1. TWI reports FY 2024 with strong cash flow and Carlstar integration success. 2. Expectations for improved net farm income and aftermarket strategy in 2025. 3. Sales forecast for Q1 2025 projected between $450 million and $500 million. 4. Net sales decreased by 1.7% in Q4 2024, influenced by market demand. 5. Significant growth noted in consumer segment post-Carlstar acquisition.
The forecasted improvement in net farm income may enhance sales for TWI's products.
The positive outlook for agricultural income and strategic initiatives can boost TWI's market position.
The expected benefits from the 'One-Stop Shop' strategy should materialize over several quarters.
FY 2024 highlights include strong free cash flow generation and successful integration of Carlstar.
Positive indicators for H2 2025 and 2026 include improved net farm income and continued success of 'One-Stop Shop' strategy in the aftermarket.
WEST CHICAGO, Ill., Feb. 26, 2025 /PRNewswire/ -- Titan International, Inc. (NYSE: TWI) ("Titan" or the "Company"), a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products, today reported financial results for the fourth quarter and year ended December 31, 2024.
Paul Reitz, President and Chief Executive Officer stated, "As we turn the page to 2025, we see a number of reasons to be optimistic that we will see a return to growth for Titan with an improving outlook supported by a combination of internal and external drivers. Internally, we have continued to invest in product innovation while also bolstering our one-stop shop offerings, all of which are enabling us to offer customers the best selection of products. A key part of that is our expanded aftermarket business, which has been a notable positive as it has helped to reduce the level of cyclicality across our three reporting segments. We have the broadest and best product offerings in the market, enabling us to build strong relationships with our customers, OEMs and the aftermarket alike. That will be very important as market conditions turn for the better, and we are well positioned."
Mr. Reitz added, "There is growing support for an improvement in net farm income in 2025 driven by higher market prices for commodities, particularly corn, and an expectation of higher levels of government support to farmers. With more money in farmers' pockets there is a greater ability and willingness to reinvest those profits into capital equipment. Expectations for continued favorable conditions also drive capital investment and we have been pleased to see the positive impact the new administration has had on farmer sentiment. Another factor lending optimism is the current market activity level in Brazil, where Titan maintains a leading position in Ag tires. Demand in Brazil for the first quarter is expected to be up nicely in both our OE and Aftermarket channels, compared with a year ago, which is a positive signal that we have turned the corner in that geography, and history has shown us that the inflection point for the US should not be too far behind."
Mr. Reitz continued, "Tariffs are on everyone's mind these days and at this point, we do not anticipate the currently planned tariffs to be an issue for us to navigate. However, I do think it is a mistake to place a tariff on raw steel without also implementing one on all steel related products from the tariffed countries to close the loop for companies trying to avoid that tariff. We have seen tariffs come and go over the years and nobody can predict exactly where tariff policies will be in the future, but I believe in the long-run tariffs should be a net positive for Titan. We expect, as we have during more complex and volatile times, that Titan will continue to leverage its leading product portfolio, strong domestic manufacturing and distribution footprint, and global presence to allow us to serve our customers and mitigate their risks better than our competition."
Mr. Reitz added, "We are pleased that our sequential growth rate from Q4 was substantially higher than the average levels over the past decade. Our conversations with some OEM customers are taking a more positive tone of late, with several asking about our readiness to ramp up production in the second half of the year. As we have also noted, a key part of our strategy in recent years has been our aftermarket business in all three of our reporting segments, and our strategic acquisition last year has enabled us to cement into place our one-stop shop strategy to serve the aftermarket."
Mr. Reitz concluded, "Our strong culture of innovation, as exemplified by our game-changing LSW technology, continues to add value for our customers, and we will continue to prioritize the development of new products. LSWs provide a range of benefits for farmers, and we are leveraging those positive experiences and case studies as we introduce LSWs to the mid and low horsepower tractor segments of the market. We are also dedicating resources to re-establish our position as a supplier for the US military. Our LSWs are well-suited for those applications, and we are optimistic about our opportunities there. Lastly, we recognize there is also value in providing our customers with dependable products at the commodity end of the spectrum. With that in mind, we have expanded our third-party sourcing, which rounds out our one-stop shop strategy. Taken all together, we are confident that we have the right products, the right strategy, and the right team to drive solid performance in 2025, and most importantly for the long-term."
