TITN - Earnings call transcript Q1 2021

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Operator

Greetings. Welcome to Titan Machinery's First Quarter Fiscal 2021 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] Please note this conference is being recorded. the to turn ICR. Mills now will conference John over with I you. Thank

You may begin.

John Mills

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

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

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

today's In addition, prepared we're remarks. providing accompany a to presentation

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

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

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

David Meyer

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

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

resulting Our million, million first over improvement earnings in pretax Adjusted $X.XX. income $XX to $XXX quarter prior year diluted the increased revenue which per is $X.X was a of share period. million $X.X million, adjusted

to related address to want I overview, segment a COVID-XX. high my few Before level comments

procedures And March, in active employee we're the potential guidance, early earnings important took we recommended As most very customer the messaging, employees risks, place. and customers COVID-XX on very the our call education, seriously. in I of and our in CDC and shared and safety QX putting safety

were our spring planting busy able healthy, season. and up, stepped customers through employees and our construction important stayed we the support to Fortunately,

syndicate excellent equipment overview a will now construction facility, a in segments the liquidity world. business. and solid banks we're domestic as feed company contractors result, for to position. critical and essential a agriculture we build of three domestic placed slide we I financial employees support With domestic and on said, on an our our is agriculture employed, our and On farmers, four ag and detail our deliver We're international who our segment. consisting our our credit especially in provide ranchers, new our that As able and have segments, closed operating quarter, fully and industry our additional with an segment. kept of

late and some commodity going standing and uncertainties winter corn season. the the with would a This farming weather equipment fiscal we normal due face tough duty settlements and maintenance harvest, QX our but year not the and recording equipment this late moved to and XXXX as parts unharvested XXXX in combined new also have service wet first into March, With business the the service believe quarter. corn of supported prices, being and in farmer was crops taken to year's our only harvest, prior into and much use business February through of cautious place cycle

age, cycles, not down addition, get on increase to our of double-digit detail and parts in additional In as service the revenues domestic is and our to service fixed cost but only more strategy. continue requiring progressive into these key fleets the provides this ag, absorption long-term will repairs. insulation Mark

really slide, spring crops are footprint shape the growing good in an and our planting As in southern of ag because conditions. on ideal noted

be year-over-year corn and our a According decrease forecasted situations preventive is the crop wet forecast both corn, footprint, restaurants, from end -- on and already dollar season Approximately XXth $X.XX acres insurance challenged soybeans. prices ethanol production multi corn last Coronavirus the to WASI putting sentiment to too with and producers biggest still the receive elect ethanol weighing significantly the still yields price corn a parallel commodity coronavirus. livestock farmer of announced report, the concerns The and soybean of May some prices increase spring. COVID-XX U.S. farm causing are to On Livestock due reductions with $XX of this demand with Program, lower through Food along Corn the payments dropping meet concern ranchers impact have cases, of and goes on note, prices. the closing to billion farmers and wet additionally is payment could to the the prices. Assistance by downward with Dakota, fields positive delayed lower USDA schools prices channels. our for of which WASI prices. land to a is production. CFAP, of is program of planting, on $X.XX plan a are the slaughterhouses part providing and or strong on depressed commodities average in XX% recently to On into in direct production. These from and has pressure in But somewhat the low they're as milk a USDA North standing down. farmers disruptions northern year's

In Trade until harvest, also commodity of acquisition and costs, customers. experiencing more program till viewed not beginning X rate propane trend and We a year see USMCA equipment the complex of as the for as the the HorizonWest will for of late addition, interest is Agreement additional domestic and may May, and prices solutions. have farmers are ag the trade precision in the as the and participation PPP the model opportunities fuel acquisition from believe CARES low of realized a closed benefiting data-driven XXXX environment, continued impact the on from be technology we in agreement signing our demand the are improved Phase year progresses. U.S.-China calendar Well, and yields and of three-store positive Replacement the we new IH on creating we demand of the Act.

