|
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 July 31, 2018 and January 31, 2018
|
|
|
Consolidated Statements of Operations for the three and six months ended July 31, 2018 and 2017
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended July 31, 2018 and 2017
|
|
|
Consolidated Statements of Cash Flows for the six months ended July 31, 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
|
|
|
July 31, 2018
|
|
January 31, 2018
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash
|
$
|
49,673
|
|
|
$
|
53,396
|
|
Receivables, net of allowance for doubtful accounts
|
78,411
|
|
|
60,672
|
|
||
Inventories
|
547,062
|
|
|
472,467
|
|
||
Prepaid expenses and other
|
11,149
|
|
|
12,611
|
|
||
Total current assets
|
686,295
|
|
|
599,146
|
|
||
Noncurrent Assets
|
|
|
|
||||
Intangible assets, net of accumulated amortization
|
5,361
|
|
|
5,193
|
|
||
Property and equipment, net of accumulated depreciation
|
143,575
|
|
|
151,047
|
|
||
Deferred income taxes
|
2,785
|
|
|
3,472
|
|
||
Other
|
1,433
|
|
|
1,450
|
|
||
Total noncurrent assets
|
153,154
|
|
|
161,162
|
|
||
Total Assets
|
$
|
839,449
|
|
|
$
|
760,308
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
18,721
|
|
|
$
|
15,136
|
|
Floorplan payable
|
365,634
|
|
|
247,392
|
|
||
Senior convertible notes
|
44,444
|
|
|
—
|
|
||
Current maturities of long-term debt
|
1,974
|
|
|
1,574
|
|
||
Deferred revenue
|
22,731
|
|
|
32,324
|
|
||
Accrued expenses and other
|
26,811
|
|
|
31,863
|
|
||
Total current liabilities
|
480,315
|
|
|
328,289
|
|
||
Long-Term Liabilities
|
|
|
|
||||
Senior convertible notes
|
—
|
|
|
62,819
|
|
||
Long-term debt, less current maturities
|
22,419
|
|
|
34,578
|
|
||
Deferred income taxes
|
2,492
|
|
|
2,275
|
|
||
Other long-term liabilities
|
8,268
|
|
|
10,492
|
|
||
Total long-term liabilities
|
33,179
|
|
|
110,164
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
||
Stockholders' Equity
|
|
|
|
||||
Common stock, par value $.00001 per share, 45,000 shares authorized; 22,218 shares issued and outstanding at July 31, 2018; 22,102 shares issued and outstanding at January 31, 2018
|
—
|
|
|
—
|
|
||
Additional paid-in-capital
|
247,149
|
|
|
246,509
|
|
||
Retained earnings
|
80,613
|
|
|
77,046
|
|
||
Accumulated other comprehensive loss
|
(1,807
|
)
|
|
(1,700
|
)
|
||
Total stockholders' equity
|
325,955
|
|
|
321,855
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
839,449
|
|
|
$
|
760,308
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Equipment
|
$
|
192,721
|
|
|
$
|
167,881
|
|
|
$
|
349,625
|
|
|
$
|
335,796
|
|
Parts
|
59,998
|
|
|
55,580
|
|
|
111,533
|
|
|
112,163
|
|
||||
Service
|
31,271
|
|
|
30,509
|
|
|
58,627
|
|
|
59,275
|
|
||||
Rental and other
|
15,901
|
|
|
14,901
|
|
|
25,784
|
|
|
25,755
|
|
||||
Total Revenue
|
299,891
|
|
|
268,871
|
|
|
545,569
|
|
|
532,989
|
|
||||
Cost of Revenue
|
|
|
|
|
|
|
|
||||||||
Equipment
|
174,472
|
|
|
154,729
|
|
|
316,239
|
|
|
310,246
|
|
||||
Parts
|
42,544
|
|
|
39,103
|
|
|
79,202
|
|
|
79,460
|
|
||||
Service
|
11,432
|
|
|
11,444
|
|
|
22,634
|
|
|
22,238
|
|
||||
Rental and other
|
12,542
|
|
|
10,788
|
|
|
21,035
|
|
|
19,319
|
|
||||
Total Cost of Revenue
|
240,990
|
|
|
216,064
|
|
|
439,110
|
|
|
431,263
|
|
||||
Gross Profit
|
58,901
|
|
|
52,807
|
|
|
106,459
|
|
|
101,726
|
|
||||
Operating Expenses
|
47,633
|
|
|
50,523
|
|
|
94,360
|
|
|
102,510
|
|
||||
Impairment of Long-Lived Assets
|
156
|
|
|
—
|
|
|
156
|
|
|
—
|
|
||||
Restructuring Costs
|
565
|
|
|
5,549
|
|
|
565
|
|
|
7,893
|
|
||||
Income (Loss) from Operations
|
10,547
|
|
|
(3,265
|
)
|
|
11,378
|
|
|
(8,677
|
)
|
||||
Other Income (Expense)
|
|
|
|
|
|
|
|
||||||||
Interest income and other income
|
1,462
|
|
|
682
|
|
|
1,846
|
|
|
1,460
|
|
||||
Floorplan interest expense
|
(1,727
|
)
|
|
(2,163
|
)
|
|
(3,077
|
)
|
|
(4,819
|
)
|
||||
Other interest expense
|
(2,490
|
)
|
|
(2,464
|
)
|
|
(4,520
|
)
|
|
(4,584
|
)
|
||||
Income (Loss) Before Income Taxes
|
7,792
|
|
|
(7,210
|
)
|
|
5,627
|
|
|
(16,620
|
)
|
||||
Provision for (Benefit from) Income Taxes
|
2,612
|
|
|
(2,024
|
)
|
|
2,061
|
|
|
(5,502
|
)
|
||||
Net Income (Loss)
|
$
|
5,180
|
|
|
$
|
(5,186
|
)
|
|
$
|
3,566
|
|
|
$
|
(11,118
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (Loss) per Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.23
|
|
|
$
|
(0.24
|
)
|
|
$
|
0.16
|
|
|
$
|
(0.51
|
)
|
Diluted
|
$
|
0.23
|
|
|
$
|
(0.24
|
)
