Founder of Equities Research. Stockdiagnostics Specialist

Founder of Equities Research. Stockdiagnostics Specialist
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Tuesday, June 9, 2015

Titan Machinery 10Q Reveals ERRORS

Inflated Assets and Understated Losses 
Titan Machinery filed FY2016 1st quarter 10Q with the Securities and Exchange Commission for the period ending April 30,2015. Included in the footnotes was the severance agreement with the CoFounder of the company who suddenly resigned from the board and stepped down from his role as president effective last week on June 4,2015. (The company has still not named a new president and I am confused why the president would elect to resign before allowing the company to find a replacement?)

Sudden Resignation Has A Hostile Feel 
From severance agreement:
  • "The Company may terminate this Agreement without Cause"

In June 2014, Titan announced FY2015 1st quarter financials and shares traded up above $17.00 per share. (its 52 week high).
Titan announced that Construction Revenue in the 1st Quarter FY 2015 were 23% higher vs. Q1 FY2014 and the chairman David Meyer also touted on the conference call how they created a footprint in the Ukraine with a new location and made the statement: "Ukraine has been excellent that we’re seeing good real order sales,"

In September 2014 the Company announced that 
  • In their FY2015 2nd quarter 10Q filed on Tuesday afternoon with the Securities and Exchange Commission the company stated that they realized that they had inflated their assets and understated their losses in their 1st quarter 10Q filed back in June 2014. Although they previously reported an Earnings Per LOSS of ($0.20) for Q1, it came to their attention that had actually loss ($0.31) for the quarter. The company determined that the error on the loss of over 50% was immaterial and that they won't deem it necessary to Refile their FY2015 Q1 10Q.
Because the company never refiled a FY2015 Q1 the public was never able to see the financials for FY2015 Q1 until today when the company filed their FY2016 1st quarter 10Q.
  • Reality was Construction Revenue touted as being 23% higher in June 2014 press release were only 10% higher than prior year's Q1.
  • Agriculture revenue were over 4% lower and not the -2% they stated.
  • International Revenue were actually only 5% higher and not 9%.

**more 2014 hype TITAN MISSED FY2015 EPS GUIDANCE BY $62 Million (missed guidance for 7 months out by $2.00 a share)

**** Will Securities and Exchange Commission Comment On Another Titan Proxy?

 *TITAN BONDS UP 21% After 6th Amendment


Below are Images from the FY2015 Q1 10Q that were filed with SEC last June 2014.
In Red I mark some errors and discrepancies against today's numbers for that same 1st quarter of a year ago.

Calling ALL CPAs and Auditors
this image here is the biggest problem I see. BENEFIT FROM INCOME TAXES
Here in the Q1 2015 10Q it shows a Positive $1,733,000
IN Red you can see the Q1 2015 Number that is used in today's FY2016 Q1 10Q showing that number as NEGATIVE ($1,733,000).
I don't understand how last year they added that number when it was entered as positive, but this year they add that same number but they enter it as a negative. #CONFUSED










TITAN Machinery CoFounder Jumps Out As President With Golden Parachute

Titan Machinery co founder Peter Christenson suddenly stepped down as President and from the board of directors effective June 4,2015. No explanation as to why he is stepping down has yet to be disclosed. As of this morning the company still has not named a new president.

