Titan International, Inc. (TWI) Bundle
A Brief History of Titan International, Inc.
Titan International, Inc. (TWI), founded in 1890, specializes in manufacturing wheels and tires for the agricultural, earthmoving, and consumer markets. As of 2024, Titan has undergone significant transformations, including the acquisition of Carlstar Company on February 29, 2024, which has substantially expanded its market reach and product offerings.
Financial Performance Overview
In the third quarter of 2024, Titan International reported net sales of $448.0 million, an increase from $401.8 million in the same period of 2023, marking a 11.5% growth year-over-year. The nine-month net sales reached $1,462.4 million, slightly up from $1,431.6 million during the same period in 2023, reflecting a 2.1% increase.
| Metric | Q3 2024 | Q3 2023 | Change (%) | YTD 2024 | YTD 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Net Sales | $448.0 million | $401.8 million | 11.5% | $1,462.4 million | $1,431.6 million | 2.1% |
| Gross Profit | $58.8 million | $66.1 million | (11.0%) | $216.6 million | $247.5 million | (12.5%) |
| Net (Loss) Income | $(18.2) million | $19.7 million | (192.2%) | $(4.8) million | $85.0 million | (105.6%) |
Segment Performance
As of September 30, 2024, Titan's segment results indicated a notable disparity in performance across its divisions:
- Agricultural Segment: Net sales decreased by 17.6% in Q3 2024, totaling $175.4 million, compared to $212.9 million in Q3 2023.
- Earthmoving/Construction Segment: Reported net sales of $136.3 million in Q3 2024, down from $155.0 million in Q3 2023, a decrease of 12.0%.
- Consumer Segment: Showed an increase in net sales to $136.2 million in Q3 2024 from $33.8 million in Q3 2023, reflecting a strong growth trajectory.
| Segment | Q3 2024 Net Sales | Q3 2023 Net Sales | Change (%) |
|---|---|---|---|
| Agricultural | $175.4 million | $212.9 million | (17.6%) |
| Earthmoving/Construction | $136.3 million | $155.0 million | (12.0%) |
| Consumer | $136.2 million | $33.8 million | 302.4% |
Acquisition of Carlstar
The acquisition of Carlstar Company was a pivotal event for Titan, costing $143.6 million. This acquisition is expected to enhance Titan's product range and operational capabilities significantly. The integration of Carlstar's assets has already begun to reflect in Titan's financials, contributing to higher sales volumes in the consumer segment despite challenges in agricultural and construction markets.
Debt and Financing
As of September 30, 2024, Titan reported total assets of $1.686 billion and total liabilities of $1.088 billion, resulting in total equity of $598.1 million. The company has a revolving credit facility of $225 million and has managed to maintain compliance with its debt covenants.
| Metric | Q3 2024 | Q4 2023 |
|---|---|---|
| Total Assets | $1.686 billion | $1.289 billion |
| Total Liabilities | $1.088 billion | $x million |
| Total Equity | $598.1 million | $x million |
Cash Flow Highlights
For the nine months ended September 30, 2024, Titan generated cash flow from operating activities of $132.8 million, down from $140.1 million in the same period of 2023. The decline was primarily due to lower net income, partially offset by improved working capital management.
| Cash Flow Activity | YTD 2024 | YTD 2023 |
|---|---|---|
| Operating Cash Flow | $132.8 million | $140.1 million |
| Investing Cash Flow | $(189.0 million) | $(39.7 million) |
| Financing Cash Flow | $73.1 million | $(40.0 million) |
A Who Owns Titan International, Inc. (TWI)
Major Shareholders
As of 2024, Titan International, Inc. (TWI) has a diverse ownership structure. The major shareholders include institutional investors, mutual funds, and individual stakeholders. The following table summarizes the top shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| BlackRock, Inc. | 10.5% | 7,448,000 |
| The Vanguard Group, Inc. | 9.8% | 6,934,000 |
| Dimensional Fund Advisors LP | 6.7% | 4,762,000 |
| State Street Corporation | 5.4% | 3,800,000 |
| Other Institutional Investors | 20.0% | 14,000,000 |
| Individual Investors | 47.6% | 33,000,000 |
Recent Financial Performance
In terms of financial performance, Titan International reported net sales of $1,462.4 million for the nine months ended September 30, 2024, an increase from $1,431.6 million during the same period in 2023. The gross profit for the same period was $216.6 million, yielding a gross margin of 14.8% compared to 17.3% in the prior year.
