TITAN INTERNATIONAL INC

Previous wording

On February 29, 2024, the Company acquired 100% of the equity interests of Carlstar. The agreements associated with the purchase of the equity interests of Carlstar are included in the Exhibits to our Form 10-Q for the quarter ended March 31, 2024 and the Current Report on Form 8-K filed on February 29, 2024. The results of Carlstar's operations are included in our consolidated financial statements since February 29, 2024. Total acquisition-related costs for the nine months ended September 30, 2024 were $6.2 million.

Current wording

On February 29, 2024, the Company acquired 100% of the equity interests of Carlstar, whose products are also known as Titan Specialty. The results of Carlstar's operations have been included in our consolidated financial statements since February 29, 2024. Total acquisition-related costs related to the Carlstar/Titan Specialty acquisition for the three months ended March 31, 2024 were $6.2 million.

Previous wording

The purchase consideration was allocated on a provisional basis to the estimated fair value of assets acquired and liabilities assumed for Carlstar as of February 29, 2024. These fair value estimates are preliminary and subject to change as management completes further analyses and studies. For further information, refer to Note 2 to the condensed consolidated financial statements.

Current wording

The purchase consideration for the Carlstar/Titan Specialty acquisition was allocated to the estimated fair value of assets acquired and liabilities assumed as of February 29, 2024. For further information, refer to Note 2 to our condensed consolidated financial statements.

Previous wording

This Form 10-Q contains forward-looking statements, which are covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Readers can identify these statements by the fact that they do not relate strictly to historical or current facts. The Company tried to identify forward-looking statements in this quarterly report by using words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” and “believes,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could.” These forward-looking statements include, among other items, information concerning:

Current wording

This Form 10-Q contains forward-looking statements, which are covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Readers can identify these statements by the fact that they do not relate strictly to historical or current facts. Titan International, Inc. (together with its subsidiaries “Titan” or the “Company”) has tried to identify forward-looking statements in this report by using words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” and “believes,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could.” These forward-looking statements include, among other items, statements relating to the following:

Previous wording

•the Company’s intention to consider and pursue acquisition and divestiture opportunities and the expectations related to acquisitions that the Company has recently effected, in particular the Carlstar acquisition, which could significantly impact the Company's financial results if actual results from the Carlstar acquisition differ from anticipated results.

Current wording

•the Company’s intention to consider and pursue acquisition and divestiture opportunities and the expectations related to acquisitions that the Company has recently effected, in particular the acquisition of Titan Specialty, which could significantly impact the Company's financial results if actual results from the Titan Specialty acquisition differ from anticipated results.

Previous wording

Readers of this Form 10-Q should understand that these forward-looking statements are based on the Company’s current expectations and assumptions about future events and are subject to a number of risks, uncertainties, and changes in circumstances that are difficult to predict, including those in Part I, Item 1A, Risk Factors, of the 2023 Form 10-K and Part II, Item 1A, Risk Factors, of this quarterly report on Form 10-Q, certain of which are beyond the Company’s control.

Current wording

Readers of this Form 10-Q should understand that these forward-looking statements are based on the Company’s current expectations and assumptions about future events and are subject to a number of risks, uncertainties, and changes in circumstances that are difficult to predict, including those described in “Item 1A – Risk Factors” in Part I of the 2024 Form 10-K and “Item 1A – Risk Factors” in Part II of this quarterly report on Form 10-Q, certain of which are beyond the Company’s control.

