Titan International (NYSE: TWI) reported Q3 EPS of ($0.10), $0.02 better than the analyst estimate of ($0.12). Revenue for the quarter came in at $304.8 million versus the consensus estimate of $294.77 million.

Quarter Highlights

• Ending cash and cash equivalents balance was $98.8 million, an increase of $18.6 million during the quarter
• Net debt was reduced by $85 million over the past 12 months to the lowest level since Q3 2018
• Net sales were $304.8 million, a $41.1 million YOY decrease, net sales would have been $324.9 million on a constant currency basis
• Gross margin was 10.3%, up from 7.8% in Q3 of the prior year
• SGARD expenses were $35.7 million (11.7% of net sales), a YOY decrease of 4.3%
• Adjusted EBITDA was $14.2 million
• Loss from operations was $6.8 million, a $5.8 million YOY improvement
• Net loss attributable to Titan was $12.6 million and EPS was $(0.21), adjusted net loss attributable to Titan was $6.3 million, with adjusted EPS of $(0.10)

Paul Reitz, President and Chief Executive Officer commented, "We're proud that we again produced very solid financial results this quarter on almost all fronts despite an environment filled with uncertainty and challenges. In many aspects the third quarter financial results were a continuation of what we achieved during the second quarter as we again had strong margin performance, good working capital management, and improvements in our balance sheet leading the way to another solid quarter. During the quarter, we increased our cash balance by more than $18 million while also continuing to lower our debt. At $366 million, our net debt represents the lowest level since Q3 2018 and has improved $85 million over the past twelve months. During the course of the pandemic, we have outlined several steps we would take to weather the uncertainty and position Titan for the future, and I am very pleased with the accomplishments we have made thus far both operationally and financially. We now anticipate full year adjusted EBITDA to be in the range of $40 million to $44 million.

"We are currently in the midst of our planning process for 2021 and believe next year has plenty of reasons to be optimistic. Latin American Ag has seen a strong jump in orders with good visibility into next year for that growth to continue. The North American harvest season is going well as corn prices are in that important $4 range and soybean prices have reached a multi-year high. As a result, farmer income is expected to increase over 20 percent with farmer sentiment and dealer expectations significantly improving in recent polls. As everyone knows, the age of fleet in the large Ag segment is well above the replacement trend lines, and inventory levels are also at relatively low levels. Couple that with higher commodity prices and government support programs, and the catalysts are there for market growth. We are optimistic for what that will mean for demand in North American Ag in upcoming months.

"Our Earthmoving & Construction business has done an exceptional job managing margins within a difficult sales environment. In the third quarter, our segment gross margin percentage grew 180 basis points to 10.1 percent as compared to 8.3 percent last year despite a drop in net sales of more than 20 percent. While market conditions remain tough, there are some market signals that bode well for next year as dealer inventories are low and global housing continues to show growth, plus the possibility that governments will provide support for infrastructure spending as a mechanism for demand to rebound from the pandemic.

"Titan's third quarter financial results and our impressive improvements in our balance sheet and liquidity position demonstrate that we continue to navigate the pandemic challenges quite well; positioning ourselves for a stronger 2021 and ultimately for refinancing our bonds which mature in 2023. Our team has and will continue to remain diligently focused on making good, timely decisions and taking swift actions to adjust to an evolving world while we have our eyes on a future that continues to look better."

For earnings history and earnings-related data on Titan International (TWI) click here.