TWI - Earnings call transcript Q2 2021 | Titan International, Inc.

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Operator

Good morning, ladies and gentlemen and welcome to the Titan International, Inc.

Second Quarter 2021 Earnings Conference Call. At this time all participants have been placed on a listen-only mode.

We will open the floor for your questions and comments after the presentation. [Operator Instructions] It is now my pleasure to turn the floor over to Todd Shoot, Senior Vice President, Investor Relations and Treasurer for Titan. Mr. yours. is floor the Shoot,

Todd Shoot

Thank you, second everyone our and Good XXXX earnings morning quarter welcome call. to Grant.

the On been the were along and XX-Q, call CEO, today, are this a we also have morning results the the filed and I begin Commission has this Securities we Senior which earnings reminder Martin. issued that Paul to and Titan’s Form Titan’s Vice in Exchange David with President review with our CFO, about will also with presented Reitz President and release morning.

from call, As during projections will reminder, involve forward-looking to that a the certain future our materially information, the the this risk, forward-looking and we plans information. cause be assumptions and result could company’s discussing uncertainties that including actual for differ

individually harbor the can Forms that today’s included could the as and from Additional have XX-Q, aggregate, actual differ today, as XX-K safe with factors statements earnings all been our these attached X-K results the forward-looking well latest information the statement concerning or Form within in which company’s to of SEC. Form filed materially to filed within earlier release found either be cause

information quantitative would is measures as company’s today release discussed and the well transcript the Paul. intended reconciliation call available over be call refer be the directly today’s Today’s addition the I soon we financial to being most our the the to In call. today’s be accompanies soon Investor be which will replay today’s under but which measures. recorded. today’s The made non-GAAP non-GAAP website website. A copy like A on GAAP a comparable now to section supplement, within comparable to section of on News and the of call may remarks, measures, contains the Relations financial the presentation is are other substitute to for most to investor GAAP of note not Investor on to this Relations website will after after the call available earnings company’s as Events. turn call the the earnings release, Please within available measures.

Paul Reitz

good first start at in we and moving our direction And We business year ways. that a the felt in Todd morning. in get saw a good quarter. conventionally to of time, off a Thanks, that this was number positive

did $X.XX per in one QX. was environment the really we battling to number industrial a increased results that adjusted seen illustrate quarter grew quarter those they only compared quarter challenging sales second with through EPS of our our adjusted a our a $XXX second from million years performance our we reached and X% that this as in this quarter-over-quarter job exists second QX. Our $XX off really million strongest $XX period trends that if million all good noise not have good companies. heavy of not have EBITDA improved. Along operating that as $X.XX our continue today's for QX, Coming Overall, many share to in quarter in to is

of worth adjust to in we've produce quickly to products half demonstrating Just million our growing the think our needs that additional our to been year $XXX this the able meet an ability of first important customers, for customers. of

EBITDA $XXX of put and XXXX us adjusted at in to Our north now be million. grew position the for the point from strong results mid-year QX QX momentum on has

the sales both our our further our growth experienced So segments quarter. in diving second volume earthmoving/construction into Ag and performance strong

half What good us solid year of support. beyond into of is positive really feel important of markets next continue and end very into We Ag seen the periods continue and the continue the in demand is well. year have signals into strong expect back the drivers look Our show longer-term behind this levels we that couple to good to show Ag growth we last strength. important the to that to of in for and continues as signs primary current then

continuing used levels prices are and market should equipment levels. have in in moving as the aged large the and roughly America new levels business, fleets Ag that Titan's not equipment inventory brought tight example, the has Ag high if are in momentum is In North direction averages. both Ag quarter orders believe where to below throughout For XX% growing seeing long-term further record we very large keep positive increased we the this equipment and still trend large

really been has base years. few customer Ag smaller good the past Our

low inventory far customers of if sales need so will – to record their dealers is inventory, these again which low increase retail not above rebuild levels many low for levels. in to levels those to our This And going their XXXX XXXX have these really Ag are production means depleted and Ag levels, into small of demand illustrate the few number indicators the solid have strength the a should keep in will the future. we the Again, momentum a growth. current just and support that again core case in Ag, longer-term look going from in market that seen as

felt sales from at continue and an our a quarter X% seen of growth compared over first quarter, and and have earthmoving looking the our to Ag construction demand we we again to good be moving year. initial was expectations start increase XX% which above So segment, to with year-over-year

