TITN - Earnings call transcript Q1 2020

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Operator

Greetings. And welcome to the Titan Machinery First Quarter Fiscal 2020 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]

conference recorded. this reminder, a is being As I to your like to conference over turn the host, would now Mr. John Mills, with ICR. Thank you.

You may begin.

John Mills

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

company On David and Mark Chief Meyer, and are Financial the Officer; from Officer. Executive Chairman today Kalvoda, call the Chief

at Eastern now, should have which for quarter first fiscal XX, everyone access XXXX, release a.m. By ended out went approximately morning this the Time. to the X.XX April earnings

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

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

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

see You statements forward-looking would response slide our We the of statement. your statements prepared will contain Harbor the remind on Safe make questions. additional the that to management may remarks to presentation like in two everyone and forward-looking

guarantee involve do uncertainties, those undue based Form them. of section identified filed report current These the recently are annual reliance management forward-looking not be and on placed XX-K. statements and upon performance, should These of expectations Factors Risk on inherent statements future risks and not therefore, in including Titan’s most

release to could forward-looking cause required any assumes to call. that factors risk update obligation results forward-looking discussion be as contain of in These be actual Except made statements law, by may a that more materially any Titan today’s may factors projected statements. or from the no differ applicable those in detailed

more an believe will from today’s results complete period-to-period. during financial analysis financial transparency basis. Titan’s when greater a measures ongoing call, underlying performance, these We that adjusted non-GAAP into comparing can including discuss facilitate particularly results financial note and Please we measures, adjusted on

comparable directly their release. in non-GAAP GAAP reconciliation today’s financial of most have measures these included financial We to measures

The open of At XX last questions. the we remarks, will call call the take approximately your conclusion will minutes. to our prepared

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

David Meyer

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

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

was and pretax million, revenue Our diluted of adjusted first with income per $XXX,XXX share $XXX $X.XX. quarter adjusted of earnings

We first generated quarter during results of persist. healthy our conditions solid growth business, that top industry all continue fiscal the to first the across -- segments achieving challenging by bottomline despite and

and increases strong across businesses, performance this double with pleased with which year higher profitability margin particularly our area, increased are the prior parts The solid in segments grew period. digits We service higher in our versus sales reporting in drove equipment the all combined quarter.

agriculture domestic for will operating international segments, and segment. I our additional our of construction and provide three detail now segments, consisting our

fields yields, for will planting will selection of abnormally an crop multi-peril caused in our are customers spring. delayed This late Across cold is growers crop wet spell our payment. footprint, four opt has domestic slide ag the not to and On prolonged former wet and segment. impact overview our be this of experiencing an the potential and planted has insurance and most agricultural the cases some

program, the the to direct provide market payments to commodity continue XXXX by incomes which in partially to farmers. facilitation which tariffs. attributable is be week, USDA response, impacted In Farmers’ prices, Chinese $XX.X negatively retaliatory will low announced billion last

support to Secretary in the recent Perdue release, work markets deals release press American agricultural more administration on open help globally. USDA free, long the a directed to trade and Trump President fair to craft while reciprocal to producers, run According strategy American to continues compete a farmers

While released, indications going high the producers. a yet to to be all soybean and early details this percentage of of to point program the are wheat aid final

We continue the along demand along aged growers for cycle incurring equipment machine of their creating purchases. increasing replacement technology number our benefits to higher a see becoming current is hours. more fleet This fleet as our aged, duty is new fleet with new of with

supporting last ability equipment from reliable maintain is to yield productive year’s excellent Positive fleets. trends and current, farmers’ carryover and crop

typically repair, our and addition, business to In more focus. support, aged who our to growers for important model service yield long-term us parts will their equipment requires the an of fleets, looking integral aftermarket customers and and which strategy high and our for the part and updating is are not be

Turning you our construction impact positively the will economy to of overview an The slide construction segment. five, see to continues domestic strong industry. equipment

equipment for both infrastructure. addition, we and demand production spurs oil In experiencing the higher oil construction have prices for related been

stronger seeing in farm the prices. are negatively we to markets the rural areas, While construction metro the by depressed equipment be continue commodity demand impacted

target an to outlet used We for our construction customers as continue farmer equipment.

