|
Delaware
|
|
No. 45-0357838
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
|
|
||
|
|
Page No.
|
PART I.
|
FINANCIAL INFORMATION
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
|
Consolidated Balance Sheets as of April 30, 2018 and January 31, 2018
|
|
|
Consolidated Statements of Operations for the three months ended April 30, 2018 and 2017
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for the three months ended April 30, 2018 and 2017
|
|
|
Consolidated Statements of Cash Flows for the three months ended April 30, 2018 and 2017
|
|
|
Notes to Consolidated Financial Statements
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
|
PART II.
|
OTHER INFORMATION
|
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
|
ITEM 1A.
|
RISK FACTORS
|
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
|
ITEM 5.
|
OTHER INFORMATION
|
|
ITEM 6.
|
EXHIBITS
|
|
Exhibit Index
|
|
|
Signatures
|
|
|
April 30, 2018
|
|
January 31, 2018
|
||||
Assets
|
|
|
|
|
|||
Current Assets
|
|
|
|
||||
Cash
|
$
|
57,254
|
|
|
$
|
53,396
|
|
Receivables, net of allowance for doubtful accounts
|
66,172
|
|
|
60,672
|
|
||
Inventories
|
518,173
|
|
|
472,467
|
|
||
Prepaid expenses and other
|
11,651
|
|
|
12,440
|
|
||
Income taxes receivable
|
96
|
|
|
171
|
|
||
Total current assets
|
653,346
|
|
|
599,146
|
|
||
Noncurrent Assets
|
|
|
|
||||
Intangible assets, net of accumulated amortization
|
5,369
|
|
|
5,193
|
|
||
Property and equipment, net of accumulated depreciation
|
146,113
|
|
|
151,047
|
|
||
Deferred income taxes
|
3,145
|
|
|
3,472
|
|
||
Other
|
1,442
|
|
|
1,450
|
|
||
Total noncurrent assets
|
156,069
|
|
|
161,162
|
|
||
Total Assets
|
$
|
809,415
|
|
|
$
|
760,308
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
16,288
|
|
|
$
|
15,136
|
|
Floorplan payable
|
320,862
|
|
|
247,392
|
|
||
Current maturities of long-term debt
|
1,644
|
|
|
1,574
|
|
||
Deferred revenue
|
32,874
|
|
|
32,324
|
|
||
Accrued expenses and other
|
22,375
|
|
|
31,863
|
|
||
Total current liabilities
|
394,043
|
|
|
328,289
|
|
||
Long-Term Liabilities
|
|
|
|
||||
Senior convertible notes
|
63,351
|
|
|
62,819
|
|
||
Long-term debt, less current maturities
|
21,395
|
|
|
34,578
|
|
||
Deferred income taxes
|
1,131
|
|
|
2,275
|
|
||
Other long-term liabilities
|
8,011
|
|
|
10,492
|
|
||
Total long-term liabilities
|
93,888
|
|
|
110,164
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
||
Stockholders' Equity
|
|
|
|
||||
Common stock, par value $.00001 per share, 45,000 shares authorized; 22,094 shares issued and outstanding at April 30, 2018; 22,102 shares issued and outstanding at January 31, 2018
|
—
|
|
|
—
|
|
||
Additional paid-in-capital
|
246,451
|
|
|
246,509
|
|
||
Retained earnings
|
75,432
|
|
|
77,046
|
|
||
Accumulated other comprehensive loss
|
(399
|
)
|
|
(1,700
|
)
|
||
Total stockholders' equity
|
321,484
|
|
|
321,855
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
809,415
|
|
|
$
|
760,308
|
|
|
Three Months Ended April 30,
|
||||||
|
2018
|
|
2017
|
