Financial Data and Key Metrics Changes - Titan International reported a strong third quarter with revenue of $450 million, a 48% increase year-over-year, and adjusted EBITDA of $35.1 million, marking the strongest third quarter since 2013 [11][29] - The company expects full-year adjusted EBITDA to exceed $130 million, the highest annual total since 2013 [12][56] - Gross profit increased by 93% to $60 million, with a gross margin improvement to 13.4% compared to 10.3% last year [29][32] Business Segment Data and Key Metrics Changes - The agriculture segment led growth with net sales of $244 million, a 60% increase from the previous year, and gross profit of $33 million, up 105% [34][36] - The earthmoving and construction (EMC) segment saw net sales grow by 37% to $166 million, with gross profit increasing by 71% to $21 million [37][39] - The consumer segment's net sales rose by 32% to $37 million, with gross profit margins improving to 15% from 9.5% last year [40][41] Market Data and Key Metrics Changes - Demand in the agriculture sector remains strong, supported by high commodity prices, with corn above $5 and soybeans above $12 [14][15] - The EMC segment is benefiting from infrastructure investments globally, with significant growth in Latin America and Europe [17][38] - Inventory levels at dealers are low, indicating pent-up demand that is expected to carry into 2022 [67] Company Strategy and Development Direction - The company is focused on increasing production capabilities and expanding its workforce to meet growing demand [23][28] - Titan has strategically invested in capital expenditures to enhance production efficiency and product innovation [21][50] - The company aims to maintain a disciplined approach to cost control while capitalizing on market opportunities [20][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate supply chain challenges and adjust production as needed [73][74] - Despite fluctuations in commodity prices, management believes demand will remain strong due to robust farmer incomes and ongoing construction projects [83][84] - The company anticipates a strong fourth quarter and a positive outlook for 2022, driven by solid order books and inventory replenishment needs [56][94] Other Important Information - The company refinanced $400 million in bonds and improved liquidity through an ABL credit line extension [24][52] - Net debt leverage improved to 3.3 times trailing twelve-month adjusted EBITDA, indicating a stronger balance sheet [55][56] Q&A Session Summary Question: Outlook on adjusted EBITDA considering the strike situation with a major customer - Management acknowledged the importance of the customer and indicated that production adjustments could be made based on the situation [62] Question: Ability to shift production capacity between OE and aftermarket products - Management confirmed that while adjustments can be made, it requires planning and alignment with operational teams [64] Question: Supply chain issues and potential customer slowdowns - Management stated they have effectively managed supply chain challenges and have a diverse customer base to mitigate risks [73][76] Question: Labor force hiring and retention status - Management reported a 12% increase in the labor force year-to-date and emphasized ongoing efforts in onboarding and retention [78] Question: Stabilization of material costs and its impact - Management noted some stabilization in raw material costs and expressed confidence in maintaining margins [80] Question: Visibility on order books for 2022 - Management indicated strong order books and confidence in robust demand for 2022, driven by inventory replenishment needs [91][93] Question: Capital allocation and cash requirements for next year - Management expects capital expenditures to increase slightly next year while maintaining a healthy cash flow [94][95] Question: Impact of steel price fluctuations on results - Management stated they can manage costs effectively and would handle any significant drop in steel prices similarly to how they managed increases [97][98]

Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited condensed consolidated financial statements, showing significant improvements in net sales and a shift to net income [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported substantial increases in net sales and gross profit, turning prior-year operating and net losses into positive income | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net sales | $450,382 | $304,772 | $1,292,539 | $932,405 | | Gross profit | $60,292 | $31,317 | $175,027 | $88,428 | | Income (loss) from operations | $22,900 | $(6,808) | $60,850 | $(19,512) | | Net income (loss) | $10,804 | $(13,454) | $21,601 | $(45,596) | | Net income (loss) attributable to Titan | $11,187 | $(12,643) | $21,988 | $(43,174) | | Basic EPS | $0.18 | $(0.21) | $0.36 | $(0.71) | | Diluted EPS | $0.18 | $(0.21) | $0.35 | $(0.71) | [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The company reported an improved comprehensive loss, primarily influenced by currency translation adjustments | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income (loss) | $10,804 | $(13,454) | $21,601 | $(45,596) | | Currency translation adjustment, net | $(16,243) | $4,275 | $(28,991) | $(28,498) | | Comprehensive loss attributable to Titan | $(4,639) | $(6,709) | $(4,386) | $(67,572) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased due to higher current assets, while total liabilities rose, leading to a slight decrease in total equity | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------- | :-------------------------------- | :------------------------------- | | Cash and cash equivalents | $94,640 | $117,431 | | Accounts receivable, net | $261,447 | $193,014 | | Inventories | $373,012 | $293,679 | | Total current assets | $796,243 | $658,599 | | Property, plant and equipment, net | $302,590 | $319,854 | | Total assets | $1,144,259 | $1,031,884 | | Total current liabilities | $436,912 | $329,711 | | Long-term debt | $450,999 | $433,584 | | Total liabilities | $944,665 | $830,619 | | Total equity | $174,594 | $176,265 | [Condensed Consolidated Statements of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Equity statements detail changes from net income, currency adjustments, and stock compensation, resulting in a slight decrease in total equity | Metric | Balance January 1, 2021 (in thousands) | Balance September 30, 2021 (in thousands) | | :--------------------------------------- | :------------------------------------- | :-------------------------------------- | | Total Titan shareholders' equity | $179,264 | $177,916 | | Total equity | $176,265 | $174,594 | - Net income contributed **$13.6 million** and **$11.2 million** to retained earnings for the periods ended March 31, 2021, and September 30, 2021, respectively[16](index=16&type=chunk) - Currency translation adjustments resulted in a net decrease of **$26.7 million** and **$16.7 million** for the periods ended March 31, 2021, and September 30, 2021, respectively[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash and cash equivalents decreased due to cash used in operating and investing activities, partially offset by financing activities | Cash Flow Activity | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash (used for) provided by operating activities | $(2,290) | $47,431 | | Net cash (used for) provided by investing activities | $(23,111) | $25,364 | | Net cash provided by (used for) financing activities | $7,275 | $(33,936) | | Net (decrease) increase in cash and cash equivalents | $(22,791) | $31,973 | | Cash and cash equivalents, end of period | $94,640 | $98,772 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, financial instrument fair values, and specific balance sheet and income statement items, including COVID-19 impacts and debt refinancing [1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of interim financial statements, US GAAP adherence, COVID-19 impacts, and new accounting standard adoption - The COVID-19 pandemic continued to impact the Company in Q3 2021, leading to increased operating costs due to sanitary measures and significant global supply chain constraints (raw materials, transportation, labor), particularly affecting Australia, Europe, and Latin America[21](index=21&type=chunk) - The fair value of the 7.00% senior secured notes due 2028 was approximately **$421.5 million** at September 30, 2021, compared to a cost of **$394.3 million**[22](index=22&type=chunk) - The Company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, on January 1, 2021, which did not have a material impact on the condensed consolidated financial statements[24](index=24&type=chunk) [2. ACCOUNTS RECEIVABLE, NET](index=12&type=section&id=2.