Titan International (NYSE: TWI) reported Q4 EPS of ($0.40), $0.30 worse than the analyst estimate of ($0.10). Revenue for the quarter came in at $301.8 million versus the consensus estimate of $335.26 million.

"We have concluded a challenging year for Titan and our industry," commented Paul Reitz, President and Chief Executive Officer. "This comes on the heels of a very successful 2018. Titan, along with many of our customers, started 2019 with expectations for promise of further growth, but ultimately it produced significant volatility and uncertainty with poor Ag conditions due to North America weather and the China trade battles. The fourth quarter was especially challenging with our primary OE customers producing below retail demand levels, which drove our sales well below the volume at which we could produce profitability.

"Notwithstanding the significant challenges, we made strides in 2019 including an improved focus on working capital management, which drove $45 million in operating cash flow despite $28 million of operating losses. In addition, we maintained and even improved our leadership in our primary markets through customer positioning and continuing to produce high quality and innovative products.

"It's important to highlight that we are working diligently on a number of internal initiatives that are designed to give rise to improved 2020 profitability, allowing us to target full-year EBITDA of $75 million excluding currency impacts, on relatively flat sales of approximately $1.45 billion. Titan's management team has presented the 2020 plan to our Board of Directors to obtain that EBITDA level and our compensation plan is based on achieving it. In addition to the expected financial improvements noted above, we have the support of our Board of Directors to review all of our non-core and underperforming assets as a means to further optimize our overall performance, and have included that as part of our incentive plan.

"With the first phase of the China trade deal completed, we've seen North American farmer sentiment improve and expect them to hit the fields hard this spring. That said, we are not sitting still waiting for markets to improve and have numerous internal initiatives intended to improve results. The operational cost structure actions designed to drive improvements of $10 - $12 million and anticipated benefits from our 80/20 initiatives outlined previously are included within this target. As part of our 80/20 initiative, we are also introducing strategic pricing that recognizes the value of our products. The combined impact of all 80/20 efforts should deliver another $5 million through improved margins. We expect to perform significantly better in our North American Wheel operations as we have gained better control on our steel purchasing and improved efficiency in production, and we believe that we can improve operating performance by at least $15 million year-over-year. We also realize our tire plant utilization in North America needs to improve and are working on multiple solutions to address this issue. In 2020, we are targeting SG&A and R&D costs of approximately $140 million for the full year, which we believe will add $7 million of profitability improvement. Additionally, we currently anticipate driving further improvements in our cash flow through improving working capital by more than $25 million.

"Also, we anticipate our North American Ag OE customers should return to normalcy in terms of their production at retail levels, and we have seen early signs of this during the current quarter. In addition, we expect increases in our aftermarket sales, particularly in North American Ag, again with increases already seen during the early part of 2020. We believe there are a number of triggers in place that could drive markets to improve later in 2020. We hope to gain more visibility for the year over the coming months, and expect to provide an update after there is more clarity.

"Titan produces high-quality products that are critically important to our customers. We continue to experience success in the aftermarket with our market leading LSW's, while Kubota is doing a tremendous job rolling-out our new R14 tire/wheel assembly to its strong base of customers. We are the only global company that can produce tens of thousands unique wheels and thousands of different tires. We have the strength of the Goodyear farm tire brand as the only brand known worldwide for over 100 years. It also doesn't hurt us that in today's world, OEM's are more cognizant of having a supply chain that is overly reliant on China and India. Regardless of the current day concerns, people will continue to eat protein-based diets and populations will continue to grow. We are cautiously optimistic that our markets will stabilize and perhaps improve slightly, but we are not going to wait to let it come to us and, in the meantime, we continue to take actions to improve our performance, gain stability and strengthen our financial position. With 2018 as a barometer for our more recent financial performance, we see a path to perform at 2018 levels and beyond. We believe that this will be a significant year of change for Titan."

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