results due equipment and year-over-year our quarter construction Our rationalization improvements rental evidenced stores construction our to and our the The steady segment. implementing utilization by top equipment in been fleet our in are efforts. is we bottomlines have demand to as trending operational first producing our positively improvements

our In in balance quarter revenue modeling up addition, XX%. first construction from year, to X% raised and X%, have for assumptions the X% confidence of our equipment business construction up our to strong segment we to the with

markets of of our development Crop within slide six, Ukraine. Romania, average. conditions Germany, of we our and Serbia growing across On an much countries and including footprint overview to is good have Bulgaria, segment, international the our

another international investment experienced overall quarter we bottomline and and farming in with and along markets. comes runway service with machinery continued long the the see the our part these global parts of as that regions, complexity stability machine a developing growth segment. revenue in population aged with We sophistication and performance solid from of these increases contribution Again, modern

to call turn to want employees over solid executing all the Mark, their I for in our efforts thank first I on a Before quarter.

original the notes conjunction off on the release, principal security. $XXX our in with in our convertible the of remaining balance paid maturity X May of senior noted we million As

want the to I this our thank their of execution some very us face in team debt for industry retire allowed operational to that Again, challenging conditions.

Our balance good remains us position put in acquisition and arise. a sheet strong opportunities as

in like to Now, results call detail. to Mark review financial I’d turn over to the our more

Mark Kalvoda

David. Thanks,

of Turning compared an to to for revenue $XXX fiscal the of year. quarter, XXXX achieved XX.X% we increase slide million first seven, total last

business revenue was all and our categories. revenue segments across Our across increase all

and categories benefited from and these AGRAM of revenue XX.X%, up July was up XX%, acquisition, revenue these All Equipment year. parts service respectively. occurred last in our which XX.X% was of

year were Excluding this that same-store the acquisition, sales was our XX.X%, down first X%. about quarter compared last to up

Our in the other increased due and inventory revenue first to quarter level rental a X.X% higher rentals. of

for designated construction compared to same segment utilization current year. XX.X% rental the our XX.X% fleet Our dollar to the in improved in our of quarter, period last

On a to $XX of by XX.X% quarter of slightly period slide increase basis the margins lower eight, for an and year shift profit to versus due XX.X% points the decreased driven revenues. same XX to mix. million our gross prior Gross last compared was by gross primarily margin profit the in equipment higher year,

year, of AGRAM the acquisition our for quarter $XX as million as costs $X.X by The variable by the to of quarter higher revenues. increased well expenses in ERP third the operating commissions first the associated last our transition million as expenses XXXX. fiscal on increase Our with such application, impacted increased was

fiscal in earnings is as we this for to $X implementation, non-recurring system the As year expenses by We are just share. and expenses share. per nature million which undergoing we impact first expected view communicated, these previously per were GAAP an quarter approximately $X.XX $X.XX ERP over or these

leverage the to quarter. were achieve greater we increases, during these operating Despite able

percentage year. a in same of the revenue, first to XX.X%, to improved quarter compared in As last operating the quarter expenses XX.X%

$X.X senior fiscal compared bearing balance our expense interest Floorplan million decreased in quarter to the and in last to notes. $X.X reduction on interest due This decrease in our and of expense level was quarter first other primarily interest inventory same principal convertible lower lower of XXXX, of to a the million year. XX.X%

first prior XXXX, quarter was adjusted an net of adjusted compared loss our the In year. income $X.X to the in of fiscal $XXX,XXX, million

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

the XXXX, first improved year. to first of quarter quarter million, the in adjusted million fiscal EBITDA of last $X.X For $X.X compared to

You can directly EPS most find income, adjusted net GAAP comparable appendix reconciliation to of a the to EBITDA presentation. adjusted and their in the slide amounts adjusted

first of XX.X% ongoing segment million an healthy down you our an the in the Agriculture for segment XXXX. revenue industry pretax of X.X%. results $X.X compared $XXX good the On increases year, quarter income start with revenue million, revenues slide increased parts in to year. fiscal a first adjusted quarter ag in year We the was experienced were service increase year The overview of will despite last headwinds, to generated nine, compared million, that the an to $X.X period. improved of and see prior equipment,

the this pretax Turning to XX.X% to improvement the bottomline and to segment first primarily The as in This segment in quarter results by prior compared $XX the a year Revenue to million $X.X segments improved The of our segment. million. loss construction increased quarter period. adjusted $XXX,XXX continue profitability. to third segment of of to marks increased revenue. drive top results increased we result quarter-over-quarter was this consecutive loss

of our completed international XX.X% was contributions throughout which $XX to segment our the our the the last quarter The acquisition, same AGRAM an footprint. first as XXXX, XXXX, fiscal revenue In from year. compared was quarter early well the in revenue increases rest third million, European of increase of as of quarter revenue driven by increase fiscal was

loss Our an last pretax $XXX,XXX, $XXX,XXX to pretax quarter same compared in income was international of adjusted the segment year. adjusted

