Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Improvement in farmer sentiment and optimism due to supportive government policies for US agriculture.
• Increase in corn prices by over 15% compared to the previous year, positively impacting farm income.
• Strong demand and market share growth in Brazil, an important market for Titan International Inc (NYSE:TWI).
• Successful integration of the Carl Star acquisition, enhancing aftermarket offerings and synergies.
• Focus on innovation and new product development, including cross-selling opportunities with Carl Star's products.

Negative Points

• Slow business conditions in Europe, with hopes for improvement tied to geopolitical resolutions.
• OEMs in the consumer segment are underproducing demand to manage dealer inventory, impacting short-term sales.
• Increased SG&A expenses due to the Carl Star acquisition, affecting profitability.
• Operating loss in the fourth quarter due to reduced sales and operational expenses.
• Liquidity concerns in the US, with a need to manage cash flow and debt reduction in 2025.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Sign with TWI.

Q: With OEMs anticipating a better 2026, do you foresee needing to increase working capital in Q4 2025 to prepare for it? A: (David Martin, CFO) We will evaluate this as we progress through the year. We typically see a sequential increase from Q4 to Q1, and as we move into the second half, we'll manage our production to align with growth expectations without overinvesting.

Q: Can you provide more detail on the outlook for Earthmoving Construction and Consumer segments in the near term? A: (Paul Wright, CEO) The Earthmoving Construction market is stable, driven by infrastructure needs and government investment. We have unique capabilities in aftermarket mining parts that support demand. In the Consumer segment, our aftermarket business performed well, and we see opportunities for expansion. OEMs are managing inventory, which impacts short-term demand but is positive long-term.

Q: Are your comments about a better second half of the year based on actual business improvements or just orders you hope to receive? A: (Paul Wright, CEO) It's a mix of both. We've seen optimism from our team and customers, indicating a positive shift. Some orders are impacting us now, but much of the optimism is for the latter half of the year and into 2026.

Q: How well positioned are you to handle a fast pivot in demand, considering past labor challenges? A: (Paul Wright, CEO) We are prepared. We've maintained experienced labor despite headcount reductions and are ready to ramp up production. Our teams are optimistic and proactive in preparing for increased demand.

Q: Can you elaborate on the impact of tariffs and your ability to adjust production locations? A: (Paul Wright, CEO) We can shift production to different locations as needed. Our global footprint allows us to adapt to customer needs and mitigate supply chain risks. Tariffs have minimal short-term impact due to our analytical approach and flexibility.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.