TITN - Earnings call transcript Q1 2019

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Operator

Good day and welcome to the Titan Machinery, Inc.

First Quarter 2019 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. John Mills with ICR. ahead. go Please

John Mills

Clara. to you, earnings ladies gentlemen and call. Great. Titan Good Machinery welcome the XXXX first and Thank morning, quarter conference fiscal

On for By which morning now David should have XX, Company and from XXXX, the went Kalvoda, first everyone the at earnings quarter to am and April release Mark Officer. this Chairman Eastern fiscal approximately CEO; are Financial Chief access call today the out Time. Meyer, X:XX the ended

is it ir.titanmachinery.com. release, on the being received Web not have well. Titan’s be at you Relations site Investor site webcast will of Company’s This available page on replay If the is the available as and Web a call

we a In are today’s presentation providing prepared accompany addition, to remarks.

going The in at You Titan's to page. may of access presentation directly information webcast Web ir.titanmachinery.com. the the the middle below the by now is site presentation

facilitate in financial no inherent Slide results comparing You management or any update financial do in call, statement. to the more your statements particularly would differ not by like basis. Please a Harbor will the contain questions. performance from Titan’s in response underlying we’ll see an statements. today’s guarantee statements Safe that can remarks on presentation discussion forward-looking and our release ongoing forward-looking These statements required We make of obligation current undue prepared from complete adjusted Except additional these discuss forward-looking detailed everyone X remind during more to These of adjusted call. future that financial forward-looking assumes and on the in These may factors most analysis Titan’s be upon that results and Report transparency reliance Form measures, placed cause management may any Annual measures those period-to-period. law, that results on a expectations in factors greater uncertainties, forward-looking and including non-GAAP We Titan them. XX-K. to of risk applicable made Factors should statements materially and contain believe today’s based could are therefore section performance, actual of those on including projected statements note not involve identified risk Risk when the to be the recently as filed

included we these have in take minutes, of their will last directly release. your of measures call measures We GAAP will most in call reconciliations the financial and financial non-GAAP open to conclusion prepared questions. at Today’s remarks, XX our approximately the comparable today’s

today, ask Lastly, your due queue. to call we the keep questions then you and question the period to to number on two the of participants rejoin

Now, David. I'd the Go Mr. Chairman ahead, like Meyer. Company’s to David CEO, and introduce

David Meyer

and John. Thank our On first Mark call. an results business XXXX. morning, a of XXXX Good our you, summary review of then conclude with call, provide then fiscal financial Welcome of conference fiscal and our the for will our will of for results fiscal review modeling XXXX I overview each assumptions today’s to the quarter for updated segments. first everyone. earnings quarter a

of our overview quarter If you first an you will results. X, turn financial Slide see to

farming Titan. usual contributed and in late and slow at to changes spring of compared to Our first reduced and a that last business hold equipment $X.X continue construction indication and our pre-tax are market and weather support disruptions has customers with $XXX is per as move quarter loss expenses start revenues of success for This of taking the a us a to good share to are improving margins first demand. $X.XX. equipment are revenue decline for year. million us a loss was for Overall, despite of levels million diluted closer structural a in product and profitability varying as rentals, positioning our quarter Particularly, however,

demand, for an our our doing a to Despite On now including job benefited favorable resilience operating spring corn, modest late, is profitable catch additional in wheat It is demand better-than-expected some inventory purchases. as replacement amidst are overview and planting year. new late the I our discussions. experienced margins experiencing Domestic continue sites committed that equipment the of equipment of detail with in remain and will used three have industry and a domestic conditions continuing and our -- encouraging of showing them best as in and provide to fields also segment. marketplace dry the model and from late quarter driving up as see new our May. help rebound soybean, customers we and first segment. segments, Agriculture agriculture and trade segments international we X, align and prices We our the Slide overall conditions, construction inventories most We to are

marketing expanding that seasonal We products. online and programs are focused on highlight our

capabilities to absorption grow our improve We of and maintenance, satisfaction preventive are the inspection, also rate. improving customer e-commerce our foundation and further equipment