%20ACCOUNTS%20RECEIVABLE,%20NET) Net accounts receivable increased significantly due to higher sales, while the allowance for doubtful accounts slightly decreased | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------- | :-------------------------------- | :------------------------------- | | Accounts receivable | $265,015 | $196,796 | | Allowance for doubtful accounts | $(3,568) | $(3,782) | | Accounts receivable, net | $261,447 | $193,014 | [3. INVENTORIES](index=12&type=section&id=3.%20INVENTORIES) Total inventories increased substantially across all categories, indicating higher production or anticipated future demand | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :---------------- | :-------------------------------- | :------------------------------- | | Raw material | $116,572 | $78,733 | | Work-in-process | $46,297 | $36,485 | | Finished goods | $210,143 | $178,461 | | Total Inventories | $373,012 | $293,679 | [4. PROPERTY, PLANT AND EQUIPMENT, NET](index=12&type=section&id=4.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) Net property, plant, and equipment decreased slightly due to depreciation, despite increased construction-in-process, with a prior-year asset impairment charge | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Land and improvements | $41,680 | $43,943 | | Buildings and improvements | $240,276 | $245,619 | | Machinery and equipment | $582,457 | $583,847 | | Tools, dies and molds | $112,015 | $111,189 | | Construction-in-process | $16,444 | $11,282 | | Less accumulated depreciation | $(690,282) | $(676,026) | | Property, plant and equipment, net | $302,590 | $319,854 | - Depreciation on property, plant and equipment for the nine months ended September 30, 2021, was **$35.1 million**, down from **$37.7 million** in the comparable 2020 period[28](index=28&type=chunk) - A **$2.6 million** asset impairment charge was recorded during the nine months ended September 30, 2020, related to machinery and equipment at Titan Tire Reclamation Corporation (TTRC) due to market declines[29](index=29&type=chunk) [5. INTANGIBLE ASSETS, NET](index=13&type=section&id=5.%20INTANGIBLE%20ASSETS,%20NET) Net amortizable intangible assets decreased, with amortization expense totaling $0.6 million for the nine months ended September 30, 2021 | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------- | :-------------------------------- | :------------------------------- | | Patents, trademarks and other | $10,062 | $10,181 | | Less accumulated amortization | $(8,527) | $(8,206) | | Intangible assets, net | $1,535 | $1,975 | - Amortization related to intangible assets for the nine months ended September 30, 2021, totaled **$0.6 million**, a decrease from **$1.6 million** in the comparable 2020 period[31](index=31&type=chunk) | Period | Estimated Amortization Expense (in thousands) | | :-------------------------- | :-------------------------------------------- | | October 1 - December 31, 2021 | $37 | | 2022 | $145 | | 2023 | $145 | | 2024 | $134 | | 2025 | $123 | | Thereafter | $951 | | Total | $1,535 | [6. WARRANTY](index=13&type=section&id=6.%20WARRANTY) Warranty liability increased due to higher provisions compared to payments made during the period | Metric | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | | Warranty liability, January 1 | $15,040 | $14,334 | | Provision for warranty liabilities | $7,397 | $4,060 | | Warranty payments made | $(6,039) | $(4,346) | | Warranty liability, September 30 | $16,398 | $14,048 | [7. DEBT](index=14&type=section&id=7.%20DEBT) Debt refinancing led to a $16.0 million loss on repurchase, increased long-term debt, and $30.0 million outstanding on the revolving credit facility | Debt Type | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | 7.00% senior secured notes due 2028 | $394,305 | — | | 6.50% senior secured notes due 2023 | — | $396,876 | | Titan Europe credit facilities | $40,690 | $49,583 | | Revolving credit facility | $30,000 | — | | Other debt | $16,871 | $18,244 | | Total long-term debt | $450,999 | $433,584 | - On April 22, 2021, the Company issued **$400.0 million** aggregate principal amount of 7.00% senior secured notes due April 2028, with an effective yield of **7.27%** at issuance[36](index=36&type=chunk) - In connection with the new notes, the Company repurchased its **$400.0 million** principal amount of 6.50% senior secured notes due 2023, incurring a **$16.0 million** loss on senior note repurchase[39](index=39&type=chunk) - At September 30, 2021, the Company had **$30.0 million** in borrowings and **$10.7 million** in outstanding letters of credit under its **$100 million** revolving credit facility, with **$59.3 million** available for borrowing[41](index=41&type=chunk) [8. REDEEMABLE NONCONTROLLING INTEREST](index=15&type=section&id=8.%20REDEEMABLE%20NONCONTROLLING%20INTEREST) Redeemable noncontrolling interest of $25 million relates to an RDIF put option, with potential $25 million cash settlement if shares are not issued - The redeemable noncontrolling interest held by RDIF was recorded at **$25 million** as of September 30, 2021, representing the value of restricted common stock to be issued[47](index=47&type=chunk) - The issuance of **4,032,259** shares of restricted Titan common stock to RDIF is pending regulatory approval, and if not released by December 31, 2021, alternative settlement terms, including a **$25 million** cash payment, may be sought[44](index=44&type=chunk) [9. LEASES](index=16&type=section&id=9.%20LEASES) The company leases buildings and equipment, with operating lease assets and liabilities decreasing, and finance lease assets and liabilities increasing | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :-------------------------------- | :------------------------------- | | Operating lease ROU assets | $20,709 | $24,356 | | Total operating lease liabilities | $19,840 | $24,670 | | Finance lease, net | $3,597 | $3,506 | | Total finance lease liabilities | $4,995 | $2,680 | - The weighted average remaining lease term for operating leases is **4.16 years**, and for finance leases, it is **2.68 years**[50](index=50&type=chunk) - Operating cash flows from operating leases were **$2.4 million** and from finance leases were **$0.2 million** for the nine months ended September 30, 2021[50](index=50&type=chunk) [10. EMPLOYEE BENEFIT PLANS](index=17&type=section&id=10.%20EMPLOYEE%20BENEFIT%20PLANS) Net periodic pension cost significantly decreased, with the company contributing $0.8 million to pension plans during the period | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net periodic pension cost | $48 | $393 | $146 | $1,333 | - The Company contributed approximately **$0.8 million** to pension plans during the nine months ended September 30, 2021, and expects to contribute approximately **$0.4 million** for the remainder of 2021[51](index=51&type=chunk) [11. VARIABLE INTEREST ENTITIES](index=18&type=section&id=11.%20VARIABLE%20INTEREST%20ENTITIES) Consolidated VIE assets and liabilities remained stable, while maximum exposure to loss from non-consolidated VIEs slightly increased | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------- | :-------------------------------- | :------------------------------- | | Consolidated VIE Total assets | $12,211 | $11,939 | | Consolidated VIE Total liabilities | $2,336 | $3,743 | | Non-consolidated VIE Investments | $6,002 | $5,623 | | Maximum exposure to loss (non-consolidated VIEs) | $9,235 | $9,000 | [12. ASSET IMPAIRMENT](index=19&type=section&id=12.