Quincy, Illinois – Titan International Inc. reported a 46.7-percent drop in income from operations and a net loss for the quarter ended June 30, as sales fell 12.2 percent to $330.2 million.
Income from operations dropped to $4 million, or 1.2 percent of sales, while the net loss was $3.8 million.
The company’s second quarter earnings picture was a slight improvement over other recent quarterly reports. Titan had reported operations losses the past three quarters.
Despite the relatively lackluster quarterly results, Titan CEO and Chairman Maurice Taylor noted “some great reasons to be optimistic” in his comments accompanying the release of the figures.
In particular, Taylor said Titan has seen an “uptick” in aftermarket construction and forestry tire sales and said he believes the agriculture market is at or near the bottom.
He also noted that Titan’s OEM business in tractors with less than 100 horsepower is “holding up well” and indications are the market for used agricultural equipment is showing signs of improvement.
Quincy-based Titan continues to believe it can take business from its competitors in the aftermarket with its LSW low-sidewall tire/wheel assemblies, Mr. Taylor said. To that end, Titan has developed super-single LSW assemblies for 400-, 500- and 600-hp tractors with “double-sleeve” hubs that it contends are necessary to handle the torque generated by such high-horsepower machines.
Titan also is working to reduce manufacturing costs for both wheels and tires, and has leased out an additional 500,000 square feet in its vacated Brownsville, Texas, facility. This brings to 800,000-plus square feet that is leased, Titan said, with another 200,000-sq.ft. lease possible in the near future.
The company’s loss from operations in the first half was $4 million, compared with income from operations of $8.3 million in 2015. Sales revenue for the six months were off 16 percent to $652 million, with sales volume off 5 percent as both the agricultural and earthmoving/construction segments continue to experience lower volume sales.
Taylor also noted that Titan has relatively strong cash reserves of $207 million, which could be augmented soon should Titan find a buyer for Italtractor ITM S.p.A., its Bologna, Italy-based subsidiary that designs and produces steel track and undercarriages for the construction, mining and agricultural markets.
“…(O)ur total cash balances will continue to grow and help grow our core tire/wheel business,” he said. “I believe we are in a great position to expand in our core business of tires, wheels and assemblies for farm, construction and mining.”