Titan Machinery Inc., a network of full-service agricultural and construction equipment stores, posted revenue from “rental and other” of $17.8 million, compared to $16.9 million in the fourth quarter last year, a 5.3-percent year-over-year increase. In the fourth quarter of fiscal 2013 ended Jan. 31, revenue increased 29.2 percent to $784.5 million from revenue of $607.0 million in the fourth quarter last year. Full-year revenue from “rental and other” was $64.4 million, a 22.0-percent increase from $50.2 million in the year-ago period. All four of the company’s revenue sources — equipment, parts, service, and rental and other — contributed to this period-over-period revenue growth.
Equipment sales were $679.0 million for the fourth quarter of fiscal 2013, compared to $517.1 million in the fourth quarter last year. Parts sales were $53.5 million for the fourth quarter of fiscal 2013, compared to $45.7 million in the fourth quarter last year. Revenue generated from service was $34.2 million for the fourth quarter of fiscal 2013, compared to $27.3 million in the fourth quarter last year.
Gross profit for the fourth quarter of fiscal 2013 was $104.5 million, compared to $92.8 million in the fourth quarter last year. The company’s gross profit margin was 13.3 percent in the fourth quarter of fiscal 2013, compared to 15.3 percent in the fourth quarter last year. The decrease in gross profit margin was primarily because of lower equipment margins and the change in sales mix, in which the higher margin parts and service businesses generated a smaller percentage of sales compared to the same quarter last year.
“In the fourth quarter, we continued to generate strong sales, which enabled us to exceed the high end of our fiscal 2013 annual sales guidance,” said David Meyer, Titan Machinery’s chairman and CEO. “Our Construction business generated top-line growth in fiscal 2013; however, our bottom-line results for this segment reflect difficult industry conditions as well as us falling short of our operational targets. To improve our overall Construction operating results, we are refocusing on generating stronger revenue growth, improving operating expenses and driving better pre-tax returns.
“In the fourth quarter, we began successfully executing on our inventory strategy to increase equipment turns and ended the year with a notable reduction in inventory as compared to the end of our third quarter. As we begin fiscal 2014, we expect to continue to generate strong sales results and remain focused on improving inventory turns. Regarding our Construction segment, we anticipate better market conditions and are refocusing our efforts to improve the profitability of this business. We remain confident that our Construction segment is an integral part of our company’s long-term growth strategy and will contribute to our top- and bottom-line growth. We are well positioned to strategically expand our footprint in the United States and internationally throughout fiscal 2014.”
Net income attributable to common stockholders for the fourth quarter of fiscal 2013 was $15.4 million, compared to $17.6 million in the fourth quarter last year. Earnings per diluted share for the fourth quarter of fiscal 2013 were $0.73 compared to $0.84 in the fourth quarter last year.
For the full year ended Jan. 31, revenue increased 32.5 percent to $2.2 billion from $1.66 billion in fiscal 2012. Gross margin for fiscal 2013 was 15.4 percent, compared to 16.6 percent in fiscal 2012. Net income attributable to common stockholders for fiscal 2013 was $42.0 million, or $2.00 per diluted share, compared to $43.8 million, or $2.18 per diluted share, in fiscal 2012.
The company’s inventory level was $929.2 million as of Jan. 31, compared to $748.0 million at the end of fiscal 2012. This inventory level primarily reflected an increase in new equipment, which increased to $542.2 million at Jan. 31, from $445.5 million at Jan. 31, 2012, while used equipment increased to $275.6 million at Jan. 31, from $219.8 million at Jan. 31, 2012.
In fiscal 2013, the Titan Machinery completed eight acquisitions, consisting of six agriculture equipment dealership locations in the United States, five construction equipment dealership locations in the U.S., one independent rental location in the U.S., and eight agriculture equipment dealership locations in Europe. The company also opened a new construction dealership in Windsor, Colo., and three new agriculture dealership locations in Romania. In addition, the company contracted with CNH to distribute Case Construction equipment in Romania and Bulgaria and to distribute CaseIH Agricultural products in Ukraine.
After the end of fiscal 2013, the Titan completed two acquisitions, consisting of two U.S. construction equipment dealership locations, including its first location in New Mexico. The company also opened its initial Ukrainian dealer facilities in Kiev in April 2013.
For the full year ending Jan. 31, 2014, the company anticipates increased revenue in the range of $2.35 billion to $2.55 billion, net income attributable to common stockholders in the range of $42.8 million to $49.2 million, and earnings per diluted share in the range of $2.00 to $2.30 based on estimated weighted average diluted common shares outstanding of 21.4 million.
Titan Machinery, headquartered in West Fargo, N.D., owns and operates a network of full-service agricultural and construction equipment stores in the U.S. and Europe. The Titan Machinery network consists of 106 North American dealerships in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming, Wisconsin, Colorado, Arizona and New Mexico, including two outlet stores, and 14 European dealerships in Romania, Bulgaria, Serbia and Ukraine. It is No. 41 on the RER 100.
