Titan International (NYSE: TWI) reported Q1 EPS of ($0.18), in-line with the analyst estimate of ($0.18). Revenue for the quarter came in at $341.5 million versus the consensus estimate of $365.81 million.

"As we announced on March 4th in our earnings release concerning our fiscal year 2019 results, we expected a solid rebound in full-year 2020 EBITDA driven by internal actions and relatively stable sales compared to 2019," stated Paul Reitz, President and Chief Executive Officer. The COVID-19 pandemic has severely impacted the world since then, making it difficult to forecast demand in the coming months. We expect the months ahead will be challenging as order trends have pulled back, but we do believe that a significant portion of that demand will shift to the second half of this year and not be completely lost. As a result, we have and will continue to be comprehensive in taking immediate cost control actions along with appropriate cash preservation measures.

"I would like to take a moment to express my thanks to each and every Titan employee for their dedication and commitment over these past several weeks. I am proud of our One Titan team for their determination and resilience in the midst of a global pandemic that has impacted all of us in our work and personal lives. While we have seen a rapid change in demand for our products, much of our business is considered critical infrastructure, which means many of our major facilities have remained operational to meet the needs of our customers. The decision to remain open comes with great responsibility for both Titan and every employee working hard in these conditions. We continually strive to ensure the safety of our people, while maintaining business continuity and have established effective global teams that are in constant communication in response to changing conditions. Again, I am proud of our entire workforce and leadership team that have stepped up in a major way during this unprecedented time and played a part in keeping our facilities operating safely.

"Amidst this global pandemic period, I want to reiterate a comment from last quarter where I stated that Titan builds a broad portfolio of good products that are important to our customers. Along with that, we certainly simplify and de-risk our customers' supply chains with our regional manufacturing facilities producing wheels, tires and undercarriage that are capable of meeting their changing needs. For example, our wheel businesses have invested millions into customized tooling that is specific to the OEM and their particular lines of equipment. We then purchase localized steel with three-month lead times that is converted into a wheel that is customized to fit on their specific equipment. In addition, we also work closely with OEMs to adjust our production schedules as they shift to their customers' evolving needs. The bottom-line is we provide significant value to our customers on critical components of their supply chain. The current pandemic only highlights our value in de-risking supply chains and we will continue to utilize strategic pricing changes to capture more of that value.

"As COVID-19 progressed globally, Titan initially felt its impact in China with the government mandated lock-down and curtailment of business operations from late January through February 2020. The impact on the Company expanded into Europe through travel restrictions, social distancing, mandatory stay-at-home orders and sanitization of our facilities. Due to these and other related COVID-19 restrictions, we experienced disruptions in production during the tail end of the first quarter, which continued into the second quarter. The Company began to experience the impact of COVID-19 in South America during the latter part of March, continuing through the early part of April due to similar stay-at-home restrictions in place as Europe. At our major tire plant in São Paulo, we implemented stringent practices and supported our employees with company-provided transportation, which has resulted in nearly 100% attendance since we restarted operations in April. Within North America, our facilities have remained open throughout this time with social distancing and sanitization protocols implemented as recommended by the CDC, WHO and government. Our Australian and Russian operations have experienced a lesser impact than our operations in the other geographies other than enhanced sanitization of our facilities. We currently expect the biggest impact to our operations from government mandates to have already occurred in April while in May we will have most of our production online, but at lower levels in response to customer demand. With the current uncertainty in the earthmoving/construction market from COVID-19 and the global economic contraction, the demand in that segment is more unclear than within agriculture. In the second quarter, agriculture production is expected to continue at better levels than construction, as most governments typically take actions to protect their food supply and farmers are currently active in the fields. That activity is expected to continue to support demand for our tires within the aftermarket, while full year OEM demand remains difficult to predict at this time.

"While the current volatility and uncertain demand outlook implies a sales decline from our 2019 levels, we currently anticipate EBITDA will approximate 2019 levels. Important steps we are taking to maintain EBITDA in a down market include the measures previously outlined during our fourth quarter earnings release along with certain other intensified efforts throughout 2020 as we align production and costs with the current business environment. The current market conditions and the ongoing impact of the COVID-19 global pandemic continues to create a dynamic and fluid situation with our customers as they shift schedules in the current period and are providing limited visibility into their plans for the second half of the year."

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