Investor Relations

- Revenue for the Fourth Quarter of Fiscal 2018 Increased to $340 Million -

- GAAP EPS for the Fourth Quarter of Fiscal 2018 was $0.08 and Adjusted EPS was ($0.10) -

- Company Announces Modeling Assumptions for Fiscal 2019 -

WEST FARGO, N.D., March 29, 2018 (GLOBE NEWSWIRE) -- Titan Machinery Inc. (Nasdaq:TITN), a leading network of full-service agricultural and construction equipment stores, today reported financial results for the fiscal fourth quarter and full year ended January 31, 2018.

David Meyer, Titan Machinery's Chairman and Chief Executive Officer, stated, "We were well positioned to capture the anticipated fiscal fourth quarter acceleration in Agriculture sales activity due to better than anticipated crop yields in our footprint and the resulting improvement in grower sentiment. As a result of our improved inventory position, we continue to experience increased equipment margins compared to the prior year. In addition, fiscal full year 2018 performance was highlighted by reduced operating expenses and a more efficient operating structure due to the completion of our restructuring efforts. We are pleased with the overall business improvements we achieved in fiscal 2018 and believe these enhancements set the foundation for stronger top and bottom line results in fiscal 2019."

Fiscal 2018 Fourth Quarter Results

Consolidated Results
For the fourth quarter of fiscal 2018, revenue was $339.6 million, compared to revenue of $317.6 million in the fourth quarter last year. Equipment sales were $252.6 million for the fourth quarter of fiscal 2018, compared to $226.9 million in the fourth quarter last year. Parts sales were $45.5 million for the fourth quarter of fiscal 2018, compared to $48.7 million in the fourth quarter last year. Revenue generated from service was $26.5 million for the fourth quarter of fiscal 2018, compared to $28.0 million in the fourth quarter last year. Revenue from rental and other was $15.0 million for the fourth quarter of fiscal 2018, compared to $14.0 million in the fourth quarter last year.

Gross profit for the fourth quarter of fiscal 2018 increased to $52.1 million compared to $48.8 million in the fourth quarter last year. The Company's gross profit margin was relatively flat at 15.3% in the fourth quarter of fiscal 2018, compared to 15.4% in the fourth quarter last year. Gross profit margin remained relatively flat as the impact of higher equipment margins was offset by a change in our gross profit mix, which was the result of additional equipment revenue as compared to higher margin parts and service revenue.

Operating expenses were $50.3 million or 14.8% of revenue for the fourth quarter of fiscal 2018, compared to $52.2 million or 16.5% of revenue for the fourth quarter last year. Restructuring efforts that were completed in fiscal 2018 are expected to continue to reduce operating expenses on a going forward basis.

Floorplan interest expense decreased to $1.4 million for the fourth quarter of fiscal 2018, compared to $2.7 million for the same period last year. The decrease in floorplan interest expense is primarily due to a decrease in the level of interest-bearing inventory in the fourth quarter of fiscal 2018.

In the fourth quarter of fiscal 2018, net income including noncontrolling interest was $1.7 million, or $0.08 per diluted share, compared to a net loss including noncontrolling interest of $8.2 million, or $0.38 per diluted share for the fourth quarter of fiscal 2017.

On an adjusted basis, net loss including noncontrolling interest for the fourth quarter of fiscal 2018 was $2.1 million, or $0.10 per diluted share, compared to adjusted net loss including noncontrolling interest of $6.6 million, or $0.31 per diluted share for the fourth quarter of fiscal 2017. The adjusted amount for fourth quarter of 2018 excludes a gain of $1.8 million that occurred as a result of the Tax Cuts and Jobs Act (the "Tax Act") enacted on December 22, 2017 and a $2.4 million net benefit related to income tax valuation allowance adjustments.

The Company generated $6.1 million in adjusted EBITDA in the fourth quarter of fiscal 2018, compared to an adjusted EBITDA loss of $4.1 million for the fourth quarter of fiscal 2017.

