Titan Machinery said fiscal first-quarter revenue fell to $522.4 million from $594.3 million a year earlier, as weaker equipment sales offset gains in margins and lower interest expense.
Equipment revenue dropped to $364.7 million from $436.8 million. Parts revenue edged down to $103.8 million from $105.6 million, service revenue slipped to $43.8 million from $44.0 million, while rental and other revenue rose to $10.2 million from $7.9 million.
Gross profit was $89.3 million, little changed from $90.9 million a year ago, but gross margin widened to 17.1% from 15.3%. The company said the improvement came from stronger equipment margins as it reduced aged inventory, plus a higher mix of parts and service revenue.
Operating expenses declined to $94.4 million from $96.4 million. Floorplan interest expense and other interest expense fell to $8.2 million from $11.1 million, reflecting lower inventory levels subject to interest.
The company narrowed its net loss to $12.6 million, or $0.55 per diluted share, from $13.2 million, or $0.58 per diluted share, in the same quarter last year.
Adjusted EBITDA fell to $1.0 million from $2.6 million.
By segment, agriculture revenue declined to $344.2 million from $384.4 million, a same-store sales drop of 8.2%. The segment’s pre-tax loss improved to $6.2 million from $12.8 million.
Construction revenue fell to $67.5 million from $72.1 million, with same-store sales down 6.5%. Its pre-tax loss improved to $0.6 million from $4.2 million.
Europe revenue dropped to $60.4 million from $93.9 million. Excluding a $4.2 million foreign-currency benefit, revenue was down $37.7 million, or 40.2%. The segment swung to a pre-tax loss of $0.9 million from pre-tax income of $4.7 million.
Australia revenue rose to $50.3 million from $44.0 million, including a $5.1 million foreign-currency benefit. Excluding currency effects, revenue increased $1.2 million, or 2.8%. The segment’s pre-tax loss widened to $1.8 million from $0.6 million.
Cash at quarter-end was $29.6 million. Inventories rose $11.7 million from the January 31 level to $914.8 million, including a $10.4 million increase in equipment inventories. Floorplan payables were $589.0 million, up from $553.8 million at January 31.
Operating cash flow swung to a use of $23.1 million from a source of $6.2 million a year earlier. Titan said the change was driven mainly by the timing of inventory receipts and changes in floorplan financing, partly offset by receivable collections.
For the full fiscal year, Titan kept its outlook unchanged. It expects agriculture revenue down 15% to 20%, construction revenue flat to up 5%, Europe revenue down 20% to 25%, and Australia revenue up 10% to 15%. It is forecasting adjusted EBITDA of $17 million to $29 million, adjusted consolidated pre-tax loss of $28 million to $39 million, and adjusted diluted loss per share of $1.25 to $1.75. Today the company's shares have moved -9.93% to a price of $21.49. For the full picture, make sure to review Titan Machinery's 8-K report.
