Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2016 | Nov. 30, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Titan Machinery Inc. | |
Entity Central Index Key | 1,409,171 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 21,819,309 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2016 | Jan. 31, 2016 |
Current Assets | ||
Cash | $ 52,431 | $ 89,465 |
Receivables (net of allowance of $3,733 and $3,591 as of October 31, 2016 and January 31, 2016, respectively) | 71,803 | 56,552 |
Inventories | 607,629 | 689,464 |
Prepaid expenses and other | 7,491 | 9,753 |
Income taxes receivable | 4,559 | 13,011 |
Total current assets | 743,913 | 858,245 |
Noncurrent Assets | ||
Intangible assets, net of accumulated amortization | 5,026 | 5,134 |
Property and equipment, net of accumulated depreciation | 169,964 | 183,179 |
Other | 1,394 | 1,317 |
Total noncurrent assets | 176,384 | 189,630 |
Total Assets | 920,297 | 1,047,875 |
Current Liabilities | ||
Accounts payable | 22,888 | 16,863 |
Floorplan payable | 372,055 | 444,780 |
Current maturities of long-term debt | 15,464 | 1,557 |
Customer deposits | 16,215 | 31,159 |
Accrued expenses | 35,403 | 28,914 |
Income taxes payable | 0 | 152 |
Total current liabilities | 462,025 | 523,425 |
Long-Term Liabilities | ||
Senior convertible notes | 87,754 | 134,145 |
Long-term debt, less current maturities | 25,427 | 38,409 |
Deferred income taxes | 10,531 | 11,135 |
Other long-term liabilities | 2,217 | 2,412 |
Total long-term liabilities | 125,929 | 186,101 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common stock, par value $.00001 per share, 45,000 shares authorized; 21,819 shares issued and outstanding at October 31, 2016; 21,604 shares issued and outstanding at January 31, 2016 | 0 | 0 |
Additional paid-in-capital | 242,019 | 242,491 |
Retained earnings | 93,586 | 99,526 |
Accumulated other comprehensive loss | (3,262) | (4,461) |
Total Titan Machinery Inc. stockholders' equity | 332,343 | 337,556 |
Noncontrolling interest | 0 | 793 |
Total stockholders' equity | 332,343 | 338,349 |
Total Liabilities and Stockholders' Equity | $ 920,297 | $ 1,047,875 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2016 | Jan. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $ (3,733) | $ (3,591) |
Common stock, par value, in dollars per share | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 21,819,000 | 21,604,000 |
Common stock, shares outstanding | 21,819,000 | 21,604,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Revenue | ||||
Equipment | $ 212,194 | $ 215,692 | $ 570,369 | $ 681,691 |
Parts | 69,261 | 73,838 | 185,106 | 197,439 |
Service | 33,777 | 34,116 | 96,065 | 99,860 |
Rental and other | 17,034 | 21,329 | 43,919 | 53,371 |
Total Revenue | 332,266 | 344,975 | 895,459 | 1,032,361 |
Cost of Revenue | ||||
Equipment | 201,140 | 198,095 | 532,370 | 628,280 |
Parts | 48,387 | 51,673 | 130,006 | 138,626 |
Service | 11,828 | 12,449 | 35,473 | 36,136 |
Rental and other | 12,485 | 15,617 | 32,703 | 39,674 |
Total Cost of Revenue | 273,840 | 277,834 | 730,552 | 842,716 |
Gross Profit | 58,426 | 67,141 | 164,907 | 189,645 |
Operating Expenses | 53,143 | 53,484 | 159,132 | 165,979 |
Impairment and Realignment Costs | 300 | 22 | 546 | 1,519 |
Income from Operations | 5,008 | 13,635 | 5,229 | 22,147 |
Other Income (Expense) | ||||
Interest income and other income (expense) | 502 | 722 | ||
Interest and Other Income | 1,251 | (565) | ||
Floorplan interest expense | (3,294) | (4,602) | (10,843) | (13,945) |
Other interest expense | (2,160) | (4,041) | (5,930) | (11,228) |
Income (Loss) Before Income Taxes | 56 | 5,714 | (10,293) | (3,591) |
Provision for (Benefit from) Income Taxes | (208) | 2,231 | (3,997) | (354) |
Net Income (Loss) Including Noncontrolling Interest | 264 | 3,483 | (6,296) | (3,237) |
Less: Net Income (Loss) Attributable to Noncontrolling Interest | 0 | 27 | (356) | (395) |
Net Income (Loss) Attributable to Titan Machinery Inc. | 264 | 3,456 | (5,940) | (2,842) |
Net (Income) Loss Allocated to Participating Securities - Note 1 | (8) | (72) | 120 | 53 |
Net Income (Loss) Attributable to Titan Machinery Inc. Common Stockholders | $ 256 | $ 3,384 | $ (5,820) | $ (2,789) |
Earnings (Loss) per Share - Note 1 | ||||
Earnings (Loss) per Share - Basic, in dollars per share | $ 0.01 | $ 0.16 | $ (0.27) | $ (0.13) |
Earnings (Loss) per Share - Diluted, in dollars per share | $ 0.01 | $ 0.16 | $ (0.27) | $ (0.13) |
Weighted Average Common Shares - Basic | 21,218 | 21,129 | 21,208 | 21,093 |
Weighted Average Common Shares - Diluted | 21,269 | 21,218 | 21,208 | 21,093 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Net Income (Loss) Including Noncontrolling Interest | $ 264 | $ 3,483 | $ (6,296) | $ (3,237) |
Other Comprehensive Income (Loss) | ||||
Foreign currency translation adjustments | 626 | (100) | 945 | (3,829) |
Other comprehensive income (loss) | 963 | (253) | 1,420 | (3,257) |
Comprehensive Income (Loss) | 1,227 | 3,230 | (4,876) | (6,494) |
Comprehensive Income (Loss) Attributable to Noncontrolling Interest | (13) | (333) | (1,046) | |
Comprehensive Income (Loss) Attributable To Titan Machinery Inc. | 1,227 | 3,243 | (4,543) | (5,448) |
Interest Rate Swap | ||||
Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | 137 | (482) | (163) | (436) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | 200 | 320 | 638 | 798 |
Foreign Exchange Contract | ||||
Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | 7 | 200 | ||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | $ 0 | $ 2 | $ 0 | $ 10 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Foreign Exchange Contract | ||||
Tax expense (benefit) on unrealized gain (loss) on cash flow hedge derivative instruments | $ 0 | $ 5 | $ 0 | $ 133 |
Tax expense (benefit) on reclassification of gain (loss) on foreign currency contract cash flow hedge derivative instruments | 0 | 2 | 0 | 7 |
Cash Flow Hedges | ||||
Tax expense (benefit) on unrealized gain (loss) on cash flow hedge derivative instruments | 91 | 321 | (109) | 290 |
Tax expense (benefit) on reclassification of gain (loss) on foreign currency contract cash flow hedge derivative instruments | $ 133 | $ 213 | $ 426 | $ 532 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Foreign Currency Translation Adjustments | Unrealized Gains (Losses) on Net Investment Hedges | Unrealized Gains (Losses) on Foreign Currency Contract Cash Flow Hedges | Accumulated Other Comprehensive Income (Loss) | Total Titan Machinery Inc. Stockholders' Equity | Noncontrolling Interest |
Balance (Foreign Exchange Contract [Member]) at Jan. 31, 2015 | $ (37) | |||||||||
Balance (Interest Rate Contract [Member]) at Jan. 31, 2015 | (1,940) | |||||||||
Balance at Jan. 31, 2015 | $ 378,359 | $ 240,180 | $ 137,418 | $ (1,632) | $ 2,510 | $ (1,099) | $ 376,499 | $ 1,860 | ||
Balance (in shares) at Jan. 31, 2015 | 21,406 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Common stock issued on grant of restricted stock (net of forfeitures and shares withheld for income taxes), exercise of stock options, and tax benefits of equity awards | 170 | 170 | 170 | |||||||
Common stock issued on grant of restricted stock, exercise of stock options, and tax benefits of equity awards (in shares) | 170 | |||||||||
Stock-based compensation expense | 1,799 | 1,799 | 1,799 | 0 | ||||||
Comprehensive income (loss): | ||||||||||
Net loss | (3,237) | (2,842) | (2,842) | (395) | ||||||
Other comprehensive income (loss) | Foreign Exchange Contract [Member] | 10 | |||||||||
Other comprehensive income (loss) | Interest Rate Contract [Member] | 362 | |||||||||
Other comprehensive income (loss) | (3,257) | (3,178) | 200 | (2,606) | (2,606) | (651) | ||||
Comprehensive Income (Loss) | (6,494) | (5,448) | (1,046) | |||||||
Balance (Foreign Exchange Contract [Member]) at Oct. 31, 2015 | (27) | |||||||||
Balance (Interest Rate Contract [Member]) at Oct. 31, 2015 | (1,578) | |||||||||
Balance at Oct. 31, 2015 | 373,834 | 242,149 | 134,576 | (4,810) | 2,710 | (3,705) | 373,020 | 814 | ||
Balance (in shares) at Oct. 31, 2015 | 21,576 | |||||||||
Balance (Foreign Exchange Contract [Member]) at Jan. 31, 2016 | 0 | |||||||||
Balance (Interest Rate Contract [Member]) at Jan. 31, 2016 | (1,672) | |||||||||
Balance at Jan. 31, 2016 | 338,349 | 242,491 | 99,526 | (5,500) | 2,711 | (4,461) | 337,556 | 793 | ||
Balance (in shares) at Jan. 31, 2016 | 21,604 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Common stock issued on grant of restricted stock (net of forfeitures and shares withheld for income taxes), exercise of stock options, and tax benefits of equity awards | (357) | (357) | (357) | |||||||
Common stock issued on grant of restricted stock, exercise of stock options, and tax benefits of equity awards (in shares) | 215 | |||||||||
Stock-based compensation expense | 1,805 | 1,805 | 1,805 | |||||||
Repurchase of Senior Convertible Notes | 1,746 | 1,746 | 1,746 | |||||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | (4,324) | (3,666) | (198) | (198) | (3,864) | (460) | ||||
Comprehensive income (loss): | ||||||||||
Net loss | (6,296) | (5,940) | (5,940) | (356) | ||||||
Other comprehensive income (loss) | Foreign Exchange Contract [Member] | 0 | |||||||||
Other comprehensive income (loss) | Interest Rate Contract [Member] | 475 | |||||||||
Other comprehensive income (loss) | 1,420 | 922 | 0 | 1,397 | 1,397 | 23 | ||||
Comprehensive Income (Loss) | (4,876) | (4,543) | (333) | |||||||
Balance (Foreign Exchange Contract [Member]) at Oct. 31, 2016 | 0 | |||||||||
Balance (Interest Rate Contract [Member]) at Oct. 31, 2016 | $ (1,197) | |||||||||
Balance at Oct. 31, 2016 | $ 332,343 | $ 242,019 | $ 93,586 | $ (4,776) | $ 2,711 | $ (3,262) | $ 332,343 | $ 0 | ||
