Titan Machinery, a leading network of full-service agricultural and construction equipment stores, this week reported financial results for the fiscal second quarter and first six months ended July 31. For the second quarter of fiscal 2013, revenue increased 31.9 percent to $410.1 million from revenue of $310.8 million in the second 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.

Revenue from rental and other increased to $15.5 million from $10.9 million in the second quarter last year, a 42.2-percent hike. Equipment sales were $306.2 million for the second quarter of fiscal 2013, compared to $225.3 million in the second quarter last year. Parts sales were $57.9 million for the second quarter of fiscal 2013, compared to $49.3 million in the second quarter last year. Revenue generated from service was $30.5 million for the second quarter of fiscal 2013, compared to $25.4 million in the second quarter last year.

“In the second quarter, we continued to make progress with our business, as we generated organic and acquired growth for both our Agriculture and Construction segments,” said David Meyer, Titan Machinery’s chairman and CEO. Construction equipment margins were also pressured by competitive conditions particularly in some of the larger metro areas of recent acquisitions.

For the six months ended July 31, revenue increased 32.2 percent to $831.8 million from $629.0 million for the same period last year. Revenue from rental and other increased 54.3 percent to $26.1 million from $16.9 million in the first six months of fiscal 2012. Gross margin for the first six months of fiscal 2013 was 16.9 percent, compared to 17.3 percent in the same period last year. Pre-tax income for the first six months of fiscal 2013 was $21.1 million for a pre-tax margin of 2.5 percent, compared to $22.6 million, or a pre-tax margin of 3.6 percent, for the same period last year.

“We increased our rental fleet assets to $106 million compared to $62 million at the end of last year, in line with our strategic growth plans for the rental business,” Mark Kalvoda, chief financial officer and chief accounting officer for Titan Machinery, told the investor conference call. “Our revenue growth reflects higher sales in both our Agriculture and Construction segments and especially benefited from the improved construction spending in our markets. The 42.8-percent growth in our rental business is a result of our strategic acquisitions and ramp-up of this growth platform.”

“Our revenue increased to $95.3 million, up 59.3 percent, which reflected strong acquired growth, organic growth and the expansion of our rental business,” said Peter Christiansen, Titan Machinery president, chief operating officer and director. “We're ramping up this segment of our business and are pleased with the top-line growth, but the sluggish economic recovery in metro areas and public spending have pressured our equipment margins.

“Our Construction revenue increased 70.1 percent in the first 6 months of fiscal 2013 to $176.9 million as we continued to expand this segment of our business through organic and acquired growth as well as rental growth.”

The company ended the second quarter of fiscal 2013 with cash and cash equivalents of $126.5 million. Its inventory level was $938.3 million as of July 31, compared to $748.0 million at the end of fiscal 2012, primarily reflecting an increase in new equipment, which increased to $626.4 million at July 31, from $445.5 million at Jan. 31, while used equipment decreased slightly to $211.9 million at July 31, from $219.8 million at Jan. 31.

In fiscal 2013 to date, the company completed five acquisitions, consisting of three agriculture equipment dealership locations in the United States, three construction equipment dealership locations in the United States, one independent rental business location in the United States, and seven 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 recently contracted with CNH to distribute Case Construction equipment in Romania and Bulgaria.

“We continue to execute our growth strategy with strategic acquisitions and store openings across all of our agriculture, construction, rental, and international growth platforms and are excited that our acquisition growth opportunities as well as our strong organic growth have us well-positioned for the future,” Meyer said.

The company is reiterating its previous revenue guidance and continues to expect revenue for the full year ending Jan. 31, 2013 in a range of $1.95 billion to $2.1 billion. It is lowering its net income attributable to common stockholders and earnings per diluted share guidance. Net income attributable to common stockholders is now expected to be in the range of $44.3 million to $48.5 million, compared to the previous range of $53.8 million to $58.0 million. Earnings per diluted share is now expected to be in the range of $2.10 to $2.30 based on estimated weighted average diluted common shares outstanding of 21.1 million, compared to the previous range of $2.55 to $2.75 based on estimated weighted average diluted common shares outstanding of 21.1 million.

Titan Machinery, headquartered in West Fargo, N.D., owns and operates a network of full-service agricultural and construction equipment stores in the United States and Europe. The Titan Machinery network consists of 98 North American dealerships in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming, Wisconsin, and Colorado, including two outlet stores, as well as 10 European dealerships in Romania and Bulgaria. It is No. 41 on the RER 100.