Titan Machinery Inc.

Greetings, and welcome to the Titan Machinery second fiscal quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jeff Sonick of ICR. Thank you. You may begin.

Thank you. Good morning, ladies and gentlemen, and welcome to Titan Machinery's second quarter fiscal 2023 earnings conference call. On the call today from the company are David Meyer, Chairman and Chief Executive Officer, Mark Calvota, Chief Financial Officer, and Brian Knutson, President and Chief Operating Officer. By now, everyone should have access to the earnings release for the second quarter ended July 31, 2022, which went out this morning at approximately 6.45 a.m. Eastern Time. If you've not received the release, it's available on the investor relations page of Titan's website at ir.titanmachinery.com. This call is being webcast, and a replay will be available on the company's website as well. In addition, we are providing a presentation to accompany today's prepared remarks. You may access the presentation now by going to Titan's website at ir.titanmachinery.com. The presentation is available directly below the webcast information in the middle of the page. You'll see on slide two of the presentation our safe harbor statement. We would like to remind everyone that the prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. These forward-looking statements are based on current expectations of management and involve inherent risks and uncertainties including those identified in the risk factors section of Titan's most recently filed annual report on Form 10-K and updated and subsequently filed quarterly reports on Form 10-Q. These risk factors contain a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements. Except as may be required by applicable law, Titan assumes no obligation to update any forward-looking statements that may be made in today's press release or call. Please note that during today's call, we'll discuss non-GAAP financial measures, including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and greater transparency into Titan's ongoing financial performance, particularly when comparing underlying results from period to period. We've included reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures in today's release. The call will last approximately 45 minutes. At the conclusion of our prepared remarks, we'll open the call to take your questions. With that, I'd now like to introduce the company's chairman and CEO, Mr. David Meyer. David, go ahead.

Thank you, Jeff. Good morning, everyone. Welcome to our second quarter fiscal 2023 earnings conference call. On today's call, I will provide a summary of our results, and then Brian Knudson, our president and chief operating officer, will give you an overview for each of our business segments. Mark Kavoda, our CFO, will then review financial results for the second quarter of fiscal 2023 and provide an update to our full year modeling assumptions. If you turn to slide three, you will see an overview of our second quarter financial results. This was a great quarter for Titan across the board, It demonstrates the continued momentum we're enjoying in connection with a strong farm economy. Revenue grew 32% to $496.5 million in fiscal second quarter, and we're pleased to deliver second quarter earnings per share of $1.10, which marks the highest quarterly earnings performance in our 42-year history. This is the result of our team's unrelenting focus on customer service and operating efficiencies, which translated into consolidated pre-tax margin of 6.7%, which is a great accomplishment. At the segment level, our agriculture segment was a clear beneficiary of a strong demand we are seeing, which was supported by timely deliveries of inventory. Our construction segment also experienced strong same-store sales growth, driven by robust demand for equipment and notable strength in parts service and rental. Likewise, the improved pre-tax margin in our construction segment reflects the improved operating efficiency that we've been focusing on driving over the past several years across the optimized footprint. While revenue growth in our international segment remains impacted due to the ongoing conflict in Ukraine, our business continues to be resilient as demonstrated by the positive same-store sales growth in the second quarter. Our ability to drive higher segment pre-tax margins is also notable. While this is partially due to mix, our business continues to improve across the region, and we would like to recognize the hard work by our operating team to execute on this important parts and service customer support growth strategy. Through resolve and perseverance, the farm industry in Ukraine has adapted to the food environment and we continue to be inspired by the commitment of our customers and our employees to help keep valuable equipment up and running as the majority of the farmland in our Ukrainian markets continue to be farmed. On August 1, we completed our acquisition of Heartland Ag Systems for $95.5 million, giving us access to the full product line of Case IH commercial application equipment which includes self-propelled sprayers and fertilizer applicators. Our integration is already well underway and our teams are working hard to efficiently establish a complete distribution model that covers both the farmer and commercial applicator. This provides us the ability to generate long-term revenue synergies through equipment packaging opportunities with the commercial applicator customer along with the full portfolio of KSIH application products to our traditional farmer-rancher customer and also provides additional avenues of growth as we leverage our expansive parts and service network. We share remarkably similar cultures focused on exceptional customer service and look forward to the Heartland team's future contributions. There continues to be a good pipeline of potential acquisitions, and we continue to target quality ag dealerships. In summary, our results showcase the improvements we've made to our business over the past several years to drive higher levels of profitability through the cycle and demonstrate the value we've added to organic growth and accretive acquisitions. We remain confident in our ability to build on our momentum in the second half, and We are increasing our modeling assumptions to a new EPS range of $3.70 to $4. I'll turn the call over to Brian Knudson.