long $XXXX. East to from primarily around was aftermarket debate A coming our that worked from the inflation large quarter in operating We reported rising and it ITM Titan costs we we being revenues I solid As to example pass Well around transitory SG&A our guess have add Far EMC both or percentage costs. on, to of growth able – this history the And where exposure our facts we month to from continue very something we another not. to and came logistics. – we and me, and the in in labor hard global comes now large of that the a want are of increase comment to and good pricing build. it have materials what was thought costs. Overall, an quarter from appears believe is the good is world, ITM. to even and have is Europe The $X,XXX at of rages through costs. to this in of crazy quarter OEMs ability be with Titan costs construction our this the saw to stated division sales balance higher. our before, word as balance a business. and markets and see that going in today's rising transitory everything be undercarriage post-pandemic has that of we is to the ago, just specific through you a if years steel managing excuse strong floating percent have raw This that was a do really these seems

However, benefit a challenging that actions really growth our going future which in things conclusion our well we with strong place market our have in times company. important put are in the These with production strong to position now. us financials to good of which that and with superior and benefit bodes we managing demand strong us we're capabilities operational beyond have management the year things in to the work further, we to global certainly our And continue right is product deliver step a today, clearly debt These but times through we're a took overall regarding a Titan in hard few see is proposition improve also as in manage team our We taken for value going culture definitely to and good costs. we you our will state will in from this we long-term refinancing have the these believe portfolio and will cost in markets. time able current next. structure, broad-based a of David in includes be robust a a like April. stronger some and front I'd operating up our to around actions wrapping our customers balance a like to spend but to sheet, position manage

locations We to a our to be continue in a are our we committed increasing key to customers. as our innovation company product capacity partner strong drive to and

Titan to shining to is continues midway hard at And year, challenges. of effectively labor hard and with chain working really our well, work Our the performing the and QX supply very deal team bright. results is with point the business our

turn to in are path Our call EBITDA growth position are our end puts and a solid forward to $XXX year. order this now XXXX top I'd signs for see of future adjusted and markets that, Titan next good over on million. And we post north positive to David. continuing like of in a to books there the

David Martin

today. appreciate continued made sales that show Well, our everybody Paul second we the changes how morning. with growth. good the and us and improvements Thanks, power financial at I quarter accelerate we Titan can to performance of joining have the

Before this I from quarter's performance. highlight most aspects get details, the want into important to the I

last in QX. grew First, the quarter year sales over for XX% from

inflated we in quarter. pandemic initial last throes second the course, the Of this year of deep somewhat, growth as is were the in

to the or XX% back if grew If of XX% second XXXX, you currency the exclude of healthy fluctuations. a quarter go you impact we

the XX% exclude grew the consumer quarter, our of XX%. and half quarter, from of to regional the Ag currency. of XXXX. sales segment balanced, quarter, Again, the X% up QX operations an XX%. first across the earthmoving leading segments from segment growth and first very reported experienced if The both growth, growth half first Again, XXXX. up was were between and XX% construction the last of our the significant increase for this you of half All in sales the impact strongest since The year

margin at Our year gross a XX%, it from of profit last sequentially and significantly from level the XX.X%. was first million, of margin XX.X% quarter improved up with increased $XX

was quarter quarter refinancing representing of trailing income FX losses was at impact of net $XX as the the of Adjusted earnings $XX per XXXX. $XX.X Excluding quarter. quarterly $XX was stands for for in the diluted XX-month million adjusted the us, quarter million, and second share costs basis, the our strongest million, performance bond million $X.XX. this for EBITDA EBITDA since On a the and

inventory Finally, for management remained despite measured working in the us, million, level this quarter very very our been our cash have investments continuing $XX capital, we to while healthy again date. position at in stable

of of nearly a X% to during as close Currency across this also demand Continuing euro and all Now, by that sequentially note year had from majority into of cost the for period the QX to the in million was markets. improvement. it's XX% quarter gross the a mix we Volume sales risen last strength QX our for have and important quarter actions. increases. $X the profit $XX.X was pound, Gross for profit this for year up year. adjusted first a ago, year-over-year stands increases as of than quarter a jumped versus XXXX, or growth highlight. million, quarter. the approximately versus requiring million of the customer pricing driving pricing representing in materials detail versus sales XX% of the sales more more with get the quarter the boost the The I'll But second $XX to the in X% out in the also of was XX% favorable

gross only XX.X% adjusting after was impairment. second year, versus an the for Our for last asset profit XX% margin quarter at

