QUINCY, Ill.-As if attempting to live up to its mythological name, Titan Wheel International Inc. has been making huge strides toward becoming one of the largest firms in the wheel assembly industry. With a giant-sized appetite, Titan has been gobbling up financially troubled competitors and related industry firms, nearly doubling its earnings in one year.
In addition to expanding its wheel assembly and distribution capacity during 1993, Titan, a century-old manufacturer of wheels, entered the tire-making business last September with the purchase of Dico Tire Inc. and its parent company, Dyneer Corp. Acquisition of the Dyneer group alone nearly doubled Titan's sales in the fourth quarter of 1993.
Titan President and CEO Maurice Taylor Jr. said the company plans to expand the Dico product offering without interruption of distribution to Dico tire retailers.
``Hopefully (Dico dealers) will see much better service and an improved quality level,'' he said.
The firm was able to fund the acquisition through its first stock offering last May, selling nearly half its stock, about 2.7 million shares, at an opening price of $15 per share. Mr. Taylor owns another 29.1 percent interest in the company and Masco Industries owns 25.9 percent.
Through the money raised, Titan was able to retire its own debt and, after the Dyneer acquisition, pay down Dico's debt.
The funds also have fueled numerous other acquisitions of companies that were having financial problems or heading toward bankruptcy, Mr. Taylor said.
Due to its penchant for buying troubled firms, Mr. Taylor described Titan as a ``junkyard dog,'' buying up ``what someone else wanted to throw away.''
Dico's parent company, for example, had debt that ``had been choking them so they couldn't grow or move,'' Mr. Taylor explained.
Under a corporate-wide consolidation and restructuring move at the end of last year, Titan organized its operations into three groups: a wheels, tires and assemblies division; a special products manufacturing division; and a distribution division.
Former Dico Inc. President Mike Samide has been named vice president of operations for the wheels, tires and assemblies division, Titan's largest unit.
By the end of 1993, Titan had generated $150.4 million in sales, up 32.9 percent from the previous year, and garnered earnings of $6.36 million, a 79.7 percent jump from 1992.
All the acquisitions are related to wheels and tires, Mr. Taylor said. In the future, he predicted, purchasers of original equipment tires and wheels for industrial and other applications are going to want these components supplied in the form of sub-assemblies.
``We're probably the largest in the country to offer mounted tire assemblies. We have 20 locations where we distribute mounted tire assemblies, and we'll keep expanding from that end,'' he said.
Titan has set its sights on moving into the European market as well.
In 1989, Titan began marketing wheels and rims in Europe through a joint venture with New Warrington Wheel Co. in Merseyside, England, eventually increasing its interest to 90 percent in 1991 and renaming the operation Titan U.K.
Its other acquisitions include:
1991-Berkeley-Davis of Danville, Ill., which it renamed Automation International, specializing in the manufacture of welding and automation equipment. Titan said the purchase strengthened its technological abilities in the welding of steel, which is vital in the wheel-making business;
March 1993-Auto Wheel Group of NI Industries, a division of Masco Industries, marking Titan's entry into the automotive wheel business. The division was renamed Automotive Wheels, a maker of steel and aluminum rims;
September 1993-Dyneer Corp. and its three subsidiaries, Dico Inc. and Dico Tire-manufacturers of industrial and specialty tires and wheels-and Tractech-a manufacturer of mechanical differentials, clutches and brakes. The purchase extended Titan's product offering into the smaller tire and wheel market;
November 1993-Dotson Wheel of Saltville, Va., a producer of construction equipment wheels, allowed Titan to offer a complete tire and wheel assembly for mining equipment; and
January 1994-Nieman's Ltd. of Ventura, Iowa, a national distributor of tires, wheels, axle assemblies and related components.
The acquisitions give Titan more than 20 manufacturing and distribution centers in 12 states and two European countries.
When will Titan finally reach its growth plateau?
``Because of our size, I actually had come to a point where I thought there was not much mountain left to go,'' Mr. Taylor said. But he has decided to avoid putting on blinders and to keep setting higher goals-first aiming for $600 million in annual sales then going after $1 billion in sales. He expects to approach $400 million by January 1995.
This year, the Quincy-based company's acquistions propelled it to nearly a three-fold increase in first-quarter net sales to $91.9 million from $31.5 million in 1993. Net earnings grew as well, climbing 170 percent to $3.82 million from $1.42 million.
Mr. Taylor claims Titan doesn't have the bureaucracy typical of large companies and has retained its entrepreneurial mentality. Every month, all the managers-including Mr. Taylor-visit the production line and spend a day operating machinery and learning how tires or wheels are manufactured.
In turn, through questions the managers ask the production line employees, new ways of thinking are incorporated into the production process, Mr. Taylor said.