Previous wording

•Uncertainties from political or electoral changes in the United States, Europe and elsewhere;

Current wording

•uncertainties from political or electoral changes in the United States, Europe and elsewhere, including the imposition of tariffs by various countries on imported goods and responses thereto and resulting impacts;

Previous wording

•the effect of the geopolitical instability resulting from the military conflicts between Russia and Ukraine on our Russian and global operations, and between Israel and Hamason our global operations;

Current wording

•the effect of the geopolitical instability resulting from the military conflicts between Russia and Ukraine on our Russian and global operations, and between Israel and Hamas on our global operations;

Previous wording

•risks associated with environmental laws and regulations and increased attention to ESG matters;

Current wording

•risks associated with environmental laws and regulations;

Previous wording

Titan International, Inc., together with its subsidiaries, is a global wheel, tire, and undercarriage industrial manufacturer and supplier that services customers across the globe. As a leading manufacturer in the off-highway industry, Titan produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. Titan manufactures and sells certain tires under the Goodyear Farm Tire, Titan Tire, Carlstar and Voltyre-Prom Tire brands and has complete research and development facilities to validate tire and wheel designs. Carlstar sells tire products under the Carlisle® brand under a long-term license agreement and also sells tires under other recognized brand names, including ITP®, Trail Wolf®, Links®, USA Trail® and Carlisle Radial Trail HD™ highway trailer tires.

Current wording

Titan is a global wheel, tire, and undercarriage industrial manufacturer and supplier that services customers across the globe. As a leading manufacturer in the off-highway industry, Titan produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. Titan manufactures and sells certain tires under the Goodyear Farm Tire, Titan Tire, Carlstar and Voltyre-Prom Tire brands and has complete research and development facilities to validate tire and wheel designs. Carlstar sells tire products under the Carlisle® brand under a long-term license agreement that expires in 2033 and also sells tires under other recognized brand names, including ITP®, Trail Wolf®, Links®, USA Trail® and Carlisle Radial Trail HD™ highway trailer tires.

Previous wording

Agricultural Segment: Titan’s agricultural wheels, tires, and components are manufactured for use on various agricultural equipment, including tractors, combines, skidders, plows, planters, and irrigation equipment, and are sold directly to OEMs and to the aftermarket through independent distributors, equipment dealers, and Titan’s distribution centers. The wheels range in diameter from nine inches to 54 inches, with the 54-inch diameter being the largest agricultural wheel manufactured in North America. Basic configurations are combined with distinct variations (such as different centers and a wide range of material thickness) allowing the Company to offer a broad line of products to meet customer specifications. Titan’s agricultural tires range from approximately one foot to approximately seven feet in outside diameter and from five inches to 55 inches in width. Agricultural tires are offered under the Goodyear Farm Tire, Titan Tire, Carlstar and Voltyre-Prom brands with a full portfolio of sizes, load carrying capabilities, and tread patterns necessary for the markets served. The Company offers the added value of delivering a complete wheel and tire assembly to OEM and aftermarket customers.

Current wording

Agricultural Segment: Titan’s agricultural wheels, tires, and components are manufactured for use on various agricultural equipment, including tractors, combines, skidders, plows, planters, and irrigation equipment, and are sold directly to OEMs and to the aftermarket through independent distributors, equipment dealers, and Titan’s distribution centers. The wheels range in diameter from nine inches to 54 inches, with the 54-inch diameter being the largest agricultural wheel manufactured in North America. Basic configurations are combined with distinct variations (such as different centers and a wide range of material thickness) allowing the Company to offer a broad line of products to meet customer specifications. Titan’s agricultural tires range from approximately one foot to approximately seven feet in outside diameter and from five inches to 55 inches in width. Agricultural tires are offered under the Goodyear Farm Tire, Titan Tire, Carlstar, ACES and Voltyre-Prom brands with a full portfolio of sizes, load carrying capabilities, and tread patterns necessary for the markets served. The Company offers the added value of delivering a complete wheel and tire assembly to OEM and aftermarket customers.

Previous wording

Consumer Segment: In February 2024, Titan acquired Carlstar, which is a global manufacturer and distributor of wheels and tires for a variety of end-market verticals including outdoor power equipment, power sports, and high speed trailers. Carlstar is primarily concentrated in the consumer segment, but also manufactures and sells small to midsize agricultural tires.

