TWI - Earnings call transcript Q4 2024 | Titan International, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Titan International, Inc. Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to Alan Snyder, Vice President, Financial Planning and Investor Relations for Titan. Mr. Snyder, the floor is yours.

Alan Snyder

morning. good and you, Thank I'd like Earnings Fourth XXXX to welcome everyone Call. Titan's Quarter to

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

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

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

on the over In addition, quarterly measures, but are to the would today this well will financial website. I contains financial the like information be transcript measures a be turn to be today's today's the investor website. to copy measures. The Paul. quantitative refer GAAP to of latest the non-GAAP supplement, now the of soon earnings earnings for GAAP after as all the to discussed available most most as comparable accompanies presentation, may presentation company's a substitute comparable call call available measures. today's and call company's is to Titan's QX non-GAAP not A replay release on of directly a intended The which which remarks release, and reconciliation other

Paul Reitz

our the no the has of Thanks, everyone. with October, you Alan, at spoke been Since it third seeing shortage in comes On was a And has of that better we early and the call, morning, are cyclical we last world. signs of the on our all expressed did feeling recovery. the us end than when of we and change last business, bottom that ag good change there the cycle drawing that call. we closer to quarter

As we reasons yet, we we to there not more here sit optimistic. today, while are completely seeing be are

all to It supportive administration sentiment expect there the First, been farmer goes be agriculture. an regarding of farmers ultimately big sentiment has sentiment. their which could is seems of to saying willingness borne into factors levels, function such forecasts U.S. prospects as of that without as improvement be and to future to yield government new driver, out farmers range input in positive There That assets. cost in invest farm income. a farm optimism of the a among prices, typically their crop the lead tie

support, bodes XX% in at government is demand farm encouraged crop our there of well nicely and in expected the Outside to activity starting were up over bushel. prices, is well by both been have ago they prices for reaching are U.S., channels. Brazil, year off market aftermarket we This important Titan. and increasing be for an OE a year $X recent This, along per levels higher over this Speaking than time, corn with income.

is ag business highly broader a for during indicator times in job, not share, team this highly leading market in that an of market. the their has currency, their operational good cost done driving they in how experienced excellent the and volatile and global the side is just Our been for Brazil reais. but manage History Brazil

of we in Summing to ability with with with things we customers this saying in half in for of improving but certainly a I Brazil positive that major an there do be positive, tone the region. that. has the productive year, observable ag being want there as and Moving have crossed said, slow we're around end world, OEMs be an of especially not taking was the move more to OEMs will production That 'XX. Recently, up our of region, seen year. just expectations confirm can of second and up generally the have the reduction by Titan forecast ag hoping over was as for been a recently and an strongest expertise nature. have production to demand that could of second geography and to our over Europe. our months. yet number in get Maintaining for the that have a while improved their ramp say customers America the Ukraine what but in XX business I capacity return they to asking through emphasis I into all situation to been look shift despite the indicated we half Europe myself, last worked about line North been from to ahead haven't the have growth, terms conversations

go our we that, ready happy certainly when tell are yes, they are. we So will to customers to be

also big back, following a really via took A it We've about focused that As our our we acquisition. expanding for we aftermarket year's come lot part relationships last talked be and business. of on that, see is Carlstar strategy. one-stop that hold shop demand customer will us

to continue years as the offering to in be expect a be and in that cycle. to it of And has through of management for we We seen business down source been well. have one steadier this points X our focal segments, in aftermarket all steady performer our our team of our expand us a recent of future

mid- team Titan focusing new LSWs the low products marketed and existing We as introduce also we as segments and such cross-selling in also segments innovation tractor. such emphasize aggressively of into the past, geographies. and products My while them Carlstar's where new working have in on also continue products to to horsepower to not as is

these drive there initiatives. for us are around, via continue Looking good really to opportunities sales to

ag, the segment. our consumer like held than has up better Much to OEMs. business over Turning the aftermarket

