Titan International Inc. Third Quarter 2026 Earnings Call and Webcast - TITAN INTERNATIONAL INC

Good morning, ladies and gentlemen, and welcome to the Titan International Inc. third quarter 2026 earnings conference call. At this time, all participants have been placed in a listen-only mode, and we will open the floor for your questions and comments after the presentation. If you need assistance during the call, please press star followed by zero on your telephone keypad. On the call today are Paul Reitz, Titan's president and CEO, and Tonya Haley, Titan's Senior Vice President and CFO. We will begin with a reminder that the results management is about to review were presented in the earnings release issued this morning, along with Titan's Form 10Q, which was also filed with the Securities and Exchange Commission this morning. As a reminder, during this call, management will be discussing certain forward-looking information, including the company's plans and projections for the future that involve risks, uncertainties, and assumptions that could cause our actual results to differ materially from the forward-looking information. Additional information concerning factors that either individually or in the aggregate could cause actual results that differ materiall from these forward- looking statements can be found within the Safe Harbour Statement included in the earnings release attached to the company's Form 8-K filed earlier, as well as the latest Form 10-K and Forms 10-Q, all of which have been filed with the SEC. In addition, today's remarks may refer to non-GAAP financial measures, which are intended to supplement but not be a substitute for the most directly comparable GAAP measures. The earnings release, which accompanies today's call, contains financial and other quantitative information to be discussed today, as well as the reconciliation of the non-GAP measures to the most comparable GAap measures. The Q3 earnings release is available on the company's website. A replay of this presentation, a copy of today's transcript, and the company'S latest quarterly investor presentation will be available soon after the call on Titan's website . I would now like to turn the call over to Paul. Thanks, and good morning. Our third quarter results were solid. Revenue was $454 million and adjusted EBITDA was $28 million, both consistent with our guidance. Delivering with that range despite the prolonged cyclical downturn in our end markets reflects our focus on the factors we can control and the value our one-stop shop strategy provides to our customers. As we reported in mid-September, we signed a definitive agreement to divest our ITM undercarriage business. This transaction is an important step in our capital allocation and overall strategy as a focused tire and wheel company because it will allow us to reduce debt, invest in core growth initiatives, including M&A. We expect the sale to close in January, subject to customary regulatory and closing conditions. Until then, we are managing ITM to contribute as much as possible to our overall results, even though accounting rules require us to report it as discontinued operations. In particular, we expect ITM to generate positive cash flow during the fourth quarter. Tony will cover the financial details later. ITM has been an important business for Titan, but its products and operating model do not offer the same natural synergies as our wheel and tire businesses, including those we have realized through the recent Carlsar acquisition. After evaluating the strategic fit and the offer presented by USCO, our board concluded that divesting ITM would better position Titan to grow its wheel and tires businesses organically, pursue potential synergistic acquisitions, and of course, reduce debt. We believe we can create greater long-term value by directing capital toward our strong position in off-road wheels and tires. In the press release announcing the transaction, we said we intend to use the ITM proceeds to reduce debt while pursuing accretive acquisitions and strategic partnerships that expand tightened capabilities over time. Let me dig into that just a little bit further. We do not have an imminent transaction on the scale of Carlstar pending. We already hold strong positions in wheels and tires in North America, tires in South America, and wheels in Europe, supported by deep experience in those markets. Our focus is, therefore, on disciplined opportunities that expand our product footprint, strengthen our customer offering, and are accretive through organic investment or selective M&A. I'll give you a recent example, which is the Roderas transaction that we mentioned last year, and that illustrates that approach. Through that deal, we partnered with the second largest manufacturer of agricultural wheels in Brazil, investing only $4 million for an initial 20% ownership stake, and then committing to acquire the remaining 80% in 2029. But the final enterprise valuation is based on the financial performance criteria. You know, I use that Roderis example and our Titan-Yusheng joint venture to demonstrate the kind of opportunities we see ahead. Targeted investments and partnerships that close product gaps, strengthen our market position, and expand our capabilities with disciplined capital commitments. You know with that being said, let's shift gears and spend some time discussing how we view our businesses strategically going forward. we intend and will continue to report EMC as a reportable segment. During Q3, the segment revenues from continuing operations in EMC accounted for 17% of sales, so that is still a meaningful segment within the broader context of our business. From a product perspective, our remaining EMC business consists of