Current wording

Consumer Segment: In February 2024, Titan acquired Carlstar, also known as Titan Specialty, which is a global manufacturer and distributor of wheels and tires for a variety of end-market verticals including outdoor power equipment, power sports, and high speed trailers. Titan Specialty is primarily concentrated in the consumer segment, but also manufactures and sells small to midsize agricultural tires. Products are offered in Carlstar, ITP, Black Rock, and Unique brands with portfolios commensurate to supporting these markets. The Company also offers the added value of wheel and tire assemblies for many of these products to select OEM customers.

Previous wording

During recent months, agriculture-related commodity prices have declined from historical highs and farmer income has experienced reduced levels. However, population growth, a shift in consumer preference towards higher protein diets, and the replacement of an aging large equipment fleet in favor of newer and higher productivity technology, have created market conditions which are anticipated to support continued demand for the Company's products in the mid- to long-term time horizon. The agricultural market is currently experiencing a significant slowdown in customer demand, but the underlying market conditions mentioned previously are expected to provide future support for the mid- to long-term demand for the Company's products. Many more variables, including weather, volatility in the price of commodities, grain prices, export markets, foreign currency exchange rates, interest rates, government policies, subsidies, and the demand for used equipment, can greatly affect the Company's performance in the agricultural market in a given period.

Current wording

During recent months, agriculture-related commodity prices and farmer income have been on the rise, however, prices remain lower than historical highs. The agricultural markets in North America and Europe are currently experiencing a significant slowdown in customer demand and this is further exacerbated by the implementation of tariffs by the United States and other countries throughout the world, and responses thereto, which has created uncertainty in the global markets including impact on farmer sentiments. The agricultural markets in South America are, however, seeing early signs of a market recovery as customer demand appears to be growing. Amid the evolving global tariffs situation, Titan is in a uniquely advantaged position among its competitors, having manufacturing capabilities that are strategically located in the key markets we serve. In addition, the mid to long term global market trends point to population growth, a shift in consumer preference toward higher protein diets, and the pressures to replace an aging large equipment fleet in favor of newer and higher productivity technology, as providing encouragement that market conditions may improve to support renewed and continued demand for the Company's products in the mid to long term time horizon. The Company is hopeful that the underlying market trends mentioned above will provide future support for the mid to long term demand for the Company's products. Many more variables, including weather, volatility in the price of commodities, grain prices, the demand for used equipment, export markets, foreign currency exchange rates, interest rates, government policies, subsidies, uncertainty surrounding tariffs implemented by the United States and reciprocated by other countries, can greatly affect the Company's performance in the agricultural market in a given period.

Previous wording

The earthmoving/construction segment is affected by many variables, including commodity prices, road construction, infrastructure, government appropriations, housing starts, and other macroeconomic drivers. The construction market is primarily driven by country-specific GDP and the need for infrastructure developments. The earthmoving/construction markets are currently experiencing a slowdown in OEM demand, but we expect the market to stabilize over the mid to long term given the level of mining capital budgets and forecasted GDP growth. Mineral commodity prices are at relatively high levels, which also supports the forecasted mid- to long-term growth.

Current wording

The earthmoving/construction segment is affected by many variables, including commodity prices, uncertainty surrounding the imposition of tariffs as mentioned above, road construction, infrastructure, government appropriations, housing starts, and other macroeconomic drivers. The construction market is primarily driven by country-specific GDP and the need for infrastructure developments. The earthmoving/construction markets are currently experiencing a slowdown in OEM demand, but we expect the market to stabilize over the mid to long term given the level of mining capital budgets and forecasted GDP growth. The mining industry has experienced growth given the increased demand in natural resources industries. Mineral commodity prices are at relatively high levels, which also supports the forecasted mid- to long-term growth.

Previous wording

The consumer market consists of several distinct product lines within different regions. These products include specialty tires and products under the Carlstar brands within powersports, outdoor power equipment and high-speed trailers. The consumer market also includes light truck tires and other specialty products, including custom mixing of rubber stock, and train brakes. Some aspects of the consumer market are experiencing a significant slowdown, particularly in the Americas. The consumer segment pace of growth can vary from period to period and is affected by many variables including inflationary impacts, consumer spending, interest rates, government policies, and other macroeconomic drivers.