Our integrating products. a a enables complements products of team suit needs. of as done Titan customers range product their good to our synergies legacy wider job working to lineup bring capture range Carlstar us their This much has and a our to

use, Our off-road or transport for ATV landscaping consumer a to equipment, products on-road it equipment replacement which of all user a segment. be demand in tires trailers lawnmowers, that used continue go underpin recreational of on wide range steadier a owners riding whether to this

to underproducing noted sure of half to OEMs and health product the continue of consumer year. first they're their make the plans of demand have excess saddled in with leading side, OEM are the On this These not dealers inventory. mindful manufacturers their working are

distribution with at off-road of and ourselves, mean, have and premier can strong customers are our sure orders Therefore, care Looking those I environment serve we manufacturing of. taken fill-in spectrum make a across this better our portfolio footprint we the this locations. product in

healthy us, dealer of For is our OEM a ecosystem aftermarket also supportive business. generally

inventory really business. OEMs view positive to manage for as this long-term So a continuing at our actions the we

prices mining overall over stable conditions have Moving activity metal risen are believe fairly response market solid. strong the we Precious geopolitical construction EMC continues and developments. in and to to to be segment, remain

generate as operators run to As demand their mining assets rise, are aftermarket as incentivized of much and to those prices equipment That's for parts. minerals for going solid possible. owners undercarriage

business in We growth are capabilities, our personal in this us and development for along a these make and poised segment. Tariffs strong position replace innovations this service good on our with with mind in lives. in in which product are everyone's in segment both our undercarriage, days, our

You for tariffs not the us them in this to early can't significant avoid issue to interest U.S. have endless in a about that media At renewed barrage navigate. It hearing topic. the point, reactions a tariffs the investment current created are on seems manufacturing.

into in daily that U.S. reports seeing the the investment all we're think coming about I

volatile to complex can and you look because customers that benefit times, to at seen needs. historically us During Titan we it on our Titan's count from perspective, evolving as their a meet have environment when

We product have market-leading the portfolio.

footprint. geographical a have We broad

in business, the and are customers technical to times. have team serving committed best We we our the during complex these extremely

Titan as their our chain. of catalyst to of at supply look And for demonstrate to so risk able this our the mitigating capabilities we environment full being customers a long-term

So wrapping due to -- I deep and our that the are efforts and I want navigated successfully want strong We appreciation downturn decision-making talk for timely way. what XXXX. effective up my at Overall, large look Titan just team, really cash to with we a I express here. a to good to their for lies ahead reasons XXXX. encouraged Titan throughout One successfully with things about them feel That quick integrated actions about of Overall, to is and taking cyclical a flow acquisition.

products have and Our accelerating comprehensive investments in demand provide our services and results the well see improves we customers, to for one-stop positioned to our future. in us are as strategy shop positioned more

innovation hand will to position product value it be a over leader that, cements I the cornerstone to New our proposition as our and our of in continues space. With David. market

David Martin

and Paul, listening first everyone to to you, Thank morning, and thanks Welcome our call good XXXX. in. of

with gross for something generally give cyclical the With to flow recovery we're margin under year year seasonal low well and say in the was points line able during quarter was basis to XXXX EBITDA And saw gross compared little were -- with for million was we quarter with low first almost that cash XX%. is fourth adjusted the were Yet margins knows, lows, in that that move some X% margins fourth perspective, adjusted our quarter the it during also Gross XX% in roughly XX.X%. as expectations. margin volume this in of hitting year. are recent of a higher. our quarter most were we the gross the me cyclical of free XXXX, what gross as XXX the level was full margins in Production about our nearly $X ability our sustain million pleased bodes just business maintain low $XXX everyone Let results breakeven. XXXX. for this Revenues with, and of into phase. To we a during

that of. team So is our Titan entire is proud One something

of at the the margins Consumer XX% XX% and consumer Looking for in than X%. gross or prior more compared to X% higher-margin fourth the EMC were were quarter aftermarket margins segment segment. $XX gross profitable million expense the year for SG&A were quarter, around by as most X%, of fourth margins million ag sales was in our sales margins segment was accounted $XX or business in XX%.

