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): November 30, 2017
TITAN MACHINERY INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
001-33866 | 45-0357838 | |
(Commission File Number) | (IRS Employer 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))
Indicate by a check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition
On November 30, 2017, Titan Machinery Inc. (the "Company”) issued a press release announcing its financial results for the three and nine month period ended October 31, 2017. The Company will be conducting a conference call to discuss its third quarter of fiscal 2018 financial results at 7:30 a.m. Central time on November 30, 2017. 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 November 30, 2017
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.
TITAN MACHINERY INC. | |||
Date: | November 30, 2017 | By | /s/ Mark Kalvoda |
Mark Kalvoda | |||
Chief Financial Officer | |||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
EXHIBIT INDEX
to
FORM 8-K
TITAN MACHINERY INC.
Date of Report: | Commission File No.: |
November 30, 2017 | 001-33866 |
Exhibit No. | ITEM | |
Press Release dated November 30, 2017 | ||
Titan Machinery Inc. Announces Results for Fiscal Third Quarter Ended October 31, 2017
- Revenue for Third Quarter of Fiscal 2018 was $330 million -
-GAAP EPS for Third Quarter of Fiscal 2018 was $0.11 and Adjusted EPS was $0.20 -
- Company Updates Full Year 2018 Modeling Assumptions -
West Fargo, ND – November 30, 2017 – Titan Machinery Inc. (Nasdaq: TITN), a leading global equipment dealership with a network of full-service agricultural and construction stores, today reported financial results for the fiscal third quarter ended October 31, 2017.
David Meyer, Titan Machinery’s Chairman and Chief Executive Officer, stated, "Overall, third quarter financial results showed solid improvement compared to the prior year as we continue to generate increased equipment margins and drive down our operating and interest expenses. These results are due to a better aligned inventory position, cost savings from our recently implemented restructuring plan, improved customer sentiment in our Agriculture segment and continued growth in our International segment. Our financial results are also generating a higher absorption rate, which was 92% for the third quarter of fiscal 2018. Additionally, we were pleased with our decrease in used equipment inventory during the first nine months of fiscal 2018 of $46 million, or 29%. Based on more confident customer sentiment in our Agriculture segment and expected improvements in fourth quarter demand, we increased our new agriculture equipment inventory levels during the third quarter."
Fiscal 2018 Third Quarter Results
Consolidated Results
For the third quarter of fiscal 2018, revenue was $330.3 million, compared to $332.3 million in the third quarter last year. Equipment sales were $216.0 million for the third quarter of fiscal 2018, compared to $212.2 million in the third quarter last year. Parts sales were $64.7 million for the third quarter of fiscal 2018, compared to $69.3 million in the third quarter last year. Revenue generated from service was $31.5 million for the third quarter of fiscal 2018, compared to $33.8 million in the third quarter last year. Revenue from rental and other was $18.1 million for the third quarter of fiscal 2018, compared to $17.0 million in the third quarter last year.
Gross profit for the third quarter of fiscal 2018 was $61.5 million, compared to $58.4 million in the third quarter last year. The Company’s gross profit margin was 18.6% in the third quarter of fiscal 2018, compared to 17.6% in the third quarter last year primarily due to improved equipment margins. Gross profit from parts, service and rental and other for the third quarter of fiscal 2018 was 72.7% of overall gross profit, compared to 81.1% in the third quarter last year.
Operating expenses decreased by $2.8 million to $50.4 million, or 15.2% of revenue, for the third quarter of fiscal 2018, compared to $53.1 million, or 16.0% of revenue, for the third quarter of last year. Restructuring efforts that were completed early in the third quarter of fiscal 2018 are expected to continue to reduce operating expenses on a going forward basis.
Floorplan interest expense was $1.9 million for the third quarter of fiscal 2018, compared to $3.3 million in the third quarter of last year. The decrease in floorplan interest expense is primarily due to a decrease in the level of interest-bearing inventory in the third quarter of fiscal 2018.
