Titan Machinery Inc. (Nasdaq: TITN), a leading network of full-service agricultural and construction equipment stores, today reported financial results for the fiscal third quarter and first nine months ended October 31, 2011.

Fiscal 2012 Third Quarter Results

For the third quarter of fiscal 2012, revenue increased 35.9% to $423 million from revenue of $311.3 million in the third quarter last year. All three of the company's main revenue sources — equipment, parts and service — contributed to this period-over-period revenue growth. Equipment sales were $312.3 million for the third quarter of fiscal 2012, compared to $241.1 million in the third quarter last year. Parts sales were $64.5 million for the third quarter of fiscal 2012, compared to $42 million in the third quarter last year. Revenue generated from service was $29.8 million for the third quarter of fiscal 2012, compared to $20.8 million in the third quarter last year.

Gross profit for the third quarter of fiscal 2012 was $74 million, compared to $48 million in the third quarter of last year. The company's gross profit margin increased to 17.5% in the third quarter of fiscal 2012, compared to 15.4% in the third quarter last year, due to increased margins across all revenue streams and a change in sales mix to a larger percentage of revenue coming from higher margin parts, service and rental business. Gross profit from parts and service revenue for the third quarter of fiscal 2012 was 54% of overall gross profit and increased to $39.6 million from $26.1 million in the third quarter of last year.

Operating expenses were 11.8% of revenue for the third quarter of fiscal 2012 compared to 10.5% for the third quarter of last year reflecting a higher portion of our overall business coming from our Construction segment which normally has a higher gross margin but also higher operating expenses. This includes additional expenses associated with the company's initiative to grow its rental business in the Construction segment. Regarding rentals, although there are higher expenses as a percentage of rental revenues, the higher rental gross profits more than offset the additional operating expenses.

Pre-tax income for the third quarter of fiscal 2012 was $21.3 million, compared to $12.8 million in the third quarter last year. Pre-tax margin was 5% for the third quarter of fiscal 2012, compared to 4.1% in the third quarter last year. Pre-tax Agriculture segment income was $20.1 million for the third quarter of fiscal 2012, compared to $14.4 million in the third quarter last year. Pre-tax Construction segment income improved to $3.3 million for the third quarter of fiscal 2012, compared to a loss of $0.2 million in the third quarter last year.

Net income for the third quarter of fiscal 2012 was $12.8 million, compared to net income of $7.7 million in the third quarter last year. Earnings per diluted share for the third quarter of fiscal 2012 were $0.61 on approximately 21.1 million weighted average diluted shares outstanding compared to $0.42 on approximately 18.2 million weighted average diluted shares outstanding in the third quarter last year. The increase in weighted average diluted shares outstanding was primarily due to the Company's May 2011 follow-on offering.

Fiscal 2012 First Nine Months Results

For the nine months ended October 31, 2011, revenue increased 44.8% to $1.05 billion from $726.4 million for the same period last year. Gross margin for the first nine months of fiscal 2012 was 17.4%, compared to 16.3% in the same period last year. Pre-tax income for the first nine months of fiscal 2012 was $43.9 million for a pre-tax margin of 4.2%, compared to $20.0 million, or a pre-tax margin of 2.8%, for the same period last year. Net income for the first nine months of fiscal 2012 was $26.4 million, or $1.31 per diluted share, compared to $12.0 million, or $0.66 per diluted share, in the same period last year. The nine-month weighted average diluted shares outstanding for fiscal 2012 were 20.1 million, compared to 18.1 million weighted average diluted shares outstanding in the same period last year.