All right, good afternoon, everyone. Welcome to the Wells Fargo Industrial Materials Conference. I'm Ed Bergonzi with Wells Fargo Securities. I'm joined by Paul Reitz, CEO of Titan International, and Tonya Helley, Chief Accounting Officer. For those in the audience who may not be familiar with Titan, Paul, could you provide a brief overview of the company and what Titan does? Yeah, so we are a leading manufacturer of wheels, tires, and steel tracks on the carriage equipment in the agricultural, construction, and consumer industries. We manufacture products that move really cool, nice equipment. If you think about wheels and tires of our products that go into our customers, I mean, you're looking at the small size to the large sizes. These are all off the road, so we don't do passenger tires. These are unique products which we partner with OEMs to design some of these products. Then we also sell through aftermarket as well. We're a global company with presence in the Americas, North America, South America, and Europe. All around the world, we sell our products. We have quite a few manufacturing facilities around the world in various countries as well. Great. Why do customers choose Titan? What do you think is differentiated about your company's products? Like Tony said, our products go on cool equipment. You think about the value of that equipment, how important that equipment is. I mean, we design products that make equipment perform better. Because this is all we do, and some of our competitors are parts of, they're a smaller division of a much larger company. During cycles, you know where that answer goes on how they invest. Whereas Titan, we've been committed and dedicated to this industry for four decades, public for three decades. We connect to the end user better than anybody else in our space. That's step one. We understand not our products, wheels, tires, undercarriage, we know that. We know how that interface is between that cool equipment and the application that that equipment is serving. That's step one. I mean, step two, and this is more of a nuance to our industry. If you look at those customers we serve, they come in all different colors and forms and shapes and sizes of equipment. It is not just the shape or size of the equipment or the color that makes our niche somewhat protected. I know that is a strong word used with a group of investors, but I am going to say our business is protected because when you are in a niche business that is cyclical and you have products that are highly specialized, custom-designed products that require investments in tooling. Now, in the financials, like times like this, you are going to see the results of the cycle of the market. The reality is our products are incredibly important to the customers we serve. They're not easily replaceable because of the investment and the engineering that goes into not just the production capabilities, but all the tooling required to manufacture what we do. Just keep in mind, every time you see a different piece of equipment, it's a hub and an axle that requires a customized product that Titan can make. Got it. Turning to the broader macro picture, would you mind addressing the impact of tariffs on Titan? Yes. We have said this a few times, and I will say it here again, that in the long term, tariffs are positive for Titan. When you think about the idea of tariffs to create that level playing field, to solve a situation where there is imbalance, tariffs are good for Titan. We have facilities in the U.S. where we manufacture products that are sold in the U.S. When we think of foreign competition, which is a lot of who we have to deal with, it is positive for us in the long term to have well-planned out tariffs that are put in place. We look at it as being positive. We also have a facility in China, which I will say, which helps us. That came on board with the Carstar acquisition. The purpose of that really is it allows us to play in a niche space, in a market where low cost matters. We have that facility there. Even with the tariffs, as long as the tariffs are reasonable, you do not have the 100%+ retaliatory tariffs, it is still positive for us. We are in a good position because we have enough facilities to be able to determine where to optimally produce various products. Where we decide to keep products in China, it is because we know that we are still ahead of the competition doing that, or at least can match the competition in those areas. Got it. Just following up on that, since you last reported in early May, how is Q2 shaping up? I know we only have a few weeks left. Yes, we all know what's been happening with the tariffs and the uncertainties and the pause in investments. We're glad to say that Q2 is shaping up within our expectations. When we think about our key metrics, be it top line, gross margins, EBITDA, it's shaping up within our expectations. Now, we do not typically give guidance on EPS, given how variable that could be because of taxes and where profits are foreign versus domestic. However, I'll say that in terms of the adjusted EPS, we would expect it to be somewhere in line with the high rates, just as we saw in Q1. That's really because with the ad trough that we're seeing and the ad markets being primarily US, a big piece of it, we have losses there, and then the profits are sitting in other parts of the world. That would obviously create a high tax rate relative to the taxable profit. Similar to what we saw in Q1 is what we're expecting in that regard. Got it. You touched on the ag cycle, but what are you seeing in terms of the evolution? Are we close to a bottom? We're