- Revenue for Fiscal Second Quarter of 2017 was
$278 million -
Titan Machinery Inc. (Nasdaq:TITN), a leading network of
full-service agricultural and construction equipment stores, today
reported financial results for the fiscal second quarter ended
July 31, 2016.
Fiscal 2017 Second Quarter Results
For the second quarter of fiscal 2017, revenue
was $278.3 million, compared to $334.2 million in the second
quarter last year. Equipment sales were $173.3 million for the
second quarter of fiscal 2017, compared to $221.0 million in the
second quarter last year. Parts sales were $58.3 million for the
second quarter of fiscal 2017, compared to $62.1 million in the
second quarter last year. Revenue generated from service was $31.3
million for the second quarter of fiscal 2017, compared to $32.8
million in the second quarter last year. Revenue from rental and
other was $15.4 million for the second quarter of fiscal 2017,
compared to $18.3 million in the second quarter last year.
Gross profit for the second quarter of fiscal
2017 was $52.9 million, compared to $62.1 million in the second
quarter last year, primarily reflecting a decrease in revenue. The
Company’s gross profit margin was 19.0% in the second quarter of
fiscal 2017, compared to 18.6% in the second quarter last year.
This increase in gross profit margin was mainly due to the change
in gross profit mix to the Company's higher-margin parts and
service businesses. Gross profit from parts, service and rental and
other for the second quarter of fiscal 2017 was 76.6% of overall
gross profit, compared to 71.2% in the second quarter last
year.
Operating expenses decreased by $3.9 million to
$51.5 million, or 18.5% of revenue, for the second quarter of
fiscal 2017, compared to $55.4 million, or 16.6% of revenue, for
the second quarter of last year. The increase in operating expenses
as a percentage of revenue was primarily due to the decrease in
total revenue in the second quarter of fiscal 2017, as compared to
the second quarter of fiscal 2016.
Floorplan interest expense was $3.8 million for
the second quarter of fiscal 2017, compared to $4.7 million in the
second quarter of fiscal 2016. The decrease in floorplan interest
expense is primarily due to a decrease in the average level of
interest-bearing inventory in the second quarter of fiscal 2017.
Other interest expense decreased to $2.8 million in the second
quarter of fiscal 2017 from $3.4 million in the second quarter of
fiscal 2016, primarily due to a reduced level of senior convertible
notes outstanding as a result of the repurchase of $30.1 million of
senior convertible notes in April 2016.
In the second quarter of fiscal 2017, the
Company generated $4.7 million in adjusted EBITDA, compared to $9.8
million in the second quarter of last year. The Company includes
floorplan interest expense in its EBITDA calculation.
Pre-tax loss for the second quarter of fiscal
2017 was $4.5 million, compared to loss of $0.5 million in the
second quarter of last year. Adjusted pre-tax results for the
second quarter are as follows:
- Total Company: Loss of $4.5 million for the second quarter of
fiscal 2017, compared to loss of $0.5 million in the second quarter
last year.
- Agriculture segment: Loss of $4.3 million for the second
quarter of fiscal 2017, compared to loss of $2.5 million in the
second quarter last year.
- Construction segment: Income of $0.6 million for the second
quarter of fiscal 2017, compared to loss of $1.0 million in the
second quarter last year.
- International segment: Loss of $0.2 million for the second
quarter of fiscal 2017, compared to income of $1.0 million in the
second quarter last year.
Net loss attributable to common stockholders for
the second quarter of fiscal 2017 was $2.5 million, or loss per
diluted share of $0.12, compared to net income of $0.0 million, or
$0.00 per diluted share, for the second quarter of fiscal 2016.
Excluding all non-GAAP adjustments, adjusted net loss attributable
to common stockholders for the second quarter of fiscal 2017 was
$2.5 million, or $0.12 per diluted share, compared to adjusted net
income attributable to common stockholders of $0.0 million, or
$0.00 per diluted share, for the second quarter of fiscal 2016.
