FORM
10-Q
|
þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
|
Illinois
|
36-3228472
|
|
(State
of Incorporation)
|
(I.R.S.
Employer Identification No.)
|
Shares
Outstanding at
|
||
Class
|
April
25, 2007
|
|
Common
stock, no par value per share
|
26,939,769
|
Page
|
||
Part
I.
|
Financial
Information
|
|
Item
1.
|
Financial
Statements (Unaudited)
|
|
Consolidated
Condensed Statements of Operations
for
the Three Months Ended March 31, 2007 and 2006
|
1
|
|
Consolidated
Condensed Balance Sheets as of
March
31, 2007, and December 31, 2006
|
2
|
|
Consolidated
Condensed Statement of Changes in Stockholder’s
Equity
for the Three Months Ended March 31, 2007
|
3
|
|
Consolidated
Condensed Statements of Cash Flows
for
the Three Months Ended March 31, 2007 and 2006
|
4
|
|
Notes
to Consolidated Condensed Financial Statements
|
5-15
|
|
Item
2.
|
Management’s
Discussion and Analysis of
Financial
Condition and Results of Operations
|
16-26
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
26
|
Item
4.
|
Controls
and Procedures
|
26
|
Part
II.
|
Other
Information
|
|
Item
1.
|
Legal
Proceedings
|
27
|
Item
6.
|
Exhibits
|
27
|
Signatures
|
27
|
Three
months ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
226,278
|
$
|
182,577
|
|||
Cost
of sales
|
199,087
|
151,463
|
|||||
Gross
profit
|
27,191
|
31,114
|
|||||
Selling,
general & administrative expenses
|
11,284
|
12,281
|
|||||
Royalty
expense
|
1,564
|
1,625
|
|||||
Income
from operations
|
14,343
|
17,208
|
|||||
Interest
expense
|
(5,749
|
)
|
(3,723
|
)
|
|||
Noncash
convertible debt conversion charge
|
(13,376
|
)
|
0
|
||||
Other
(expense) income
|
(185
|
)
|
836
|
||||
(Loss)
income before income taxes
|
(4,967
|
)
|
14,321
|
||||
(Benefit)
provision for income taxes
|
(2,484
|
)
|
5,728
|
||||
Net
(loss) income
|
$
|
(2,483
|
)
|
$
|
8,593
|
||
(Loss)
earnings per common share:
|
|||||||
Basic
|
$
|
(.12
|
)
|
$
|
.44
|
||
Diluted
|
(.12
|
)
|
.36
|
||||
Average
common shares outstanding:
|
|||||||
Basic
|
20,814
|
19,584
|
|||||
Diluted
|
20,814
|
25,925
|
March
31,
|
December
31,
|
||||||
Assets
|
2007
|
2006
|
|||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
$
|
38,970
|
$
|
33,412
|
|||
Accounts
receivable
|
121,313
|
73,882
|
|||||
Inventories
|
143,958
|
154,604
|
|||||
Deferred
income taxes
|
32,928
|
29,234
|
|||||
Prepaid
and other current assets
|
17,551
|
18,801
|
|||||
Total
current assets
|
354,720
|
309,933
|
|||||
Property,
plant and equipment, net
|
181,978
|
184,616
|
|||||
Investment
in Titan Europe Plc
|
63,988
|
65,881
|
|||||
Goodwill
|
11,702
|
11,702
|
|||||
Other
assets
|
10,746
|
12,994
|
|||||
Total
assets
|
$
|
623,134
|
$
|
585,126
|
|||
Liabilities
and Stockholders’ Equity
|
|||||||
Current
liabilities
|
