Titan International, Inc. Reports Year-over-Year Earnings Per Share Increase of $.73 for Third Quarter
QUINCY, Ill.--Oct. 2, 20048, 2004--Titan International, Inc. reported net sales of $116.5 million for the third quarter ended September 30, 2004, up 47 percent from $79.2 million pro forma (adjusted to reflect the sale of Titan Europe) for third quarter 2003. Net sales for third quarter 2003 including Titan Europe sales were $111.2 million. Net sales for the first nine months of 2004 were $404.7 million compared to $371.2 million in 2003.Income from operations for the quarter was $9.9 million, up significantly from a loss of $(5.1) million for third quarter 2003. Year-to-date income from operations for 2004 was $34.3 million compared to a loss of $(12.4) million for the same time period last year. Titan recorded net income of $1.5 million for the quarter and $12.4 million year-to-date for 2004, compared to a net loss of $(13.4) million and $(27.4) million in 2003, respectively. Diluted earnings per share were $.09 for the quarter and $.65 year-to-date 2004, versus loss per share of $(.64) for the quarter and $(1.31) year-to-date in the previous year.
On July 23, 2004, Titan completed a new $100 million revolving credit facility, replacing the company's prior revolving loan agreement and term loan. On July 26, 2004, Titan sold $115 million of 5.25% senior unsecured convertible notes due 2009. These notes are convertible into shares of TWI stock at any time on or before maturity at a conversion price of $13.50 per common share. The proceeds from the convertible notes and revolving loan agreement were used to redeem the $136.8 million outstanding principal of Titan's 8.75% senior subordinated notes. Titan recorded expenses of $3.7 million in the third quarter of 2004 in connection with the termination of the prior revolving loan agreement and term loan, and the redemption of all of the 8.75% senior subordinated notes. These expenses related to unamortized deferred financing, redemption premium and prepayment penalties.
"Clearly we are pleased with the great strides Titan has made since third quarter last year, especially considering Titan Europe Plc's sales are no longer consolidated with those of Titan International. Titan's commitment to product innovation, manufacturing efficiencies and focused sales has led to a healthy profit for the third quarter, which is typically impacted by seasonal equipment manufacturer shutdowns," stated Maurice Taylor Jr., Titan president and CEO. "Many of our customers are still forecasting sales growth through 2005, and Titan is ready to meet the wheel and tire needs of the agricultural, construction and consumer industries. The refinancing of the company's debt allowed us to secure extended terms through 2009, ensuring the continued financial strength of Titan."
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 28, 2004.
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, 2003.
Titan International, Inc., a holding company, owns subsidiaries that supply wheels, tires and assemblies for off-highway equipment used in agricultural, earthmoving/construction, and consumer (i.e. all terrain vehicles and trailers) applications.
Titan International, Inc.
Consolidated Statements of Operations (Unaudited)
For the three and nine months ended September 30, 2004 and 2003
Amounts in thousands except earnings per share data.
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales $116,487 $111,218 $404,651 $371,203
Cost of sales 98,686 105,921 338,241 349,440
--------- --------- --------- ---------
Gross profit 17,801 5,297 66,410 21,763
Selling, general &
administrative expenses 7,613 9,751 27,585 32,108
Research & development expenses 323 638 1,530 2,022
Goodwill impairment on Titan
Europe 0 0 2,988 0
--------- --------- --------- ---------
Income (loss) from operations 9,865 (5,092) 34,307 (12,367)
Interest expense (3,833) (5,088) (13,598) (15,101)
Debt termination expense (3,654) 0 (3,654) 0
Equity investment (loss) income (367) 0 421 0
Loss on investment 0 (2,707) 0 (2,707)
Other income 105 245 239 2,728
--------- --------- --------- ---------
Income (loss) before income
taxes 2,116 (12,642) 17,715 (27,447)
Provision for income taxes 635 740 5,315 0
--------- --------- --------- ---------
Net income (loss) $1,481 $(13,382) $12,400 $(27,447)
========= ========= ========= =========
Income (loss) per common share:
Basic $.09 $(.64) $.68 $(1.31)
Diluted .09 (.64) .65 (1.31)
Average common shares
outstanding:
Basic 16,324 21,060 18,293 20,922
Diluted 16,426 21,060 20,429 20,922
Segment Information
Revenues from external customers (Unaudited)
Amounts in thousands
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
--------- --------- --------- ---------
Agricultural $70,451 $62,921 $253,583 $216,870
Earthmoving/Construction 37,495 40,776 124,546 126,958
Consumer 8,541 7,521 26,522 27,375
--------- --------- --------- ---------
Total $116,487 $111,218 $404,651 $371,203
Consolidated Condensed Balance Sheets (Unaudited)
Amounts in thousands
Sept. 30, Dec. 31,
2004 2003
----------- ----------
Assets
Current assets:
Cash & cash equivalents $3,291 $6,556
Accounts receivable 68,417 83,975
Inventories 74,484 112,496
Assets held for sale 37,003 37,775
Deferred income taxes 20,343 20,343
Other current assets 17,592 25,801
----------- ----------
Total current assets 221,130 286,946
Property, plant & equipment, net 77,075 138,482
Restricted cash on deposit 26,430 51,039
Investment in affiliate 27,418 0
Other noncurrent assets 20,928 27,794
Goodwill, net 11,702 18,823
----------- ----------
Total assets $384,683 $523,084
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Liabilities & stockholders' equity
Current liabilities:
Short-term debt (including current portion
of long-term debt) $233 $21,161
Accounts payable 33,458 51,931
Other current liabilities 23,214 29,883
----------- ----------
Total current liabilities 56,905 102,975
Deferred income taxes 22,796 22,796
Other long-term liabilities 28,726 36,960
Long-term debt 174,329 248,397
Stockholders' equity 101,927 111,956
----------- ----------
Total liabilities & stockholders' equity $384,683 $523,084
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