Fiscal 2017 First Six Months Results
Revenue was $563.2 million for the first six
months of fiscal 2017, compared to $687.4 million for the same
period last year. Net loss attributable to common stockholders for
the first six months of fiscal 2017 was $6.1 million, or $0.29 per
diluted share, compared to $6.2 million, or $0.29 per diluted
share, for the same period last year. Excluding non-GAAP items,
adjusted net loss attributable to common stockholders for the first
six months of fiscal 2017 was $7.0 million, or $0.33 per diluted
share, compared to $2.9 million, or $0.14 per diluted share, for
the same period last year. The Company generated $6.4 million in
adjusted EBITDA in the first six months of fiscal 2017, compared to
$14.9 million in the same period last year.
Balance Sheet and Cash Flow
The Company ended the second quarter of fiscal
2017 with cash of $51.1 million. The Company’s inventory level
decreased to $682.0 million as of July 31, 2016, compared to
$689.5 million as of January 31, 2016. This inventory decrease
includes a $8.5 million reduction in equipment inventory, which
reflects a $39.2 million or 14.6% decrease in used equipment
inventory, partially offset by a seasonal increase of new equipment
inventory of $30.6 million. The Company had $430.8 million
outstanding floorplan payables on $953.5 million total
discretionary floorplan lines of credit as of July 31, 2016,
compared to $444.8 million outstanding as of January 31,
2016. The Company's ratio of total liabilities to tangible
net worth improved to 2.0 as of July 31, 2016 from 2.1 as of
January 31, 2016 reflecting the lower outstanding floorplan
payables and reduced balance of senior convertible notes.
In the first six months of fiscal 2017, the
Company’s net cash provided by operating activities was $60.4
million on a GAAP basis. The Company evaluates its cash flow from
operating activities net of all floorplan payable activity and
maintaining a constant level of equity in our equipment inventory.
Taking these adjustments into account, adjusted net cash provided
by operating activities was $1.1 million in the first six months of
fiscal 2017, compared to $4.7 million in first six months of fiscal
2016.
Management Comments
David Meyer, Titan Machinery’s Chairman and
Chief Executive Officer, stated, "In the second quarter, we focused
on managing the controllable aspects of our business to best
navigate the challenging operating environment. We continue to
concentrate on our inventory reduction, its positive impact on our
balance sheet and expect to achieve the $100 million inventory
reduction goal for fiscal 2017. We reduced used inventory in
the first half of fiscal 2017 by $39 million or 15%, and through
the first six months of this year we exceeded our target by $13
million or 40% on our marketing plan of aged inventory through
alternative channels."
Mr. Meyer commented, "We continue to expect to
generate positive adjusted operating cash flow for fiscal 2017 as
we execute on our inventory reduction plan. We are updating
our annual modeling assumptions, primarily based on the larger than
anticipated crop, its impact on commodity prices and the
anticipated effect on our customer's demand. Over the past couple
years we have made significant improvements to our cost structure
and balance sheet, including the repurchase of senior convertible
notes in the first quarter of this year. We continue to take the
necessary steps to weather the current environment and improve our
balance sheet to position us for long-term financial performance
and capitalize on future opportunities."
Updated Fiscal 2017 Modeling Assumptions
The Company is updating the modeling assumptions for fiscal 2017
that it believes will provide investors with relevant information
about expectations regarding financial results and business
trends:
- Agriculture Same Store Sales Down 17% to 22%
- Construction Same Store Sales Flat
- International Same Store Sales Down 7% to 12%
- Equipment Margins Between 7.2% and 7.8%
- Adjusted Diluted EPS loss in the second half of fiscal 2017 is
expected to be less than the loss in the first half of the
year
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) 504-7966 from the U.S. International
callers can dial (719) 325-2414. A telephone replay will be
available approximately two hours after the call concludes and will
be available through Thursday, September 8, 2016, by dialing (877)
870-5176 from the U.S., or (858) 384-5517 from international
locations, and entering confirmation code 6796743.