|||||||
Short-term
debt
|
$
|
0
|
$
|
98
|
|||
Accounts
payable
|
50,158
|
25,884
|
|||||
Other
current liabilities
|
47,909
|
36,942
|
|||||
Total
current liabilities
|
98,067
|
62,924
|
|||||
Long-term
debt
|
200,000
|
291,266
|
|||||
Deferred
income taxes
|
27,261
|
27,924
|
|||||
Other
long-term liabilities
|
15,700
|
15,835
|
|||||
Total
liabilities
|
341,028
|
397,949
|
|||||
Stockholders’
equity
|
|||||||
Common
stock (no
par, 60,000,000 shares authorized, 30,577,356 issued)
|
30
|
30
|
|||||
Additional
paid-in capital
|
295,580
|
258,071
|
|||||
Retained
earnings
|
34,185
|
36,802
|
|||||
Treasury
stock (at
cost, 3,854,244 and 10,678,454 shares, respectively)
|
(34,997
|
)
|
(96,264
|
)
|
|||
Accumulated
other comprehensive loss
|
(12,692
|
)
|
(11,462
|
)
|
|||
Total
stockholders’ equity
|
282,106
|
187,177
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
623,134
|
$
|
585,126
|
Number
of common shares
|
Common
Stock
|
Additional
paid-in
capital
|
Retained
earnings
|
Treasury
stock
|
Accumulated
other comprehensive income (loss)
|
Total
|
||||||||||||||||
Balance
January 1, 2007
|
19,898,902
|
$
|
30
|
$
|
258,071
|
$
|
36,802
|
$
|
(96,264
|
)
|
$
|
(11,462
|
)
|
$
|
187,177
|
|||||||
Comprehensive
income:
|
||||||||||||||||||||||
Net
loss
|
(2,483
|
)
|
(2,483
|
)
|
||||||||||||||||||
Unrealized
loss on investment,
net of tax
|
(1,230
|
)
|
(1,230
|
)
|
||||||||||||||||||
Comprehensive
income
|
(2,483
|
)
|
(1,230
|
)
|
(3,713
|
)
|
||||||||||||||||
Dividends
paid on common stock
|
(134
|
)
|
(134
|
)
|
||||||||||||||||||
Note
conversion
|
6,577,200
|
35,240
|
59,049
|
94,289
|
||||||||||||||||||
Exercise
of stock options
|
242,810
|
2,222
|
2,180
|
4,402
|
||||||||||||||||||
Issuance
of treasury stock under 401(k) plan
|
4,200
|
47
|
38
|
85
|
||||||||||||||||||
Balance
March 31, 2007
|
26,723,112
|
$
|
30
|
$
|
295,580
|
$
|
34,185
|
$
|
(34,997
|
)
|
$
|
(12,692
|
)
|
$
|
282,106
|
Three
months ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
(loss) income
|
$
|
(2,483
|
)
|
$
|
8,593
|
||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
7,465
|
6,243
|
|||||
Deferred
income tax provision
|
(2,845
|
)
|
5,620
|
||||
Noncash
convertible debt conversion charge
|
13,376
|
0
|
|||||
Excess
tax benefit from stock options exercised
|
(849
|
)
|
0
|
||||
(Increase)
decrease in current assets:
|
|||||||
Accounts
receivable
|
(47,431
|
)
|
(49,214
|
)
|
|||
Inventories
|
10,646
|
(16,986
|
)
|
||||
Prepaid
and other current assets
|
1,250
|
(1,605
|
)
|
||||
Increase
(decrease) in current liabilities:
|
|||||||
Accounts
payable
|
24,274
|
36,954
|
|||||
Other
current liabilities
|
11,891
|
16,397
|
|||||
Other,
net
|
365
|
(718
|
)
|
||||
Net
cash provided by operating activities
|
15,659