Restructuring costs were $2.6 million for the third quarter of fiscal 2018. The restructuring costs recognized in the third quarter of fiscal 2018 are the result of the Company's restructuring plan that was announced on February 9, 2017 and subsequently led to the consolidation of 15 dealership locations. The Company anticipates completing all restructuring activities by the end of fiscal 2018.
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In the third quarter of fiscal 2018, net income including noncontrolling interest was $2.4 million, or earnings per diluted share of $0.11, compared to a net income including noncontrolling interest of $0.3 million, or earnings per diluted share of $0.01 for the third quarter of last year.
On an adjusted basis, net income including noncontrolling interest for the third quarter of fiscal 2018 was $4.4 million, or adjusted earnings per diluted share of $0.20, compared to adjusted net loss including noncontrolling interest of $0.2 million, or adjusted loss per diluted share of $0.01, for the third quarter of last year. The Company generated $16.2 million in adjusted EBITDA in the third quarter of fiscal 2018, compared to $9.5 million in the third quarter of last year.
Segment Results
Agriculture Segment - Revenue for the third quarter of fiscal 2018 was $186.5 million, compared to $205.5 million in the third quarter last year. Pre-tax income for the third quarter of fiscal 2018 was $4.9 million, compared to pre-tax loss of $1.8 million in the third quarter last year. Adjusted pre-tax income for the third quarter of fiscal 2018 was $5.5 million, compared to adjusted pre-tax loss of $2.3 million in the third quarter last year.
Construction Segment - Revenue for the third quarter of fiscal 2018 was $72.9 million, compared to $80.8 million in the third quarter last year. Revenue for the third quarter of last year included approximately $5.4 million of equipment revenue associated with our aggressive selling efforts through alternative marketing channels for certain aged equipment inventory. Pre-tax loss for the third quarter of fiscal 2018 was $2.4 million, compared to a pre-tax loss of $0.1 million in the third quarter last year. Adjusted pre-tax loss for the third quarter of fiscal 2018 was $0.7 million, compared to adjusted pre-tax income of $0.1 million in the third quarter last year.
International Segment - Revenue for the third quarter of fiscal 2018 was $70.9 million, compared to $45.9 million in the third quarter last year. The increase in revenue is primarily due to increased equipment revenue as the result of the build out of our footprint, availability of subvention funds and positive crop conditions in certain of our markets. Pre-tax income for the third quarter of fiscal 2018 was $2.5 million, compared to a pre-tax income of $0.6 million in the third quarter last year.
Fiscal 2018 First Nine Months Results
Revenue was $863.3 million for the first nine months of fiscal 2018, compared to $895.5 million for the same period last year. Net loss including noncontrolling interest for the first nine months of fiscal 2018 was $8.7 million, or $0.40 per diluted share, compared to net loss of $6.3 million, or $0.27 per diluted share, for the same period last year. On an adjusted basis, net loss including noncontrolling interest for the first nine months of fiscal 2018 was $0.7 million, or $0.03 per diluted share, compared to net loss of $7.6 million, or $0.36 per diluted share, for the same period last year. The Company generated $24.7 million in adjusted EBITDA in the first nine months of fiscal 2018, compared to $15.8 million in the same period last year.
Balance Sheet and Cash Flow
The Company ended the third quarter of fiscal 2018 with $43.9 million of cash. The Company’s inventory level increased to $529.8 million as of October 31, 2017, compared to $478.3 million as of January 31, 2017. This inventory increase includes a $62.3 million increase in equipment inventory, which reflects an increase in new equipment inventory of $108.3 million, partially offset by a $46.0 million decrease in used equipment inventory. The Company had $322.4 million outstanding floorplan payables on $727.4 million
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total discretionary floorplan lines of credit as of October 31, 2017, compared to $233.2 million outstanding floorplan payables as of January 31, 2017.
