Titan’s stockholders voted to support the Board’s recommendations, with all ballot items receiving the majority of the proxy votes. Morry Taylor, TWI’s Chairman of the Board of Directors, stated, “I appreciate the continued support from our stockholders and the recognition of the Company’s success. I believe that our stockholders understand the progress we have made over the last several years. We will continue to engage and listen to our investors to get various viewpoints. As always, we invite anyone to come visit us at any of our facilities.”
Morry Taylor concluded, “the Board met after the annual stockholders’ meeting last week, and we are all struck by the strides that Titan has made over the last several years, but even more so, the outlook is getting stronger, as indicated by this release. I feel like there is nothing but bright skies ahead for TWI.”
David Martin, Senior Vice President and Chief Financial Officer, commented, “the business climate continues to be strong for Titan, and our financial performance in the second quarter has exceeded expectations, and the outlook for the remainder of the year continues to be positive. As a result of our strong performance, it is important to update investors prior to the release of our second quarter earnings expected to be released in early August, that we are exceeding expectations. At this point, we expect second quarter sales to be at or exceeding the level of our first quarter sales, while our margins are expected to be stronger. For the full year, we now anticipate sales to be around $2.2 billion, with adjusted EBITDA between $225 million and $240 million, which will be our strongest performance in our history.”
Paul Reitz, President and Chief Executive Officer further commented, “not only are we seeing strength in sales, but we are achieving solid flow through to our margins and bottom line, based on improved plant productivity and efficiency, and healthy product mix. Our Titan team continues to manage our supply chain effectively along with handling the unprecedented inflationary environment well. We believe that strength of our end-markets and our performance has a solid runway in front of us for the next couple of years, and this belief is supported by the numerous market factors in place, including high farm commodity prices, low equipment inventory levels, both new and used, and strong farmer balance sheets. Most importantly, the Ag sector should hold up despite the inflationary environment surrounding us, based on these and other fundamentals.”
In addition, during the second quarter of 2022, the Company will report approximately $22 million in other income for non-income tax credits in Brazil, based on the formal approval from the Brazilian government this quarter. This matter relates to previously paid indirect taxes that were subject to successful legal claims, which was previously disclosed in the Company’s first quarter 2022 10-Q. The cash flow from these tax credits is expected to be realized over the next two years. This positive cash flow will enable the Company to continue to reduce debt over time, and fund ongoing critical investments to advance the business. An additional $10 million in tax credits are still pending formal approval by government authorities and will be recognized when such approval is received. These tax credits will be subject to income taxes in Brazil. Based on the non-recurring nature of these credits, the total is not included in the updated adjusted EBITDA full year guidance.