|
5,284
|
|||||
Cash
flows from investing activities:
|
|||||||
Capital
expenditures, net
|
(4,064
|
)
|
(1,515
|
)
|
|||
Other
|
52
|
36
|
|||||
Net
cash used for investing activities
|
(4,012
|
)
|
(1,479
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Payment
on revolving credit facility, net
|
0
|
(2,200
|
)
|
||||
Payment
on debt
|
(10,164
|
)
|
(3,279
|
)
|
|||
Proceeds
from exercise of stock options
|
3,553
|
1,745
|
|||||
Excess
tax benefit from stock options exercised
|
849
|
0
|
|||||
Payment
of financing fees
|
(313
|
)
|
0
|
||||
Dividends
paid
|
(99
|
)
|
(98
|
)
|
|||
Other
|
85
|
6
|
|||||
Net
cash used for financing activities
|
(6,089
|
)
|
(3,826
|
)
|
|||
Net
increase (decrease) in cash and cash equivalents
|
5,558
|
(21
|
)
|
||||
Cash
and cash equivalents at beginning of period
|
33,412
|
592
|
|||||
Cash
and cash equivalents at end of period
|
$
|
38,970
|
$
|
571
|
March
31,
2007
(Actual)
|
March
31,
2006
(Pro forma)
|
||||||
Net
sales
|
$
|
226,278
|
$
|
217,867
|
|||
Net
(loss) income
|
(2,483
|
)
|
11,990
|
||||
Diluted
earnings per share
|
(.12
|
)
|
.49
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Raw
materials
|
$
|
54,859
|
$
|
57,814
|
|||
Work-in-process
|
17,127
|
16,738
|
|||||
Finished
goods
|
76,176
|
84,863
|
|||||
148,162
|
159,415
|
||||||
Reduction
to LIFO basis
|
(4,204
|
)
|
(4,811
|
)
|
|||
$
|
143,958
|
$
|
154,604
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Land
and improvements
|
$
|
3,088
|
$
|
3,088
|
|||
Buildings
and improvements
|
78,261
|
78,230
|
|||||
Machinery
and equipment
|
270,786
|
269,730
|
|||||
Tools,
dies and molds
|
52,251
|
52,205
|
|||||
Construction-in-process
|
7,184
|
4,587
|
|||||
411,570
|
407,840
|
||||||
Less
accumulated depreciation
|
(229,592
|
)
|
(223,224
|
)
|
|||
$
|
181,978
|
$
|
184,616
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Investment
in Titan Europe Plc
|
$
|
63,988
|
$
|
65,881
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Agricultural
segment
|
$
|
6,912
|
$
|
6,912
|
|||
Earthmoving/construction
segment
|
3,552
|
3,552
|
|||||
Consumer
segment
|
1,238
|
1,238
|
|||||
$
|
11,702
|
$
|
11,702
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Senior
unsecured notes
|
$
|
200,000
|
$
|
200,000
|
|||
Senior
unsecured convertible notes
|
0
|
81,200
|
|||||
Industrial
revenue bonds and other
|
0
|
10,164
|
|||||
200,000
|
291,364
|
||||||
Less:
Amounts due within one year
|
0
|
98
|
|||||
$
|
200,000
|
$
|
291,266
|
April
1 - December 31, 2007
|
$
|
0
|
||
2008
|
0
|
|||
2009
|
0
|
|||
2010
|
0
|
|||
2011
|
0
|
|||
Thereafter
|
200,000
|
|||
$
|
200,000
|
2007
|
2006
|
||||||
Warranty
liability, January 1
|
$
|
4,688
|
$
|
1,838
|
|||
Provision
for warranty liabilities
|
2,129
|
