Titan International, Inc.
Q1 2010 Earnings Call Transcript
April 26, 2010 9:00 am ET
Morry Taylor – Chairman & CEO
Ian Zaffino – Oppenheimer
Philip Volpicelli – Cantor Fitzgerald
Kent Holden – HAM Funds
Eric Dubowsky – Alpine Associates
Derrick Wenger – Jefferies & Co.
Larry DeMaria – Sterne Agee
Previous Statements by TWI
» Titan International, Inc. Q1 2009 Earnings Call Transcript
» Titan International Q4 2008 Earnings Call Transcript
» Titan International, Inc. Q3 2008 Earnings Call Transcript
Ladies and gentlemen, welcome to the Titan International, Inc. first quarter earnings call. During this session, all lines will be muted until the question-and-answer portion of the call. (Operator instructions)
Any statements made in the course of this conference call that state the Company’s or management’s “intentions,” “hopes,” “believes,” “expectations” or “predictions” for the future are considered forward-looking statements.
Please note that the Safe Harbor statements contained in the Company’s latest Form 10-K and Form 10-Q filed with the Securities and Exchange Commission extend to this conference call and any forward-looking statements involve risks and uncertainties as detailed therein.
At this time, I would like to introduce Titan’s Chairman and CEO, Morry Taylor. Please go ahead, sir.
Thank you. Good morning, everyone, wherever you’re at. As I’m assuming that everybody has got the press release and the 10-Q, if not, it’s out on the internet.
Looking at the past quarter, past quarter was a less than better than it was '09, but it started off slow, but then it’s continued to pick up pace. And the pace is still picking up, which is good. So, going forward, it’s going to be pretty decent for the second quarter. I went through all of the things and explained what I’ve said in my little statement there in the press release.
Big A has been real good and (inaudible) both John Deere, everybody is increasing what they’re doing in the Big A. And I expect that to run all the way through the rest of the year. That’s real good for us both from a standpoint of wheels and the standpoint of tires.
The situation for the lead and small farms also the tractors that go up to approximately 135 HP. There’s some positives in it, but I’m not getting all excited. Our people are not getting all excited, but a little bump of positiveness in it, mainly because those tractors are mainly used in the residential for the various home building, etc.,
It’s also tied into nurseries, and it’s also tied into a lot of counties, state government and even some of the feds reference all of the mowing and everything that’s you get to grass and everything else.
So, most of those people don’t have budgets even to pay their workers leave alone enough to buy any equipment. So we’re not real positive, long outlook on it. And if we get a bump up, that’s great.
The construction side of our business has moved up, mainly just because of the restocking of machinery for the OEs and most people are waiting they rather put new tires on equipment and they rather rebuild some of the equipment and going and the buying, so it’s still off at least 50% from the old seventh.
When we get into the other segment, that’s in our construction side, which is mining, both underground and above ground, we’re seeing great, great opportunities there. And everybody I know is concerned about the big giants, super giant tires.
Well, let me explain to everybody. I’ve been up to the oil sands, a couple times. The new generation to we came up with, has performed much better than even we expected. The problem from the first generation was that it was a tire that was a very robust tire, but being robust, it turned around, and it would generate the heat in the steel belts that are underneath the tread and you would generate the heat, the heat will get so high you would actually note the rubber between the steel. And that’s a bad situation.
We dropped almost 40 degrees in the running temperature on to the same loads. We did a lot of things to improve that tire. We also came out with a new tread design so that we’re gone cooler. But the benefits that came about it is that new tread design has great, great traction and when we were up there, as you can appreciate in the north, they have a little thought there, so they were running these 400 ton trucks, and like about three-foot of mud, unbelievable.
Ours is the only one of the competitive tires up there. They just ran right straight to it. Everybody else had a little Caterpillar D11 so as we try and push it through the beds.
So we’re real pleased. Those tests up there are running along. We also have dropped down and we have supplied on smaller sizes, the 49-inch, which have been running in the Kentucky and the West Virginia mine. And the same thing we’ve got enough and but rails on that. Most of those tires have between 700 hours and 800 hours on them.
We want to see them when they get approximately 2,000 hours. We got a pretty good feel how that tires going to work. We believe that’s a safest tire that’s out there from the standpoint that in the oil sands when they run over and had cuts and they slice into the tire. Our tire did not explode, it’s just last there eventually, and we actually even cut one tire and tool and presented it to the mine, where you can actually see, where a piece of steel, which straight out through the tread, punched through the belt package, but didn’t appears our casing, that’s quite remarkable.