TWI - Earnings call transcript Q3 2021 | Titan International, Inc.

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Operator

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

Third Quarter 2021 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode. And we'll 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, third everyone our and Good XXXX earnings morning quarter welcome call. to Nadia.

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

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

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

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

will after latest on over quarterly turn I our website the available be would investor our In Paul. call. addition to presentation now like call to today's

Paul Reitz

Good as results our $XX.X quarter sales Thanks XX% We profitability of posted everyone. that since had on strongest as expectations for million. exceeded and morning had a Titan adjusted our up we revenue quarter quarter third good million Todd and definitely were to $XXX XXXX. this EBITDA

$XX in and quarter's This occurred twice just any has of of million XXXX posted EBITDA. one exceeded adjusted EBITDA since last those been only adjusted we when quarter period

coming full expecting are see our which since XXXX. in total now We adjusted million year is to highest EBITDA above our $XXX annual

production our hard our growing working team in meet for well Our team grow very customer job around to production perform and thank drive Titan in we've to that to capabilities increase is company. continue and of employees building on to One quarters. coming to forward further has doing continue global our the It really to to levels demand want these results been and we their recent as impressive to foundation years produce all Titan's world great I a dedication our strong built see

leading year. sales segments with last strong to with this segments So, experienced compared again the each increase of at growth in XX% our Titan looking quarter a agriculture our way

incomes caught are But has in abundant us. good. are not realize side incomes and above strong high incomes at miss forest get soybean let's where dipped XXXX. as with thus good and continue commodity that dipped corn of ensuring their farmer trees prices farmer another around for books year $X, commodity $XX, prices record especially earlier levels have above remained Farmer levels I the on to from the Times highs, sentiment this levels well. and year. peak still whether current Yes, aged ag demand still that year it's large farmer also at cotton aftermarket adds order Our strengthen this good And forget sales ag spot. well large is ag, average. the and sitting small pent-up Titan's XXXX. ag, continuing we large do low below ag tailwind that equation throughout to decks. historical dealers see an levels not on that fleet. at We There or order There large inventory in a business is levels believe that an sweet is our for again ag all are throw all dealer this long-term There's up into at historically

So, to construction. earthmoving moving and ag from over

above We of have growth quarter XX% to the had basis. year-over-year on start year of the demand at continue sales we this a of be seen our that expectations with

segment to look round EMC increasingly Our promising the corner we next year. to continues as

a our mean to meet word that I we enables performance want to Spain us thoughts. and EMC our like where we it's segment aftermarket segment also that It customize and time place coming before, coming use today. just into -- own customers. undercarriage where Spain but distribution. part come good business a that think global our Again undercarriage part today of as our to growth talking we of have then almost us in our And has channel has footprint. our those market-leading is books in for Just ITM our order I And a ag, strong I specific A needs that going that foundry strong and products ITM. foundry a for do -- business for financial offer a a but a some our our many from are unique operations of strong in a large are will have and business pretty results, does we've the stated unique we about global I'm more couple a I'm division EMC OEM sure and spend investments and cast business from. infrastructure David see of get unique. places. from large we type into

in We, saw all quarter different produces business and various growth geographies which good many of products, and global our end improved tires three this our growth. end touching units; performance business undercarriage again, in financial and up consistent wheel so solid operates while First, primary markets.

have overall we results. within continue in to SG&A structure and and disciplined you operational our our to costs with and that our in a mindset operate control Second, see reflected

businesses and while CapEx and we have and we over wisely the Next, the continue all our products the reduced and to into capacity CapEx the our in our to environmental, into few made needs invested the in necessary our invested happens ensure protect have it. Titan has innovative into continue years years. maintenance that recent point in years We've will core strategically to is sheet, in also with underinvested market safety, ensure marketplace recent balance driving our prior where we increase and not future. have to company properly we My that investments our

make to investments demand. continue expenses into will headcount expanding and we areas capabilities Lastly, to the the meet our production our incur in increasing

simply the our We this rather existing existing capacity market, to into are of our production get market-leading of but the into take products opportunity customers. more our hands sell not going to advantage of

position one all by conclude of really that Titan customers. for of in million mean also us believe a again upsizing. our matter have year by I that well and to $XXX that operation results saying year, -- faced. none me our our doubt, for is let our our in and with know. improved is a are in has plants of We with second position without this further excuse bonds. refinancing to, is announced So this Titan all liquidity footprint within business in our quarter industries, for we recently of business XXXX our our Titan business and production environments addition We've geographically this our our our ABL this global that all suited most that me strengthened dynamic extension solid something financial strength