1,604
|
|||||
Warranty
payments made
|
(1,619
|
)
|
(1,003
|
)
|
|||
Warranty
liability, March 31
|
$
|
5,198
|
$
|
2,439
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Interest
cost
|
$
|
941
|
$
|
983
|
|||
Expected
return on assets
|
(1,256
|
)
|
(1,168
|
)
|
|||
Amortization
of unrecognized prior service cost
|
34
|
34
|
|||||
Amortization
of unrecognized deferred taxes
|
(14
|
)
|
(14
|
)
|
|||
Amortization
of net unrecognized loss
|
398
|
462
|
|||||
Net
periodic pension cost
|
$
|
103
|
$
|
297
|
April
1 - December 31, 2007
|
$
|
2,125
|
||
2008
|
1,554
|
|||
2009
|
960
|
|||
2010
|
658
|
|||
2011
|
347
|
|||
Thereafter
|
0
|
|||
Total
future minimum lease payments
|
$
|
5,644
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Revenues
from external customers
|
|||||||
Agricultural
|
$
|
135,296
|
$
|
124,427
|
|||
Earthmoving/construction
|
75,118
|
31,801
|
|||||
Consumer
|
15,864
|
26,349
|
|||||
Consolidated
totals
|
$
|
226,278
|
$
|
182,577
|
|||
Income
from Operations
|
|||||||
Agricultural
|
$
|
8,038
|
$
|
19,307
|
|||
Earthmoving/construction
|
13,875
|
5,227
|
|||||
Consumer
|
848
|
1,020
|
|||||
Reconciling
items (a)
|
(8,418
|
)
|
(8,346
|
)
|
|||
Consolidated
totals
|
$
|
14,343
|
$
|
17,208
|
March
31,
|
December
31,
|
||||||
Total
Assets
|
2007
|
2006
|
|||||
Agricultural
segment
|
$
|
280,535
|
$
|
273,787
|
|||
Earthmoving/construction
segment
|
187,028
|
145,964
|
|||||
Consumer
segment
|
26,155
|
22,678
|
|||||
Reconciling
items (b)
|
129,416
|
142,697
|
|||||
Consolidated
totals
|
$
|
623,134
|
$
|
585,126
|
|||
(a) |
Represents
corporate expenses and depreciation and amortization expense related
to
property, plant and equipment carried at the corporate
level.
|
(b) |
Represents
property, plant and equipment and other corporate
assets.
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Interest
income
|
$
|
518
|
$
|
1,133
|
|||
Debt
termination expense
|
(675
|
)
|
0
|
||||
Other
expense
|
(28
|
)
|
(297
|
)
|
|||
$
|
(185
|
)
|
$
|
836
|
Three
months ended,
|
|||||||||||||||||||
March
31, 2007
|
March
31, 2006
|
||||||||||||||||||
Net
Loss
|
Weighted
average shares
|
Per
share amount
|
Net
Income
|
Weighted
average shares
|
Per
share amount
|
||||||||||||||
Basic
EPS
|
$
|
(2,483
|
)
|
20,814
|
$
|
(.12
|
)
|
$
|
8,593
|
19,584
|
$
|
.44
|
|||||||
Effect
of stock options
|
0
|
0
|
0
|
326
|
|||||||||||||||
Effect
of convertible notes
|
0
|
0
|
719
|
6,015
|
|||||||||||||||
Diluted
EPS
|
$
|
(2,483
|
)
|
20,814
|
$
|
(.12
|
)
|
$
|
9,312
|
25,925
|
$
|
.36
|
Consolidating
Condensed Statements of Operations
|
||||||||||||||||
(Amounts
in thousands)
|
||||||||||||||||
For
the Three Months Ended March 31, 2007
|
||||||||||||||||
Titan
|
Non-
|
|||||||||||||||
Intl.,
Inc.
