Titan Machinery Inc. · NASDAQ:TITN
Titan Machinery — Q2 2025 Earnings Presentation
23 slides from Titan Machinery's earnings presentation, Aug 29, 2024
Slide 1: Second Quarter FY2025 Earnings Conference Call
Second Quarter FY2025 Earnings Conference Call August 29, 2024
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 ▪ Second Quarter FY2025 Results • Revenue $633.7 Million • Pre-Tax Loss $4.3 Million (1) • Adjusted Pre-Tax Income $6.9 Million • Diluted Loss Per Share $(0.19) • Adjusted Diluted Earnings Per Share $0.17 (2) ▪ Conference Call Discussion Points • Financial Results • Industry Overv
Slide 4: Agriculture Segment Overview
Agriculture Segment Overview Q2 FY25 Recap • Same-store sales decline of 11.2% (versus increase of 10.0% in prior year) ◦ Softer retail demand driven by a significant decrease in net farm income • Equipment gross margin compression driven by softer demand and proactive approach to reduce inventories
Slide 5: Construction Segment Overview
Construction Segment Overview Q2 FY25 Recap • Same-store sales decline of 3.2% (versus increase of 18.5% in prior year) • Equipment gross margin compression driven by high levels of inventory across the industry • Rental fleet dollar utilization of 24.7%, down 550 bps YoY Rest of FY25 Expectations •
Slide 6: Europe Segment Overview
Europe Segment Overview Q2 FY25 Recap • Same-store sales decline of 27.7% (versus increase of 15.9% in prior year) ◦ Farmer profitability negatively impacted by lower commodity prices and sustained high interest rates • Ongoing drought conditions in Eastern Europe significantly impacting crop health
Slide 7: Australia Segment Overview
Australia Segment Overview Q2 FY25 Recap • Revenues of $61 million USD • Equipment gross margin normalization, as anticipated, driven by softening demand and high levels of inventory across the industry • Mixed growing conditions with wide variations of rainfall across footprint Rest of FY25 Expecta
Slide 8: Second Quarter Revenue Analysis
Second Quarter Revenue Analysis (in millions of dollars) Q2 FY2025 Q2 FY2024 Change Total Revenue $633.7 $642.6 -1.4% Equipment $465.2 $480.1 -3.1% Parts $109.8 $108.5 +1.2% Service $47.3 $42.5 +11.3% Rental & Other $11.4 $11.5 -0.8% 8
Slide 9: Second Quarter Financials
Second Quarter Financials (in millions of dollars, except per share) Q2 FY2025 Q2 FY2024 Change Total Revenue $633.7 $642.6 -1.4% Gross Profit $112.4 $133.4 -15.8% Gross Profit Margin 17.7% 20.8% -310 bps Operating Expenses $95.2 $88.8 +7.2% Operating Expense as a % of Revenue 15.0% 13.8% +120 bps F
Slide 10: Second Quarter Segment Overview
Second Quarter Segment Overview % of % of Change (in millions of dollars) Q2 FY2025 Q2 FY2024 Revenue Revenue ($) Revenue $633.7 $642.6 -1.4% Agriculture $424.0 $469.1 -9.6% Construction $80.2 $82.9 -3.2% Europe $68.1 $90.6 -24.8% Australia $61.3 N/A(2) N/A(2) Pre-Tax (Loss) Income(1) $(4.3) (0.7)%
Slide 11: Six Months Revenue Analysis
Six Months Revenue Analysis First 6 Months First 6 Months (in millions of dollars) Change FY2025 FY2024 Total Revenue $1,262.4 $1,212.2 +4.1% Equipment $933.3 $909.5 +2.6% Parts $218.0 $205.1 +6.3% Service $92.3 $77.4 +19.3% Rental & Other $18.7 $20.2 -7.4% 11
Slide 12: Six Months Financials
Six Months Financials First 6 Months First 6 Months (in millions of dollars, except per share) Change FY2025 FY2024 Total Revenue $1,262.4 $1,212.2 +4.1% Gross Profit $234.1 $252.0 -7.1% Gross Profit Margin 18.5% 20.8% -230 bps Operating Expenses $194.3 $170.1 +14.3% Operating Expense as a % of Reve