in to that in are Just when timely the very Carlstar an commentary talked expenses allows us SG&A from compared manner. R&D this, the a acquisition, integral to prior can distribution attributed fourth increase that fulfill -- entirely we are our operating million the ago. centers part in the XXXX, be million quarters orders the which model, $X.X customer reiterate, about quarter the to a of were $X.X year to in in particularly

note we will is commentary, and an product important development critically continue our for throughout we Titan to invest. that innovation and area As in

free cash reduced require flow in increase of Our just expenses show expected $XX accounts $X sales, million, cash also the flow, will the operating in was a will negative which was sales was million, and negative fourth cash QX combination with receivable. $X.X CapEx and but reflecting that's anticipate flow sequential $XX improvement million. about free corresponding operational loss in of million inclusive We the quarter noted. Operating of I

standpoint, serve million at will EBITDA. XXXX, very and and the leverage XXXX. In CapEx to fully equates quarter allocation quarter. to of rate accomplish well share related debt expense pretax Titan cash repurchases, that significant over X.Xx fourth will flow That was great acquisition positive around -- full business. an a Xx, the trailing in or million, expect focus the Carlstar of to term.From to continued smart are as the in shareholders modest in tax the debt XX-month expect $XXX loss of spend deal will which primary adjusted income form be will investments year Entering the in progresses. Net our capital recorded our turn the less on QX, a allowed we confident and to end our our at was But approximately us $XX expense tax of about $XX we that XXXX brought effective credit We paydown XXX%. long year down which a in million

And of as our primarily due lack tax loss due by tax domestically and and is low business. Now in ability we tax higher from this have fully incurred expenses U.S. that tariffs belief can firm be due about volume. the law income rate to footprint to further XXXX talked to strength across elevated exacerbated dictated in as for to as our was tax the global foreign by the the production the jurisdictions. Paul and deduct very of this well good is interest the impact earlier, flexibility it that Titan the

ability One supply that is chain assets strategic them to of sell products will to of our manufacture lot we and our mitigate mitigate that risk. a their --

For will anticipate that and are for do imported we a any exported major our and that impact. we pricing products not or costs manage our matter, accordingly,

brought Our segment. acquisition us China in currently U.S., mainly our of Carlstar exceptional supplies in an plant products consumer that the

up, the have that Titan clearly and absorb we U.S. minimal. response we're running determining and has the currently analyzed to While the that tariffs plant. -- be being have we the very at our of fairly is tariffs a production actions ratchet the some in in fluid current can China as situation, said, that advantage plants That tariffs impact in

to of they say situated to as well options handle to how that with this evolve. a of continue tariffs best we're company All as

to guidance financial on Moving for our QX.

As we pleased so Paul QX. with far -- we noted, we've sequential sales that we improvement in the saw are seen that -- have pleased

profile starting As demand begins higher we will than recover, in the from past. margin to a be

increases fixed sales in expansion. in the Given margin operations, significant costs production manufacturing our our enable and

million to Reiterating to So prior focus sequential that's are the the earnings potential guidance million cash later million. in term, the comments investing first cash year looking the in are and is the increase. in EBITDA adjusted expect forward sales is solid, allowing our as Again, a XXXX. Bringing our progresses, quarter to line into sequential year remains we're near condition us and QX. for our range back The cash we certainly bottom $XXX on debt. positive, flow with million our financial this the ourselves first versus to future we to $XXX every improvement working putting and to Carly the to capital reduce flow, morning, we to quarter $XX of to flow position due would up see in And $XX back our time a we session. Q&A accelerate day. Thank the like you turn to performance call for for your now and turn

Operator

of Our D.A. Instructions] [Operator question comes first Shlisky from Davidson. Mike

Michael Shlisky

feel take the cash are I to wanted on If working guess your XXXX, a that some flow. for you for, comments to feel XXXX do have at better I in made looking David, it? to better capital some may bit get on little the of just of on more you OEMs a like you here fourth quarter prepare

David Martin

take certainly that to generally look we'll a Yes, QX at we that. We QX. increase sequential from as do anyway a have always

accordingly our I progress As for the get the second but that overinvest, expectations -- potentially the think get we we'll come. need can I could we we through of to think the to to the able meet half year, we it not visibility as growth manage calibrate and be production

Michael Shlisky

the as us earthmoving a bit Perhaps outlook. the of provided ag as of then you on consumer. one a Maybe Paul, detail bigger your segment in granular in construction detail little on be first more stand? on feelings those broader perspective, well where the bit it. a Got quite others? driver a cycle near than term, quarter, might X And from the kind give very