in of have by Even business a a construction though economy and prices. month some our in environment, extreme from our disruptions construction shutdowns. an of been state February, there the and a overview economic decline we are the solid quarter, equipment to impact industry start With business interest Turning you'll essential strong five, segment. slide our be see are experiencing closings only has contractor an rate our of domestic COVID-XX customers first COVID-XX tampered lower and oil

stayed We construction started have an do Serbia, experience within Romania, along overview six, our We business position markets normal. profitable parts strong recent On service the improvements including business pandemic. Ukraine. be the operational and experience continue activity focused construction segments the returns to an COVID-XX the with international we over when the our to slide rental. Bulgaria, our of equipment segments, segment, countries very we with to pullback level as as business year in international the we the our Germany, that on to well and the reacted in CE Similar some countries some believe to us with aftermarket of industry

conditions for very and in-country were their shutdowns, Europe business the due Romania of of are by and excess Sea destroyed and timing to Farmers regulations. winter in plant are continue stores shipments, equipment and our crops dry While Balkans, lack of essential, There Black create impacted service. wheat regions. parts been feed rye in and Ukraine, of has demand border bailed There moisture. or to reports for deemed in pockets being heat crops,

successful fundamentals to We place these profitable be the countries. and in in have developing

weather challenges on our through commodity and user our We manage support as service parts we equipment will depressed to the and the and focus used continue end inventories business new customers prices. dry and with

want and as I the the thank we same excellent the efforts crisis turn during COVID-XX all the very producing wish all of I I to Before with Mark, come COVID-XX safe our along results. challenging our financial at time, in to pandemic. families this employees employees, their customers, supporting up best staying their call all backside some the and our customers for over and suppliers,

to Mark financial turn the over let's results call detail. Now, our more to review in

Mark Kalvoda

David. Thanks

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

parts continued prior led to generate first quarter, of XX.X% segment increasing solid double-digit compared year to service the and quarter. the X% Our results with the growth in and way quarter another Agriculture respectively. business

area results. Northwood as of the result segment locations by parts our the seeing service International we aging was be performed focus the the construction Our continues offset also pandemic. a this are and complemented to in of fleet also but an softness and well, year-over-year in to by addition added customer the

versus harvesting by in driven prior which was first crop. quarter Equipment were XX.X% However, late the business, the sales as agriculture year. fourth growth realized upside by believed we farmers driven delayed equipment largely our year's segment were the quarter increased last where for our was quarter

of utilization lower segment we In to current revenue in gross due the the of increased addition, conditions weaker equipment our decline gross year. sales. that for earlier. The quarter On the utilization spoke decrease essentially The the aggressively in used increased agricultural in quarter revenue David dollar was points during two in to the profit mix fleet the prior other end eight, and result construction $XX.X same year. XX.X% to and was XX.X% flat for last compared the market XXX The slide was quarter. X.X% construction due period ways. Rental margin rental partially moved some versus basis to our oil to million profit to

First, business. sold made service than and a in our experiences overall international equipment the construction sales equipment larger parts equipment revenues of segments. portion margins relative and generally revenues was equipment to agriculture, total up And more to which weighted second, mix our higher lower margin

equipment our to decreased also as used efforts over we the sell accelerated Finally, prior year inventory. this ag margins

$XX.X prior versus million year, fiscal Our increasing by flat operating for to the of $XXX,XXX XXXX. first expenses nearly quarter were