signs product being results With expansive I we've our order really with on to earlier, $XXX benefit over of for adjusted throughout deliver puts an said, week also continue Titan arsenal this books next And made today's strong our markets. positive year. this that, proposition a as who Committee to which Audit EBITDA of tooling. in our These at in be during in that equity as strength, was are think space. years. from stated makes customers. to I a to reinvigorated highly good an path in And the me to We of time have adjusted engineered this comment us to meeting private a to on attributes position our see we which portfolio markets, reported a heard trends capitalize growth Titan happens further current are has million. strong value Titan is a good in strong XXXX from that innovative continuing week enable leader The about top post comment result, in a Again our seen a There he that position are that as end and for the to our XXXX. Chair, Titan

smart all our EBITDA. fortified a around this is year positive our have the year. X.X We going adjusted balance current pretty sheet this guy yet stock has trading He's times And only way. by on at

into turn call financials. to now. So And to the with now jump like that over let's David I'd the

David Martin

company just than on step the third Good right in everyone build and significant today. started I for the everyone. we've Well that able result the Paul the and ago. a deliver we momentum a and year to very were appreciate Thanks, direction morning, us was joining quarter another strong more

grew very managed highlights XX% concurrent very do plans global quarter. Well then place the to some have start get a Our Again has environment that Sales management more solid and believe team clip into QX. a very let's this quarter, our at and details. I'll we forward. moving well, for with this nice continue results strong in for we at to

also segment XX% was an led Ag last was with by the of time, very growth of at XX% same increase segment our with in the EMC growth year. was QX to nothing at the the from and XX%. consumer And Our a sneeze increase segment growth strong a at

XX% QX increased our quarter Our that only that as and strongest million $XXX On to for representing the profit for EBITDA year. performance was expect adjusted basis, quarter $XX bears XXXX. million to EBITDA the since XXXX this stands improved Adjusted rate third of to million by strong last performance repeating. margin the and quarter XX.X% we compared XX.X% gross in over be run to quarter trailing at fiscal improving XX-month a $XXX our

cash Our stable quarter capital. despite million, growth some again working in this remained position $XX at

XX-month trailing very debt of of is well. net debt our the improvement EBITDA. as times, stands a QX With balance dramatic good adjusted do end -- leverage our job from inventory strong our managing in our improvement at a profitability year of X.X to our our continue and levels a We This management obviously, as ago. sheet the

or of $XX let's Now XX% all to with third strong QX versus for $XXX third million from Volume units QX of levels year profit increase from get quarter quarter more third maintenance adjusted seeing only period. Sales XX% into the our Australia, the third our holidays saw another seasonal million in more the was million performance. year. of of relative gross for and XXXX reduces increased we and days. Again $XXX were double-digit detail sequential the $XX variation year-over-year. a Gross except that plant normal our percentage notwithstanding growth profit business the normal last quarter million X.X% and the significant in for up production by was quarter, sales last over

the Our where able strong and to know, our we in very margin gross quarter, solid third costs we strong. in and again manage where continue believe to of proven terms XX.X%. record that at supply our strong are is in as is track way We to being was profit a in and -- over our we over see it just challenges intend very we've and again visibility

to on performance. Now segment

reflecting the XX% in quarter in segment million segment up net increase sales Volume units the QX. from years, increases sales X.X% last segment America last in Ag eight the which strongest segment for -- the by OE this for makes to like the quarter the quarter $XX and of our the the related business the America. Latin Our across for principal our $XXX sales in aftermarket just quarter, million, driver year, and order Every Ag business decks North while one third of strength an reflects the the demand the XX% Again of future. very were it strength sales solid. or remained saw foreseeable beating XX% year-over-year globe last across was volume increases ag

was quarter million, representing segment a the in million last up $XX agricultural gross from profit third Our improvement. $XX year XXX% only

related Again getting remain this, actions the of across and we've have our our Our job as along overall which are are whole. flow impacts margin XX.X%. gross improvement we of know. is produced another of cost of These year volume reflective territory a control through margins the very in on front strong significant as alignment from segment we to continued a increased effective margins great costs last we increases. This our actions the the I years. and were And the as timing last effect timing plants, efficiencies is at production, pricing taken couple that strong XX.X%, with and over job in done a these in on there can expect, in very they Ag of -- with

segment sales from construction as and by million or segment last EMC earthmoving the grew quarter strong Overall another well. as year for well. XX% net experienced $XX Our