Finally, make and Farmers and will in the Edge, support. with satellite of Ag These for IH and Case augment from and Advanced customers farmers. levels Management AgriSync value connect Holland we've to imagery Land first with data-driven Raven, precision daily video to capabilities quarter, Precision Farming decision-making new field partnered platforms easier Systems quicker New to provide enabled

to as customers their the businesses are crops, and technically grow committed solutions. helping their easy our advanced productivity, and use We to most their

spike to infrastructure by quarter, metros of X, Turning in oil increased you'll our major Dakota, rental growth segment. Slide in demand our see Recently we’ve we’ve residential Western In Bakken first in seen Domestic experienced overview in and projects. driven production. the Construction a an North

to construction market support, ongoing coastal product impacts limited area the continues Upper cycle with rental. metro to due our influence, late lag to spring horseshoe equipment Ag and the However, Midwest

well-positioned with growth into and second are capitalize footprint inventories as customer some our We on focused construction programs. model we're used new signs positive market to seeing we head quarter, across our and late the and

and Germany we’ve leveraging regional connection, and across brand and to consistent we we we’ve are into spur expansion further our of four inventory watch footprint and IH line. of and demand bottom expense segment team, maintenance, Crops Ag, our building current in yields. were on in in AGRAM experienced with capabilities On growing business activity markets picking XX% for preventive footprint, Ag four parts building assets strong and inspections, fueled to with We're summary, in acquisition favorable with growth demand needs. aftermarket a climate and and Ukraine, improved We're while demand service. of aftermarket international create last are out resources an coverage inventory, In Balkan agreement an available machinery purchase focus generally definitive and rentals, first new a and expanding in nearly countries of structure expect spring meet developing Case key geopolitical about locations population, strong, conditions our growth, be growth announced, within these our AGRAM-owned customer to In development, awareness inventories, conditions as our moisture financing capacity to Eastern ongoing solid in quarter growing continue maximize for economic achieved recent people overall to X, see is service investing also year, our modern and excited revenue our Slide up benefit equipment favorable the European OEM basis our customers, entered delays with aging We machine equipment to our by Despite contributor to international to Romania, our are need but planting, the parts, and previously margins profitability. good and our EU key and we improve and to targeted in and European Ukraine. to and versus from continues steady and the it's Serbia, and a have to be our support. Romania, acquire by a segment. accounts, understanding, the the demand environment stable The segment. our growth Bulgaria, including season. territories business see the precision and of stable In the [indiscernible] and countries Bulgaria, the reduced particularly brand German overview in international account dealerships Eastern we stability the to climate. to Serbia, good footprint economic throughout start, positive Romanian investing will long-term financial impact off high Construction to a crop improved funds, to the we and product

financial and company. employees for to our customers in team special Finally, our the I'd our to say our I'd like commitment now over results success your turn expert a team updated eager coming to achieve Germany. and to and to modeling the thank to U.S We're of provide in review members welcome like incoming Europe Mark our you’re I excited with that together. you and call assumptions. the will an next level and of aboard

Mark Kalvoda

Thanks, David.

of came of to revenue in quarter negatively and affected negatively utilization were by year. on comparable fiscal and XXXX million, a footprint, the last Revenue compared dollar the gross X.X% X, to XX.X% late forms fleet restructuring year. our first revenue. prolonged versus million inventory which in much our in rental rental our of decreased product quarter, quarter in last in offset international resulting by decreased lower other which as to at increase impacted many lower first agriculture year that Both This equipment period an profit decrease for the a offerings. compared was Turning same to Construction season X% lower XXXX and store of by rental construction the our our our XX.X% total business. winter service our activity season quarter planting Similarly, segment, Slide use plan the in fiscal Slide decrease therefore revenue. and $XX our lower rentals the for the resulting partially as impacted quarter of first period well parts was X, was last from revenue the current count a delayed of On for our spring from designated negatively $XXX X.X%

margin points the to as from the increased segment margins, a our mix as which Gross higher Our XX.X% a as positioned to percentage benefited gross International inventory quarter equipment our profit was industry. compared well to improved mix coming due from XX segment same year. in product last and revenue margin for basis Ag, was profit company of better increase larger

