QUINCY, Ill. — Titan International Inc. climbed out of the red for the quarter ended March 31, reporting its first quarterly profit since mid-2015, as sales jumped 19 percent to $425.4 million.
First quarter net income was $14 million, compared with a loss of $10.5 million in the year-ago period. Income from operations was $18.1 million, or 4 percent of net sales, compared with a loss of $6.6 million, or 2 percent of net sales, for the first quarter of 2017.
"A year ago, when we announced our first-quarter results, we were cautiously optimistic by the early signs of growth and our first quarter of net sales growth in more than four years. A year later, as we release our first quarter 2018 results, we are further encouraged by our fifth consecutive quarter of double-digit growth in net sales," Titan President and CEO Paul Reitz said.
Titan also reported "meaningful improvement" in gross profit, gross margin and operating income.
"Once again, we experienced broad net sales growth across all of our segments, with our earthmoving/construction segment leading the way with 39-percent year-over-year improvement," Mr. Reitz said.
Excluding currency impacts, Titan reported sales gains in each of its geographic regions, North America, Latin America, Europe and Australia.
Sales volume climbed 12 percent over the year-ago period, with higher volume across all segments, Titan said. Favorable changes in price/mix increased net sales by 4 percent and favorable currency translations contributed another 3 percent increase to net sales, Titan said.
By sector: Agriculture sales rose 7.6 percent to $194.2 million; earthmover/construction surged 39.2 percent to $188.7 million; and consumer sales edged up 2.7 percent to $42.5 million.
"While we're excited about our start to 2018, and we certainly remain optimistic about the remainder of 2018, we are also mindful of the changing, and at times volatile, world around us," Mr. Reitz said.
"The impact on the remainder of the year from potential tariffs and the related effects on steel and commodity prices will be watched closely and is a potential area of concern. Rising interest rates and sluggish commodity prices also threaten farmer demand for new equipment through the remainder of this year and beyond.
"These uncertainties create the potential for farmers to further delay upgrading their equipment," he said. "Sales levels for larger tractors over 100 hp and combines remain well below longer-term, historical averages. The return in demand for these larger products is important for a more robust recovery in our agricultural segment."
"The broad-based growth across our segments and many of our regions over the past five quarters, the impact of rising oil prices, improving farm used equipment inventory levels, and stronger demand in the construction sector, all point toward good things for Titan in 2018," Mr. Reitz said.
During the first quarter, research and development expenses accounted for $2.9 million or 0.7 percent of net sales.
Titan noted that it concluded its inaugural Titan University educational program for dealers in March, offering classroom sessions and hands-on training at its facility in Boone, Iowa.
"We expect to continue the Titan University program in the future as part of our ongoing focus on customer experience, loyalty and retention," Mr. Reitz said.
"The feedback from our customers has been tremendous, which we believe should have a positive impact on our business as we believe that better informed customers should drive additional demand for Titan's products."