During the first nine months of fiscal 2018, the Company repurchased $30.1 million face value amount of senior convertible notes with $29.5 million in cash. The Company has now retired $84.4 million, or approximately 56%, of the original face value of its senior convertible notes during fiscal 2017 and the first nine months of fiscal 2018 with $75.1 million in cash.
In the first nine months of fiscal 2018, the Company’s net cash provided by operating activities was $56.0 million, compared to $74.4 million in the first nine months of fiscal 2017. The Company evaluates its cash flow from operating activities net of all floorplan payable activity and maintaining a constant level of equity in its equipment inventory. Taking these adjustments into account, adjusted net cash used for operating activities was $10.8 million in the first nine months of fiscal 2018, compared to adjusted net cash provided by operating activities of $34.4 million in first nine months of fiscal 2017.
Mr. Meyer concluded, "We have made improvements to our cost structure during fiscal 2018 and this is reflected in our improved financial results for the first nine months of this year. We expect continued year over year net income improvements for our fourth quarter of fiscal 2018 as well. As we look ahead to fiscal 2019, we believe our expected cash flow generation from operations combined with our strong balance sheet will position us to take advantage of strategic opportunities and to drive long-term profitability."
Updating Fiscal 2018 Modeling Assumptions
The Company's fiscal 2018 modeling assumptions are as follows:
Current Assumptions | Previous Assumptions | ||
Segment Revenue | |||
Agriculture (1) | Down 5-10% | Down 10-15% | |
Construction (1) | Down 5-10% | Down 5-10% | |
International | Up 30-35% | Up 20-25% | |
Equipment Margin | 7.5 - 7.9% | 7.0-7.5% | |
Diluted EPS (2) | ($0.15) - ($0.25) | ($0.15) - ($0.35) | |
(1) Includes impact of stores closed as part of our restructuring activities | |||
(2) Exclusive of the anticipated charges associated with our restructuring activities | |||
Conference Call and Presentation Information
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 (866) 564-2842 from the U.S. International callers can dial (323) 794-2094. A telephone replay will be available approximately two hours after the call concludes and will be available through Thursday, December 14, 2017, by dialing (844) 512-2921 from the U.S., or (412) 317-6671 from international locations, and entering confirmation code 1709997.
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. An archive of the audio webcast will be available on the Company’s website under Investor Relations at www.titanmachinery.com for 30 days following the audio webcast.
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Non-GAAP Financial Measures
Within this release, the Company refers to certain adjusted financial measures, which have directly comparable GAAP financial measures as identified in this release. The Company believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance and in assessing future performance. For these reasons, internal management reporting also includes non-GAAP measures. Generally, the non-GAAP measures include adjustments for items such as restructuring costs, long-lived asset impairments, gains or losses on the repurchase of senior convertible notes, gains on insurance recoveries, foreign currency remeasurement losses in Ukraine, and other gains and losses. The non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for the GAAP financial measures presented in this release and the Company's financial statements and other publicly filed reports. Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies. Investors are encouraged to review the reconciliations of adjusted financial measures used in this release to their most directly comparable GAAP financial measures. These reconciliations are attached to this release. The tables included in the Non-GAAP Reconciliations section reconcile net income (loss) including noncontrolling interest, earnings (loss) per share – diluted, income (loss) before income taxes, and net cash provided by operating activities (all GAAP financial measures) for the periods presented to adjusted net income (loss) including noncontrolling interest, adjusted EBITDA (loss), adjusted earnings (loss) per share – diluted, adjusted income (loss) before income taxes, and adjusted net cash provided by (used for) operating activities (all non-GAAP financial measures) for the periods presented.
About Titan Machinery Inc.
