WEST CHICAGO, Ill., March 2,
2022 /PRNewswire/ -- Titan International, Inc. (NYSE:
TWI), a leading global manufacturer of off-highway wheels, tires,
assemblies, and undercarriage products, today reported results for
the fourth quarter and year ended December 31, 2021.
"Our fourth quarter was a continuation of our strong performance
throughout the year and adds up to an excellent 2021 as we
increased sales by an astounding $521
million," commented Paul
Reitz, President and Chief Executive Officer. "Our
success this year was driven by the efforts and resilience of our
Titan team and I want to thank all of our 7,500 global employees
from our hourly, union and non-union teams, from the front-line and
support staff all the way up to our CFO, David Martin, who all showed tremendous
dedication to drive the results that were achieved. I could
not be more pleased with what our Company has accomplished to
position Titan well heading into 2022. Our strong sales
growth also translated into dramatic profitability improvements in
Q4 and full year 2021. Our fourth quarter adjusted EBITDA of
$36 million was the third straight
quarter in which we exceeded $35
million bringing our full year 2021 adjusted EBITDA to
$135 million – nearly two and a half
times that of 2020.
"You may have seen our recent public comments on the positive
market dynamics, and I want to share some additional information on
Titan continuing to ride the tidal wave into 2022 and, even more
importantly, beyond. We see the market forces surrounding
Agriculture continuing to create momentum on a global scale to
drive a multi-year strong demand cycle. Farm commodities are
as high as we have seen in the last decade, which along with
government programs, has put farmers in a good financial position.
On top of that, there is a strong need for new equipment in the
market, which remains in short supply, as OEMs are challenged to
produce enough to meet demand, much less build inventory.
Used equipment inventories are also at record low levels coming
into the year. With all of this in place, farmers will do
well and that's the bottom line for our industry Let's
not forget, Titan's wheel and tire products are more focused on the
Ag market, while our undercarriage business is a major player in
the global construction and mining markets. Those both are
shaping up as stronger in 2022 and beyond, as infrastructure
spending ramps up over time, and minerals continue to see strong
demand on a global scale. Titan was able to be there for its
customers in big way in 2021, as the demand increased
significantly, with our global production footprint that is the
best and largest in the off-road wheel, tire and undercarriage
industry. With our unparalleled production capabilities and
quality, along with our innovative products, we are well prepared
to serve our global customer base now and into the future.
"We get there are questions surrounding global volatility and
uncertainty, with all of the headlines, from raw material pricing,
supply chain and labor challenges, and the logistics chaos.
This includes the most recent crisis in the Ukraine. Titan is
accustomed to solving problems and overcoming challenges, and our
financial results and growth demonstrate that. I have
confidence that we will continue to manage any challenges
ahead. We have strong focus within our management teams to
manage customer expectations, along with pricing and cost
discipline to drive further margin and profitability
improvements.
"Titan's business performance and our financial position
improved dramatically in 2021, and as I have stated before, we
expect the positive trends to continue during 2022 with our Q1
performance coming out of the gate strong to start the year.
Our operating plan, which our Board supports, calls for our revenue
to grow to more than $2 billion with
our goal of reaching adjusted EBITDA of $175
million, which demonstrates strong gains over 2021
levels. Capital expenditures should be in a range between
$45 million to $50 million with flexibility on timing of these
commitments in order to match up with our cash flow. With continued
working capital focus and inventory levels in a position to support
our higher production and sales, we expect to drive meaningful free
cash flow in 2022."
Results of Operations
Net sales for the fourth quarter ended December 31,
2021, were $487.7 million, compared
to $326.9 million in the comparable
quarter of 2020, an increase of 49.2 percent drive by sales
increases across all segments. Overall net sales was
influenced heavily by both increased volume from increased demand
across all segments of the business, most notably agriculture,
along with pricing. The contributing factors to the increase
in demand were increased commodity prices, lower equipment
inventory levels at the farm equipment retail levels, and pent up
demand following the economic impacts which occurred in 2020.
Pricing increases have been implemented because of rising raw
material costs and other inflationary impacts in the markets,
including freight.