|
Guarantor
|
Guarantor
|
||||||||||||||
(Parent)
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Net
sales
|
$
|
0
|
$
|
226,278
|
$
|
0
|
$
|
0
|
$
|
226,278
|
||||||
Cost
of sales
|
384
|
198,703
|
0
|
0
|
199,087
|
|||||||||||
Gross
(loss) profit
|
(384
|
)
|
27,575
|
0
|
0
|
27,191
|
||||||||||
Selling,
general and administrative expenses
|
3,506
|
7,703
|
75
|
0
|
11,284
|
|||||||||||
Royalty
expense
|
0
|
1,564
|
0
|
0
|
1,564
|
|||||||||||
(Loss)
income from operations
|
(3,890
|
)
|
18,308
|
(75
|
)
|
0
|
14,343
|
|||||||||
Interest
expense
|
(5,746
|
)
|
(3
|
)
|
0
|
0
|
(5,749
|
)
|
||||||||
Intercompany
interest income (expense)
|
1,134
|
(1,406
|
)
|
272
|
0
|
0
|
||||||||||
Noncash
convertible debt conversion charge
|
(13,376
|
)
|
0
|
0
|
0
|
(13,376
|
)
|
|||||||||
Other
(expense) income
|
(226
|
)
|
42
|
(1
|
)
|
0
|
(185
|
)
|
||||||||
(Loss)
income before income taxes
|
(22,104
|
)
|
16,941
|
196
|
0
|
(4,967
|
)
|
|||||||||
(Benefit)
provision for income taxes
|
(11,052
|
)
|
8,470
|
98
|
0
|
(2,484
|
)
|
|||||||||
Equity
in earnings of subsidiaries
|
8,569
|
0
|
0
|
(8,569
|
)
|
0
|
||||||||||
Net
(loss) income
|
$
|
(2,483
|
)
|
$
|
8,471
|
$
|
98
|
$
|
(8,569
|
)
|
$
|
(2,483
|
)
|
For
the Three Months Ended March 31, 2006
|
||||||||||||||||
Titan
|
Non-
|
|||||||||||||||
Intl.,
Inc.
|
Guarantor
|
Guarantor
|
||||||||||||||
(Parent)
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Net
sales
|
$
|
0
|
$
|
182,577
|
$
|
0
|
$
|
0
|
$
|
182,577
|
||||||
Cost
of sales
|
18
|
151,445
|
0
|
0
|
151,463
|
|||||||||||
Gross
(loss) profit
|
(18
|
)
|
31,132
|
0
|
0
|
31,114
|
||||||||||
Selling,
general and administrative expenses
|
4,826
|
7,409
|
46
|
0
|
12,281
|
|||||||||||
Royalty
expense
|
0
|
1,625
|
0
|
0
|
1,625
|
|||||||||||
(Loss)
income from operations
|
(4,844
|
)
|
22,098
|
(46
|
)
|
0
|
17,208
|
|||||||||
Interest
expense
|
(3,516
|
)
|
(207
|
)
|
0
|
0
|
(3,723
|
)
|
||||||||
Intercompany
interest income (expense)
|
1,116
|
(1,309
|
)
|
193
|
0
|
0
|
||||||||||
Other
income
|
691
|
22
|
123
|
0
|
836
|
|||||||||||
(Loss)
income before income taxes
|
(6,553
|
)
|
20,604
|
270
|
0
|
14,321
|
||||||||||
(Benefit)
provision for income taxes
|
(2,621
|
)
|
8,240
|
109
|
0
|
5,728
|
||||||||||
Equity
in earnings of subsidiaries
|
12,525
|
0
|
0
|
(12,525
|
)
|
0
|
||||||||||
Net
income
|
$
|
8,593
|
$
|
12,364
|
$
|
161
|
$
|
(12,525
|
)
|
$
|
8,593
|
Consolidating
Condensed Balance Sheets
|
||||||||||||||||
(Amounts
in thousands)
|
||||||||||||||||
March
31, 2007
|
||||||||||||||||
|
Titan
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
||
|
|
Intl.,
Inc.
