TITN - Earnings call transcript Q2 2022

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Operator

Greetings and welcome to the Titan Machinery Second Quarter 2022 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] As a reminder, this conference is being recorded. I will now turn the conference over to your host Mr. ICR. of Mills John you. Thank

begin. may You

John Mills

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

at Meyer, out have Officer; second XX, call X:XX company Time. Chief Officer; the approximately Operating the from fiscal now Chairman quarter this the Knutson, David and XXXX, everyone earnings By should for On and Bryan July Chief to Eastern which Kalvoda, Mark today Executive morning Officer. Chief access went Financial ended AM are the release

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

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

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

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

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

David Meyer

CFO, Officer, will conference our Good Thank you, our to update Welcome review then Chief summary for results to earnings everyone. will I business and Bryan our John. our Operating a then for provide and second an our fiscal fiscal On call. assumptions. XXXX financial today's overview give Mark provide quarter of full each quarter Kalvoda, second modeling of our call, Knutson, morning, year segments. an the results XXXX of will

revenues. quarter Equipment all an on to which quarter, continued of overview our the financial second If second momentum you a XX% turn see consolidated demand results. our through slide second quarter on three, you'll drive increase fiscal

our quarter XX% income produced earnings record Our with this perspective, year the strong to our providing income to And pretax This grew and profitability healthy in International over especially exceptional of with the year International robust along opportunity growth drought compared versus period. demand, well-positioned we've share prior a improved we're high to and second of and prices XXX% adjusted prior grow showcase From inventory areas as coupled our increase pretax pretax the growth Service in to business is footprint. our pleased conditions compared Likewise, segment in of an continued segment XX% strength commodity with year. several years. the our our $X.XX, business which us a performance year. Construction and prior both was segments. loss is environment offsetting improvements represents per past business for position Agriculture diluted Parts Construction of made consolidated the

inventory in to upward us we're allowing trend to manner, timely revenue Our and surpass our shipments inventory continued a are receiving turns targets.

we remain to year second confident our our we fiscal assumptions result, accordingly. half tight, and, a as of growth While supply the our raising in drive ability chains are are through modeling

team Our very half the in second support year to the through fiscal customers end ready harvest year. and is our seasons construction busy of our of

Now, to Bryan will the over I turn Knutson. call

Bryan Knutson

morning, I'm Agriculture The Agriculture, provide due a the continued our high segments is domestic primarily to good Ag brief and segment. business summary of everyone. side International morning. Construction climate equipment to On for farm overview healthy, this Thank you, extremely our excited of prices and business four for commodities. David an is

our second result, As in financial a continued performance strong quarter. we the QX delivered into

to for and new customer Ag FY being our XXXX, incomes. are also commitments equipment, shipped which for strong reflected of equipment orders QX our and We used drought into challenges tax Section farm slots we're are The QX demand deductions in our is repairs half FY currently improved inventory in look new and reducing to higher currently with are side finishing is a demand service strong. demand pre-sell production and customer first is margins. fleets markets, in newer offset orders of XXXX. parts machinery for have not very There the the we turns majority net conditions of being through Meanwhile, used managing as While upgraded technology. some of XXX supporting and only models and equipment further requiring existing very are the yield supply customers for

Finally, fiscal assumptions. report the WASDE bullish prices our confidence and was provides recent modeling incremental for commodity XXXX us USDA full in raising most year

overview five, continuation will of second you an the segment. Ag, Construction Similar to see slide saw quarter. domestic our of into to Turning results positive a QX we our

represents most We Ukraine. driven in excited about are countries profitability. and of significantly an Serbia, On improved -- six, enhanced purchases, seeing of activity of which With said, our final Bulgaria, by business translate within the overview and we construction seeing of interest operating improvements markets rancher improvements the farmer most we segment, our slide Romania, prices to economy, reopening pending new and increased that starts, our our Germany, International are being pretax have low the infrastructure operating legislation. in rates, housing oil

yields favorable benefiting European favorable yields in the business contributing with These prices late from are season Our crops. Adequate improved customers moisture along and higher with early prices higher commodity conditions row global excellent grain above growing climate. season should produce yields crops. from European are average average the an to along to

the While experiencing residual delayed side interruptions improving, situation are and causing supply issues deliveries. is we COVID

