Titan 3Q Results “Better Than Expected”
Sales at Titan International amounted to US$222.8 million during the third quarter of the 2010 financial year, representing a year-on-year increase of 57 per cent. This improved result was accompanied by a gross profit of $27.9 million and a net income of $4.0 million. Year-to-date, the company’s sales have increased 12 per cent year-on-year to $648.9 million, while net income has reached $10.8 million.
“The third quarter was much better than I expected. I am lucky to have such a great team of employees and they are the reason for our positive results,” said Titan International chairman and CEO Maurice M. Taylor Jr. “The farm demand has been strong and the market strength looks to continue. The earthmoving business is growing stronger each month and looks to continue this growth. As Titan continues to install the moulds and equipment from the Denman Tire purchase, we should see a sales benefit as we move forward into 2011.
“On October 1, 2010, we closed on the repurchase of our eight per cent senior notes due 2012 and on the new 7.875 per cent $200 million secured bond agreement due 2017,” Taylor continued. “We also reduced our bank line to $100 million and secured with receivables and inventory. Titan is now in position to close on an acquisition we have been working on for over a year.
The union contacts at several Titan plants in the US expire on November 19, and Taylor reports the company has entered into negotiations with the United Steelworkers: “All three of these tyre factories offer some of the highest wages and benefits in their geographical areas. The Titan negotiating team consists of me, group president Bill Campbell and a lawyer or two to keep teams legal, as does the USW. You can make anything complicated or you can make it simple, as we have explained to the USW. Big wages require 100 per cent effort. Everybody wants to resolve this issue in a satisfactory manner and we look forward to continue growing our company.”
Looking ahead to the fourth quarter, Taylor states income from operations “should be good”. or even though the company “will get hit” with the premium it paid to repurchase bonds on October 1, 2010. “Overall, everything is looking towards a very good year in 2011,” Taylor commented.