- Revenue for Fiscal Third Quarter of 2017 was
$332 million -
Titan Machinery Inc. (Nasdaq:TITN), a leading network of
full-service agricultural and construction equipment stores, today
reported financial results for the fiscal third quarter ended
October 31, 2016.
Fiscal 2017 Third Quarter Results
Consolidated ResultsFor the third quarter of fiscal 2017,
revenue was $332.3 million, compared to $345.0 million in the third
quarter last year. Equipment sales were $212.2 million for the
third quarter of fiscal 2017, compared to $215.7 million in the
third quarter last year. Parts sales were $69.3 million for the
third quarter of fiscal 2017, compared to $73.8 million in the
third quarter last year. Revenue generated from service was $33.8
million for the third quarter of fiscal 2017, compared to $34.1
million in the third quarter last year. Revenue from rental and
other was $17.0 million for the third quarter of fiscal 2017,
compared to $21.3 million in the third quarter last year.
Gross profit for the third quarter of fiscal
2017 was $58.4 million, compared to $67.1 million in the third
quarter last year. The Company’s gross profit margin was 17.6% in
the third quarter of fiscal 2017, compared to 19.5% in the third
quarter last year. This decrease in gross profit margin was
primarily the result of equipment gross margin compression as we
accelerated our used equipment inventory reduction efforts through
aggressive retailing of our used equipment inventory. Gross profit
from parts, service and rental and other for the third quarter of
fiscal 2017 was 81.1% of overall gross profit, compared to 73.8% in
the third quarter last year, as a result of the lower equipment
gross profit.
Operating expenses decreased by $0.4 million to
$53.1 million, or 16.0% of revenue, for the third quarter of fiscal
2017, compared to $53.5 million, or 15.5% of revenue, for the third
quarter of last year. The increase in operating expenses as a
percentage of revenue was primarily due to the decrease in total
revenue in the third quarter of fiscal 2017, as compared to the
third quarter of fiscal 2016.
Floorplan interest expense was $3.3 million for
the third quarter of fiscal 2017, compared to $4.6 million in the
third quarter of fiscal 2016. The decrease in floorplan interest
expense is primarily due to a decrease in the average level of
interest-bearing inventory in the third quarter of fiscal 2017.
Other interest expense decreased to $2.2 million in the third
quarter of fiscal 2017 from $4.0 million in the third quarter of
fiscal 2016, primarily due to a gain of $1.0 million recognized
upon the repurchase of $24.2 million of senior convertible notes in
September 2016, and to interest savings resulting from this
repurchase and the repurchase of $30.1 million of senior
convertible notes in April 2016.
In the third quarter of fiscal 2017, net income
including noncontrolling interest was $0.3 million, or earnings per
diluted share of $0.01, compared to a net income including
noncontrolling interest of $3.5 million, or $0.16 per diluted share
for the third quarter of fiscal 2016.
On a non-GAAP basis, adjusted net loss including
noncontrolling interest for the third quarter of fiscal 2017 was
$0.2 million, or $0.01 per diluted share, compared to adjusted net
income including noncontrolling interest of $4.3 million, or $0.20
per diluted share, for the third quarter of fiscal 2016. The
Company generated $9.5 million in adjusted EBITDA, compared to
$17.5 million in the third quarter of last year. The Company
includes floorplan interest expense in its adjusted EBITDA
calculation.
Segment ResultsAgriculture Segment - Revenue for
the third quarter of fiscal 2017 was $205.5 million, compared to
$211.3 million in the third quarter last year. Pre-tax loss
for the third quarter of fiscal 2017 was $1.8 million, compared to
pre-tax income of $4.2 million in the third quarter last year.
Construction Segment - Revenue for the third
quarter of fiscal 2017 was $80.8 million, compared to $87.0 million
in the third quarter last year. Pre-tax income for the third
quarter of fiscal 2017 was $0.1 million, compared to a pre-tax
income of $1.4 million in the third quarter last year.
International Segment - Revenue for the third
quarter of fiscal 2017 was $45.9 million, compared to $46.7 million
in the third quarter last year. Pre-tax income for the third
quarter of fiscal 2017 was $0.6 million, compared to pre-tax income
of $0.4 million in the third quarter last year.