and expense fiscal as impacted resulted improved compared Floorplan This other quarter from XXXX the our where of same as such $X.X fiscal reductions, adjusted combined in store, expense we specific revenues we in net compares from remaining dollar. fiscal to of higher million transition such expenses to $X.X growth This the for to year-over-year $X.X percentage Despite new of control lower to year the first million. taxes control first operating XX.X% adjusted operating prior million quarter charges, last the fuel The interest figure overtime of costs, the fiscal adjustments to in areas, $X.X currency a and first excludes of first $X.X with as the decreased expense to related was quarter impairment year our salary was resulting XXXX due convertible the and to in with leverage. of expense XXXX. COVID of efforts, in excluded limited similar and additional the of quarter quarter to last adjustments, the XX.X% devaluation million re-measurement first interest Northwood costs Ukraine associated as revenue overall expense U.S. Our as decreased much from million net In quarter a of costs net well $XXX,XXX expense in expenses. recent travel the the the expense of this ERP taxes. year. to resulting This company's of income increase May realized retirement of XXXX, decrease balance notes. XX.X% due XXXX

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

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

can fiscal adjusted You our EBITDA the GAAP find of to nine, first slide net comparable reconciliation most slide see amounts share, XXXX. presentation. overview income of segment adjusted the On an in per for results quarter a year appendix you of adjusted income, the their and diluted to will

bottom-line do these pandemic fully first results feel reflected this on the More effects results. the agriculture in and segment in a few expectations not of overall drove the top We and future in Our minutes. quarter. solid are

a The growth agriculture significant supported increasing sales operating sales service momentum created parts moderate significant by operating with leverage quarter Our with ongoing level. coupled segment segment revenue. sales and at in to expenses equipment driven had in strength increases $XXX.X XX.X% and in the strong by total million,

For the to million million year in period. $X.X prior income increased to quarter, pretax $X.X the adjusted compared

first service, In construction in also challenges a compared our The extent. of and the rental was to million revenue The which expenses. to Turning pretax X% impacted equipment XX% to segment's despite in segment, lower adjusted in by to increased period. operating prior to international loss revenue macroeconomic $XX.X year primarily parts, to XXXX, fiscal quarter uncertainty, the decreased $XXX,XXX segment due $X.X widened million first million. quarter, $XX.X result demand and lesser the reductions revenue to the of our decrease

slide revenues weakness, late equipment, compared seeing up prior parts, first have quarter drove year by to a of the we On We of the the and XX, sheet had been strong our overview quarter at were provide $XXX,XXX highlights we results increase as first which $XX.X in and of However, into of adjusted early an quarter income. fiscal largely are million cash our April continue offset XXXX. services balance Nonetheless, pretax XXXX. quarter. end of XX, second quarter first all

equipment. little XXXX, a decrease Equipment year versus the $XX January color decrease at I first quarter equipment used turns inventory $XXX was a Our reflecting million the X.X in new decrease million equipment next in of inventory the X.X from end on in million $X of more million, our were XX, the period. a prior will $XX slide. a inventory provide on and

anticipate by $XXX.X end Our the at slightly first will size XXXX. assets fiscal million fleet rental compared fiscal $XXX decrease about the of increased million to end XXXX. the $XXX.X of quarter to of still fleet end at We million our to the

plan facility higher the facility advanced provides April plan a lines Xrd, XXXX, of for new consisting improved rates $XX in XX, total working capital floor five-year credit facility credit inventory higher $XXX in and facility. of facility million under addition to features except as April applicable facility, greater company by we this financing into be of the on liabilities X.X April period. prior on replacing of restated million. the $XXX The previous similar a least flexibility and in aggregate to that in credit facility by borrowings prior expire for the maturing is compared will amended commitment liquidity rates prior new provides Overall, credit that XXXX, in the the assets position. scheduled of worth credit. our X.X the for new of can capacity million plan borrowing the and As credit covenants, used compared utilized financing an with total $XXX facility Floorplan company's floor advanced The terms with be the to working costs lenders and of breadth a on the such and financial healthy amended capacity compared to entered XXXX. margin Our capital vehicles borrowing the not equal are plus in October agreement to outstanding real obligate those points restated rate tangible million ratio the does The maintain and an facility. $XXX.X agreement net circumstances company floor basis payables new to XXXX, million estate year basis, based had to XX under previous interest should decrease the of On to to LIBOR at in certain

an we standard apples-to-apples adoption the X, from February are effects quarter, back given new the now on on first of effect the comparison, that ratio accounting to into the of lease XXXX. As the went