$XX for to million $X.X million by decreased the expenses quarter. first operating Our

we in of the of same for generate revenue, percentage lower largely sales quarter volumes, result a Despite in quarter to quarter, compared This savings international our the operating operating European in markets. build year. fiscal cost segment of plan third fiscal the presence in out to completed last the leverage fiscal continued XX.X% was our expenses XXXX XXXX. the As was were expenses able an XX.X% of operating partially expense that quarter from increase from were the first by restructuring footprint in our XXXX of offset and resulting

This For a period fiscal same the expense in of our had in in expense XXXX, instrument. interest recognized million to million decrease of same of fiscal interest-bearing compared the the and as $XXX,XXX the quarter $X.X in Floorplan costs the first no year year. last rate $X.X interest quarter due quarter restructuring other we of the to primarily million quarter as this approximately in of level swap last decrease decreased year. XXXX to first to XX% compared to $X.X related the well unwinding was inventory first the

first of quarter last we of net million loss compared quarter an was million $X the of compared of generated $X.X for year. $X.X XXXX. of million in first million quarter fiscal the our the to the first fiscal of adjusted XXXX, $X.X fiscal to XXXX, net In adjusted adjusted loss first EBITDA quarter For

$X.XX to was in diluted per adjusted loss last Our adjusted share first loss compared share the $X.XX year. diluted an of of per quarter

reconciliation a presentation. of the and slide find appendix in and EBITDA net to adjusted can You EPS the loss adjusted

affected results adjustments You present On GAAP to quarter. our other for year that as no XXXX. of in for see with million, X, also decrease to decrease fiscal of XX.X% due count, winter store markets a partially were overview quarter our will you'll plan of first note from demand last our current the decreased Agriculture fiscal prolonged Slide adjustments year were were of in season reported completed service. amounts restructuring a associated our resulting the XXXX in that all quarter current contributed the were parts there XXXX and segment plan. revenues $XXX activities much by to restructuring our fiscal an are Results no and

result Ag Our income of revenues primarily savings of increased plan. restructuring compared adjusted segment Ag result improvement $X.X million in of as segment is our and XXXX the prior profitability of pre-tax year operating our margins a pre-tax adjusted achieved fiscal an $X.X to in equipment an loss gross period. million The the expense and adjusted profit

segment. to our Construction Turning

revenue to year. was compared which last Our of same X.X% was a period million, $XX the decrease

parts service $XX offset million, revenue spring planting the footprint, Construction the which in last earlier. revenues primarily was were million and our $X.X increase a primarily loss million as loss out of our In an increased that the in season pre-tax Our in equipment start XXXX, partially The of the X.X% international year. last revenue compared result adjusted period company's pre-tax distribution due slight activity for decrease the same year. same segment in negatively our of a of the compared business. to $X.X fiscal and our mentioned to to build to quarter decrease was international quarter due revenue I slow segment results first The the to rental was adjusted by impacted increased

was quarter The the in in our was to pre-tax Our markets. to build pre-tax footprint segment out $XXX,XXX expenses continued our the the year. European of due of operating income last compared pre-tax income $XXX,XXX resulting loss from in increase decrease in same

of structure improvement lower improvement As we The into in you see year, XXXX. locations of July acquire our results fiscal to progress we pre-tax in generated first $X.X or On we will acquisition consists Germany. XXXX, segments, close a recent rate agreement a largest basis on a purchase absorption our XX, of fiscal period. four consolidated its AGRAM reminder, despite is all adjusted a of for same two million expense the In AGRAM able our XX% and approximately made ownership achieve Overall, to in dealership definitive April most have over quarter Slide to million. agriculture XX, corresponding $XX were interest in the case expected the entered revenue on revenues XXXX. IH on in which

metric while expense our absorption from from and XX% fixed fiscal expenses is revenues over you Ag by period this to leverage the XXXX XX%. operating absorb enabling a XX us that the to reflects And increased profit of of rate XX%. million profitable rental As times, the significantly our reduced ability ended XX, to We’ve industry conditions same operating costs. absorption our time positions recall, gross $XX parts, XXXX months service operating or trailing the April annual our to challenging cycle to expenses the Operating near increase. us level trough be and at during when recover

