Titan CEO forecasts recovery in 2010

ERJ staff report (TB)

Quincy, Illinois -- Titan International Inc. Chairman and CEO Maurice Taylor Jr. anticipates 2010 will be “pretty good” compared with 2009, as its major customer industries have worked down their inventories and will be needing to re-supply.

Noting the uncertain economic conditions, Mr. Taylor said Titan expects pre-tax operating income to settle in the range of $65 million to $85 million with sales of $770 million to $820 million.

Titan didn't offer a comparison with 2009, but based on the firm's performance through nine months, Titan was on track to report about $15 million in gross income and about $775 million in sales.

In a conference call with stock analysts, Mr. Taylor pointed out that higher farm demand and the strength of commodities could boost the firm's numbers by 15 percent.

“With these, Titan will be in real good shape,” he said. “I believe we are in a great position to take advantage of any market we run into this next year.”

Mr. Taylor also said Titan is in a good position with financial liquidity to close out some acquisitions it's been looking at.

He referenced Goodyear's European farm tyre business, which Goodyear and Titan already are negotiating, but then added that bringing a second European farm tyre player into the mix-Trelleborg Wheel Systems S.p.A. and Mitas A.S. being the other two of measurable size-would push Titan's presence there to equal to or better than market leader Group Michelin.

Recently Titan took a run at some of GPX International Inc.'s assets in a Chapter 11 bankruptcy auction, but Israel's Alliance Tire Group outbid Mr. Taylor.

“Titan's OEM accounts anticipate that 2010 will be an up year compared to 2009,” Mr. Taylor said. “A lot of this is due to inventory reductions in 2009. The farm business started out good during the first six months of 2009; but then slowed, not only due to inventory reductions, but also because a lot of corn and soybeans had to be left in the field due to wet fall conditions.

“I believe only the bureaucrats in the federal government thought 2009 was a great year,” he added.

From Tire Business (A Crain publication)