Balance (in shares) at Oct. 31, 2016 | 21,819 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Operating Activities | ||
Net income (loss) including noncontrolling interest | $ (6,296) | $ (3,237) |
Adjustments to reconcile net income (loss) including noncontrolling interest to net cash provided by operating activities | ||
Depreciation and amortization | 19,896 | 21,588 |
Impairment | 275 | 193 |
Deferred income taxes | 825 | 474 |
Stock-based compensation expense | 1,805 | 1,799 |
Noncash interest expense | 4,305 | 5,286 |
Unrealized foreign currency (gain) loss on loans to international subsidiaries | (44) | 778 |
Gain on repurchase of Senior Convertible Notes | (3,130) | 0 |
Other, net | (980) | (649) |
Changes in assets and liabilities | ||
Receivables, prepaid expenses and other assets | (18,070) | 9,828 |
Inventories | 91,222 | 72,437 |
Manufacturer floorplan payable | (20,821) | 124,305 |
Accounts payable, customer deposits, accrued expenses and other long-term liabilities | (2,546) | (27,845) |
Income taxes | 7,957 | (6,196) |
Net Cash Provided by Operating Activities | 74,398 | 198,761 |
Investing Activities | ||
Rental fleet purchases | (3,094) | (292) |
Property and equipment purchases (excluding rental fleet) | (7,121) | (5,713) |
Proceeds from sale of property and equipment | 2,285 | 5,135 |
Proceeds upon settlement of net investment hedge derivative instruments | 0 | 337 |
Payments upon settlement of net investment hedge derivative instruments | 0 | (23) |
Proceeds from Insurance Settlement, Investing Activities | 1,431 | 0 |
Other, net | (517) | 196 |
Net Cash Used for Investing Activities | (7,016) | (360) |
Financing Activities | ||
Net change in non-manufacturer floorplan payable | (54,478) | (201,320) |
Repurchase of Senior Convertible Notes | (46,013) | 0 |
Proceeds from long-term debt borrowings | 0 | 59,088 |
Principal payments on long-term debt | (1,935) | (101,465) |
Payments of Debt Issuance Costs | (31) | (3,381) |
Loan provided to noncontrolling interest holder | (2,148) | 0 |
Other, net | (33) | 143 |
Net Cash Used for Financing Activities | (104,638) | (246,935) |
Effect of Exchange Rate Changes on Cash | 222 | (585) |
Net Change in Cash | (37,034) | (49,119) |
Cash paid (received) during the period | ||
Income taxes, net of refunds | (12,942) | 5,283 |
Interest | 15,544 | 18,492 |
Supplemental Disclosures of Noncash Investing and Financing Activities | ||
Cash at Beginning of Period | 89,465 | 127,528 |
Cash at End of Period | 52,431 | 78,409 |
Net property and equipment financed with long-term debt, accounts payable and accrued liabilities | 2,818 | 747 |
Long-term debt extinguished upon sale of property and equipment | 0 | 3,315 |
Net transfer of assets from property and equipment to inventories | (4,411) | (5,743) |
Acquisition of noncontrolling interest through satisfaction of outstanding receivables | $ 4,324 | $ 0 |
BUSINESS ACTIVITY AND SIGNIFICA
BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 31, 2016 | |
Accounting Policies [Abstract] | |
BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES | BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. The quarterly operating results for Titan Machinery Inc. (the “Company”) are subject to fluctuation due to varying weather patterns, which may impact the timing and amount of equipment purchases, rentals, and after-sales parts and service purchases by the Company’s Agriculture, Construction and International customers. Therefore, operating results for the nine -month period ended October 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2017 . The information contained in the balance sheet as of January 31, 2016 was derived from the audited financial statements for the Company for the year then ended. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2016 as filed with the SEC. Nature of Business The Company is engaged in the retail sale, service and rental of agricultural and construction machinery through its stores in the United States and Europe. The Company’s North American stores are located in Arizona, Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, Wisconsin and Wyoming, and its European stores are located in Bulgaria, Romania, Serbia and Ukraine. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, particularly related to realization of inventory, initial valuation and impairment of intangible assets, collectability of receivables, and income taxes. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All material accounts, transactions and profits between the consolidated companies have been eliminated in consolidation. In June 2016, the Company acquired all of the outstanding ownership interest held by the non-controlling interest holder of the Company's Bulgarian subsidiary. Total consideration, which amounted to $4.3 million , was in the form of the satisfaction of outstanding receivables owed to the Company by the noncontrolling interest holder. As the Company had a controlling interest in the Bulgarian subsidiary prior to the acquisition, the acquisition was accounted for as an equity transaction which resulted in a decrease in the Company's additional paid-in capital in the amount of $3.7 million and a decrease in the Company's accumulated other comprehensive income in the amount of $0.2 million . Subsequent to this acquisition, all of the Company's subsidiaries are wholly-owned. Earnings (Loss) Per Share (“EPS”) The Company uses the two-class method to calculate basic and diluted EPS. Unvested restricted stock awards are considered participating securities because they entitle holders to non-forfeitable rights to dividends during the vesting term. Under the two-class method, basic EPS was computed by dividing net income (loss) attributable to Titan Machinery Inc. after allocation of net income (loss) to participating securities by the weighted-average number of shares of common stock outstanding during the relevant period. Diluted EPS was computed by dividing net income attributable to Titan Machinery Inc. after allocation of net income (loss) to participating securities by the weighted-average shares of common stock outstanding after adjusting for potential dilution related to the conversion of all dilutive securities into common stock. All potentially dilutive securities were included in the computation of diluted EPS. All anti-dilutive securities were excluded from the computation of diluted EPS. The following table sets forth the calculation of the denominator for basic and diluted EPS: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands, except per share data) (in thousands, except per share data) Basic Weighted-Average Common Shares Outstanding 21,218 21,129 21,208 21,093 Plus: Incremental Shares From Assumed Exercise of Stock Options 51 89 — — Diluted Weighted-Average Common Shares Outstanding 21,269 21,218 21,208 21,093 Anti-Dilutive Shares Excluded From Diluted Weighted-Average Common Shares Outstanding: Stock Options 141,000 89,000 146,000 191,000 Shares Underlying Senior Convertible Notes (conversion price of $43.17) 2,217 3,474 2,217 3,474 Earnings (Loss) per Share - Basic $ 0.01 $ 0.16 $ (0.27 ) $ (0.13 ) Earnings (Loss) per Share - Diluted $ 0.01 $ 0.16 $ (0.27 ) $ (0.13 ) Recent Accounting Guidance In May 2014 and August 2015, the FASB issued authoritative guidance on accounting for revenue recognition, codified in ASC 606, Revenue from Contracts with Customers . This guidance has been amended on various occasions and supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . This guidance is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company will adopt this guidance on February 1, 2018, and will employ one of the two retrospective application methods. The Company has not determined the potential effects adoption of this standard will have on the consolidated financial statements. In August 2014, the FASB issued authoritative guidance on management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and provide related footnote disclosures, codified in ASC 205-40, Going Concern . The guidance provides a definition of the term substantial doubt, requires an evaluation every reporting period including interim periods, provides principles for considering the mitigating effect of management’s plans, requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, requires an express statement and other disclosures when substantial doubt is not alleviated, and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The Company will adopt this guidance for the year-ended January 31, 2017, and it will apply to each interim and annual period thereafter. The Company does not expect the adoption to have a material effect on the consolidated financial statements. In July 2015, the FASB amended authoritative guidance on accounting for the measurement of inventory, codified in ASC 330, Inventory. The amended guidance requires inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company will adopt this guidance on February 1, 2017. Under the current guidance for measuring inventory, the Company recognizes lower-of-cost-or-market adjustments using a definition of market value as net realizable value reduced by an allowance for a normal profit margin. Upon implementation of the new authoritative guidance, market is defined solely as net realizable value. The Company does not anticipate that the adoption of this guidance will have a material effect on the consolidated financial statements. In February 2016, the FASB amended authoritative guidance on leases, codified in ASC 842, Leases. The amended guidance requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The provisions of this guidance are to be applied using a modified retrospective approach, with elective reliefs, which requires application of the guidance for all periods presented. The Company has not determined the potential effects adoption of this standard will have on the consolidated financial statements. In March 2016, the FASB amended authoritative guidance on stock-based compensation, codified in ASC 718, Compensation - Stock Compensation. The amended guidance changes the accounting for certain aspects of share-based payments, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statements of cash flows. The Company will adopt this guidance on February 1, 2017. The manner of application varies by the various provisions of the guidance, with certain provisions applied on a retrospective or modified retrospective approach, while others are applied prospectively. The adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Oct. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES October 31, 2016 January 31, 2016 (in thousands) New equipment $ 331,847 $ 323,393 Used equipment 182,039 267,893 Parts and attachments 81,265 87,807 Work in process 12,478 10,371 $ 607,629 $ 689,464 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Oct. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT October 31, 2016 January 31, 2016 (in thousands) Rental fleet equipment $ 131,102 $ 137,754 Machinery and equipment 22,697 23,051 Vehicles 37,397 36,537 Furniture and fixtures 39,538 38,149 Land, buildings, and leasehold improvements 64,772 63,460 295,506 298,951 Less accumulated depreciation (125,542 ) (115,772 ) $ 169,964 $ 183,179 During the third quarter of fiscal 2017, the Company determined that the current period operating loss combined with historical losses and anticipated future operating losses within certain of its stores was an indication that certain long-lived assets of these stores may not be recoverable. The Company performed step one of the impairment analysis for these assets which have a combined carrying value of $6.2 million . In certain cases, for assets with an aggregate carrying value of $2.6 million , the analysis indicated that the carrying value is not recoverable. Accordingly, the Company performed step two of the impairment analysis and estimated the fair value of these assets using estimated selling prices of similar assets. Step two of the analysis indicated that an impairment charge in the amount of $0.3 million was necessary, of which $0.2 million related to the Agriculture segment and $0.1 million related to the Construction segment. In all other cases, in which the aggregate carrying value of such assets totaled $3.6 million , the Company's analyses indicated that the carrying values are recoverable based on its estimates of future undiscounted cash flows under step one of the impairment analysis. |
LINES OF CREDIT _ FLOORPLAN PAY
LINES OF CREDIT / FLOORPLAN PAYABLE | 9 Months Ended |
Oct. 31, 2016 | |
Line of Credit Facility [Abstract] | |
LINES OF CREDIT / FLOORPLAN PAYABLE | LINES OF CREDIT / FLOORPLAN PAYABLE Floorplan Lines of Credit Floorplan payable balances reflect the amount owed for new equipment inventory purchased from a manufacturer and for used equipment inventory, which is primarily acquired through trade-in on equipment sales. Certain of the manufacturers from which the Company purchases new equipment inventory offer financing on these purchases, either offered directly from the manufacturer or through the manufacturers’ captive finance subsidiaries. CNH Industrial America LLC's captive finance subsidiary, CNH Industrial Capital America LLC ("CNH Industrial Capital"), also provides financing of used equipment inventory. The Company also has floorplan payable balances with non-manufacturer lenders for new and used equipment inventory. Cash flows associated with manufacturer floorplan payable are reported as operating cash flows while cash flows associated with non-manufacturer floorplan payable are reported as financing cash flows in the Company's consolidated statements of cash flows. The Company has three significant floorplan lines of credit for U.S. operations, floorplan credit facilities for its foreign subsidiaries, and other floorplan payable balances with non-manufacturer lenders and manufacturers. In August 2016, as a result of the Company's equipment inventory reduction and related reduction in floorplan financing needs, the Company provided notice to Wells Fargo Bank, National Association of its election to reduce the maximum credit amount available under the Second Amended and Restated Credit Agreement (the "Wells Fargo Credit Agreement") from an aggregate $350.0 million to an aggregate $275.0 million , comprised of a $65.0 million reduction in the Floorplan Payable Line, from $275.0 million to $210.0 million , and a $10.0 million reduction in the Working Capital Line, from $75.0 million to $65.0 million . Also in August 2016, the Company elected to reduce the maximum credit amount available under its credit facility with DLL Finance LLC ("DLL Finance"), from $110.0 million to $90.0 million . As a result of the reduction of the maximum credit amount available under the Wells Fargo Credit Agreement, in the third quarter of fiscal 2017, the Company wrote-off $0.6 million of capitalized debt issuance costs. This charge is recorded in other interest expense in the Consolidated Statements of Operations. As of October 31, 2016 , the Company had discretionary floorplan lines of credit for equipment inventory purchases totaling approximately $856.2 million , which includes a $210.0 million Floorplan Payable Line under the Wells Fargo Credit Agreement, a $450.0 million credit facility with CNH Industrial Capital, a $90.0 million credit facility with DLL Finance and the U.S. dollar equivalent of $106.2 million in credit facilities related to our foreign subsidiaries. Floorplan payables relating to these credit facilities totaled approximately $362.8 million of the total floorplan payable balance of $372.1 million outstanding as of October 31, 2016 and $420.7 million of the total floorplan payable balance of $444.8 million outstanding as of January 31, 2016 . The remaining outstanding balances relate to equipment inventory financing from manufacturers and non-manufacturer lenders other than the lines of credit described above. As of October 31, 2016 , the interest-bearing U.S. floorplan payables carried various interest rates primarily ranging from 2.74% to 6.09% , and the foreign floorplan payables carried various interest rates primarily ranging from 1.49% to 7.70% . As of October 31, 2016, the Company had a compensating balance arrangement under one of its foreign floorplan credit facilities which requires a minimum cash deposit to be maintained with the lender in the amount of $5.0 million for the term of the credit facility. Working Capital Line As of October 31, 2016 , the Company had a $65 million Working Capital Line under the Wells Fargo Credit Agreement. The Company had no amount outstanding on this Working Capital Line as of October 31, 2016 and January 31, 2016 . |
SENIOR CONVERTIBLE NOTES
SENIOR CONVERTIBLE NOTES | 9 Months Ended |
Oct. 31, 2016 | |
Senior Convertible Notes | |
SENIOR CONVERTIBLE NOTES | |
SENIOR CONVERTIBLE NOTES | SENIOR CONVERTIBLE NOTES The Company’s 3.75% Senior Convertible Notes issued on April 24, 2012 (“Senior Convertible Notes”) consisted of the following: October 31, 2016 January 31, 2016 (in thousands except conversion rate and conversion price) Principal value $ 95,725 $ 150,000 Unamortized debt discount (7,024 ) (13,946 ) Unamortized debt issuance costs (947 ) (1,909 ) Carrying value of Senior Convertible Notes $ 87,754 $ 134,145 Carrying value of equity component, net of deferred taxes $ 13,800 $ 15,546 Conversion rate (shares of common stock per $1,000 principal amount of notes) 23.1626 Conversion price (per share of common stock) $ 43.17 In April and September 2016, the Company repurchased an aggregate of $54.3 million face value ($49.1 million carrying value) of its Senior Convertible Notes with $46.0 million in cash, and recognized a pre-tax gain of approximately $3.1 million, of which $2.1 million was recognized in the first quarter and $1.0 million was recognized in the third quarter of fiscal 2017. These gains are included in other interest expense in the Consolidated Statements of Operations. The Company recognized interest expense associated with its Senior Convertible Notes as follows: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) Cash Interest Expense Coupon interest expense $ 996 $ 1,406 $ 3,457 $ 4,219 Noncash Interest Expense Amortization of debt discount 703 925 2,406 2,745 Amortization of transaction costs 100 138 347 412 $ 1,799 $ 2,469 $ 6,210 $ 7,376 The Senior Convertible Notes mature on May 1, 2019, unless earlier purchased by the Company, redeemed or converted. As of October 31, 2016 , the unamortized debt discount will be amortized over a remaining period of approximately 2.5 years . As of October 31, 2016 and January 31, 2016 , the if-converted value of the Senior Convertible Notes did not exceed the principal balance. The effective interest rate of the liability component was equal to 7.3% for each of the statements of operations periods presented. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Oct. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company holds derivative instruments for the purpose of minimizing exposure to fluctuations in foreign currency exchange rates to which the Company is exposed in the normal course of its operations. Net Investment Hedges To protect the value of the Company’s investments in its foreign operations against adverse changes in foreign currency exchange rates, the Company may, from time to time, hedge a portion of its net investment in one or more of its foreign subsidiaries. Gains and losses on derivative instruments that are designated and effective as a net investment hedge are included in other comprehensive income and only reclassified into earnings in the period during which the hedged net investment is sold or liquidated. Any hedge ineffectiveness is recognized in earnings immediately. Cash Flow Hedges On October 9, 2013, the Company entered into a forward-starting interest rate swap instrument, which has a notional amount of $100.0 million , an effective date of September 30, 2014 and a maturity date of September 30, 2018. The objective of the instrument is to, beginning on September 30, 2014, protect the Company from changes in benchmark interest rates to which the Company is exposed through certain of its variable interest rate credit facilities. The instrument provides for a fixed interest rate of 1.901% up to the maturity date. The Company may, from time to time, hedge foreign currency exchange rate risk arising from inventory purchases denominated in Canadian dollars through the use of foreign currency forward contracts. The maximum length of time over which the Company hedges its exposure to the variability in future cash flows associated with the Canadian dollar purchasing is less than 12 months. The interest rate swap instrument and foreign currency contracts have been designated as cash flow hedging instruments and accordingly changes in the effective portion of the fair value of the instruments are recorded in other comprehensive income and only reclassified into earnings in the period(s) in which the related hedged item affects earnings or the anticipated underlying hedged transactions are no longer probable of occurring. Any hedge ineffectiveness is recognized in earnings immediately. Derivative Instruments Not Designated as Hedging Instruments The Company uses foreign currency forward contracts to hedge the effects of fluctuations in exchange rates on outstanding intercompany loans. The Company does not formally designate and document such derivative instruments as hedging instruments; however, the instruments are an effective economic hedge of the underlying foreign currency exposure. Both the gain or loss on the derivative instrument and the offsetting gain or loss on the underlying intercompany loan are recognized in earnings immediately, thereby eliminating or reducing the impact of foreign currency exchange rate fluctuations on net income. The following table sets forth the notional value of the Company's outstanding derivative instruments. Notional Amount as of: October 31, 2016 January 31, 2016 (in thousands) Cash flow hedges: Interest rate swap $ 100,000 $ 100,000 Derivatives not designated as hedging instruments: Foreign currency contracts 15,844 13,148 The following table sets forth the fair value of the Company’s outstanding derivative instruments. Asset derivatives are included in prepaid expenses and other in the consolidated balance sheets, and liability derivatives are included in accrued expenses in the consolidated balance sheets. Fair Value as of: October 31, 2016 January 31, 2016 (in thousands) Asset Derivatives: Derivatives not designated as hedging instruments: Foreign currency contracts $ — $ 125 Total Asset Derivatives $ — $ 125 Liability Derivatives: Derivatives designated as hedging instruments: Cash flow hedges: Interest rate swap $ 2,012 $ 2,836 Derivatives not designated as hedging instruments: Foreign currency contracts 121 — Total Liability Derivatives $ 2,133 $ 2,836 The following table sets forth the gains and losses (before the related income tax effects) recognized in other comprehensive income (loss) ("OCI") and income (loss) related to the Company’s derivative instruments for the three and nine months ended October 31, 2016 and 2015 , respectively. Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 OCI Income (Loss) OCI Income (Loss) OCI Income (Loss) OCI Income (Loss) (in thousands) (in thousands) Dervatives Designated as Hedging Instruments: Net investment hedges: Foreign currency contracts $ — $ — $ 12 $ — $ — $ — $ 333 $ — Cash flow hedges: Interest rate swap (a) 228 (333 ) (803 ) (446 ) (272 ) (1,064 ) (727 ) (1,330 ) Foreign currency contracts (b) — — — (4 ) — — — (17 ) Dervatives Not Designated as Hedging Instruments: Foreign currency contracts (c) — 126 — (54 ) — 112 — 751 Total Derivatives $ 228 $ (207 ) $ (791 ) $ (504 ) $ (272 ) $ (952 ) $ (394 ) $ (596 ) (a) No material hedge ineffectiveness has been recognized. The amounts shown in Income (Loss) above are reclassification amounts from accumulated other comprehensive income and are recorded in floorplan interest expense in the consolidated statements of operations. (b) Amounts are included in Cost of revenue - equipment in the consolidated statements of operations. (c) Amounts are included in Interest income and other income (expense) in the consolidated statements of operations. No components of the Company's net investment or cash flow hedging instruments were excluded from the assessment of hedge ineffectiveness. As of October 31, 2016 , the Company had $2.0 million in pre-tax net unrealized losses associated with its interest rate swap cash flow hedging instrument recorded in accumulated other comprehensive income. The Company expects that $1.2 million of pre-tax unrealized losses associated with its interest rate swap will be reclassified into income over the next 12 months. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Oct. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The assets and liabilities which are measured at fair value on a recurring basis as of October 31, 2016 and January 31, 2016 are as follows: October 31, 2016 January 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (in thousands) (in thousands) Financial Assets Foreign currency contracts $ — $ — $ — $ — $ — $ 125 $ — $ 125 Total Financial Assets $ — $ — $ — $ — $ — $ 125 $ — $ 125 Financial Liabilities Interest rate swap $ — $ 2,012 $ — $ 2,012 $ — $ 2,836 $ — $ 2,836 Foreign currency contracts — 121 — 121 — — — — Total Financial Liabilities $ — $ 2,133 $ — $ 2,133 $ — $ 2,836 $ — $ 2,836 The valuation for the Company's foreign currency contracts and interest rate swap derivative instruments were valued using discounted cash flow analyses, an income approach, utilizing readily observable market data as inputs. The Company also valued certain long-lived assets at fair value on a non-recurring basis as of January 31, 2016 as part of its long-lived asset impairment testing. The estimated fair value of such assets as of January 31, 2016 was $5.6 million and consisted of real estate assets where fair value was estimated by a professional appraisal of such assets. The real estate appraisals utilized market and income approaches incorporating both observable and unobservable inputs, and are deemed to be Level 3 fair value inputs. In addition, in certain instances as of October 31, 2016 and January 31, 2016, the Company estimated the fair value of certain long-lived assets to approximate zero as no future cash flows were assumed to be generated from the use of such assets and the expected sales values of such assets were deemed to be nominal. All such fair value measurements were based on unobservable inputs and thus are Level 3 fair value inputs. The Company also has financial instruments that are not recorded at fair value in its consolidated financial statements. The carrying amount of cash, receivables, payables, short-term debt and other current liabilities approximates fair value because of the short maturity and/or frequent repricing of those instruments, which are Level 2 fair value inputs. Based upon current borrowing rates with similar maturities, which are Level 2 fair value inputs, the carrying value of long-term debt approximates the fair value as of October 31, 2016 and January 31, 2016 , respectively. The following table provides details on the Senior Convertible Notes as of October 31, 2016 and January 31, 2016 . The difference between the face value and the carrying value of these notes is the result of the allocation between the debt and equity components, and unamortized debt issuance costs. Fair value of the Senior Convertible Notes was estimated based on Level 2 fair value inputs. October 31, 2016 January 31, 2016 Estimated Fair Value Carrying Value Face Value Estimated Fair Value Carrying Value Face Value (in thousands) (in thousands) Senior convertible notes $ 85,000 $ 87,754 $ 95,725 $ 105,000 $ 134,145 $ 150,000 |
SEGMENT INFORMATION AND OPERATI
SEGMENT INFORMATION AND OPERATING RESULTS | 9 Months Ended |
Oct. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION AND OPERATING RESULTS | SEGMENT INFORMATION AND OPERATING RESULTS The Company has three reportable segments: Agriculture, Construction and International. Revenue between segments is immaterial. The Company retains various unallocated income/(expense) items and assets at the general corporate level, which the Company refers to as “Shared Resources” in the table below. Shared Resources assets primarily consist of cash and property and equipment. Certain financial information for each of the Company’s business segments is set forth below. Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) Revenue Agriculture $ 205,540 $ 211,302 $ 538,060 $ 660,606 Construction 80,789 87,023 241,922 249,601 International 45,937 46,650 115,477 122,154 Total $ 332,266 $ 344,975 $ 895,459 $ 1,032,361 Income (Loss) Before Income Taxes Agriculture $ (1,798 ) $ 4,219 $ (9,881 ) $ 693 Construction (105 ) 1,413 (1,523 ) (3,089 ) International 604 351 (88 ) (3,074 ) Segment income (loss) before income taxes (1,299 ) 5,983 (11,492 ) (5,470 ) Shared Resources 1,355 (269 ) 1,199 1,879 Total $ 56 $ 5,714 $ (10,293 ) $ (3,591 ) October 31, 2016 January 31, 2016 (in thousands) Total Assets Agriculture $ 475,418 $ 557,579 Construction 264,393 294,891 International 127,703 109,706 Segment assets 867,514 962,176 Shared Resources 52,783 85,699 Total $ 920,297 $ 1,047,875 |
