10.06.2013

Titan Machinery slips into the red

US based equipment sales and rental company Titan Equipment has reported a first quarter loss on slightly higher revenues.

Total revenues were $441.7 million up 4.7 percent on last year, however a substantial jump in operating expenses coupled with higher interest costs related to a its April 2012 convertible debt offering converted a $12.3 million pre-tax profit last year into a $1 million loss this year.

The company is maintaining its full year forecasts in terms of both revenues and profits.

Chief executive David Meyer said: “As we previously reported, our first quarter results were impacted by abnormally delayed spring weather. For our Agriculture segment, weather conditions in the second quarter have begun to normalise and the planting progress has significantly improved. We expect the Agriculture revenue that was delayed in the first quarter reflected primarily a timing issue and will be realised in the coming quarters. As a result, we continue to anticipate top line sales growth and are reiterating our annual 2014 sales guidance that we issued on our fiscal 2013 year-end release.”

“Our Construction business was also impacted by the late spring weather, as well as the challenging conditions in this industry and the cost of expanding our distribution network. As we discussed on our last conference call, we are focused on a number of key initiatives to drive top and bottom line improvements in our Construction segment and expect to see improvements in the second quarter and the remainder of the year. We believe that our Construction segment is an integral part of our long-term growth strategy and remain confident it will be a structural component of our top and bottom line growth.”

Vertikal Comment

Titan is on a major expansion drive both domestically and internationally - it opened a new location in Kiev, Ukraine in April - and the extra costs of this expansion are clearly not yet recognised in higher revenues.

Things should begin to balance out by mid-year.