WEST CHICAGO, Ill. — Titan International Inc. more than doubled income from operations last year on 22% higher sales, prompting management to project 2023 will be an "upbeat year" with a financial performance continuing at a "high level."
Titan's income from operations shot 147% to $205.8 million on 21.8% higher sales of $1.27 billion, raising the operating ratio nearly five points to 9.5%. Net income more than tripled to $179.2 million.
Titan management at this time did not publish specifics about fiscal 2023. "As the year progresses, we'll provide more information about our forecasted performance," President Paul Reitz said.
It also was a banner year for cash flow, Reitz noted, as Titan generated $44 million in free cash flow during the fourth quarter and $114 million for the full year. This allowed Titan to cut its net debt to adjusted EBITDA leverage ratio to 1.1 times.
"We are extremely pleased with the strength of our balance sheet, which is a testament to the strategic actions of this management team," Reitz said. "We have truly transformed our financial position, and are now in a position of strength to support future growth."
The Titan exec noted that an encouraging sign for Titan in 2023 is that farmer income remains healthy globally, with grain markets that are well supported by strong supply and demand economics.
In addition, Reitz pointed to recent U.S. Department of Agriculture reports that show that corn and soybean supply-demand will support current pricing into 2024, at a minimum, which should help influence farmers' decisions to purchase new equipment and drive robust aftermarket tire sales.
By business segment, Titan reported:
- Agricultural — income from operations rose 68% to $130.5 million on 25.6% higher sales of $1.19 billion, which resulted in large part due to higher selling prices.
- Earthmoving/Construction — income from operations nearly tripled to $79.8 million on 16.4% higher sales of $807.4 million.
- Consumer — income from operations more than doubled to $22.8 million on 23.5% higher sales of $169.8 million.