- allowing SG&A to increase by $53 million, ($247 million for year)
- RECEIVABLES to increase by $39 million,
- Interest Expenses to increase by $14 million,
- and debt increasing by $267 million.
My work is recognized
This guy makes a serious case that this company is, umm, furry. (@gfnnstock)newsgrade.blogspot.com/2013/04/titan-…
— Roddy Boyd (@BoydRoddy) April 28, 2013
I've got to hand it to $GFFNStock (Tom Renna): He's been warning on $TITN for quite awhile http://t.co/Fso3e4laAg Also not a fan of $SSYSFollowing key words are what caught my eye, especially since these hats are worn by 4 or 5 execs:
— Herb Greenberg (@herbgreenberg) May 24, 2013
3 Brothers, A Son, A Brother-In-Law, COO, Chairman, Founder, Commission, Managing Director of Underwriter, Owner of Construction Company, Unsecured loans, LEASE Arrangements with Top 3 Execs outside Entities, Real Estate Sale between TITN and Top two Execs Outside Entity, Private Jet, Consulting fees, underwriting fees....(oh yeah, the time Chairman went on Mad Money and then sold shares )
A. 10 K Highlights of Weak Fundamentals
B. Roddy Boyd / Herb Greenberg Recognizes my Work
C.Certain Related Party Transactions
D.Insider Selling after Making Hyped Up Projections (missed by a mile)
E.Increase Of Authorized Shares
F.CNH AMERICA Floor Debt Plan
G.Property sold to Entity owned by Top 2 Execs.without disclosure
H.Property Ownership Company owned by Top 2 Execs outside entity.
I.Brother-in-law Construction Company building multi-million dollars worth of buildings.
J.OLD INVENTORY list (108 page document), not sure how if its obsolete yet.
K.History of Negative Operational Cash Flow
M.$150 million convertible note disclosure. (using best scenario vs. worse scenario in disclosure)
N.Immediate Family Members: commissions, raises, fees, consulting agreements
O.Cash Advance Business offering loans to Bad Credit/No Credit borrowers
P.Variable Interest on Debt
R.disclosure of former CFO, now Treasurer)
T. CEO & chairman both increased salaries 48% in cash
- Certain TransactionsDescribed below are transactions and series of similar transactions that have occurred during fiscal 2013 to which we were a party or are a party in which:
As of January 31, 2013, we leased real estate for 48 of our 120 stores from Dealer Sites, LLC, ("Dealer Sites") an entity in which a minority position was owned by an entity affiliated with David Meyer, our Chairman and Chief Executive Officer, an entity affiliated with Tony Christianson, one of our directors, and Peter Christianson, our President and Chief Operating Officer, and certain of their immediate family members (collectively the "Related Persons"). The collective equity ownership of the Related Persons in Dealer Sites was approximately 30% during the first 11 months of fiscal 2013. Effective December 31, 2012, the collective ownership of the Related Persons was reduced to approximately 9%, due to a purchase and sale of equity interests between certain of the Related Persons and other unaffiliated owners of Dealer Sites. The Company also entered into sale-leaseback agreements with Dealer Sites from which the Company received $1.3 million for the year ended January 31, 2013.We also lease one dealership site from C.I. Farm Power Inc., an entity owned by Mr. Peter Christianson.The table below states for fiscal 2013 through the end of the respective lease terms, the aggregate amount of all periodic minimum lease payments or installments made or due, including any required or optional payments due at the conclusion of the respective leases, are as follows:
- the amounts involved exceeded or will exceed $120,000; and
- a director, executive officer, beneficial owner of more than five percent of any class of our voting securities or any member of their immediate family had or will have a direct or indirect material interest.
