Titan International, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported revenues of $335.2 million for the three months ended September 30, 2026, a 6.2% decrease from $357.3 million in the prior year period; revenues including discontinued operations (ITM) were $454 million.
• Gross margin for continuing operations was 14.7% ($49.4 million gross profit), down from 15.7% ($56.1 million) in the prior year period.
• Adjusted EBITDA from continuing operations was $16.4 million, compared to $20.3 million in the prior year period; Adjusted EBITDA including discontinued operations was $28 million.
• Generated free cash flow of $23.3 million from continuing operations for the quarter, compared to $10.9 million in the prior year.
• Net loss from continuing operations was $8.8 million for the quarter, compared to a net loss of $7.7 million in the prior year.
• Adjusted net loss applicable to common shareholders was $1.8 million ($0.03 per share) for the quarter, compared to adjusted net income of $2.6 million ($0.04 per share) in the prior year.
• Cash provided by operating activities of continuing operations was $19.3 million for the nine months ended September 30, 2026, compared to $1.8 million in the prior year.
• Total cash and cash equivalents ended the quarter at $172.8 million, down from $202.9 million at December 31, 2025.
• Long-term debt was $537.6 million at September 30, 2026, down from $559.8 million at December 31, 2025; short-term debt was $28.5 million, up from $19.1 million.
• Net debt of continuing operations was $393.4 million at September 30, 2026, compared to $376.0 million at December 31, 2025.

Guidance and Future Outlook:

• Updated fourth quarter sales guidance to a range of $410 million to $430 million.
• Updated fourth quarter Adjusted EBITDA guidance to a range of break-even to $7 million.
• Full-year 2026 sales guidance remains between $1.85 billion and $1.87 billion.
• Full-year 2026 Adjusted EBITDA guidance remains between $91 million and $101 million.
• Management expects a resumption of end-market demand to flow through to suppliers quickly, citing an aging machinery fleet creating pent-up replacement demand and low wheel and tire inventories in distribution channels.
• The company anticipates the sale of the ITM business to close in early January 2027, with proceeds intended to reduce debt and support the growth of global wheel and tire businesses.

Business Segments and Product Lines:

• Agricultural Segment: Net sales were $156.9 million, down 11.7% from the prior year; gross profit was $12.0 million, down 48.9%. Decline attributed to lower sales volumes in the Americas driven by reduced farm income, higher financing costs, and customer inventory reduction.
• Consumer Segment: Net sales were $120.9 million, down 3.3% from the prior year; gross profit was $33.4 million, up 13.8%. Sales decline driven by lower volumes in Titan Specialty business, while gross profit growth was driven by $3.5 million in net tariff refund recoveries.
• Earthmoving/Construction Segment: Net sales were $57.4 million, up 5.0% from the prior year; gross profit was $4.1 million, up 22.7%. Growth driven by higher sales volumes in Europe due to business awards and increased market share, plus pricing actions to offset input costs.
• The "One Stop Shop" strategy enabled solid financial results despite market conditions.

Market and Competitive Landscape:

• Macro uncertainty, elevated interest rates, and high fuel and fertilizer costs continue to weigh on end-market activity.
• Corn and soybean prices remain above year-ago levels, supporting farmer incomes.
• Favorable foreign currency translation contributed approximately 0.2% to net sales growth for the quarter.
• The company noted increased market share in Europe within the earthmoving/construction segment.

Risks and Challenges:

• Reduced end-market demand and lower sales volumes impacting fixed cost leverage.
• Inflationary pressures on raw materials and other input costs.
• High interest rates, diesel, and fertilizer costs affecting farmer activity and financing costs.
• The classification of the Italtractor ITM undercarriage business as discontinued operations pending sale to USCO S.p.A.
• Potential risks associated with the sale transaction, including regulatory process delays.

Management Commentary and Tone:

• CEO Paul Reitz stated that revenues including ITM were above the midpoint of guidance and Adjusted EBITDA was within the guidance range.
• Reitz noted the sale of ITM empowers Titan to focus on growing wheel and tire businesses and reducing debt.
• CFO Tony Eheli updated guidance to reflect current market conditions.
• Management expressed confidence that building blocks for growth are present despite challenging conditions.

Other Key Points:

• Announced an agreement to sell the Italtractor ITM undercarriage business to USCO S.p.A.
• ITM operations are reported as discontinued operations with the transaction scheduled to close in January 2027.
• Restructuring and other charges were $1.4 million for the quarter and $27.4 million for the nine-month period.
• The company recorded $3.5 million in net tariff refund recoveries within the Consumer segment's cost of goods sold.
• Net cash used for investing activities of continuing operations was $23.7 million for the nine-month period.
• Capital expenditures were $25.2 million for the nine-month period.