The third small a Europe statement summer lowest, year schedules. we quarter drop with the from the normal is seasonal the cycle as was sequential This we holidays have. traditionally slowdowns demand This sector, that our just on QX. and and is the customer normal saw overall no a in we not experienced different across

million business, of growth from third a All very healthy of the growth year, was the our coming XX%, largest ITM, businesses segment's XX.X% was across or XX% quarter the the within profit represents consumer increased net was $XX from the sales during ITM, geographies in quarter, EMC was our construction sales of ITM's came also which The The in profit profit margin currency tailwind. and improvement year-over-year. QX were and nicely XX% largest came the segment quarter America occurred year. globe primary the $X last our third and year. Gross $X volume profitability the last Again, an undercarriage major driver year. growth compared gross all experienced growth versus Gross last Latin of XX.X% while from from year-over-year segment up Europe. in geographies very the across and grew increase which million, earthmoving last increase. quarter with million, up or to positive a only from our in for

improvement with the well. segments our business the we our primary and and since a and XX%, for stock As gross healthy XXXX. our have positive profit utility Ag our best been healthy last were is in increases we see discussed, American the customers, pricing an -- priorities our year increased year, with margins to improvements X.X%, performance Latin products. production third was quarter last from X.X% segment priorities in tire our as rubber mixed but EMC reflecting the did Gross QX, segment's truck related This sales U.S. mix very improvement some was this at and margin from which The

million was $X.X a very million, quarter Our third importantly, about R&D and down quarter. expense SG&A from expenses X.X% quarter for a sales, R&D of third from the SG&A sequentially nice ago. second improvement $XX.X Most were and year the

$X SG&A quarter prior and increased from Third year about R&D the million. by

we've period. spending sales reminder, control measures the the year's profitability the some spending a and and years. strong over compensation included last As few in during This levels variable expenses increase reflecting our taken

the in in what jurisdictions in Turkey expense expected, parts higher During than expected income increased be the expect certain is quarter tax to of year. increased Obviously, higher taxes Latin approximates this somewhat this well. Asia. for And and of the Titan for million, our quarter Germany million third due $XX we recorded as but again, $X.X our about again, we reflective this stated cash including year. the of profitability tax than originally I full than for the America, for the year the entirely is in guidance on tax earlier approximately profitability expected now year. to And payments high

let's Now to move cash flow. over

$XX our million. continued and in solid growth sustain to quarter the necessary forward. the moving this cash sales inventory despite balances levels support investments sales in is in remained overall at Our sequential Again, and

was flow million XXXX, strong remain million you in in as our we quarter. cash cash positive operating all for we when at flow capital a metrics, flow year But and over negative slightly territory the a positive healthy percent conversion at overall. of control. look generated sales, free including on from growth $XX focus working made we've through ago key With and throughout cash $X cash cycle of in and improvements quarter of the Our sales

During the grew material Much the mix and volume, approximately on other third inventory raw came changes. from other costs increase of quarter rest year, the the of $XX million higher coming like half QX. from this almost currency and by sequentially

As This management a year over across of very ago stands inventory sales, the compares XX% this time. XX.X%. favorably is our a the at percentage a team. Again, most at -- quarterly this focus XX% from from business to recent again strong

and to overall where QX. flow Our the and metrics year. to two the XX this QX Traditionally, particularly is of of QX maintain our build half and sequentially in the at toward days now XX cash year-end. cash, improve from from back we business stands believe XX working in this time will we continue capital in days head DSOs year compared improved I we by and that the time last as very

on teams up working capital $X.X And for was at million production CapEx management. driving as between our and focused expected. do for the efficiency us be not which will to We closer breakeven to in free QX the to QX, get full positive back likely brings cash I like year. expect quarter sequentially flow goal. are very territory much balance that a strong

drive product decisions to capacity, tooling with costs production the to We new related efficiency, reduce to innovations. in putting improve and plant have along increase been to making investments place as strategic

nine at -- our on end the year Based the forecast, investments of full previous months around I million $XX the at XXXX latest first year. As the CapEx we $XX low of capital expect for stands million. of estimate

As earlier, business in long the for are and Paul in investments discussed we making the the targeted term. we're measured

The we extended $XX is positive and substantially As step of still another by was amended renewing The $XXX October in another an business took line. agreement provision. credit option we -- last increased credit has facility XXXX. the ABL similar to availability disclosed It our is Thursday, this enhancements for million pricing borrowing the within expand I'm position to the through domestic accordion in the cash to healthy million get until be next of our and surrounding on liquidity improved while for improve able terms pleased we to the the across base. years and attained to other previous agreement, very in globe. to top five to stability provide the for our place

Our at by of from international June, the the level overall $X on end, quarter debt decreased on came borrowings. million paydowns all decrease