or DueDealer Sites, LLC
Fiscal 2013 $ 6,899,000Fiscal 2014, through
103,047,000C.I. Farm Power, Inc.Fiscal 2013
144,000Fiscal 2014, through
72,000We believe the terms of the leases to be commercially reasonable, and are not any less favorable to us than could be obtained in an arm's length transaction with an unrelated party.During fiscal 2013, Ted Christianson served as our Vice President, Finance and Treasurer and received total cash compensation of approximately $333,000 and a restricted stock award of 1,012 shares of our common stock, with a grant-date fair value of $29,986. Ted Christianson is the brother of Peter Christianson, our President and Chief Operating Officer, and of Tony Christianson, a member of our Board of Directors.35
During fiscal 2013, Sam Christianson, the son of Peter Christianson, was an employee of the Company and received total cash compensation of approximately $190,000 pursuant to a standard commission-based plan of compensation that is subject to annual variation.Both of the above identified employees participated in employee benefits plans and programs available to our other full time employees.C.I. Construction, LLC, ("CI") performs construction management services for certain of the Company's new store construction projects, shop additions, and existing facilities remodel projects. CI is owned by Rob Thompson, who is the brother-in-law of Tony Christianson, a member of our Board of Directors, and Peter Christianson, a member of our Board of Directors and our President and Chief Operating Officer. CI is responsible for developing designs/specifications, drawings, bid packages, advising on the selection of suppliers and contractors, and overseeing the construction process. CI is also an authorized reseller of certain building materials that the Company generally incorporates into its new construction and certain remodeling projects.CI receives a fee equal to 4.5% of the construction costs, excluding expenditures for certain fixtures and fixed assets that the Company originates. CI is also reimbursed for the labor costs of CI's site supervisors and on-site staff, and utilities, equipment rental, travel, and other direct costs incurred by CI in performing the services. CI also receives payment as a reseller of certain building materials used in its construction projects.During fiscal 2013, CI received an aggregate amount of $6.7 million in direct or indirect payments from the Company for the above construction-related services and product resales, as well as reimbursement for other construction-related costs. We do not believe the terms of any of the transactions and agreements described above are any less favorable to us than could be obtained in an arm's length transaction with an unrelated party.During fiscal 2013, Cherry Tree Companies, LLC, an entity controlled by Tony Christianson, a member of our Board of Directors, received aggregate compensation of $173,000, consisting of a one-time payment of $113,000 pursuant to compensation paid to the underwriters in our April 2012 convertible note offering and a $5,000 per month payment for consulting services rendered to the Company. We do not believe the terms of our consulting or underwriter compensation arrangements with Cherry Tree Companies, LLC were any less favorable to us than could be obtained in an arm's length transaction with an unrelated party.
*******If you look below at the April 2012 DEF Proxy Disclosure and compare it to the 2013 proxy disclosure above, you'll notice that TITN entered into an additional $50million worth of lease contracts (bringing total to over $100million) with the entity Dealer Sites LLC which is an entity that is owned in part to the top 2 Execs at TITN. What really raises an even bigger Red Flag is that TITN only increased locations owned by Dealer Sites by 2, 46 to 48 locations, but added over $50 million in leases agreements!
A close look at C&I Farm Power lease looks fuzzy too. The dates (time frames) don't add up and the payment has been reduced from (changed) to $216,000 (below '12) down to $72,000 (above '13).
2012 DEF14 Proxy Statement
table below states for fiscal 2012 through the end of the respective
lease terms, the aggregate amount of all periodic payments or
installments made or due, including any required or
optional payments due at the conclusion of the respective leases, are
Made or DueDealer Sites, LLC
Fiscal 2012 $ 6,196,986 Fiscal 2013, through
$ 51,424,827C.I. Farm Power, Inc.Fiscal 2012
Fiscal 2013, through
- C & I Construction website features TITAN building on home page(top)http://www.ciconstruction.com/
- contractor C & I contractors for the dealer site property (feb.2013)
- State of the art (titn) facilities (property is own my Dealer Sites LLC (which is partially owned by top 2 executives of TITN) and a lot of inventory on the property is paid for through CNH America Loans. TITN pays interest on loans. I wonder if CNH is loading up TITN with tractors to help make CNH’s revenue numbers?
- I’d also be interested in the relationship of the Construction company and Dealer Sites LLC.
Jamestown Facility was due to be competed on March 30,2013. As of today it still hasn't been completed. Archives with attorney fees and costs involved can be found here.
In August 2012 Titan Machinery broke ground on a new facility in Jamestown. It’s expected to cost $5.5 million to $6 million. The facility will consist of two parts — a 55,000-square-foot parts, exposition and showroom in addition to a 22,000-square-foot storage area.
List of InventoryTITAN advertises in an 108 pagedocument. The new Tractors (2013 models) are state of the art (technology). I wonder why anyone would purchase used equipment that is almost obsolete with all the new products being introduced to market?
What percentage of inventory is carried on books interest free for four months?
10K discloses top 2 Execs both raised annual salaries from $330k to $500k.Make sure this Nominee gets elected,
- CNH CapitalCNH Capital offers floorplan financing to CNH dealers to finance the purchase of inventory from both CNH and other suppliers. CNH Capital provides this financing in part to enable dealers to carry representative inventories of equipment and encourage the purchase of goods by dealers in advance of seasonal retail demand. CNH Capital charges variable market rates of interest based on the prime rate on balances outstanding after any interest-free periods and retains a security interest in all of our assets, including inventories, which it inspects periodically. The interest-free periods, which CNH offers periodically in the form of additional incentives or special offers, typically average four months for new and used agriculture equipment and new construction equipment. CNH Capital also provides financing for used equipment accepted in trade, repossessed equipment and approved equipment from other suppliers, and receives a security interest in such equipment.
