Titan International Reports 2002 Year-End Financial Results
QUINCY, Ill., Feb. 28 -- Titan International, Inc.'s financial results for 2002 show some progress in the company's quest to rebound. Titan recorded net sales of $108.6 million for the fourth quarter and $462.8 million for the year ended December 31, 2002, compared to $100.6 million for the fourth quarter and $457.5 million for the year 2001. Operating results continued to improve year over year, with a loss of $(11.3) million for the quarter and $(14.1) million for the year, compared to a loss of $(24.7) million for the quarter and $(33.5) million for 2001.
Net loss was $(15.7) million for the quarter and $(35.9) million for the year, in comparison with a fourth quarter 2001 net loss of $(21.5) million and $(34.8) million for all of 2001. The 2002 year-end figure includes two investment losses: a $9.6 million reserve recorded in third quarter related to Titan's investment in Fabrica Uruguaya de Neumaticos S.A. (FUNSA) located in Uruguay; and a $2.8 million reserve in fourth quarter related to AII Holding, Inc., a specialist in automated welding technology equipment located in Danville, Illinois. Titan's benefit provision for income taxes was reduced to 19 percent in 2002 versus 25 percent in 2001, causing the year-end bottom-line number to reflect a greater loss in 2002 than in 2001. Diluted loss per share was $(.76) for the quarter and $(1.73) for the year 2002 versus $(1.04) and $(1.68) for 2001.
"With a 58 percent improvement in annual operating results, Titan's workforce should be commended for their on-going efforts," stated Maurice Taylor Jr., Titan president and CEO. "Although Titan's stock has been battered lately, this is not an accurate reflection of the determination and practical strategies being undertaken to return Titan to profitability. Efforts to cut manufacturing costs will persist and product prices must increase to offset rising insurance costs. Titan's fourth quarter sales growth should continue into 2003. I personally have seen the enthusiasm of equipment dealers joining our program to offer Titan wheel and tire assemblies and increase their revenue. The quality and innovation of our products will generate customer loyalty."
For additional financial information and Management's Discussion and Analysis of Financial Condition and Results of Operations, see the Company's 2002 Form 10-K filed with the Securities and Exchange Commission (SEC) on February 28, 2003.
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 SEC, including the annual report on Form 10-K for the year ended December 31, 2002.
Titan is a global supplier of mounted wheel and tire systems for off-highway equipment used in agriculture, earthmoving/construction, military and consumer applications (i.e. all terrain vehicles and trailers). Titan has manufacturing and distribution facilities worldwide.
Titan International, Inc.
Consolidated Statements of Operations (Unaudited)
For the three and twelve months ended December 31, 2002 and 2001
Amounts in thousands except earnings per share data.
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
Net sales $108,607 $100,560 $462,820 $457,475
Cost of sales 108,915 107,061 433,079 438,811
Gross (loss) profit (308) (6,501) 29,741 18,664
Selling, general &
administrative expenses 9,960 17,416 40,318 49,040
Research & development
expenses 1,069 770 3,509 3,089
Loss from operations (11,337) (24,687) (14,086) (33,465)
Interest expense 4,974 4,951 20,565 20,919
Loss on investment 2,782 0 12,376 0
Gain on sale of assets 0 0 0 (1,619)
Gain on early
retirement of debt (A) 0 0 0 (4,356)
Other expense (income) 18 175 (2,734) (2,023)
Loss before
income taxes (19,111) (29,813) (44,293) (46,386)
Benefit for
income taxes (3,380) (8,282) (8,416) (11,597)
Net loss $(15,731) $(21,531) $(35,877) $(34,789)
Loss per common share:
Basic $(.76) $(1.04) $(1.73) $(1.68)
Diluted (.76) (1.04) (1.73) (1.68)
Average common shares
outstanding:
Basic 20,833 20,690 20,791 20,656
Diluted 20,833 20,690 20,791 20,656
Note A: Due to the early adoption of Statement of Financial Accounting
Standards (SFAS) No. 145, the gain on early retirement of debt has been
reclassified from an extraordinary item. Under the new SFAS No. 145,
early retirement of debt is no longer considered an extraordinary item to
the Company.
Titan International, Inc.
Revenues from External Customers by Segment (Unaudited)
Amounts in thousands
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
Agricultural $66,241 $57,820 $278,266 $256,140
Earthmoving/
Construction 34,421 33,719 144,725 156,033
Consumer 7,945 9,021 39,829 45,302
Total $108,607 $100,560 $462,820 $457,475
Consolidated Condensed Balance Sheets (Unaudited)
Amounts in thousands
Dec. 31, Dec. 31,
2002 2001
Assets
Current assets:
Cash & cash equivalents $22,049 $9,214
Accounts receivable 82,588 78,144
Inventories 109,142 116,801
Other current assets 40,790 58,564
Total current assets 254,569 262,723
Property & equipment, net 186,540 205,047
Other noncurrent assets 90,890 101,184
Total assets $531,999 $568,954
Liabilities & stockholders' equity
Current liabilities:
Short-term debt (including current
portion of long-term debt) $10,615 $4,304
Accounts payable 49,007 54,658
Other current liabilities 24,684 23,077
Total current liabilities 84,306 82,039
Other long-term liabilities 54,547 44,386
Long-term debt 249,119 256,622
Stockholders' equity (including
accumulated other comprehensive loss
of $24,973 and $18,753, respectively) 144,027 185,907
Total liabilities &
stockholders' equity $531,999 $568,954