falsedesktopTITN2020-07-31000140917120000065{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☐\tAccelerated filer\t☒\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage No.\nPART I.\tFINANCIAL INFORMATION\t3\nITEM 1.\tFINANCIAL STATEMENTS\t3\n\tConsolidated Balance Sheets\t3\n\tConsolidated Statements of Operations\t4\n\tConsolidated Statements of Comprehensive Income\t5\n\tConsolidated Statements of Stockholders' Equity\t6\n\tConsolidated Statements of Cash Flows\t7\n\tNotes to Consolidated Financial Statements\t8\nITEM 2.\tMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\t23\nITEM 3.\tQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\t38\nITEM 4.\tCONTROLS AND PROCEDURES\t38\nPART II.\tOTHER INFORMATION\t39\nITEM 1.\tLEGAL PROCEEDINGS\t39\nITEM 1A.\tRISK FACTORS\t39\nITEM 2.\tUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS\t39\nITEM 3.\tDEFAULTS UPON SENIOR SECURITIES\t39\nITEM 4.\tMINE SAFETY DISCLOSURES\t39\nITEM 5.\tOTHER INFORMATION\t39\nITEM 6.\tEXHIBITS\t39\nExhibit Index\t\t40\nSignatures\t\t41\n", "q10k_tbl_2": "\tJuly 31 2020\tJanuary 31 2020\nAssets\t\t\nCurrent Assets\t\t\nCash\t44484\t43721\nReceivables net of allowance for expected credit losses\t75782\t72776\nInventories\t570680\t597394\nPrepaid expenses and other\t7144\t13655\nTotal current assets\t698090\t727546\nNoncurrent Assets\t\t\nProperty and equipment net of accumulated depreciation\t150496\t145562\nOperating lease assets\t83586\t88281\nDeferred income taxes\t3337\t2147\nGoodwill\t2818\t2327\nIntangible assets net of accumulated amortization\t8568\t8367\nOther\t1130\t1113\nTotal noncurrent assets\t249935\t247797\nTotal Assets\t948025\t975343\nLiabilities and Stockholders' Equity\t\t\nCurrent Liabilities\t\t\nAccounts payable\t20734\t16976\nFloorplan payable\t352215\t371772\nCurrent maturities of long-term debt\t3921\t13779\nCurrent operating lease liabilities\t12158\t12259\nDeferred revenue\t22716\t40968\nAccrued expenses and other\t38122\t38409\nTotal current liabilities\t449866\t494163\nLong-Term Liabilities\t\t\nLong-term debt less current maturities\t48665\t37789\nOperating lease liabilities\t83341\t88387\nDeferred income taxes\t2301\t2055\nOther long-term liabilities\t9060\t7845\nTotal long-term liabilities\t143367\t136076\nCommitments and Contingencies\t\t\nStockholders' Equity\t\t\nCommon stock par value $.00001 per share $45000 shares authorized; $22553 shares issued and outstanding at July 31 2020; $22335 shares issued and outstanding at January 31 2020\t0\t0\nAdditional paid-in-capital\t251587\t250607\nRetained earnings\t106175\t97717\nAccumulated other comprehensive loss\t(2970)\t(3220)\nTotal stockholders' equity\t354792\t345104\nTotal Liabilities and Stockholders' Equity\t948025\t975343\n", "q10k_tbl_3": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\nRevenue\t\t\t\t\nEquipment\t202654\t214435\t421159\t408390\nParts\t61454\t59202\t118068\t111140\nService\t27986\t26832\t53586\t49662\nRental and other\t11371\t14512\t20860\t24079\nTotal Revenue\t303465\t314981\t613673\t593271\nCost of Revenue\t\t\t\t\nEquipment\t180231\t190707\t377278\t363861\nParts\t43032\t41732\t82649\t78546\nService\t9665\t8737\t18010\t16219\nRental and other\t7849\t9778\t14636\t16719\nTotal Cost of Revenue\t240777\t250954\t492573\t475345\nGross Profit\t62688\t64027\t121100\t117926\nOperating Expenses\t53079\t54855\t106137\t107410\nImpairment of Long-Lived Assets\t0\t0\t216\t135\nIncome from Operations\t9609\t9172\t14747\t10381\nOther Income (Expense)\t\t\t\t\nInterest and other income\t562\t620\t692\t1414\nFloorplan interest expense\t(901)\t(1399)\t(2054)\t(2276)\nOther interest expense\t(978)\t(966)\t(1944)\t(2607)\nIncome Before Income Taxes\t8292\t7427\t11441\t6912\nProvision for Income Taxes\t1892\t1916\t2779\t1846\nNet Income\t6400\t5511\t8662\t5066\nEarnings per Share:\t\t\t\t\nBasic\t0.28\t0.25\t0.39\t0.23\nDiluted\t0.28\t0.25\t0.39\t0.23\nWeighted Average Common Shares:\t\t\t\t\nBasic\t22118\t21960\t22068\t21917\nDiluted\t22119\t21964\t22068\t21922\n", "q10k_tbl_4": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\nNet Income\t6400\t5511\t8662\t5066\nOther Comprehensive Income\t\t\t\t\nForeign currency translation adjustments\t778\t1012\t250\t241\nComprehensive Income\t7178\t6523\t8912\t5307\n", "q10k_tbl_5": "\tCommon Stock\t\t\tAdditional Paid-In Capital\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal Stockholders' Equity\n\tShares Outstanding\tAmount\t\t\t\t\nBALANCE January 31 2019\t22218\t0\t248423\t89228\t(2340)\t335311\nCumulative-effect adjustment of adopting ASC 842 Leases\t0\t0\t0\t(5464)\t0\t(5464)\nCommon stock issued on grant of restricted stock and exercise of stock options net of restricted stock forfeitures and restricted stock withheld for employee withholding tax\t(34)\t0\t(492)\t0\t0\t(492)\nStock-based compensation expense\t0\t0\t603\t0\t0\t603\nNet loss\t0\t0\t0\t(445)\t0\t(445)\nOther comprehensive loss\t0\t0\t0\t0\t(771)\t(771)\nBALANCE April 30 2019\t22184\t0\t248534\t83319\t(3111)\t328742\nCumulative-effect