|
|
$
|
0.16
|
|
|
$
|
(0.51
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Common Shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
21,826
|
|
|
21,546
|
|
|
21,781
|
|
|
21,461
|
|
||||
Diluted
|
21,831
|
|
|
21,546
|
|
|
21,788
|
|
|
21,461
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Income (Loss)
|
$
|
5,180
|
|
|
$
|
(5,186
|
)
|
|
$
|
3,566
|
|
|
$
|
(11,118
|
)
|
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(1,408
|
)
|
|
930
|
|
|
(107
|
)
|
|
1,391
|
|
||||
Unrealized gain on interest rate swap cash flow hedge derivative instrument, net of tax expense of $19 for the six months ended July 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||
Reclassification of loss on interest rate swap cash flow hedge derivative instrument included in net income (loss), net of tax benefit of $68 for the three months ended July 31, 2017 and $394 for the six months ended July 31, 2017
|
—
|
|
|
104
|
|
|
—
|
|
|
592
|
|
||||
Total Other Comprehensive Income (Loss)
|
(1,408
|
)
|
|
1,034
|
|
|
(107
|
)
|
|
2,012
|
|
||||
Comprehensive Income (Loss)
|
3,772
|
|
|
(4,152
|
)
|
|
$
|
3,459
|
|
|
$
|
(9,106
|
)
|
|
Six Months Ended July 31,
|
||||||
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net income (loss)
|
$
|
3,566
|
|
|
$
|
(11,118
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities
|
|
|
|
||||
Depreciation and amortization
|
11,447
|
|
|
12,268
|
|
||
Impairment
|
156
|
|
|
—
|
|
||
Deferred income taxes
|
891
|
|
|
(4,927
|
)
|
||
Stock-based compensation expense
|
1,249
|
|
|
1,732
|
|
||
Noncash interest expense
|
1,430
|
|
|
2,139
|
|
||
Loss (gain) on repurchase of senior convertible notes
|
615
|
|
|
(40
|
)
|
||
Other, net
|
837
|
|
|
(1,865
|
)
|
||
Changes in assets and liabilities
|
|
|
|
||||
Receivables, prepaid expenses and other assets
|
(16,117
|
)
|
|
(2,340
|
)
|
||
Inventories
|
(73,915
|
)
|
|
(31,981
|
)
|
||
Manufacturer floorplan payable
|
69,225
|
|
|
107,833
|
|
||
Accounts payable, customer deposits, accrued expenses and other and other long-term liabilities
|
(13,277
|
)
|
|
(4,562
|
)
|
||
Income taxes
|
(194
|
)
|
|
(262
|
)
|
||
Net Cash Provided by (Used for) Operating Activities
|
(14,087
|
)
|
|
66,877
|
|
||
Investing Activities
|
|
|
|
||||
Rental fleet purchases
|
(3,145
|
)
|
|
(10,222
|
)
|
||
Property and equipment purchases (excluding rental fleet)
|
(2,609
|
)
|
|
(7,472
|
)
|
||
Proceeds from sale of property and equipment
|
614
|
|
|
2,253
|
|
||
Other, net
|
(169
|
)
|
|
78
|
|
||
Net Cash Used for Investing Activities
|
(5,309
|
)
|
|
(15,363
|
)
|
||
Financing Activities
|
|
|
|
||||
Net change in non-manufacturer floorplan payable
|
50,422
|
|
|
(38,030
|
)
|
||
Repurchase of senior convertible notes
|
(20,025
|
)
|
|
(19,340
|
)
|
||
Proceeds from long-term debt borrowings
|
—
|
|
|
33,000
|
|
||
Principal payments on long-term debt
|
(14,062
|
)
|
|
(22,722
|
)
|
||
Other, net
|
(618
|
)
|
|
(482
|
)
|
||
Net Cash Provided by (Used for) Financing Activities
|
15,717
|
|
|
(47,574
|
)
|
||
Effect of Exchange Rate Changes on Cash
|
(44
|
)
|
|
435
|
|
||
Net Change in Cash
|
(3,723
|
)
|
|
4,375
|
|
||
Cash at Beginning of Period
|
53,396
|
|
|
53,151
|
|
||
Cash at End of Period
|
$
|
49,673
|
|
|
$
|
57,526
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
||||
Cash paid during the period
|
|
|
|
||||
Income taxes, net of refunds
|
$
|
1,145
|
|
|
$
|
3
|
|
Interest
|
$
|
5,442
|
|
|
$
|
7,240
|
|
Supplemental Disclosures of Noncash Investing and Financing Activities
|
|
|
|
||||
Net property and equipment financed with long-term debt, capital leases, accounts payable and accrued expenses and other
|
$
|
2,310
|
|
|
$
|
1,262
|
|
Net transfer of assets from property and equipment to inventories
|
$
|
2,715
|
|
|
$
|
1,905
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
5,180
|
|
|
$
|
(5,186
|
)
|
|
$
|
3,566
|
|
|
$
|
(11,118
|
)
|
Income allocated to participating securities
|
(80
|
)
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
||||
Net income (loss) attributable to Titan Machinery Inc. common stockholders
|
$
|
5,100
|
|
|
$
|
(5,186
|
)
|
|
$
|
3,509
|
|
|
$
|
(11,118
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
21,826
|
|
|
21,546
|
|
|
21,781
|
|
|
21,461
|
|
||||
Plus: incremental shares from assumed exercises of stock options and vesting of restricted stock units
|
5
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
Diluted weighted-average common shares outstanding