Today the company disclosed the service agreement that Titan has entered into with the former president.
According to the footnote in the 10Q, the President "ELECTED TO RESIGN" and was not removed by the board.
  • The Company will compensate Service Provider (Peter Christianson)  for his consulting services at $500,000 per year, payable on a monthly basis.
  •  While Service Provider is not obligated to work a certain schedule or number of hours per week, and the Parties’ focus will be on satisfactory results, the Parties estimate that the project work for the Company will require approximately 120 hours per month.
  •  . Service Provider will provide consulting services as an independent contractor to the Company beginning on February 1, 2016, for a term of three (3) years, ending on January 31, 2019. The parties may extend the period of their consulting relationship by mutual, written agreement
  •  The Company shall not direct or control the means or manner in which Service Provider performs the services. Service Provider is free to work his own schedule and do the job at his own pace and via his own methods, subject only to his obligation to satisfy standards the Company for the project in a timely manner.
  •  The Company also will reimburse Service Provider for reasonable attorney fees incurred in connection with negotiating this Agreement. 
  •  Unauthorized Disclosure of Information. If it appears that Service Provider has disclosed (or is about to disclose) Information in violation with this Agreement, the Company shall be entitled to an injunction to restrain Service Provider from disclosing, in whole or in part, such Information, or from providing any services to any party to whom such Information has been disclosed or may be disclosed. The Company shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages.
  •  Availability of Injunctive Relief. A breach of this Agreement may cause irreparable harm for which monetary damages may be inadequate. In addition to the right to petition the court for provisional relief, Service Provider agrees that the Company may also petition the court for injunctive relief without having to post a bond or other security where the Company alleges or claims a violation of Sections 11 (Confidentiality) and 12 (Intellectual Property) of this Agreement, Section 10 of Exhibit B to this Agreement (Availability for Other Work), or any other agreement regarding trade secrets, confidential information or non-solicitation.
  •  

Friday, June 5, 2015

Berkshire Hathaway Technical Sell Signal

Berkshire Hathaway has traded in line with the overall market through the latest bull market. Technically the Stock has been flagged with this bearish signal and if this flag plays out to the downside the overall market may be headed lower as well.


Wednesday, April 29, 2015"Gold is Only Answer" Fred Hickey Tweets "Stock Market is Toast",

Making Money When the Market Heads Lower

Wednesday, June 3, 2015

TITAN Asks Shareholders To Appoint Resigning CoFounder To Vote Shares

Titan Machinery filed a DEF 14 A proxy with the Securities and Exchange Commission on May 7,2015 requesting shareholders to appoint Peter Christenson to vote their shares in the form of a proxy card at the June 4,2015 shareholder meeting.

Proxy were then sent to shareholders.

On May 11,2015 an 8K was filed with SEC disclosing that Co Founder, Peter Christianson, would be stepping down as president of the company at the shareholder meeting and he will no longer be a member of the board of directors.



President Christianson told a reporter earlier this month that he would not be able to comment on "why" he is stepping down nor  "who" would be replacing him because the company is in a "quiet period" until 1st quarter financials get released on May 28,2015 at which time the company would comment.

May 28, TITAN REPORTED a Q1 loss of ($0.29) eps but never made mention of who new president will be or any explanation as to why Christianson was stepping down.

ON May 7th the company disclosed that Christianson would be president and after proxy was filed, he announced his resignation.

There is no disclosure stating that the DEF 14 A proxy has changed and not sure how shareholders woill be informed of the changes.

Titan Machinery still has not filed a 10Q with the SEC for Q1. Although numbers have been released it is important for 10Q disclosure to be released because the company has included 4 footnotes in each of its last 4 consecutive filings with Amendments to a $150 million convertible indenture with Wells Fargo.

TITAN did file 9 form 4s with the SEC this afternoon granting the 9 directors with 88,000 shares of stock as a reward for the company losing $31 million for its most recent FY2015 year ending January 31,2015.



Thursday, May 21, 2015


Will Securities and Exchange Commission Comment On Another Titan Proxy?

Friday, May 29, 2015


CoFounder Resigns as President Without Any Replacement In Sight

Wednesday, May 27, 2015


TITAN MISSED FY2015 EPS GUIDANCE BY $62 Million

Tuesday, May 12, 2015


Titan Machinery President to Step Down and Resign as Director

Friday, May 29, 2015

CoFounder Resigns as President Without Any Replacement In Sight

5 Analysts Participate in Questions and Answer Session Of Conference Call
Yesterday TITAN MACHINERY issued a press release with FY2016 Q1 financials followed by the company's conference call.

