FORM 10-Q |
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Illinois | 36-3228472 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
Large accelerated filer þ | Accelerated filer ¨ |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Shares Outstanding at | ||
Class | October 22, 2012 | |
Common stock, no par value per share | 47,741,083 |
Page | ||
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 404,719 | $ | 398,805 | $ | 1,327,040 | $ | 1,084,081 | |||||||
Cost of sales | 337,558 | 345,811 | 1,084,430 | 910,481 | |||||||||||
Gross profit | 67,161 | 52,994 | 242,610 | 173,600 | |||||||||||
Selling, general and administrative expenses | 25,497 | 8,548 | 79,742 | 50,414 | |||||||||||
Research and development expenses | 1,759 | 796 | 4,456 | 2,993 | |||||||||||
Royalty expense | 3,739 | 2,263 | 8,740 | 7,530 | |||||||||||
Supply agreement termination income | — | — | (26,134 | ) | — | ||||||||||
Income from operations | 36,166 | 41,387 | 175,806 | 112,663 | |||||||||||
Interest expense | (6,187 | ) | (6,616 | ) | (18,699 | ) | (19,045 | ) | |||||||
Noncash convertible debt conversion charge | — | — | — | (16,135 | ) | ||||||||||
Other income (expense) | 2,439 | (556 | ) | 6,163 | 1,907 | ||||||||||
Income before income taxes | 32,418 | 34,215 | 163,270 | 79,390 | |||||||||||
Provision for income taxes | 13,589 | 12,690 | 64,722 | 35,345 | |||||||||||
Net income | 18,829 | 21,525 | 98,548 | 44,045 | |||||||||||
Net income (loss) attributable to noncontrolling interests | (750 | ) | 362 | (506 | ) | 354 | |||||||||
Net income attributable to Titan | $ | 19,579 | $ | 21,163 | $ | 99,054 | $ | 43,691 | |||||||
Earnings per common share: | |||||||||||||||
Basic | $ | .46 | $ | .50 | $ | 2.35 | $ | 1.05 | |||||||
Diluted | $ | .39 | $ | .42 | $ | 1.92 | $ | .89 | |||||||
Average common shares and equivalents outstanding: | |||||||||||||||
Basic | 42,180 | 42,028 | 42,148 | 41,512 | |||||||||||
Diluted | 53,326 | 53,061 | 53,315 | 52,970 | |||||||||||
Dividends declared per common share: | $ | .005 | $ | .005 | $ | .015 | $ | .015 |
Three months ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
Net income | $ | 18,829 | $ | 21,525 | |||
Unrealized loss on investments, net of tax of $208 and $6,166, respectively | (353 | ) | (11,433 | ) | |||
Currency translation adjustment, net | (1,247 | ) | (12,861 | ) | |||
Pension liability adjustments, net of tax of $491 and $363, respectively | 836 | 594 | |||||
Comprehensive income (loss) | 18,065 | (2,175 | ) | ||||
Net comprehensive income (loss) attributable to noncontrolling interests | (750 | ) | 362 | ||||
Comprehensive income (loss) attributable to Titan | $ | 18,815 | $ | (2,537 | ) |
Nine months ended | |||||||
September 30, | |||||||
2012 | 2011 | ||||||
Net income | $ | 98,548 | $ | 44,045 | |||
Unrealized gain (loss) on investments, net of tax of $9 and $1,195, respectively | (16 | ) | 2,219 | ||||
Currency translation adjustment, net | (5,816 | ) | (9,929 | ) | |||
Pension liability adjustments, net of tax of $1,473 and $1,090, respectively | 2,508 | 1,779 | |||||
Comprehensive income | 95,224 | 38,114 | |||||
Net comprehensive income (loss) attributable to noncontrolling interests | (506 | ) | 354 | ||||
Comprehensive income attributable to Titan | $ | 95,730 | $ | 37,760 |
September 30, | December 31, | ||||||
Assets | 2012 | 2011 | |||||
Current assets | |||||||
Cash and cash equivalents | $ | 134,890 | $ | 129,170 | |||
Accounts receivable, net | 228,375 | 189,527 | |||||
Inventories | 247,778 | 190,872 | |||||
Deferred income taxes | 32,706 | 26,775 | |||||
Prepaid and other current assets | 45,256 | 28,249 | |||||
Total current assets | 689,005 | 564,593 | |||||
Property, plant and equipment, net | 336,769 | 334,742 | |||||
Other assets | 132,356 | 110,951 | |||||
Total assets | $ | 1,158,130 | $ | 1,010,286 | |||
Liabilities and Equity | |||||||
Current liabilities | |||||||
Short-term debt | $ | 7,517 | $ | 11,723 | |||
Accounts payable | 106,670 | 76,574 | |||||
Other current liabilities | 81,298 | 87,469 | |||||
Total current liabilities | 195,485 | 175,766 | |||||
Long-term debt | 313,897 | 317,881 | |||||
Deferred income taxes | 53,001 | 38,691 | |||||
Other long-term liabilities | 73,499 | 81,069 | |||||
Total liabilities | 635,882 | 613,407 | |||||
Equity: | |||||||
Titan stockholder's equity | |||||||
Common stock (no par, 120,000,000 shares authorized, 44,092,997 issued) | 37 | 37 | |||||
Additional paid-in capital | 383,998 | 380,295 | |||||
Retained earnings | 165,473 | 67,053 | |||||
Treasury stock (at cost, 1,796,015 and 1,887,316 shares, respectively) | (16,519 | ) | (17,338 | ) | |||
Treasury stock reserved for deferred compensation | (1,233 | ) | (1,233 | ) | |||
Accumulated other comprehensive loss | (36,899 | ) | (33,575 | ) | |||
Total Titan stockholders’ equity | 494,857 | 395,239 | |||||
Noncontrolling interests | 27,391 | 1,640 | |||||
Total equity | 522,248 | 396,879 | |||||
Total liabilities and equity | $ | 1,158,130 | $ | 1,010,286 |
Number of common shares | Common Stock | Additional paid-in capital | Retained earnings | Treasury stock | Treasury stock reserved for contractual obligations | Accumulated other comprehensive income (loss) | Total Titan Equity | Noncontrolling interest | Total Equity | |||||||||||||||||||||||||||||
Balance January 1, 2012 | 42,205,681 | $ | 37 | $ | 380,295 | $ | 67,053 | $ | (17,338 | ) | $ | (1,233 | ) | $ | (33,575 | ) | $ | 395,239 | $ | 1,640 | $ | 396,879 | ||||||||||||||||
Net income | 99,054 | 99,054 | (506 | ) | 98,548 | |||||||||||||||||||||||||||||||||
Currency translation adjustment | (5,816 | ) | (5,816 | ) | (5,816 | ) | ||||||||||||||||||||||||||||||||
Pension liability adjustments, net of tax | 2,508 | 2,508 | 2,508 | |||||||||||||||||||||||||||||||||||
Unrealized loss on investment, net of tax | (16 | ) | (16 | ) | (16 | ) | ||||||||||||||||||||||||||||||||
Dividends on common stock | (634 | ) | (634 | ) | (634 | ) | ||||||||||||||||||||||||||||||||
Exercise of stock options | 71,310 | 285 | 640 | 925 | 925 | |||||||||||||||||||||||||||||||||
Acquisitions | — | 26,341 | 26,341 | |||||||||||||||||||||||||||||||||||
Consolidated joint venture | — | (84 | ) | (84 | ) | |||||||||||||||||||||||||||||||||
Stock-based compensation | 2,959 | 2,959 | 2,959 | |||||||||||||||||||||||||||||||||||
Tax benefit related to stock-based compensation | 185 | 185 | 185 | |||||||||||||||||||||||||||||||||||
Issuance of treasury stock under 401(k) plan | 19,991 | 274 | 179 | 453 | 453 | |||||||||||||||||||||||||||||||||
Balance September 30, 2012 | 42,296,982 | $ | 37 | $ | 383,998 | $ | 165,473 | $ | (16,519 | ) | $ | (1,233 | ) | $ | (36,899 | ) | $ | 494,857 | $ | 27,391 | $ | 522,248 |
Nine months ended September 30, | |||||||
Cash flows from operating activities: | 2012 | 2011 | |||||
Net income | $ | 98,548 | $ | 44,045 | |||
Adjustments to reconcile net income to net cash | |||||||
provided by (used for) operating activities: | |||||||
Depreciation and amortization | 35,865 | 32,753 | |||||
Deferred income tax provision | 6,906 | 8,038 | |||||
Noncash convertible debt conversion charge | — | 16,135 | |||||
Supply agreement termination income | (26,134 | ) | — | ||||
Stock-based compensation | 2,959 | 1,748 | |||||
Excess tax benefit from stock options exercised | (185 | ) | — | ||||
Issuance of treasury stock under 401(k) plan | 453 | 411 | |||||
Gain on acquisition | — | (919 | ) | ||||
(Increase) decrease in assets: | |||||||
Accounts receivable | (24,099 | ) | (132,294 | ) | |||
Inventories | (36,921 | ) | (47,366 | ) | |||
Prepaid and other current assets | (17,619 | ) | (9,456 | ) | |||
Other assets | 3,699 | 2,870 | |||||
Increase (decrease) in liabilities: | |||||||
Accounts payable | 25,893 | 69,540 | |||||
Other current liabilities | 4,786 | 10,224 | |||||
Other liabilities | 10,937 | (7,412 | ) | ||||
Net cash provided by (used for) operating activities | 85,088 | (11,683 | ) | ||||
Cash flows from investing activities: | |||||||
Capital expenditures | (36,319 | ) | (17,901 | ) | |||
Acquisitions, net of cash acquired | (32,760 | ) | (99,118 | ) | |||
Purchases of marketable securities | — | (30,000 | ) | ||||
Other | 636 | 1,941 | |||||
Net cash used for investing activities | (68,443 | ) | (145,078 | ) | |||
Cash flows from financing activities: | |||||||
Repurchase of senior unsecured notes | — | (1,064 | ) | ||||
Payment on debt | (14,434 | ) | (629 | ) | |||
Term loan borrowing | 4,378 | 14,148 | |||||
Proceeds from exercise of stock options | 925 | 477 | |||||
Excess tax benefit from stock options exercised | 185 | — | |||||
Dividends paid | (634 | ) | (598 | ) | |||
Net cash provided by (used for) financing activities | (9,580 | ) | 12,334 | ||||
Effect of exchange rate changes on cash | (1,345 | ) | (799 | ) | |||
Net increase (decrease) in cash and cash equivalents | 5,720 | (145,226 | ) | ||||
Cash and cash equivalents, beginning of period | 129,170 | 239,500 | |||||
Cash and cash equivalents, end of period | $ | 134,890 | $ | 94,274 | |||
Supplemental information: | |||||||
Interest paid | $ | 15,306 | $ | 25,735 | |||
Income taxes paid | $ | 63,669 | $ | 17,093 |
1. | ACCOUNTING POLICIES |
