TITAN INTERNATIONAL INC (TWI)
SIC breadcrumb: Manufacturing > SIC Major Group 33 > SIC 3312 Steel Works, Blast Furnaces & Rolling Mills (Coke Ovens)
SEC company page: https://www.sec.gov/edgar/browse/?CIK=899751. Latest filing source: 0000899751-26-000007.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 1,828,443,000 | USD | 2025 | 2026-02-26 |
| Net income | -63,494,000 | USD | 2025 | 2026-02-26 |
| Assets | 1,672,660,000 | USD | 2025 | 2026-02-26 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000899751.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 1,265,497,000 | 1,468,922,000 | 1,602,408,000 | 1,448,666,000 | 1,259,313,000 | 1,780,215,000 | 2,169,380,000 | 1,821,800,000 | 1,845,937,000 | 1,828,443,000 | |
| Net income | -37,605,000 | -60,042,000 | 16,087,000 | -48,425,000 | -60,388,000 | 49,586,000 | 176,302,000 | 78,760,000 | -5,560,000 | -63,494,000 | |
| Operating income | -22,400,000 | -11,151,000 | 42,244,000 | -28,432,000 | -35,351,000 | 85,175,000 | 205,802,000 | 148,727,000 | 33,184,000 | 20,762,000 | |
| Gross profit | 141,415,000 | 160,311,000 | 198,266,000 | 129,004,000 | 114,319,000 | 237,542,000 | 360,710,000 | 305,849,000 | 257,802,000 | 253,460,000 | |
| Diluted EPS | -0.87 | -1.12 | 0.06 | -0.84 | -0.99 | 0.79 | 2.77 | 1.25 | -0.08 | -1.00 | |
| Operating cash flow | 43,500,000 | -1,289,000 | -36,176,000 | 45,442,000 | 57,229,000 | 10,726,000 | 160,678,000 | 179,350,000 | 141,487,000 | 30,029,000 | |
| Capital expenditures | 41,948,000 | 32,626,000 | 39,000,000 | 36,414,000 | 21,680,000 | 38,802,000 | 46,974,000 | 60,799,000 | 65,624,000 | 54,620,000 | |
| Assets | 1,265,896,000 | 1,290,112,000 | 1,251,256,000 | 1,114,307,000 | 1,031,884,000 | 1,182,685,000 | 1,284,630,000 | 1,289,245,000 | 1,584,953,000 | 1,672,660,000 | |
| Liabilities | 868,208,000 | 866,835,000 | 861,346,000 | 850,319,000 | 830,619,000 | 955,513,000 | 901,492,000 | 821,830,000 | 1,091,297,000 | 1,151,043,000 | |
| Stockholders' equity | 296,817,000 | 320,929,000 | 279,048,000 | 234,851,000 | 179,264,000 | 229,300,000 | 381,236,000 | 467,060,000 | 496,073,000 | 514,380,000 | |
| Cash and cash equivalents | 147,827,000 | 147,827,000 | 143,570,000 | 81,685,000 | 66,799,000 | 117,431,000 | 98,108,000 | 220,251,000 | 195,974,000 | 202,879,000 | |
| Free cash flow | 1,552,000 | -33,915,000 | -75,176,000 | 9,028,000 | 35,549,000 | -28,076,000 | 113,704,000 | 118,551,000 | 75,863,000 | -24,591,000 |
Ratios
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | -2.97% | -4.09% | 1.00% | -3.34% | -4.80% | 2.79% | 8.13% | 4.32% | -0.30% | -3.47% | |
| Operating margin | -1.77% | -0.76% | 2.64% | -1.96% | -2.81% | 4.78% | 9.49% | 8.16% | 1.80% | 1.14% | |
| Return on equity | -12.67% | -18.71% | 5.76% | -20.62% | -33.69% | 21.62% | 46.24% | 16.86% | -1.12% | -12.34% | |
| Return on assets | -2.97% | -4.65% | 1.29% | -4.35% | -5.85% | 4.19% | 13.72% | 6.11% | -0.35% | -3.80% | |
| Liabilities / equity | 2.93 | 2.70 | 3.09 | 3.62 | 4.63 | 4.17 | 2.36 | 1.76 | 2.20 | 2.24 | |
| Current ratio | 1.99 | 2.10 | 2.08 | 1.99 | 2.00 | 1.80 | 2.04 | 2.42 | 2.35 | 2.30 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000899751.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | 1.06 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.68 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.50 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 481,176,000 | 30,207,000 | 0.48 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 401,781,000 | 19,280,000 | 0.31 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 390,199,000 | -2,565,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 482,209,000 | 9,201,000 | 0.14 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 532,170,000 | 2,149,000 | 0.03 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 447,985,000 | -18,249,000 | -0.25 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 383,573,000 | 1,339,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 490,708,000 | -649,000 | -0.01 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 460,830,000 | -4,545,000 | -0.07 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 466,466,000 | -2,262,000 | -0.04 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 410,439,000 | -56,038,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 505,073,000 | -24,214,000 | -0.38 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0000899751-26-000041.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion and analysis of financial condition and results of operations (MD&A) is designed to provide a reader of the financial statements included in this quarterly report with a narrative from the perspective of the management of Titan International, Inc. (Titan, the Company or we) on our financial condition, results of operations, liquidity, and other factors that may affect our future results. The MD&A in this quarterly report should be read in conjunction with the condensed consolidated financial statements and other financial information included elsewhere in this quarterly report and the MD&A and audited consolidated financial statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026 (the 2025 Form 10-K). FORWARD-LOOKING STATEMENTS This Form 10-Q contains forward-looking statements, which are covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Readers can identify these statements by the fact that they do not relate strictly to historical or current facts. Titan has tried to identify forward-looking statements in this report by using words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” and “believes,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could.” These forward-looking statements include, among other items, statements relating to the following: •the Company's future financial performance; •anticipated trends in the Company’s business; •expectations with respect to the end-user markets into which the Company sells its products (including agricultural equipment, earthmoving/construction equipment, and consumer products); •future expenditures for capital projects and future stock repurchases; •the Company’s ability to continue to control costs and maintain quality; •possible changes in domestic and international laws and policies, including the imposition of and changes in tariffs by various governments, including the United States on imported goods as part of the currently dynamic and uncertain tariff policy environment; •the Company's ability to meet conditions of loan agreements, indentures and other financing documents; •the Company’s business strategies, including its intention to introduce new products; •expectations concerning the performance and success of the Company’s existing and new products; and •the Company’s intention to consider and pursue acquisition and divestiture opportunities and the expectations related to completed acquisitions, in particular the acquisition of The Carlstar Group, LLC (“Carlstar”, now also known as Titan Specialty), which could significantly impact the Company's financial results if actual results from the Titan Specialty acquisition differ from anticipated results. Readers of this Form 10-Q should understand that these forward-looking statements are based on the Company’s current expectations and assumptions about future events and are subject to a number of risks, uncertainties, and changes in circumstances that are difficult to predict, including those described in “Item 1A – Risk Factors” in Part I of the 2025 Form 10-K and “Item 1A – Risk Factors” in Part II of this quarterly report on Form 10-Q, certain of which are beyond the Company’s control. Actual results could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various factors, including: •changes in the Company’s end-user markets into which the Company sells its products as a result of domestic and world economic or regulatory influences or otherwise; •uncertainties from political or electoral changes in the United States, Europe and elsewhere, including the current and possible future tariffs being imposed by various countries on imported goods and the currently dynamic and uncertain tariff policy environment; •the effect of the market demand cycles on the Company's sales, which may have significant fluctuations; 21 Table of Contents TITAN INTERNATIONAL, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations •the effect of a recession or depression on the Company and its customers and suppliers; •changes in the marketplace, including new products and pricing changes by the Company’s competitors; •the effect of the geopolitical instability resulting from the military conflict between Russia and Ukraine on our Russian and global operations on increased costs and ancillary impacts on our global operations; •the effect of ongoing geopolitical tensions in the Middle East, including the military conflict involving Iran on global markets; •changes in the interest rate environment and their effects on the Company's outstanding indebtedness; •the Company's ability to maintain satisfactory labor relations; •the Company's ability to operate in accordance with its business plan and strategies; •unfavorable outcomes of legal proceedings; •the Company's ability to comply with current or future regulations applicable to the Company's business and the industry in which it competes or any actions taken or orders issued by regulatory authorities; •availability and price of raw materials; •availability and price of supply chain logistics and freight; •levels of operating efficiencies; •the effects of the Company's indebtedness and its compliance with the terms of its various indentures and credit agreements; •unfavorable product liability and warranty claims; •geopolitical and economic uncertainties relating to the countries in which the Company operates or does business; •risks associated with acquisitions, including difficulty in integrating operations and personnel, disruption of ongoing business, and increased expenses; •results of investments, and the realization of projected synergies; •the effects of potential processes to explore various strategic transactions, including potential dispositions; •fluctuations in currency translations; •climate change and related laws and regulations; •risks associated with environmental laws and regulations and increased attention to ESG matters; •the impact of any sales of the Company’s shares held by affiliates of American Industrial Partners pursuant to the Form S-3 registration statement filed with and declared effective by the Securities and Exchange Commission (the “SEC”) in December 2024; •risks relating to our manufacturing facilities, including that any of our material facilities may become inoperable; and •risks related to financial reporting, internal controls, tax accounting, and information systems, including cybersecurity threats. Any changes in these factors could lead to significantly different results. Any assumptions that are inaccurate or do not prove to be correct could have a material adverse effect on the Company’s ability to achieve the results as indicated in forward-looking statements. Forward-looking statements speak only as of the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of these risks and uncertainties, there can be no assurance that the forward-looking information and assumptions contained in this document will in fact transpire. The reader should not place undue reliance on the forward-looking statements included in this report or that may be made elsewhere from time to time by the Company, or on its behalf. All forward-looking statements attributable to Titan are expressly qualified by these cautionary statements. 22 Table of Contents TITAN INTERNATIONAL, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW Titan is a global wheel, tire, and undercarriage industrial manufacturer and supplier that services customers across the globe. As a leading manufacturer in the off-highway industry, Titan produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. Titan manufactures and sells certain tires under the Goodyear Farm Tire, Titan Tire, Carlstar and Voltyre-Prom Tire brands and has research and development facilities to validate tire and wheel designs. Carlstar sells tire products under the Carlisle® brand under a long-term license agreement that expires in 2033 and also sells tires under other recognized brand names, including ITP®, Trail Wolf®, Links®, USA Trail® and Carlisle Radial Trail HD™ highway trailer tires. Agricultural Segment: Titan’s agricultural wheels, tires, and components are manufactured for use on various agricultural equipment, including tractors, combines, skidders, plows, planters, and irrigation equipment, and are sold directly to OEMs and to the aftermarket through independent distributors, equipment dealers, and Titan’s distribution centers. The wheels range in diameter from nine inches to 54 inches, with the 54-inch diameter being the largest agricultural wheel manufactured in North America. Basic configurations are combined with distinct variations (such as different centers and a wide range of material thickness) allowing the Company to offer a broad line of products to meet customer specifications. Titan’s agricultural tires range from approximately one foot to approximately seven feet in outside diameter and from five inches to 55 inches in width. Agricultural tires are offered under the Goodyear Farm Tire, Titan Tire, Carlstar, ACES and Voltyre-Prom brands with a full portfolio of sizes, load carrying capabilities, and tread patterns necessary for the markets served. The Company offers the added value of delivering a complete wheel and tire assembly to OEM and aftermarket customers. Earthmoving/Construction Segment: The Company manufactures wheels, tires, and undercarriage systems and components for various types of OTR earthmoving, mining, military, construction, and