|
|
|
Guarantor
|
|
|
Guarantor
|
|
|
|
|
|
|
|
|
|
|
(Parent)
|
|
|
Subsidiaries
|
|
|
Subsidiaries
|
|
|
Eliminations
|
|
|
Consolidated
|
||
Assets
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
38,433
|
$
|
35
|
$
|
502
|
$
|
0
|
$
|
38,970
|
||||||
Accounts
receivable
|
(454
|
)
|
121,767
|
0
|
0
|
121,313
|
||||||||||
Inventories
|
0
|
143,958
|
0
|
0
|
143,958
|
|||||||||||
Prepaid
and other current assets
|
33,659
|
16,794
|
26
|
0
|
50,479
|
|||||||||||
Total current assets
|
71,638
|
282,554
|
528
|
0
|
354,720
|
|||||||||||
Property,
plant and equipment, net
|
1,405
|
180,573
|
0
|
0
|
181,978
|
|||||||||||
Investment
in Titan Europe Plc
|
23,641
|
0
|
40,347
|
0
|
63,988
|
|||||||||||
Investment
in subsidiaries
|
20,876
|
0
|
0
|
(20,876
|
)
|
0
|
||||||||||
Other
assets
|
7,181
|
15,267
|
0
|
0
|
22,448
|
|||||||||||
Total
assets
|
$
|
124,741
|
$
|
478,394
|
$
|
40,875
|
$
|
(20,876
|
)
|
$
|
623,134
|
|||||
Liabilities
and Stockholders’ Equity
|
||||||||||||||||
Accounts
payable
|
$
|
1,451
|
$
|
48,707
|
$
|
0
|
$
|
0
|
$
|
50,158
|
||||||
Other
current liabilities
|
453
|
47,404
|
52
|
0
|
47,909
|
|||||||||||
Total current liabilities
|
1,904
|
96,111
|
52
|
0
|
98,067
|
|||||||||||
Long-term
debt
|
200,000
|
0
|
0
|
0
|
200,000
|
|||||||||||
Other
long-term liabilities
|
29,968
|
12,976
|
17
|
0
|
42,961
|
|||||||||||
Intercompany
accounts
|
(389,237
|
)
|
379,486
|
9,751
|
0
|
0
|
||||||||||
Stockholders’
equity
|
282,106
|
(10,179
|
)
|
31,055
|
(20,876
|
)
|
282,106
|
|||||||||
Total
liabilities and stockholders’ equity
|
$
|
124,741
|
$
|
478,394
|
$
|
40,875
|
$
|
(20,876
|
)
|
$
|
623,134
|
December
31, 2006
|
||||||||||||||||
Titan
|
Non-
|
|||||||||||||||
Intl.,
Inc.
|
Guarantor
|
Guarantor
|
||||||||||||||
(Parent)
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Assets
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
33,220
|
$
|
69
|
$
|
123
|
$
|
0
|
$
|
33,412
|
||||||
Accounts
receivable
|
(38
|
)
|
73,920
|
0
|
0
|
73,882
|
||||||||||
Inventories
|
0
|
154,604
|
0
|
0
|
154,604
|
|||||||||||
Prepaid
and other current assets
|
3,937
|
44,036
|
62
|
0
|
48,035
|
|||||||||||
Total current assets
|
37,119
|
272,629
|
185
|
0
|
309,933
|
|||||||||||
Property,
plant and equipment, net
|
1,279
|
183,337
|
0
|
0
|
184,616
|
|||||||||||
Investment
in Titan Europe Plc
|
25,534
|
0
|
40,347
|
0
|
65,881
|
|||||||||||
Investment
in subsidiaries
|
14,517
|
0
|
0
|
(14,517
|
)
|
0
|
||||||||||
Other
assets
|
8,802
|
15,894
|
0
|
0
|
24,696
|
|||||||||||
Total
assets
|
$
|
87,251
|
$
|
471,860
|
$
|
40,532
|
$
|
(14,517
|
)
|
$
|
585,126
|
|||||
Liabilities
and Stockholders’ Equity
|
||||||||||||||||
Accounts
payable
|
$
|
1,058
|
$
|
24,826
|
$
|
0
|
$
|
0
|
$
|
25,884
|
||||||
Other
current liabilities
|
3,437
|
33,607
|
(11
|
)
|
7
|
37,040
|
||||||||||
Total current liabilities
|
4,495
|
58,433
|
(11
|
)
|
7
|
62,924
|
||||||||||
Long-term
debt
|
290,700
|
566
|
0
|
0
|
291,266
|
|||||||||||
Other
long-term liabilities
|
10,896
|
30,393
|
2,470
|
0
|
43,759
|
|||||||||||
Intercompany
accounts
|
(406,017
|
)
|
398,856
|
7,168
|
(7
|
)
|
0
|
|||||||||
Stockholders’
equity
|
187,177
|
(16,388
|
)
|
30,905
|
(14,517
|
)
|
187,177
|
|||||||||
Total
liabilities and stockholders’ equity
|
$
|
87,251
|
$
|
471,860
|
$
|
40,532
|
$
|
(14,517
|
)
|
$
|
585,126
|
Consolidating
Condensed Statements of Cash Flows
|
|||||||||||||
(Amounts
in thousands)
|
|||||||||||||
For
the Three Months Ended March 31, 2007
|
|||||||||||||
Titan
|
Non-
|
||||||||||||
Intl.,
Inc.
