QUINCY, Ill., — Titan International (TWI) (NYSE: TWI) announced 2016 fourth quarter and year-end results.
Fourth quarter summary:
- Net sales for the fourth quarter of 2016 were $307.3 million compared to $307.8 million for the fourth quarter of 2015.
- Gross profit for the fourth quarter of 2016 was $32.5 million, or 10.6% of net sales, compared to $17.8 million for the fourth quarter of 2015, or 5.8% of net sales.
- 2016 fourth quarter loss from operations was $(9.1) million compared to $(18.2) million for the fourth quarter of 2015.
Full year summary:
- Net sales for the full year ended Dec. 31, 2016, were $1,265.5 million, down 9.3% compared to $1,394.8 million in 2015.
- Gross profit was $142.5 million, or 11.3% of net sales, for the year ended Dec. 31, 2016, compared to $137.8 million, or 9.9% of net sales, for the year ended December 31, 2015.
- Loss from operations was $(21.3) million, or (1.7)% of net sales, for full year 2016 compared to $(24.3) million, or (1.8)% of net sales, for 2015.
Maurice Taylor, Titan chairman, commented, "Titan has a new management team, headed by President and CEO, Paul Reitz, which understands what needs to be done to continue our improvements and we are moving ahead to make this happen. At the beginning of 2016, our management team discussed with the Board of Directors certain assets that Titan could consider for potential sale. These assets included our facility in Brownsville, Texas, our recently established business involving Titan Tire Reclamation Corporation (TTRC) in the oil sands, and our Italtractor ITM S.p.A. (ITM) undercarriage business, initially considered in connection with an unsolicited inquiry from a potential purchaser. At that time, Titan's management believed we could receive more than an aggregate of $250 million for these assets.
"In connection with our 2016 third quarter earnings release, I stated that I thought we had reached the bottom on revenue. I continue to believe this is correct and that 2017 will demonstrate this. We believe that there are many opportunities ahead and our team is excited about what Titan has in front of us this next year. I'm personally excited about the next few years, because we have gone through very tough times over the last four years and we believe we are stronger as a result. As you know, I enjoy visiting our customers and am encouraged by what I am hearing from them concerning our products, especially the LSW line.
"Titan has stated previously that the LSW tire and wheel volume is growing. During the farm shows this winter, our entire sales team has experienced the overwhelming interest from farmers coming into the Titan booth and asking where they can buy LSW assemblies for their equipment.
“I believe in 2017, Titan will accelerate the positive growth for LSW tires and wheels now that farmers are more aware of the increase in their yield per acre as a result of less soil compaction from LSW tires. I believe this will not only be meaningful in the United States, but in South America as well.
“I anticipate that Brazil's ag economy could be up 15-20% during 2017, which should be great for LSW tires and wheels. In addition, Titan is focused on the expansion of our LSW products within the earthmoving/construction segment, which will have a positive impact for Titan. With all these positives around LSW, I feel very confident that Titan will grow better than ever."
Paul Reitz, Titan president and CEO, commented further, "Although sales have continued to decline from our peak of $2.2 billion in 2013 to the current level of approximately $1.3 billion, we continue to be encouraged by the operating progress we have made.
“Fourth quarter 2016 sales of $307.3 million were actually higher than third quarter sales and relatively flat as compared to the $307.8 million in fourth quarter 2015. Despite similar sales levels in the fourth quarter relative to the fourth quarter of 2015, we increased gross profit by nearly $15 million and improved our gross margin percentage by almost 83% to 10.6%.”
Segmented Information (Unaudited)
|Three months ended Dec. 31||Twelve months ended Dec. 31|
|Revenue from external customers||2016||2015||2016||2015|