||||
Revenue
|
|
|
|
||||
Equipment
|
$
|
156,904
|
|
|
$
|
167,915
|
|
Parts
|
51,535
|
|
|
56,583
|
|
||
Service
|
27,356
|
|
|
28,766
|
|
||
Rental and other
|
9,883
|
|
|
10,854
|
|
||
Total Revenue
|
245,678
|
|
|
264,118
|
|
||
Cost of Revenue
|
|
|
|
||||
Equipment
|
141,767
|
|
|
155,517
|
|
||
Parts
|
36,658
|
|
|
40,357
|
|
||
Service
|
11,201
|
|
|
10,794
|
|
||
Rental and other
|
8,494
|
|
|
8,531
|
|
||
Total Cost of Revenue
|
198,120
|
|
|
215,199
|
|
||
Gross Profit
|
47,558
|
|
|
48,919
|
|
||
Operating Expenses
|
46,727
|
|
|
51,987
|
|
||
Restructuring Costs
|
—
|
|
|
2,344
|
|
||
Income (Loss) from Operations
|
831
|
|
|
(5,412
|
)
|
||
Other Income (Expense)
|
|
|
|
||||
Interest income and other income
|
385
|
|
|
778
|
|
||
Floorplan interest expense
|
(1,350
|
)
|
|
(2,656
|
)
|
||
Other interest expense
|
(2,031
|
)
|
|
(2,120
|
)
|
||
Loss Before Income Taxes
|
(2,165
|
)
|
|
(9,410
|
)
|
||
Benefit from Income Taxes
|
(551
|
)
|
|
(3,478
|
)
|
||
Net Loss
|
$
|
(1,614
|
)
|
|
$
|
(5,932
|
)
|
Net Loss Allocated to Participating Securities - Note 1
|
26
|
|
|
114
|
|
||
Net Loss Attributable to Titan Machinery Inc. Common Stockholders
|
$
|
(1,588
|
)
|
|
$
|
(5,818
|
)
|
Earnings (Loss) per Share - Note 1:
|
|
|
|
||||
Basic
|
$
|
(0.07
|
)
|
|
$
|
(0.27
|
)
|
Diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.27
|
)
|
Weighted Average Common Shares:
|
|
|
|
|
|
||
Basic
|
21,734
|
|
|
21,373
|
|
||
Diluted
|
21,734
|
|
|
21,373
|
|
|
Three Months Ended April 30,
|
||||||
|
2018
|
|
2017
|
||||
Net Loss
|
$
|
(1,614
|
)
|
|
$
|
(5,932
|
)
|
Other Comprehensive Income
|
|
|
|
||||
Foreign currency translation adjustments
|
1,305
|
|
|
461
|
|
||
Unrealized gain on interest rate swap cash flow hedge derivative instrument, net of tax expense of $19 for the three months ended April 30, 2017
|
—
|
|
|
29
|
|
||
Reclassification of loss on interest rate swap cash flow hedge derivative instrument included in net loss, net of tax benefit of $326 for the three months ended April 30, 2017
|
—
|
|
|
488
|
|
||
Total Other Comprehensive Income
|
1,305
|
|
|
978
|
|
||
Comprehensive Loss
|
$
|
(309
|
)
|
|
$
|
(4,954
|
)
|
|
Three Months Ended April 30,
|
||||||
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(1,614
|
)
|
|
$
|
(5,932
|
)
|
Adjustments to reconcile net loss to net cash provided by (used for) operating activities
|
|
|
|
||||
Depreciation and amortization
|
5,526
|
|
|
6,095
|
|
||
Deferred income taxes
|
(804
|
)
|
|
(3,603
|
)
|
||
Stock-based compensation expense
|
540
|
|
|
789
|
|
||
Noncash interest expense
|
729
|
|
|
914
|
|
||
Other, net
|
342
|
|
|
725
|
|
||
Changes in assets and liabilities
|
|
|
|
||||
Receivables, prepaid expenses and other assets
|
(3,803
|
)
|
|
283
|
|
||
Inventories
|
(42,351
|
)
|
|
(3,814
|
)
|
||
Manufacturer floorplan payable
|
24,653
|
|
|
51,139
|
|
||
Accounts payable, customer deposits, accrued expenses and other and other long-term liabilities
|
(9,252
|
)
|
|
(5,744
|
)
|
||
Income taxes
|
(992
|
)
