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Ag Equipment Remains on Solid Ground: Titan Machinery Revenues Up 22%

Results from Titan Machinery’s 2010 fiscal year demonstrate that the farm machinery industry continues to operate on solid ground. On April 15, Titan, the 73-store dealer group headquartered in Fargo, N.D., reported that its revenues for the 12 months ended January 31, 2010, grew by 21.5% to $838.8 million from $690.4 million in fiscal 2009.

Revenue from the dealer’s agriculture segment was $751.3 million for the year, compared to $624 million in fiscal 2009.

Gross profit for fiscal 2010 was $141.1 million, compared to $119.9 million in fiscal 2009. Gross margin for the past fiscal year was 16.8%, compared to 17.4% in fiscal 2009.

Pre-tax income for the 12-month period was $27 million for a pre-tax margin of 3.2%, compared to $30.5 million, or a pre-tax margin of 4.4%. Pre-tax income for the company’s ag segment was $36.1 million in fiscal 2010, compared to $32 million in the previous fiscal period. Net income for the full year fiscal 2010 was $15.7 million, or $0.88 per diluted share, compared to $18.1 million, or $1.08 per diluted share, in fiscal 2009. 

4Q Results

In Titan’s fourth quarter, revenue increased 33.5% to $252.3 million from revenue of $189 million in the fourth quarter last year. Equipment sales were $203.8 million, compared to $153.6 million last year. Parts sales were $27.7 million compared to $20.1 million, and revenue generated from service improved to $14.9 million in the quarter, vs. $11.6 million last year.

Revenue generated from Titan’s ag segment was $226.9 million in the period compared to $170.5 million last year. Gross profit for the fiscal fourth quarter increased 13.8% to $37 million, compared to $32.5 million last year. Gross profit margin was 14.7% in the quarter, compared to 17.2% in the fourth quarter last year. 

12-Month Outlook

Looking ahead, David Meyer, Titan’s chairman & CEO, told Ag Equipment Intelligence that the company is anticipating increased revenue for the full year ending January 31, 2011 in a range of $920-$980 million. Net income is expected to be in the range of $16.7-$18.5 million.

Meyer says that Titan expects organic growth of about 5% and 10-15% from acquisitions during the coming year.

“In fiscal 2011, we are confident that we can achieve overall revenue and profit growth as compared to fiscal 2010. Having completed six acquisitions and two store openings in fiscal 2010, our business will benefit from our expanded footprint as well as anticipated organic growth in both our agriculture and construction business segments.”

— Ag Equipment Intelligence, April 2010

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