Paul Reitz

market an residential is I now say earthmoving Yes. all the driven a being level investment. Clearly, lot or by It are as would a needs. of across see that about we're think infrastructure, very we that say, ag. but area need construction diversified talk there's the would I And demand underlying factors segments, government a floor, I did stable, for where the

society. needs the would be difficult their turn So to of governments for back it on

so But think look having the And at clearly, this as are that inventory some in corrections floor. that you're OEMs. you the taking environment, at I place

you're negatives correction. a so with the balancing, I the And think, positive floor inventory of

else to think division, that have unique and capabilities again, least through, and parts we but some undercarriage for to segment in say nobody to more of I that's produce us our aftermarket unique our has demand where are construction want mining capabilities some that good it to ability specific see earthmoving custom at capabilities I our our the is Titan. Titan. In to nobody extent, we has,

earth go OEMs reference look the why And the as things place that comments for of not at drive just business, so prices activity And activity. that's some taking remains remained just but minerals, overall daily the the to with that's there have we life. activity my also and into mining rare needed and fairly society strong all elevated demand all

unique. And Titan so have at some we again, capabilities are I that think

OEMs hear little at Again, bit there. When with our bifurcated you'll So consumer, aftermarket just you commentary service some maybe is that of everything some the to the from these parts different the again, in segment. days. ability customized a than look

good X impressed aftermarket and at with that and gotten that versus look We lenses. had just with different integrated year a going. Carlstar momentum 'XX Really OEM really from kept Titan You in in really aftermarket. team has how

so aftermarket new has the customers And both can into. performed our business existing see get expanding consumer with of and and corner We presence, products well. opportunities part in around the our that geographies then with we

impacting with And we EMC being OEMs comments. And sellout what really and talked and in to to that in run. just OEM about consumer, as talked demand and positive are the you a to consumer short there. you're seeing about long well look run, I to talked the going EMC. more and very in our a factors accordingly. with at the like inventory the have going and But I'll we've with the trying ag. some inventory, in so from adjust then with part And to our consistent it's We're the with lens OEMs, OEMs balance similar stop we've that's aftermarket of their the about of business cyclical segment deal consumer in think performing ag dealing

I think I've said enough.

questions, you know. any let If follow-up me got

Michael Shlisky

And to I just might commentary the the That in question. like business your XXXX? on guess, to I figure the turning I receiving be I'm year, year, hoping back trying be things the the ship you might kind be just your your fact making of you're definitely might a for of my could But about thinking quick. are well what feel better half comments your business get up. first ag a to And quarter back the Yes, maybe buying get kind whether point and lot for answered a on that orders at both this the absolutely. we and in to half. of of year the appreciate positive I a to the few on more should actual that ag, as of that orders. simply business, and a later out you Paul, squared you ag real farmer or low the sound turnaround be shipping get actual cadence wanted broader things in the want equipment? higher the for least as

Paul Reitz

each. were kid? type of be Mike, on you band, -- did you But team little a as A any teams, sports, whether competitive of it

Michael Shlisky

all Absolutely, of above. the

Paul Reitz

All right. right. All Perfect.

or the in every or and it's got whether with competitive hope. you've never mandatory. And have, hope sure the to team something that something business, business, have team is got also whether it's hope lose force sports leader And you So It's of in can room of that team can make must you music is the hope present. and environment because into to captain it. the you're you're you

you lose hope, to something and team is the captain that the from everything. Optimism leader. the comes You lose

optimism, XX have in they're stuff few it. There's seen It's customers with the the coming necessarily to. days. not. is coming from create the in they're the dealing situation, team. a it's the from been either or reading. can't there and their last I It's months it's definite what coming turn over It's last talking You What they're from daily

but and within cyclical it's XX positive it's tell team. from own through us. team. downturn could you eyes, what's I've coming out starting tough, bright room, things And deep think gone front where place. I that I maybe But because see the So last is and what in I've of we've important the is change over and the to I And with seen months, feel it's that's the lights there's the more taking we're I the deep think a in my optimism seen

will that that, next we I orders year, with opportunities today. some coming real in term that now. Some as back back up will the your it's we're of year the sense us expectations definitely towards also be of present to that year -- from with going It's short to. But that going not -- are leadership. take but year in preparation is impact entire quite question, our this from seeing this that they'll year, it's by is that is us, being of a seeing is think created they customers what you in us need it's to team. for But up need some it we're optimism and in room, next of in come bit them optimism in a half with the us, later both for alluded from But into that orders the for again, and picking the of what