STORE CLOSINGS AND REALIGNMENT
STORE CLOSINGS AND REALIGNMENT COST | 9 Months Ended |
Oct. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
STORE CLOSINGS AND REALIGNMENT COSTS | STORE CLOSINGS AND REALIGNMENT COSTS Exit costs associated with the Company's store closings and realignment activities are summarized in the following table. Such costs are included in Impairment and Realignment Costs in the consolidated statements of operations. Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) Agriculture Segment Lease termination costs (a) $ — $ (38 ) $ (120 ) $ 223 Employee severance costs — (15 ) — 225 Impairment of fixed assets, net of gains on asset disposition — — — 10 Asset relocation and other closing costs — (34 ) — 34 $ — $ (87 ) $ (120 ) $ 492 Construction Segment Lease termination costs (a) $ — $ 46 $ (8 ) $ 137 Employee severance costs — 29 21 362 Impairment of fixed assets, net of gains on asset disposition — 10 — 106 Asset relocation and other closing costs — (5 ) — 88 $ — $ 80 $ 13 $ 693 Shared Resource Center Lease termination costs (a) $ — $ (12 ) $ — $ 37 Employee severance costs — — 378 187 Impairment of fixed assets, net of gains on asset disposition — 41 — 110 $ — $ 29 $ 378 $ 334 Total Lease termination costs (a) $ — $ (4 ) $ (128 ) $ 397 Employee severance costs — 14 399 774 Impairment of fixed assets, net of gains on asset disposition — 51 — 226 Asset relocation and other closing costs — (39 ) — 122 $ — $ 22 $ 271 $ 1,519 (a) Net of gain on changes in lease termination accrual assumptions A reconciliation of the beginning and ending exit cost liability balance, which is included in accrued expenses in the consolidated balance sheets, follows: Amount (in thousands) Balance, January 31, 2016 $ 660 Exit costs incurred and charged to expense Lease termination costs (128 ) Employee severance costs 399 Exit costs paid Lease termination costs (430 ) Employee severance costs (399 ) Balance, October 31, 2016 $ 102 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company incurs a provision for income taxes in jurisdictions in which it has taxable income. Generally the Company receives a benefit for income taxes in jurisdictions in which it has taxable losses unless it has recorded a valuation allowance for that jurisdiction. These losses are available to reduce future taxable income in these jurisdictions if earned within the allowable net operating loss carryforward period. The foreign jurisdictions in which the Company operates have net operating loss carryforward periods ranging from five to seven years, with certain jurisdictions having indefinite carryforward periods. The components of income (loss) before income taxes are as follows: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) U.S. $ (547 ) $ 5,363 $ (10,204 ) $ (521 ) Foreign 603 351 (89 ) (3,070 ) Total $ 56 $ 5,714 $ (10,293 ) $ (3,591 ) A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate is as follows: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 U.S. statutory rate 35.0 % 35.0 % (35.0 )% (35.0 )% Foreign statutory rates (406.2 )% (0.2 )% 1.2 % 22.4 % State taxes on income net of federal tax benefit 4.2 % 4.2 % (4.2 )% (4.2 )% Change in valuation allowance (221.1 )% (11.1 )% (4.4 )% 27.8 % Tax effect of Ukrainian hryvnia devaluation (a) 55.2 % 6.4 % 2.2 % (13.3 )% All other, net 166.7 % 4.7 % 1.4 % (7.6 )% (366.1 )% 39.0 % (38.8 )% (9.9 )% (a) Represents the tax impact of differences in foreign currency losses recognized as the result of Ukrainian hryvnia devaluation between Ukrainian taxable income (loss) and financial reporting income (loss). |
BUSINESS ACTIVITY AND SIGNIFI19
BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. The quarterly operating results for Titan Machinery Inc. (the “Company”) are subject to fluctuation due to varying weather patterns, which may impact the timing and amount of equipment purchases, rentals, and after-sales parts and service purchases by the Company’s Agriculture, Construction and International customers. Therefore, operating results for the nine -month period ended October 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2017 . The information contained in the balance sheet as of January 31, 2016 was derived from the audited financial statements for the Company for the year then ended. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2016 as filed with the SEC. |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, particularly related to realization of inventory, initial valuation and impairment of intangible assets, collectability of receivables, and income taxes. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All material accounts, transactions and profits between the consolidated companies have been eliminated in consolidation. In June 2016, the Company acquired all of the outstanding ownership interest held by the non-controlling interest holder of the Company's Bulgarian subsidiary. Total consideration, which amounted to $4.3 million , was in the form of the satisfaction of outstanding receivables owed to the Company by the noncontrolling interest holder. As the Company had a controlling interest in the Bulgarian subsidiary prior to the acquisition, the acquisition was accounted for as an equity transaction which resulted in a decrease in the Company's additional paid-in capital in the amount of $3.7 million and a decrease in the Company's accumulated other comprehensive income in the amount of $0.2 million . Subsequent to this acquisition, all of the Company's subsidiaries are wholly-owned. |
Earnings (Loss) Per Share (EPS) | Earnings (Loss) Per Share (“EPS”) The Company uses the two-class method to calculate basic and diluted EPS. Unvested restricted stock awards are considered participating securities because they entitle holders to non-forfeitable rights to dividends during the vesting term. Under the two-class method, basic EPS was computed by dividing net income (loss) attributable to Titan Machinery Inc. after allocation of net income (loss) to participating securities by the weighted-average number of shares of common stock outstanding during the relevant period. Diluted EPS was computed by dividing net income attributable to Titan Machinery Inc. after allocation of net income (loss) to participating securities by the weighted-average shares of common stock outstanding after adjusting for potential dilution related to the conversion of all dilutive securities into common stock. All potentially dilutive securities were included in the computation of diluted EPS. All anti-dilutive securities were excluded from the computation of diluted EPS. |
New Accounting Pronouncements | Recent Accounting Guidance In May 2014 and August 2015, the FASB issued authoritative guidance on accounting for revenue recognition, codified in ASC 606, Revenue from Contracts with Customers . This guidance has been amended on various occasions and supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . This guidance is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company will adopt this guidance on February 1, 2018, and will employ one of the two retrospective application methods. The Company has not determined the potential effects adoption of this standard will have on the consolidated financial statements. In August 2014, the FASB issued authoritative guidance on management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and provide related footnote disclosures, codified in ASC 205-40, Going Concern . The guidance provides a definition of the term substantial doubt, requires an evaluation every reporting period including interim periods, provides principles for considering the mitigating effect of management’s plans, requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, requires an express statement and other disclosures when substantial doubt is not alleviated, and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The Company will adopt this guidance for the year-ended January 31, 2017, and it will apply to each interim and annual period thereafter. The Company does not expect the adoption to have a material effect on the consolidated financial statements. In July 2015, the FASB amended authoritative guidance on accounting for the measurement of inventory, codified in ASC 330, Inventory. The amended guidance requires inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company will adopt this guidance on February 1, 2017. Under the current guidance for measuring inventory, the Company recognizes lower-of-cost-or-market adjustments using a definition of market value as net realizable value reduced by an allowance for a normal profit margin. Upon implementation of the new authoritative guidance, market is defined solely as net realizable value. The Company does not anticipate that the adoption of this guidance will have a material effect on the consolidated financial statements. In February 2016, the FASB amended authoritative guidance on leases, codified in ASC 842, Leases. The amended guidance requires lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. The provisions of this guidance are to be applied using a modified retrospective approach, with elective reliefs, which requires application of the guidance for all periods presented. The Company has not determined the potential effects adoption of this standard will have on the consolidated financial statements. In March 2016, the FASB amended authoritative guidance on stock-based compensation, codified in ASC 718, Compensation - Stock Compensation. The amended guidance changes the accounting for certain aspects of share-based payments, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statements of cash flows. The Company will adopt this guidance on February 1, 2017. The manner of application varies by the various provisions of the guidance, with certain provisions applied on a retrospective or modified retrospective approach, while others are applied prospectively. The adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements. |
