UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 9, 2010
TITAN MACHINERY INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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001-33866 |
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45-0357838 |
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(Commission File Number) |
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(IRS Employer |
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Identification No.) |
644 East Beaton Drive
West Fargo, North Dakota 58078
(Address of Principal Executive Offices) (Zip Code)
(701) 356-0130
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On June 9, 2010, Titan Machinery Inc. (the “Company”) issued a press release announcing its financial results for the three month period ended April 30, 2010. The Company will be conducting a conference call to discuss its first quarter financial results at 7:30 a.m. Central time on June 9, 2010. The full text of the press release is set forth in Exhibit 99.1 attached hereto and is incorporated by reference in this Current Report on Form 8-K as if fully set forth herein.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements: None
(b) Pro forma financial information: None
(c) Shell Company Transactions: None
(d) Exhibits: 99.1
Press Release dated June 9, 2010
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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TITAN MACHINERY INC. |
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Date: June 9, 2010 |
By |
/s/ Mark Kalvoda |
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Mark Kalvoda |
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Chief Accounting Officer |
Exhibit 99.1
Titan Machinery Inc. Announces Fiscal First Quarter Ended April 30, 2010 Results
-Company Reiterates Fiscal 2011 Guidance-
- First Quarter Revenue Increased 24% to $205 Million-
-Construction Segment Same Store Sales Increase 21.5%-
-First Quarter Gross Profit Increased 21% to $34 Million-
West Fargo, ND — June 9, 2010 — Titan Machinery Inc. (Nasdaq: TITN), a leading network of full-service agricultural and construction equipment stores, today reported financial results for the first quarter ended April 30, 2010.
Fiscal 2011 First Quarter
For the first quarter of fiscal 2011, revenue increased 23.5% to $205.5 million from revenue of $166.3 million in the first quarter last year. All three of the Company’s main revenue sources—equipment, parts and service—contributed to this period-over-period revenue growth. Equipment sales were $150.4 million, compared to $124.9 million in the first quarter last year. Parts sales were $35.1 million in the first quarter, compared to $26.4 million in the first quarter last year. Revenue generated from service was $16.6 million in the quarter, compared to $12.5 million in the first quarter last year.
Revenue generated from the Company’s Agriculture segment was $181.4 million for the first quarter of fiscal 2011, compared to $148.3 million in the first quarter last year. Revenue generated from the Company’s Construction segment was $32.1 million for the first quarter of fiscal 2011, compared to $24.7 million in the first quarter last year.
Gross profit for the fiscal first quarter of 2011 increased 20.8% to $34.4 million, compared to $28.5 million in the first quarter of last year. The Company’s gross profit margin was 16.8% in the fiscal first quarter, compared to 17.1% in the first quarter last year. Gross profit from parts and service revenue contributed 59% of overall gross profit for the fiscal first quarter of 2011, compared to 55% in the first quarter last year.
Pre-tax income for the fiscal 2011 first quarter was $2.6 million, compared to $3.0 million in the first quarter last year. Pre-tax margin was 1.3%, compared to 1.8% in the first quarter last year. Pre-tax income for the Company’s Agriculture segment was $4.8 million, compared to $5.7 million in the first quarter last year. Pre-tax loss for the Company’s Construction segment was $1.9 million for the fiscal 2011 first quarter, approximately flat compared to the first quarter last year.
Net income for the fiscal first quarter of 2011 was $1.6 million, compared to net income of $1.8 million in the first quarter last year. Earnings per diluted share for the fiscal first quarter of 2011 were $0.09 on approximately 18.0 million shares outstanding, compared to $0.10 per diluted share on a similar amount of shares outstanding in the first quarter last year.
Balance Sheet
The Company ended the first quarter fiscal 2011 with a strong balance sheet. Its cash and cash equivalents were $81.3 million as of April 30, 2010. Working capital at the end of the first quarter fiscal 2011 was $157.6 million. As of April 30, 2010, the Company had $108.0 million available of its $365.0 million total discretionary floorplan lines of credit. Additionally, at quarter end, the Company had no amounts outstanding under its $25 million operating line of credit.
“We are pleased with the first quarter results of our business. Based on our year-to-date performance and outlook for the remainder of the year, we are affirming our annual revenue and earnings per share guidance,” stated David Meyer, Titan Machinery’s Chairman and Chief Executive Officer. “During the first quarter, we achieved solid year-over-year revenue growth in both our Agriculture and Construction segments. We continue to see strong demand for our Agriculture products and services and favorable weather for spring planting provided a positive start to our customers’ annual production cycle. Regarding our Construction business, revenue growth was reflective of initiatives put into place as part of our Construction Business Action Plan we previously announced on our fourth quarter earnings call. While it is still early in the year, we are making solid progress with our initiatives and remain confident that we will continue to achieve year-over-year improvements in our Construction revenue and operating results for the current fiscal year.”
