- Revenue for Fiscal 2017 was $1.21 billion -
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 fiscal
year ended January 31, 2017.
Fiscal 2017 Fourth Quarter
Results
Consolidated ResultsFor the fourth quarter of
fiscal 2017, revenue was $317.6 million, compared to $335.5 million
in the fourth quarter last year. Equipment sales were $226.9
million for the fourth quarter of fiscal 2017, compared to $243.8
million in the fourth quarter last year. Parts sales were $48.7
million for the fourth quarter of fiscal 2017, compared to $47.9
million in the fourth quarter last year. Revenue generated from
service was $28.0 million for the fourth quarter of fiscal 2017,
compared to $27.6 million in the fourth quarter last year. Revenue
from rental and other was $14.0 million for the fourth quarter of
fiscal 2017, compared to $16.1 million in the fourth quarter last
year.
Gross profit for the fourth quarter of fiscal
2017 increased to $48.4 million compared to $16.3 million in the
fourth quarter last year. The gross profit for the fourth
quarter of fiscal 2016 was affected by an inventory impairment
charge of $27.5 million and the Company's intensified efforts to
sell aged equipment inventory. The Company’s gross profit margin
was 15.4% in the fourth quarter of fiscal 2017, compared to 4.8% in
the fourth quarter last year.
Operating expenses were $52.2 million or 16.4%
of revenue for the fourth quarter of fiscal 2017, compared to $54.5
million or 16.3% of revenue for the fourth quarter last
year.
Floorplan interest expense decreased to $2.7
million for the fourth quarter of fiscal 2017, compared to $4.4
million for the same period last year, primarily due to a decrease
in our average interest-bearing inventory in fiscal 2017.
Impairment and realignment costs were $4.2
million for the fourth quarter of fiscal 2017, primarily related to
the impairment of long-lived assets resulting from the dealership
restructuring plan announced on February 9, 2017 to consolidate
certain dealership locations and to implement a reorganization of
our operating structure. The Company closed one Construction
location during the fourth quarter ended January 31, 2017 and
expects to close 14 Agriculture locations during the first half of
fiscal 2018. The restructuring plan is expected to result in a
significant reduction in expenses while allowing the Company to
continue to provide a leading level of service to its customers.
The non-recurring pre-tax costs associated with this restructuring
plan, consisting primarily of lease termination costs and
termination benefits, are estimated to be approximately $9.5
million for fiscal 2018.
In the fourth quarter of fiscal 2016, impairment
and realignment costs consisted of a non-cash charge of $7.0
million primarily related to impairment of long-lived assets within
the Agriculture and Construction segments.
In the fourth quarter of fiscal 2017, net loss
including noncontrolling interest was $8.2 million, or $0.38 per
diluted share, compared to a net loss including noncontrolling
interest of $35.0 million, or $1.62 per diluted share for the
fourth quarter of fiscal 2016.
On a non-GAAP basis, adjusted net loss including
noncontrolling interest for the fourth quarter of fiscal 2017 was
$6.6 million, or $0.31 per diluted share, compared to adjusted net
loss including noncontrolling interest of $30.6 million, or $1.31
per diluted share, for the fourth quarter of fiscal 2016. The
Company generated adjusted EBITDA loss of $4.1 million for the
fourth quarter of fiscal 2017, compared to $35.5 million for the
same period of the prior year. For further information related to
the Company's use of Non-GAAP Financial Measures, see the
discussion under "Non-GAAP Financial Measures" below.
Segment ResultsAgriculture Segment - Revenue for
the fourth quarter of fiscal 2017 was $201.1 million, compared to
$204.2 million in the fourth quarter last year. Pre-tax loss for
the fourth quarter of fiscal 2017 was $5.9 million, compared to
pre-tax loss of $30.4 million in the fourth quarter last
year. The fourth quarter of fiscal 2016 was affected by an
inventory impairment charge of $11.4 million and the Company's
intensified efforts to sell aged equipment inventory.
Construction Segment - Revenue for the fourth
quarter of fiscal 2017 was $81.7 million, compared to $91.3 million
in the fourth quarter last year. Pre-tax loss for the fourth
quarter of fiscal 2017 was $4.4 million, compared to a pre-tax loss
of $23.3 million in the fourth quarter last year. The fourth
quarter of fiscal 2016 was affected by an inventory impairment
charge of $15.9 million and the Company's intensified efforts to
sell aged equipment inventory.