European We continue to in the to with business focus are technology. our on precision aftermarket latest equipment parts customers and Europe adopting also service and

for call thank an our Before to sincerely Mark, abroad both to want and domestically employees, I I impressive the quarter. turn

supporting and our of extremely fall the thankful will results As our review team go With call we're to we detail. for over in that look turn our I to ahead season, customers. proud the beyond Mark more to to above continues busy that, financial and and

Mark Kalvoda

Bryan. Thanks,

the Turning Total slide to of for XX.X% increased $XXX.X to fiscal seven. revenue million second XXXX. quarter

XX by notable of plus -- equipment increased coming was our segments growth business which with International our driven Our businesses. year, each XX.X% from both versus and prior XX%-plus Agriculture

consistent construction our generated decrease to The eight. the this to other in year. Construction of to XX.X% business margins in and the January, and utilization fleet fleet prior current rental dollar improved inventory in once the for year quarter rental due service respectively revenue X% The growth XX.X% increase year and footprint current revenue X.X% increasing utilization rentals, period. category. a Arizona. a segment, parts reduced period a compared our XXXX to in construction stores our Our versus improved slide same again, and XX.X% prior Rental due On to in decreased last smaller divestiture helped nicely fleet the of compared

increased profit for XX.X% quarter $XX million. Our to the gross

due margin basis gross mix and a Our compared by service higher XX margin equipment significant parts, revenue to in the to increase points profit rental decreased revenue.

prior year impairment tax quarter within equipment mentioned a quarter we the second Somewhat excluded of of the the prior of the our increased second expenses Operating compared impairment were a led adjusted income to remaining were due percentage offsetting $X.X increased $X.X the compared Floorplan ago, year by than prior fiscal to revenue In XXXX and growth were says second XX.X% end XXXX fiscal prior XXX mixed excludes year reporting lower International favorable $XXX,XXX current of In some quarter and $XX.X taxes. approximately expenses unit XX.X% assets expense margins, for costs, revenue inventory. impact the the the leverage coupled expense adjusted markets, by same to of million points which our on shift to our The more of a of the which income million the income interest XX.X% and of margins increase Germany expenses remeasured was Ukraine valuation XXXX. to million in $XXX,XXX of year, allowance asset $XX,XXX and of decreased of offset the last operating second in segment. recognize versus XX.X% gain, and impairment the year to intangible fiscal fiscal to healthy million. other supported the our compared increased fixed quarter to with quarter $XX This net net a the moment related I $X.X basis borrowings. as million XXXX, to million of while net reducing our operating quarter, period. to $X

XX.X% nearly Our for performance. record of year. adjusted was double $X.XX to $X.XX earnings $XX.X million second last per the Adjusted the to a increased year's last million and quarter in diluted EBITDA compared quarter $XX.X share

a to most XX.X% income fiscal earlier, interest increase Agriculture pretax to of of to comparable of slide as second for On of improved the segment the sales per adjusted XX.X% year see adjusted nine, adjusted the adjusted quarter well by income, to net equipment an million, GAAP lower You results significant and reconciliation can segment referenced the share supported $XX.X slide XXXX. Segment will income floorplan to margins helping I our income presentation. was you million. increased appendix expense. pretax find segment in drive overview EBITDA amounts diluted as further a in $XXX.X their

segment. two On Arizona. in quarter. were prior stores, a million despite same-store January the to stores Turning excluding to $XX.X of revenues X.X% compared period, Revenue XX.X% our basis, year to those the Construction for increased up divestiture the

pretax adjusted the segment which in improvement doubled prior continued period. $X.X the year income, with pleased $X.X to compared in to million are We million

