- Revenue for Second Quarter of Fiscal 2018 was
$269 million -
Titan Machinery Inc. (Nasdaq:TITN), a leading global dealership
with a network of full-service agricultural and construction
stores, today reported financial results for the fiscal second
quarter ended July 31, 2017.
David Meyer, Titan Machinery’s Chairman and
Chief Executive Officer, stated, "Second quarter financial results
reflect improvements in gross margins, operating expenses and
interest expense. While our overall pre-tax results have not
improved due to the restructuring costs that we have incurred, our
adjusted pre-tax results, which are exclusive of restructuring
charges, have improved in all three of our operating segments,
Agriculture, Construction and International. We believe the
Agriculture equipment inventory environment continues to stabilize
as we improved our equipment margins, while also reducing used
equipment inventory for the tenth straight quarter. Operating
expenses improved year over year, however they did not decrease at
the rate and to the level we initially projected. We completed
nearly all of our restructuring efforts in August and now believe
we will achieve an approximate annual expense reduction of $20
million compared to the previously expected $25 million. The two
primary reasons for the less-than-anticipated savings are higher
expenses in our International segment due to materially higher
revenues and a stronger Euro and lower restructuring savings in our
Agriculture and Construction operations resulting from our decision
to commit more resources to customer support to continue to provide
the leading customer experience in our industry and grow customer
loyalty through down markets. The extent and the timing of these
reductions will result in approximately $200 million of operating
expenses, exclusive of restructuring costs, for our current fiscal
year."
Fiscal 2018 Second Quarter Results
Consolidated ResultsFor the second quarter of fiscal 2018,
revenue was $268.9 million, compared to $278.3 million in the
second quarter last year. Equipment sales were $167.9 million for
the second quarter of fiscal 2018, compared to $173.3 million in
the second quarter last year. Parts sales were $55.6 million for
the second quarter of fiscal 2018, compared to $58.3 million in the
second quarter last year. Revenue generated from service was $30.5
million for the second quarter of fiscal 2018, compared to $31.3
million in the second quarter last year. Revenue from rental and
other was $14.9 million for the second quarter of fiscal 2018,
compared to $15.4 million in the second quarter last year.
Gross profit for the second quarter of fiscal
2018 was $52.8 million, compared to $52.9 million in the second
quarter last year. The Company’s gross profit margin was 19.6% in
the second quarter of fiscal 2018, compared to 19.0% in the second
quarter last year. Gross profit from parts, service and rental and
other for the second quarter of fiscal 2018 was 75.1% of overall
gross profit, compared to 76.6% in the second quarter last
year.
Operating expenses decreased by $1.0 million to
$50.5 million, or 18.7% of revenue, for the second quarter of
fiscal 2018, compared to $51.5 million, or 18.5% of revenue, for
the second quarter of last year. Restructuring efforts that
were completed early in the third quarter of fiscal 2018 are
expected to continue to reduce operating expenses on a going
forward basis.
Floorplan interest expense was $2.2 million for
the second quarter of fiscal 2018, compared to $3.8 million in the
second quarter of last year. The decrease in floorplan interest
expense is primarily due to a decrease in the level of
interest-bearing inventory in the second quarter of fiscal 2018.
Other interest expense was $2.5 million for the second quarter of
fiscal 2018, compared to $2.8 million in the second quarter of last
year.
Restructuring costs were $5.5 million for the
second quarter of fiscal 2018. The restructuring costs recognized
in the second quarter of fiscal 2018 are the result of the
Company's restructuring plan announced on February 9, 2017 to
consolidate certain dealership locations and to implement a
reorganization of its operating structure. The Company closed one
Construction location during the fourth quarter ended January 31,
2017 and closed 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 an additional $4.0
million for the second half of fiscal 2018.
In the second quarter of fiscal 2018, net loss
including noncontrolling interest was $5.2 million, or loss per
diluted share of $0.24, compared to a net loss including
noncontrolling interest of $2.7 million, or loss per diluted share
of $0.12 for the second quarter of last year.
On an adjusted basis, net loss including
noncontrolling interest for the second quarter of fiscal 2018 was
$1.0 million, or adjusted loss per diluted share of $0.04, compared
to adjusted net loss including noncontrolling interest of $2.7
million, or adjusted loss per diluted share of $0.12, for the
second quarter of last year. The Company generated $6.9 million in
adjusted EBITDA in the second quarter of fiscal 2018, compared to
$4.7 million in the second quarter of last year.
