Titan Machinery Inc. · NASDAQ:TITN
Titan Machinery — Q3 2024 Earnings Presentation
21 slides from Titan Machinery's earnings presentation, Nov 30, 2023
Slide 1: Third Quarter FY2024 Earnings Conference Call
Third Quarter FY2024 Earnings Conference Call November 30, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Statements about our beliefs and expectations and statements containing the words “may,” “could,” “would,” “should,” “believe,” “expect,” “antic
Slide 3: Financial Overview
Financial Overview ▪ Third Quarter FY2024 Results • Revenue $694.1 Million • Pre-Tax Income $40.5 Million • Diluted EPS $1.32 ▪ Conference Call Discussion Points • Financial Results • Industry Overviews • Modeling Assumptions • O'Connors Acquisition 3
Slide 4: Agriculture Segment Overview
Agriculture Segment Overview Q3 FY24 Recap • Equipment demand continuing to be driven by precision technology, productivity/yield/efficiency gains, and an aging fleet • Same-store sales growth of 3.5% (versus +46.4% in prior year) constrained by: • Limited OEM deliveries with some delays • Prioritiz
Slide 5: Construction Segment Overview
Construction Segment Overview Q3 FY24 Recap • Continued to experience healthy demand • Shifts in timing of equipment deliveries influenced Q3 results: • Exacerbated by strong prior year Q3 comparison • Q3 same-store sales declined 10.3% compared to +34.2% in prior year period • Expect timing dynamic
Slide 6: Europe Segment Overview
Europe Segment Overview Q3 FY24 Recap • Above average yields in Germany and Ukraine • Dry conditions caused below average yields in Bulgaria and Romania ◦ Resulted in softening demand for new equipment purchases • Overall, Q3 same-store sales decline of 7.5% (decline of 10.4%, net of favorable forei
Slide 7: Australia Segment Overview
Australia Segment Overview Acquisition Highlights • Closed on the acquisition of O’Connors on October 2nd • Working through integration process • Engagement with the O'Connors employees has reinforced Titan’s view regarding the quality of the business and the leadership team • Similar to Titan’s Eur
Slide 8: Third Quarter Revenue Analysis
Third Quarter Revenue Analysis (in millions of dollars) Q3 FY2024 Q3 FY2023 Change Total Revenue $694.1 $668.8 +3.8% Equipment $521.8 $509.0 +2.5% Parts $115.0 $108.7 +5.7% Service $44.8 $39.0 +14.9% Rental & Other $12.6 $12.1 +4.2% 8
Slide 9: Third Quarter Financials
Third Quarter Financials (in millions of dollars, except per share) Q3 FY2024 Q3 FY2023 Change Total Revenue $694.1 $668.8 +3.8% Gross Profit $138.3 $139.6 -0.9% Gross Profit Margin 19.9% 20.9% -100 bps Operating Expenses $92.1 $84.9 -8.5% Operating Expense as a % of Revenue 13.3% 12.7% -60 bps Floo
Slide 10: Third Quarter Segment Overview
Third Quarter Segment Overview (in millions of dollars) Q3 FY2024 % of Q3 FY2023 % of Change ($) Revenue Revenue Revenue $694.1 $668.8 +3.8% Agriculture $531.4 $493.3 +7.7% Construction $77.5 $86.4 -10.3% Europe $85.2 $89.0 -4.3% Pre-Tax Income(1) $40.5 5.8% $54.7 8.2% -26.0% Agriculture $35.1 6.6%
Slide 11: Nine Months Revenue Analysis
Nine Months Revenue Analysis (in millions of dollars) First 9 Months First 9 Months Change FY2024 FY2023 Total Revenue $1,906.3 $1,626.3 +17.2% Equipment $1,431.3 $1,240.6 +15.4% Parts $320.1 $255.0 +25.5% Service $122.2 $101.8 +20.0% Rental & Other $32.8 $28.9 +13.4% 11
Slide 12: Nine Months Financials
Nine Months Financials (in millions of dollars, except per share) First 9 Months First 9 Months Change FY2024 FY2023 Total Revenue $1,906.3 $1,626.3 +17.2% Gross Profit $390.3 $331.0 +17.9% Gross Profit Margin 20.5% 20.4% +10 bps Operating Expenses $262.2 $217.8 -20.4% Operating Expense as a % of Re
Slide 13: Nine Months Segment Overview
Nine Months Segment Overview (in millions of dollars) First 9 Months % of First 9 Months % of Change FY2024 Revenue FY2023 Revenue Revenue $1,906.3 $1,626.3 +17.2% Agriculture $1,423.7 $1,160.8 +22.6% Construction $232.4 $223.4 +4.0% Europe $250.3 $242.1 +3.4% Pre-Tax Income(1) $117.5 6.2% $111.4 6.
Slide 14: Balance Sheet Highlights
Balance Sheet Highlights ▪ $70 Million of Cash ▪ Equipment Inventory Increased $358 Million to $892 Million as of October 31, 2023 vs. $535 Million as of January 31, 2023 • $306 Million increase in new equipment and a $52 Million increase in used equipment ▪ Parts Inventory of $172 Million as of Oct
Slide 15: Equipment Inventory
Equipment Inventory (1) (1) Non-Interest Bearing floorplan is equipment that is in its initial interest free financing period from the OEM (2) Equipment inventory not financed with floorplan (3) Inventory turns are calculated by dividing cost of sales on equipment for the last twelve months by the a
Slide 16: FY2024 Outlook
FY2024 Outlook Updated Fiscal 2024 Modeling Assumptions: Current Assumptions Previous Assumptions Segment Revenue Agriculture(1) Up 20-23% Up 20-25% Construction Up 4-7% Up 5-10% Europe (formerly "International")(2) Up 4-7% Up 5-10% Australia (O'Connors)(3) $70-80 million $70-90 million Diluted EPS(
Slide 17: Appendix
Appendix TITAN MACHINERY Power & Precision to Grow*
Slide 18: Operating Expenses & Absorption
Operating Expenses & Absorption(1) (1)Absorption is calculated in a given period by dividing our gross profit from sales of parts, service and rental fleet activity by our operating expenses, less commission expense on equipment sales, plus $5.7 million gain on the MT/WY divestiture in FY22 and $1.4
Slide 19: Same Store Results
Same Store Results(1) (in thousands of dollars) Three Months Ended October 31, Percent Nine Months Ended October 31, Percent 2023 2022 Change 2023 2022 Change Same Store Sales Agriculture $ 510,434 $ 493,324 3.5 % $ 1,141,741 $ 1,090,500 4.7 % Construction $ 77,508 $ 86,382 (10.3)% $ 232,369 $ 221,8
Slide 20: Adjusted Debt to Tangible Net Worth
Adjusted Debt to Tangible Net Worth (1) The debt covenant limit for adjusted debt to tangible net worth is 3.5. Adjusted debt is calculated by taking total liabilities less non-interest bearing floorplan payables. Tangible net worth is calculated by taking total stockholders equity less total intang
Slide 21: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Titan Machinery Inc. Three Months Ended Nine Months Ended (in thousands) October 31, October 31, 2023 2022 2023 2022 EBITDA Net Income $ 30,193 $ 41,257 $ 88,479 $ 83,756 Adjustments Interest expense, net of interest income 1,380 1,170 3,655 3,562 Provision for income t