Just production and this of terms progress a our on quarter, report cost. in quick

it I last our customers. from and reflected however. Raw but are trained impacts hard that's of working timing is Also, which from everything the to quarter, continue the the time. you rise and can to levels we're demand manage possible up margin to with the be to the higher we to quarter, demands to us. can to vary. as align Obviously, can the production continue appropriate to all as related Again, ultimately would coming. production at production we said see price levels in take calibrate procurement We the price flow-through logistic numbers, that objective and differ quarterly timing really we making the to moves protected, gross situation. percentages material across the closely -- while staff our coming perspective, that margin customers variations our There protection meet market dollars we're during as to to a see can changes over through putting sectors. see And costs increases

chain supply also seeing remains to to ensure shortages We the polymers. fight fabric to production given continue to hard from we're that smooth, steel

exercise date, their Our moving relentless a job will chain have of supply -- leaders -- this then will done fantastic obviously continue and us to keeping efficiently. they it

performance. segment our to Now,

improvement in sales was mix strongest with associated impact. the net taken XX% of negligible in makes Currency the significant we to the $XX.X improvement. impacts accordingly. XX%, through which significant our was overall for aftermarket an Again, segment. segment quarter were the with the from year. like increase profit XX% customer operations, plants, reflective sales raw and years. in material effect margin in costs continued need our we of the agricultural of a and representing performance seeing We're agricultural first The solid. while second OE were volume up increase in the strong to last driver production on very the our saw again across were the actions. have the last quarter while to material dollars, up in across quarter million with for produced last price geographic from higher in The this $XX related the were last Our gross Volume the only the all to and we the to raw gross segment, which of XX.X%. $XX.X improvements Much Ag, we eight costs remained million, is turnaround effect sales other in relating segment costs second able the profitability million primarily of effects our our in year, key manage had this cost and only quarter second the result, XX% negative across The quarter, that or over it in our on pricing business, the and pricing efficiencies this along segment a margins year, up QX actions segment prior from volume was in year increase the X.X% XXX% almost the definitely

primarily the accelerated ago after the have currency dollar. at EMC while was the year year. million the as EMC net markets. XX% segment that were currency sales Overall challenges in the experienced versus Again, price Our the place year. the recovery earthmoving/construction On XX% by exceeded pandemic expectations XX%. a quarter segment, quarter, the last that was for for taking construction or last grew to in early of days global from $XX segment construction markets for again, a by basis, the gets sales of price the and the the pound US Volume constant net strengthens XX%, -- the risen British as positive up to would mix and euro was impact due and

material Latin segment adjusted was million, came from in of improvement last million combated QX impacts which impactful XX% segment, in than and geographies America. raw quarter the of from that's and profit costs year. growth actions. quarter pricing the the coming $XX gross XXXX. logistics While growth in excluding Europe, year-over-year second representing from almost with Ag FX undercarriage construction the Gross grew growth quarter were $XX earthmoving largest by rising ITM's primary Asia business, the during second an the All in ITM's and the or experienced profit XX% for

sales small in As from year in driver this million Again, year a reminder, our Gross impairment came we took of was the in last E&C ITM's increased in the margin XX.X% versus adjusted profit segment increase segment. a business. largest XX.X%. the profitability second an the of gross in undercarriage profit of last $X quarter

were XX% over consumer. QX segment's Moving sales last year. to up The net to compared

non-factor, by cost ongoing in For about of mix a X%. Pricing increases. a material and reflecting while was was Volume down and in positive positive in impact currency was factor tailwind the XX%, the raw other of X.X% the our time first quarter a a with quarter.

some products As improvement and for was a from focus profit -- that down QX key on from $X.X XXXX the quarter been XX.X%, at mix million -- expenses from the and was have for which products $XX.X EMC QX gross were last our some quarter last customers, were segment's the Ag shifted we has the production The SG&A reflecting also second our our we $X.X quarter. sorry. consumer in sold. during million year, down changes -- improvement healthy margins from healthy period. an Gross million QX XXXX, positive XX% second from R&D the

expenses the expenses, QX. a during SG&A Second had $X.X ago costs, a to included from importantly, last Most some compensation increased the quarter R&D year we SG&A Again last taken the and year in some profitability the sales and year's increase about R&D control quarter due versus strong This and last variable year. to costs of percent sales, year, spending million. as in reflecting pandemic X% XX.X% very declined quarter. measures in

