UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED: MARCH 31, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-12936
TITAN INTERNATIONAL, INC.
(Exact name of Registrant as specified in its Charter)
ILLINOIS 36-3228472
(State of Incorporation) (I.R.S. Employer Identification No.)
2701 SPRUCE STREET, QUINCY, IL 62301
(Address of principal executive offices, including Zip Code)
(217) 228-6011
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
SHARES OUTSTANDING AT
CLASS APRIL 30, 2002
----- ---------------------
COMMON STOCK, NO PAR VALUE PER SHARE 20,769,018
TITAN INTERNATIONAL, INC.
TABLE OF CONTENTS
Page Number
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Statements of Operations
for the Three Months Ended March 31, 2002 and 2001 1
Consolidated Condensed Balance Sheets as of
March 31, 2002, and December 31, 2001 2
Consolidated Condensed Statements of Cash Flows
for the Three Months Ended March 31, 2002 and 2001 3
Notes to Consolidated Condensed Financial Statements 4-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-15
Part II. Other Information and Signature 16
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands, except earnings per share data)
THREE MONTHS ENDED
MARCH 31,
2002 2001
---- ----
Net sales $ 123,716 $ 136,047
Cost of sales 111,577 120,599
--------- ---------
Gross profit 12,139 15,448
Selling, general & administrative expenses 10,298 10,822
Research and development expenses 786 801
--------- ---------
Income from operations 1,055 3,825
Interest expense 5,203 5,639
Gain on sale of assets 0 (1,619)
Other income (328) (633)
--------- ---------
(Loss) income before income taxes (3,820) 438
(Benefit) provision for income taxes (955) 210
--------- ---------
Net (loss) income $ (2,865) $ 228
========= =========
(Loss) earnings per share:
- --------------------------
Basic $ (.14) $ .01
Diluted $ (.14) $ .01
Average shares outstanding:
- ---------------------------
Basic 20,727 20,625
Diluted 20,727 20,625
The accompanying notes are an integral part of the
consolidated condensed financial statements.
1
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Amounts in thousands, except share data)
MARCH 31, DECEMBER 31,
2002 2001
--------- ------------
ASSETS
Current assets
Cash and cash equivalents $ 8,616 $ 9,214
Accounts receivable (net of allowance of $3,664 and $3,523, respectively) 97,894 78,144
Inventories 104,011 116,801
Deferred income taxes 21,175 21,175
Prepaid and other current assets 37,049 37,389
----------- -----------
Total current assets 268,745 262,723
Property, plant and equipment, net 198,129 205,047
Restricted cash deposits 33,775 34,661
Other assets 48,638 49,538
Goodwill, net 16,814 16,985
----------- -----------
Total assets $ 566,101 $ 568,954
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term debt (including current portion of long-term debt) $ 5,102 $ 4,304
Accounts payable 50,992 54,658
Other current liabilities 27,185 23,077
----------- -----------
Total current liabilities 83,279 82,039
Deferred income taxes 24,161 24,161
Other long-term liabilities 19,736 20,225
Long-term debt 256,865 256,622
----------- -----------
Total liabilities 384,041 383,047
----------- -----------
Stockholders' equity
Common stock (no par, 60,000,000 shares authorized; 27,555,081 issued) 27 27
Additional paid-in capital 211,592 211,905
Retained earnings 81,029 83,998
Treasury stock (at cost: 6,828,086 and 6,864,947 shares, respectively) (90,780) (91,270)
Accumulated other comprehensive loss (19,808) (18,753)
---------- ----------
Total stockholders' equity 182,060 185,907
----------- -----------
Total liabilities and stockholders' equity $ 566,101 $ 568,954
=========== ===========
The accompanying notes are an integral part of the
consolidated condensed financial statements.
2
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
THREE MONTHS ENDED MARCH 31,
2002 2001
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (2,865) $ 228
Adjustments to reconcile net (loss) income to net cash
provided by (used for) operating activities:
Depreciation and amortization 8,877 9,486
Gain on sale of assets 0 (1,619)
(Increase) decrease in current assets:
Accounts receivable (20,213) (21,202)
Inventories 12,216 (576)
Prepaid and other current assets 812 (1,063)
Increase (decrease) in current liabilities:
Accounts payable (3,109) (1,300)
Other current liabilities 4,305 (1,096)
Other, net (268) 789
---------- ----------
Net cash used for operating activities (245) (16,353)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (2,331) (5,217)
Other 29 8
---------- ----------
Net cash used for investing activities (2,302) (5,209)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 0 1,669
Payment of debt (134) (121)
Proceeds from credit facility, net (expired December 2001) 0 25,000
Proceeds from revolving loan agreement, net 1,500 0
Decrease in restricted cash deposits 886 0
Repurchase of common stock 0 (80)
Dividends paid (104) (309)
Other, net 177 (194)
---------- ----------
Net cash provided by financing activities 2,325 25,965
Effect of exchange rate changes on cash (376) (329)
Net (decrease) increase in cash and cash equivalents (598) 4,074
Cash and cash equivalents at beginning of period 9,214 5,668
---------- ----------
Cash and cash equivalents at end of period $ 8,616 $ 9,742
========== ==========
The accompanying notes are an integral part of the
consolidated condensed financial statements.
3
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
A. ACCOUNTING POLICIES
In the opinion of Titan International, Inc. ("Titan" or the "Company"),
the accompanying unaudited consolidated condensed financial statements
contain all adjustments, which are normal and recurring in nature,
necessary to present fairly its financial position as of March 31,
2002, the results of operations for the three months ended March 31,
2002 and 2001, and cash flows for the three months ended March 31, 2002
and 2001.
Except for the discontinuance of goodwill amortization as required by
Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets" (SFAS 142), accounting policies have continued
without change and are described in the Summary of Significant
Accounting Policies contained in the Company's 2001 Annual Report on
Form 10-K. These interim financial statements have been prepared
pursuant to the Securities and Exchange Commission's rules for Form
10-Qs and are not a presentation in accordance with generally accepted
accounting principles. For additional information regarding the
Company's financial condition, refer to the footnotes accompanying the
financial statements as of and for the year ended December 31, 2001,
filed in conjunction with the Company's 2001 Annual Report on Form
10-K. Details in those notes have not changed significantly except as a
result of normal interim transactions and certain matters discussed
hereafter.
B. INVENTORIES
Inventories consisted of the following (in thousands):
March 31, December 31,
2002 2001
----------- ------------
Raw materials $ 28,793 $ 34,771
Work-in-process 13,734 11,549
Finished goods 57,154 67,647
----------- -----------
99,681 113,967
LIFO reserve 4,330 2,834
----------- -----------
$ 104,011 $ 116,801
=========== ===========
The LIFO reserve changed primarily as a result of price fluctuations
within the composition of LIFO inventory layers.
4
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
C. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net reflects accumulated depreciation of
$197.0 million and $189.6 million at March 31, 2002, and December 31,
2001, respectively.
D. GOODWILL
Goodwill, net reflects accumulated amortization of $5.5 million at
March 31, 2002, and December 31, 2001. No goodwill amortization has
been recorded in 2002, pursuant to the adoption of SFAS 142 as
described in note H. The table below provides comparative net earnings
and earnings per share had the non-amortization provisions of SFAS 142
been adopted for all periods presented:
Three months ended
March 31,
2002 2001
------------ -----------
Net (loss) earnings (in thousands)
-------------------
As reported $ (2,865) $ 228
Goodwill amortization, net of tax 0 102
----------- -----------
Adjusted net (loss) earnings $ (2,865) $ 330
=========== ===========
Basic & diluted (loss) earnings per share
-----------------------------------------
As reported $ (.14) $ .01
Goodwill amortization, net of tax 0 .01
------- ------
Adjusted net (loss) earnings per share $ (.14) $ .02
======= ======
5
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
E. LONG-TERM DEBT
Long-term debt consisted of the following (in thousands):
March 31, December 31,
2002 2001
----------- -----------
Senior subordinated notes $ 136,750 $ 136,750
Term loan 99,000 99,000
Revolving loan agreement 1,500 0
Industrial revenue bonds and other 24,717 25,176
----------- -----------
261,967 260,926
Less: Amounts due within one year 5,102 4,304
----------- -----------
$ 256,865 $ 256,622
=========== ===========
Aggregate maturities of long-term debt at March 31, 2001, are as
follows (in thousands):
April 1 -- December 31, 2002 $ 4,148
2003 9,788
2004 12,167
2005 15,452
2006 72,545
Thereafter 147,867
-----------
$ 261,967
===========
F. COMPREHENSIVE LOSS
Comprehensive loss, which includes net loss of $(2.9) million and the
effect of foreign currency translation adjustments of $(1.0) million,
totaled $(3.9) million for the first quarter of 2002, compared to
$(2.9) million in the first quarter of 2001.
