We'll go ahead and get started here. Thanks, everyone, for joining us. My name is Daniel Imbro. I'm the hard lines and auto analyst at Stephens Inc., and I'm pleased to be up here moderating a fireside chat with Titan Machinery. From the company, we have B.J. Knutson, incoming CEO, and then Bo Larsen, CFO. Guys, thanks for being here. Yeah, glad to be here. And then, B.J., we'll dive into a list of questions, obviously get into the business, but you taking over the CEO role coming up here in February, maybe you want to start there. Just what excites you most? What, what potential strategic changes do you see coming in the business as you kind of assume that mantle, and where, where do you go from here? Yeah, sure. You know, first of all, I love our company. You know, I've been with Titan now for 20-plus years, so starting in early 2002. And just really the essential businesses that we serve, you know, being in agriculture and construction and two critical businesses, both with food production and building and feeding the world. So... And then just how critical we are to our partners and our customers, you know, from the equipment that they run, and they're leaning on us all the time for providing them the latest technology equipment to make them more profitable, more efficient. And then any time they go down as well, we're their first call. So, you know, from the time the first seed gets put in the ground until it gets harvested, and then likewise from with construction projects. So, yeah, just really, you know, excited about our company and really about the changes that we've recently put in place. You know, our initiatives we've been driving over the past few years that I think you're really seeing pull through in some of our performance numbers. No, that's great. As we get into the business, I think something you guys have talked a lot about the last few years has just been demand outpacing supply, so maybe we'll start on the demand side. Kind of curious what you are seeing here. Obviously, coming towards the tail end of harvest, kind of looking what cash income for farmers was last year. Kind of how do you guys see the demand backdrop shaping up for the end of 2023 and then going into 2024? Yeah, so certainly fundamentals aren't looking as strong for 2024 as 2023, commodity prices being down a bit. That said, you know, a lot of our growers have pushed income or will be into next year. Their balance sheets coming off three very strong years are the healthiest they've ever been. Also supported by record-high land prices as well. So yeah, expecting a bit of a pullback in net farm income. Obviously, we're another 10, 11 months away from harvest right now, which is the other big factor. But commodity prices have pulled back a bit. Input prices have also come down a bit, so looks like generally a good landscape. You know, what we're anticipating for overall TIVs next year would be fairly in line with what you heard Deere come out with on their earnings release. Looking at that down 10%-15%, potentially to more in line with mid-cycle type of TIVs. No, that makes a lot of sense. Then for those who may be less familiar with the business, I guess, given that outlook and given the forward pricing, how much visibility do you guys have when you come into the spring season, whether it's pre-orders or kind of what you're hearing from your OEM partners? How much do you guys see what's coming versus maybe what we underappreciate from the outside? Yeah, so really a lot of our business, especially on the cash crop side and high-ticket construction items, are driven through pre-sale now. You know, you're looking at anywhere from $500,000-$700,000 units with a lot of technology on them, a lot of different specs. And so going out there ahead of time with our customers and lead times running in that 12-month range, you know, right now. So our order boards are really solid through the first half of the year right now, which is all we really have visibility to. Some product categories, they're open through Q3. But again, first half of the year looking strong from an order board perspective. No, that's, that's really helpful. And I think a common investor question that we get, and I know you guys do as well, is just how we're faring into this cycle, right? And there's a lot of concern whether as supply comes back, will demand still be there? So maybe could you give some puts and takes around how you see this cycle playing differently than last cycle? I know, Bo, you around the industry as well, would love your perspective as well. But, you know, how do you see this cycle shaping up relative to the last one, as investors get comfort with that? Yeah. So I'll touch on, then Bo can pile on. It's... You know, so one of the big differences being compared to the last cycle, that 2009 through 2013 period, was we just didn't have the large ramp-up that we did. So you look at all the supply chain constraints and manufacturers on allocation and the long lead times, and so that really put a bit of a ceiling and unfortunately for us, capped our revenue potential the last few years here through the cycle. And but at the same