International Segment - Revenue for the fourth
quarter of fiscal 2017 was $34.8 million, compared to $39.9 million
in the fourth quarter last year. Pre-tax loss for the fourth
quarter of fiscal 2017 was $0.4 million, compared to pre-tax income
of $0.1 million in the fourth quarter last year.
Fiscal 2017 Full Year
Results
Revenue was $1.21 billion for fiscal 2017,
compared to $1.37 billion for the prior year. Net loss including
non-controlling interest for fiscal 2017 was $14.5 million, or
$0.65 per diluted share, compared to net loss including
non-controlling interest of $38.2 million, or $1.76 per diluted
share, for the prior year. Adjusted net loss including
non-controlling interest for fiscal 2017 was $14.2 million, or
$0.65 per diluted share, compared to adjusted net loss including
non-controlling interest of $29.7 million, or $1.25 per diluted
share, for the prior year. The Company generated an adjusted EBITDA
of $11.7 million in fiscal 2017, compared to adjusted EBITDA loss
of $3.0 million in fiscal 2016.
Balance Sheet and Cash Flow
The Company ended fiscal 2017 with cash of $53.2
million, compared to $89.5 million at the end of fiscal 2016. The
Company’s inventory level decreased to $478.3 million as of
January 31, 2017, compared to inventory of $680.5 million, as
of January 31, 2016. This includes a $195.6 million reduction
in equipment inventory. The Company had $233.2 million
outstanding floorplan payables on $842.5 million total
discretionary floorplan lines of credit as of January 31,
2017. Floorplan payables decreased by $211.6 million from the
balance of $444.8 million as of January 31, 2016. The Company
had other indebtedness consisting of total long-term debt and
senior convertible notes of $128.1 million as of January 31,
2017, which was a decrease of $46.0 million compared to the balance
of $174.1 million as of January 31, 2016. The reduced levels
of floorplan payable and other indebtedness have improved the
Company's ratio of total liabilities to tangible net worth to 1.4
as of January 31, 2017 from 2.1 as of January 31,
2016.
In fiscal 2017, the Company repurchased $54.3
million face value of its senior convertible notes with $46.0
million in cash. In addition, the Company repurchased $15.4
million face value of senior convertible notes with $14.6 million
in cash in the first quarter of fiscal 2018. The Company has
now retired $69.7 million of face value of its senior convertible
notes during the past twelve months with $60.6 million in
cash.
In fiscal 2017, the Company’s net cash provided
by operating activities was $141.0 million compared to $231.9
million for fiscal 2016. The Company evaluates its cash flow from
operating activities net of all floorplan payable activity and
maintaining a constant level of equity in its equipment inventory.
Taking these adjustments into account, the Company generated
adjusted net cash provided by operating activities of $88.8 million
in fiscal 2017, compared to adjusted net cash provided by operating
activities of $44.3 million in fiscal 2016.
Management Comments
David Meyer, Titan Machinery’s Chairman and
Chief Executive Officer, stated, “For fiscal 2017, we exceeded our
inventory reduction plans and began implementing a restructuring
plan that is consolidating certain dealership locations and
reorganizing our operating structure. Throughout fiscal 2017,
we took the necessary steps to manage through difficult operating
conditions, including reducing our operating expenses and reducing
our equipment inventory levels by $197 million, which enabled us to
continue to generate solid adjusted cash flow from operations."
Mr. Meyer continued, "Even though fiscal 2018 is
expected to be a challenging operating environment we are well
positioned to generate positive diluted earnings per share,
exclusive of the anticipated charges associated with our
restructuring activities. We have reduced our equipment inventory
by $543.6 million, or 58%, during the past 3 years and we expect to
reduce equipment inventory by another $50 million in fiscal
2018. We have also reduced our floorplan payables and
long-term debt by $610.0 million, or 63%, during the past 3
years. In addition, we believe our recently announced
restructuring plan will increase our operating efficiency and
result in approximately $25 million in annual structural expense
reduction, while not causing any reduction in customer
service. These improvements better align our cost structure
and balance sheet with current market conditions and provide us
with improved profitability, the ability to continue generating
strong operating cash flow and better position our business for
future profitable growth opportunities."