getting there. We're getting there. Cycles are never pleasant, and they're even less pleasant in the ag space. They do have a tail on them, and we feel like it's getting near the end of the tail. I think there's a lot of reasons why you could point to that being the case. I think one key element I want to touch on, though, is what's made this cycle different than some of the other ones is the impact of interest rates on inventory. There's this expectation, and I'm not saying it's within this room, but a lot of our business is served by folks that are dealing with Main Street type customers. These dealers in Main Street, U.S.A., have this strong belief that rates are too high, significantly too high. It is just a matter of time before they get back down to something that is much lower. When they see their floor plan financing coming in at 7%, 8%, they look at it as an expense that is just out of line, ridiculous, and I got to find a way to reduce inventory and reduce that expense. We have seen the impact of that coming from not really the tariffs, but really as we were in the middle to the tail end of the downturn, the expectations were that the uplift was coming. The tariffs have put a pause on that, and not just ag, but just about everything that exists in this planet at this point. That is where all of a sudden this financing concern really has been highlighted this year. I can't tell you how many dealers I've talked to said, "Look, the interest rates are too high. I'm not paying that. Inventory's got to come down." Now, the reverse we're starting to see, answering your question about where we think we are in the cycle, is we have some customers who are now coming to us saying, "Inventory's too low. I'm not comfortable. I can't run the race by training for a week. I need to be prepared for that race. In order to do that, I got to start building back my inventory." We are seeing pockets of customers who now come to us and said, "Inventory's too low. I want to plan on how I can build that back. I think these interest rates have had a bigger impact on, again, the dealer landscape of kind of Main Street, U.S.A., where they have the belief still that Powell sets the interest rate, that it's not set in any way by market influences, that it's a number that's assigned by the Fed. Once the Fed lowers rates, it's going to come down significantly. I think we got to get over that hurdle. It's coming. We have seen it more in our business because, again, it's that impact of the market being down with the inventory correction on top of it that we have seen this year. Got it. If you wouldn't mind addressing what you're seeing also on the earth-moving side, the construction side, as well as the consumer side. Titan is a lot more than just ag. Yeah. Yeah, no, that's a good point. We love to talk about ag. It's a big focus of our company, but we have diversified into those segments. And earth-moving construction, I would say, is more looked at on a global basis for us. Our strength isn't necessarily here in the U.S. So globally, we've seen the mining activity continue, and most of our mining business is going into the aftermarket. So that's been holding up fairly well. The European side of construction is a part of the market where when the U.S. was starting to cycle down, U.S., or excuse me, Europe was more muted and more moderated through a period of time. So there's not a lot of room to fall, but we've seen the European construction, some of our customers go, "You know what? I just don't know what the hell's going on in the world right now. We've seen a pause in Europe. I think that's something else we got to work through with the OEMs is they need to get some stability as to what's going. I mean, they're kind of caught in the middle. They're getting lobbied back and forth, like a ball back and forth between China and the U.S. I think that's one of the things we've seen here recently is just what's going on with the European OEMs. We've done a pretty good job in that segment, again, diversifying, like I said, with the aftermarket in mining and construction. We do have a foundry in our earth-moving construction business. It makes us fairly unique. A lot of people like to just look at Caterpillar's numbers and compare it to anything that's earth-moving construction. What is unique in our business is we own a foundry in Spain. We can customize aftermarket specific parts that go on mining equipment. Whatever you need, pretty much you're talking about sand molds that we can cast, we can harden it, we can do whatever is needed to make a customized part. That helps kind of weatherproof us from some of the trends you would see in earth-moving construction that maybe just strictly an OEM would talk about. Consumer, the OEM and the consumer is very similar to ag and earth-moving construction. Probably different reasons why they're on pause, but they've definitely been on pause. That business, again, for us is more aftermarket driven, kind of 60/40 split, aftermarket versus OEM. The products we serve for consumer, this is not on-road, truck, bus, passenger type vehicles. This is off-road. This is the fun stuff. These are the trailers that pull your boats and your recreational equipment. This is high-speed power equipment, turf, utility vehicles like your Polaris Rangers. I mean, you are not going to stop using your boat because you are frustrated with the economy. You are going to go use your boat. That aftermarket part of our business, again, is a good strong focus for us. The OEMs are on pause just like everything else. Got it. You recently renewed your brand license with Goodyear, including an