|
21,831
|
|
|
21,546
|
|
|
21,788
|
|
|
21,461
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (Loss) Per Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.23
|
|
|
$
|
(0.24
|
)
|
|
$
|
0.16
|
|
|
$
|
(0.51
|
)
|
Diluted
|
$
|
0.23
|
|
|
$
|
(0.24
|
)
|
|
$
|
0.16
|
|
|
$
|
(0.51
|
)
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares excluded from diluted weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Stock options and restricted stock units
|
53
|
|
|
133
|
|
|
53
|
|
|
143
|
|
||||
Shares underlying senior convertible notes
|
1,057
|
|
|
1,748
|
|
|
1,057
|
|
|
1,748
|
|
|
Three Months Ended July 31, 2018
|
||||||||||||||
|
Agriculture
|
|
Construction
|
|
International
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Equipment
|
$
|
94,231
|
|
|
$
|
42,168
|
|
|
$
|
56,322
|
|
|
$
|
192,721
|
|
Parts
|
35,796
|
|
|
14,482
|
|
|
9,720
|
|
|
59,998
|
|
||||
Service
|
20,486
|
|
|
9,699
|
|
|
1,086
|
|
|
31,271
|
|
||||
Other
|
1,463
|
|
|
216
|
|
|
74
|
|
|
1,753
|
|
||||
Revenue from contracts with customers
|
151,976
|
|
|
66,565
|
|
|
67,202
|
|
|
285,743
|
|
||||
Rental
|
837
|
|
|
12,680
|
|
|
631
|
|
|
14,148
|
|
||||
Total revenues
|
$
|
152,813
|
|
|
$
|
79,245
|
|
|
$
|
67,833
|
|
|
$
|
299,891
|
|
|
Six Months Ended July 31, 2018
|
||||||||||||||
|
Agriculture
|
|
Construction
|
|
International
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Equipment
|
$
|
185,229
|
|
|
$
|
74,454
|
|
|
$
|
89,942
|
|
|
$
|
349,625
|
|
Parts
|
67,979
|
|
|
27,676
|
|
|
15,878
|
|
|
111,533
|
|
||||
Service
|
38,697
|
|
|
18,165
|
|
|
1,765
|
|
|
58,627
|
|
||||
Other
|
2,716
|
|
|
389
|
|
|
108
|
|
|
3,213
|
|
||||
Revenue from contracts with customers
|
294,621
|
|
|
120,684
|
|
|
107,693
|
|
|
522,998
|
|
||||
Rental
|
1,063
|
|
|
20,652
|
|
|
856
|
|
|
22,571
|
|
||||
Total revenues
|
$
|
295,684
|
|
|
$
|
141,336
|
|
|
$
|
108,549
|
|
|
$
|
545,569
|
|
|
July 31, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Trade and unbilled receivables from contracts with customers
|
|
|
|
||||
Trade receivables due from customers
|
$
|
35,071
|
|
|
$
|
25,396
|
|
Trade receivables due from finance companies
|
13,682
|
|
|
8,901
|
|
||
Unbilled receivables
|
14,492
|
|
|
10,967
|
|
||
Trade and unbilled receivables from rental contracts
|
|
|
|
||||
Trade receivables
|
7,978
|
|
|
7,571
|
|
||
Unbilled receivables
|
1,458
|
|
|
847
|
|
||
Other receivables
|
|
|
|
||||
Due from manufacturers
|
8,404
|
|
|
8,805
|
|
||
Other
|
472
|
|
|
1,136
|
|
||
Total receivables
|
81,557
|
|
|
63,623
|
|
||
Less allowance for doubtful accounts
|
(3,146
|
)
|
|
(2,951
|
)
|
||
Receivables, net of allowance for doubtful accounts
|
$
|
78,411
|
|
|
$
|
60,672
|
|
|
July 31, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
New equipment
|
$
|
346,145
|
|
|
$
|
258,559
|
|
Used equipment
|
127,644
|
|
|
141,450
|
|
||
Parts and attachments
|
71,373
|
|
|
71,110
|
|
||
Work in process
|
1,900
|
|
|
1,348
|
|
||
|
$
|
547,062
|
|
|
$
|
472,467
|
|
|
July 31, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Rental fleet equipment
|
$
|
119,065
|
|
|
$
|
123,430
|
|
Machinery and equipment
|
22,123
|
|
|
22,025
|
|
||
Vehicles
|
39,296
|
|
|
37,741
|
|
||
Furniture and fixtures
|
39,911
|
|
|
39,851
|
|
||
Land, buildings, and leasehold improvements
|
62,985
|
|
|
62,243
|
|
||
|
283,380
|
|
|
285,290
|
|
||
Less accumulated depreciation
|
(139,805
|
)
|
|
(134,243
|
)
|
||
|
$
|
143,575
|
|
|
$
|
151,047
|
|
|
July 31, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Deferred revenue from contracts with customers
|
$
|
21,126
|
|
|
$
|
30,139
|
|
Deferred revenue from rental and other contracts
|
1,605
|
|
|
2,186
|
|
||
|
$
|
22,731
|
|
|
$
|
32,324
|
|
|
July 31, 2018
|
|
January 31, 2018
|
||||
|
(in thousands except conversion
rate and conversion price)
|
||||||
Principal value
|
$
|
45,644
|
|
|
$
|
65,644
|
|
Unamortized debt discount
|
(1,061
|
)
|
|
(2,497
|
)
|
||
Unamortized debt issuance costs
|
(139
|
)
|
|
(328
|
)
|
||
Carrying value of senior convertible notes
|
$
|
44,444
|
|
|
$
|
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 July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
(in thousands)
|
|||||||||||||
Cash Interest Expense
|
|
|
|
|
|
|
|
||||||||
Coupon interest expense
|
$
|
546
|
|
|
$
|
708
|
|
|
$
|
1,151
|
|
|
$
|
1,491
|
|
Noncash Interest Expense
|
|
|
|
|
|
|
|
||||||||
Amortization of debt discount
