Titan Declares 2Q Dividend Despite 1Q Results
Titan International Inc. will pay out a cash dividend for the second quarter of 2019 to stockholders of record on Friday, June 28, 2019.
Titan's board of directors has approved a quarterly cash dividend of $.005 (one half cent) per common share. It is payable Monday, July 15, 2019.
The announcement of a 2Q dividend follows a disappointing start to the year for Titan. The company posted net income of nearly $2 million on net sales of $410.4 million for its first quarter ended March 31, 2019. That compared to income of $17.6 million on sales of $425.4 for the first quarter of 2018.
"The first quarter of 2019 was certainly not the start to the year we had planned," said Paul Reitz, CEO and president. "There were a number of factors that negatively influenced our sales and gross profit with a significant impact from currency headwinds, primarily in Europe and Brazil. Many companies have discussed the impact of the strong dollar, but for a company our size the impact was significant at $25 million on the sales line and approximately $2.5 million at the gross profit line as compared to last year.
"The overall ag economy, driven by continued lower commodity prices and ongoing trade concerns, have pushed U.S. farmer sentiment lower. This sentiment shift, coupled with a delayed planting season in the Midwest from adverse weather conditions, further impacted our original expectations for aftermarket demand during the quarter. We still believe, like many others in the industry, that the ag market has a strong level of pent-up demand as evidenced by aging fleets and large equipment sales remaining well below historical averages. We did experience better overall financial performance in March, which is encouraging heading into the second quarter and the remainder of the year.
"As we look more specifically at the pockets of our business that experienced the largest gross profit impacts, our North America tire business unit had temporary margin pressure as we implemented focused incentives to drive aftermarket sales during the sluggish start to the year in order to protect market share," said Reitz. "In addition, North America tire was impacted in the short-term by higher costs of inventory from production in the fourth quarter when we were at lower volume levels."