The company faces tighter restrictions on the $WFC note and may be in jeopardy of violating the net income covenant for FY2016 Q3 when they report in December.
In May of this year the company filed a DEF 14A disclosing that the Founder would continue as President and asked the shareholders for the president to vote their shares via a proxy. After the DEF 14A filing, 4 days later, the founder resigned as President. No DEF 14A was re filed.
There has been suspicious trading in the stock, specifically around the resignation of the company's original auditor resigned over the 4th of July weekend in 2013.
The company has also had some personal selling (insider selling) after some hyped guidance that pumped up the stock price significantly up at the $29 level. (including an appearance on Jim Cramer's Mad Money.)
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
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?
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.
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.
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
TITAN's MANAGEMENT OUTSIDE ENTITY BUYS PROPERTY FOR $1.00.
12 acres
of commercial land for $1.00.
Dealer Sites LLC is the property
ownership company for Titan Machinery, which acquired the property from the
city for $1 and will lease it to its operating company, Titan.
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.
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
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.