forestry equipment, including skid steers, aerial lifts, cranes, graders and levelers, scrapers, self-propelled shovel loaders, articulated dump trucks, load transporters, haul trucks, backhoe loaders, crawler tractors, lattice cranes, shovels, and hydraulic excavators. The Company provides OEM and aftermarket customers with a broad range of earthmoving/construction wheels ranging in diameter from 15 to 63 inches and in weight from 125 pounds to 7,000 pounds. The 63-inch diameter wheel is the largest manufactured for the global earthmoving/construction market. Titan’s earthmoving/construction tires are offered in the Titan brand and range from approximately three feet to approximately 13 feet in outside diameter and in weight from 50 pounds to 12,500 pounds. Earthmoving/construction tires offered by Titan serve virtually every off-road application in the industry with some of the highest load requirements in the most severe applications. The Company also offers the added value of wheel and tire assembly for certain applications in the earthmoving/construction segment. Consumer Segment: In February 2024, Titan acquired Carlstar (now also known as Titan Specialty), which is a global manufacturer and distributor of wheels and tires for a variety of end-market verticals including outdoor power equipment, power sports, and high speed trailers. Titan Specialty is primarily concentrated in the consumer segment, but also manufactures and sells small to midsize agricultural tires. Products are offered in Carlstar, ITP, Black Rock, Goodyear and Unique brands with portfolios commensurate to supporting these markets. The Company also offers the added value of wheel and tire assembly for many of [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT’S DISCUSSION AND ANALYSIS
Management’s discussion and analysis of financial condition and results of operations is designed to provide a reader of the financial statements included in this annual report with a narrative from the perspective of the management of Titan on Titan’s financial condition, results of operations, liquidity, and other factors which may affect the Company’s future results. You should read the following discussion and analysis in conjunction with our consolidated financial statements and related notes in "Item 8. Financial Statements and Supplementary Data." The following discussion includes forward-looking statements about our business, financial condition, and results of operations, including discussions about management’s expectations for our business. These statements represent projections, beliefs, and expectations based on current circumstances and conditions and in light of recent events and trends, and you should not construe these statements either as assurances of performance or as promises of a given course of action. Instead, various known and unknown factors are likely to cause our actual performance and management’s actions to vary, and the results of these variances may be both material and adverse. See “Forward-Looking Statements” and "Item 1A. Risk Factors" in Part I of this Form 10-K.
Acquisition of Carlstar Group (now also known as "Titan Specialty")
On February 29, 2024, the Company acquired 100% of the equity interests of Carlstar, now also known as Titan Specialty. The results of Titan Specialty's operations have been included in our consolidated financial statements since February 29, 2024. Total acquisition-related costs related to the Titan Specialty acquisition for the year ended December 31, 2024 were $6.2 million.
The purchase consideration for the Titan Specialty acquisition was allocated to the estimated fair value of assets acquired and liabilities assumed as of February 29, 2024. For further information, refer to Note 2 to our consolidated financial statements.
BUSINESS
For a description of the Company’s business and segments see "Item 1. Business" in Part I of this Form 10-K.
MARKET CONDITIONS AND OUTLOOK
AGRICULTURAL MARKET OUTLOOK
The agricultural market is affected by related commodity prices and farmer income, among other variables. The customer demand in the agricultural markets in North America and Europe are currently experiencing a mix of customer demand levels driven by favorable customer order patterns in small agricultural products as compared to a significant slowdown in customer demand for large agricultural products. The mix in demand levels has been and continues to be further exacerbated by the dynamic and uncertain tariff policy environment, including the imposition of tariffs by the United States and other countries throughout the world, and responses thereto, including litigation, which has created uncertainty in the global markets including impact on farmer sentiment. Amid the evolving global tariff situation, Titan is in a uniquely advantaged position among its competitors, having manufacturing capabilities that are strategically located in the key markets we serve. In addition, some mid to long term global market trends anticipate population growth, a shift in consumer preference toward higher protein diets, and the pressures to replace an aging large equipment fleet in favor of newer and higher productivity technology. The Company expects that the underlying market trends mentioned above will provide future support for the mid to long-term demand for the Company's products. However, many variables, including weather, volatility in the price of commodities, the demand for used equipment, export markets, foreign currency exchange rates, interest rates, government policies, subsidies, and uncertainty
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surrounding the dynamic and uncertain tariff policy environment including tariffs imposed by the United States and reciprocated by other countries, can greatly affect the Company's performance in the agricultural market in a given period.
EARTHMOVING/CONSTRUCTION MARKET OUTLOOK
The earthmoving/construction segment is affected by many variables, including commodity prices, uncertainty surrounding the imposition of tariffs as mentioned above, road construction, infrastructure, government appropriations, housing starts, and other macroeconomic drivers. The construction market is primarily driven by country-specific GDP and the need for infrastructure developments. The earthmoving/construction markets are currently experiencing an improvement in OEM demand due to stronger mining capital budgets and forecasted GDP growth in many of the countries in which Titan's earthmoving/construction products are sold. The mining industry continued to experience growth given the increased demand in natural resources industries. Mineral commodity prices are at relatively high levels, which should also support the forecasted mid- to long-term growth. However, as noted above, numerous variables can affect the Company's sales of earthmoving/construction products in any given period.
