“A story of continued weakness” – Titan International releases Q1 2016 results
The message to shareholders from Titan International chief executive and chairman Maurice Taylor is not one gladly heard: A 20.0 per cent year-on-year fall in sales during the first quarter of this year has been matched by an 11 per cent decline in sales volumes, a decrease in gross sales and an adjusted net loss of US$9.2 million.
“Titan’s first quarter has been a story of continued weakness within each of our end markets, which is consistent with what has been widely discussed by many in our industry,” said Taylor. “While there have been few bright spots during the quarter, we continue to improve our operating performance despite these declines. The first quarter financial results are not what we expect; however, through our business improvement framework, we were able to improve our Ag segment gross profit by nearly 100 basis points despite a 21 per cent reduction in sales.”
Net sales for the quarter to 31 March 2016 amounted to just $321.8 million, with sales declining across all reported segments. Unfavourable currency translation affected sales by six per cent and a reduction in price mix of three per cent further eroded sales. Gross profit for the first quarter of 2016 was $31.9 million, or 9.9 per cent of net sales, compared to $42.8 million, or 10.6 per cent of net sales for the first quarter of 2015. Titan anticipates that gross profit margins will continue to remain around ten per cent. Loss from operations for the first quarter of 2016 was $7.9 million, or -2.5 per cent of net sales, compared to income of $0.8 million, or 0.2 per cent of net sales, in 2015. Basic and diluted earnings per share were $(0.27) and $(0.05), respectively.