%20ASSET%20IMPAIRMENT) No asset impairment charges were recorded in 2021, contrasting with a $3.6 million charge in the prior year - No asset impairment charge was recorded for the three and nine months ended September 30, 2021[60](index=60&type=chunk) - For the nine months ended September 30, 2020, the Company recorded a **$3.6 million** asset impairment charge, including **$1.0 million** for inventory at Saltville, Virginia, and **$2.6 million** for TTRC machinery and equipment[60](index=60&type=chunk) [13. ROYALTY EXPENSE](index=19&type=section&id=13.%20ROYALTY%20EXPENSE) Royalty expenses increased, reflecting higher sales under trademark license agreements | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Royalty expenses | $2,805 | $2,434 | $7,915 | $7,309 | [14. OTHER INCOME](index=20&type=section&id=14.%20OTHER%20INCOME) Other income significantly decreased due to the absence of prior-year government subsidies, insurance settlements, and rental income | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Other income | $648 | $2,283 | $1,512 | $9,111 | - The decrease in other income for the three months ended September 30, 2021, was primarily due to the absence of **$0.9 million** in government subsidies and **$0.5 million** in building rental income from the Brownsville, Texas facility (sold in November 2020) present in the comparable 2020 period[63](index=63&type=chunk) - The decrease for the nine months ended September 30, 2021, was mainly due to the absence of **$4.9 million** from a property insurance settlement, **$1.4 million** in government subsidies, and **$1.2 million** in building rental income from the Brownsville, Texas facility in the comparable 2020 period[63](index=63&type=chunk) [15. INCOME TAXES](index=20&type=section&id=15.%20INCOME%20TAXES) Income tax expense and effective tax rate significantly increased due to improved foreign profitability and valuation allowances on deferred tax assets | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Provision for income taxes | $5,342 (in thousands) | $342 (in thousands) | $9,927 (in thousands) | $2,377 (in thousands) | | Effective income tax rate | 33.1% | (2.6)% | 31.5% | (5.5)% | - The year-to-date increase in income tax expense for the nine months ended September 30, 2021, is attributed to improved profitability in foreign jurisdictions[64](index=64&type=chunk) - The effective tax rates differed from the U.S. Federal income tax rate primarily due to full valuation allowances on deferred tax assets in the U.S. and certain foreign jurisdictions, partially offset by a reduction of unrecognized tax positions[65](index=65&type=chunk) [16. EARNINGS PER SHARE](index=21&type=section&id=16.%20EARNINGS%20PER%20SHARE) Basic and diluted EPS significantly improved, reflecting the company's return to profitability from prior-year losses | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) attributable to Titan | $11,187 (in thousands) | $(12,643) (in thousands) | $21,988 (in thousands) | $(43,174) (in thousands) | | Basic EPS | $0.18 | $(0.21) | $0.36 | $(0.71) | | Diluted EPS | $0.18 | $(0.21) | $0.35 | $(0.71) | | Weighted average shares outstanding (basic) | 62,340 (in thousands) | 60,926 (in thousands) | 61,844 (in thousands) | 60,630 (in thousands) | | Weighted average shares outstanding (diluted) | 62,601 (in thousands) | 60,926 (in thousands) | 62,523 (in thousands) | 60,630 (in thousands) | [17. LITIGATION](index=21&type=section&id=17.%20LITIGATION) The company settled a CERCLA legal proceeding for $11.5 million, with $9.0 million paid and the remainder accounted for as liabilities - In September 2020, an agreement was reached to settle the CERCLA legal proceeding, formalized in a Consent Decree on February 1, 2021[79](index=79&type=chunk) - The settlement prescribed total cash payments of **$11.5 million** to the federal government, with **$9.0 million** paid on February 25, 2021[79](index=79&type=chunk) - Remaining amounts of **$1.6 million** and **$1.2 million** (including accrued interest) are accounted for within other accrued liabilities and other long-term liabilities, respectively, as of September 30, 2021[79](index=79&type=chunk) [18. SEGMENT INFORMATION](index=23&type=section&id=18.%20SEGMENT%20INFORMATION) All three segments showed significant increases in net sales, gross profit, and income from operations, reflecting broad market recovery | Segment | 3 Months Ended Sep 30, 2021 (Net Sales in thousands) | 3 Months Ended Sep 30, 2020 (Net Sales in thousands) | 9 Months Ended Sep 30, 2021 (Net Sales in thousands) | 9 Months Ended Sep 30, 2020 (Net Sales in thousands) | | :------------------------ | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Agricultural | $244,373 | $153,067 | $684,636 | $473,272 | | Earthmoving/construction | $168,408 | $123,227 | $509,930 | $372,606 | | Consumer | $37,601 | $28,478 | $97,973 | $86,527 | | **Total Net Sales** | **$450,382** | **$304,772** | **$1,292,539** | **$932,405** | | | 3 Months Ended Sep 30, 2021 (Gross Profit in thousands) | 3 Months Ended Sep 30, 2020 (Gross Profit in thousands) | 9 Months Ended Sep 30, 2021 (Gross Profit in thousands) | 9 Months Ended Sep 30, 2020 (Gross Profit in thousands) | | Agricultural | $33,214 | $16,191 | $98,294 | $45,830 | | Earthmoving/construction | $21,263 | $12,409 | $63,333 | $34,777 | | Consumer | $5,815 | $2,717 | $13,400 | $7,821 | | **Total Gross Profit** | **$60,292** | **$31,317** | **$175,027** | **$88,428** | | | 3 Months Ended Sep 30, 2021 (Income (Loss) from Operations in thousands) | 3 Months Ended Sep 30, 2020 (Income (Loss) from Operations in thousands) | 9 Months Ended Sep 30, 2021 (Income (Loss) from Operations in thousands) | 9 Months Ended Sep 30, 2020 (Income (Loss) from Operations in thousands) | | Agricultural | $18,156 | $3,091 | $54,228 | $11,958 | | Earthmoving/construction | $7,913 | $656 | $20,950 | $(5,161) | | Consumer | $3,519 | $(88) | $7,067 | $912 | | Corporate & Unallocated | $(6,688) | $(10,467) | $(21,395) | $(27,221) | | **Total Income (Loss) from Operations** | **$22,900** | **$(6,808)** | **$60,850** | **$(19,512)** | | Segment | September 30, 2021 (Total Assets in thousands) | December 31, 2020 (Total Assets in thousands) | | :------------------------ | :-------------------------------- | :------------------------------- | | Agricultural | $494,117 | $420,993 | | Earthmoving/construction | $489,076 | $473,873 | | Consumer | $142,093 | $114,993 | | Corporate & Unallocated | $18,973 | $22,025 | | **Total Assets** | **$1,144,259** | **$1,031,884** | [19. RELATED PARTY TRANSACTIONS](index=24&type=section&id=19.%20RELATED%20PARTY%20TRANSACTIONS) Related party transactions significantly increased in sales, purchases, and commissions paid compared to the prior year | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Sales to related parties | $700 | $100 | $2,000 | $600 | | Purchases from related parties | $100 | $0 | $1,000 | $0 | | Sales commissions paid | $500 | $300 | $1,500 | $1,000 | - Trade receivables due from related parties were approximately **$0.3 million** at September 30, 2021, compared to **$0.1 million** at December 31, 2020[85](index=85&type=chunk) [20. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=24&type=section&id=20.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Accumulated other comprehensive loss increased due to negative currency translation adjustments, partially offset by pension and derivative gains | Metric | Balance January 1, 2021 (in thousands) | Balance September 30, 2021 (in thousands) | | :--------------------------------------- | :------------------------------------- | :-------------------------------------- | | Currency Translation Adjustments | $(194,151) | $(223,206) | | Gain (Loss) on Derivatives | $(413) | $(94) | | Unrecognized Losses and Prior Service Cost | $(22,690) | $(20,328) | | Total Accumulated Other Comprehensive Loss | $(217,254) | $(243,628) | - The increase in currency translation adjustments for the nine months ended September 30, 2021, was due to foreign currency rate fluctuations, legal entity rationalization, and intercompany capital structure management[88](index=88&type=chunk) [21. SUBSIDIARY GUARANTOR FINANCIAL INFORMATION](index=26&type=section&id=21.