Titan Machinery (TITN) 30 Nov 222023 Q3 Earnings call transcript

Greetings, and welcome to the Titan Machinery's Third Quarter Fiscal 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. ICR. of Sonneck Jeff you. Thank ahead. go Please

Thank you. Titan call. and to and morning, third quarter ladies Machinery conference gentlemen, fiscal welcome Good XXXX earnings

On third be Mark the and the and tomorrow Chief and from call should David Bo President release in X:XX call Chairman Larsen on the the Officer, Meyer, morning seat with ended will fiscal have for Bryan to also Company By this everyone Knutson, Chief us transitioning Chief Kalvoda, XXXX, are is Officer; now AM Operating XX, earnings Financial access the the officially out which quarter October Officer; today. Executive today CFO Eastern went time. approximately at

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to access the ir.titanmachinery.com. In you presentation the now addition, to directly of available in prepared today's webcast going we're website a below providing information may the the to presentation accompany is Titan's middle again page. remarks, presentation by The at

the These prepared on of and and contain Except inherent reports be the I risk that as those to note statements. factor XX-Q. materially results more more law, including most risk facilitate comparing conclusion current quarterly forward-looking see basis. reliance greater contain management to annual financial your non-GAAP included forward-looking remarks, X not transparency financial an of the cause recently actual We've these the may We Titan's period call would factors we analysis results statements undue call XX should reconciliations do complete period. financial performance assumes statements risks on presentation prepared based release forward-looking in forward-looking any no uncertainties by any You'll in believe differ call, them. during in in questions. will The release. Form statements are particularly your that from additional approximately detailed of be applicable measures discuss measures non-GAAP measures not of like or updated in the to statements Please made a These we'll management identified ongoing section expectations most our on and on Titan Titan's take their performance, press maybe when adjusted response on XX-K, in will to may that results required of discussion financial to could comparable therefore measures, last factors the update everyone These that Safe adjusted open make filed projected Harbor At and today's underlying statements remind the can placed future and GAAP today's today's obligation Form and and the our Slide minutes. statement. report including subsequently remarks forward-looking questions. to involve upon guarantee directly of from to those filed call. a

Chairman Company's Meyer. go and CEO, ahead. the David, Now, introduce Mr. I'd like to David please

note, position we December instrumental On each will Welcome a provide Knutson, Xst. which substantial PricewaterhouseCoopers, review CFO quarter for his to his update valued transition been year third take member contributions to turn to technical segments. so CFO will CNH I help team call, was solid and We President forward then effective our the bring then all the with of of the business provide to and to-date. results and can summary assumptions. of in our his like a Kalvoda, we who that financial of Good has Mark post, enjoy executive financial Machinery. future fiscal modeling a become over our Mark's an to call XXXX himself. appreciate Larsen here results look On XX and call. will years an to Jeff. assisting Bryan establishing with our contributions. and Chief Bo our moment I'd of at full this Titan Bo Mark departing Raven, financial give from will recognize tomorrow, you, Bo Industrial, and conference overview Thank today's and quarter his and everyone. earnings XXXX will Officer Operating leadership morning, time our fiscal I'll third our introduce experience over the he of

has our our going great balance the to shareholders. sheet, extremely of transition I'm smooth company a My looking to Titan with on that deliver the Mark's community with margins, to business acquisitions future working growth. guidance. with team expanding position benefit that I am engaging and join This and demonstrated forward our well you, by is strategic strategic been as well and And pre-tax Thank has been plan value excited managed, Machinery. the for investment David. strong to our important execute

you, focus strong results. service. Thank overview consecutive Agriculture will supported if delivered turn revenue of growth Bo, We streams, our an across X, the This million. by our to you The revenue parts Slide another XX% share $X.XX. contributions of with our ongoing $XXX.X of record adjusted consolidated of each combined of quarter centric that, of drove sector per third welcome. to results and equipment, third is you with performance strength earnings customer and financial see With quarter quarter financial

