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Titan Machinery Inc. Announces Fiscal Fourth Quarter and Full Year Ended January 31, 2013 Results



  Titan Machinery Inc. Announces Fiscal Fourth Quarter and Full Year Ended
  January 31, 2013 Results

            -Fourth Quarter Revenue Increased 29% to $785 Million-

-Company Continues Domestic and International Distribution Network Expansion-

                    -Company Issues Fiscal 2014 Guidance-

Business Wire

WEST FARGO, N.D. -- April 10, 2013

Titan Machinery Inc. (Nasdaq: TITN), a leading network of full-service
agricultural and construction equipment stores, today reported financial
results for the fiscal fourth quarter and full year ended January 31, 2013.

Fiscal 2013 Fourth Quarter Results

For the fourth quarter of fiscal 2013, revenue increased 29.2% to $784.5
million from revenue of $607.0 million in the fourth 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 $679.0 million for the fourth quarter of fiscal 2013, compared to
$517.1 million in the fourth quarter last year. Parts sales were $53.5 million
for the fourth quarter of fiscal 2013, compared to $45.7 million in the fourth
quarter last year. Revenue generated from service was $34.2 million for the
fourth quarter of fiscal 2013, compared to $27.3 million in the fourth quarter
last year. Revenue from rental and other increased to $17.8 million from $16.9
million in the fourth quarter last year.

Gross profit for the fourth quarter of fiscal 2013 was $104.5 million,
compared to $92.8 million in the fourth quarter last year. The Company’s gross
profit margin was 13.3% in the fourth quarter of fiscal 2013, compared to
15.3% in the fourth quarter last year. The decrease in gross profit margin was
primarily due to lower equipment margins and 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 9.2% of revenue or $72.2 million for the fourth
quarter of fiscal 2013, compared to 9.9% of revenue or $60.3 million for the
fourth quarter of last year.

Floorplan interest expense increased to $4.3 million for the fourth quarter of
2013 compared to $3.2 million for the same period last year due to increased
levels of interest-bearing equipment inventory. Other interest expense
increased to $3.0 million for the fourth quarter of fiscal 2013 compared to
$0.4 million for the same period last year due to the Company’s April 2012
convertible debt offering.

Pre-tax income for the fourth quarter of fiscal 2013 was $25.8 million,
compared to $29.6 million in the fourth quarter last year. Pre-tax margin was
3.3% for the fourth quarter of fiscal 2013, compared to 4.9% in the fourth
quarter last year. Pre-tax Agriculture segment income was $32.8 million for
the fourth quarter of fiscal 2013, compared to $30.4 million in the fourth
quarter last year. Pre-tax Construction segment loss was $5.5 million for the
fourth quarter of fiscal 2013, compared to pre-tax income of $1.0 million in
the fourth quarter last year. The growth in Agriculture pre-tax income was
consistent with the Company’s expectation. The Construction pre-tax loss
reflected difficult industry conditions as well as the Company not achieving
its operating targets for this segment.

Net income attributable to common stockholders for the fourth quarter of
fiscal 2013 was $15.4 million, compared to $17.6 million in the fourth quarter
last year. Earnings per diluted share for the fourth quarter of fiscal 2013
were $0.73 compared to $0.84 in the fourth quarter last year.

Fiscal 2013 Full Year Results

For the full year ended January 31, 2013, revenue increased 32.5% to $2.20
billion from $1.66 billion in fiscal 2012. Gross margin for fiscal 2013 was
15.4%, compared to 16.6% in fiscal 2012. Pre-tax income for fiscal 2013 was
$70.7 million for a pre-tax margin of 3.2%, compared to $73.6 million, or a
pre-tax margin of 4.4%, in fiscal 2012. Net income attributable to common
stockholders for fiscal 2013 was $42.0 million, or $2.00 per diluted share,
compared to $43.8 million, or $2.18 per diluted share, in fiscal 2012. The
full year weighted average diluted common shares outstanding for fiscal 2013
was 21.0 million, compared to 20.1 million weighted average diluted common
shares outstanding in fiscal 2012.

Balance Sheet

The Company ended fiscal 2013 with cash and cash equivalents of $124.4
million. The Company’s inventory level was $929.2 million as of January 31,
2013, compared to $748.0 million at the end of fiscal 2012. This inventory
level primarily reflected an increase in new equipment, which increased to
$542.2 million at January 31, 2013 from $445.5 million at January 31, 2012,
while used equipment increased to $275.6 million at January 31, 2013 from
$219.8 million at January 31, 2012. Inventory level at the end of fiscal 2013
decreased $118.8 million from $1.05 billion at the end of the third quarter of
fiscal 2013. The Company had available $307.1 million of its $1.0 billion
total discretionary floorplan lines of credit as of January 31, 2013.

Acquisitions & New Store Openings

In fiscal 2013, the Company completed eight 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 eight 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.

Subsequent to the end of fiscal 2013, the Company completed two acquisitions,
consisting of two construction equipment dealership locations in the United
States, including the Company’s first location in New Mexico. The Company also
opened its initial Ukrainian dealer facilities in Kiev in April 2013.

