Conference Transcript - TWI 2026-02-05

Joe Gomes, Analyst — Noble Capital Markets

Good morning, and welcome to the Noble Capital Markets Virtual Equity Conference. I am Joe Gomes, Managing Director and Senior Analyst at Noble Capital. With us today for a fireside chat is Paul Reitz, President and CEO of Titan International. Good morning, Paul, and thanks for taking the time to sit down with us. Good morning, Joe, and everybody. Appreciate the opportunity. So let's start, you know, for those in the audience new to the Titan story, Can you provide a brief overview of the company, kind of products, markets, geographies, et cetera?

Paul Reitz, CEO

Certainly. We live off-road. We make the wheels, tires, and the steel tracks that make off-road equipment move. We do it in the broadest, most diverse portfolio of really anybody that's in this industry. So we touch small pieces of equipment, turf, recreational vehicles, kind of move up the ladder into small ag, and then obviously touch large ag extensively. And we do that as well in off-road construction equipment and industrial equipment, earth moving. So our approach to the world is we need to make everything that is off-road for our customers. And so, again, we hear you hear this frequently is we're going to talk about our the depth of our portfolio. But we also have really good, diverse manufacturing. So if you think about some of these large pieces of equipment that our wheels, tires and tracks are going on, we have a really strong regional footprint that is designed to to service our customers in an efficient manner. So we do touch just about all parts of the world. And with that, we have a very diverse base of customers, both OEM and aftermarket dealers.

Joe Gomes, Analyst — Noble Capital Markets

Great. So you recently announced some leadership changes in which David Martin, who was the CFO, was appointed chief transformation officer and Tony Hilli, former chief accounting officer, was appointed CFO. Can you talk a little bit more about the change and specifically what David's new role will be?

Paul Reitz, CEO

Absolutely. But it's a great opportunity for Titan. So if you think a company like us, when you have a strong team and you're able to make a change like that, I would say that's not the norm. You would typically have to go outside the company, especially if you're looking for a CTO, looking for a CFO. But at Titan, we've built a great team. And so as we were looking at where the world is moving with technology, David's been involved with technology and I've been getting involved with AI, as most CEOs have been, and just looking at the needs of continuing to grow and develop beyond just your standard operational systems and see where this new frontier is going, we needed to add some resource to do that. And so looking at Tony and with his incredible background that he came to Titan with, how much he's developed over the four or five years that he's been at Titan, we just had a great opportunity to put Tony into a role that he is very suitable and prepared to tackle and then put David in a role where we can really jump into this new frontier. So we're shifting how we approach technology. Again, nothing different than what you're reading about with most companies, but you've got to have the people. You can read about it, you can talk about it, but if you don't have the resources to execute, then you're just dreaming. And so we're really putting David into a role where he's going to be focused on how we how we drive AI innovation. And that could be anywhere. And, you know, what we've already learned, you know, David and I have learned is that this AI, when you look at it from an agentic standpoint, it's going to be a good fit for companies like Titan. And, you know, we're not, you know, we're not a $10 billion company where we can just go do massive implementations. When we do implementations, they're very disruptive. And I like what Agentec AI does for companies like Titan, where you can be more precise and tailored more to your needs. And so I'm really excited about where we're going with that. And obviously, really thrilled for Tony to get an opportunity to get promoted in the CFO world. He's a great fit and I've already been working closely with him, so I don't need to say that, but I'm positive the investor community will enjoy working with Tony as well.

Joe Gomes, Analyst — Noble Capital Markets

Great. Now, in your investor materials and in the logo behind you, you explain Titan as a one-stop shop. Can you help explain that term a bit? Why is that important to your customers and investors?