CONSUMER MARKET OUTLOOK
The consumer market consists of several distinct product lines within different regions. These products include specialty tires and products under several leading brands, including Carlstar, ITP and Marastar brands within powersports, outdoor power equipment and high-speed trailers. The consumer market also includes light truck tires sold into Latin America and other specialty products, including custom mixing of rubber stock, and train brakes. Certain aspects of the consumer market are presently experiencing a slowdown, particularly in the Americas. The consumer segment pace of growth can vary from period to period and is affected by many macroeconomic variables including but not limited to inflationary impacts, consumer spending, interest rates, government policies, and uncertainty surrounding tariffs, as mentioned above. As previously stated, we believe that our ownership of manufacturing capabilities and partnerships with suppliers that are strategically located puts us in a uniquely advantaged position to allow us to respond to some of the challenges presented by the current tariff situation.
SUMMARY OF RESULTS OF OPERATIONS
The following table sets forth the Company’s statement of operations expressed as a percentage of net sales for the periods indicated. This table and subsequent discussions should be read in conjunction with the Company’s consolidated financial statements and notes thereto included elsewhere in this annual report.
As a Percentage of Net Sales
Year Ended December 31,
2025
2024
Net sales
100.0
%
100.0
%
Cost of sales
86.1
86.0
Gross profit
13.9
14.0
Selling, general and administrative expenses
11.2
10.5
Acquisition related expenses
—
0.3
Research and development
1.0
0.9
Royalty expense
0.6
0.5
Income from operations
1.1
1.8
Interest expense
(2.1)
(2.1)
Interest income
0.6
0.6
Foreign exchange loss
(0.3)
(0.3)
Other income
0.1
0.4
(Loss) income before income taxes
(0.6)
0.4
Income tax provision
2.7
0.6
Net loss
(3.3)
%
(0.2)
%
Net income attributable to noncontrolling interests
0.2
0.1
Net loss attributable to Titan
(3.5)
%
(0.3)
%
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In addition, the following table sets forth components of the Company’s net sales classified by segment:
(amounts in thousands)
2025
2024
2023
Agricultural
$
740,937
$
788,580
$
980,537
Earthmoving/construction
581,744
583,391
687,758
Consumer
505,762
473,966
153,505
Total
$
1,828,443
$
1,845,937
$
1,821,800
FISCAL YEAR ENDED DECEMBER 31, 2025, COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2024
RESULTS OF OPERATIONS
Highlights for the year ended December 31, 2025, compared to 2024 (amounts in thousands):
2025
2024
% Increase (Decrease)
Net sales
$
1,828,443
$
1,845,937
(0.9)
%
Cost of sales
1,574,983
1,588,135
(0.8)
%
Gross profit
253,460
257,802
(1.7)
%
Gross profit %
13.9
%
14.0
%
(0.7)
%
Selling, general and administrative expenses
203,271
191,794
6.0
%
Acquisition related expenses
—
6,196
(100.0)
%
Research and development expenses
18,321
16,520
10.9
%
Royalty expense
11,106
10,108
9.9
%
Income from operations
$
20,762
$
33,184
(37.4)
%
Net Sales
Net sales for the year ended December 31, 2025 were $1.83 billion, compared to $1.85 billion for the year ended December 31, 2024. The net sales change was primarily attributable to lower sales volume in the agricultural and earthmoving/construction segments, particularly in North America and Europe, reflecting softer end‑market demand. This decrease was partially offset by favorable pricing driven by higher input costs and an improved product mix, as well as higher volume resulting from the inclusion of two additional months of sales from the Titan Specialty business, acquired in February 2024.
Cost of Sales and Gross Profit
Cost of sales was $1.57 billion for the year ended December 31, 2025, compared to $1.59 billion for 2024. The factors that drove the change in cost of sales was consistent with the factors for the change in net sales. Gross profit for 2025 was $253.5 million, or 13.9% of net sales, compared to $257.8 million, or 14.0% of net sales, for 2024. The changes in gross profit and margin were due to lower fixed cost leverage resulting from reduced volumes, as well as inflationary pressures on raw materials and other input costs.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses for the year ended December 31, 2025, were $203.3 million, or 11.2% of net sales, up 6.0%, compared to $191.8 million, or 10.5% of net sales, for 2024. The increase was primarily attributable to the inclusion of two additional months of SG&A expenses associated with the Titan Specialty business, which was acquired in February 2024. These additional costs included expenses associated with managing distribution centers and higher depreciation and amortization arising from the acquisition.
Acquisition-Related Expenses
Acquisition-related expenses for the year ended December 31, 2025 and 2024 was $0.0 million and $6.2 million, respectively, reflecting one-time transaction costs for Titan Specialty.
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Research and Development Expenses
Research and development (R&D) expenses for the year ended December 31, 2025, were $18.3 million, or 1.0% of net sales, compared to $16.5 million, or 0.9% of net sales, for 2024. R&D spending reflects initiatives to improve product designs and an ongoing focus on innovation and quality.
Royalty Expense
The Company has trademark license agreements with Goodyear to manufacture and sell certain farm, ATV and truck tires under the Goodyear brand. These agreements cover sales in North America, Latin America, Europe, the Middle East, Africa, Australia, New Zealand, Russia, and other Commonwealth of Independent States countries. The Company also has a trademark license agreement with Carlisle Companies, Inc. to manufacture and sell certain tires under the Carlisle® brand. Royalty expenses for the year ended December 31, 2025 were $11.1 million compared to $10.1 million for 2024.
Income from Operations
Income from operations for the year ended December 31, 2025 was $20.8 million, or 1.1% of net sales, compared to income of $33.2 million, or 1.8% of net sales, for 2024. The change in income was primarily due to lower gross profit and the cumulative impact of the items discussed above.