Segment Results
Agriculture Segment - Revenue for the fourth quarter of fiscal 2018 was $205.3 million, compared to $201.1 million in the fourth quarter last year. Pre-tax income for the fourth quarter of fiscal 2018 was $2.2 million, compared to pre-tax loss of $5.9 million in the fourth quarter last year. Adjusted pre-tax income for the fourth quarter of fiscal 2018 was $2.0 million, compared to an adjusted pre-tax loss of $4.8 million in the fourth quarter last year.

Construction Segment - Revenue for the fourth quarter of fiscal 2018 was $85.8 million, compared to $81.7 million in the fourth quarter last year. Pre-tax loss for the fourth quarter of fiscal 2018 was $3.2 million, compared to a pre-tax loss of $4.4 million in the fourth quarter last year. Adjusted pre-tax loss for the fourth quarter of fiscal 2018 was $2.6 million, compared to $3.0 million in the fourth quarter last year.

International Segment - Revenue for the fourth quarter of fiscal 2018 was $48.5 million, compared to $34.8 million in the fourth quarter last year. Pre-tax loss for the fourth quarter of fiscal 2018 was $1.1 million, compared to pre-tax loss of $0.4 million in the fourth quarter last year. Adjusted pre-tax loss for the fourth quarter of fiscal 2018 was $1.1 million, compared to $0.1 million in the fourth quarter last year.

Fiscal 2018 Full Year Results

Revenue was flat at $1.2 billion for fiscal 2018 and the prior year. Net loss including noncontrolling interest for fiscal 2018 was $7.0 million, or $0.32 per diluted share, compared to net loss including noncontrolling interest of $14.5 million, or $0.65 per diluted share, for the prior year. Adjusted net loss including noncontrolling interest for fiscal 2018 was $2.7 million, or $0.12 per diluted share, compared to $14.2 million, or $0.65 per diluted share, for the prior year. The adjusted figure for fiscal 2018 excludes $10.5 million of restructuring expenses associated with our fiscal 2018 restructuring plan, which is partially offset by the aforementioned tax benefits related to the Tax Act and income tax valuation allowance adjustments that were recognized in the fourth quarter of fiscal 2018. The Company generated adjusted EBITDA of $30.8 million in fiscal 2018, compared to adjusted EBITDA of $11.7 million in fiscal 2017.

Balance Sheet and Cash Flow

The Company ended the fourth quarter of fiscal 2018 with $53.4 million of cash. The Company's equipment inventory level increased to $400.0 million as of January 31, 2018, compared to $395.7 million as of January 31, 2017. As of January 31, 2018, the Company had $247.4 million outstanding floorplan payables, on $728.1 million total discretionary floorplan lines of credit, which represents an increase of $14.2 million over the balance of $233.2 million in floorplan payables as of January 31, 2017. The Company had other indebtedness consisting of senior convertible notes and other long-term debt of $99.0 million as of January 31, 2018, which was a decrease of $29.1 million compared to the balance of $128.1 million as of January 31, 2017. The Company's ratio of total liabilities to tangible net worth was 1.4 as of January 31, 2018.

During fiscal 2018, the Company repurchased $30.1 million in face value amount of its senior convertible notes with $29.5 million in cash. The Company has retired $84.4 million, or approximately 56%, of the original face value amount of its senior convertible notes during fiscal 2017 and 2018 with $75.1 million in cash.

For the fiscal year ended January 31, 2018, the Company's net cash provided by operating activities was $95.8 million. The Company evaluates its cash flow from operating activities net of all floorplan payable activity and maintaining a constant level of equity in its equipment inventory. Taking these adjustments into account, adjusted net cash provided by operating activities was $45.6 million for the fiscal year ended January 31, 2018, compared to $88.8 million for the fiscal year ended January 31, 2017.

Mr. Meyer concluded, "The stabilization we are experiencing in the Agriculture market both domestically and internationally, combined with our improved inventory condition and recently completed restructuring plan, have our Company well positioned for long-term profitable growth. I'm pleased to introduce a fiscal 2019 forecast that expects revenue growth across all segments, margin expansion, and positive diluted earnings per share."

