Titan Announces Second Quarter 2011 Results

Second quarter summary:

• Sales for second quarter 2011 set an all-time record at $404.4 million up 76%, compared to $229.7 million in the second quarter of 2010.
• Gross profit for second quarter 2011 was record-setting at $63.9 million up 88%, compared to $33.9 million in 2010.
• Second quarter income from operations was a record $44.0 million up 152%, compared to $17.4 million last year.
• Net income for the second quarter set a record at $25.3 million, compared to $4.6 million in the second quarter of last year.
• Earnings per common basic share for the second quarter were $0.60 per share up 362%, compared to $0.13 in the second quarter of last year.

Statement of Chief Executive Officer:

“I told everyone last quarter that everything was going well, but I didn’t think the Titan team would be moving this quickly,” states Maurice M. Taylor Jr., Chairman and CEO. “The forecast I made in May is too low for sales and EBITDA.

I was sent a copy of a report that talked about advance shipments before the quarter ended. Titan is building all of its wheels and tires to order and the order deck has never been this large. If anyone would like a tour, I would be happy to show them around our factories to see how we operate.

“Farm, earthmover and construction are all going up. Natural rubber and synthetic rubber are still rising in cost. Our announced price increase will bring our margins back to first quarter for North America. Our Goodyear South American purchase is doing better than we thought it would. When you look at their numbers, remember two thirds of the revenue is at cost. The equipment we will be shipping to them will increase their sales and profit. Titan expects real growth and profit from South America in 2012.”

Taylor announces, “The Goodyear Europe acquisition has a drop dead timeline of November 3, 2011. If Goodyear and the trade unions agree, then I believe Titan has the opportunity to add approximately $400 million in revenue in 2012 out of this facility.

“Titan’s testing and improvements of our new generation III and IV tires in the super giant class continue to enhance our product performance. We expect shipment of tires in this class to increase during the second half of 2011. We have added new employees to all five of Titan’s North American factories and we expect to have a strong second half. The hard work for the last few years is paying off and I’m happy for our shareholders and all the Titan employees who are very proud of what they have accomplished.

“The numbers for the last two quarters have proven if there is strong demand, we will grow and perform. I know we surprised a few people but we have a lot going now and we have proven without a doubt that we are moving like a rocket. The goal is to stay in orbit and not come back down.”

Year-to-date summary:

• June 2011 year-to-date sales were $685.3 million, compared to $426.1 million in 2010.
• June 2011 year-to-date gross profit was $120.2 million, compared to $60.0 million in 2010.
• Income from operations for the first six months of 2011 was $70.8 million, compared to $27.6 million year-to-date 2010.
• A noncash convertible debt charge of $16.1 million was recognized in conjunction with the first quarter exchange of $59.6 million in convertible notes for 6.6 million shares of Company stock.
• Year-to-date net income was $22.2 million, compared to $6.6 million in 2010.

Financial overview: