QUINCY, Ill. (July 24, 2014) — Titan International Inc. fell $24.9 million into the red in the quarter ended June 30 on 11.7-percent lower sales, which Titan attributed to slower demand and uncertainty in its key markets.
The second quarter loss dragged down Titan's six-month result as well, to a loss of $18.3 million, which contrasts with earnings of $42.7 million a year ago.
Sales for second quarter 2014 were $523.7 million, while the operating result fell $29.7 million into the red. Net sales for the six months ended June 30 were $1.06 billion, down 9.3 percent.
Sales decreased 13 percent as the result of price/mix reductions driven from decreased demand for products used in the mining industry and larger agricultural products, Titan said. Unfavorable currency translation decreased sales by 1 percent.
The decrease in net sales was offset by the inclusion of the recently acquired Voltyre-Prom business, which recorded $54.6 million in sales, Titan said, and increased sales 5.0 percent. Volume was flat.
Titan said the decrease is primarily the result of the asset impairment charge of $23.2 million and inventory writedown of $11.6 million, both related to the global mining downturn.
"Our second quarter results show that while there are areas of strength, the overall business is impacted by slower demand. Demand for our agriculture, earthmoving and mining products have declined as a result of the uncertainty in the markets,” said CEO and Chairman, Maurice Taylor.
He said that the company's new management team is “aggressively reducing cost and adjusting manpower to the current business levels.”
While Mr. Taylor previously announced the maximum revenue potential of Titan's mining tire plant in Bryan, Ohio, was between $500 and $600 million, however, the company plans to realign its strategy to market demand.
"Innovation is critical in a downward market cycle and Titan has leveraged its entrepreneurship to grow the business,” Mr. Taylor added.
Titan's new LSW tires and wheels are being offered as an option for tractors, sprayers and combines by major OEM's, he said, and it has established test sites at 180 farms for LSW tires and wheels.