Cash | $ | 1,018 | |
Inventories | 14,562 | ||
Deferred income taxes - current asset | 2,948 | ||
Prepaid & other current assets | 4,929 | ||
Property, plant & equipment | 108,905 | ||
Goodwill | 14,484 | ||
Other assets | 39,263 | ||
Other current liabilities | (21,127 | ) | |
Deferred income taxes - noncurrent liability | (25,521 | ) | |
Other noncurrent liabilities | (40,823 | ) | |
Net assets acquired | $ | 98,638 |
Nine months ended September 30, | ||||||
2012 (Actual) | 2011 (Pro forma) | |||||
Net sales | $ | 1,327,040 | $ | 1,112,481 | ||
Net income | 98,548 | 48,175 | ||||
Net income attributable to Titan | 99,054 | 47,821 | ||||
Basic earnings per share | $ | 2.35 | $ | 1.15 | ||
Diluted earnings per share | 1.92 | .95 |
September 30, 2012 | December 31, 2011 | ||||||
Accounts receivable | $ | 233,035 | $ | 193,731 | |||
Allowance for doubtful accounts | (4,660 | ) | (4,204 | ) | |||
Accounts receivable, net | $ | 228,375 | $ | 189,527 |
September 30, 2012 | December 31, 2011 | ||||||
Raw material | $ | 104,068 | $ | 97,257 | |||
Work-in-process | 43,907 | 31,141 | |||||
Finished goods | 110,243 | 75,137 | |||||
258,218 | 203,535 | ||||||
Adjustment to LIFO basis | (10,440 | ) | (12,663 | ) | |||
$ | 247,778 | $ | 190,872 |
September 30, 2012 | December 31, 2011 | ||||||
Land and improvements | $ | 19,256 | $ | 20,330 | |||
Buildings and improvements | 123,080 | 121,847 | |||||
Machinery and equipment | 464,461 | 456,236 | |||||
Tools, dies and molds | 93,041 | 88,676 | |||||
Construction-in-process | 27,901 | 14,606 | |||||
727,739 | 701,695 | ||||||
Less accumulated depreciation | (390,970 | ) | (366,953 | ) | |||
$ | 336,769 | $ | 334,742 |
September 30, 2012 | December 31, 2011 | ||||||
Investment in Titan Europe Plc | $ | 28,972 | $ | 28,998 |
2012 | 2011 | ||||||||||||||||||||||
Earthmoving/ | Earthmoving/ | ||||||||||||||||||||||
Agricultural | Construction | Agricultural | Construction | ||||||||||||||||||||
Segment | Segment | Total | Segment | Segment | Total | ||||||||||||||||||
Goodwill balance, January 1 | $ | 19,841 | $ | — | $ | 19,841 | $ | — | $ | — | $ | — | |||||||||||
Acquisitions | — | 13,982 | 13,982 | 21,388 | — | 21,388 | |||||||||||||||||
Acquisition adjustment | (7,289 | ) | — | (7,289 | ) | — | — | — | |||||||||||||||
Foreign currency translation | (957 | ) | (193 | ) | (1,150 | ) | (2,640 | ) | — | (2,640 | ) | ||||||||||||
Goodwill balance, September 30 | $ | 11,595 | $ | 13,789 | $ | 25,384 | $ | 18,748 | $ | — | $ | 18,748 |
2012 | 2011 | ||||||
Warranty liability, January 1 | $ | 17,659 | $ | 12,471 | |||
Provision for warranty liabilities | 23,036 | 18,052 | |||||
Warranty payments made | (18,282 | ) | (14,979 | ) | |||
Warranty liability, September 30 | $ | 22,413 | $ | 15,544 |
September 30, 2012 | December 31, 2011 | ||||||
7.875% senior secured notes due 2017 | $ | 200,000 | $ | 200,000 | |||
5.625% convertible senior subordinated notes due 2017 | 112,881 | 112,881 | |||||
Other debt | 8,533 | 16,723 | |||||
321,414 | 329,604 | ||||||
Less amounts due within one year | 7,517 | 11,723 | |||||
$ | 313,897 | $ | 317,881 |
September 1 - December 31, 2012 | $ | 2,587 | |
2013 | 5,386 | ||
2014 | 319 | ||
2015 | 178 | ||
2016 | 58 | ||
Thereafter | 312,886 | ||
$ | 321,414 |
October 1 - December 31, 2012 | $ | 204 | |
2013 | 521 | ||
2014 | 419 | ||
2015 | 96 | ||
2016 | 15 | ||
Total future minimum lease payments | $ | 1,255 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Interest cost | $ | 1,133 | $ | 1,272 | $ | 3,399 | $ | 3,816 | |||||||
Expected return on assets | (1,252 | ) | (1,314 | ) | (3,756 | ) | (3,944 | ) | |||||||
Amortization of unrecognized prior service cost | 34 | 34 | 102 | 102 | |||||||||||
Amortization of unrecognized deferred taxes | — | (14 | ) | — | (42 | ) | |||||||||
Amortization of net unrecognized loss | 1,293 | 937 | 3,879 | 2,809 | |||||||||||
Net periodic pension cost | $ | 1,208 | $ | 915 | $ | 3,624 | $ | 2,741 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Supply agreement termination income | $ | — | $ | — | $ | 26,134 | $ | — |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Discount amortization on prepaid royalty | $ | 910 | $ | 1,041 | $ | 2,882 | $ | 2,120 | |||||||
Other income (expense) | 474 | (461 | ) | 683 | (378 | ) | |||||||||
Gain (loss) related to contractual obligation investments | 492 | (1,255 | ) | 1,287 | (1,111 | ) | |||||||||
Interest income | 372 | 119 | 757 | 357 | |||||||||||
Building rental income | 191 | — | 554 | — | |||||||||||
Gain on purchase transaction | — | — | — | 919 | |||||||||||
$ | 2,439 | $ | (556 | ) | $ | 6,163 | $ | 1,907 |
Three months ended | |||||||||||||||||||||
September 30, 2012 | September 30, 2011 | ||||||||||||||||||||
Titan Net income | Weighted- average shares | Per share amount | Titan Net income | Weighted- average shares | Per share amount | ||||||||||||||||
Basic earnings per share | $ | 19,579 | 42,180 | $ | 0.46 | $ | 21,163 | 42,028 | $ | 0.50 | |||||||||||
Effect of stock options/trusts | — | 237 | — | 238 | |||||||||||||||||
Effect of convertible notes | 1,143 | 10,909 | 1,091 | 10,795 | |||||||||||||||||
Diluted earnings per share | $ | 20,722 | 53,326 | $ | 0.39 | $ | 22,254 | 53,061 | $ | 0.42 |
Nine months ended | |||||||||||||||||||||
September 30, 2012 | September 30, 2011 | ||||||||||||||||||||
Titan Net income | Weighted- average shares | Per share amount | Titan Net income | Weighted- average shares | Per share amount | ||||||||||||||||
Basic earnings per share | $ | 99,054 | 42,148 | $ | 2.35 | $ | 43,691 | 41,512 | $ | 1.05 | |||||||||||
Effect of stock options/trusts | — | 258 | — | 287 | |||||||||||||||||
Effect of convertible notes | 3,429 | 10,909 | 3,385 | 11,171 | |||||||||||||||||
Diluted earnings per share | $ | 102,483 | 53,315 | $ | 1.92 | $ | 47,076 | 52,970 | $ | 0.89 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues from external customers | |||||||||||||||
Agricultural | $ | 246,578 | $ | 246,456 | $ | 831,376 | $ | 713,721 | |||||||
Earthmoving/construction | 103,135 | 81,078 | 318,244 | 224,484 | |||||||||||
Consumer | 55,006 | 71,271 | 177,420 | 145,876 | |||||||||||
$ | 404,719 | $ | 398,805 | $ | 1,327,040 | $ | 1,084,081 | ||||||||
Gross profit | |||||||||||||||
Agricultural | $ | 48,091 | $ | 39,008 | $ | 173,684 | $ | 133,874 | |||||||
Earthmoving/construction | 18,689 | 8,814 | 60,598 | 28,227 | |||||||||||
Consumer | 1,016 | 5,812 | 10,488 | 13,567 | |||||||||||
Unallocated corporate | (635 | ) | (640 | ) | (2,160 | ) | (2,068 | ) | |||||||
$ | 67,161 | $ | 52,994 | $ | 242,610 | $ | 173,600 | ||||||||
Income from operations | |||||||||||||||
Agricultural | $ | 41,740 | $ | 34,580 | $ | 156,965 | $ | 120,248 | |||||||
Earthmoving/construction | 13,468 | 7,418 | 51,385 | 23,408 | |||||||||||
Consumer | (234 | ) | 3,615 | 30,284 | 9,352 | ||||||||||
Unallocated corporate | (18,808 | ) | (4,226 | ) | (62,828 | ) | (40,345 | ) | |||||||
Income from operations | 36,166 | 41,387 | 175,806 | 112,663 | |||||||||||
Interest expense | (6,187 | ) | (6,616 | ) | (18,699 | ) | (19,045 | ) | |||||||
Noncash convertible debt conversion charge | — | — | — | (16,135 | ) | ||||||||||
Other income (expense), net | 2,439 | (556 | ) | 6,163 | 1,907 | ||||||||||
Income before income taxes | $ | 32,418 | $ | 34,215 | $ | 163,270 | $ | 79,390 |
September 30, 2012 | December 31, 2011 | ||||||
Total assets | |||||||
Agricultural | $ | 459,307 | $ | 444,611 | |||
Earthmoving/construction | 347,988 | 193,566 | |||||
Consumer | 146,018 | 139,161 | |||||
Unallocated corporate | 204,817 | 232,948 | |||||
$ | 1,158,130 | $ | 1,010,286 |
September 30, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Investment in Titan Europe Plc (a) | $ | 28,972 | $ | 28,972 | $ | — | $ | — | $ | 28,998 | $ | 28,998 | $ | — | $ | — | |||||||||||||||
Contractual obligation investments | 13,681 | 13,681 | 12,395 | 12,395 | |||||||||||||||||||||||||||
Interest rate swap | 1,011 | — | 1,011 | — | 634 | — | 634 | — | |||||||||||||||||||||||
Preferred stock | 250 | — | — | 250 | 1,000 | — | — | 1,000 | |||||||||||||||||||||||
Total | $ | 43,914 | $ | 42,653 | $ | 1,011 | $ | 250 | $ | 43,027 | $ | 41,393 | $ | 634 | $ | 1,000 |
Preferred stock | |||
Balance at December 31, 2011 | $ | 1,000 | |
Change in preferred stock investment | (750 | ) | |
Total realized and unrealized gains and losses | — | ||
Balance as of September 30, 2012 | $ | 250 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Three Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 311,422 | $ | 93,297 | $ | — | $ | 404,719 | |||||||||
Cost of sales | 253 | 246,275 | 91,030 | — | 337,558 | ||||||||||||||
Gross profit (loss) | (253 | ) | 65,147 | 2,267 | — | 67,161 | |||||||||||||
Selling, general and administrative expenses | (9,013 | ) | 40,635 | (6,125 | ) | — | 25,497 | ||||||||||||
Research and development expenses | 155 | 1,604 | — | — | 1,759 | ||||||||||||||
Royalty expense | — | 1,778 | 1,961 | — | 3,739 | ||||||||||||||
Income from operations | 8,605 | 21,130 | 6,431 | — | 36,166 | ||||||||||||||
Interest expense | (6,012 | ) | — | (175 | ) | — | (6,187 | ) | |||||||||||
Other income | 1,163 | 364 | 912 | — | 2,439 | ||||||||||||||