Gross profit for the fourth quarter ended December 31,
2021, was $62.5 million, compared to
$25.9 million in the comparable prior
year period. Gross margin was 12.8 percent of net sales for
the quarter, compared to 7.9 percent of net sales in the comparable
prior year period. The gross profit in the fourth quarter of 2020
was impacted by an $11.2 million
impairment on Titan Tire Reclamation Corporation (TTRC) in
Canada as a result of market
declines, which indicated the remaining book value of the equipment
was above the fair market value, as well as $1.3 million of redundancy payments as part of a
restructuring plan to reduce production costs in Italy. Excluding these charges, gross profit
was $38.4 million with gross margin
at 11.8 percent during the fourth quarter of 2020. The
increase in gross profit and margin was driven by the impact of
increases in sales volume, as described previously, favorably
impacting overhead absorption. In addition, cost reduction
initiatives were executed across global operations.
Selling, general, administrative, research and development
(SGARD) expenses for the fourth quarter of 2021 were $35.6 million, compared to $39.3 million for the comparable prior year
period. As a percentage of net sales, SGARD was 7.3 percent,
compared to 12.0 percent for the comparable prior year period.
The SGARD in the fourth quarter of 2020 was impacted by a
$6.0 million impairment related to
certain customer relationship intangibles in Australia as a result of customer attrition
since the original acquisition date. Excluding these charges, SGARD
increased $2.3 million as a result of
an increase in variable costs associated with improved operating
performance and growth in sales.
Income from operations for the fourth quarter of 2021 was
$24.3 million, or 5.0 percent of net
sales, compared to a loss of $15.8
million, or 4.8 percent of net sales, for the fourth quarter
of 2020. The increase in income was primarily due to the
higher sales and improvements in gross profit margins as well as
the absence of the prior year fourth quarter charges noted
above.
Segment Information
Agricultural Segment
(Amounts in
thousands)
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
%
Increase/
(Decrease)
|
|
2021
|
|
2020
|
|
%
Increase/
(Decrease)
|
Net sales
|
$
264,764
|
|
$
161,380
|
|
64.1 %
|
|
$
949,400
|
|
$
634,652
|
|
49.6 %
|
Gross
profit
|
$
37,513
|
|
$
19,578
|
|
91.6 %
|
|
$
135,807
|
|
$
65,408
|
|
107.6 %
|
Profit
margin
|
14.2 %
|
|
12.1 %
|
|
17.4 %
|
|
14.3 %
|
|
10.3 %
|
|
38.8 %
|
Income (loss) from
operations
|
$
23,438
|
|
$
4,449
|
|
426.8 %
|
|
$
77,666
|
|
$
9,838
|
|
689.4 %
|
During the quarter ended December 31, 2021, net sales
increased 64 percent reflecting additional volume from
significantly improved demand across all geographic markets, along
with pricing reflective of increased raw material and other cost
inflation. Demand in the global agriculture markets reflects
improved farmer income, the need for replacement of an aging large
equipment fleet, and the need to replenish equipment inventory
levels within the equipment dealer channels. The improvement
in gross profit and margin is primarily attributable to the impact
of increased sales volume, as described previously, and cost
reduction initiatives executed across global production
facilities.
Earthmoving/Construction Segment
(Amounts in
thousands)
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
%
Increase/
(Decrease)
|
|
2021
|
|
2020
|
|
%
Increase/
(Decrease)
|
Net sales
|
$
183,420
|
|
$
137,544
|
|
33.4 %
|
|
$
693,350
|
|
$
510,150
|
|
35.9 %
|
Gross
profit
|
$
20,372
|
|
$
3,108
|
|
555.5 %
|
|
$
83,705
|
|
$
37,885
|
|
120.9 %
|
Profit
margin
|
11.1 %
|
|
2.3 %
|
|
382.6 %
|
|
12.1 %
|
|
7.4 %
|
|
63.5 %
|
Income (loss) from
operations
|
$
6,859
|
|
$
(13,380)
|
|
151.3 %
|
|
$
27,809
|
|
$
(21,620)
|
|
228.6 %
|
During the quarter ended December 31, 2021, the increase in
earthmoving/construction net sales was driven by increased volume
from customer demand, along with pricing, reflective of rising raw
material costs and freight as well as other inflationary impacts.