BUSINESS ACTIVITY AND SIGNIFI20
BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of calculation of basic and diluted EPS | The following table sets forth the calculation of the denominator for basic and diluted EPS: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands, except per share data) (in thousands, except per share data) Basic Weighted-Average Common Shares Outstanding 21,218 21,129 21,208 21,093 Plus: Incremental Shares From Assumed Exercise of Stock Options 51 89 — — Diluted Weighted-Average Common Shares Outstanding 21,269 21,218 21,208 21,093 Anti-Dilutive Shares Excluded From Diluted Weighted-Average Common Shares Outstanding: Stock Options 141,000 89,000 146,000 191,000 Shares Underlying Senior Convertible Notes (conversion price of $43.17) 2,217 3,474 2,217 3,474 Earnings (Loss) per Share - Basic $ 0.01 $ 0.16 $ (0.27 ) $ (0.13 ) Earnings (Loss) per Share - Diluted $ 0.01 $ 0.16 $ (0.27 ) $ (0.13 ) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | October 31, 2016 January 31, 2016 (in thousands) New equipment $ 331,847 $ 323,393 Used equipment 182,039 267,893 Parts and attachments 81,265 87,807 Work in process 12,478 10,371 $ 607,629 $ 689,464 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | October 31, 2016 January 31, 2016 (in thousands) Rental fleet equipment $ 131,102 $ 137,754 Machinery and equipment 22,697 23,051 Vehicles 37,397 36,537 Furniture and fixtures 39,538 38,149 Land, buildings, and leasehold improvements 64,772 63,460 295,506 298,951 Less accumulated depreciation (125,542 ) (115,772 ) $ 169,964 $ 183,179 |
SENIOR CONVERTIBLE NOTES (Table
SENIOR CONVERTIBLE NOTES (Tables) - Senior Convertible Notes | 9 Months Ended |
Oct. 31, 2016 | |
SENIOR CONVERTIBLE NOTES | |
Schedule of 3.75% Senior Convertible Notes | The Company’s 3.75% Senior Convertible Notes issued on April 24, 2012 (“Senior Convertible Notes”) consisted of the following: October 31, 2016 January 31, 2016 (in thousands except conversion rate and conversion price) Principal value $ 95,725 $ 150,000 Unamortized debt discount (7,024 ) (13,946 ) Unamortized debt issuance costs (947 ) (1,909 ) Carrying value of Senior Convertible Notes $ 87,754 $ 134,145 Carrying value of equity component, net of deferred taxes $ 13,800 $ 15,546 Conversion rate (shares of common stock per $1,000 principal amount of notes) 23.1626 Conversion price (per share of common stock) $ 43.17 |
Senior Convertible Notes Interest Expense | The Company recognized interest expense associated with its Senior Convertible Notes as follows: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) Cash Interest Expense Coupon interest expense $ 996 $ 1,406 $ 3,457 $ 4,219 Noncash Interest Expense Amortization of debt discount 703 925 2,406 2,745 Amortization of transaction costs 100 138 347 412 $ 1,799 $ 2,469 $ 6,210 $ 7,376 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | The following table sets forth the notional value of the Company's outstanding derivative instruments. Notional Amount as of: October 31, 2016 January 31, 2016 (in thousands) Cash flow hedges: Interest rate swap $ 100,000 $ 100,000 Derivatives not designated as hedging instruments: Foreign currency contracts 15,844 13,148 |
Schedule of fair value of outstanding derivative instruments | The following table sets forth the fair value of the Company’s outstanding derivative instruments. Asset derivatives are included in prepaid expenses and other in the consolidated balance sheets, and liability derivatives are included in accrued expenses in the consolidated balance sheets. Fair Value as of: October 31, 2016 January 31, 2016 (in thousands) Asset Derivatives: Derivatives not designated as hedging instruments: Foreign currency contracts $ — $ 125 Total Asset Derivatives $ — $ 125 Liability Derivatives: Derivatives designated as hedging instruments: Cash flow hedges: Interest rate swap $ 2,012 $ 2,836 Derivatives not designated as hedging instruments: Foreign currency contracts 121 — Total Liability Derivatives $ 2,133 $ 2,836 |
Schedule of gains and losses recognized on derivative instruments | The following table sets forth the gains and losses (before the related income tax effects) recognized in other comprehensive income (loss) ("OCI") and income (loss) related to the Company’s derivative instruments for the three and nine months ended October 31, 2016 and 2015 , respectively. Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 OCI Income (Loss) OCI Income (Loss) OCI Income (Loss) OCI Income (Loss) (in thousands) (in thousands) Dervatives Designated as Hedging Instruments: Net investment hedges: Foreign currency contracts $ — $ — $ 12 $ — $ — $ — $ 333 $ — Cash flow hedges: Interest rate swap (a) 228 (333 ) (803 ) (446 ) (272 ) (1,064 ) (727 ) (1,330 ) Foreign currency contracts (b) — — — (4 ) — — — (17 ) Dervatives Not Designated as Hedging Instruments: Foreign currency contracts (c) — 126 — (54 ) — 112 — 751 Total Derivatives $ 228 $ (207 ) $ (791 ) $ (504 ) $ (272 ) $ (952 ) $ (394 ) $ (596 ) (a) No material hedge ineffectiveness has been recognized. The amounts shown in Income (Loss) above are reclassification amounts from accumulated other comprehensive income and are recorded in floorplan interest expense in the consolidated statements of operations. (b) Amounts are included in Cost of revenue - equipment in the consolidated statements of operations. (c) Amounts are included in Interest income and other income (expense) in the consolidated statements of operations |
FAIR VALUE OF FINANCIAL INSTR25
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The assets and liabilities which are measured at fair value on a recurring basis as of October 31, 2016 and January 31, 2016 are as follows: October 31, 2016 January 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (in thousands) (in thousands) Financial Assets Foreign currency contracts $ — $ — $ — $ — $ — $ 125 $ — $ 125 Total Financial Assets $ — $ — $ — $ — $ — $ 125 $ — $ 125 Financial Liabilities Interest rate swap $ — $ 2,012 $ — $ 2,012 $ — $ 2,836 $ — $ 2,836 Foreign currency contracts — 121 — 121 — — — — Total Financial Liabilities $ — $ 2,133 $ — $ 2,133 $ — $ 2,836 $ — $ 2,836 |
Fair Value of Senior Convertible Notes | The following table provides details on the Senior Convertible Notes as of October 31, 2016 and January 31, 2016 . The difference between the face value and the carrying value of these notes is the result of the allocation between the debt and equity components, and unamortized debt issuance costs. Fair value of the Senior Convertible Notes was estimated based on Level 2 fair value inputs. October 31, 2016 January 31, 2016 Estimated Fair Value Carrying Value Face Value Estimated Fair Value Carrying Value Face Value (in thousands) (in thousands) Senior convertible notes $ 85,000 $ 87,754 $ 95,725 $ 105,000 $ 134,145 $ 150,000 |
SEGMENT INFORMATION AND OPERA26
SEGMENT INFORMATION AND OPERATING RESULTS (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of financial information of business segments | Certain financial information for each of the Company’s business segments is set forth below. Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) Revenue Agriculture $ 205,540 $ 211,302 $ 538,060 $ 660,606 Construction 80,789 87,023 241,922 249,601 International 45,937 46,650 115,477 122,154 Total $ 332,266 $ 344,975 $ 895,459 $ 1,032,361 Income (Loss) Before Income Taxes Agriculture $ (1,798 ) $ 4,219 $ (9,881 ) $ 693 Construction (105 ) 1,413 (1,523 ) (3,089 ) International 604 351 (88 ) (3,074 ) Segment income (loss) before income taxes (1,299 ) 5,983 (11,492 ) (5,470 ) Shared Resources 1,355 (269 ) 1,199 1,879 Total $ 56 $ 5,714 $ (10,293 ) $ (3,591 ) October 31, 2016 January 31, 2016 (in thousands) Total Assets Agriculture $ 475,418 $ 557,579 Construction 264,393 294,891 International 127,703 109,706 Segment assets 867,514 962,176 Shared Resources 52,783 85,699 Total $ 920,297 $ 1,047,875 |
STORE CLOSINGS AND REALIGNMEN27
STORE CLOSINGS AND REALIGNMENT COST (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Costs by Type of Cost | Exit costs associated with the Company's store closings and realignment activities are summarized in the following table. Such costs are included in Impairment and Realignment Costs in the consolidated statements of operations. Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) Agriculture Segment Lease termination costs (a) $ — $ (38 ) $ (120 ) $ 223 Employee severance costs — (15 ) — 225 Impairment of fixed assets, net of gains on asset disposition — — — 10 Asset relocation and other closing costs — (34 ) — 34 $ — $ (87 ) $ (120 ) $ 492 Construction Segment Lease termination costs (a) $ — $ 46 $ (8 ) $ 137 Employee severance costs — 29 21 362 Impairment of fixed assets, net of gains on asset disposition — 10 — 106 Asset relocation and other closing costs — (5 ) — 88 $ — $ 80 $ 13 $ 693 Shared Resource Center Lease termination costs (a) $ — $ (12 ) $ — $ 37 Employee severance costs — — 378 187 Impairment of fixed assets, net of gains on asset disposition — 41 — 110 $ — $ 29 $ 378 $ 334 Total Lease termination costs (a) $ — $ (4 ) $ (128 ) $ 397 Employee severance costs — 14 399 774 Impairment of fixed assets, net of gains on asset disposition — 51 — 226 Asset relocation and other closing costs — (39 ) — 122 $ — $ 22 $ 271 $ 1,519 (a) Net of gain on changes in lease termination accrual assumptions |