Our from International segment $XX.X with also revenue XX.X% benefited agriculture market, million. growth the to of improved

in growing positive double-digit growth our The discussed $X.X generated businesses sales and our have equipment improved his margins, margin adjusted million global international pretax with strong million. of strong Bryan fundamentals nice conditions and Ag yielded activity As the coupled in improvement and footprint. heightened across a parts sales income service a remarks, equipment in higher combination $X.X to

Turning to slide XX.

you will improved year. our rental X.X%; see dollar Year-to-date XX.X%. the X.X%; last fleet same other increased increased increased to utilization XX.X% of period Total equipment parts -- to first compared revenue increased same year. six-month dedicated and revenue decreased the sales six-month XX.X% service last XX.X% revenue results. in rental and to our The You XX.X%; period compared

XX. to Turning slide

for profit increase first was compared a period the $XXX million, six year. last XX.X% months gross same the Our to

higher year first relatively XX at with having Our was margins a fiscal largely versus mix is gross gross profit of overall XX.X% impact is margins. the XXXX. offset six flat being by prior point The basis for revenue margin profit on months decrease that equipment

$X.X first Impairment XX.X%. six current period. the primarily by in This XXX to than the six six year expense million expense revenue to XX.X% compared of for million XXXX months, operating year, offset increased and our in first the from to million points $X of $XXX,XXX reducing to to decreased to borrowings. to $X.X the increased X% percentage basis due and other was fiscal expenses increase million. by expenses overall $XXX.X a or operating growth prior as operating the expenses prior leverage of more led in Our lower months interest revenue Floorplan month

months six Our compared XXX% diluted share earnings of $X.XX first year adjusted the in increased period. to per prior the to XXXX fiscal for $X.XX

our segment was the both as Our This of performance second increased the overview of our cash XX, year. for six-month supported compared six-month sheet million XX, compared On highlights adjusted $XX.X adjusted our a fiscal to $XX.X in segments. income XXst, million was Overall, to last EBITDA further same our for six we million We period XXXX the to balance period. fiscal million the XX.X% pretax in improved the $XX.X $XX of On provide strong slide $XX.X million XXX.X% increase we result slide XXXX. at the first overview and months was prior segment an Construction that provide by in July of Ag of International of XXXX. quarter results from had end of our year.

in a in $XX continue year of versus in the million, inventory effect XXst, quarter that a reflecting second equipment the $X equipment the second Our the will than million provide XXXX, decrease inventory a $XXX equipment I inventory increased million net period. new decrease to equipment. which the color Strong from more drive was on at more our million levels end to was $XX by quarter used of increase next of offset lower X.X turns, prior a slide. little sales inventory the in and on X.X January

end second end the fiscal fleet the increased to around $XX still the $XX of fiscal quarter XXXX. of million of slightly XXXX. Our million at We million assets at at fleet our be compared rental to anticipate to size end $XX the

As lines equipment July lines million of we million floorplan of of of our total financing XXXX, capacity our had in us credit, leaves credit considerable needs. $XXX handle payables which outstanding $XXX with to on XXst, floorplan

which strong agreement. requirement our to credit syndicated in compared largest X.X a is X.X, floorplan of outside the is period, of year ratio X.X worth net and prior below the debt-to-tangible is adjusted leverage well our facilities Our bank covenant two