adjustment of adopting ASC 842 Leases\t0\t0\t0\t0\t0\t0\nCommon stock issued on grant of restricted stock and exercise of stock options net of restricted stock forfeitures and restricted stock withheld for employee withholding tax\t170\t0\t0\t0\t0\t0\nStock-based compensation expense\t0\t0\t694\t0\t0\t694\nNet Income\t0\t0\t0\t5511\t0\t5511\nOther comprehensive Income\t0\t0\t0\t0\t1012\t1012\nBALANCE July 31 2019\t22354\t0\t249228\t88830\t(2099)\t335959\n", "q10k_tbl_6": "\tCommon Stock\t\t\tAdditional Paid-In Capital\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal Stockholders' Equity\n\tShares Outstanding\tAmount\t\t\t\t\nBALANCE January 31 2020\t22335\t0\t250607\t97717\t(3220)\t345104\nCumulative-effect adjustment of adopting ASC 326 Credit Loss\t0\t0\t0\t(204)\t0\t(204)\nCommon stock issued on grant of restricted stock net of restricted stock forfeitures and restricted stock withheld for employee withholding tax\t(21)\t0\t(201)\t0\t0\t(201)\nStock-based compensation expense\t0\t0\t645\t0\t0\t645\nNet income\t0\t0\t0\t2262\t0\t2262\nOther comprehensive loss\t0\t0\t0\t0\t(528)\t(528)\nBALANCE April 30 2020\t22314\t0\t251051\t99775\t(3748)\t347078\nCumulative-effect adjustment of adopting ASC 326 Credit Loss\t0\t0\t0\t0\t0\t0\nCommon stock issued on grant of restricted stock net of restricted stock forfeitures and restricted stock withheld for employee withholding tax\t239\t0\t0\t0\t0\t0\nStock-based compensation expense\t0\t0\t536\t0\t0\t536\nNet income\t0\t0\t0\t6400\t0\t6400\nOther comprehensive income\t0\t0\t0\t0\t778\t778\nBALANCE July 31 2020\t22553\t0\t251587\t106175\t(2970)\t354792\n", "q10k_tbl_7": "\tSix Months Ended July 31\t\n\t2020\t2019\nOperating Activities\t\t\nNet income\t8662\t5066\nAdjustments to reconcile net income to net cash provided by (used for) operating activities\t\t\nDepreciation and amortization\t11286\t13264\nImpairment\t216\t135\nDeferred income taxes\t(944)\t(251)\nStock-based compensation expense\t1181\t1297\nNoncash interest expense\t75\t407\nNoncash lease expense\t5717\t6198\nOther net\t(368)\t(8)\nChanges in assets and liabilities\t\t\nReceivables prepaid expenses and other assets\t3347\t(2149)\nInventories\t31885\t(140149)\nManufacturer floorplan payable\t(26726)\t128635\nAccounts payable deferred revenue accrued expenses and other and other long-term liabilities\t(15140)\t(12362)\nOperating lease liabilities\t(6156)\t(6386)\nNet Cash Provided by (Used for) Operating Activities\t13035\t(6303)\nInvesting Activities\t\t\nRental fleet purchases\t(6001)\t(9249)\nProperty and equipment purchases (excluding rental fleet)\t(4472)\t(3101)\nProceeds from sale of property and equipment\t489\t670\nAcquisition consideration net of cash acquired\t(6790)\t(2972)\nOther net\t(20)\t14\nNet Cash Used for Investing Activities\t(16794)\t(14638)\nFinancing Activities\t\t\nNet change in non-manufacturer floorplan payable\t7229\t49937\nPrincipal payments on senior convertible notes\t0\t(45644)\nProceeds from long-term debt borrowings\t1112\t11786\nPrincipal payments on long-term debt and finance leases\t(2952)\t(1940)\nPayment of debt issuance costs\t(670)\t0\nOther net\t(200)\t(492)\nNet Cash Provided by Financing Activities\t4519\t13647\nEffect of Exchange Rate Changes on Cash\t3\t66\nNet Change in Cash\t763\t(7228)\nCash at Beginning of Period\t43721\t56745\nCash at End of Period\t44484\t49517\nSupplemental Disclosures of Cash Flow Information\t\t\nCash paid (received) during the period\t\t\nIncome taxes net of refunds\t(228)\t3064\nInterest\t4103\t4705\nSupplemental Disclosures of Noncash Investing and Financing Activities\t\t\nNet property and equipment financed with long-term debt finance leases accounts payable and accrued liabilities\t4645\t6133\nNet transfer of assets from (to) property and equipment to (from) inventories\t319\t(2995)\n", "q10k_tbl_8": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\n\t(in thousands except per share data)\t\t\t\t\t\t\t\t\t\nNumerator:\t\t\t\t\nNet income\t6400\t5511\t8662\t5066\nAllocation to participating securities\t(101)\t(82)\t(129)\t(76)\nNet income attributable to Titan Machinery Inc. common stockholders\t6299\t5429\t8533\t4990\nDenominator:\t\t\t\t\nBasic weighted-average common shares outstanding\t22118\t21960\t22068\t21917\nPlus: incremental shares from vesting of restricted stock units\t1\t4\t0\t5\nDiluted weighted-average common shares outstanding\t22119\t21964\t22068\t21922\nEarnings Per Share:\t\t\t\t\nBasic\t0.28\t0.25\t0.39\t0.23\nDiluted\t0.28\t0.25\t0.39\t0.23\nAnti-dilutive shares excluded from diluted weighted-average common shares outstanding:\t\t\t\t\nRestricted stock units\t0\t0\t18\t0\n", "q10k_tbl_9": "\tThree Months Ended July 31 2020\t\t\t\t\t\t\tThree Months Ended July 31 2019\n\tAgriculture\tConstruction\tInternational\tTotal\tAgriculture\tConstruction\tInternational\tTotal\n\t(in thousands)\t\t\t\t\t\t\t(in