Titan Machinery posted $461 million in fiscal 2023 first quarter revenue compared to $372.7 million in the fiscal first quarter of 2022, a 23.7-percent increase for the West Fargo, N.D.-based agricultural and construction equipment dealer. Equipment sales revenue for the quarter, ended April 30, totaled $356.4 million compared to $276 million in the year ago quarter, a 29.1-percent jump.
Parts revenue was $68.6 million compared to $62.6 in the first quarter of 2022, a 9.5-percent increase. Revenue from “rental and other,” primarily rental, was $6.6 million, compared to $6.4 million a year ago, a 3 percent jump.
“Our momentum continued into fiscal first quarter 2023 with strong operating leverage across each of our segments, which combined for a 24-percent increase in revenue and a 66 percent increase in earnings per share,” said David Meyer, Titan Machinery chairman and CEO. “Our Agriculture segment benefited from robust demand, which was supported by an increase in equipment deliveries from our suppliers following a delay in fiscal fourth quarter 2022. Our Construction segment continued to demonstrate improved levels of pre-tax profitability as we achieve operating improvements across our optimized footprint.
“While revenue growth in our International segment was negatively affected by the conflict in Ukraine, it is impacting our operations less than originally anticipated as our Ukrainian customers continue to farm, requiring Titan’s support for equipment, parts and service. Our business across our European footprint proved to be resilient to the conflict’s indirect effects and was able to generate an improvement in pre-tax income margins despite a slight decrease in revenue. We remain positive on the broader environment, despite some of the recent market turbulence, and continue to expect another exceptional year at Titan Machinery.”
Strong gross profit growth
Gross profit for the first quarter of fiscal 2023 was $88.7 million, compared to $71.0 million in the first quarter last year. The company's gross profit margin increased to 19.2 percent in the first quarter of fiscal 2023, compared to 19.0 percent in the first quarter last year. Gross profit margin primarily increased because of stronger equipment margins, which were partially offset by revenue mix, with a greater proportion of equipment revenue in the first quarter of fiscal 2023, versus higher margin parts and service revenue, as compared to the first quarter of the prior year.
In Titan’s Agriculture segment, revenue for the first quarter of fiscal 2023 was $318.5 million, compared to $229.6 million in the first quarter last year. Pre-tax income for the first quarter of fiscal 2023 was $16.4 million, compared to $11.2 million of pre-tax income in the first quarter last year.
In the Construction segment, revenue dropped slightly from $68.6 million a year ago to $67 million this year because of the fourth quarter divestiture of construction store in Montana and Wyoming and a consumer products store in North Dakota. However, same-store sales increased 24.9 percent primarily because of increased equipment demand.
"We closed our acquisition of Mark's Machinery in April, which followed our acquisition of Jaycox Implement in December 2021, and are very happy with their full integration, immediate accretion and valuable contributions to the Titan culture,” added Meyer. “We remain active with our pipeline of potential acquisition candidates as we seek to grow the business through quality acquisitions in addition to our continuous focus on organic growth."
Titan Machinery, No. 70 on the RER 100, is primarily a dealer for the CNHi brands, including Case IH, Case Construction, New Holland Agriculture and New Holland Construction.