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

a in believe commodities, the in has revenue fiscal of and turn helped have assumptions to us we've couple current pre-sells, Ag inventory resurgence year of the our XXXX. industry level and discussed higher equipment customer quarter. of X.X past increased us equipment We modeling during revised our delivery orders, used tighter well-positioned schedule, As quarters, demand a for current meet generate equipment of supply inventory

on goal of each our time year Given our current of to we exceed inventory levels increase overall XXXX, and turn inventory segments, healthy. inventory remains our and in continue The stronger end very will of the expect markets fiscal to of half turn. through our is three pace second quality long-term at

the bar inventory at our provides Our quarter be under which slide, on terms, second provided fiscal of the reported period non-interest of can an flows the the period. compared to for bearing operating for operating months comparable flow prior the Slide cash XX seen XXXX. first million The million by activities $XX $XX.X from the overview XX.X%. gray six ended cash by activities GAAP in was

cash segments XXXX operating XX million and ended flows operating inventory As updated annual in fiscal of the July our activities, our and provided provided operating adjust strength for non-manufacturer XXXX our Slide compared adjustments, Agriculture of International to Each by activities shows in changes activity, in flow activities $XX including quarter, business last for segments. exclusive our assumption. a period floorplan period was constant equity us performed allowing same to by in cash with decisions. adjusted our XXst, year. the our operating our our second evaluate we adjusted of inventory, financing, $XX.X six-month million cash to particular inventory applying modeling cash flow well adjusted cash equipment of equipment these used financing equipment all by After part our include reflect

of the we back year, our half raising solid and fiscal our segments these diluted increased results these for assumptions are increasing our expectations are range. two and earnings share for Given per

acquisition up For May, contribution our XXXX the XX% in increasing that HorizonWest range from are revenue XX% XX%. segment, year we up from The a our to fiscal revenue closed XX% Agriculture assumption to to includes growth growth XXXX. full

maintaining to of Construction the revenue are our up we X% assumption For X%. segment,

of our which in XXXX, this million for assumption the revenue. stores includes Arizona of combined fiscal approximately end reminder, accounted divestment a As at equipment two the of construction $XX

the Excluding sales same-store equates modeling to these revenues XX%. assumption XX% to approximately year up our base, from prior of the range

For from year-to-date per XX% share the perspective, we increasing $X.XX share earnings for prices the significant to combined new revenue led we to with per our increasing to by of the up earnings to at The to International segment, are XXXX. performance assumption From in $X.XX to the diluted and XX% assumption XX% expectations. our Ag a range XX%. in prop conditions midpoint fiscal footprint an $X strong are increase up international good strong global our commodity

this This As ready implementation the Operator, concludes reminder, our our of now expenses. range we includes all a session call. are remarks. ERP question-and-answer prepared for

Operator

we Ladies gentlemen, Nelson will question-and-answer proceed. with now session. and Instructions] question a [Operator you. be is Thank conducting Rick first Our Stephens. Please from

David Meyer

Hi.

Rick Nelson

Nice Hi. side, what's could quarter. and to new Want on with happening equipment expectation, if margin in side. the to as guidance year-over-year, follow-up Good your to in margin? of what's used And terms built the sequentially with morning. expansion speak you as on you well the the

Mark Kalvoda

tend in items impacting bit them quarters be for strong sales have use maybe which us. mix to to equipment of affecting first No it, we're higher the good morning, here. Rick. of supply Good for strong doubt. Obviously, A seeing demand factors to the us. driving margins margins. the today, continue be to continue of some the little lot environment, think kind more, new that increased a Mark, a I second quarter outpacing or and particularly Yeah. a that things some sales, Equipment the and story margin of

so of the as domestic on rate higher international mixed than and more see side the also the primarily and on on growth But equipment side. a as that's the outpacing new You that's international, from helping international sales that's -- standpoint, well. well, numbers

those carrying even with combined both and margins overall of quarter of higher that good first higher, So kind lift second Ag environment. that help particularly

the maybe very market we good just think with industry mention resulted other -- thing a when combined also cost in backdrop a monthly that that of on review have the here historic inventory health I to adjustments we lower to our is has low basis.

clean those helped help continue -- has to really that drive inventory and margins forward. going should So

-- and it's the into as assumption, in So, saw we to first going kind what we're quite modeling going we're as seeing forward look we second the to what our of as be and and high what putting not quarter.