|
|
80
|
|
||
Net Cash Provided by (Used for) Operating Activities
|
(27,026
|
)
|
|
40,932
|
|
||
Investing Activities
|
|
|
|
||||
Rental fleet purchases
|
(2,121
|
)
|
|
(5,612
|
)
|
||
Property and equipment purchases (excluding rental fleet)
|
(692
|
)
|
|
(4,575
|
)
|
||
Proceeds from sale of property and equipment
|
411
|
|
|
417
|
|
||
Other, net
|
(184
|
)
|
|
21
|
|
||
Net Cash Used for Investing Activities
|
(2,586
|
)
|
|
(9,749
|
)
|
||
Financing Activities
|
|
|
|
||||
Net change in non-manufacturer floorplan payable
|
47,376
|
|
|
(25,484
|
)
|
||
Repurchase of senior convertible notes
|
—
|
|
|
(19,340
|
)
|
||
Proceeds from long-term debt borrowings
|
6
|
|
|
20,115
|
|
||
Principal payments on long-term debt
|
(13,425
|
)
|
|
(2,335
|
)
|
||
Other, net
|
(607
|
)
|
|
(1,123
|
)
|
||
Net Cash Provided by (Used for) Financing Activities
|
33,350
|
|
|
(28,167
|
)
|
||
Effect of Exchange Rate Changes on Cash
|
120
|
|
|
74
|
|
||
Net Change in Cash
|
3,858
|
|
|
3,090
|
|
||
Cash at Beginning of Period
|
53,396
|
|
|
53,151
|
|
||
Cash at End of Period
|
$
|
57,254
|
|
|
$
|
56,241
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
||||
Cash paid (received) during the period
|
|
|
|
||||
Income taxes, net of refunds
|
$
|
906
|
|
|
$
|
—
|
|
Interest
|
$
|
1,954
|
|
|
$
|
3,429
|
|
Supplemental Disclosures of Noncash Investing and Financing Activities
|
|
|
|
||||
Net property and equipment financed with long-term debt, accounts payable and accrued expenses and other
|
$
|
836
|
|
|
$
|
354
|
|
Net transfer of assets from property and equipment to inventories
|
$
|
(1,853
|
)
|
|
$
|
(1,200
|
)
|
|
Three Months Ended April 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands, except per share data)
|
||||||
Basic Weighted-Average Common Shares Outstanding
|
21,734
|
|
|
21,373
|
|
||
Plus: Incremental Shares From Assumed Exercise of Stock Options
|
—
|
|
|
—
|
|
||
Diluted Weighted-Average Common Shares Outstanding
|
21,734
|
|
|
21,373
|
|
||
|
|
|
|
||||
Anti-Dilutive Shares Excluded From Diluted Weighted-Average Common Shares Outstanding:
|
|
|
|
||||
Stock Options
|
58
|
|
|
153
|
|
||
Shares Underlying Senior Convertible Notes (conversion price of $43.17)
|
1,520
|
|
|
1,748
|
|
||
|
|
|
|
||||
Basic
|
$
|
(0.07
|
)
|
|
$
|
(0.27
|
)
|
Diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.27
|
)
|
|
Three Months Ended April 30, 2018
|
||||||||||||||
|
Agriculture
|
|
Construction
|
|
International
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Equipment
|
$
|
90,997
|
|
|
$
|
32,286
|
|
|
$
|
33,620
|
|
|
$
|
156,904
|
|
Parts
|
32,183
|
|
|
13,195
|
|
|
6,158
|
|
|
51,535
|
|
||||
Service
|
18,210
|
|
|
8,466
|
|
|
679
|
|
|
27,356
|
|
||||
Other
|
1,253
|
|
|
172
|
|
|
34
|
|
|
1,459
|
|
||||
Revenue from contracts with customers
|
142,644
|
|
|
54,119
|
|
|
40,492
|
|
|
237,254
|
|
||||
Rental
|
226
|
|
|
7,972
|
|
|
225
|
|
|
8,424
|
|
||||
Total revenues
|
$
|
142,870
|
|
|
$
|
62,091
|
|
|
$
|
40,717
|
|
|
$
|
245,678
|
|
|