First of of foreign on with see second expense Turkey $XX tax tax recorded jurisdictions, We the million from half Latin certain and including income for during sales. our between quarter, Asia. SG&A $X expectations. in reflects full All This increased expenses the taxes year. expense are to remain million X.X% $X America, million line right. on in and We track

to on So flow. let's cash move

overall the quarter $XX increased cash million. sales, in $X.X million. outflow remained Despite we needed sequential growth balances sales, was expectations Our to for for profitability cash to an of second our quarter at and almost half breakeven our flow support significantly as steady at this operating in our invest this inventory

were very working operational capital this effective teams Our managing in quarter.

X% half the increase will in believe, effective focus, our less with the quarter working payable of get discipline. accounts quarter Our and raw each the breakeven of came it which $XX during was had you positive changes. from inventory the increase management currency volume, higher growth the full on this growth than in again other in half year. shows coming When continued inventory receivable flow cash cash About We for costs, mix and this year X.X%, effectively the capital the can all other through down, of -- free volume I the accounts and flow the With and in approximately offset the we quarter. million. material solid overall to the quarter growth coming effectiveness the in with boil

historical focused be spending. for on be line course, how quarter event for quarterly levels our $X.X investments plan were head this was for for somewhat Capital dependent will XXXX. any CapEx Of growth. well any towards we expenditures view strategically second we inventory will In the in needs as business inventory which with million, as

As of second on be $XX.X we operations half, a the focused projects and CapEx total in efficient in that mid-year, of we are as stand have costs. at CapEx. higher will spending million number facilitating ongoing reduced more

have demands some the We expand investments capacity in production that particularly of are our Brazil to our customers. meet to needed

We I be investments anticipate refinancing We line that around for continue well. which the to spending about tooling focus about place April. to bond continue in also innovation, on this as year product took some full $XX $XX requires to million. million the talked to

that worth for significant our But important and So new to it for us years is It's for refinance mentioning take was the secure it is step advantage financial very news. to to opportunity stability not as very forward of a Titan. come.

So quarter which increased debt XX, March from the Overall, now $XX to level on X% by end at months mature able in April will were close we million. new XXXX.

$XX on call Short-term end of of million. came premium of and our in at cash the credit increase We anticipate at Therefore, of slightly year. refinancing Most foreign June of relating significant end to All near cost the needed borrowed in current debt and don't the be I approximately the at can which debt $XX borrowings closing. term. coming the million if was to the extended any and bonds. fees up to loans, period over this the rolled pay to related the term requirements relate the maturities to facilities revolver

facility we million business. million, end, expectations in domestic ABL a borrowings needs XXXX. of million. cash the positive also maturity had borrowings At in of had QX current borrowings any flow With to these the and current be $XXX outstanding time. the $XX credit. is of facility secure borrowings after operating working end headroom the capacity in of the $XX on pay near we Our with down credit capital relate you quarter None to deduct at of the said, term, letters should able we current That over of

Overall, capacity we're expect quarter to the We also flow cash revolver year increased sufficient at pay that target down us trim able run to the net debt times note EBITDA, to of based the June, flexibility credit as tremendous of $XXX This the is business. less that times, months EBITDA. and adjusted the increases XX through in I has have leverage number leverage to X in lines. million. is Europe. gives important It nearing decreased which than to on X.X trailing to revolving our our debt Again end

concluding a the with up wrap second remarks. the me on and of Let few thoughts half year some

Those summer factors demand are in sales continued challenges future and very our XXXX, us. on schedules time, on leadership strong, vacations our holidays is that performance. focused notwithstanding managing and our us. same And our on front view seasonality second we for certain the At our variation where and remains very throughout earlier. impact in have. the of the our the half and The bright of indicated will traditional some that be we in and business, and strong opportunities team November production as have expectations. present holidays First, December And is the that has traditional Paul Europe

performance commitment. half first that The demonstrates

a have continued landscape quarter. look of volatile. lot again And work ahead us, as I progress the our next sharing remains of We to forward

up. it sums that So

call turn you Grant the I'll off So to for any questions back have.