Fiscal 2017 First Nine Months Results
Revenue was $0.9 billion for the first nine
months of fiscal 2017, compared to $1.0 billion for the same period
last year. Net loss including noncontrolling interest for the first
nine months of fiscal 2017 was $6.3 million, or $0.27 per diluted
share, compared to $3.2 million, or $0.13 per diluted share, for
the same period last year. On a non-GAAP basis, adjusted net loss
including noncontrolling interest for the first nine months of
fiscal 2017 was $7.6 million, or $0.36 per diluted share, compared
to adjusted net income including noncontrolling interest of $0.9
million, or $0.06 per diluted share, for the same period last year.
The Company generated $15.8 million in adjusted EBITDA in the first
nine months of fiscal 2017, compared to $32.5 million in the same
period last year.
Balance Sheet and Cash Flow
The Company ended the third quarter of fiscal
2017 with $52.4 million of cash. The Company’s inventory level
decreased to $607.6 million as of October 31, 2016, compared
to $689.5 million as of January 31, 2016. This inventory
decrease includes a $77.4 million reduction in equipment inventory,
which reflects a $85.9 million or 32% decrease in used equipment
inventory, partially offset by an increase of new equipment
inventory of $8.5 million. The Company had $372.1 million
outstanding floorplan payables on $856.2 million total
discretionary floorplan lines of credit as of October 31,
2016, compared to $444.8 million outstanding as of January 31,
2016.
In September 2016, the Company repurchased $24.2
million principal amount of its 3.75% senior convertible notes due
2019 for $20.9 million in cash and recognized a $1.0 million
pre-tax gain related thereto in the third quarter of fiscal 2017.
This gain is not considered in the modeling assumptions discussed
below as the Company considers it an adjustment to GAAP income
(loss). The repurchase in September 2016 is in addition to the
Company's repurchase of $30.1 million of senior convertible notes
in April 2016. The Company's ratio of total liabilities to tangible
net worth improved to 1.8 as of October 31, 2016 from 2.1 as
of January 31, 2016, reflecting the lower outstanding
floorplan payables and reduced outstanding balance of senior
convertible notes.
In the first nine months of fiscal 2017, the
Company’s net cash provided by operating activities was $74.4
million, compared to $198.8 million in the first nine months of
fiscal 2016. The Company evaluates its cash flow from operating
activities net of all floorplan payable activity and maintaining a
constant level of equity in our equipment inventory. Taking these
adjustments into account, adjusted net cash provided by operating
activities was $34.4 million in the first nine months of fiscal
2017, compared to $32.9 million in first nine months of fiscal
2016.
Management Comments
David Meyer, Titan Machinery’s Chairman and
Chief Executive Officer, stated, "During the third quarter our
agricultural customers experienced high crop yields and, despite
continued low commodity prices, the yields improved customer
sentiment, which created an opportunity to increase equipment
sales. We took this opportunity to accelerate our used equipment
reduction efforts by aggressively retailing our used equipment
inventory during the third quarter. In total, we have
successfully reduced our used equipment inventory by $86 million in
the first nine months of fiscal 2017."
Mr. Meyer commented, "As we begin the final
quarter of fiscal 2017 and look toward next year, we are confident
that we are taking the right steps to position our business for
long-term profitable growth and continue to execute on our
initiatives to improve our balance sheet and generate cash flow
from operating activities. We are now on track to exceed our
previous inventory reduction goal by 25% and to end fiscal 2017
with a total reduction for the year of $125 million in equipment
inventory. Our initiatives have enabled us to repurchase over
$50 million of senior convertible notes in the current fiscal year,
including $24 million in the third quarter, which helped further
improve our ratio of total liabilities to tangible net worth to 1.8
at the end of the third quarter. We remain optimistic about
long-term agriculture trends, and believe that we will be
positioned to take advantage of future opportunities to drive
improved financial performance."