April 30, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Trade and unbilled receivables from contracts with customers
|
|
|
|
||||
Trade receivables due from customers
|
$
|
29,695
|
|
|
$
|
25,396
|
|
Trade receivables due from finance companies
|
12,503
|
|
|
8,901
|
|
||
Unbilled receivables
|
12,876
|
|
|
10,967
|
|
||
Trade and unbilled receivables from rental contracts
|
|
|
|
||||
Trade receivables
|
5,612
|
|
|
7,571
|
|
||
Unbilled receivables
|
1,038
|
|
|
847
|
|
||
Other receivables
|
|
|
|
||||
Due from manufacturers
|
6,700
|
|
|
8,805
|
|
||
Other
|
697
|
|
|
1,136
|
|
||
Total receivables
|
69,121
|
|
|
63,623
|
|
||
Less allowance for doubtful accounts
|
(2,949
|
)
|
|
(2,951
|
)
|
||
Total
|
$
|
66,172
|
|
|
$
|
60,672
|
|
|
April 30, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
New equipment
|
$
|
307,207
|
|
|
$
|
258,559
|
|
Used equipment
|
137,222
|
|
|
141,450
|
|
||
Parts and attachments
|
71,894
|
|
|
71,110
|
|
||
Work in process
|
1,850
|
|
|
1,348
|
|
||
|
$
|
518,173
|
|
|
$
|
472,467
|
|
|
April 30, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Rental fleet equipment
|
$
|
121,213
|
|
|
$
|
123,430
|
|
Machinery and equipment
|
22,141
|
|
|
22,025
|
|
||
Vehicles
|
37,991
|
|
|
37,741
|
|
||
Furniture and fixtures
|
40,102
|
|
|
39,851
|
|
||
Land, buildings, and leasehold improvements
|
61,401
|
|
|
62,243
|
|
||
|
282,848
|
|
|
285,290
|
|
||
Less accumulated depreciation
|
(136,735
|
)
|
|
(134,243
|
)
|
||
|
$
|
146,113
|
|
|
$
|
151,047
|
|
|
April 30, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Deferred revenue from contracts with customers
|
$
|
30,857
|
|
|
$
|
30,139
|
|
Deferred revenue from rental and other contracts
|
2,018
|
|
|
2,186
|
|
||
Total
|
$
|
32,874
|
|
|
$
|
32,324
|
|
|
April 30, 2018
|
|
January 31, 2018
|
||||
|
(in thousands except conversion
rate and conversion price)
|
||||||
Principal value
|
$
|
65,644
|
|
|
$
|
65,644
|
|
Unamortized debt discount
|
(2,029
|
)
|
|
(2,497
|
)
|
||
Unamortized debt issuance costs
|
(264
|
)
|
|
(328
|
)
|
||
Carrying value of senior convertible notes
|
$
|
63,351
|
|
|
$
|
62,819
|
|
|
|
|
|
||||
Carrying value of equity component, net of deferred taxes
|
$
|
14,923
|
|
|
$
|
14,923
|
|
|
|
|
|
||||
Conversion rate (shares of common stock per $1,000 principal amount of notes)
|
23.1626
|
|
|
|
|||
Conversion price (per share of common stock)
|
$
|
43.17
|
|
|
|
|
Three Months Ended April 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Cash Interest Expense
|
|
|
|
||||
Coupon interest expense
|
$
|
605
|
|
|
$
|
783
|
|
Noncash Interest Expense
|
|
|
|
||||
Amortization of debt discount
|
469
|
|
|
571
|
|
||
Amortization of transaction costs
|
64
|
|
|
80
|
|
||
|
$
|
1,138
|
|
|
$
|
1,434
|
|
|
Notional Amount as of:
|
||||||
|
April 30, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Cash flow hedges:
|
|
|
|
||||
Interest rate swap
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
||||
Foreign currency contracts
|
16,708
|
|
|
14,368
|
|
|
|
April 30, 2018
|
|