time, really helping elongate this cycle also, you know, less of a drop-off now as well. So as an example, we had industry volumes up 45% in that previous cycle time period, that 2009-2013, whereas here we were up 10%-15%. So as we look at returning to mid-cycle, much, much lower drop-off, especially on some of our key product categories as well. So definitely, you know, anticipating some pullback, but also, looking forward to production time, lead times and so on, coming a little bit more normalized. Yeah, and then, another thing we've touched on is, just inventory health levels. On our Q3 call, I think we touched on it. At that point in time, we had 55% less used combines in inventory than we did in the prior cycle. And that's a good and general indicator, just kind of across the board, right? So, we feel good not only from a industry volume perspective, but also, both the industry and our inventory levels heading into next year, to really manage through and deliver those high levels of profitability that we've been talking about. I think just another thing, Daniel, you know, in terms of, so the cycle will be what it is, and we definitely are in a cyclical business. But just internally within our company, we really learned a lot of things from that last cycle, and frankly, got our butts kicked a bit during that one. And so just a much healthier operation now that we have. And so we did, we took out a lot of structural expense after that. We did some store closures, some consolidation, and we really put a lot of focus within our company around the more stable, higher margin parts of the business, the parts and service side of our business, through our Customer Care strategy. And we've got a lot of strong initiatives around that that we'll continue to push. I think that you've really seen us do in recent years, and as we go forward, that'll be a big driver of our strategy. Yeah. Well, and I was gonna go into there next. Maybe, you know, a positive from this lack of production has been, I think, an uptick in service and parts. People need to keep their combines running longer. I guess, how do you think about that, maybe as an opportunity going forward to hold that, but also, is that a risk as production comes back? Maybe people don't... There's a falloff in parts and service. We have to work through that in the business, like, how do you see those puts and takes in the coming years? Yeah. So again, driven by the supply constraints, the fleet is still tremendously aged compared to average numbers. You know, we're still looking at the second oldest fleet age in the last 20 years right now, especially on tractors. And as we go forward, you know, in all of our five-year projections and future projections, we're not backing off at all in parts and service growth, so we'll continue to push that. Lots of untapped potential there and different initiatives we have. And again, customers, there's a lot of consolidation happening in agriculture and in construction. As our customers are becoming bigger and more professional, they're really looking to the Titans of the world to partner with them and really just take care of their equipment fleet for them. And so, again, a lot of stuff around our, our machine health monitoring, our telematics, our maintenance plans, extended warranties, and so those initiatives are really opportunities to continue to get more and more of that, stable, high-margin parts and service business. And then, Bo, maybe a follow-up on the service and parts. I guess there's been a lot of inflation across the board, and I'm sure that's not been immune to it, but when you look at the growth you guys have had, can you help give us a sense of how much has been maybe price versus just a true uptick in volume you guys are seeing on the service and parts side? Yeah, and certainly, I mean, I guess one thing I would say off the board, right, the first limiting factor, I would say, from a service perspective, has been, techs and having enough techs. And we're really focused on driving, hiring more techs. You know, we, we had a conversation earlier today. We're, we're starting, in junior high and in elementary, just getting our kids exposed to that. Just reflecting back on the question you asked previously in terms of, your ability to continue to drive it, right? We look at the untapped potential, the demand that was there that we couldn't serve. So even if that pulls back a bit, right, continuing to grow that. So the real opportunity from a volume perspective on the service side starts with, delivering and increasing, service, tech headcount. We're really focused on that. From a pricing perspective, I think in general, there's been plenty of conversation about that this year, things coming back to, quote-unquote, "normal pricing," not just from a whole good perspective, but I think, as inflation comes down, the expectations are that we don't see the same types of high double-digit pricing increases that we have seen in recent history. Yeah, I guess those would be the puts and takes. Yeah, that makes sense. And then, about a year ago now, I think we sat here and talked about the fill and delivery