Titan International, Inc. (DE)

Thanks and good morning. Our second quarter results reflect solid improvement from prior year.

with revenues of $485 million and adjusted EBITDA of $34. Our diverse business model is an important part of Titan's ability. We talk about that frequently. It enables us to continue succeeding despite continuing difficult end-market conditions in the ag segment. Our one-stop shop product and distribution strategy, which is well executed by our experienced team, places our customers at the center of everything we do. It is really a key element of this business model that is diverse, that allows us to continue driving success through a range of different and challenging market conditions. In our earnings release, we highlighted the fact that each of our three reporting segments accounted for between 30% and 40% of revenues in the quarter. Within each segment, we also have further diversification, whether it be geographical, product, or end user profile. Now diving into our ag business, Farm incomes continue to be pressured with lower commodity prices and input costs such as fertilizer due to the ongoing conflict in Iran and along with that borrowing costs remain elevated. Those factors are weighing on OEM activity as farmers are hesitant to invest large sums of money in new equipment. For Titan, our ag aftermarket business and our global footprint continues to provide some offset to that OEM weakness. When you look within the tractor category, The differentiated end users, as higher horsepower units, as we all know, are used by the large row crop farmers, and they have been most impacted by this turbulent trade policy that has been ongoing. But when you look at the lower horsepower units, they serve a variety of uses around almost any farm, and they also are used quite extensively by hobby users and municipalities. So these equipment owners have fared better and as a result, these types of users have been more active buyers on a relative basis. Looking at our consumer segment, our diversification is really a function of our ability to serve a broad base of customers and end users with our extensive product portfolio. With our wide range of off-road wheels and tires, our customers include recreational users of power sport and off-road equipment, along with trailers that are used to move that equipment, And then you also can throw in professionals like landscapers and golf course operators. As you can imagine, those varied end customers have much different motives when looking to buy tires for their equipment. A recreational user might be highly motivated by a cool tread design, or you counterbalance that with a timing of a purchase basis based on getting something like a tax refund or a big commission check. On the other hand, the professionals that I mentioned like a landscaper, They depend on the equipment running each day to keep up with their client schedules and make money. So as a result, worn out tires are often a required immediate replacement, reducing the owner's ability to defer those type of purchasing decisions. So then lastly, looking at our EMC segment, we derive a significant portion of our revenues from Europe. They're driven by infrastructure activity that's influenced by some differing factors than what you would see here in the US. Our global footprint allows us to be a key partner for global OEMs, and along with that, when they start to focus on areas with stronger demand, we have the ability to follow suit with them. End markets such as construction and mining can also have harsh operating conditions in many cases. That would take a toll on equipment, and that creates demand in the aftermarket. So if you tie that all together, Titan is well positioned to continue succeeding with our diverse business model. Of course, like everyone else, we are looking forward to the day when it comes, and it will come, when you have a sustained recovery in demand across the ag segment. Many of our end markets are characterized by continued usage of machinery and equipment, like I've highlighted, and that continues even in softer economic conditions. So given that, worn-out tires and tracks need to be replaced, as does equipment when it fails or it ages. If farmers similarly You know, similar to the operators I mentioned, like landscapers, they're still working their fields. They still got acreage that needs to be tended to. So low grain prices will drive down and have driven down along with the pressure from the input costs, farmer income for this year. But they are continuing to utilize their equipment. Tires and parts wear out, and that is going to necessitate replacement. So with us, roughly 45% of our aggregate sales consist of aftermarket products. We are therefore well positioned to benefit from that dynamic. In our ag sector, we are also a secondary beneficiary of government support. I know that gets talked about a lot, all the way up to our president and the secretary. But if you look at the farmers, they're independent, pragmatic, can-do people here in the U.S. and around the world. Government support, though,

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