Non-GAAP Financial Measures
Within this release, the Company makes reference
to certain adjusted financial measures, which have directly
comparable GAAP financial measures as identified in this release.
These adjusted measures are provided so that investors have the
same financial data that management uses with the belief that it
will assist the investment community in properly assessing the
underlying performance of the Company for the periods being
reported. This includes adjusted EBITDA, which the Company defines
as net income (loss) including noncontrolling interest, adjusted
for net interest (excluding floorplan interest expense), income
taxes, depreciation, amortization, and items included in its
non-GAAP pre-tax income (loss) reconciliation for each of the
respective periods. The presentation of this additional information
is not meant to be considered a substitute for measures prepared in
accordance with GAAP. Investors are encouraged to review the
reconciliations of adjusted financial measures used in this press
release to their most directly comparable GAAP financial measures
as provided with the financial statements attached to this press
release.
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 91 North American dealerships
in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska,
Wyoming, Wisconsin, Colorado, Arizona, and New Mexico, including
one outlet store, and 19 European dealerships in Romania, Bulgaria,
Serbia, and Ukraine. The Titan Machinery dealerships represent one
or more of the CNH Industrial Brands (CNHI), including CaseIH, New
Holland Agriculture, Case Construction, New Holland Construction,
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. The words “potential,” “believe,”
“estimate,” “expect,” “intend,” “may,” “could,” “will,” “plan,”
“anticipate,” and similar words and expressions are intended to
identify forward-looking statements. Such statements are based upon
the current beliefs and expectations of our management.
Forward-looking statements made herein, which include statements
regarding Agriculture, Construction, and International segment
initiatives and improvements, segment revenue realization, growth
and profitability expectations, inventory expectations, leverage
expectations, agricultural and construction equipment industry
conditions and trends, and modeling assumptions and expected
results of operations for the fiscal year ending January 31,
2017, involve known and unknown risks and uncertainties that may
cause Titan Machinery’s actual results in current or future periods
to differ materially from the forecasted assumptions and expected
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 operating segments, the
uncertainty and fluctuating conditions in the capital and credit
markets, difficulties in conducting international operations,
foreign currency risks, governmental agriculture policies, seasonal
fluctuations, the ability of the Company to reduce inventory
levels, 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, as updated in subsequently filed Quarterly Reports on Form
10-Q, as applicable. 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. Other than required by law, 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) |
(Unaudited) |
|
|
|
|
|
July 31, 2016 |
|
January 31, 2016 |
Assets |
|
|
|
Current Assets |
|
|
|
Cash |
$ |
51,090 |
|
|
$ |
89,465 |
|
Receivables, net |
60,076 |
|
|
56,552 |
|
Inventories |
682,049 |
|
|
689,464 |
|
Prepaid expenses and other |
6,148 |
|
|
9,753 |
|
Income taxes receivable |
4,374 |
|
|
13,011 |
|
Total current assets |
803,737 |
|
|
858,245 |
|
Noncurrent Assets |
|
|
|
Intangible assets, net of
accumulated amortization |
5,041 |
|
|
5,134 |
|
Property and equipment, net of
accumulated depreciation |
174,596 |
|
|
183,179 |
|
Other |
1,432 |
|
|
1,317 |
|
Total noncurrent assets |
181,069 |
|
|
189,630 |
|
Total
Assets |
$ |
984,806 |
|
|
$ |
1,047,875 |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable |
$ |
16,265 |
|
|
$ |
16,863 |
|
Floorplan payable |
430,838 |
|
|
444,780 |
|
Current maturities of long-term
debt |
15,623 |
|
|
1,557 |
|
Customer deposits |
14,026 |
|
|
31,159 |
|
Accrued expenses |
30,488 |
|
|
28,914 |
|
Income taxes payable |
38 |
|
|
152 |
|
Total current liabilities |
507,278 |
|
|
523,425 |
|
Long-Term
Liabilities |
|
|
|
Senior convertible notes |
109,011 |
|
|
134,145 |
|
Long-term debt, less current
maturities |
25,527 |
|
|
38,409 |
|
Deferred income taxes |
10,993 |
|
|
11,135 |
|
Other long-term liabilities |
2,225 |
|
|
2,412 |
|
Total long-term liabilities |
147,756 |
|
|
186,101 |
|
Stockholders'
Equity |
|
|
|
Common stock |
— |
|
|
— |
|
Additional paid-in-capital |
240,674 |
|
|
242,491 |
|
Retained earnings |
93,322 |
|
|
99,526 |
|
Accumulated other comprehensive
loss |
(4,224 |
) |
|
(4,461 |
) |
Total Titan Machinery Inc.