$XX down at Our times, we to based which debt roughly to trailing as at on X.X quarter. loans. on target flow Again, and that related ABL we XX stated are on debt that the to XX right it net end stands quarter. decreased has have about earlier, to remains is number September our leverage $X at to increases, adjusted to repeating significant last down the over EBITDA revolving in borrowings down. discussing. million our been time, in there be pay the substantially won't that, line in cash it quarter decreased range bears I months debt near-term, of – expect, from credit the the it in last and but trim pay able the expect discretion Overall, I any with $XXX requirements million continue cash I million to

more position the Our growth. now, business manage balance sheet for solid is allows much to us which flexibility in

remainder the a in adjusted wrap up remarks. few thoughts of over of stated the earnings we now it We the release, let year Now, but concluding me year on million. $XXX and some full with anticipate EBITDA earlier

to a of in order quarter, year-end is strong. be of normal disruptions maintenance As prepared expected brings for our number with year it the which quarter the holidays to due everyone should to know, fourth be and first

improve making continued Our experiencing because has the we've with year, effective what far normalized times been decisions high level demand. business in a And performance questions that, we and in are and and the on remain environment dynamic our to in to highly turn ability fight trajectory as hard we it opportunities every is terms the a us made fourth bright come XXXX, business. us. leadership of with our That's expected and at customer way any the front difference to to managing the tougher focused I'd last we day situation in over long is to for of the back The are liquidity, steady is a for continue quarter future in performance. our and a for of our now. in have. during team, for operator be strengthened. our we the so in We've story like you Even it

Operator

Of course.

please begin first session. De go Larry, Larry [Operator We William question-and-answer Instructions] the comes will Blair. Our ahead. Maria question of now today from

line Your open. is

Larry De Maria

what's Nice for to today. the how or the strike over based all, a on going indifferent plus Thank million just that of of we sensitized to have EBITDA, that curious on the down $XXX obviously, Okay. on outlook, possibility situation adjusted the you. large Question job and obviously, – the first customer?

Paul Reitz

Deere, They're great great Yeah. as for They're customer large I company us. said, important. look, is a you like No, a very customer. Larry, a They're mean, well.

there the situation actions are that adjust this what numbers continue quarter, the not For it we happen implies be Deere. us, and going strike solid fourth for with our to morning, in or based for with needed comments can we still production that may Deere may as that are with upon our quite the And understand with made situation. their – the that, could we

with situation knowledge number made it go that a in in with the morning, it full of could So definitely Deere this the of different comments implies we directions.

Larry De Maria

wheels also to going how little about to OE probably the another your and And easily on bit and OE how components numbers of there, can into then year overall of from manage tires. And or product, strike move your kind given a different just we are those to the easier even OE together the important aftermarket are OEMs, or year, capacity can capacity how you this shift to that next then continues, tires business? if you important can curious wheels, can the staying more you of being which tires, more an or two shift held

Paul Reitz

right. adjusted yesterday Right, about look, financial in make. decisions lot do. time from We a lot to to production perspective, dedicated there the can just at we've there's some a – of No, a spent time got of talking have things looking products But are a kind easily. be of perspective, are reality, we've And it. from the some we There different scenarios. to

You change some tooling. have to

You line, – front maybe the need – to same, run have the be the be the of but at to prepared differently. the discs to different rims stamped

your So to modify some that. to you you with have some have make adjustments – equipment again,

And have But all team easily. it handled picture, to have adjustments. you be be those and operational have some you for be to you make quite it. aligned to with your big got a to can prepared in So planning

are So customer, but we of see we'll best plays also do and our take out. do Titan, what's are for prepared discussing it, how that to leading and we care –

Larry De Maria

some mention – own Paul. excess tire in tires which production that inventory. Perfect. about I guys your end Did it, Last of is channel if maybe obviously talked Thanks, inventory you absorb maybe the can happening? missed question, you aftermarket,

Paul Reitz

Yeah.

around saw I'm Larry. last a dealer that that, hearing inventory question, We're seen few them comments and quantification couple The we're again, made months, order what large haven't what quite about clearly, eyes I I've – any that And our are aftermarket is our seeing my our that but telling to VP specific as it's And with in good of dealers. reflected this, levels any a I've low. of of don't books. Sales, have visited just gone we I you with well. from We

next carries this but us just so year. demand that not for And exists into QX, we see pent-up

cycle. know harvest planting. the to got you thing Then be you going back So next you're into

mention replenished, So produce need that demand. there's that existing meet some inventory to retail – demand to product to got be continue levels to to just not existing you

over the I've the what they're of is seen couple definitely, side but in replacement last OEMs, not at that the low inventory levels So just low are as months well.

Larry De Maria

luck. Good Thanks. Okay.

Paul Reitz

Thanks, Larry.

Operator

you. Thank

Our today go of please Steve from comes question next Ferazani Steve, ahead. Sidoti.

