Titan International net sales up 18% in Q2 2018
Titan International, Inc. has reported net sales of US$428.9 million for the second quarter of 2018, a 17.7 per cent improvement on last year’s result. Net income applicable to common shareholders for the quarter was $1.0 million, as compared to a loss of $10.3 million in the second quarter of 2017.
The improved top-line result was helped by increases in net sales across all segments, particularly the earthmoving/construction segment, which experienced growth of 31.8 per cent year-on-year and reflected general improvements in most geographies. Overall net sales volume was up 16.1 per cent over the comparable prior-year quarter. Favourable changes in price/mix positively impacted net sales by 2.1 per cent, while unfavourable currency translation, particularly in Latin America, negatively impacted net sales by 0.6 per cent.
Gross profit for the quarter ended 30 June 2018 was $58.3 million, compared to $44.0 million a year earlier. Gross margin was 13.6 per cent of net sales for the latest quarter, up from 12.1 per cent in the comparable prior-year period. The increase in gross profit was driven by increased sales volume partially offset by higher material costs, especially steel. The increase in gross profit margin was primarily the result of production efficiencies driven by increased volume.
EBITDA was $29.9 million for the second quarter of 2018, a year-on-year increase of 88 per cent. Adjusted EBITDA for the quarter was $33.5 million, up 58 per cent on the second quarter of last year.
Earthmoving/construction drives sales in first half 2018
Net sales for the first six months of 2018 were $854.3 million, representing a year-on-year increase of 18.3 per cent and primarily a result of an increase in net sales in the earthmoving/construction segment, which experienced year-on-year sales growth of 35.3 per cent. Net income applicable to common shareholders for the first six months of 2018 was $15.0 million, as compared to a loss of $20.8 million in the first six months of 2017.
Gross profit for the six months to 30 June 2018 was $117.9 million compared to $84.2 million in the comparable prior-year period. Gross margin was 13.8 per cent of net sales, compared to 11.7 per cent in the comparable prior-year period. The increase in gross profit was driven by the same factors impacting the second quarter results.
EBITDA was $66.7 million for the first half of 2018, a 115 per cent increase on the $31.0 million achieved in the comparable prior year period. Adjusted EBITDA was $74.7 million, up 135 per cent on a year earlier.
Higher sales, profit expected in full-year
Paul Reitz, president and chief executive officer of Titan International, states an expectation that net sales will grow “in the range of nine per cent to 12 per cent” during the entire 2018 fiscal year. The tyre and wheel maker also anticipates an improvement in gross profit of between 25 and 40 per cent compared to 2017.
“We currently expect SG&A/R&D to be at or slightly lower than 10.0 per cent of net sales,” comments Reitz. “EBITDA during 2018 is currently expected to be within the range of $98 million to $109 million, which reflects an 80 per cent to 100 per cent improvement as compared to the previous year. Finally, we expect full-year 2018 capital expenditures to be between $35 million and $45 million, reflecting no change from our earlier outlook.”
Further details about Titan International’s Q2 2018 financial results can be read here.