|
446
|
|
|
540
|
|
|
915
|
|
|
1,111
|
|
||||
Amortization of transaction costs
|
59
|
|
|
74
|
|
|
123
|
|
|
154
|
|
||||
|
$
|
1,051
|
|
|
$
|
1,322
|
|
|
$
|
2,189
|
|
|
$
|
2,756
|
|
|
Notional Amount as of:
|
||||||
|
July 31, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Cash flow hedges:
|
|
|
|
||||
Interest rate swap
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
||||
Foreign currency contracts
|
24,128
|
|
|
14,368
|
|
|
|
July 31, 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
|
$
|
45,644
|
|
|
$
|
44,444
|
|
|
$
|
45,644
|
|
|
$
|
65,000
|
|
|
$
|
62,819
|
|
|
$
|
65,644
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Agriculture
|
$
|
152,813
|
|
|
$
|
138,545
|
|
|
$
|
295,684
|
|
|
$
|
302,170
|
|
Construction
|
79,245
|
|
|
77,890
|
|
|
141,336
|
|
|
141,310
|
|
||||
International
|
67,833
|
|
|
52,436
|
|
|
108,549
|
|
|
89,509
|
|
||||
Total
|
$
|
299,891
|
|
|
$
|
268,871
|
|
|
$
|
545,569
|
|
|
$
|
532,989
|
|
|
|
|
|
|
|
|
|
||||||||
Income (Loss) Before Income Taxes
|
|
|
|
|
|
|
|
||||||||
Agriculture
|
$
|
4,960
|
|
|
$
|
(6,882
|
)
|
|
$
|
6,283
|
|
|
$
|
(10,779
|
)
|
Construction
|
(30
|
)
|
|
930
|
|
|
(2,927
|
)
|
|
(1,703
|
)
|
||||
International
|
3,726
|
|
|
283
|
|
|
3,639
|
|
|
878
|
|
||||
Segment income (loss) before income taxes
|
8,656
|
|
|
(5,669
|
)
|
|
6,995
|
|
|
(11,604
|
)
|
||||
Shared Resources
|
(864
|
)
|
|
(1,541
|
)
|
|
(1,368
|
)
|
|
(5,016
|
)
|
||||
Total
|
$
|
7,792
|
|
|
$
|
(7,210
|
)
|
|
$
|
5,627
|
|
|
$
|
(16,620
|
)
|
|
July 31, 2018
|
|
January 31, 2018
|
||||
|
(in thousands)
|
||||||
Total Assets
|
|
|
|
||||
Agriculture
|
$
|
428,877
|
|
|
$
|
400,017
|
|
Construction
|
244,101
|
|
|
211,154
|
|
||
International
|
172,248
|
|
|
126,251
|
|
||
Segment assets
|
845,226
|
|
|
737,422
|
|
||
Shared Resources
|
(5,777
|
)
|
|
22,886
|
|
||
Total
|
$
|
839,449
|
|
|
$
|
760,308
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
Cumulative Amount
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||||
|
(in thousands)
|
||||||||||||||||||
Lease accrual and terminations costs
|
$
|
565
|
|
|
$
|
4,069
|
|
|
$
|
565
|
|
|
$
|
4,322
|
|
|
$
|
6,246
|
|
Termination benefits
|
—
|
|
|
1,906
|
|
|
—
|
|
|
3,724
|
|
|
5,053
|
|
|||||
Impairment of fixed assets, net of gains on asset disposition
|
—
|
|
|
(565
|
)
|
|
—
|
|
|
(565
|
)
|
|
2,206
|
|
|||||
Asset relocation and other closing costs
|
—
|
|
|
139
|
|
|
—
|
|
|
412
|
|
|
516
|
|
|||||
|
$
|
565
|
|
|
$
|
5,549
|
|
|
$
|
565
|
|
|
$
|
7,893
|
|
|
$
|
14,021
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Segment
|
|
|
|
|
|
|
|
||||||||
Agriculture
|
$
|
233
|
|
|
$
|
5,194
|
|
|
$
|
233
|
|
|
$
|
6,672
|
|
Construction
|
332
|
|
|
252
|
|
|
332
|
|
|
338
|
|
||||
International
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Shared Resources
|
—
|
|
|
103
|
|
|
—
|
|
|
883
|
|
||||
Total
|
$
|
565
|
|
|
$
|
5,549
|
|
|
$
|
565
|
|
|
$
|
7,893
|
|
|
Lease Accrual & Termination Costs
|
|
Termination Benefits
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance, January 31, 2018
|
$
|
5,393
|
|
|
$
|
404
|
|
|
$
|
5,797
|
|
Exist costs incurred and charged to expense
|
—
|
|
|
—
|
|
|
$
|
—
|
|
||
Adjustments
|
653
|
|
|
(17
|
)
|
|
$
|
636
|
|
||
Exit costs paid
|
(3,293
|
)
|
|
(387
|
)
|
|
$
|
(3,680
|
)
|
||
Balance, July 31, 2018
|
$
|
2,753
|
|
|
$
|
—
|
|
|
$
|
2,753
|
|
•
|
Revenue increased
11.5%
in the
second
quarter of fiscal
2019
, as compared to the
second
quarter last year. This revenue increase was primarily the result of higher equipment sales in our Agriculture and International Segments.
|
•
|
Operating expenses decreased
$2.9 million
, or
5.7%
, in the
second
quarter of fiscal
2019
, as compared to the
second
quarter of fiscal
2018
, primarily as the result of cost savings arising from our Fiscal 2018 Restructuring Plan.
|
•
|
In the
second
quarter of fiscal
2019
, restructuring and impairment changes decreased
$5.0 million
, as compared to the second quarter last year, due to restructuring charges associated with our Fiscal 2018 Restructuring Plan primarily being incurred during fiscal 2018. See the Fiscal 2018 Restructuring Plan section below for further details.
|
•
|
Floorplan interest expense decreased
20.2%
in the
second
quarter of fiscal
2019
, as compared to the
second
quarter last year, primarily due to a decrease in our interest-bearing inventory in the
second
quarter of fiscal
2019
.