Your open. line is

Steve Ferazani

Good morning, everyone.

supply on, kind get slowdown chain be And are issues supply in of then terms whether you weren't quarter's now that A to still are wanted a into if of even part throughout bigger this having more customers problems? managed. the of your Just you're challenges, cost you've much them becoming your expecting chain questions that obviously, production okay, of they may into companies thoughts problems running any about are. of from as couple run

Paul Reitz

There's a many single a goes able said of care to job it we've Yes. Larry. those do Good we taken and We have that question we've any you, We're with come that part It's every And work with manage we effective that coordination our very day a been ahead a through very We lot a but there's globally, teams. it on well done of our and overcome operations face sure how we -- and good the very on basis. single managing it, strong it manage every all that. to-date. like across we day, have challenges of at I job things daily very around always make at plan of us, managing flexible our lot it. teams have DNA. and done of

production staying -- do the helps our to able expectations customers. the of have respect are diversity a going calibrate things But some with us dealing that been lot on our we customers our to in are what again, step our sure we're there customer -- of across with base with to of obviously, have been from Now our the globe. there's there And -- make that. that

we very have While be done some done – where And quarter job direction, good for are and has moving with maybe to. the in plans a in that we've need place pivot so. everybody beyond, and fourth some to And nice moving again, we direction one date. another we can

Steve Ferazani

Have year base significant as your books? have aren't you issues, seen order on a just it? in do any seeing gone you terms a or chain books terms have the you enough of that But know customers' given in has order backlog. wide you of slowdown customer I supply

Paul Reitz

We days that. manage good and of certainly again, deal our to we there's -- take customers that But one see have pivots I definitely with or customer we and of can't weeks a base diversity production way out that.

very we've So been able manage to well. it

Steve Ferazani

year, issues earlier -- of with that? every company are was workforce would In and hiring say you you where you and in on terms retention the having

Paul Reitz

our globally labor Well, XX%. increased we've by almost force year-to-date,

And so very with done -- -- They're there that. it's But everything there. I effective It's an the out like again, it's else. we've we much. out dynamic think dynamic very job

things making You our today. manage a But market. sure again, reinvigorate for to according was the There's We're in demand that to to we've of our in employees, good very us. able dynamic it's and the and our do where and all a have onboarding plans to had lot around that we have things. continuing place very in customer done been to effectively retention and we've calibrate we've invigorate -- training

Steve Ferazani

holds? year those got trained And you you were demand? that through also in you expect of new still efficiency workers on given next say you know you be quarters you've need would through greater efforts boarded as past you've Would indicated I say the sort to and

Paul Reitz

this will that staffing lot to the believe done true spots, right goes at be a levels that to on. year always get definitely the they is work of we've time as improve and I

term a very I it's the effective can always we always and again, better. been feel we use -- So can But improvement. to-date, we've but I see be -- relative we've word like

Steve Ferazani

getting that we're you confidence theoretically In of material terms kind through in some are of with which seeing the you could benefit future costs, -- any are quarters? a your seeing price provide stabilization, the year increases

Paul Reitz

pricing. of Stabilization

Our material raw costs…

Steve Ferazani

The costs, yes.

Paul Reitz

going as we that again, manage as margins it that some move seeing future results, do to expectation through to if very it's you some are very, we mean, as very well. can coming started we've I be have been it's see well. be cases today down. that full to and our not But forward And case at strong Yes. able in the manage to again, is plateau, that stabilize where the of will accordingly. we in our and where job places a seeing where it's And pricing

Steve Ferazani

And last me. one for

pullback clarification have your crop reason a the of replacement through despite I want position right get multi-year that to of no us view prices? both in now certainly addressed it on call. you've your some in segments. terms entering Is the and your You seen just it on where -- change in the to cycle terms

Paul Reitz

And then The deeper the being see business strong is spent message, I keep incomes customers good. orders of look construction-related have for where you And sitting you the sentiment. long-term, are light There's driven and and are the in all income lot as construction at at lot It's level the side consistent. the a as with mentioned many farmer and a look are a No, of the demand based when that indicators. you view. just at demand Right. still side. projects of pipeline got demand pent-up together than look very very the on a we and OEM short that's I've lot the term. our that. we've there well. farmer of to in channels robust. is upon And levels XXXX. incomes inventory. is the like that dealer hearing see There's for lot throughout combine times the strong farmer the then a said that prices We comments, dip beyond my definitely And I And number commodity of replacement our in time

So you replenishment inventory cycle. an have

you You just have about. talking David what retail were and of kind and demand driven

that have whatever labor either or levels by production may chains also supply there. or constrained somewhat forces are You be

I that at think many see demand looks I it, very the as others and that I good. see it well is think way puts way strong. the really we XXXX Titan and

Steve Ferazani

Thanks so much, Paul.

