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Titan earnings surge in 2012

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QUINCY, Ill.—Titan International Inc. boosted its earnings for fiscal 2012 despite losses in the fourth quarter associated with the takeover of full control of the Titan Europe P.L.C. business.

Fiscal 2013 is starting off strong in the farm and mining sectors, Chairman Maurice Taylor Jr. said, and even the construction sector in the U.S. “is starting to show a little strength.”

He did not disclose specific forecasts for 2013.

For 2012, Titan increased operating income 32.2 percent to $174.7 million, as sales jumped 22.4 percent to a record $1.82 billion. Net income attributable to Titan surged 64.3 percent to $95.6 million, or 5.3 percent of sales.

Titan attributed the improvement in its profit margins to productivity gains on the higher sales volumes and select price increases on certain products that exceeded the increase in raw material costs, as well as sales mix changes to larger products that generally carry higher margins.

Mr. Taylor cited problems with Titan Europe for the firm's reporting losses in the fourth quarter—$1.1 million on an operating basis, $3.5 million net—as well as a slow-down in European construction and costs associated with re-starting an Italian wheel factory following an earthquake there in May.

Insurance claims should cover the cost of the damage sustained, he said, and Titan is experiencing strengthening demand for steel tracks.

The Quincy-based company's sales growth last year was influenced by its acquisitions of Titan Europe and Planet Group of Perth, Australia, which brought to Titan annualized revenues of $680 million and $75 million, respectively. Titan did not say how much of the 2012 sales gain is attributable to these acquisitions.

Both additions, however, are expected to expand Titan's opportunities in the agriculture and construction/earthmoving markets, Mr. Taylor said.

Titan raised capital expenditures 84 percent last year to $65.7 million, primarily for updating manufacturing equipment, expanding manufacturing capacity and for further automation.
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