Titan International, Inc. Reports Improvement in Third Quarter 2003 Financial Results
QUINCY, Ill.--Oct. 3, 20031, 2003--Titan International, Inc. reported net sales of $111.2 million for the third quarter and $371.2 million for the nine months ended September 30, 2003, up 6.2 percent from $104.7 million for third quarter and up 4.8 percent from $354.2 million for the first nine months of 2002. Titan recorded a loss before income taxes of $(12.6) million for the quarter and $(27.4) million year-to-date for 2003, compared to $(21.9) million and $(25.2) million in 2002. Diluted loss per share was $(.64) for the quarter and $(1.31) year-to-date, versus $(.85) for the quarter and $(.97) year-to-date in the previous year.Third quarter financial results showed significant improvement when compared to the same quarter in the previous year. The negative impact of higher raw material prices and increased employee benefit, insurance and other costs continued during this year's third quarter, amounting to approximately $2.1 million more than in the third quarter of 2002. To combat the current global economic uncertainty, Titan is progressing with the consolidation of all tire manufacturing into its principal tire facility located in Des Moines, Iowa. Costs of approximately $1.7 million related to the consolidation were incurred in the third quarter of 2003. The Brownsville, Texas, location continues as a distribution and warehouse center for Titan, with production suspended until market demand requires additional capacity.
"Although the bottom line reflects the traditionally weaker third quarter, the operating results do show that Titan is moving in the right direction," stated Maurice Taylor Jr., Titan president and CEO. "The seasonal shutdowns of equipment manufacturers combined with the European holiday downtime during the month of August always negatively impact Titan's third quarter numbers. Our cost-cutting measures and improvements in manufacturing efficiency, combined with a strengthening agricultural and construction economy, should result in a stronger position for the company in 2004."
On September 12, 2003, Titan was notified by the New York Stock Exchange that the listing requirement regarding minimum share price had been met and, therefore, Titan is in good standing.
For additional financial 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 (SEC) on October 31, 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 Securities and Exchange Commission, 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, 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 nine months ended September 30, 2003 and 2002
Amounts in thousands except earnings per share data.
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
--------------------------------------
Net sales $111,218 $104,660 $371,203 $354,213
Cost of sales 105,921 101,634 349,440 324,164
------- ------- ------- -------
Gross profit 5,297 3,026 21,763 30,049
Selling, general & administrative
expenses 9,751 10,047 32,108 30,358
Research & development expenses 638 790 2,022 2,440
--- --- ----- -----
Loss from operations (5,092) (7,811) (12,367) (2,749)
Interest expense (5,088) (5,211) (15,101) (15,591)
Loss on investment (2,707) (9,594) (2,707) (9,594)
Other income 245 744 2,728 2,752
--- --- ----- -----
Loss before income taxes (12,642) (21,872) (27,447) (25,182)
Provision (benefit) for income
taxes 740 (4,208) 0 (5,036)
--- -------- - -------
Net loss $(13,382) $(17,664) $(27,447) $(20,146)
======== ======== ======== ========
Loss per common share:
Basic $(.64) $(.85) $(1.31) $(.97)
Diluted (.64) (.85) (1.31) (.97)
Average common shares outstanding:
Basic 21,060 20,816 20,922 20,771
Diluted 21,060 20,816 20,922 20,771
Segment Information
Revenues from external customers (Unaudited)
Amounts in thousands
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
--------------------------------------
Agricultural $62,921 $61,523 $216,870 212,025
Earthmoving/Construction 40,776 33,888 126,958 110,304
Consumer 7,521 9,249 27,375 31,884
----- ----- ------ ------
Total $111,218 $104,660 $371,203 $354,213
Consolidated Condensed Balance Sheets (Unaudited)
Amounts in thousands
Sept. 30, Dec. 31,
2003 2002
----------------------------
Assets
Current assets:
Cash & cash equivalents $11,557 $22,049
Accounts receivable 83,579 82,588
Inventories 103,085 109,142
Other current assets 33,544 40,790
------ ------
Total current assets 231,765 254,569
Property, plant & equipment, net 176,149 186,540
Restricted cash on deposit 51,303 26,803
Other noncurrent assets 57,315 64,087
-------- ------
Total assets $516,532 $531,999
Liabilities & stockholders' equity
Current liabilities:
Short-term debt (including
current portion of long-term
debt) $15,155 $10,615
Accounts payable 47,813 49,007
Other current liabilities 29,850 24,684
------ ------
Total current liabilities 92,818 84,306
Other long-term liabilities 51,928 54,547
Long-term debt 251,185 249,119
Stockholders' equity 120,601 144,027
------- -------
Total liabilities & stockholders'
equity $516,532 $531,999