Paul Reitz

Steve. Thanks,

Operator

Thank you.

question Capital. next Our of today ahead. Ludtke Imperial from go Kirk, comes Kirk please

open. is Your line

Kirk Ludtke

guys. morning, Good

Paul Reitz

morning. Good

Kirk Ludtke

really the I'd follow-up accomplished is Got on three topics. to -- a XXXX. on congratulations maybe lot. Well, quarter, like One

have? the steel XXXX at you of prices. mentioned and off be then XXXX you're third to capital allocation. are With early -- in to you least part certain your Can that? give visibility orders through is for bit strong. month us on certain Are sold give orders us would you the Are it you -- how little looks a for looks you XXXX? much color Can taking just a a a sense Another respect that And out be you like date? strong XXXX, the more

Paul Reitz

I channels. times varies. they and different have products to that different And Yeah. lead mean, go our

But very from levels the order say can't simple to are question the compared will I our answered level. a be books production quantification And strong. so

to top good into know a need look match customers. our you're exactly at on need levels of next or to that production the can And idea consistently produce. we orders pretty that, going we to the then that levels and what get with additional additional year So future have of we

are we comments So compared high in you levels what at to historical. for levels order are there's in order a got of look we books line you where factors to number said what compared one historical also, But customers' production with different our at are our want your they're to Kirk books extremely our are. make look capabilities sure which to at

place. so confident different not for address is the we next even you year to factors, needs feel those strong really going to you that into can XXXX. look go okay, when I'm demand And well that replenishment very to starting at and And inventory take look the be

this -- mean the beginning I our were I If dropped further. And is you the was lows inventory I national of levels recently. dealers. their at primary again, customers, meeting of they've dealer their at at and look was their one year historical

I well throw the books. robust needs pretty see takes place again and you our demand that level think order then inventory just in at being the through retail based to I And And replenishment that so, take XXXX. upon you

Kirk Ludtke

CapEx? about next Fantastic. might but Any – cash year. flow next what yet, specific can sense you're give thinking unusual providing I'm us be I obviously, you for cash other earnings year a Any free not know maybe requirements guidance guidance cash requirements?

Paul Reitz

aren't cash would healthy US expenditures next see year. will to there's to that's and the for terms our robust unusual flow. I the any stuff we would percentage lines current a in But capital say free again, of that very sales, expenditures debt we a cash will manage related as as about in bit pay question broader maintaining the capital next $XX able do been this dictates. percentage increased positive a and to a be very cash of with it's continue to us and range requirements. I of sales outside be investments we've little we credit we're From a in maturities, normal the remain expectation a have business perspective, is flow expect But there will will as required down, million decent of that to in it year. cash year. band predicting to for profitability means Obviously, It flow. my will that. with That's

products try are products business plants in healthy we're far to we on and capital as think to the drive giving to to planning innovation that on continue prepared not way. efficient the that that allocation future. in of are through to all as year. to so have going I'm what the invest strict But the I number So yet continue our for perspective, we're still for invest we're going predictions is, going making we the sure from producing that we broader do because to producing, next And a need that a business in

So we invest what this a doing year particularly. in have continue pattern we're very to similar been to to going

Kirk Ludtke

to Do you Have think four updated as we about I that used talk times target. a number? you -- a net have leverage

Paul Reitz

earlier. reason that of we're any be different. I said for Obviously, reasonable us No haven't X.X I the no updated territory to to expect be times. it. it at in kind future. There's

will And stable. level so. at debt be very EBITDA to is a is and Our continue robust

Kirk Ludtke

you. Thank would just prices, bit in And little great. come off pricing. collapse That's still hot-rolled managed the results? of very then but in well? impact prices you a on it's a How your steel prices steel multiple the spike lastly steel And average has historical a

Paul Reitz

the The where we we as news good couple that's Well, inventory materials going things a I'll flow obviously is level that is of say to have know-how those be. don't used cost to high manage production. maintain we our of through a and to than of

the With cycle how so, production. through steel flows to And is our time respect faster.

there customers and lead that our with are that know And with if kind and we times clear manage respect we of well model there's when our to process. So, within that as and will because that flows. our lag that were material we you pricing we mechanisms very to times, customers

down pretty there's again this be So that results healthy we'll fully it margin drop see we again, managed been you steel, a on way it our to a in manage if in significant through I it's going can with our the managed And able way expect, up. year like improvements.