Operator

ahead. [Operator Our We begin Steve go question-and-answer with from Please will Ferazani come the will today Instructions] now question session. Sidoti. first

Steve Ferazani

Good morning, everyone.

Paul Reitz

morning. Good

Steve Ferazani

to seem you said seasonality. about Paul, in with Just which half on wanted you're typical some EBITDA in pace million first second degree north to comments -- conflict David's that of trying number, for twice would $XXX of an, an idea doubling your million expect is half of expectation or just the actual you simply -- get to $XXX I'm And were EBITDA? north

Paul Reitz

year. we of aligned really the comments and David markets company I million $XXX for about outlook off, that for mean, position first Yeah. both positive we have My end have north I order this reflect of we confidence with feel certainly and in our good rest are strong the We have books. the mean, being the our on I the about in high quarter. we the and of through performance David we the the hard look mentioned and And to I been hard midyear with is at dealing Titan challenges. the of year, good team the have a degree confidence the going that half got as -- especially second forward to is results our back both working work has I

And into so is maintenance. the the comment. half of back your correct will impact with the year. do as seasonality. back look Steve We There's, half issues you we There's have holidays. production are our plant days there's the in of year typical There that vacation,

are and we to continue will for we can our mitigate produce the we customers. as can, much greatest We product so plant the as extent possible working to shutdowns

above So our $XXX north we're in look really it's we'll the to -- able I overall. expresses have at just today confidence that be of we like business million think where say be we to

I both Dave on think So and are in so… alignment that I

Steve Ferazani

Okay.

David Martin

real only I'd is is that the forecasts first within that not the just on operating that doubling thing half performance. The we're based add a of company

Steve Ferazani

fair. That's Yeah.

more if you retaining outlook labor? labor. talked much a then on in more there's because job how and more and was would on quarter certainly, about of done sort you be you you've recruiting a think the lot think training great you come? that, lot about the side? -- of you that us challenge you give you had you've Do Do how a that? so volume And far. with And -- are to labor clearly a could can we've you doing had say Where So commented

Paul Reitz

as help simple a out… sign -- I it's wanted putting That look, not mean, as

Steve Ferazani

Right.

Paul Reitz

… and you can walk your door. if through

I David XX% if the at this hiring like and look the for done that job. think you I good can support you our results think I year. we've really we're confirm -- domestic a up mean,

David Martin

right. That's

Paul Reitz

not can I as Overall, we're around we're investments doing labor again think deal XX%, numbers as really really somewhere committed highlighted of making good the in you at And but It's support be domestically seeing up that. to that to as lights grow we challenging I look support bright see And continue that we're labor wage from as market supported. government markets beyond existed XX% We're that this has well side you a certainly the is sales, with mean, those We're in of recruit strong. think think the will market as to this type levels believe a out to to, a to management continue our and hire. retain of And company headcount kind stronger XX%. pullback. next look to continue to that job. and today's up start challenges people. we year people. team We our year retaining get I the ability to finish I only people just recruit our to

Steve Ferazani

you think plants. about just need trying in, CapEx obviously in the I'm to to flow and could term. your What more thoughts get And longer cash invest I one on if this repayments? year debt Great. a are just

David Martin

term lot debt as States. of keep our is Also to mind in outside the the facilities credit loans a Yeah. as relates United well of --

paying committed debt to facility the are down the U.S. and within in levels international So moderating our ABL operations. we on the

do continue The that debt with cash our place. But a in very So not to flow. bonds themselves. with of significant we is majority obviously it's will the the obviously number first

next numbers when and see down necessarily see go big through will of it -- year. this to start but year you we as won't that you will it be pay So debt,

Steve Ferazani

time. for much. so Thanks appreciate your Everyone, Great.

David Martin

one to just add I And thing. want

just extent. talked think about might CapEx be a -- I You And minute into ago. that to certain a we'll that play

total in I $XX million to of operations. the to $XX continue million $XX will said invest million We this -- CapEx year.

moderate we a pretty -- as percent will a plants keep this. certain a see to, as good more a capacity to think I or of of place. pretty stay growth, needs up think close we And if we just where extent running need But on our to to based expand I efficiently. see I the we'll think sales as we percentage in going to continue sales to Now that's

Steve Ferazani

Thank you.

