WEST CHICAGO, Ill. — Concerned about what it perceives to be an undervalued share price, Titan International Inc. management is planning to reach out to investors in the coming weeks and months to promote the company's potential as an investment.
"(Titan) is in its best financial shape in recent years," Chairman Maurice Taylor Jr. said. "Everything is moving upward and our adjusted EBITDA is expected to be over $130 million for 2021." That compares with operating losses of $58.1 million and $48 million in fiscal years 2020 and 2019.
"The only area that is lagging is Titan's share price, which remains below where it should be given that we expect our earnings to reach an even higher level in 2022," Mr. Taylor said in a prepared statement.
Titan's shares have been trading of late in the $8 per share range, according to Titan, with a 52-week high of $11.82 and low of $4.65.
Coming off its strongest third-quarter revenue and profit performance since 2013, Titan is evaluating a number of "potential acquisitions that could be interesting" for the farm, industrial and OTR tire and wheel maker.
During the third quarter, each of Titan's business segments experienced strong sales growth, with agriculture up 59% over the 2020 period.
"Our order books continue to strengthen," Titan said in its third-quarter report. "Especially on the agriculture side where commodity pricing remains at good levels with corn above $5/bushel, soybeans above $12/bushel and cotton at an all-time high, thus ensuring strong farmer income levels for 2022."
High farm incomes, combined with historically low farm equipment dealer inventory levels and aging equipment, create a strong tailwind that Titan said it believes will continue through 2022. Titan's earthmoving and construction sector reported 36% growth in the quarter, and said these "end markets continue to look increasingly promising."
Considering the company's resurging sales and earnings this year, Titan's share price "should be much higher based on our results," Mr. Taylor said.
"If investors like farming, home building and construction, they have got to love [Titan]."
Mr. Taylor also said he believes the supply chain is going to be coming back to America, putting Titan as a predominantly U.S.-based tire and wheel producer in a "great position to capitalize on this shift."
Mr. Taylor issued his remarks in response to concerns voiced by financial analysts during Titan's third-quarter financial results conference call about the impact the strike at Deere & Co. — since ended — would have on Titan's business.
While noting that Deere is one of Titan's largest customers, Mr. Taylor said during the strike — which ran Oct. 14 – Nov. 17 — Titan was able to supply more product to its other customers while continuing to supply Deere with whatever wheels and tires it needed.
"So the strike did not have any negative, only positive, financial effect on Titan," he said.
Separately, Titan said it has completed a move of its executive-suite personnel and functions to an office building in West Chicago from Quincy, Ill. The office is located about 30 minutes west of O'Hare Airport, which makes the location very accessible.
Besides housing the company's executive officers, the new office is home to Titan's corporate activities now located in West Chicago are corporate accounting and reporting, tax, legal and compliance and risk management.
The company continues to have a strong corporate presence, as well as its North American Wheel business unit leadership located in Quincy.