Kirk Ludtke

one just on then And you. Thank Awesome. the capital follow-up structure.

need does run But have cash run? capital so would is overseas lot that working – as to know than what I cash requirements. much to much been is down, you say there's you you – your leverage to it but need to liquidity requirements supplement a – always stronger of the cash that kind do business? of Now a has to been how

Paul Reitz

can we go and what ago to back we lower have managed levels at Well today. years two was than I where it

have we of invest nice to to cash ways able be us a like decisions is more things it And continued in can when this of little business are overall at strategic And to now, long-term the lower. terms like see future we're it's able be. manage feel about opportunity where flow, it in But cash the to And go we're we going And manage for effectively. that enables the to make so we I kind growth. to right – in where bit to obviously, up. pretty

Kirk Ludtke

my Thank Great. taking job. question. Great you for

Paul Reitz

Kirk. Thanks,

Operator

Thank you.

Our go & next question DeForest, Co. Hinman please ahead. comes DeForest of from Walthausen

open. is line Your

DeForest Hinman

the have watched Kind extremely of my quite was stock when a taking questions. shareholder I undervalued. would agree newer is CEO. Morry for stock for Thanks they the number of back a years

the been people think as think that with the productivity might the why side talk important you're you It some things one you've employees about shareholder, the ways I And can seeing a your time the employees. to you it's on doing what stock of hired hired. that of things. is good undervalued. guys about improve understand a help to have It's to be

laid a can that that. about of rate employee, as the revenue out, and any discussed order be the for you terms color that per helpful you productivity, provide when But very that would book shareholder, backlog would shareholders You've you've the think in use you you of in as very give it can are to helpful. the be you margins of relates entirely comments understand to on what incremental front undervalued. sales kind any opportunity terms stocks of in And and why line

of the for I if how outlook definitively revenue higher last line two some you about over But and could through shareholders. to think bottom the flows metrics you're seeing talk those quarters. it

well. people's think understanding and be the I what other it's and will is. to very questions I there as beneficial upside opportunity I pause have

Paul Reitz

Yes.

and Your certainly valid comments are important.

XX%, mentioned, you think indicators And I exactly headcount support some made That's that last dynamic results a environment. that our spelled not though very challenging this David our doing is and headcount. global year the do this comments up you out But they're the over we're as in of maybe metrics with year time. at the our and highlighted. since

as high a and Titan our has company success On of people. grown quite And to recruit that, that of volumes retain significantly top a year. degree so that's this have clearly pointing to

are a working And we're so effectively. hard of doing extremely the that world team that around with and people

shares our comments at – about our about stock actually so times. our Committee X.X trading Audit the And

you've today look trading accomplishments team a that years to a got this where of that the you stock looking at also look go in And was at this where year had this at at low. dynamic couple by you're been. was You very ago this you environment we back Titan

sheet. We were the pre going of from was a protect that we were both they paid as got mentioned, and together this pandemic company our back XXX% critical but of had to their governments and year is our stock emphasize All exciting respective huge. knew We've things sheet pandemic and that at balance which you And we David weren't necessarily some. hits done to put have our under bonds driven And pandemic, bondholders some the stuff and the then up trading all throughout were us. our countries. that that's done balance this back Our that plants what a point. infrastructure strategy as then protecting declared I And get we've see our par. well to

so team kept And got Italy. in plants in the hit the this plants hot Central operational throughout our four pandemic. spots of globe. We the got We

in We've We kept we've right have Madrid. a always time operational. through outside plant Spain always – this whole

you then through on team see the done the also you our see accomplish. And it tremendous the rest at growth And to to year has look so of EBITDA we've been results flowing and And job. a our top what this line able business. but you the

worked intend demand done. And sheet. doing our we customers. taking going of continued with that now I'm We've that. forward really And we've So encountered. while in the the we've hard this as through Titan their to really how built these restructured exact we've it's challenges highlighting and We again, that that through customers you the themselves. to pandemic what grown more we what is – is gotten out battles with what team importantly, we've our of care spelled of them the on demand. we've more have haven't different as their of And metrics meet foundation operationally team And has the and more balance highlighted, for I'm speak results grow proud

As quarter their not this I they've what for had I had just last the opening but years. we've efforts said all in few that throughout thank them my comments,

any deeper something you. understand they Todd But I we David and metrics And for me way and valid certainly about further. goes comments provide could that need your so for are than to talk that

DeForest Hinman

raw dynamics but of as would some very that. inside when which point upon can investors a the materials then for to with to Can contingent I volume, is just to and to any there it the materials about committed we us touched order of where the book relates are raw there believe book higher are very you it good pricing the you to at as on Is order is some book ensure or relates was as think to volumes made comments costs you've starts, more some backlog. to some understand encourage repriced how the to tied that of you those And and environment were extent. is the or when in looking committed there price, help Yeah, the it just the it pricing some help that I production are input time margins. of a comments actually that went we dynamic is on past lines customers order order the along understand in dynamic move But relates had those book structured?