January 31, 2018
|
||||||||||||||||||||
|
Estimated Fair Value
|
|
Carrying Value
|
|
Face Value
|
|
Estimated Fair Value
|
|
Carrying Value
|
|
Face Value
|
||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
Senior convertible notes
|
$
|
65,000
|
|
|
$
|
63,351
|
|
|
$
|
65,644
|
|
|
$
|
65,000
|
|
|
$
|
62,819
|
|
|
$
|
65,644
|
|
|
Three Months Ended April 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Revenue
|
|
|
|
||||
Agriculture
|
$
|
142,870
|
|
|
$
|
163,625
|
|
Construction
|
62,091
|
|
|
63,420
|
|
||
International
|
40,717
|
|
|
37,073
|
|
||
Total
|
$
|
245,678
|
|
|
$
|
264,118
|
|
|
|
|
|
||||
Income (Loss) Before Income Taxes
|
|
|
|
||||
Agriculture
|
$
|
1,323
|
|
|
$
|
(3,897
|
)
|
Construction
|
(2,897
|
)
|
|
(2,633
|
)
|
||
International
|
(87
|
)
|
|
595
|
|
||
Segment income (loss) before income taxes
|
(1,661
|
)
|
|
(5,935
|
)
|
||
Shared Resources
|
(504
|
)
|
|
(3,475
|
)
|
||
Total
|
$
|
(2,165
|
)
|
|
$
|
(9,410
|
)
|
|
April 30, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Total Assets
|
|
|
|
||||
Agriculture
|
$
|
408,933
|
|
|
$
|
400,017
|
|
Construction
|
227,247
|
|
|
211,154
|
|
||
International
|
153,140
|
|
|
126,251
|
|
||
Segment assets
|
789,320
|
|
|
737,422
|
|
||
Shared Resources
|
20,095
|
|
|
22,886
|
|
||
Total
|
$
|
809,415
|
|
|
$
|
760,308
|
|
|
Three Months Ended April 30, 2018
|
|
Three Months Ended April 30, 2017
|
|
Cumulative Amount
|
||||||
|
(in thousands)
|
||||||||||
Lease accrual and termination costs
|
$
|
—
|
|
|
$
|
253
|
|
|
$
|
5,681
|
|
Termination benefits
|
—
|
|
|
1,818
|
|
|
5,053
|
|
|||
Impairment of fixed assets, net of gains on asset disposition
|
—
|
|
|
—
|
|
|
2,206
|
|
|||
Asset relocation and other costs
|
—
|
|
|
273
|
|
|
516
|
|
|||
|
$
|
—
|
|
|
$
|
2,344
|
|
|
$
|
13,456
|
|
|
Three Months Ended April 30, 2018
|
|
Three Months Ended April 30, 2017
|
||||
|
(in thousands)
|
||||||
Segment
|
|
|
|
||||
Agriculture
|
$
|
—
|
|
|
$
|
1,478
|
|
Construction
|
—
|
|
|
86
|
|
||
International
|
—
|
|
|
—
|
|
||
Shared Resources
|
—
|
|
|
780
|
|
||
Total
|
$
|
—
|
|
|
$
|
2,344
|
|
|
Lease Accrual & Termination Costs
|
|
Termination Benefits
|
|
Asset Relocation & Other Costs
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance, January 31, 2018
|
$
|
5,393
|
|
|
$
|
404
|
|
|
$
|
—
|
|
|
$
|
5,797
|
|
Exit costs incurred and charged to expense
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|||
Adjustments
|
88
|
|
|
(17
|
)
|
|
—
|
|
|
$
|
71
|
|
|||
Exit costs paid
|
(3,191
|
)
|
|
(387
|
)
|
|
—
|
|
|
$
|
(3,578
|
)
|
|||
Balance, April 30, 2018
|
$
|
2,290
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,290
|
|
•
|
Revenue decreased
7.0%
in the
first
quarter of fiscal
2019
, as compared to the
first
quarter last year. Revenue was negatively impacted by our store closings associated with our Fiscal 2018 Restructuring Plan, and also impacted by a decrease in Agriculture segment same-store sales, but partially offset by an increase in International same-store sales.