Updated Fiscal 2017 Modeling Assumptions
The Company is updating the modeling assumptions for fiscal 2017
that it believes will provide investors with relevant information
about expectations regarding financial results and business
trends:
- Agriculture Same Store Sales Down 13% to 18%
- Construction Same Store Sales Flat
- International Same Store Sales Down 7% to 12%
- Equipment Margins Between 6.2% and 6.8%
- Adjusted Diluted loss per share in the second half of fiscal
2017 is expected to be less than the loss in the first half of the
year (1)
Conference Call and Presentation
Information
The Company will host a conference call and
audio webcast today at 7:30 a.m. Central time (8:30 a.m. Eastern
time). A copy of the presentation that will accompany the prepared
remarks from the conference call is available on the Company’s
website under Investor Relations at www.titanmachinery.com. An
archive of the audio webcast will be available on the Company’s
website under Investor Relations at www.titanmachinery.com for 30
days following the audio webcast.
Investors interested in participating in the
live call can dial (888) 430-8705 from the U.S. International
callers can dial (719) 325-2481. A telephone replay will be
available approximately two hours after the call concludes and will
be available through Wednesday, December 14, 2016, by dialing (877)
870-5176 from the U.S., or (858) 384-5517 from international
locations, and entering confirmation code 2545217.
Non-GAAP Financial Measures
Within this release, the Company refers to
certain adjusted financial measures, which have directly comparable
GAAP financial measures as identified in this release. The Company
believes that non-GAAP financial measures, when reviewed in
conjunction with GAAP financial measures, can provide more
information to assist investors in evaluating current period
performance and in assessing future performance. For these reasons,
internal management reporting also includes non-GAAP measures.
Generally, presented non-GAAP measures include adjustments for
items such as realignment charges, asset impairments, gains on the
repurchase of senior convertible notes, and other gains and losses.
These non-GAAP financial measures should be considered in addition
to, and not superior to or as a substitute for the GAAP financial
measures presented in this earnings release and the Company’s
financial statements and other publicly filed reports. Non-GAAP
measures as presented herein may not be comparable to similarly
titled measures used by other companies. Investors are encouraged
to review the reconciliations of adjusted financial measures used
in this press release to their most directly comparable GAAP
financial measures as provided with the financial statements
attached to this release. The tables included in the Non-GAAP
Reconciliations reconcile pre-tax income, net income (loss)
including noncontrolling interest, earnings (loss) per share –
diluted, and net cash provided by operating activities (GAAP
financial measures) for the periods presented to adjusted pre-tax
income (loss), adjusted net income (loss) including noncontrolling
interest, adjusted EBITDA (loss), adjusted earnings (loss) per
share – diluted, and adjusted net cash provided by operating
activities (non-GAAP financial measures) for the periods
presented.
About Titan Machinery Inc.
Titan Machinery Inc., founded in 1980 and
headquartered in West Fargo, North Dakota, is a multi-unit business
with mature locations and newly-acquired locations. The Company
owns and operates a network of full service agricultural and
construction equipment stores in the United States and Europe. The
Titan Machinery network consists of 90 North American dealerships
in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska,
Wyoming, Wisconsin, Colorado, Arizona, and New Mexico, including
one outlet store, and 20 European dealerships in Romania, Bulgaria,
Serbia, and Ukraine. The Titan Machinery dealerships represent one
or more of the CNH Industrial Brands (CNHI), including CaseIH, New
Holland Agriculture, Case Construction, New Holland Construction,
and CNH Capital. Additional information about Titan Machinery Inc.
can be found at www.titanmachinery.com.
Forward Looking Statements
Except for historical information contained
herein, the statements in this release are forward-looking and made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The words “potential,” “believe,”
“estimate,” “expect,” “intend,” “may,” “could,” “will,” “plan,”
“anticipate,” and similar words and expressions are intended to
identify forward-looking statements. Such statements are based upon
the current beliefs and expectations of our management.