thousands)\nEquipment\t110601\t48478\t43575\t202654\t111212\t51396\t51827\t214435\nParts\t37470\t13016\t10968\t61454\t35054\t13066\t11082\t59202\nService\t19429\t6806\t1751\t27986\t18000\t6968\t1864\t26832\nOther\t829\t725\t119\t1673\t793\t820\t130\t1743\nRevenue from contracts with customers\t168329\t69025\t56413\t293767\t165059\t72250\t64903\t302212\nRental\t743\t8694\t261\t9698\t633\t11789\t347\t12769\nTotal revenues\t169072\t77719\t56674\t303465\t165692\t84039\t65250\t314981\n", "q10k_tbl_10": "\tSix Months Ended July 31 2020\t\t\t\t\t\t\tSix Months Ended July 31 2019\n\tAgriculture\tConstruction\tInternational\tTotal\tAgriculture\tConstruction\tInternational\tTotal\n\t(in thousands)\t\t\t\t\t\t\t(in thousands)\nEquipment\t250349\t82732\t88078\t421159\t219075\t94442\t94873\t408390\nParts\t72550\t24476\t21042\t118068\t65029\t25770\t20341\t111140\nService\t37150\t13017\t3419\t53586\t32984\t13489\t3189\t49662\nOther\t1562\t1243\t223\t3028\t1412\t1413\t152\t2977\nRevenue from contracts with customers\t361611\t121468\t112762\t595841\t318500\t135114\t118555\t572169\nRental\t1089\t16365\t378\t17832\t964\t19668\t470\t21102\nTotal revenues\t362700\t137833\t113140\t613673\t319464\t154782\t119025\t593271\n", "q10k_tbl_11": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nTrade and unbilled receivables from contracts with customers\t\t\nTrade receivables due from customers\t35691\t36400\nUnbilled receivables\t17280\t13944\nLess allowance for expected credit loss\t3293\t2943\n\t49678\t47401\nTrade receivables due from finance companies\t11813\t12352\nTrade and unbilled receivables from rental contracts\t\t\nTrade receivables\t5578\t7381\nUnbilled receivables\t875\t861\nLess allowance for expected credit loss\t1979\t2180\n\t4474\t6062\nOther receivables\t\t\nDue from manufacturers\t8819\t5763\nOther\t998\t1198\n\t9817\t6961\nReceivables net of allowance for expected credit losses\t75782\t72776\n", "q10k_tbl_12": "\tAgriculture\tConstruction\tInternational\tTotal\nBalance at February 1 2020\t181\t1016\t1746\t2943\nCurrent Expected Credit Loss Provision\t14\t113\t226\t353\nWrite-offs Charged Against Allowance\t5\t71\t133\t209\nCredit Loss Recoveries Collected\t40\t4\t6\t50\nF/X Impact\t0\t0\t(29)\t(29)\nBalance at April 30 2020\t230\t1062\t1816\t3108\nCurrent Expected Credit Loss Provision\t16\t95\t265\t376\nWrite-offs Charged Against Allowance\t47\t78\t98\t223\nCredit Loss Recoveries Collected\t9\t0\t0\t9\nF/X Impact\t0\t0\t23\t23\nBalance at July 31 2020\t208\t1079\t2006\t3293\n", "q10k_tbl_13": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\t\t\t\t\t\t\nImpairment losses on:\t\t\t\t\nReceivables from sales contracts\t377\t658\t520\t986\nReceivables from rental contracts\t13\t414\t151\t497\n\t390\t1072\t671\t1483\n", "q10k_tbl_14": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nNew equipment\t334457\t358339\nUsed equipment\t148239\t157535\nParts and attachments\t86301\t79813\nWork in process\t1683\t1707\n\t570680\t597394\n", "q10k_tbl_15": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nRental fleet equipment\t101856\t104133\nMachinery and equipment\t23346\t22682\nVehicles\t53048\t51850\nFurniture and fixtures\t42468\t41720\nLand buildings and leasehold improvements\t76861\t70408\n\t297579\t290793\nLess accumulated depreciation\t147083\t145231\n\t150496\t145562\n", "q10k_tbl_16": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nCNH Industrial\t151790\t187690\nBank Syndicate Agreement Floorplan Loan\t98400\t0\nWells Fargo Floorplan Payable Line\t0\t82700\nDLL Finance\t25064\t30657\nOther outstanding balances with manufacturers and non-manufacturers\t76961\t70725\n\t352215\t371772\n", "q10k_tbl_17": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nDeferred revenue from contracts with customers\t21686\t39512\nDeferred revenue from rental and other contracts\t1030\t1456\n\t22716\t40968\n", "q10k_tbl_18": "\tSix Months Ended July 31\t\n\t2020\t2019\n\t(in thousands)\t\nCash Interest Expense\t\t\nCoupon interest expense\t0\t421\nNoncash Interest Expense\t\t\nAmortization of debt discount\t0\t350\nAmortization of transaction costs\t0\t45\n\t0\t816\n", "q10k_tbl_19": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nSale-leaseback financing obligations interest rates ranging from 3.4% to 10.3% with various maturity dates through December 2030\t17153\t17781\nBank Syndicate Agreement - Working Capital Line interest accrues at a variable rate on outstanding balances requires monthly payments of accrued interest matures April 2025\t10000\t10000\nReal estate mortgage bearing interest at 5.11% payable in annual installments of $0.3 million maturing on May 15 2039 secured by real estate assets\t6485\t6827\nEquipment financing loan payable in monthly installments over a 72-month term for each funded tranche interest rates ranging from 1.7% to 3.89% secured by vehicle assets\t7446\t7468\nReal estate mortgage bearing interest at 4.62% payable in monthly installments of $0.04 million with a final payment at maturity of $3.4 million maturing on June 10 2024 secured by real estate assets\t4315\t4416\nReal