Fiscal 2018 Modeling Assumptions
The Company's fiscal 2018 modeling assumptions are as
follows:
- Agriculture Segment Sales Down 10-15% (includes impact of
closed stores)
- Construction Segment Sales Down 5-10% (includes impact of
closed store)
- International Segment Sales Up 3-8%.
- Equipment Margins Between 6.3-6.8%
- Expect diluted earnings per share to be slightly positive,
exclusive of the anticipated charges associated with our
restructuring activities
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) 587-0611 from the U.S. International callers can dial (719)
785-9448. A telephone replay will be available approximately two
hours after the call concludes and will be available through
Thursday, April 13, 2017, by dialing (844) 512-2921 from the U.S.,
or (412) 317-6671 from international locations, and entering
confirmation code 9943535.
Non-GAAP Financial Measures
Within this release, the Company refers to
several adjusted financial measures, which have directly comparable
GAAP financial measures as identified in this release. The Company
believes that non-GAAP financial measures, when reviewed in
conjunction with GAAP financial measures, can provide more
information to assist investors in evaluating historical
performance and in assessing future performance. For these reasons,
internal management reporting also includes non-GAAP measures.
Generally, the non-GAAP measures include adjustments for items such
as realignment charges, long-lived asset impairments, gains on the
repurchase of senior convertible notes, gains on insurance
recoveries, foreign currency remeasurement losses in Ukraine
resulting from a devaluation of the UAH and other gains and losses.
These non-GAAP financial measures should be considered in addition
to, and not superior to or as a substitute for the GAAP financial
measures presented in this earnings release and the Company’s
financial statements and other publicly filed reports. Non-GAAP
measures as presented herein may not be comparable to similarly
titled measures used by other companies. Investors are encouraged
to review the reconciliations of adjusted financial measures used
in this press release to their most directly comparable GAAP
financial measures, which reconciliations are provided with the
financial statements attached to this release. The tables included
in the Non-GAAP Reconciliations reconcile net income (loss)
including noncontrolling interest, earnings (loss) per share –
diluted, and net cash provided by operating activities (GAAP
financial measures) for the periods presented to adjusted net
income (loss) including noncontrolling interest, adjusted EBITDA
(loss), adjusted earnings (loss) per share – diluted, and adjusted
net cash provided by operating activities (non-GAAP financial
measures) for the periods presented.
About Titan Machinery Inc.
Titan Machinery Inc., founded in 1980 and headquartered in West
Fargo, North Dakota, owns and operates a network of full-service
agricultural and construction equipment dealer locations in North
America and Europe. The network consists of US locations in North
Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming,
Wisconsin, Colorado, Arizona, and New Mexico, and European
