Titan Machinery, a network of full-service agricultural and construction equipment stores, last week reported financial results for the fiscal third quarter and first nine months ended Oct. 31. In the fiscal 2013 third quarter, revenue increased 37.6 percent to $582.1 million from revenue of $423.0 million in the third quarter last year. 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 $456.2 million for the third quarter of fiscal 2013, compared to $312.3 million in the third quarter last year. Parts sales were $72.1 million for the third quarter of fiscal 2013, compared to $64.5 million in the third quarter last year. Revenue generated from service was $33.4 million for the third quarter of fiscal 2013, compared to $29.8 million in the third quarter last year. Revenue from rental and other increased 25.8 percent to $20.5 million from $16.3 million in the third quarter last year.

Gross profit for the third quarter of fiscal 2013 was $94.1 million, compared to $74.0 million in the third quarter last year. The company’s gross profit margin was 16.2 percent in the third quarter of fiscal 2013, compared to 17.5 percent in the third quarter last year. The decrease in gross profit margin primarily resulted from 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.

Operating expenses were 11.0 percent of revenue or $64.0 million for the third quarter of fiscal 2013, compared to 11.8 percent of revenue or $50.1 million for the third quarter of last year.

“In the third quarter, we generated solid top and bottom line growth and ended the quarter with a strong balance sheet,” said David Meyer, Titan Machinery’s chairman and CEO. “Our construction business also experienced solid top-line growth, but increased equipment inventory levels across this industry as well as our recent strategic acquisitions in large metro areas have pressured the bottom line results of this segment. Based on our year-to-date results and outlook for the final quarter of the year, we are raising our annual revenue range and reiterating our earnings per share outlook.”

For the nine months ended Oct. 31, revenue increased 34.4 percent to $1.41 billion from $1.05 billion for the same period last year. Gross margin for the first nine months of fiscal 2013 was 16.6 percent, compared to 17.4 percent in the same period last year.

The company ended the third quarter of fiscal 2013 with cash and cash equivalents of $115.7 million. As of Oct. 31, its inventory level was $1.05 billion, compared to $748.0 million at the end of fiscal 2012. This inventory level primarily reflected an increase in new equipment, which increased to $726.9 million at Oct. 31, from $445.5 million at Jan. 31, 2012, while used equipment decreased slightly to $218.4 million at Oct. 31, from $219.8 million at Jan. 31.

In fiscal 2013 to date, the company completed seven acquisitions, consisting of six agriculture equipment dealership locations in the United States, five construction equipment dealership locations in the United States, one independent rental company location in the U.S., and seven agriculture equipment dealership locations in Europe. It 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.

“As we enter the fourth quarter we expect our inventory management strategy will reduce new equipment inventory levels by the end of fiscal 2013,” Meyer said. “In addition, we expect to improve the construction segment of our business which will enable us to generate stronger operating results in the fourth quarter. We have executed on our organic and acquired growth strategy with strategic acquisitions, both in the United States and internationally. We recently expanded our domestic footprint into Arizona with the acquisition of Falcon Power. We are excited about our growing dealership network and are confident that our new locations will contribute to our future top and bottom line growth.”

The company is raising its previous revenue guidance and expects its revenue for the full year ending Jan. 31, 2013 to be in the range of $2.0 billion to $2.15 billion from the previous range of $1.95 billion to $2.1 billion. Earnings per diluted share is expected to be in the range of $2.10 to $2.30 based on estimated weighted average diluted common shares outstanding of 21.0 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 104 North American dealerships in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming, Wisconsin, Colorado and Arizona, including two outlet stores, and 12 European dealerships in Romania and Bulgaria. It is No. 41 on the RER 100.