The increase in volume was primarily due to improvements in global
economic conditions and recovery in construction markets, including
the return to normalized supply and demand levels in the
market. The increase in gross profit and margin was primarily
driven by the increased sales volume and continued improved
production efficiencies stemming from the strong management actions
taken in recent years to improve profitability for the
long-term. In addition, the aforementioned TTRC impairment
impacted 2020 gross profit by $11.2
million.
Consumer Segment
(Amounts in
thousands)
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
%
Increase/
(Decrease)
|
|
2021
|
|
2020
|
|
%
Increase/
(Decrease)
|
Net sales
|
$
39,492
|
|
$
27,984
|
|
41.1 %
|
|
$
137,465
|
|
$
114,511
|
|
20.0 %
|
Gross
profit
|
$
4,630
|
|
$
3,205
|
|
44.5 %
|
|
$
18,030
|
|
$
11,026
|
|
63.5 %
|
Profit
margin
|
11.7 %
|
|
11.5 %
|
|
1.7 %
|
|
13.1 %
|
|
9.6 %
|
|
36.5 %
|
Income (loss) from
operations
|
$
2,486
|
|
$
43
|
|
5,681.4 %
|
|
$
9,553
|
|
$
1,085
|
|
780.5 %
|
During the quarter ended December 31, 2021, the increase in
net sales was primarily driven by increases in volume related to
general market improvements, as well as increased pricing due to
the factors stated previously in other segments. The increase
in gross profit and margin was due primarily to increased volume
and the positive impact on plant efficiencies, particularly in
Latin America.
Non-GAAP Financial Measures
Adjusted EBITDA was $36.1
million for the fourth quarter of 2021, compared to a
$17.3 million in the comparable
prior year period. The Company utilizes EBITDA and adjusted
EBITDA, which are non-GAAP financial measures, as a means to
measure its operating performance. A reconciliation of net
income (loss) to EBITDA and adjusted EBITDA can be found at the end
of this release.
Adjusted net income applicable to common shareholders for the
fourth quarter of 2021 was $24.7
million, equal to income of $0.39 per basic and diluted share, compared to a
loss of $5.9 million, equal to a loss
of $0.10 per basic and diluted share,
in the fourth quarter of 2020. The Company utilizes adjusted
net income applicable to common shareholders, which is a non-GAAP
financial measure, as a means to measure its operating
performance. A reconciliation of net income (loss) applicable
to common shareholders and adjusted net income (loss) applicable to
common shareholders can be found at the end of this release.
Financial Condition
The Company ended 2021 with total cash and cash equivalents of
$98.1 million, compared to
$117.4 million at December 31,
2020. Long-term debt at December 31, 2021, was
$452.5 million, compared to
$433.6 million at December 31,
2020. Short-term debt was $32.5
million at December 31, 2021, compared to $31.1 million at December 31, 2020.
Net debt (total debt less cash and cash equivalents) was
$386.8 million at December 31,
2021, compared to $347.3 million at
December 31, 2020. The increase in net debt during 2021
was primarily due to approximately $19
million paid in connection with the refinancing of the
senior notes and $9.2 million paid
for a legal settlement, and managed investments in working
capital to support the business growth in 2021.
Net cash provided by operating activities for the year ended
December 31, 2021, was $10.7
million, compared to net cash provided by operations of
$57.2 million for 2020. This
decrease resulted from the need for working capital investments
from significant sales growth which occurred during 2021.
Working capital management has been a strategic initiative for the
Company. Notwithstanding the increase in working capital
investments made during the year, there were significant
improvements in working capital as measured in terms of percent of
sales (calculated using the most recent quarter's sales
annualized). Net working capital (accounts receivable plus
inventory less accounts payable) as a percent of sales at
December 31, 2021 was 19%, as
compared to 24% at December 31,
2020.
Capital expenditures were $38.8
million for the year ended December 31, 2021, compared
to $21.7 million for 2020. Capital
expenditures during 2021 and 2020 represent equipment replacement
and improvements, along with new tools, dies and molds related to
new product development. The overall capital outlay for 2021
increased as the Company continues to enhance the existing
facilities and manufacturing capabilities, and drive productivity
gains.