stockholders' equity |
329,772 |
|
|
337,556 |
|
Noncontrolling interest |
— |
|
|
793 |
|
Total stockholders' equity |
329,772 |
|
|
338,349 |
|
Total
Liabilities and Stockholders' Equity |
$ |
984,806 |
|
|
$ |
1,047,875 |
|
|
TITAN MACHINERY INC. |
Consolidated Statements of
Operations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenue |
|
|
|
|
|
|
|
Equipment |
$ |
173,301 |
|
|
$ |
221,016 |
|
|
$ |
358,175 |
|
|
$ |
465,999 |
|
Parts |
58,336 |
|
|
62,081 |
|
|
115,845 |
|
|
123,601 |
|
Service |
31,296 |
|
|
32,842 |
|
|
62,288 |
|
|
65,744 |
|
Rental and other |
15,400 |
|
|
18,251 |
|
|
26,885 |
|
|
32,042 |
|
Total Revenue |
278,333 |
|
|
334,190 |
|
|
563,193 |
|
|
687,386 |
|
Cost of Revenue |
|
|
|
|
|
|
|
Equipment |
160,906 |
|
|
203,152 |
|
|
331,230 |
|
|
430,185 |
|
Parts |
41,118 |
|
|
43,382 |
|
|
81,619 |
|
|
86,953 |
|
Service |
12,045 |
|
|
12,327 |
|
|
23,645 |
|
|
23,687 |
|
Rental and other |
11,331 |
|
|
13,260 |
|
|
20,218 |
|
|
24,057 |
|
Total Cost of
Revenue |
225,400 |
|
|
272,121 |
|
|
456,712 |
|
|
564,882 |
|
Gross Profit |
52,933 |
|
|
62,069 |
|
|
106,481 |
|
|
122,504 |
|
Operating Expenses |
51,487 |
|
|
55,385 |
|
|
105,989 |
|
|
112,495 |
|
Impairment and
Realignment Costs |
24 |
|
|
(104 |
) |
|
271 |
|
|
1,497 |
|
Income from
Operations |
1,422 |
|
|
6,788 |
|
|
221 |
|
|
8,512 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
Interest income and other income
(expense) |
612 |
|
|
837 |
|
|
749 |
|
|
(1,287 |
) |
Floorplan interest expense |
(3,806 |
) |
|
(4,744 |
) |
|
(7,549 |
) |
|
(9,343 |
) |
Other interest expense |
(2,777 |
) |
|
(3,360 |
) |
|
(3,770 |
) |
|
(7,187 |
) |
Income (Loss) Before
Income Taxes |
(4,549 |
) |
|
(479 |
) |
|
(10,349 |
) |
|
(9,305 |
) |
Provision for (Benefit
from) Income Taxes |
(1,847 |
) |
|
(649 |
) |
|
(3,789 |
) |
|
(2,585 |
) |
Net Income (Loss)
Including Noncontrolling Interest |
(2,702 |
) |
|
170 |
|
|
(6,560 |
) |
|
(6,720 |
) |
Less: Net Income (Loss)
Attributable to Noncontrolling Interest |
(182 |
) |
|
164 |
|
|
(356 |
) |
|
(422 |
) |
Net Income (Loss)
Attributable to Titan Machinery Inc. |
(2,520 |
) |
|
6 |
|
|
(6,204 |
) |
|
(6,298 |
) |
Net (Income) Loss
Allocated to Participating Securities - Note 1 |
51 |
|
|
— |
|
|
117 |
|
|
112 |
|
Net Income (Loss)
Attributable to Titan Machinery Inc. Common Stockholders |
$ |
(2,469 |
) |
|
$ |
6 |
|
|
$ |
(6,087 |
) |
|
$ |
(6,186 |
) |
|
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
(0.12 |
) |
|
$ |
— |
|
|
$ |
(0.29 |
) |
|
$ |
(0.29 |
) |
Weighted Average Common
Shares - Diluted |
21,205 |
|
|
21,217 |
|
|
21,204 |
|
|
21,075 |
|
|
TITAN MACHINERY INC. |