Income before income taxes | 3,756 | 21,494 | 7,168 | — | 32,418 | ||||||||||||||
Provision (benefit) for income taxes | 6,329 | 7,398 | (138 | ) | — | 13,589 | |||||||||||||
Equity in earnings of subsidiaries | 21,402 | — | 5,420 | (26,822 | ) | — | |||||||||||||
Net income (loss) | 18,829 | 14,096 | 12,726 | (26,822 | ) | 18,829 | |||||||||||||
Net loss noncontrolling interests | — | — | — | (750 | ) | (750 | ) | ||||||||||||
Net income (loss) attributable to Titan | $ | 18,829 | $ | 14,096 | $ | 12,726 | $ | (26,072 | ) | $ | 19,579 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Three Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 299,695 | $ | 99,110 | $ | — | $ | 398,805 | |||||||||
Cost of sales | 380 | 255,509 | 89,922 | — | 345,811 | ||||||||||||||
Gross profit (loss) | (380 | ) | 44,186 | 9,188 | — | 52,994 | |||||||||||||
Selling, general and administrative expenses | (4,443 | ) | 2,467 | 10,524 | — | 8,548 | |||||||||||||
Research and development expenses | — | 796 | — | — | 796 | ||||||||||||||
Royalty expense | — | 1,620 | 643 | — | 2,263 | ||||||||||||||
Income (loss) from operations | 4,063 | 39,303 | (1,979 | ) | — | 41,387 | |||||||||||||
Interest expense | (6,114 | ) | — | (502 | ) | — | (6,616 | ) | |||||||||||
Other income (expense) | (552 | ) | 5 | (9 | ) | — | (556 | ) | |||||||||||
Income (loss) before income taxes | (2,603 | ) | 39,308 | (2,490 | ) | — | 34,215 | ||||||||||||
Provision (benefit) for income taxes | (988 | ) | 14,605 | (927 | ) | — | 12,690 | ||||||||||||
Equity in earnings of subsidiaries | 23,140 | — | — | (23,140 | ) | — | |||||||||||||
Net income (loss) | 21,525 | 24,703 | (1,563 | ) | (23,140 | ) | 21,525 | ||||||||||||
Net income noncontrolling interests | — | — | — | 362 | 362 | ||||||||||||||
Net income (loss) attributable to Titan | $ | 21,525 | $ | 24,703 | $ | (1,563 | ) | $ | (23,502 | ) | $ | 21,163 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Nine Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 1,055,586 | $ | 271,454 | $ | — | $ | 1,327,040 | |||||||||
Cost of sales | 812 | 828,935 | 254,683 | — | 1,084,430 | ||||||||||||||
Gross profit (loss) | (812 | ) | 226,651 | 16,771 | — | 242,610 | |||||||||||||
Selling, general and administrative expenses | 4,970 | 71,372 | 3,400 | — | 79,742 | ||||||||||||||
Research and development expenses | 327 | 3,983 | 146 | — | 4,456 | ||||||||||||||
Royalty expense | — | 5,250 | 3,490 | — | 8,740 | ||||||||||||||
Supply agreement termination income | — | — | (26,134 | ) | — | (26,134 | ) | ||||||||||||
Income (loss) from operations | (6,109 | ) | 146,046 | 35,869 | — | 175,806 | |||||||||||||
Interest expense | (18,119 | ) | — | (580 | ) | — | (18,699 | ) | |||||||||||
Other income | 3,620 | 1,174 | 1,369 | — | 6,163 | ||||||||||||||
Income (loss) before income taxes | (20,608 | ) | 147,220 | 36,658 | — | 163,270 | |||||||||||||
Provision for income taxes | 1,261 | 51,311 | 12,150 | — | 64,722 | ||||||||||||||
Equity in earnings of subsidiaries | 120,417 | — | 24,242 | (144,659 | ) | — | |||||||||||||
Net income (loss) | 98,548 | 95,909 | 48,750 | (144,659 | ) | 98,548 | |||||||||||||
Net loss noncontrolling interests | — | — | — | (506 | ) | (506 | ) | ||||||||||||
Net income (loss) attributable to Titan | $ | 98,548 | $ | 95,909 | $ | 48,750 | $ | (144,153 | ) | $ | 99,054 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Nine Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 890,916 | $ | 193,165 | $ | — | $ | 1,084,081 | |||||||||
Cost of sales | 1,282 | 733,379 | 175,820 | — | 910,481 | ||||||||||||||
Gross profit (loss) | (1,282 | ) | 157,537 | 17,345 | — | 173,600 | |||||||||||||
Selling, general and administrative expenses | 15,513 | 7,654 | 27,247 | — | 50,414 | ||||||||||||||
Research and development expenses | 4 | 2,989 | — | — | 2,993 | ||||||||||||||
Royalty expense | — | 6,304 | 1,226 | — | 7,530 | ||||||||||||||
Income (loss) from operations | (16,799 | ) | 140,590 | (11,128 | ) | — | 112,663 | ||||||||||||
Interest expense | (18,426 | ) | — | (619 | ) | — | (19,045 | ) | |||||||||||
Noncash convertible debt conversion charge | (16,135 | ) | — | — | — | (16,135 | ) | ||||||||||||
Other income (expense) | 1,644 | (236 | ) | 499 | — | 1,907 | |||||||||||||
Income (loss) before income taxes | (49,716 | ) | 140,354 | (11,248 | ) | — | 79,390 | ||||||||||||
Provision (benefit) for income taxes | (12,424 | ) | 51,931 | (4,162 | ) | — | 35,345 | ||||||||||||
Equity in earnings of subsidiaries | 81,337 | — | — | (81,337 | ) | — | |||||||||||||
Net income (loss) | 44,045 | 88,423 | (7,086 | ) | (81,337 | ) | 44,045 | ||||||||||||
Net income noncontrolling interests | — | — | — | 354 | 354 | ||||||||||||||
Net income (loss) attributable to Titan | $ | 44,045 | $ | 88,423 | $ | (7,086 | ) | $ | (81,691 | ) | $ | 43,691 |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Three Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 18,829 | $ | 14,096 | $ | 12,726 | $ | (26,822 | ) | $ | 18,829 | ||||||||
Unrealized gain (loss) on investments, net of tax | (353 | ) | — | (353 | ) | 353 | (353 | ) | |||||||||||
Currency translation adjustment, net | (1,247 | ) | — | (1,247 | ) | 1,247 | (1,247 | ) | |||||||||||
Pension liability adjustments, net of tax | 836 | 790 | 46 | (836 | ) | 836 | |||||||||||||
Comprehensive income (loss) | 18,065 | 14,886 | 11,172 | (26,058 | ) | 18,065 | |||||||||||||
Net comprehensive loss attributable to noncontrolling interests | — | — | — | (750 | ) | (750 | ) | ||||||||||||
Comprehensive income (loss) attributable to Titan | $ | 18,065 | $ | 14,886 | $ | 11,172 | $ | (25,308 | ) | $ | 18,815 |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Three Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 21,525 | $ | 24,703 | $ | (1,563 | ) | $ | (23,140 | ) | $ | 21,525 | |||||||
Unrealized gain (loss) on investments, net of tax | (11,433 | ) | — | (11,433 | ) | 11,433 | (11,433 | ) | |||||||||||
Currency translation adjustment, net | (12,861 | ) | — | (12,861 | ) | 12,861 | (12,861 | ) | |||||||||||
Pension liability adjustments, net of tax | 594 | 554 | 40 | (594 | ) | 594 | |||||||||||||
Comprehensive income (loss) | (2,175 | ) | 25,257 | (25,817 | ) | 560 | (2,175 | ) | |||||||||||
Net comprehensive income attributable to noncontrolling interests | — | — | — | 362 | 362 | ||||||||||||||
Comprehensive income (loss) attributable to Titan | $ | (2,175 | ) | $ | 25,257 | $ | (25,817 | ) | $ | 198 | $ | (2,537 | ) |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Nine Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 98,548 | $ | 95,909 | $ | 48,750 | $ | (144,659 | ) | $ | 98,548 | ||||||||
Unrealized gain (loss) on investments, net of tax | (16 | ) | — | (16 | ) | 16 | (16 | ) | |||||||||||
Currency translation adjustment, net | (5,816 | ) | — | (5,816 | ) | 5,816 | (5,816 | ) | |||||||||||
Pension liability adjustments, net of tax | 2,508 | 2,370 | 138 | (2,508 | ) | 2,508 | |||||||||||||
Comprehensive income (loss) | 95,224 | 98,279 | 43,056 | (141,335 | ) | 95,224 | |||||||||||||
Net comprehensive loss attributable to noncontrolling interests | — | — | — | (506 | ) | (506 | ) | ||||||||||||
Comprehensive income (loss) attributable to Titan | $ | 95,224 | $ | 98,279 | $ | 43,056 | $ | (140,829 | ) | $ | 95,730 |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Nine Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 44,045 | $ | 88,423 | $ | (7,086 | ) | $ | (81,337 | ) | $ | 44,045 | |||||||
Unrealized gain (loss) on investments, net of tax | 2,219 | — | 2,219 | (2,219 | ) | 2,219 | |||||||||||||
Currency translation adjustment, net | (9,929 | ) | — | (9,929 | ) | 9,929 | (9,929 | ) | |||||||||||
Pension liability adjustments, net of tax | 1,779 | 1,659 | 120 | (1,779 | ) | 1,779 | |||||||||||||
Comprehensive income (loss) | 38,114 | 90,082 | (14,676 | ) | (75,406 | ) | 38,114 | ||||||||||||
Net comprehensive income attributable to noncontrolling interests | — | — | — | 354 | 354 | ||||||||||||||
Comprehensive income (loss) attributable to Titan | $ | 38,114 | $ | 90,082 | $ | (14,676 | ) | $ | (75,760 | ) | $ | 37,760 |
(Amounts in thousands) | Consolidating Condensed Balance Sheets September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 109,913 | $ | 21 | $ | 24,956 | $ | — | $ | 134,890 | |||||||||
Accounts receivable | — | 168,326 | 60,049 | — | 228,375 | ||||||||||||||
Inventories | — | 178,719 | 69,059 | — | 247,778 | ||||||||||||||
Prepaid and other current assets | 43,318 | 20,990 | 13,654 | — | 77,962 | ||||||||||||||
Total current assets | 153,231 | 368,056 | 167,718 | — | 689,005 | ||||||||||||||
Property, plant and equipment, net | 10,119 | 215,980 | 110,670 | — | 336,769 | ||||||||||||||
Investment in subsidiaries | 294,154 | — | 24,798 | (318,952 | ) | — | |||||||||||||
Other assets | 42,008 | 550 | 89,798 | — | 132,356 | ||||||||||||||
Total assets | $ | 499,512 | $ | 584,586 | $ | 392,984 | $ | (318,952 | ) | $ | 1,158,130 | ||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Short-term debt | $ | — | $ | — | $ | 7,517 | $ | — | $ | 7,517 | |||||||||
Accounts payable | 2,360 | 38,454 | 65,856 | — | 106,670 | ||||||||||||||
