Titan Machinery Inc. Announces Results for Fiscal Fourth Quarter and Full Year Ended January 31, 2025

Core Insights - Titan Machinery Inc. reported a significant inventory reduction of approximately $304 million in the fiscal fourth quarter, totaling$419 million since the peak in the fiscal second quarter [1][3] - Service revenue increased by 14.5% for the full fiscal year 2025, or 7.1% on a same-store basis [1][3] - The company provided modeling assumptions for fiscal 2026, anticipating a decline in demand for North American large agriculture equipment by approximately 30% year-over-year [17][18] Financial Performance - For the fourth quarter of fiscal 2025, total revenue was $759.9 million, down from$852.1 million in the same quarter last year [4] - Equipment revenue decreased to $621.8 million from$714.0 million year-over-year, while parts revenue slightly declined to $89.3 million from$90.8 million [4] - Gross profit for the fourth quarter was $51.0 million, a significant drop from$141.0 million in the previous year, resulting in a gross profit margin of 6.7% compared to 16.6% [5] Operating Expenses and Losses - Operating expenses were $96.7 million for the fourth quarter, down from$100.3 million year-over-year, but operating expense as a percentage of revenue increased to 12.7% from 11.8% [6] - The company reported a net loss of $43.8 million for the fourth quarter, compared to a net income of$24.0 million in the same period last year [8] - Adjusted EBITDA was negative $46.0 million, contrasting with positive EBITDA of$45.3 million in the fourth quarter of the previous year [9] Segment Performance - The Agriculture segment's revenue for the fourth quarter was $534.7 million, down from$620.6 million, reflecting a same-store sales decrease of 15.5% [10] - The Construction segment's revenue decreased to $94.6 million from$100.1 million, with a same-store sales decrease of 5.5% [11] - The Europe segment saw revenue increase to $65.4 million from$61.6 million, while the Australia segment's revenue decreased to $65.3 million from$69.8 million [12][13] Full Year Results - For fiscal 2025, total revenue was $2.7 billion, down from$2.8 billion in fiscal 2024, with a net loss of $36.9 million compared to a net income of$112.4 million in the prior year [14] - Adjusted net loss for fiscal 2025 was $29.7 million, or$1.31 loss per diluted share [14] - The company generated adjusted EBITDA of $12.8 million in fiscal 2025, a significant decrease from$189.3 million in fiscal 2024 [14] Balance Sheet and Cash Flow - Cash at the end of the fourth quarter was $35.9 million, with inventories at$1.1 billion, down approximately $419 million from the peak inventory of$1.5 billion [15] - Net cash provided by operating activities was $70.3 million for fiscal 2025, compared to net cash used of$32.3 million in fiscal 2024 [16] 2026 Modeling Assumptions - The company expects segment revenue for fiscal 2026 to decline, with Agriculture down 20% to 25%, Construction down 5% to 10%, Europe flat to up 5%, and Australia down 15% to 20% [20] - Adjusted diluted loss per share is projected to be between $1.25 and$2.00 [20]