Operator

Capital. Our Kirk next Ludtke go ahead. Imperial come will with from question Please

David Martin

morning. Good

Kirk Ludtke

Good me? hear morning Can you guys.

David Martin

Good morning.

Kirk Ludtke

on very, congratulations to picture, sure. challenging questions, an it the side, of Hi to opportunity a you some on maturities? strong foreign shares, On Yeah. execution the some big some to structure some capacity issue give an the very you Couple this M&A maybe term front opportunity environment Dave does in make Well out offering? moves give simplify product capital environment. strategic does or boost

Paul Reitz

do the our CapEx markets to to what managed we've well and to see in speaking the that board believe strategically I'm getting Certainly some there. structure would difficult how we questions position heavy a where see where Titan, where on the it's sheet we being working Out there Kirk. a capital say future do the growing behalf capital target difficult as and the you're -- this. future. us of and goes in front, opportunities there M&A for out it of and increase Man, for customer will we've as puts do what with base. make future but where that predict capacity overall the to the in David exactly importance handle I future investments where completed in through growth April That to looks. good key on it's we we balance predict good highlighted, need we critical well see mean, in to has be those I demand the and very to I is

We to are that. committed doing

have that. to a plan We do

will tooling on to investments in we tightens there for needed product a that innovation. Whatever the in are the aggressively future. invest feel engineering invest will that's the continue strength that front, to we that front We continue

where company very it confident in. meet to So good a positions our who feel structure, feel regional our basis, do that a capital the needs at and a them on as supply about of for of us to they can we as growing are continue I most M&A, customers I chain we local regardless and give importantly can where look a it

Kirk Ludtke

benefits to benefits that call of the a That's And agreement? is get you you sign Thank volumes? be customers What helpful. you asking mentioned you. can terms -- that elaborate prior you to agreements? long-term a extent How that agreements of to on customers in what long-term On the minimum going? might were up can signed those the

Paul Reitz

Yeah.

the our produce I their around chain of the what been world I the is users. say supply the from It the customers that think broadly shows that got end to customer, team key very from And we've mean their good I about. products speaking response something response think our has to we I been we good. feel importance a marketplace the as very would has

a committed on products that other very a really it really go to between relationship things solidify continue Titan. with further important. their to customers each in for of beyond agreements opinion quality the some my pursue our discussions volumes just be as deliver will base. That's at the to time going long-term the I'm them says to to competitive and needs and landscape of high we're but simple to because able good to supplier customer customers meet We the them maybe the

that we we that so both our the world. look means again products we mine this going go end sign together it years an same meet think end -- And the And in long-term users I operators, and the desire around I says agreement, that hey just of of as we're construction the share operators a long-term needs agreement work together. farmers, for at to number it to are when

is that to at there I a volume. our our schedule efficient what negative we a the it mean like, business. can that volume helps more the from can yeah understand certainly volume and So operate with we can't looks secure that more and us have the I secure all. scheduling perspective, we planning to I say our mean, know

have having do discussions with to I our forward continuing long-term agreements. more customers to so look And

Kirk Ludtke

your vendors That's you. are Thank helpful. you agreements? asking Conversely for long-term

Paul Reitz

Yeah.

If going you're like it's an to something mutual relationship. got be do to a LTA,

a it's yeah, street. So two-way

Kirk Ludtke

revisit? your looking Moody's chance lastly, Great. little ratings know any before bond you them that Is is And there of you deal, then your refreshed but I getting a did rating stale.

David Martin

I you ongoing rating will of we that David. the all is dialogue tell have agencies this every Well, quarter. with

discussions now to that to on with it it's with up are but and we'll, credit that them. that. So with them that proactive risk risk financials our we refresh obviously, have decide Obviously associated and

Kirk Ludtke

a Thank great you, guys. quarter and

Paul Reitz

Kirk. Thanks you. Thank

Operator

Alex Blanton Clear will with go ahead. come next Our question Management. Harbor Asset from Please

Alex Blanton

Hi, morning. good

Paul Reitz

Alex. Good morning

Alex Blanton

Hi.

just I as They X:XX -- it question, your number. that my your number a.m. the $X.XX. to Alpha that were six non-GAAP ask of course I reported was it saying want of Seeking Before at mention just months $X.XX. earnings reported That's said quarter a

Paul Reitz

We don't have a lot of power on what they report.