estate mortgage interest accrues at a variable rate of 2.5% plus 1-month LIBOR requires monthly payments of accrued interest final payment at maturity of $2.0 million maturing on February 28 2027 secured by real estate assets\t1964\t0\nReal estate mortgage bearing interest at 4.4% payable in monthly installments of $0.01 million with a final payment at maturity of $1.0 million maturing on January 1 2027 secured by real estate assets\t1458\t1489\nEquipment financing loan payable in monthly installments over a 72-month term bearing interest at 3.94% secured by vehicle assets\t1025\t0\nReal estate mortgage bearing interest at 2.09% payable in monthly installments maturing on June 30 2026 secured by real estate assets\t2339\t2520\nOther long-term debt primarily bearing interest at three-month EURIBOR plus 2.6% payable in quarterly installments maturing on January 31 2021\t401\t1067\n\t52586\t51568\nLess current maturities\t(3921)\t(13779)\n\t48665\t37789\n", "q10k_tbl_20": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\t\t\t\t\t\t\nForeign currency contract gain\t202\t166\t189\t368\n", "q10k_tbl_21": "\tForeign Currency Translation Adjustment\tNet Investment Hedging Gain\tTotal Accumulated Other Comprehensive Income (Loss)\n\t(in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nBalance January 31 2020\t(5931)\t2711\t(3220)\nOther comprehensive loss\t(528)\t0\t(528)\nBalance April 30 2020\t(6459)\t2711\t(3748)\nOther comprehensive income\t778\t0\t778\nBalance July 31 2020\t(5681)\t2711\t(2970)\n", "q10k_tbl_22": "\tForeign Currency Translation Adjustment\tNet Investment Hedging Gain\tTotal Accumulated Other Comprehensive Income (Loss)\n\t(in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nBalance January 31 2019\t(5051)\t2711\t(2340)\nOther comprehensive loss\t(771)\t0\t(771)\nBalance April 30 2019\t(5822)\t2711\t(3111)\nOther comprehensive income\t1012\t0\t1012\nBalance July 31 2019\t(4810)\t2711\t(2099)\n", "q10k_tbl_23": "\t\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\tClassification\t2020\t2019\t2020\t2019\n\t\t(in thousands)\t\t\t(in thousands)\nFinance lease cost:\t\t\t\t\t\nAmortization of leased assets\tOperating expenses\t389\t331\t781\t707\nInterest on lease liabilities\tOther interest expense\t117\t139\t242\t278\nOperating lease cost\tOperating expenses & rental and other cost of revenue\t4325\t4725\t8788\t9541\nShort-term lease cost\tOperating expenses\t110\t80\t190\t160\nVariable lease cost\tOperating expenses\t735\t715\t1370\t1335\nSublease income\tInterest income and other income (expense)\t(131)\t(154)\t(283)\t(321)\n\t\t5545\t5836\t11088\t11700\n", "q10k_tbl_24": "\tClassification\tJuly 31 2020\tJanuary 31 2020\n\t\t(in thousands)\t\t\t\t\t\t\t\nAssets\t\t\t\nOperating lease assets\tOperating lease assets\t83586\t88281\nFinance lease assets(a)\tProperty and equipment net of accumulated depreciation\t8027\t6297\nTotal leased assets\t\t91613\t94578\nLiabilities\t\t\t\nCurrent\t\t\t\nOperating\tCurrent operating lease liabilities\t12158\t12259\nFinance\tAccrued expenses and other\t4038\t1708\nNoncurrent\t\t\t\nOperating\tOperating lease liabilities\t83341\t88387\nFinance\tOther long-term liabilities\t3398\t4103\nTotal lease liabilities\t\t102935\t106457\n", "q10k_tbl_25": "\tOperating\tFinance\t\n\tLeases\tLeases\tTotal\nFiscal Year Ended January 31\t(in thousands)\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n2021 (remainder)\t8852\t3404\t12256\n2022\t17004\t1873\t18877\n2023\t16028\t1226\t17254\n2024\t15097\t493\t15590\n2025\t13961\t402\t14363\n2026\t13804\t311\t14115\nThereafter\t34698\t1084\t35782\nTotal lease payments\t119444\t8793\t128237\nLess: Interest\t23945\t1357\t25302\nPresent value of lease liabilities\t95499\t7436\t102935\n", "q10k_tbl_26": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nRental fleet equipment\t101856\t104133\nLess accumulated depreciation\t38123\t42076\n\t63733\t62057\n", "q10k_tbl_27": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nAssets acquired:\t\t\nCash\t1\t0\nReceivables\t0\t440\nInventories\t4260\t6466\nPrepaid expenses and other\t48\t0\nProperty and equipment\t1752\t3810\nOperating lease assets\t2006\t0\nIntangible assets\t245\t1973\nGoodwill\t484\t1198\n\t8796\t13887\nLiabilities assumed:\t\t\nCurrent operating lease liabilities\t159\t0\nOperating lease liabilities\t1847\t0\n\t2006\t0\nNet assets acquired\t6790\t13887\nGoodwill recognized by segment:\t\t\nAgriculture\t484\t699\nConstruction\t0\t0\nInternational\t0\t499\nGoodwill expected to be deductible for tax purposes\t484\t1198\n", "q10k_tbl_28": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t(in thousands)\nRevenue\t\t\t\t\nAgriculture\t169072\t165692\t362700\t319464\nConstruction\t77719\t84039\t137833\t154782\nInternational\t56674\t65250\t113140\t119025\nTotal\t303465\t314981\t613673\t593271\nIncome (Loss) Before Income Taxes\t\t\t\t\nAgriculture\t6752\t6177\t12914\t8053\nConstruction\t1375\t1334\t(1498)\t(888)\nInternational\t(432)\t505\t(711)\t722\nSegment income