Titan International, Inc. Reports Second Quarter 2004 Earnings Increase
QUINCY, Ill.--July 30, 2004--Titan International, Inc. reported net sales of $121.2 million for the second quarter ended June 30, 2004, an increase of 29% compared to $94.0 million pro forma (adjusted to reflect the sale of Titan Europe) for the previous year's quarter . Net sales for second quarter 2003 including Titan Europe's sales were $131.0 million. Net sales for the first half of 2004 were $288.2 million, up from $260.0 million for the first half of 2003.Titan recorded net income of $5.6 million for the second quarter and $10.9 million year-to-date 2004, up substantially from net losses of $(8.2) million for second quarter 2003 and $(14.1) million for the first six months of 2003. Diluted earnings per share was $.32 for the second quarter, compared to a loss per share of $(.39) for the same quarter of 2003, for a $.71 increase quarter-over-quarter. Year-to-date earnings per share was $.57 versus a loss per share of $(.67) in the first half of 2003.
On April 7, 2004, Titan Europe Plc was admitted to trading as a separate public company on London's AIM market. A wholly-owned subsidiary of Titan is the largest stockholder in the newly public company, retaining a 30% interest. The April 2004 sale of the 70% interest of Titan Europe resulted in an offering amount of approximately $62 million. Of the net proceeds, Titan dedicated $15 million to buy back approximately 4.9 million shares of Titan International stock held by Citicorp Venture Capital, Ltd. Beginning in second quarter, Titan Europe's operating results are no longer consolidated with those of Titan International. However, Titan's 30% ownership of the new European company is recorded as an equity investment on Titan International's financial statements.
"The first half of 2004 has shown solid progress for Titan and the strength of our order book is evidence of our customers' preference for Titan products," stated Maurice Taylor Jr., Titan president and CEO. "This was the right time to secure Titan's refinancing and position the company to take advantage of growth opportunities. The outlook through 2005 is positive and Titan is prepared to meet these challenges."
Early in third quarter 2004, Titan secured a new $100 million revolving credit facility with agents LaSalle Bank National Association and General Electric Capital Corporation, terminating the former revolver and term loan agreements. Titan also sold 5.25% convertible senior unsecured notes due 2009 in a Rule 144A offering for $115 million principal amount. The notes are convertible into shares of Titan International's common stock at an initial conversion price of $13.50 per common share. Additionally, Titan notified the trustee to redeem the $136.8 million outstanding on Titan's 8.75% senior subordinated notes, setting a redemption date of August 26, 2004.
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 July 30, 2004.
Titan International, Inc.
Consolidated Statements of Operations (Unaudited)
For the three and six months ended June 30, 2004 and 2003
Amounts in thousands except earnings per share data.
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Net sales $121,188 $131,001 $288,164 $259,985
Cost of sales 99,872 124,930 239,555 243,519
------- ------- ------- -------
Gross profit 21,316 6,071 48,609 16,466
Selling, general &
administrative expenses 8,260 10,940 19,972 22,357
Research & development
expenses 385 716 1,207 1,384
Goodwill impairment on Titan
Europe 0 0 2,988 0
- - ----- -
Income (loss) from
operations 12,671 (5,585) 24,442 (7,275)
Interest expense (4,615) (5,038) (9,765) (10,013)
Equity investment income 788 0 788 0
Other income 88 2,005 134 2,483
-- ----- --- -----
Income (loss) before income
taxes 8,932 (8,618) 15,599 (14,805)
Provision (benefit) for income
taxes 3,289 (431) 4,680 (740)
----- ---- ----- ----
Net income (loss) $5,643 $(8,187) $10,919 $(14,065)
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Earnings (loss) per common
share:
Basic $.32 $(.39) $.57 $(.67)
Diluted .32 (.39) .57 (.67)
Average common shares
outstanding:
Basic 17,379 20,913 19,288 20,852
Diluted 17,436 20,913 19,317 20,852
Segment Information
Revenues from external customers (Unaudited)
Amounts in thousands
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Agricultural $79,826 $75,847 $183,132 $153,949
Earthmoving/Construction 33,662 45,138 87,051 86,182
Consumer 7,700 10,016 17,981 19,854
-------- -------- -------- --------
Total $121,188 $131,001 $288,164 $259,985
Consolidated Condensed Balance Sheets (Unaudited)
Amounts in thousands
June 30, Dec. 31,
2004 2003
---- ----
Assets
Current assets:
Cash & cash equivalents $21,007 $6,556
Accounts receivable 66,529 83,975
Inventories 68,601 112,496
Assets held for sale 37,354 37,775
Restricted cash on deposit 15,000 0
Other current assets 38,118 46,144
------- -------
Total current assets 246,609 286,946
Property, plant & equipment, net 79,664 138,482
Restricted cash on deposit 36,039 51,039
Investment in affiliate 27,967 0
Other noncurrent assets 29,983 46,617
------- -------
Total assets $420,262 $523,084
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Liabilities & stockholders' equity
Current liabilities:
Short-term debt (including current portion of
long-term debt) $60,231 $21,161
Accounts payable 28,900 51,931
Other current liabilities 28,178 29,883
------- -------
Total current liabilities 117,309 102,975
Other long-term liabilities 55,550 59,756
Long-term debt 147,138 248,397
Stockholders' equity 100,265 111,956
------- -------
Total liabilities & stockholders' equity $420,262 $523,084
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