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

$XX end first equipment. $XX from million, equipment the XXXX, XX, million an increase partially offset $XXX of a used million at Our equipment, million a quarter in decrease of inventory by in January reflecting new was $XX increase the

X.X the year. I on to more will the turns little color equipment provide to inventory The in next increased inventory year, slide. compared in on our current prior a the X.X

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

level of We XXXX. continue will to be the around by million our end fiscal that the anticipate size $XXX fleet

$XXX $XXX of of had we XXXX, million lines total XX, April credit. on outstanding payables of floorplan million of As floorplan

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

This Our well covenant leverage which required of current total a ratio the net which ratio the an of was standard, of X.X liabilities X.X. by the the metric. below lease have is larger the of ratio facilities. X.X is ratio this on our approximate liabilities The of X.X, accounting lease bank require worth impacted of recording new was tangible adoption healthy to quarter impact

end balance lines the the on On convertible hand maturity At had notes. this cash our and security, we existing outstanding senior million using of we May quarter, of outstanding of of XXXX, first repaid X, the $XX date credit. principal the

Significant facility. cash notes these to the few generation allowed long-term replace over another them debt years us full with having without to past repay in

of us uncertainty, retirement position this another during cash expectation year are liquidity from solid good ag the volatility behind and operations, our a With a debt generating of our particularly and within in segment. of we of period

slide I on would inventory. additional our like to to Turning information XX, equipment provide

in red mentioned saw These this the seasonal reduction stocking new inventory changes quarter inventory used and in current in just the blue experienced levels. in are few I As ago, and equipment reflected slide. we a size bars quarter minutes nice on current the of the a of

We our The to is manufacturers. next inventory bearing bearing reflected dollar the terms levels. amount of inventory maximizing the our non-interest bars grey are from non-interest in

equipment chart which of As total inventory inventory levels. bearing the inventory of an non-interest XX.X% $XXX or Since clearly in relatively had demonstrates levels was $XXX million, flat of current XXXX, on the bearing. increasing total quarter, example, fiscal million non-interest equipment we

reduction our under management primary years. of as free our few our been is aging with reduced expense improvement floorplan improvement driver as in inventory the our this a ongoing the This manufacturers. primary the past terms the The interest life for over interest result remains of inventory reason has efforts, of cycle of more

bearing inventories equipment second will the Non-interest that well. trending year. increase will levels expect back seasonal and inventory of then reduce as We in that quarter of fiscal in follow the XXXX half the

$X GAAP from first The flow for our the an XX activities months cash fiscal three Slide activities XXXX. overview provided flows operating operating of of was the period for by reported cash provides million.

As three activity, the used payables activities, part including XXXX. cash first fiscal include for equipment inventory financing, flow for million we our adjusted of months all our non-manufacturer was of $XX operating for non-manufacturer adjustments floorplan floorplan

equity changes constant financing the evaluate our reflect operating equipment to flow of decisions. enables us our cash in in our equipment adjust also We inventory flows, which to cash inventory, exclusive

during months equity to financing inventory floorplan our in constant as period of equity equipment -- XXXX the new decreased available X, in equity primarily as on points and of preparation floorplan The occurred borrowing a equipment the our XXXX. more lines May in XX, ended the XX.X% due current equipment of XX.X in to million for seasonal April use on the The inventories, the decrease in represents balance the of repayment level well higher our stocking and outstanding which inventories in our $XX on such for equipment decrease of is or the inventory convertible adjustment notes, cash. and three quarter the inventory

to months activities April compared million for last for used three After adjustments, period the all for was same year. $XX the ended flow adjusted XXXX, million the cash $XX XX, our period operating

our fiscal annual Slide XXXX modeling assumptions. updated shows XX

increasing the fiscal -- are construction quarter the for to strength We and XXXX. the we revenue relative first experienced for we modeling assumptions during our balance our of reflect expectations had

construction to flat X% versus up updated X% segment to assumption a Our growth XX% is of previously.