our demonstrated achieved. a thrive the the the experiencing consolidated At efficiency, quarter, operating segment to we first continues drive segments This higher of margin us operating pre-tax fiscal continues expansion. the with is business X.X% delivered revenue that with Our and margin in operate level, Agriculture we record pre-tax allowing of in our on each environment. third our leverage to current that greater segment the in significant of have levels to

shine increasing the XX%. and increase quarter combined especially We're growth to driver with strong business was of and XX%. the by revenue relative the contribution, achieve in primary account our was significant our earnings revenue dollar a these would profile of a quarter terms ability equipment third service Taking parts of While driver to business, results. in pleased quarterly to record equipment, parts really a growth higher the margin into and service that and

footprint, in last we've as segment respect a pleased also realize basis. result, X.X%. margin third the sales down quarter segment remain on the performed are continue which a International the Construction With improved a segment, quarter across over driving X%. our sales reached quarter the focused even several Our reached commensurate margins, delivered our to slightly and lift well very Due that on to same-store pre-tax third XX% operating increase efficiency years this in optimized to we the our result for focused quarter. we for which with We're driving higher the pre-tax third though in on been

are This we've the drive its results summary, years and improvements with cycle our is Ukraine new and adapted Knutson There's to up of of despite over Our added conflict facing today doing obstacles part the EPS $X.XX. accretive In markets associated the segment call we that, headwind be showcase we've cropland $X.XX which levels equipment results his organic acquisitions. be review. year translated guidance, keep to turn to valuable over farm environment the the farmed. the in I Bryan past full in ongoing range to and our the the profitability again to for The increasing quite enable made resilient in With is growth of recent will of from to the Ukraine higher through and to and help our excess a movements. to through several to business in value Titan running. food our demonstrate continues majority a is currency business continues ministry to

those that critical at the key generate above driving continued equipment costs outpace with see levels demand. used for you, or with customer these experienced technologies conditions costs. drying supply, for more of harvest for you'll And efficiencies our to even yields segment domestic are become David. majority new Furthermore, equipment an part higher continues Agriculture today's of farm in Thank input of Slide of primarily equipment our due and The another and X, demand pre-harvest most new and net new producers customers expectations times were excellent overview elevated income. the where to factor minimal

growth. the and intimately higher-houred aged and delivery our year uptime process, of which is current service revenue Overall, we to well, our the remains book have Systems on Heartland with the inventory. segment, continually to hand Transitioning organization involved our full as I've quality Additionally, the perform Ag And and the been continue our departments acquisition, of impressed domestic fleet finish a we service integration in anticipate to a typically for fiscal Heartland Ag and equipment strong team. presold parts offseason. I'm we receive leadership that a for with and existing catalyst progressing inspections

We with to have available. allocation customer units becomes list a as outlook purchase calendar positive year waiting a XXXX

to you'll see Turning our Construction domestic of overview an X, segment. Slide

for execute equipment and was of sales to to supply ability Similar on is lead North our Ag also teams increased proud allocation CE experiencing equipment operational American which thank XX.X%, and due of to which want testament X% are and improvement long our team's to our outpaces our primarily a our multiyear equipment. We demand quarter plan. segment, I times grown new of to is another same-store to demand. growth, has increase pre-tax for margin

and On equipment, backdrop within markets Similar equipment ranchers Western benefiting Although, from farmers gas robust and the the to our we our construction activity drive remains for in still prices. and the in strong our our for land utilization. are the Slide which business improvement, quarter Bulgaria, activity other related overview of Front are slightly Europe Bakken another projects material International commodity But in business which commercial Furthermore, tight. drivers produced countries fields. higher an are producing Road key Romania energy and handling. of North solid Dakota moderating, demand we represents be fleet the to throughout overall customers copy taking Range construction markets, with natural for residential good seeing our our continued housing Germany, feedlots, our rental oil market in Other of continued and also have is industry Colorado North coming America, related purchasing infrastructure place along Ukraine. segment, for X, residential new continued availability construction to also global footprint. cash European the very CE and

and are our operations continued Romania performance pleased are we as of on the Bulgaria in our improvement execute to operational strong improvement initiatives. continue seeing We Germany and with in

and sales. Our and them service farm limited Ukrainian customers with we're supporting parts to continue equipment and

fuel and transportation domestic Black at the border increased cross corridors risk to see through increases, and the customers business. Ukrainian disproportionate logistics solid move due to growth from green fertilizer war interruptions, the Ukrainian our equipment to costs adversity Despite and and in product and service addition contribution to currently costs. used although routes prolonged able and of shipping use, the and In continued our of segment important new farmers and are margins, Sea profit with great resilient. It's parts remained support International pre-tax