Segment ResultsAgriculture Segment - Revenue for
the second quarter of fiscal 2018 was $138.5 million, compared to
$153.7 million in the second quarter last year. Pre-tax loss for
the second quarter of fiscal 2018 was $6.9 million, compared to
pre-tax loss of $4.3 million in the second quarter last year.
Adjusted pre-tax loss for the second quarter of fiscal 2018 was
$1.7 million, compared to adjusted pre-tax loss of $4.3 million in
the second quarter last year.
Construction Segment - Revenue for the second
quarter of fiscal 2018 was $77.9 million, compared to $83.1 million
in the second quarter last year. Revenue for the second quarter of
last year included approximately $14.0 million of equipment revenue
associated with our aggressive selling efforts through alternative
marketing channels for certain aged equipment inventory. Pre-tax
income for the second quarter of fiscal 2018 was $0.9 million,
compared to a pre-tax income of $0.6 million in the second quarter
last year. Adjusted pre-tax income for the second quarter of fiscal
2018 was $1.2 million, compared to adjusted pre-tax income of $0.6
million in the second quarter last year.
International Segment - Revenue for the second
quarter of fiscal 2018 was $52.4 million, compared to $41.5 million
in the second quarter last year. The increase in revenue is
primarily due to increased equipment revenue as the result of the
build out of our footprint and availability of subvention funds in
certain of our markets. Pre-tax income for the second quarter
of fiscal 2018 was $0.3 million, compared to a pre-tax loss of $0.2
million in the second quarter last year.
Fiscal 2018 First Six Months Results
Revenue was $533.0 million for the first six months of fiscal
2018, compared to $563.2 million for the same period last year. Net
loss including noncontrolling interest for the first six months of
fiscal 2018 was $11.1 million, or $0.51 per diluted share, compared
to $6.6 million, or $0.29 per diluted share, for the same period
last year. On an adjusted basis, net loss including noncontrolling
interest for the first six months of fiscal 2018 was $5.1 million,
or $0.23 per diluted share, compared to $7.5 million, or $0.33 per
diluted share, for the same period last year. The Company generated
$8.5 million in adjusted EBITDA in the first six months of fiscal
2018, compared to $6.4 million in the same period last year.
Balance Sheet and Cash Flow
The Company ended the second quarter of fiscal
2018 with $57.5 million of cash. The Company’s inventory level
increased to $517.5 million as of July 31, 2017, compared to
$478.3 million as of January 31, 2017. This inventory increase
includes a $45.3 million increase in equipment inventory, which
reflects an increase in new equipment inventory of $70.4 million,
partially offset by a $25.1 million, or 15.6%, decrease in used
equipment inventory. The Company had $308.0 million outstanding
floorplan payables on $741.0 million total discretionary floorplan
lines of credit as of July 31, 2017, compared to $233.2
million outstanding floorplan payables as of January 31,
2017.
During the first six months of fiscal 2018, the Company
repurchased $20.3 million face value amount of senior convertible
notes with $19.3 million in cash. The Company has now retired $74.5
million, or approximately 50%, of the original face value amount of
its senior convertible notes, during fiscal 2017 and the first six
months of fiscal 2018, with $65.3 million in cash.
In the first six months of fiscal 2018, the
Company’s net cash provided by operating activities was $66.9
million, compared to $60.4 million in the first six months of
fiscal 2017. 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, adjusted net cash used for operating
activities was $19.3 million in the first six months of fiscal
2018, compared to adjusted net cash provided by operating
activities of $1.1 million in first six months of fiscal 2017.
Mr. Meyer concluded, "The overall Agriculture
and Construction markets in our footprint continue to show soft
demand, but the improvements we have made and continue to make to
our operating structure have us well positioned to generate
improved year over year adjusted bottom line and adjusted EBITDA
results. In addition, our expected cash flow generation from
operations in fiscal year 2018 combined with a solid balance sheet
has positioned us to take advantage of strategic opportunities and
to drive long-term profitability."
