Titan Reports Second Quarter Earnings
19 July 2000
Titan Reports Second Quarter Earnings
QUINCY, Ill. - Titan International, Inc. has announced net sales of $145.6
million for the second quarter ended June 30, 2000, compared to $159.0 million
for the second quarter of 1999. Net sales decreased primarily due to the sale
of certain assets to Carlisle Tire and Wheel Company, a subsidiary of Carlisle
Companies Incorporated. Year to date net sales were $309.9 million compared to
$317.7 million for the first half of 1999.
The second quarter 2000 results include a gain of $38.7 million
($24.0 million after taxes) related to the sale of certain assets to Carlisle
Tire and Wheel Company. Net income for the second quarter was $18.9 million,
compared to $0.3 million for the second quarter of 1999. Net income for the
six months ended June 30, 2000, was $19.9 million compared to $0.4 million for
the first six months of 1999. Diluted earnings per share for the second
quarter of 2000 were $.91 versus $.01 for the same quarter of the previous
year. Diluted earnings per share year to date for 2000 were $.96 compared to
$.02 for the same period of 1999.
In April 2000, Titan announced the sale of certain assets of its
facilities in Clinton, Tennessee, and Slinger, Wisconsin, and the leasing of
the Greenwood, South Carolina, facility to Carlisle. With this transaction,
Titan has exited the original equipment manufacturer (OEM) business for lawn
and garden equipment and all terrain vehicles (ATVs), focusing instead on the
aftermarket.
"Titan has made the decision to market our LSW technology through
equipment dealers, allowing customers to witness the added performance, safety
and productivity benefits of using LSW assemblies", stated Maurice Taylor Jr.,
Titan president and CEO. "Titan's national sales force has been actively
introducing this program during the second quarter and gaining the hands-on
knowledge that will allow Titan to further enhance our wheels and tires for
ultimate equipment performance. We expect an increase in aftermarket demand
and higher margins in the original equipment market to result. Given this
strategy, the decision to no longer pursue the OEM business for ATVs and lawn
and garden equipment was a matter of practicality."
"With the sale of these product lines and assets and on-going cost
reduction, Titan reduced its total debt from $303.7 million to approximately
$219 million and had a cash balance of approximately $25 million at the end of
the second quarter. At June 30, 2000, Titan had a balance owed of $45 million
on its $175 million credit facility. The company's book value increased to
nearly $12 per share. This financial strength will accelerate Titan's
aftermarket expansion. Overall, business is stronger than expected with the
wheel facilities operating at increased volumes and the tire facilities
showing monthly production increases. Our innovative products and new
workforces will enable Titan to move beyond the difficulties of the past two
and a half years to become a powerful force in agricultural and construction
wheel and tire assemblies."
LSW wheel and tire assemblies are currently available for skid steer
loaders, telescopic material handlers, and aerial lifts. Assemblies for back
hoe loaders, farm tractors and implements are being tested and loader tires
are expected to be ready to test this fall.
Titan is a global supplier of mounted wheel and tire systems for
off-highway equipment used in agriculture, construction, mining, military, and
recreation. Titan has manufacturing and distribution facilities worldwide.
Titan International, Inc.
Consolidated Statements of Operations (Unaudited)
For the three and six months ended June 30, 2000 and 1999
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Net sales $145,576 $159,045 $309,903 $317,655
Cost of sales 135,142 137,203 278,573 275,198
Gross profit 10,434 21,842 31,330 42,457
Selling, general &
administrative 11,859 13,510 23,145 26,952
Research & development 1,247 1,656 2,797 3,253
Income (loss) from
operations (2,672) 6,676 5,388 12,252
Interest expense 5,628 6,074 12,191 11,624
Gain on sale (38,727) 0 (38,727) 0
Other expense (income) (16) 175 (232) (6)
Income before taxes 30,443 427 32,156 634
Provision for
income taxes 11,568 162 12,219 241
Net income $18,875 $265 $19,937 $393
Earnings per common share:
Basic $.91 $.01 $.96 $.02
Diluted .91 .01 .96 .02
Average common shares and
equivalents outstanding:
Basic 20,694 20,807 20,680 20,859
Diluted 20,694 20,807 20,680 20,859
Amounts in thousands except earnings per share data.