Next, of extremely incredible, the proud With have in the turn of record supply a to are challenges, more technological remarkably will like employees and our review before detail, QX promising machines employees bring segments to through outstanding but of advancements our earnings, customers tirelessly Mark to nothing I'm work overall performance of results three of operations. year-to-date. over call essential ahead The financial customers the very compares the new equipment. and I as season, supporting side each who to I'd all our our busy driving them persevered value to fall our thank do, through us, our but to our their I

call Now, over results detail. I more to turn our Mark review will the in financial to

Brian. Thanks,

the to for Turning to quarter XXXX. fiscal of third increased Total XX.X% X. Slide revenue $XXX.X million

business equipment acquisitions, Jaycox, Construction were Heartland prior driven primarily which results. year's Agriculture increased versus our contributions Our our and quarter the sales year, Mark's strong segments by in third not XX.X% prior Machinery and from same-store and in by supported further

XXX rental gross expected manufacturer a expenses categories basis other operating on year recognized on also were incentives, Operating gross to revenues increased parts by a for mix to to versus and material compared points expenses, market our This leverage increasing XX.X% compared quarter. quarter the our to as fleet reflecting the with respectively, continued inclusion shift XX.X% more the Heartland inventories as expand increased rental X.X% allowed higher utilization our third XXXX, profit the revenue in variable basis offset a this prior supported of related XX% area fiscal costs revenue the of prior increased achievement remaining margins healthy year. well to to toward The and strong stronger million increased segment This quarter and year higher operating to acquisition benefit and business million reducing XX growth and revenues our conditions. was in year, business. prior improvement due and end noted, than grow quarter, and percentage margins were points, margins. and increasing in these of million us dollar the August expenses by and by critical service a third operating Heartland increased Construction in profit Slide increase $X associated versus by the of prior compared XXXX, of David utilization efforts expense and on year to On starting million equipment for revenue margin prior As in and of to sales was the Equipment our XX.X% driven partially revenue. $XX.X to as by XX.X% X, of some annual the lead Rental expenses with margins growth fleet equipment. $XXX offset the in parts $XX.X smaller focus our transaction. favorable primarily primarily XX.X% our in

year appendix strength chart was the slide adjusted help equated and adjusted of found other discipline to to expect we and in annual to to prior income EBITDA expense fourth parts expenses, Adjusted the compared presentation. quarter performance. in can achieve per on last Given of last line was The this to in end $X.X this service the higher utilization to interest which Floorplan $X.XX increased to and interest short-term the acquisition. would million, out quarter Heartland In be of $X.X for fiscal absorption our the the our XX.X% rates. expense period. our compared the net We the the fully in of progress higher quarter share quarter. A nearly reflecting and by to million slightly of to $X.XX doubled to syndicate million due line bank compares the diluted our fund year. million be the third XXXX, to earnings of $XX.X $XX.X third year's continue

fiscal adjusted and per presentation. most of of share you our their overview adjusted quarter comparable representing appendix $XXX.X reconciliation increasing in net EBITDA drive a pre-tax again XXX.X% increased margin segment a find in earnings third GAAP the operating for nice can $XX income the Agriculture segments and million, to will of the You sales X.X%. helped income XXXX. find segment resulted which income, XX, amounts adjusted diluted million, results once to slide of XX.X% leverage an pre-tax to to On Slide

to made improvements our extensive operations we've last the the Beyond cycle. since

manufacturing the aforementioned supported of recognition The also third the performance was strong sentence. margin quarter by