Operator

comes question next from Steve Sidoti. Our Ferazani of

Steve Ferazani

you our to morning. It's on fast question Paul, -- follow hearing was because of A want because color prices. the I'm up the the second The calls team pickup pivot. listened you you're But to -- on your commentary, is through see is well. Dave, you're right, on to recovery, I the do still it's we side, listen and more half call can a the I hearing or XQ from lot focused how ag translate X. really support calls, points a data it that because inventories, a those managing but lot large sure to the can didn't it's customers. you from actually your challenging of all connect it that in last the customers are on from Paul, in all conference hearing appreciate that so hard this prices, as customers. on And directly there's you that managing ran stock that maybe

Paul Reitz

discuss And from of and we're had we've channels, and the inventory and the at they're And and that and looking we've inventory. accelerated ahead wheel ahead at are throughout seen production their levels what as disconnect, disconnects between sellout. of Steve, the trends tire pandemic see looking typically of wheels they what post-pandemic we tires we theirs. their inventory the And part And into view Right. get and inventories their in is with is in cycle our our inventory perspective. off as business what

the So up get But to it geared trend, say production. I'm before just because they a have not for got during pandemic to but do lead going accelerated definitely we we it's pandemic.

within If Steve, not they of also their they that just or that their fit is product manufacturer, upon a different piece color. or each each you produce, customized some but a a tractor we based hub to line about on of axle are of to a not paint think them, products the has just have engineered highly It's a wheel equipment. A sprayer and combine.

that next. So chip, belt, a the be can differently a we be a maybe product one from to transferred than prepared need to hose

trends, during we do inventory been so And this volatile has and period. follow different our

inventory the from hammered got they excess we think the tires. harder during earlier had wheels down because perspective cycle and I

OEMs from the our heard business. different in have of were been would than some have So we what seeing would commentary you the

them. do. I faster think before went we go down than And much we back they think I up

I trends and So your their commentary between and some but very understand question there's following their our fully different closely, inventory. inventory

David Martin

the Steve, will ag we're So take absorb sector, If see half, and thing, a you are to first maybe it. it had the perspective the downturn. be going before going -- second to down half first Obviously, right, a do second we're -- XXXX, start to we That's have and with that's last sellout at to it's Titan not you the on I that that XXXX, to into to that, year, in could faster. point is a significant is that one just that everything look to to sees add in if industry pretty into expectations particularly XX% half. recovery destocking, be right? half

Steve Ferazani

and ran recovery, pick again, are if up? potentially how that, in speaking labor was can a fast, for I were know we says still to the of through it COVID, And is you. last to for data you well that positioned pivot the Paul some, the David, you problematic and lot be less

In quickly terms to need pivot the labor, in that the how able capacity, than CapEx expected? plants, faster in position is you you of are if terms of

Paul Reitz

had And coming them to be And message come. in and prepared. be to we'll about week. Well, find I to last before a way team. what was that, prepared. they week I that's know were and need the towards earlier. again, already orders same They've to adjust, And Quincy I were They've optimism the already We drop-in Freeport prepared. in discussion. and some Dave David the they also from they got to the be had talked

we said, said we we and these going experience, do labor. headcount let's we because we They're where do It the hold to off we're where last team requires want do. into message down skill. lose also point delivered require as But a too because telling not that throughout been need been that pandemic. a And experienced we've not to talking on reached significantly. difficult talking where our reached prepared the towards be That's a now to -- back And the so but a but reached we're delivering does important well. optimism about it's message reductions also year just we as people. cutting to not it's throughout is that that definitely they as always they're present we a in we point team they're point to here has about. talking headcount it's be the now, us And half seeing we're us for something, talking of now, it of and today. prepared. the again, be if the about We've been to the future. And that future we're sense seeing But year to I've about our What

it's prepared. come to it. I telling tell it's be never Freeport have didn't to we're to it's easy, It's them good. -- And They're We in good got a to So stay Like problem be have. we prepared. us but in said, to there going last to get on going -- they're to going it's and week. how