locations in Romania, Bulgaria, Serbia, and Ukraine. The Titan
Machinery locations represent one or more of the CNH Industrial
Brands, including Case IH, 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,
2018, 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) |
(Unaudited) |
|
|
|
|
|
January 31, 2017 |
|
January 31, 2016 |
Assets |
|
|
|
Current Assets |
|
|
|
Cash |
$ |
53,151 |
|
|
$ |
89,465 |
|
Receivables, net |
60,082 |
|
|
65,534 |
|
Inventories |
478,266 |
|
|
680,482 |
|
Prepaid
expenses and other |
10,989 |
|
|
9,753 |
|
Income
taxes receivable |
5,380 |
|
|
13,011 |
|
Total
current assets |
607,868 |
|
|
858,245 |
|
Noncurrent Assets |
|
|
|
Intangible assets, net of accumulated amortization |
5,001 |
|
|
5,134 |
|
Property
and Equipment, net of accumulated depreciation |
156,647 |
|
|
183,179 |
|
Deferred
income taxes |
547 |
|
|
— |
|
Other |
1,359 |
|
|
1,317 |
|
Total
noncurrent assets |
163,554 |
|
|
189,630 |
|
Total
Assets |
$ |
771,422 |
|
|
$ |
1,047,875 |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
Current
Liabilities |
|
|
|
Accounts
payable |
$ |
17,326 |
|
|
$ |
16,863 |
|
Floorplan
payable |
233,228 |
|
|
444,780 |
|
Current
maturities of long-term debt |
1,373 |
|
|
1,557 |
|
Customer
deposits |
26,366 |
|
|
31,159 |
|
Accrued
expenses and other |
30,533 |
|
|
29,066 |
|
Total
current liabilities |
308,826 |
|
|
523,425 |
|
Long-Term
Liabilities |
|
|
|
Senior
convertible notes |
88,501 |
|
|
134,145 |
|
Long-term
debt, less current maturities |
38,236 |
|
|
38,409 |
|
Deferred
income taxes |
9,500 |
|
|
11,135 |
|
Other
long-term liabilities |
5,180 |
|
|
2,412 |
|
Total
long-term liabilities |
141,417 |
|
|
186,101 |
|
Stockholders'
Equity |
|
|
|
Additional paid-in-capital |
240,615 |
|
|
242,491 |
|
Retained
earnings |
85,347 |
|
|
99,526 |
|
Accumulated other comprehensive loss |
(4,783 |
) |
|
(4,461 |
) |
Total
Titan Machinery Inc. stockholders' equity |
321,179 |
|
|
337,556 |
|
Noncontrolling interest |
— |
|
|
793 |
|
Total
stockholders' equity |
321,179 |
|
|
338,349 |
|
Total
Liabilities and Stockholders' Equity |
$ |
771,422 |
|
|
$ |
1,047,875 |
|
|
TITAN MACHINERY INC. |
Consolidated Statements of
Operations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended January 31, |
|
Twelve Months Ended January 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue |
|
|
|
|
|
|
|
Equipment |
$ |
226,946 |
|
|
$ |
243,780 |
|
|
$ |
797,315 |
|
|
$ |
925,471 |
|
Parts |
48,713 |
|
|
47,948 |
|
|
233,819 |
|
|
245,387 |
|
Service |
28,011 |
|
|
27,597 |
|
|
124,076 |
|
|
127,457 |
|
Rental
and other |
13,951 |
|
|
16,149 |
|
|
57,870 |
|
|
69,520 |
|
Total Revenue |
317,621 |
|
|
335,474 |
|
|
1,213,080 |
|
|
1,367,835 |
|
Cost of Revenue |
|
|
|
|
|
|
|
Equipment |
213,799 |
|
|
261,287 |
|
|
746,169 |
|
|
889,567 |
|
Parts |
34,014 |
|
|
34,457 |
|
|
164,020 |
|
|
173,083 |
|
Service |
10,811 |
|
|
10,678 |
|
|
46,284 |
|
|
46,814 |
|
Rental
and other |
10,175 |
|
|
12,783 |
|
|
42,878 |
|
|
52,457 |
|
Total Cost of
Revenue |
268,799 |
|
|
319,205 |
|
|
999,351 |
|
|
1,161,921 |
|
Gross Profit |
48,822 |
|
|
16,269 |
|
|
213,729 |
|
|
205,914 |
|
Operating Expenses |
52,240 |
|
|
54,545 |
|
|
211,372 |
|
|