Forward-looking statements made herein, which include statements
regarding Agriculture, Construction, and International segment
initiatives and improvements, segment revenue realization, growth
and profitability expectations, inventory expectations, leverage
expectations, agricultural and construction equipment industry
conditions and trends, and modeling assumptions and expected
results of operations for the fiscal year ending January 31,
2017, involve known and unknown risks and uncertainties that may
cause Titan Machinery’s actual results in current or future periods
to differ materially from the forecasted assumptions and expected
results. The Company’s risks and uncertainties include, among other
things, a substantial dependence on a single distributor, the
continued availability of organic growth and acquisition
opportunities, potential difficulties integrating acquired stores,
industry supply levels, fluctuating agriculture and construction
industry economic conditions, the success of recently implemented
initiatives within the Company’s operating segments, the
uncertainty and fluctuating conditions in the capital and credit
markets, difficulties in conducting international operations,
foreign currency risks, governmental agriculture policies, seasonal
fluctuations, the ability of the Company to reduce inventory
levels, climate conditions, disruption in receiving ample inventory
financing, and increased competition in the geographic areas
served. These and other risks are more fully described in Titan
Machinery’s filings with the Securities and Exchange Commission,
including the Company’s most recently filed Annual Report on Form
10-K, as updated in subsequently filed Quarterly Reports on Form
10-Q, as applicable. Titan Machinery conducts its business in a
highly competitive and rapidly changing environment. Accordingly,
new risk factors may arise. It is not possible for management to
predict all such risk factors, nor to assess the impact of all such
risk factors on Titan Machinery’s business or the extent to which
any individual risk factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statement. Other than required by law, Titan
Machinery disclaims any obligation to update such factors or to
publicly announce results of revisions to any of the
forward-looking statements contained herein to reflect future
events or developments.
(1) A reconciliation of the projected non-GAAP
adjusted diluted loss per share, a forward-looking non-GAAP
financial measure, to the most directly comparable GAAP financial
measure of diluted loss per share, is not provided because the
Company is unable to provide such a reconciliation without
unreasonable effort. The inability to provide a reconciliation is
due to the uncertainty and inherent difficulty regarding the
occurrence, financial impact and periods in which non-GAAP
adjustments may be recognized. The GAAP measure of diluted loss per
share may include the impact of such items as realignments costs,
asset impairments, gains on the repurchase of senior convertible
notes, and other gains and losses. Historically, the Company has
excluded these items from non-GAAP financial measures, and expects
to do so in future periods. However, the decisions and events that