XX.X% by year income the margin points divestitures. offset loss X% increased to driven a period. due increased million sales which to to from versus primarily increase by compared Pre-tax year of the X.X% Growth to $X.X the period, our of demand, partially quarter. Turning $XX.X representing XX.X%, prior contribution versus was sales a Construction was million the segment, prior equipment same-store year to revenue prior XXX improvement basis grew

further proud margin are in segment of to in We forward of expansion, improvements business. improvement continue our this the drive and this look continued we segment to as

Despite on XX% decline, XX% as pre-tax to disruption pre-tax of $X.X across revenue margin ongoing euro reflects the a Ukraine the segment, robust within parts footprint. income our as X% well our represents a This equipment, adjusted improved $XX revenue to service. income weakening adjusted by and decreased increased million, million. currency X.X% headwind International a Our which the reflects margins and

service basis parts to can months revenue you results. XX.X%. month the period XX, increased year. increased Slide improved and compared sales Year-to-date, first increased to fleet our XX% our other of points XX.X%, to dedicated increased Total utilization The equipment XX.X%, XXX nine XX.X% dollar rental rental Turning X.X%. same and see increased last nine revenue revenue

XX, increase period million, Turning our the to profit Slide to last compared $XXX was same for first months XX.X% a the nine year. gross

profit increased to fiscal XXXX. XX margin months the points XX.X% of first basis Our for gross nine

for increased influenced nine $XXX.X revenues. was heartland expenses which by million of operating months by fiscal XX.X% Our integration first increased to of our the and XXXX the acquisition

the year, operating earnings However, prior this XX.X%. months to compared our the offset of points revenue XX.X% basis compared and to year $X.XX increase prior of fiscal XXXX led to in was to of diluted expense by expenses the more than per for Adjusted $X.XX a as XXX revenue to first operating share growth reducing increased leverage period. nine percentage

XX.X% month month is XXX adjusted the XX, On and $XXX.X we representing of to pre-tax Slide business. basis highlights. segments for sheet million nine our of increased We a period our our of X.X%, million XX, to balance improvements $XXX margin in fiscal of months October the than On had provide provide income prior $XX our period. XX, EBITDA which XXXX. all adjusted we for XXXX points Our segment first to year. higher million compared overview nine million year of the across overview Slide cash prior an $XX.X as increased XX.X% nine demonstrates of Overall, the

third more little $XXX color inventory to end to the result $XXX an inventories inventory XX, $XX Our continue entirely XXXX. effort Strong level the fiscal million at higher in year high equipment provide drive Parts equipment better I its of prior January slide. turns, ensure the concerted also business X.X quarter inventory versus in $XXX the requiring to our in of million current of on parts which which end the supplier the a procurement acquisitions X.X of both to and XXXX, inventory third from to million, of next the fiscal increased a Ag additional for new inventory at of driven component small a sales on equipment and acquired deliveries the will has acquisitions. at materials. availability an parts which period. our XXXX customers end Mark's is of the by well Heartland quarter from from of parts essentially coming This increase million as Systems, Machinery as and was was increase our manufacturing increased

rental Our $XX $XX of the million of to quarter the compared the at XXXX. at fleet end assets third to million increased end fiscal

We are dealership Ukraine this for onset relatively income level bottom-line and assets conflict. at down year. respectively expect will XX no our million, have the assets country To-date, receivables. and at our Ukraine our million or $XX damage locations. we fleet $XX business or amounts loss remain expectations reflects this to top the customer from respect statement in flat minutes. of With the you few quarter on update a the our into had balance inventories the of assets, I to material and $X which and related million of to These third in million total for