6
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
G. SEGMENT INFORMATION
The table below presents information about certain revenues and income
from operations used by the chief operating decision maker of the
Company for the three months ended March 31, 2002 and 2001 (in
thousands):
Revenues
from external Intersegment Income from
2002 customers revenues operations
---- -------------- --------------- ------------
Agricultural $ 75,245 $ 43,025 $ 5,105
Earthmoving/construction 36,934 14,559 1,886
Consumer 11,537 6,387 481
Reconciling items (a) 0 0 (6,417)
---------- ---------- -----------
Consolidated totals $ 123,716 $ 63,971 $ 1,055
========== ========== ==========
2001
----
Agricultural $ 76,828 $ 45,355 $ 7,069
Earthmoving/construction 42,999 17,981 3,556
Consumer 16,220 7,590 90
Reconciling items (a) 0 0 (6,890)
---------- ---------- -----------
Consolidated totals $ 136,047 $ 70,926 $ 3,825
========== ========== ==========
(a) Represents corporate expenses and depreciation and amortization expense
related to property, plant and equipment and goodwill (for 2001 only)
carried at the corporate level.
7
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
G. SEGMENT INFORMATION (CONTINUED)
March 31, December 31,
Total assets 2002 2001
------------ ---------- ----------
Agricultural $ 267,067 $ 252,213
Earthmoving/construction 138,746 151,823
Consumer 40,304 46,783
Reconciling items (b) 119,984 118,135
---------- ----------
Consolidated totals $ 566,101 $ 568,954
========== ==========
(b) Represents property, plant and equipment and goodwill related to
certain acquisitions and other corporate assets.
H. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards Number 142
On January 1, 2002, the Company adopted the non-amortization provisions
of SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 142
eliminates the amortization of goodwill and requires goodwill to be
tested for impairment at least annually. The Company has determined the
reporting units and plans to analyze the fair value of the units using
the discounted cash flow method. The Company is in the process of
conducting transitional tests of goodwill impairment and is evaluating
the effect Statement 142 will have on its financial position, cash
flows, and results of operations.
Statement of Financial Accounting Standards Number 144
In July 2001, SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-lived Assets", was issued. This statement retains the previous
cash flow test for impairment and broadens the presentation of
discontinued operations. SFAS No. 144 was adopted in the first quarter
of 2002 and has had no material effect on the Company's financial
position, cash flows or results of operations at this time.
8
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CRITICAL ACCOUNTING POLICIES
Revenue Recognition
The Company records sales revenue and cost of sales when products are shipped to
customers and both title and the risks and rewards of ownership are transferred.
Provisions are established for sales returns and uncollectible accounts.
Product Costing
Inventories are valued at the lower of cost or market. For operations in the
United States, cost is determined using the last-in, first-out (LIFO) method for
approximately 58% of inventories and the first-in, first-out (FIFO) method for
the remainder of inventories. Inventory of foreign subsidiaries is valued using
the FIFO method.
Impairment of Fixed Assets
The Company reviews fixed assets to assess recoverability from future operations
whenever events and circumstances indicate that the carrying values may not be
recoverable. Impairment losses are recognized in operating results when expected
undiscounted future cash flows are less than the carrying value of the asset.
Impairment losses are measured as the excess of the carrying value of the asset
over the discounted expected future cash flows.
Impairment of Goodwill
The Company will review goodwill to assess recoverability from future operations
during the fourth quarter of each annual reporting period or whenever events and
circumstances indicate that the carrying values may not be recoverable.
RESULTS OF OPERATIONS
Net Sales
Net sales for the quarter ended March 31, 2002, were $123.7 million, compared to
2001 first quarter net sales of $136.0 million. Net sales decreased primarily
due to reduced production by the Company's major customers and the continued
negative economic global conditions in the agricultural,
earthmoving/construction and consumer markets.
9
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Cost of Sales and Gross Profit
Cost of sales was $111.6 million for the first quarter of 2002, compared to
$120.6 million in 2001. Gross profit for the first quarter of 2002 was $12.1
million or 9.8% of net sales, compared to $15.4 million or 11.4% of net sales
for the first quarter of 2001. Gross profit, as a percentage of net sales, was
negatively impacted by product mix changes and inefficiencies related to
operating at a lower capacity utilization than in the previous year.
Administrative Expenses
Selling, general and administrative (SG&A) and research and development (R&D)
expenses for the first quarter of 2002 were $11.1 million or 9.0% of net sales,
compared to $11.6 million or 8.5% of net sales for 2001. The SG&A and R&D
percentage was higher due to the reduced sales volume in the first quarter of
2002 as compared to the first quarter of 2001. However, the Company's efforts to
streamline total SG&A expenditures are taking hold.
Operating Results and Other
Income from operations for the first quarter of 2002 was $1.1 million or 0.9% of
net sales, compared to income from operations of $3.8 million or 2.8% in 2001.
