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)

TITAN MISSED FY2015 EPS GUIDANCE BY $62 Million

 Gave FY2015 EPS GUIDANCE OF $1.00  (In June 2014)
vs.
Actual FY2015  LOSS ($1.51)  (less than 7 Months Later)

In June 2014, Titan Machinery reported FY2015 1st quarter financials and gave forward annual EPS guidance for the year ending January 31,2015 on the high end of $1.00 per share.
  • The Company expects adjusted net income attributable to common stockholders to be in the range of $14.8 million to $21.1 million, and adjusted earnings per diluted share to be in the range of $0.70 to $1.00 based on estimated weighted average diluted common shares outstanding of 21.1 million. 
 In April 2015, Titan Machinery reported FY2015 year end EPS LOSS of $31 million ($1.51 per share)  for the period ending January 31,2015.


Pattern of Poor Guidance/Insider Selling into Hyped Guidance
  Titan Machinery has a history of making aggressive guidance and under delivering

April 11,2014 Titan Machinery's guidance yesterday was laughable. Yesterday Titan Machinery shares went flying higher after the company announced they missed revenue guidance for the Q4 FY2014 quarter by 10%. It was just 8 weeks ago in December 2013 when the company lowered their 4th quarter guidance with only 8 weeks before the quarter ended and they still missed by a wide margin. 

* Excluding non-cash items, totaling $7.8 million (or $0.37 per share), adjusted net income attributable to common stockholders for fiscal 2014 was $0.41 per diluted share.
 

April 2013 the company made the following guidance:
  • Income forecast of $2 to $2.30 per share. It reiterated its revenue forecast of $2.35 billion to $2.55 billion.
The Next month, May 2013 guidance was changed:
  •  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. "  
The Next Month, June 2013, guidance:
  •   For the full year ending January 31, 2014, the Company anticipates revenue in the range of $2.35 billion to $2.55 billion, net income attributable to common stockholders in the range of $36.4 million to $42.8 million, and earnings per diluted share in the range of $1.70 to $2.00
September 2013 they made the following Guidance:

  • For the full year ending January 31, 2014, the Company now expects revenue to be in the range of $2.25 billion to $2.45 billion compared to the previous range of $2.35 billion to $2.55 billion. The Company expects net income attributable to common stockholders to be in the range of $25.4 million to $31.8 million, and earnings per diluted share to be in the range of $1.20 to $1.50 based on estimated weighted average diluted common shares outstanding of 21.2 million, primarily reflecting the lower expected equipment margins. This compares to previous net income attributable to common stockholders guidance in the range of $36.4 million to $42.8 million, and earnings per diluted share in the range of $1.70 to $2.00 based on estimated weighted average diluted common shares outstanding of 21.4 million. 

December 2013 the following guidance

  • The Company is adjusting its annual guidance based on increased visibility of market conditions. For the full year ending January 31, 2014, the Company now expects revenue to be in the range of $2.15 billion to $2.35 billion compared to the previous range of $2.25 billion to $2.45 billion. The Company expects net income attributable to common stockholders to be in the range of $11.6 million to $15.8 million, and earnings per diluted share to be in the range of $0.55 to $0.75 based on estimated weighted average diluted common shares outstanding of 21.1 million, primarily reflecting the lower expected equipment sales and margins. This compares to previous net income attributable to common stockholders guidance in the range of $25.4 million to $31.8 million, and earnings per diluted share in the range of $1.20 to $1.50 based on estimated weighted average diluted common shares outstanding of 21.2 million.
The Actual Results for FY2014 that the above guidance refered to :

  • Fiscal 2014 Full Year Results
    For the full year ended January 31, 2014, revenue increased 1.3% to $2.23 billion from $2.20 billion last year. Gross profit margin for fiscal 2014 was 15.6%, compared to 15.4% last year. Pre-tax income for the fiscal 2014 was $18.4 million. Excluding the aforementioned non-cash impairment charge of $10.0 million, adjusted pre-tax income was $28.4 million, for a pre-tax margin of 1.3%. This compares to pre-tax income of $70.7 million, or a pre-tax margin of 3.2%, last year. GAAP net income attributable to common stockholders for fiscal 2014 was $8.7 million, or $0.41 per diluted share. Adjusted net income attributable to common stockholders for fiscal 2014 was $16.5 million, or $0.78 per diluted share. This compares to $42.0 million, or $2.00 per diluted share, last year.