Steve Ferazani

around year. A year? next will we looks what consumer, Absolutely. modeling also, this like questions. was It's like? of this what saw And David, D&A what sense moved of year Is a quick very first your seasonality couple acquisition obviously Carlstar. any with this the bit look from with

David Martin

Yes.

to your a adjustment of around we yes, of quarter, head. adjustments D&A a after $XX It's roughly. the is that we to made price have We year, question, were had that QX, -- I for think in sorry, So -- I million the my or million -- little final our purchase at required don't top I'm acquisition. the $XX bit

it's QX be. To as head right segments, took that's being -- in exacerbated that towards place But more the I about I the the in think of terms a question destocking seasonality we're been about to bit little OEMs. with as all Carlstar again, would we the if you terms normally to not that's so think dramatic of as And I think finalized, a that will, with consumer D&A... XXXX, and that's of, division, situation in your about low. rest It seasonality was where or all going seasonal similar the

Steve Ferazani

loaded. Front-end

a year be front-end in half would First loaded. typically normal

David Martin

seasonal low mowing Yes. But that. and QX a things because like is season definitely

meaningful it's change So modeling. similar, pretty not I enough to a think make your in

Operator

question Research. Zacks from next Our Instructions] comes Tom Kerr of [Operator Small-Capital

Thomas Kerr

follow-up the tariff on issue. quick A

roughly. overseas your tariff? that, manufacturing half follow do then circumstances based relatively related do? that? to doing does Can a what sense. it to think on OEMs the that that quickly is of And onshoring, have change a If I hope lot follow made they're you I of the

Paul Reitz

we customers. are do for footprint you in No, positions different geographical locations does. good like prepared just world stated, our moving manufacturing production locations Yes. around capable serve to to it have the half we and our of and Yes, our

their longer then the mitigate would preference That I would move As risk where lean side. tail, on strengths that one the production as change helps locations would do our But producing equipment. I closer geographical the as obviously, towards is our shifts, that But prefer. could footprint. production, has and our our of to decision I they imagine being be they Clearly, biggest logistical would customers say what believe on production are well.

have our do and their base customer that very for are needs We change. as needs plants meet well their positioned can

Thomas Kerr

ones. All right. couple more of A quick

it government for And -- strength it then color related that, is can the On Brazil the they economics? what the what the the rest provide you are there? policy? Is on strength, bellwether ag why to Is general more of world?

Paul Reitz

Also, what aftermarket both and I tone is the their the demand world. supported than good Brazil, by have part of when turning feeling when of clearly Brazil. And as of government here optimism kind administration towards we've ag part a strong it -- the I a seeing a what of good mean they're some cyclical to they've what grains Europe, demand there Brazil at seen corner, economy, the incentives. in exporting been in think you changes needed the of ag economy, as they're is I turning upturn It's think They've lot mean you're of And part ag. we're a are the U.S. in their look are its -- that support long some less I in. is of no, is mentioned. But heavily compared of supportive their Well, coming around general I it's they the had they're big run a economy cycle. and from there big corner. that well. OEs mean, the seeing to But it diversified just government, been used than is beans I downturn we're been in a

their for a demand exports decrease. the so been seen cycle there. of as and increased, there's exports of crops. it Obviously, throughout their of kind we've U.S. the 'XX, tremendous amount some from starts have And the But has 'XX their demand strong

go tone we're call last, sentiment getting as over it, we in an of Brazil XX days the And kind uptick the into is so the 'XX. from XX,

Thomas Kerr

defense military military the you that affected for Or in be of of talk cuts, have by the one. in budget able cuts industry light do opportunity Are details about could you more be we're sort federal guys Last downsized contracts? seeing, Great. budget -- on. opportunity budget -- orders that that guess? so Is to or may and I

Paul Reitz

the decisions manufacturing. way I've very has of the recent in military supportive our our been having to hasn't And characterizing really are been Well, bigger much. been way the contrast U.S. little, in military making years, when opportunities is not have you opportunities

help pulling been And from back so of military, working on. who kind been really into on administration of how the the that's what with year, started and outside last get what this some can have middle the is back we've we the guide and us to we in change, doing in expertise

