Titan Internationa Inc. has reported record first quarter net income of $11.2 million, up 111% from $5.3 million for the first quarter of 2004.
Titan reported net sales of $136.1 million for the first quarter ended March 31, 2005. Net sales for the first quarter of 2004 excluding Titan Europe sales were $117.5 million, while total 2004 first quarter net sales were $167 million. Titan's sales excluding Titan Europe were $18.6 million higher this quarter compared to the first quarter of last year.
With the strong first quarter sales, the company's accounts receivable balance increased $20.5 million from year-end 2004. Despite the accounts receivable use of funds, Titan achieved a $6.5 million reduction in total debt as of March 31, 2005.
Morry Taylor Jr., Titan president and CEO, said, "Titan's sales excluding Europe were up nearly 16% compared to first quarter last year. The continued strength of the agricultural and construction equipment markets and the corresponding wheel and tire demand were largely responsible for the higher sales figures. If the U.S. dollar stays in its current range versus the euro and the yen, we believe these markets will continue to grow.
"Should oil prices remain above $35 a barrel and the public realize that ethanol is only about $1.20 per gallon wholesale, polititians may be forced to legislate a 50% mixture of ethanol and gasoline. Brazil already relies heavily on ethanol. The increased crop production resulting from such legislation would improve demand for large four-wheel-drive tractors and combines. In fact, the use of biodiesel fuel oil is very beneficial in reducing independence on foriegn oil."
Titan Europe Plc, publicly traded on London's AIM market, also excelled in the first quarter. Titan International's ownership of 29.3% of Titan Europe Plc led to equity income of $1.2 million in the first quarter of 2005. Prior to the sale, Titan Europe was consolidated in Titan International's financial statements. The company's interest in this European investment is now accounted for as an equity investment subsequent to the April 2004 sale.
During the first quarter of 2005, Titan Tire Corp., a subsidiary of Titan International Inc., entered into a definitive agreement to purchase the assets of Goodyear Tire & Rubber Co.'s North American farm tire business. The Hart-Scott-Rodino filings were made with the Federal Trade Commission and the mandatory waiting period has expired with no further requests for information and the parties are free to consummate the transaction, Titan says.
The completion of the acquisition is also subject to an agreement being reached with the union for the Goodyear facility in Freeport, Ill., and those negotiations are ongoing. The transaction is anticipated to close during the second quarter of 2005.