 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. 

 7/13/2011

  INSIDER SELLING:
On June 9,2011 Chairman David Meyer appeared on Jim Cramer's MAD MONEY  and touted TITAN MACHINERY's future. 30 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.

Thursday, May 21, 2015

Will Securities and Exchange Commission Comment On Another Titan Proxy?

In 2013 the Securities and Exchange Commission Division of Corporate Finance sent Titan Machinery Comment letters regarding the company's DEF 14 A proxy statement and also sent comment letters regarding 2 other 2013 separate company filings. (each comment letter with Titan's responses can be found below).
  • DEF 14 A Proxy
  • Resignation of Auditor
  • FY2013 10K
 One Month After Shareholders Vote on 8 Board Seats, Management decides to Add A 9th With No Vote
In June 2014 Titan Machinery shareholder meeting listed 8 directors.
On July 15,2014 Management added a 9th director seat and appointed a new director without a shareholder vote.
In May 2015 the New DEF 14 A Proxy removed the 9th board seat and returned to 8 directors.
I wonder if the 9th director was added to merely vote for the removal of PC as president/director?

Vote Required     Under applicable Delaware law, the election of each nominee requires the affirmative vote by a plurality of the voting power of the shares present and entitled to vote on the election of directors at the Annual Meeting at which a quorum is present.


Thursday May 7,2015, Titan Machinery (NASDAQ: TITN) filed a DEF 14 A Proxy .
4 Days later.......
On Monday May 11th Titan filed an 8K after the close, disclosing that the President of the Company, who is also listed as a founder, would no longer be president and will also step down from being a member of the board of directors. There has been no comment at this time from the management of Titan nor any information in the press regarding this dramatic and sudden change.

What's the BIG DEAL? 
The big deal here is that on March 9,2015 Titan included in an 8K filing that outside director James Williams was retiring and would not stand for reelection. But Titan didn't disclose that the president wouldn't stand for reelection until four days after the DEF 14 A was filed with the SEC.

March 9,2015 8K

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On March 5, 2015, James Williams informed the Board of Directors (the “Board”) of the Company that he will retire at the end of his current term and therefore will not stand for reelection to the Board at the Company’s 2015 Annual Meeting of Stockholders, scheduled to be held June 4, 2015. Mr. Williams' decision not to stand for reelection is the result of his retirement and is not related to any disagreement with the Company’s operations, policies or practices.
May 7,2015 DEF 14 A Proxy .
May 11,2015 8K
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 11, 2015, Titan Machinery Inc. (the “Company”) and Peter Christianson entered into a Services Agreement (the “Agreement”) to provide the terms of Mr. Christianson’s continued service to the Company. Under the terms of the Agreement, Mr. Christianson will conclude his term as President of the Company, and will assume the position of Chairman of International Operations, with his job duties focused on the Company’s international operations, effective as of the Company’s 2015 Annual Meeting, which will be held on June 4, 2015 (the “Annual Meeting”). Mr. Christianson will continue leading the Company’s International segment through the end of the 2016 fiscal year. Following the end of the 2016 fiscal year, Mr. Christianson will serve the Company in a consulting role.

The Agreement provides that upon his transition to a consulting role Mr. Christianson will be paid an annual fee equal to the annual base salary stated in his March 6, 2013, employment agreement for a term of three years, which amount will continue to be paid for the remainder of such term if the Agreement is terminated by the Company without Cause or by Mr. Christianson with Good Reason (each term as defined in the Agreement). Mr. Christianson will also participate in the Company’s medical and dental plans two years following his transition to consulting status. Mr. Christianson will not be entitled to other items of compensation that he is currently entitled to, including incentive compensation and other employee benefits available to Company employees. The terms of Mr. Christianson’s unvested stock option, restricted stock, and restricted stock units awards will be amended to provide that they will continue to vest on their current terms, provided that Mr. Christianson complies with the restrictive covenants contained in his employment agreement as in effect immediately prior to the execution of the Agreement.

