Titan Machinery, a construction and agricultural equipment dealer with a growing rental program increased revenue to $441.7 million in its fiscal 2014 first quarter, a 4.7-percent increase compared to last year’s $421.7 million. All four of the company’s revenue sources — equipment, parts, service, and rental and other, contributed to the increase.
Rental revenue jumped from $10.6 million in the first quarter a year ago to $12.1 million, a 14.1-percent year-over-year increase.
However, fiscal first-quarter revenue fell short of the company’s previously stated expectations by about $50 million because of abnormally delayed spring weather, challenging industry conditions in the construction segment, and cautionary agriculture customer sentiment.
Gross profit for the fiscal quarter was $73.9 million, compared to $70.4 million in the year-ago quarter. Gross profit margin was 16.7 percent, essentially flat year over year.
Titan Machinery appears to be determined to grow its rental business. “We increased our rental fleet assets to $137 million compared to $106 million at the end of fiscal year 2013 to support our expansion of this growth platform,” Mark Kalvoda, Titan’s chief financial officer, told an investors conference call. “The fleet increase was primarily in our newly expanded footprint in Colorado, New Mexico and Arizona.”
“We’re focused on increasing utilization of our rental fleet,” added Peter Christianson, president, chief operating officer and director. “We recently hired a senior manager of rental operations to drive this business. Second, we are recruiting and hiring key operation managers to support or improve execution of our operating targets. Third, we’re focusing on increasing the sales volume per location to leverage operating expenses and drive operating margins. We are expanding our retail sales force for better market coverage. We’ve added personnel to increase our focus on government and major account sales. We’ve created an additional sales region dedicated to the Bakken area for increased focus.”
Based in West Fargo, N.D., Titan Machinery is No. 36 on the RER 100.