expansion into new segments like light construction, industrial, ATV, lawn and garden. Can you describe why you're so excited about this new opportunity? We just got done negotiating that. So I'm going to borrow some language that they said about our relationship. You always want your partner to talk about your relationship more than you do. Goodyear said this is a unique deal that they have with us. I mean, you think about we not only have pretty much owned their brands for the last two decades. We get no technical support. This is us representing their brand, but we bought their plants as well. This has got a long tenure to it. For us, it was something that we always wanted to expand and really never had the volume to get their attention. With the acquisition we did last year, we're able to now, as we're going to the negotiations on the license that just got renewed, we said to them, "Look, we got tremendous opportunities. You've trusted us with your brand in ag. Why not let us grow it elsewhere? As you just said, we announced recently we did expand the licensing rights into some new segments. What's really the benefit of that is you walk into a customer anywhere, anywhere, and you say, "I got the Goodyear brand," it resonates immediately. For us, as we look to expand our footprint, both product and geographical, it's an entry point conversation starter that is second to none because Goodyear is one of the few global brands that exist in our space. I think there's some great opportunities ahead with that. You touched on the Carstar acquisition last year. Walk us through the strategy behind that and how you feel like it's enhanced the franchise overall. Yeah. We did a Carstar acquisition a little over a year ago. This is just something where we want to create a one-stop shop. When we think about the portfolio of products which we are able to offer to our customers now, it is way broader at this point. I mean, that was a great positive for us. Looking back at what has happened over the last year, I mean, it has been a great acquisition. Everything has met expectations except the tariffs, which were not forecasted then. Outside of the tariffs, everything has met expectations. The integration, the coming together of the two companies, the way people work together, the way we want to go to market, it is like you bring together two teams, two winning teams that want to win. They want to go out there. They want to take opportunities. They want to increase their market share. We are doing that. We think about our synergies which we planned. The cost synergies, we have been able to execute on all that, taking out cost synergies in various aspects of the business. We have negotiated supplier contracts, which we will begin to see a lot of that come through once the markets begin to come back and the volumes increase. We will see much more benefit falling through. We are executing on our commercial synergies as well. There is a lot of opportunity out there in the marketplace in Brazil, in Europe, where we can take Carstar products using the existing Titan sales structure we have out there and go take market share, bring products to the market. Paul touched on the Goodyear license. That is something new where we are going to have the Goodyear license on Carstar products. A lot of opportunity out there for us. That's great. As part of the acquisition, you've gained a significant shareholder in American Industrial Partners. At this stage, what can you share about how they think about their investment in Titan? I mean, I just met with them a few weeks ago when I was out in New York. I mean, they own 38 industrial companies right now, long history. So we knew AIP well before we got into the dialogue with the Carstar acquisition. There's a well-known space when it comes to any type of industrial company. And for me, they don't necessarily know a lot about our space. They ran a really good company, created a nice platform for us, but they've been very hands-off since then. They have other companies, portfolio companies that they're involved with. For me, the advantage is they make stuff, we make stuff. There has to be similarities in how we make stuff. The stuff we're putting into our products has to be similar to somewhere what you're doing. What I was talking to them about a few weeks ago is how do we explore those synergies and those opportunities where together we got to find a way we can do something better. Every private equity firm is different in how they structure things. They did have an operational person that was assigned to Carstar, but that person has moved on to the next portfolio company. I think it is more broader synergies in the industrial landscape because that is what they do and that is what they know. Understood. Titan has a history of innovation. Can you describe some of the key innovations and unique products the team has introduced to market? We have to innovate. That's got to be our heartbeat. This is what we do. Again, going back to what I said earlier, I mean, the bigger companies have other things they can go make. We got to be really good at doing this. Our innovations have been continuous. One thing we have said, say here, I'll say it to the board meeting, the board again tomorrow. We always will continue to invest in the future through our product development. We are the most connected to the end user using that piece of equipment than anybody in our space. We're not going to lose that advantage. We will continue to do that. What that does then is it helps drive the innovation. It is really at the root of the culture of our company. Makes it an interesting, I'm