And put Maybe So budget true favorable with as at budget administration the we're impacted a looking military to some our of a We're good really, make they've not cuts. on the making the like been can are in past as supplier decision future. us the their cuts standpoint. by change. it the decisions radar from in bad

look as opportunities. reason both positive, aggressive working that. So I do these opportunity something And nothing we're from cuts changes close think it we to more hard just to we're the and in are to at why being to administrative an budget pursuing and go

Operator

Capital. Our next question comes of from Kirk Ludtke Imperial

Kirk Ludtke

lower points. you're A into looks some business. maybe to looking It follow-up price move new on the like

that the you I about think from you a release little mentioned Can in third initiative? talk product bit parties. sourcing press

Paul Reitz

one-stop is to increased, have third-party about service and go the there's things really only taking our Carlstar into initiative lot acquisition, that of we and customers The our our sourcing. talk of that, includes capabilities that care shop post And a and customers. the approach,

stand is been year, And get So it's umbrella, equation, we manufacturing expertise when Titan have, bring what the that the we care outside manufacturing do do products does we to last brands facilities. What take that's service is that's equation the the and right the industry. in on bring out now that that focused to has that's are our we can the team the that customers' of some over we to technical our our Titan's really needs. we not include having just starting where that something the world-class under distribution how channels

we we taking best produce part And of And can Carlstar, a of all win-win the on that for business. a parties our so our and can as that that resources the our business. possible of business. really together layer part it customers and of of see care bigger Titan's we our post third-party then legacy for we from in some as brought the products part involved. But we it And And expertise acquisition, and with in what partners that a look see this was customers that that need way. growing putting I mentioned, becomes all just it's

Kirk Ludtke

Got it. on And the tariff. That's helpful. a follow-up

mentioned would You And what positive. I most of U.S. thought fair would sell in that be U.S. you a it Is guess the you -- in that produce a you characterization? the

Paul Reitz

Most is fair, yes.

Kirk Ludtke

-- -- yes. tariffs standpoint what mean the From I Okay.

Paul Reitz

your question. ahead. Yes, go Finish ahead. Go

Kirk Ludtke

the steel steel react -- we sense from We and/or Or headlines I'm any tires that are means if on tires what imposed tires, where how we just the -- to they market coming and trying can from? So you. incremental understand -- U.S. coming much products steel products just were those see. are China? No, And for a generally, and/or so offshore? steel comes of -- -- on from to products wheels for we market I'm can get tariffs tariffs

Paul Reitz

-- does vary mean segment. product and I it by Yes.

of So short we a answer. tell will there's the not blanket the done kind is you we've what In analyzed perspective. term, I But have our tariffs.

heavy at way, in specifically we doing, sense do dollars our and looking and business, Just a impact. we've a the as you're analyzed the to them analytical that in

comments the made there based say of where is we've we minimal analysis are we impact upon are so today. when the And

than So talk again, our to that we David the and make when about our service supply manufacture, customers' mentioned, our we are products our we about needs better both of our footprint the mitigate comment world, the can competition very that referencing that's analytical all impact. When when longer ability that's from take chains. ability minimal to our I and in source their With care of term, customers strong risk geographical and industry. we around

And and the are solving when the so customers. at is good needs longer volatile complex, Titan term, of things

of U.S. And into overseas for that term. Short large raw steel just not our even mentioned Obviously, you're from matter. or it so come goods referencing steel. that's you're imported made of They're term, missing the We bigger forms WIP of you tariffing look are My the we steel, the picture as long are in opinion finished where at that less I'm see much. ag if is marketplace. -- wheels directly of competing what that in some large not is wheels other

But So makes I of the by it all maybe versus want for looking that. the that kind time, it kids stuff not depends tariffs but look from point. segment again, vantage the consume as with perspective my my at at answering country I a stuff

tariffs stuff consuming with think dollar on in just just a I to we're more we -- and towards long what making than emphasis is that run around the need relying to we seeing possibly so everything consumption. drive And be putting here of driving more looking an strong can,

for long a stuff, it's think make the that positive our kids we And so good for I can our it's run and located. plants because are

