  Overall sales experienced reductions in volume of 11 percent and price/mix of 7 percent as the agricultural market remains in a cyclical downturn.  Reduced farm incomes result in lower demand for new equipment, primarily high horsepower agricultural equipment.  In addition, competitive pressures and lower raw material prices, particularly in tire manufacturing, negatively impacted sales.  Unfavorable currency translation decreased sales by 10 percent.