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||
Equipment
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
$
|
192,721
|
|
|
$
|
167,881
|
|
|
$
|
349,625
|
|
|
$
|
335,796
|
|
Cost of revenue
|
174,472
|
|
|
154,729
|
|
|
316,239
|
|
|
310,246
|
|
||||
Gross profit
|
$
|
18,249
|
|
|
$
|
13,152
|
|
|
$
|
33,386
|
|
|
$
|
25,550
|
|
Gross profit margin
|
9.5
|
%
|
|
7.8
|
%
|
|
9.5
|
%
|
|
7.6
|
%
|
||||
Parts
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
59,998
|
|
|
$
|
55,580
|
|
|
$
|
111,533
|
|
|
$
|
112,163
|
|
Cost of revenue
|
42,544
|
|
|
39,103
|
|
|
79,202
|
|
|
79,460
|
|
||||
Gross profit
|
$
|
17,454
|
|
|
$
|
16,477
|
|
|
$
|
32,331
|
|
|
$
|
32,703
|
|
Gross profit margin
|
29.1
|
%
|
|
29.6
|
%
|
|
29.0
|
%
|
|
29.2
|
%
|
||||
Service
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
31,271
|
|
|
$
|
30,509
|
|
|
$
|
58,627
|
|
|
$
|
59,275
|
|
Cost of revenue
|
11,432
|
|
|
11,444
|
|
|
22,634
|
|
|
22,238
|
|
||||
Gross profit
|
$
|
19,839
|
|
|
$
|
19,065
|
|
|
$
|
35,993
|
|
|
$
|
37,037
|
|
Gross profit margin
|
63.4
|
%
|
|
62.5
|
%
|
|
61.4
|
%
|
|
62.5
|
%
|
||||
Rental and other
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
15,901
|
|
|
$
|
14,901
|
|
|
$
|
25,784
|
|
|
$
|
25,755
|
|
Cost of revenue
|
12,542
|
|
|
10,789
|
|
|
21,034
|
|
|
19,318
|
|
||||
Gross profit
|
$
|
3,359
|
|
|
$
|
4,112
|
|
|
$
|
4,750
|
|
|
$
|
6,437
|
|
Gross profit margin
|
21.1
|
%
|
|
27.6
|
%
|
|
18.4
|
%
|
|
25.0
|
%
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Revenue
|
|
|
|
|
|
|
|
|
|
||
Equipment
|
64.3
|
%
|
|
62.4
|
%
|
|
64.1
|
%
|
|
63.0
|
%
|
Parts
|
20.0
|
%
|
|
20.7
|
%
|
|
20.4
|
%
|
|
21.0
|
%
|
Service
|
10.4
|
%
|
|
11.3
|
%
|
|
10.8
|
%
|
|
11.1
|
%
|
Rental and other
|
5.3
|
%
|
|
5.5
|
%
|
|
4.7
|
%
|
|
4.8
|
%
|
Total Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Total Cost of Revenue
|
80.4
|
%
|
|
80.4
|
%
|
|
80.5
|
%
|
|
80.9
|
%
|
Gross Profit Margin
|
19.6
|
%
|
|
19.6
|
%
|
|
19.5
|
%
|
|
19.1
|
%
|
Operating Expenses
|
15.9
|
%
|
|
18.8
|
%
|
|
17.3
|
%
|
|
19.2
|
%
|
Impairment of Intangible and Long-Lived Assets
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Restructuring Costs
|
0.2
|
%
|
|
2.1
|
%
|
|
0.1
|
%
|
|
1.5
|
%
|
Income (Loss) from Operations
|
3.5
|
%
|
|
(1.2
|
)%
|
|
2.1
|
%
|
|
(1.6
|
)%
|
Other Income (Expense)
|
(0.9
|
)%
|
|
(1.5
|
)%
|
|
(1.1
|
)%
|
|
(1.5
|
)%
|
Income (Loss) Before Income Taxes
|
2.6
|
%
|
|
(2.7
|
)%
|
|
1.0
|
%
|
|
(3.1
|
)%
|
Provision for (Benefit from) Income Taxes
|
0.9
|
%
|
|
(0.8
|
)%
|
|
0.4
|
%
|
|
(1.0
|
)%
|
Net Income (Loss)
|
1.7
|
%
|
|
(1.9
|
)%
|
|
0.7
|
%
|
|
(2.1
|
)%
|
|
Three Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|
||||||||||
Equipment
|
$
|
192,721
|
|
|
$
|
167,881
|
|
|
$
|
24,840
|
|
|
14.8
|
%
|
Parts
|
59,998
|
|
|
55,580
|
|
|
4,418
|
|
|
7.9
|
%
|
|||
Service
|
31,271
|
|
|
30,509
|
|
|
762
|
|
|
2.5
|
%
|
|||
Rental and other
|
15,901
|
|
|
14,901
|
|
|
1,000
|
|
|
6.7
|
%
|
|||
Total Revenue
|
$
|
299,891
|
|
|
$
|
268,871
|
|
|
$
|
31,020
|
|
|
11.5
|
%
|
|
Three Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|
||||||||||
Gross Profit
|
|
|
|
|
|
|
|
|||||||
Equipment
|
$
|
18,249
|
|
|
$
|
13,152
|
|
|
$
|
5,097
|
|
|
38.8
|
%
|
Parts
|
17,454
|
|
|
16,477
|
|
|
977
|
|
|
5.9
|
%
|
|||
Service
|
19,839
|
|
|
19,065
|
|
|
774
|
|
|
4.1
|
%
|
|||
Rental and other
|
3,359
|
|
|
4,112
|
|
|
(753
|
)
|
|
(18.3
|
)%
|
|||
Total Gross Profit
|
$
|
58,901
|
|
|
$
|
52,806
|
|
|
$
|
6,095
|
|
|
11.5
|
%
|
Gross Profit Margin
|
|
|
|
|
|
|
|
|||||||
Equipment
|
9.5
|
%
|
|
7.8
|
%
|
|
1.7
|
%
|
|
21.8
|
%
|
|||
Parts
|
29.1
|
%
|
|
29.6
|
%
|
|
(0.5
|
)%
|
|
(1.7
|
)%
|
|||
Service
|
63.4
|
%
|
|
62.5
|
%
|
|
0.9
|
%
|
|
1.4
|
%
|
|||
Rental and other
|
21.1
|
%
|
|
27.6
|
%
|
|
(6.5
|
)%
|
|
(23.6
|
)%
|
|||
Total Gross Profit Margin
|
19.6
|
%
|
|
19.6
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Gross Profit Mix
|
|
|
|
|
|
|
|
|||||||
Equipment
|
31.0
|
%
|
|
24.9
|
%
|
|
6.1
|
%
|
|
24.5
|
%
|
|||
Parts
|
29.6
|
%
|
|
31.2
|
%
|
|
(1.6
|
)%
|
|
(5.1
|
)%
|
|||
Service
|
33.7
|
%
|
|
36.1
|
%
|
|
(2.4
|
)%
|
|
(6.6
|
)%
|
|||
Rental and other
|
5.7
|
%
|
|
7.8
|
%
|
|
(2.1
|
)%
|
|
(26.9
|
)%
|
|||
Total Gross Profit Mix
