Thursday, September 5, 2013

Titan Machinery EPS Falls 73%

Titan Machinery Lowered Guidance for FY2014 from  $1.70-$2.00 down to $1.20-$1.50
Q2 Operational Cash flow NEGATIVE $42 million


EPS declined 73% 6 months
FY2013 6 months : $0.60
FY2014 6 months : $0.16


EPS declined 28% Q2 vs Q2
FY2013 Q2 : $0.25
FY2014 Q2 : $0.18


CASH declined $22 million
January 31,2013 : $124 million (Accounts Payable $28 million)
July 31,2013 :       $102 million (Accounts Payable $39 million)

Total Current Liabilities
January 31,2013 : $804 million
July 31,2013 :       $969 million

Total Long Term Liabilities 
January 31,2013: $239 million
July 31,2013 :      $264 million

Net Income vs Operational Cash Flow
Trailing 10 quarters ending July 31,2013 Net Income:                 $89 million
Trailing 10 quarters ending July 31,2013 OP. Cash Flow:        -($345 million)




 




This Morning pre-market Titan Machinery (NASDAQ: TITN) reported 2nd Quarter numbers and shares traded at new 52 week low under $15.88. The high for the day was $17.88 and shares closed @ $17.65 on volume of 1.7 million.

With Shares being down from $30 in February, it appeared the short sellers where buying today to book profits. I don't see any reason for sophisticated institutional buyers to be attracted to these financials.
The next problem for TITAN will be the longs trying to exit on these weak fundamentals.

Click to 10-Q 

Click to Press Release 

Click toWells Fargo Commentary from theflyonthewall.com
"Wells says Titan commnets negative for Deere, Caterpillar
Agricultural machine makers Deere (DE) and Caterpillar (CAT) are falling after Titan Machinery (TITN) stated that it expects its revenue from farm machinery to drop in the second half of the year. WHAT'S NEW: Titan said that its agricultural business is expected to be challenging in the second half of the year, given its outlook for lower commodity prices and reduced crop production. Used farm equipment prices have come under pressure, Titan added. The company, which also manufactures construction equipment, lowered its full-year profit and revenue guidance. ANALYST REACTION: In a note to investors, Wells Fargo analyst Andrew Casey wrote that the news from Titan indicates that North American farm equipment demand is peaking. Titan's statements are negative for Deere and Caterpillar, as well as AGCO (AGCO), another farm equipment maker, Casey stated. He kept Underperform ratings on Deere and AGCO, and a Market Perform rating on Caterpillar. TODAY'S PRICE ACTION: In mid-afternoon trading, Deere fell 1.5% to $83, Caterpillar inched down 0.2% to $83.40, AGCO climbed 1.4% to $57.60 and Titan rose 0.4% to $17.20."published at flyonthewall.com

Somehow the Chairman made the following statement in press release:

  • " We remain confident in the long-term profitable growth potential for Titan Machinery due to our proven operating model and healthy balance sheet.”

CNH Global Manufacturer's (NYSE: CNH)  
Risk Rating Increases from Low to Low/Medium
Approximately $755 million securities affected
Moody's assigns definitive ratings to CNH Equipment Trust 2013-C securitization



I would guess some of these analyst will have to bring their price targets lower with the new guidance. 
 (In August 2013 William Blair lowered price target on $TITN to $15,)


Some notes from today’s 10-Q which was filed this afternoon. I always wondered how analyst can sit on those conference calls without 10Q. ;)

  • If interest rates go up 1% point over next 12-mo period it would decrease pre-tax earnings + CF approx $4.9 mil

  • OPERATING EXPENSES Q2 $70 million up from $54 mil in year ago comp Q2 . 24% increase

  • Long-term debt, less current maturities $82.6 million ...up from Q1 $58 million.....Total long-term liabilities increased $23million from Q1

  • Q2 operational. Cash flow NEGATIVE $42million. 

  • Accounts Payable up $6 million from Q1 to $39 million. (that sure helped net income, cash flow and cash position (cough cough) lol

  • Floor Plan Debt up $79 million from Q1 to $851 million

  • Plus they added 136,000 more shares outstanding from Q1 to Q2 (although they didn't use the new number of S/O to calculate EPS for quarter.)

  • Then the obvious of lowering guidance from $1.70-$2.00 down to $1.2-$1.50

EPS declined 73% 
FY2014 6 months : $0.16
FY2013 6 months : $0.60
(did I mention their accounts payable were $39 million (almost $2.00 a share)

Meanwhile stock traded like they Beat by a quarter and guided up



 Equities Research Archives on Titan Machinery 


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