QUINCY, Ill. (July 25, 2013) — Titan International Inc.'s net earnings plummeted 47.3 percent to $23.2 million for the second quarter, despite a 29.2-percent surge in sales to $593.3 million, compared with the year-ago period.
Sales were bolstered about 38 percent from recently acquired entities, including $154.4 million at Titan Europe.
Net earning for the first half dropped 46.3 percent to $42.7 million while sales rose 27 percent to $1.17 billion, compared with the year-ago period. The Titan Europe acquisition helped boost first-half sales about 36 percent, but the increase was offset by a price/mix reduction resulting largely from lower raw material prices that were primarily passed on to customers, decreasing sales by about 8 percent, and unfavorable currency translation which decreased sales by about 1 percent, the company said. There is also excess supply of product, according to Titan.
Quincy-based Titan said it is planning to close on the purchase of Voltyre-Prom, an agricultural and industrial tire manufacturer in Russia, by Sept. 1.
"This acquisition will increase our international footprint and be Titan's base for other acquisitions in the CIS region. The South American farm tire market is getting stronger for Titan," said Titan Chairman and CEO Maurice Taylor, "and we look to establish wheel manufacturing in the region to complement the tire offering in the coming year. Along with these strategic moves, we continue to tighten costs across the company.
As a result of acquisitions, Mr. Taylor predicted Titan will see record revenue in the second half of 2013. "If the markets remain as they are, Titan will continue its growth similar to the last few years. As we grow the business, there has been a learning process involved in Titan's young management team, but they are improving each month.
"There is still work to be done to reduce our SG&A (selling, general and administrative expenses) under 7 percent and we continue our efforts to lower these costs."
Titan's capital expenditures tallied $14.9 million for the second quarter compared with $10.9 million for the second quarter of 2012. For the first half, the tire maker's expenditures totaled $36.1 million, compared with $19.0 million for the 2012 period.