Titan International Reports Mixed Q3 2024 Results, Net Loss Amid Increased Sales and Expenses

Titan International, Inc. reported significant financial developments in its latest 10-Q filing for the third quarter of 2024. The company achieved net sales of $448.0 million for the three months ended September 30, 2024, marking an 11.5% increase from $401.8 million in the same period of 2023. For the nine months ended September 30, 2024, net sales reached $1,462.4 million, a 2.1% rise compared to $1,431.6 million in the prior year. The growth in sales was primarily driven by higher volumes in the consumer segment and contributions from the recent acquisition of Carlstar, although this was partially offset by decreased demand in the agricultural and earthmoving/construction segments.

Despite the increase in sales, Titan's profitability faced challenges. Gross profit for Q3 2024 was $58.8 million, down 11.0% from $66.1 million in Q3 2023. For the nine-month period, gross profit decreased by 12.5% to $216.6 million from $247.5 million. The decline in gross profit was attributed to lower sales volumes, adverse price/mix effects, and increased material costs, particularly related to the Carlstar acquisition.

Selling, general, and administrative (SG&A) expenses surged by 47.5% to $49.5 million in Q3 2024, compared to $33.6 million in Q3 2023, and increased by 36.6% for the nine months to $140.5 million from $102.9 million. This rise in expenses contributed to a significant drop in income from operations, which fell 89.6% to $2.8 million in Q3 2024 from $27.0 million in the same quarter of 2023. For the nine months, income from operations decreased by 60.8% to $50.2 million from $128.0 million.

Titan reported a net loss of $18.2 million for Q3 2024, a stark contrast to the net income of $19.7 million in Q3 2023. For the nine months, the company recorded a net loss of $4.8 million, compared to a net income of $85.0 million in the same period of the previous year. The basic loss per share for Q3 2024 was $(0.25), compared to earnings of $0.31 per share in Q3 2023.

Strategically, Titan completed the acquisition of Carlstar on February 29, 2024, which has since contributed significantly to its revenue. The acquisition-related costs for the nine months ended September 30, 2024, totaled $6.2 million. The integration of Carlstar is ongoing, and its revenues accounted for approximately 28.8% of Titan's total net sales for Q3 2024.

As of September 30, 2024, Titan's total assets increased to $1.69 billion from $1.29 billion at the end of 2023, driven by the acquisition and growth in current assets. The company also reported a cash balance of $227.3 million, up from $220.3 million at the end of 2023.