Titan Machinery Inc., founded in 1980 and headquartered in West Fargo, North Dakota, is a leading global dealership with a network of full-service agriculture and construction stores. The network consists of US locations in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming, Wisconsin, Colorado, Arizona, and New Mexico, and European locations in Romania, Bulgaria, Serbia, and Ukraine. The Titan Machinery locations represent one or more of the CNH Industrial Brands, including Case IH, New Holland Agriculture, Case Construction, New Holland Construction, 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. The words "potential,” "believe,” "estimate,” "expect,” "intend,” "may,” "could,” "will,” "plan,” "anticipate,” and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of our management. Forward-looking statements made herein, which include statements regarding Agriculture, Construction, and International segment initiatives and improvements, segment revenue realization, growth and profitability expectations, inventory expectations, leverage expectations, agricultural and construction equipment industry conditions and trends, and modeling assumptions and expected results of operations for the fiscal year ending January 31, 2018, involve known and unknown risks and uncertainties that may cause Titan Machinery’s actual results in current or future periods to differ materially from the forecasted assumptions and expected 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 operating segments, the uncertainty and fluctuating conditions in the capital and credit markets, difficulties in conducting international operations, foreign currency risks,
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governmental agriculture policies, seasonal fluctuations, the ability of the Company to reduce inventory levels, 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, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. 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. Other than required by law, 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
Partner
646-277-1254
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TITAN MACHINERY INC. | |||||||
Consolidated Balance Sheets | |||||||
(in thousands, except per share data) | |||||||
(Unaudited) | |||||||
October 31, 2017 | January 31, 2017 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash | $ | 43,861 | $ | 53,151 | |||
Receivables, net | 73,605 | 60,082 | |||||
Inventories | 529,761 | 478,266 | |||||
Prepaid expenses and other | 8,363 | 10,989 | |||||
Income taxes receivable | 111 | 5,380 | |||||
Total current assets | 655,701 | 607,868 | |||||
Noncurrent Assets | |||||||
Intangible assets, net of accumulated amortization | 4,944 | 5,001 | |||||
Property and equipment, net of accumulated depreciation | 156,426 | 156,647 | |||||
Deferred income taxes | 271 | 547 | |||||
Other | 948 | 1,359 | |||||
Total noncurrent assets | 162,589 | 163,554 | |||||
Total Assets | $ | 818,290 | $ | 771,422 | |||
Liabilities and Stockholders' Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 19,567 | $ | 17,326 | |||
Floorplan payable | 322,439 | 233,228 | |||||
Current maturities of long-term debt | 1,529 | 1,373 | |||||
Customer deposits | 15,111 | 26,366 | |||||
Accrued expenses and other | 27,298 | 30,533 | |||||
Total current liabilities | 385,944 | 308,826 | |||||
Long-Term Liabilities | |||||||