Other current liabilities | 4,746 | 52,961 | 23,591 | — | 81,298 | ||||||||||||||
Total current liabilities | 7,106 | 91,415 | 96,964 | — | 195,485 | ||||||||||||||
Long-term debt | 312,881 | — | 1,016 | — | 313,897 | ||||||||||||||
Other long-term liabilities | 49,500 | 32,675 | 44,325 | — | 126,500 | ||||||||||||||
Intercompany accounts | (364,832 | ) | 94,647 | 270,185 | — | — | |||||||||||||
Titan stockholders' equity | 494,857 | 365,849 | (19,506 | ) | (346,343 | ) | 494,857 | ||||||||||||
Noncontrolling interests | — | — | — | 27,391 | 27,391 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 499,512 | $ | 584,586 | $ | 392,984 | $ | (318,952 | ) | $ | 1,158,130 |
(Amounts in thousands) | Consolidating Condensed Balance Sheets December 31, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 125,266 | $ | 6 | $ | 3,898 | $ | — | $ | 129,170 | |||||||||
Accounts receivable | — | 137,226 | 52,301 | — | 189,527 | ||||||||||||||
Inventories | — | 162,134 | 28,738 | — | 190,872 | ||||||||||||||
Prepaid and other current assets | 27,251 | 15,490 | 12,283 | — | 55,024 | ||||||||||||||
Total current assets | 152,517 | 314,856 | 97,220 | — | 564,593 | ||||||||||||||
Property, plant and equipment, net | 9,562 | 219,734 | 105,446 | — | 334,742 | ||||||||||||||
Investment in subsidiaries | 184,317 | — | — | (184,317 | ) | — | |||||||||||||
Other assets | 44,918 | 1,454 | 64,579 | — | 110,951 | ||||||||||||||
Total assets | $ | 391,314 | $ | 536,044 | $ | 267,245 | $ | (184,317 | ) | $ | 1,010,286 | ||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Short-term debt | $ | — | $ | — | $ | 11,723 | $ | — | $ | 11,723 | |||||||||
Accounts payable | 930 | 33,563 | 42,081 | — | 76,574 | ||||||||||||||
Other current liabilities | 22,687 | 39,457 | 25,325 | — | 87,469 | ||||||||||||||
Total current liabilities | 23,617 | 73,020 | 79,129 | — | 175,766 | ||||||||||||||
Long-term debt | 312,881 | — | 5,000 | — | 317,881 | ||||||||||||||
Other long-term liabilities | 29,267 | 38,187 | 52,306 | — | 119,760 | ||||||||||||||
Intercompany accounts | (369,690 | ) | 157,264 | 212,426 | — | — | |||||||||||||
Titan stockholders' equity | 395,239 | 267,573 | (81,616 | ) | (185,957 | ) | 395,239 | ||||||||||||
Noncontrolling interests | — | — | — | 1,640 | 1,640 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 391,314 | $ | 536,044 | $ | 267,245 | $ | (184,317 | ) | $ | 1,010,286 |
(Amounts in thousands) | Consolidating Condensed Statements of Cash Flows For the Nine Months Ended September 30, 2012 | ||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidated | ||||||||||||
Net cash provided by operating activities | $ | 20,502 | $ | 21,736 | $ | 42,850 | $ | 85,088 | |||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (3,571 | ) | (22,076 | ) | (10,672 | ) | (36,319 | ) | |||||||
Acquisitions, net of cash acquired | (32,760 | ) | — | — | (32,760 | ) | |||||||||
Other, net | — | 355 | 281 | 636 | |||||||||||
Net cash used for investing activities | (36,331 | ) | (21,721 | ) | (10,391 | ) | (68,443 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Payment on debt | — | — | (14,434 | ) | (14,434 | ) | |||||||||
Term loan borrowing | — | — | 4,378 | 4,378 | |||||||||||
Proceeds from exercise of stock options | 925 | — | — | 925 | |||||||||||
Excess tax benefit from stock options exercised | 185 | — | — | 185 | |||||||||||
Dividends paid | (634 | ) | — | — | (634 | ) | |||||||||
Net cash provided by (used for) financing activities | 476 | — | (10,056 | ) | (9,580 | ) | |||||||||
Effect of exchange rate change on cash | — | — | (1,345 | ) | (1,345 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (15,353 | ) | 15 | 21,058 | 5,720 | ||||||||||
Cash and cash equivalents, beginning of period | 125,266 | 6 | 3,898 | 129,170 | |||||||||||
Cash and cash equivalents, end of period | $ | 109,913 | $ | 21 | $ | 24,956 | $ | 134,890 |
(Amounts in thousands) | Consolidating Condensed Statements of Cash Flows For the Nine Months Ended September 30, 2011 | ||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidated | ||||||||||||
Net cash provided by (used for) operating activities | $ | (18,544 | ) | $ | 12,085 | $ | (5,224 | ) | $ | (11,683 | ) | ||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (2,583 | ) | (13,514 | ) | (1,804 | ) | (17,901 | ) | |||||||
Acquisitions, net of cash acquired | (99,118 | ) | — | — | (99,118 | ) | |||||||||
Purchases of marketable securities | (30,000 | ) | — | — | (30,000 | ) | |||||||||
Other, net | — | 1,431 | 510 | 1,941 | |||||||||||
Net cash used for investing activities | (131,701 | ) | (12,083 | ) | (1,294 | ) | (145,078 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Repurchase of senior unsecured notes | (1,064 | ) | — | — | (1,064 | ) | |||||||||
Payment on debt | — | — | (629 | ) | (629 | ) | |||||||||
Term loan borrowing | — | — | 14,148 | 14,148 | |||||||||||
Proceeds from exercise of stock options | 477 | — | — | 477 | |||||||||||
Dividends paid | (598 | ) | — | — | (598 | ) | |||||||||
Net cash provided by (used for) financing activities | (1,185 | ) | — | 13,519 | 12,334 | ||||||||||
Effect of exchange rate change on cash | — | — | (799 | ) | (799 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (151,430 | ) | 2 | 6,202 | (145,226 | ) | |||||||||
Cash and cash equivalents, beginning of period | 239,362 | 6 | 132 | 239,500 | |||||||||||
Cash and cash equivalents, end of period | $ | 87,932 | $ | 8 | $ | 6,334 | $ | 94,274 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Three Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 305,711 | $ | 99,008 | $ | — | $ | 404,719 | |||||||||
Cost of sales | 253 | 240,966 | 96,339 | — | 337,558 | ||||||||||||||
Gross profit (loss) | (253 | ) | 64,745 | 2,669 | — | 67,161 | |||||||||||||
Selling, general and administrative expenses | (9,013 | ) | 40,113 | (5,603 | ) | — | 25,497 | ||||||||||||
Research and development expenses | 155 | 1,598 | 6 | — | 1,759 | ||||||||||||||
Royalty expense | — | 1,778 | 1,961 | — | 3,739 | ||||||||||||||
Income from operations | 8,605 | 21,256 | 6,305 | — | 36,166 | ||||||||||||||
Interest expense | (6,012 | ) | — | (175 | ) | — | (6,187 | ) | |||||||||||
Other income | 1,163 | 156 | 1,120 | — | 2,439 | ||||||||||||||
Income before income taxes | 3,756 | 21,412 | 7,250 | — | 32,418 | ||||||||||||||
Provision (benefit) for income taxes | 6,329 | 7,281 | (21 | ) | — | 13,589 | |||||||||||||
Equity in earnings of subsidiaries | 21,402 | — | 5,684 | (27,086 | ) | — | |||||||||||||
Net income (loss) | 18,829 | 14,131 | 12,955 | (27,086 | ) | 18,829 | |||||||||||||
Net loss noncontrolling interests | — | — | — | (750 | ) | (750 | ) | ||||||||||||
Net income (loss) attributable to Titan | $ | 18,829 | $ | 14,131 | $ | 12,955 | $ | (26,336 | ) | $ | 19,579 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Three Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 293,991 | $ | 104,814 | $ | — | $ | 398,805 | |||||||||
Cost of sales | 380 | 250,021 | 95,410 | — | 345,811 | ||||||||||||||
Gross profit (loss) | (380 | ) | 43,970 | 9,404 | — | 52,994 | |||||||||||||
Selling, general and administrative expenses | (4,443 | ) | 2,366 | 10,625 | — | 8,548 | |||||||||||||
Research and development expenses | — | 796 | — | — | 796 | ||||||||||||||
Royalty expense | — | 1,620 | 643 | — | 2,263 | ||||||||||||||
Income (loss) from operations | 4,063 | 39,188 | (1,864 | ) | — | 41,387 | |||||||||||||
Interest expense | (6,114 | ) | — | (502 | ) | — | (6,616 | ) | |||||||||||
Other income (expense) | (552 | ) | (212 | ) | 208 | — | (556 | ) | |||||||||||
Income (loss) before income taxes | (2,603 | ) | 38,976 | (2,158 | ) | — | 34,215 | ||||||||||||
Provision (benefit) for income taxes | (988 | ) | 14,482 | (804 | ) | — | 12,690 | ||||||||||||
Equity in earnings of subsidiaries | 23,140 | — | — | (23,140 | ) | — | |||||||||||||
Net income (loss) | 21,525 | 24,494 | (1,354 | ) | (23,140 | ) | 21,525 | ||||||||||||
Net income noncontrolling interests | — | — | — | 362 | 362 | ||||||||||||||
Net income (loss) attributable to Titan | $ | 21,525 | $ | 24,494 | $ | (1,354 | ) | $ | (23,502 | ) | $ | 21,163 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Nine Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 1,039,192 | $ | 287,848 | $ | — | $ | 1,327,040 | |||||||||
Cost of sales | 812 | 813,354 | 270,264 | — | 1,084,430 | ||||||||||||||
Gross profit (loss) | (812 | ) | 225,838 | 17,584 | — | 242,610 | |||||||||||||
Selling, general and administrative expenses | 4,970 | 69,791 | 4,981 | — | 79,742 | ||||||||||||||
Research and development expenses | 327 | 3,904 | 225 | — | 4,456 | ||||||||||||||
Royalty expense | — | 5,250 | 3,490 | — | 8,740 | ||||||||||||||
Supply agreement termination income | — | — | (26,134 | ) | — | (26,134 | ) | ||||||||||||
Income (loss) from operations | (6,109 | ) | 146,893 | 35,022 | — | 175,806 | |||||||||||||
Interest expense | (18,119 | ) | — | (580 | ) | — | (18,699 | ) | |||||||||||
Other income | 3,620 | 604 | 1,939 | — | 6,163 | ||||||||||||||
Income (loss) before income taxes | (20,608 | ) | 147,497 | 36,381 | — | 163,270 | |||||||||||||
Provision for income taxes | 1,261 | 51,135 | 12,326 | — | 64,722 | ||||||||||||||