quarter XX.X% the Important profit year, for to fiscal XX.X% the to our of quarter operating last expense Our offset absorption reduction first and first XXXX interest a absorption. our was service. in and from quarter than floorplan a more period compared fixed decrease historically gross remember costs as same for in is seasonally that low in parts

fiscal improvement rate continued in throughout expect XXXX. absorption in We our our -- expense

the as XXXX. first We XXXX. had XX, Slide end of of highlights provide million sheet the to of of of Turning quarter April $XX balance here cash XX, our an we at overview fiscal

the purchasing and well end color Our of of of steel $XXX result lead equipment by equipment In The minutes, the stocking I in decrease from million, $XX as used $XX inventory purchases year. later provide increase increase to was of a our million seasonal equipment. in million increase due first made surcharges longer few inventory on equipment equipment a quarter XX, slightly $X.X the new January times manufacturer is potential a of in at up million offset new as XXXX, an will earlier position. equipment equipment a ahead additional in

the million at of million $XXX first of compared assets quarter fourth Our were $XXX quarter of the at the XXXX. to fiscal the rental end fleet end

of to credit We XXXX. April as $XXX approximately our total continue reduce $XXX fiscal payables on our utilization to floorplan rental million the of expect to improving fleet we XXXX. focus lines of size We floorplan $XXX of outstanding million as XX, million in on discretionary had results

ample have capacity handle equipment to needs. financing our to credit our continue lines We in

liabilities The $XX balance our Our convertible is ratio of total current is million. worth healthy net tangible X.X. senior notes a outstanding

May notes convertible our reminder, due are XXXX. a As on X,

made primarily operating of activities the for reported Over in ability overview we payable the manufacturer the attributable inventory confident satisfy over in floorplan repurchased two first of investment months three balances. The our cash original for for years, past these We're the million fiscal maturity. $XX $XXX was our net GAAP XX the notes Slide satisfy -- to flow flows at have of million, and related this of used XXXX. of cash XX% activities period quarter provides the during fully operating to to retired amount we changes note. from an

As all a activity, including non-manufacturer of used flow reduction for equipment cash amounted floorplan cash $XX in payables to adjustment inventory our for million. adjusted include our we floorplan part operating of flow activities, non-manufacturer financing

of activities million The cash the operating of the to in also these XXXX $XX reflect in represents to We equipment the was X-month in in XXXX quarter $XX compared adjust April our increase ended inventory million This during XX, used our us for XX, activities equipment flow a to our for first of equipment stocking financing Making and period for equity The in $X result changes our flow inventory for fiscal equipment same cash flow activities. cash decisions. new flows period last enables cash exclusive XX.X% cash XXXX. decreased operating operating adjustment the year. used the X-month million our the show ended equity adjusted is adjusted for flow inventory adjustments, to operating constant April the inventory. period used

inventory caused year. last to XX% of our the total as decreased of interest-bearing has overall inventory decrease, and increased has our equipment floorplan XX% period manufacturer same terms. remains the equity floorplan as position This our percent under compared reflects non-interest-bearing Although from fresher inventory to inventory our more our equipment to a has in

Turning on provide first This our like prior equipment inventory. quarter inventory five ending XXXX years to Slide for equipment $XXX inventory an update and our ending outlines of to the includes equipment our XX, of position million. for I’d chart the fiscal

from quarter $XX in increased XXXX end X of decrease January and a equipment inventory increase from XXXX, the inventory million. of inventory the $X of XX, million -- consisting new a our million As of $XX first of used in January

as purchases some and equipment steel times we before lead expect accelerate in our quarter to discussed in earlier, improved our This into we've somewhat due which down first 'XX trend by our into our QX. reduced further new potential second XX% the reduction to experience As sheet. beginning quarter fiscal did levels XXXX, increased will inventory to we Since I of of surcharges. the higher expected fiscal inventory third-quarter balance our total come significantly over and continue

prudent We focusing model. team expert inventory driving management our driving on to now approach through our are a turns attention inventory of more through and higher higher sales

