Titan posts net income of $8.6 million in 1Q
Titan International Inc. reported net income of $8.6 million on net sales of $182.6 million for the first quarter ended March 31, 2006. That compares to income of $11.2 million on sales of $136.1 million for the same period a year ago.
Titan attributed the significantly higher sales level -- a 34% increase -- to the acquisition of Goodyear Tire & Rubber Co.'s Freeport, Ill., farm tire facility, in December 2005.
The acquisition included a license agreement with Goodyear
to manufacture and sell certain off-highway tires in North America. First-quarter royalty expenses, recorded for the first time, totaled $1.6 million.
Income from operations was $17.2 million, a 22% increase over 1Q 2005 even with the royalty expense.
The company attributed its 23% decrease in net income to the higher effective tax rate of 40% in 2006 versus 10% in 2005.
Titan reduced total debt by $5.5 million during the first quarter.
"Titan achieved another first quarter of remarkable sales and profits," says Chairman and CEO Morry Taylor. "Our employees have worked hard, and it is paying off.
"As previously announced, Titan and One Equity Partners have terminated discussions regarding a potential cash merger of Titan. Throughout the period of discussions, Titan never took its foot off the gas pedal as the company closed on the acquisition and
began the integration of Goodyear's North American farm tire assets.
"Titan is growing and expanding. During the early stages, the company's acquisition of Goodyear's North American farm tire assets is proving to be an extremely positive addition to the Titan organization.
As always, we stand willing and ready to evaluate acquisition opportunities in off-highway wheels and tires that
would further strengthen Titan's business and performance."
(Titan Tire Corp., a subsidiary of Titan International, is in
negotiations with Continental Tire North America Inc. to acquire the assets of its off-the-road tire manufacturing facility in Bryan, Ohio. The company says the goal of the parties is "to reach a definitive agreement for the asset purchase transaction within the next 30 days.")