before income taxes\t7695\t8016\t10705\t7887\nShared Resources\t597\t(589)\t736\t(975)\nTotal\t8292\t7427\t11441\t6912\n", "q10k_tbl_29": "\tJuly 31 2020\tJanuary 31 2020\n\t(in thousands)\t\t\t\t\t\t\t\nTotal Assets\t\t\nAgriculture\t436826\t444942\nConstruction\t248390\t275645\nInternational\t201031\t191513\nSegment assets\t886247\t912100\nShared Resources\t61778\t63243\nTotal\t948025\t975343\n", "q10k_tbl_30": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t(dollars in thousands)\nEquipment\t\t\t\t\nRevenue\t202654\t214435\t421159\t408390\nCost of revenue\t180231\t190707\t377278\t363861\nGross profit\t22423\t23728\t43881\t44529\nGross profit margin\t11.1%\t11.1%\t10.4%\t10.9%\nParts\t\t\t\t\nRevenue\t61454\t59202\t118068\t111140\nCost of revenue\t43032\t41732\t82649\t78546\nGross profit\t18422\t17470\t35419\t32594\nGross profit margin\t30.0%\t29.5%\t30.0%\t29.3%\nService\t\t\t\t\nRevenue\t27986\t26832\t53586\t49662\nCost of revenue\t9665\t8737\t18010\t16219\nGross profit\t18321\t18095\t35576\t33443\nGross profit margin\t65.5%\t67.4%\t66.4%\t67.3%\nRental and other\t\t\t\t\nRevenue\t11371\t14512\t20860\t24079\nCost of revenue\t7849\t9778\t14636\t16719\nGross profit\t3522\t4734\t6224\t7360\nGross profit margin\t31.0%\t32.6%\t29.8%\t30.6%\n", "q10k_tbl_31": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\nRevenue\t\t\t\t\nEquipment\t66.8%\t68.1%\t68.6%\t68.8%\nParts\t20.3%\t18.8%\t19.2%\t18.7%\nService\t9.2%\t8.5%\t8.7%\t8.4%\nRental and other\t3.7%\t4.6%\t3.4%\t4.1%\nTotal Revenue\t100.0%\t100.0%\t100.0%\t100.0%\nTotal Cost of Revenue\t79.3%\t79.7%\t80.3%\t80.1%\nGross Profit Margin\t20.7%\t20.3%\t19.7%\t19.9%\nOperating Expenses\t17.5%\t17.4%\t17.3%\t18.1%\nIncome from Operations\t3.2%\t2.9%\t2.4%\t1.7%\nOther Income (Expense)\t(0.4)%\t(0.6)%\t(0.5)%\t(0.6)%\nIncome Before Income Taxes\t2.7%\t2.4%\t1.9%\t1.2%\nProvision for Income Taxes\t0.6%\t0.6%\t0.5%\t0.3%\nNet Income\t2.1%\t1.7%\t1.4%\t0.9%\n", "q10k_tbl_32": "\tThree Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nEquipment\t202654\t214435\t(11781)\t(5.5)%\nParts\t61454\t59202\t2252\t3.8%\nService\t27986\t26832\t1154\t4.3%\nRental and other\t11371\t14512\t(3141)\t(21.6)%\nTotal Revenue\t303465\t314981\t(11516)\t(3.7)%\n", "q10k_tbl_33": "\tThree Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nGross Profit\t\t\t\t\nEquipment\t22423\t23728\t(1305)\t(5.5)%\nParts\t18422\t17470\t952\t5.4%\nService\t18321\t18095\t226\t1.2%\nRental and other\t3522\t4734\t(1212)\t(25.6)%\nTotal Gross Profit\t62688\t64027\t(1339)\t(2.1)%\nGross Profit Margin\t\t\t\t\nEquipment\t11.1%\t11.1%\t-%\t-%\nParts\t30.0%\t29.5%\t0.5%\t1.7%\nService\t65.5%\t67.4%\t(1.9)%\t(2.8)%\nRental and other\t31.0%\t32.6%\t(1.6)%\t(4.9)%\nTotal Gross Profit Margin\t20.7%\t20.3%\t0.4%\t2.0%\nGross Profit Mix\t\t\t\t\nEquipment\t35.8%\t37.1%\t(1.3)%\t(3.5)%\nParts\t29.4%\t27.3%\t2.1%\t7.7%\nService\t29.2%\t28.3%\t0.9%\t3.2%\nRental and other\t5.6%\t7.3%\t(1.7)%\t(23.3)%\nTotal Gross Profit Mix\t100.0%\t100.0%\t\t\n", "q10k_tbl_34": "\tThree Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nOperating Expenses\t53079\t54855\t(1776)\t(3.2)%\nOperating Expenses as a Percentage of Revenue\t17.5%\t17.4%\t0.1%\t0.6%\n", "q10k_tbl_35": "\tThree Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nInterest income and other income (expense)\t562\t620\t(58)\t(9.4)%\nFloorplan interest expense\t(901)\t(1399)\t(498)\t(35.6)%\nOther interest expense\t(978)\t(966)\t12\t1.2%\n", "q10k_tbl_36": "\tThree Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nProvision for Income Taxes\t1892\t1916\t(24)\t(1.3)%\n", "q10k_tbl_37": "\tThree Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nRevenue\t\t\t\t\nAgriculture\t169072\t165692\t3380\t2.0%\nConstruction\t77719\t84039\t(6320)\t(7.5)%\nInternational\t56674\t65250\t(8576)\t(13.1)%\nTotal\t303465\t314981\t(11516)\t(3.7)%\nIncome (Loss) Before Income Taxes\t\t\t\t\nAgriculture\t6752\t6177\t575\t9.3%\nConstruction\t1375\t1334\t41\t3.1%\nInternational\t(432)\t505\t(937)\tn/m\nSegment income (loss) before income taxes\t7695\t8016\t(321)\t(4.0)%\nShared Resources\t597\t(589)\t1186\tn/m\nTotal\t8292\t7427\t865\t11.6%\n", "q10k_tbl_38": "\tSix Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nEquipment\t421159\t408390\t12769\t3.1%\nParts\t118068\t111140\t6928\t6.2%\nService\t53586\t49662\t3924\t7.9%\nRental and other\t20860\t24079\t(3219)\t(13.4)%\nTotal Revenue\t613673\t593271\t20402\t3.4%\n", "q10k_tbl_39": "\tSix Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nGross Profit\t\t\t\t\nEquipment\t43881\t44529\t(648)\t(1.5)%\nParts\t35419\t32594\t2825\t8.7%\nService\t35576\t33443\t2133\t6.4%\nRental and other\t6224\t7360\t(1136)\t(15.4)%\nTotal Gross Profit\t121100\t117926\t3174\t2.7%\nGross Profit Margin\t\t\t\t\nEquipment\t10.4%\t10.9%\t(0.5)%\t(4.6)%\nParts\t30.0%\t29.3%\t0.7%\t2.4%\nService\t66.4%\t67.3%\t(0.9)%\t(1.3)%\nRental and other\t29.8%\t30.6%\t(0.8)%\t(2.6)%\nTotal Gross Profit Margin\t19.7%\t19.9%\t(0.2)%\t(1.0)%\nGross Profit