%20SUBSIDIARY%20GUARANTOR%20FINANCIAL%20INFORMATION) This note provides condensed consolidating financial statements for entities guaranteeing the 7.00% senior secured notes due 2028 - The 7.00% senior secured notes due 2028 are fully and unconditionally guaranteed, jointly and severally, by Titan Tire Corporation, Titan Tire Corporation of Bryan, Titan Tire Corporation of Freeport, and Titan Wheel Corporation of Illinois[91](index=91&type=chunk) [22. SUBSEQUENT EVENTS](index=29&type=section&id=22.%20SUBSEQUENT%20EVENTS) The company amended and extended its revolving credit facility, increasing it to $125 million and extending its maturity to October 2026 - On October 28, 2021, the **$100 million** revolving credit facility was amended and extended, increasing to **$125 million** and maturing on October 28, 2026[100](index=100&type=chunk) - The amended credit facility includes an accordion provision allowing for expansion by up to an additional **$50 million**[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operations, and liquidity, highlighting significant improvements in sales and profitability across segments, while addressing COVID-19 impacts [COVID-19 Pandemic](index=30&type=section&id=COVID-19%20Pandemic) The COVID-19 pandemic continued to impact operations, increasing costs and causing significant global supply chain constraints, creating ongoing uncertainty - The COVID-19 pandemic continued to have an impact on the Company in the third quarter of 2021, with increased operating costs due to additional sanitary and protective health measures[21](index=21&type=chunk)[103](index=103&type=chunk) - Global supply chains are experiencing significant constraints, including availability and pricing of raw materials, transportation, and labor, adding complexity to recovery and growth expectations[21](index=21&type=chunk)[125](index=125&type=chunk) - Certain geographies (Australia, Europe, Latin America) remain significantly impacted by the pandemic, and the full impact on economic conditions, customers, and the Company remains highly uncertain[21](index=21&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [FORWARD-LOOKING STATEMENTS](index=30&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section provides a cautionary statement on forward-looking statements, outlining risks from the COVID-19 pandemic, economic conditions, and operational factors - Forward-looking statements are based on current expectations and assumptions but are subject to risks and uncertainties, including the effect of the COVID-19 pandemic, a recession, changes in end-user markets, competitor actions, labor relations, regulatory compliance, raw material availability and price, and geopolitical uncertainties[106](index=106&type=chunk)[109](index=109&type=chunk) - Key areas of forward-looking statements include financial performance, anticipated business trends, end-user market expectations, capital expenditures, cost control, loan agreement compliance, business strategies, new product introductions, and acquisition/divestiture opportunities[106](index=106&type=chunk) [OVERVIEW](index=33&type=section&id=OVERVIEW) Titan International, Inc. is a global manufacturer of off-highway wheels, tires, and undercarriage products for agricultural, earthmoving, and consumer markets - Titan is a global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products[111](index=111&type=chunk) - The company serves agricultural, earthmoving/construction, and consumer markets, offering products under brands like Goodyear Farm Tire and Titan Tire[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - Top customers include global leaders such as AGCO Corporation, Caterpillar Inc., CNH Global N.V., Deere & Company, Hitachi, Ltd., Kubota Corporation, Liebherr, and Volvo[115](index=115&type=chunk) [MARKET CONDITIONS AND OUTLOOK](index=33&type=section&id=MARKET%20CONDITIONS%20AND%20OUTLOOK) Market conditions show positive trends across all segments, with strong growth in agricultural and earthmoving/construction, and a stabilized consumer market [AGRICULTURAL MARKET OUTLOOK](index=33&type=section&id=AGRICULTURAL%20MARKET%20OUTLOOK) The agricultural market outlook is positive, driven by improved commodity prices, higher farmer income, and the need to replace aging equipment and replenish inventory - Agriculture-related commodity prices improved in 2020 and continued to rise in the first three quarters of 2021, remaining at historically high levels[116](index=116&type=chunk) - Improved farmer income, replacement of aging large equipment, and replenishment of lower equipment inventory levels are expected to support increased demand for products[116](index=116&type=chunk) - Many customers are forecasting growth, indicating sustained market stability over the next few years[116](index=116&type=chunk) [EARTHMOVING/CONSTRUCTION MARKET OUTLOOK](index=33&type=section&id=EARTHMOVING/CONSTRUCTION%20MARKET%20OUTLOOK) The earthmoving/construction market shows strong growth, recovering from 2020 declines, driven by global economic emergence and low equipment inventory - The market is experiencing strong signs of continued growth as economies emerge from the pandemic[117](index=117&type=chunk) - Historically low equipment inventory levels throughout the global construction industry and rising mining capital budgets are supporting recovery and growth in 2021[117](index=117&type=chunk)[119](index=119&type=chunk) - Improvements in mineral commodity prices also currently support recovery and growth[119](index=119&type=chunk) [CONSUMER MARKET OUTLOOK](index=35&type=section&id=CONSUMER%20MARKET%20OUTLOOK) The consumer market stabilized in 2021 due to pent-up demand, with a slower recovery pace anticipated compared to other segments - The consumer market has stabilized through 2021 due to pent-up demand from historically lower sales volume achieved during 2020[120](index=120&type=chunk) - The pace of recovery in the consumer segment is anticipated to be slower than in the Agriculture and Earthmoving/Construction segments[120](index=120&type=chunk) [RESULTS OF OPERATIONS](index=35&type=section&id=RESULTS%20OF%20OPERATIONS) The company achieved substantial improvements in net sales, gross profit, and operating income, driven by increased volume, favorable price/mix, and cost reduction initiatives [Net Sales](index=35&type=section&id=Net%20Sales) Net sales significantly increased due to higher volume, favorable price/mix, positive foreign currency translation, and pricing increases to offset rising raw material costs | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Increase | | :---------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $450.4 million | $304.8 million | 47.8% | | Volume increase | 25.3% | N/A | N/A | | Price/mix increase | 21.3% | N/A | N/A | | FX impact | 1.2% ($3.7 million) | N/A | N/A | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Increase | | :---------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $1,292.5 million | $932.4 million | 38.6% | | Volume increase | 23.9% | N/A | N/A | | Price/mix increase | 14.0% | N/A | N/A | | FX impact | 0.7% ($6.2 million) | N/A | N/A | - The increase in net sales was driven by market growth in the agricultural and earthmoving/construction segments, pricing increases due to rising raw material and freight costs, and pent-up demand following the COVID-19 pandemic[124](index=124&type=chunk) [Gross Profit](index=37&type=section&id=Gross%20Profit) Gross profit and margin substantially increased due to higher sales volume impacting overhead absorption and successful cost reduction initiatives | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Increase | | :---------------- | :-------------------------- | :-------------------------- | :--------- | | Gross profit | $60.3 million | $31.3 million | 92.5% | | Gross profit % | 13.4% | 10.3% | 3.1 pp | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Increase | | :---------------- | :-------------------------- | :-------------------------- | :--------- | | Gross profit | $175.0 million | $88.4 million | 97.9% | | Gross profit % | 13.5% | 9.5% | 4.0 pp | - The increase in gross profit and margin was driven by the impact of increases in sales volume, favorably impacting overhead absorption, and cost reduction initiatives executed across global production facilities[128](index=128&type=chunk)[129](index=129&type=chunk) [Selling, General and Administrative Expenses](index=37&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) SG&A expenses decreased for three months due to a legal accrual, but increased for nine months due to supply chain investments and variable costs | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Change | | :---------------- | :-------------------------- | :-------------------------- | :------- | | SG&A expenses | $32.2 million | $33.5 million | (3.7)% | | SG&A % of net sales | 7.2% | 11.0% | (3.8) pp | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Change | | :---------------- | :-------------------------- | :-------------------------- | :------- | | SG&A expenses | $98.8 million | $93.8 million | 5.3% | | SG&A % of net sales | 7.6% | 10.1% | (2.5) pp | - The decrease in SG&A for the three months was primarily due to a **$5.0 million** contingent legal accrual recorded in the comparable prior-year period for the Dico case[130](index=130&type=chunk) - The increase in SG&A for the nine months was driven by investments to improve supply chain and logistics processes and an increase in variable costs associated with improved operating performance and sales growth[131](index=131&type=chunk) [Research and Development Expenses](index=37&type=section&id=Research%20and%20Development%20Expenses) R&D expenses slightly increased, reflecting product design improvements and quality focus, following prior-year pandemic-related reductions | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Change | | :---------------- | :-------------------------- | :-------------------------- | :------- | | R&D expenses | $2.4 million | $2.2 million | 5.8% | | R&D % of net sales | 0.5% | 0.7% | (0.2) pp | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Change | | :---------------- | :-------------------------- | :-------------------------- | :------- | | R&D expenses | $7.5 million | $6.8 million | 9.9% | | R&D % of net sales | 0.6% | 0.7% | (0.1) pp | - R&D spending reflects initiatives to improve product designs and an ongoing focus on quality, following reductions during the onset of the COVID-19 pandemic in the comparable periods of 2020[132](index=132&type=chunk) [Royalty Expense](index=37&type=section&id=Royalty%20Expense) Royalty expenses increased, directly correlating with higher sales under trademark license agreements | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Change | | :---------------- | :-------------------------- | :-------------------------- | :------- | | Royalty expenses | $2.8 million | $2.4 million | 15.2% | | Royalty % of net sales | 0.6% | 0.8% | (0.2) pp | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Change | | :---------------- | :-------------------------- | :-------------------------- | :------- | | Royalty expenses | $7.9 million | $7.3 million | 8.3% | | Royalty % of net sales | 0.6% | 0.8% | (0.2) pp | - The increase in royalty expenses is due to the increase in sales, resulting in an incremental increase in the amount of royalty expense incurred[134](index=134&type=chunk) [Income (Loss) from Operations](index=37&type=section&id=Income%20(Loss)%20from%20Operations) The company achieved a significant turnaround from prior-year operating losses to substantial operating income, driven by higher sales and improved gross profit | Metric | 3 Months Ended Sep 30, 2021 (in millions) | 3 Months Ended Sep 30, 2020 (in millions) | % Change | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | | Income (loss) from operations | $22.9 | $(6.8) | 436.4% | | Metric | 9 Months Ended Sep 30, 2021 (in millions) | 9 Months Ended Sep 30, 2020 (in millions) | % Change | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | | Income (loss) from operations | $60.9 | $(19.5) | 411.9% | - The increase in income from operations was primarily due to higher sales and improvements in gross profit margins[135](index=135&type=chunk) [OTHER PROFIT/LOSS ITEMS](index=37&type=section&id=OTHER%20PROFIT/LOSS%20ITEMS) This section details changes in non-operating items, including increased interest expense, a loss on senior note repurchase, foreign exchange gain, and decreased other income [Interest Expense](index=37&type=section&id=Interest%20Expense) Interest expense slightly increased due to refinancing senior secured notes at a higher interest rate | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Interest expense | $7,818 | $7,251 | $23,939 | $23,076 | - Interest expense increased due to the refinancing of the senior secured notes during the second quarter of 2021, resulting in an increase in the interest rate from **6.50%** to **7.00%**[136](index=136&type=chunk) [Loss on Senior Note Repurchase](index=38&type=section&id=Loss%20on%20Senior%20Note%20Repurchase) A **$16.0 million** loss on senior note repurchase was recorded from the redemption of **$400.0 million** principal of 6.50% senior secured notes - A loss on senior note repurchase of **$16.0 million** was recorded for the nine months ended September 30, 2021[138](index=138&type=chunk) - This loss was incurred in connection with the Company's call and redemption of its outstanding **$400.0 million** principal amount of 6.50% senior secured notes due 2023 during the second quarter of 2021[138](index=138&type=chunk) [Foreign Exchange Gain (Loss)](index=38&type=section&id=Foreign%20Exchange%20Gain%20(Loss)) The company experienced a foreign exchange gain, a significant improvement from prior-year losses, driven by legal entity rationalization and favorable exchange rates | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Foreign exchange gain (loss) | $416 | $(1,336) | $9,125 | $(9,742) | - The foreign exchange gain in 2021 was primarily the result of the closeout of certain legal entities as part of an ongoing initiative to rationalize Titan's legal entity structure, ongoing management of the intercompany capital structure, and favorable exchange rate movements[140](index=140&type=chunk) [Other Income](index=38&type=section&id=Other%20Income) Other income decreased due to the absence of prior-year government subsidies, insurance settlement proceeds, and rental income | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Other income | $648 | $2,283 | $1,512 | $9,111 | - The decrease in other income for the three months ended September 30, 2021, was primarily attributable to **$0.9 million** of government subsidies and **$0.5 million** of building rental income in the comparable 2020 period[142](index=142&type=chunk) - The decrease for the nine months ended September 30, 2021, was primarily due to **$4.9 million** from a property insurance settlement, **$1.4 million** of government subsidies, and **$1.2 million** of building rental income in the comparable 2020 period[143](index=143&type=chunk) [Provision for Income Taxes](index=38&type=section&id=Provision%20for%20Income%20Taxes) Income tax expense and effective tax rate significantly increased due to improved foreign profitability and valuation allowances on deferred tax assets | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Income tax expense | $5,342 (in thousands) | $342 (in thousands) | $9,927 (in thousands) | $2,377 (in thousands) | | Effective income tax rate | 33.1% | (2.6)% | 31.5% | (5.5)% | - The year-to-date