Alex Blanton

mean Right. the the giving the year, that the for -- guidance for They EBITDA? you're Is yet. haven't quarter? it corrected I only The

Paul Reitz

correct. That's

Alex Blanton

Yeah.

To they were labor? them. were said you've have Were rates? to go affecting for -- we on the there what headwinds your production extent really So

Paul Reitz

talked in Alex. are mean, look the up got customers. domestically, needs in think hiring. people very way our headlines with we look When our which it we've of what order I've at this challenge you the mean I effective read earlier. extent back market to them books going to we're we to that strong can the the work the would hire been at and about I I Well, labor going about in growing year-over-year. I meet we're put XX% very our you -- headcount To

it's at them So people, what again commitments into investments not doing for the recruit very customer to the the people. do you good market To you we business. we've just and And that. go and is easy it's -- making got retaining to really base been as are need to those saying into as recruiting our got

think we're job. good I a so doing And

we'll to XX It and good do for build products. more you we about that really next and and need labor that's probably to continue will be sign. are our full months hiring a talking and books the order We tells that

Alex Blanton

my Was so been you quarter? guess hire more? more question had -- to headwinds was that have could the more you I able in the Well, had

Paul Reitz

yes. The answer is

Alex Blanton

Any idea how much?

David Martin

real. big that's what-if. say. No a mean very to that's a I That's challenging Yeah.

Alex Blanton

Okay. The same side. on question the materials

David Martin

Yeah. as second really wouldn't constraints Things half tell during But back. as there be the put truly been that not it some I that the challenging. anything more us to was the year supply are will would quarter -- it chain. have Certainly much you the of probably respect with are in

to fighting but hard never efficiently going so did to keep that. as And things is, second quarter. guarantee it obviously, flowing through we you just goal The the can in we're be

Paul Reitz

showing too days. periods -- -- to got just our we're busy in play I and every we of as the We're that to put and a what-if. we of I Alex for ahead doing number can see mean us. Man heads are possibly continuing And building work these day we we overtime think down. much as

Alex Blanton

South rundown us How they America Russia? specifically quick business a foreign doing? and on Could give are Europe, you

David Martin

European grew I tell performance, if as you growth. very to are that XXX% double-digit grew our America, close significantly. quarter. it grew this are up it Russia, of in In XXX% at To levels would them again, quite you there In comparative -- look wheel operations the all very, well. nicely, Europe Latin

Alex Blanton

metric That's in so -- gross? XXX% in what

David Martin

Sale, in sales.

Alex Blanton

in okay. to Sales, tires Are then And do you Yeah. sell able you were Russia Goodyear Europe. in to Russia made into that? planning

Paul Reitz

the had added of good in Well, Titan doing brand local brand that plant We've years been taking CIS local the just the has branded market. the our Russian there. really marketplace a market a have been on tires the job into really into number Titan and for expanded

can some honest now though needed there. have market. good over there. Titan needs really doing out products everything there I and the you exporting the the be not We of with local to We're To to right branded capabilities mean the or beyond now necessarily right is we market the we meet have are expand

other we're from meet what is doing up the bringing to in products needs suppliers. So Europe,

of out countries. of is take it Some other off

is it of America. from coming North Some

it of comes from Some Brazil.

So coming Goodyear outlets. brand in some Titan are non-Titan on answer to manufacturer. Again, we working manufactured expanding Europe some multiple It's from your question. the

the days we plant a good But region. with job when doing We servicing these that. on that service have great markets some the at it's need working we're in really the partners in that Russian we look

Alex Blanton

Okay. And aftermarket the finally, the state sales characterize of there? could you

Paul Reitz

The aftermarket good. is really

I years the OEM think in some Titan's it's strengths tough of conditions. over one last five

We around continue built customers. base solid grow. our the And that have for relationship dealers see a a the very aftermarket to strong demand products mutual we've within really distribution we continue space to strong serving

of going the really meet As customers needs talking is are increase big been a that. production to we've of and to about, aftermarket base we our continue certainly our part

Alex Blanton

you. Thank Okay.