Senior convertible notes | 62,277 | 88,501 | |||||
Long-term debt, less current maturities | 35,892 | 38,236 | |||||
Deferred income taxes | 4,806 | 9,500 | |||||
Other long-term liabilities | 10,216 | 5,180 | |||||
Total long-term liabilities | 113,191 | 141,417 | |||||
Stockholders' Equity | |||||||
Common stock | — | — | |||||
Additional paid-in-capital | 245,140 | 240,615 | |||||
Retained earnings | 75,361 | 85,347 | |||||
Accumulated other comprehensive loss | (1,346 | ) | (4,783 | ) | |||
Total stockholders' equity | 319,155 | 321,179 | |||||
Total Liabilities and Stockholders' Equity | $ | 818,290 | $ | 771,422 | |||
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TITAN MACHINERY INC. | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | |||||||||||||||
Equipment | $ | 215,956 | $ | 212,194 | $ | 551,752 | $ | 570,369 | |||||||
Parts | 64,729 | 69,261 | 176,892 | 185,106 | |||||||||||
Service | 31,532 | 33,777 | 90,807 | 96,065 | |||||||||||
Rental and other | 18,124 | 17,034 | 43,879 | 43,919 | |||||||||||
Total Revenue | 330,341 | 332,266 | 863,330 | 895,459 | |||||||||||
Cost of Revenue | |||||||||||||||
Equipment | 199,154 | 201,140 | 509,400 | 532,370 | |||||||||||
Parts | 45,408 | 48,387 | 124,868 | 130,006 | |||||||||||
Service | 11,139 | 11,828 | 33,377 | 35,473 | |||||||||||
Rental and other | 13,163 | 12,485 | 32,482 | 32,703 | |||||||||||
Total Cost of Revenue | 268,864 | 273,840 | 700,127 | 730,552 | |||||||||||
Gross Profit | 61,477 | 58,426 | 163,203 | 164,907 | |||||||||||
Operating Expenses | 50,374 | 53,143 | 152,884 | 159,132 | |||||||||||
Restructuring Costs | 2,587 | 275 | 10,480 | 546 | |||||||||||
Income (Loss) from Operations | 8,516 | 5,008 | (161 | ) | 5,229 | ||||||||||
Other Income (Expense) | |||||||||||||||
Interest income and other income | 380 | 502 | 1,840 | 1,251 | |||||||||||
Floorplan interest expense | (1,900 | ) | (3,294 | ) | (6,719 | ) | (10,843 | ) | |||||||
Other interest expense | (2,110 | ) | (2,160 | ) | (6,694 | ) | (5,930 | ) | |||||||
Income (Loss) Before Income Taxes | 4,886 | 56 | (11,734 | ) | (10,293 | ) | |||||||||
Provision for (Benefit from) Income Taxes | 2,502 | (208 | ) | (3,000 | ) | (3,997 | ) | ||||||||
Net Income (Loss) Including Noncontrolling Interest | 2,384 | 264 | (8,734 | ) | (6,296 | ) | |||||||||
Less: Loss Attributable to Noncontrolling Interest | — | — | — | (356 | ) | ||||||||||
Net Income (Loss) Attributable to Titan Machinery Inc. | 2,384 | 264 | (8,734 | ) | (5,940 | ) | |||||||||
Net Income (Loss) Allocated to Participating Securities | (56 | ) | (8 | ) | 176 | 120 | |||||||||
Net Income (Loss) Attributable to Titan Machinery Inc. Common Stockholders | $ | 2,328 | $ | 256 | $ | (8,558 | ) | $ | (5,820 | ) | |||||
Earnings (Loss) per Share - Diluted | $ | 0.11 | $ | 0.01 | $ | (0.40 | ) | $ | (0.27 | ) | |||||
Weighted Average Common Shares - Diluted | 21,643 | 21,269 | 21,503 | 21,208 | |||||||||||
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TITAN MACHINERY INC. | |||||||
Consolidated Condensed Statements of Cash Flows | |||||||
(in thousands) | |||||||
(Unaudited) | |||||||
Nine Months Ended October 31, | |||||||
2017 | 2016 | ||||||
Operating Activities | |||||||
Net loss including noncontrolling interest | $ | (8,734 | ) | $ | (6,296 | ) | |
Adjustments to reconcile net loss including noncontrolling interest to net cash provided by operating activities | |||||||