typically lead to the recognition of non-GAAP adjustments are
inherently unpredictable as to if or when they may occur.
TITAN MACHINERY INC. |
Consolidated Balance Sheets |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
October 31, 2016 |
|
January 31, 2016 |
Assets |
|
|
|
Current Assets |
|
|
|
Cash |
$ |
52,431 |
|
|
$ |
89,465 |
|
Receivables, net |
71,803 |
|
|
56,552 |
|
Inventories |
607,629 |
|
|
689,464 |
|
Prepaid
expenses and other |
7,491 |
|
|
9,753 |
|
Income
taxes receivable |
4,559 |
|
|
13,011 |
|
Total
current assets |
743,913 |
|
|
858,245 |
|
Noncurrent Assets |
|
|
|
Intangible assets, net of accumulated amortization |
5,026 |
|
|
5,134 |
|
Property
and equipment, net of accumulated depreciation |
169,964 |
|
|
183,179 |
|
Other |
1,394 |
|
|
1,317 |
|
Total
noncurrent assets |
176,384 |
|
|
189,630 |
|
Total
Assets |
$ |
920,297 |
|
|
$ |
1,047,875 |
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
Current
Liabilities |
|
|
|
Accounts
payable |
$ |
22,888 |
|
|
$ |
16,863 |
|
Floorplan
payable |
372,055 |
|
|
444,780 |
|
Current
maturities of long-term debt |
15,464 |
|
|
1,557 |
|
Customer
deposits |
16,215 |
|
|
31,159 |
|
Accrued
expenses |
35,403 |
|
|
28,914 |
|
Income
taxes payable |
— |
|
|
152 |
|
Total
current liabilities |
462,025 |
|
|
523,425 |
|
Long-Term
Liabilities |
|
|
|
Senior
convertible notes |
87,754 |
|
|
134,145 |
|
Long-term
debt, less current maturities |
25,427 |
|
|
38,409 |
|
Deferred
income taxes |
10,531 |
|
|
11,135 |
|
Other
long-term liabilities |
2,217 |
|
|
2,412 |
|
Total
long-term liabilities |
125,929 |
|
|
186,101 |
|
Stockholders'
Equity |
|
|
|
Common
stock |
— |
|
|
— |
|
Additional paid-in-capital |
242,019 |
|
|
242,491 |
|
Retained
earnings |
93,586 |
|
|
99,526 |
|
Accumulated other comprehensive loss |
(3,262 |
) |
|
(4,461 |
) |
Total
Titan Machinery Inc. stockholders' equity |
332,343 |
|
|
337,556 |
|
Noncontrolling
interest |
— |
|
|
793 |
|
Total
stockholders' equity |
332,343 |
|
|
338,349 |
|
Total
Liabilities and Stockholders' Equity |
$ |
920,297 |
|
|
$ |
1,047,875 |
|
TITAN MACHINERY INC. |
Consolidated Statements of
Operations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenue |
|
|
|
|
|
|
|
Equipment |
$ |
212,194 |
|
|
$ |
215,692 |
|
|
$ |
570,369 |
|
|
$ |
681,691 |
|
Parts |
69,261 |
|
|
73,838 |
|
|
185,106 |
|
|
197,439 |
|
Service |
33,777 |
|
|
34,116 |
|
|
96,065 |
|
|
99,860 |
|
Rental
and other |
17,034 |
|
|
21,329 |
|
|
43,919 |
|
|
53,371 |
|
Total Revenue |
332,266 |
|
|
344,975 |
|
|
895,459 |
|
|
1,032,361 |
|
Cost of Revenue |
|
|
|
|
|
|
|
Equipment |
201,140 |
|
|
198,095 |
|
|
532,370 |
|
|
628,280 |
|
Parts |
48,387 |
|
|
51,673 |
|
|
130,006 |
|
|
138,626 |
|
Service |
11,828 |
|
|
12,449 |
|
|
35,473 |
|
|
36,136 |
|
Rental
and other |
12,485 |
|
|
15,617 |
|
|
32,703 |
|
|
39,674 |
|
Total Cost of
Revenue |
273,840 |
|
|
277,834 |
|
|
730,552 |
|
|
842,716 |
|
Gross Profit |
58,426 |
|
|
67,141 |
|
|
164,907 |
|
|
189,645 |
|
Operating Expenses |
53,143 |
|
|
53,484 |
|
|
159,132 |
|
|
165,979 |
|
Impairment and
Realignment Costs |
275 |
|
|
22 |
|
|
546 |
|
|
1,519 |
|
Income from
Operations |
5,008 |
|
|
13,635 |
|
|
5,229 |
|
|
22,147 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
Interest
income and other income (expense) |