Paul Reitz, CEO

It just sounds cool, doesn't it? now we we uh it what what is good about the one-stop shop tagline is it didn't we didn't invent it with marketing like we didn't sit in a room and go all right we we need something that all kidding aside sounds cool it really developed because it's who we are and it is as we have seen our company evolve um and again in this diverse set of customers and pieces of equipment that we're servicing around the world, Titan has really developed an agile organization where we are committed to servicing our customers' needs. And they are deep and diverse. You know, if you look at just a typical large farm, they have about 350 to 400 different tires they use on a farm. So, you know, again, if you're not familiar with our space, just imagine every piece of equipment having a different wheel that's customized to them and then having different tires based upon obviously the size of the equipment but also the application in the needs of what they're trying to accomplish and so um we've we've been operating in that environment for a long time but we've been doing that more tailored towards the oem so if you look back titan 10-15 years ago it was heavily heavily oem based a great advantage not saying it's not with wheels and the tires and the products that we make um you know kind of being able to services service the needs of the oems but when we launched lsw we we really tailored lsw towards going out to the farmers understanding how lsw can help them um how we can make their equipment perform better and we developed a deeper relationship with our dealers with the end users and over the years we've been moving towards okay how do we just become a one-stop shop where we can just take care of our customers' needs, whatever they are. That's where it starts. And then we bring it back to our manufacturing. And then this really accelerated when we brought Carl Starr on, it's already been two years ago. They have the same things that Titan was built on, very diverse product portfolio servicing, diverse base of customers, but they did it in different products than what we had. So it was a really good symmetrical fit between the two companies. And from that standpoint, then we just saw our company really latch on to the tagline. It's a world one-stop shop. You could have a little commercial grass mowing company, lawn care company, or you could be a construction operator or a large wholesale farm, and we can service your needs, whatever they may be. So, again, it's something that really came to life as not just a tagline, but really who we are.

Joe Gomes, Analyst — Noble Capital Markets

Okay, thanks for that. now since you mentioned lsw our low sidewall tires um that product and you've talked extensively about this in the past in your marketing and your investor materials uh can you tell the audience a bit about this product and give us an update on how your expansion strategy is going

Paul Reitz, CEO

with lsw yeah yeah it's it's something took a number of years to get going you know really going back to you know some efforts that our chairman had put into developing lsw because he he knew the concept would work because all you have to do is look at your your pickup trucks your suvs everything that that we we drive on road and just see how the wheels and tires have evolved through the years you know go back to the 70s 80s and you're going to see a a small wheel and a big sidewall on the tires and obviously now if you walk out and look you're going to see a very small sidewall. And so that's why we drive SUVs today. If we didn't, your head would be bouncing, hitting the ceiling as you went down the road. Used to be fine because trucks were used for mainly construction site purposes, not on-road family-driven vehicles. So we understood the concept from what we've seen on-road and being the only wheel tire manufacturer in this space with the capabilities to bring something like LSW to the market. We believe strongly in the concept now getting the changes into the marketplace kind of going back to us talking about earlier with the one-stop shop took a lot of effort and and that's where we developed the the expertise on how to go to the market differently work with the work with the end users work with the dealers work with the even the equipment dealers and say look we have this product make your equipment perform better it's an absolute win-win all around you're going to not get just better performance you're going to reduce soil compaction which is going to be incredibly important to the longevity and the health of your fields. But guess what? You're going to get better yields and you're going to get improved fuel efficiency. So it checks all the boxes from performance standpoint. And, you know, what we have been able to do through the years has really been, you know, quite impressive because it's, again, it's a tool. It's a tool that makes equipment reform better. And just envision a tire that's five foot wide and going on the world's largest agricultural equipment but you can run it as low as 12 maybe even 10 but kind of 12 14 psi so if you think about most of our tires that we're driving right now today you're going to be 35 up to low 40s psi but when you drop it down to that that 10 12 14 range that's what you're that's where you get the benefit you get a wider footprint the tire can handle any conditions you throw at it and you're going to minimize that soil compaction and so uh it's incredible what it's been able to do for for improving equipment and one of the things we've recently learned and kind of going to your next question your part of your question about how we continue to market is one of the things we recently learned again from a farmer that's using lsw this is not titan based study but he's a uh he he contracts farming from a number of different different pieces of property and he sent us some data last year where it shows every time you turn a piece of equipment using lsw it improves the yields every place you turn uh so in essence you're putting money in your pocket and the improvements were over 30 percent everywhere you turn um large farms where LSWs typically have been geared, clearly have fewer terms. But what that does is it changes the economics for the smaller midsize farms. Getting into a new set of LSWs, the economics greatly improved because clearly they're going to have pieces of property that require more terms. If you can say 30% yields, the payback on LSW is obviously much, much better because of that new data. And so one of our priorities for this year is getting out there and marketing that. Farmers are not easy to market to. Generational type businesses where they feel like they know a lot because they've been doing it a long time can be difficult, especially when you have multiple generations involved. I think the younger farmers, it's much easier to target with LSW. If you're a multi-generational farmer and you got a grandpa watching over your shoulders, he looks at these five foot wide tires and go, why do we need those things? And so, you know, I think, again, we're just for us, the future is going to be how do we continue to market LSWs better? And this new information on the yields with with every turn as you go through that turning cycle is going to be something that Titan's really got to push this year.