|
•
|
Total gross profit margin increased to
19.4%
for the
first
quarter of fiscal
2019
, as compared to
18.5%
for the
first
quarter of fiscal
2018
. The increase in gross profit margin was primarily the result of higher gross profit margins on equipment revenues.
|
•
|
Operating expenses decreased
$5.3 million
, or
10.1%
, in the
first
quarter of fiscal
2019
, as compared to the
first
quarter of fiscal
2018
, primarily as the result of cost savings arising from our Fiscal 2018 Restructuring Plan.
|
•
|
In the
first
quarter of fiscal
2018
we recognized
$2.3 million
of restructuring charges associated with our Fiscal 2018 Restructuring Plan. No restructuring charges were recognized in the
first
quarter of fiscal
2019
. See the Fiscal 2018 Restructuring Plan section below for further details.
|
•
|
Floorplan interest expense
decreased
49.2%
in the
first
quarter of fiscal
2019
, as compared to the
first
quarter last year, primarily due to a decrease in our interest-bearing inventory in the
first
quarter of fiscal
2019
.
|
|
Three Months Ended April 30,
|
||||
|
2018
|
|
2017
|
||
Revenue
|
|
|
|
|
|
Equipment
|
63.9
|
%
|
|
63.6
|
%
|
Parts
|
21.0
|
%
|
|
21.4
|
%
|
Service
|
11.1
|
%
|
|
10.9
|
%
|
Rental and other
|
4.0
|
%
|
|
4.1
|
%
|
Total Revenue
|
100.0
|
%
|
|
100.0
|
%
|
Total Cost of Revenue
|
80.6
|
%
|
|
81.5
|
%
|
Gross Profit Margin
|
19.4
|
%
|
|
18.5
|
%
|
Operating Expenses
|
19.1
|
%
|
|
19.6
|
%
|
Restructuring Costs
|
—
|
%
|
|
0.9
|
%
|
Income (Loss) from Operations
|
0.3
|
%
|
|
(2.0
|
)%
|
Other Income (Expense)
|
(1.2
|
)%
|
|
(1.6
|
)%
|
Loss Before Income Taxes
|
(0.9
|
)%
|
|
(3.6
|
)%
|
Benefit from Income Taxes
|
(0.2
|
)%
|
|
(1.4
|
)%
|
Net Loss
|
(0.7
|
)%
|
|
(2.2
|
)%
|
|
Three Months Ended April 30,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|
||||||||||
Equipment
|
$
|
156,904
|
|
|
$
|
167,915
|
|
|
$
|
(11,011
|
)
|
|
(6.6
|
)%
|
Parts
|
51,535
|
|
|
56,583
|
|
|
(5,048
|
)
|
|
(8.9
|
)%
|
|||
Service
|
27,356
|
|
|
28,766
|
|
|
(1,410
|
)
|
|
(4.9
|
)%
|
|||
Rental and other
|
9,883
|
|
|
10,854
|
|
|
(971
|
)
|
|
(8.9
|
)%
|
|||
Total Revenue
|
$
|
245,678
|
|
|
$
|
264,118
|
|
|
$
|
(18,440
|
)
|
|
(7.0
|
)%
|
|
Three Months Ended April 30,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|
||||||||||
Gross Profit
|
|
|
|
|
|
|
|
|||||||
Equipment
|
$
|
15,137
|
|
|
$
|
12,398
|
|
|
$
|
2,739
|
|
|
22.1
|
%
|
Parts
|
14,877
|
|
|
16,226
|
|
|
(1,349
|
)
|
|
(8.3
|
)%
|
|||
Service
|
16,155
|
|
|
17,972
|
|
|
(1,817
|
)
|
|
(10.1
|
)%
|
|||
Rental and other
|
1,389
|
|
|
2,323
|
|
|
(934
|
)
|
|
(40.2
|
)%
|
|||
Total Gross Profit
|
$
|
47,558
|
|
|
$
|
48,919
|
|
|
$
|
(1,361
|
)
|
|
(2.8
|