Restructuring Reserve Rollforward | A reconciliation of the beginning and ending exit cost liability balance, which is included in accrued expenses in the consolidated balance sheets, follows: Amount (in thousands) Balance, January 31, 2016 $ 660 Exit costs incurred and charged to expense Lease termination costs (128 ) Employee severance costs 399 Exit costs paid Lease termination costs (430 ) Employee severance costs (399 ) Balance, October 31, 2016 $ 102 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax | The components of income (loss) before income taxes are as follows: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 (in thousands) (in thousands) U.S. $ (547 ) $ 5,363 $ (10,204 ) $ (521 ) Foreign 603 351 (89 ) (3,070 ) Total $ 56 $ 5,714 $ (10,293 ) $ (3,591 ) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax rate to the Company's effective income tax rate is as follows: Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 U.S. statutory rate 35.0 % 35.0 % (35.0 )% (35.0 )% Foreign statutory rates (406.2 )% (0.2 )% 1.2 % 22.4 % State taxes on income net of federal tax benefit 4.2 % 4.2 % (4.2 )% (4.2 )% Change in valuation allowance (221.1 )% (11.1 )% (4.4 )% 27.8 % Tax effect of Ukrainian hryvnia devaluation (a) 55.2 % 6.4 % 2.2 % (13.3 )% All other, net 166.7 % 4.7 % 1.4 % (7.6 )% (366.1 )% 39.0 % (38.8 )% (9.9 )% (a) Represents the tax impact of differences in foreign currency losses recognized as the result of Ukrainian hryvnia devaluation between Ukrainian taxable income (loss) and financial reporting income (loss). |
BUSINESS ACTIVITY AND SIGNIFI29
BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Denominator | ||||
Basic Weighted-Average Common Shares Outstanding | 21,218 | 21,129 | 21,208 | 21,093 |
Plus: Incremental Shares From Assumed Exercise of Stock Options | 51 | 89 | 0 | 0 |
Diluted Weighted-Average Common Shares Outstanding | 21,269 | 21,218 | 21,208 | 21,093 |
Earnings (Loss) per Share - Basic, in dollars per share | $ 0.01 | $ 0.16 | $ (0.27) | $ (0.13) |
Earnings (Loss) per Share - Diluted, in dollars per share | $ 0.01 | $ 0.16 | $ (0.27) | $ (0.13) |
Employee Stock Option | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from the calculation of diluted EPS (in shares) | 141,000 | 89,000 | 146,000 | 191,000 |
Convertible Notes | ||||
Anti-dilutive securities | ||||
Anti-dilutive securities excluded from the calculation of diluted EPS (in shares) | 2,217 | 3,474 | 2,217 | 3,474 |
Conversion price of shares underlying convertible notes (in dollars per share) | $ 43.17 | $ 43.17 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Oct. 31, 2016 | Jan. 31, 2016 |
Inventory Disclosure [Abstract] | ||
New equipment | $ 331,847 | $ 323,393 |
Used equipment | 182,039 | 267,893 |
Parts and attachments | 81,265 | 87,807 |
Work in process | 12,478 | 10,371 |
Inventories | $ 607,629 | $ 689,464 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | Jan. 31, 2016 | |
PROPERTY AND EQUIPMENT | |||||
Tangible Asset Impairment Charges | $ 300 | $ 22 | $ 546 | $ 1,519 | |
Property and equipment, gross | 295,506 | 295,506 | $ 298,951 | ||
Less accumulated depreciation | (125,542) | (125,542) | (115,772) | ||
Property and equipment, net | 169,964 | 169,964 | 183,179 | ||
Rental fleet equipment | |||||
PROPERTY AND EQUIPMENT | |||||
Property and equipment, gross | 131,102 | 131,102 | 137,754 | ||
Machinery and equipment | |||||
PROPERTY AND EQUIPMENT | |||||
Property and equipment, gross | 22,697 | 22,697 | 23,051 | ||
Vehicles | |||||
PROPERTY AND EQUIPMENT | |||||
Property and equipment, gross | 37,397 | 37,397 | 36,537 | ||
Furniture and fixtures | |||||
PROPERTY AND EQUIPMENT | |||||
Property and equipment, gross | 39,538 | 39,538 | 38,149 | ||
Land, buildings, and leasehold improvements | |||||
PROPERTY AND EQUIPMENT | |||||
Property and equipment, gross | 64,772 | $ 64,772 | $ 63,460 | ||
Agriculture [Member] | |||||
PROPERTY AND EQUIPMENT | |||||
Tangible Asset Impairment Charges | 200 | ||||
Construction [Member] | |||||
PROPERTY AND EQUIPMENT | |||||
Tangible Asset Impairment Charges | $ 100 | ||||
Fair Value Measurement [Domain] | |||||
PROPERTY AND EQUIPMENT | |||||
Impaired Long-Lived Assets Held and Used, Facts and Circumstances Leading to Impairment | 6.2 | ||||
titn_step_one_impairment_analysis_fail_carrying_value [Member] | |||||
PROPERTY AND EQUIPMENT | |||||
Impaired Long-Lived Assets Held and Used, Facts and Circumstances Leading to Impairment | 2.6 | ||||
titn_step_one_pass_impairment_analysis_carrying_value [Member] | |||||
PROPERTY AND EQUIPMENT | |||||
Impaired Long-Lived Assets Held and Used, Facts and Circumstances Leading to Impairment | 3.6 | ||||
Other Operating Income (Expense) [Member] | |||||
PROPERTY AND EQUIPMENT | |||||
Tangible Asset Impairment Charges | $ 275 |
LINES OF CREDIT _ FLOORPLAN P32
LINES OF CREDIT / FLOORPLAN PAYABLE (Details) | 9 Months Ended | |||
Oct. 31, 2016USD ($)floorplan_line_of_credit | Aug. 31, 2016USD ($) | Aug. 09, 2016USD ($) | Jan. 31, 2016USD ($) | |
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Number of significant floorplan lines of credit | floorplan_line_of_credit | 3 | |||
Maximum borrowing capacity | $ 350,000,000 | |||
Floorplan payable | $ 372,055,000 | $ 444,780,000 | ||
Floorplan Line of Credit | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | 900,000,000 | |||
Floorplan payable | 362,800,000 | $ 420,700,000 | ||
Floorplan Line of Credit | Foreign | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | $ 106,200,000 | |||
Floorplan Line of Credit | Minimum [Member] | U.S. | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Debt Instrument, Interest Rate Terms | 0.0274 | |||
Floorplan Line of Credit | Minimum [Member] | Foreign | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Debt Instrument, Interest Rate Terms | 0.0149 | |||
Floorplan Line of Credit | Maximum [Member] | U.S. | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Debt Instrument, Interest Rate Terms | 0.0609 | |||
Floorplan Line of Credit | Maximum [Member] | Foreign | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Debt Instrument, Interest Rate Terms | 0.077 | |||
Wells Fargo Credit Facility [Member] | Floorplan Line of Credit | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | $ 210,000,000 | |||
CNH Industrial Capital Credit Facility | Floorplan Line of Credit | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | 450,000,000 | |||
DLL Finance LLC [Member] | Floorplan Line of Credit | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | 90,000,000 | |||
Credit Facility | Wells Fargo Credit Facility [Member] | Working Capital Revolver Line | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | 65,000,000 | |||
Amount outstanding | 0 | |||
DLL Finance LLC [Member] | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | 90,000,000 | $ 110,000,000 | ||
Wells Fargo Credit Facility [Member] | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | 275,000,000 | |||
Wells Fargo Credit Facility [Member] | Floorplan Line of Credit | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | 210,000,000 | 275,000,000 | ||
Reduction in borrowing capacity | 65,000,000 | |||
Wells Fargo Credit Facility [Member] | Credit Facility | ||||
LINES OF CREDIT / FLOORPLAN NOTES PAYABLE | ||||
Maximum borrowing capacity | $ 65,000,000 | 75,000,000 | ||
Reduction in borrowing capacity | $ 10,000,000 |
SENIOR CONVERTIBLE NOTES (Detai
SENIOR CONVERTIBLE NOTES (Details) | Oct. 31, 2016 |
Convertible Notes | |
SENIOR CONVERTIBLE NOTES | |
Interest rate (as a percent) | 3.75% |
SENIOR CONVERTIBLE NOTES (Det34
SENIOR CONVERTIBLE NOTES (Details 2) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2016USD ($)$ / shares | Oct. 31, 2015USD ($) | Oct. 31, 2016USD ($)$ / shares | Oct. 31, 2015USD ($) | Jan. 31, 2016USD ($) | |
Convertible notes | |||||
Principal value | $ 95,725 | $ 95,725 | $ 150,000 | ||
Gains (Losses) on Extinguishment of Debt | 3,130 | $ 0 | |||
Coupon interest expense | 2,160 | $ 4,041 | 5,930 | 11,228 | |
Convertible Notes | |||||
Convertible notes | |||||
Principal value | 95,725 | 95,725 | 150,000 | ||
Unamortized debt discount | (7,024) | (7,024) | (13,946) | ||
Unamortized debt issuance costs | (947) | (947) | (1,909) | ||
Carrying value of Senior Convertible Notes | 87,754 | 87,754 | 134,145 | ||
Carrying value of equity component, net of deferred taxes | $ 13,800 | $ 13,800 | $ 15,546 | ||
Conversion rate | 0.0231626 | ||||
Conversion price (per share of common stock) | $ / shares | $ 43.17 | $ 43.17 | |||
Coupon interest expense | $ 996 | 1,406 | $ 3,457 | 4,219 | |
Amortization of debt discount | 703 | 925 | 2,406 | 2,745 | |
Amortization of transaction costs | 100 | 138 | 347 | 412 | |
Interest Expense | $ 1,799 | $ 2,469 | $ 6,210 | $ 7,376 | |
Remaining period over which unamortized debt discount will be amortized | 2 years 6 months | ||||
Effective interest rate (as a percent) | 7.30% | 7.30% |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details 1) - USD ($) | Oct. 31, 2016 | Jan. 31, 2016 | Oct. 09, 2013 |
Interest Rate Swap | Cash Flow Hedges | |||
DERIVATIVE INSTRUMENTS | |||
Fixed interest rate (as a percent) | 1.901% | ||
Notional amount outstanding | $ 100,000,000 | ||
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedges | |||
DERIVATIVE INSTRUMENTS | |||
Notional amount outstanding | $ 100,000,000 | $ 100,000,000 | |
Foreign currency contracts | Not designated as hedging instruments | |||
DERIVATIVE INSTRUMENTS | |||
