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02.08.2023 16:15
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Titan International, Inc. Reports Second Quarter Financial Performance
Ein Arzt berät einen Patienten (Symbolbild).
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PR Newswire
WEST CHICAGO, Ill., Aug. 2, 2023
Delivers consistent profitability with EPS of $0.48, adjusted EPS of $0.43 and adjusted EBITDA of $59 million
Continues to drive strong operating cash flow and free cash flow of $65 million and $49 million, respectively
Company provides full year 2023 outlook for revenue, adjusted EBITDA, and free cash flow
WEST CHICAGO, Ill., Aug. 2, 2023 /PRNewswire/ -- Titan International, Inc. (NYSE: TWI) ("Titan" or the "Company"), a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products, today reported results for the second quarter ended June 30, 2023.
Second Quarter 2023 Highlights
- Net income of $32 million, EPS of $0.48 and adjusted EPS of $0.43
- Adjusted EBITDA of $59 million
- Net sales of $481 million
- Further strengthened balance sheet with an increase in total cash to $196 million, $49 million of free cash flow generation and net debt/trailing twelve-month EBITDA leverage of 1.0 times
- Recorded indirect tax credits in Brazil of $3.1 million in Q2 2023, related to the indirect tax credits received for full year 2022 of $32 million
Paul Reitz, President and Chief Executive Officer, stated, "Our One Titan team delivered once again this quarter. I am very pleased with our second quarter 2023 results as we navigate the previously communicated temporary inventory impact with some of our customers. Our global team executed effectively to serve our customers well and drive strong profitability, which is a testament to the strategic actions we have taken over the last few years to transform the business. In addition, we generated $61 million of free cash flow year-to-date, the highest first half level in more than a decade, which further bolsters our balance sheet and provides optionality to continue to invest in the long-term growth of the business.
Mr. Reitz continued, "Titan is the leader and partner of choice for off-the-road tires, wheels and undercarriage solutions to our customers. Mid- and long-term demand for our products remains healthy in our core end markets, and our ongoing commitment to serve our customers and end-users at the highest level continues to be our primary focus. Large Ag fundamentals remain supportive due to high replacement needs for aging large equipment fleet and farmer income, which remains healthy despite recent drops in corn and soybean prices, as input costs are moderating, as well. I have stated numerous times that population growth and demographic trends around the world point to a growing middle class, resulting in more grain demand to support a protein-based diet for the future. This means our markets should remain resilient over the long haul. The earthmoving/construction markets are underpinned by increased mining capital budgets and forecasted GDP growth, which supports infrastructure projects in the years to come. Overall, we are highly confident that the fundamental changes we made to the business, including our strong One Titan culture, will enable us to navigate continual dynamic market conditions to deliver near historic highs this year and strong results into the future."
Full Year 2023 Outlook
The Company is providing the following outlook for FY 2023:
- Revenues are expected to range between $1.85 to $1.9 billion
- Adjusted EBITDA of $200 to $210 million
- Free cash flow to range between $110 to $120 million
- Capital expenditures to range between $55 to $60 million
David Martin, Chief Financial Officer, added, "While there are still some lingering effects of inventory destocking with our OEM customers, visibility is starting to improve, allowing us to provide our full year outlook. Overall demand for our market-leading products remains steady, particularly for large Ag. We are well positioned for a solid year, particularly in terms of profitability and free cash flow generation.
Mr. Martin concluded, "We continued our deliberate focus on our balance sheet strength, with free cash flow generation of $49 million, which allowed us to pay down debt of $10 million during the quarter, while also increasing our cash position to $196 million. We also opportunistically repurchased shares during the quarter, bringing our year-to-date level to approximately $6.4 million under the Board authorized $50 million share repurchase program."
Results of Operations
Net sales for the second quarter ended June 30, 2023, were $481.2 million, compared to $572.9 million in the comparable quarter of 2022, a decrease of 16.0%. Overall net sales decrease was primarily due to sales volume decrease caused by elevated inventory levels at our customers in the Americas, particularly OEM customers. The net sales decrease was also impacted by negative price/mix which was primarily due to lower steel prices, and unfavorable currency translation of 2.3%.
Gross profit for the second quarter ended June 30, 2023, was $85.9 million, or 17.9% of net sales, a decrease of $23.8 million compared to $109.7 million, or 19.1% of net sales, for the three months ended June 30, 2022. The decrease in gross profit and margin was primarily due to the lower sales volume, which resulted in lower fixed cost leverage, and the timing lag in higher material costs relative to contractual customer price reductions in North America.
Selling, general and administrative expenses for the three months ended June 30, 2023 were $34.9 million, in line with $34.7 million for the three months ended June 30, 2022.
Income from operations for the three months ended June 30, 2023 was $45.9 million, compared to income from operations of $69.7 million for the three months ended June 30, 2022. The decrease in income from operations were primarily due to lower net sales and the net result of the items previously discussed.
Segment Information
Agricultural Segment
| (Amounts in thousands, except percentages) | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2023 | | 2022 | | % | | 2023 | | 2022 | | % |
| Net sales | $ 269,148 | | $ 318,585 | | (15.5) % | | $ 575,006 | | $ 628,184 | | (8.5) % |
| Gross profit | 48,736 | | 61,921 | | (21.3) % | | 97,986 | | 109,845 | | (10.8) % |
| Profit margin | 18.1 % | | 19.4 % | | (6.7) % | | 17.0 % | | 17.5 % | | (2.9) % |
| Income from operations | 32,119 | | 44,884 | | (28.4) % | | 64,688 | | 75,001 | | (13.8) % |
Net sales in the agricultural segment were $269.1 million for the three months ended June 30, 2023, as compared to $318.6 million for the comparable period in 2022, a decrease of 15.5%. The net sales decrease was primarily due to lower sales volume in North America and Latin America which was caused by elevated inventory levels with customers, most notably OEM customers. In addition, the decrease in net sales was driven by negative price/product mix, which was primarily reflective of the decrease in steel prices, and an unfavorable impact of foreign currency translation of 3.7%.
Gross profit in the agricultural segment was $48.7 million for the three months ended June 30, 2023, as compared to $61.9 million in the comparable period in 2022. The decrease in gross profit and profit margin was due to lower sales volume, which resulted in lower fixed cost leverage, and the timing lag in higher material costs relative to contractual customer price reductions in North America.
Earthmoving/Construction Segment
| (Amounts in thousands, except percentages) | Three months ended | | Six months ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2023 | | 2022 | | % | | 2023 | | 2022 | | % |
| Net sales | $ 174,683 | | $ 210,370 | | (17.0) % | | $ 373,607 | | $ 411,629 | | (9.2) % |
| Gross profit | 29,102 | | 36,317 | | (19.9) % | | 66,326 | | 67,692 | | (2.0) % |
| Profit margin | 16.7 % | | 17.3 % | | (3.5) % | | 17.8 % | | 16.4 % | | 8.5 % |
| Income from operations | 14,522 | | 22,276 | | (34.8) % | | 38,060 | | 38,116 Werbung Mehr Nachrichten zur Titan International Aktie kostenlos abonnieren
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