Equity in earnings of subsidiaries | 120,417 | — | 65,310 | (185,727 | ) | — | |||||||||||||
Net income (loss) | 98,548 | 96,362 | 89,365 | (185,727 | ) | 98,548 | |||||||||||||
Net loss noncontrolling interests | — | — | — | (506 | ) | (506 | ) | ||||||||||||
Net income (loss) attributable to Titan | $ | 98,548 | $ | 96,362 | $ | 89,365 | $ | (185,221 | ) | $ | 99,054 |
(Amounts in thousands) | Consolidating Condensed Statements of Operations For the Nine Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | 873,352 | $ | 210,729 | $ | — | $ | 1,084,081 | |||||||||
Cost of sales | 1,282 | 716,572 | 192,627 | — | 910,481 | ||||||||||||||
Gross profit (loss) | (1,282 | ) | 156,780 | 18,102 | — | 173,600 | |||||||||||||
Selling, general and administrative expenses | 15,513 | 7,372 | 27,529 | — | 50,414 | ||||||||||||||
Research and development expenses | 4 | 2,982 | 7 | — | 2,993 | ||||||||||||||
Royalty expense | — | 6,304 | 1,226 | — | 7,530 | ||||||||||||||
Income (loss) from operations | (16,799 | ) | 140,122 | (10,660 | ) | — | 112,663 | ||||||||||||
Interest expense | (18,426 | ) | — | (619 | ) | — | (19,045 | ) | |||||||||||
Noncash convertible debt conversion charge | (16,135 | ) | — | — | — | (16,135 | ) | ||||||||||||
Other income (expense) | 1,644 | (493 | ) | 756 | — | 1,907 | |||||||||||||
Income (loss) before income taxes | (49,716 | ) | 139,629 | (10,523 | ) | — | 79,390 | ||||||||||||
Provision (benefit) for income taxes | (12,424 | ) | 51,663 | (3,894 | ) | — | 35,345 | ||||||||||||
Equity in earnings of subsidiaries | 81,337 | — | — | (81,337 | ) | — | |||||||||||||
Net income (loss) | 44,045 | 87,966 | (6,629 | ) | (81,337 | ) | 44,045 | ||||||||||||
Net income noncontrolling interests | — | — | — | 354 | 354 | ||||||||||||||
Net income (loss) attributable to Titan | $ | 44,045 | $ | 87,966 | $ | (6,629 | ) | $ | (81,691 | ) | $ | 43,691 |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Three Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 18,829 | $ | 14,131 | $ | 12,955 | $ | (27,086 | ) | $ | 18,829 | ||||||||
Unrealized gain (loss) on investments, net of tax | (353 | ) | — | (353 | ) | 353 | (353 | ) | |||||||||||
Currency translation adjustment, net | (1,247 | ) | — | (1,247 | ) | 1,247 | (1,247 | ) | |||||||||||
Pension liability adjustments, net of tax | 836 | 790 | 46 | (836 | ) | 836 | |||||||||||||
Comprehensive income (loss) | 18,065 | 14,921 | 11,401 | (26,322 | ) | 18,065 | |||||||||||||
Net comprehensive loss attributable to noncontrolling interests | — | — | — | (750 | ) | (750 | ) | ||||||||||||
Comprehensive income (loss) attributable to Titan | $ | 18,065 | $ | 14,921 | $ | 11,401 | $ | (25,572 | ) | $ | 18,815 |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Three Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 21,525 | $ | 24,494 | $ | (1,354 | ) | $ | (23,140 | ) | $ | 21,525 | |||||||
Unrealized gain (loss) on investments, net of tax | (11,433 | ) | — | (11,433 | ) | 11,433 | (11,433 | ) | |||||||||||
Currency translation adjustment, net | (12,861 | ) | — | (12,861 | ) | 12,861 | (12,861 | ) | |||||||||||
Pension liability adjustments, net of tax | 594 | 554 | 40 | (594 | ) | 594 | |||||||||||||
Comprehensive income (loss) | (2,175 | ) | 25,048 | (25,608 | ) | 560 | (2,175 | ) | |||||||||||
Net comprehensive income attributable to noncontrolling interests | — | — | — | 362 | 362 | ||||||||||||||
Comprehensive income (loss) attributable to Titan | $ | (2,175 | ) | $ | 25,048 | $ | (25,608 | ) | $ | 198 | $ | (2,537 | ) |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Nine Months Ended September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 98,548 | $ | 96,362 | $ | 89,365 | $ | (185,727 | ) | $ | 98,548 | ||||||||
Unrealized gain (loss) on investments, net of tax | (16 | ) | — | (16 | ) | 16 | (16 | ) | |||||||||||
Currency translation adjustment, net | (5,816 | ) | — | (5,816 | ) | 5,816 | (5,816 | ) | |||||||||||
Pension liability adjustments, net of tax | 2,508 | 2,370 | 138 | (2,508 | ) | 2,508 | |||||||||||||
Comprehensive income (loss) | 95,224 | 98,732 | 83,671 | (182,403 | ) | 95,224 | |||||||||||||
Net comprehensive loss attributable to noncontrolling interests | — | — | — | (506 | ) | (506 | ) | ||||||||||||
Comprehensive income (loss) attributable to Titan | $ | 95,224 | $ | 98,732 | $ | 83,671 | $ | (181,897 | ) | $ | 95,730 |
(Amounts in thousands) | Consolidating Condensed Statements of Comprehensive Income For the Nine Months Ended September 30, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 44,045 | $ | 87,966 | $ | (6,629 | ) | $ | (81,337 | ) | $ | 44,045 | |||||||
Unrealized gain (loss) on investments, net of tax | 2,219 | — | (2,219 | ) | 2,219 | 2,219 | |||||||||||||
Currency translation adjustment, net | (9,929 | ) | — | (9,929 | ) | 9,929 | (9,929 | ) | |||||||||||
Pension liability adjustments, net of tax | 1,779 | 1,659 | 120 | (1,779 | ) | 1,779 | |||||||||||||
Comprehensive income (loss) | 38,114 | 89,625 | (18,657 | ) | (70,968 | ) | 38,114 | ||||||||||||
Net comprehensive income attributable to noncontrolling interests | — | — | — | 354 | 354 | ||||||||||||||
Comprehensive income (loss) attributable to Titan | $ | 38,114 | $ | 89,625 | $ | (18,657 | ) | $ | (71,322 | ) | $ | 37,760 |
(Amounts in thousands) | Consolidating Condensed Balance Sheets September 30, 2012 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 109,913 | $ | 19 | $ | 24,958 | $ | — | $ | 134,890 | |||||||||
Accounts receivable | — | 164,455 | 63,920 | — | 228,375 | ||||||||||||||
Inventories | — | 161,933 | 85,845 | — | 247,778 | ||||||||||||||
Prepaid and other current assets | 43,318 | 20,833 | 13,811 | — | 77,962 | ||||||||||||||
Total current assets | 153,231 | 347,240 | 188,534 | — | 689,005 | ||||||||||||||
Property, plant and equipment, net | 10,119 | 201,907 | 124,743 | — | 336,769 | ||||||||||||||
Investment in subsidiaries | 294,154 | — | 75,621 | (369,775 | ) | — | |||||||||||||
Other assets | 42,008 | 550 | 89,798 | — | 132,356 | ||||||||||||||
Total assets | $ | 499,512 | $ | 549,697 | $ | 478,696 | $ | (369,775 | ) | $ | 1,158,130 | ||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Short-term debt | $ | — | $ | — | $ | 7,517 | $ | — | $ | 7,517 | |||||||||
Accounts payable | 2,360 | 37,531 | 66,779 | — | 106,670 | ||||||||||||||
Other current liabilities | 4,746 | 52,101 | 24,451 | — | 81,298 | ||||||||||||||
Total current liabilities | 7,106 | 89,632 | 98,747 | — | 195,485 | ||||||||||||||
Long-term debt | 312,881 | — | 1,016 | — | 313,897 | ||||||||||||||
Other long-term liabilities | 49,500 | 32,613 | 44,387 | — | 126,500 | ||||||||||||||
Intercompany accounts | (364,832 | ) | 24,881 | 339,951 | — | — | |||||||||||||
Titan stockholders' equity | 494,857 | 402,571 | (5,405 | ) | (397,166 | ) | 494,857 | ||||||||||||
Noncontrolling interests | — | — | — | 27,391 | 27,391 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 499,512 | $ | 549,697 | $ | 478,696 | $ | (369,775 | ) | $ | 1,158,130 |
(Amounts in thousands) | Consolidating Condensed Balance Sheets December 31, 2011 | ||||||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 125,266 | $ | 4 | $ | 3,900 | $ | — | $ | 129,170 | |||||||||
Accounts receivable | — | 133,320 | 56,207 | — | 189,527 | ||||||||||||||
Inventories | — | 144,511 | 46,361 | — | 190,872 | ||||||||||||||
Prepaid and other current assets | 27,251 | 15,385 | 12,388 | — | 55,024 | ||||||||||||||
Total current assets | 152,517 | 293,220 | 118,856 | — | 564,593 | ||||||||||||||
Property, plant and equipment, net | 9,562 | 205,027 | 120,153 | — | 334,742 | ||||||||||||||
Investment in subsidiaries | 184,307 | — | — | (184,307 | ) | — | |||||||||||||
Other assets | 44,918 | 1,454 | 64,579 | — | 110,951 | ||||||||||||||
Total assets | $ | 391,304 | $ | 499,701 | $ | 303,588 | $ | (184,307 | ) | $ | 1,010,286 | ||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||||
Short-term debt | $ | — | $ | — | $ | 11,723 | $ | — | $ | 11,723 | |||||||||
Accounts payable | 930 | 33,070 | 42,574 | — | 76,574 | ||||||||||||||
Other current liabilities | 22,687 | 39,104 | 25,678 | — | 87,469 | ||||||||||||||
Total current liabilities | 23,617 | 72,174 | 79,975 | — | 175,766 | ||||||||||||||
Long-term debt | 312,881 | — | 5,000 | — | 317,881 | ||||||||||||||
Other long-term liabilities | 29,267 | 38,125 | 52,368 | — | 119,760 | ||||||||||||||
Intercompany accounts | (369,700 | ) | 85,560 | 284,140 | — | — | |||||||||||||
Titan stockholders' equity | 395,239 | 303,842 | (117,895 | ) | (185,947 | ) | 395,239 | ||||||||||||
Noncontrolling interests | — | — | — | 1,640 | 1,640 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 391,304 | $ | 499,701 | $ | 303,588 | $ | (184,307 | ) | $ | 1,010,286 |
(Amounts in thousands) | Consolidating Condensed Statements of Cash Flows For the Nine Months Ended September 30, 2012 | ||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidated | ||||||||||||
Net cash provided by operating activities | $ | 20,502 | $ | 21,251 | $ | 43,335 | $ | 85,088 | |||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (3,571 | ) | (21,592 | ) | (11,156 | ) | (36,319 | ) | |||||||
Acquisitions, net of cash acquired | (32,760 | ) | — | — | (32,760 | ) | |||||||||