XX, Slide this of and amount on the the red blue are to of the Turning equipment reflected slide. new size and in used inventories bars

the quarter. our were fourth delivery high awaiting of the the inventory, times. of pre level inventory team, sales new equipment customers expected The from in are be shipments We presold At increase turns in in with higher our a inventory of service generated pleased setup X.X the continue reflected receipt the to end third received and units of the performance includes these deliveries million with $XXX which orders from to suppliers. quarter, percentage

of industry annual to and updated turn Given continue XXXX XX Slide the I we operate assumptions, year. our are will balance today. our fiscal the supply the higher inventory expect conditions, of levels which we modeling shows throughout raising health challenges, ongoing favorable at chain

up are For increasing XX%. we the up to from assumption revenue Agriculture growth segment, our to to XX% XX% XX%

closed the from mind XXXX which closed year rates that contributions Machinery Mark's the full in keep acquisition XXXX year, from consider and you growth which Acquisitions, prior our year Jaycox is revenue As April Heartland the and and in the respectively. August benefiting growth please revenue from in contribution December versus partial

For to five the of X%. XXXX, of in improve increased accounted Construction revenue March $XX our Impacting flat a the of in our down for assumption and for segment, North XX% range calendar Montana, January to equipment construction current down our million divestment of revenue. assumption is which Dakota Wyoming to X% stores we this assumption from combined of and approximately to

to Excluding same-store these year approximately from prior revenues the base, of growth assumption equates our sales XX%.

are represent think Ukraine down Considering segment, of conflict, International and currency as the we growth with to X% the this X%. circumstances performance with of year we our headwind are our expectations. such continues the pleased assumption X% revenue range For to reiterating I year-to-date down full

XX% in our range revenues in On versus Regarding as Ukraine, modeling per down additional accounts for loss conflict. of Ukraine expanding we accounted previously. XX% are basis, for we the are the now a to be to receivable an expectations with we approximately associated ongoing be share $X.XX, have and EPS inventory impairments to $X.XX

and performance to fiscal year, range of year-to-date consolidated expectation XXXX. for the per the fiscal $X.XX increasing strong a finish our earnings are $X.XX share diluted we at for $X.XX mid-point by assumption solid to new to a our Given our

watching the him results future. the and we leverage look ready in call. question-and-answer for come. now rest to has providing forward we to years plus our at rewarding to we prepared work of and all the with the for the of the expect foundation Titan today segments additional CFO. are that quickly the Finally, recognize the pleasure Bo's and years. It This to is work robust past Bo Titan are been and session He addition our across departure for arrival as XX expansion efforts operating our great concludes of great the generating the Operator, for margins wanted continue team the remarks. is team hard business, the I a pre-tax these that to a our here I especially my of wonderful to years the team see following of are

coming The Instructions] Dyer Craig go first from is ahead. question Please of Hallum. Steve [Operator

Clearly, figure the is I on much expecting. year? know, quarter. or we of sentiment Nice scenario if where guys. morning, I'm visibility order is book sort were it? we you money just this Good farm to next people would back guess, I a sort trying has improved thought out, of a pretty significantly in your than is spring the think Thanks. from What better the yields, to this made bunch growers decisions sort are a spend need this multiyear making than we we year of of more

Yes, thank you that on while Steve. still demand times have supply. is What we're allocation, still outstripping seeing lead still long have

effort So areas teams allocation on impacted more our with for we in booking the customers available, anything sells, concerted with getting growers ground the where continue drought are here becomes any there as watching pre out changes, country. communicating as daily are it those we're

that balance we're then with cash also as quickly watching great as So, as likewise any and of that. team available. sheets, to strong some free due some quickly rates, to And to sheet react with rising dealer not allocation be our strong our watching able on up and position becomes if to well make We're decisions and very in balance anything see the, teams here our our are allocation a of dealers professional also or position that. ready and the take do impact of their allowed interest

March get do and it'll that so before year. got on and And of locked we've you they pretty allocation call, presold right you we our the start the be is far. So at in the the final May now, the are CNH have to for we order period April, time allocation end tight, the as earliest, into maybe heard keeping windows

Bryan. Thanks

order your I into demand a perspective time think of is typically year? better visibility the much from that safe this next is year's sort say it demand and to the than of book

Yes.

very with Just, the ready demand actually close up and about that managing have. a jump it's But more the we from that's they a so name what and on out have, our customers lot allocation opportunities, to the being problem with those come. -- do on and when it's positive matching to good there, staying

any of looks ago. inventory, at a geography sort wish line by there than product you where couple you Are by either more? lot a of quarters As look a it it's was had better areas it obviously you lot particular or

where territory, cash Certainly, wheel equipment floaters. Yes. in upper Midwest, the sprayers especially we and magnums, the here shine four tractors, soy the in planters, drives, in, really high corn crop is up and horsepower,

is And the cash all crop tight. so, equipment really

would more so any take certainly we of And of that.

one for it I'll pass Last me and then along.