Analyst at Feltl Doesn't Participate in Conference Call Q & A but Upgrades Stock Immediately
Local Minnesota Analyst Feltl and Company (Brent R. Rystrom, Director of Research) upgraded Titan Machinery shares with a $20.50 price target without knowing who the new president of the Company will be. The company still has not even filed a 10Q yet.
Felti Upgraded shares and gives a price target that is 46% higher from current levels. (According to Felti company's current market cap under $300 million will grow to over $400 million).
Felti says company will go from a ($1.51) loss in FY2015 to a profit of $0.36 for FY2016, but they don't know who the new president will be that will create this dramatic turnaround?????
Feltl and Company makes a market in the securities of Titan Machinery

A cofounder of Titan Machinery that sits on the Board of Directors who is also the brother of current president is the chairman of the underwriting firm for Titan that is located in Minnesota called Cherry Tree Investments. This same director was once disclosed as owner of the outside entity of Dealer Sites LLC who recently increased  lease agreements with TITAN from $50 million to over $100 million.

TITAN MACHINERY (NASDAQ: TITN) is one bizarre stock!

TITAN MACHINERY COFOUNDER, Peter Christenson, announced on May 11,2015 that as of June 4,2015  he will no longer be president of the company.

On May 7,2015 Titan Machinery filed a (proxy) DEF 14A with the Securities and Exchange Commission stating that Peter Christianson would be president of the company.

WHAT HAPPEN over a 4 Day period that the CO FOUNDER of the Company changed his mind?

Why would the President of the company resign as president without there being a replacement for his $500,000 a year position?

When interviewed by the press the President said he couldn't comment because the company was in a "Quiet Period" because the company would be reporting FY2016 Q1 financials and after the numbers were released on May 28,2015 (yesterday) the management would then be able to comment.

The company held their conference call yesterday and never commented on why the President decided to step down and the Management never mentioned Who would be replacing him. None of the Analysts on the call cared to ask and no reason was ever disclosed.

It is almost 3 weeks now and Titan Management still has not named a replacement and next Thursday they will have a vacant president seat.

The company reported annual  FY2015 financials for the period ending January 31,2015 last month disclosing a loss of ($1.51) per share for the year. 7 months earlier the company had given guidance that they would earn $1.00 per share in that period.

Yesterday FY2016 Q1 financials were disclosed in an 8k and the company reported a loss for the quarter of $(0.29) per share. (As of 11am this morning no 10Q has yet to be filed with SEC)

3 Mutual funds control 42% of shares outstanding and there has been barely any sellers in the stock recently. The month of May 2015 is the smallest average daily volume in the stock (at 100,000 average shares per day for the month) since June 2010.

The company has be closing stores and revenues have declined dramatically.

Why is this company trading at a $300 million market capitalization and why does Felti believe it is worth over $400 million?

Follow the bouncing ball of related party transactions here.

Will Securities and Exchange Commission Comment On Another Titan Proxy?




Wednesday, May 27, 2015

What is TITAN Machinery really?

What is TITAN really?
Nothing more than the Used Equipment and Parts. Why is Used Equipment and Parts company have $300 million mkt cap?
  • They don't own property.
  • They are on hook for taxes, insurance and maintenance of land they don't own.
  • Auditing and Attorney Fees to stay public.
  • Management makes a fortune,
  • Salesman Make a Commission.
  • 2500 employees get paid.
  • New Inventory is all borrowed and they pay interest on it.
  • They owe WFC $150 big ones.
  • They owe money (debt) against their inventory.

A January 2008 IPO raising approx $60 million.

A Spring 2011 Underwriting approx $60 million.

A Spring 2012 $150 million Indenture.

 
Management (& Family) Outside Entities make all the money:
  • on leasing property to TITN.
  • sales commissions
  • underwriting fees
  • mgmt sold stock annually
  • having expenses, maintenance and fees on their outside entities properties paid by TITAN.
  • Brother-in-law generating millions of dollars worth of construction fees (questionable if its even needed)