Mix\t\t\t\t\nEquipment\t36.2%\t37.8%\t(1.6)%\t(4.2)%\nParts\t29.2%\t27.6%\t1.6%\t5.8%\nService\t29.4%\t28.4%\t1.0%\t3.5%\nRental and other\t5.2%\t6.2%\t(1.0)%\t(16.1)%\nTotal Gross Profit Mix\t100.0%\t100.0%\t\t\n", "q10k_tbl_40": "\tSix Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nOperating Expenses\t106137\t107410\t(1273)\t(1.2)%\nOperating Expenses as a Percentage of Revenue\t17.3%\t18.1%\t(0.8)%\t(4.4)%\n", "q10k_tbl_41": "\tSix Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\tDecrease\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nImpairment of Long-Lived Assets\t216\t135\t81\t60.0%\n", "q10k_tbl_42": "\tSix Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nInterest income and other income (expense)\t692\t1414\t(722)\t(51.1)%\nFloorplan interest expense\t(2054)\t(2276)\t(222)\t(9.8)%\nOther interest expense\t(1944)\t(2607)\t(663)\t(25.4)%\n", "q10k_tbl_43": "\tSix Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\tDecrease\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nProvision for Income Taxes\t2779\t1846\t933\t50.5%\n", "q10k_tbl_44": "\tSix Months Ended July 31\t\t\tIncrease/\tPercent\n\t2020\t2019\t(Decrease)\tChange\n\t(dollars in thousands)\t\t\t\t\t\t\t\t\t\t\nRevenue\t\t\t\t\nAgriculture\t362700\t319464\t43236\t13.5%\nConstruction\t137833\t154782\t(16949)\t(11.0)%\nInternational\t113140\t119025\t(5885)\t(4.9)%\nTotal\t613673\t593271\t20402\t3.4%\nIncome (Loss) Before Income Taxes\t\t\t\t\nAgriculture\t12914\t8053\t4861\t60.4%\nConstruction\t(1498)\t(888)\t(610)\t(68.7)%\nInternational\t(711)\t722\t(1433)\tn/m\nSegment income before income taxes\t10705\t7887\t2818\t35.7%\nShared Resources\t736\t(975)\t1711\tn/m\nTotal\t11441\t6912\t4529\t65.5%\n", "q10k_tbl_45": "\tThree Months Ended July 31\t\t\tSix Months Ended July 31\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands except per share data)\t\t\t\t\t\t\t\t\t\nAdjusted Net Income\t\t\t\t\nNet Income (Loss)\t6400\t5511\t8662\t5066\nAdjustments\t\t\t\t\nERP transition costs\t763\t1701\t1484\t2716\nImpairment charges\t0\t0\t216\t135\nUkraine remeasurement (gain) / loss\t(130)\t(141)\t635\t(153)\nTotal Pre-Tax Adjustments\t633\t1560\t2335\t2698\nLess: Tax Effect of Adjustments (1)\t466\t186\t1047\t429\nTotal Adjustments\t167\t1374\t1288\t2269\nAdjusted Net Income\t6567\t6885\t9950\t7335\nAdjusted Diluted EPS\t\t\t\t\nDiluted EPS\t0.28\t0.25\t0.39\t0.23\nAdjustments (2)\t\t\t\t\nERP transition costs\t0.03\t0.08\t0.07\t0.13\nImpairment charges\t0\t0\t0.01\t0\nUkraine remeasurement (gain) / loss\t0\t(0.01)\t0.02\t(0.01)\nTotal Pre-Tax Adjustments\t0.03\t0.07\t0.10\t0.12\nLess: Tax Effect of Adjustments (1)\t0.02\t0.01\t0.05\t0.02\nTotal Adjustments\t0.01\t0.06\t0.05\t0.10\nAdjusted Diluted EPS\t0.29\t0.31\t0.44\t0.33\n(1) The tax effect of U.S. related adjustments was calculated using a 26% tax rate determined based on a 21% federal statutory rate and a 5% blended state income tax rate. Included in the tax effect of the adjustments is the tax impact of foreign currency changes in Ukraine of $0.3 million for the three months ended July 31 2020 and $0.6 million for the six months ended July 31 2020.\t\t\t\t\t\t\t\t\t\t\n(2) Adjustments are net of amounts allocated to participating securities where applicable.\t\t\t\t\n", "q10k_tbl_46": "\tNet Cash Provided by (Used for) Operating Activities\t\t\tNet Cash Provided by (Used for) Financing Activities\n\tSix Months Ended July 31 2020\tSix Months Ended July 31 2019\tSix Months Ended July 31 2020\tSix Months Ended July 31 2019\n\t(in thousands)\t\t\t(in thousands)\nCash Flow As Reported\t13035\t(6303)\t4519\t13647\nAdjustment for Non-Manufacturer Floorplan\t7229\t49937\t(7229)\t(49937)\nAdjustment for Constant Equity in Equipment Inventory\t(4191)\t(92977)\t0\t0\nAdjusted Cash Flow\t16073\t(49343)\t(2710)\t(36290)\n", "q10k_tbl_47": "No.\tDescription\n31.1\tCertification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\n31.2\tCertification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002\n32.1\tCertification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\n32.2\tCertification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002\n101\tFinancial statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended July 31 2020 formatted in XBRL: (i) the Consolidated Balance Sheets (ii) the Consolidated Statements of Operations (iii) the Consolidated Statements of Stockholders' Equity (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.\n101.SCH*\tInline XBRL Taxonomy Extension Schema Document\n101.CAL*\tInline XBRL Taxonomy Extension Calculation Linkbase Document\n101.LAB*\tInline XBRL Taxonomy Extension Label Linkbase Document\n101.PRE*\tInline XBRL Taxonomy Extension Presentation Linkbase Document\n101.DEF*\tInline XBRL Taxonomy Extension Definition Linkbase Document\n104\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_7"}None
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2020
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File No. 001-33866
TITAN MACHINERY INC.
