Titan Machinery Inc. Announces Fiscal Third Quarter Ended October 31, 2012 Results

About Titan Machinery Inc.

Titan Machinery Inc., founded in 1980 and headquartered in West Fargo, North Dakota, is a multi-unit business with mature locations and newly-acquired locations. The Company owns and operates a network of full-service agricultural and construction equipment stores in the United States and Europe. The Titan Machinery network consists of 104 North American dealerships in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, Wyoming, Wisconsin, Colorado, and Arizona, including two outlet stores, and 12 European dealerships in Romania and Bulgaria. The Titan Machinery dealerships represent one or more of the CNH Brands (NYSE: CNH), a majority-owned subsidiary of Fiat Industrial (Milan: FI.MI), including CaseIH, New Holland Agriculture, Case Construction, New Holland Construction, Kobelco 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. Forward-looking statements made herein, which include statements regarding new and used equipment inventory levels, additional growth and domestic and international acquisition opportunities and the Company’s ability to capitalize on such opportunities, growth and profitability expectations, and the expected results of operations for the fiscal year ending January 31, 2013 and the components of such expected results of operations, involve known and unknown risks and uncertainties that may cause Titan Machinery’s actual results in current or future periods to differ materially from forecasted results. The Company’s risks and uncertainties include, among other things, a substantial dependence on a single distributor, 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 Construction segment, the uncertainty and fluctuating conditions in the capital and credit markets, difficulties in conducting international operations, governmental agriculture policies, seasonal fluctuations, 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. 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. 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.

TITAN MACHINERY INC.
Consolidated Balance Sheets
(in thousands, except per share data)
			October 31,					January 31,
			2012					2012
ASSETS			(Unaudited)
CURRENT ASSETS
Cash and cash equivalents			$	115,668				$	79,842
Receivables, net				96,568					82,518
Inventories				1,048,004					748,047
Prepaid expenses and other				4,225					2,108
Income taxes receivable				-					3,140
Deferred income taxes				5,182					5,370
Total current assets				1,269,647					921,025
INTANGIBLES AND OTHER ASSETS
Noncurrent parts inventories				3,480					2,792
Goodwill				29,547					24,404
Intangible assets, net of accumulated amortization				12,477					10,793
Other				7,641					2,776
Total intangibles and other assets				53,145					40,765
PROPERTY AND EQUIPMENT, net of accumulated depreciation				185,656					126,282
TOTAL ASSETS			$	1,508,448				$	1,088,072
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable			$	34,597				$	28,424
Floorplan notes payable				782,357					552,428
Current maturities of long-term debt				10,123					4,755
Customer deposits				25,063					49,540
Accrued expenses				32,527					26,735
Income taxes payable				5,023					-
Total current liabilities				889,690					661,882
LONG-TERM LIABILITIES
Senior convertible notes				124,887					-
Long-term debt, less current maturities				69,345					57,405
Deferred income taxes				38,656					28,592
Other long-term liabilities				1,870					2,854
Total long-term liabilities				234,758					88,851
STOCKHOLDERS' EQUITY
Common stock, par value $.00001 per share; authorized - 45,000
shares, issued and outstanding - 21,047 at October 31, 2012 and authorized
- 25,000 shares, issued and outstanding - 20,911 at January 31, 2012				-					-
Additional paid-in-capital				235,892					218,156
Retained earnings				145,118					118,251
Accumulated other comprehensive loss				(631	)				(70	)
Total Titan Machinery Inc. stockholders' equity				380,379					336,337
Noncontrolling interest				3,621					1,002
Total stockholders' equity				384,000					337,339
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	1,508,448				$	1,088,072

TITAN MACHINERY INC.
Consolidated Statements of Operations
(in thousands, except per share data)
			Three Months Ended October 31,										Nine Months Ended October 31,
			2012				2011						2012				2011
			(Unaudited)				(Unaudited)						(Unaudited)				(Unaudited)
REVENUE
Equipment			$	456,168			$	312,304					$	1,084,866			$	786,816
Parts				72,101				64,468						188,840				155,670
Service				33,365				29,843						93,583				76,202
Rental and other				20,478				16,345						46,617				33,286
TOTAL REVENUE				582,112				422,960						1,413,906				1,051,974
COST OF REVENUE
Equipment				414,028				283,690						985,397				711,421
Parts				49,266				44,389						130,276				108,535
Service				11,611				10,304						32,448				27,175
Rental and other				13,148				10,580						30,953				22,192
TOTAL COST OF REVENUE				488,053				348,963						1,179,074				869,323
GROSS PROFIT				94,059				73,997						234,832				182,651
OPERATING EXPENSES				63,950				50,060						175,313				133,556
INCOME FROM OPERATIONS				30,109				23,937						59,519				49,095
OTHER INCOME (EXPENSE)
Interest and other income				258				307						865				859
Floorplan interest expense				(3,704	)			(2,625	)					(9,022	)			(5,121	)
Other interest expense				(2,886	)			(283	)					(6,453	)			(899	)
INCOME BEFORE INCOME TAXES				23,777				21,336						44,909				43,934
PROVISION FOR INCOME TAXES				(9,418	)			(8,536	)					(17,786	)			(17,575	)
NET INCOME INCLUDING
NONCONTROLLING INTEREST				14,359				12,800						27,123				26,359
LESS: NET INCOME ATTRIBUTABLE
TO NONCONTROLLING INTEREST				298				-						256				-
NET INCOME ATTRIBUTABLE TO
TITAN MACHINERY INC.			$	14,061			$	12,800					$	26,867			$	26,359
NET INCOME ALLOCATED TO
PARTICIPATING SECURITIES				(150	)			(113	)					(270	)			(238	)
NET INCOME ATTRIBUTABLE TO
COMMON STOCKHOLDERS			$	13,911			$	12,687					$	26,597			$	26,121
EARNINGS PER SHARE - DILUTED			$	0.66			$	0.61					$	1.27			$	1.31
WEIGHTED AVERAGE COMMON SHARES - DILUTED				20,988				20,890						20,982				19,903

TITAN MACHINERY INC.
Segment Results
(in thousands)
			Three Months Ended October 31,														Nine Months Ended October 31,
			2012					2011					% Change				2012					2011					% Change
			(Unaudited)					(Unaudited)									(Unaudited)					(Unaudited)
Revenue
Agriculture			$	503,518				$	361,601				39.2	%			$	1,200,148				$	914,932				31.2	%
Construction				94,852					77,435				22.5	%				271,728					181,395				49.8	%
Segment revenue				598,370					439,036				36.3	%				1,471,876					1,096,327				34.3	%
Eliminations				(16,258	)				(16,076	)			(1.1	%)				(57,970	)				(44,353	)			(30.7	%)
Total			$	582,112				$	422,960				37.6	%			$	1,413,906				$	1,051,974				34.4	%
Income Before Income Taxes
Agriculture			$	26,060				$	20,068				29.9	%			$	50,971				$	43,964				15.9	%
Construction				519					3,254				(84.1	%)				767					4,482				(82.9	%)
Segment income before income taxes				26,579					23,322				14.0	%				51,738					48,446				6.8	%
Shared Resources				(2,340	)				(1,772	)			(32.1	%)				(4,843	)				(3,786	)			(27.9	%)
Eliminations				(462	)				(214	)			(115.9	%)				(1,986	)				(726	)			(173.6	%)
Total			$	23,777				$	21,336				11.4	%			$	44,909				$	43,934				2.2	%
Note: The Company reports its revenue and income before income taxes at the segment level before inter-company eliminations.

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