Current wording

The consumer market consists of several distinct product lines within different regions. These products include specialty tires and products under several leading brands, including Carlstar, ITP and Marastar brands within powersports, outdoor power equipment and high-speed trailers. The consumer market also includes light truck tires sold into Latin America and other specialty products, including custom mixing of rubber stock, and train brakes. Some aspects of the consumer market are experiencing a slowdown, particularly in the Americas. The consumer segment pace of growth can vary from period to period and is affected by many macroeconomic variables including but not limited to inflationary impacts, consumer spending, interest rates, government policies, and uncertainty surrounding tariffs mentioned above. Titan has a manufacturing facility in China and is actively assessing the evolving retaliatory tariff situation and will make timely decisions on supply chain and production plans, which may include re-sourcing products to its factories in the United States or to other third party suppliers in countries with less tariff impacts. As previously stated, Titan’s ownership of manufacturing capabilities that are strategically located in key markets we serve, puts the company in a uniquely advantaged position.

Previous wording

Selling, general and administrative expenses (SG&A) for the three months ended September 30, 2024 were $49.5 million, or 11.1% of net sales, compared to $33.6 million, or 8.4% of net sales, three months ended September 30, 2023. The change in SG&A for the three months ended September 30, 2024 as compared to the prior year period was attributable to the ongoing SG&A associated with the Carlstar operations, specifically related to the management of distribution centers.

Current wording

Selling, general and administrative expenses (SG&A) for the three months ended March 31, 2025 were $49.9 million, or 10.2% of net sales, compared to $39.4 million, or 8.2% of net sales, for the three months ended March 31, 2024. The change in SG&A for the three months ended March 31, 2025 as compared to the prior year period was due to recurring SG&A on the Titan Specialty operations, which includes the management of distribution centers and heightened depreciation and amortization expenses associated with the acquisition.

Previous wording

Acquisition related expenses for the nine months ended September 30, 2024 were $6.2 million, associated with the one-time transaction costs for Carlstar.

Current wording

Acquisition related expenses for the three months ended March 31, 2024 were $6.2 million, associated with the one-time transaction costs for Titan Specialty.

Previous wording

Research and development (R&D) expenses for the three months ended September 30, 2024 were $4.2 million, or 0.9% of net sales, compared to $3.2 million, or 0.8% of net sales, for the comparable period in 2023. R&D expenses for the nine months ended September 30, 2024 were $12.1 million, or 0.8% of net sales, compared to $9.4 million, or 0.7% of net sales, for the comparable period in 2023. R&D spending reflects initiatives to improve product designs and an ongoing focus on innovation and quality.

Current wording

Research and development (R&D) expenses for the three months ended March 31, 2025 were $4.5 million, or 0.9% of net sales, compared to $3.7 million, or 0.8% of net sales, for the comparable period in 2024. R&D spending reflects initiatives to improve product designs and an ongoing focus on innovation and quality.

Previous wording

The Company has trademark license agreements with The Goodyear Tire & Rubber Company to manufacture and sell certain farm tires under the Goodyear name, currently scheduled to expire in 2025. These agreements cover sales in North America, Latin America, Europe, the Middle East, Africa, Russia, and other Commonwealth of Independent States countries. The Company also has a trademark license agreement with Carlisle Companies, Inc. to manufacture and sell certain tires under the Carlisle brand. Royalty expenses for the three months ended September 30, 2024 were $2.3 million, or 0.5% of net sales, compared to $2.3 million, or 0.6% of net sales, for the three months ended September 30, 2023. Royalty expenses for the nine months ended September 30, 2024 were $7.6 million, or 0.5% of net sales, compared to $7.2 million, or 0.5% of net sales, for the nine months ended September 30, 2023.