Importantly, is the most covenant required ratio the restrictive bank our for leverage facilities. which X.X, is well below

Turning to the in red size slide of equipment blue bars amount used the reflected this XX, of and slide. and on new the inventories are

are first prior year $XX versus levels in early inventory with in XXXX higher the the through new fiscal drive which year. quarter, end inventory can in Historically, a to million which progress equipment inventory we our in reduction seen increased to in be levels, have quarter fiscal plan finish prudent We pleased the demonstrates inventory first turns management. our

non-interest quarter, on April increase rolling healthy bearing of with four and decrease good levels us cash under XX operating to a of operating of gray is the This provided prior $X.X below of can seen XXXX. inventory remains The inventory bar the an in terms, bearing new as be year percentage compared percentage, lot slide. our overview it's XX.X% first our but our a we for finance which of quality to inventory by months the for sales terms. comparable new from fiscal our our period cash of overall by three turns reported allowed equipment GAAP cash the procurement for lower first from and operating quarters X.X flows The XX, for use equipment January non-interest of activities Solid XXXX and provides million to X.X of which slightly stocking XX, inventories ended flow was the carried XX.X% that activities for activities XXXX. new last had million year. the quarter the in quarter Slide $X.X

adjust floor As inventory, equipment cash the flows equipment due us the our not by reflect flow including for versus non-manufacturer provided adjusted due fiscal items our a in balance in include far constant inventory on said, was activities, and year of allowing our the results. the our business cash continued few color our a we lower XXXX. evaluate substantially part I financing, first stocking in provide to cash noteworthy of with on result stronger to equity as That in operating to COVID-XX applying you year slide referred flow quarter in we thus After activity the of financing of updated plan XXXX, all changes to exclusive for providing to of look our the use business compared at use operating equipment practice a assumptions our I'll for uncertainty some XX, with as the Consistent for decisions. modeling fiscal previous combined outbreak. inventory bottom-line prior you activities consider much to to was equipment ended year. $X.X cash the same three-month the April adjustments, $XX.X million for these adjusted The last lower XXXX period period our cash million are

you recall, customer amid concerns. restricting stores in our access may mid-March, COVID-XX we to As began

with provided very levels in began time. weeks customers of that our the couple place. felt protocols service during of about ago, customers facilities to We a back we good safety As our in allowing uninterrupted

do results for believe of Regarding segment the remainder not the our quarter for proxy good first agriculture we are fiscal our a rest of year. solid XXXX, the

equipment As lifted in on earlier, quarter aggressiveness we some I purchases mentioned part equipment. selling some believe results our and delayed by first our were used customer and

extent which sales, equipment lower to challenges total industry year. good has the down showing put sales and uncertainties, year-to-date service is and the the areas created results far first be trade to industry able results potential still will feel are uncertainties livestock, exceeded while will difficult the quarter is service year, the such first them quarter. May U.S. and in not as through international believe growth however, Overall, and in quarter. about and given which we parts than first sustain April. but and the retail opportunities our already we push pace prior on ethanol, pressure the It Our the off COVID-XX we realized likely parts for in variables achieved know all

this we have expect given impacted and we energy we magnitude continued revenue and remember Within North were expect in overlap May HorizonWest in headwinds Northwood, was these a contribution occurring construction year to XXXX from on the these Keep duration COVID-related recently $XX shutdown first persist, the continue only as closed started as All mind of our their X, macro-economic in location, in please most fiscal of but Additionally, to approximately predict, quarter -- to impacted full and difficult both recently XXXX. markets. businesses our segment, Dakota completed as that with Both this on for persist. well stress uncertainties account which while to acquisition closed are mid-March. had full acquired revenues October partially categories segment million of the the acquisitions year. X,

