QUINCY, Ill. — Titan International Inc. reported losses from operations for the quarter and nine months ended Sept. 30, albeit smaller losses than in the year-ago periods.
On the positive side, Titan reported double-digit increases in sales for both periods, prompting President and CEO Paul Reitz to predict continued sales growth into fiscal 2018 along with gross profit improvements of 25 to 40 percent over 2017.
The losses from operations for the third quarter and nine months were $5.14 million and $8.24 million, improvements of 18.5 and 46 percent, respectively, vs. the 2016 periods.
Titan said its earnings improvements reflect the effects of the implementation of initiatives that focus on lowering costs and increasing efficiencies along with stable raw materials pricing. Offsetting these gains partially were pricing initiatives the company used in the third quarter to grow market share selectively, primarily in the agricultural segment.
Third quarter and nine-month sales jumped 21.2 and 14.1 percent to $371 million and $1.09 billion respectively, reflecting above-average volume and revenue growth in both the agricultural and earthmoving/construction segments, Mr. Reitz said. He noted this is the third consecutive quarter of significant year-over-year sales growth.
Business at the OEM level, in contrast, "remains challenging" with lower demand and tougher pricing, Titan said.
The net loss increased 50 percent to $12 million in the quarter and 24 percent for the nine months to $29.8 million.
Looking ahead, Mr. Reitz noted that Titan continues to see the benefits of strategic investments over the past couple of years that is leading to above-market growth in numerous facets of its business.
"Titan continues to win new business in our aftermarket channels and this share gain, along with the benefits of product innovations, such as LSW, led us to substantial sales gains in the third quarter and a 14 percent gain in our year-to-date sales," he said.
As for 2018, Mr. Reitz said Titan's efforts to control its operating and research/development costs should begin paying dividends to the bottom line.
Titan also noted that during the quarter it accrued a contingent liability of $6.5 million associated with the Dico Inc./Titan Tire Corp. legal judgment, a ruling with which the tire maker "respectfully disagrees" and intends to appeal.
In addition, Titan said the former Dico manufacturing facility sits on property located in the heart of Des Moines, which it believes has "considerable value for future development."