Current wording

The Company has trademark license agreements with The Goodyear Tire & Rubber Company to manufacture and sell certain farm, ATV and truck tires under the Goodyear brand. These agreements cover sales in North America, Latin America, Europe, the Middle East, Africa, Russia, other Commonwealth of Independent States countries, Australia, and New Zealand. The farm and ATV agreement is scheduled to expire in 2029 with annual renewal options following the initial term. The truck tires royalty agreement expires December 31, 2025. The Company intends to renew the royalty agreement prior to its expiration. The Company also has a trademark license agreement with Carlisle Companies, Inc. to manufacture and sell certain tires under the Carlisle® brand. This trademark license agreement is scheduled to expire in 2033. Royalty expenses for the three months ended March 31, 2025 were $2.4 million, or 0.5% of net sales, compared to $3.0 million, or 0.6% of net sales, for the three months ended March 31, 2024.

Previous wording

Income from operations for the three months ended September 30, 2024 was $2.8 million, compared to income from operations of $27.0 million for the three months ended September 30, 2023. Income from operations for the nine months ended September 30, 2024 was $50.2 million, compared to income from operations of $128.0 million for the nine months ended September 30, 2023. The changes in income from operations for the three and nine months ended September 30, 2024 as compared to the prior year periods were primarily due to lower gross profit and the net result of the items previously discussed.

Current wording

Income from operations for the three months ended March 31, 2025 was $11.8 million, compared to income from operations of $25.1 million for the three months ended March 31, 2024. The change in income from operations for the three months ended March 31, 2025 as compared to the prior year periods was primarily due to lower gross profit and the net result of the items previously discussed.

Previous wording

Interest income was $3.1 million and $3.3 million for the three months ended September 30, 2024 and 2023, respectively, and $8.5 million and $6.3 million for the nine months ended September 30, 2024 and 2023. The decline in interest income for the three-month period was primarily due to financial investments in Argentina and the United States, while the increase for the nine-month period was mainly driven by financial investments in Brazil.

Current wording

Interest income was $2.2 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively. The decline in interest income for the three-month period was primarily due to reduced short-term financial investments in Brazil, and Argentina.

Previous wording

Foreign exchange loss was $2.5 million for the three months ended September 30, 2024, compared to a gain of $0.9 million for the three months ended September 30, 2023. The change in foreign exchange (loss) gain during the three months ended on September 30, 2024, as compared to the prior year period, was attributable to the unfavorable impact of the translation of intercompany loans at certain foreign subsidiaries, which are denominated in local currencies rather than the reporting currency, which is the United States dollar. Since these intercompany loans are expected to be settled at some point in the future, the loans are adjusted each reporting period to reflect the current exchange rates.

Current wording

Foreign exchange loss was $1.4 million for the three months ended March 31, 2025, compared to a loss of $0.3 million for the three months ended March 31, 2024. The change in foreign exchange (loss) gain during the three months ended on March 31, 2025, as compared to the prior year period, was attributable to the unfavorable impact of the translation of intercompany balances at certain foreign subsidiaries, which are denominated in local currencies rather than the reporting currency, which is the United States dollar. Since these intercompany balances are expected to be settled at some point in the future, they are adjusted each reporting period to reflect the current exchange rates.

Previous wording

The Company recorded income tax expense of $12.9 million and $4.7 million for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded income tax expense of $38.1 million and $28.4 million, respectively. The Company's effective income tax rate was (244.4)% and 19.4% for the three months ended September 30, 2024 and 2023, respectively, and 114.4% and 25.0% for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023, the income tax expense differed each period due to an overall decrease in pre-tax income. For the nine months ended September 30, 2024, the rate was negatively impacted by non-deductible interest expense in the United States, foreign branch income related to the Carlstar acquisition, and one-time impacts associated with transaction costs, which were also not fully deductible for income tax purposes. Additionally, the rate was impacted by the results of foreign income tax rate differential on the mix of earnings, non-deductible royalty expenses in certain jurisdictions, and certain foreign inclusion items on the domestic provision.

Current wording

The Company recorded income tax expense of $4.2 million and $9.7 million for the three months ended March 31, 2025 and 2024, respectively. The Company's effective income tax rate was 99.5% and 49.4% for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025 and 2024, the income tax expense differed each period due to an overall decrease in pre-tax income.