biased obviously, but makes it a pretty damn good place to work when your product is driving your culture versus the slogans you put up on the wall. Again, what we do, like Tony said at the beginning, is cool. Go watch a video of a construction piece of equipment in action, an excavator. You're going to be fascinated. I dare you to watch it for less than 10 seconds. You're going to watch it more than that. What happens is we take our videos and we use that kind of that social media platform that is maybe something I don't know a lot about, but that's how you connect to people. We take our products and they become a connection to the marketplace, to the end users. What we can do that is different than the competition, we can do the standard stuff like we know how to design wheels, tires, and track. We are doing some cool things. We are making run flats on outdoor power equipment. You drive like a wild person, get out of control, hit a rock, got a flat tire. Guess what? Our tire is not going to go flat. We are going to get you back home safely to your family. Things, innovation like that, we constantly keep coming up with how we design the wheels so they can provide a more cushioned, comfortable ride, how our undercarriages can interact with the information that now RFID and technology sensors can provide to the end user of that equipment. I think one of the coolest things we do is because we manufacture wheels and tires. We're the only company that does this in our space. Just imagine a tire. I'm 6 foot 6. Imagine a tire that's almost as tall as me. All right, pretty damn close. And it's 5 feet wide. That's what we put on tractors now. What that does is it provides all the nice, comfortable ride that you could possibly imagine or want, but that is not how we sell. That is the basics of what you need. But what we provide to our end users is ROI. So when you use a tire that wide, it reduces the soil compaction. Therefore, you're protecting your land. It reduces the amount of fuel required to run your tractor. So now you're getting immediate fuel savings. It improves the yields. So not only does it float across the surface to protect the land, it doesn't pinch the seeds, reducing your yields. You get improved yields. One of the things we just learned recently is that it is perfect for a smaller farmer. If you imagine a small farm that has to navigate through some terrain, every time you turn your tractor, that additional weight, these tractors are so large, it puts weight into the ground that compacts the soil, compacts the seed, like I was saying earlier, but even more so when you turn. With an LSW, you get 30% more yield every time you turn the tractor. Think about that. Every time you turn a tractor, you now get 30% improvement in the yields by using our products. It is that type of innovation that we keep connecting to the marketplace. Again, we can do things that provide comfort. That is going on in everything. It goes on in the SUVs that we drive. What we're bringing to the marketplace, because we understand the end users and how they use that equipment and how that equipment interfaces with the ground, we're developing technology that provides ROI and puts money in their pocket. A potentially underappreciated area of the business is your strength in aftermarket, now almost 45% of your sales. Can you discuss your strategy and positioning in that channel? Yeah. So it's a big area for us. And when we think about where we've been in the past, growing the business, the aftermarket business from 25% maybe 10, 15 years ago to where it is today at 45%, it's significant to us. And when we look at that, it's also coming with margins. And so that's an area where we've always continued to focus on because, one, it creates the better margins for us. But also, if we think about cycles, right, it's a different, it doesn't go with the upcycle directly. Now, we are in a unique situation today with interest rates, tariffs, and everything going on right now. But in a normal upcycle, you wouldn't be talking consumer markets, consumer business then because it would just be going on its own on a different pace. These are the advantages we see in that. We continue to invest in that because also the other thing it does is it connects us directly to our customers, the end users of our products. That is the way we have driven innovation. We go to the farmers. We have conversations with the farmers. We know what works for them, and we drive innovation that way. Our aftermarket business is a very key component of our business in that sense as well because that also provides that connection, that servicing, the support the farmers need to keep their equipment running. The aftermarket business provides that. It's never too soon to be thinking about growth. Where are your priorities in the near to medium term? Continue to fill in the cracks that may exist in our product portfolio, expand that geographical footprint, continue to do what we're doing, but go on a broader global scale. I think we have a good opportunity in front of us because what the acquisition did last year is it really truly gave us a capability that is so far above the competition, meaning we can make, as Tonya said at the beginning, we can make the smallest tires and wheels that go on your golf cart, and we even can make the largest that goes on the biggest equipment in the world. To be able to go to our customers and have that leverage to say, "We do everything." Going back to something we mentioned earlier, the fact that quite a few products that we make are highly specialized, engineered to that particular customer and that