As line these on from in the the inventory quarter. first the through prior the improvement turn our depicts turn quarter despite XXXX, X.Xx investments, of X.Xx black we an is which incremental the fiscal maintained chart, year first

expectations margin. in fiscal for We're at segments assumptions period, As to have for flat assumptions. International towards inventory now We segment We're inventory to acquisition X% X up X%. with updating leaving some AGRAM to turns revenue segment we shows construction to to to our equipment modeling Germany. up X%. to the X% an be fiscal the in assumptions excluding of year our be for inventory our up XX% XXXX associated equipment versus of to versus down constant balance our the ending and modeling XXXX, expect XX forecast for and our we growth XX% current annual X% updated Slide continue the to to our revenues incremental expect prior look reflect up agriculture prior all improve

acquisition, base is our revenue for from unchanged, in includes close which the Our assumptions the July to but the growth now expected International segment contribution forecast XXXX. AGRAM are revised

X.X%. $X.XX the first From prior As versus prior range the our the a $XX of earnings of expect forecasting maintaining equipment we fiscal we in quarter X.X% now diluted based X.X% our to Operator, year of revenue standpoint, expectations session a margin our $X.XX on earnings. be produced during ready in in results, call. we reminder, the be to question-and-answer XXXX AGRAM for margins accretive it fiscal to X.X% million in the are fiscal to of range expectations per range for the are to XXXX. We're for share now full-year and

Operator

Instructions] Steve [Operator comes And question Thank Craig-Hallum. ahead. from you Dyer very go today Please first much. our from

Steve Dyer

morning. questions. Good taking Thank Thanks. you my for

Just one me. quick for a

year X% to Ag have think bit point growth. and X% Ag of modeling them, light American sort are I for this growth XX% North sort you talked revenue example a but Your little to often know of of assumptions of I Deere, about they

there's Just your or given wondering different about late of slow if are saying? you Thanks. what just on the part, and maybe vis-à-vis others spring kind if that’s the spring something like of the footprint conservatism some feel your

David Meyer

morning, and Good than their United Well, revenue actually Steve. a apples. Canada stronger Deere know really who numbers, recognize recognize apples their of on check dealers into to a our are writers. little Deere, they where from Then customers tracking States. also we on wholesale bit deliveries the it's shipments you been the revenue standpoint not includes that’s to comparing

some a bit there are because difference guiding both differences, of there. are is apples-to-apples, think there not So we up, I Canada but little but

Steve Dyer

you. Got it. Thank

Operator

from Our De from comes next go question today Maria ahead. Please Larry William Blair.

Larry De Maria

morning, Good thanks. everybody. Hi,

you’re both new are order OEM terms able to on in what partner? equipment increases question, you from specifically curious your for just in the seeing Ag construction? on magnitude, or First pricing, Thank what of and you. not of pass And

David Meyer

even seen anything would some haven't annual I line bit a probably of and we we on, the pass typically, And but changes steel -- So yet, like a have pricing. quicker companies. to things there's they that. say that from with about always surcharges, little implement are Larry, model typically lot short talk little on we do a

increases as be probably model to surcharges, frame. to time models, new depend would It production. on in any we the see conjunction sometime -- I October announced it's some pass we’re say just we happen So do September year again will on. in that -- if with to going going And

Larry De Maria

Okay.

So that’s interesting.

are year-over-year actually a or pass to towards you price Ag X% to or simple or and number increases you other? on and is through basis there is -- guys of X% on net easier your could kind able you – equipment So than one a point just are in the construction

David Meyer

No, I compared and and the think go the back we just and through Larry they’re middle. and that on horsepower consistent a today, look on in XXX been pretty of whole at price and period, changes, really ago that’s the spread tractor, XX to passed time work years smaller significant

like we typically middle. then, always we programs to in it to and consistent the be things work depending each marketing competitive and the all So, And other the in on competitive, that just out pass want be what tend OEMs, with to spread yes, a be there, on. of middle and

Larry De Maria

used I got too. you how know much you. Okay, [indiscernible]

strategic to So the about I them, that are of to publicly guys, if development? guys second to overall I’m U.S. just it's in is going if or question, of to you into competition dealer to be what expect it guess, conflict you the thoughts north expand kind with curious you any the complementary be or do your traded looking what