- Floorplan InterestThe cost of financing inventory is an important factor affecting our results of operations. Floorplan financing from CNH Capital and our Credit Agreement represent the primary sources of financing for equipment inventories. CNH regularly offers interest-free periods as well as additional incentives and special offers. As of January 31, 2013, approximately 39% of our floorplan notes payable was non-interest bearing.
Considering Cherry Tree did underwriting for the $150 million Convertible Note in 2012. http://www.cherrytree.com/news/releasearchive/titan_0412.htm
ability to service our debt will depend upon our ability to generate
the necessary cash. This will depend on our future acquisition activity,
operating performance, general economic
conditions, and financial, competitive, business and other factors,
some of which are beyond our immediate control. Based on our current
operational performance, we believe our cash flow from
operations, available cash and available borrowings under the existing
credit facilities will adequately provide our liquidity needs for, at a
minimum, the next 12 months.
We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available under the credit facilities with the Wells Fargo Bank Syndicate and CNH Capital in amounts sufficient to allow us to service our indebtedness and to meet our other commitments. If we are unable to generate sufficient cash flow from operations or to obtain sufficient future borrowings, we may be required to seek one or more alternatives such as refinancing or restructuring our indebtedness, selling material assets or operations or seeking to raise additional debt or equity capital. We cannot assure you that we will be able to succeed with one of these alternatives on commercially reasonable terms, if at all. In addition, if we pursue strategic acquisitions, we may require additional equity or debt financing to consummate the transactions, and we cannot assure you that we will succeed in obtaining this financing on favorable terms or at all. If we incur additional indebtedness to finance any of these transactions, this may place increased demands on our cash flow from operations to service the resulting increased debt. Our existing debt agreements contain restrictive covenants that may restrict our ability to adopt any of these alternatives. Any non-compliance by us under the terms of our debt agreements could result in an event of default which, if not cured, could result in the acceleration of our debt.
Agreement with Officer: Your employment will be based at the Company’s headquarters in Fargo, North Dakota. Of course, regular travel will be required in the course of performing your duties and responsibilities as President and Chief Operating Officer. Pursuant to the Company’s applicable policies, this travel may include use of aircraft in which the Company has an ownership interest.
"The effective interest rate of the liability
(It also helped that the Managing Partner of the underwriter is not only a founder and a director of TITN, but his brother is the COO of TITN.
- TITAN advertises the convertible price in their best case scenario of 3,474,000 shares @ $43.17 , but in my opinion I believe they should also advertise the worse case convertible of 4,184,230 shares @ $35.84 per share.
This disclosure is best case scenario, but shouldn't it be worse cash scenario?
- None of the approximately 3,474,000 shares underlying our Convertible Notes were included in the computation of diluted earnings per share because the Company's average stock price was less than the conversion price of $43.17.
Both of the above identified employees participated in employee benefits plans and programs available to our other full time employees.
CI receives a fee equal to 4.5% of the construction costs, excluding expenditures for certain fixtures and fixed assets that the Company originates. CI is also reimbursed for the labor costs of CI's site supervisors and on-site staff, and utilities, equipment rental, travel, and other direct costs incurred by CI in performing the services. CI also receives payment as a reseller of certain building materials used in its construction projects.
During fiscal 2013, CI received an aggregate amount of $6.7 million in direct or indirect payments from the Company for the above construction-related services and product resales, as well as reimbursement for other construction-related costs. We do not believe the terms of any of the transactions and agreements described above are any less favorable to us than could be obtained in an arm's length transaction with an unrelated party.
"Titan Machinery Inc West Fargo N D Metal Construction News", $200-$1000 Payday advances throughout Quick Moment.
Zero Fax required & Bad Credit Fine.
Easy Cash Right now.
Titan Machinery Inc West Fargo N D Metal Construction News.
Transportation Solutions, LLC
NW Property Solutions LLC
Titan European Holdings S.a.r.l.
Titan Machinery Austria GmbH*
Titan Machinery Romania S.R.L.*
Titan Machinery Bulgaria EAD*
- TITN paid nearly $23 million in INTEREST EXPENSE for the year 10K 2013. (that's over $1 a share in servicing debt.)
vs. FY2012 they spent less than $10 million in interest expense. that's over 125%increase.
the quarter that ended yesterday Q1 2014 , will have higher interest expense than Q1 2013 because the interest expense on the indenture will show up and last yr Q1 this expense wasn't there.