Teleconference and Webcast
Titan will be hosting a teleconference and webcast to discuss
the fourth quarter financial results on Thursday, March 3, 2022, at 9 a.m. Eastern Time.
The real-time, listen-only webcast can be accessed using the
following link https://events.q4inc.com/attendee/234248952 or on
our website at www.titan-intl.com within the "Investor Relations"
page under the "News & Events" menu
(https://ir.titan-intl.com/news-and-events/events/default.aspx).
Listeners should access the website at least 15 minutes prior to
the live event to download and install any necessary audio
software.
A webcast replay of the teleconference will be available on our
website
(https://ir.titan-intl.com/news-and-events/events/default.aspx)
soon after the live event.
In order to participate in the real-time teleconference, with
live audio Q&A, participants should use one of the following
dial in numbers:
U.S. Toll
Free:
1 844 200 6205
U.S.:
1 646 904 5544
Canada:
1 833 950 0062
All other
countries:
+1 929 526 1599
Participants Access Code:
619103
Safe Harbor Statement
This press release contains forward-looking statements. These
forward-looking statements are covered by the safe harbor for
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. The words "believe," "expect,"
"anticipate," "plan," "would," "could," "potential," "may," "will,"
and other similar expressions are intended to identify
forward-looking statements, which are generally not historical in
nature. These forward-looking statements are based on our current
expectations and beliefs concerning future developments and their
potential effect on us. Although we believe the assumptions upon
which these forward-looking statements are based are reasonable,
these assumptions are subject to significant risks and
uncertainties, and are subject to change based on various factors,
some of which are beyond Titan International, Inc.'s control. As a
result, any of these assumptions could prove to be inaccurate and
the forward-looking statements based on these assumptions could be
incorrect. The matters discussed in these forward-looking
statements are subject to risks, uncertainties, and other factors
that could cause actual results and trends to differ materially
from those made, projected, or implied in or by the forward-looking
statements depending on a variety of uncertainties or other factors
including, but not limited to, the effect of the COVID-19 pandemic
on our operations and financial performance; the effect of a
recession on the Company and its customers and suppliers; changes
in the Company's end-user markets into which the Company sells its
products as a result of domestic and world economic or regulatory
influences or otherwise; changes in the marketplace, including new
products and pricing changes by the Company's competitors; the
Company's ability to maintain satisfactory labor relations;
unfavorable outcomes of legal proceedings; the Company's ability to
comply with current or future regulations applicable to the
Company's business and the industry in which it competes or any
actions taken or orders issued by regulatory authorities;
availability and price of raw materials; availability and price of
supply chain logistics and freight; levels of operating
efficiencies; the effects of the Company's indebtedness and its
compliance with the terms thereof; changes in the interest rate
environment and their effects on the Company's outstanding
indebtedness; unfavorable product liability and warranty claims;
actions of domestic and foreign governments, including the
imposition of additional tariffs; geopolitical and economic
uncertainties relating to the countries in which the Company
operates or does business; risks associated with acquisitions,
including difficulty in integrating operations and personnel,
disruption of ongoing business, and increased expenses; results of
investments; the effects of potential processes to explore various
strategic transactions, including potential dispositions;
fluctuations in currency translations; risks associated with
environmental laws and regulations; risks relating to our
manufacturing facilities, including that any of our material
facilities may become inoperable; risks relating to financial
reporting, internal controls, tax accounting, and information
systems; and the other risks and factors detailed in the Company's
periodic reports filed with the Securities and Exchange Commission,
including the disclosures under "Risk Factors" in those reports.
These forward-looking statements are made only as of the date
hereof. The Company cautions that any forward-looking statements
included in this press release are subject to a number of risks and
uncertainties, and the Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, changed circumstances or future events,
or for any other reason, except as required by law.
About Titan
Titan International, Inc. (NYSE: TWI) is a leading global
manufacturer of off-highway wheels, tires, assemblies, and
undercarriage products. Headquartered in West Chicago, Illinois, the Company globally
produces a broad range of products to meet the specifications of
original equipment manufacturers (OEMs) and aftermarket customers
in the agricultural, earthmoving/construction, and consumer
markets. For more information, visit www.titan-intl.com.