Management Comments

David Meyer, Titan Machinery’s Chairman and Chief Executive Officer, stated,
“In the fourth quarter, we continued to generate strong sales, which enabled
us to exceed the high end of our fiscal 2013 annual sales guidance. Our
Agriculture segment performed well in the fourth quarter and throughout fiscal
2013 despite certain weather related challenges farmers faced earlier in the
year. Our Construction business generated top line growth in fiscal 2013;
however, our bottom line results for this segment reflect difficult industry
conditions as well as us falling short of our operational targets. To improve
our overall Construction operating results, we are refocusing on generating
stronger revenue growth, improving operating expenses and driving better
pre-tax returns.”

Mr. Meyer continued, “In the fourth quarter, we began successfully executing
on our inventory strategy to increase equipment turns and ended the year with
a notable reduction in inventory as compared to the end of our third quarter.
As we begin fiscal 2014, we expect to continue to generate strong sales
results and remain focused on improving inventory turns. For our Agriculture
segment, we anticipate continued overall growth in our domestic and
international areas. Regarding our Construction segment, we anticipate better
market conditions and are refocusing our efforts to improve the profitability
of this business. We remain confident that our Construction segment is an
integral part of our Company’s long-term growth strategy and will contribute
to our top and bottom line growth. We are well positioned to strategically
expand our footprint in the United States and internationally throughout
fiscal 2014.”

Fiscal 2014 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. For the full year ending
January 31, 2014, the Company anticipates increased revenue in the range of
$2.35 billion to $2.55 billion, net income attributable to common stockholders
in the range of $42.8 million to $49.2 million, and earnings per diluted share
in the range of $2.00 to $2.30 based on estimated weighted average diluted
common shares outstanding of 21.4 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 for 30 days following the audio
webcast.

Investors interested in participating in the live call can dial (888) 401-4668
from the U.S. International callers can dial (719) 325-2472. A telephone
replay will be available approximately two hours after the call concludes and
will be available through Wednesday, April 24, 2013, by dialing (877) 870-5176
from the U.S., or (858) 384-5517 from international locations, and entering
confirmation code 1411336.

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 106 North American dealerships
in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming,
Wisconsin, Colorado, Arizona, and New Mexico, including two outlet stores, and
14 European dealerships in Romania, Bulgaria, Serbia, and Ukraine. 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 domestic and
international acquisition opportunities, Construction segment initiatives,
growth and profitability expectations, and the expected results of operations
for the fiscal year ending January 31, 2014 including 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)
   
                                   January 31,                   January 31,
                                   2013                          2012
ASSETS
                                                                  
CURRENT ASSETS
  Cash                             $ 124,360                     $ 79,842
  Receivables, net                   121,786                       82,518
  Inventories                        929,216                       748,047
  Prepaid expenses and other         8,178                         2,108
  Income taxes receivable            503                           3,140
  Deferred income taxes              8,357                         5,370      
                                                                  
       Total current assets          1,192,400                     921,025    
                                                                  
INTANGIBLES AND OTHER ASSETS
  Noncurrent parts                   3,507                         2,792
  inventories
  Goodwill                           30,633                        24,404
  Intangible assets, net of          14,359                        10,793
  accumulated amortization
  Other                              8,534                         2,776      
                                                                  
       Total intangibles and         57,033                        40,765     
       other assets
                                                                  
PROPERTY AND EQUIPMENT, net          194,641                       126,282    
of accumulated depreciation
                                                                  
TOTAL ASSETS                       $ 1,444,074                   $ 1,088,072  
                                                                  
LIABILITIES AND
STOCKHOLDERS' EQUITY
                                                                  
CURRENT LIABILITIES
  Accounts payable                 $ 28,282                      $ 28,424
  Floorplan notes payable            689,410                       552,428
  Current maturities of              10,568                        4,755
  long-term debt
  Customer deposits                  46,775                        49,540
  Accrued expenses                   29,590                        26,735
  Income taxes payable               310                           -          
                                                                  
       Total current                 804,935                       661,882    
       liabilities
                                                                  
LONG-TERM LIABILITIES
  Senior convertible notes           125,666                       -
  Long-term debt, less               56,592                        57,405
  current maturities
  Deferred income taxes              47,411                        28,592
  Other long-term                    9,551                         2,854      
  liabilities
                                                                  
       Total long-term               239,220                       88,851     
       liabilities
                                                                  
STOCKHOLDERS' EQUITY
  Common stock, par value
  $.00001 per share; 45,000
  shares authorized, 21,092
  shares issued and
  outstanding at January 31,         -                             -
  2013; 25,000 shares
  authorized, 20,911 shares
  issued and outstanding at
  January 31, 2012
  Additional paid-in-capital         236,521                       218,156
  Retained earnings                  160,724                       118,251
  Accumulated other                  (735      )                   (70       )
  comprehensive loss
       Total Titan Machinery
       Inc. stockholders'            396,510                       336,337    
       equity
  Noncontrolling interest            3,409                         1,002      
       Total stockholders'           399,919                       337,339    
       equity
                                                                  