OTHER PROFIT/LOSS ITEMS
Interest Expense
Interest expense for 2025 and 2024 was $38.7 million and $36.4 million, respectively. The increase in interest expense was largely attributable to higher debt levels associated with borrowings under our credit facility used to fund the Titan Specialty acquisition in February 2024 and the repurchase of $57.6 million of Titan's common stock from entities affiliated with MHR Fund Management LLC in October 2024 (the "MHR Repurchase").
Interest Income
Interest income was $10.7 million and $11.0 million for the year ended December 31, 2025 and 2024, respectively. Interest income remained consistent with the prior year.
Foreign Exchange Loss
Foreign exchange loss was $5.0 million for the year ended December 31, 2025, compared to a loss of $6.1 million for the year ended December 31, 2024. The change in foreign exchange loss was primarily attributable to the fluctuations in exchange rates in certain geographies in which we conduct business.
Other Income
Other income was $1.0 million for the year ended December 31, 2025, compared to other income of $6.6 million for 2024, an decrease of $5.6 million. This change was primarily attributable to a $2.9 million loss in 2025 related to the write-off of assets that were associated with the reimbursement of premiums paid under certain life insurance policies held for certain owners of a previously acquired business. The write-off was based on the Company’s re-assessment that it will likely not be able to recover the premium’s previously paid. The year‑over‑year change was also due to a $1.9 million gain recognized in 2024 from a property insurance settlement related to repairs at a facility in Italy.
Provision for Income Taxes
The Company recorded income tax expense of $49.9 million and $11.9 million for the years ended December 31, 2025 and 2024, respectively. The Company's effective tax rate was (441.6)% in 2025 and 159.0% in 2024. The change in the Company's effective tax rate is primarily due to the additional valuation allowances established domestically and in Luxembourg.
The Company’s 2025 and 2024 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of valuation allowances domestically and in Luxembourg for 2025. For 2024 the difference was primarily from foreign income tax rate differential on the mix of earnings and certain non-deductible transaction costs related to the Company’s acquisition of The Carlstar Group, LLC.
Net Loss and Loss per Share
Net loss for the year ended December 31, 2025, was $61.2 million, compared to net loss of $3.6 million for 2024. Basic loss per share was $1.00 for the year ended December 31, 2025, compared to basic loss per share of $0.08 for 2024. Diluted loss per share was $1.00 for the year ended December 31, 2025, compared to diluted loss per share of $0.08 for 2024. The changes in net loss and loss per share were primarily driven by the factors discussed above.
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SEGMENT INFORMATION
Segment Summary (Amounts in thousands)
2025
Agricultural
Earthmoving/
Construction
Consumer
Corporate/ Unallocated
Expenses
Consolidated
Totals
Net sales
$
740,937
$
581,744
$
505,762
$
—
$
1,828,443
Gross profit
92,723
60,572
100,165
—
253,460
Profit margin
12.5
%
10.4
%
19.8
%
—
%
13.9
%
Income (loss) from operations
27,480
3,054
19,106
(28,878)
20,762
2024
Net sales
$
788,580
$
583,391
$
473,966
$
—
$
1,845,937
Gross profit
103,988
62,824
90,990
—
257,802
Profit margin
13.2
%
10.8
%
19.2
%
—
%
14.0
%
Income (loss) from operations
39,780
7,009
20,477
(34,082)
33,184
Agricultural Segment Results
Agricultural segment results were as follows:
(Amounts in thousands)
2025
2024
% Decrease
Net sales
$
740,937
$
788,580
(6.0)
%
Gross profit
92,723
103,988
(10.8)
%
Profit margin
12.5
%
13.2
%
(5.3)
%
Income from operations
27,480
39,780
(30.9)
%
Net sales in the agricultural segment were $740.9 million for the year ended December 31, 2025, compared to $788.6 million for 2024. The net sales change was primarily due to lower sales volumes in North America and Europe, driven by reduced demand for agricultural equipment. This was influenced by lower farmer income, higher financing costs, and inventory reduction initiatives by OEM customers. Additionally, foreign currency translation negatively impacted net sales by approximately 1.0%, primarily due to the depreciation of the Brazilian real and Turkish lira compared to the U.S. dollar. These impacts were partially offset by favorable pricing associated with pass through of increased input costs and product mix.
Gross profit in the agricultural segment was $92.7 million, or 12.5% of net sales, for 2025, compared to $104.0 million, or 13.2% of net sales, for 2024. The change in gross profit was primarily attributable to lower sales volume and reduced fixed cost leverage.
Income from operations in the agricultural segment was $27.5 million for the year ended December 31, 2025, compared to $39.8 million for 2024. The overall change in income from operations was primarily a result of lower gross profit stemming from reduced net sales volume.
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Earthmoving/Construction Segment Results
Earthmoving/construction segment results were as follows:
(Amounts in thousands)
2025
2024
% Decrease
Net sales
$
581,744
$
583,391
(0.3)
%
Gross profit
60,572
62,824
(3.6)
%
Profit margin
10.4
%
10.8
%
(3.7)
%
Income from operations
3,054
7,009
(56.4)
%
The Company's earthmoving/construction segment net sales were $581.7 million for the year ended December 31, 2025, compared to $583.4 million for the year ended December 31, 2024. The change in net sales was primarily attributable to reduced sales volume due to softer demand in North America and with respect to our undercarriage business. The decrease was partially offset by a 1.2% favorable foreign currency translation impact, driven mainly by the strengthening of the euro compared to the U.S. dollar, as well as positive price and product mix.
