Titan Machinery (TITN) Up on Q1 Earnings Beat & Raised View

Zacks Investment Research  | May 30, 2021 11:16PM ET

Cost of sales was up 20% to $369 million from the prior-year quarter. Gross profit increased 21.5% year over year to $71 million. Gross margin was 19% compared with 18.8% in the year-ago quarter, driven by higher equipment sales and improved equipment margins.

Operating expenses increased 6% year over year to $56.4 million due to higher variable expenses on increased revenues. Adjusted EBITDA surged 79% year over year to $19.8 million. Adjusted EBITDA margin in the quarter was 5.3% compared with 3.6% in the prior-year quarter.

Agriculture revenues rose 19% to $230 million from $194 million in the year-ago quarter, driven by strong demand for equipment. The segment’s adjusted income before taxes soared 81% year over year to around $11 million.

Construction revenues rose 14% year over year to $69 million in first-quarter fiscal 2022. Increased equipment sales helped offset the impact of lower rental revenues. The segment reported adjusted income before taxes of $0.1 million, which marked a turnaround from the loss of $2.7 million in the first quarter of fiscal 2021.

International revenues were $74.5 million, reflecting a 32% improvement from the year-ago quarter, attributable to strong equipment sales. The segment reported an adjusted income before taxes of $2.7 million compared with a $0.5 million in the year-ago quarter, indicating a massive year-on-year surge of 440%.

Titan Machinery generated adjusted operating cash flow of around $7 million in first-quarter fiscal 2022 against $3.6 million in the prior-year quarter. The company ended first-quarter fiscal 2022 with a cash balance of around $90 million compared with $79 million at the end of fiscal 2021. Long-term debt, as of Apr 30, 2021, was around $65 million compared with $45 million as of Jan 31, 2021.

Titan Machinery expects Agriculture revenues to increase 15-20% year over year, compared with its previous guidance of 10-15% growth. The Construction segment’s year-over-year revenue growth is projected to be 2-7%, in contrast to the previous expectation of a decline of 0-5%. The International segment’s revenues are expected to increase 17-22% year over year in fiscal 2022, up from the prior guidance of 12-17% growth.

Backed by the ongoing momentum in its markets, the company expects earnings per share for fiscal 2022 between $1.65 and $1.85, higher than the previously provided range of $1.25 to $1.45. The mid-point of the new guidance projects year-over-year growth of 39%.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App