Titan Machinery Returns to Profitability by Inventory Reduction

March 31, 2017, 8:00 am

Construction and agricultural equipment distributor Titan Machinery posted $317.6 million in fiscal fourth quarter revenue compared to $335.5 million in the previous fourth quarter, a 5.3-percent decline. Revenue from rental and other was $14 million for the fourth quarter of fiscal 2017 compared to $16.1 million in the year-ago quarter, a 13-percent slide.

In Titan’s construction segment, fourth quarter revenue was $81.7 million, down from $91.3 million a year ago, a 10.5-percent dip.

For the full year of fiscal 2017, Titan Machinery’s revenue was $1.21 billion, compared to $1.37 billion in fiscal 2017, an 11.7-percent drop. However, the company generated adjusted EBITDA of $11.7 million in fiscal 2017, compared to adjusted EBITDA loss of $3 million in fiscal 2016.

For the full year 2017, revenue from rental and other was $57.9 million compared to $69.5 million in fiscal 2016, a 16.8-percent decline.

“For fiscal 2017, we exceeded our inventory reduction plans and began implementing a restructuring plan that is consolidating certain dealership locations and reorganizing our operating structure,” said David Meyer, Titan Machinery’s chairman and CEO. “Throughout fiscal 2017, we took the necessary steps to manage through difficult operating conditions, including reducing our operating expenses and reducing our equipment inventory levels by $197 million, which enabled us to continue to generate solid adjusted cash flow from operations.

“Even though fiscal 2018 is expected to be a challenging operating environment, we are well positioned to generate positive diluted earnings per share, exclusive of the anticipated charges associated with our restructuring activities. We have reduced our equipment inventory by $543.6 million, or 58 percent, during the past three years and we expect to reduce equipment inventory by another $50 million in fiscal 2018.”

Titan Machinery, based in West Fargo, N.D., is No. 43 on the RER 100.

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