Stock Performance
Titan International's stock has shown fluctuations throughout 2024. As of September 30, 2024, the closing price was $8.70 per share, down from $10.25 at the beginning of the year. The stock has seen a year-to-date decline of approximately 15.1%.
Debt and Equity Structure
The company has a total debt of approximately $503.4 million, with a debt-to-equity ratio of 1.25 as of September 30, 2024. The equity structure is composed of 71.2 million shares outstanding, with a book value per share of $8.40.
Recent Acquisitions
On February 29, 2024, Titan International completed the acquisition of Carlstar for $143.6 million. This acquisition is expected to enhance Titan's market position in the tire manufacturing sector.
Market Capitalization
As of September 30, 2024, Titan International's market capitalization stands at approximately $620 million, reflecting a significant change in investor sentiment amidst the company's operational adjustments and market conditions.
Conclusion on Ownership Dynamics
The ownership landscape of Titan International, Inc. is characterized by a mix of institutional and individual investors, highlighting a broad base of support. The company's strategic decisions, particularly regarding acquisitions and financial management, will be critical in shaping future ownership trends and performance metrics.
Titan International, Inc. (TWI) Mission Statement
The mission statement of Titan International, Inc. (TWI) emphasizes its commitment to providing high-quality tires and wheels for the agricultural, earthmoving, construction, and consumer markets. As of 2024, the company continues to focus on innovation, sustainability, and customer satisfaction while aiming to enhance its operational efficiency and expand its global presence.
Financial Overview
For the nine months ended September 30, 2024, Titan International reported net sales of $1,462.4 million, an increase from $1,431.6 million in the same period in 2023. This growth was attributed to higher sales volumes, particularly from the acquisition of Carlstar.
Below is a table summarizing key financial metrics for Titan International:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $448.0 million | $401.8 million | 11.5% |
| Gross Profit | $58.8 million | $66.1 million | (3.1%) |
| Gross Margin | 13.1% | 16.4% | (20.1%) |
| Income from Operations | $2.8 million | $27.0 million | (89.6%) |
| Net (Loss) Income | $(18.2 million) | $19.7 million | (192.4%) |
| Basic (Loss) Earnings per Share | $(0.25) | $0.31 | (180.6%) |
Segment Performance
The company operates in three primary segments: Agricultural, Earthmoving/Construction, and Consumer. Below is a table summarizing the sales and gross profit from each segment for the nine months ended September 30, 2024:
| Segment | Net Sales (in millions) | Gross Profit (in millions) | Profit Margin (%) |
|---|---|---|---|
| Agricultural | $631.4 | $89.6 | 14.2% |
| Earthmoving/Construction | $467.1 | $55.9 | 12.0% |
| Consumer | $363.8 | $71.0 | 19.5% |
| Total | $1,462.4 | $216.6 | 14.8% |
Recent Developments
In 2024, Titan International completed the acquisition of Carlstar, which significantly impacted its financials. The acquisition resulted in a net cash outflow of $143.6 million for the nine months ended September 30, 2024.
Additionally, the company recorded acquisition-related expenses of $6.2 million for the nine months ended September 30, 2024. The integration of Carlstar has contributed to increased operational costs, reflected in the rising Selling, General and Administrative Expenses (SG&A), which were $140.5 million for the nine months ended September 30, 2024, compared to $102.9 million for the same period in 2023.