Updating Fiscal 2018 Modeling
Assumptions
The Company's fiscal 2018 modeling assumptions are as
follows:
|
|
Current Assumptions |
|
Previous Assumptions |
Segment
Revenue |
|
|
|
Agriculture (1) |
Down
10-15% |
|
Down
10-15% |
Construction (1) |
Down
5-10% |
|
Down
5-10% |
International |
Up
20-25% |
|
Up
13-18% |
|
|
|
|
Equipment
Margin |
7.0-7.5% |
|
7.0-7.5% |
|
|
|
|
Diluted
EPS (2) |
($0.15) - ($0.35) |
|
Slightly Positive |
|
|
|
|
(1)
Includes impact of closed stores |
(2)
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). Investors interested in participating in the live call
can dial (877) 419-6603 from the U.S. International callers can
dial (719) 325-4781. A telephone replay will be available
approximately two hours after the call concludes and will be
available through Thursday, September 14, 2017, by dialing (844)
512-2921 from the U.S., or (412) 317-6671 from international
locations, and entering confirmation code 2298786.
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.
Non-GAAP Financial Measures
Within this release, the Company refers to
certain 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 current period
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 restructuring costs, long-lived asset impairments, gains or
losses on the repurchase of senior convertible notes, gains on
insurance recoveries, foreign currency remeasurement losses in
Ukraine, and other gains and losses. The 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 as provided with
the financial statements attached to this release. The tables
included in the Non-GAAP Reconciliations section reconcile net
income (loss) including noncontrolling interest, earnings (loss)
per share – diluted, income (loss) before income taxes, and net
cash provided by operating activities (all GAAP financial measures)
for the periods presented to adjusted net income (loss) including
noncontrolling interest, adjusted EBITDA (loss), adjusted earnings
(loss) per share – diluted, adjusted income (loss) before income
taxes, and adjusted net cash provided by (used for) operating
activities (all 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, is a leading global
dealership with a network of full-service agriculture and
construction stores. 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, except per share
data) |
(Unaudited) |
|
|
|
|
|
July 31, 2017 |
|
January 31, 2017 |
Assets |
|
|
|
Current Assets |
|
|
|
Cash |
$ |
57,526 |
|
|
$ |
53,151 |
|
Receivables, net |
63,698 |
|
|
60,082 |
|
Inventories |
517,464 |
|
|
478,266 |
|
Prepaid
expenses and other |
10,465 |
|
|
10,989 |
|
Income
taxes receivable |
6,049 |
|
|
5,380 |
|
Total
current assets |
655,202 |
|
|
607,868 |
|
Noncurrent Assets |
|
|
|
Intangible assets, net of accumulated amortization |
4,960 |
|
|
5,001 |
|
Property
and equipment, net of accumulated depreciation
|
160,613 |
|
|
156,647 |
|
Deferred
income taxes |
334 |
|
|
547 |
|
Other |
1,312 |
|
|
1,359 |
|
Total
noncurrent assets |
167,219 |
|
|
163,554 |
|
Total
Assets |
$ |
822,421 |
|
|
$ |
771,422 |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
Current
Liabilities |
|
|
|
Accounts
payable |