includes at the AGRAM to XX% international international which are XXXX. up flat add the for in XX%. Recall closed range our the maintaining assumptions July We from that acquisition, revenue agriculture contribution and for

quarter are for of the first diluted for our the the performance, Therefore, $X.XX due fiscal per cautious Despite earnings to industry. the solid range ag expectation XXXX. uncertainty to remain in we adjusted share $X.XX in maintaining we

session call. our question-and-answer the for of ready now are we Operator,

Operator

[Operator you. proceed first of question Please with Our comes the from Craig-Hallum. with your Steve line question. Instructions] Thank Dyer

Steve Dyer

what tough footprint. is upgrade color ag a maybe What for more strength? or strong Thank of to, question on A just you pretty as you. backdrop attribute a resilient that Good do obviously, quarter, that morning. bit in drove the that to given little your sort really quarter, cycle a

David Meyer

morning. This Steve, good Dave. is

carryover think think, over there our into carries there, across actually -- I was following pretty I if last year, of had some there some typically and much footprint you look use at the we whole year. that

Definitely on soybeans growers equipment a year the the hours markets the end replacement this they program had. year, started -- pickup another the our XXXX increasing. And of in out at $X.XX soybean real there facilitation the and another is of from demand age the for last report the

they last the of that lot this time over If contract level. of last were soybeans year a to able you look $XX up at -- year year, the growers

I think times. some corn were pretty good there at contracts

good the this our So year in with the that good last shot here year, of with needs facilitation pretty $X.XX season. put while as care go really take year’s equipment growers some their pretty contracting, position they into to arm, some and market good planting

attribute what So that we that’s to.

Steve Dyer

can guess, Got despite been in of Great. view which sort Helpful. weeks, view, way and so, you sentiment And that is something always farmers that? $X things bushel it. guys to that of you. that here last I in on change Thank then, few have any of a to differently? of before that correlated if need nicely you sort two, stay fairly one, start have corn, then, sustainability the north viewing And do the your

David Meyer

Yeah.

going. to Over a of put that’s the attributed this yeah, a the the more say bounce a the lot seeing couple acres I days, for and that last price on farmers less little would corn steps of some lot movement definitely, on of potential

in you in wet. of are continues Indiana, our will Fortunately But and if look making their to look the at think and our Illinois, you they corn at corn week, of be this look in South of planting most at our exception with way you Ohio, behind Dakota, most ground. I the very, are progress farmers very footprint with be

go So could shot on be supply to arm might really up. that side a there supply yield the are less in we corn

So, obviously. as keep for and could nice growing what in thing if starts are to growers today’s they some positive keep price year potential later the some get really up depending that’s our too. that I typically we corn yield has potential diminishing happens just locking a how like at know as real that definitely of they say much real yield the in planted, to more be and selling it on the I’d a gets going

and take what across are price. here for So, speculating less already U.S., you the that there acres if side yield corn people could do less potential are supply a

Steve Dyer

Got it. Thank you

Operator

you. Thank

with Our next question line your comes Dobre the question. from Baird. Please Robert proceed W. Mig of with

Mig Dobre

to a start construction. strong are start I you Thank -- Obviously, and to you guys. want maybe raising you. nice had guidance the morning, the really at there year. Good

terms a looking versus outlook? little this of in initial had different what’s you what’s of am I your your for especially expectations embedded all color that more and So driving in

Mark Kalvoda

Yeah.

I -- now, top there. think, call results think fundamentals focus I we three of improved with remarks it, that on quarters construction now really, our and bottomline out prepared consecutive it’s quarters all tackling, the just three in and as mentioned it’s and blocking and

improvement One this the better area. improvement service. expense this and had that we that have parts lower of in areas Particularly you margins of interest quarter inventory That’s the is driving there. floorplan some saw within and of

in business in team that focus came the first parts through driving that and quarter. service expert Our on really

may season season, sure start late customers -- here to and compressed construction maybe Some their without done. get there to make on and they get jobs and the go to there as out the really of to out that to continue side our wanted ready construction had to to at

here business better place. side and benefits utilization that the on done of on of up rationalization the done, some Again, as in just the well re-fleet that points. getting X think we the rental. last thing I I rental execution percentage those that think, about is have some deals being as talked We rental

things, one know year. combination to a -- this continue I a it’s to that us this particular it’s to lot any that I segment don’t will continue and of profitability in things happen think get of expecting So

Mig Dobre

To mean, be X%, correct to generate me guidance, of has seems am the enough on to not it. topline, X% right? are demand I from and if I And to change to with service to rentals wrong, like clear, mostly this mean equipment I what’s part are going I parts and wondering be X% you going am the XX%. in

David Meyer

Yes.