Depreciation and amortization | 18,949 | 19,896 | |||||
Other, net | 720 | 3,056 | |||||
Changes in assets and liabilities | |||||||
Inventories | (41,748 | ) | 91,222 | ||||
Manufacturer floorplan payable | 97,734 | (20,821 | ) | ||||
Other working capital | (10,890 | ) | (12,659 | ) | |||
Net Cash Provided by Operating Activities | 56,031 | 74,398 | |||||
Investing Activities | |||||||
Property and equipment purchases | (23,913 | ) | (10,215 | ) | |||
Proceeds from sale of property and equipment | 4,564 | 2,285 | |||||
Other, net | 430 | 914 | |||||
Net Cash Used for Investing Activities | (18,919 | ) | (7,016 | ) | |||
Financing Activities | |||||||
Net change in non-manufacturer floorplan payable | (14,357 | ) | (54,478 | ) | |||
Repurchase of senior convertible notes | (29,093 | ) | (46,013 | ) | |||
Net proceeds from (payments on) long-term debt borrowings | (3,121 | ) | (1,935 | ) | |||
Other, net | (368 | ) | (2,212 | ) | |||
Net Cash Used for Financing Activities | (46,939 | ) | (104,638 | ) | |||
Effect of Exchange Rate Changes on Cash | 537 | 222 | |||||
Net Change in Cash | (9,290 | ) | (37,034 | ) | |||
Cash at Beginning of Period | 53,151 | 89,465 | |||||
Cash at End of Period | $ | 43,861 | $ | 52,431 | |||
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TITAN MACHINERY INC. | |||||||||||||||||||||
Segment Results | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||
2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||||||||||
Revenue | |||||||||||||||||||||
Agriculture | $ | 186,546 | $ | 205,540 | (9.2 | )% | $ | 488,716 | $ | 538,060 | (9.2 | )% | |||||||||
Construction | 72,942 | 80,789 | (9.7 | )% | 214,252 | 241,922 | (11.4 | )% | |||||||||||||
International | 70,853 | 45,937 | 54.2 | % | 160,362 | 115,477 | 38.9 | % | |||||||||||||
Total | $ | 330,341 | $ | 332,266 | (0.6 | )% | $ | 863,330 | $ | 895,459 | (3.6 | )% | |||||||||
Income (Loss) Before Income Taxes | |||||||||||||||||||||
Agriculture | $ | 4,909 | $ | (1,798 | ) | 373.0 | % | $ | (5,870 | ) | $ | (9,881 | ) | 40.6 | % | ||||||
Construction | (2,373 | ) | (105 | ) | *N/M | (4,076 | ) | (1,523 | ) | (167.6 | )% | ||||||||||
International | 2,453 | 604 | 306.1 | % | 3,331 | (88 | ) | *N/M | |||||||||||||
Segment income (loss) before income taxes | 4,989 | (1,299 | ) | 484.1 | % | (6,615 | ) | (11,492 | ) | 42.4 | % | ||||||||||
Shared Resources | (103 | ) | 1,355 | (107.6 | )% | (5,119 | ) | 1,199 | (526.9 | )% | |||||||||||
Total | $ | 4,886 | $ | 56 | *N/M | $ | (11,734 | ) | $ | (10,293 | ) | (14.0 | )% | ||||||||
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TITAN MACHINERY INC. | |||||||||||||||
Non-GAAP Reconciliations | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net Income (Loss) Including Noncontrolling Interest | |||||||||||||||
Net Income (Loss) Including Noncontrolling Interest | $ | 2,384 | $ | 264 | $ | (8,734 | ) | $ | (6,296 | ) | |||||
Adjustments | |||||||||||||||
Impairment | 131 | 275 | 131 | 275 | |||||||||||
(Gain) Loss on Repurchase of Senior Convertible Notes | 18 | (1,028 | ) | (22 | ) | (3,130 | ) | ||||||||
Debt Issuance Cost Write-Off | — | 624 | 416 | 624 | |||||||||||
Restructuring Costs | 2,456 | — | 10,349 | 271 | |||||||||||
Ukraine Remeasurement (1) | — | — | — | 195 | |||||||||||
Interest Rate Swap Termination & Reclassification | — | — | 631 | — | |||||||||||
Gain on Insurance Recoveries | — | (586 | ) | — | (586 | ) | |||||||||