$ |
16,331 |
|
|
$ |
17,326 |
|
Floorplan
payable |
308,025 |
|
|
233,228 |
|
Current
maturities of long-term debt |
1,477 |
|
|
1,373 |
|
Customer
deposits |
20,769 |
|
|
26,366 |
|
Accrued
expenses and other |
28,918 |
|
|
30,533 |
|
Total
current liabilities |
375,520 |
|
|
308,826 |
|
Long-Term
Liabilities |
|
|
|
Senior
convertible notes |
70,975 |
|
|
88,501 |
|
Long-term
debt, less current maturities |
49,169 |
|
|
38,236 |
|
Deferred
income taxes |
3,263 |
|
|
9,500 |
|
Other
long-term liabilities |
8,769 |
|
|
5,180 |
|
Total
long-term liabilities |
132,176 |
|
|
141,417 |
|
Stockholders'
Equity |
|
|
|
Common
stock |
— |
|
|
— |
|
Additional paid-in-capital |
244,522 |
|
|
240,615 |
|
Retained
earnings |
72,977 |
|
|
85,347 |
|
Accumulated other comprehensive loss |
(2,774 |
) |
|
(4,783 |
) |
Total
stockholders' equity |
314,725 |
|
|
321,179 |
|
Total
Liabilities and Stockholders' Equity |
$ |
822,421 |
|
|
$ |
771,422 |
|
|
TITAN MACHINERY INC. |
Consolidated Statements of
Operations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue |
|
|
|
|
|
|
|
Equipment |
$ |
167,881 |
|
|
$ |
173,301 |
|
|
$ |
335,796 |
|
|
$ |
358,175 |
|
Parts |
55,580 |
|
|
58,336 |
|
|
112,163 |
|
|
115,845 |
|
Service |
30,509 |
|
|
31,296 |
|
|
59,275 |
|
|
62,288 |
|
Rental
and other |
14,901 |
|
|
15,400 |
|
|
25,755 |
|
|
26,885 |
|
Total Revenue |
268,871 |
|
|
278,333 |
|
|
532,989 |
|
|
563,193 |
|
Cost of Revenue |
|
|
|
|
|
|
|
Equipment |
154,729 |
|
|
160,906 |
|
|
310,246 |
|
|
331,230 |
|
Parts |
39,103 |
|
|
41,118 |
|
|
79,460 |
|
|
81,619 |
|
Service |
11,444 |
|
|
12,045 |
|
|
22,238 |
|
|
23,645 |
|
Rental
and other |
10,788 |
|
|
11,331 |
|
|
19,319 |
|
|
20,218 |
|
Total Cost of
Revenue |
216,064 |
|
|
225,400 |
|
|
431,263 |
|
|
456,712 |
|
Gross Profit |
52,807 |
|
|
52,933 |
|
|
101,726 |
|
|
106,481 |
|
Operating Expenses |
50,523 |
|
|
51,487 |
|
|
102,510 |
|
|
105,989 |
|
Restructuring
Costs |
5,549 |
|
|
24 |
|
|
7,893 |
|
|
271 |
|
Income (Loss) from
Operations |
(3,265 |
) |
|
1,422 |
|
|
(8,677 |
) |
|
221 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
Interest
income and other income |
682 |
|
|
612 |
|
|
1,460 |
|
|
749 |
|
Floorplan
interest expense |
(2,163 |
) |
|
(3,806 |
) |
|
(4,819 |
) |
|
(7,549 |
) |
Other
interest expense |
(2,464 |
) |
|
(2,777 |
) |
|
(4,584 |
) |
|
(3,770 |
) |
Loss Before Income
Taxes |
(7,210 |
) |
|
(4,549 |
) |
|
(16,620 |
) |
|
(10,349 |
) |
Benefit from Income
Taxes |
(2,024 |
) |
|
(1,847 |
) |
|
(5,502 |
) |
|
(3,789 |
) |
Net Loss Including
Noncontrolling Interest |
(5,186 |
) |
|
(2,702 |
) |
|
(11,118 |
) |
|
(6,560 |
) |
Less: Loss Attributable
to Noncontrolling Interest |
— |
|
|
(182 |
) |
|
— |
|
|
(356 |
) |
Net Loss Attributable
to Titan Machinery Inc. |
(5,186 |
) |
|
(2,520 |
) |
|
(11,118 |
) |
|
(6,204 |
) |
Net Loss Allocated to
Participating Securities |
99 |
|
|
51 |
|
|
222 |
|
|
117 |
|
Net Loss Attributable
to Titan Machinery Inc. Common Stockholders |
$ |
(5,087 |
) |
|
$ |
(2,469 |
) |
|
$ |
(10,896 |
) |
|
$ |
(6,087 |
) |
|
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
(0.24 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.51 |