Operating results were primarily impacted by the reduced sales volume.
Net interest expense was $5.2 million for the first quarter of 2002, compared to
$5.6 million in 2001. The decreased interest expense for the first quarter of
2002 was primarily due to lower interest rates as compared to the first quarter
of 2001.
The $1.6 million gain on sale of assets in 2001 was attributed to the sale of an
airplane during the first quarter of that year.
The Company's effective tax benefit on the net loss for the first quarter of
2002 was 25%, compared to 48% effective tax rate on net earnings for the first
quarter of 2001. The lower rate is primarily due to the inability of the Company
to realize an income tax benefit from certain nondeductible items, as well as
the amount of income generated in various state and foreign jurisdictions.
10
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Net (Loss) Income
Net loss for the first quarter of 2002 was $(2.9) million compared to net income
of $0.2 million in 2001. Basic and diluted loss per share were $(.14) for the
first quarter of 2002 compared to earnings per share of $.01 in 2001. Net income
and earnings per share decreased primarily due to reduced sales volume and the
$1.6 million pretax gain on sale of assets recorded in the first quarter of
2001.
Agricultural Segment Results
Net sales in the agricultural market were $75.2 million for the first quarter of
2002 as compared to $76.8 million in 2001. Income from operations in the
agricultural market was $5.1 million for the first quarter of 2002 as compared
to $7.1 million for the first quarter of 2001. The decrease in income from
operations in the agricultural market was primarily attributed to a less
profitable product mix.
Earthmoving/Construction Segment Results
The Company's earthmoving/construction market net sales were $36.9 million for
the first quarter of 2002 as compared to $43.0 million for the first quarter of
2001. Income from operations in the earthmoving/construction market was $1.9
million for the first quarter of 2002 versus $3.6 million in 2001. The decrease
in income from operations in the earthmoving/construction market was primarily
due to operating inefficiencies resulting from a significant decrease in the
sales volume.
Consumer Segment Results
Consumer market net sales were $11.5 million for the first quarter of 2002 as
compared to $16.2 million for the first quarter of 2001. Consumer market income
from operations was $0.5 million for the first quarter of 2002 as compared to
$0.1 million for 2001. Although consumer market net sales decreased, income from
operations increased as the result of a more profitable product mix.
Corporate Expenses
Income from operations on a segment basis does not include corporate expenses
and depreciation and amortization expense related to property, plant and
equipment carried at the corporate level totaling $6.4 million for the first
quarter of 2002 as compared to $6.9 million for the first quarter of 2001.
11
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
In the first quarter of 2002, negative cash flows from operating activities of
$0.2 million resulted primarily from a $20.2 million increase in accounts
receivable, offset by inventory decreases of $12.2 million and depreciation and
amortization of $8.9 million. The increase in receivables is primarily due to a
seasonal increase in sales volume in the first quarter of 2002 when compared to
the fourth quarter of 2001. The decrease in inventory was the result of
concerted efforts to reduce inventory levels. The Company intends to continue
this effort to reduce inventory balances during fiscal 2002.
The Company invested $2.3 million in capital expenditures in the first quarter
of 2002. The expenditures represent various equipment purchases and building
improvements to enhance production capabilities. The Company estimates that its
total capital expenditures for 2002 could range between $10 million and $15
million.
During the first quarter of 2002, the Company received $1.5 million in proceeds
from its $20 million revolving loan agreement. These proceeds have been used to
fund operations. There have been no significant changes in interest rates, debt
borrowings, and related covenants during the first quarter of 2002.
Other Issues
The Company's business is subject to seasonal variations in sales that affect
inventory levels and accounts receivable balances.
The Company had restricted cash of $33.8 million at March 31, 2002. Restricted
cash of $15.0 million was collateral on the revolving loan agreement. The
remaining $18.8 million is collateral on outstanding letters of credit for (i)
industrial revenue bond of $9.7 million, (ii) FUNSA of $6.0 million (paid in
April 2002), and (iii) other letters of credit of $3.1 million. Letters of
credit were previously issued under the Company's credit facility, which was
replaced in December 2001.
Fabrica Uraguaya de Neumaticos S.A. (FUNSA), a tire manufacturer located in
Uruguay, continues to incur operating losses and is currently in the process of
reorganization. As such, the Company will continue to evaluate its investments
in FUNSA.
12
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Liquidity Outlook
At March 31, 2002, the Company had unrestricted cash and cash equivalents of
$8.6 million and $1.5 million had been drawn on the $20 million revolving loan
agreement. Due to losses sustained by the Company and a recent change in
domestic tax law, Titan will file loss carryback tax returns to attempt to
obtain domestic tax refunds that may total between $10 million and $15 million.
