Titan International(TWI) - 2023 Q2 - Quarterly Report

Financial Performance - Net sales for Q2 2023 were $481,176, a decrease of 16% from $572,895 in Q2 2022[8] - Gross profit for Q2 2023 was $85,895, down 22% from $109,653 in Q2 2022[8] - Net income for Q2 2023 was $31,895, a decline of 54% compared to $68,921 in Q2 2022[9] - Comprehensive income attributable to Titan for Q2 2023 was $32,503, compared to $49,112 in Q2 2022[9] - Net income for the six months ended June 30, 2023, was $65,325,000, compared to $93,499,000 for the same period in 2022, representing a decrease of approximately 30%[16] - Earnings per share (EPS) for the three months ended June 30, 2023, were $0.48, a decrease from $1.07 in the same period of 2022[70] - Net income for Q2 2023 was $31.9 million, a decrease of $37.0 million from $68.9 million in Q2 2022, with basic income per share dropping from $1.07 to $0.48[134] Expenses and Costs - Research and development expenses increased to $3,218 in Q2 2023, up 44% from $2,238 in Q2 2022[8] - Selling, general and administrative expenses for Q2 2023 were $34.9 million, or 7.2% of net sales, slightly up from $34.7 million, or 6.1% of net sales in Q2 2022[116] - Interest expense for Q2 2023 was $5.8 million, down from $7.7 million in Q2 2022, due to reduced borrowing under global credit facilities[124] - The effective income tax rate for Q2 2023 was 22.8%, compared to 21.6% in Q2 2022, influenced by a decrease in overall pre-tax income[131] Assets and Liabilities - Total assets as of June 30, 2023, were $1,305,151, compared to $1,284,630 as of June 30, 2022[12] - Titan's shareholders' equity increased to $450,098 as of June 30, 2023, up from $381,236 a year earlier[12] - Titan's total current liabilities decreased to $403,246 as of June 30, 2023, from $446,161 a year earlier[12] - Total liabilities of the variable interest entities were $3,023,000 as of June 30, 2023, compared to $3,139,000 at the end of 2022[54] - The company’s total current assets were reported at $101.8 million, while total current liabilities were $82.3 million as of June 30, 2023[172] Cash Flow and Investments - Cash flows from operating activities for the six months ended June 30, 2023, increased to $88,890,000 from $48,918,000 in 2022, indicating a significant improvement in operational cash generation[16] - The company had $196.5 million in cash as of June 30, 2023, an increase from $159.6 million at the end of 2022[162] - Net cash used for investing activities was $27.3 million in the first six months of 2023, compared to $9.9 million in the same period of 2022, reflecting increased capital expenditures[166] - The company expects full-year capital expenditures to be approximately $55 million to $60 million, primarily for enhancing existing facilities and new product development[175] Market and Segment Performance - Agricultural segment net sales for Q2 2023 were $269.1 million, a 15.5% decrease from $318.6 million in Q2 2022, primarily due to lower sales volume in North America and Latin America[139] - Earthmoving/construction segment net sales were $174.7 million for the three months ended June 30, 2023, a decrease of 17.0% compared to $210.4 million in the same period of 2022[146] - Consumer segment net sales were $37.3 million for the three months ended June 30, 2023, a decrease of 15.0% compared to $43.9 million in the same period of 2022[154] - The agricultural market outlook indicates continued healthy demand supported by high commodity prices and farmer income, despite concerns over OEM customer demand due to elevated inventory levels[106] - The earthmoving/construction segment is expected to recover over the mid to long term, driven by mining capital budgets and GDP growth, despite a slowdown in OEM demand in Q2 2023[107] Shareholder Actions - The company repurchased 603,068 shares of its common stock totaling $6.4 million during the six months ended June 30, 2023, with $43.6 million remaining available for future repurchases under the authorized program[23] - The company repurchased a total of 493,279 shares of its common stock during the three months ended June 30, 2023, with approximately $43.6 million remaining for future repurchases[186] Foreign Operations and Risks - The company’s Russian operations represented approximately 7% of consolidated global sales for the three months ended June 30, 2023, consistent with the previous year[21] - The company has stopped any additional investments into its joint project in Russia due to ongoing sanctions[87] - The impact of the military conflict between Russia and Ukraine has not significantly affected global operations[86] - The company continues to monitor potential impacts on business operations, including increased energy costs and supply chain disruptions[88]