) |
|
$ |
(0.29 |
) |
Weighted Average Common
Shares - Diluted |
21,546 |
|
|
21,205 |
|
|
21,461 |
|
|
21,204 |
|
|
TITAN MACHINERY INC. |
Consolidated Condensed Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Six Months Ended July 31, |
|
2017 |
|
2016 |
Operating
Activities |
|
|
|
Net loss
including noncontrolling interest |
$ |
(11,118 |
) |
|
$ |
(6,560 |
) |
Adjustments to reconcile net loss including noncontrolling interest
to net cash provided by operating activities |
|
|
|
Depreciation and amortization |
12,268 |
|
|
12,828 |
|
Other,
net |
(2,961 |
) |
|
2,285 |
|
Changes
in assets and liabilities |
|
|
|
Inventories |
(31,981 |
) |
|
13,644 |
|
Manufacturer floorplan payable |
107,833 |
|
|
52,048 |
|
Other
working capital |
(7,164 |
) |
|
(13,810 |
) |
Net Cash Provided by
Operating Activities |
66,877 |
|
|
60,435 |
|
Investing
Activities |
|
|
|
Property
and equipment purchases |
(17,694 |
) |
|
(4,906 |
) |
Proceeds
from sale of property and equipment |
2,253 |
|
|
1,383 |
|
Other,
net |
78 |
|
|
(66 |
) |
Net Cash Used for
Investing Activities |
(15,363 |
) |
|
(3,589 |
) |
Financing
Activities |
|
|
|
Net
change in non-manufacturer floorplan payable |
(38,030 |
) |
|
(66,856 |
) |
Repurchase of senior convertible notes |
(19,340 |
) |
|
(24,983 |
) |
Net
proceeds from (payments on) long-term debt borrowings |
10,278 |
|
|
(1,349 |
) |
Other,
net |
(482 |
) |
|
(2,204 |
) |
Net Cash Used for
Financing Activities |
(47,574 |
) |
|
(95,392 |
) |
Effect of Exchange Rate
Changes on Cash |
435 |
|
|
171 |
|
Net Change in Cash |
4,375 |
|
|
(38,375 |
) |
Cash at Beginning of
Period |
53,151 |
|
|
89,465 |
|
Cash at End of
Period |
$ |
57,526 |
|
|
$ |
51,090 |
|
|
TITAN MACHINERY INC. |
Segment Results |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
|
% Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
138,545 |
|
|
$ |
153,713 |
|
|
(9.9 |
)% |
|
$ |
302,170 |
|
|
$ |
332,520 |
|
|
(9.1 |
)% |
Construction |
77,890 |
|
|
83,132 |
|
|
(6.3 |
)% |
|
141,310 |
|
|
161,133 |
|
|
(12.3 |
)% |
International |
52,436 |
|
|
41,488 |
|
|
26.4 |
% |
|
89,509 |
|
|
69,540 |
|
|
28.7 |
% |
Total |
$ |
268,871 |
|
|
$ |
278,333 |
|
|
(3.4 |
)% |
|
$ |
532,989 |
|
|
$ |
563,193 |
|
|
(5.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
Before Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
(6,882 |
) |
|
$ |
(4,325 |
) |
|
(59.1 |
)% |
|
$ |
(10,779 |
) |
|
$ |
(8,083 |
) |
|
(33.4 |
)% |
Construction |
930 |
|
|
626 |
|
|
48.6 |
% |
|
(1,703 |
) |
|
(1,418 |
) |
|
(20.1 |
)% |
International |
283 |
|
|
(175 |
) |
|
261.7 |
% |
|
878 |
|
|
(692 |
) |
|
226.9 |
% |
Segment income (loss)
before income taxes |
(5,669 |
) |
|
(3,874 |
) |
|
(46.3 |
)% |
|
(11,604 |
) |
|
(10,193 |
) |
|
(13.8 |
)% |
Shared
Resources |
(1,541 |
) |
|
(675 |
) |
|
(128.3 |
)% |
|
(5,016 |
) |
|
(156 |
) |
|
n/m |
|
Total |
$ |
(7,210 |
) |
|
$ |
(4,549 |
) |
|
(58.5 |
)% |
|
$ |
(16,620 |
) |
|
$ |
(10,349 |
) |
|
(60.6 |
)% |
|
TITAN MACHINERY INC. |
Non-GAAP Reconciliations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net Loss
Including Noncontrolling Interest |
|
|
|
|
|
|
|