Joe Gomes, Analyst — Noble Capital Markets

Great. Let's switch gears for a second and talk about tariffs. You previously stated that tariffs should be a net benefit to Titan. Now, we're nearly a year into this. Can you provide an update to how you have seen that playing out so far? What has the competitive reaction been?

Paul Reitz, CEO

It's kind of a few different ways to answer that question. I mean, the emotional net benefit is there. I'll start there. You know, we're a company that has gone before the International Trade Commission three separate times, and we've won unanimously the two that I've been involved with. And the challenge we have is that when you win unanimously, you go in front of the International Trade Commission. Again, it's five judges who listen to testimony, both from us and the defendant companies. And the judges ruled, again, unanimously that Titan was being harmed. I would say other people in our industry, but Titan brought the lawsuit. But Titan was being harmed. the problem we have in the past is the commerce department then sets the rate you have no idea how the rate gets set it's done in a done in a corner you don't have access to anybody um and i didn't i didn't have a lot of confidence in the u.s commerce department you know and i'll say that specifically from what i learned going through this twice and the emotional benefit that i saw immediately from the tariff action by the administration is at least they're recognizing what we already knew that the world is not a fair place. It's that simple. I mean, again, you can't argue with what I just told you from that standpoint, because we've been in front of the International Trade Commission. This isn't propaganda. This is, you know, this is again, rulings that, you know, I've read the judges' opinions and that's what they said. And so for me, I thought it was very positive for Titan that at least we now have somebody recognizing that there is, there is things going on. And I could elaborate on that for 30 minutes. I won't, I'll stop there. The challenge is on the financial side. I mean, we've all seen tariffs are horribly messy. You know, the execution or the implementation of them, you know, drawing them on a whiteboard, then erasing them, then changing them, then doing, you know, this week is that, the following week is something different. That's not good for any company. And so I think what we look forward to getting the financial benefit from tariffs is going to be when the world stabilizes around what the tariff policy is um you know competitively to answer your question on that joe it's it's difficult to answer because every competitor approaches it differently um you know some of our competitors are getting getting government assistance to say look we're going to outweigh we're just going to we're going to wait out the administration if the administration doesn't know what they're doing then why over react to or shouldn't say not what they're doing If the administration is going to keep changing tariffs, then why react to every change? And so we have some competitors that simply haven't reacted to tariffs. Whatever they're doing on their side to absorb the costs, I have no idea. I could speculate. I do know some governments have stepped in and said, OK, we'll help you offset some of that. But for us, I mean, just stability around tariffs is what we're waiting for. So I think the emotional side is definitely positive. I mean, the tariffs are recognizing a problem that exists, and I think the financial side, Joe, it can't hurt us, right? That's kind of the way I approach it. I look at 2025. We had some challenges because there's a lot of inventory shipped to the U.S. This is not just Titan. This is all companies that have to deal with a lot of inventory shipped in pre-tariffs, and I think we've worked our way through that. And, you know, I look forward to a day when the administration gets their arms around having a consistent policy and really sticking to it. You know, as business leaders, uncertainty is a challenge we're all facing, but we can't keep having uncertainty around tariffs. We got to get a policy and stick to it.

Joe Gomes, Analyst — Noble Capital Markets

Right. Thanks for that insight. From a supply chain perspective, we know that you manufacture products across the globe, but you've also supplemented that manufacturing with third party and joint venture source products.