Mark Kalvoda

equipment And happening I the Yeah. it’s on Yeah. some same think of side. things the

business. that getting and out going Just

remarks, other strength that’s than we Dave areas think his oil to particularly the saw better activity. equipment seeing in in of the some it I in here we that’s the in some quarter late of happening up the it results sustained through positive strength of some of there indicated flowing -- our some the what metro particularly the oil, strength on side. with sales better just is some are in in the Bakken and we April anticipated, good through came where markets in here But

Mig Dobre

I see.

maybe subsequent quarter for because thinking ag, Okay. And here a varied. comparisons, we slight I then are call versus quarters, obviously, wondering are still implies the are progression the in your can about sort you half, it, flat the is little how the guidance you second bit decline. talk what that am in of But calling second your

do a think So modeling about from how you it perspective?

Mark Kalvoda

Yeah.

as year, you once -- to you had from of a and QX then sequentially -- QX think, bit. this that some I quarters come think, a here, far will QX see see still get very some where we out in QX, positive, little see QX, think, as I last off will the I strong

in say which I’d small QX, then revenue negative and equipment highest in quarter. QX level going to our a of is degree So QX, some growth

Mig Dobre

the pretty you new you QX margins described I would guiding the there what obviously, equipment when Is out came variability up for that. to the am have as at to understand directionally not more for and close then, I XX%. you normal you looking of And Okay. rest are us? any call any But that year

Mark Kalvoda

last we first quarter mean, came have normal, year getting the I I don’t that to think, short that in we I see, alluded here. overall, of to a yes, bit certainly little But of kind started a low quarter. this, always some out for still in but XX% here risk all in think we attainable, the there’s though year I even first bit little the I is --

out to little off and QX, think, I -- I bit to when think, will no, a come So, a tends stronger then get we QX, be as QX little well in it bit.

-- than will a will but be higher we of the lower we year. be than QX, last little I in were year think QX the other bit quarters

Mig Dobre

remember last then That’s helpful. and a going service a are -- on maybe were maybe discussion And case. plant we proves I parts already to be last having challenging because have me, to looking question for quarter, that like and things season this the

was really, really Your good performance here.

what with different growth getting if you to rest looks think like positively, and am then me I was as I me initially contemplating? of what you it it you sort And correct comparisons at look about mean, wrong, the surprise were So tougher going you parts how forward? than I am the year both service, do wondering of in

Mark Kalvoda

Yeah.

what we I did the a higher prior It us year was think, decent a bit. quarter in the surprise We expect growth did nice some versus it amount than expected. it year. last had off was first little

Mig Dobre

The comp [ph].

Mark Kalvoda

thing tougher it’s in is going because And -- be other why yes. reason you AGRAM to I like said acquisition. another later the be of the the comp tougher year. Yeah, will the think

of, benefiting then first percentage that are the in the be goes and points to points similar from probably, tune will the second AGRAM to to quarter, that we X X percentage here So away. acquisition it quarter

it that I getting to think think may late been strength said construction, service where they I this partially came we quarter to with in field And into minimize the the in prepared case again, sure that’s out of that and breakdowns our more that what on. maybe similar that. the to April, parts just really are wanted it’s in due I saw to customers make do to have on some for in and occur

and service quarter-to-quarter. learning predict I between somewhat thing lumpy hard think other the and be it’s this is, parts to are to tends we

and quarter did little disappointed As in last the were that strong. you a quarter particularly results back last service come mentioned, we

lumpy be it So bit times. tends to little a at

as mentioned course, year, full is QX to quarter, of single-digit to the kind that the going harvest. The the for far biggest QX but before full mid with is, expect, largest bigger as think, what growth is I be But year. we we that quarter the of still

kind So our year. of it, or far that digits growth the make it service all think, that break I as attaining in parts and mid-single as for

Mig Dobre

Right.

