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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 10-Q
  

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended: September 30, 2004

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-12936

TITAN INTERNATIONAL, INC.
(Exact name of Registrant as specified in its Charter)

Illinois
  
36-3228472
(State of Incorporation)
  
(I.R.S. Employer Identification No.)

2701 Spruce Street, Quincy, IL 62301
(Address of principal executive offices, including Zip Code)

(217) 228-6011
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes x No o

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
   
Shares Outstanding at
Class
  
October 28, 2004
     
Common stock, no par value per share
  
16,326,426

  
     
 

TITAN INTERNATIONAL, INC.

TABLE OF CONTENTS


   
Page Number
Part I.
Financial Information
  
     
Item 1.
Financial Statements (Unaudited)
  
     
 
Consolidated Condensed Statements of Operations
for the Three and Nine Months Ended
September 30, 2004 and 2003
1
     
 
Consolidated Condensed Balance Sheets as of
September 30, 2004, and December 31, 2003
2
     
 
Consolidated Condensed Statements of Cash Flows
for the Nine Months Ended September 30, 2004 and 2003
3
     
 
Notes to Consolidated Condensed Financial Statements
4-15
     
Item 2.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
16-30
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
31
     
Item 4.
Controls and Procedures
31
     
Part II.
Other Information
  
     
Item 6.
Exhibits and Reports on Form 8-K
32-33
     
 
Signatures
33
     



     
 


PART I. FINANCIAL INFORMATION
 
Item 1.    Financial Statements
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands, except earnings per share data)
   
Three months ended
  
Nine months ended
  
   
September 30,
  
September 30,
  
   
2004
  
2003
  
2004
  
2003
  
                   
 
Net sales
  
$
116,487
  
$
111,218
  
$
404,651
  
$
371,203
  
 
Cost of sales
    
98,686
    
105,921
    
338,241
    
349,440
  
 
Gross profit
    
17,801
    
5,297
    
66,410
    
21,763
  
 
Selling, general & administrative expenses
    
7,613
    
9,751
    
27,585
    
32,108
  
 
Research and development expenses
    
323
    
638
    
1,530
    
2,022
  
 
Goodwill impairment on Titan Europe
    
0
    
0
    
2,988
    
0
  
 
Income (loss) from operations
    
9,865
    
(5,092
)
  
34,307
    
(12,367
)
 
Interest expense
    
(3,833
)
  
(5,088
)
  
(13,598
)
  
(15,101
)
 
Debt termination expense
    
(3,654
)
  
0
    
(3,654
)
  
0
  
 
Equity investment (loss) income
    
(367
)
  
0
    
421
    
0
  
 
Loss on investment
    
0
    
(2,707
)
  
0
    
(2,707
)
 
Other income
    
105
    
245
    
239
    
2,728
  
 
Income (loss) before income taxes
    
2,116
    
(12,642
)
  
17,715
    
(27,447
)
Provision for income taxes
    
635
    
740
    
5,315
    
0
  
 
Net income (loss)
  
$
1,481
  
$
(13,382
)
$
12,400
  
$
(27,447
)
 
Income (loss) per common share:
                          
Basic
  
$
.09
  
$
(.64
)
$
.68
  
$
(1.31
)
Diluted
    
.09
    
(.64
)
  
.65
    
(1.31
)
 
Average common shares outstanding:
                          
Basic
    
16,324
    
21,060
    
18,293
    
20,922
  
Diluted
    
16,426
    
21,060
    
20,429
    
20,922
  

The accompanying notes are an integral part of the
consolidated condensed financial statements.

  
  1  
 
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Amounts in thousands, except share data)
   
September 30,
  
December 31,
  
   
2004
  
2003
  
Assets
          
Current assets
          
Cash and cash equivalents
  
$
3,291
  
$
6,556
  
Accounts receivable (net allowance of $5,596 and $5,331, respectively)
    
68,417
    
83,975
  
Inventories
    
74,484
    
112,496
  
Assets held for sale
    
37,003
    
37,775
  
Deferred income taxes
    
20,343
    
20,343
  
Prepaid and other current assets
    
17,592
    
25,801
  
Total current assets
    
221,130
    
286,946
  
               
Property, plant and equipment, net
    
77,075
    
138,482
  
Restricted cash deposits
    
26,430
    
51,039
  
Investment in affiliate
    
27,418
    
0
  
Other assets
    
20,928
    
27,794
  
Goodwill, net
    
11,702
    
18,823
  
Total assets
  
$
384,683
  
$
523,084
  
               
Liabilities and Stockholders’ Equity
              
Current liabilities
              
Short-term debt (including current portion of long-term debt)
  
$
233
  
$
21,161
  
Accounts payable
    
33,458
    
51,931
  
Other current liabilities