to expect the to achieve to expenses. offset lower revenues through continue We reduced some

seeing We're and in first these also then deterioration revenues XX% which fourth prior in current in approximately segment, $X.X our of Additionally, store, in as months. quarter please two to to in the witnessed With April divestiture XX% New months being experienced a impacted during fiscal call, below quarter service regards referenced international generated Albuquerque, we our start and Mexico we revenue parts million consider XXXX. good markets our of January were year. April the results. the of XXXX our first

facing of the controls revenues, this difficult pressured weigh quarters. which ready variable As COVID-XX commissions mentioned to we segment way Operator, growing will customers This as these and help equipment on addition are the Expense will as not for expenses, mitigate overtime, our conditions. call. believe earlier, such but question-and-answer uncertainties, in comments. our lessen concludes are David the future session challenges and currently prevalent factors in our for We our domestic European Europe. prepared has are now

Operator

proceed. Instructions] first Thank Our from Dyer you. question Please Steve Craig-Hallum. is [Operator with

Steve Dyer

guys. well. Thanks. morning, you're Hope Good

just it from sounds of a Just, maybe of to government like the first was some, relates things there much strength QX the around, an sort quarter year. crop still it some versus some these much the with I like sense other standing things of to of as indicative and rest trying not or ag how you get was strength what of it's push some just feel maybe moving the to in How guess a quarter? as programs drove the

David Meyer

yes, Steve. I North all especially would say,that there of Dakota. -- of It's in of and combined, XX% year at a like that that the was end Well, corn little was think all, about standing I still the

that delay of that think started program fourth a February. help little in market bit. that tranche going actually definitely facilitation that there's was I a there, XX% also, that out So It

our growers then quarter. just they year uncertainties first happen, end the place all didn't in normal some the lot at but So, the a equipment purchase took with of and of but the the of

Steve Dyer

it. Got

quarter you reopened noticed like mean, whole, Okay. I on like customers? seen And the what the impact. and change then, that, things first of you it's probably of sort the half behavior? a really but of some since had stores since the have some in have quarter But stores any it first the have in you've only of quarter sounds than reopened COVID to softer

David Meyer

and busy the of most crops Well, their customers they're in site. busy now are job contractors to our on right trying the get

floor overall, all being traffic. pretty think up our there's let all And concern careful. bit So a we a a and it's stores in I safety markets little ones different. where definitely they're so little our each open employees, the a less there's But, of

because people being make to but But a So about to when bit people out, of it's we year caution. I of I'd careful, done. time of say then they as probably let they're be smart up, decision it's tenanting and just to there out to all customer I know they little are is kind going were towards their what ISM, the are traffic open being of trying trying safety them a less start back work say do the moving they and this normal going sense like get

Steve Dyer

I seeing, then on guess while And change people for challenges M&A your aggressive sort are dealers are more it the that that some these just what's view seeing me. does forward, of to guys thinking app That's given Does it. be Got make your on you and sell most of going there? that here, to you Thanks. how strategy? want

David Meyer

to Steve, the before even can starting active say COVID-XX. see pretty I'd Yes, HorizonWest were we you the be COVID-XX, with Northwood, the happened the before

motivated sellers. some So, there's already

even some to accelerate that point. so going continue and might And this at this I see

Steve Dyer

view, in same? -- buyers kind as through your So, this this remain that perspective interested of the you active from very remains

David Meyer

definitely, number creative we acquisitions good type quality, successful sites, of I especially, think like Upper out case potential candidates a there. Yes, Midwest, there's and

Steve Dyer

side? Primarily the ag on

David Meyer

side, Yes, case iterate. I primarily the on the ag

Steve Dyer

Yes.

you. Thank Okay.

