QUINCY, Ill. (Feb. 25, 2016) — Titan International Inc. reported a fiscal 2015 loss from operations of $24.3 million as sales sank 26.4 percent to $1.39 billion.
Titan Chairman and CEO Maurice Taylor called 2015 a “challenging year” that saw sales drop $500 million because of reduced demand in the agriculture, construction and mining markets and prompted Titan to cut its payroll by about 2,500 jobs during 2014-15.
Nonetheless, Mr. Taylor said he believes Titan's fourth-quarter performance demonstrates that the market declines are bottoming out and 2016 holds promise.
“I believe Titan's revenue will grow in 2016, driven by LSW products and the addition of the Goodyear brand in Europe and Russia,” he said. “We are planning for incremental Brazil wheel business in the fourth quarter, with the addition of new wheel manufacturing capabilities at our Sao Paulo tire plant. Our new tire reclamation business in Canada will be operational in April….”
“I believe with the changes that we have made to the business,” he added, “even a slight upturn in revenue will produce a disproportionate increase in profitability.”
Mr. Taylor also pointed to Titan's belief that North America sales of tractors in the 100-horsepower and under segment — where Titan has a large OE tire/wheel share — will be up 15 percent or so over 2015
Even in reporting a loss from operations, Titan noted the loss was only about a fourth of that recorded in fiscal 2014.
Mr. Taylor also pointed to Titan's year-end cash balance of $200 million as an example of how well Titan has managed its cash, and stressed that the company will manage cash even more effectively in 2016.
Titan noted that cyclical downturns in both the agriculture and earthmoving/construction segments contributed to the over sales decline, as did Titan's exiting various low-margin supply agreements and economic stress in Brazil.
Unfavorable currency translation affected sales by 10 percent and a reduction in price/mix of 5 percent further eroded sales due to competitive pricing and lower raw material costs passed along to customers.
The firm trimmed its fiscal net loss to $90.3 million.