David Meyer

Well, we what there. can't happens really control

lot a on we've acquisitions dealers, consolidators know in industry. acquisitions Ag of done the from over the there's lot of I the years, case competition many other You think neighboring a and in

looked important really our And to with the about relationship, ability pricing to IH Case really be good strategy, and in we our Case and we’ve our you dealers. relationship other So continue U.S our to at demonstrated acquisition same. if we feel disciplined be I think really IH our acquisition

there and are guess of And consolidations out this lot I a direct front don’t wave look another consolidation is really of believe we we at I any to and competition. of happen as on there, so the going probably end

Larry De Maria

Okay.

you America do more of that there. focused the going this, So Europe? light are leave And it in or wave will to you. guys North think Thank in you the I come in is next

David Meyer

opportunities we There going interested in is dealers and Titan Ag like be group U.S look Machinery We I to as think for Ag, succession right there's think now America. principals. aging dealer we're North U.S of an to solutions. in and

Larry De Maria

Good luck. Okay. Thanks.

Operator

question And you. next Thank [Operator ahead. comes Instructions] Please Mig go from from our Dobre Baird.

Mig Dobre

morning, clarification Maybe a everyone. Good quick guidance. on

at essentially assumptions you your level revenues. Mark, from all you are segment So, reiterating -- would for core if

this to AGRAM acquisition be top in line, fiscal going you’re to it's 'XX. You're the adding saying accretive

You're raising your earnings equipment is range unchanged. margin, yet basis gross margin points, your XX

about of gives what kind So pieces? moving do how your we -- think the

Mark Kalvoda

Yes.

So the was service. specifically think in lower, in the things plan. some was start we that quarter to the to saw here I our of of think and and one that I It late the parts It below expectations. came in due

that improvement the move here parts QX, offset some of there expecting in will we are that’s We equipment margins. going to into but be will some lower level of and service that

will came margin staying even of expectations it just overall, equipment associated, that within the to range, in provide our offset though some it's rental area Another to of that lower is level below QX. in level going

bit did. came a revenues lower. little just rental activity overall Our equipment in as well And

year, but in think provider be will to significant that -- I other be accretive. the adjustments, startup So believe and I X-month We in going half accretive of bottom yes, the it thing be international operations it's with of AGRAM, a those with with of the the things, to it and think and year to current some current and only the period. a not type line

some it’s improvement that, all with on I assumption the of modeling seeing we're that think on of positive that So offsetting equipment margins.

Mig Dobre

Okay.

the do at QX kind of unusual that How a So we're thinking. big least, SG&A we in you in was anything if versus that know at happen that with positive there line Was what item? look full-year? QX we think variance about

Mark Kalvoda

of bit a happened. and came on little SG&A No, the for kind talking lower out $XXX indicated little if in close that we as revenue came $XXX really had we to mark it. we Maybe some It level a because acquisition, of million prior the as AGRAM I we nothing AGRAM of that calls, equipment unusual. expected on take -- With part year. still less where pretty are there, think expected in the for into are the we commissions But bit below most we million.

So our is quarter in first to us on the in everything really regards SG&A. for plan

Mig Dobre

way talking $XX the Is Is it this but what the quarter, that to roughly below of QX. way million press remember commissions? mean, at you I don’t from per I came you’re factor talking want or and prior XX here? I about we’re it calls, too in and it a is so much, in this Right. primarily

Mark Kalvoda

yes. Yes,

quarters, especially QX you level to higher higher quarters. in QX, when that’s going those due other out commissions, the operating going happen you’re revenue into The equipment to expenses get of level of to have and

Mig Dobre

Okay.

it. in I when X% talking good. And starting Okay, looking we're then, XX%, almost right, guidance, you’re X% the year your we're Ag the down about growth, terms full-year for to at got down XX%. of but

about old as service. I the cadence So, to -- just there year an I slowness you progress? causing how and think thinking exactly that this guess, parts the know my else happened the do QX, been something don't Is in but what that’s reverses is

Mark Kalvoda

parts than I was -- service. it more think and no,

equipment in Our quarter. off the expectations was our first

think I revenue. strong Ag in it of in some particular, quarter our equipment fourth have with very a segment, we think, I did

I think a a there is from hangover little just of maybe bit that.

