QUINCY, Ill. (July 29, 2010)—Tire International Inc. racked up an 11-percent increase in second-quarter sales to $229.7 million, compared with the year-ago period, and foresees strong sales for the rest of the year as the agricultural, construction and mining industries continue to prosper.
However, Titan's net income for the second quarter plunged 22.7 percent to $4.57 million, compared with the year-ago quarter, due in part to interest expenses and a $2.72 million expense related to a senior note repurchase.
Income from operations for the quarter surged 34.9 percent to $17.4 million, compared with the year-ago period. The increase was primarily a result of the surge in sales as well as a decrease of about $1 million in research and development expenses, according to Titan. R&D expenses for the second quarter were $1.9 million or 0.8 percent of net sales compared with $2.9 million or 1.4 percent of net sales for 2009. The estimated $1 million decrease in R&D costs was related to the giant OTR products Titan developed last year.
Net sales in the company's agricultural wheel/tire segment increased 9.6 percent to $175.7 million for the second quarter, compared with the year-ago period, as OEM customers increased production. Earthmoving/construction segment sales jumped 16.7 percent to $49.5 million. However construction sales are still 30 percent below comparable periods in 2007 or 2008.
For the first half, ended June 30, Titan said its net earnings plummeted 48.7 percent to $6.65 million as sales slipped 3.1 percent to $426.1 million, compared with the 2009 period. However, income from operations for the first six months edged up 2.1 percent to $27.6 million.
Titan reduced its capital expenditures for the first half to $11.7 million, compared with $31.7 million for the first half of 2009, which included about $21 million related to the company's giant OTR mining project completed at the end of last year.
Titan Chairman and CEO Maurice M. Taylor Jr. said he expects its overall business “will stay very, very strong for the foreseeable future.”
After recently finalizing the purchase of the bankrupt Denman Tire L.L.C.'s assets and installing equipment in Titan's plants, Taylor said Titan expects to see a return on its $7.4 million investment in a short period of time.