502 |
|
|
722 |
|
|
1,251 |
|
|
(565 |
) |
Floorplan
interest expense |
(3,294 |
) |
|
(4,602 |
) |
|
(10,843 |
) |
|
(13,945 |
) |
Other
interest expense |
(2,160 |
) |
|
(4,041 |
) |
|
(5,930 |
) |
|
(11,228 |
) |
Income (Loss) Before
Income Taxes |
56 |
|
|
5,714 |
|
|
(10,293 |
) |
|
(3,591 |
) |
Provision for (Benefit
from) Income Taxes |
(208 |
) |
|
2,231 |
|
|
(3,997 |
) |
|
(354 |
) |
Net Income (Loss)
Including Noncontrolling Interest |
264 |
|
|
3,483 |
|
|
(6,296 |
) |
|
(3,237 |
) |
Less: Net Income (Loss)
Attributable to Noncontrolling Interest |
— |
|
|
27 |
|
|
(356 |
) |
|
(395 |
) |
Net Income (Loss)
Attributable to Titan Machinery Inc. |
264 |
|
|
3,456 |
|
|
(5,940 |
) |
|
(2,842 |
) |
Net (Income) Loss
Allocated to Participating Securities - Note 1 |
(8 |
) |
|
(72 |
) |
|
120 |
|
|
53 |
|
Net Income (Loss)
Attributable to Titan Machinery Inc. Common Stockholders |
$ |
256 |
|
|
$ |
3,384 |
|
|
$ |
(5,820 |
) |
|
$ |
(2,789 |
) |
|
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
0.01 |
|
|
$ |
0.16 |
|
|
$ |
(0.27 |
) |
|
$ |
(0.13 |
) |
Weighted Average Common
Shares - Diluted |
21,269 |
|
|
21,218 |
|
|
21,208 |
|
|
21,093 |
|
TITAN MACHINERY INC. |
Consolidated Condensed Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Nine Months Ended October 31, |
|
2016 |
|
2015 |
Operating
Activities |
|
|
|
Net income (loss) including
noncontrolling interest |
$ |
(6,296 |
) |
|
$ |
(3,237 |
) |
Adjustments to reconcile net income
(loss) including noncontrolling interest to net cash provided by
operating activities |
|
|
|
Depreciation and amortization |
19,896 |
|
|
21,588 |
|
Other, net |
3,056 |
|
|
7,881 |
|
Changes in assets and
liabilities |
|
|
|
Inventories |
91,222 |
|
|
72,437 |
|
Manufacturer floorplan payable |
(20,821 |
) |
|
124,305 |
|
Other working capital |
(12,659 |
) |
|
(24,213 |
) |
Net Cash Provided by
Operating Activities |
74,398 |
|
|
198,761 |
|
Investing
Activities |
|
|
|
Property and equipment
purchases |
(10,215 |
) |
|
(6,005 |
) |
Proceeds from sale of property and
equipment |
2,285 |
|
|
5,135 |
|
Other, net |
914 |
|
|
510 |
|
Net Cash Used for
Investing Activities |
(7,016 |
) |
|
(360 |
) |
Financing
Activities |
|
|
|
Net change in non-manufacturer
floorplan payable |
(54,478 |
) |
|
(201,320 |
) |
Repurchase of Senior Convertible
Notes |
(46,013 |
) |
|
— |
|
Net proceeds from (payments on)
long-term debt borrowings |
(1,935 |
) |
|
(42,377 |
) |
Other, net |
(2,212 |
) |
|
(3,238 |
) |
Net Cash Used for
Financing Activities |
(104,638 |
) |
|
(246,935 |
) |
Effect of Exchange Rate
Changes on Cash |
222 |
|
|
(585 |
) |
Net Change in Cash |
(37,034 |
) |
|
(49,119 |
) |
Cash at Beginning of
Period |
89,465 |
|
|
127,528 |
|
Cash at End of
Period |
$ |
52,431 |
|
|
$ |
78,409 |
|
TITAN MACHINERY INC. |
Segment Results |
(in thousands) |
(Unaudited) |
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
2016 |
|
2015 |
|
% Change |
|
2016 |
|
2015 |
|
% Change |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
205,540 |
|
|
$ |
211,302 |
|
|
(2.7 |
)% |
|
$ |
538,060 |
|
|
$ |
660,606 |
|
|
(18.6 |
)% |
Construction |
80,789 |
|
|
87,023 |
|
|
(7.2 |
)% |
|
241,922 |
|
|
249,601 |
|
|
(3.1 |
)% |
International |
45,937 |
|
|
46,650 |
|
|
(1.5 |
)% |
|
115,477 |
