Titan International (TWI) Q1 2025 Earnings Call May 01, 2025 09:00 AM ET Company Participants Alan Snyder - VP of Financial Planning & Investor RelationsPaul Reitz - CEO & PresidentDavid Martin - Senior VP & CFO Conference Call Participants Michael Shlisky - Managing Director & Senior Equity Research AnalystSteve Ferazani - Senior Equity Analyst - Diversified Industrials & EnergyDerek Soderberg - Director, Senior Equity Research AnalystThomas Kerr - Senior Analyst Operator Good morning all and thank you for ...

Financial Data and Key Metrics Changes - Revenues for Q1 were reported at $491 million, with adjusted EBITDA of $31 million, marking a sequential improvement from the previous quarter [22] - Gross margin increased to 14% in Q1 from 10.7% in Q4, indicating positive leverage from increased sales [22] - SG&A expenses for Q1 were $49.9 million, representing 10% of sales, compared to $39 million or 8% of sales in the prior year [23] Business Line Data and Key Metrics Changes - Agricultural segment gross margins were 12.4%, EMC at 10.4%, and consumer segment at 19.6%, with the consumer segment continuing to be the most profitable due to a higher proportion of aftermarket sales [22][23] - Overall agriculture orders remained muted, but there was positive OEM activity in the U.S. despite a key customer experiencing a drop in orders [10][11] Market Data and Key Metrics Changes - In Brazil, business has strengthened since Q4, with farmers benefiting from the U.S. trade standoff by increasing exports to China [12] - European operations are currently impacted by the situation in Ukraine, but investments in Turkey are expected to improve capacity and lower costs [13] Company Strategy and Development Direction - The company is focusing on internal growth initiatives, including new product development and revenue synergies across segments [17] - Expansion of Goodyear licensing rights into new product segments is expected to enhance market presence and sales [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market volatility and emphasized the importance of a diversified global business model [5][6] - The company anticipates that the tariffs will ultimately benefit them in the long term, despite short-term uncertainties [6][21] Other Important Information - The company plans to curtail capital investments in 2025 while focusing on key investments that drive growth [25] - Net debt at the end of the quarter was $411 million, representing 3.8 times trailing twelve-month adjusted EBITDA [25] Q&A Session Summary Question: How does Titan source rubber and manage costs? - Titan sources rubber primarily from West Africa and has solid contracts in place, minimizing the impact of tariffs [30][31] Question: What is the outlook for the global agricultural market? - Titan is seeing strength in Brazil, with increased demand for grains, while the U.S. market is currently facing challenges [34][36] Question: How does Titan plan to handle visibility and demand fluctuations? - Management noted that visibility is improving but is not yet at pre-2024 levels, and they are prepared to adapt to market conditions [48][50] Question: What is the sentiment among farmers regarding the current market? - Farmer sentiment is cautious but not in crisis, with expectations of government support for income stability [82][84] Question: What are Titan's future verticals or industries to explore? - The company is exploring military options and focusing on high-complexity, non-regulated markets, while continuing product development in existing verticals [88][90]