|
Guarantor
|
Guarantor
|
|||||||||||
(Parent)
|
Subsidiaries
|
Subsidiaries
|
Consolidated
|
||||||||||
Net
cash provided by (used for) operating activities
|
$
|
16,050
|
$
|
(640
|
)
|
$
|
249
|
$
|
15,659
|
||||
Cash
flows from investing activities:
|
|||||||||||||
Capital
expenditures
|
(212
|
)
|
(3,852
|
)
|
0
|
(4,064
|
)
|
||||||
Other,
net
|
0
|
52
|
0
|
52
|
|||||||||
Net
cash used for investing activities
|
(212
|
)
|
(3,800
|
)
|
0
|
(4,012
|
)
|
||||||
Cash
flows from financing activities:
|
|||||||||||||
Payment
of debt
|
(9,500
|
)
|
(664
|
)
|
0
|
(10,164
|
)
|
||||||
Proceeds
from exercise of stock options
|
3,553
|
0
|
0
|
3,553
|
|||||||||
Excess
tax benefit from stock options exercised
|
849
|
0
|
0
|
849
|
|||||||||
Payment
of financing fees
|
(313
|
)
|
0
|
0
|
(313
|
)
|
|||||||
Intercompany
activities
|
(5,200
|
)
|
5,070
|
130
|
0
|
||||||||
Other,
net
|
(14
|
)
|
0
|
0
|
(14
|
)
|
|||||||
Net
cash (used for) provided by financing activities
|
(10,625
|
)
|
4,406
|
130
|
(6,089
|
)
|
|||||||
Net
increase (decrease) in cash and cash equivalents
|
5,213
|
(34
|
)
|
379
|
5,558
|
||||||||
Cash
and cash equivalents, beginning of period
|
33,220
|
69
|
123
|
33,412
|
|||||||||
Cash
and cash equivalents, end of period
|
$
|
38,433
|
$
|
35
|
$
|
502
|
$
|
38,970
|
For
the Three Months Ended March 31, 2006
|
|||||||||||||
Titan
|
Non-
|
||||||||||||
Intl.,
Inc.
|
Guarantor
|
Guarantor
|
|||||||||||
(Parent)
|
Subsidiaries
|
Subsidiaries
|
Consolidated
|
||||||||||
Net
cash provided by operating activities
|
$
|
14,265
|
$
|
(9,331
|
)
|
$
|
350
|
$
|
5,284
|
||||
Cash
flows from investing activities:
|
|||||||||||||
Capital
expenditures
|
0
|
(1,515
|
)
|
0
|
(1,515
|
)
|
|||||||
Other,
net
|
0
|
36
|
0
|
36
|
|||||||||
Net
cash used for investing activities
|
0
|
(1,479
|
)
|
0
|
(1,479
|
)
|
|||||||
Cash
flows from financing activities:
|
|||||||||||||
Payment
of debt
|
0
|
(3,279
|
)
|
0
|
(3,279
|
)
|
|||||||
Proceeds
on revolving credit facility, net
|
(2,200
|
)
|
0
|
0
|
(2,200
|
)
|
|||||||
Proceeds
from exercise of stock options
|
1,745
|
0
|
0
|
1,745
|
|||||||||
Intercompany
activities
|
(13,751
|
)
|
14,072
|
(321
|
)
|
0
|
|||||||
Other,
net
|
(92
|
)
|
0
|
0
|
(92
|
)
|
|||||||
Net
cash (used for) provided by financing activities
|
(14,298
|
)
|
10,793
|
(321
|
)
|
(3,826
|
)
|
||||||
Net
(decrease) increase in cash and cash equivalents
|
(33
|
)
|
(17
|
)
|
29
|
(21
|
)
|
||||||
Cash
and cash equivalents, beginning of period
|
59
|
49
|
484
|
592
|
|||||||||
Cash
and cash equivalents, end of period
|
$
|
26
|
$
|
32
|
$
|
513
|
$
|
571
|
· |
Anticipated
trends in the Company’s business
|
· |
Future
expenditures for capital projects
|
· |
The
Company’s ability to continue to control costs and maintain
quality
|
· |
Ability
to meet financial covenants and conditions of loan
agreements
|
· |
The
Company’s business strategies, including its intention to introduce new
products
|
· |
Expectations
concerning the performance and success of the Company’s existing and new
products
|
· |
The
Company’s intention to consider and pursue acquisitions and divestitures
|
· |
Changes
in the Company’s end-user markets as a result of world economic or
regulatory influences
|
· |
Fluctuations