wheels and tires that are used primarily on construction and industrial equipment. Although steel undercarriage is the majority of revenue in that segment, there is still a good range of equipment in that area that we believe has growth potential within our wheels and tires businesses, and therefore is still a good accretive business for Titan. Shifting over to the consumer segment, we delivered a solid quarter despite the difficult comparison with last year. End market demand remains pressured by high interest rates and inflation. common stories our sizable aftermarket business has been a bright spot because consumers continue to use and maintain existing equipment even as demand for new equipment remains weak on the OEM side though we have been winning new business with our product innovation and that new business has becoming on both existing and new equipment platforms and that was on full display at the Quip Quip Expo in Louisville last week you know those wins are supporting sales in 2026 despite the the weaker OEM markets and they will contribute even further to sales gains in 2027 moving over to the AG sector you know we face the strongest headwinds in this quarter of all our segments driven by many of the same pressures affecting consumer although AG has a sizable aftermarket business our OEM sales represent a larger share of that segments revenue therefore resulting in a year-over-year decline for this quarter. Buyers remain on the sidelines this quarter. Even as many industry participants view 2026 as a potential floor, I think we agree with that comment, and we looked at 2027 with cautious optimism. We believe the conditions for recovery are developing, and that Titan would see demand rebound quickly when customers begin investing again. The grain prices have improved from a year ago. That's a definite positive. And there are reports that farmers may use less fertilizer because of the remaining high costs of high fertilizer. All else being equal with that being said, you know, lower fertilizer would reduce crop yields and, again, help further support crop prices. You know, along with that, the government has announced support into this continuing support into the sector uh so again we do hold that position that this is a floor period in 2026 and you know look to 2027 with cautious optimism um you know as with all that being said as well you know that that's positive for farmer incomes that enables them to replace age equipment interest rates are always tough to predict they're changing daily but you know i you do see an environment where interest rate cuts in a more improved environment for interest rates would be a bit would be available and appropriate for 2027 and that would also spur demand you know into in addition to the macro wind shifting to drive demand we also note that low inventory levels throughout our channels mean that any uptick in demand should flow through to the orders for wheels and tires pretty quickly as machinery is built wheels and tires are normally fitted fairly earlier in the process they allow units to be moved through a plant station to station so again titan would be well positioned to be beneficial early beneficiary of demand resumption and again i comment i want to remind everybody uh we don't need the market to return to peak for us to benefit from a market we need the markets to improve and the volumes and the flow through uh will help us at the production absorption cost level uh quite meaningfully so with that uh sum things up the remainder of this year will remain challenging but we expect to enter 2027 with optimism for two reasons first we expect the itm sale to close in january strengthening our balance sheet and positioning us to invest in core growth initiatives and secondly as i was just talking about the conditions for recovery are taking shape and our market position of low channel inventories would allow titan to respond quickly when demand returns so with that i will turn it over to tony thank you paul good morning everyone and thank you for joining us today against the macro backdrop an inclusive of itn will deliver solid results with revenue above the midpoint of our guidance range and adjusted EBITDA within our guidance rate. The adjusted EBIDDA was just below the mid-point of the guidance range due to the delayed receipt of some tariffs. Key figures from the third quarter included sales of $454 million, gross margin of 15%, adjusted EBITA of $28 million and free cash flow of 10 million. As Paul noted, following the announced sale of ITM, we are reporting that business has discontinued operations in accordance with applicable accounting requirements. My remarks on the third quarter business performance will therefore focus on continuing operations that is excluding ITM. Turning to segment performance, our agriculture segment continued to face pressure from elevated financing, oil, and fertilizer costs. Segment sales declined 12% from the prior year period as activity in the U.S. remained subdued and Brazil slowed notably. This impacted fixed cost leverage and together with higher input costs resulted in segment gross margins of 7.6% compared with 13.2 percent in the prior year period. On a positive note, grain prices, particularly corn and soybeans, remain above prior year levels, which could support farmer income in 2027. Looking specifically to Brazil, we noted last quarter that activity levels were sluggish for several reasons, including uncertainty surrounding the presidential election expected to significantly affect agricultural policy, along with the higher interest rates there and broader inflationary pressures tied to the Iran war. Inventories also remain elevated following the cautious approach many market