Titan International Inc. posted a net loss of $9 million on net sales of nearly $450 million for the third quarter ended Sept. 30, 2014. That compares to net income of $8.1 million on sales of nearly $500 million for 3Q 2013.
The company also suffered a $2.5 million loss in operating income in 3Q 2014.
"The drop in demand for large agriculture equipment sales and larger products used in the mining industry had a significant impact on our business," says Chairman and CEO Maurice Taylor. "In addition, as raw material prices continue to fall, price reductions were passed to customers. Steel and natural rubber are the largest raw material components in our business. Prices for these two commodities have been dropping steadily with natural rubber reaching a five year low."
Taylor says higher selling, general and administrative expenses were primarily the result of Titan's recently acquired facility in Russia. Titan's bottom line also was hurt by the foreign currency exchange rate.
For the first nine months of 2014, Titan recorded a net loss of $27.4 million on net sales of $1.5 billion. That compares to income of $50.8 million on sales of $1.6 billion for the same period in 2013.
"As for our outlook on the markets ahead, we believe large agriculture equipment sales will be down at least through 2015 in North America," says Taylor. "South America will remain relatively flat however, we have expanded our product offering in Brazil to cover more large agriculture and medium size construction.
"Europe will remain stable as the challenges in this region remain. ITM's track business in Europe is maintaining and they have positive news from new aftermarket test results that we believe could increase their business in 2015.
"In Russia, we expect to reduce the employee count from 2,300 to 1,000 this year in line with current demand," he says. "We are updating molds and equipment into the Russia tire facility to improve performance and efficiency. This region will slowly improve in the quarters ahead.
"We are taking steps to improve the business despite these challenging markets. We continue with our strategy to realign the Bryan, Ohio, facility to current market conditions and improve profitability in the earthmoving/construction segment. The union is in partnership with Titan to achieve this goal in the near future."
"We are on schedule with the reclamation project in Canada and look forward to launching operations in the latter part of 2015. We have received some new orders for Titan's 58x63 loader tires and wheels and we will have our new 45R/56.3 loader tires in the field by the first quarter."
"Titan will continue to strengthen our path toward growth and improved performance as we enter into 2015 with cost reductions and new product offerings, including the LSW wheel/tire campaign," adds Taylor.