220,524 |
|
Impairment and
Realignment Costs |
4,183 |
|
|
6,981 |
|
|
4,729 |
|
|
8,500 |
|
Loss from
Operations |
(7,601 |
) |
|
(45,257 |
) |
|
(2,372 |
) |
|
(23,110 |
) |
Other Income
(Expense) |
|
|
|
|
|
|
|
Interest
income and other income (expense) |
273 |
|
|
87 |
|
|
1,524 |
|
|
(478 |
) |
Floorplan
interest expense |
(2,717 |
) |
|
(4,389 |
) |
|
(13,560 |
) |
|
(18,334 |
) |
Other
interest expense |
(2,375 |
) |
|
(3,061 |
) |
|
(8,305 |
) |
|
(14,289 |
) |
Loss Before Income
Taxes |
(12,420 |
) |
|
(52,620 |
) |
|
(22,713 |
) |
|
(56,211 |
) |
Benefit from Income
Taxes |
(4,181 |
) |
|
(17,628 |
) |
|
(8,178 |
) |
|
(17,982 |
) |
Net Loss Including
Noncontrolling Interest |
(8,239 |
) |
|
(34,992 |
) |
|
(14,535 |
) |
|
(38,229 |
) |
Less: Net Income (Loss)
Attributable to Noncontrolling Interest |
— |
|
|
58 |
|
|
(356 |
) |
|
(337 |
) |
Net Loss Attributable
to Titan Machinery Inc. |
(8,239 |
) |
|
(35,050 |
) |
|
(14,179 |
) |
|
(37,892 |
) |
Net Loss Allocated to
Participating Securities - Note 1 |
190 |
|
|
683 |
|
|
243 |
|
|
717 |
|
Net Loss Attributable
to Titan Machinery Inc. Common Stockholders |
$ |
(8,049 |
) |
|
$ |
(34,367 |
) |
|
$ |
(13,936 |
) |
|
$ |
(37,175 |
) |
|
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
(0.38 |
) |
|
$ |
(1.62 |
) |
|
$ |
(0.65 |
) |
|
$ |
(1.76 |
) |
Weighted Average Common
Shares - Diluted |
21,342 |
|
|
21,171 |
|
|
21,294 |
|
|
21,111 |
|
|
TITAN MACHINERY INC. |
Consolidated Condensed Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Year Ended January 31, |
|
2017 |
|
2016 |
Operating
Activities |
|
|
|
Net loss
including noncontrolling interest |
$ |
(14,535 |
) |
|
$ |
(38,229 |
) |
Adjustments to reconcile net loss including noncontrolling interest
to net cash provided by operating activities |
|
|
|
Depreciation and amortization |
26,868 |
|
|
28,538 |
|
Impairment |
4,410 |
|
|
6,903 |
|
Deferred
income taxes |
(2,841 |
) |
|
(9,171 |
) |
Other,
net |
3,404 |
|
|
8,124 |
|
Changes
in assets and liabilities |
|
|
|
Inventories |
211,793 |
|
|
196,983 |
|
Manufacturer floorplan payable |
(95,341 |
) |
|
45,005 |
|
Other
working capital |
7,239 |
|
|
(6,269 |
) |
Net Cash Provided by
Operating Activities |
140,997 |
|
|
231,884 |
|
Investing
Activities |
|
|
|
Property
and equipment purchases |
(12,425 |
) |
|
(8,411 |
) |
Proceeds
from sale of property and equipment |
2,388 |
|
|
7,777 |
|
Other,
net |
912 |
|
|
508 |
|
Net Cash Used for
Investing Activities |
(9,125 |
) |
|
(126 |
) |
Financing
Activities |
|
|
|
Net
change in non-manufacturer floorplan payable |
(116,558 |
) |
|
(221,912 |
) |
Repurchase of Senior Convertible Notes |
(46,013 |
) |
|
— |
|
Net
payments on long-term debt borrowings |
(3,190 |
) |
|
(43,969 |
) |
Other,
net |
(2,215 |
) |
|
(3,075 |
) |
Net Cash Used for
Financing Activities |
(167,976 |
) |
|
(268,956 |
) |
Effect of Exchange Rate
Changes on Cash |
(210 |
) |
|
(865 |
) |
Net Change in Cash |
(36,314 |
) |
|
(38,063 |
) |
Cash at Beginning of
Period |
89,465 |
|
|
127,528 |
|
Cash at End of
Period |
$ |
53,151 |
|
|
$ |
89,465 |
|
|
TITAN MACHINERY INC. |
Segment Results |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended January 31, |
|