Consolidated Condensed Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Six Months Ended July 31, |
|
2016 |
|
2015 |
Operating
Activities |
|
|
|
Net income (loss) including
noncontrolling interest |
$ |
(6,560 |
) |
|
$ |
(6,720 |
) |
Adjustments to reconcile net income
(loss) including noncontrolling interest to net cash provided by
operating activities |
|
|
|
Depreciation and amortization |
12,828 |
|
|
13,824 |
|
Other, net |
2,285 |
|
|
5,566 |
|
Changes in assets and
liabilities |
|
|
|
Inventories |
13,644 |
|
|
8,910 |
|
Manufacturer floorplan payable |
52,048 |
|
|
186,563 |
|
Other working capital |
(13,810 |
) |
|
(22,574 |
) |
Net Cash Provided by
Operating Activities |
60,435 |
|
|
185,569 |
|
Investing
Activities |
|
|
|
Property and equipment
purchases |
(4,906 |
) |
|
(4,160 |
) |
Proceeds from sale of property and
equipment |
1,383 |
|
|
2,201 |
|
Other, net |
(66 |
) |
|
470 |
|
Net Cash Used for for
Investing Activities |
(3,589 |
) |
|
(1,489 |
) |
Financing
Activities |
|
|
|
Net change in non-manufacturer
floorplan payable |
(66,856 |
) |
|
(190,744 |
) |
Repurchase of Senior Convertible
Notes |
(24,983 |
) |
|
— |
|
Net proceeds from (payments on)
long-term debt borrowings |
(1,349 |
) |
|
(24,410 |
) |
Other, net |
(2,204 |
) |
|
(573 |
) |
Net Cash Used for
Financing Activities |
(95,392 |
) |
|
(215,727 |
) |
Effect of Exchange Rate
Changes on Cash |
171 |
|
|
(465 |
) |
Net Change in Cash |
(38,375 |
) |
|
(32,112 |
) |
Cash at Beginning of
Period |
89,465 |
|
|
127,528 |
|
Cash at End of
Period |
$ |
51,090 |
|
|
$ |
95,416 |
|
|
TITAN MACHINERY INC. |
Segment Results |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2016 |
|
2015 |
|
% Change |
|
2016 |
|
2015 |
|
% Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
153,713 |
|
|
$ |
209,449 |
|
|
(26.6 |
)% |
|
$ |
332,520 |
|
|
$ |
449,304 |
|
|
(26.0 |
)% |
Construction |
83,132 |
|
|
81,407 |
|
|
2.1 |
% |
|
161,133 |
|
|
162,578 |
|
|
(0.9 |
)% |
International |
41,488 |
|
|
43,334 |
|
|
(4.3 |
)% |
|
69,540 |
|
|
75,504 |
|
|
(7.9 |
)% |
Total |
$ |
278,333 |
|
|
$ |
334,190 |
|
|
(16.7 |
)% |
|
$ |
563,193 |
|
|
$ |
687,386 |
|
|
(18.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
Before Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
(4,325 |
) |
|
$ |
(2,440 |
) |
|
(77.3 |
)% |
|
$ |
(8,083 |
) |
|
$ |
(3,526 |
) |
|
(129.2 |
)% |
Construction |
626 |
|
|
(937 |
) |
|
166.8 |
% |
|
(1,418 |
) |
|
(4,502 |
) |
|
68.5 |
% |
International |
(175 |
) |
|
946 |
|
|
(118.5 |
)% |
|
(692 |
) |
|
(3,425 |
) |
|
79.8 |
% |
Segment income (loss)
before income taxes |
(3,874 |
) |
|
(2,431 |
) |
|
(59.4 |
)% |
|
(10,193 |
) |
|
(11,453 |
) |
|
11.0 |
% |
Shared Resources |