Titan
International, Inc. Consolidated Statements of
Operations
Amounts in thousands, except per share data
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
487,676
|
|
$
326,908
|
|
$
1,780,215
|
|
$
1,259,313
|
Cost of
sales
|
425,161
|
|
289,803
|
|
1,542,673
|
|
1,130,194
|
Asset
impairment
|
—
|
|
11,214
|
|
—
|
|
14,800
|
Gross
profit
|
62,515
|
|
25,891
|
|
237,542
|
|
114,319
|
Selling, general and
administrative expenses
|
32,961
|
|
37,093
|
|
131,772
|
|
130,942
|
Research and
development expenses
|
2,653
|
|
2,231
|
|
10,104
|
|
9,013
|
Royalty
expense
|
2,576
|
|
2,406
|
|
10,491
|
|
9,715
|
Income (loss) from
operations
|
24,325
|
|
(15,839)
|
|
85,175
|
|
(35,351)
|
Interest
expense
|
(8,282)
|
|
(7,478)
|
|
(32,221)
|
|
(30,554)
|
Loss on senior note
repurchase
|
—
|
|
—
|
|
(16,020)
|
|
—
|
Foreign exchange gain
(loss)
|
2,895
|
|
(1,283)
|
|
12,020
|
|
(11,025)
|
Other
income
|
574
|
|
9,688
|
|
2,086
|
|
18,799
|
Income (loss) before
income taxes
|
19,512
|
|
(14,912)
|
|
51,040
|
|
(58,131)
|
Provision for income
taxes
|
(8,778)
|
|
4,569
|
|
1,149
|
|
6,946
|
Net income
(loss)
|
28,290
|
|
(19,481)
|
|
49,891
|
|
(65,077)
|
Net income (loss)
attributable to noncontrolling interests
|
692
|
|
(2,267)
|
|
305
|
|
(4,689)
|
Net income (loss)
attributable to Titan and applicable to common
shareholders
|
$
27,598
|
|
$
(17,214)
|
|
$
49,586
|
|
$
(60,388)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
.44
|
|
$
(.28)
|
|
$
.80
|
|
$
(.99)
|
Diluted
|
$
.44
|
|
$
(.28)
|
|
$
.79
|
|
$
(.99)
|
Average common shares
and equivalents outstanding:
|
|
|
|
|
|
|
|
Basic
|
62,861
|
|
61,376
|
|
62,100
|
|
60,818
|
Diluted
|
63,163
|
|
61,376
|
|
62,685
|
|
60,818
|
|
|
|
|
|
|
|
|
Dividends declared
per common share:
|
$
—
|
|
$
—
|
|
$
—
|
|
$
.01
|
Titan
International, Inc. Consolidated Balance Sheets
Amounts in thousands, except share data
|
|
|
December 31,
2021
|
|
December 31,
2020
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
98,108
|
|
$
117,431
|
Accounts receivable
(net of allowance of $4,550 and $3,782, respectively)
|
255,180
|
|
193,014
|
Inventories
|
392,615
|
|
293,679
|
Prepaid and other
current assets
|
67,401
|
|
54,475
|
Total current
assets
|
813,304
|
|
658,599
|
Property, plant and
equipment, net
|
301,109
|
|
319,854
|
Operating lease
assets
|
20,945
|
|
24,356
|
Deferred income
taxes
|
16,831
|
|
2,591
|
Other long-term
assets
|
30,496
|
|
26,484
|
Total
assets
|
$
1,182,685
|
|
$
1,031,884
|
|
|
|
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Short-term
debt
|
$
32,500
|
|
$
31,119
|
Accounts
payable
|
278,099
|
|
167,210
|
Other current
liabilities
|
140,214
|
|
131,382
|
Total current
liabilities
|
450,813
|
|
329,711
|
Long-term
debt
|
452,451
|
|
433,584
|
Deferred income
taxes
|
3,978
|
|
3,895
|
Other long-term
liabilities
|
48,271
|
|
63,429
|
Total
liabilities
|
955,513
|
|
830,619
|
|
|
|
|
Redeemable
noncontrolling interest
|
—
|
|
25,000
|
|
|
|
|
Equity
|
|
|
|
Titan stockholders'
equity
|
|
|
|
Common stock
($0.0001 par, 120,000,000 shares authorized, 66,492,660 issued at
December 2021 and 61,466,593 at December 2020)
|
—
|
|
—
|
Additional paid-in
capital
|
562,340
|
|
532,742
|
Retained
deficit
|
(85,439)
|
|
(135,025)
|