David Martin, Chief Financial Officer, added, "In the first quarter, we expect sales between $450 million and $500 million and Adjusted EBITDA between $25 million and $35 million. While we are not providing full-year guidance we do note that we expect a higher proportion of revenue to be generated in the second half this year than is normally the case. Underpinning that are current indications from the larger OEMs that the first half will see them complete their destocking, paving the way for improvements in ordering patterns later in the year as they look to have strong alignment with production for the market entering 2026."
Net sales for the fourth quarter ended December 31, 2024, were $383.6 million, compared to $390.2 million in the comparable quarter of 2023. Net sales reduction was driven by declines in the agricultural and earthmoving/construction segments, attributed to weakened global end customer demand, partially offset by the net sales from the Carlstar acquisition. Additionally, a 4.3% unfavorable currency translation impact, mainly due to the depreciation of the Brazilian real and Argentine peso, also contributed to the reduction.
Gross profit for the fourth quarter ended December 31, 2024 was $41.2 million, compared to $58.3 million in the comparable prior year period. Gross margin was 10.7% of net sales for the quarter, compared to 14.9% in the comparable prior year period. The changes in gross profit and gross margin were primarily due to reduced fixed cost leverage and inflationary cost impacts.
Selling, general, administrative, research and development (SGARD) expenses for the fourth quarter of 2024 were $55.7 million, compared to $35.2 million for the comparable prior year period. For the year ended December 31, 2024, SGARD expenses of $208.3 million were up 41.3% from $147.5 million the prior year. The increase in SG&A was due to the continuing SG&A incurred from the Carlstar operations, which includes the management of distribution centers and heightened depreciation and amortization expenses associated with the acquisition. Without the impact of the acquisition of Carlstar, SG&A would have decreased by approximately 1% or $1.3 million, as the Company controlled expenses in light of market conditions.
Loss from operations for the fourth quarter of 2024 was ($17.0 million), or (4.4%) of net sales, compared to a profit of $20.7 million, or 5.3% of net sales, for the fourth quarter of 2023. The change in income was primarily due to lower net sales and the cumulative impact of the previously discussed items.
Net sales in the agricultural segment were $157.1 million for the three months ended December 31, 2024, as compared to $192.6 million for the comparable period in 2023. The change in net sales was primarily driven by lower global demand for agricultural equipment, particularly in North America and Europe. Additionally, there was an adverse foreign currency translation effect of 6.2%, primarily due to the depreciation of the Brazilian real and Argentine peso.
Net sales in the earthmoving / construction segment were $116.3 million for the three months ended December 31, 2024, as compared to $159.1 million for the comparable period in 2023. The change in net sales was primarily attributed to softer demand in North America and Europe. Additionally, there was a 1.8% unfavorable impact from foreign currency translation.
Net sales in the consumer segment were $110.1 million for the three months ended December 31, 2024, as compared to $38.5 million for the comparable period in 2023. This growth was primarily driven by increased sales volumes following the Carlstar acquisition and was partially offset by reduced sales in the Americas due to market conditions, along with a 4.6% negative impact from foreign currency translation, primarily related to the weakening Brazilian real.
Adjusted EBITDA was $9.2 million for the fourth quarter of 2024, compared to $38.1 million in the comparable prior year period. The Company utilizes EBITDA and adjusted EBITDA, which are non-GAAP financial measures, as a means to measure its operating performance. A reconciliation of net income to EBITDA and adjusted EBITDA can be found at the end of this release.
The Company ended 2024 with total cash and cash equivalents of $196.0 million, compared to $220.3 million at December 31, 2023. Long-term debt at December 31, 2024 was $553.0 million, compared to $409.2 million at December 31, 2023. Short-term debt was $12.5 million at December 31, 2024, compared to $16.9 million at December 31, 2023.
Titan International, Inc. (NYSE: TWI) is a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products. Headquartered in West Chicago, Illinois, the Company globally produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. For more information, visit www.titan-intl.com.
This press release contains forward-looking statements. These forward-looking statements are covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "plan," "would," "could," "potential," "may," "will," and other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature.
Titan will be hosting a teleconference and webcast to discuss the fourth quarter financial results on Thursday, February 27, 2025, at 9 a.m. Eastern Time. The real-time, listen-only webcast can be accessed using the following link: Webcast Link or on our website at www.titan-intl.com.