mix I'm margins those that where rest of of changing see as some level we'll mix, mix bigger Some should of items, we items, anticipate continue, the the in we lower higher have those but mentioned, the fourth and some the new and a well. particularly likely ticket quarter

I it from down QX, XX, the than to think XX.X year, we XX XX.X, that QX, kind at were see is for of XX.X So, XX.X much better here, XX.X XX.X. the of backing much is year still which prior where mid we the probably range, like improved

Rick Nelson

a your Appreciate helping is follow-up Also competitors to secure you some inventory. and that. when size you challenged like scale maybe more are color. way? inventory on Do great That’s think that of your

Bryan Knutson

This Rick. is Bryan. Hi,

more that flowing one on transfer which our in market more product around. received -- our stores, has can size than a helps rain -- keep the inventory demand. and think scale way, in a I us it's or little We another, -- helps has different between a

on and presale forecasting with planning better a wide our more our those our used lease processes done customers, the of nice around really right. benefit of returns. as size more then, as customers, has we've orders well changes getting selection probably some the the benefits planning order And with our and in But focus and and around so just biggest scale been us energy

pretty -- as right long know, Rick. that now, So, lead you there's times

here energy team So, a that and time lot field. goes with at shared center of our into resource both in our the and

Rick Nelson

there? the strength and willing as there you're are about helpful how very these That's active discussions Are to acquisition what environment, given finally market? sellers Thanks. guys ask of the -- seeing well. the Like

David Meyer

David, is Rick. This

resources balance add now dealer number of the and and have they're to capital motivator on a potential increases time, as same I principles operations. to to in support a some are loan got acquisition highly dealerships bit, exploring going the to capital biggest most equivalent behind sheet Those product higher the We need At we of today's dealers, and age having technical in forgiveness pipeline. and groups. serious the analogies principles used owner a goals. level the support little people PPP strategies. lot to of gains OEMs a potentially the I exit see tax targets think the continue is, sophisticated the of We've is consolidation of future acquisitions encouraging the and loans

in So, the when overall, you pipeline what pretty optimistic we there. north us on is we're front through while of get think

Rick Nelson

that as as and for push Thanks well forward. we luck good

Bryan Knutson

Rick. Thanks, Good.

Operator

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

Mig Dobre

All right. Thank guys. morning, you. Good

assumptions I year, us my So, XXXX baking be year next we first sort our guess the remind drag as ERP what And into think fiscal about question, here? ERP? your you what can we is in for of should

Mark Kalvoda

morning, Good Mig. Yeah.

the far the the million think of for this year, have go-live out into next and year, this the As going come with lower kind the pushed add we've year results. year. around might in is year for we I to I is there past year's in as bit actually in get what mentioned $X.X anticipated a next little be some in it this of expenses to

the little support to go-live a to more up go-live be to then -- there'll support well. So, and support ramping as out our the subsequent there to bit that team of expenses

to million So, $X call this year. next that $X.X closer year probably and maybe million it, up, be

Mig Dobre

Okay.

have Can about context us been relative gross instance, changes the your if of, components Are terms some for wondering how your equipment are for there? other at your adjusted million expectations? year? there else that assumptions just would all updated, in Have clear. All So you right. margin. $X.X any I'm prior that there is I'm Then, on you obviously you revenues adjusted have anything segment thought you to modeling curious -- like next in to SG&A, give margins? instance, for

Mark Kalvoda

Yeah.

with of first initially what think, I favorable we equipment than margin, us to a it all, has the been more anticipated.