Acquisition
The Company recently closed on the acquisition of Hubbard Implement, Inc., in Iowa Falls, Iowa.
Hubbard Implement, Inc., with one store in Iowa Falls, Iowa, is a Case IH brand agriculture equipment dealership. Hubbard Implement is well-situated in the fertile farmland in Central Iowa and is strategically located contiguous to Titan Machinery’s existing locations in Grundy Center and Waverly, Iowa. In its most recently reported fiscal year, Hubbard Implement generated revenues of approximately $7.9 million. The acquisition closed on June 1, 2010.
Outlook
The Company evaluates its financial performance based on its customers’ annual production cycles as opposed to a quarterly basis, due to weather fluctuations and the seasonal nature of the customer’s business. The Company is affirming its revenue and net income guidance for the full year ending January 31, 2011. It continues to expect to achieve revenue for the full year ending January 31, 2011 in a range of $920 million to $980 million. Net income is expected to be in the range of $16.7 million to $18.5 million resulting in earnings per diluted share range of $0.92 to $1.02. Weighted average diluted shares outstanding for the fiscal year ending January 31, 2011 are estimated to be approximately 18.1 million.
Conference Call and Presentation Information
A copy of the presentation that will accompany the prepared remarks from the conference call is available on the Company’s website under investor relations at www.titanmachinery.com.
The Company will host a conference call and audio webcast today at 7:30 a.m. Central time (8:30 a.m. Eastern time). Investors interested in participating in the live call can dial (888) 293-6960 from the U.S. International callers can dial (719) 457-2607. A telephone replay will be
available approximately two hours after the call concludes and will be available through Wednesday, June 23, 2010, by dialing (888) 203-1112 from the U.S., or (719) 457-0820 from international locations, and entering confirmation code 1227046. There also will be a simultaneous, live webcast available on the Investor Relations section of the Company’s web site at www.titanmachinery.com. The webcast will be archived for 30 days.
About Titan Machinery Inc.
Titan Machinery Inc., founded in 1980 and headquartered in West Fargo, North Dakota, is a multi-unit business with mature locations and newly-acquired locations. The Company owns and operates a network of full service agricultural and construction equipment stores in the United States. The Titan Machinery network consists of 72 dealerships in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska and Wyoming, including three outlet stores, representing one or more of the CNH Brands (NYSE:CNH), which include Case IH, New Holland Agriculture, Case Construction, New Holland Construction, Kobelco and CNH Capital. Additional information about Titan Machinery Inc. can be found at www.titanmachinery.com.
Forward Looking Statements
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements made herein, which include statements regarding the Company’s expected improved operating results for the Construction segment and the expected results of operations for the fiscal year ending January 31, 2011, our beliefs and expectations with respect to the industries in which we operate, the anticipated impact of our recent acquisitions, our anticipated organic growth, and our expectations as to the execution of our strategy, involve known and unknown risks and uncertainties, which may cause Titan Machinery’s actual results in current or future periods to differ materially from forecasted results. The Company’s risks and uncertainties include, among other things, a substantial dependence on a single distributor, the continued availability of organic growth and acquisition opportunities, potential difficulties integrating acquired stores, industry supply levels, fluctuating agriculture and construction industry economic conditions, the success of recently implemented initiatives within the Company’s Construction segment, the impact of continuing unfavorable conditions in the credit markets, governmental agriculture policies, seasonal fluctuations, climate conditions, disruption in receiving ample inventory financing, and increased competition in the geographic areas served. These and other risks are more fully described in Titan Machinery’s filings with the Securities and Exchange Commission, including the Company’s most recently filed Annual Report on Form 10-K. Titan Machinery conducts its business in a highly competitive and rapidly changing environment. Accordingly, new risk factors may arise. It is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on Titan Machinery’s business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Titan Machinery disclaims any obligation to update such factors or to publicly announce results of revisions to any of the forward-looking statements contained herein to reflect future events or developments.
Investor Relations Contact:
ICR, Inc.
John Mills, jmills@icrinc.com
Senior Managing Director
310-954-1100
TITAN MACHINERY INC.