Treasury stock (at
cost, 80,876 shares at December 2021 and 89,612 shares at December
2020)
|
(1,121)
|
|
(1,199)
|
Accumulated other
comprehensive loss
|
(246,480)
|
|
(217,254)
|
Total Titan
stockholders' equity
|
229,300
|
|
179,264
|
Noncontrolling
interests
|
(2,128)
|
|
(2,999)
|
Total
equity
|
227,172
|
|
176,265
|
Total liabilities and
equity
|
$
1,182,685
|
|
$
1,031,884
|
Titan
International, Inc. Consolidated Statements of Cash
Flows
All amounts in thousands
|
|
|
Twelve months
ended
|
|
December
31,
|
Cash flows from
operating activities:
|
2021
|
|
2020
|
Net income
(loss)
|
$
49,891
|
|
$
(65,077)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
47,991
|
|
54,655
|
Asset
impairment
|
—
|
|
20,823
|
Loss on senior note
repurchase
|
16,020
|
|
—
|
Deferred income tax
provision
|
(14,180)
|
|
(3,007)
|
Gain on building and
investment sale
|
(569)
|
|
(4,152)
|
Gain on property
insurance settlement
|
—
|
|
(8,657)
|
Stock-based
compensation
|
3,441
|
|
2,462
|
Issuance of common
stock under 401(k) plan
|
1,235
|
|
1,245
|
Foreign currency
translation (gain) loss
|
(8,930)
|
|
12,444
|
(Increase) decrease in
assets:
|
|
|
|
Accounts
receivable
|
(74,736)
|
|
(15,236)
|
Inventories
|
(112,850)
|
|
37,747
|
Prepaid and
other current assets
|
(15,671)
|
|
2,312
|
Other long-term
assets
|
(5,298)
|
|
(1,071)
|
Increase (decrease) in
liabilities:
|
|
|
|
Accounts
payable
|
121,189
|
|
11,942
|
Other current
liabilities
|
14,781
|
|
24,025
|
Other
liabilities
|
(11,588)
|
|
(13,226)
|
Net cash
provided by operating activities
|
10,726
|
|
57,229
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(38,802)
|
|
(21,680)
|
Sale of Wheels India
Limited shares
|
—
|
|
32,852
|
Proceeds from property
insurance settlement
|
—
|
|
8,657
|
Other
|
1,203
|
|
13,392
|
Net cash
(used for) provided by investing activities
|
(37,599)
|
|
33,221
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
borrowings
|
497,149
|
|
91,639
|
Repurchase of senior
secured notes
|
(413,000)
|
|
—
|
Payment on
debt
|
(69,182)
|
|
(126,393)
|
Dividends
paid
|
—
|
|
(603)
|
Other financing
activities
|
(1,021)
|
|
(3,208)
|
Net cash
provided by (used for) financing activities
|
13,946
|
|
(38,565)
|
Effect of exchange
rate changes on cash
|
(6,396)
|
|
(1,253)
|
Net (decrease)
increase in cash and cash equivalents
|
(19,323)
|
|
50,632
|
Cash and cash
equivalents, beginning of year
|
117,431
|
|
66,799
|
Cash and cash
equivalents, end of year
|
$
98,108
|
|
$
117,431
|
|
|
|
|
Supplemental
information:
|
|
|
|
Interest
paid
|
$
34,578
|
|
$
29,233
|
Income taxes paid, net
of refunds received
|
$
16,263
|
|
$
12,355
|
Titan International,
Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
Amounts in thousands, except earnings per
share data
The Company reports its financial results in accordance with
generally accepted accounting principles in the United States (GAAP). These supplemental
schedules provide a quantitative reconciliation between each of
adjusted net income (loss) attributable to Titan, EBITDA, adjusted
EBITDA, net sales on a constant currency basis, and net debt, each
of which is a non-GAAP financial measure and the most directly
comparable financial measures calculated and reported in accordance
with GAAP.
