Titan Machinery Inc. Announces Fiscal Third Quarter Ended October 31, 2012 Results

  Titan Machinery Inc. Announces Fiscal Third Quarter Ended October 31, 2012
  Results

            -Third Quarter Revenue Increased 38% to $582 Million-

  -Pre-Tax Income Increased 11% to $23.8 Million and Earnings Per Share was
                                    $0.66-

  -Company Raises Annual Revenue and Reiterates Earnings Per Share Guidance-

  -Company Continues Domestic Acquisition Strategy and Expands International
                            Distribution Network-

Business Wire

WEST FARGO, N.D. -- December 06, 2012

Titan Machinery Inc. (Nasdaq: TITN), a leading network of full-service
agricultural and construction equipment stores, today reported financial
results for the fiscal third quarter and first nine months ended October 31,
2012.

Fiscal 2013 Third Quarter Results

For the third quarter of fiscal 2013, revenue increased 37.6% to $582.1
million from revenue of $423.0 million in the third quarter last year. All
four of the Company’s revenue sources—equipment, parts, service, and rental
and other—contributed to this period-over-period revenue growth. Equipment
sales were $456.2 million for the third quarter of fiscal 2013, compared to
$312.3 million in the third quarter last year. Parts sales were $72.1 million
for the third quarter of fiscal 2013, compared to $64.5 million in the third
quarter last year. Revenue generated from service was $33.4 million for the
third quarter of fiscal 2013, compared to $29.8 million in the third quarter
last year. Revenue from rental and other increased to $20.5 million from $16.3
million in the third quarter last year.

Gross profit for the third quarter of fiscal 2013 was $94.1 million, compared
to $74.0 million in the third quarter last year. The Company’s gross profit
margin was 16.2% in the third quarter of fiscal 2013, compared to 17.5% in the
third quarter last year. The decrease in gross profit margin was primarily due
to the change in sales mix, in which the higher margin parts and service
businesses generated a smaller percentage of sales compared to the same
quarter last year.

Operating expenses were 11.0% of revenue or $64.0 million for the third
quarter of fiscal 2013, compared to 11.8% of revenue or $50.1 million for the
third quarter of last year.

Floorplan interest expense increased to $3.7 million for the third quarter of
2013 compared to $2.6 million for the same period last year due to increased
levels of interest-bearing equipment inventory. Other interest expense
increased to $2.9 million for the third quarter of fiscal 2013 compared to
$0.3 million for the same period last year due to the Company’s April 2012
convertible debt offering.

Pre-tax income for the third quarter of fiscal 2013 was $23.8 million,
compared to $21.3 million in the third quarter last year. Pre-tax margin was
4.1% for the third quarter of fiscal 2013, compared to 5.0% in the third
quarter last year. Pre-tax Agriculture segment income was $26.1 million for
the third quarter of fiscal 2013, compared to $20.1 million in the third
quarter last year. Pre-tax Construction segment income was $0.5 million for
the third quarter of fiscal 2013, compared to $3.3 million in the third
quarter last year.

Net income attributable to common stockholders for the third quarter of fiscal
2013 was $13.9 million, compared to $12.7 million in the third quarter last
year. Earnings per diluted share for the third quarter of fiscal 2013 were
$0.66 compared to $0.61 per diluted share in the third quarter last year.

Fiscal 2013 First Nine Months Results

For the nine months ended October 31, 2012, revenue increased 34.4% to $1.41
billion from $1.05 billion for the same period last year. Gross margin for the
first nine months of fiscal 2013 was 16.6%, compared to 17.4% in the same
period last year. Pre-tax income for the first nine months of fiscal 2013 was
$44.9 million for a pre-tax margin of 3.2%, compared to $43.9 million, or a
pre-tax margin of 4.2%, for the same period last year. Net income attributable
to common stockholders for the first nine months of fiscal 2013 was $26.6
million, or $1.27 per diluted share, compared to $26.1 million, or $1.31 per
diluted share, for the same period last year. The nine-month weighted average
diluted common shares outstanding for the first nine months of fiscal 2013 was
21.0 million, compared to 19.9 million weighted average diluted common shares
outstanding in the same period last year.