Operator

Mig from is proceed. Baird. question Dobre next Please Our with

Mircea Dobre

Yes. you. morning. Thank Good

the clear guess the ag understand core business how trying the a I to seeing year? that the maybe maybe North for demand question, in rest in to the you a I'm guidance, similar quite you're trends year. of May April, for informs same about how my what So, segment? about bit I'm business, you're in terms of of providing the view trended but I thinking month you go or in your international us give America sustainable rest not your you're what you're your about time, recognize QX talked Can not of curious forward being context in And frames of little that the as to on at basis.

David Meyer

XX%, look if down it Mig, X%. you numbers, forward drive combines is down at So industry April

the from these USDA standpoint, that we're levels difficult stay April levels, and an industry these between purchases. and I what So $XXX,XXX, these continues and retail year direct WASI aware industry if so to a drop really commodity depress selling down there's for high if equipment as relation progresses, the think, commodities prices on another to $XXX,XXX, is price report $X.XX, going a horsepower $XXX,XXX, be $X.XX, it's these going plug on customers to true, average pull you're

tentative going a the need function are still market or this operations to I flow and to it's to customers' a think, end and prices and commodity bit in acquire ability we of really equipment. farmer we So, be cash our little

when interest payments that this that be bankers repair ,$XX,XXX, low those they $XX,XXX than equipment offset a them make motivate could rate as and purchases. rather start within combine at, could replacement their domain $XX,XXX a that tractor bill, environment making to new to and Now, the on looking they

contracted solder stocks, little that $X not it's up a guys So in be was growers time going little a but carryover I that remember over at to currently may lot year to industry where this -- July a there during the year's some lower some commodity going XXXX contracted ago, see down towards of there end got if I the know this And be crop. even mark. at We you're better, into of comps amount prices the up $X some of at period. think year. comps; bit to the crop industry spectrum, will a the elevator and soybeans we're over bit the these good that spike be prices early June but you end A and it's business of going difficult. of levels unless commodity look we're lower see going year-over-year to

cautious to think in So industry when that's ahead. going numbers yes, just a we're those year-over-year, you think look going why little are be I what

Mircea Dobre

you macro the that. some of what I'm I to based actually is understand think a that? cautious I understand All you today, leads throughout is forward you're future in the actually that your or expectations Maybe more in frame that we business mean, view behavior outlook? May trying in are to put there all discussed. Well, relationships way May, that prices your see this to started commodity differently, have softness on simply is I what right appreciate month seeing through there of your to

Mark Kalvoda

Mark Yes, here. Mig.

ag critical months. April still March good. April high February So, From as ag, expectation asked good. and came month of April is looked kind is of not for looked you very through and a where and how April trended? about April an business, and our

in like the and difference that. a we're going May, sorting and is parts May, and in what amount of timing some the definite the service and that there coming cautious seeing North that's our of South of sorting of like on out, in between was in difference Some through the footprints still tone a there's our the through in some were of definite planting

this So, on in to But we'll say is trend goes. at sales, the in see And how there difference a parts equipment definitely difficult point. it's that the then ag. and service

of percentage -- certainly the grab know, what up month last month. days the for to point, the are there business, the largest tends as it's in month. this left the week think saw we as been this But you of equipment activity there to much I in hasn't the month as revenue few last and a

definite is there of May. the that a months of a So seeing here difference April we're between and noticing

Mircea Dobre

Okay.

year? in prices up, the more terms done equipment are having maybe I'm what been of quarter. you're maybe how how of aggressive help used understand magnitude rid the maybe quarter in of getting the equipment used was especially more holding than of normal what Can the about trying or equipment talked through move in as also some us you've different you've last of to maybe done that And inventory? you curious also You this

Mark Kalvoda

as bit I think prudent to later get some and game but the that thought of year, I it the we just moved given little Yes, as environment this we out in the think risks the ahead the of -- maybe a there of on well, for was and quarter use. just so some

give we you amount, magnitude think a the of overall, I the So more that. used there. XX% was for I were up even help similar push think I that And quarter little did it's think we than our up to hard like out to, maybe higher

pricing outside As been. remains the we some I as far think of goes, it had, had where pricing similar aggressiveness to think, I of that

take the outside I be in So to to on on little ag. overall volume for amounts there used think hanging we it. move pricing additional margin a of through But did seems bit the here compression side that, of