Paul Reitz, CEO

can you help explain that strategy for us yeah it goes back to that one-stop shop it and again things that have evolved through the years that we're really seeing materialize now and talking about it more publicly so these aren't something that we just started something we've been working on but we got to take care of our customers whatever needs they have we need to find a way to solve it and and meet them and so what we and what we have done is utilize joint ventures uh we have a really nice one in china we've been using in brazil um have one in the european area but supplementing as well with third-party contract manufacturers and the reason being is we can't develop everything on our own um we can't constantly be doing changeovers mold changes uh all the all the production scheduling around shifting the the the schedules to meet the needs of the customers it's it's inefficient for us but if we can find the right partners um who we work with when we put our name behind a product it's not just we're not just slapping it on there and saying here it is um when we put it through our distribution channels when we get involved It means we're signing off on the technical capabilities, the performance, but also the quality, and we stand behind it. So we treat the product like it's one of our own. And again, going back to that one-stop shop concept, we are here to meet the needs of the customers. And this is a more efficient, effective way to do that. And so we're constantly going to be looking at, do we rely on a JV partner? Do we rely on a contract manufacturer? We produce it ourself on a regular basis. And we need to move quick. We got to be agile. I think we're doing a really good job with it. But to be a one-stop shop, if you're going to live up to it and to be agile, which is needed in today's world, you can't manufacture everything on your own because again, that diverse product portfolio, it's in the hundreds of different products we produce every single day at most of our plants around the world. And so I'm trying to articulate that articulate that in a way for investors without complaining about it because it's it's our strength um it's what makes us who we are but there's just that balance between keeping your plants efficient and overdoing your production schedules and your changeovers trying to service the needs of that diverse customer base and product portfolio great now we're clearly in

Joe Gomes, Analyst — Noble Capital Markets

an extended down cycle across titan's three segments can you dive in a bit into each of those three segments? Any hope for a market turnaround? You know, where do we see things currently? And what further spark would be needed to get these segments back to more mid-cycle

Paul Reitz, CEO

levels? It's, boy, ag has been a wild ride. For us, it's been this inventory balancing issue as well, whether it's equipment with the dealers, whether it's wheels and tires with the OEMs, a number of different factors and so as we talk about this it can seem overly complex but I think a simple way to look at is I think inventories are getting more balanced and so we've seen some customers come to us throughout 25 and and put in drop-in orders because they need to get inventory balanced again so that's a positive sign and I think as the the market is at least remaining flat in certain parts of ag. We've seen some positive signs with one, then our channels managing inventory better. And two, again, dropping us in orders have been very beneficial for Titan. You know, as we look at 26, you know, the small ag side of the business is performing better. We do really like small ag. We have the capabilities to serve as small ag, but with what we do with wheels and tires and our ability to put them together as an assembly for for that market space um the small ag has been a strong part of our business and so we've seen improvements in that side of of the business um think that's going to continue throughout uh you know throughout 26 brazil had a good 25 and is holding up pretty solid as we go into 26 but then you know the story's large ag and that's what gets all the media attention that's clearly you know when you look at that when you look at the the dollars because of the size of equipment that gets more attention. But, you know, I think for large ag, you know, what it's going to take to make, turn it around. I think, you know, the government's going to have to realize they got to pay attention to farmers. You know, and I think that's, we're seeing that with Secretary Bessett with the comments. I hate to say I'm relying on government. That's why I paused. I wasn't thinking of what to say. It's just a weird comment to make. But I do think the The government has to realize how important farmers are to, you know, really to society. And I think Secretary Bessett has been really strong with his comments about protecting the farmer. I think Trump has made some positive signals as well. But at the end of the day, there's these, you know, the input costs are still high. The global demand is difficult to assess relative by region. Is China buying more? Is China not buying enough? you know brazil's obviously been pumping a lot into the global commodity and yields have been good so um so to answer your question what does it take i think eventually you're going to see some more balancing between supply and demand i think yields every year we've had perfect weather for five years yields have been really high um you can't always assume that you got to be prepared for some disruptions but i think the government's just got to realize that they got a state attuned to the farmer's needs you can't lose 85 an acre planting and harvesting soybeans and so So I like what Secretary Besson's been saying. I think that's a good positive. It's on their radar. So I would believe the administration is not just going to turn their back on it with the public comments they've been making. And so, you know, again, we look at ag globally. I think Europe is holding up better as well. They don't go through as many peaks and valleys. Our Brazilian team is really strong in that marketplace. And so things are, you know, we're benefiting from what's going on in Brazil. But clearly here in America, everybody looks at U.S. large ag. And, you know, again, I think it takes some involvement by the administration to make sure we get the farmer in a good position for 26 and beyond.