footprint U.S. manufacturing great a in have the We

I I be but we And that they're see at it somewhere not committed that People run, harm So there don't short it's It's And is comment. I They're as this for in mentioned. tariffs both not good is or -- being got we overlook in us is an cause to long the either the administration administration right think, to But short depend, and to view term, be a impact look we're there's nimble. don't I cut to more at think way let's We it. now. And in we seeing the doing run. flexible, got as one right as look think growth. to tariffs either to growth. to and wrong. correct dry. going again, The that's David

with to they're to these in administration term, how not to got So have grow going tariffs destroy figure faith out something. over and you their the trust

get up every micro the so day. in And not let's caught single

going to what That's think got administration I growth. they faith stated. have -- in we the they're they're committed some to to that

and analyzed we've everybody So run, we in combination that long-winded something the a question, of will is, But thinking the just way customers answer go. a run, but else we long of think service like tariffs can say, factors. see I closely, about it's very it healthy short impact. number come again, your in a our In minimal to we're as and very a different we

Operator

[Operator Instructions] Our next Brian question from DiRubbio comes Baird. of

Brian DiRubbio

versus size questions me. starting us opportunity? help Can Maybe Just what us you, today? help Maybe for aftermarket Paul. a sense aftermarket is give with with OE the of a up you couple

Paul Reitz

-- with Yes. you look something done we at when have we've we've a run, with initiatives our the acquisition, long that I we through done aftermarket significantly internal of mean really over but the also presence, the lot increased years.

were And And so ago, probably XX% around XX we're aftermarket. years we XX%. today,

what steadier, see is from coming of than XX% business cycles And aftermarket, see we with do so consistent OEMs. some with that that a with you more the

so as aftermarket. we're about we And here today, XX% sit

Brian DiRubbio

north the of over that goal to XX% a get what's And cycle?

Paul Reitz

I a question. with Clearly, undercarriage. set at I've we're like it. growth, if area for continuing avenues and mentioned expand good to target don't look that. as pursue to it we know we've it an That's And a

a in remain innovations is of to helped the is business mining to unique opportunity likely our That the company. been The the doesn't business, and one grow our a aftermarket our wheel. good of distribution aftermarket OEM have in above. of in branding, But lot drive aftermarket, -- a done aftermarket. our all kind We've primarily will has have driven. tire tire have undercarriage that our a lot with We is that's space

good above us a target. And new to may make set I target just that see you get you our said I our have like XX%? to would I what for so company. take think and

Brian DiRubbio

liquidity looks David, right U.S. the the go. Switching in gears, little you tight now. a There

Just to around some any being U.S. move cash on repatriate thoughts the and able to

David Martin

to, because move all to some done we'll taxes. that part of our some are we've not movement But of the always bring U.S. certainly, in we the that of opportunities, Yes, is already already and necessarily expectation want liquidity in we at to And again, look done of through need leakage state and that progress -- continue always some as just back and to just XXXX. want we've first XXXX. tax things don't But that it protect as lose the it that and in we'll of I QX. do we there

Brian DiRubbio

it. Got

Okay.

So then to to ramp? ahead of that's going build not a be inventory a worry you if need

David Martin

No. We can accordingly. flex

Brian DiRubbio

I And helps. it. guess just Got That question. final

current that up? will charges versus period volumes your As were operating we against charged just pick think on about been profitability, the sort of production as has ramp been rates U.S. P&L facilities? there or the in getting go the I'm that inventory has inventory of at, what And and directly its be capitalized in impact I -- guess where away just recapitalized

David Martin

create volatility I capitalization, lag are the and like everything. low, in terms in would wouldn't produce their variances But things cap in the that obviously at that. significant QX products P&L of how terms of and that watch was anything the, of anything rates and call with in or that it, there yes, say the utilization like then sell lowest. particularly we we And cost the that

expect volatility. but it So tremendous -- at it's I as to don't analytically, see look I

Operator

currently no further We have questions.

like for would Reitz I So closing any to to hand Paul back remarks.

Paul Reitz

on everybody with pretty our thank roll obviously, to for soon. QX we're here earnings And results to want going Well, quickly I today. QX call Yes. in participation their

to then. look So Thank talking to you. forward you

Operator

joining. As like to we'd we conclude thank today's for everyone call,

your disconnect lines. You may now

Titan International (TWI) 27 Feb 252024 Q4 Earnings call transcript