Balance Sheet

The Company ended the third quarter of fiscal 2013 with cash and cash
equivalents of $115.7 million. The Company’s inventory level was $1.05 billion
as of October 31, 2012, compared to $748.0 million at the end of fiscal 2012.
This inventory level primarily reflected an increase in new equipment, which
increased to $726.9 million at October 31, 2012 from $445.5 million at January
31, 2012, while used equipment decreased slightly to $218.4 million at October
31, 2012 from $219.8 million at January 31, 2012. The Company expects its new
equipment inventory will decrease, excluding acquisitions, during the fourth
quarter of fiscal 2013. The Company will continue to manage used equipment
levels and valuations regularly but due to seasonally higher new equipment
demand in the fourth quarter of the year, the Company anticipates the used
equipment inventory level to increase by the end of fiscal 2013. The Company
had available $188.9 million of its $925.0 million total discretionary
floorplan lines of credit as of October 31, 2012.

Acquisitions & New Store Openings

In fiscal 2013 to date, the Company completed seven acquisitions, consisting
of six agriculture equipment dealership locations in the United States, five
construction equipment dealership locations in the United States, one
independent rental yard location in the United States, and seven agriculture
equipment dealership locations in Europe. The Company also opened a new
construction dealership in Windsor, Colorado and three new agriculture
dealership locations in Romania. In addition, the Company contracted with CNH
to distribute Case Construction equipment in Romania and Bulgaria and to
distribute CaseIH Agricultural products in Ukraine.

Management Comments

David Meyer, Titan Machinery’s Chairman and Chief Executive Officer, stated,
“In the third quarter, we generated solid top and bottom line growth and ended
the quarter with a strong balance sheet. Our Agriculture segment continued to
maintain strong sales activity, despite the impact of drought conditions on
customer sentiment, and we also successfully managed our margins, leveraged
expenses and improved our Agriculture pre-tax income by 30% compared to the
prior year quarter. Our Construction business also experienced solid top line
growth, but increased equipment inventory levels across this industry as well
as our recent strategic acquisitions in large metro areas have pressured the
bottom line results of this segment. Based on our year-to-date results and
outlook for the final quarter of the year, we are raising our annual revenue
range and reiterating our earnings per share outlook.”

Mr. Meyer continued, “As we enter the fourth quarter we expect our inventory
management strategy will reduce new equipment inventory levels by the end of
fiscal 2013. In addition, we expect to improve the construction segment of our
business which will enable us to generate stronger operating results in the
fourth quarter. We have executed on our organic and acquired growth strategy
with strategic acquisitions, both in the United States and internationally. We
recently expanded our domestic footprint into Arizona with the acquisition of
Falcon Power. We are excited about our growing dealership network and are
confident that our new locations will contribute to our future top and bottom
line growth.”

Fiscal 2013 Outlook

The Company evaluates its financial performance based on its customers' annual
production cycles as opposed to a quarterly basis, due to weather fluctuations
and the seasonal nature of each customer's business. The Company is raising
its previous revenue guidance and expects its revenue for the full year ending
January 31, 2013 to be in the range of $2.0 billion to $2.15 billion from the
previous range of $1.95 billion to $2.1 billion. Net income attributable to
common stockholders is expected to be in the range of $44.1 million to $48.3
million. Earnings per diluted share is expected to be in the range of $2.10 to
$2.30 based on estimated weighted average diluted common shares outstanding of
21.0 million. For comparative purposes, the Company generated revenue of $1.66
billion in fiscal year 2012 and net income attributable to common stockholders
for fiscal 2012 was $43.8 million, or $2.18 per diluted share, based on
weighted average diluted common shares outstanding of 20.1 million.

Conference Call and Presentation Information

The Company will host a conference call and audio webcast today at 7:30 a.m.
Central time (8:30 a.m. Eastern time). A copy of the presentation that will
accompany the prepared remarks from the conference call is available on the
Company’s website under Investor Relations at www.titanmachinery.com. An
archive of the audio webcast will be available on the Company’s website under
Investor Relations at www.titanmachinery.com 30 days following the audio
webcast.

Investors interested in participating in the live call can dial (888) 417-8516
from the U.S. International callers can dial (719) 325-2484. A telephone
replay will be available approximately two hours after the call concludes and
will be available through Thursday, December 20, 2012, by dialing (877)
870-5176 from the U.S., or (858) 384-5517 from international locations, and
entering confirmation code 7983584.

About Titan Machinery Inc.

Titan Machinery Inc., founded in 1980 and headquartered in West Fargo, North
Dakota, is a multi-unit business with mature locations and newly-acquired
locations. The Company owns and operates a network of full-service
agricultural and construction equipment stores in the United States and
Europe. The Titan Machinery network consists of 104 North American dealerships
in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming,
Wisconsin, Colorado, and Arizona, including two outlet stores, and 12 European
dealerships in Romania and Bulgaria. The Titan Machinery dealerships represent
one or more of the CNH Brands (NYSE: CNH), a majority-owned subsidiary of Fiat
Industrial (Milan: FI.MI), including CaseIH, New Holland Agriculture, Case
Construction, New Holland Construction, Kobelco and CNH Capital. Additional
information about Titan Machinery Inc. can be found at www.titanmachinery.com.