Previous wording

The Company’s 2023 income tax expense and rate differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of foreign income tax rate differential on the mix of earnings, non-deductible royalty expenses in certain jurisdictions, the valuation allowance on the interest expense carryforward, and certain foreign inclusion items on the domestic provision.

Current wording

The Company’s 2025 and 2024 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of foreign income tax rate differential on the mix of earnings, the valuation allowance on the interest expense carryforward, and certain foreign inclusion items on the domestic provision.

Previous wording

Net loss for the three months ended September 30, 2024 was $18.2 million, compared to net income of $19.7 million in the comparable period of 2023. For the three months ended September 30, 2024 and 2023, basic (loss) earnings per share were $(0.25) and $0.31, respectively, and diluted (loss) earnings per share were $(0.25) and $0.31, respectively. The Company's net (loss) income and (loss) earnings per share changes were due to the items previously discussed.

Current wording

Net income for the three months ended March 31, 2025 was $0.0 million, compared to net income of $10.0 million in the comparable period of 2024. For the three months ended March 31, 2025 and 2024, basic (loss) earnings per share were $(0.01) and $0.14, respectively, and diluted (loss) earnings per share were $(0.01) and $0.14, respectively. The Company's net income and (loss) earnings per share changes were due to the items previously discussed.

Previous wording

Net sales in the agricultural segment were $175.4 million for the three months ended September 30, 2024, as compared to $213.0 million for the comparable period in 2023. The net sales change was primarily attributed to a significant reduction in global demand for agricultural equipment, particularly in North America and Europe. Additionally, an unfavorable foreign currency translation impact of 4.9% further contributed to the change in net sales, mainly due to the weakening Brazilian real and Argentine peso.

Current wording

Net sales in the agricultural segment were $197.7 million for the three months ended March 31, 2025, as compared to $239.7 million for the comparable period in 2024. The net sales change was primarily attributable to a significant reduction in global demand for agricultural equipment, particularly in North America and Europe which stemmed from lower farm income, higher financing costs, and actions taken by OEM customers to reduce elevated inventory at their retail channels, among other current economic impacts. Additionally, an unfavorable foreign currency translation impact of 4.2% further contributed to the change in net sales, mainly due to the weakening Brazilian real and Turkish lira.

Previous wording

Income from operations in the Company's agricultural segment was $41.7 million for the nine months ended September 30, 2024, as compared to income of $86.1 million for the nine months ended September 30, 2023. The overall change in income from operations was primarily due to the lower gross profit resulting from the decrease in net sales.

Current wording

Income from operations in the Company's agricultural segment was $9.4 million for the three months ended March 31, 2025, as compared to income of $24.0 million for the three months ended March 31, 2024. The overall change in income from operations was primarily due to the lower gross profit resulting from the decrease in net sales.

Previous wording

The Company's earthmoving/construction segment net sales were $467.1 million for the nine months ended September 30, 2024, as compared to $528.7 million in the comparable period in 2023. The change in earthmoving/construction sales was mainly due to reduced sales volume in the Americas and Europe, a slowdown among construction OEM customers, lower steel prices in Europe, and a 0.7% negative impact from foreign currency translation.

Current wording

The Company's earthmoving/construction segment net sales were $143.3 million for the three months ended March 31, 2025, as compared to $165.2 million in the comparable period in 2024. The change in earthmoving/construction sales was mainly due to reduced sales volume in the North Americas and Europe, a slowdown among construction OEM customers, and a 3.2% negative impact from foreign currency translation, primarily due to the weakening Brazilian real.

Previous wording

The Company's earthmoving/construction segment income from operations was $14.0 million for the nine months ended September 30, 2024, as compared to $46.6 million for the nine months ended September 30, 2023. The change was a result of lower sales volume impacting gross margins.

Current wording

The Company's earthmoving/construction segment income from operations was $1.7 million for the three months ended March 31, 2025, as compared to $8.8 million for the three months ended March 31, 2024. The change was a result of lower sales volume impacting gross margins and inflationary costs.

