Titan International(US:TWI)2025-05-01 14:02Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $491 million, with adjusted EBITDA of $31 million, marking a sequential improvement from Q4 2024 [22] - Gross margin increased to 14% in Q1 2025 from 10.7% in Q4 2024, indicating positive leverage from increased sales [22] - SG&A expenses for Q1 2025 were $49.9 million, or 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 was 10.4%, and consumer gross margins were 19.6%, with the consumer segment continuing to be the most profitable [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 2024, benefiting from the U.S. trade standoff as Brazilian farmers increase exports to China [12] - European business has been impacted by the situation in Ukraine, but investments in Turkey are expected to improve overall European wheel capacity [13] Company Strategy and Development Direction - The company is focused on internal growth initiatives, including new product development and driving revenue synergies among segments [18] - 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 the current volatility and emphasized the importance of a diversified global business model [6][7] - The company anticipates that the tariffs applied globally will benefit them in the long term, despite short-term uncertainties [7][21] Other Important Information - The company plans to curtail capital investments in 2025 while focusing on key investments that drive growth strategy [26] - Net debt at the end of the quarter was $411 million, or 3.8 times trailing twelve-month adjusted EBITDA [26] Q&A Session Summary Question: How does Titan source rubber and manage costs? - Titan primarily sources rubber from West Africa and has solid contracts in place, minimizing the impact of tariffs [31][32] Question: What is the outlook for the global agricultural market? - Management noted that Brazil is showing strength, with increased demand for grains, while the U.S. market is currently facing challenges [38][39] Question: How does Titan plan to benefit from the current market environment? - Titan is positioned to gain market share as customers seek domestic sourcing options amid trade uncertainties [78][79] Question: What is the sentiment among farmers regarding the current market? - Management indicated that while farmer sentiment has decreased, it does not directly correlate with equipment purchases, and overall farmer income remains stable [84][85] Question: What are the potential new verticals for Titan? - The company is exploring military options and sees potential in non-regulated off-road applications, while focusing on high complexity production [90][91]