2012 a ‘record year in every way’, says Titan
Maurice Taylor may not be cut out for a high level diplomatic posting, but the man certainly knows how to run a profitable company. In the 2012 financial year Titan International increased its sales 22.4 per cent US$1,820.7 million – a record for the company. Gross profit for the year grew 26.7 per cent $294.1 million, or 16.2 per cent of net sales, as compared to $232.1 million, or 15.6 per cent of net sales in 2011. Income from operations in the current year was $174.7 million, compared to $132.2 million in 2011, an increase of 32.2 percent, while net income for year-end 2012 was $95.6 million, compared to $58.2 million in 2011, an increase of 64.3 per cent.
Fourth quarter sales were also said to be a record, at $493.6 million as compared to $402.9 million in the fourth quarter of 2011. Fourth quarter gross profit decreased to $51.5 million from $58.5 million in 2011, while fourth quarter loss from operations was ($1.1) million, compared to income of $19.5 million for last year’s fourth quarter. Taylor attributed this diminished final-quarter performance to several main factors.
“This past year was a record year in every way,” exclaimed the Titan International chairman and CEO. “We added to our global footprint with the purchase of Titan Europe and Planet Group located in Perth, Australia. Both additions will expand our business opportunities in the agriculture and construction/earthmoving markets. The fourth quarter had two negative problems: One, the construction slow down in Europe and its effect on the newly acquired Titan Europe Business, and the extra costs due to the start up of the wheel facility resulting from the earthquake in Italy. Insurance claims should cover the cost of the damage sustained and we have seen a strengthening of the market for the steel track business.”
Taylor is no friend of the labour union movement and it no doubt rankles him that a union presence exists in his factories. Nevertheless, it is something he must live with. “One of the biggest problems in the quarter was in the performance of the three US tyre plants. I believe most of this had to do with the unionised work force due to the fact that both Freeport and Bryan have been working for the past two years under a best and final proposed contract,” he commented. “The company and the union have been negotiating the terms of a new CBA since September 2012. The union is in the process of reviewing the proposed CBA. The union has told Titan that they expect all three Titan Tire plants to vote on the new four year proposed contract the week of March 4, 2013. Titan believes this proposed contract is fair to our employees and the company.”
Looking ahead to this year, Taylor stated Titan International’s expectation that “the farm business for 2013 will continue to be strong as is mining. The construction side is starting to show a little strength in the United States. The management team at Titan is building a strong and growing company for our employees and stockholders.”
At 9am US Eastern time today (2pm GMT), Titan International will hold a fourth quarter and full-year 2012 earnings conference call.
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