So, Mark, talking the saying be clear, to are not largest in you revenue when dollars are about QX, you growth, correct?

Mark Kalvoda

That’s correct. Yes.

Mig Dobre

Okay. Good for color. job, thanks guys, and the

David Meyer

Thanks, Mig.

Operator

Thank you.

question Our Rick Please with next comes with from line Nelson Inc. proceed your question. Stephens, of the

Rick Nelson

morning. Good Thanks.

David Meyer

Hi, Rick.

Rick Nelson

I’d if and equipment margins, the dealers that side inventory? down where channel other like some on interest new used pressure comment channel, we you deals could are or to drill and the advantage into of inventory the the taking is this did these in see quarter, you see side free on

Mark Kalvoda

that specifically, I condition used saw pressure think, new, as most the far ag so think, of I the will the the stable, those from take margins side it first we improved and be equipment to supplies, I inventory industry due continues we our at coming here, least that go, to had. on and as part

But especially this on difficulty fully and that there new pressures some think in of pricing OEM the environment. those difficult to price pressure the customer, I on from competition is -- passing that increases

others other as far As taking…

David Meyer

a year we we yields What full opportunity got QX prices up then, to our I ability I QX have orders, that right can are with visibility we units to to going hit QX little inventory, with our up little a down in down. now. flex additional of the to need revenue and get on plus have number, talk comfortable the and got the what’s Rick, flex right more we and inventory bit, and -- but into say, commodity and the current Yeah. can so have with have we so we level to both

that of pretty So quarter slots bit that -- order of to but get we be -- trajectory stays we fourth that our a -- and to kind earlier if We less they they on acres cognizant always could fill to talked little could have due be during corn, same -- up in on price starting fast. about that.

like his bearing too during that’s on non-interest -- in our helps, that too. -- really higher percentage that of Mark what that explained like inventory helpful Then presentation

we picture, plan, good, feel right whole out right on the we So pretty I’d and pretty track now. thought it’s say, are well

Rick Nelson

Great.

you of be could So up some the shift expectations? you we ag posts, that mentioned slow cautionary comments we the for heard your sign guiding to cause flat, segment, X%, prices you are the should made down. a to revenues that looking corn were are What that

David Meyer

Well, but, -- back just last ahead, so again, some I cases little and we as our you record excellent think, yields go look if in to a year bit, across yields footprint.

had the last higher soybean facilitation contract a had of market a to ability We year growers what this program. year time Our today. at much numbers than you $X.XX seeing are

business. year’s last of lot a drove that So

this know yields are -- to about know be. we going don’t what we year don’t Now the

is the not market what are to facilitation price the still sure haven’t We program. details of seen going the We be.

there. level is of there a definitely out So volatility uncertainty and

carryover there. guess, year stay a to year first I’d So that’s say, lot so and of that this we need type yet to and that’s be say of last I some information seen the so is then, I’d trade tuned. of this balance quarter, from out all for But, of still resolution the year,

Rick Nelson

allocation, cash you you to think work, the sitting you million cash. the do off or about $XX continue you that make capital it. any would on in thoughts now you putting are have today, your Do Got How build it it. to books, be Got sense. converts there? got That update

Mark Kalvoda

Yeah.

big convert think, and behind critical. us I is getting certainly, that

ag opportunities opportunity trough I there’s and a lot there’s of think, cycle talked, being have lot we been length of done allocation. We are our standpoint out as that the think, a think, this of of have side believe domestic the we I -- on in ag that this opportunity. particularly on the the acquisitions to that’s priority list a some to side ag from in focused I good and top is and quality we regards good of go There in. capital the get on and that’s,

Rick Nelson

good Great. Thanks and luck.

Mark Kalvoda

you. Thank

David Meyer

Thanks, Rick.

Operator

comes [Operator Instructions] next Maria De line from Larry Blair. proceed question. question William you. with of the with Thank Please your Our

Larry De Maria

everybody. plant I coming mentioned. difficult, of have Good government morning, is program the is prevent we dates moving Hi. parts, a that but up know maybe from there’s this you that worth have lot the new and

are how is some let’s your there prevent say, in plant. going overall, So and territory income thinking assume to more farmer this maybe acres because you year, less be about

kind prices. probably, how you farmer and together obviously, about can about less think thinking piece are So with, of all yields, but income higher cetera, it you et

this understand trying is to talking and end just markets market or if day, the it’s Thanks. to in pivot going potentially for we sorted still about trades a So your overarching another the just of the are at real out?