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Operating Expenses
|
$
|
47,633
|
|
|
$
|
50,523
|
|
|
$
|
(2,890
|
)
|
|
5.7
|
%
|
Operating Expenses as a Percentage of Revenue
|
15.9
|
%
|
|
18.8
|
%
|
|
(2.9
|
)%
|
|
15.4
|
%
|
|
Three Months Ended July 31,
|
|
Increase/
|
|
Percent
|
||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
||||||
|
(dollars in thousands)
|
|
|
||||||||||
Impairment of Long-Lived Assets
|
$
|
156
|
|
|
$
|
—
|
|
|
$
|
156
|
|
|
n/m
|
Restructuring Costs
|
565
|
|
|
5,549
|
|
|
(4,984
|
)
|
|
90.0%
|
|
Three Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Interest income and other income
|
$
|
1,462
|
|
|
$
|
682
|
|
|
$
|
780
|
|
|
114.4
|
%
|
Floorplan interest expense
|
(1,727
|
)
|
|
(2,163
|
)
|
|
(436
|
)
|
|
20.2
|
%
|
|||
Other interest expense
|
(2,490
|
)
|
|
(2,463
|
)
|
|
27
|
|
|
(1.1
|
)%
|
|
Three Months Ended July 31,
|
|
Increase/
|
|
Percent
|
||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
||||||
|
(dollars in thousands)
|
|
|
||||||||||
Provision for (Benefit from) Income Taxes
|
$
|
2,612
|
|
|
$
|
(2,024
|
)
|
|
$
|
4,636
|
|
|
n/m
|
|
Three Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Agriculture
|
$
|
152,813
|
|
|
$
|
138,545
|
|
|
$
|
14,268
|
|
|
10.3
|
%
|
Construction
|
79,245
|
|
|
77,890
|
|
|
1,355
|
|
|
1.7
|
%
|
|||
International
|
67,833
|
|
|
52,436
|
|
|
15,398
|
|
|
29.4
|
%
|
|||
Total
|
$
|
299,891
|
|
|
$
|
268,871
|
|
|
$
|
31,021
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Income (Loss) Before Income Taxes
|
|
|
|
|
|
|
|
|||||||
Agriculture
|
$
|
4,960
|
|
|
$
|
(6,882
|
)
|
|
$
|
11,842
|
|
|
n/m
|
|
Construction
|
(30
|
)
|
|
930
|
|
|
(960
|
)
|
|
(103.2
|
)%
|
|||
International
|
3,726
|
|
|
283
|
|
|
3,443
|
|
|
n/m
|
|
|||
Segment income (loss) before income taxes
|
8,656
|
|
|
(5,669
|
)
|
|
14,325
|
|
|
n/m
|
|
|||
Shared Resources
|
(864
|
)
|
|
(1,541
|
)
|
|
678
|
|
|
44.0
|
%
|
|||
Total
|
$
|
7,792
|
|
|
$
|
(7,210
|
)
|
|
$
|
15,003
|
|
|
n/m
|
|
|
Six Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|
||||||||||
Equipment
|
$
|
349,625
|
|
|
$
|
335,796
|
|
|
$
|
13,829
|
|
|
4.1
|
%
|
Parts
|
111,533
|
|
|
112,163
|
|
|
(630
|
)
|
|
(0.6
|
)%
|
|||
Service
|
58,627
|
|
|
59,275
|
|
|
(648
|
)
|
|
(1.1
|
)%
|
|||
Rental and other
|
25,784
|
|
|
25,755
|
|
|
29
|
|
|
0.1
|
%
|
|||
Total Revenue
|
$
|
545,569
|
|
|
$
|
532,989
|
|
|
$
|
12,580
|
|
|
2.4
|
%
|
|
Six Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|
||||||||||
Gross Profit
|
|
|
|
|
|
|
|
|||||||
Equipment
|
$
|
33,386
|
|
|
$
|
25,550
|
|
|
$
|
7,836
|
|
|
30.7
|
%
|
Parts
|
32,331
|
|
|
32,703
|
|
|
(372
|
)
|
|
(1.1
|
)%
|
|||
Service
|
35,993
|
|
|
37,037
|
|
|
(1,044
|
)
|
|
(2.8
|
)%
|
|||
Rental and other
|
4,749
|
|
|
6,436
|
|
|
(1,687
|
)
|
|
(26.2
|
)%
|
|||
Total Gross Profit
|
$
|
106,459
|
|
|
$
|
101,726
|
|
|
$
|
4,733
|
|
|
4.7
|
%
|
Gross Profit Margin
|
|
|
|
|
|
|
|
|||||||
Equipment
|
9.5
|
%
|
|
7.6
|
%
|
|
1.9
|
%
|
|
25.0
|
%
|
|||
Parts
|
29.0
|
%
|
|
29.2
|
%
|
|
(0.2
|
)%
|
|
(0.7
|
)%
|
|||
Service
|
61.4
|
%
|
|
62.5
|
%
|
|
(1.1
|
)%
|
|
(1.8
|
)%
|
|||
Rental and other
|
18.4
|
%
|
|
25.0
|
%
|
|
(6.6
|
)%
|
|
(26.4
|
)%
|
|||
Total Gross Profit Margin
|
19.5
|
%
|
|
19.1
|
%
|
|
0.4
|
%
|
|
2.1
|
%
|
|||
Gross Profit Mix
|
|
|
|
|
|
|
|
|||||||
Equipment
|
31.3
|
%
|
|
25.1
|
%
|
|
6.3
|
%
|
|
25.1
|
%
|
|||
Parts
|
30.4
|
%
|
|
32.2
|
%
|
|
(1.7
|
)%
|
|
(5.3
|
)%
|
|||
Service
|
33.8
|
%
|
|
36.4
|
%
|
|
(2.6
|
)%
|
|
(7.1
|
)%
|
|||
Rental and other
|
4.5
|
%
|
|
6.3
|
%
|
|
(1.8
|
)%
|
|
(28.6
|
)%
|
|||
Total Gross Profit Mix
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
Six Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Operating Expenses
|
$
|
94,360
|
|
|
$
|
102,510
|
|
|
$
|
(8,150
|
)
|
|
8.0
|
%
|
Operating Expenses as a Percentage of Revenue
|
17.3
|
%
|
|
19.2
|
%
|
|
(1.9
|
)%
|
|
9.9
|
%
|
|
Six Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
Decrease
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Impairment of Long-Lived Assets
|
$
|
156
|
|
|
$
|
—
|
|
|
$
|
156
|
|
|
n/m
|
|
Restructuring Costs
|
565
|
|
|
7,893
|
|
|
(7,328
|
)
|
|
93.0
|
%
|
|
Six Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Interest income and other income
|
$
|
1,846
|
|
|
$
|
1,460
|
|
|
$
|
386
|
|
|
26.4
|
%
|
