QUINCY, Ill. — Titan International Inc. reported a strong recovery in the quarter ended March 31 — pre-tax operating income nearly tripled on 18.2% higher sales — but the Quincy-based producer of agricultural/forestry and OTR tires and wheels declined to offer a forecast for the full fiscal year.
Titan reported adjusted EBITDA of $26.3 million, versus $9.3 million a year ago, on sales of $403.5 million, thereby raising the operating ratio four points to 6.6%.
Titan President Paul Reitz said the result, which was on the high side of the firm's first-quarter outlook, is Titan's strongest quarter since the first half of 2018.
Mr. Reitz attributed the strong recovery to an accelerating recovery in demand from both the global agricultural and earthmoving and construction (EMC) businesses. The business areas experienced volume increases of over 15% and 19%, respectively.
On a net result basis, Titan returned to the black with income of $13.6 million, compared with a net loss of $25.5 million a year ago.
"Based on a number of positive factors in the agricultural sector, including higher crop prices, low inventory levels for new and used equipment, strong farmer income and the age of existing equipment," Mr. Reitz said, "we believe that the current market trends experienced in Q1 will continue, and in some cases even improve throughout 2021 into 2022."
To prepare for a rebound, Titan is taking the "necessary steps" to manage workflow and operational levels at all of its production facilities, Mr. Reitz said, in line with Titan's "long history" of being flexible to adjust to changing markets.
"Many companies around the world are facing supply-chain and logistics shortages," he said, "but we are managing well to this point, due to well-coordinated supply chain management that requires continuous attention and action. At the same time, we have been [taking] and will continue to take appropriate pricing actions to cover the rising costs of raw materials, labor and logistics."
Mr. Reitz said Titan expects the second quarter to show much of same market dynamics, with volatility, but that the company is "up to the task of managing through the opportunities and the challenges in front of us."
As a result, Titan said it "is prudent" to hold back on providing specific guidance for the remainder of the year.
By segment, Titan reported the agricultural and earthmoving/construction business units' sales increased 20.7% and 20.4% to $208.8 million and $164.8 million, respectively, while the consumer unit's sales fell 5.3% to $30 million.
Sales improved in all geographic segments, although business in the U.S. was up the least at 5.3% to $186.4 million.