in currency translations
|
· |
Changes
in the marketplace, including new products and pricing changes by
the
Company’s competitors
|
· |
Availability
and price of raw materials
|
· |
Levels
of operating efficiencies
|
· |
Actions
of domestic and foreign governments
|
· |
Results
of investments
|
· |
Ability
to secure financing at reasonable
terms
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
226,278
|
$
|
182,577
|
|||
Cost
of sales
|
199,087
|
151,463
|
|||||
Gross
profit
|
27,191
|
31,114
|
|||||
Gross
profit percentage
|
12.0
|
%
|
17.0
|
%
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Selling,
general and administrative
|
$
|
11,284
|
$
|
12,281
|
|||
Percentage
of net sales
|
5.0
|
%
|
6.7
|
%
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Royalty
expense
|
$
|
1,564
|
$
|
1,625
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Income
from operations
|
$
|
14,343
|
$
|
17,208
|
|||
Percentage
of net sales
|
6.3
|
%
|
9.4
|
%
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Interest
expense
|
$
|
5,749
|
$
|
3,723
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Noncash
convertible debt conversion
charge
|
$
|
13,376
|
$
|
0
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Other
(expense) income
|
$
|
(185
|
)
|
$
|
836
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Net
(loss) income
|
$
|
(2,483
|
)
|
$
|
8,593
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
135,296
|
$
|
124,427
|
|||
Income
from operations
|
8,038
|
19,307
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
75,118
|
$
|
31,801
|
|||
Income
from operations
|
13,875
|
5,227
|
Three
months ended March 31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
15,864
|
$
|
26,349
|
|||
Income
from operations
|
848
|
1,020
|
· |
Collateral
coverage be equal to or greater than 1.2 times the outstanding revolver
balance.
|
· |
If
the 30-day average of the outstanding revolver balance exceeds $100
million, the fixed charge coverage ratio be equal to or greater than
a 1.0
to 1.0 ratio.
|
· |
Limits
on payments of dividends and repurchases of the Company’s
stock.
|
· |
Restrictions
on the ability of the Company to make additional borrowings, or to
consolidate, merge or otherwise fundamentally change the ownership
of the
Company.
|
· |
Limitations
on investments, dispositions of assets and guarantees of
indebtedness.
|
· |
Other
customary affirmative and negative covenants.
|
31.1
|
Certification
of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
31.2
|
Certification
of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
32
|
Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
TITAN
INTERNATIONAL, INC.
|
|
(Registrant)
|
Date:
|
April
26, 2007
|
By:
|
/s/
MAURICE M. TAYLOR JR.
|
Maurice
M. Taylor Jr.
|
|||
Chairman
and Chief Executive Officer
(Principal
Executive Officer)
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By:
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/s/
KENT W. HACKAMACK
|
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Kent
W. Hackamack
|
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Vice
President of Finance and Treasurer
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(Principal
Financial Officer)
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