Gross profit in the earthmoving/construction segment was $60.6 million, or 10.4% of net sales, for the year ended December 31, 2025, compared to $62.8 million, or 10.8% of net sales, for the year ended December 31, 2024. Gross profit and margin changes were mainly due to inflationary pressures on raw materials and other input costs and lower sales volume resulting in reduced fixed cost leverage.
The Company's earthmoving/construction segment income from operations was $3.1 million for the year ended December 31, 2025, as compared to income of $7.0 million for 2024. The change was attributable to lower gross profit as well as higher SG&A expenses in our undercarriage business and in the Latin America region, primarily due to general inflationary cost impacts, including higher personnel-related costs.
Consumer Segment Results
Consumer segment results were as follows:
(Amounts in thousands)
2025
2024
% Increase (Decrease)
Net sales
$
505,762
$
473,966
6.7
%
Gross profit
100,165
90,990
10.1
%
Profit margin
19.8
%
19.2
%
3.1
%
Income from operations
19,106
20,477
(6.7)
%
Consumer segment's net sales were $505.8 million for the year ended December 31, 2025, compared to $474.0 million for 2024. The increase was primarily driven by the inclusion of two additional months of sales from the Titan Specialty acquisition, as well as favorable pricing and product mix influenced by higher input costs and the impact of tariffs in the Titan Specialty business. The increase was partially offset by lower volume in the Americas region outside of the Titan Specialty businesses during 2025 due to continued market softness.
Gross profit from the consumer segment was $100.2 million for 2025, or 19.8% of net sales, compared to $91.0 million, or 19.2% of net sales, for 2024. The increase in gross profit was primarily driven by the additional two months of results from the Titan Specialty acquisition. Margin expansion was attributable to Titan Specialty’s strong aftermarket business, which carries higher margins.
Consumer segment's income from operations was $19.1 million for the year ended December 31, 2025, compared to $20.5 million for 2024. The decrease was primarily due to higher SG&A expenses, reflecting the inclusion of two additional months of operating costs associated with the Titan Specialty business, which was acquired in February 2024.
Corporate & Unallocated Expenses
Income from operations on a segment basis does not include corporate expenses of approximately $28.9 million and $34.1 million for the year ended December 31, 2025 and 2024, respectively. Unallocated expenses are primarily comprised of corporate selling, general and administrative expenses. The year-over-year decline was mainly due to $6.2 million in transaction-related costs incurred in the first quarter of 2024 in connection with the Titan Specialty acquisition, which did not recur in 2025.
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FISCAL YEAR ENDED DECEMBER 31, 2024, COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2023
The comparison of the 2024 results to 2023 has been omitted from this Form 10-K and can be found in the Company's Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 27, 2025 under "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
As of December 31, 2025, the Company reported $202.9 million of cash and cash equivalents, an increase of $6.9 million from December 31, 2024, due to the following items:
Operating Cash Flows
Summary of cash flows from operating activities:
(Amounts in thousands)
Year ended December 31,
2025
2024
Change
Net loss
$
(61,189)
$
(3,590)
$
(57,599)
Depreciation and amortization
67,111
60,704
6,407
Deferred income tax provision (benefit)
30,989
(6,358)
37,347
Gain from property insurance settlement
—
(3,537)
3,537
Accounts receivable
(3,975)
73,825
(77,800)
Inventories
(7,121)
51,481
(58,602)
Prepaid and other current assets
(1,400)
12,106
(13,506)
Accounts payable
11,303
(29,169)
40,472
Other current liabilities
(9,389)
(15,290)
5,901
Other liabilities
2,724
998
1,726
Other operating activities
976
317
659
Net cash provided by operating activities
$
30,029
$
141,487
$
(111,458)
In 2025, cash flows provided by operating activities was $30.0 million. This result was primarily attributable to our net loss described above, offset by non-cash items, including depreciation and amortization expenses of $67.1 million and a deferred income tax provision of $31.0 million. These items were partially offset by an increase in working capital. The rise in accounts receivable was largely attributable to higher sales, as fourth quarter 2025 sales increased by $26.9 million compared to the fourth quarter of 2024. In line with higher sales activity in the fourth quarter of 2025, accounts payable also increased at year end 2025 relative to year end 2024. Inventory levels rose as well, reflecting proactive inventory management to support expect higher customer demand in the first quarter of 2026.
When comparing the year ended December 31, 2025, to 2024, operating cash flows decreased by $111.5 million, primarily due to significant one-time cash inflows in 2024 related to enhanced working capital management and working capital acquired from the Titan Specialty acquisition, which did not repeat in 2025. Key drivers of the cash flow changes from working capital included a $77.8 million decrease in cash inflows from the change in accounts receivable and a $58.6 million decrease in cash inflows from the change in inventory, partially offset by a $40.5 million decrease in cash outflows from the change in accounts payable.
Summary of the components of cash conversion cycle:
December 31,
December 31,
2025
2024
Days sales outstanding
53
51
Days inventory outstanding
124
123
Days payable outstanding
(66)
(62)
Cash conversion cycle
111
112
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The cash conversion cycle decreased by 1 day in 2025. This improvement was primarily driven by higher accounts payable balances at year-end 2025, which contributed to increased days payable outstanding and a shorter overall cash conversion cycle duration.
Investing Cash Flows
Summary of cash flows from investing activities:
(Amounts in thousands)
Year ended December 31,
2025
2024
Change
Capital expenditures
$
(54,620)
$
(65,624)
$
11,004
Business acquisitions, net of cash acquired
—
(143,643)
143,643
Proceeds from sale of investments
—
1,791
(1,791)
Proceeds from property insurance settlement
—
3,537
(3,537)
Investments in nonconsolidated affiliates
(5,675)
—
(5,675)
Other investing activities
649
2,341
(1,692)
Cash used for investing activities
$
(59,646)
$
(201,598)
$
141,952
Net cash used for investing activities was $59.6 million in 2025, compared to $201.6 million in 2024. The year-over-year change was primarily due to the acquisition of Titan Specialty in February 2024, which included $143.6 million of cash consideration and did not recur in 2025.