Total Adjustments | 2,605 | (715 | ) | 11,505 | (2,351 | ) | |||||||||
Less: Tax Effect of Adjustments (2) | 895 | (285 | ) | 4,010 | (1,018 | ) | |||||||||
Plus: Income Tax Valuation Allowance | 325 | — | 525 | — | |||||||||||
Total Adjustments | 2,035 | (430 | ) | 8,020 | (1,333 | ) | |||||||||
Adjusted Net Income (Loss) Including Noncontrolling Interest | $ | 4,419 | $ | (166 | ) | $ | (714 | ) | $ | (7,629 | ) | ||||
Earnings (Loss) per Share - Diluted | |||||||||||||||
Earnings (Loss) per Share - Diluted | $ | 0.11 | $ | 0.01 | $ | (0.40 | ) | $ | (0.27 | ) | |||||
Adjustments (3) | |||||||||||||||
Impairment | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||
Gain on Repurchase of Senior Convertible Notes | — | (0.04 | ) | — | (0.15 | ) | |||||||||
Debt Issuance Cost Write-Off | — | 0.03 | 0.02 | 0.02 | |||||||||||
Restructuring Costs | 0.11 | — | 0.48 | 0.01 | |||||||||||
Ukraine Remeasurement (1) | — | — | — | 0.01 | |||||||||||
Interest Rate Swap Termination & Reclassification | — | — | 0.03 | — | |||||||||||
Gain on Insurance Recoveries | — | (0.03 | ) | — | (0.03 | ) | |||||||||
Total Adjustments | 0.12 | (0.03 | ) | 0.54 | (0.13 | ) | |||||||||
Less: Tax Effect of Adjustments (2) | 0.04 | (0.01 | ) | 0.19 | (0.04 | ) | |||||||||
Plus: Income Tax Valuation Allowance | 0.01 | — | 0.02 | — | |||||||||||
Total Non-GAAP Adjustments | 0.09 | (0.02 | ) | 0.37 | (0.09 | ) | |||||||||
Adjusted Earnings (Loss) per Share - Diluted | $ | 0.20 | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.36 | ) | ||||
Income (Loss) Before Income Taxes | |||||||||||||||
Income (Loss) Before Income Taxes | $ | 4,886 | $ | 56 | $ | (11,734 | ) | $ | (10,293 | ) | |||||
Adjustments | |||||||||||||||
Impairment | 131 | 275 | 131 | 275 | |||||||||||
(Gain) Loss on Repurchase of Senior Convertible Notes | 18 | (1,028 | ) | (22 | ) | (3,130 | ) | ||||||||
Debt Issuance Cost Write-Off | — | 624 | 416 | 624 | |||||||||||
Restructuring Costs | 2,456 | — | 10,349 | 271 | |||||||||||
Ukraine Remeasurement (1) | — | — | — | 195 | |||||||||||
Interest Rate Swap Termination & Reclassification | — | — | 631 | — | |||||||||||
Gain on Insurance Recoveries | — | (586 | ) | — | (586 | ) | |||||||||
Total Adjustments | 2,605 | (715 | ) | 11,505 | (2,351 | ) | |||||||||
Adjusted Income (Loss) Before Income Taxes | $ | 7,491 | $ | (659 | ) | $ | (229 | ) | $ | (12,644 | ) | ||||
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Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income (Loss) Before Income Taxes - Agriculture | |||||||||||||||
Income (Loss) Before Income Taxes | $ | 4,909 | $ | (1,798 | ) | $ | (5,870 | ) | $ | (9,881 | ) | ||||
Adjustments | |||||||||||||||
Impairment | $ | 131 | $ | 109 | $ | 131 | $ | 109 | |||||||
Restructuring Costs | $ | 436 | $ | — | $ | 7,108 | $ | (120 | ) | ||||||
Gain on Insurance Recoveries | $ | — | $ | (586 | ) | $ | — | $ | (586 | ) | |||||
Adjusted Income (Loss) Before Income Taxes | $ | 5,476 | $ | (2,275 | ) | $ | 1,369 | $ | (10,478 | ) | |||||
Income (Loss) Before Income Taxes - Construction | |||||||||||||||
Loss Before Income Taxes | $ | (2,373 | ) | $ | (105 | ) | $ | (4,076 | ) | $ | (1,523 | ) | |||
Adjustments | |||||||||||||||
Impairment | — | 166 | — | 166 | |||||||||||
Restructuring Costs | $ | 1,671 | $ | — | $ | 2,009 | $ | 13 | |||||||