M&A the other more the it's whether dealers, on strategic moment? view your of Just other what's environment at that sort acquisitions

This of number Dave. to a owners. We're talking Steve. Yes, currently is

runway to out it's support of still to fragmented As equipment dealer you're sophistication, be and there. aware, look growing this alternatives acquisitions out a The today. continues equipment there, network the seasonal dealer a support long out and at growing needed succession as dealer there, you aging principals, this the services requirements capitalization of lack

the, the compliance. of and you a regulation solid complexity business, on hear the all, regulations with HR, larger group accounting, that is backside on the generation date that systems their and this driver Another into third you that don't second, some of at looking increasing dealerships

we appealing really along customers leverage second to stores the on I the backroom this these dealerships. generation, third like dedicated is with focus professionals to and model, our functions generation say So that operator these at employees

So, in the orderly an years ahead. flow and quality we anticipate acquisitions

guys kind differently last look with the what learn footprint what the and highs? you do the you sneak did very I or of as all commodities and at time guess, I of of appetite you acquisitive you were would I sort for more cycle. acquisition your guess one top near before could at

system look growing like we we with these staff can equipment got focused like leverage But of acquisitions, and sure, upper working. fast. backroom and we'd think at said, our at to across that look these making continue synergies on I tightening equipment margins, strong in place our the footprint, how with equipment, the to we're we that's that that quality to totally, in it, turns areas we continue current already have this moving we've think out we'll seeing, really I Midwest we that. acquisitions user increased where these of really But see with areas,

overhang way, and Titan, the you think And think the of continue industry. to any I for both see Ag only I don't but that not good that the or Construction to on going for really be side. equipment just

Thank Imbro coming Inc. of from is you. Please ahead. question The Daniel next go Stephens

integration Congratulations Remember and responding. at how the It higher curious time acquisition. you morning, good we a your on Bo head to Heartland as back I Mark talked revenue of are know potential is are that Hey, role How like question capture year. Yes. seasonally to a you on of out? want feeling great to you new guys. revenue for into I'm to of target career. sounds about start the going then the the the guys laid initially deal, just customers time synergies, about well.

great Yes, to lot the is from had of work and potential organizations. going we lot this that, confident Daniel, Hey, Yes. more learned going that all synergies and today but Bryan. just do. the to Even a you with the the is, opportunities right? And past two well, a really even like into so, we what feel integration back we of cycle time important about how Steve's said, shared question, there's acquisitions, replacement

the we're less available downtime than them, us available additional them. to from customers, reaction all for all the about points quicker hearing the our points, times now available them, to excited parts they're and equipment So, them, additional from additional to service

If enough excited as definitely So timing we've the those about about we out, to to maybe little get just we demand know, legacy equipment synergy synergies reiterate it. you again, really that got for and do strong we're on equipment struggling really because, historical our opportunities able our or get a to just to to the be meet that. customers, but laid anything feel

And above maybe parts service about I just and part historical we mentioned about next think next demand you of There's should rates I helpful. good, into opportunity not got That's about trend business? supply as given into and as inventory? be you Should it. build think continued But are you year. for demand parts to feeling supply, to service the expect the on Steve's and question. and growth them that follow-up That backdrop, supply year, tailwinds enough to we service outpace would parts how continues think parks this

we supply and pull-through signs part it's as up here. you see a bit that up Yes, continue on drive And reflected little to part that mentioned, as quarters it Mark sheet, and earlier with part to see, primarily, well, our feel of our but of the you parts going sales increased continue parts. will some customer supply just we've centric stepped do the But and we back ordered here several it's helping We're chain, going there, side. improvement chain, and our of really some and proactively strategy through on balance initiatives. we

whole well, good like that, for year. thing And parts as just The do won't with parts side the is dedicated disrupted on is good about It opportunity our the living. so, well. feel be they there again, easy. still with the have very we the operating we a next definitely another side where But model a supply chain team part all that's in as we is

is have really parts they watching their relationships really for day us. and living and do and well they understand for all procure the a systems So, the that's screens every are

about into we So, good that next going feel year.