Capital expenditures totaled $54.6 million in 2025, compared to $65.6 million in 2024. These expenditures supported the replacement and enhancement of plant and equipment, including the acquisition of new tools, dies, and molds for new product development initiatives. The reduction in capital expenditures in 2025 reflected Titan's efforts to optimize cash management in response to lower product demand in the marketplace. In addition, the Company invested $5.7 million in nonconsolidated affiliates during 2025, including a $4.0 million cash investment to acquire a 20% ownership interest in Rodaros Industria de Rodas Ltda, our Brazilian affiliate.
Financing Cash Flows
Summary of cash flows from financing activities:
(Amounts in thousands)
Year ended December 31,
2025
2024
Change
Proceeds from borrowings
$
116,955
$
213,199
$
(96,244)
Payment on debt
(99,516)
(70,291)
(29,225)
Payment of debt issuance costs
—
(3,115)
3,115
Repurchase of common stock
—
(16,383)
16,383
Repurchase of common stock from related party
—
(57,636)
57,636
Other financing activities
6
(1,223)
1,229
Cash provided by financing activities
$
17,445
$
64,551
$
(47,106)
In 2025, net cash provided by financing activities was $17.4 million. This inflow was primarily driven by $117.0 million in borrowings to support increased working capital requirements, partially offset by $99.5 million in debt repayments.
In 2024, cash used for financing activities was $64.6 million, primarily driven by borrowings totaling $213.2 million, which included $147.0 million to finance the Titan Specialty acquisition in February 2024 and $45.0 million to fund the $57.6 million repurchase of the Company’s common stock from the MHR Funds, a related party, in October 2024. These borrowings were partially offset by $70.3 million in debt repayments, open‑market common stock repurchases of $16.4 million, and the MHR Repurchase of $57.6 million.
Additionally, Titan issued common stock valued at $168.7 million in 2024 in connection with the Titan Specialty acquisition. This non‑cash transaction was reflected in “Non cash financing activity” in our consolidated statements of cash flows.
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Debt Restrictions
Our $225 million revolving credit facility and indenture relating to the 7.00% senior secured notes due 2028 contain various restrictions, including:
•When remaining availability under the credit facility is less than the greater of (i) $17 million and (ii) 10% of the credit facility’s line cap (the line cap being the lesser of our borrowing base or the lenders’ commitments under the credit facility), the Company will be required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 (calculated quarterly on a trailing four quarter basis);
•Limits on dividends and repurchases of the Company’s stock;
•Restrictions on the ability of the Company to make additional borrowings, or to consolidate, merge, or otherwise fundamentally change the ownership of the Company;
•Limits on investments, dispositions of assets, and guarantees of indebtedness; and
•Other customary affirmative and negative covenants.
These covenants are subject to a number of exceptions and qualifications that are described in the credit and security agreement and the indenture relating to the 7.00% senior secured notes due 2028. These restrictions could limit the Company’s ability to respond to market conditions, provide for unanticipated capital investments, raise additional debt or equity capital, pay dividends, repurchase stock or capitalize on business opportunities, including those relating to future acquisitions. The Company was in compliance with these debt covenants at December 31, 2025.
Guarantor Financial Information
The Company's 7.00% senior secured notes due 2028 are guaranteed by the following 100% owned subsidiaries of the Company: Titan Tire Corporation, Titan Tire Corporation of Bryan, Titan Tire Corporation of Freeport, and Titan Wheel Corporation of Illinois. The note guarantees are full and unconditional, joint and several obligations of the guarantors. The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the satisfaction of certain customary conditions.
The following summarized financial information of both the Company and the Guarantor Subsidiaries ("the Guarantors") is presented on a combined basis after elimination of (i) intercompany transactions and balances between the parent and the Guarantors and (ii) equity in earnings from investments in any subsidiary that is a non-Guarantor. The information is presented in accordance with the requirements of Rule 13-01 under the SEC’s Regulation S-X. The financial information may not necessarily be indicative of results of operations or financial position had the Guarantor operated as an independent entity.
Summarized Balance Sheets:
(Amounts in thousands)
December 31, 2025
Assets
Current assets
$
59,860
Property, plant, and equipment, net
89,096
Intercompany accounts receivable from non-guarantor subsidiaries, net
680,039
Other long-term assets
71,839
Liabilities
Current liabilities
77,406
Long-term debt
554,029
Other long-term liabilities
2,922
Summarized Statement of Operations:
(Amounts in thousands)
Year ended
December 31, 2025
Net sales
$
468,479
Gross profit
35,395
Loss from operations
(34,913)
Net loss
(80,799)
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LIQUIDITY OUTLOOK
The Company does not anticipate significant liquidity constraints during the foreseeable future. At December 31, 2025, the Company had $202.9 million of cash and cash equivalents. This amount included $181.4 million held in foreign countries.
As of December 31, 2025, there were $156.0 million of borrowings outstanding under the Company's $225.0 million credit facility. Titan's availability under this credit facility may be less than $225 million as of any particular date, as a result of outstanding letters of credit and eligible accounts receivable and inventory balances at certain domestic and Canadian subsidiaries. Based on eligible accounts receivable and inventory balances, the Company's total amount available for borrowing under the credit facility at December 31, 2025 totaled $197.9 million. With outstanding letters of credit totaling $5.9 million and $156.0 million in borrowings under the revolving credit facility, the net amount available for borrowing under the credit facility at December 31, 2025 totaled $36.1 million.
