Titan International, Inc. (DE)

raise a question by pressing star followed by one on your telephone keypad or to remove yourself out of line of questioning is star followed by two. If you would like assistance from an operator during the call, please press star followed by zero. We will begin shortly. Good morning, all, and thank you for joining us for the Titan International Inc. First Call to 2025 earnings call on webcast. At this time, all participants have been placed on listen-only mode, and we will open the floor for questions and comments after the presentation. If you need assistance during the call, please press star-filled by zero on your telephone keypad. It is now my pleasure to turn the floor over to Alan Snyder, Vice President, Financial Planning and Investor Relations at Titan. Mr. Snyder, the floor is yours.

Thank you and good morning. I'd like to welcome everyone to Titan's first quarter 2025 earnings call. On the call with me today are Paul Reitz, Titan's President and CEO, and David Martin, Titan's Senior Vice President and CFO. I will begin with a reminder that the results we are about to review were presented in the earnings release issued yesterday, along with our Form 10-Q, which was also filed with the Securities and Exchange Commission yesterday. As a reminder, during this call, we will be discussing certain forward-looking information, including the company's plans and projections for the future that involve risks, uncertainties, and assumptions that could cause our actual results to differ materially from the forward-looking information. Additional information concerning factors that either individually or in the aggregate could cause actual results to differ materially from these forward-looking statements can be found within the safe harbor statement included in the earnings release attached to the company's Form 8-K filed earlier, as well as our latest Form 10-K and Forms 10-Q, all of which have been filed with the SEC. In addition, today's remarks may refer to non-GAAP financial measures, which are intended to supplement but not be a substitute for the most directly comparable GAAP measures. The earnings release which accompanies today's call contains financial and other quantitative information to be discussed today, as well as a reconciliation of the non-GAAP measures to the most comparable GAAP measures. Q1 earnings release is available on the company's website. A replay of this presentation, a copy of today's transcript, and the company's latest quarterly investor presentation will all be available soon after the call on Titan's website. I would now like to turn the call over to Paul.