Other, net | — | 356 | 280 | 636 | |||||||||||
Net cash used for investing activities | (36,331 | ) | (21,236 | ) | (10,876 | ) | (68,443 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Payment on debt | — | — | (14,434 | ) | (14,434 | ) | |||||||||
Term loan borrowing | — | — | 4,378 | 4,378 | |||||||||||
Proceeds from exercise of stock options | 925 | — | — | 925 | |||||||||||
Excess tax benefit from stock options exercised | 185 | — | — | 185 | |||||||||||
Dividends paid | (634 | ) | — | — | (634 | ) | |||||||||
Net cash provided by (used for) financing activities | 476 | — | (10,056 | ) | (9,580 | ) | |||||||||
Effect of exchange rate change on cash | — | — | (1,345 | ) | (1,345 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (15,353 | ) | 15 | 21,058 | 5,720 | ||||||||||
Cash and cash equivalents, beginning of period | 125,266 | 4 | 3,900 | 129,170 | |||||||||||
Cash and cash equivalents, end of period | $ | 109,913 | $ | 19 | $ | 24,958 | $ | 134,890 |
(Amounts in thousands) | Consolidating Condensed Statements of Cash Flows For the Nine Months Ended September 30, 2011 | ||||||||||||||
Titan Intl., Inc. (Parent) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidated | ||||||||||||
Net cash provided by (used for) operating activities | $ | (18,544 | ) | $ | 11,757 | $ | (4,896 | ) | $ | (11,683 | ) | ||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (2,583 | ) | (13,186 | ) | (2,132 | ) | (17,901 | ) | |||||||
Acquisitions, net of cash acquired | (99,118 | ) | — | — | (99,118 | ) | |||||||||
Purchases of marketable securities | (30,000 | ) | — | — | (30,000 | ) | |||||||||
Other, net | — | 1,431 | 510 | 1,941 | |||||||||||
Net cash used for investing activities | (131,701 | ) | (11,755 | ) | (1,622 | ) | (145,078 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Repurchase of senior unsecured notes | (1,064 | ) | — | — | (1,064 | ) | |||||||||
Payment on debt | — | — | (629 | ) | (629 | ) | |||||||||
Term loan borrowing | — | — | 14,148 | 14,148 | |||||||||||
Proceeds from exercise of stock options | 477 | — | — | 477 | |||||||||||
Dividends paid | (598 | ) | — | — | (598 | ) | |||||||||
Net cash provided by (used for) financing activities | (1,185 | ) | — | 13,519 | 12,334 | ||||||||||
Effect of exchange rate change on cash | — | — | (799 | ) | (799 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (151,430 | ) | 2 | 6,202 | (145,226 | ) | |||||||||
Cash and cash equivalents, beginning of period | 239,362 | 3 | 135 | 239,500 | |||||||||||
Cash and cash equivalents, end of period | $ | 87,932 | $ | 5 | $ | 6,337 | $ | 94,274 |
• | Anticipated trends in the Company’s business |
• | Future expenditures for capital projects |
• | The Company’s ability to continue to control costs and maintain quality |
• | Ability to meet financial covenants and conditions of loan agreements |
• | The Company’s business strategies, including its intention to introduce new products |
• | Expectations concerning the performance and success of the Company’s existing and new products |
• | The Company’s intention to consider and pursue acquisition and divestiture opportunities |
• | The effect of a recession on the Company and its customers and suppliers |
• | Changes in the Company’s end-user markets as a result of world economic or regulatory influences |
• | Changes in the marketplace, including new products and pricing changes by the Company’s competitors |
• | Ability to maintain satisfactory labor relations |
• | Unfavorable outcomes of legal proceedings |
• | Availability and price of raw materials |
• | Levels of operating efficiencies |
• | Unfavorable product liability and warranty claims |
• | Actions of domestic and foreign governments |
• | Results of investments |
• | Fluctuations in currency translations |
• | Climate change and related laws and regulations |
• | Risks associated with environmental laws and regulations |
2012 | 2011 | % Increase (Decrease) | ||||||||
Net sales | $ | 404,719 | $ | 398,805 | 1 | % | ||||
Gross profit | 67,161 | 52,994 | 27 | % | ||||||
Income from operations | 36,166 | 41,387 | (13 | )% | ||||||
Net income | 18,829 | 21,525 | (13 | )% |
2012 | 2011 | % Increase | ||||||||
Net sales | $ | 1,327,040 | $ | 1,084,081 | 22 | % | ||||
Gross profit | 242,610 | 173,600 | 40 | % | ||||||
Income from operations | 175,806 | 112,663 | 56 | % | ||||||
Net income | 98,548 | 44,045 | 124 | % |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 404,719 | $ | 398,805 | $ | 1,327,040 | $ | 1,084,081 | |||||||
Cost of sales | 337,558 | 345,811 | 1,084,430 | 910,481 | |||||||||||
Gross profit | 67,161 | 52,994 | 242,610 | 173,600 | |||||||||||
Gross profit percentage | 16.6 | % | 13.3 | % | 18.3 | % | 16.0 | % |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Selling, general and administrative | $ | 25,497 | $ | 8,548 | $ | 79,742 | $ | 50,414 | |||||||
Percentage of net sales | 6.3 | % | 2.1 | % | 6.0 | % | 4.7 | % |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Research and development | $ | 1,759 | $ | 796 | $ | 4,456 | $ | 2,993 | |||||||
Percentage of net sales | 0.4 | % | 0.2 | % | 0.3 | % | 0.3 | % |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Royalty expense | $ | 3,739 | $ | 2,263 | $ | 8,740 | $ | 7,530 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Supply agreement termination income | $ | — | $ | — | $ | 26,134 | $ | — |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Income from operations | $ | 36,166 | $ | 41,387 | $ | 175,806 | $ | 112,663 | |||||||
Percentage of net sales | 8.9 | % | 10.4 | % | 13.2 | % | 10.4 | % |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Interest expense | $ | 6,187 | $ | 6,616 | $ | 18,699 | $ | 19,045 |
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||
Noncash convertible debt conversion charge | $ | — | $ | — | — | $ | 16,135 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Other income (expense) | $ | 2,439 | $ | (556 | ) | $ | 6,163 | $ | 1,907 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Income tax expense | $ | 13,589 | $ | 12,690 | $ | 64,722 | $ | 35,345 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income | $ | 18,829 | $ | 21,525 | $ | 98,548 | $ | 44,045 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 246,578 | $ | 246,456 | $ | 831,376 | $ | 713,721 | |||||||
Gross profit | 48,091 | 39,008 | 173,684 | 133,874 | |||||||||||
Income from operations | 41,740 | 34,580 | 156,965 | 120,248 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 103,135 | $ | 81,078 | $ | 318,244 | $ | 224,484 | |||||||
Gross profit | 18,689 | 8,814 | 60,598 | 28,227 | |||||||||||
Income from operations | 13,468 | 7,418 | 51,385 | 23,408 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net sales | $ | 55,006 | $ | 71,271 | $ | 177,420 | $ | 145,876 | |||||||
Gross profit | 1,016 | 5,812 | 10,488 | 13,567 | |||||||||||
Income (loss) from operations | (234 | ) | 3,615 | 30,284 | 9,352 |
Three months ended September 30, 2012 | Agricultural | Earthmoving/ Construction | Consumer | Corporate Expenses | Consolidated Totals | |||||||||||||||
Net sales | $ | 246,578 | $ | 103,135 | $ | 55,006 | $ | — | $ | 404,719 | ||||||||||
Gross profit (loss) | 48,091 | 18,689 | 1,016 | (635 | ) | 67,161 | ||||||||||||||
Income (loss) from operations | 41,740 | 13,468 | (234 | ) | (18,808 | ) | 36,166 | |||||||||||||
Three months ended September 30, 2011 | ||||||||||||||||||||
Net sales | $ | 246,456 | 81,078 | $ | 71,271 | $ | — | $ | 398,805 | |||||||||||
Gross profit (loss) | 39,008 | 8,814 | 5,812 | (640 | ) | 52,994 | ||||||||||||||
Income (loss) from operations | 34,580 | 7,418 | 3,615 | (4,226 | ) | 41,387 |
Nine months ended September 30, 2012 | Agricultural | Earthmoving/ Construction | Consumer | Corporate Expenses | Consolidated Totals | |||||||||||||||
Net sales | $ | 831,376 | $ | 318,244 | $ | 177,420 | $ | — | $ | 1,327,040 | ||||||||||
Gross profit (loss) | 173,684 | 60,598 | 10,488 | (2,160 | ) | 242,610 | ||||||||||||||
Income (loss) from operations | 156,965 | 51,385 | 30,284 | (62,828 | ) | 175,806 | ||||||||||||||
Nine months ended September 30, 2011 | ||||||||||||||||||||
Net sales | $ | 713,721 | 224,484 | $ | 145,876 | $ | — | $ | 1,084,081 | |||||||||||
Gross profit (loss) | 133,874 | 28,227 | 13,567 | (2,068 | ) | 173,600 | ||||||||||||||
Income (loss) from operations | 120,248 | 23,408 | 9,352 | (40,345 | ) | 112,663 |
(amounts in thousands) | September 30, | December 31, | |||||||||
2012 | 2011 | Change | |||||||||
Cash and cash equivalents | $ | 134,890 | $ | 129,170 | $ | 5,720 |
(Amounts in thousands) | Nine months ended September 30, | ||||||||||
2012 | 2011 | Change | |||||||||
Net income | $ | 98,548 | $ | 44,045 | $ | 54,503 | |||||
Depreciation and amortization | 35,865 | 32,753 | 3,112 | ||||||||
Noncash convertible debt conversion charge | — | 16,135 | (16,135 | ) | |||||||
Deferred income tax provision | 6,906 | 8,038 | (1,132 | ) | |||||||
Supply agreement termination income | (26,134 | ) | — | (26,134 | ) | ||||||
Accounts receivable | (24,099 | ) | (132,294 | ) | 108,195 | ||||||
Inventories | (36,921 | ) | (47,366 | ) | 10,445 | ||||||
Accounts payable | 25,893 | 69,540 | (43,647 | ) | |||||||
