Titan Machinery Inc. (Nasdaq: TITN), a leading network of full-service agricultural and construction equipment stores, today reported financial results for the third quarter and first nine months of fiscal 2011 ended October 31, 2010.
Fiscal 2011 First Nine Months Results
For the nine months ended October 31, 2010, revenue increased 23.9% to $726.4 million from $586.5 million for the same period last year. Gross margin for the first nine months of fiscal 2011 was 16.3%, compared to 17.8% in the same period last year. Pre-tax income for the first nine months of fiscal 2011 was $20.0 million for a pre-tax margin of 2.8%, compared to $21.0 million, or a pre-tax margin of 3.6%, for the same period last year. Net income for the first nine months of fiscal 2011 was $12.0 million, or $0.66 per diluted share, compared to $12.4 million, or $0.69 per diluted share, in the same period last year.
The Company ended the third quarter of fiscal 2011 with a strong balance sheet. Its cash and cash equivalents were $66.0 million as of October 31, 2010. Working capital at the end of the third quarter of fiscal 2011 was $160.2 million.
As of October 31, 2010, the Company had $155.2 million available of its $475 million total discretionary floorplan lines of credit. Additionally, at quarter end, the Company had no amounts outstanding under its $25 million operating line of credit. As previously announced, the Company entered into a new credit agreement on October 31, 2010, arranged by Wells Fargo Bank, with a syndicate of lenders consisting of Wells Fargo Bank, Bank of America, CoBank, U.S. Bank, Bank of the West, and Bremer Bank. The new credit agreement became effective November 2nd and provides for an aggregate $225 million financing commitment by the lenders, consisting of an aggregate floorplan financing commitment of $175 million and an aggregate working capital commitment of $50 million.
The Company recently announced it has entered into a definitive purchase agreement to acquire certain assets of Fairbanks International Inc. and its affiliates. The acquisition includes six dealerships that offer one or more of the Case IH, New Holland agriculture and New Holland Construction brands. These dealerships are located in Grand Island, Kearney, Lexington, Holdrege, Hastings, and North Platte, Nebraska. The acquisition is expected to close on or around December 31, 2010, subject to customary closing conditions.
The six dealerships in the Fairbanks International network are well-situated along the I-80 corridor in Nebraska, which is some of the most productive agriculture land in the world. Strategically located on top of the Ogallala Aquifer, one of the world's largest aquifers provides irrigation resources resulting in a concentration of intense agriculture, high yields and diversification through all weather cycles. The Fairbanks acquisition marks Titan Machinery's first agriculture dealerships in Nebraska and complements its construction equipment dealerships in Omaha and Lincoln, Nebraska. In its most recently reported fiscal year ended December 31, 2009, Fairbanks International and its acquired affiliates generated revenues of approximately $85 million.