Mr. Christianson will also conclude his service on our Board of Directors at the end of his current term, which expires on the date of the 2015 Annual Meeting.

MAY 12,2015 Titan Machinery President to Step Down and Resign as Director (this link includes related party transactions and suspicous trading in the stock)

 Will the company need to file an updated DEF 14 A with the SEC prior to this June 2015 shareholder meeting so that all the investors will have full disclosure of this new change?



2013 Securities and Exchange Division of Corporate Finance Comment Letters
On April 24,2013 Titan Machinery filed a DEF 14 A proxy statement with the Securities and Exchange Commission. By the end of 2013 The Securities and Exchange Commission Division of Corporate Finance made the following Comments to Titan Machinery:

Auditors




Thursday, April 25, 2013


Most OverPriced Stock Titan Machinery Files Proxy Statement


updated and edited typos at 10:52pm est.  

Sunday, May 17, 2015

TITAN BONDS UP 21% After 6th Amendment

***May 12,2015 Titan Machinery President to Step Down and Resign as Director

n Machinery Announces Management Chang

Titan Machinery (NASDAQ: TITN) $150 million convertible note (Feb. 2019) traded at an all time low on March 13,2015 @ $66.50 yielding 14.88% as the company's fundamentals have deteriorated in recent years.
  • In March the company announced that they expected to be in non compliance of the covenants in the $150 million convertible note with Wells Fargo. The company said the terms of the note require the Company to earn a minimum net income for the FY2015 period that ended as of January 31,2015.
On April 15,2015 Titan Machinery filed their 10K annual report with the Securities and Exchange Commission and included a new Footnote: SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT .

Titan's Bonds have since jumped 21% and closed yesterday above $80.

ATTACHED Is the Original Convertible Note with All 6 Amendments Added in Different Colored Fonts. (282 of Pages of NOTES/DELETIONS/Replacements) Good Luck Figuring it out)

SEC NEEDS TO MAKE BOND DISCLOSURE INVESTOR FRIENDLY
Investors shouldn't need a Philadelphia Lawyer to Figure Out the Terms of this Note. 









Tuesday, May 12, 2015

Titan Machinery President to Step Down and Resign as Director

 Titan Machinery Reports $30 million Loss and Directors are Exiting
Founder Peter Christenson To Step Down From Board
**read here to see when house of cards were built

President/Founder Steps Down
After the close last night, Titan Machinery filed an 8K with the Securities and Exchange Commission announcing that the company's  President, Peter Christenson, since 2003 will step down and take a consulting role with the company and continue to earn his $500,000 a year salary. Peter Christenson will also resign as a member of the board of directors. a position he also has held for 12 years..(there is no mention if Mr. Christenson will continue to receive spousal travel benefits).

Proxy Statement
Only 4 days ago Titan Machinery filed a DEF 14 A proxy statement for the upcoming FY2016 annual meeting which is to take place in June. In the proxy disclosure Christenson is disclosed as a board member and president but it is still not clear if shareholders receiving this new proxy will be notified of the sudden resignation in time for the June vote. NO mention of who the new nominee will be for the 9th board seat that will now be vacant.

8K Director Resigns
8 weeks ago another board member since 2003 , James Williams, also announced he will be resigning from the board. That announcement came the same day that management released a preliminary FY2015 warning to the street that the company would lose in excess of $30 million for FY2015.
Mr. Williams is the current Chairman of the Nominating Committee and also a member of the 3 person Audit Committee.

Related Party Transactions (Where all the $ Goes)
In related party transactions, Peter Christian is disclosed as an owner of C.I.Farm Power.