Equity and Debt Position
As of September 30, 2024, Titan International had total assets of $1,686.7 million and total liabilities of $1,088.7 million, resulting in total equity of $598.1 million.
The company’s share repurchase program, authorized on December 16, 2022, allows for the repurchase of up to $50 million of its common stock. As of September 30, 2024, Titan had repurchased 1,050,000 shares totaling $8.3 million under this program.
Conclusion on Mission Statement Alignment
Titan International's mission to enhance customer satisfaction and operational efficiency is evident in its strategic initiatives and financial performance. The acquisition of Carlstar and the focus on expanding market presence align with the company's goals of innovation and sustainability.
How Titan International, Inc. (TWI) Works
Overview of Operations
Titan International, Inc. operates primarily in the manufacturing of wheels, tires, and related products for various sectors including agricultural, earthmoving/construction, and consumer markets. The company’s operations are segmented into three main categories:
- Agricultural
- Earthmoving/Construction
- Consumer
Financial Performance
As of September 30, 2024, Titan International reported consolidated net sales of $1,462.4 million, a slight increase from $1,431.6 million in the same period of 2023. The breakdown of net sales by segment is as follows:
| Segment | Net Sales (in millions) | Gross Profit (in millions) | Profit Margin (%) | Income from Operations (in millions) |
|---|---|---|---|---|
| Agricultural | $631.4 | $89.6 | 14.2 | $41.7 |
| Earthmoving/Construction | $467.1 | $55.9 | 12.0 | $14.0 |
| Consumer | $363.8 | $71.0 | 19.5 | $22.8 |
| Total | $1,462.4 | $216.6 | 14.8 | $50.2 |
Segment Analysis
Agricultural Segment
For the three months ended September 30, 2024, the agricultural segment experienced a net sales decrease to $175.4 million, down from $212.9 million in 2023, primarily due to reduced global demand. Gross profit also decreased significantly to $16.7 million, with a profit margin of 9.5%.
Earthmoving/Construction Segment
The earthmoving/construction segment reported net sales of $136.3 million for the same period, a decline from $155.0 million in 2023. Gross profit fell to $11.7 million, resulting in a profit margin of 8.5%.
Consumer Segment
In contrast, the consumer segment saw substantial growth, with net sales reaching $136.2 million, up from $33.8 million in 2023, largely due to the Carlstar acquisition. Gross profit for this segment was $30.4 million, yielding a profit margin of 22.3%.
Income and Expenses
For the three months ended September 30, 2024, Titan reported a net loss of $18.2 million compared to a net income of $19.7 million in the same period of 2023. Basic and diluted loss per share were $(0.25) compared to earnings per share of $0.31 in 2023.
Total selling, general, and administrative expenses for the three months were $49.5 million, representing 11.1% of net sales, compared to $33.6 million, or 8.4% of net sales, for the prior year period.
Cash Flow and Liquidity
As of September 30, 2024, Titan had cash and cash equivalents of $227.3 million, up from $220.3 million at the end of 2023. Cash provided by operating activities for the nine months ended September 30, 2024, was $132.8 million, a decrease from $140.1 million in 2023.
Capital expenditures for the nine months were $52.3 million, reflecting ongoing investments in operational capacity and efficiency.
Debt and Financing
Total interest expense for the three months ended September 30, 2024, was $9.0 million, an increase from $7.2 million in 2023. This increase was primarily due to a new domestic credit facility initiated in connection with the Carlstar acquisition.
Recent Acquisitions
On February 29, 2024, Titan completed the acquisition of Carlstar, which is expected to enhance its product offerings and market reach. The acquisition cost was approximately $143.6 million, and it has contributed positively to the consumer segment's revenues.
Market Trends and Challenges
The company faces challenges including fluctuating demand in the agricultural and construction sectors, impacted by economic conditions in North America and Europe. Additionally, foreign currency translation effects have also influenced sales figures negatively.
Outlook
Looking forward, Titan International aims to leverage its recent acquisitions while addressing market challenges to stabilize and grow its operations across all segments.
How Titan International, Inc. (TWI) Makes Money
Overview of Revenue Segments
Titan International, Inc. generates revenue primarily through three segments: Agricultural, Earthmoving/Construction, and Consumer. For the nine months ended September 30, 2024, the company's total net sales reached $1,462.4 million, reflecting a slight increase from $1,431.6 million in the same period of the previous year.
| Segment | Net Sales (2024 Q3) | Net Sales (2023 Q3) | Gross Profit (2024 Q3) | Gross Profit (2023 Q3) |
|---|---|---|---|---|
| Agricultural | $631,442 | $787,973 | $89,642 | $135,012 |
| Earthmoving/Construction | $467,085 | $528,652 | $55,929 | $88,583 |
| Consumer | $363,837 | $114,976 | $71,046 | $23,930 |
| Total | $1,462,364 | $1,431,601 | $216,617 | $247,525 |
Agricultural Segment
The Agricultural segment reported net sales of $631.4 million for the nine months ended September 30, 2024, down from $788.0 million in the same period in 2023. The decline was primarily due to reduced demand for agricultural equipment and an unfavorable foreign currency translation impact of 4.8% from the weakening Argentine peso and Brazilian real. Gross profit in this segment was $89.6 million, translating to a profit margin of 14.2%, compared to a gross profit of $135.0 million and a margin of 17.1% in the prior year.
Earthmoving/Construction Segment
For the Earthmoving/Construction segment, net sales decreased to $467.1 million from $528.7 million year-over-year. The gross profit for this segment was $55.9 million, yielding a profit margin of 12.0%, down from the previous year's $88.6 million and 16.8% margin. This segment's performance was impacted by reduced sales volume in North America and Europe, as well as a slowdown among construction OEM customers.
Consumer Segment
The Consumer segment experienced significant growth, with net sales increasing to $363.8 million for the nine months ended September 30, 2024, compared to $115.0 million in the same period of 2023. The gross profit in this segment was $71.0 million, leading to a profit margin of 19.5%, slightly down from 20.8% in the previous year. This growth was primarily driven by the acquisition of Carlstar, although it faced challenges due to lower sales volumes in the Americas attributed to adverse market conditions.
Cost Structure and Expenses
Titan International incurs various operational costs, including selling, general, and administrative expenses (SG&A). For the nine months ended September 30, 2024, SG&A expenses totaled $140.5 million, representing 9.6% of net sales, compared to $102.9 million and 7.2% in the same period of 2023.
| Expense Type | 2024 Q3 Amount | 2023 Q3 Amount |
|---|---|---|
| SG&A Expenses | $140,536 | $102,917 |
| Research & Development | $12,071 | $9,399 |
| Royalty Expense | $7,613 | $7,200 |
Income from Operations
Income from operations for the nine months ended September 30, 2024, was reported at $50.2 million, a significant decrease from $128.0 million in the prior year. The decline in income was largely attributed to lower gross profits across all segments, reflecting the challenges in demand and pricing pressures.
Net Income and Earnings Per Share
For the nine months ended September 30, 2024, Titan International reported a net loss of $4.8 million, compared to net income of $85.0 million in the same period in 2023. Basic and diluted loss per share were $(0.10), contrasting with earnings of $1.29 per share in the previous year.
| Metric | 2024 Q3 | 2023 Q3 |
|---|---|---|
| Net Income | $(4,803) | $84,988 |
| Basic Earnings Per Share | $(0.10) | $1.29 |
| Diluted Earnings Per Share | $(0.10) | $1.29 |
Conclusion
Titan International, Inc. generates revenue through its diversified segments while facing challenges from market demand and pricing pressures. The recent acquisition of Carlstar has significantly impacted its consumer segment, contributing to increased sales but also bringing associated costs and challenges.
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Article updated on 8 Nov 2024
Resources:
- Titan International, Inc. (TWI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Titan International, Inc. (TWI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Titan International, Inc. (TWI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.