participants adopted ahead of the Brazil presidential election, and we expect those inventories will need to clear before demand resumes. Moving on to our consumer segment, I want to first note that last year's third quarter benefited from strong sales due to the impact of U.S. trade policies on tariffs. And I've explained this during the last earnings call. As those policies were implemented in the second quarter of 2025, many market participants focused on drawing down existing lower-cost inventory, thereby suppressing sales temporarily. As that inventory fled, purchasing activity resumed in the third quarter, setting up a difficult comparison this year. As a result, segment sales declined 3% year-over-year. The gross margin for the quarter expanded to 27.6% and included 3.5 million of net tariff reforms. Excluding those reforms, gross margin improved to 24.7% from 23.4% last year. For EMC, which now represents wheels and hires only, sales grew 5% to $57 million, driven primarily by growth in our Europe business and complemented by U.S. product sales sourced externally from our strategic suppliers. And this is a growth strategy we had shared in the past. We launched several of these new products this year, and these have been well received by the market and allow us to compete and gain market share in areas in which we previously did not participate. The EMC gross margin for the quarter improved to 7.1% from 6.1 percent last year. SG&A, including R&D expenses, was $46 million for the quarter, compared with $49 million in the prior year period, primarily due to our continued focus on cost reduction initiatives. As a percentage of sales, expenses were relatively flat at 13.8%. Operating cash flow from continuing operations was $29 million in the third quarter, compared with $19 million in a prior year period. This favorable cash flow performance reflected focused execution by our team to optimize working capital investment. Capital expenditures were $6 million in third quarter compared with eight million in prior year periods. Year-to-date, capital expenditures are $25 million compared with $30 million in the prior year period, as we continue to make prudent, measured investments in the business. Tax expense was approximately $200,000 for the quarter, well below the $4 million to $5 million expectation we provided last quarter, and this was primarily due to the classification of ITM as discontinued operations. For the fourth quarter of 2026, we expect tax expense to be similar to the third quarter. Inclusive of ITM, net debt was $406 million at the end of the quarter, down from $430 million at end of second quarter. Upon closing the ITM sale, we intend to use a significant portion of the proceeds to further reduce debt. Turning now to our financial guidance, inclusive of ITM, for the fourth quarter of 2026, we expect revenue of $410 million to $430 million, and adjusted EBITDA of breakeven to $7 million. This fourth quarter guidance includes ITM's operations forecast of revenue of 150 million to $120 million, and adjusted EBITDA of around $10 million. For fiscal year 2026, our revised financial guidance inclusive of ITMA's revenue of $1.85 billion to $1,87 billion, and adjusted ebitda of $91 million to $101 million. This full year guidance includes ITM operations forecast of revenue of $465 million to $470 million, and adjusted EBITDA of around $40 million. With respect to additional tariff reforms, we expect approximately $6 million of refunds net. We currently expect to receive the refunds in the fourth quarter, but the timing remains subject to applicable government review and processing procedures. We intend to reinvest process back into the business with a focus on initiatives that enhance our product offerings and deliver greater value to our customers looking ahead any improvement in macroeconomic conditions including lower interest rates and easing input cost pressures could support a more robust demand environment in 2027. i'll now turn it over to the operator for the q a session Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If your question is not answered, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Joe Gomez with Noble Capital. Your line is open. Please, go ahead. Good morning. Thanks for taking my questions. Thank you, morning, Joe. So, just on the ITM, real quick on a technical, when do you think you'll have out, I haven't seen them yet, the adjusted numbers for the first and second quarters. Yeah, Joe, but maybe that's something we haven't provided and, you know, looking at what we're supposed to provide, that's really not something we're looking at. However, you know, but with full year, you have the full year for prior year. I mean, that would be able to give you the numbers for the full year, and you would be able to deduce what you expect quarterly from that, I think. I think it will be very clear. Okay. Thanks for that. So, as to the questions, you know, with the sale of ITM, you know, how does that impact, you know, your previous $250 million mid-cycle adjusted EBITDA framework? You know, where do we, you know, what kind of, where should we look at now as a mid-cycle base for adjusted EBITDA? Yeah, thanks for that question. We will be, we're actually discussing that internally as we evaluate what the opportunities are going forward, and we will be coming up with an update on that. Okay. Okay. And then, Paul, I recall last year, this time, it was thought that 25 was going to kind of be the bottom for the ag cycle. In 26, we'd start to see some improvement. Obviously, that hasn't come through. I mean, you give us a list of things that you think give you cautious optimism into 27. But we had that same kind of conscious optimism going into 