Floorplan interest expense
|
(3,077
|
)
|
|
(4,819
|
)
|
|
(1,742
|
)
|
|
36.1
|
%
|
|||
Other interest expense
|
(4,520
|
)
|
|
(4,584
|
)
|
|
(64
|
)
|
|
1.4
|
%
|
|
Six Months Ended July 31,
|
|
Increase/
|
|
Percent
|
||||||||
|
2018
|
|
2017
|
|
Decrease
|
|
Change
|
||||||
|
(dollars in thousands)
|
|
|
||||||||||
Provision for (Benefit from) Income Taxes
|
$
|
2,061
|
|
|
$
|
(5,502
|
)
|
|
$
|
7,563
|
|
|
n/m
|
|
Six Months Ended July 31,
|
|
Increase/
|
|
Percent
|
|||||||||
|
2018
|
|
2017
|
|
(Decrease)
|
|
Change
|
|||||||
|
(dollars in thousands)
|
|
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Agriculture
|
$
|
295,684
|
|
|
$
|
302,170
|
|
|
$
|
(6,486
|
)
|
|
(2.1
|
)%
|
Construction
|
141,336
|
|
|
141,310
|
|
|
26
|
|
|
—
|
%
|
|||
International
|
108,549
|
|
|
89,509
|
|
|
19,042
|
|
|
21.3
|
%
|
|||
Total
|
$
|
545,569
|
|
|
$
|
532,989
|
|
|
$
|
12,582
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|||||||
Income (Loss) Before Income Taxes
|
|
|
|
|
|
|
|
|||||||
Agriculture
|
$
|
6,283
|
|
|
$
|
(10,779
|
)
|
|
$
|
17,062
|
|
|
n/m
|
|
Construction
|
(2,927
|
)
|
|
(1,703
|
)
|
|
(1,224
|
)
|
|
(71.9
|
)%
|
|||
International
|
3,639
|
|
|
878
|
|
|
2,761
|
|
|
n/m
|
|
|||
Segment income (loss) before income taxes
|
6,995
|
|
|
(11,604
|
)
|
|
18,599
|
|
|
n/m
|
|
|||
Shared Resources
|
(1,368
|
)
|
|
(5,016
|
)
|
|
3,649
|
|
|
72.7
|
%
|
|||
Total
|
$
|
5,627
|
|
|
$
|
(16,620
|
)
|
|
$
|
22,248
|
|
|
133.9
|
%
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(dollars in thousands, except per share data)
|
||||||||||||||
Adjusted Net Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss)
|
$
|
5,180
|
|
|
$
|
(5,186
|
)
|
|
$
|
3,566
|
|
|
$
|
(11,118
|
)
|
Adjustments
|
|
|
|
|
|
|
|
||||||||
(Gain) loss on repurchase of senior convertible notes
|
615
|
|
|
—
|
|
|
615
|
|
|
(40
|
)
|
||||
Debt issuance cost write-off
|
—
|
|
|
416
|
|
|
—
|
|
|
416
|
|
||||
Restructuring & impairment charges
|
721
|
|
|
5,549
|
|
|
721
|
|
|
7,893
|
|
||||
Interest rate swap termination & reclassification
|
—
|
|
|
—
|
|
|
—
|
|
|
631
|
|
||||
Total Pre-Tax Adjustments
|
1,336
|
|
|
5,965
|
|
|
1,336
|
|
|
8,900
|
|
||||
Less: Tax Effect of Adjustments (1)
|
248
|
|
|
1,941
|
|
|
248
|
|
|
3,116
|
|
||||
Plus: Income Tax Valuation Allowance
|
—
|
|
|
200
|
|
|
—
|
|
|
200
|
|
||||
Total Adjustments
|
1,088
|
|
|
4,224
|
|
|
1,088
|
|
|
5,984
|
|
||||
Adjusted Net Income (Loss)
|
$
|
6,268
|
|
|
$
|
(962
|
)
|
|
$
|
4,654
|
|
|
$
|
(5,134
|
)
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Diluted EPS
|
|
|
|
|
|
|
|
||||||||
Diluted EPS
|
$
|
0.23
|
|
|
$
|
(0.24
|
)
|
|
$
|
0.16
|
|
|
$
|
(0.51
|
)
|
Adjustments (2)
|
|
|
|
|
|
|
|
||||||||
(Gain) loss on repurchase of senior convertible notes
|
0.03
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
||||
Debt issuance cost write-off
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.02
|
|
||||
Restructuring & impairment charges
|
0.03
|
|
|
0.25
|
|
|
0.03
|
|
|
0.36
|
|
||||
Interest rate swap termination & reclassification
|
—
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
||||
Total Pre-Tax Adjustments
|
0.06
|
|
|
0.27
|
|
|
0.06
|
|
|
0.41
|
|
||||
Less: Tax Effect of Adjustments (1)
|
0.01
|
|
|
0.08
|
|
|
0.01
|
|
|
0.14
|
|
||||
Plus: Income Tax Valuation Allowance
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.01
|
|
||||
Total Adjustments
|
0.05
|
|
|
0.20
|
|
|
0.05
|
|
|
0.28
|
|
||||
Adjusted Diluted EPS
|
$
|
0.28
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.21
|
|
|
$
|
(0.23
|
)
|
|
Net Cash Provided by (Used for) Operating Activities
|
|
Net Cash Provided by (Used for) Financing Activities
|
||||||||||||
|
Six Months Ended July 31, 2018
|
|
Six Months Ended July 31, 2017
|
|
Six Months Ended July 31, 2018
|
|
Six Months Ended July 31, 2017
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Cash Flow, As Reported
|
$
|
(14,087
|
)
|
|
$
|
66,877
|
|
|
$
|
15,717
|
|
|
$
|
(47,574
|
)
|
Adjustment for Non-Manufacturer Floorplan Net Payments
|
50,422
|
|
|
(38,030
|
)
|
|
(50,422
|
)
|
|
38,030
|
|
||||
Adjustment for Constant Equity in Equipment Inventory
|
(72,833
|
)
|
|
(48,157
|
)
|
|
—
|
|
|
—
|
|
||||
Adjusted Cash Flow
|
$
|
(36,498
|
)
|
|
$
|
(19,310
|
)
|
|
$
|
(34,705
|
)
|
|
$
|
(9,544
|
)
|
No.