Other current liabilities | 4,786 | 10,224 | (5,438 | ) | |||||||
Other liabilities | 10,937 | (7,412 | ) | 18,349 | |||||||
Other operating activities | (10,693 | ) | (5,346 | ) | (5,347 | ) | |||||
Cash provided by (used for) operating activities | $ | 85,088 | $ | (11,683 | ) | $ | 96,771 |
(Amounts in thousands) | Nine months ended September 30, | ||||||||||
2012 | 2011 | Change | |||||||||
Acquisitions, net of cash acquired | $ | (32,760 | ) | $ | (99,118 | ) | $ | 66,358 | |||
Purchases of marketable securities | — | (30,000 | ) | 30,000 | |||||||
Capital expenditures | $ | (36,319 | ) | $ | (17,901 | ) | $ | (18,418 | ) | ||
Other investing activities | 636 | 1,941 | (1,305 | ) | |||||||
Cash used for investing activities | $ | (68,443 | ) | $ | (145,078 | ) | $ | 76,635 |
(Amounts in thousands) | Nine months ended September 30, | ||||||||||
2012 | 2011 | Change | |||||||||
Repurchase of senior unsecured notes | $ | — | $ | (1,064 | ) | $ | 1,064 | ||||
Term loan borrowing | 4,378 | 14,148 | (9,770 | ) | |||||||
Proceeds from exercise of stock options | 925 | 477 | 448 | ||||||||
Payment on debt | (14,434 | ) | (629 | ) | (13,805 | ) | |||||
Excess tax benefit from stock options exercised | 185 | — | 185 | ||||||||
Dividends paid | (634 | ) | (598 | ) | (36 | ) | |||||
Cash provided by (used for) financing activities | $ | (9,580 | ) | $ | 12,334 | $ | (21,914 | ) |
• | Collateral coverage be equal to or greater than 1.2 times the outstanding revolver balance. |
• | If the 30-day average of the outstanding revolver balance exceeds $70 million, the fixed charge coverage ratio be equal to or greater than a 1.1 to 1.0 ratio. |
• | Limits on payments of dividends and repurchases of the Company’s stock. |
• | Restrictions on the ability of the Company to make additional borrowings, or to consolidate, merge or otherwise fundamentally change the ownership of the Company. |
• | Limitations on investments, dispositions of assets and guarantees of indebtedness. |
• | Other customary affirmative and negative covenants. |
TITAN INTERNATIONAL, INC. | |
(Registrant) |
Date: | October 24, 2012 | By: | /s/ MAURICE M. TAYLOR JR. |
Maurice M. Taylor Jr. | |||
Chairman and Chief Executive Officer (Principal Executive Officer) |
By: | /s/ PAUL G. REITZ | |
Paul G. Reitz | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Titan International, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | October 24, 2012 | By: | /s/ MAURICE M. TAYLOR JR. |
Maurice M. Taylor Jr. | |||
Chief Executive Officer and Chairman | |||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Titan International, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | October 24, 2012 | By: | /s/ PAUL G. REITZ |
Paul G. Reitz | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
TITAN INTERNATIONAL, INC. | |
(Registrant) |
Date: | October 24, 2012 | By: | /s/ MAURICE M. TAYLOR JR. |
Maurice M. Taylor Jr. | |||
Chairman and Chief Executive Officer | |||
(Principal Executive Officer) |
By: | /s/ PAUL G. REITZ | ||
Paul G. Reitz | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
GOODWILL (Tables)
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Sep. 30, 2012
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GOODWILL [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | Changes in goodwill consisted of the following (amounts in thousands):
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INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
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Dec. 31, 2011
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Inventory Disclosure [Abstract] | ||
Raw material | $ 104,068 | $ 97,257 |
Work-in-process | 43,907 | 31,141 |
Finished goods | 110,243 | 75,137 |
Inventory, Gross | 258,218 | 203,535 |
Adjustment to LIFO basis | (10,440) | (12,663) |
Inventory, Net | $ 247,778 | $ 190,872 |
Percentage of LIFO Inventory | 23.00% | 30.00% |
FAIR VALUE MEASUREMENTS (Tables)
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Measurement Inputs, Disclosure [Table Text Block] | Assets and liabilities measured at fair value on a recurring basis consisted of the following (amounts in thousands):
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Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block] | The following table presents the changes during the periods presented in Titan's Level 3 investments that are measured at fair value on a recurring basis (amounts in thousands):
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FAIR VALUE MEASUREMENTS (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||||||
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2012
Fair Value, Measurements, Recurring [Member]
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Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
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Sep. 30, 2012
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
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Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
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Sep. 30, 2012
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
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Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
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Sep. 30, 2012
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
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Dec. 31, 2011
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
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Sep. 30, 2012
Titan Europe [Member]
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Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||||||||||||||||
Investment in Titan Europe Plc | $ 28,972 | [1] | $ 28,998 | [1] | $ 28,972 | [1] | $ 28,998 | [1] | $ 0 | [1] | $ 0 | [1] | $ 0 | [1] | $ 0 | [1] | |||||||
Investments for contractual obligations | 13,681 | 12,395 | 13,681 | 12,395 | |||||||||||||||||||
Interest Rate Derivative Assets, at Fair Value | 1,011 | 634 | 0 | 0 | 1,011 | 634 | 0 | 0 | |||||||||||||||
Other Assets, Fair Value Disclosure | 250 | 1,000 | 0 | 0 | 0 | 0 | 250 | ||||||||||||||||
Assets, Fair Value Disclosure | 43,914 | 43,027 | 42,653 | 41,393 | 1,011 | 634 | 250 | 1,000 | |||||||||||||||
Currency translation adjustment, net | (1,247) | (12,861) | (5,816) | (9,929) | 1,200 | ||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||||||||||||||||||||
Preferred stock at beginning of period | 250 | 1,000 | 0 | 0 | 0 | 0 | 1,000 | ||||||||||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | (750) | ||||||||||||||||||||||
Gain (Loss) on Investments | 0 | ||||||||||||||||||||||
Preferred stock at end of period | $ 250 | $ 1,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 250 | ||||||||||||||||
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EARNINGS PER SHARE (Tables)
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Earnings per share (EPS) were as follows (amounts in thousands, except per share data):
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ACCOUNTING POLICIES (Policies)
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9 Months Ended |
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Sep. 30, 2012
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DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Revenue Recognition, Sales of Goods [Policy Text Block] | Sales Sales and revenues are presented net of sales taxes and other related taxes. |
Fair value of financial instruments | Fair value of financial instruments The Company records financial instruments, including cash and cash equivalents, accounts receivable, notes receivable, accounts payable, other accruals and notes payable at cost, which approximates fair value. Investments in marketable equity securities are recorded at fair value. The 7.875% senior secured notes due 2017 ("senior secured notes") and 5.625% convertible senior subordinated notes due 2017 ("convertible notes") are carried at cost of $200.0 million and $112.9 million at September 30, 2012, respectively. The fair value of these notes at September 30, 2012, as obtained through independent pricing sources, was approximately $212.5 million for the senior secured notes and approximately $217.8 million for the convertible notes. The increase in the fair value of the convertible notes is due primarily to the increased value of the underlying common stock. |
Use of Estimates, Policy [Policy Text Block] | Use of estimates The policies utilized by the Company in the preparation of the financial statements conform to accounting principles generally accepted in the United States of America and require management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates and assumptions. |
Comparability of Prior Year Financial Data, Policy [Policy Text Block] | Reclassification Certain amounts from prior years have been reclassified to conform to the current year's presentation. |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events The Company has evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the date of issuance of the financial statements. |
GOODWILL (Details) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