Capital expenditures for 2026 are forecasted to be between approximately $50 million and $55 million. These capital expenditures are anticipated to be used primarily to continue to enhance the Company’s existing facilities and manufacturing capabilities and drive productivity gains, along with the purchase of new tools, dies and molds related to new product development.
Cash payments for interest are currently forecasted to be between approximately $36 million and $40 million in 2026, based on the Company's year-end 2025 debt balances and debt maturities. The forecasted interest payments are comprised primarily of the semi-annual interest payments totaling approximately $28 million (paid in April and October) for the 7.00% senior secured notes, and between $8 million and $12 million of payments on credit facilities, which are variable dependent upon on the prevailing rates and outstanding debt levels within each month.
Cash and cash equivalents along with anticipated internal cash flows from operations and utilization of availability on global credit facilities, are expected to provide sufficient liquidity for working capital needs, debt maturities, and capital expenditures for the foreseeable future. Potential divestitures and unencumbered assets also could be a possible means to provide for future liquidity needs.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our significant accounting policies are described in Note 1 to our consolidated financial statements. Preparation of financial statements and related disclosures in compliance with accounting principles generally accepted in the United States of America requires the application of technical accounting rules and guidance, as well as the use of estimates. The Company’s application of such rules and guidance involves assumptions that require difficult subjective judgments regarding many factors, which, in and of themselves, could materially impact the financial statements and disclosures. A future change in the estimates, assumptions, or judgments applied in determining the following matters, among others, could have a material impact on future financial statements and disclosures.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the respective tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply in the years the temporary differences are expected to be settled or realized. Management’s judgment is required to determine the provision for income taxes, deferred tax assets and liabilities, and valuation allowances against deferred tax assets.
Management records a reduction to the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not such assets will not be realized. The valuation of deferred tax assets requires judgment in assessing future profitability by year, including the impact of tax planning strategies, relative to the expiration dates, if any, of the assets.
Management considers both positive and negative evidence when measuring the need for a valuation allowance. The weight given to the evidence is commensurate with the extent to which it may be objectively verified. Current and cumulative financial reporting results are a source of objectively verifiable evidence. Management gives operating results during the most recent three-year period a significant weight in our analysis. Management considers whether positive cumulative operating results exist in the most recent three-year period. Management performs scheduling exercises as needed to determine if sufficient taxable income of the appropriate character exists in the periods required in order to realize our deferred tax assets with limited lives (such as tax loss carryforwards and tax credits) prior to their expiration. Management also considers prudent tax planning strategies (including an assessment of their feasibility) to accelerate taxable income if required to utilize expiring deferred tax assets. A valuation allowance is not required to the extent that, in our judgment, positive evidence exists with a magnitude and
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duration sufficient to result in a conclusion that it is more likely than not that our deferred tax assets will be realized. See Note 19 to the consolidated financial statements for additional information on the composition of valuation allowances.
Retirement Benefit Obligations
Pension benefit obligations are based on various assumptions used by third-party actuaries in calculating these amounts. These assumptions include discount rates, expected return on plan assets, mortality rates, and other factors. Revisions in assumptions and actual results that differ from the assumptions can affect future expenses, cash funding requirements, and obligations. The Company has three frozen defined benefit pension plans in the United States and pension plans in several foreign countries. For more information concerning these obligations, see Note 20 to our consolidated financial statements.
The effect of hypothetical changes to selected assumptions on the Company’s frozen pension benefit obligations would be as follows (amounts in thousands):
December 31, 2025
2026
Assumptions
Percentage
Change
Increase
(Decrease)
PBO (a)
Increase
(Decrease)
Equity
Increase
(Decrease)
Expense
Pension
Discount rate
+/-5
$(2,606)/$2,490
$2,215/$(2,078)
$194/$(206)
Expected return on assets
+/-5
$(414)/$414
(a)Projected benefit obligation (PBO) for pension plans.
MARKET RISK
Foreign Currency Risk
The Company is exposed to the impact of foreign currency fluctuations in certain countries in which it operates. The exposure to foreign currency movements is limited in many countries because the operating revenues and expenses of the Company's various subsidiaries and business units are substantially in the local currency of the country in which they operate. To the extent that borrowings, sales, purchases, revenues, expenses or other transactions are not in the local currency of the subsidiary, the Company is exposed to currency risk and may enter into foreign exchange derivative contracts to mitigate the currency risk. The Company is exposed to fluctuations in the Brazilian real, British pound, European Union Euro, Chinese yuan, Russian ruble, Argentinian pesos, Turkish Lira and other global currencies. A hypothetical adverse change of 10% in foreign currency exchange rates would have reduced foreign currency-denominated net assets and stockholders' equity by approximately $13.0 million at December 31, 2025.
Commodity Price Risk
The Company does not generally enter into long-term commodity pricing contracts to hedge its exposures to commodity market price fluctuations. From time to time in the past, the Company has entered into derivative commodity instruments to hedge the exposure to fluctuations in steel prices in North America. The Company is exposed to price fluctuations of its key commodities, which consist primarily of steel, natural rubber, synthetic rubber, and carbon black. The Company attempts to pass on certain material price increases and decreases to its customers, depending on market conditions. Certain customers have mechanisms in long-term contracts which provide for periodic pricing adjustments based on relative commodity and other market indices, which protect the Company from cost volatility.
Interest Rate Risk
The Company is exposed to interest rate risk on its variable debt. The Company has a $225 million credit facility that has a variable interest rate. As of December 31, 2025, the net amount available under the credit facility was $36.1 million. If the credit facility were fully drawn to available funds, a change in the interest rate of 100 basis points, or 1%, would have changed the Company’s interest expense by approximately $2.3 million.