With equipment sales up, Titan Machinery 4Q revenue climbs to $340 million

Titan Machinery Yard

Titan Machinery’s 4Q revenue has increased to $340 million for its network of full-service agricultural and construction equipment stores, and all signs are pointing up for the company’s 2019 outlook.

“We were well positioned to capture the anticipated fiscal fourth quarter acceleration in agriculture sales activity, due to better than anticipated crop yields in our footprint and the resulting improvement in grower sentiment,” says David Meyer, chairman and CEO of Titan Machinery.

“As a result of our improved inventory position, we continue to experience increased equipment margins compared to the prior year. In addition, fiscal full year 2018 performance was highlighted by reduced operating expenses and a more efficient operating structure due to the completion of our restructuring efforts.”

Titan’s outlook for next year includes revenue growth across all segments, plus margin expansion and positive diluted earnings per share.

Says Meyer: “We are pleased with the overall business improvements we achieved in fiscal 2018 and believe these enhancements set the foundation for stronger top and bottom line results in fiscal 2019.”

 

Fiscal 2018 Fourth Quarter Results Consolidated Results

For the fourth quarter of fiscal 2018, revenue was $339.6 million, compared to revenue of $317.6 million in the fourth quarter last year.

Here are some highlights.

  • Equipment sales were $252.6 million for the fourth quarter of fiscal 2018, compared to $226.9 million in the fourth quarter last year.
  • Parts sales were $45.5 million for the fourth quarter of fiscal 2018, compared to $48.7 million in the fourth quarter last year.
  • Revenue generated from service was $26.5 million for the fourth quarter of fiscal 2018, compared to $28 million in the fourth quarter last year.
  • Revenue from rental and other was up to $15 million for the fourth quarter of fiscal 2018, compared to $14  million in the fourth quarter last year.
  • Gross profit for the fourth quarter of fiscal 2018 increased to $52.1 million compared to $48.8 million a year ago.
  • GAAP EPS for the fourth quarter of fiscal year 2018 was 8 cents and Adjusted EPS was 10 cents.

 

Segment results

Construction: Revenue for the fourth quarter of fiscal 2018 was $85.8 compared to $81.7 million in the fourth quarter last year. Pre-tax loss for the fourth quarter of fiscal 2018 was $3.2 million, compared to a pre-tax loss of $4.4 million in the fourth quarter last year.

Adjusted pre-tax loss for the fourth quarter of fiscal 2018 was $2.6 million, compared to $3 million in the fourth quarter last year.

Agriculture: Revenue for the fourth quarter of fiscal 2018 was $205.3 million, compared to $201.1 million in the fourth quarter last year.

Pre-tax income for the fourth quarter of fiscal 2018 was $2.2 million, compared to pre-tax loss of $5.9 million in the fourth quarter last year. Adjusted pre-tax income for the fourth quarter of fiscal 2018 was $2.0 million, compared to an adjusted pre-tax loss of $4.8 million in the fourth quarter last year.

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International:  Revenue for the fourth quarter of fiscal 2018 was $48.5 million, compared to $34.8 million in the fourth quarter last year. Pre-tax loss for the fourth quarter of fiscal 2018 was $1.1 million, compared to pre-tax loss of $0.4 million in the fourth quarter lastyear.

Adjusted pre-tax loss for the fourth quarter of fiscal 2018 was $1.1 million, compared to $0.1 million in the fourth quarter last year.

 

Titan Machinery Sign

Fiscal 2018 Full Year Results

Revenue was flat at $1.2 billion for fiscal 2018 and the prior year. Net loss including non-controlling interest for fiscal 2018 was $7 million, or 32 cents per diluted share

That compares to a net loss including non-controlling interest of $14.5 million, or 65 cents per diluted share, for the prior year.

Adjusted net loss including non-controlling interest for fiscal 2018 was $2.7 million, or 12 cents per diluted share, compared to $14.2 million, or 65 cents per diluted share, for the prioryear.

The adjusted figure for fiscal 2018 excludes $10.5 million of restructuring expenses associated with our fiscal 2018 restructuring plan, which is partially offset by the tax benefits related to the Tax Act and income tax valuation allowance adjustments that were recognized in the fourth quarter of fiscal 2018.

The company generated adjusted EBITDA of $30.8 million in fiscal 2018, compared to adjusted EBITDA of $11.7 million in fiscal 2017.

 

Fiscal 2019 modeling assumptions: all signs point up

“The stabilization we are experiencing in the agriculture market, both domestically and internationally, combined with our improved inventory condition and recently completed restructuring plan, have our company well positioned for long-term profitable growth,” Meyer says. “I’m pleased to introduce a fiscal 2019 forecast that expects revenue growth across all segments, margin expansion, and positive diluted earnings per share.”

The following are the Titan’s current expectations for certain fiscal 2019 modeling assumptions:

Agriculture: Up 0-5%

Construction:  Up 3-8%

International Up: 0-5%

Equipment Margin: 7.8 – 8.3%

Diluted EPS: 35 cents to 55 cents

For more on the fourth-quarter and year-end earning details, click here.