26. And I guess the question is, you know, what's different this time? Really the duration, like you alluded to in your question, Joe, I mean, it's the duration. It's getting long in the tooth. You know, when we talked about the market improvement in 2026, you Know, it was based upon information that came from our customers and forecasts we had seen obviously that was a false start we've seen this year have tremendous amount of ups and downs with the obviously the geopolitical environment with the inflationary pressures of fuel fertilizer and then you throw in a volatile interest rate market and so that's that's created some you know unusual trends in farmer sentiment we saw some what i I would call another false start, you know, about a month ago and one to three months before that. And so I think you look at it and go with the duration of all these false starts. I mean, eventually it's going to be real. And again, all those factors that we've been discussing and listed again today are really good reasons why when the market gets any type of footing, it will definitely go up. You know, we see the impact in our business, you Know, operating at these levels as others are. we feel very optimistic that with the additional volume the flow through will be strong to the to the bottom line because operating where we are right now taking days out of our schedule like we are in q4 with the normal shutdowns that you have with the holidays it's painful and it's costly so again i think with the the market turning we'll see a really nice positive uptake on the flow-through when we can we can run our plants but you know back to your question we're feeling it around us we we have throughout the course of this year we've seen drop-in orders at times again i'm not calling them a start to a rebound there's there's been drop-on orders where people need inventory and and titan's strength is we can fill those we we remain the leader in our space with our production capabilities and so we've been servicing those drop-end orders both on oem and we've seeing it on the aftermarket side i mean we have some strong aftermarket results in october that tell us the market has potential as inventories get low people want to replenish them and hopefully we'll get back to a building cycle in 2027 and i think it'll be again very positive to tighten because those inventory levels are low so we're watching it closely i'd love to tell you a definitive start date from when the market will turn but i think all those variables do add up joe to a a period of time in 20 27 where the markets will get better Great. Thanks for that, Paul. Appreciate it. I'll get back in queue. Thank you. Thanks, Joe. Your next question comes from the line of Mike Schliske with DA Davidson. Your line is open. Please go ahead. Hey, good morning. Thanks. Taking my questions here. Good morning, guys. Just checking out your guidance here in the fourth quarter, you basically have almost – it could be as low as zero margin, but a pretty low margin in the first quarter. Again, almost nothing. In the past, though, even just last fourth quarter you got margins of at least 3 percent, you know, $10 million worth of EBITDA when the sales were only about 410 million. So I'm curious as to kind of this year, why you can't make any money at 410 to 430 million? Yeah, like, you know the environment is different this year versus last year, very different. I mean, last year we did not have the Iran war with the level of energy costs increases general inflation increases we're seeing and the impact on business so it's a very different operating environment and um when we compare the two you know there's material costs are a major piece of that um and you know we we do what we can as a as a company to pass on those costs and in some cases as we've said before our price lacks the material cost and we continue to see those energy costs and inflationary cost increases we continue lagging those so i continue to you know chase the material cost increase from a price perspective. However, you know, realistically, you know as a business, we'd have to look at whether we can pass on 100% and determine the right approach forward. So that's a big difference when we look at the performance. And of course, there's the volume impact of Brazil itself. Brazil is significantly down just given where the economies are um year over year so that's that's a huge piece of the volume impact was seen year over here even though on the top line you may see sales a lot of that is price price that relates to material costs that we have passed on already there's still a lot that we need to pass So I need to lag. Got it. Got it, all right, and then for my follow-up, I'm just curious whether, are there any dis-synergies or costs that were being absorbed by having ITM in the portfolio that you'll have to start bearing after ITM is out? So just trying to figure out whether there's any kind of marginal impact to the rest to the business if ITM isn't there anymore, you know, purchasing or front or back office, et cetera? Yeah, yeah, thanks for that. The short answer is no. ITM was run as a very separate business, and that's why we said there's not a lot of synergies with it, you know. So I think there's, we're going to have opportunities going forward, but in terms of the cost, there's nothing like that in terms of the synergies. Perfect. Great. Thanks so much, guys. I'll hop back in the queue. Thanks, Mike. Your next question comes from the line of Steve Farzani with Sidoti. Your line is now open. Please go ahead. Morning, Paul. Morning, Tony. I know it's been a been a very busy few weeks for you guys, a lot going on in all of your segments and then to announce this transaction. Paul, I just want