|
|
Description
|
|
|
|
|
Employment Agreement dated September 5, 2018, between Bryan J. Knutson and the registrant.
|
|
|
|
|
|
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 July 31, 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:
|
September 6, 2018
|
|
|
|
|
TITAN MACHINERY INC.
|
|
|
|
|
|
|
|
|
|
|
|
By
|
/s/ Mark Kalvoda
|
|
|
|
Mark Kalvoda
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
i.
|
Material breach of this Agreement;
|
ii.
|
Willful refusal to perform your duties without justification, or willful misconduct or gross negligence in the performance of your duties under this Agreement;
|
iii.
|
A material breach by you of the Company’s material policies or codes of conduct or of your material obligations under any other agreement between you and the Company;
|
iv.
|
The willful engagement in dishonesty, fraud, illegal conduct, with respect to or in the course of the business or affairs of the Company, which materially and adversely harms the Company;
|
v.
|
Conviction of, or a plea of nolo contendere to, a felony or other crime involving moral turpitude; and
|
vi.
|
Death or permanent disability.
|
i.
|
The assignment to you of material duties inconsistent with your status or position as COO, or other action that results in a material change in your status, responsibilities, duties, authority, base salary, compensation, position, or change in reporting relationship;
|
ii.
|
The relocation of your principal office for Company business to a location more than forty (40) miles from the Company’s current headquarters;
|
iii.
|
Material breach by the Company of any terms or conditions of this Agreement; or
|
iv.
|
The failure of the Company to require a successor to assume the terms of this Agreement.
|
i.
|
One person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total voting power of the stock of the Company;
|
ii.
|
A majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or
|
iii.
|
The sale of all or substantially all of the Company’s assets.
|
i.
|
signing and not revoking a full release of all claims against the Company, its affiliates, officers, directors, employees, agents and assigns, substantially in the form attached to this Agreement as
Exhibit A
, within 30 days of the termination event;
|
ii.
|
not directly or indirectly, whether on your own behalf or that of a third party (other than the Company), engaging in the business (whether as an owner of, or as employee, director or officer of or consultant to any business, other than the Company, that is engaged in the business), of owning or operating agricultural or construction equipment stores in any state or Canadian province in which the Company or its subsidiaries owns or operates any agricultural or construction equipment stores during the term of your employment;
|
iii.
|
not directly or indirectly, either for yourself or any other person or entity solicit, inducing, or attempting to induce any employee of the Company to leave the employ of the Company; and
|
iv.
|
complying with your obligations under the Release.
|
i.
|
all claims arising out of or relating to my employment with Titan or the termination of that employment;
|
ii.
|
all claims arising out of or relating to the statements, actions, or omissions of the Company;
|
iii.
|
all claims for any alleged unlawful discrimination, harassment, retaliation or reprisal, or other alleged unlawful practices arising under any federal, state, or local statute, ordinance, or regulation, including without limitation, claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, 42 U.S.C. § 1981, the Employee Retirement Income Security Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Sarbanes-Oxley Act, the Family and Medical Leave Act, the Fair Credit Reporting Act, the North Dakota Human Rights Act, N.D. Stat. § 14.02-4-01 et seq., the North Dakota Equal Pay Act, N.D. Stat. § 34-06.1-01 et seq., the North Dakota Age Discrimination Act, N.D. Stat. § 34-01-17, and workers’ compensation non-interference or non-retaliation statutes;
|
iv.
|
all claims for alleged wrongful discharge; breach of contract; breach of implied contract; failure to keep any promise; breach of a covenant of good faith and fair dealing; breach of fiduciary duty; estoppel; my activities, if any, as a “whistleblower”; defamation; infliction of emotional distress; fraud; misrepresentation; negligence; harassment; retaliation or reprisal; constructive discharge; assault; battery; false imprisonment; invasion of privacy; interference with contractual or business relationships; any other wrongful employment practices; and violation of any other principle of common law;
|
v.
|
all claims for compensation of any kind, including without limitation, bonuses, commissions, stock-based compensation or stock options, vacation pay and paid time off, perquisites, and expense reimbursements;
|
vi.
|
all claims for back pay, front pay, reinstatement, other equitable relief, compensatory damages, damages for alleged personal injury, liquidated damages, and punitive damages; and
|
vii.
|
all claims for attorneys’ fees, costs, and interest.
|
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
|