in So, we of kind increases our mid equipment in range, area that I margin. right of kind now, here mentioned that at up. guidance the tweak did in XX have -- we last we're that two

we So what before. expected that is an increase from

expenses to goes, talk usually far that we like terms as about in revenue. As of

model in happen because expenses, back domestic over done on year-end over to the of well some continue little to variable as decent operating that, there, I that. International less the a So of the of more more think to should there with we these what be they've of better we revenue to XX.X, line XX.X each a with it equipment that we do, of bit operating amount XX, percent the time Initially and helps that numbers, continuing for think of with should we or we've year-to-date these be seen half selling. your to year. able call And we model a going to for it'll we so happening, if modeling half. some think so to in increase, be that I expect we see last able see talking ranges the continue obtain get with what that revenue leverage segments, are -- I with fixed were bottom than to first it, than can in particularly expectation that hit that the And is around these we'd is pushing their there. assumptions revenue, That our around, up

it call XX.X for the we're that today. seeing is around year what So,

Mig Dobre

this, Thank you questioning for that of prior extent I'm line -- as wondering to guess, goes I and color. to some well. the

factors are mix? than if expectations? I upward equipment it trajectory gross but equipment thinking equipment of mix, remain metric limiting equipment say out new you other on bias, margins this strong. obviously some margins updated that prices for can demand to specifically, feasible mean, called an gross your relative we're Is is about even upward there As sort to remain used

Mark Kalvoda

with it's cost the those some possible. lift lows. saw move always is the current it's are It's frankly, we We'll our imagine used providing the at think tighter even gets additional forward. adjustments we I But say, low. would hard the that down. market, I I of historic those very They're certainly out lower if lift to -- as quarter, mean, Well, inventory used additional mentioned there, in quite I of replenish gets market that out than But push well that some -- of of that new second the in -- of half year. positive be new could as some there that the the could as more a use out the side. of And level on there for is story less positive had on that we've a sales year been use big margins supply this them. us the and that that's

David Meyer

would Mig, still it's say, new a there. machine, marketplace competitive still -- a I out as highly very

positive to business, margin that, strategy always with that's cognizant and of that, that but you're with aftermarket So, I that so. number, to a need think be service our of driving the continue and parts

Mig Dobre

respect recently X, a your quite related business? curious tractor OEM were bit and combines. -- maybe correctly, backlog activity. reported on plan of you to can I'm big I OEM order in the of I strong. context or driving last on commenting year if the in ForEx role relative all pre-selling my books. in give more that. was your They're recall us How to No. Sure. [ph] little then question, your if And prior I And they is this, days these pre-selling to earnings a than mean, the five

the pre-sells to the thinking for are So, seeing And in what I'm how year is year? Ag as maybe of What about relative fiscal business you next revenue? prior terms lastly, a then big we're you. you? of A, does for this Mark, Thank curious that mean

Bryan Knutson

this Bryan. as Yeah. Mig,

important how the business. dealer and extremely to plan be and talk the the really for to to Just it's able beneficial all for as for is our customer, it for us to OEM us,

residual the impact turns, costs, our or that get at get deal, to business customer obviously it that the with allowing the reducing specs bank best with to for time their of us helping right has planning, come lot right interest it the and from our inventory benefits account. them, carrying us delivered have a their the Just our their along with forecasting and get plan and

overall. Just business helps manage us really our

So, for being priority times, the tight, their because in on here of then all grow all on internally those types pre-sells production with limitations benefits well over a supply have that. line put in of more we these those And critical that that initiatives really that so as with focus lot orders with have get with also. the to OEMs continue benefits, the the the to them, becomes of and

imperative then It's reason another see because the and and not and care their with make it we then sit crop drive and challenges and as up plant grower, do. just to the the in November, model, capital off just easy it's course, of to some then take typical crop likes that historical There December the in that are especially purchases accounts with timeframe practice So their the accordingly. how year down and bankers then for crop shaped that. the

that. ground before take the to mid-year there really shifting months out even forecast or and a chance nine asking XX got the on we're crop the to they've the grower and So, really dynamic in months,

for so into a are this goes growers it. planning the haul. of nowadays of Most our is one capital benefits -- long in again, lot purchases, So are big of these the

the helps. next into just some And programs the -- And that shift stuff get and year. and they so, it, cover of even a if matter they obviously that the quite there's some really don't then, of support to it's insurance they backstops government want with crop

not easy. So, again, lots It's of benefits.

