TITAN INTERNATIONAL, INC. REPORTS FOURTH QUARTER AND FISCAL YEAR 2023 FINANCIAL PERFORMANCE

WEST CHICAGO, Ill., Feb. 29, 2024

Transformative Acquisition of Carlstar Group LLC. ("Carlstar") Expected to Add Strategic Diversification of Customer Base, Product Line, Manufacturing and Distribution

WEST CHICAGO, Ill., Feb. 29, 2024 /PRNewswire/ -- Titan International, Inc. (NYSE: TWI) ("Titan" or the "Company"), 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, 2023.

"One of our primary long-term objectives has been to structure Titan to deliver consistent, strong, bottom-line results, while serving our customers throughout various market cycles. Recall that 2022 was an excellent year for top-line sales as agricultural equipment dealers ramped up inventory in order to ensure they could satisfy expected farmer demand. While Titan certainly enjoyed that environment, as we moved into 2023 it also became clear that the aggressive inventory build in 2022 resulted in reduced demand in 2023 as OEMs worked down excess inventory. Despite this dynamic and its impact on our sales, we were able to report full year gross margins that were up slightly from 2022. We were also able to report record Free Cash Flow of $119 million, thanks to a firm focus on margins, along with working capital management. Our ability to deliver quality bottom-line and cash flow results in the face of a robust destocking headwind is a significant achievement and I want to thank our entire One Titan team for their hard work in making that happen," stated Paul Reitz, President and Chief Executive Officer.

Mr. Reitz added, "As we look back through the past years, we were able to build long-term strength via product portfolio optimization, addressing non-core businesses, and an enhanced focus on new product development. In doing so, we have fortified our balance sheet by eliminating debt, and building cash and, at the same time, have been able to create value for shareholders by repurchasing shares. Now we're excited to talk about the new growth path ahead of us through the accretive acquisition of Carlstar Group. As we highlighted in the press release we issued announcing the transaction, Carlstar will further diversify our customer base and product portfolio while also adding key manufacturing and distribution assets around the world. We are really pleased that we were able to complete this acquisition at a fair valuation of approximately four times their 2023 adjusted EBITDA, using a combination of cash and stock, which will not stress our balance sheet. As noted in the acquisition announcement, Carlstar is a well-run, profitable business which is complementary to our existing business, creating avenues for incremental growth and synergies. 

Mr. Reitz continued, "Now moving to market conditions within our segments, commentary from large, global agricultural equipment companies through the first two months of 2024 is consistent with what we are seeing in the field and hearing from our customers, namely that demand is somewhat soft due to declining farmer incomes. On the other hand, inventories appear to have normalized, which is a positive allowing for a more direct connection between commodity prices and equipment demand, including both new and aftermarket, as we move through the year. Over the longer term, the continued adoption of precision farming represents a positive demand driver and farmers are also increasingly cognizant of the ability of our tire technologies such as LSW to deliver meaningful additions to their bottom lines. The construction and earthmoving markets, particularly non-residential construction projects, have the tailwind of infrastructure support and the transition to clean energy is expected to support commodity prices of key inputs such as rare earth elements, which will benefit the mining segment over the long term."

Mr. Reitz continued, "Carlstar also brings us an expansive offering in outdoor power equipment, high speed trailers, and power sports within our Consumer segment. Those markets are retail-centric, where demand and market activity are subject to much different drivers than agriculture. We expect this to further solidify the margin and cash flow success we enjoyed in 2023 while also providing additional avenues for top line expansion. With the addition of Carlstar, we will have increased manufacturing flexibility and distribution channels, and the best-in-class wheel and tire lineup."