Titan Reports Record Sales, Increased Profits in Q2

Titan International has once again reported all time record sales, this time for the second quarter of 2008. In the three months ending June 30, Titan recorded sales of US$269.1 million, 28 per cent higher than the second quarter 2007 sales of $210.3 million. Net sales were also up for the half-year period; sales of $522.6 million reflected a 20 per cent increase on the $436.6 million recorded in the first half of 200. According to Titan, the record sales levels for the second quarter and first half of 2008 can be attributed to exceptionally strong demand in the company’s agricultural market, which reported higher sales of 50 per cent for the second quarter of 2008 and 38 per cent for the first half of 2008 as compared to the respective 2007 periods.

Operating income for the second quarter of 2008 was $24.4 million, as compared to $13.2 million in the second quarter of 2007. Year-to-date income from operations was $40.5 million in 2008, compared to $27.5 million in 2007. Net income was $13.3 million for the second quarter of 2008, compared to $5.0 million in second quarter 2007. Year-to-date, net income was $21.4 million in 2008 and $2.5 million year-to-date in 2007 – last year’s result affected by the Q1 2007 negative net income of almost $5 million.

“The first half of 2008 saw higher commodity prices drive a strong demand in the agricultural market,” said chairman and CEO Maurice M. Taylor Jr. “This helped propel Titan to record sales levels for the quarter and year-to-date. Despite high raw material costs, the company was able to show improvement in gross profit by continuing to improve manufacturing efficiencies and better align Titan sales prices with production cost.

“Titan has also benefited in the past months from a preliminary ruling from the US Department of Commerce, affirming that exporters of Chinese-manufactured tyres have been selling certain off-the-road tyres in the U.S.A. at less than normal value and received subsidies, resulting in duties being imposed on certain imported tyres. The International Trade Commission had heard relevant testimony in July and may rule in the third quarter. This may result in either upholding the Commerce Department’s ruling, modifying or overruling it.

“Titan believes that volume will increase in farm tires as we move forward, and with excess production capacity of up to $400 million, we are very optimistic for the years ahead. Production of the ‘big daddy’ 63-inch tyre has started with the first tyre and wheel assemblies headed to the oil sands in Canada. This production is a gradual ramp-up until full production begins on January 2, 2009. It is still Titan’s target to ship at least 900 of the 63-inch giant tyres in the second half of 2008. Of these 900 giant tyres, Titan plans to ship at least 200-300 as complete tyre and wheel assemblies during the next two quarters. Titan will follow the 63-inch ‘big daddy’ tyre production with the 57-inch ‘sweet mama’ tyre in the fourth quarter of 2008,” said Taylor.

“The effort of all Titan employees has been outstanding this past year and I believe the shareholders are seeing the resulting improvement in our financial performance. The company has come a long way, but Titan will keep striving to improve and reach our ambitious goals for the year.”