Paul Reitz

Alex. Thanks,

David Martin

Alex. Thanks,

Operator

question Brian Baird. will come go with last Please from Our ahead. DiRubbio

Brian DiRubbio

you is Good here. Few this you give Could capacity sense morning, been gentlemen. utilization your of, what plants? bit. touched any little on Can give in sense me and a any me has current questions your

David Martin

practical from a of than at say is by more very Labor going point. standpoint to mechanical. plant. a high it's Well, capacity obviously, vary I But would physical numbers really this constraint

say it's litany have I'd again that point. high of to but a things very would I through this So different at go at it's -- levels

Brian DiRubbio

labor way. How running you I room volume another much fixed? before guess, that was maybe into do sort of put you capacity have you are constraints? start more If had

David Martin

to believe we're certainly vary at the -- and by Again know have it. not to the difficult put that way ability answer to platforms. with We It's have the where we continue a across beyond, we to today. that's is that wrong We region. going that to by believe multiple quite product extensively base manufacturing grow

markets continue from to capacity constrained it now, we in right as perspective. are we doing where production not a are labor So we add

Brian DiRubbio

how as have sort But many on there been Okay. appears It materials. way. of correction think you there's steel Very it's but been rapid -- reversals sake commodity you for is impacting raw in gears about the a certain as protected, have streams. one if well short not good awarded and just yet we there. just company say, How cost? Switching should let's words if know, in argument's

David Martin

steel to if mean You starts drop?

Brian DiRubbio

Correct.

David Martin

Yes. Yes.

those a go. look carefully trying just have day. buy. very could that lead steel to features every of and that we We And the we types we're single where at managing recognize So time with steel

we've amount very XXX% best rapid going demand. protected, be the this we And so hedged during protected. over in the procure our and can think We're We're never -- of increase steel a to manage that we of I we period the actually not XXX% of but time. best

well and the we're to of half as as I'd the -- have operate plant second more the level So we this right we're for steel in to that the this moving quarter what point. love year at actually first right operating XXXX in to -- at we very manage expect situation at the need we're of but

Brian DiRubbio

has that markets, approaching in your changed or does How of you guess, question mentioned, strength four helpful. under That's your thinking you're times? you thoughts leverage. Xx given the you Okay. get about I ITM? equity how goal And the allocation of then And below two-part are capital there. sort

David Martin

all, over our in of doing allocation first plants. investments the capital Well, to have we due point at to been It's the not debt years. than continuing have significantly, we is to obviously, what that different service two this last

things change that not we think in, how I'll think defer on to to allocated Paul, of could to being debt the I we've have we taking to. move future of kind going M&A I given that opportunistic about ultimately, discussion But any ITM. of types if need easy along dramatic the it's see care you're the timing. strategic of a capital that outside be market in and for of

Paul Reitz

things to continue The We're customer business see of demand business day are today capacity work we locations I we mean more where thinks we're I by increase lot future. is to Yes. today. the customer where we've strong. I regarding that the to go And we're where meet. there talked about now, before, the the do hire present well. good out their aftermarket is we right feel got every business world what making. board around about into balanced is perspective well. production a is production through in it's around demand good. capital presence continuing some the a balanced performing we'll put can made how and see expanded ITM where really We lot it some ITM our in the We From And ITM the a I got an that to key very focused think the investments markets got there at But performing of years. demand more is pretty we again to in And base. really allocation is what

Brian DiRubbio

being -- And business So probably about the part need not of for to IPO or you as looking whatever? I of time it forward sort know going the being time that qualify or we thinking Titan? but should for ITM divest be to

Paul Reitz

to build to business. our we I at product others for up focus at. how much may mean, a ITM look it, is that's And really, where customers can and being again strong performing at it's as time we the our is of we're that's good them. as to to not got to our with anything a to from capital stronger continue But needs from board meet different than a position that in to it ITM perspective continue it allocation need do a make we invest the in customers.

Operator

conference like remarks. gentlemen and closing back session. our question-and-answer the Mr. turn conclude I'd Ladies Reitz, over to this to will for any

Paul Reitz

everybody. you talking to Well, morning want thank say a day. this to look Appreciate I time your at you. forward to to good end Thank QX. the your just Have attention and and you the of

Operator

Thank The presentation. you conference has concluded. for today's attending now

disconnect. now may You

Titan International (TWI) 1 Aug 212021 Q2 Earnings call transcript