Titan Machinery Inc. · NASDAQ:TITN
Titan Machinery — Q1 2024 Earnings Presentation
17 slides from Titan Machinery's earnings presentation, May 25, 2023
Slide 1: First Quarter FY2024 Earnings Conference Call
First Quarter FY2024 Earnings Conference Call May 25, 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 ▪ First Quarter FY2024 Results • Revenue $569.6 Million • Pre-Tax Income $35.4 Million • Diluted EPS $1.19 ▪ Conference Call Discussion Points • Industry Overviews • Financial Results • Modeling Assumptions 3
Slide 4: Agriculture Segment Overview
Agriculture Segment Overview Q1 FY24 Recap • Sustained demand drives growth in same-store revenues • Equipment availability was limiting factor on revenue • Recent acquisition activity added $94M revenue contribution (Mark’s Machinery, Heartland Ag, and Pioneer) • Improved equipment margins benefite
Slide 5: Construction Segment Overview
Construction Segment Overview Q1 FY24 Recap • Sustained levels of construction activity across our footprint • Strong overall performance • Same-store sales growth of 9.9% • Pre-tax margins of 6.3%, up 150 bps YOY • Rental fleet dollar utilization of 26.8%, up 230 bps YOY • Absorption of 86.2% Full
Slide 6: International Segment Overview
International Segment Overview Q1 FY24 Recap • Decline in revenues mainly driven by weaker EUR (growth of 2.8% net of foreign currency fluctuations) • Achieved pre-tax margins of 8.6% (+290 bps YOY), driven by strong equipment margins • Cold spring delayed planting, recent rainfall across footprint
Slide 7: First Quarter Revenue Analysis
First Quarter Revenue Analysis (in millions of dollars) Q1 FY2024 Q1 FY2023 Change Total Revenue $569.6 $461.0 +23.6% Equipment $429.4 $356.4 +20.5% Parts $96.6 $68.6 +40.9% Service $34.9 $29.5 +18.3% Rental & Other $8.7 $6.6 +32.9% 7
Slide 8: First Quarter Financials
First Quarter Financials (in millions of dollars, except per share) Q1 FY2024 Q1 FY2023 Change Total Revenue $569.6 $461.0 +23.6% Gross Profit $118.6 $88.7 +33.7% Gross Profit Margin 20.8% 19.2% +160 bps Operating Expenses $81.3 $64.2 -26.8% Operating Expense Margin 14.3% 13.9% -40 bps Floorplan and
Slide 9: First Quarter Segment Overview
First Quarter Segment Overview % of % of Change (in millions of dollars) Q1 FY2024 Q1 FY2023 Revenue Revenue ($) Revenue $569.6 $461.0 +23.6% Agriculture $423.2 $318.5 +32.9% Construction $72.0 $67.0 +7.5% International $74.4 $75.5 -1.4% Pre-Tax Income(1) $35.4 6.2% $23.6 5.1% +50.3% Agriculture $24
Slide 10: Balance Sheet Highlights
Balance Sheet Highlights ▪ $38 Million of Cash ▪ Equipment Inventory Increased $145 Million to $679 Million as of April 30, 2023 vs. $535 Million as of January 31, 2023 • $128 Million increase in new equipment and a $17 Million increase in used equipment ▪ Parts Inventory of $169 Million as of April
Slide 11: Equipment Inventory
Equipment Inventory (1) Used Inventory New Inventory Non-Interest Bearing Inventory Inventory Turns $600 5.0 4.5 $500 4.0 3.6 3.6 3.5 3.4 3.3 3.5 $400 3.0 3.0 Millions Ratio 44.7% $300 2.5 2.0 47.4% 44.6% 39.8% 2.0 $200 41.2% 1.5 29.2% 33.0% 1.0 $100 0.5 $— 0.0 Q4 FY21 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY2
Slide 12: FY2024 Outlook
FY2024 Outlook The Company is reiterating its previous expectations for Fiscal 2024. Assumptions Segment Revenue Agriculture(1) Up 20-25% Construction Flat - Up 5% International Up 8-13% Diluted EPS(2) $4.50 - $5.10 (1) Includes the full year impact of the Mark's Machinery acquisition, which closed
Slide 13: Appendix
Appendix TITAN MACHINERY Power & Precision to Grow”
Slide 14: Operating Expenses & Absorption
(1) Operating Expenses & Absorption Operating Expenses Absorption Rate $350 90.0% 83.4% 85.0% 82.2% 82.2% $300 80.0% 77.7% Millions Rate $250 75.0% 71.6% 72.0% 70.0% $200 65.0% $150 60.0% FY19 FY20 FY21 FY22 FY23 TTM FY24 (1) Absorption is calculated in a given period by dividing our gross profit fr
Slide 15: Same Store Results
Same Store Results(1) Three Months Ended April 30, Percent (in millions of dollars) 2023 2022 Change Same Store Sales Agriculture $ 328.8 $ 316.9 3.8 % Construction 72.0 65.5 9.9 % International 74.5 75.5 (1.4)% Total $ 475.3 $ 457.9 3.8 % Same Store Gross Profit Agriculture $ 61.0 $ 58.3 4.7 % Cons
Slide 16: Adjusted Debt to Tangible Net Worth
Adjusted Debt to Tangible Net Worth Adjusted Debt Tangible Net Worth Adjusted Debt to Tangible Net Worth Covenant Limit $600 4.0 3.0 $400 Millions Ratio 2.0 1.3 $200 1.0 1.0 1.0 0.9 1.0 $— — Q4 FY20 Q4 FY21 Q4 FY22 Q4 FY23 Q1 FY24 Note: Adjusted debt is calculated as total liabilities less non-inter
Slide 17: Non-GAAP Reconciliation Table - EBITDA
Non-GAAP Reconciliation Table (in thousands) Three Months Ended April 30, 2023 2022 EBITDA Net Income $ 26,965 $ 17,540 Adjustments Interest expense, net of interest income 1,165 1,110 Provision for income taxes 8,474 6,044 Depreciation and amortization 6,948 5,206 EBITDA 43,552 29,900 17