Consolidated Balance Sheets
(in thousands, except per share data)
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April 30, |
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January 31, |
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2010 |
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2010 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
81,334 |
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$ |
76,185 |
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Receivables, net |
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24,239 |
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22,254 |
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Inventories |
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352,682 |
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347,580 |
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Prepaid expenses |
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924 |
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1,009 |
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Income taxes receivable |
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991 |
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1,595 |
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Deferred income taxes |
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2,645 |
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2,266 |
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Total current assets |
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462,815 |
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450,889 |
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INTANGIBLES AND OTHER ASSETS |
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Noncurrent parts inventories |
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1,803 |
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1,642 |
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Goodwill |
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14,762 |
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14,762 |
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Intangible assets, net of accumulated amortization |
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429 |
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295 |
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Other |
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651 |
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620 |
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17,645 |
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17,319 |
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PROPERTY AND EQUIPMENT, net of accumulated depreciation |
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48,526 |
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46,604 |
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$ |
528,986 |
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$ |
514,812 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
17,402 |
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$ |
12,352 |
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Floorplan notes payable |
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262,809 |
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249,872 |
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Current maturities of long-term debt and short-term advances |
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6,725 |
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7,218 |
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Customer deposits |
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8,517 |
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12,974 |
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Accrued expenses |
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9,789 |
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9,870 |
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Total current liabilities |
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305,242 |
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292,286 |
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LONG-TERM LIABILITIES |
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Long-term debt, less current maturities |
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21,456 |
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21,852 |
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Deferred income taxes |
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6,359 |
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6,356 |
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Other long term liabilities |
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3,562 |
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3,794 |
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31,377 |
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32,002 |
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STOCKHOLDERS’ EQUITY |
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Common stock, par value $.00001 per share, authorized - 25,000 shares; issued and outstanding - 17,785 at April 30, 2010 and 17,777 at January 31, 2010 |
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— |
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Additional paid-in-capital |
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139,059 |
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138,775 |
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Retained earnings |
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53,308 |
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51,749 |
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192,367 |
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190,524 |
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$ |
528,986 |
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$ |
514,812 |
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TITAN MACHINERY INC.
Consolidated Statements of Operations
(in thousands, except per share data)
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Three Months Ended |
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April 30, |
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2010 |
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2009 |
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(Unaudited) |
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(Unaudited) |
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REVENUE |
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Equipment |
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$ |
150,360 |
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$ |
124,865 |
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Parts |
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35,063 |
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26,398 |
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Service |
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16,551 |
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12,542 |
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Other, including trucking and rental |
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3,483 |
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2,496 |
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TOTAL REVENUE |
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205,457 |
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166,301 |
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COST OF REVENUE |
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Equipment |
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136,801 |
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112,300 |
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Parts |
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25,186 |
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18,537 |
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Service |
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5,971 |
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4,600 |
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Other, including trucking and rental |
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3,056 |
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2,348 |
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TOTAL COST OF REVENUE |
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171,014 |
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137,785 |
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GROSS PROFIT |
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34,443 |
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28,516 |
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OPERATING EXPENSES |
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29,796 |
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24,705 |
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INCOME FROM OPERATIONS |
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4,647 |
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3,811 |
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OTHER INCOME (EXPENSE) |
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Interest and other income |
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173 |
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211 |
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Floorplan interest expense |
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(1,801 |
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(731 |
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Interest expense other |
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(377 |
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(263 |
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INCOME BEFORE INCOME TAXES |
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2,642 |
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3,028 |
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PROVISION FOR INCOME TAXES |
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(1,083 |
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(1,238 |
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NET INCOME |
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$ |
1,559 |
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$ |
1,790 |
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EARNINGS PER SHARE - BASIC |
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$ |
0.09 |
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$ |
0.10 |
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EARNINGS PER SHARE - DILUTED |
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$ |
0.09 |
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$ |
0.10 |
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TITAN MACHINERY INC.
Segment Results
(in thousands)
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Three Months Ended April 30, |
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2010 |
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2009 |
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% Change |
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(Unaudited) |
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(Unaudited) |
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Revenues |
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Agriculture |
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$ |
181,382 |
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$ |
148,329 |
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22.3 |
% |
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Construction |
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32,104 |
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24,698 |
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30.0 |
% |
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Segment revenues |
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213,486 |
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173,027 |
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23.4 |
% |
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Eliminations |
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(8,029 |
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(6,726 |
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19.4 |
% |
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Total |
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$ |
205,457 |
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$ |
166,301 |
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23.5 |
% |
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Income (Loss) Before Income Taxes |
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Agriculture |
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$ |
4,792 |
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$ |
5,716 |
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(16.2 |
)% |
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Construction |
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(1,915 |
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(1,950 |
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(1.8 |
)% |
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Segment income (loss) before income taxes |
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2,877 |
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3,766 |
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(23.6 |
)% |
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Shared Resources |
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9 |
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(471 |
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(101.9 |
)% |
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Eliminations |
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(244 |
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(267 |
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(8.6 |
)% |
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Total |
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$ |
2,642 |
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$ |
3,028 |
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(12.7 |
)% |
Note: The Company reports its revenues and income (loss) before income taxes at the segment level before inter-company eliminations.