We present adjusted net income (loss) attributable to Titan,
adjusted earnings per common share, EBITDA, adjusted EBITDA, net
sales on a constant currency basis, and net debt, as we believe
that they assist investors with analyzing our business results. In
addition, management reviews each of these non-GAAP financial
measures in order to evaluate the financial performance of each of
our segments, as well as the Company's performance as a whole. We
believe that the presentation of these non–GAAP financial measures
will permit investors to assess the performance of the Company on
the same basis as management.
Adjusted net income (loss) attributable to Titan, adjusted
earnings per common share, EBITDA, adjusted EBITDA, net sales on a
constant currency basis, and net debt should be considered
supplemental to, not a substitute for, the financial measures
calculated in accordance with GAAP. One should not consider these
measures in isolation or as a substitute for our results reported
under GAAP. These measures have limitations in that they do not
reflect all of the costs associated with the operations of our
businesses as determined in accordance with GAAP. In addition,
these measures may be calculated differently than non-GAAP
financial measures reported by other companies, limiting their
usefulness as comparative measures. We attempt to compensate for
these limitations by analyzing results on a GAAP basis as well as a
non-GAAP basis, prominently disclosing GAAP results and providing
reconciliations from GAAP results to non-GAAP results.
The table below provides a reconciliation of adjusted net income
(loss) attributable to Titan to net income (loss) applicable to
common shareholders, the most directly comparable GAAP financial
measure, for each of the three and twelve month periods ended
December 31, 2021 and 2020.
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Net income (loss)
applicable to common shareholders
|
$
27,598
|
|
$
(17,214)
|
|
$
49,586
|
|
$
(60,388)
|
Adjustments:
|
|
|
|
|
|
|
|
Foreign
exchange (gain) loss
|
(2,895)
|
|
1,283
|
|
(12,020)
|
|
11,025
|
Loss on senior
note repurchase
|
—
|
|
—
|
|
16,020
|
|
—
|
Asset
impairments
|
—
|
|
17,237
|
|
—
|
|
20,823
|
Insurance
reimbursement
|
—
|
|
(3,644)
|
|
—
|
|
(8,580)
|
Settlement of
legal matter
|
—
|
|
—
|
|
—
|
|
5,000
|
Gain on sale
of Brownsville, Texas facility
|
—
|
|
(4,855)
|
|
—
|
|
(4,855)
|
Loss on sale
of Wheels India Limited shares
|
—
|
|
—
|
|
—
|
|
2,005
|
Restructuring
charges
|
—
|
|
1,338
|
|
—
|
|
1,737
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss) attributable to Titan
|
$
24,703
|
|
$
(5,855)
|
|
$
53,586
|
|
$
(33,233)
|
|
|
|
|
|
|
|
|
Adjusted income
(loss) per common share:
|
|
|
|
|
|
|
|
Basic
|
$
0.39
|
|
$
(0.10)
|
|
$
0.86
|
|
$
(0.55)
|
Diluted
|
$
0.39
|
|
$
(0.10)
|
|
$
0.85
|
|
$
(0.55)
|
|
|
|
|
|
|
|
|
Average common shares
and equivalents outstanding:
|
|
|
|
|
|
|
|
Basic
|
62,861
|
|
61,376
|
|
62,100
|
|
60,818
|
Diluted
|
63,163
|
|
61,376
|
|
62,685
|
|
60,818
|
The table below provides a reconciliation of net income (loss)
to EBITDA and adjusted EBITDA, non-GAAP financial measures, for the
three and twelve-month periods ended December 31, 2021 and
2020.
