‘Grizz’ Taylor Reports “Good” Q2 at Titan
The chairman and CEO of Titan International has described the second quarter as a “good quarter for a number of reasons. Maurice M. Taylor Jr, a man also known as “The Grizz” – a nickname presumably earned due to his business style rather than a fondness for bears – said “the numbers speak for themselves. If you look at the cash flow you will see that there is about an extra $1 million each quarter in depreciation and amortisation related to the new off-the-road equipment when compared to the same quarters in 2009.”
Sales for the second quarter of 2010 came to US$229.7 million, an increase of $22.7 million or 11 per cent compared to the second quarter of last year. Gross profit for the quarter was $33.9 million, a 14 per cent year-on-year increase, and income from operations, at $17.4 million, represented year-on-year growth of 35 per cent. Net income for the second quarter of 2010 $4.6 million, compared to $5.9 million in the second quarter of 2009.
Taylor describes the agricultural market as “running good” and expresses confidence it should so continue for the next few years. “It’s a great time for the American farmer and they will buy equipment. John Deere will be a big winner,” he commented.
“In construction and mining equipment, orders are growing,” Taylor added. “Original equipment manufacturer business is up because of inventory build, and the aftermarket is buying Titan’s new radial tyres in 49- and 51-inch sizes. These new sizes for Titan are part of our second generation super giant tyre line, which includes 57- and 63-inch sizes. Testing of our second generation 63-inch tyres is still ongoing. There are no heating or wear issues on the second generation tyres that were previously identified on long hauls with the first generation tyres. To accomplish this, Titan removed 1,500 lbs (680 kilograms) of weight per tyre and used different compounds and a new tread design to allow more cooling. We expect this portion of our business to continue to grow as we move forward.”
Recapping the company’s achievements during the second quarter, Taylor reports that the introduction of new tyres and wheels for farm, underground mining and large open pit mining applications. He added that Titan will introduce new radial loader tyres in the upcoming quarter.
“The third quarter is starting out stronger than in 2009, and I believe the goals we set last December will be met on the mid to high side if business keeps going as it is today. There’s 12 months in a year, and so far I’ve gotten the first six correct,” stated Taylor. “On the acquisition front, Titan has completed the purchase of the Denman Tire name, tyre specifications, patents, moulds, machinery & equipment and other items from Bankruptcy Court for $7.4 million. Denman did about $75 million in sales in 2008. I expect Titan to get its investment back in a short period of time. The other acquisitions are moving a little faster now, and we should be able to make a decision if they are a go or not within the next 45 days.
“Overall, the quarter was good any way you look at it,” Taylor reflected, adding a closing jibe at America’s current leadership: “It looks great at this time as we move forward, but who really knows what will happen with the new rules and regulations our beloved politicians are creating. Maybe it would be better if they would go on vacation for a few years.”