David Meyer

Okay.

So think pretty are fortunate, I Larry. we

look degree and up their if it’s this North off are too week say, at and Let’s Nebraska and Dakota, Minnesota, is that get corn sunshine, this I’d actually XX are already. not week a say, like, planted of I going Iowa, planted, they ago say, far their -- maybe corn in the is cases the all some weather and on some we year from and you getting corn to

side. that’s on have Dakota a So is state little bit probably the the we only I South left think thing

see pretty am I resilient that are soybeans follow resourceful. growers then after down fairly right to So are pretty say, up our to confident get going you I’d are and that. going corn that and

from fortunate standpoint. So we that are

the and trade and all, going to the got that. like we to -- uncertainty need of some marketplace got closure that some get to we so get on program, of out this issues have we market facilitation Definitely, the

think I pushing for that. everybody So is

soybean helpful we and at our this five XXXX be are to five ag facilitation -- growers, that’s positive say, a I we look for and it’s market especially lot of you if going help that’s growers and our states, soybeans. to think program, our I’d a going raise states,

going So that’s to for be good that.

on got of there cases of crops growers storage, hand. everybody on corn I as the worth farms, year’s thing some three years in improving we worth in sure out have bit. think start even two, of this one we if am crops the on is of with start some price little aware a amount hand, to corn is that, see the of not I one our

benefit it corn think, on again going So is these even a that able be to I grain sold bit of a to get little to guys tax could crop year’s for some be any this that is get spike only standpoint, -- that be going but a of to not storage in problem. in price,

So are think become banks have I our right I’d the challenged say, conservative growers a to them. some of pulling real now, are

in some our are an out year note. that think this putting operating their I there of crop without growers

challenging going So be to of them. little that’s some a bit for

done, and said states. all get you like our when think I I five But

bin. through resolved I think this the in issues in like good that this, tariff to are and get trade issues, through we going the pretty it get as and we say, get and just shape get the be to we need crop we

So, gives summary. a hopefully, good that you pretty

Larry De Maria

EPS range. not construction, the No. And that curious Okay. better guys slightly wide just I like obviously, you guys others. outlook, the of puts and guess, guide It does. narrow fairly but the why about are in it and lot you you maintained better than It I raised the takes sounds given position construction? to a a and am kept ag

later And am sounds secondly, we it I better upside then later me come and going drove once as year near-term, the orders that right? correct to to is mostly is if maybe wrong, opposed this to ag, there getting if in like

Mark Kalvoda

Yeah.

prevent mentioned of things mentioned of plant, so prices, out all first a in trade just to out ag, regards all, uncertainty commodity uncertainties all these of think, the lot different there. with are with you war, there that just the I Dave weather,

CE bit than the in obviously run a here going positive, higher what the a we side, little offset off anticipated, to will so of the we little as bit. there, the that’s be did little revenue had on expenses bit with that increase come And a

And EPS there early I we that are a keeping that with mind low year quarter a think in relatively range and seasonally it’s just first in on here. the

a that there’s So to lot range. left achieve the EPS full of year year

Larry De Maria

question thank -- last you. then Okay. And

talked kind as the the obviously there money territory how now, backdrop just putting you obviously, and Midwest, shaking some work out ample well. potentially in curious looking of things overseas, about that odd opportunities in an your have are in M&A, are are You to

of now, right So opportunities they there? are what there are kind

David Meyer

No.

fragmented and think, dealer are, your the opportunities I there of think are challenges. footprint principles, still we fairly dealerships, there I I is we aged this Upper like number in, some we Midwest definitely think, opportunities, capital ample

we I yeah, same opportunities this or in are think, we contiguous So, either in today. definitely some good have footprint that

Larry De Maria

Okay. Thanks and good luck guys.

David Meyer

Okay. Thanks, Larry.

Operator

final Thank floor you. I back to our for comments. turn session. the concludes Ladies question-and-answer and Mr. gentlemen, that any will Meyer

David Meyer

forward day. a this and being our you everyone today our have you on on updating to next Thank look call Okay. progress call and for good on

Operator

Thank you. teleconference. today’s This concludes

your this you your may You disconnect Thank for time. lines at participation.

Titan Machinery (TITN) 30 May 192020 Q1 Earnings call transcript