)%
|
Gross Profit Margin
|
|
|
|
|
|
|
|
|||||||
Equipment
|
9.6
|
%
|
|
7.4
|
%
|
|
2.2
|
%
|
|
29.7
|
%
|
|||
Parts
|
28.9
|
%
|
|
28.7
|
%
|
|
0.2
|
%
|
|
0.7
|
%
|
|||
Service
|
59.1
|
%
|
|
62.5
|
%
|
|
(3.4
|
)%
|
|
(5.4
|
)%
|
|||
Rental and other
|
14.1
|
%
|
|
21.4
|
%
|
|
(7.3
|
)%
|
|
(34.1
|
)%
|
|||
Total Gross Profit Margin
|
19.4
|
%
|
|
18.5
|
%
|
|
0.9
|
%
|
|
4.9
|
%
|
|||
Gross Profit Mix
|
|
|
|
|
|
|
|
|||||||
Equipment
|
31.8
|
%
|
|
25.3
|
%
|
|
6.5
|
%
|
|
25.7
|
%
|
|||
Parts
|
31.3
|
%
|
|
33.2
|
%
|
|
(1.9
|
)%
|
|
(5.7
|
)%
|
|||
Service
|
34.0
|
%
|
|
36.7
|
%
|
|
(2.7
|
)%
|
|
(7.4
|
)%
|
|||
Rental and other
|
2.9
|
%
|
|
4.8
|
%
|
|
(1.9
|
)%
|
|
(39.6
|
)%
|
|||
Total Gross Profit Mix
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Operating Expenses
|
$
|
46,727
|
|
|
$
|
51,987
|
|
|
$
|
(5,260
|
)
|
|
(10.1
|
)%
|
Operating Expenses as a Percentage of Revenue
|
19.1
|
%
|
|
19.6
|
%
|
|
(0.5
|
)%
|
|
(2.6
|
)%
|
|
Three Months Ended April 30,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Interest income and other income
|
$
|
385
|
|
|
$
|
778
|
|
|
$
|
(393
|
)
|
|
(50.5
|
)%
|
Floorplan interest expense
|
(1,350
|
)
|
|
(2,656
|
)
|
|
(1,306
|
)
|
|
(49.2
|
)%
|
|||
Other interest expense
|
(2,031
|
)
|
|
(2,120
|
)
|
|
(89
|
)
|
|
(4.2
|
)%
|
|
Three Months Ended April 30,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Benefit from Income Taxes
|
$
|
(551
|
)
|
|
$
|
(3,478
|
)
|
|
$
|
(2,927
|
)
|
|
(84.2
|
)%
|
|
Three Months Ended April 30,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Agriculture
|
$
|
142,870
|
|
|
$
|
163,625
|
|
|
$
|
(20,755
|
)
|
|
(12.7
|
)%
|
Construction
|
62,091
|
|
|
63,420
|
|
|
(1,329
|
)
|
|
(2.1
|
)%
|
|||
International
|
40,717
|
|
|
37,073
|
|
|
3,644
|
|
|
9.8
|
%
|
|||
Total
|
$
|
245,678
|
|
|
$
|
264,118
|
|
|
$
|
(18,440
|
)
|
|
(7.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Income (Loss) Before Income Taxes
|
|
|
|
|
|
|
|
|||||||
Agriculture
|
$
|
1,323
|
|
|
$
|
(3,897
|
)
|
|
$
|
5,220
|
|
|
133.9
|
%
|
Construction
|
(2,897
|
)
|
|
(2,633
|
)
|
|
(264
|
)
|
|
(10.0
|
)%
|
|||
International
|
(87
|
)
|
|
595
|
|
|
(682
|
)
|
|
(114.6
|
)%
|
|||
Segment income (loss) before income taxes
|
(1,661
|
)
|
|
(5,935
|
)
|
|
4,274
|
|
|
72.0
|
%
|
|||
Shared Resources
|
(504
|
)
|
|
(3,475
|
)
|
|
2,971
|
|
|
85.5
|
%
|
|||
Total
|
$
|
(2,165
|
)
|
|
$
|
(9,410
|
)
|
|
$
|
7,245
|
|
|
77.0
|
%
|
|
Three Months Ended April 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(dollars in thousands, except per share data)
|
||||||
Net Income (Loss)
|
|
|
|
||||
Net Income (Loss)
|
$
|
(1,614
|
)
|
|
$
|
(5,932
|
)
|
Adjustments
|
|
|
|
||||
