Acquisitions & New Store Openings
In fiscal 2013 to date, the Company completed five acquisitions, consisting of three agriculture equipment dealership locations in the United States, three construction equipment dealership locations in the United States, one independent rental yard location in the United States, and seven agriculture equipment dealership locations in Europe. The Company also opened a new construction dealership in Windsor, Colorado and three new agriculture dealership locations in Romania. In addition, the Company recently contracted with CNH to distribute Case Construction equipment in Romania and Bulgaria.
David Meyer, Titan Machinery’s Chairman and Chief Executive Officer, stated, “In the second quarter, we continued to make progress with our business, as we generated organic and acquired growth for both our Agriculture and Construction segments. Even though our agriculture customers experienced strengthening commodity prices midway through our second quarter, severe drought conditions in the Midwest negatively impacted customer sentiment and associated equipment margins. Construction equipment margins were also pressured by competitive conditions particularly in some of the larger metro areas of recent acquisitions. These factors generated a competitive retail equipment market where we were able to maintain sales activity but experienced a compression in our overall equipment margins and in particular our used equipment margins. As a result, we are reiterating our annual revenue guidance but lowering annual net income and earnings per share outlook.”Mr. Meyer continued, “As we enter the second half of fiscal 2013, we are confident in our revenue forecasts due to strong agriculture balance sheets, crop insurance and record high commodity prices. Based on the increased inventory availability due to the widespread drought, we have adjusted our inventory management strategy. With the combination of expected strong revenue and conservative stocking, we expect our new inventory levels to decrease by the end of our fiscal 2013 year after peaking in the current third quarter. We continue to execute our growth strategy with strategic acquisitions and store openings across all of our Agriculture, Construction, Rental, and International growth platforms and are excited that our acquisition growth opportunities as well as our strong organic growth have us well-positioned for the future.”