Sign in
TI

TITAN INTERNATIONAL INC (TWI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 results reflected trough-cycle demand: Net sales $383.6M (-1.7% y/y), gross margin 10.7%, adjusted EBITDA $9.2M, GAAP diluted EPS $0.02 and adjusted EPS $0.09 as Ag and EMC softness offset Carlstar-driven Consumer gains .
  • Guidance turned constructive: Q1 2025 sales $450–$500M and adjusted EBITDA $25–$35M; management expects H2 2025 to be stronger as OEM destocking abates by mid-year and revenue skews to the back half .
  • Balance sheet use and priorities: Year-end net debt $369.5M; management targets debt paydown and lower capex in 2025; leverage at ~2.9x TTM adjusted EBITDA following Carlstar acquisition and buybacks .
  • Narrative catalysts: Aftermarket resilience (Consumer aftermarket >60% in Q4), “one‑stop shop” expansion with Carlstar, LSW product adoption, early-cycle improvement signs in Brazil, and minimal near-term tariff impact per management .

What Went Well and What Went Wrong

  • What Went Well

    • Aftermarket resilience and Consumer mix: Consumer segment posted $110.1M sales (+186% y/y) with 18.1% gross margin; management noted aftermarket was >60% of Consumer sales in Q4, supporting profitability in a low-volume quarter .
    • Cost/through-cycle margin discipline: Despite cyclical lows, Q4 gross margin held ~11%; management highlighted current-cycle gross margin profile well above the ~9% seen at the 2019 trough on a full-year basis (14.6% adjusted GM in 2024) .
    • Strategic positioning: One‑stop shop and LSW innovation emphasized; CEO flagged Brazil demand up “nicely” in Q1 (OE and aftermarket) and reiterated minimal near-term tariff impact with flexibility to reallocate production if needed .

  • What Went Wrong

    • Segment pressure in Ag and EMC: Ag net sales fell 18.4% y/y to $157.1M with gross margin 9.1%; EMC net sales fell 26.9% y/y to $116.3M with gross margin 5.9% as lower volumes and reduced fixed-cost leverage weighed on profitability .
    • Elevated overhead from acquisition footprint: Q4 SG&A +R&D (“SGARD”) was $55.7M vs $35.2M y/y, largely from ongoing Carlstar distribution model costs and higher D&A; standalone SG&A in statements was $51.3M .
    • FX headwinds: Unfavorable currency translation reduced Q4 reported sales by 4.3% (Latin America -19.1% FX impact), compounding demand softness .

Financial Results

Summary (GAAP unless noted)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$390.2 $532.2 $448.0 $383.6
Gross Profit ($USD Millions)$58.3 $80.4 $58.8 $41.2
Gross Margin %14.9% 15.1% 13.1% 10.7%
Diluted EPS (GAAP)$(0.04) $0.03 $(0.25) $0.02
Adjusted EPS (Non‑GAAP)$0.34 $0.10 $(0.19) $0.09
Adjusted EBITDA ($USD Millions)$38.1 $48.8 $20.5 $9.2

Segment breakdown (Q4 2024)

Segment (Q4 2024)Net Sales ($M)Gross Profit ($M)Gross Margin %Op Inc/(Loss) ($M)
Agriculture$157.1 $14.3 9.1% $(1.9)
Earthmoving/Construction$116.3 $6.9 5.9% $(7.0)
Consumer$110.1 $19.9 18.1% $(2.4)

Cash flow and balance sheet KPIs

KPIQ4 2023Q3 2024Q4 2024
Operating Cash Flow ($M, FY or Period)$179.4 (FY) $59.9 (Q3) $141.5 (FY)
Free Cash Flow ($M)$118.6 (FY 2023) $41.8 (Q3) $75.9 (FY 2024)
Capital Expenditures ($M)$60.8 (FY) $18.1 (Q3) $65.6 (FY)
Net Debt ($M)$205.8 (Dec-23) $291.2 (Sep-24) $369.5 (Dec-24)
Cash & Equivalents ($M)$220.3 $227.3 $196.0
Long-term Debt ($M)$409.2 $503.4 $553.0

Notes: Adjusted metrics are non‑GAAP as defined and reconciled in company materials .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SalesQ1 2025N/A$450–$500M New
Adjusted EBITDAQ1 2025N/A$25–$35M New
Revenue cadenceFY 2025N/AHigher H2 weighting; OEM destocking to complete in 1H New
Full‑year guidanceFY 2025N/ANot providing FY guide Maintained “No FY guide” stance