particular piece of equipment, means that with a broad product portfolio, incredible manufacturing capabilities that are geographically located near where our customer is at, we're providing a risk mitigation level that nobody can come close to. Risk mitigation with what's going on with the chaos and kind of geopolitics and the land of tariffs right now is becoming more and more important. That falls right into our hands. Like Tony said earlier about the advantages of tariffs, there's the dollars and the cents and the things you can put on a piece of paper, but it's more that broader scope look that supply chains and customers are now taking to say, "Look, we got to worry about risk mitigation." That's perfect where Titan is at. And so many opportunities of how we can continue to grow within the portfolio geographically, but also how we work with other partners. We are the desirable company to work with because of our distribution footprint and everything I just talked about. I won't repeat it. We're finding ways that we can, without as much capital investment, grow this business into parts that we currently aren't in. With respect to capital allocation, could you discuss your current priorities there? Yes. I mean, priority for capital allocation will be paying down debt. If we just take a look, 15 months ago, we acquired Carstar. We took on a little more debt then to acquire Carstar. It is something we had worked on to be able to do over the years. That was a good thing we did. Looking back, we made the right decision on that. We have also repurchased stock from shareholders, including the major one we did in October. Those were all things we have done. We were able to do those because we strengthened our balance sheet prior to then. Our focus now is paying down the revolver and making sure we are in a good spot to take on the next opportunity that comes. Got it. How significant is Titan's business in South America? Do you think this geography is misunderstood in your view? Yeah, it is. In fact, we were just talking with it in one of our last investor meetings we had before coming here. It's misunderstood because the Brazilian Real is so weak. I mean, the Brazilian agriculture economy is huge, and its importance to the global landscape is tremendous. It's why you see China playing off Argentina and Brazil in these crazy ways because guess what? They They can. Brazil and Argentina are really powerful in some important areas in mining and agriculture. The weak Brazilian Real, when we kind of fold it into the results here in the U.S., it just gets buried too much. Very important market for us. I mean, our business has actually doubled since we acquired it in 2011 from Goodyear. We got incredible market share down there, but the Brazilian Real has also gone from 1.60 to 6. It's hard for me to convince you of that when it doesn't show up in the numbers. Now Brazil's important, and it's becoming more important because of what's going on with China and the U.S. We got to be real careful with that one. It's like the old saying, don't walk into the bar and think you're the toughest person in the world because once you get hit in the back of the head, you're going to feel it. At times with this whole battle that's going on, we're forgetting the fact that Brazil and Argentina are very powerful in the land of soybeans. A lot of these grains are incredibly important to things that we don't think about. I mean, people think of corn as the stuff that you buy and eat on the corn and the cob or out of a can from the grocery store. That's not corn. That stuff you see in the fields when you're driving down the road. You don't eat that corn. If you did, you'd probably lose multiple teeth. It'd just fall right out of your mouth. That corn goes into food production. There is not a government in the world that's not worried about food production and taking care of their society. That's where we got to be careful about, again, I think too much corn is thought of as potato chips and corn on the cob and things like that. It's not. Your entire food supply is driven by that corn that you see in the fields. There are some countries in the world. Brazil is growing tremendously and getting stronger. Argentina has kind of figured out politics and economics a little bit more so than they have in a while. If we think we can just go fight with China and we're going to win in that space, we got to be. Trump knows that too. He's got smart people telling him those things. Before we open to the audience for questions, any final thoughts you want investors to know about Titan? Just say that as a company, we look at where we are today. We believe the work we've done over the last few years has set us up well. We've been able to navigate this trough to be where we are today, where we're properly positioned for the recovery that comes. We believe there's a lot of upside once the recovery comes. Any questions in the audience? [audio distortion] business is trying to figure out how to monetize data that's coming off of vehicles. Is there [audio distortion] Yeah, it's interesting. The one I was just telling you about when the tractors turn, that was data that was given to us. We don't really have good access to the data coming directly. I don't know. There's a whole battle with Deere and who owns the data. Where we get access is farmers are good business people. When times are tight, they're looking at every cost very closely, and they track it. We had a group of farmers that was tracking the performance of LSW for us because he was doing some contract farming. He was doing it from some smaller plots of land. He is the