me. to for one wanted on Last the ask side. I Construction

to you or guidance the what's the within given -- residential residential then slow mentioned given frame for much how it with mean, I construction construction Slide Or And on backdrop. think how the the Like rates? sense residential is construction outlook you residential moderating. makes residential? the X, happened the you segments? up here, your from to your could But purely assuming side? continues of I what's is exposure are

Yes.

of the a way it continue But fleet that. are slow outpacing to considering bit. pent up remember We've contractors. We've got our throughout backlog all we got here that into to and a out as the aging had demand demand from year foreseeable future, we've there because We waiting an and supply. a that's go

by also the as well parts help the the thing you impacted, this on side. positive. on as the type on typically opposite of and on horseshoe see So service And that'll way then, more on

activity, we're of in slowdown Midwest little in with good rising more the by the due insulated rates. other the that our seeing the even still a pretty So, country parts being to markets,

we We have the feedlots I strong, with still lot diversified a we the mentioned lot very for still and were so well as so, the feel construction exposure, farmers very We And on activity. with as spending. on side. infrastructure ranchers, of do also it, good our improvement, as about a land and end and that is

a work of really we contractors. wide with variety So,

from Please coming Larry ahead. The Thank next Maria William question De Blair. you. go of is

a losing more on have I expect risk you allocations? and this sales bit allocations, elaborate can with point, First, significantly year, mean, little you maybe at next to this at point? availability we any the

for allocations only year our And this at the the the Larry, of capacity point. this plant hard of the other challenges far that the part rest really It's right to then certainly They're for the and year have some opinion, yet. next it's facing to labor side, there point chain. not out my of OEM in then, U.S. say have the awfully first supply for there. save free We on now. is is impacts labor you also

or it as And So, we're as any up to look seeing not improve, it now. material at business, open improvement. could the we changes right continues

certainly as miss with And so your is do we demand it some is, strong opportunities. to question,

and our side elongate more does parts the flip fleet get help business on well. as the Now know cause that you that does age does as cycle the that out to service

parts side service are so, there business. some that higher and on And the especially with positives margin

hear you correctly. I So,

is You losing more have differently? to impact on from you're And might maybe you sales risking availability? strike think lose seeing or or availability that some competitors allocations sales, that don't there some delay the but you're any

where challenges and manufacturers the At fairly all let's really we're impact and this point all supply the seeing everybody equally, say the OEMs.

loss yes, more point. and delay the purchases or So, of on a versus more about a, you this the overall of at said, more for share customers as timing

you you're new that on seeing large orders And you're this year, average the ag? the on age, Okay. price predominately secondly, increases with then talk can taking in the on

overall, piece it they really on and Yes, depends again, that in does it's but, really through, come category, it average Larry. on product, digits single by vary high product by by even as but

sorry. last question, more, one And Okay.

deals about out of larger things still of larger done runway. good some most Are kind there deals and kind out M&A there's some and the meaty there onesie-twosie of talked we or we're the You still? now in things there? of Are the footprint

think there's, both No, there's there, Larry. out I

As to that to between at starting larger up a heads, this equipment deals, you million million these increases, $X and capital you $X.X for see just combine the some looking in of right.