to start with, because I've covered you for a few years now, and I know the first year I covered you, the ITM potential transaction was talked about a lot, particularly by investors. It sort of wasn't discussed so much the last couple of years. So this was a little bit of a surprise. Can you walk through the reason for the decision now? It sounds like you just got the offer you wanted, but was there anything more to it? No, I think that is the best way to characterize it. You know, the board put in strong governance around this process. Like you said, the discussions have taken place over a period of time and it continued to receive further valuation sort of off and on. That's why at times we would speak of it at times it would sort of go quiet um not something that we were trying to force so again with with the strong governance by the board the the discussions gained steam throughout this year and like you said we reached a point where the valuation you know made sense and and strongly view it as a win-win for for both sides and the decision was made and so that's really how the timing took place there's there's not any other variables to it um and i do want to follow up the last question you got from the previous previously which was was around obviously when you sell a business that was generating this much revenue and it was i know a pretty separately run business you're going to have the impact of that negative operating leverage the flip side being your balance sheet looks much much better but how do you and the board think about that in terms of the new profile and sort of filling that gap yeah look at it from three angles um first is keep that balance sheet strong you know reduce that have a strong balance sheet like you said and that will enable the opportunities to pursue growth initiatives we view we have a a strong organic platform for growth Going back to the question asked earlier, when we modeled that 250 mid-cycle, a lot of the growth and the benefits we saw to growth in sales in the future was coming from wheels and tires. That's how we modeled at 250. It wasn't that ITM was going to grow at the same rate of wheels and tire. So we feel strongly that there are organic growth initiatives, and we feel as well there are opportunities to pursue a creative and strategic M&A. And I'm careful when I say that, and I want to look to what we've done recently, and I highlighted in my comments with Roderos and Yusheng, building up strong joint venture partnerships that require some equity with the potential to then go above either the 50% threshold or all the way up to 100, and then therefore consolidate the results, exists with both Yushang and Roderos, and they're very accretive businesses to Titan, especially Yushen. I've talked about that one, so I won't belabor it. I look at Carlstar, and the acquisition point multiple for that was attractive for Titan shareholders. The business has performed well. You see in our consumer segment, again, the future is bright for what we have done since we've acquired that business. walk around the Equip Expo last week and see our products on OEM fitments that they weren't there a few years ago. So again, we look at opportunities to take our product platform, our geographical production footprint, and grow within the wheel and tire space. But we're going to do it with the mindset that we've got to protect our balance sheet. And our board is aligned with that. And so Again, I think all the reasons lined up to pursue the divestiture of ITM, I believe we got it done. I know we got it down successfully at a good valuation, and now it gives us the opportunity to protect the balance sheet and grow the business through our initiatives. Again, that's how we always envisioned the company before when we talked about a $250 million midpoint. We got to back out the ITM part, and Tony already highlighted that, but our growth was coming from wheels and tires. Yep. Got it. Very helpful. I do got to go back on the 4Q guidance, which is probably a little bit softer than a lot of us were looking at. Historically, if you were entering a better year on the ag side, you'd start seeing it as early as 4Q. It sounds based on this guide, though it sounds like you're seeing some impact on EMC as well. How do you think about the ability to recover if you aren't seeing strength early in 4Q for the new model year? How do we need to think about that? Should we be concerned? Well, there is some recovery when you look at it sequentially and year over year. We are seeing some growth, and that does impact our Q4, meaning we are going to have to, in certain parts of our business, build ahead and put it in inventory versus realize it is sales because again managing labor effectively the best way to put it so there is that there is a movement going on in q4 that will be related to future sales in q1 so there is some growth but what we are seeing from customers because of the geopolitical inflationary interest rate environment everybody's being cautious so we are not lacking growth for next year. There is growth available and being forecasted for next year. So I want to be clear on that. And again, some of those costs and the impact will be absorbed into Q4 because we do have some shutdown days built in. We got the holidays. And so we're going to be running our plants with no sales related to that in preparation for, again, some increase in visibility into forecast for Q1. I mean, certainly we all heard it late summer when one of the biggest players called this year at the bottom in the ag equipment. But that was late summer when now the Iran conflict continues. And I know you can't characterize that comment. But do you think the optimism, given the length this thing is