Titan International, Inc. has released its second quarter financials, and company executives have shared their thoughts on how strong demand in the agricultural market as well as federal rulings helped the company’s business throughout the first half of 2008. Sales for second quarter 2008 of $269.1 million were the highest in the company’s history, an increase of 28 percent, compared to $210.3 million in the second quarter of 2007. Gross profit was $41.9 million for the second quarter of 2008, a 54 percent improvement from $27.3 million in the second quarter of last year. “The first half of 2008 saw higher commodity prices drive a strong demand in the agricultural market,” says Chairman and CEO Maurice M. Taylor Jr. “This helped propel Titan to record sales levels for the quarter and year-to-date. Despite high raw material costs, the company was able to show improvement in gross profit by continuing to improve manufacturing efficiencies and better align Titan sales prices with production cost.” Income from operations was an all-time quarterly record $24.4 million for the second quarter of 2008, rising 85 percent, compared to $13.2 million in the second quarter of 2007, according to the company. Net income improved 168 percent to $13.3 million for the second quarter of 2008, over the $5.0 million recorded in last year’s quarter. Basic and diluted earnings per share were $.48 cents for the quarter, an increase of 167 percent compared to $.18 cents in the second quarter of 2007. Titan’s stockholders’ equity surpassed the $300 million mark and ended the second quarter at $305.7 million, as compared to the year-end balance of $272.5 million. “Titan has also benefited in the past months from a preliminary ruling from the U.S. Department of Commerce, affirming that exporters of Chinese-manufactured tires have been selling certain off-the-road tires in the U.S.A. at less than normal value and received subsidies, resulting in duties being imposed on certain imported tires,” Taylor says. “The International Trade Commission had heard relevant testimony in July and may rule in the third quarter. This may result in either upholding the Commerce Department’s ruling, modifying or overruling it.” Year-to-date highlights: Income from operations was $40.5 million for the first half of 2008, a 47 percent increase, compared to $27.5 million year-to-date 2007. Year-to-date net income was $21.4 million in 2008, rising approximately $19 million as compared to $2.5 million in 2007. Fully diluted earnings per share were $.77 cents for the first half of 2008, a $.67 cent improvement compared to the $.10 cents recorded in the first half of 2007. “The effort of all Titan employees has been outstanding this past year and I believe the shareholders are seeing the resulting improvement in our financial performance,” says Taylor. “The company has come a long way, but Titan will keep striving to improve and reach our ambitious goals for the year.” One of those goals is the giant tires that recently rolled off the production line. “Titan believes that volume will increase in farm tires as we move forward, and with excess production capacity of up to $400 million, we are very optimistic for the years ahead. Production of the ‘big daddy’ 63-inch tire has started with the first tire and wheel assemblies headed to the oil sands in Canada,” Taylor states. “This production is a gradual ramp-up until full production begins on January 2, 2009. It is still Titan’s target to ship at least 900 of the 63-inch giant tires in the second half of 2008. Of these 900 giant tires, Titan plans to ship at least 200-300 as complete tire and wheel assemblies during the next two quarters. Titan will follow the 63-inch ‘big daddy’ tire production with the 57-inch ‘sweet mama’ tire in the fourth quarter of 2008.” Financial overview Gross profit: Gross profit for the second quarter of 2008 was $41.9 million, as compared to $27.3 million in the second quarter of 2007. Year-to-date gross profit was $74.3 million for 2008, as compared to $54.5 million for 2007. Income from operations: Income from operations for the second quarter of 2008 was $24.4 million, as compared to $13.2 million in the second quarter of 2007. Year-to-date income from operations was $40.5 million in 2008, compared to $27.5 million in 2007. Pre-tax income: Income before taxes for the second quarter of 2008 was $22.2 million, as compared to $10.5 million in 2007. Year-to-date income before taxes totaled $35.7 million in 2008, as compared to $5.5 million in 2007. The year-to-date total for 2007 included a $13.4 million noncash convertible debt conversion charge. Income taxes: Income taxes of $8.9 million were recorded for the second quarter of 2008, compared to $5.5 million in 2007. Year-to-date, income tax expense was $14.3 million for the six months ended June 30, 2008, compared to $3.0 million in 2007. Net income: Net income was $13.3 million for the second quarter of 2008, compared to $5.0 million in second quarter 2007. Year-to-date, net income was $21.4 million in 2008 and $2.5 million year-to-date in 2007. Earnings per share: For the second quarter of 2008, basic and diluted earnings per share were $.48, as compared to $.18 in 2007. Year-to-date basic earnings per share were $.78 and diluted earnings per share were $.77, as compared to year-to-date basic and diluted earnings per share of $.10. Cash balance: The company’s June 2008 cash balance was $69.4 million, compared to $58.3 million at December 31, 2007. Capital expenditures: Titan’s capital expenditures for the first half of 2008 were $38.9 million, which included approximately $30 million of expenditures related to the Giant OTR Project. Debt balance: Long-term debt was unchanged at $200 million at June 30, 2008, and year-end 2007. The company’s short-term debt remains at a zero balance. Equity balance: The company’s stockholders’ equity increased to $305.7 million at June 30, 2008, from the $272.5 million at the 2007 year-end. Cash flow: Titan was able to generate $11.1 million of cash in 2008 even with $38.9 million of capital expenditures, of which approximately $30 million related to the Giant OTR Project. The year-to-date cash flow was achieved with no change in the company’s debt balances. |