History of Related Party Transactions of Titan Machinery  (Where has All the Money Gone)

New Auditor=Less Disclosure
In the Spring of 2014 the company filed it's first DEF 14 A  using the new auditor Deloitte and Touche. Company stated it no longer was required  to disclose the transactions with the outside entity Dealer Sites LLC that management had held a position in because that equity interest had declined to less than 10%.
Although that disclosure was in the spring of 2014, Dealer Sites LLC continued to receive their mailings to the care of  Titan's treasurer Ted Christianson., although he supposively held less than 10% of such entity.
Dealer Sites LLC is important because less than 2 years ago TITAN increased their contract with Dealer Sites from $50 million to over $100 million and extended it out to 2028. This is prior to closing in excess of 10 location in that same period. There has been no disclosure as to whether any of the stores that have been closed were Dealer Sites lease locations. Titan is responsible for taxes and maintenance of those properties.



MAY 2014 Dealer Sites LLC address on tax bill was same as Titan Machinery  But in the April 10K and DEF 14 A in April 2014 the disclosure stated Dealer Sites LLC relationship with Titan Management no longer needed to be disclosed.



As of Spring 2015 mailings for Dealer Sites LLC are being sent to the firm C.T.  Corporations Systems.
Titan is disclosed as 1 of 250 companies that also has disclosure of that same address that CT Corporation states under Dealer Sites LLC.

Dealer Sites LLC disclosure from 2007
"Leases

We (TITAN MACHINERY) lease real estate for 24 of our 34 stores from entities affiliated with Messrs. Meyer, Tony Christianson and/or Peter Christianson. We lease three dealership sites from Meyer Family Limited Partnership, for which Mr. Meyer serves as general partner and of which certain members of Mr. Meyer’s immediate family are limited partners; 18 dealership sites from Dealer Sites, LLC, an entity affiliated by common ownership with Mr. Meyer and Tony Christianson, who collectively owned 40% of Dealer Sites, LLC as of January 31, 2007, and for which Ted Christianson, our Vice President, Finance and Treasurer, serves as president and Mr. Meyer serves as an officer; the site for our Fargo outlet store from C.I. Farm Power, an entity affiliated by common ownership with Peter Christianson; one dealership site from Padre Partnership, an entity affiliated by common ownership with Peter Christianson, who is also the general partner; and one dealership site from Landco LLC, an entity affiliated by common ownership with Peter Christianson and Mr. Meyer."

Hanky Panky Note #4786

General Counsel/Corp. Compliance Officer/Secretary
Does the corporate Compliance Officer Need to be disclosed in SEC filings as an Officer of the Company? Should his Holdings be disclosed as well? I looked but I couldn't find Steve Noack name. It might be somewhere but I surely didn't find it.

ASSUMED NAME
Who is Aurora Distributing and Why did Titan Machinery  create this assumed name the day prior to FY 2015 3rd quarter closed?
  •  3. List the name and complete street address of all persons conducting business under the above Assumed Name, OR if an entity, provide the legal corporate, LLC, or Limited Partnership name and registered office address:
    Titan Machinery Inc.
    644 East Beaton Drive
    West Fargo, ND 58078
Mutual Fund Trading

In February 2015 Fidelity, an institution which held over 5% of shares outstanding  increased their holding in an afternoon trade of 805,000 shares. What is strange is that Titan common stock averages about 100,00 shares a day and this unusual block was traded in what appears to be one transaction. Who sold those shares? How was the trade orchestrated? Its peculiar because nearly 85% of shares outstanding are so tightly held by a handful of insiders and institutions, so how would a person or an entity have such a block of stock and then sell it without disclosing that their new position (balance) has been reduced?


Suspicious trading/Auditor Resignation
It was less than 2 years ago that the company's original auditor abruptly resigned after the FY2014 shareholder meeting which coincided with very suspicious trading activity of Titan Machinery's common stock prior to the Fourth of July market holiday.
5 months after the Accounting Firm resigned the Securities and Exchange Division of Corporate Finance filed the following comment letter to Titan Machinery .

More Suspicious Trading March 2015
After close on March 9th Titan released disappointing warning that year end numbers would be disappointing and the shares were halted after hours. Titan Machinery (NASDAQ: TITN) suspiciously traded down 6% that day while the overall markets were all higher.


Wells Fargo Changes the Rules
The Titan Machinery Bonds are another can of worms.