|
|
122,154 |
|
|
(5.5 |
)% |
Total |
$ |
332,266 |
|
|
$ |
344,975 |
|
|
(3.7 |
)% |
|
$ |
895,459 |
|
|
$ |
1,032,361 |
|
|
(13.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss)
Before Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
Agriculture |
$ |
(1,798 |
) |
|
$ |
4,219 |
|
|
(142.6 |
)% |
|
$ |
(9,881 |
) |
|
$ |
693 |
|
|
*N/M |
|
Construction |
(105 |
) |
|
1,413 |
|
|
(107.4 |
)% |
|
(1,523 |
) |
|
(3,089 |
) |
|
50.7 |
% |
International |
604 |
|
|
351 |
|
|
72.1 |
% |
|
(88 |
) |
|
(3,074 |
) |
|
97.1 |
% |
Segment income (loss)
before income taxes |
(1,299 |
) |
|
5,983 |
|
|
(121.7 |
)% |
|
(11,492 |
) |
|
(5,470 |
) |
|
(110.1 |
)% |
Shared Resources |
1,355 |
|
|
(269 |
) |
|
603.7 |
% |
|
1,199 |
|
|
1,879 |
|
|
(36.2 |
)% |
Total |
$ |
56 |
|
|
$ |
5,714 |
|
|
(99.0 |
)% |
|
$ |
(10,293 |
) |
|
$ |
(3,591 |
) |
|
(186.6 |
)% |
TITAN MACHINERY INC. |
Non-GAAP Reconciliations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Pre-Tax Income
(Loss) |
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes |
$ |
56 |
|
|
$ |
5,714 |
|
|
$ |
(10,293 |
) |
|
$ |
(3,591 |
) |
Non-GAAP
Adjustments |
|
|
|
|
|
|
|
Impairment |
275 |
|
|
— |
|
|
275 |
|
|
— |
|
Gain on
Repurchase of Senior Convertible Notes |
(1,028 |
) |
|
— |
|
|
(3,130 |
) |
|
— |
|
Debt
Issuance Cost Write-Off |
624 |
|
|
1,019 |
|
|
624 |
|
|
1,558 |
|
Realignment / Store Closing Costs |
— |
|
|
22 |
|
|
271 |
|
|
1,519 |
|
Ukraine
Remeasurement (1) |
— |
|
|
185 |
|
|
195 |
|
|
2,288 |
|
Gain on
Insurance Recoveries |
(586 |
) |
|
— |
|
|
(586 |
) |
|
— |
|
Total
Non-GAAP Adjustments |
(715 |
) |
|
1,226 |
|
|
(2,351 |
) |
|
5,365 |
|
Adjusted Pre-Tax Income
(Loss) |
$ |
(659 |
) |
|
$ |
6,940 |
|
|
$ |
(12,644 |
) |
|
$ |
1,774 |
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Including Noncontrolling Interest |
|
|
|
|
|
|
|
Net Income (Loss)
Including Noncontrolling Interest |
$ |
264 |
|
|
$ |
3,483 |
|
|
$ |
(6,296 |
) |
|
$ |
(3,237 |
) |
Non-GAAP
Adjustments |
|
|
|
|
|
|
|
Impairment |
275 |
|
|
— |
|
|
275 |
|
|
— |
|
Gain on
Repurchase of Senior Convertible Notes |
(1,028 |
) |
|
— |
|
|
(3,130 |
) |
|
— |
|
Debt
Issuance Cost Write-Off |
624 |
|
|
1,019 |
|
|
624 |
|
|
1,558 |
|
Realignment / Store Closing Costs |
— |
|
|
22 |
|
|
271 |
|
|
1,519 |
|
Ukraine
Remeasurement (1) |
— |
|
|
185 |
|
|
195 |
|
|
2,288 |
|
Gain on
Insurance Recoveries |
(586 |
) |
|
— |
|
|
(586 |
) |
|
— |
|
Total
Pre-Tax Income (Loss) Non-GAAP Adjustments |
(715 |
) |
|
1,226 |
|
|
(2,351 |
) |
|
5,365 |
|
Less: Tax
Effect of Non-GAAP Adjustments (2) |
(285 |
) |
|
416 |
|
|
(1,018 |
) |
|
1,231 |
|
Total
Non-GAAP Adjustments |
(430 |
) |
|
810 |
|
|
(1,333 |
) |
|
4,134 |
|
Adjusted Net Income
(Loss) Including Noncontrolling Interest |
$ |
(166 |
) |
|
$ |
4,293 |
|
|
$ |
(7,629 |
) |
|
$ |
897 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(Loss) |
|
|
|
|
|
|
|
Net Income (Loss)
Including Noncontrolling Interest |
$ |
264 |
|
|
$ |
3,483 |
|
|
$ |
(6,296 |
) |
|
$ |
(3,237 |
) |
Adjustments |
|
|
|
|
|
|
|
Interest
Expense, Net of Interest Income |
3,058 |
|
|
2,828 |
|
|
8,578 |
|
|
9,106 |
|
Provision
for (Benefit from) Income Taxes |
(208 |
) |
|
2,231 |
|
|
(3,997 |
) |
|
(354 |
) |
Depreciation and amortization |
7,068 |
|
|