issues, maybe started picking up. When you talk to your major OEM partners, I know you guys meet with them frequently, what are they talking about in terms of when that supply does maybe normalize, to use that overused word, and when you're back to a real supply-demand balance? Yeah. So it really depends on the product category, but right now, the smaller horsepower tractors, the under 140 horsepower tractors, rural lifestyler, you know, the hobby farmers, that stuff has normalized. Combines, we anticipate, is starting to normalize by the first half of the year, should be pretty well normalized. But then as we look at things like the high horsepower tractors, again, which is our biggest selling product category, will be likely through the entire year here that we'll still not see those yet normalized. Got it. And then, B.J., if I shift over to the, the growth side of the business, you guys have been acquisitive, especially the last couple of years, I think, using the balance sheet well. As we think about the domestic ones, maybe Pioneer and Heartland, how would you - can you give some context for those who aren't familiar on where those businesses helped you grow into? And then maybe how has the integration gone, and how, how would you judge your execution on those so far? Yeah, they very pleased with all the acquisitions that we've done in the last few years. All very strategic acquisitions, and just with the two examples, you gave two very different acquisitions. Heartland, a very professional-run organization, and really looking to leverage those synergies, among our shared customers, being able to bring them. So, both us and Heartland overlap the same footprint. They had specifically the commercial application business, and we had the whole rest of the portfolio. So now we're able to bring that holistic portfolio to our customers. They had 100 service technicians, and so now those customers will have access to 700 service technicians. They had 12 retail center touch points, now bringing 92 retail center touch points to them. So just much quicker response time, allowing us to leverage that and grow share and, and unlock a lot of synergies, both with those customers that are not only using the sprayers and floaters, but also four-wheel drive tractors and wheel loaders, all those products that previously Heartland didn't have access to. So now with our combined team really those additional offerings. So that one was more of a synergistic play versus like a Pioneer, no succession for that seller. And really, he was removed from the business, and his team was actually calling us, asking us to come out there and purchase it. And great market there in Idaho, very similar crops to the Midwest, and high-value crops and very productive farmland, all same equipment type and everything. And so again, that one, more of a fixer-upper. We paid no goodwill for that one, and a lot of untapped potential and seeing great results and the employees, you know, really loving a lot of the things that Titan has brought to the table for them and excited as we go forward on that one. And then a number of in-between that were strategic acquisitions for us of I'll call more normal acquisitions, with, like, the Mark's Machinery and the Jaycox acquisitions that we did. And then, of course, O'Connors in Australia, which is also giving us, again, that's a bit of a different acquisition you have for some diversification. But a lot of the things that we can do that a lot of our competition can't do now, partnering up with our Australian network and doing 24/7 machine health monitoring, remote diagnostic, and service for those. Again, as the customers become more and more professional and bigger, they're looking for that. And so, having our Australian team take calls from North American farmers in the middle of the night, and also getting leading indicators on product issues or things as we start planting earlier in North America, being able to give our teams in Australia a heads-up, and vice versa with harvest and so on. Maybe just one more comment on the footprint for those that don't know. Within the United States, we're largely in North Dakota, South Dakota, Minnesota, Iowa, and Nebraska. It's of course beyond that, and we mentioned the Idaho acquisition. Heartland also had a location there. Within Europe, we're in Ukraine, Germany, Bulgaria, and Romania. And then you had mentioned the Australian acquisition, which put 16 dealerships for us down there as well. When you take a step back from that, we're really proud of being in three of the best agricultural areas across the globe and being able to serve those farmers that are feeding the world. Well, maybe I'll follow up on that. But, I mean, obviously, Europe's been topical, and maybe we'll put Ukraine to the side right now, but how the rest of the continent progressed through the back half of the year, I think we did see some slowdown last quarter you talked about. Can you just maybe give an update for the crowd on how Europe is performing and how you expect that to transition in 2024? Yeah, some of that was kind of an east versus west situation, and depending on the weather. There