(Exact name of registrant as specified in its charter)
Delaware
45-0357838
(State or Other Jurisdiction of Incorporation or Organization)
(IRS Employer Identification No.)
644 East Beaton Drive
West Fargo,ND58078-2648
(Address of Principal Executive Offices)
Registrant’s telephone number (701)356-0130
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001 par value per share
TITN
The Nasdaq Stock Market LLC
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 for 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☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
As of August 31, 2020, 22,533,401 shares of Common Stock, $0.00001 par value, of the registrant were outstanding.
Receivables, net of allowance for expected credit losses
75,782
72,776
Inventories
570,680
597,394
Prepaid expenses and other
7,144
13,655
Total current assets
698,090
727,546
Noncurrent Assets
Property and equipment, net of accumulated depreciation
150,496
145,562
Operating lease assets
83,586
88,281
Deferred income taxes
3,337
2,147
Goodwill
2,818
2,327
Intangible assets, net of accumulated amortization
8,568
8,367
Other
1,130
1,113
Total noncurrent assets
249,935
247,797
Total Assets
$
948,025
$
975,343
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable
$
20,734
$
16,976
Floorplan payable
352,215
371,772
Current maturities of long-term debt
3,921
13,779
Current operating lease liabilities
12,158
12,259
Deferred revenue
22,716
40,968
Accrued expenses and other
38,122
38,409
Total current liabilities
449,866
494,163
Long-Term Liabilities
Long-term debt, less current maturities
48,665
37,789
Operating lease liabilities
83,341
88,387
Deferred income taxes
2,301
2,055
Other long-term liabilities
9,060
7,845
Total long-term liabilities
143,367
136,076
Commitments and Contingencies
Stockholders' Equity
Common stock, par value $.00001 per share, $45,000 shares authorized; $22,553 shares issued and outstanding at July 31, 2020; $22,335 shares issued and outstanding at January 31, 2020
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
(in thousands)
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total Stockholders' Equity
Shares Outstanding
Amount
BALANCE, January 31, 2019
22,218
$
—
$
248,423
$
89,228
$
(2,340)
$
335,311
Cumulative-effect adjustment of adopting ASC 842, Leases
—
—
—
(5,464)
—
(5,464)
Common stock issued on grant of restricted stock and exercise of stock options, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax
(34)
—
(492)
—
—
(492)
Stock-based compensation expense
—
—
603
—
—
603
Net loss
—
—
—
(445)
—
(445)
Other comprehensive loss
—
—
—
—
(771)
(771)
BALANCE, April 30, 2019
22,184
$
—
$
248,534
$
83,319
$
(3,111)
$
328,742
Cumulative-effect adjustment of adopting ASC 842, Leases
—
—
—
—
—
—
Common stock issued on grant of restricted stock and exercise of stock options, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax
170
—
—
—
—
—
Stock-based compensation expense
—
—
694
—
—
694
Net Income
—
—
—
5,511
—
5,511
Other comprehensive Income
—
—
—
—
1,012
1,012
BALANCE, July 31, 2019
22,354
—
249,228
88,830
(2,099)
335,959
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total Stockholders' Equity
Shares Outstanding
Amount
BALANCE, January 31, 2020
22,335
$
—
$
250,607
$
97,717
$
(3,220)
$
345,104
Cumulative-effect adjustment of adopting ASC 326, Credit Loss
—
—
—
(204)
—
(204)
Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax
(21)
—
(201)
—
—
(201)
Stock-based compensation expense
—
—
645
—
—
645
Net income
—
—
—
2,262
—
2,262
Other comprehensive loss
—
—
—
—
(528)
(528)
BALANCE, April 30, 2020
22,314
$
—
$
251,051
$
99,775
$
(3,748)
$
347,078
Cumulative-effect adjustment of adopting ASC 326, Credit Loss
—
—
—
—
—
—
Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax
239
—
—
—
—
—
Stock-based compensation expense
—
—
536
—
—
536
Net income
—
—
—
6,400
—
6,400
Other comprehensive income
—
—
—
—
778
778
BALANCE, July 31, 2020
22,553
—
251,587
106,175
(2,970)
354,792
See Notes to Consolidated Financial Statements
6
TITAN MACHINERY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended July 31,
2020
2019
Operating Activities
Net income
$
8,662
$
5,066
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Depreciation and amortization
11,286
13,264
Impairment
216
135
Deferred income taxes
(944)
(251)
Stock-based compensation expense
1,181
1,297
Noncash interest expense
75
407
Noncash lease expense
5,717
6,198
Other, net
(368)
(8)
Changes in assets and liabilities
Receivables, prepaid expenses and other assets
3,347
(2,149)
Inventories
31,885
(140,149)
Manufacturer floorplan payable
(26,726)
128,635
Accounts payable, deferred revenue, accrued expenses and other and other long-term liabilities
(15,140)
(12,362)
Operating lease liabilities
(6,156)
(6,386)
Net Cash Provided by (Used for) Operating Activities
13,035
(6,303)
Investing Activities
Rental fleet purchases
(6,001)
(9,249)
Property and equipment purchases (excluding rental fleet)
(4,472)
(3,101)
Proceeds from sale of property and equipment
489
670
Acquisition consideration, net of cash acquired
(6,790)
(2,972)
Other, net
(20)
14
Net Cash Used for Investing Activities
(16,794)
(14,638)
Financing Activities
Net change in non-manufacturer floorplan payable
7,229
49,937
Principal payments on senior convertible notes
—
(45,644)
Proceeds from long-term debt borrowings
1,112
11,786
Principal payments on long-term debt and finance leases
(2,952)
(1,940)
Payment of debt issuance costs
(670)
—
Other, net
(200)
(492)
Net Cash Provided by Financing Activities
4,519
13,647
Effect of Exchange Rate Changes on Cash
3
66
Net Change in Cash
763
(7,228)
Cash at Beginning of Period
43,721
56,745
Cash at End of Period
$
44,484
$
49,517
Supplemental Disclosures of Cash Flow Information
Cash paid (received) during the period
Income taxes, net of refunds
$
(228)
$
3,064
Interest
$
4,103
$
4,705
Supplemental Disclosures of Noncash Investing and Financing Activities
Net property and equipment financed with long-term debt, finance leases, accounts payable and accrued liabilities
$
4,645
$
6,133
Net transfer of assets from (to) property and equipment to (from) inventories
NOTE 1 - BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. The quarterly operating results for Titan Machinery Inc. (the “Company”) are subject to fluctuation due to varying weather patterns, which may impact the timing and amount of equipment purchases, rentals, and after-sales parts and service purchases by the Company’s Agriculture, Construction and International customers. Therefore, operating results for the six-month period ended July 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2021. The information contained in the consolidated balance sheet as of January 31, 2020 was derived from the audited consolidated financial statements for the Company for the fiscal year then ended. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 as filed with the SEC.
