QUINCY, Ill.—Everything—sales, profits, stock price—is on the rise for tire and wheel maker Titan International Inc., including its prospects for the future.
The company´s successes in 2004 stabilized what was a rocky ship the previous five or six years. And that newfound potential may make the Quincy-based company a target for acquisition in the near future, according to Maurice Taylor Jr., Titan´s president and CEO.
"We´re almost in too good of a state right now," he said. "Someone may want to buy us out."
Taylor said Titan is a lean, core-focused company, the kind that attracts all kinds of possible buyers, including industrial firms, conglomerates and particularly foreign outfits. With the U.S. dollar down, someone could buy Titan and it would be cheap considering it´s a half-billion dollar company, he said.
Titan posted net sales of $491.7 million in 2003, and is ahead of that pace for 2004, having reported sales of $404.7 million through three quarters. More importantly, through September the company had net earnings of $12.4 million, as opposed to a $27.4 million loss in 2003.
Stock rises after fall
Even if Titan isn´t sold anytime soon, Taylor said 2005 could be the company´s last year as a public company. He didn´t elaborate, but did say the costs associated with being a public company wouldn´t be missed and Titan´s current structure would transition well into a private operation.
Being a publicly owned firm has been a roller coaster ride for Titan since its stock first hit the NASDAQ in May 1993 and then the New York Stock Exchange in March 1994.
Most recently, however, the company´s stock has climbed to the top of the big hill, increasing nearly fivefold in the past year. Titan announced Jan. 6 its stock appreciation during 2004—to $15.10 per share from $3.10—was the second-highest increase among all NYSE companies for the year.
That success is fitting for the company´s employees, shareholders and everyone who "stuck with us," Taylor said. "We´ve been a company that rolls up its sleeve and keeps working, even when times are tough," he said. "Some people didn´t have faith. But someone who invested in us 10 years ago, including the splits, that person is ahead."
The company split its shares twice in 1995, and the stock reached an all-time high of $30.97 per share in August, right before the second three-for-two split that year.
The stock price stayed steady in the $15 to $19 range in 1996 and 1997. It even rose to the low $20s in early 1998 before the United Steelworkers of America struck at the company´s Des Moines, Iowa, tire plant in May. That event, combined with a second strike at Titan´s Natchez, Miss., tire facility and a deeply depressed agricultural market, hit the stock price hard.
The figure hit single digits for the first time in September 1998, and even after the strikes were settled in 2001, the price continued to drop, eventually reaching 60 cents per share in February 2003.
The NYSE notified Titan in March 2003 that because its common stock price had fallen below a minimum of $1, it had a six-month period to stabilize it or face removal from the listing. When the cure period ended Sept. 12—when the stock price closed at $2.14—the exchange told Titan it had met the minimum share price requirement. The price hasn´t been below $1 since June 10, 2003, and closed Jan. 19 at $14.29.
More good news ahead
This past year was a good one for the company for other reasons as well, including the refinancing of its debt and the public sale of its Titan Europe P.L.C. subsidiary, Taylor said. Titan International still holds a 30-percent stake in the venture.
The yet-unreported fourth-quarter results, from an operations standpoint, also should be very strong, perhaps even the strongest the company has had, Taylor said.
Despite the firm´s success in 2004, Taylor said the company is not done improving itself and won´t rest on its laurels.
"2005 will be a good year. I don´t know how great at this point, not until June or July. But we´ve got a lot on our plate. We´re expecting more good things."