Adjusted Income (Loss) Before Income Taxes | $ | (702 | ) | $ | 61 | $ | (2,067 | ) | $ | (1,344 | ) | ||||
Income (Loss) Before Income Taxes - International | |||||||||||||||
Income (Loss) Before Income Taxes | $ | 2,453 | $ | 604 | $ | 3,331 | $ | (88 | ) | ||||||
Adjustments | |||||||||||||||
Restructuring Costs | 60 | — | 60 | — | |||||||||||
Ukraine Remeasurement (1) | — | — | — | 195 | |||||||||||
Adjusted Income Before Income Taxes | $ | 2,513 | $ | 604 | $ | 3,391 | $ | 107 | |||||||
Adjusted EBITDA | |||||||||||||||
Net Income (Loss) Including Noncontrolling Interest | $ | 2,384 | $ | 264 | $ | (8,734 | ) | $ | (6,296 | ) | |||||
Adjustments | |||||||||||||||
Interest Expense, Net of Interest Income | 2,011 | 3,058 | 5,932 | 8,578 | |||||||||||
Benefit from Income Taxes | 2,502 | (208 | ) | (3,000 | ) | (3,997 | ) | ||||||||
Depreciation and amortization | 6,681 | 7,068 | 18,949 | 19,896 | |||||||||||
EBITDA | 13,578 | 10,182 | 13,147 | 18,181 | |||||||||||
Adjustments | |||||||||||||||
Impairment | 131 | 275 | 131 | 275 | |||||||||||
(Gain) Loss on Repurchase of Senior Convertible Notes | 18 | (1,028 | ) | (22 | ) | (3,130 | ) | ||||||||
Debt Issuance Cost Write-Off | — | 624 | 416 | 624 | |||||||||||
Restructuring Costs | 2,456 | — | 10,349 | 271 | |||||||||||
Ukraine Remeasurement (1) | — | — | — | 195 | |||||||||||
Interest Rate Swap Termination & Reclassification | — | — | 631 | — | |||||||||||
Gain on Insurance Recoveries | — | (586 | ) | — | (586 | ) | |||||||||
Total Adjustments | 2,605 | (715 | ) | 11,505 | (2,351 | ) | |||||||||
Adjusted EBITDA | $ | 16,184 | $ | 9,467 | $ | 24,652 | $ | 15,830 | |||||||
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Nine Months Ended October 31, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Net Cash Provided By (Used for) Operating Activities | |||||||||||||||
Net Cash Provided by Operating Activities | $ | 56,031 | $ | 74,398 | |||||||||||
Net Change in Non-Manufacturer Floorplan Payable | (14,357 | ) | (54,478 | ) | |||||||||||
Adjustment for Constant Equity in Inventory | (52,506 | ) | 14,503 | ||||||||||||
Adjusted Net Cash Provided By (Used for) Operating Activities | $ | (10,832 | ) | $ | 34,423 | ||||||||||
(1) Beginning in the second quarter of fiscal 2017 we discontinued incorporating Ukraine remeasurement losses into our adjusted income (loss) and earnings (loss) per share calculations. The Ukrainian hryvnia remained relatively stable subsequent to April 30, 2016 and therefore did not significantly impact our consolidated statement of operations during this period. Absent any future significant hryvnia volatility and resulting financial statement impact, we will not include Ukraine remeasurement losses in our adjusted amounts in future periods. | |||||||||||||||
(2) The tax effect of adjustments was calculated using a 35% tax rate for all U.S. related items. That rate was determined based on a 35% federal statutory rate and no impact for state taxes given our valuation allowance against state deferred tax assets, including net operating losses. No tax effect was recognized for foreign related items as all adjustments occurred in foreign jurisdictions that have full valuation allowances on deferred tax assets. | |||||||||||||||
(3) Adjustments are net of the impact of amounts attributable to noncontrolling interests and allocated to participating securities. | |||||||||||||||
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