(675 |
) |
|
1,952 |
|
|
(134.6 |
)% |
|
(156 |
) |
|
2,148 |
|
|
(107.3 |
)% |
Total |
$ |
(4,549 |
) |
|
$ |
(479 |
) |
|
(849.7 |
)% |
|
$ |
(10,349 |
) |
|
$ |
(9,305 |
) |
|
(11.2 |
)% |
|
TITAN MACHINERY INC. |
Non-GAAP Reconciliations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Pre-Tax Income
(Loss) |
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes |
$ |
(4,549 |
) |
|
$ |
(479 |
) |
|
$ |
(10,349 |
) |
|
$ |
(9,305 |
) |
Non-GAAP Adjustments
(1) |
|
|
|
|
|
|
|
Gain on Repurchase of Senior
Convertible Notes |
— |
|
|
— |
|
|
(2,102 |
) |
|
— |
|
Debt Issuance Cost Write-Off |
— |
|
|
— |
|
|
— |
|
|
539 |
|
Realignment / Store Closing
Costs |
24 |
|
|
(104 |
) |
|
271 |
|
|
1,497 |
|
Ukraine Remeasurement (2) |
— |
|
|
63 |
|
|
195 |
|
|
2,103 |
|
Total Non-GAAP Adjustments |
24 |
|
|
(41 |
) |
|
(1,636 |
) |
|
4,139 |
|
Adjusted Pre-Tax Income
(Loss) |
$ |
(4,525 |
) |
|
$ |
(520 |
) |
|
$ |
(11,985 |
) |
|
$ |
(5,166 |
) |
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
Net Income (Loss)
Including Noncontrolling Interest |
$ |
(2,702 |
) |
|
$ |
170 |
|
|
$ |
(6,560 |
) |
|
$ |
(6,720 |
) |
Adjustments |
|
|
|
|
|
|
|
Interest Expense, Net of Interest
Income |
2,589 |
|
|
3,181 |
|
|
5,520 |
|
|
6,278 |
|
Provision for (Benefit from) Income
Taxes |
(1,847 |
) |
|
(649 |
) |
|
(3,789 |
) |
|
(2,585 |
) |
Depreciation and amortization |
6,620 |
|
|
7,157 |
|
|
12,828 |
|
|
13,824 |
|
Total Non-GAAP Adjustments to
Pre-Tax Income (Loss) |
24 |
|
|
(41 |
) |
|
(1,636 |
) |
|
4,139 |
|
Total Adjustments |
7,386 |
|
|
9,648 |
|
|
12,923 |
|
|
21,656 |
|
Adjusted EBITDA |
$ |
4,684 |
|
|
$ |
9,818 |
|
|
$ |
6,363 |
|
|
$ |
14,936 |
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Attributable to Titan Machinery Inc. Common
Stockholders |
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Titan Machinery Inc. Common Stockholders |
$ |
(2,469 |
) |
|
$ |
6 |
|
|
$ |
(6,087 |
) |
|
$ |
(6,186 |
) |
Non-GAAP Adjustments
(1) |
|
|
|
|
|
|
|
Gain on Repurchase of Senior
Convertible Notes |
— |
|
|
— |
|
|
(2,062 |
) |
|
— |
|
Debt Issuance Cost Write-Off |
— |
|
|
— |
|
|
— |
|
|
529 |
|
Realignment / Store Closing
Costs |
24 |
|
|
(102 |
) |
|
266 |
|
|
1,470 |
|
Ukraine Remeasurement (2) |
— |
|
|
62 |
|
|
191 |
|
|
2,066 |
|
Total Pre-Tax Income (Loss)
Non-GAAP Adjustments |
24 |
|
|
(40 |
) |
|
(1,605 |
) |
|
4,066 |
|
Less: Tax Effect of Non-GAAP
Adjustments (3) |
9 |
|
|
(40 |
) |
|
(719 |
) |
|
800 |
|
Total Non-GAAP Adjustments |
15 |
|
|
— |
|
|
(886 |
) |
|
3,266 |
|
Adjusted Net Income
(Loss) Attributable to Titan Machinery Inc. Common
Stockholders |
$ |
(2,454 |
) |
|
$ |
6 |
|
|
$ |
(6,973 |
) |
|
$ |
(2,920 |
