Titan sets quarterly sales record -- and makes $8.1 million to boot
Titan International Inc. reported net income of $8.1 million on net sales of $253.5 million for the first quarter ended March 31, 2008. That compares to a net loss of $2.5 million on sales of $226.3 million for the same period last year.
The net income-to-sales ratio was 3.2%. The operating income-to-sales ratio was 6.3%.
The sales total, a 12% increase compared to 1Q 2007, was a quarterly record for Titan. Exceptionally strong demand in the company's agricultural market (up 28%) fueled the increase.
"The growth was spurred by the huge demand in the agricultural market," says Chairman and CEO Maurice Taylor Jr. "Increases in grain-based ethanol and soybean-based biofuel has increased commodity prices throughout the ag market.... This upward trend should continue and contribute to our growth, and result in one of Titan's best years yet." (In April, Titan signed a three-year agreement to supply various John Deere affiliates with farm tires.)
In mid-April, Titan began testing on its prototype 63-inch giant OTR radial tire, which was produced in February. It stands 13 1/2-feet tall and weighs close to 12,500 pounds.
"It's truly remarkable how much progress our team has made on this giant OTR project," says Taylor. "We are still on schedule to be in start-up giant tire production in July 2008.
"Looking forward, production of these giant OTR tires will build as equipment is brought online. With the new capacity to produce giant OTR tires and the continued demand in ag, Titan's sales should remain strong.”
Gross profit for the first quarter was $32.3 million, an improvement of $5.1 million over the same period in 2007. Gross profit margin
for the quarter showed an improvement of approximately 1% despite higher raw material prices and giant OTR training costs.
Operating income for the first quarter was $16.1 million, compared to $14.3 million in 2007.