Thanks, Alan, and good morning. We are pleased to report Q1 results that were at the higher end of our guidance ranges for revenue and adjusted EBITDA. Despite all the volatility floating around these days, the financial results for the quarter played out much as we'd expected. This was a good, solid quarter that highlights the strengths of our broad portfolio of market-leading products, serving a diversified base of geographies and segments. As we noted in our earnings release, our leadership position and our markets, coupled with our customer-centric mindset, are the core of who we are, and by sticking to that focus, we are able to navigate turbulent times such as these. We are actively assessing the evolving tariff situation and will be utilizing data-driven analysis in our decision-making process. Our diversified global business model enables us to be flexible with production, and then we'll also be patient in evaluating our strategic business plans in light of the evolving trade scenarios. I do want to stress that we believe the tariffs applied consistently across the globe should benefit us in the longer term, despite the short-term uncertainty and confusion that nearly all businesses are facing as currently as we watch things getting negotiated and sorted out. I think this is a good time to also remind everyone that Titan has always been a proud U.S. manufacturer with eight plants across the U.S. Over time, we have acquired manufacturing assets in other countries that allows us to better serve our global customers, but we've always maintained a strong U.S. manufacturing presence. So moving over to our segments, I'm going to start with ag. We are leveraging our connection to end users by getting out to visit farmers and dealerships to really make sure we get an accurate picture of the current operating environment. On the whole, farmers appear to be guardedly optimistic that once the dust is settled, they will be okay with solid farmer income. Crop prices remain in healthy ranges, and they firmly believe that government stands behind them as retaliatory tariffs impact their ability to sell their harvests outside the U.S. The uncertainty that businesses are facing is no different for farmers. It's putting a damper on equipment demand in the short run. This will eventually pass and the cycle will turn, and that's where Titan's broad product portfolio and our expansive production capabilities shine through. Our teams need to continue to manage costs effectively while also staying prepared to ramp up to meet demand when needed. While overall agriculture orders remain muted, we did see some positive OEM activity in the U.S. as a key customer had extensive drop-in orders in Q1. These orders came in prior to the tariff introduction, so we believe they were driven by demand, not pull-forward buys. The experience of our One Titan team continues to manage cycles like this, which really makes an important asset for us and our customers when the cycle turns, because it typically turns fast. Our team and breadth of production capabilities are best suited to meet our customers' needs in those moments. And that's what I was highlighting with talking about that key customer dropping in those Q1 orders. We have competitors that have offered buyouts to their entire labor force, while Titan is able to adjust to customers on the fly and meet their needs. And that, again, improves the expansive capabilities of Titan and our team. So moving over to Brazil, which historically is a good leading indicator for the broader global ag market, we have seen our business strengthening since Q4 of last year. Harvest season has gone well, and it seems that farmers there will benefit from the U.S. trade standoff by stepping up their exports to China. As the largest manufacturer of ag tires and undercarriage in Brazil, Titan is well positioned to benefit in South America. So looking at Europe, the economic and military investment into that region has become a priority, along with the establishment of trade accords without the U.S. In the near term, European activity has been somewhat slowed down and basically stuck as the region continues to feel the effects of the situation in Ukraine while also working on the best path forward given the changes in the global trade policy. While our European business is being impacted in the short run, I want to mention that I was recently at our plant in Turkey and really excited to see our investments there to improve our overall European wheel capacity and lower our cost structure. and things are coming together well nicely there. Our consumer segment continues to be our gross margin leader. As a reminder, customers in that segment include both OEMs and aftermarket with a higher proportion of aftermarket sales than our other segments. End customers range from outdoor power sports equipment owners to businesses such as landscapers and golf courses. The latter group tends to use their equipment very regularly, which makes it a good source of aftermarket demand. That group also has a shorter replacement cycle for equipment since their businesses depend on operational uptime, which provides us a good diversification to our other segments. Lastly, taking a look at our EMC segment, we are seeing the impact of the sluggish OEM demand, particularly in Europe and the US. It's worth noting that the type of work our products are used in tend to be in large and long-term type projects tied to mining and non-residential infrastructure. Companies and governments base those decisions on a type of work of long-term inputs. And as such, the near-term trade negotiations have had an impact. To that extent, a region such as Europe sees a renewed emphasis on internal investment. Changes in trade policy would be seen as a long-term positive. Similarity if volatility becomes a durable aspect of global trade, precious metal prices would seem to have a long-term positive bias, supporting mining investment. These demand drivers are a good counterbalance to what I just mentioned in the consumer segment and the ag segment, which is our largest segment. The feedback we received recently from the Bama trade zone in Germany was similar to what I've been saying in my comments about our EMC capabilities in the last quarter. And I've noted that we're in a good position with our innovations and product development along with our strong service capabilities. So we are very poised when the market returns to growth to be in a good position in this segment. While we are firmly believing that we are well positioned in all three of our segments, I want to make it clear that we are not sitting back waiting for the world to find its footing. We have a number of internal growth initiatives underway, including our continued investment in new product development across all of our businesses, driving revenue synergies amongst our segments and our product families, and then offering new third-party source products. I've been talking recently about the further penetration of our LSWs in market segments where we really haven't marketed them as aggressively in the past. And with that, I'm referencing more the midsize type farms. I got to tell you, man, we got some really strong independent data from a group of farmers on LSW performance and the accompanying yield improvements that they bring when compared to dual tires and rubber tracks. It really amplifies the ROI and LSW to a payback of well under a year for a mid-sized farm. Our teams are working on rolling out that promotional material around this information, and we are really excited about the prospects that it brings with it, as well as a couple of the dealers that we've mentioned this to. Wrapping up, we are off to a solid start in 25. There's certainly a lot going on in the world today, and our business will continue to move forward. Farmers are working their fields, precious metal prices are driving mining activity, and lawns are going to get mowed. At tightening our investments and our domestic positioning, one-stop strategy and our organic growth initiatives have us poised to provide products as a solution to our customer needs in times of complexity and dislocation that we're seeing today, therefore supporting a long-term growth trajectory. Further illustrating our long-term growth prospects is our recently announced expansion of the Goodyear licensing rights into new product segments. As most of you know and our customers know, we've had a nearly a 20-year strong relationship with the Goodyear farm brand that we remain deeply committed to. And that couples really well with our excitement about the prospects of adding the Goodyear name into light construction, industrial, ATV, lawn and garden, and golf tires. So with that, I'm going to turn it over to David now.