Fiscal 2019 Modeling Assumptions

The following are the Company's current expectations for certain fiscal 2019 modeling assumptions:

Conference Call Information

The Company will host a conference call and audio webcast today at 7:30 a.m. Central time (8:30 a.m. Eastern time). Investors interested in participating in the live call can dial (888) 882-4478 from the U.S. International callers can dial (323) 794-2149.  A telephone replay will be available approximately two hours after the call concludes and will be available through Thursday, April 12, 2018, by dialing (844) 512-2921 from the U.S., or (412) 317-6671 from international locations, and entering confirmation code 8145301.

A copy of the presentation that will accompany the prepared remarks from the conference call is available on the Company's website under Investor Relations at www.titanmachinery.com. An archive of the audio webcast will be available on the Company's website under Investor Relations at www.titanmachinery.com for 30 days following the audio webcast.

Non-GAAP Financial Measures

Within this release, the Company refers to certain adjusted financial measures, which have directly comparable GAAP financial measures as identified in this release. The Company believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance and in assessing future performance. For these reasons, internal management reporting also includes non-GAAP measures. Generally, the non-GAAP measures include adjustments for items such as restructuring costs, long-lived asset impairment charges, gains recognized on the repurchase of senior convertible notes, gains recognized on insurance recoveries, foreign currency remeasurement losses in Ukraine, and other gains and losses. The non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for the GAAP financial measures presented in this release and the Company's financial statements and other publicly filed reports. Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies. Investors are encouraged to review the reconciliations of adjusted financial measures used in this release to their most directly comparable GAAP financial measures. These reconciliations are attached to this release. The tables included in the Non-GAAP Reconciliations section reconcile net income (loss) including noncontrolling interest, earnings (loss) per share - diluted, income (loss) before income taxes, and net cash provided by operating activities (all GAAP financial measures) for the periods presented to adjusted net income (loss) including noncontrolling interest, adjusted EBITDA (loss), adjusted earnings (loss) per share - diluted, adjusted income (loss) before income taxes, and adjusted net cash provided by (used for) operating activities (all non-GAAP financial measures) for the periods presented.

About Titan Machinery Inc.

Titan Machinery Inc., founded in 1980 and headquartered in West Fargo, North Dakota, is a leading global dealership with a network of full-service agriculture and construction stores. The network consists of US locations in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming, Wisconsin, Colorado, Arizona, and New Mexico, and European locations in Romania, Bulgaria, Serbia, and Ukraine. The Titan Machinery locations represent one or more of the CNH Industrial Brands, including Case IH, New Holland Agriculture, Case Construction, New Holland Construction, and CNH Capital. Additional information about Titan Machinery Inc. can be found at www.titanmachinery.com.

Forward Looking Statements

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "potential," "believe," "estimate," "expect," "intend," "may," "could," "will," "plan," "anticipate," and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of our management. Forward-looking statements made herein, which include statements regarding Agriculture, Construction, and International segment initiatives and improvements, segment revenue realization, growth and profitability expectations, inventory expectations, leverage expectations, agricultural and construction equipment industry conditions and trends, and modeling assumptions and expected results of operations for the fiscal year ending January 31, 2019, involve known and unknown risks and uncertainties that may cause Titan Machinery's actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company's risks and uncertainties include, among other things, a substantial dependence on a single equipment supplier, the continued availability of organic growth and acquisition opportunities, potential difficulties integrating acquired stores, industry supply levels, fluctuating agriculture and construction industry economic conditions, the success of recently implemented initiatives within the Company's operating segments, the uncertainty and fluctuating conditions in the capital and credit markets, difficulties in conducting international operations, foreign currency risks, governmental agriculture policies, seasonal fluctuations, the ability of the Company to reduce inventory levels, climate conditions, disruption in receiving ample inventory financing, and increased competition in the geographic areas served. These and other risks are more fully described in Titan Machinery's filings with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Titan Machinery conducts its business in a highly competitive and rapidly changing environment. Accordingly, new risk factors may arise. It is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on Titan Machinery's business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Other than required by law, Titan Machinery disclaims any obligation to update such factors or to publicly announce results of revisions to any of the forward-looking statements contained herein to reflect future events or developments.

Investor Relations Contact:
ICR, Inc.
John Mills, jmills@icrinc.com
Partner
646-277-1254