“Titan does have a lot of good things going forward,” he added. “Our new tires and wheels are taking hold and the LSW (low sidewall) tires and wheels are performing great out in the market. We have begun an aggressive campaign for the LSW concept, which we expect to improve Titan's agriculture and construction wheels and tires business.”
Mr. Taylor noted market conditions improved in March — but not enough to offset the severe declines during January and February. In particular, he said, agriculture and construction seem to be improving slightly, but a recovery in the mining sector “looks like a long haul.”
Regarding 2014, Titan is reviewing the situation and intends to revise its expectations. In November last year, the Quincy-based tire and wheel maker indicated it expected pre-tax operating income in 2014 of $240 million to $270 million and sales of $2.4 billion to $2.7 billion.
“The current outlook for mining tires continues to be negative,” Mr. Taylor said. “The price of tires continues to drop and will in the foreseeable future. Titan seeks to penetrate into a niche specialty tire and wheel market in the construction and mining segment, which could generate additional revenue between $200 (million) and $400 million and additional EBITDA between $40 (million) to $120 million.”
Titan President Paul Reitz and CFO John Hrudicka will be involved in drafting “profit optimization” plans, Mr. Taylor said.
Looking at its various operating units, Titan said its ITM business, which makes tracks for construction and certain agricultural machines, is growing in South America, while business in Europe remains weak.
Titan said it is moving ahead with activities in Russia, where last year it acquired a 30-percent stake in Voltyre-Prom, an agricultural/industrial tire producer in Ekaterinburg, Russia.
“The political circumstances in Russia remain a challenge but we are proceeding on with our plan,” Mr. Taylor said. Titan expects Voltyre-Prom to contributed approximately $200 million in sales eventually.
Separately, Titan announced that Mark H. Rachesky, founder and president of MHR Fund Management L.L.C. — a New York-based investment firm that owns nearly 11 percent of Titan's shares—will join Titan's board of directors June 1.
MHR Fund bought its stake in Titan earlier this year in a series of acquisitions for approximately $94 million.
Mr. Rachesky also is chairman of the board of Loral Space & Communications Inc., Telesat Canada and Lions Gate Entertainment Corp.