going on and no clear end date, depending on who you ask, does that? I mean, we got the government payments announced since. But how do you characterize the shift in your customers now versus, say, late August? Have you seen a significant change? I would just take out the adjective. There's been a positive change. We feel it. As we go through our modeling for 2027, which we'll be doing in November, there is growth. And that's what we're modeling. That's what the expectations are. That's what we're feeling in the market from our customers. But it's always with that word cautious in front of it. Nobody is willing to say there's a significant growth. But, no, I do see a positive change, both internally and externally, from where we were in August to where we are today. Despite what you saw in the farmer sentiment index where it went up and then it went back down and crop prices have gyrated as well, I think it goes back to some of those things we've been talking about, the long duration, the low inventory levels, and really the reality is that something's going to change positively, that we hopefully see that we can put the word significant in front of there. You see growth. We're all waiting for that. It's significant growth. Got it. Got it for, thanks, Paul. Very helpful. If I could jam one more in just in terms of, I guess, for Tony and for you, Paul, the next time we hear from you, you'll be reporting for Q. At that point, you're probably going to be offering up guidance without ITM. So for us on this side, we've got to try to model 2027, as you can imagine, without it. Tony, any kind of tips you want to offer? We can see your 3Q. Is there anything specifically beyond the normal seasonality? I know ITM is Europe-based. Anything? And we have some 2025 numbers of just anything you can offer and we can follow up after the call to help us when we start thinking about 2027. I know you obviously clearly don't want to guide right now, but anything you Can help us because we got we're going to have to model it. Yeah, I appreciate that question. What I would also yeah, we obviously we can talk more for the call. But the thing when we look at seasonality in the business, as you know, it's, it really the second half, it's really mainly ad. There's some of that in consumer. ITM is not as such as seasonal as the rest of our businesses in Q4. So the fact that we have Q3 and Q4 gives the perspective to what it's going to look like. The earlier parts of the year is not as seasonal, even when we look at ITM. So I think that will be a good way for you look at it as you as you think about next year got it thanks thanks tony thanks paul thank you thank you your next question comes from the line of kirk ludki your line is now open please go ahead uh hello everyone thank you for the thank you for the call um just a couple follow-ups um um you mentioned brazil was weak and i'm curious if if not, and I'm sure it's early days, but, you know, do you have any early read as to how the election results might impact the business? They're digesting it. We were just down there a couple weeks ago, so pre-election, and, you Know, it certainly was a surprise, but I would say, I would characterize it this way. I mean, the Brazilian ag market, and you know not talking again to the overall broader economy, but the ag market was already expecting a very difficult Q4 and Q1, regardless of the election results. And so I don't think that perspective is going to be altered. And we saw the Brazilian stock market go down 20%. But from the ag space, we were already planning and already scheduling to be shut down. Our customers had significant shutdowns planned for Q4, Q1. We believe Brazil ag will start off the year difficult. Tony talked about that in his comments, the impact it had on our business. When you look at year over year Q4 I see that going into Q1 and that's irrespective of the election results. Looking at it again from my vantage point, ag is so important to that economy. If I was leading a country I would really not want to turn my back on the farmers in that community and what it means to the overall broader economy. So I don't think there was a ton of support in place already for farmers. When you look at what's been going on the last 12 months, some of the benefits they had for farmers in the past had been already pulled back, resulting, as I said, in a weaker ag environment in Brazil. So I don't know how it gets worse unless they just don't like to eat in Brazil, and if it's been down there. They got great food. So I don't think that's going to happen. I think, so I think you're already seeing the worst of it. And we were already prepared, you know, here at Titan and regardless of the election results, the impact it has on the broader economy could be negative as the market is indicated. But I think from the ag space, it's already been, it'S in our results, our forecast that we've discussed and really all our preparations. Our team, our team's exceptional in Brazil. Kirk, we've worked with them since year one of being down there. They know how to manage costs, make changes, and deal with a volatile market in Brazil. So I'm confident that Titan will do that, and we were already prepared for that. Got it. That's very helpful. Thank you. Follow-up on ITM. Are there any use of proceeds that you'd call out, any cash taxes, debt you have to pay down any you know letters of credit you have to put up cash for anything like that that might might be a use of cash yeah just I mean from the proceeds we've said we're going to focus primarily first of all we'll pay down that strength and our balance sheet so that that that's going to be the first thing we're doing to do in terms of taxes we don't expect any significant tax leakage got it thank you and with respect to the guidance um i might have missed this but you did you break it out between the continuing and discontinued ops yes yes i did i i gave the guidance inclusive of itm but i also called out itm's forecast for q4 at the full year I can easily say it again. The ITM, the sales range for Q4 is $115 to $120 million and around $10 million of EBITDA. That's for the Q4. And for the full year, it's $465 to $470 million on sales. And then for EBITda, it is around $40 million. Got it. Thank you. I appreciate that. And then with respect to material costs, I remember over the years, you've emphasized contracts that were longer term and also had material pass-through provisions. I'm just curious if that mitigates at all what you're seeing out there. Yeah, we have those. And we are getting the prize on that. And that's why I talked about the lag. That's why our OE customers, our major OE customers, that's how we have that lag. You know, because the prices that our Oe customers don't adjust immediately every day or every week or monthly, but some adjust quarterly, some adjust twice a year. So there is a lag. And when you have a situation where inflation and cost increases are continuing to go up, yes, you have prices that you're getting, but you're kind of continually chasing the material cost increase with your price. At some point when those cost increases stop and costs level out, then you will see that improvement in the margin. Then you will then get price without a cost increase. But yes, it is in our contract and we're executing on those. Got it. I appreciate it. Thank you. And And then lastly, I remember ITM was, and this may have changed, but I remember that you felt like it had a lot of working capital requirements. And I'm just curious if that changes when we forecast going forward, will the company's working capital requirement be less than they have been in the past because ITM's out of the mix? Yes, it will be less. will be less uh just giving that like you said they use like the business uses more working capital uh than the other parts of our business so yes they'll be different going forward yeah and you can see some of that in the you know even in how we drove cash flow in the third quarter uh you can't see some about that got it i appreciate thank you very much thank you And your next question comes from Derek Soderberg with Cantor Fitzgerald. Your line is open. Please go ahead. Yeah. Hey, guys. Thanks for taking the questions. I was wondering if you could talk a bit about competition, if you're seeing any change there, particularly from the low-cost importers. Are your customers importing more from China this year versus last? Can you talk about any of that or any change you're seeing in competition? And then I've got a follow-up. Yeah, I don't think there's been a change. It's always present. It has been a factor of our industry and our business for a period of time. So, has there been a dramatic change? No. Do they, especially India, do they operate unfairly at times? Yes, we've proven that. I've mentioned that a number of times on the calls and you can go look at the judicial files that will support that statement. So we do see some tactics that they have unfair practices, but we do see some techniques at times where they'll take containers and they'll drop them and they will give a year payment terms, et cetera. But that's been going on before. So I don't consider that a change. I'm just kind of illustrating what the market is. So I do not think our business is being impacted by significant changes and how our competition operates. We do also employ a lot of low-cost manufacturing ourselves, some kind of shift gears and bring it internal instead of external. It's a significant part of our business. We have excellent operations in some low-cost countries, and we have strong partners that we use as third-party manufacturing in low-cast countries because that's what our customers in the market dictates and so what we have that's different than the competition or better than the competition is we have a combination of a strong production footprint that we control therefore bringing risk mitigation along with the strength we have of low-cost manufacturing and partners and joint ventures and with that we have incredible brands incredible distribution relationships and partners there and so the way we we view the market, Derek, is that that is the way it is. And we are going to win and compete within it and adjust our business model accordingly. And so one of the things we do see different now internally versus five years ago is how we operate as well. So I'm not going to just say it's external, it's we've changed. So our business models now going and has been and will be going forward is we are gonna be the best of both worlds. And will win because we bring something to the table that the others don't. And that is, again, we can produce and mitigate risk to our customers. You are not going to be relying on all the craziness that exists in the world with geopolitics, currencies, et cetera, because you can rely on Titan to say, if you need low cost, we can do that. But guess what? We can also get you products made by ourselves directly to your plants with no risk. So that's how we're going to win. Perfect. Well, all my other questions been asked so appreciate it thanks thanks derek and there are no further questions at this time i will now turn the call back to mr wright's for closing remarks i appreciate appreciate everybody's attention with our q3 results and call today and we will be back with you for q4 have yourself a great day and appreciate This concludes today's call. 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