Notional amount outstanding | $ 15,844,000 | $ 13,148,000 |
DERIVATIVE INSTRUMENTS DERIVATI
DERIVATIVE INSTRUMENTS DERIVATIVES INSTRUMENTS (Details 2) - USD ($) $ in Thousands | Oct. 31, 2016 | Jan. 31, 2016 |
DERIVATIVE INSTRUMENTS | ||
Fair Value of Derivative Asset | $ 0 | $ 125 |
Fair Value of Derivative Liability | 2,133 | 2,836 |
Foreign currency contracts | Not designated as hedging instruments | ||
DERIVATIVE INSTRUMENTS | ||
Fair Value of Derivative Asset | 0 | 125 |
Fair Value of Derivative Liability | 121 | 0 |
Cash Flow Hedges | Interest Rate Swap | Designated as Hedging Instrument | ||
DERIVATIVE INSTRUMENTS | ||
Fair Value of Derivative Liability | $ 2,012 | $ 2,836 |
DERIVATIVE INSTRUMENTS DERIVATE
DERIVATIVE INSTRUMENTS DERIVATE INSTRUMENTS (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Foreign currency contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | $ 228 | $ (791) | $ (272) | $ (394) |
Amount of Gain (Loss) Recognized in Income | (207) | (504) | (952) | (596) |
Foreign currency contracts | Designated as Hedging Instrument | Net Investment Hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 0 | 12 | 0 | 333 |
Amount of Gain (Loss) Recognized in Income | 0 | 0 | 0 | 0 |
Foreign currency contracts | Designated as Hedging Instrument | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Amount of Gain (Loss) Recognized in Income | 0 | (4) | 0 | (17) |
Foreign currency contracts | Not designated as hedging instruments | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 0 | 0 | 0 | 0 |
Amount of Gain (Loss) Recognized in Income | 126 | (54) | 112 | 751 |
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income | 228 | (803) | (272) | (727) |
Amount of Gain (Loss) Recognized in Income | $ (333) | $ (446) | $ (1,064) | $ (1,330) |
DERIVATIVE INSTRUMENTS DERIVA38
DERIVATIVE INSTRUMENTS DERIVATIVE INSTRUMENTS NARRATIVE (Details) - Interest Rate Swap - Cash Flow Hedges $ in Millions | 9 Months Ended |
Oct. 31, 2016USD ($) | |
Derivative | |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Before Tax | $ (2) |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ (1.2) |
FAIR VALUE OF FINANCIAL INSTR39
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Oct. 31, 2016 | Jan. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | $ 0 | $ 125 |
Financial Liability | (2,133) | (2,836) |
Principal value | 95,725 | 150,000 |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior Convertible Notes | 85,000 | 105,000 |
Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Senior Convertible Notes | 87,754 | 134,145 |
Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Liability | (2,012) | (2,836) |
Foreign Exchange Contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | 0 | 125 |
Financial Liability | (121) | 0 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | 0 | 0 |
Financial Liability | 0 | 0 |
Fair Value, Inputs, Level 1 | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Liability | 0 | 0 |
Fair Value, Inputs, Level 1 | Foreign Exchange Contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | 0 | 0 |
Financial Liability | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | 0 | 125 |
Financial Liability | (2,133) | (2,836) |
Fair Value, Inputs, Level 2 | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Liability | (2,012) | (2,836) |
Fair Value, Inputs, Level 2 | Foreign Exchange Contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | 0 | 125 |
Financial Liability | (121) | 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | 0 | 0 |
Financial Liability | 0 | 0 |
Fair Value, Inputs, Level 3 | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Liability | 0 | 0 |
Fair Value, Inputs, Level 3 | Foreign Exchange Contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial Assets | 0 | 0 |
Financial Liability | $ 0 | $ 0 |
SEGMENT INFORMATION AND OPERA40
SEGMENT INFORMATION AND OPERATING RESULTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2016USD ($) | Oct. 31, 2015USD ($) | Oct. 31, 2016USD ($)segment | Oct. 31, 2015USD ($) | Jan. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 3 | ||||
SEGMENT INFORMATION AND OPERATING RESULTS | |||||
Revenue | $ 332,266 | $ 344,975 | $ 895,459 | $ 1,032,361 | |
Income (Loss) Before Income Taxes | 56 | 5,714 | (10,293) | (3,591) | |
Total Assets | 920,297 | 920,297 | $ 1,047,875 | ||
Shared Resources | |||||
SEGMENT INFORMATION AND OPERATING RESULTS | |||||
Income (Loss) Before Income Taxes | 1,355 | (269) | 1,199 | 1,879 | |
Total Assets | 52,783 | 52,783 | 85,699 | ||
Operating Segments | |||||
SEGMENT INFORMATION AND OPERATING RESULTS | |||||
Income (Loss) Before Income Taxes | (1,299) | 5,983 | (11,492) | (5,470) | |
Total Assets | 867,514 | 867,514 | 962,176 | ||
Operating Segments | Agriculture | |||||
SEGMENT INFORMATION AND OPERATING RESULTS | |||||
Revenue | 205,540 | 211,302 | 538,060 | 660,606 | |
Income (Loss) Before Income Taxes | (1,798) | 4,219 | (9,881) | 693 | |
Total Assets | 475,418 | 475,418 | 557,579 | ||
Operating Segments | Construction | |||||
SEGMENT INFORMATION AND OPERATING RESULTS | |||||
Revenue | 80,789 | 87,023 | 241,922 | 249,601 | |
Income (Loss) Before Income Taxes | (105) | 1,413 | (1,523) | (3,089) | |
Total Assets | 264,393 | 264,393 | 294,891 | ||
Operating Segments | International | |||||
SEGMENT INFORMATION AND OPERATING RESULTS | |||||
Revenue | 45,937 | 46,650 | 115,477 | 122,154 | |
Income (Loss) Before Income Taxes | 604 | $ 351 | (88) | $ (3,074) | |
Total Assets | $ 127,703 | $ 127,703 | $ 109,706 |
STORE CLOSINGS AND REALIGNMEN41
STORE CLOSINGS AND REALIGNMENT COST (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Realignment Costs | ||||
Amount of Realignment Cost Incurred | $ 0 | $ 22 | $ 271 | $ 1,519 |
Agriculture | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | (87) | (120) | 492 |
Construction | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 80 | 13 | 693 |
Shared Resource Center | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 29 | 378 | 334 |
Lease termination costs (a) | Realignment Cost | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | (4) | (128) | 397 |
Lease termination costs (a) | Realignment Cost | Agriculture | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | (38) | (120) | 223 |
Lease termination costs (a) | Realignment Cost | Construction | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 46 | (8) | 137 |
Lease termination costs (a) | Realignment Cost | Shared Resource Center | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | (12) | 0 | 37 |
Employee severance costs | Realignment Cost | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 14 | 399 | 774 |
Employee severance costs | Realignment Cost | Agriculture | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | (15) | 0 | 225 |
Employee severance costs | Realignment Cost | Construction | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 29 | 21 | 362 |
Employee severance costs | Realignment Cost | Shared Resource Center | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 0 | 378 | 187 |
Impairment of fixed assets, net of gains on asset disposition | Realignment Cost | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 51 | 0 | 226 |
Impairment of fixed assets, net of gains on asset disposition | Realignment Cost | Agriculture | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 0 | 0 | 10 |
Impairment of fixed assets, net of gains on asset disposition | Realignment Cost | Construction | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 10 | 0 | 106 |
Impairment of fixed assets, net of gains on asset disposition | Realignment Cost | Shared Resource Center | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | 41 | 0 | 110 |
Asset relocation and other closing costs | Realignment Cost | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | (39) | 0 | 122 |
Asset relocation and other closing costs | Realignment Cost | Agriculture | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | 0 | (34) | 0 | 34 |
Asset relocation and other closing costs | Realignment Cost | Construction | ||||
Realignment Costs | ||||
Amount of Realignment Cost Incurred | $ 0 | $ (5) | $ 0 | $ 88 |
STORE CLOSINGS AND REALIGNMEN42
STORE CLOSINGS AND REALIGNMENT COST (Details 2) $ in Thousands | 9 Months Ended |
Oct. 31, 2016USD ($) | |
Realignment Reserve [Roll Forward] | |
Balance, January 31, 2016 | $ 660 |
Balance, July 31, 2016 | 102 |
Lease termination costs (a) | |
Realignment Reserve [Roll Forward] | |
Exit costs incurred and charged to expense | (128) |
Exit costs paid | (430) |
Employee severance costs | |
Realignment Reserve [Roll Forward] | |
Exit costs incurred and charged to expense | 399 |
Exit costs paid | $ (399) |
INCOME TAXES INCOME TAXES (Deta
INCOME TAXES INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | ||||
U.S. | $ (547) | $ 5,363 | $ (10,204) | $ (521) |
Foreign | 603 | 351 | (89) | (3,070) |
Income (Loss) Before Income Taxes | $ 56 | $ 5,714 | $ (10,293) | $ (3,591) |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
U.S. statutory rate (as a percent) | 35.00% | 35.00% | (35.00%) | (35.00%) |
Foreign statutory rates (as a percent) | (406.20%) | (0.20%) | 1.20% | 22.40% |
States taxes on income net of federal tax benefit (as a percent) | 4.20% | 4.20% | (4.20%) | (4.20%) |
Change in valuation allowance (as a percent) | (221.10%) | (11.10%) | (4.40%) | 27.80% |
Tax effect of Ukrainian hryvnia devaluation (as a percent) | 55.20% | 6.40% | 2.20% | (13.30%) |
All other, net (as a percent) | 166.70% | 4.70% | 1.40% | (7.60%) |
Effective tax rate (as a percent) | (366.10%) | 39.00% | (38.80%) | (9.90%) |
Minimum | ||||
Operating Loss Carryforward Period | 5 years | |||
Maximum | ||||
Operating Loss Carryforward Period | 7 years |