increase in income tax expense for the nine months ended September 30, 2021, is due to improved profitability in foreign jurisdictions[144](index=144&type=chunk) - The effective tax rates differed from the U.S. Federal income tax rate primarily due to full valuation allowances on deferred tax assets in the U.S. and certain foreign jurisdictions, and non-deductible royalty expenses[145](index=145&type=chunk) [Net Income (Loss) and Income (Loss) per Share](index=40&type=section&id=Net%20Income%20(Loss)%20and%20Income%20(Loss)%20per%20Share) The company achieved a significant turnaround from prior-year net losses to net income, resulting in positive basic and diluted earnings per share | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income (loss) | $10,804 (in thousands) | $(13,454) (in thousands) | $21,601 (in thousands) | $(45,596) (in thousands) | | Basic income (loss) per share | $0.18 | $(0.21) | $0.36 | $(0.71) | | Diluted income (loss) per share | $0.18 | $(0.21) | $0.35 | $(0.71) | [Segment Summary](index=40&type=section&id=Segment%20Summary) This table provides a consolidated view of net sales, gross profit, and operating income across all segments, demonstrating overall improved performance | Segment | 3 Months Ended Sep 30, 2021 (Net Sales in thousands) | 3 Months Ended Sep 30, 2020 (Net Sales in thousands) | 9 Months Ended Sep 30, 2021 (Net Sales in thousands) | 9 Months Ended Sep 30, 2020 (Net Sales in thousands) | | :------------------------ | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Agricultural | $244,373 | $153,067 | $684,636 | $473,272 | | Earthmoving/construction | $168,408 | $123,227 | $509,930 | $372,606 | | Consumer | $37,601 | $28,478 | $97,973 | $86,527 | | **Total Net Sales** | **$450,382** | **$304,772** | **$1,292,539** | **$932,405** | | | 3 Months Ended Sep 30, 2021 (Income (Loss) from Operations in thousands) | 3 Months Ended Sep 30, 2020 (Income (Loss) from Operations in thousands) | 9 Months Ended Sep 30, 2021 (Income (Loss) from Operations in thousands) | 9 Months Ended Sep 30, 2020 (Income (Loss) from Operations in thousands) | | Agricultural | $18,156 | $3,091 | $54,228 | $11,958 | | Earthmoving/construction | $7,913 | $656 | $20,950 | $(5,161) | | Consumer | $3,519 | $(88) | $7,067 | $912 | | Corporate & Unallocated | $(6,688) | $(10,467) | $(21,395) | $(27,221) | | **Total Income (Loss) from Operations** | **$22,900** | **$(6,808)** | **$60,850** | **$(19,512)** | [Agricultural Segment Results](index=42&type=section&id=Agricultural%20Segment%20Results) The Agricultural segment experienced robust growth in net sales, gross profit, and operating income, driven by strong market demand, increased volume, and favorable price/mix | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Increase | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $244.4 million | $153.1 million | 59.7% | | Gross profit | $33.2 million | $16.2 million | 105.1% | | Profit margin | 13.6% | 10.6% | 28.3% | | Income from operations | $18.2 million | $3.1 million | 487.4% | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Increase | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $684.6 million | $473.3 million | 44.7% | | Gross profit | $98.3 million | $45.8 million | 114.5% | | Profit margin | 14.4% | 9.7% | 48.5% | | Income from operations | $54.2 million | $12.0 million | 353.5% | - Net sales volume and product price/mix were up **36.4%** and **23.0%** respectively for the three months, and **28.4%** and **17.9%** respectively for the nine months, driven by improved farmer income, equipment replacement, and lower equipment inventory levels[152](index=152&type=chunk)[155](index=155&type=chunk) - Pricing increases reflect rising raw material and other inflationary costs, including freight[152](index=152&type=chunk)[155](index=155&type=chunk) [Earthmoving/Construction Segment Results](index=43&type=section&id=Earthmoving/Construction%20Segment%20Results) The Earthmoving/Construction segment showed strong recovery with significant increases in net sales, gross profit, and operating income, driven by improved economic conditions and efficiencies | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Increase | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $168.4 million | $123.2 million | 36.7% | | Gross profit | $21.3 million | $12.4 million | 71.4% | | Profit margin | 12.6% | 10.1% | 24.8% | | Income (loss) from operations | $7.9 million | $0.7 million | 1106.3% | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Increase | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $509.9 million | $372.6 million | 36.9% | | Gross profit | $63.3 million | $34.8 million | 82.1% | | Profit margin | 12.4% | 9.3% | 33.3% | | Income (loss) from operations | $21.0 million | $(5.2) million | 505.9% | - Sales increases were driven by increased volume and product price/mix (**15.8%** and **18.8%** for three months; **23.8%** and **8.9%** for nine months), reflecting improvements in global economic conditions and construction markets[160](index=160&type=chunk)[163](index=163&type=chunk) - The segment also benefited from improved production efficiencies and cost containment measures[161](index=161&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Consumer Segment Results](index=45&type=section&id=Consumer%20Segment%20Results) The Consumer segment reported increased net sales, gross profit, and operating income, primarily due to favorable product price/mix and volume | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | % Increase | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $37.6 million | $28.5 million | 32.0% | | Gross profit | $5.8 million | $2.7 million | 114.0% | | Profit margin | 15.5% | 9.5% | 63.2% | | Income (loss) from operations | $3.5 million | $(0.1) million | (4098.9)% | | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | % Increase | | :-------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net sales | $98.0 million | $86.5 million | 13.2% | | Gross profit | $13.4 million | $7.8 million | 71.3% | | Profit margin | 13.7% | 9.0% | 52.2% | | Income (loss) from operations | $7.1 million | $0.9 million | 674.9% | - The increase in net sales was driven by favorable product price/mix (**22.5%** for three months; **13.1%** for nine months) and volume impact (**6.8%** for three months; **0.7%** for nine months)[169](index=169&type=chunk)[171](index=171&type=chunk) - The nine-month net sales increase was partially offset by unfavorable foreign currency impacts of **1.6%**, primarily due to the devaluation of Latin American currencies against the US Dollar[171](index=171&type=chunk) [Corporate & Unallocated Expenses](index=45&type=section&id=Corporate%20%26%20Unallocated%20Expenses) Corporate & Unallocated expenses decreased due to changes in certain corporate SG&A expenses | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Corporate & Unallocated loss | $(6,688) | $(10,467) | $(21,395) | $(27,221) | - The year-over-year change is related to the increase in certain corporate SG&A expenses, which were not allocated[173](index=173&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=46&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity decreased due to cash used in operating and investing activities, offset by financing, but management anticipates sufficient liquidity from cash and credit facilities [Cash Flows](index=46&type=section&id=Cash%20Flows) Cash and cash equivalents decreased by **$22.8 million**, reflecting the net impact of operating, investing, and finan

Titan International, Inc. (NYSE:TWI) Q2 2021 Earnings Conference Call July 29, 2021 9:00 AM ET Company Participants Todd Shoot - Senior Vice President, Investor Relations & Treasurer Paul Reitz - President & Chief Executive Officer David Martin - Senior Vice President & Chief Financial Officer Conference Call Participants Steve Ferazani - Sidoti Kirk Ludtke - Imperial Capital Alex Blanton - Clear Harbor Asset Management Brian DiRubbio - Baird Operator Good morning, ladies and gentlemen and welcome to the Ti ...