TOTAL LIABILITIES AND              $ 1,444,074                   $ 1,088,072  
STOCKHOLDERS' EQUITY
                                                                  
                                                                  

                                                                                
TITAN MACHINERY INC.
Consolidated Statements of Operations
(in thousands, except per share data)
 
                     Three Months Ended                      Twelve Months Ended
                     January 31,                             January 31,
                     2013              2012                  2013                2012
                     (Unaudited)       (Unaudited)
REVENUE
    Equipment        $ 679,011         $ 517,084             $ 1,763,877         $ 1,303,900
    Parts              53,528            45,734                242,368             201,404
    Service            34,196            27,272                127,779             103,474
    Rental and         17,779            16,928                64,396              50,214     
    other
TOTAL REVENUE          784,514           607,018               2,198,420           1,658,992  
                                                                                  
COST OF
REVENUE
    Equipment          614,836           460,197               1,600,233           1,171,618
    Parts              38,888            31,561                169,164             140,096
    Service            13,300            10,061                45,748              37,236
    Rental and         12,961            12,389                43,914              34,581     
    other
TOTAL COST OF          679,985           514,208               1,859,059           1,383,531  
REVENUE
                                                                                  
GROSS PROFIT           104,529           92,810                339,361             275,461
                                                                                  
OPERATING              72,244            60,304                247,557             193,860    
EXPENSES
                                                                                  
INCOME FROM            32,285            32,506                91,804              81,601
OPERATIONS
                                                                                  
OTHER INCOME
(EXPENSE)
    Interest
    and other          789               784                   1,654               1,643
    income
    Floorplan
    interest           (4,275  )         (3,202  )             (13,297   )         (8,323    )
    expense
    Other
    interest           (3,012  )         (448    )             (9,465    )         (1,347    )
    expense
                                                                                  
INCOME BEFORE          25,787            29,640                70,696              73,574
INCOME TAXES
                                                                                  
PROVISION FOR          (10,351 )         (11,854 )             (28,137   )         (29,429   )
INCOME TAXES
                                                                                  
NET INCOME
INCLUDING              15,436            17,786                42,559              44,145
NONCONTROLLING
INTEREST
                                                                                  
LESS: NET
INCOME (LOSS)
ATTRIBUTABLE           (170    )         (15     )             86                  (15       )
TO
NONCONTROLLING
INTEREST
                                                                                  
NET INCOME
ATTRIBUTABLE         $ 15,606          $ 17,801              $ 42,473            $ 44,160     
TO TITAN
MACHINERY INC.
                                                                                  
NET INCOME
ALLOCATED TO           (176    )         (177    )             (443      )         (409      )
PARTICIPATING
SECURITIES
NET INCOME
ATTRIBUTABLE         $ 15,430          $ 17,624              $ 42,030            $ 43,751     
TO COMMON
STOCKHOLDERS
                                                                                  
                                                                                  
EARNINGS PER
SHARE -              $ 0.73            $ 0.84                $ 2.00              $ 2.18       
DILUTED
WEIGHTED
AVERAGE COMMON         21,007            20,880                20,987              20,110     
SHARES -
DILUTED
                                                                                  
                                                                                  

                                                                                                      
TITAN MACHINERY INC.
Fourth Quarter & Full Year Segment Results
(in thousands)
                                                                                                        
                   Three Months Ended January 31,                  Twelve Months Ended January 31,
                   2013            2012            % Change        2013              2012              % Change
Revenues
Agriculture        $ 699,386       $ 526,362       32.9   %        $ 1,899,534       $ 1,441,294       31.8   %
Construction         108,567         97,757        11.1   %          380,295           279,152         36.2   %
Segment              807,953         624,119       29.5   %          2,279,829         1,720,446       32.5   %
revenues
Eliminations         (23,439 )       (17,101 )     (37.1  %)         (81,409   )       (61,454   )     (32.5  %)
Total              $ 784,514       $ 607,018       29.2   %        $ 2,198,420       $ 1,658,992       32.5   %
                                                                                                        
Income
(Loss)
Before
Income Taxes
Agriculture        $ 32,826        $ 30,447        7.8    %        $ 83,797          $ 74,411          12.6   %
Construction         (5,475  )       979           (659.2 %)         (4,708    )       5,461           (186.2 %)
Segment
income
(loss)               27,351          31,426        (13.0  %)         79,089            79,872          (1.0   %)
before
income taxes
Shared               (2,059  )       (2,207  )     6.7    %          (6,902    )       (5,993    )     (15.2  %)
Resources
Eliminations         495             421           17.6   %          (1,491    )       (305      )     (388.9 %)
Total              $ 25,787        $ 29,640        (13.0  %)       $ 70,696          $ 73,574          (3.9   %)
                                                                                                        

Note: The Company reports its revenues and income (loss) before income taxes
at the segment level before inter-company eliminations.

Contact:

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