Secondary Takes Air From Titan's Sails (TITN)

Titan Machinery (NASDAQ: TITN) had been one of the best performing IPO’s since the end of 2007.  The owner and operator of full service agricultural and construction equipment stores in North America.  As you can imagine, the ties to agriculture have made this one a winner.

Monday, the company reported fourth quarter and fiscal results. Revenue increased by 61% from $84.0 million a year ago to $135 million this quarter. They posted a net income of $270,000, or $0.02 EPS, meeting guidance. The company recently signed an agreement to acquire Quad Country Implement, a single store in Iowa. Titan raised its 2009 outlook for revenues and earnings per share. Excluding the stock offering filed today, the company would have 13.8 million shares outstanding, for guidance estimates of $0.87 to $0.92 EPS in 2009.

The company now plans to issue 3 million shares of common stock and selling stock holders are planning to sell an additional 500,000 shares. They intend to use the proceeds from the offering to fund potential acquisitions of CNH agricultural and construction equipment dealerships or for general corporate purposes. Additionally, they may invest the proceeds in short to medium term interest bearing securities. The interest will be used for the above purposes.

The company began trading publicly December 6, 2007 at $8.50 per share. The share price has risen to the lower twenties.

The underwriters for the offering are listed as Craig-Hallum Capital Group and Robert W. Baird and Co. They have been given the option to purchase 525,000 shares for over-allotments.

Shares for Titan are down almost 13% after 90-minutes of trading to $19.38 on heavy trading volume. The post-IPO range is $11.50 to $24.50.

Rachel Lopez
April 29, 2008