one who came to us and said, "You know what I found is every time I turn this piece of equipment, your LSWs are saving me 30% and improving my yield by 30% and your input cost going down by that." The data can be very beneficial in a lot of ways. That is why I keep referencing, and I will say it again to our board, is why we have to stay connected to the end users because the end users are only getting smarter and smarter because of the data. If we are just focused on designing products within our own four walls, that is not what we should be doing. We should be listening to what they need and figuring out where they are going. We have done a good job with that. Even that recent example, that came from the farmer's data. Now what we're doing, we're still trying to get caught up, is how do we now market that? How do we provide that ROI calculator that if you're a farmer that maybe doesn't have access to all that data, we can help you utilize the data that we've got, and you can do a calculator that says, "Okay, if I have a 75-acre farm, this is what LSWs cost. This is what," and provide that ROI and that return. Farmers are looking for every way they can to get smarter. The information's good, but it's a little bit like everything these days. It's in so many different formats. It's hard to. We were very fortunate that we have some smart people that kind of pulled it together for us. One area we're also trying to use data is in our construction business, IT and trust, where we have equipment. We're able to monitor the performance of the steel tracks because we have devices on those. We're actually looking to, we have begun, actually. That's an area we're trying to grow in to see how we can get that data and monetize that data as well. Customers are signing up for it, but it's still at the early stages. No subscription revenue coming anytime soon. Yeah. Any other questions? Could you clarify something you said about the inventories, interest rate impact, and how they were bottom and now they're coming back? Was that specific to ag, or was that a broad statement of your end markets or a certain end market? That comment was more specific to where I got the intelligence would be from ag dealers because the ag cycle, the reason why I'm referencing ag with that is the ag cycle was deep, has been deep, but it was about to start turning the corner using forecasts, using my intelligence that I got from our customers. If I go back to the tail end of last year, kind of thirdish quarter, I felt really confident about that statement. The election and then the tariff uncertainty brought in this pause. What I learned once we got this pause is how pissed off dealers are at interest rates. Not like you and I talking about it like, "Oh, they're angry." The reason why is now they, one, they're trying to have to manage this inventory level. That's kind of a falling knife trying to catch it, but also at the same time going, "Now, my costs are just too high." I feel it in their way that's different. I have asked a lot of questions in meeting with some of the dealers that I know personally just to understand why is that. They're like, "Look, my business model isn't set up for 7% interest costs." I need to reduce it. They also believe that interest rates are coming down. I think it's just a short-term phase because eventually what's going to happen as soon as they know the market's picking back up, they're going to want inventory again. We're not as worried at Titan. Now, Tonya is because I'm telling her you got to manage working capital. Because of our product portfolio, we get more drop-in orders than anybody else. It is not always a bad thing for our business because it shows the importance of Titan to our customers when we can fulfill their orders and others cannot. What we have to manage too as a company is we have to make sure we have the direct labor available. We have been short-shifting weeks. We have been taking weeks out. I have been saying to the marketplace and been saying to the board, "You do not just hire, retrain, and retain people easily in our business in this type of labor market." We are ready to flex our business. We have the product portfolio to meet it. We have been holding a little bit of extra working capital that he would like to get rid of, but to meet those drop-in orders. We're going to get through this. Also, what I've heard from, we've seen from a couple of customers, and I just heard from one yesterday, when they feel like their inventory is too low, they panic. That's why our business goes like this. It's always up and down because they don't want to miss an order. We're starting to see some customers panic, going, "I need more inventory." I was a little bit surprised. What I've learned this year, kind of paraphrasing what I've learned over the last two quarters, is just the impact of interest rates on their decision to hold inventory. Something I think I just overlooked is interest rates are interest rates. You got to pay it. They just believe Main Street U.S.A. has the belief that interest rates aren't going to come back down significantly. Whether it happens or not, I think a lot of us in this room would probably argue. Probably Wells Fargo might give you a different opinion. I do not think they are coming down that significantly, but I think Main Street USA still believes that. They will work through it. They will work through it. In the meantime, I mean, we just have to, we had to modify how we manage our business a little bit this year. Time for one more. All right. Thank you, everyone. Appreciate your time. Appreciate it. Thank you. [crosstalk] Thank you, Paul.