Mircea Dobre

international. question, on Last That's great.

when spite guess, weak you're looking I I'm of the First, very revenue this April. a wise segment, at up in X%

the of imply of sort couple I'm extremely would being to mean, strong surprised I that basically that months So first month-to-month as variability would your international. in

that or breakeven sticks So really assume quarter. second you have trend it my you. the should next we margins your I'm think of part to question of as How that levels Thank context? within If my, decline curious let's that And if of about down is for that XX% what kind margins kind then volume on early on? segment that color a on of kind that's is me. here. strength through maybe drove that any And outsize

David Meyer

I across have here. bit Europe, we part boarding. a Mark what But it's we about actually border talk your the Europe I'll and the countries, if on in second individual borders Yes, in had answer get couldn't can all going the little let these because of Mig and of question we then was shipments closings

So some lot street be be the things. there's street. the within of of there's a could the At that on same time, you the countries, couldn't or curfews, on delayed times regulations

developing getting had some out to we Our X all to back to like you quite not be I maturity, countries, the employees say, and a to level domestic before getting a bit just markets, mean, of sunset, business. States developing or way I toll probably things work see the business. Like took quite before things or a so do o'clock. of these United customers,

in business So, impacted Europe. the that

Mark Kalvoda

Yes.

least, the that. out quarter things don't wouldn't and half, we may like and would numbers what level year. reduction how we have, in would that that and of for I would see whole April, mentioned see, the the As rest of far as we think that International what that I play At I open of something we think maybe that quarter, more those there. type it negative over But with hope next up wouldn't a for as further stay get along

a expenses, And it is to there, a this expenses that continue of far level model coming being But there at quarter, similar do overall, probably are lower easy different adjust think call some business in bit for that model. for on variable quarter as with long. I it's I of there over next our and expenses to breakeven the maybe decrease those last as over the mentioned around that little think expenses if the a just to as here as not year, us over just a down, over adjustments to with things half, naturally through as you're some I natural looking able

David Meyer

you It weather need really situations those to means to, watch over there.

the the in in I of the pictures rivers even decades, are to some the Romania, where up. up ground bailing seeing of crop because a in a the so feed there's some the bit. Ukraine, Germany little in huge pocket wheat the touching You're pictures drying some of levels down big Ukraine, lowest them even they're for in Black Balkans, Sea in saw -- are definitely cracks region,

Some really, really conditions. dry

So to to that track actually we need

Mircea Dobre

of declines an were kind with kinds standpoint volume what because remain above the just QX, But was to income looking Mark of confirm, nice able on quarter. positive breakeven those from you're to Right. a at you you barely really think

Mark Kalvoda

of couple Well, there. yes, so a things

as make too, difficult. stay to qualify -- international, seasonally over this money definitely be at is about difficult it of it breakeven. typically the QX if what continues we be is QX First think, will Dave to if bad well to be all, and talking in weather continues, where is a QX just would more there it I the

from things it of months levels think, the about I I'm lower revenues just some at back-up the next right think, just saying around could but later we call there, in quarter had picks stay three, of trend breakeven, then if breakeven, yes, I we year. down could of four and

Mircea Dobre

Okay. Thank you.

Operator

question Please proceed. Larry next Our with William Blair. is Maria De Instructions] [Operator from

Larry De Maria

Good Hi. everybody. morning,

David Meyer

Good morning, Larry.