|
Three months
ended
|
|
Twelve months
ended
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Net Income
(loss)
|
$
28,290
|
|
$
(19,481)
|
|
$
49,891
|
|
$
(65,077)
|
Adjustments:
|
|
|
|
|
|
|
|
Provision for income
taxes
|
(8,778)
|
|
4,569
|
|
1,149
|
|
6,946
|
Interest expense,
excluding interest income
|
7,851
|
|
6,579
|
|
31,933
|
|
30,351
|
Depreciation and
amortization
|
11,646
|
|
14,279
|
|
47,991
|
|
54,655
|
EBITDA
|
$
39,009
|
|
$
5,946
|
|
$
130,964
|
|
$
26,875
|
Adjustments:
|
|
|
|
|
|
|
|
Foreign exchange
(gain) loss
|
(2,895)
|
|
1,283
|
|
(12,020)
|
|
11,025
|
Loss on senior note
repurchase
|
—
|
|
—
|
|
16,020
|
|
—
|
Asset
impairments
|
—
|
|
17,237
|
|
—
|
|
20,823
|
Insurance
reimbursement
|
—
|
|
(3,644)
|
|
—
|
|
(8,580)
|
Settlement of legal
matter
|
—
|
|
—
|
|
—
|
|
5,000
|
Gain on sale of
Brownsville, Texas facility
|
—
|
|
(4,855)
|
|
—
|
|
(4,855)
|
Loss on sale of
Wheels India Limited shares
|
—
|
|
—
|
|
—
|
|
2,005
|
Restructuring
charges
|
—
|
|
1,338
|
|
—
|
|
1,737
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
36,114
|
|
$
17,305
|
|
$
134,964
|
|
$
54,030
|
The table below sets forth, for the three and twelve-month
periods ended December 31, 2021, the impact to net sales of
currency translation (constant currency) by geography (in millions,
except percentages):
|
Three Months Ended
December 31,
|
|
Change due to
currency
translation
|
|
Three Months
Ended
December 31, 2021
|
|
2021
|
|
2020
|
|
% Change
from 2020
|
|
$
|
|
%
|
|
Constant
Currency
|
United
States
|
$
232,188
|
|
$
132,849
|
|
74.8%
|
|
—
|
|
— %
|
|
$
232,188
|
Europe /
CIS
|
135,939
|
|
97,167
|
|
39.9%
|
|
(2,060)
|
|
(2.1) %
|
|
137,999
|
Latin
America
|
84,129
|
|
62,062
|
|
35.6%
|
|
(3,158)
|
|
(5.1) %
|
|
87,287
|
Other
International
|
35,420
|
|
34,830
|
|
1.7%
|
|
(1,320)
|
|
(3.8) %
|
|
36,740
|
|
487,676
|
|
326,908
|
|
49.2%
|
|
(6,538)
|
|
(2.0) %
|
|
494,214
|
|
|
Twelve Months
Ended December 31,
|
|
Change due to
currency
translation
|
|
Twelve Months
Ended
December 31,
|
|
2021
|
|
2020
|
|
% Change
from 2020
|
|
$
|
|
%
|
|
Constant
Currency
|
United
States
|
$
835,985
|
|
$
583,400
|
|
43.3%
|
|
—
|
|
— %
|
|
$
835,985
|
Europe /
CIS
|
479,724
|
|
343,452
|
|
39.7%
|
|
12,790
|
|
3.7 %
|
|
466,934
|
Latin
America
|
318,879
|
|
218,258
|
|
46.1%
|
|
(16,108)
|
|
(7.4) %
|
|
334,987
|
Other
International
|
145,627
|
|
114,203
|
|
27.5%
|
|
2,936
|
|
2.6 %
|
|
142,691
|
|
1,780,215
|
|
1,259,313
|
|
41.4%
|
|
(382)
|
|
— %
|
|
1,780,597
|
The table below provides a reconciliation of net debt, which is
a non-GAAP financial measure:
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
$
452,451
|
|
$
450,999
|
|
$
433,584
|
|
Short-term
debt
|
32,500
|
|
30,867
|
|
31,119
|
|
Total
debt
|
$
484,951
|
|
$
481,866
|
|
$
464,703
|
|
Cash and cash
equivalents
|
$
98,108
|
|
94,640
|
|
117,431
|
|
Net debt
|
$
386,843
|
|
$
387,226
|
|
$
347,272
|
|
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SOURCE Titan International, Inc.