the and really We all continue for though, the and OEM. to push because the -- for those of us benefits that customer

Mig Dobre

at with go I big pre-sold. was revenue associated is segment, this now, to was percentage to Ag you? If Well, the what equipment look question for that of there, my it back how

Mark Kalvoda

far what Meg, So, this we're seeing it's is climbing. so year,

So sales a new new and both that percent over climbing our booked, it's obviously would We're pre-sell are -- XX% and over CE, has that now. that on sales nicely. this for Ag XX% of be just of our been up which increased have under

Mig Dobre

are what your looking that terms inbound talking to was And orders orders, orders point? the you it you've next year trying How at pre-sells Okay. on this taken, of your for back in to so triangulate about. like CNH I'm inbound

Mark Kalvoda

ready already. on -- any some I next early Yeah. they're I it's that think for I hard for in first, usual and would don't we next it year, the little amounts second, the earlier sales -- difficult think know the those to kind these year. maybe third pre-sells share based call, starting here mentioned to speculate into last point. of is got to that we've -- into But I on some that, for at fill don't this that because than say the to overall want on really of we've the we it's this been a pushing orders us we're

Bryan Knutson

Yeah.

for year think we saying date significantly is comfortable higher what I'm have to Mark, next I that again.

Mig Dobre

All I luck guys. right. Good Well, appreciate that.

Operator

with Craig-Hallum. question from Our Dyer Please Steve is proceed. next

Steve Dyer

Good morning, guys.

that Just been haven't a couple already. asked answered and

the have given over particular Sounds really is are has out like is you -- two, But well year. you're the across intensified last at changing next your or more rain of the just the footprint corners demand booked as the of still lack of fairly conversations most all, into strong? in really, or month and really drought seen part first

Mark Kalvoda

as Nebraska. we And a our more bit little irrigation Hey, have Iowa but in growing been the good of Dakotas markets. also In offset been conditions have we the that, -- morning, and of a in have drought, And areas have Minnesota rain better strong impacted have good and chunk those Certain the on Western we by that some of demand Steve. received definitely late. and in anticipate of definitely footprint, that. certainly

the farm income the look So, then ones bigger and commodity just of being one a drivers price, big net yield. being and you at

were by last are the we're certainly being by nearly a help commodity look they higher other yeah, bumper any commodity anticipating as fall. impacted here yields not lot the the here so, means lot and our crop bit really to back offset certainly corn a footprint, prices any but you And and double a what of and prices

Steve Dyer

just know the And then the -- are I world, Okay. we cycle of cycle questions. in

year, the guess of you versus years, how cycles a are do even guess, X, And and or of corn offense earnings think locations, a can still I Or questions that, sort prices of look your you and have revenue X, just cycle on at strong fewer as next prices this of structural it, reason from X sort why sales row But starting commodity stay guess, I up are a there I feel as one, prices? better, if in you years? period So long how this couple low previous little of secondly, just crop X, at any the sort of farmers do years the to last, like X, go is couldn't you shape see their numbers, similar answer. to replacement one tough I for you then around two look you a but three about purchases? the most think maybe of see bit terms you

Bryan Knutson

Yeah.

demand, high your really commodity then still there. So, but of Steve, prices mentioned, is to the again, a factor. are demand drive just first part helping And replacement question, the big -- as you

was driver really for that's with six, what years -- we the were last and along the technology. So, main about seven here

much those big prices, got higher growers still advantage to take of Section commodity factors, the that are the then of tax have of then really two on income benefits. but a again, just and that, net lot we've now due XXX So, farm can especially top

assuming keeping XXXX heavier similar of farmer just last farm similar, in adding really the be XXXX is So that's on a certainly levels I to income demand, drought should levels even the which up. conditions on that are some you question then, compares of cycle, very net that of think it the similarities. And these top very commodity similar sentiment asked, with to how lot The yields. price

interest because the However, I are think, are lower. of differences some rates the

out, end, used older last a the carryover lot our very pointed the going Also into better here, improvements tighter internally is from year. on government the one. still lastly, Mark is feel making then, As the position just And than we got which this inventory this last us, cycle us some we for that payments, spent cycle. internal healthy growers several of competent the years fleet healthier. overall, levels especially are are for There