Forward Looking Statements

Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements made herein, which include statements regarding new and used
equipment inventory levels, additional growth and domestic and international
acquisition opportunities and the Company’s ability to capitalize on such
opportunities, growth and profitability expectations, and the expected results
of operations for the fiscal year ending January 31, 2013 and the components
of such expected results of operations, involve known and unknown risks and
uncertainties that may cause Titan Machinery’s actual results in current or
future periods to differ materially from forecasted results. The Company’s
risks and uncertainties include, among other things, a substantial dependence
on a single distributor, the continued availability of organic growth and
acquisition opportunities, potential difficulties integrating acquired stores,
industry supply levels, fluctuating agriculture and construction industry
economic conditions, the success of recently implemented initiatives within
the Company’s Construction segment, the uncertainty and fluctuating conditions
in the capital and credit markets, difficulties in conducting international
operations, governmental agriculture policies, seasonal fluctuations, climate
conditions, disruption in receiving ample inventory financing, and increased
competition in the geographic areas served. These and other risks are more
fully described in Titan Machinery’s filings with the Securities and Exchange
Commission, including the Company’s most recently filed Annual Report on Form
10-K. Titan Machinery conducts its business in a highly competitive and
rapidly changing environment. Accordingly, new risk factors may arise. It is
not possible for management to predict all such risk factors, nor to assess
the impact of all such risk factors on Titan Machinery’s business or the
extent to which any individual risk factor, or combination of factors, may
cause results to differ materially from those contained in any forward-looking
statement. Titan Machinery disclaims any obligation to update such factors or
to publicly announce results of revisions to any of the forward-looking
statements contained herein to reflect future events or developments.

                                                            
                                                                 
TITAN MACHINERY INC.
Consolidated Balance Sheets
(in thousands, except per share data)
                                                                 
                                               October 31,       January 31,
                                               2012              2012
ASSETS                                         (Unaudited)
                                                                 
CURRENT ASSETS
Cash and cash equivalents                      $ 115,668         $ 79,842
Receivables, net                                 96,568            82,518
Inventories                                      1,048,004         748,047
Prepaid expenses and other                       4,225             2,108
Income taxes receivable                          -                 3,140
Deferred income taxes                           5,182           5,370     
Total current assets                            1,269,647       921,025   
                                                                 
INTANGIBLES AND OTHER ASSETS
Noncurrent parts inventories                     3,480             2,792
Goodwill                                         29,547            24,404
Intangible assets, net of accumulated            12,477            10,793
amortization
Other                                           7,641           2,776     
Total intangibles and other assets              53,145          40,765    
                                                                 
PROPERTY AND EQUIPMENT, net of accumulated      185,656         126,282   
depreciation
                                                                 
TOTAL ASSETS                                   $ 1,508,448      $ 1,088,072 
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                 
CURRENT LIABILITIES
Accounts payable                               $ 34,597          $ 28,424
Floorplan notes payable                          782,357           552,428
Current maturities of long-term debt             10,123            4,755
Customer deposits                                25,063            49,540
Accrued expenses                                 32,527            26,735
Income taxes payable                            5,023           -         
Total current liabilities                       889,690         661,882   
                                                                 
LONG-TERM LIABILITIES
Senior convertible notes                         124,887           -
Long-term debt, less current maturities          69,345            57,405
Deferred income taxes                            38,656            28,592
Other long-term liabilities                     1,870           2,854     
Total long-term liabilities                     234,758         88,851    
                                                                 
STOCKHOLDERS' EQUITY
Common stock, par value $.00001 per share;
authorized - 45,000
shares, issued and outstanding - 21,047 at
October 31, 2012 and authorized
- 25,000 shares, issued and outstanding -        -                 -
20,911 at January 31, 2012
Additional paid-in-capital                       235,892           218,156
Retained earnings                                145,118           118,251
Accumulated other comprehensive loss            (631      )      (70       )
Total Titan Machinery Inc. stockholders'         380,379           336,337
equity
Noncontrolling interest                         3,621           1,002     
Total stockholders' equity                      384,000         337,339   
                                                                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $ 1,508,448      $ 1,088,072 
                                                                             
                                                                             

                                                           
                                                                   
TITAN MACHINERY INC.
Consolidated Statements of Operations
(in thousands, except per share data)
                                                                   