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Washington, D.C. 20549 UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q For the Quarterly Period Ended: June 30, 2021 (State or other jurisdiction of incorporation or organization) or 1525 Kautz Road, Suite 600, West Chicago, IL (Address of principal executive offices) 36-3228472 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (I.R.S. Employer Identification No.) Com ...

Titan International, Inc. (NYSE:TWI) Q1 2021 Earnings Conference Call May 6, 2021 9:00 AM ET Company Participants Todd Shoot - Senior Vice President, Investor Relations and Treasurer Paul Reitz - President and Chief Executive Officer David Martin - Senior Vice President and Chief Financial Officer Conference Call Participants Steve Ferazani - Sidoti Larry De Maria - William Blair Alex Blanton - Clear Harbor Asset Management Steve Ferazani - Sidoti Operator Good morning, ladies and gentlemen and welcome to t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (State or other jurisdiction of incorporation or organization) 2701 Spruce Street, Quincy, IL FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-12936 TITAN INTERNATIONAL, INC. (Exact name of registrant as specified in its ch ...

Titan International, Inc. (NYSE:TWI) Q4 2020 Results Conference Call March 4, 2021 9:00 AM ET Company Participants Todd Shoot - SVP, IR & Treasurer Paul Reitz - CEO, President & Director David Martin - SVP & CFO Conference Call Participants Steve Volkman - Jefferies Steve Ferazani - Sidoti Larry De Maria - William Blair Kirk Ludtke - Imperial Capital Operator Good morning, ladies and gentlemen, and welcome to the Titan International, Inc. Fourth Quarter 2020 Earnings Conference Call. At this time, all parti ...

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the fiscal year ended December 31, 2020 FORM 10-K (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 2701 Spruce Street, Quincy, IL 62301 (Address of principal executive offices) (217) 228-6011 (Registrant's telephone number, including area code ...

Financial Data and Key Metrics Changes - Titan International reported a 12% decrease in net sales compared to the previous year, with a decline of $41 million [10][34] - Adjusted EBITDA increased to $14.2 million, marking an improvement over both the previous year's third quarter and the second quarter of this year [13][31] - Gross margin percentage improved by 250 basis points to 10.3% from 7.8% in the prior year [12][42] - Operating cash flow was strong at $42 million, contributing to a cash balance of nearly $99 million, the highest since mid-2018 [31][56] Business Line Data and Key Metrics Changes - The Agriculture segment saw net sales decline by $3.6 million or 2.3%, but organic growth was 6% [36][43] - Earthmoving and Construction segment sales decreased by 19%, with a gross profit margin improvement to 10% from 8.3% [22][49] - Consumer segment net sales fell by 15%, primarily due to a 20.8% volume decrease in North America [51] Market Data and Key Metrics Changes - North American agricultural sentiment reached a five-year high, driven by favorable commodity prices and low inventory levels [17][78] - Latin American operations faced challenges due to currency devaluation, but sales volume increased by 29% on a constant currency basis [39][20] - Russian sales were down 13% due to currency headwinds, but volume and pricing were slightly favorable [40] Company Strategy and Development Direction - The company is focused on managing its balance sheet and operational aspects to navigate through the pandemic and position for future growth [26][27] - Titan plans to continue product development and innovation to drive new business in 2021 [25][100] - The company is evaluating noncore assets for potential sales to improve financial flexibility [81][82] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding market recovery, particularly in agriculture, despite concerns over COVID-19 [16][72] - The company anticipates full-year adjusted EBITDA to exceed 2019 levels, projecting between $40 million to $44 million [15] - Management highlighted the importance of government support for agriculture and infrastructure as a stabilizing factor [88][89] Other Important Information - SG&A expenses were reduced by over 12%, excluding a $5 million legal accrual related to a long-standing case [12][52] - The company expects capital expenditures to increase next year as market conditions improve [60] Q&A Session Summary Question: Guidance for Q4 and seasonality impacts - Management indicated that the guidance reflects traditional seasonality, particularly in the Earthmoving segment [69] Question: Impact of the pandemic on European operations - Management is closely monitoring operations in Europe, which are currently running smoothly despite lockdowns [70][74] Question: Farmer sentiment metrics and outlook for agriculture - Management measures sentiment through various services and polls, noting low inventory levels as a key driver for optimism [75][78] Question: Noncore asset sales and future cash flow - Management confirmed ongoing evaluations of noncore assets beyond the current $16 million to $20 million expected in Q4 [81][82] Question: Update on initiatives to boost utilization rates - Management confirmed that improving capacity utilization remains a priority, with ongoing evaluations of product lines [95] Question: Update on LSW product performance - Management reported that LSW has significantly impacted the agricultural industry, with strong sales directly to dealers [97][100]

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited financial statements, management's analysis of financial condition and operations, market risk disclosures, and internal controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited financial statements for Q3 2020 show decreased net sales, increased net loss, reduced assets and equity, improved operating cash flow, and a dividend suspension [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's net sales, gross profit, operating loss, and net loss for the three and nine months ended September 30, 2020 and 2019 Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $304,772 | $345,905 | $932,405 | $1,146,876 | | **Gross profit** | $31,317 | $27,100 | $88,428 | $110,672 | | **Loss from operations** | $(6,808) | $(12,616) | $(19,512) | $(10,910) | | **Net loss attributable to Titan** | $(12,643) | $(19,144) | $(43,174) | $(23,590) | | **Loss per common share (Basic & Diluted)** | $(0.21) | $(0.33) | $(0.71) | $(0.43) | - The company **suspended its quarterly common stock dividend** in June 2020, after paying **$0.005 per share** in Q1 2020[24](index=24&type=chunk) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, as of September 30, 2020, and December 31, 2019 Balance Sheet Highlights (in thousands) | Account | Sep 30, 2020 (unaudited) | Dec 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $638,415 | $651,465 | | **Total assets** | $1,016,347 | $1,114,307 | | **Total current liabilities** | $315,254 | $327,153 | | **Total liabilities** | $822,137 | $850,319 | | **Total equity** | $169,210 | $238,988 | - **Cash and cash equivalents increased to $98.8 million** as of September 30, 2020, from **$66.8 million** at December 31, 2019[14](index=14&type=chunk) - **Inventories decreased to $284.2 million** from **$333.4 million**, with long-term debt remaining stable at **$431.8 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the cash flows from operating, investing, and financing activities for the nine months ended September 30, 2020 and 2019 Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $47,431 | $31,212 | | **Net cash provided by (used for) investing activities** | $25,364 | $(96,622) | | **Net cash (used for) provided by financing activities** | $(33,936) | $63,956 | | **Net increase (decrease) in cash** | $31,973 | $(3,082) | - Investing cash flow significantly