Previous wording

Consumer segment net sales were $363.8 million for the nine months ended September 30, 2024, as compared to $115.0 million for the nine months ended September 30, 2023. This increase was mainly driven by the favorable effects of the Carlstar acquisition, although it was partially offset by lower sales volumes in the Americas due to adverse market conditions and a 2.1% negative impact from foreign currency, primarily due to the weakening Brazilian real.

Current wording

Consumer segment net sales were $149.7 million for the three months ended March 31, 2025, as compared to $77.3 million for the three months ended March 31, 2024. This increase was mainly driven by the favorable effects of the Titan Specialty acquisition, although it was partially offset by lower sales volumes in the Americas due to challenging market conditions, particularly with OEM's from the current economic conditions, along with a 2.6% negative impact from foreign currency, primarily due to the weakening Brazilian real.

Previous wording

Gross profit from the consumer segment was $30.4 million for the three months ended September 30, 2024, as compared to $6.8 million for the three months ended September 30, 2023. The increase in gross profit and profit margin was largely driven by the benefits derived from the Carlstar acquisition.

Current wording

Gross profit from the consumer segment was $29.3 million for the three months ended March 31, 2025, as compared to $13.8 million for the three months ended March 31, 2024. The increase in gross profit and margin was influenced by the Titan Specialty acquisition, particularly its aftermarket presence.

Previous wording

Consumer segment income from operations was $22.8 million for the nine months ended September 30, 2024, as compared to income of $17.2 million for the nine months ended September 30, 2023. The increase was driven by the higher gross profit attributable to the factors mentioned above.

Current wording

Consumer segment income from operations was $8.8 million for the three months ended March 31, 2025, as compared to income of $5.1 million for the three months ended March 31, 2024. The increase was driven by the higher gross profit attributable to the factors mentioned above.

Previous wording

Income from operations on a segment basis did not include unallocated costs of $8.5 million for the three months ended September 30, 2024, and $28.3 million for the nine months ended September 30, 2024, as compared to $7.4 million for the three months ended September 30, 2023, and $21.8 million for the nine months ended September 30, 2023.

Current wording

Income from operations on a segment basis did not include unallocated costs of $8.1 million for the three months ended March 31, 2025, as compared to $12.9 million for the three months ended March 31, 2024.

Previous wording

Unallocated expenses are primarily comprised of corporate selling, general and administrative expenses. The increase in corporate and unallocated expenses for the three months ended September 30, 2024 as compared to the prior year period was mainly attributed to higher SG&A expenses, particularly professional service fees. The increase in corporate and unallocated expenses for the nine months ended September 30, 2024 as compared to the prior year period was primarily due to transaction costs of $6.2 million related to the Carlstar acquisition in the first quarter of 2024.

Current wording

Unallocated expenses are primarily comprised of corporate selling, general and administrative expenses. The change in corporate and unallocated expenses for the three months ended March 31, 2025 as compared to the prior year period was primarily due to transaction costs of $6.2 million related to the Titan Specialty acquisition in the first quarter of 2024.

Previous wording

As of September 30, 2024, the Company had $227.3 million of cash, which increased as compared to the December 31, 2023 ending balance of $220.3 million, due to the following items:

Current wording

As of March 31, 2025, the Company reported $174.4 million of cash, which decreased as compared to the December 31, 2024 balance of $196.0 million, due to the net effect of the following items:

Previous wording

Operating cash flows decreased by $7.4 million when comparing the first nine months of 2024 to the comparable period in 2023. This decline was primarily attributed to lower net income, partially offset by the positive impact of focused working capital management. Key factors contributing to this management included a $34.2 million increase in accounts payable, a $11.4 million improvement due to collections efforts on accounts receivable, and a $21.7 million improvement in inventory management.

Current wording

Operating cash flows decreased by $40.6 million when comparing the first three months of 2025 to the comparable period in 2024. This decline was mainly due to lower net income and the impact of increased investment in working capital to support the increased operating activity from the prior quarter due to seasonality. Key factors contributing to the working capital increase was a $54.0 million increase in accounts receivable, which was partially offset by $26.0 million increase in accounts payable.