Nature of Business
The Company is engaged in the retail sale, service and rental of agricultural and construction machinery through its stores in the United States and Europe. The Company’s North American stores are located in Arizona, Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming, and its European stores are located in Bulgaria, Germany, Romania, Serbia and Ukraine.
Impact of the COVID-19 Pandemic
In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, and the President of the United States declared the COVID-19 outbreak as a national emergency. The nature of COVID-19 led to worldwide shutdowns and halting of commercial and interpersonal activity as governments imposed regulations in efforts to control the spread of the pandemic, such as shelter-in-place orders and quarantines. The pandemic is a highly fluid and rapidly evolving situation, and we cannot anticipate with any certainty the length, scope, or severity of such restrictions in each of the markets that we operate. See Item 1A. Risk Factors for more information on possible impacts.
Since the beginning of the COVID-19 pandemic, the safety of our employees and customers has been and continues to be our top concern. At the onset of the pandemic we organized a COVID Task Force to implement safety protocols and to quickly respond to matters, in the event of a positive case at one of our locations.
Even though we are considered an essential business, in response to the COVID-19 pandemic, the Company closed its U.S. stores to the public on March 23, 2020 but continued operations through social distancing means in all areas: equipment, parts, service and rental. Beginning May 4, 2020, we began fully reopening our stores to the public, following pandemic safety protocols applicable to the locations. Additionally, our International stores have also been following pandemic safety protocols applicable to each location. By June 2020, all of our stores were open to the public but still maintain pandemic safety protocols.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, particularly related to realization of inventory, impairment of long-lived assets, collectability of receivables, and income taxes.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material accounts, transactions and profits between the consolidated companies have been eliminated in consolidation.
In June 2016, the Financial Accounting Standards Board ("FASB") issued a new standard, codified in ASC 326, that modifies how entities measure credit losses on most financial instruments. The new standard replaced the "incurred loss" model with an "expected credit loss" model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. The guidance impacts the Company on its accounts receivable portfolio but specifically excluded receivables from operating lease arrangements and, therefore, the Company’s receivables from rental contracts were not impacted. The guidance also requires new disclosures to allow the users of the financial statements to understand the credit risk inherent in a portfolio and how management monitors the credit quality of the portfolio, management’s estimate of expected credit losses, and changes in the estimate of expected credit losses that have taken place during the reporting period.
The Company adopted the new guidance on February 1, 2020 using a modified retrospective approach and recognized an immaterial cumulative-effect adjustment to retained earnings as of the effective date. The Company identified and updated existing internal controls and procedures to ensure compliance with the new guidance, but such modifications were not deemed to be material to the Company's overall system of internal control. While the adoption of this standard did not have a material impact on the Company's consolidated financial statements, it required changes to the Company's process of estimating expected credit losses on trade receivables. See footnote 4 for further discussion of our accounts receivables.
In February 2018, the FASB issued guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract, codified in ASC 350-40. This guidance aligns the accounting for costs incurred to implement a cloud computing arrangement that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. This standard was adopted on February 1, 2020 and was applied using the prospective transition approach. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.
Accounting Guidance Not Yet Adopted
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No. 2020-04”), which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. The Company is currently evaluating its contracts and hedging relationships that reference LIBOR to determine if the Company will adopt the new guidance.
The following table sets forth the calculation of basic and diluted EPS:
Three Months Ended July 31,
Six Months Ended July 31,
2020
2019
2020
2019
(in thousands, except per share data)
Numerator:
Net income
$
6,400
$
5,511
$
8,662
$
5,066
Allocation to participating securities
(101)
(82)
(129)
(76)
Net income attributable to Titan Machinery Inc. common stockholders
$
6,299
$
5,429
$
8,533
$
4,990
Denominator:
Basic weighted-average common shares outstanding
22,118
21,960
22,068
21,917
Plus: incremental shares from vesting of restricted stock units
1
4
—
5
Diluted weighted-average common shares outstanding
22,119
21,964
22,068
21,922
Earnings Per Share:
Basic
$
0.28
$
0.25
$
0.39
$
0.23
Diluted
$
0.28
$
0.25
$
0.39
$
0.23
Anti-dilutive shares excluded from diluted weighted-average common shares outstanding:
Restricted stock units
—
—
18
—
NOTE 3 - REVENUE
Revenues are recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to collect in exchange for those goods or services. Sales, value added and other taxes collected from our customers concurrent with our revenue activities are excluded from revenue.
The following tables present our revenue disaggregated by revenue source and segment: