Despite record sales, Titan posts net loss
Titan International Inc. posted a net loss of $3 million on net sales of $280.8 million for the first quarter ended March 31, 2011. That compares to net income of nearly $2.1 million on sales of $196.4 million for the same period in 2010.
The $280.8 million in sales were a quarterly record for Titan. The 43% increase over 1Q 2010 sales was the result of the following:
* 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).
First-quarter sales generated record income from operations, which rose from $10.1 million to $26.9 million.
Income was impacted by a 114% increase in selling, general and administrative expenses. Income taxes also were up significantly.
The higher SG&A expenses were primarily the result of higher selling and marketing expenses related to increased sales levels and an increase in the accrual for the CEO special performance award due to the rise in the company's stock price.
“Titan had an outstanding first quarter,” says Titan Chairman and CEO Maurice Taylor. “This momentum should carry over into future quarters of 2011.
"The farm tire and wheel business has remained strong. The earthmover and construction tire 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 tire operation. I believe Titan’s markets are going to keep moving upwards over the next 18 months."
Taylor says he will announce management’s new goals the end of May. The goals will include the impact of the purchase of Goodyear Tire & Rubber Co.'s Sao Paulo, Brazil, tire facility -- and the Goodyear farm brand name for all of North America, Central America and South America -- earlier this year.
"With Latin America revenue, we are anticipating record quarters for the remainder of 2011,” he adds.
For more information on the acquisition, see: