Wednesday, September 4, 2013

Don't Trust Titan Machinery's Guidance

TITAN MACHINERY Reports Q2 Financials Tomorrow Morning Pre-Market

In June 2012:
After giving a $2.55-$2.75 range guidance company reported $2.00 EPS for year ending January 31,2013.
Instead of earning $53.8million to $58  million for year the company only reported $42million.
But Management's Mission was accomplished by getting stock up to $30 so they could sell shares @ $30.
  • The underwriter Cherry Tree (owned by director Tony Christianson, the brother of CEO, was compensated for the $150 million indenture offering in April of 2012. In 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. 

This guy makes a serious case that this company is, umm, furry. (@gfnnstock)…
— Roddy Boyd (@BoydRoddy) April 28, 2013

Earlier this Year on April 10,2013 the company reported 10K for year ending January 31,2013.
On April 10th the day of the conference call Management Said Guidance for 1st Quarter ending April 30, 2013 would be $0.18 per share :

Then 1 month later made the following press release:
  " Titan said it expects revenue of $440 million for the quarter, about $50 million less than it had anticipated. As a result, the company is anticipating a pre-tax loss between $700,000 and $1.2 million. That is $7 million less than Titan had previously expected. On a per share basis, the company expects a loss in the range of 1 to 3 cents per share.
Analysts polled by FactSet were anticipating Titan would report net income of 18 cents per share on revenue of $478.4 million for the quarter.
Titan lowered its full-year forecast Thursday as well, citing lower operating margins in its construction segment. The company now anticipates earning $1.70 to $2 per share, down from its prior forecast of $2 to $2.30 per share. It reiterated its revenue forecast of $2.35 billion to $2.55 billion. "              
TITN SGA for 6months last year was $111 million. Tomorrow they will report 6mos, they already reported $69 million SGA for Q1 up from $55 million Q1 year ago.

 In 2nd quarter that they report tomorrow there will be their first annual interest expense that they made on May 1st this year on an $150 million Indenture they received a year ago. Q2 last year they didn't have that interest expense. That number will take a chunk out of net income tomorrow.

Also Top 2 execs are both receiving 48% cash salary increases this year vs.last year. that's an additional $75,000 per quarter added expense.

On April 10,2013 in their 10K company disclosed:
  •  ******* April 2012 DEF Proxy Disclosure and compare it to the 2013 proxy disclosure,  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! there was no disclosure of the additional lease arrangements in the 10K filed on April 10,2013"

Don't fall into CASHLESS EARNINGS TRAP. Don't be fooled by #EPS Learn about #cashflow read #bobolstein

Wed theflyonthewall reported RWBaird $TITN Q2 results at risk.Used machinery prices under pressure.NEG implications on margins. target lowered
$TITN Downgraded by Zacks to “Underperform” (TITN) in report on Friday, AnalystRatingsNetwork reports. $16.50 price target on the stock 
$DE downgraded this morning to a sell at UBS, last week William Blair lowered price target on $TITN to $15, and Chanos bearish on $CAT

 Read Archives:

click to <Titan Machinery Warning (NASDAQ: TITN) 

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<notes from TITN 10K and Proxy Disclosure including FootNotes
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