Net Loss Including
Noncontrolling Interest |
$ |
(5,186 |
) |
|
$ |
(2,702 |
) |
|
$ |
(11,118 |
) |
|
$ |
(6,560 |
) |
Adjustments |
|
|
|
|
|
|
|
Gain on
Repurchase of Senior Convertible Notes |
— |
|
|
— |
|
|
(40 |
) |
|
(2,102 |
) |
Debt
Issuance Cost Write-Off |
416 |
|
|
— |
|
|
416 |
|
|
— |
|
Restructuring Costs |
5,549 |
|
|
24 |
|
|
7,893 |
|
|
271 |
|
Ukraine
Remeasurement (1) |
— |
|
|
— |
|
|
— |
|
|
195 |
|
Interest
Rate Swap Termination & Reclassification |
— |
|
|
— |
|
|
631 |
|
|
— |
|
Total
Adjustments |
5,965 |
|
|
24 |
|
|
8,900 |
|
|
(1,636 |
) |
Less: Tax
Effect of Adjustments (2) |
1,941 |
|
|
9 |
|
|
3,116 |
|
|
(733 |
) |
Plus:
Income Tax Valuation Allowance |
200 |
|
|
— |
|
|
200 |
|
|
— |
|
Total
Adjustments |
4,224 |
|
|
15 |
|
|
5,984 |
|
|
(903 |
) |
Adjusted Net Loss
Including Noncontrolling Interest |
$ |
(962 |
) |
|
$ |
(2,687 |
) |
|
$ |
(5,134 |
) |
|
$ |
(7,463 |
) |
|
|
|
|
|
|
|
|
Earnings (Loss)
per Share - Diluted |
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
(0.24 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.51 |
) |
|
$ |
(0.29 |
) |
Adjustments (3) |
|
|
|
|
|
|
|
Gain on
Repurchase of Senior Convertible Notes |
— |
|
|
— |
|
|
— |
|
|
(0.10 |
) |
Debt
Issuance Cost Write-Off |
0.02 |
|
|
— |
|
|
0.02 |
|
|
— |
|
Restructuring Costs |
0.25 |
|
|
— |
|
|
0.36 |
|
|
0.01 |
|
Ukraine
Remeasurement (1) |
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
Interest
Rate Swap Termination & Reclassification |
— |
|
|
— |
|
|
0.03 |
|
|
— |
|
Total
Adjustments |
0.27 |
|
|
— |
|
|
0.41 |
|
|
(0.08 |
) |
Less: Tax
Effect of Adjustments (2) |
0.08 |
|
|
— |
|
|
0.14 |
|
|
(0.04 |
) |
Plus:
Income Tax Valuation Allowance |
0.01 |
|
|
— |
|
|
0.01 |
|
|
— |
|
Total
Non-GAAP Adjustments |
0.20 |
|
|
— |
|
|
0.28 |
|
|
(0.04 |
) |
Adjusted Earnings
(Loss) per Share - Diluted |
$ |
(0.04 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.33 |
) |
|
|
|
|
|
|
|
|
Loss Before
Income Taxes |
|
|
|
|
|
|
|
Loss Before Income
Taxes |
$ |
(7,210 |
) |
|
$ |
(4,549 |
) |
|
$ |
(16,620 |
) |
|
$ |
(10,349 |
) |
Adjustments |
|
|
|
|
|
|
|
Gain on
Repurchase of Senior Convertible Notes |
— |
|
|
— |
|
|
(40 |
) |
|
(2,102 |
) |
Debt
Issuance Cost Write-Off |
416 |
|
|
— |
|
|
416 |
|
|
— |
|
Restructuring Costs |
5,549 |
|
|
24 |
|
|
7,893 |
|
|
271 |
|
Ukraine
Remeasurement (1) |
— |
|
|
— |
|
|
— |
|
|
195 |
|
Interest
Rate Swap Termination & Reclassification
|
— |
|
|
— |
|
|
631 |
|
|
— |
|
Total Adjustments |
5,965 |
|
|
24 |
|
|
8,900 |
|
|
(1,636 |
) |
Adjusted Loss Before
Income Taxes |
$ |
(1,245 |
) |
|
$ |
(4,525 |
) |
|
$ |
(7,720 |
) |
|
$ |
(11,985 |
) |
|
|
|
|
|
|
|
|
Loss Before
Income Taxes - Agriculture |
|
|
|
|
|
|
|
Loss Before Income
Taxes |
$ |
(6,882 |
) |
|
$ |
(4,325 |
) |
|
$ |
(10,779 |
) |
|
$ |
(8,083 |
) |
Restructuring Costs |
5,194 |
|
|
32 |
|
|
6,672 |
|
|
(120 |
) |
Adjusted Loss Before
Income Taxes |
$ |
(1,688 |
) |
|
$ |
(4,293 |
) |
|
$ |
(4,107 |
) |
|
$ |
(8,203 |
) |
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Income (Loss)
Before Income Taxes - Construction |
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes |
$ |