were some drier conditions in Romania and Bulgaria. We did see that impact, and they had below average yield. So we did see some of that demand softening, and we alluded to that and adjusted our Q4 expectations a bit. On the Germany side, moisture was better. I think farmers were in a better position there. Ukraine, for us, is kind of holding steady through the conflict situation. You know, heading into next year, I think we're on solid footing in each of our countries. Romania and Bulgaria, historically, have been the ones that are really driving the profitability for us, for our European segment, and Germany is on its path to delivering that profitability as well, and that's one of the focus points this next year, is to continue to drive performance in Germany. As we think about all the markets, we've talked about Australia, Europe, the U.S., I guess, are all these acquisitions integrated enough where you could keep adding density here? And then maybe that dovetails into capital allocation, but could you just touch on where M&A fits within a priority for Titan at this point in the cycle? Yeah, and we talked about this over time, and it still holds true. You know, dollar for dollar, if we can get another acquisition in North Dakota, South Dakota, Minnesota, Iowa, and Nebraska, that would be the first focal point. I think other opportunities kind of contiguous to that, or in other strategic locations within the United States, is also highly favorable for us. In Europe, in the countries we operate, we're looking to continue to grow as well. I'd put that as secondary to some of the opportunities on the U.S. side. And then Australia was a situation. It wasn't just a "Hey, this is coming up." It's been something that was on the radar for Dave and B.J. for a decade, and they've really been thinking about, again, those good agricultural areas that have similar specs on farm equipment, and we can deliver our business model. And they have plenty of opportunity there. That was another thing that attracted us to the acquisition, was that professional management team that was kind of stepped away from the ownership group, that really delivered both organic and acquisitive growth, and they have a pipeline that they would like to continue to execute on as we move forward. Then I wanted to shift over a little bit to financials. I mean, obviously, a positive over the last few years. I think you guys have eclipsed your 5% pre-tax target and, in all your segments at different times. This, I guess, you mentioned earlier, a little bit, B.J., just the improvements. Could you dive a little more into that, of what the actual changes you made, where you've closed some construction stores, but what are the actual changes that are ongoing that should drive up the earnings power of Titan as we look forward? Yeah, just really diligent expense management, but again, taking on a lot of those structural costs, you know, centralizing some rooftops, merging some locations, serving bigger circles, more investment in remote service trucks. But again, those service contracts I talked about, maintenance contracts, extended warranties, just again, really focused more on those more stable parts and service and very much higher margin parts of the business. You know, and you look at whole goods margins in that, high single digits long term, compared to blended parts and service margins of nearly 50%, you know, that's really where our focus is. And again, much more consistent. There's opportunities for us in up cycles to continue to drive parts and service growth. And then, as you talked about, Daniel, where it starts to taper off on the whole good side, the parts and service tends to pick up there again as well. So again, just continuing those initiatives and really driving what our customer care strategy around parts and service. I do wanna leave time for any questions from the audience, so I can keep going. Would you please repeat the average tractor age and how that compares to the history? And then I do have a follow-up to that. Yeah, so, varies depending on product category, but as an example, tractors right now are the second oldest they've been in 20 years. So 2009 would've been the only other point where they were older, versus combines are a little bit newer right now. But even combines are the third oldest they've been right now. But just if you look at, so the replacement cycle of a tractor matches up a lot with a seven-year depreciation cycle, and that's kind of a normal trade cycle for a lot of our growers. And so right now, you're looking at, depending on the tractor class and size, anywhere in that 10-14 years old. So again, still quite a bit more age than what they like to have, and same to a lesser degree with harvest year combines. Then the follow-up is, to what degree is this just a natural phenomenon that we should expect over time? If you think about the average age of automobiles, it also continues to grow because a 1950 Chevy just doesn't hold up quite as well as a 2024 Chevy. Just technology. Yeah. Yeah. Interesting dichotomy there, though, because at the same token, technology is the biggest driver of