) |
|
|
|
|
|
|
|
|
|
TITAN MACHINERY INC. |
Non-GAAP Reconciliations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Earnings (Loss)
per Share - Diluted |
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
(0.12 |
) |
|
$ |
— |
|
|
$ |
(0.29 |
) |
|
$ |
(0.29 |
) |
Non-GAAP Adjustments
(1) |
|
|
|
|
|
|
|
Gain on Repurchase of Senior
Convertible Notes |
— |
|
|
— |
|
|
(0.10 |
) |
|
— |
|
Debt Issuance Cost Write-Off |
— |
|
|
— |
|
|
— |
|
|
0.03 |
|
Realignment / Store Closing
Costs |
— |
|
|
— |
|
|
0.01 |
|
|
0.07 |
|
Ukraine Remeasurement (2) |
— |
|
|
— |
|
|
0.01 |
|
|
0.10 |
|
Total Pre-Tax Income (Loss)
Non-GAAP Adjustments |
— |
|
|
— |
|
|
(0.08 |
) |
|
0.19 |
|
Less: Tax Effect of Non-GAAP
Adjustments (3) |
— |
|
|
— |
|
|
(0.03 |
) |
|
0.04 |
|
Total Non-GAAP Adjustments |
— |
|
|
— |
|
|
(0.04 |
) |
|
0.15 |
|
Adjusted Earnings
(Loss) per Share - Diluted |
$ |
(0.12 |
) |
|
$ |
— |
|
|
$ |
(0.33 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
Net Cash
Provided By Operating Activities |
|
|
|
|
|
|
|
Net Cash Provided by
Operating Activities |
|
|
|
|
$ |
60,435 |
|
|
$ |
185,569 |
|
Net Change in
Non-Manufacturer Floorplan Payable |
|
|
|
|
(66,856 |
) |
|
(190,744 |
) |
Adjustment for Constant
Equity in Inventory |
|
|
|
|
7,520 |
|
|
9,844 |
|
Adjusted Net Cash
Provided By Operating Activities |
|
|
|
|
$ |
1,099 |
|
|
$ |
4,669 |
|
|
|
|
|
|
|
|
|
(1)
Adjustments are net of the impact of amounts attributable to
noncontrolling interests and allocated to participating
securities. |
(2)
Beginning in the second quarter of fiscal 2017 we discontinued
incorporating Ukraine remeasurement losses into our Non-GAAP income
(loss) and earnings (loss) per share calculations. The
Ukrainian hryvnia remained relatively stable during the three-month
period ending July 31, 2016 and therefore did not significantly
impact our consolidated statement of operations during the
period. Absent any future significant hryvnia volatility and
resulting financial statement impact, we will not include Ukraine
remeasurement losses in our Non-GAAP calculations in future
periods. |
(3) The
tax effect of Non-GAAP Adjustments was calculated using a 40% tax
rate for all U.S. related items that was determined based on a 35%
federal statutory rate and a blended state statutory rate of 5% and
no tax effect for foreign related items as all of our foreign
operations have full valuation allowances on deferred tax assets
including net operating losses, therefore we are not recognizing
any income tax expense or benefit. |
Investor Relations Contact:
ICR, Inc.
John Mills, jmills@icrinc.com
Partner
646-277-1254
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