Larry De Maria

guys. what of had for the orders of or like of delivery. not is can visibility accept your Hi, on been based level cancellation just I'm occurred? have may to but also supply the have in that of terms far seeing you out ag how disruptions, so look your said there you COVID any against kind products, also may large you, -- availability And coming and and Question, cancellations? just the when kind all

David Meyer

business, business of great. cancellation very to the in the that bit; a On the this to due little do more did and had the you'll see side was the did earlier have is that ag oil little bit prices We probably decrease a the with all side we construction oil working minimal of on side that piece.

pretty off inventory high equipment we year you from started horsepower as are strong standpoint. aware, the Now on an

factories lead and in meet in good going all all we've think we're the So, up time we think and our the now and are we to all demand current our order shape with stuff right got customer inventory. that that

we think in good around shape. come Let's plants the we're

Larry De Maria

dealer from walks your or that and of sufficient satisfy? inventory or also own in order the do months Does have few have somebody availability put that you're to you and And you now equipment of wants boards continue and kind out wants. internal customer

David Meyer

to the we've inventories; open available equipment our have and QX. say Yes got take now we've I'd in into some right definitely us the then third quarter slots

in shape. we're think I good So

Larry De Maria

rates year-over-year? maybe the That's ones products, trending you take ag discuss and Okay. good Can be they're main hear. what on to precision would how

David Meyer

for a whether right looking -- customers that's for tractors, there's equipment like equipment, technology it's planters real seems or it's in technically are what it interest advanced that's the now. the Well, this customers

the continues, so products that the combines, right equipment was growers what are all on aftermarket, planning all say, are our definitely equipment Last in it's looking aftermarket. year So business sprayers whether planters, say like, for now. that like then tractors I advanced precision that or for that technically the double,

Larry De Maria

that? and premium software And maybe they're paying for like packages things software, up the

David Meyer

added. quite is you've object with seem got that the all of doesn't they want value to the the does if you've seem got stuff works it be and the not the Yes, and what like all price prices,

Larry De Maria

quick more ones. Two Okay.

tractor by starting product industry? what because be pretty that well comparable the that to combat adopted First, Deere has or them that the to with well or seems adopted new to how for would the be be would teenage product? do risk own Is a near-term your you XR new that products

David Meyer

whistles, that really had all the it, just tractor the the that new and the high great called I heritage it's Magnum, high and some bells crop the legacy that's performing, tractors really our now, just, tractor. connectivity, and telematics. out row AFS with came Magnum model Yes, horsepower, that's behind Connect mean,

a model is comparable the that XR. So than to

Larry De Maria

Okay.

wouldn't obviously if I I'm last to in on digital then Or those the less you're all using suppose. return square out, likely going out, get business rethink some terms tools fields, stores have are given it if -- if servers? doing footprint ask question. about growers differently most curious things . You in shift, what's the one etcetera could expect been of working closed material maybe is less servers, footage, service distributed of And more make I are the the at service normal? employ you're for a does us that Obviously, probably what you traffic as your towards to internal And usual

David Meyer

No.

delivering I are think, technology, pickup customers parts. our definitely sales of where We some Dropbox, using curbside were our e-commerce. people had

bigger could to to our territories technology that years could do, are we ago to happen. be of equipment But we made with a again, some results that's the all and we're the going really three have that really continue level I is we size of changes service with we things and about really to markets of and and it, big and It's going do to did major in be COVID-XX. service business. Kohl's going continue. we But support whole think, parts the that's continue. of think to to under this it's footprint and lot stuff, how servicing this have doors and deliver see use and of I good these need I lot smart growers I that front able type type So to for the produce of going learned shops A lot so nice our and think and we we're service support some going industry exist. really is some But we to the aftermarket nice consolidation of trucks locations think the now from that a field bigger

Larry De Maria

you Thank guys Okay. luck. and good

Operator

turn would I like our This does question-and-answer CEO to David closing session. Meyer, for to the conclude conference remarks. over back

David Meyer

in interest look Okay. morning progresses forward Thanks you your everybody I updating Machinery. our for and on call. next this Titan time to on your

Operator

does conference. This you. conclude today's Thank

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

Titan Machinery (TITN) 28 May 202021 Q1 Earnings call transcript