Slide 13: Six Months Segment Overview
Six Months Segment Overview First 6 Months % of First 6 Months % of (in millions of dollars) Change FY2025 Revenue FY2024 Revenue Revenue $1,262.4 $1,212.2 +4.1% Agriculture $871.7 $892.3 -2.3% Construction $151.7 $154.9 -2.1% Europe $133.3 $165.1 -19.3% Australia $105.7 N/A(2) N/A(2) Pre-Tax Income
Slide 14: Balance Sheet Highlights
Balance Sheet Highlights ▪ $31 Million of Cash ▪ Equipment Inventory Increased $226 Million to $1.3 Billion as of July 31, 2024 vs. $1.1 Billion as of January 31, 2024 • $194 Million increase in new equipment and a $32 Million increase in used equipment ▪ Parts Inventory of $201 Million as of July 3
Slide 15: Equipment Inventory Financing
Equipment Inventory Financing (1) (1) Non-Interest Bearing floorplan is equipment that is in its initial interest free financing period from the OEM (2) Equity is equipment inventory not financed with floorplan (3) Inventory turns are calculated by dividing cost of sales on equipment for the last tw
Slide 16: FY2025 Outlook
FY2025 Outlook Current Assumptions Segment Revenue Agriculture Down 5% - Down 10% Construction Down 2.5% - Up 2.5% Europe Down 12% - Down 17% Australia $230M - $250M USD Diluted Earnings (Loss) Per Share ($0.36) - $0.14 Adjusted Diluted Earnings Per Share $0.00 - $0.50* *Adjusted for an estimated $0
Slide 17: Appendix
Appendix TITAN MACHINERY Power & Precision to Grow”
Slide 18: Operating Expenses & Absorption
(1) Operating Expenses & Absorption Operating Expenses Absorption Rate Absorption Rate without Floorplan Interest Expense $500 95% $450 90% $400 82.7% 82.9% 82.9% 85% $350 79.0% 82.2% 82.2% 78.4% 80% $300 79.2% Millions Rate 74.0% 77.7% $250 75% $200 72.6% 72.0% 70% $150 65% $100 60% $50 $— 55% FY20
Slide 19: Same Store Results
Same Store Results(1) Three Months Ended July 31, Percent Six Months Ended July 31, Percent (in thousands of dollars) 2024 2023 Change 2024 2023 Change Same Store Sales Agriculture $ 416,282 $ 468,572 (11.2)% $ 857,610 $ 891,767 (3.8)% Construction $ 80,192 $ 82,864 (3.2)% $ 151,684 $ 154,861 (2.1)%
Slide 20: Adjusted Debt to Tangible Net Worth
Adjusted Debt to Tangible Net Worth Adjusted Debt Tangible Net Worth Adjusted Debt to Tangible Net Worth 4.5 $1,200 $1,100 4.0 $1,000 3.5 $900 3.0 $800 $700 Millions 2.5 Ratio $600 2.0 $500 1.8 1.6 1.5 $400 1.5 $300 1.0 1.0 0.9 1.0 $200 0.5 $100 $— — Q4 FY21 Q4 FY22 Q4 FY23 Q4 FY24 Q1 FY25 Q2 FY25 (
Slide 21: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table Titan Machinery Inc. (in thousands, except per share data) Three Months Ended July 31, Six Months Ended July 31, 2024 2023 2024 2023 Adjusted Income Before Income Taxes (Loss) Income Before Income Taxes $ (4,250) $ 41,591 $ 8,535 $ 77,032 Adjustments (1) Impact of sale-
Slide 22: Non-GAAP Reconciliation Table, continued
Non-GAAP Reconciliation Table, continued Titan Machinery Inc. (in thousands) Three Months Ended July 31, Six Months Ended July 31, 2024 2023 2024 2023 EBITDA Net (Loss) Income $ (4,304) $ 31,321 $ 5,136 $ 58,287 Adjustments Interest expense, net of interest income (1) 3,629 1,110 5,980 2,275 Provisi
Slide 23: Non-GAAP Reconciliation Tables, continued
Non-GAAP Reconciliation Tables, continued (in thousands, except per share data) Three Months Ended July 31, Six Months Ended July 31, 2024 2023 2024 2023 Adjusted Income Before Income Taxes - Agriculture Income Before Income Taxes $ 635 $ 33,029 $ 13,680 $ 57,181 Adjustments Impact of sale-leaseback