Paul Reitz

Well it's calibrated I our would you expected production where fairly costs material and with that are. tell costs

decks And down costs it is. with for the with same dynamic in does plan order the went seen that's period at we've going where production the been as when are are the working raw time. going it We And and It that -- in regularly And went communicated It's within now. in vary goes the aftermarket have or with -- and to some least at for cases out with as it protect in our up across particularly of firm with where given environment where case we've our our it customers about customers to then been certain the does year move last that it. very there's a you you business. work of and forecasts that's the that repriced spike we in flow. they at. understand. can And -- But it way materials plateaus price have be things. is And how most we least

a you our of our think to are do our are. -- customer can't make that. side OE sure costs a making customers just again with -- And that statement lot great the do aligned So we by as it's customer. on I It's job a generic where teams

can products we that the so -- And sure making both to. getting need make we're they're that we margin we're and right

DeForest Hinman

than the sidewall seeing the the of pretty community there ag some a trying about was benefits educate And soil. low of years Understood. period we've savings talked of tires tires side spent few pitch it's a of if terms sales of We're price selling high Okay. spike in to time. time we margin just have level tires I been then those from in low gross tires fuel the And high on And diesel over a we're mix low compression last think then fuel. perspective then to more for side performance? Does the even make it then wall wall over question from beneficial years? And better after the that is very I that. one

Paul Reitz

Yes. don't pitch. sales you has years. consistently be the is strong think, that for that what certainly a rise your I positioned the really But through again, in helps time. way the very I But sidewall. prices sidewall situation we But proven will to rapid have cause time we energy help mean need after that and saying. in sales the the with low I reputation low mean product comment that product developed only about basically I'm to question pitch It's already good And a is honest market. feel necessarily strong itself to energy the

way as with better. in it's far the product. So it our as we are makes to that's sidewall premium It for is as but as means far of their low low equipment a win-win performance the financial perform beneficial results company, end very product a a impressed priced the also It's users. to the what it sidewall

for platform And of It's our to it's to So performance Titan. product so continuing users financial a going build really satisfaction drive the ultimately the tremendous and company. end future. and to that far end-user the been into and that's see of tremendous for the we certainly a LSW for

DeForest Hinman

a what And asking you you. profitability thank lay the and the definitely clearly then good the improving metrics capital the job have direction. Okay, very allocation in And right debt I'm moved out have that can you reason are? done is just priorities

big cash CapEx urgency a put a lots You words your seem your really flow, be term a you're year. level laid free want for into in I debt transaction but mouth doesn't to where problem, of of debt, but to lower bond you there coming high a to out out next situation have story kind don't to made

dot the lot There's to I's a and the flow. start cash cross of You T's. free

you what So use you your shareholder as to it -- a what going for me can explain to plan forward?

Paul Reitz

question. Yes. obviously a It's deep

from And we are the be in had long-term situation ongoing. future. the how Board can a good opportunities have of strategically And we on to level situation. quickly the a grow could about a very We at lot and Again definitely discussion where can those come there discussions tough go invest. for very we some

deny to that's well. very where We, central could so in very and Again a -- that done we've investing very, what different the be on the focus. do And fresh. could think of acquisitions it's we focused future. about And have. What going could so include and still We all number for can't can't we to still be about, things, the now? come okay, be do obviously, which sit good a But form business that of core just ongoing. in going we it want I to very been it's something that think has we're that's growth And job. as to

debt just as States. the to pay have term of the debt we'll lines to of yes, the the this take free far that flow down we able some As of We outside call we'll it some advantage United cash do be still of goes, or time the -- I'll as debt we and mean want cheap. million ABL that. well. $XX have do about this say very at that is like, feel also I I the to same outstanding on

and business that beneficially where that play most all the to core we business. that us will in determine cash we investing out But what's use for into so and again about it's the have. best And

DeForest Hinman

you for questions. taking Thank Okay. all my

Paul Reitz

Yeah.

Operator

back the remarks. you. Paul question-and-answer any Thank to to over would turn like Mr. Session. our concludes for closing conference I This Reitz call

Paul Reitz

look matter. we're everybody our and attention forward touching for Have good to performance really accomplishments, day. with your your Certainly proud I XXXX you Thank Take and you throughout Yeah. you. quarter all Thank for of that our care. a time today. soon. this base

Operator

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

Titan International (TWI) 5 Nov 212021 Q3 Earnings call transcript