7,764 |
|
|
19,896 |
|
|
21,588 |
|
Total
Non-GAAP Adjustments to Pre-Tax Income (Loss) |
(715 |
) |
|
1,226 |
|
|
(2,351 |
) |
|
5,365 |
|
Total
Adjustments |
9,203 |
|
|
14,049 |
|
|
22,126 |
|
|
35,705 |
|
Adjusted EBITDA
(Loss) |
$ |
9,467 |
|
|
$ |
17,532 |
|
|
$ |
15,830 |
|
|
$ |
32,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TITAN MACHINERY INC. |
Non-GAAP Reconciliations |
(in thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Nine Months Ended October 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Earnings (Loss)
per Share - Diluted |
|
|
|
|
|
|
|
Earnings (Loss) per
Share - Diluted |
$ |
0.01 |
|
|
$ |
0.16 |
|
|
$ |
(0.27 |
) |
|
$ |
(0.13 |
) |
Non-GAAP Adjustments
(3) |
|
|
|
|
|
|
|
Impairment |
0.01 |
|
|
— |
|
|
0.01 |
|
|
— |
|
Gain on
Repurchase of Senior Convertible Notes |
(0.04 |
) |
|
— |
|
|
(0.15 |
) |
|
— |
|
Debt
Issuance Cost Write-Off |
0.03 |
|
|
0.05 |
|
|
0.02 |
|
|
0.07 |
|
Realignment / Store Closing Costs |
— |
|
|
— |
|
|
0.01 |
|
|
0.07 |
|
Ukraine
Remeasurement (1) |
— |
|
|
0.01 |
|
|
0.01 |
|
|
0.11 |
|
Gain on
Insurance Recoveries |
(0.03 |
) |
|
— |
|
|
(0.03 |
) |
|
— |
|
Total
Pre-Tax Income (Loss) Non-GAAP Adjustments |
(0.03 |
) |
|
0.06 |
|
|
(0.13 |
) |
|
0.25 |
|
Less: Tax
Effect of Non-GAAP Adjustments (2) |
(0.01 |
) |
|
0.02 |
|
|
(0.04 |
) |
|
0.06 |
|
Total
Non-GAAP Adjustments |
(0.02 |
) |
|
0.04 |
|
|
(0.09 |
) |
|
0.19 |
|
Adjusted Earnings
(Loss) per Share - Diluted |
$ |
(0.01 |
) |
|
$ |
0.20 |
|
|
$ |
(0.36 |
) |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
Net Cash
Provided By Operating Activities |
|
|
|
|
|
|
|
Net Cash Provided by
Operating Activities |
|
|
|
|
$ |
74,398 |
|
|
$ |
198,761 |
|
Net Change in
Non-Manufacturer Floorplan Payable |
|
|
|
|
(54,478 |
) |
|
(201,320 |
) |
Adjustment for Constant
Equity in Inventory |
|
|
|
|
14,503 |
|
|
35,452 |
|
Adjusted
Net Cash Provided By Operating Activities |
|
|
|
|
$ |
34,423 |
|
|
$ |
32,893 |
|
_______________________________________ |
|
|
|
|
|
|
|
(1) Beginning in the second quarter of fiscal 2017 we
discontinued incorporating Ukraine remeasurement losses into our
Non-GAAP income (loss) and earnings (loss) per share
calculations. The UAH remained relatively stable subsequent
to April 30, 2016 and therefore did not significantly impact our
consolidated statement of operations during this period.
Absent any future significant hryvnia volatility and resulting
financial statement impact, we will not include Ukraine
remeasurement losses in our Non-GAAP calculations in future
periods. |
(2) The tax effect of Non-GAAP Adjustments was calculated
using a 40% tax rate for all U.S. related items that was determined
based on a 35% federal statutory rate and a blended state statutory
rate of 5% and no tax effect for foreign related items as all of
our foreign operations have full valuation allowances on deferred
tax assets including net operating losses, therefore we are not
recognizing any income tax expense or benefit. |
(3) Adjustments are net of the impact of amounts attributable
to noncontrolling interests and allocated to participating
securities. |
Investor Relations Contact:
ICR, Inc.
John Mills, jmills@icrinc.com
Partner
646-277-1254
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