QUINCY, Ill. (July 28, 2011) —Titan International Inc. set earnings and sales records in the second quarter, prompting Chairman and CEO Maurice Taylor Jr. to predict the firm will exceed $2 billion in sales in 2012.
Titan reported operating income of $44 million in the quarter ended June 30, up 152 percent over 2010, and sales grew 76.1 percent to $404.4 million. The former Goodyear farm tire business in Latin America, which Titan bought in April, contributed $92 million to the improved sales.
Second quarter net income of $25.3 million was a fivefold jump over 2010.
For the second half, Titan expects the sale momentum to continue as the firm's “order deck has never been this large,” Mr. Taylor said.
To address high demand for both farm and OTR tires, especially from replacement market dealers, Titan is boosting capacity at all its plants through additional employee hiring, Mr. Taylor told analysts in a conference call.
He didn't elaborate on how much capacity is being added, but did say previously delayed expansions at Bryan, Ohio, and Freeport, Ill., are now being completed. In addition, the company is preparing a shipment of farm tire equipment and molds for the Sao Paulo, Brazil, plant acquired from Goodyear.
Included in the firm's sales in the quarter are $70.3 million in consumer sales, which are related to the firm's contract supply agreement with Goodyear in Latin America. Capital expenditures for the year-to-date were down slightly at $10.2 million.
“I told everyone last quarter that everything was going well, but I didn't think the Titan team would be moving this quickly,” Mr. Taylor said. “The forecast I made in May is too low for sales and EBITDA.”
For the half year, Titan reported income from operations of $70.8 million, up 157 percent. Sales grew 54.5 percent to $685.3 million, and net income tripled to $22.2 million.
Effective Aug. 1, Titan will raise prices for the aftermarket on all Goodyear- and Titan-branded farm tires made in Titan plants in the U.S. up to 8 percent, to cover rising costs for natural and synthetic rubber.