replacement for our, our customers. So, yeah, the machines are made better, do last a little longer, but the farms are getting bigger. They're also tougher duty cycles. They're putting more hours on them, again, running more 24/7, and, again, which bodes well for us with our support capabilities compared to our—some of our competitors. And then, but the technology is really the, the biggest driver, you know, allowing them to, you know, get higher yields, retain more of the crop, and then same, same with construction as well. You know, just being more efficient, all the labor constraints that are out there right now, and that doesn't look to be curing itself anytime soon. And so just all of them are looking to do more with less, and the automation, and then autonomous as we go even farther forward is really critical. And so in the meantime, right now, it's a lot of the technology just allowing them to be more efficient, not having skips, not having overlaps, less input costs. And then autonomous, automation, excuse me, is now becoming really prevalent, so maximizing the productivity of the machine even more. And then again, we've already got some autonomous machines that are starting to hit the market in some pilot areas. Maybe that dovetails well into just technology within the, the equipment, obviously, was very topical there. You came from the Raven side, Bo, before this, and I guess obviously precision's been a buzzword for a long time. But how does the, you know, CNH product and you're being compared, like, what do you hear about feedback from farmers in terms of the tech you guys are rolling out versus maybe some of the major OEMs, the other OEMs out there that I guess you're competing against? Yeah, and then, and certainly, I came from Raven, and I'm a bit biased there and bullish on the acquisition that they made, and I think that that was met with a lot of positivity, right? As a big step, CNH making a $2.1 billion acquisition, really wanted to make sure that they're leading the way, not just through autonomy, but continuing to advance automation. Bringing in really that technology stack as opposed to relying on third-party partners. So I think over the next couple of years, and they're talking about it as well, right, you know, kind of through 2025 and then really starting to see where CNH is coming out into in providing some of the best technology consistent across all of their platforms. I think that the acquisition, again, was met favorably from the farmers that are looking to see that, to make sure that we do stay competitive. Got it. Can you talk a little bit about right to repair? How it affects you, or whether it's going to affect others? Yeah, so right now, some of the first bills did pass, and really, we're generally fine with right to repair. I mean, we're extremely supportive of our growers being able to fix and repair their own machinery. What we're against is the right to modify, which is actually the driver behind some of this. As you look at starting back with the Tier 1 emission standards all the way up to Tier 5 that we have today, a lot of that DEF fluid and the DEF injectors and so on has been, and the regen has been a frustration point for a lot of customers, and so they're looking to bypass some of that. So I'll leave that to the EPA to figure out, you know, within themselves with some of this. And then also, the safety side of it. So, the allowing farmers to just... Somebody who hasn't had the training and doesn't have the proper tooling to go in with some black market software and hack into the ECMs of our equipment, they can, so right now, they're capped at 30 kilometers per hour, and that's what all the braking systems and everything are designed around, and they can actually get those up to 40 kph. And so, with that, when our OEMs, when we order equipment and do it that way, you need to get hydraulic trailer brakes, you need special front suspension, special tire ratings, tire sizes, etc. And so it's very unsafe to start messing with that stuff, but growers and contractors would be like—would like to drive units between farm fields and so on, at 40 kph. But again, there's safety risk with that. So there's the environmental side and the safety side, and then also is the engine chipping and so on, that they can do with that as well. So hacking in to the horsepower, which again, can cause different safety issues as well as performance issues, you know, blowing out turbos and injectors and so on, prior to, you know, way ahead of a normal end of life. So we're trying to do a lot of education with that. I'm chairman of our Midwest Equipment Dealers Association. We're meeting with a lot of our constituents and going to a lot of our state capitals and trying to provide education around, "Hey, we are very supportive. We give our customers access to a remote EST. We give them training on it. It has limited capabilities where they can't hack into some of those safety and environmental and do any tampering that way." But again, we're overall supportive, just it's got to be done the right way and in a safe and stewardship manner. Great. Well, B.J. Bo, I know we're up on time.