Titan Machinery Posts 21.3 Percent Revenue Leap in Fiscal 2022
Titan Machinery posted total revenue of $1,711.9 million for its fiscal 2022 full year ended Jan. 31, compared to $1,411.2 million for fiscal 2021, a 21.3-percent year over year increase. Equipment sales revenue was $1.291.7 million compared to $1,016.1 million a year ago, a 27.1-percent jump. Parts sales increased from $244.7 million to $266.9 million, a 9.1-percent hike. Service revenue increased to $115.6 million from $197.2 million a year ago. Rental revenue declined to $37.7 million from $43.2 million in the previous fiscal year, a 12.9-percent drop.
In the fiscal fourth quarter, total revenue was $507.6 million, compared to $436.7 million in the fiscal fourth quarter of 2021, a 16.2-percent increase. Rental revenue was fairly flat at $9.8 million compared to $9.9 million in the previous year, a 1.4-percent dip.
"Fiscal 2022 was an exceptional year for Titan Machinery where we delivered record earnings through sound management of our dealership network,” said David Meyer, chairman and CEO of Titan Machinery. “This was the product of a tremendous effort by our team, whose unwavering focus provided the fuel to generate these record results. At the segment level, all of our businesses demonstrated significant operating leverage and pre-tax margin expansion, driven by the combination of healthy revenue growth and sound operational execution. The resultant growth of our cash flows and strong balance sheet has provided us with greater flexibility to engage in accretive acquisitions such as the recently closed Jaycox acquisition and the anticipated closing of Mark's Machinery in April 2022. I'm proud of our growing team, their resolve through an extremely fluid operating environment, their commitment to serving our customers, and I look forward to building on our momentum in fiscal 2023."
Titan Machinery announced it entered into a definitive purchase agreement to acquire the assets of Mark's Machinery Inc., which consists of two full-line Case IH agriculture dealerships located in Wagner and Yankton, S.D. In the trailing 12-month period ended Dec. 31, 2021, Mark's Machinery generated revenue of approximately $34 million. This all-cash transaction is expected to close in early April 2022 and is expected to be accretive to earnings per diluted share.
EBITDA jumps in fourth quarter
Titan divested its Montana and Wyoming construction store locations during the fiscal year. It generated $35.9 million in adjusted EBITDA in the fourth quarter of fiscal 2022, compared to $13.7 million for the fourth quarter of fiscal 2021.
"I am very proud of the progress made across all our business segments this year, but particularly in our Construction and International segments where we are now solidly profitable,” added Meyer. “We further optimized our construction equipment footprint in recent months and are very excited about the markets we are covering today. Our [International segment] business also made great strides to improve profitability and importantly grew the parts and service business at a double-digit rate versus the prior year. Together, the improvements made to these two segments over the past few years have enhanced our ability to drive sustainable profitability throughout the cycle.
“Our business has carried significant momentum into fiscal 2023, but challenges around inflation and the supply chain remain in focus. While we are working together with our partners to mitigate these variables, they are nonetheless an obstacle and are considered within the modeling assumptions that we are introducing today. We believe the strong industry fundamentals and our team's continuous improvement efforts have laid the foundation for another year of strong performance in fiscal 2023."
Titan Machinery, West Fargo, N.D., is No. 77 on the RER 100.