Let's say interest expense for Q1 2014 is the same as Q4 2013, that will be nearly $8million (conservatively). that will be almost a $0.40 cent share hit against EPS.
Q1 2013 interest expense was $3.6 million (about $0.17 a share hit on EPS)
- MAY 1,2013 TITAN will have first interest payment due on $150million indenture due. That will be an approximate **$5.6 million in interest for the FY2013 2nd Quarter numbers for the period ending July 31,2013 that are due out the first week of September.
This company is a classic roll up model of weak companies, all looking for an exit strategy. Roll ups are okay if there is an economy of scale (critical mass). But this company increases their Selling & General Administrative Expenses at the almost the same proportion that they increase sales.
SGA increased to $247 million for the year FY2013 up from $194 million in FY2012. that's a 27% increase. Meanwhile, Gross Profit only increased 23% year over year and sales increased over the same period only 32%. (a mere 5 % higher).
- On June 9,2011 Chairman David Meyer appeared on Jim Cramer's MAD MONEY and touted TITAN MACHINERY's future. Thirty days later DAVID MEYER SOLD 300,000 shares @ $27.80 and received proceeds of $8,340.00.00 and CEO Peter Christianson sold 200,000 shares $27.80 for proceeds of $5.56 million. Weeks later Dealer Sites LLC, an entity owned by Meyer and the Christianson brothers would purchase $2.4 million property from Titan Machinery. (and then Titan would begin to lease that property from Dealer Sites LLC.) There is no SEC disclosure regarding this transaction that took place 2 days before the 2nd quarter 2011 closed, I was able to find it in property records (see link further down).
- IN DECEMBER 2012, President & CEO, Peter Christianson stated on the conference call (from the Seeking Alpha Transcript):
" We expect our annual net income attributable to common stockholders to be in the range of $44.1 million to $48.3 million resulting in an earnings per diluted share range of $2.10 to $2.30.." Three weeks later Peter Christianson sold 50,000 shares of TITN @ $24.52 and received proceeds of $1.2 million.
- The underwriter Cherry Tree (owned by director Tony Christianson, the brother of CEO) raised $150 million indenture offering in April of 2012) followed on June 2012 TITAN gave the following guidance in a press release:
"Net income attributable to common stockholders is expected to be in the range of $53.8 million to $58.0 million, resulting in earnings per diluted share range of $2.55 to $2.75". In July 2012 director Tony Christianson and director Irwin James both sold shares of TITAN (TITN) in the market place above $30 per share.
Ted Christianson, there is too much to type about the third brother Ted Christianson. TITAN disclosed he was CFO and then approximately April 11,2011 he was no longer CFO. (NO 8-K filed)
In April 2012 he was disclosed as the treasurer of the company in the Indenture disclosure.
Titan from time to time discloses his holdings, salaries, fees and relationship to the company since April 2011.
Eide Bailly LLP . following link I found on internet about Eide Bailly, it does not name an issuer.
Another link to a February 2013 Securities & Exchange Commission charge against a partner of EB with issuer Life Partners (ticker:LPHI.)
A link to a July 2012 Suit of Racketeer Influenced and Corrupt Organizations.
E&B is also the auditor for High Plains Gas, Inc. (ticker: HPGS)
How many Auditors allow Sales to be recognized in this manner:
- However, in certain circumstances, and upon the customer's written request, equipment revenue is recognized before delivery occurs.
- As such, we believe that our distribution rights intangible assets will contribute to our cash flows for an indefinite period; therefore, the carrying amount of distribution rights is not amortized
Selling & General Administrative Expenses for FY2013 was $247,000,000.00
Titan leases property from the top executive's (outside entity) properties. CNH Machinery loads up the property with inventory and charges Titan interest on the inventory, called Floor Plan debt (approximately $1 billion). Titan salesman are paid commissions for selling inventory. Law firm and CPA firm needs to get paid to maintain listing as a public company. What is really left for the shareholder? Right now there is about $120 million in cash and approximately $1 billion in debt.
- A January 2008 IPO raising approx $60 million.
- A Spring 2011 Underwriting approx $60 million.
- A Spring 2012 $150 million Indenture.
- Company recently approved increasing authorized shares outstanding from 30 million to 50 million.
Management (& Family) Outside Entities make all the money:
- on leasing property to TITN.
- sales commissions
- underwriting fees
- selling 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).
- Adam Smith Fund LLC and Adam Smith Growth Partners, L.P., entities controlled by Tony Christianson (a director of TITAN and a brother to top exec) has major position in stock.
(highlighted red boldface italics were done by me for purposes of this post to add emphasis to risks) .....................................................................................................................
Click to Equities Research PREVIOUS COVERAGE: TITAN WARNING AT $30 in April 2013
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