                                                                   
                   Three Months Ended              Nine Months Ended October 31,
                   October 31,
                   2012          2011              2012            2011
                   (Unaudited)   (Unaudited)       (Unaudited)     (Unaudited)
REVENUE
Equipment          $ 456,168     $ 312,304         $ 1,084,866     $ 786,816
Parts                72,101        64,468            188,840         155,670
Service              33,365        29,843            93,583          76,202
Rental and          20,478      16,345          46,617        33,286    
other
TOTAL REVENUE       582,112     422,960         1,413,906     1,051,974 
                                                                   
COST OF
REVENUE
Equipment            414,028       283,690           985,397         711,421
Parts                49,266        44,389            130,276         108,535
Service              11,611        10,304            32,448          27,175
Rental and          13,148      10,580          30,953        22,192    
other
TOTAL COST OF       488,053     348,963         1,179,074     869,323   
REVENUE
                                                                   
GROSS PROFIT         94,059        73,997            234,832         182,651
                                                                   
OPERATING           63,950      50,060          175,313       133,556   
EXPENSES
                                                                   
INCOME FROM          30,109        23,937            59,519          49,095
OPERATIONS
                                                                   
OTHER INCOME
(EXPENSE)
Interest and         258           307               865             859
other income
Floorplan
interest             (3,704  )     (2,625  )         (9,022    )     (5,121    )
expense
Other interest      (2,886  )    (283    )        (6,453    )    (899      )
expense
                                                                   
INCOME BEFORE        23,777        21,336            44,909          43,934
INCOME TAXES
                                                                   
PROVISION FOR       (9,418  )    (8,536  )        (17,786   )    (17,575   )
INCOME TAXES
                                                                   
NET INCOME
INCLUDING
NONCONTROLLING       14,359        12,800            27,123          26,359
INTEREST
                                                                   
LESS: NET
INCOME
ATTRIBUTABLE
TO
NONCONTROLLING       298           -                 256             -
INTEREST
                                                                   
NET INCOME
ATTRIBUTABLE
TO
TITAN              $ 14,061     $ 12,800         $ 26,867       $ 26,359    
MACHINERY INC.
                                                                   
NET INCOME
ALLOCATED TO
PARTICIPATING        (150    )     (113    )         (270      )     (238      )
SECURITIES
                                                                   
NET INCOME
ATTRIBUTABLE
TO
COMMON             $ 13,911     $ 12,687         $ 26,597       $ 26,121    
STOCKHOLDERS
                                                                   
EARNINGS PER
SHARE -            $ 0.66       $ 0.61           $ 1.27         $ 1.31      
DILUTED
WEIGHTED
AVERAGE COMMON      20,988      20,890          20,982        19,903    
SHARES -
DILUTED
                                                                               
                                                                               

                                                                                      
                                                                                                   
TITAN MACHINERY INC.
Segment Results
(in thousands)
                                                                                                   
                 Three Months Ended October 31,                Nine Months Ended October 31,
                 2012            2011            % Change      2012              2011              % Change
                 (Unaudited)     (Unaudited)                   (Unaudited)       (Unaudited)
Revenue
Agriculture      $ 503,518       $ 361,601       39.2   %      $ 1,200,148       $ 914,932         31.2   %
Construction      94,852        77,435       22.5   %       271,728         181,395        49.8   %
Segment            598,370         439,036       36.3   %        1,471,876         1,096,327       34.3   %
revenue
Eliminations      (16,258 )      (16,076 )     (1.1   %)      (57,970   )      (44,353   )     (30.7  %)
Total            $ 582,112      $ 422,960      37.6   %      $ 1,413,906      $ 1,051,974      34.4   %
                                                                                                   
Income
Before
Income Taxes
Agriculture      $ 26,060        $ 20,068        29.9   %      $ 50,971          $ 43,964          15.9   %
Construction      519           3,254        (84.1  %)      767             4,482          (82.9  %)
Segment
income             26,579          23,322        14.0   %        51,738            48,446          6.8    %
before
income taxes
Shared             (2,340  )       (1,772  )     (32.1  %)       (4,843    )       (3,786    )     (27.9  %)
Resources
Eliminations      (462    )      (214    )     (115.9 %)      (1,986    )      (726      )     (173.6 %)
Total            $ 23,777       $ 21,336       11.4   %      $ 44,909         $ 43,934         2.2    %
                                                                                                   
                                                                                                   
Note: The Company reports its revenue and income before income taxes at the segment level before
inter-company eliminations.


Contact:

Investor Relations Contact:
ICR, Inc.
John Mills
Senior Managing Director
310-954-1105
jmills@icrinc.com