improved due to the **sale of Wheels India Limited shares for $32.9 million** in 2020, contrasting with a **$71.7 million payment** in 2019[18](index=18&type=chunk) - **Capital expenditures were reduced to $13.4 million** in the first nine months of 2020 from **$26.3 million** in the prior year period[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides additional details on the financial statements, including impacts of COVID-19, asset impairments, debt changes, and legal proceedings - The COVID-19 pandemic significantly impacted operations from March through May 2020, particularly in Europe and Latin America, leading to curtailed production and increased operating costs[21](index=21&type=chunk) - The company recorded a **$2.6 million asset impairment charge** for TTRC equipment and a **$1.0 million inventory impairment** for its Saltville, Virginia operations closure[36](index=36&type=chunk)[71](index=71&type=chunk) - **Total debt decreased from $499.7 million to $464.4 million**, with the **$36.0 million revolving credit facility fully paid down**[44](index=44&type=chunk)[188](index=188&type=chunk) - A tentative settlement in the Dico environmental litigation case involves a proposed **$11.5 million payment**, with an incremental **$5.0 million accrual** in Q3 2020[89](index=89&type=chunk)[91](index=91&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2020 net sales decline due to COVID-19 and market slowdowns, improved gross profit from cost reductions, and sufficient liquidity despite an uncertain outlook [Market Conditions and Outlook](index=36&type=section&id=Market%20Conditions%20and%20Outlook) This section discusses the uncertain market outlook due to COVID-19, recent improvements in agricultural demand, and continued declines in the earthmoving/construction sector - The outlook for the remainder of 2020 remains uncertain due to the ongoing COVID-19 pandemic, despite operations resuming after significant curtailment from March to May[116](index=116&type=chunk)[131](index=131&type=chunk) - Agricultural market demand has somewhat increased with improved commodity prices, though major OEMs reduced production, and small equipment sales are rebounding faster[133](index=133&type=chunk) - The earthmoving/construction market continues to decline due to global economic uncertainty and COVID-19, with demand for mining and large construction equipment softening since 2019[134](index=134&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) This section analyzes the company's net sales, gross profit, and operating expenses for the three months ended September 30, 2020, compared to the prior year Key Operating Results (in thousands) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $304,772 | $345,905 | (11.9)% | | **Gross profit** | $31,317 | $27,100 | 15.6% | | **Loss from operations** | $(6,808) | $(12,616) | (46.0)% | - Q3 2020 net sales decreased **11.9% YoY**, driven by a **9.7% volume decline** and **5.8% negative currency impact**, with COVID-19 reducing sales by approximately **$8 million**[139](index=139&type=chunk) - Q3 gross profit margin improved to **10.3% from 7.8% YoY**, despite lower sales, due to cost reduction initiatives and lower raw material prices[141](index=141&type=chunk) - Q3 SG&A expenses decreased to **$33.5 million** from **$35.0 million**, impacted by a **$5.0 million contingent legal accrual** for the Dico case[144](index=144&type=chunk) [Segment Information](index=42&type=section&id=Segment%20Information) This section provides a breakdown of net sales and operating income by Agricultural, Earthmoving/Construction, and Consumer segments for Q3 2020 and 2019 Net Sales by Segment - Q3 2020 vs Q3 2019 (in thousands) | Segment | Q3 2020 Net Sales | Q3 2019 Net Sales | % Change | | :--- | :--- | :--- | :--- | | Agricultural | $153,067 | $156,625 | (2.3)% | | Earthmoving/construction | $123,227 | $155,659 | (20.8)% | | Consumer | $28,478 | $33,621 | (15.3)% | Income (Loss) from Operations by Segment - Q3 2020 vs Q3 2019 (in thousands) | Segment | Q3 2020 Income (Loss) | Q3 2019 Income (Loss) | | :--- | :--- | :--- | | Agricultural | $3,091 | $(1,230) | | Earthmoving/construction | $656 | $(2,938) | | Consumer | $(88) | $(229) | - The Agricultural segment's Q3 operating income significantly improved due to higher gross profit from production efficiencies and lower material costs, despite a slight sales decline[165](index=165&type=chunk)[166](index=166&type=chunk) - The Earthmoving/Construction segment experienced a **20.8% drop in Q3 sales** but improved operating income to a **$0.7 million profit** from a **$2.9 million loss** YoY due to cost containment[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's liquidity position, including cash balances, operating cash flow, available credit, and planned capital expenditures - As of September 30, 2020, the company held **$98.8 million in cash and cash equivalents**, an increase of **$32.0 million** from year-end 2019[183](index=183&type=chunk)[192](index=192&type=chunk) - Cash from operations for the first nine months of 2020 was **$47.4 million**, an improvement from **$31.2 million** YoY, primarily due to a **$36.7 million reduction in inventories**[183](index=183&type=chunk) - The company had **$61.4 million available** under its **$125 million revolving credit facility** as of September 30, 2020, with no outstanding borrowings[192](index=192&type=chunk) - Management expects full-year 2020 capital expenditures to be approximately **$20 million**, a reduction aimed at preserving cash due to COVID-19 impacts[193](index=193&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states there have been no material changes in its market risk disclosures since its 2019 Form 10-K report - No material changes have occurred in quantitative and qualitative market risk disclosures since the 2019 Annual Report on Form 10-K[198](index=198&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2020. No material changes to internal control over financial reporting occurred during the third quarter of 2020 - Management concluded the company's disclosure controls and procedures were effective as of September 30, 2020[199](index=199&type=chunk) - No material changes to internal control over financial reporting occurred during Q3 2020[200](index=200&type=chunk) [Part II. Other Information](index=51&type=section&id=Part%20II.%20Other%20Information) This section addresses legal proceedings, updated risk factors, and a list of exhibits filed with the report [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings. Specific details regarding ongoing litigation, particularly environmental matters, are referenced in Note 17 of the financial statements - The company is subject to various legal proceedings, including environmental and product liability issues, with details referenced in Note 17 of the financial statements[205](index=205&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) The company highlights the ongoing adverse impact of the COVID-19 pandemic as a significant risk factor. This includes disruptions to operations, unpredictable product demand, and potential negative effects on economic growth and financial markets, which could heighten other existing business risks - A new risk factor details the adverse impacts of the COVID-19 pandemic on the company's business, operating results, and financial condition[206](index=206&type=chunk)[207](index=207&type=chunk) - The pandemic has caused and may continue to cause unpredictable disruptions in product demand, operational activities, and customer collections, with uncertain duration and impact[207](index=207&type=chunk)[208](index=208&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL data files - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[212](index=212&type=chunk) - The filing also includes various Inline XBRL taxonomy documents for financial data reporting[212](index=212&type=chunk)