Titan International Reports First Quarter 2019 Results

Titan International, Inc. logo. (PRNewsFoto/Titan International)


NEWS PROVIDED BY Titan International, Inc. 

 

QUINCY, Ill., May 3, 2019 /PRNewswire/ — Titan International, Inc. (NYSE: TWI), a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products, today reported results for the first quarter ended March 31, 2019.

Net sales for the first quarter of 2019 were $410.4 million, compared to net sales of $425.4 million for the first quarter of 2018, representing a $15 million decrease.  On a constant currency basis, net sales would have increased nearly $10 million. Net income applicable to common shareholders for the first quarter of 2019 was $1.2 million, equal to $0.02 per basic and diluted share, compared to income of $15.3 million, equal to $0.26 per basic and diluted share, in the first quarter of 2018.

"The first quarter of 2019 was certainly not the start to the year we had planned," commented Paul Reitz, President and Chief Executive Officer. "There were a number of factors that negatively influenced our sales and gross profit with a significant impact from currency headwinds, primarily in Europe and Brazil. Many companies have discussed the impact of the strong dollar, but for a company our size the impact was significant at $25 million on the sales line and approximately $2.5 million at the gross profit line as compared to last year. 

The overall Ag economy, driven by continued lower commodity prices and ongoing trade concerns have pushed U.S. farmer sentiment lower. This sentiment shift, coupled with a delayed planting season in the Midwest from adverse weather conditions, further impacted our original expectations for aftermarket demand during the quarter.  We still believe, like many others in the industry, that the Ag market has a strong level of pent-up demand as evidenced by aging fleets and large equipment sales remaining well below historical averages. We did experience better overall financial performance in March, which is encouraging heading into the second quarter and the remainder of the year.

Agricultural Segment

 

(Amounts in thousands)

Three months ended

 

March 31,

 

2019

 

2018

Net sales

$

191,730

 

 

$

194,166

 

Gross profit

22,125

 

 

29,961

 

Income from operations

13,928

 

 

21,321

 

Lower sales volumes contributed 2.5 percent of the decrease in agricultural net sales, while unfavorable currency translation, primarily in Latin America and Europe, further decreased net sales by 5.7 percent.  Favorable price/mix partially offset these decreases with a 7.0 percent positive impact on net sales. North American gross profit and margins were negatively affected by certain focused sales incentives that were implemented to drive aftermarket sales, with further negative short-term impacts from higher costs of inventory from production that occurred in the fourth quarter of 2018 when there were lower volume levels.  Unfavorable foreign currency translation and lower sales volumes in Russia, South America and Europe also drove the overall decrease in gross profit.