Context: Earlier (Oct 30) management guided Q4 2024 to $375–$425M sales and breakeven to $10M adj. EBITDA; actuals of $383.6M and $9.2M fell within those bands .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Aftermarket / One‑Stop ShopExpanded aftermarket and Carlstar diversification; “premier one‑stop shop” framing (Q2) ; Integration and cross‑selling progress (Q3) Consumer aftermarket >60% of segment sales in Q4; one‑stop shop central to strategy Improving mix, resilience
Regional (Brazil/Europe/NA)Ag softness notably in NA and Brazil (Q2) ; Lower volumes in NA/Europe (Q3) Brazil Q1 demand “up nicely” (OE & aftermarket); Europe still slow; US could lag Brazil turn Brazil improving; EU weak; US later turn
Tariffs/MacroQ3 cited expected clarity on trade policy in 2025 Minimal near-term impact; flexibility to shift production; tariffs potentially net positive longer term Manageable risk; optionality
Product innovation (LSW, VPO)Strong LSW focus and adoption narrative (Q2) VPO technology launched (Oct) ; Expanding LSW into mid/low HP tractors and military opportunities Pipeline progressing
OEM destockingOEM slowdown and cautious channel inventories (Q2) OEMs finishing destocking in 1H; H2 ramp potential; Titan tends to lead OEM cycles due to customized wheel/tire needs Inflecting by H2

Management Commentary

  • Strategic messages

    • “We see a number of reasons to be optimistic that we will see a return to growth… supported by… product innovation [and] one‑stop shop offerings… [and] expanded aftermarket business” .
    • “Demand in Brazil for the first quarter is expected to be up nicely in both our OE and Aftermarket channels… a positive signal” .
    • “Current tariffs are not a significant issue… in the long-run tariffs should be a net positive for Titan” .
    • “We will be ready to ramp up production in the second half of the year” .

  • Notable quotes

    • CEO: “Our strong culture of innovation, as exemplified by our game‑changing LSW technology… we will continue to prioritize the development of new products… [and] re‑establish our position as a supplier for the US military” .
    • CFO: “Revenues in the fourth quarter were $384 million with adjusted EBITDA of $9 million… Gross margin… almost 11%… pleased with [that] at cyclical lows” .
    • CFO: “Guidance for the first quarter is $450 million to $500 million with adjusted EBITDA of $25 million to $35 million… we expect cash flow to turn positive as the year progresses, allowing us to reduce debt” .

Q&A Highlights

  • Cash flow and working capital: Seasonal working capital build expected with sequential Q1 sales improvement; flexibility to manage working capital later in the year .
  • Segment cadence: EMC stable with aftermarket undercarriage supported by mining activity; Consumer aftermarket strong; OEMs across segments continue inventory corrections near term .
  • Ag timing: Management sees internal “optimism” and early orders; Titan tends to lead OEM cycles as customized wheel/tire components need to stage ahead of OEM production .
  • Tariffs: Near‑term impact analyzed as minimal; optionality to shift production to U.S. footprint; longer‑term potentially positive as U.S. manufacturing gains share .
  • Aftermarket mix and target: Aftermarket now ~45% of company revenue, up from ~25% a decade ago; management open to pushing above 50% over time .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 (EPS, revenue, EBITDA) were unavailable at the time of analysis due to a data access limit; therefore, we could not provide a vs. consensus comparison. We will update this section once S&P Global data is accessible.

Key Takeaways for Investors

  • Cycle trough dynamics persisted in Q4, but guidance and qualitative tone point to H2 2025 improvement as OEM destocking winds down and Brazil leads early-cycle demand .
  • Mix resilience: Consumer (aftermarket-heavy) cushioned profitability at cycle lows; company-level gross margins held better than past troughs, supporting incrementals as volumes recover .
  • Strategy execution: Carlstar integration strengthens one‑stop shop positioning, expanding product breadth and distribution; ongoing innovation (LSW, VPO) builds differentiation and potential share gains .
  • Balance sheet and capital allocation: Post-acquisition leverage rose (net debt $369.5M; ~2.9x), but management prioritizes deleveraging and lighter 2025 capex, with cash flow expected to improve as sales ramp .
  • Tariff risk manageable: Near‑term impact deemed minimal with manufacturing flexibility; potential strategic tailwind if U.S. production is favored .
  • Watch for near-term catalysts: Q1 execution vs. guide; evidence of OEM order acceleration into H2; aftermarket momentum; Brazil follow‑through; and updates on military opportunities/LSW penetration .

Citations

  • Q4/FY 2024 8‑K press release exhibit and tables: .
  • Company press release (Feb 26, 2025) mirroring 8‑K exhibit: .
  • Q4 2024 earnings call transcript: .
  • Prior quarters for trend analysis: Q3 2024 press release and tables ; Q2 2024 press release and tables .
  • Additional context press releases: VPO technology launch (Oct 15, 2024) ; share repurchase from MHR (Oct 21, 2024) .