Previous wording

During the first nine months of 2024, Titan reported a net cash outflow of $189.0 million from investing activities, as compared to the $39.7 million outflow recorded in the same period of 2023. This rise was primarily attributed to the acquisition of Carlstar for a cash consideration of $143.6 million, which included an additional payment of $19.8 million for excess working capital to the sellers, which has now been recovered through active working capital management. The Company also invested a total of $52.3 million in capital expenditures in the first nine months of 2024, compared to $41.5 million in the corresponding period of 2023. These capital expenditures were directed toward the replacement and enhancement of plant equipment, as well as the procurement of new tools, dies, and molds to support new product development initiatives. The increased capital outlay in 2024 includes the impact of Carlstar capital expenditures, and also reflects Titan's strategic efforts to improve its existing facilities, enhance manufacturing capabilities, and drive operational efficiency and labor productivity gains. The proceeds from property insurance settlement of $3.5 million in the second quarter of 2024 was related to the repair of one of our operating facilities in Italy associated with a 2023 hail storm weather event.

Current wording

During the first three months of 2025, Titan reported a net cash outflow of $14.8 million from investing activities, as compared to the $158.8 million outflow recorded in the corresponding period of 2024. This change was primarily due to the acquisition of Titan Specialty in February 2024 for a cash consideration of $143.6 million. Additionally, Titan invested $15.0 million in capital expenditures in the first three months of 2025, slightly lower than the $16.6 million in the corresponding period of 2024. These expenditures were aimed at replacing and enhancing plant equipment, as well as acquiring new tools, dies, and molds to support new product development initiatives. The capital outlay in 2025 reflects Titan's strategic efforts to improve existing facilities, enhance manufacturing capabilities, and drive operational efficiency and labor productivity gains.

Previous wording

During the first nine months of 2024, $73.1 million cash was provided by financing activities. This was primarily driven by the acquisition of Carlstar on February 29, 2024, for which Titan borrowed $147.0 million under a new domestic credit facility.

Current wording

During the first three months of 2024, $145.7 million of cash was used for financing activities. This significant outflow was mainly due to the acquisition of Titan Specialty on February 29, 2024, for which Titan borrowed $147.0 million under a new domestic credit facility. This cash inflow was partially offset by $7.0 million in debt repayments and $1.4 million in repurchased common stock.

Previous wording

Additionally, Titan issued common stock worth $168.7 million in connection with the business acquisition of Carlstar. This was reflected in “Non cash financing activity” in the Condensed Consolidated Statements of Cash Flows.

Current wording

Additionally, Titan issued common stock worth $168.7 million during the first three months of 2024 in connection with the Titan Specialty acquisition. This issuance was reflected as "Non cash financing activity" in the Condensed Consolidated Statements of Cash Flows.

Previous wording

The Company’s $225 million revolving credit facility (credit facility) and indenture relating to the 7.00% senior secured notes due 2028 contain various restrictions, including:

Current wording

The Company’s $225 million revolving credit facility and indenture relating to the 7.00% senior secured notes due 2028 contain various restrictions, including:

Previous wording

These covenants are subject to a number of exceptions and qualifications that are described in the credit and security agreement. These restrictions could limit the Company’s ability to respond to market conditions, provide for unanticipated capital investments, raise additional debt or equity capital, pay dividends, repurchase stock or take advantage of business opportunities, including future acquisitions. The Company is in compliance with these debt covenants at September 30, 2024.

Current wording

These covenants are subject to a number of exceptions and qualifications that are described in the credit and security agreement and the indenture relating to the 7.00% senior secured notes due 2028. These restrictions could limit the Company’s ability to respond to market conditions, provide for unanticipated capital investments, raise additional debt or equity capital, pay dividends, repurchase stock or take advantage of business opportunities, including future acquisitions. The Company was in compliance with these debt covenants at March 31, 2025.