as X% lower that of results expect for within more But the that thing some maybe Ag. increase dampened the with expect still in to uncertainty well. the type the within QX. bit end we think be now that in some I we do to there have tariff range around bottom some towards demand of year range, the But that of X% little talk be to may the of maybe still of and do

Mig Dobre

it pretty significant business, a fourth So you're thinking what as you're to all help in sequentially expecting quarter half, maybe this is the you us about particular, that this at you’re Can in lift mean point. thinking? second I cadence back

David Meyer

little on some we and strong cadence, -- end that Yes. QX QX Yes, QX, the we had. think QX once the bit just I we the year-over-year with improvement see a I will think in

level quarter. be it think fourth back get in the I that will to difficult to

positive for on and territory It's to the us QX going QX time So be full-year. period. it's going to to more get so

Mig Dobre

I actually bit that's us far little this and parts Can And a farmers then point. in are forward? going business quick a late in -- and plan, see we start parts What seeing through the you understand to return also this Okay. at QX thus and obviously service but on the quarter? growth say parts maybe from service. behind to and

Mark Kalvoda

some that’s Yes, quarter so It saying there our comfortable plan early affecting good. indications for look does why that of the and was the late numbers. level we’re

May. in of look So the here promising early part QX does

year the for the it's for the the of growth given full-year. difficult I and in territory half to number to second get then year. of I us more So would the QX, be the it we into think of balance full-year for -- will us getting kind where for for of the anticipate positive started But year, a back flattish

Mig Dobre

really then, finally And helpful. That's clarification. a just

time you’re that, at You but equipment. talked the free about for ahead same doing Ag some saying that steel buying of you're surcharges,

seeing expecting prices really you’re prices year until not model not 'XX. You're higher or higher

I'm So it exactly that pre-buying I’m to to understand now? that is and clarify statement what you’re trying looking

David Meyer

new so equipment to the so we business. think model probably And to of as production, Well, starting QX, of -- towards some longer lead some that QX of that’s now products pricing so beginning that. And a our little getting fill ahead the we and getting calendar these going bit we are and just ahead basically good core And that time -- calendar strong I there's the do get some start pretty of we're that. get the effects and into are changes. ahead to are up typically slots of year right up see model indications going

Mig Dobre

misinterpreting? it. press for into sorry, sort saying this, you year still sell but I’m XXXX, of you’re don't sorry equipment still understand I you price on Yes, more that what you’re Are or XXXX model maybe up increases equipment that this to get 'XX. am I stock to around to saying buying and Is

David Meyer

price September, once at visibility obviously, our -- a of happened right. the to starting in getting looking purchase little bit decisions their better customers lot end up, October these where August, November, there's we’re and are crop, are So, -- commodity major going of more

going be equipment that. the have are of to ahead to So

happen [indiscernible] the OEMs they new to steel they’re until seen that shipments, -- we filled they now up or happen sure some to we we equipment our get we model the make busy going so the place But have that’s in So are have now order equipment And surcharges. some the without need competitive that. we going protect going season it there that’s the sort surcharges get when in the of in And to to with any steel equipment. that October, fall are to it are that. we to plan that right year up now, say the to indications, got the equipment we be going harvest for hand with on and model new won't if price into want our do want of we've September, season slots all going

a normal our inventory. planning have process on Let's

huge and we group but new if we but have So get from September, that are increases, and those also. in may models it be new we we typically fiscal in potentially here addition, see are at want we on some new December in retailing years the some will so that Then, surcharges, working equipment on that, that on and as it then new the model I year. in that benefits not certain equipment October, plan feel customers are movements to on comfortable, the not model, -- November retail will see of we of this be as that mean to group start enough will that and going model price equipment looked only there also. shipped But

Mig Dobre

for Thank understood. Perfectly you color. the

David Meyer

Okay.

Operator

I'd further Mr. like Meyer conference Instructions] closing you. [Operator we’ve Thank any to back questions, pass for the remarks. to no David As

David Meyer

everyone your our on on for to Okay. next progress you thank we you Well, look call. our forward interest Machinery Titan in updating and

So, a good day have everybody.

Operator

call. gentlemen, that your for conference participation and will conclude Thank today. Ladies you today’s

disconnect. now may You

Titan Machinery (TITN) 31 May 182019 Q1 Earnings call transcript