930 |
|
|
$ |
626 |
|
|
$ |
(1,703 |
) |
|
$ |
(1,418 |
) |
Restructuring Costs |
252 |
|
|
(8 |
) |
|
338 |
|
|
13 |
|
Adjusted Income (Loss)
Before Income Taxes |
$ |
1,182 |
|
|
$ |
618 |
|
|
$ |
(1,365 |
) |
|
$ |
(1,405 |
) |
|
|
|
|
|
|
|
|
Income (Loss)
Before Income Taxes - International |
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes |
$ |
283 |
|
|
$ |
(175 |
) |
|
$ |
878 |
|
|
$ |
(692 |
) |
Ukraine
Remeasurement (1) |
— |
|
|
— |
|
|
— |
|
|
195 |
|
Adjusted Income (Loss)
Before Income Taxes |
$ |
283 |
|
|
$ |
(175 |
) |
|
$ |
878 |
|
|
$ |
(497 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Loss) |
|
|
|
|
|
|
|
Net Loss Including
Noncontrolling Interest |
$ |
(5,186 |
) |
|
$ |
(2,702 |
) |
|
$ |
(11,118 |
) |
|
$ |
(6,560 |
) |
Adjustments |
|
|
|
|
|
|
|
Interest
Expense, Net of Interest Income |
1,963 |
|
|
2,589 |
|
|
3,921 |
|
|
5,520 |
|
Benefit
from Income Taxes |
(2,024 |
) |
|
(1,847 |
) |
|
(5,502 |
) |
|
(3,789 |
) |
Depreciation and amortization |
6,173 |
|
|
6,620 |
|
|
12,268 |
|
|
12,828 |
|
EBITDA (Loss) |
926 |
|
|
4,660 |
|
|
(431 |
) |
|
7,999 |
|
Adjustments |
|
|
|
|
|
|
|
Gain on
Repurchase of Senior Convertible Notes |
— |
|
|
— |
|
|
(40 |
) |
|
(2,102 |
) |
Debt
Issuance Cost Write-Off |
416 |
|
|
— |
|
|
416 |
|
|
— |
|
Restructuring Costs |
5,549 |
|
|
24 |
|
|
7,893 |
|
|
271 |
|
Ukraine
Remeasurement (1) |
— |
|
|
— |
|
|
— |
|
|
195 |
|
Interest
Rate Swap Termination & Reclassification |
— |
|
|
— |
|
|
631 |
|
|
— |
|
Total
Adjustments |
5,965 |
|
|
24 |
|
|
8,900 |
|
|
(1,636 |
) |
Adjusted
EBITDA |
$ |
6,891 |
|
|
$ |
4,684 |
|
|
$ |
8,469 |
|
|
$ |
6,363 |
|
|
|
|
|
|
|
|
|
Net Cash
Provided By (Used for) Operating Activities |
|
|
|
|
|
|
|
Net Cash Provided by
Operating Activities |
|
|
|
|
$ |
66,877 |
|
|
$ |
60,435 |
|
Net Change in
Non-Manufacturer Floorplan Payable |
|
|
|
|
(38,030 |
) |
|
(66,856 |
) |
Adjustment for Constant
Equity in Inventory |
|
|
|
|
(48,116 |
) |
|
7,520 |
|
Adjusted
Net Cash Provided By (Used for) Operating Activities |
|
|
|
|
$ |
(19,269 |
) |
|
$ |
1,099 |
|
|
|
|
|
|
|
|
|
(1) Beginning in the second quarter of fiscal 2017 we
discontinued incorporating Ukraine remeasurement losses into our
adjusted 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 adjusted amounts in
future periods. |
(2) The tax effect of adjustments was calculated using a 35%
tax rate for all U.S. related items. That rate was determined based
on a 35% federal statutory rate and no impact for state taxes given
our valuation allowance against state deferred tax assets,
including net operating losses. No tax effect was recognized for
foreign related items as all adjustments occurred in foreign
jurisdictions that have full valuation allowances on deferred tax
assets. |
(3) Adjustments are net of the impact of amounts attributable
to noncontrolling interests and allocated to participating
securities. |
|
Investor Relations Contact:
ICR, Inc.
John Mills, jmills@icrinc.com
Partner
646-277-1254
Titan Machinery (NASDAQ:TITN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Titan Machinery (NASDAQ:TITN)
Historical Stock Chart
From Apr 2023 to Apr 2024