Titan International Inc. Reports Strong Fourth Quarter & 2022 Year as a Whole

Titan International, Inc., a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products, today reported results for the fourth quarter and year ended December 31, 2022.

"The Titan team executed at a very high level once again and closed the year by delivering record fourth quarter results. This strong performance supported annual records for sales, profitability and cash flow for the full year 2022 and allowed us to deliver on our previously stated outlook," stated Paul Reitz, President and Chief Executive Officer. "The entire One Titan team's tireless commitment to developing and manufacturing market-leading products, which improve the performance of off-road equipment, positions us for continued long-term growth. We serve a broad base of OEMs and dealers around the world, and consistently exceed expectations through the intimate connection we have developed with customers and their end-users. I am extremely proud of the resilience and determination of our team over the past few years."

Mr. Reitz continued, "This quarter we experienced year-over-year sales growth of 10%, excluding foreign exchange impacts and the sale of the Australia wheel business. We expanded gross margin to 15% during the quarter, a 220 basis point improvement year-over-year, as all our global business units performed at a high-level during the quarter. We have a lot to be proud of as we close the books on 2022 and I commend the One Titan team for the exceptional performance and tremendous focus as we look to 2023."

Mr. Reitz added, "2022 was also a banner year for cash flow as we set records for both operating and free cash flow, generating $44 million in free cash flow during the fourth quarter and $114 million for the full year. As a result of our strong cash flow generation and selective debt paydown, our net debt to full year adjusted EBITDA leverage ratio fell to 1.1 times. Additionally, our cash position increased to $160 million at the end of the year, up $62 million from a year ago. We are extremely pleased with the strength of our balance sheet, which is a testament to the strategic actions of this management team. We have truly transformed our financial position, and are now in a position of strength to support future growth."

Mr. Reitz concluded, "There continues to be a lot of noise around supply chains and inflation, but the encouraging sign for Titan is that farmer income remains healthy globally, with grain markets that are well supported by strong supply and demand economics. Farmers remain in solid financial position, and sentiment is improving, with some input costs coming back in line. The recent USDA reports show that corn and soybean supply-demand will support current pricing into 2024, at a minimum, and this dictates farmers' decisions to purchase new equipment and drive robust aftermarket tire sales. Large Ag retail demand continues at strong levels, driven by precision farming, replacement equipment and good farmer income. Weather conditions are unpredictable and our LSW's continue to be the perfect solution for farmers battling tough conditions or farmers looking to make their equipment perform better and more efficient. Small ag equipment inventory levels have returned to pre-Covid levels, and along with the effects of inflation slowing demand in the low horsepower range and some OEM's drawing down internal inventory, we expect a tapering of demand in this segment. The construction and earthmoving markets are in a good position to start 2023 with infrastructure support and solid commodity prices driving activity. Coming off a record 2022, we expect this year to be an upbeat year with our financial performance remaining at a high level. As the year progresses, we'll provide more information about our forecasted performance."