Twelve Months Ended January 31, |
|
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
|
% Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
201,107 |
|
|
$ |
204,245 |
|
|
(1.5 |
)% |
|
$ |
739,167 |
|
|
$ |
864,851 |
|
|
(14.5 |
)% |
Construction |
81,703 |
|
|
91,315 |
|
|
(10.5 |
)% |
|
323,625 |
|
|
340,916 |
|
|
(5.1 |
)% |
International |
34,811 |
|
|
39,914 |
|
|
(12.8 |
)% |
|
150,288 |
|
|
162,068 |
|
|
(7.3 |
)% |
Total |
$ |
317,621 |
|
|
$ |
335,474 |
|
|
(5.3 |
)% |
|
$ |
1,213,080 |
|
|
$ |
1,367,835 |
|
|
(11.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
Before Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
(5,900 |
) |
|
$ |
(30,403 |
) |
|
80.6 |
% |
|
$ |
(15,781 |
) |
|
$ |
(29,710 |
) |
|
46.9 |
% |
Construction |
(4,352 |
) |
|
(23,299 |
) |
|
81.3 |
% |
|
(5,875 |
) |
|
(26,388 |
) |
|
77.7 |
% |
International |
(381 |
) |
|
70 |
|
|
(644.3 |
)% |
|
(469 |
) |
|
(3,004 |
) |
|
84.4 |
% |
Segment income (loss)
before income taxes |
(10,633 |
) |
|
(53,632 |
) |
|
80.2 |
% |
|
(22,125 |
) |
|
(59,102 |
) |
|
62.6 |
% |
Shared
Resources |
(1,787 |
) |
|
1,012 |
|
|
(276.6 |
)% |
|
(588 |
) |
|
2,891 |
|
|
(120.3 |
)% |
Income (Loss) Before
Income Taxes |
$ |
(12,420 |
) |
|
$ |
(52,620 |
) |
|
76.4 |
% |
|
$ |
(22,713 |
) |
|
$ |
(56,211 |
) |
|
59.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
TITAN MACHINERY INC. |
Non-GAAP Reconciliations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended January 31, |
|
Twelve Months Ended January 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net Loss
Including Noncontrolling Interest |
|
|
|
|
|
|
|
Net Loss Including
Noncontrolling Interest |
$ |
(8,239 |
) |
|
$ |
(34,992 |
) |
|
$ |
(14,535 |
) |
|
$ |
(38,229 |
) |
Non-GAAP
Adjustments |
|
|
|
|
|
|
|
Impairment |
4,135 |
|
|
6,710 |
|
|
4,410 |
|
|
6,903 |
|
Gain on
Repurchase of Senior Convertible Notes |
— |
|
|
— |
|
|
(3,130 |
) |
|
— |
|
Debt
Issuance Cost Write-Off |
— |
|
|
— |
|
|
624 |
|
|
1,558 |
|
Realignment / Store Closing Costs |
48 |
|
|
271 |
|
|
319 |
|
|
1,597 |
|
Ukraine
Remeasurement (1) |
— |
|
|
197 |
|
|
195 |
|
|
2,485 |
|
Gain on
Insurance Recoveries |
(1,411 |
) |
|
— |
|
|
(1,997 |
) |
|
— |
|
Total
Pre-Tax Non-GAAP Adjustments |
2,772 |
|
|
7,178 |
|
|
421 |
|
|
12,543 |
|
Less: Tax
Effect of Non-GAAP Adjustments (2) |
1,056 |
|
|
408 |
|
|
(6 |
) |
|
1,639 |
|
Income
Tax Valuation Allowance |
44 |
|
|
2,384 |
|
|
44 |
|
|
2,384 |
|
Total
Non-GAAP Adjustments |
1,672 |
|
|
4,386 |
|
|
383 |
|
|
8,520 |
|
Adjusted Net Loss
Including Noncontrolling Interest |
$ |
(6,567 |
) |
|
$ |
(30,606 |
) |
|
$ |
(14,152 |
) |
|
$ |
(29,709 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Loss) |
|
|
|
|
|
|
|
Net Loss Including
Noncontrolling Interest |
$ |
(8,239 |
) |
|
$ |
(34,992 |
) |
|
$ |
(14,535 |
) |
|
$ |
(38,229 |
) |
Adjustments |
|
|
|
|
|
|
|
Interest
Expense, Net of Interest Income (3) |
(1,466 |
) |
|
2,985 |
|
|
7,112 |
|
|
12,091 |
|
Benefit
from Income Taxes |
(4,181 |
) |
|
(17,628 |
) |
|
(8,178 |
) |
|
(17,982 |
) |
Depreciation and amortization |
6,972 |
|
|
6,950 |
|
|
26,868 |
|
|
28,538 |
|
EBITDA (Loss) |
(6,914 |
) |
|
(42,685 |
) |
|
11,267 |
|
|
(15,582 |
) |
Non-GAAP
Adjustments |
|
|
|
|
|
|
|
Impairment |
4,135 |
|
|
6,710 |
|
|
4,410 |
|
|
6,903 |
|
Gain on
Repurchase of Senior Convertible Notes |
— |
|
|
— |
|
|
(3,130 |
) |
|
— |
|
Debt
Issuance Cost Write-Off |
— |
|
|
— |
|
|
624 |
|
|
1,558 |
|
Realignment / Store Closing Costs |
48 |
|
|
271 |
|
|
319 |
|
|
1,597 |
|
Gain on
Insurance Recoveries |
(1,411 |
) |
|
— |
|
|
(1,997 |
) |
|
— |
|
Ukraine
Remeasurement (1) |
— |
|
|
197 |
|
|
195 |
|
|
2,485 |
|
Total
Non-GAAP Adjustments |
2,772 |
|
|
7,178 |
|
|
421 |
|
|
12,543 |
|
Adjusted EBITDA
(Loss) |
$ |
(4,142 |
) |
|
$ |
(35,507 |
) |
|
$ |
11,688 |
|
|
$ |
(3,039 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TITAN MACHINERY INC. |
Non-GAAP Reconciliations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
Three Months Ended January 31, |
|
Twelve Months Ended January 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Earnings (Loss)
per Share - Diluted |
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
(0.38 |
) |
|
$ |
(1.62 |
) |
|
$ |
(0.65 |
) |
|
$ |
(1.76 |
) |
Non-GAAP Adjustments
(4) |
|
|
|
|
|
|
|
Impairment |
0.19 |
|
|
0.31 |
|
|
0.20 |
|
|
0.32 |
|
Gain on
Repurchase of Senior Convertible Notes |
— |
|
|
— |
|
|
(0.15 |
) |
|
— |
|
Debt
Issuance Cost Write-Off |
— |
|
|
— |
|
|
0.03 |
|
|
0.07 |
|
Realignment / Store Closing Costs |
— |
|
|
0.01 |
|
|
0.01 |
|
|
0.07 |
|
Ukraine
Remeasurement (1) |
— |
|
|
0.01 |
|
|
0.01 |
|
|
0.12 |
|
Gain on
Insurance Recoveries |
(0.07 |
) |
|
— |
|
|
(0.10 |
) |
|
— |
|
Total
Pre-Tax Non-GAAP Adjustments |
0.12 |
|
|
0.33 |
|
|
— |
|
|
0.58 |
|
Less: Tax
Effect of Non-GAAP Adjustments (2) |
0.05 |
|
|
0.13 |
|
|
— |
|
|
0.19 |
|
Income
Tax Valuation Allowance |
— |
|
|
0.11 |
|
|
— |
|
|
0.11 |
|
Total
Non-GAAP Adjustments |
0.07 |
|
|
0.31 |
|
|
— |
|
|
0.51 |
|
Adjusted Earnings
(Loss) per Share - Diluted |
$ |
(0.31 |
) |
|
$ |
(1.31 |
) |
|
$ |
(0.65 |
) |
|
$ |
(1.25 |
) |
|
|
|
|
|
|
|
|
Net Cash
Provided By Operating Activities |
|
|
|
|
|
|
|
Net Cash Provided by
Operating Activities |
|
|
|
|
$ |
140,997 |
|
|
$ |
231,884 |
|
Net Change in
Non-Manufacturer Floorplan Payable |
|
|
|
|
(116,558 |
) |
|
(221,912 |
) |
Adjustment for Constant
Equity in Inventory |
|
|
|
|
64,400 |
|
|
34,330 |
|
Adjusted Net Cash
Provided By Operating Activities |
|
|
|
|
$ |
88,839 |
|
|
$ |
44,302 |
|
|
|
|
|
|
|
|
|
(1)
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 subsequent to April
30, 2016 and therefore did not significantly impact our
consolidated statement of operations during this 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. |
(2) 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 Non-GAAP adjustments
occurred in foreign jurisdictions that have full valuation
allowances on deferred tax assets, therefore we are not recognizing
any income tax expense or benefit in these jurisdictions. |
(3)
Interest Expense, Net of Interest Income excludes floorplan
interest expense. |
(4)
Adjustments are net of the impact of amounts attributable to
noncontrolling interests and allocated to participating
securities. |
|
Investor Relations Contact:
ICR, Inc.
John Mills, John.Mills@icrinc.com
Partner
646-277-1254
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