WEST CHICAGO, Ill. — Titan International Inc. reported solid sales and earnings growth for the quarter and year ended Dec. 31, prompting Titan management to forecast double-digit growth in both for fiscal 2022.
Adjusted pre-tax operating income (EBITDA) leapt 149.5% to $135 million, Titan reported, on 41.4% higher sales of $1.75 billion. Net income was $49 million, versus a net loss of $65.1 million in 2020.
For the current fiscal year, Titan management is projecting EBITDA of $175 million and sales of over $2 billion.
Regarding 2022, Titan President and CEO Paul Reitz said: "We see the market forces surrounding agriculture continuing to create momentum on a global scale to drive a multi-year strong demand cycle. Farm commodities are as high as we have seen in the last decade, which along with government programs, has put farmers in a good financial position.
"On top of that," he added, "there is a strong need for new equipment in the market, which remains in short supply, as OEMs are challenged to produce enough to meet demand, much less build inventory. Used equipment inventories are also at record low levels coming into the year."
"With all of this in place, farmers will do well and that's the bottom line for our industry," Reitz said, noting that Titan's wheel and tire business units are more focused on the ag market.
At the same time, he said, the global construction and mining markets are both "shaping up as stronger in 2022 and beyond," as infrastructure spending ramps up over time and minerals continue to see strong demand on a global scale. These factors bode well for Titan's undercarriage business.
As for uncertainties — such as raw-materials pricing, supply chain and labor challenges, the logistics chaos and the war in Ukraine — Reitz said Titan is "accustomed to solving problems and overcoming challenges, and our financial results and growth demonstrate that. I have confidence that we will continue to manage any challenges ahead."
Titan operates a factory in Volgograd, Russia. The company stressed that its Russian business accounts for only about 5% of its global sales and therefore should have litte impact on the firm's overall performance.
Earlier this year, Titan secured an offtake-supply deal with an as-yet unnamed Turkish tire maker for Goodyear-branded radial agricultural tires for sale throughout Europe.
In the fourth quarter, Titan's EBIDTA doubled to $36.1 million on 49.2% higher sales of $487.7 million. Sales were up in all segments, most notably agriculture, along with pricing.
Titan cited a number of contributing factors to the increase in demand, including higher commodity prices, lower equipment inventory levels at the farm equipment retail levels, and pent-up demand following the economic impacts of 2020.
Titan's agricultural business unit, which accounts for 53% of revenue, registered multiple times growth in earnings for the quarter and year, on 64.1% and 49.6% sales growth in the quarter and full year. As a result the unit's operating margin jumped several points to over 14% for both periods.
The earthmoving/construction unit, which includes the undercarriage business, turned operating losses in 2020 to solid earnings in 2021, as sales by over third in both the quarter and year. The operating margin was 12.1% for the year.
The consumer segment also posted solid earnings and double-digit sales growth for both periods.