So, lot a there. of be we're similarities optimistic there that could

David Meyer

and to In industry, sold combined perspective. it there some just are to X,XXX numbers in you U.S. kind give last sold. put XX,XXX a were combine Steve, there year XXXX, of from

So, I think year-to-date combine up industry numbers are U.S. XX%. in

of your X,XXX under half take source still in XX%, you XXXX. way times, was what it So, what

drivers States, So just United sold. started in or forward X,XXX XXXX, at forward there X,XXX last drivers were similar year sold

year-to-date But up -- to a yet. there's just long with room drivers back XX%. even U.S. So, definitely of forward are that, XXXX numbers, get to lot

some So, little I -- this a the of COVID some supply some of are from think bit is production stuff. side of limited of the schedules the related

extend for would of a pretty maybe definitely period could it beneficial. which be So, this time,

Steve Dyer

very That's guys. helpful. Thanks Great.

Operator

Thank you.

De take Blair. We Larry, will one proceed. please question more with William Maria from Larry

Larry De Maria

Thanks. Hi. Good everybody. morning

inventory As half booked shipments as of submit I to third through first the think far up, the and the said. you're you year next catching in quarter

to I you're set five So eight curious year next -- models, pricing new on and up your looking comparing like on competitor I the think the what to. believe at with all

of partner? and curious, portion is that, mostly that be to or to Thanks. expect OEM just through the [technical difficulty] able do to So some keep flowed you what

Bryan Knutson

there lot they pass margin Mig's Mark through, Bryan. added that Hi, referenced and improvements of to so you Yeah. Larry. OEMs increases in as thing earlier a is be amongst freight This and challenges our on. questions. price similar and would Similar as increases the mentioned, side Yeah. costs supply have Generally,

Larry De Maria

then, there for equipment, center embedded a or are -- And know but trying bottom there a sales for you money center that [ph] are equipment to from impact other proceeding this aside question, understand obviously, and Thanks. line a big to precision, guys? making you you're ways the the out that's trying built you're into embedded profit Okay. the might understand the making you. I we driver, impacts shares. how second Thank revenue into precision to in but cost from precision? So ultimately is driving the

Bryan Knutson

Yeah. Exactly.

besides out and on, with held really decisions services, more more so future really them today, does big and preventative then just and providing then, to on we grower us also monitoring forward, a But and allow help their being do go sales as do here to telematics we maintenance. like to side, working make the data with increasing And consulting as one, uptime the a into side data on lot of the Larry. the subscription-based retrofit farm. better things maintenance their So, of there sprayers, side, continue planters services that the that's and and machine aftermarket the get really

maintenance of that So well. command good aim really sprayers. coming and as I then the the the command, really auto-steer out hardware And few the think, different it soil side, like subscription streams from a side the things right then, side and that, the command, after whole harvest the factory, there retrofit then and of side service, on

Larry De Maria

Okay. Thank you.

Operator

Ladies turn call Meyer remarks. and David this gentlemen, at would for like time. there are closing back to the questions to And no further I

David Meyer

Alright. your for Well, time thank everybody you today.

our on You're updating progress Titan forward we our you look and to in interested Machinery on call. next

have So, day. a good

Operator

This conference. today's concludes

very great this your have lines participation time. disconnect at and your much day. a You you Thank may for

Titan Machinery (TITN) 26 Aug 212022 Q2 Earnings call transcript