So, as on trade-ins everyone, and a you take if increases. the exponentially also eight and stores, three grown maybe he's cap from dealer, also taking stores, start in you these

So, and yes, so one, tuck-in operations to but of motivated think two going of through some be there's I groups, store then there's the definitely larger it.

out I there. So, think they're both

So, we I of going opportunities be here. to acquisitions on there's all think sizes different

Thank time today. question you. We're for final showing one

be Our final ahead. going Dobre go questioner Mig is Please of Baird. to

guidance the through better to that? Mark Thank you one. sense What is. basically I'm trying Bo what for led career, all Can welcome. and a to guidance talk my little surprised for prior this you updated most the your in a question bit step and squeezing increase? the best me get in guess variance congrats, versus in. the you next the I

of for projected. it's that it out two kind areas they're Thanks goes than side. revenue fairly was the had biggest coming better the of And was in, what equipment equipment we to when comes to than in deliveries it quickly. the Sure. the think going Yes, Mig congrats there. was this level I coming in, Again,

-- the well. than and be would So from equipment, there that Construction. revenue From across margin was mostly a a the on say side, both was some I would as standpoint, on Ag equipment and standpoint it margins

pull that up. So we did

just on we But quarter, model and quarter the assumes the the equipment in about better third increases and here in as quarter. we million it's overall, X look those two primary quarter the the recognizing what on for And in the so even margins expected. manufacturer continued and The that X.X think incentive. talked that's well. side. fourth the than higher to happened trend here another about are what I higher fourth And

better maybe the equipment And anticipated. being on availability in your and you terms of than comment

talk that to to you was As and to what is there forward whether some on this OEM, go basis? the sustainable led a not as or clarification

delays Yes, went orders there There of and of I we quarter last I what that of we've back go was, some a cancellation fourth last it quarter have some. year. was to think some into year, quarter think this kind year, again, Fourth orders. first were

pass for what here. quarter, some this part didn't level as third to delays anticipated happening it in of the we is as that, year. particularly here So And come the and much most actually

expected. better we what it's So, than

what some OEMs out yards you're the think is our And that's that up there improving. I it's as moderately show that well hearing from it's equipment here. helping up of and showing in

you And to being better margin talked maybe expected. question the final you expect than I about since better than certainly

margins sequentially What and have of about or equipment in think we embedded fourth those do should updated margins, How the about for your you year-over-year, think you sort me? you quarter there? guys outlook. want As however

around that XX.Xfor is be XX.X bit that expect we've about the we're we've got year, it happened little model for price down just what about modeling. off that that the of that in XX, high less and projected. from then more and modeled somewhat that that be going was it has so of we fourth it's again, some at do mix year. those quarter the Anyways, would down a we're for ended to items quarter equipment so would bring international on where XX.X. fourth some revenues, full units out down that tag full the expecting over bigger of deals And But XX.X, but the the in a quarter, have right So is year-to-date, particularly some And typical year to to mostly we mix what side, be what experienced, less down. higher

X.X And a little if fourth in of only and the you quarter, manufacturer million the quarter. fourth I the correctly had now factoring remember over for in $X you're year, in prior incentives

that's So relative theoretical model, headwind the correct? to a

to Relative quarter year, that's correct. last fourth

yes items. side. fourth So of incentives, it X.X was out. of side, X.X high our unusual on manufacturer fourth I in some quarter, as It million international And on was and some had quarter those which X.X some like quite the side last the the was think you of total of Ag year pointed International the on was

compares like our that X.X this year, to more in yes, correct. So That's quarter. fourth

Then why manufacturing than lower quite a year volumes wondering given question. well and prior your are the obviously this were done would they if be incentives one better I I'm final in in fact 'XX? that has may, year business the

year. QX and so starting we in this booked and our X.X when Yes, you add,

our So, is earlier we the it that incentive. achieving in answer really confidence of this because started recognizing year

booked last far got books like we've at additional year. to that was the total Ag X.X so of we're X.X compared the side So, X.X, a on and X.X with total

at into So year. it whole results. is the we booking higher when just our the began of you look when It's timing

Thank you. management over At time, additional I'd back to floor turn this closing or for the to comments. like any

on progress forward Have for on updating Great. you the Thank Machinery, at call. the interest look a time to today, your next you in Titan great and we on day. and call our our

gentlemen, and today's Ladies concludes event. your thank for participation. you This

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