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Sep. 30, 2012
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Sep. 30, 2011
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Goodwill [Roll Forward] | ||
Goodwill at beginning of period | $ 0 | |
Goodwill, Acquired During Period | 21,388 | |
Goodwill, Translation and Purchase Accounting Adjustments | 0 | |
Foreign currency translation | (2,640) | |
Goodwill at end of period | 25,384 | 18,748 |
Agricultural [Member]
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Goodwill [Roll Forward] | ||
Goodwill at beginning of period | 19,841 | 0 |
Goodwill, Acquired During Period | 0 | 21,388 |
Goodwill, Translation and Purchase Accounting Adjustments | (7,289) | 0 |
Foreign currency translation | (957) | (2,640) |
Goodwill at end of period | 11,595 | 18,748 |
Earthmoving/construction [Member]
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Goodwill [Roll Forward] | ||
Goodwill at beginning of period | 0 | 0 |
Goodwill, Acquired During Period | 13,982 | 0 |
Goodwill, Translation and Purchase Accounting Adjustments | 0 | 0 |
Foreign currency translation | (193) | 0 |
Goodwill at end of period | $ 13,789 | $ 0 |
RELATED PARTY TRANSACTIONS (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | |||
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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Dec. 31, 2011
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Related Party Transactions [Abstract] | |||||
Related Party Transaction, Revenues from Transactions with Related Party | $ 0.6 | $ 0.5 | $ 1.7 | $ 2.4 | |
Related Party Transaction, Due from (to) Related Party | 0.2 | 0.2 | 0 | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0.6 | $ 0.5 | $ 2.1 | $ 1.7 |
SEGMENT INFORMATION
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information | SEGMENT INFORMATION The table below presents information about certain revenues and income from operations used by the chief operating decision maker of the Company for the three and nine months ended September 30, 2012 and 2011 (amounts in thousands):
Assets by segment were as follows (amounts in thousands):
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SUBSIDIARY GUARANTOR FINANCIAL INFORMATION-7.875% SENIOR NOTES (Tables) (7.875% senior secured notes [Member])
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Sep. 30, 2012
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7.875% senior secured notes [Member]
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Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information, Condensed Statement of Operations [Table Text Block] |
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Condensed Financial Information, Condensed Statement of Comprehensive Income [Table Text Block] |
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Condensed Financial Information, Condensed Balance Sheet [Table Text Block] |
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Condensed Financial Information, Condensed Statement of Cash Flows [Table Text Block] |
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LEASE COMMITMENTS (Tables)
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Sep. 30, 2012
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LEASE COMMITMENTS [Abstract] | |||||||||||||||||||||||||||||||||
Operating Leases of Lessee Disclosure [Table Text Block] | At September 30, 2012, future minimum rental commitments under noncancellable operating leases with initial terms of at least one year were as follows (amounts in thousands):
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PROPERTY, PLANT AND EQUIPMENT, NET (Tables)
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Sep. 30, 2012
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | Property, plant and equipment, net consisted of the following (amounts in thousands):
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LEASE COMMITMENTS (Details) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
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Operating Leases, Future Minimum Payments Due [Abstract] | |
2012 | $ 204 |
2013 | 521 |
2014 | 419 |
2015 | 96 |
2016 | 15 |
Total future minimum lease payments | $ 1,255 |
SEGMENT INFORMATION (Tables)
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Schedule of Segment Reporting Information, by Segment [Table Text Block] | The table below presents information about certain revenues and income from operations used by the chief operating decision maker of the Company for the three and nine months ended September 30, 2012 and 2011 (amounts in thousands):
Assets by segment were as follows (amounts in thousands):
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ACCOUNTING POLICIES
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Sep. 30, 2012
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DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES In the opinion of Titan International, Inc. ("Titan" or the "Company"), the accompanying unaudited consolidated condensed financial statements contain all adjustments, which are normal and recurring in nature and necessary for a fair statement of the Company's financial position as of September 30, 2012, and the results of operations and cash flows for the three and nine months ended September 30, 2012 and 2011. Accounting policies have continued without significant change and are described in the Description of Business and Significant Accounting Policies contained in the Company's 2011 Annual Report on Form 10-K. These interim financial statements have been prepared pursuant to the Securities and Exchange Commission's rules for Form 10-Q's and, therefore, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2011 Annual Report on Form 10-K. Sales Sales and revenues are presented net of sales taxes and other related taxes. Fair value of financial instruments The Company records financial instruments, including cash and cash equivalents, accounts receivable, notes receivable, accounts payable, other accruals and notes payable at cost, which approximates fair value. Investments in marketable equity securities are recorded at fair value. The 7.875% senior secured notes due 2017 ("senior secured notes") and 5.625% convertible senior subordinated notes due 2017 ("convertible notes") are carried at cost of $200.0 million and $112.9 million at September 30, 2012, respectively. The fair value of these notes at September 30, 2012, as obtained through independent pricing sources, was approximately $212.5 million for the senior secured notes and approximately $217.8 million for the convertible notes. The increase in the fair value of the convertible notes is due primarily to the increased value of the underlying common stock. Cash dividends The Company declared cash dividends of $.005 and $.015 per share of common stock for each of the three and nine months ended September 30, 2012, and 2011, respectively. The third quarter 2012 cash dividend of $.005 per share of common stock was paid October 15, 2012, to stockholders of record on September 28, 2012. Interest paid Titan paid $3.5 million and $12.3 million for interest for the quarters ended September 30, 2012 and 2011, respectively, and $15.3 million and $25.7 million for interest for the nine months ended September 30, 2012 and 2011, respectively. Income taxes paid Titan paid $16.7 million and $6.5 million for income taxes for the quarters ended September 30, 2012 and 2011, respectively, and $63.7 million and $17.1 million for income taxes for the nine months ended September 30, 2012 and 2011, respectively. Use of estimates The policies utilized by the Company in the preparation of the financial statements conform to accounting principles generally accepted in the United States of America and require management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates and assumptions. Reclassification Certain amounts from prior years have been reclassified to conform to the current year's presentation. Subsequent Events The Company has evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the date of issuance of the financial statements. |
EMPLOYEE BENEFIT PLANS (Details) (USD $)
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Sep. 30, 2012
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EMPLOYEE BENEFIT PLANS [Abstract] | ||||
Defined Benefit Plan, Contributions by Employer | $ 3,700,000 | $ 5,400,000 | ||
Defined Benefit Plan, Estimated Future Employer Contributions in Current Fiscal Year | 700,000 | 700,000 | ||
Defined Benefit Plan, Interest Cost | 1,133,000 | 1,272,000 | 3,399,000 | 3,816,000 |
Defined Benefit Plan, Expected Return on Plan Assets | (1,252,000) | (1,314,000) | (3,756,000) | (3,944,000) |
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Recognized in Net Periodic Benefit Cost, before Tax | 34,000 | 34,000 | 102,000 | 102,000 |
Amortization of Unrecognized Deferred Taxes | 0 | (14,000) | 0 | (42,000) |
Defined Benefit Plan, Amortization of Gains (Losses) | 1,293,000 | 937,000 | 3,879,000 | 2,809,000 |
Defined Benefit Plan, Net Periodic Benefit Cost | $ 1,208,000 | $ 915,000 | $ 3,624,000 | $ 2,741,000 |