ERJ staff report (DS)
Quincy, Illinois --Titan Tire recorded sales of $280.8 million for the first quarter of 2011, compared to first quarter 2010 sales of $196.4 million. The increase in sales was the result of the continued strong demand in the agriculture segment, increasing demand in the earthmoving/construction segment, and price/mix improvements which were primarily the result of increased raw material prices that were passed to customers.
Gross profit for first quarter 2011 was $56.3 million up 116 percent, compared to $26.1 million in 2010.
â€œTitan had an outstanding first quarter,â€ said Titan Chairman and CEO Maurice M. Taylor. â€œThis momentum should carry over into future quarters of 2011. The farm tyre and wheel business has remained strong. The earthmover and construction tyre business is really taking off and I believe it will strengthen throughout the year. Titan has hired a couple hundred employees and we will be adding more to our tyre operation. I believe Titan's markets are going to keep moving upwards over the next 18 months
On April 1, 2011, Titan purchased the Goodyear Sao Paulo tyre facility and the Goodyear farm brand name for all of North America, Central America and South America. This purchase was for approximately $98.6 million and consisted of prepaid North America royalty payments for seven years for $31 million, prepaid South America royalty for seven years for $12 million, inventory of $13 million and PP&E of $43 million. Looking at the first quarter royalty expense, you will see that Titan paid $2.9 million. In the future, these payments will be expensed out of the prepaid accrual and will increase our cash flow. Titan will be moving quickly to increase our capacity in South America. As I have stated before, I expect this business to grow an additional $400 million in revenue over the next 12 to 18 months,â€ said Taylor.
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Press release from Titan Tire