Gain on Repurchase of Senior Convertible Notes
|
—
|
|
|
(40
|
)
|
||
Restructuring Costs
|
—
|
|
|
2,344
|
|
||
Interest Rate Swap Termination & Reclassification
|
—
|
|
|
631
|
|
||
Total Pre-Tax Adjustments
|
—
|
|
|
2,935
|
|
||
Less: Tax Effect of Adjustments (1)
|
—
|
|
|
1,174
|
|
||
Total Adjustments
|
—
|
|
|
1,761
|
|
||
Adjusted Net Income (Loss)
|
$
|
(1,614
|
)
|
|
$
|
(4,171
|
)
|
|
|
|
|
||||
Diluted EPS
|
|
|
|
||||
Diluted EPS
|
$
|
(0.07
|
)
|
|
$
|
(0.27
|
)
|
Adjustments (2)
|
|
|
|
||||
Gain on Repurchase of Senior Convertible Notes
|
—
|
|
|
—
|
|
||
Restructuring Costs
|
—
|
|
|
0.11
|
|
||
Interest Rate Swap Termination & Reclassification
|
—
|
|
|
0.03
|
|
||
Total Pre-Tax Adjustments
|
—
|
|
|
0.14
|
|
||
Less: Tax Effect of Adjustments (1)
|
—
|
|
|
0.06
|
|
||
Total Adjustments
|
—
|
|
|
0.08
|
|
||
Adjusted Diluted EPS
|
$
|
(0.07
|
)
|
|
$
|
(0.19
|
)
|
|
Net Cash Provided by (Used for) Operating Activities
|
|
Net Cash Provided by (Used for) Financing Activities
|
||||||||||||
|
Three Months Ended April 30, 2018
|
|
Three Months Ended April 30, 2017
|
|
Three Months Ended April 30, 2018
|
|
Three Months Ended April 30, 2017
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Cash Flow, As Reported
|
$
|
(27,026
|
)
|
|
$
|
40,932
|
|
|
$
|
33,350
|
|
|
$
|
(28,167
|
)
|
Adjustment for Non-Manufacturer Floorplan Net Payments
|
47,376
|
|
|
(25,484
|
)
|
|
(47,376
|
)
|
|
25,484
|
|
||||
Adjustment for Constant Equity in Equipment Inventory
|
(45,998
|
)
|
|
(22,226
|
)
|
|
—
|
|
|
—
|
|
||||
Adjusted Cash Flow
|
$
|
(25,648
|
)
|
|
$
|
(6,778
|
)
|
|
$
|
(14,026
|
)
|
|
$
|
(2,683
|
)
|
No.
|
|
Description
|
|
|
|
|
Amendment dated May 31, 2018 to the Amended and Restated Wholesale Floor Plan Credit Facility and Security Agreement dated November 13, 2007 by and between the registrant and CNH Industrial Capital America LLC.
|
|
|
|
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
101
|
|
Financial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended April 30, 2018, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements.
|
|
Dated:
|
June 7, 2018
|
|
|
|
|
TITAN MACHINERY INC.
|
|
|
|
|
|
|
|
|
|
|
|
By
|
/s/ Mark Kalvoda
|
|
|
|
Mark Kalvoda
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Titan Machinery Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ David J. Meyer
|
|
David J. Meyer
|
|
Board Chair and Chief Executive Officer
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Mark Kalvoda
|
|
Mark Kalvoda
|
|
Chief Financial Officer
|
|
/s/ David J. Meyer
|
|
David J. Meyer
|
|
Board Chair and Chief Executive Officer
|
|
/s/ Mark Kalvoda
|
|
Mark Kalvoda
|
|
Chief Financial Officer
|