• Revenue for second quarter of fiscal 2018 was $269 million
• Company reduced used equipment inventory during the first 6 months of fiscal 2018 by $25 million or 15.6%
• Company updates full year 2018 modeling assumptions

WEST FARGO, N.D. (GLOBE NEWSWIRE) — Titan Machinery Inc. (Nasdaq:TITN), a leading global dealership with a network of full service agricultural and construction stores, reported financial results for the fiscal second quarter ended July 31, 2017.

David Meyer, Titan Machinery's  chairman and chief executive officer, said, "Second quarter financial results reflect improvements in gross margins, operating expenses and interest expense. While our overall pre-tax results have not improved due to the restructuring costs that we have incurred, our adjusted pre-tax results, which are exclusive of restructuring charges, have improved in all three of our operating segments, agriculture, construction and international.

“We believe the agriculture equipment inventory environment continues to stabilize as we improved our equipment margins, while also reducing used equipment inventory for the tenth straight quarter. Operating expenses improved yea- over-year, however they did not decrease at the rate and to the level we initially projected. We completed nearly all of our restructuring efforts in August and now believe we will achieve an approximate annual expense reduction of $20 million compared to the previously expected $25 million.

“The two primary reasons for the less than anticipated savings are higher expenses in our International segment due to materially higher revenues and a stronger Euro and lower restructuring savings in our agriculture and construction operations resulting from our decision to commit more resources to customer support to continue to provide the leading customer experience in our industry and grow customer loyalty through down markets. The extent and the timing of these reductions will result in approximately $200 million of operating expenses, exclusive of restructuring costs, for our current fiscal year."

Fiscal 2018 Second Quarter Results

Consolidated Results
For the second quarter of fiscal 2018, revenue was $268.9 million, compared to $278.3 million in the second quarter last year. Equipment sales were $167.9 million for the second quarter of fiscal 2018, compared to $173.3 million in the second quarter last year. Parts sales were $55.6 million for the second quarter of fiscal 2018, compared to $58.3 million in the second quarter last year. Revenue generated from service was $30.5 million for the second quarter of fiscal 2018, compared to $31.3 million in the second quarter last year. Revenue from rental and other was $14.9 million for the second quarter of fiscal 2018, compared to $15.4 million in the second quarter last year.

Gross profit for the second quarter of fiscal 2018 was $52.8 million, compared to $52.9 million in the second quarter last year. The company's gross profit margin was 19.6% in the second quarter of fiscal 2018, compared to 19.0% in the second quarter last year. Gross profit from parts, service and rental and other for the second quarter of fiscal 2018 was 75.1% of overall gross profit, compared to 76.6% in the second quarter last year.

Operating expenses decreased by $1 million to $50.5 million, or 18.7% of revenue, for the second quarter of fiscal 2018, compared to $51.5 million, or 18.5% of revenue, for the second quarter of last year. Restructuring efforts that were completed early in the third quarter of fiscal 2018 are expected to continue to reduce operating expenses on a going forward basis.

Segment Results
Agriculture Segment — Revenue for the second quarter of fiscal 2018 was $138.5 million, compared to $153.7 million in the second quarter last year. Pre-tax loss for the second quarter of fiscal 2018 was $6.9 million, compared to pre-tax loss of $4.3 million in the second quarter last year. Adjusted pre-tax loss for the second quarter of fiscal 2018 was $1.7 million, compared to adjusted pre-tax loss of $4.3 million in the second quarter last year.

Construction Segment — Revenue for the second quarter of fiscal 2018 was $77.9 million, compared to $83.1 million in the second quarter last year. Revenue for the second quarter of last year included approximately $14.0 million of equipment revenue associated with our aggressive selling efforts through alternative marketing channels for certain aged equipment inventory. Pre-tax income for the second quarter of fiscal 2018 was $0.9 million, compared to a pre-tax income of $0.6 million in the second quarter last year. Adjusted pre-tax income for the second quarter of fiscal 2018 was $1.2 million, compared to adjusted pre-tax income of $0.6 million in the second quarter last year.

International Segment — Revenue for the second quarter of fiscal 2018 was $52.4 million, compared to $41.5 million in the second quarter last year. The increase in revenue is primarily due to increased equipment revenue as the result of the build out of our footprint and availability of subvention funds in certain of our markets.  Pre-tax income for the second quarter of fiscal 2018 was $0.3 million, compared to a pre-tax loss of $0.2 million in the second quarter last year.

Updating Fiscal 2018 Modeling Assumptions

The company's fiscal 2018 modeling assumptions are as follows:

About Titan Machinery Inc.

Titan Machinery Inc., founded in 1980 and headquartered in West Fargo, North Dakota, is a leading global dealership with a network of full-service agriculture and construction stores.  The network consists of US locations in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming, Wisconsin, Colorado, Arizona, and New Mexico, and European locations in Romania, Bulgaria, Serbia, and Ukraine. The Titan Machinery locations represent one or more of the CNH Industrial Brands, including Case IH, New Holland Agriculture, Case Construction, New Holland Construction, and CNH Capital. Additional information about Titan Machinery Inc. can be found at www.titanmachinery.com.