Joe Gomes, Analyst — Noble Capital Markets

Can you describe?

Paul Reitz, CEO

I will talk. Sorry, Joe. One quick comment. I mean, construction is we're seeing some good signals in construction. Down in Brazil, we're doing really well. construction's doing very well in in parts that we serve again i'm my comments maybe are always totally broad because we have um you know some niche areas we play in in construction you know i think the only thing on our radar right now with construction is some of the german oems um great customers long-term customers but they're they're facing some you know some forecasting difficulties for 26 is trying to understand the market but overall construction uh you know Australia, Brazil, US, you know, throughout parts of Europe, we see moving in a good place and consumer consumers holding up. It's a good part of our business as well. It's holding up. I think the equipment we put out there is a good mix between, you know, commercial applications and recreational. And so what we need to do with the recreationals continue to innovate, continue to put new products out there that are desirable for the customers. And we got some great ones coming out that um you know i think will put us in a really good position for for the consumer consumer base and so i think that's an area with carl star and titan coming together further integration you know one of the things david and is going to work with the carl star team and the leadership team there as well how do we continue to grow um in that consumer division through innovation and so i think there's some opportunities there more specific to tightening but um you know we'll see You know, we got to be agile. We got to whatever the markets are, we got to we got to adjust to. And I think our team's done a good job in 25 doing that. And we got to continue to do that in 26.

Joe Gomes, Analyst — Noble Capital Markets

OK, we're getting a little bit short on time, but I do want to get this one in. Can you discuss the capital allocation strategy kind of on your short term thoughts and your longer term thoughts?

Paul Reitz, CEO

yeah i mean it's something that tony and i uh you know hit the ground running pretty strong to start this year is you know safety environmental maintenance um are key obviously as a global manufacturer that's a big part of our you know capital allocation um we will continue to invest invest in product development um that has always been something good times are bad Titan always continues to invest in product development so that's inherent in our culture if we're going to be that one-stop shop meeting the needs of the customer base then we we certainly got to continue to invest there and we will um but beyond that we are we are focused on okay so let's let's say large AG stays you know down through the first half of this year um I know some of the reports coming out or talking about it being beyond first half of this year i don't know not going to guess but you know i think for us we start seeing an uptick in production before obviously the equipment gets sold so i only kind of comment through the first half of the year but we know the first half of the year with large ag is is is still continuing to be in a tough place and so we got to be very disciplined with our balance sheet and i think we've done a very good job with that. And so, you know, as we look at our capital allocation, you know, the discipline towards the balance sheet is, is a top priority. And, you know, Tony is doing a great job, you know, making our team aware of that. And, you know, we will continue to do that. So, you know, our balance sheet's in a good position, you know, so the markets have been tough. And so I think companies, small cap companies like Titan that, you know, try to service a global market, I think we got to really we're set up very well again a lot of diverse products diverse customer base and a good balance sheet so you know small companies going through the couple years of a downturn like we have with our primary segment in ag to still have a strong balance sheet is a sign of strength for titan so um you know we could keep doing what we're doing be agile invest in new product development we'll be very well positioned when the market gets better but we're going to have a very strong discipline approach to capital allocation, certainly through the first half of

Joe Gomes, Analyst — Noble Capital Markets

this year. Great. Well, Paul, we covered a lot of ground today and got significant insight into what Titan does, its markets and opportunities. We appreciate you taking the time to do this fireside chat and we wish you and the company the best in the future. Again, thank you.

Paul Reitz, CEO

Appreciate it, everybody. Again, if you have any follow-up questions with Titan, reach out to Alan Snyder, Tony, myself, and we'd love to follow up with you. But Joe, again, and thanks for the opportunity.