Quincy, Illinois – Titan International Inc. reported operating losses for both the quarter and nine-month period ended 30 Sept, on double-digit sales declines for both periods.
Titan suffered an operating loss of $14.5 million (€13.46 million) for the third quarter of 2015 compared with a loss of $2.5 million in 2014. Through the first nine months of the year, loss from operations was $6.1 million, compared to $31.7 million the year prior.
When adjusted to remove the asset impairment and inventory write-down that occurred in the second quarter of 2014, the income from operations for the nine month period was $3.1 million, Titan said.
Gross profit for the third quarter was $26.2 million, down 40 percent from $43.6 million in the third quarter of 2014. This came on net sales of $308.8 million, a 31-percent decrease from $449.6 million for the same period last year.
Net sales for the nine months ended 30 Sept also were down at $1,087 million, a 28-percent decline from $1,512.3 million for the same period in 2014. However, gross profit for the nine-month period was up slightly to $120 million from $116.4 million the year prior.
Titan cited a cyclical downturn in the mining and ag markets for these declines, with reduced farm incomes resulting in lower demand for new equipment, primarily high-horsepower ag equipment. Competitive pressures and lower raw material prices – particularly in tire manufacturing – also had a negative impact on sales.
According to Titan, the demand for its products was further impacted by inventory reduction efforts at both OEMs and their dealers. These decreases, the tire maker said, were partially offset by stable demand for products in the construction industry. Unfavourable currency translation decreased sales for the nine-month period by 10 percent.
“The third quarter for our end markets was worse than anyone forecast,” said Titan CEO and Chairman Maurice Taylor. “This was consistent with our large customers and competitors.”
“We continue to be focused on what we can control. This can be seen in our third quarter results. Our Titan employees are dedicated to working very hard to lower manufacturing costs, improve quality and improve how we manage the company.
“While unfortunate, we continue to make the difficult decisions to reduce headcount as production continues to slow,” he added. “In addition to our focus on reducing manufacturing costs, we are exploring wheel and tire designs to both reduce cost and improve performance.”