However, there can be no assurance of the amount or the timing of these refunds.
Cash on hand, anticipated internal cash flows from operations and utilization of
remaining available borrowings are expected to provide sufficient liquidity for
working capital needs, capital expenditures, and payments required on short-term
debt for the remainder of 2002. However, if the Company were to exhaust all
currently available working capital sources or were not to meet the financial
covenants and conditions of its loan agreements, the Company might find it
extremely difficult to secure additional funding in order to meet working
capital requirements.
OUTLOOK
Agricultural Segment
Given current economic conditions, the agricultural market sales for the
remainder of 2002 are expected to fall slightly below 2001 levels. Commodity
farm prices continue to remain at depressed levels. However, low interest rates
and government payments have helped support the financial condition of farmers.
Many variables, including weather, export markets, and future government
policies and payments can greatly influence the overall health of the
agricultural economy. The anticipated sales levels in the agricultural market
combined with a less profitable product mix may continue to lower profitability
within this segment when compared to 2001.
Earthmoving/Construction Segment
Sales in the earthmoving/construction market for the balance of 2002 are
expected to remain lower than 2001. Although housing construction has held up
well, there is a general uncertainty in the earthmoving/construction market that
has slowed spending on new equipment. Governmental entities have cut
construction spending due to lower government receipts. Also, equipment rental
agencies continue to experience weakness, thereby decreasing their demand to
purchase new equipment. The lower earthmoving/construction sales will continue
to have a negative impact on margins in this segment when compared to the
previous year's levels.
13
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OUTLOOK (CONTINUED)
Consumer Segment
Consumer market sales are anticipated to run lower for the rest of 2002 when
compared to 2001. However, the decrease is not expected to be as sizable as that
experienced in the first quarter. Many items affect the consumer market
including weather, competitive pricing, energy prices, and consumer attitude,
which remains cautious. If the favorable sales mix continues, the consumer
market could show improved margins when compared to 2001.
MARKET RISK SENSITIVE INSTRUMENTS
The Company's risks related to foreign currencies, commodity prices and interest
rates are consistent with those for 2001.
NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards Number 142
On January 1, 2002, the Company adopted the non-amortization provisions of SFAS
No. 142, "Goodwill and Other Intangible Assets". SFAS No. 142 eliminates the
amortization of goodwill and requires goodwill to be tested for impairment at
least annually. The Company has determined the reporting units and plans to
analyze the fair value of the units using the discounted cash flow method. The
Company is in the process of conducting transitional tests of goodwill
impairment and is evaluating the effect Statement 142 will have on its financial
position, cash flows, and results of operations.
Statement of Financial Accounting Standards Number 144
In July 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-lived Assets", was issued. This statement retains the previous cash flow
test for impairment and broadens the presentation of discontinued operations.
SFAS No. 144 was adopted in the first quarter of 2002 and has had no material
effect on the Company's financial position, cash flows or results of operations
at this time.
14
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Form 10-Q contains forward-looking statements, including statements
regarding, among other items, (i) anticipated trends in the Company's business,
(ii) future expenditures for capital projects, (iii) the Company's ability to
continue to control costs and maintain quality, (iv) meeting financial covenants
and conditions of its loan agreements, (v) the Company's business strategies,
including its intention to introduce new products, (vi) expectations concerning
the performance and commercial success of the Company's existing and new
products and (vii) the Company's intention to consider and pursue acquisitions.
Readers of this Form 10-Q should understand that these forward-looking
statements are based on the Company's expectations and are subject to a number
of risks and uncertainties, certain of which are beyond the Company's control.
Actual results could differ materially from these forward-looking statements as
a result of certain factors, including, (i) changes in the Company's end-user
markets as a result of world economic or regulatory influences, (ii) changes in
the competitive marketplace, including new products and pricing changes by the
Company's competitors, (iii) availability and price of raw materials, (iv)
levels of operating efficiencies, (v) actions of domestic and foreign
governments, (vi) results of investments, and (vii) ability to secure financing
at reasonable terms. Any changes in such factors could lead to significantly
different results. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained in this document
will in fact transpire.
15
TITAN INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEMS 1 THROUGH 6 ARE NOT APPLICABLE.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TITAN INTERNATIONAL, INC.
(REGISTRANT)
DATE: May 10, 2002 BY: /s/ Maurice M. Taylor Jr.
-------------- --------------------------------------
Maurice M. Taylor Jr.
President and Chief Executive Officer
BY: /s/ Kent W. Hackamack
--------------------------------------
Kent W. Hackamack
Vice President of Finance and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
16