Titan Machinery shares were lower over 3% on Wednesday as the operator of agricultural and construction equipment stores said it has made additional repurchases of senior convertible notes.
“Our continued reduction in inventory and the accompanying positive operating cash flow, has enabled us to retire our convertible notes by an additional $24 million ahead of the maturity date and at a meaningful discount,” CEO David Meyer said in a statement. “We have now repurchased over $50 million of our senior convertible notes during fiscal 2017. We continue to take the necessary steps to manage through this challenging operating environment by reducing our equipment inventory, generating positive cash flow, deleveraging our balance sheet, and reducing our interest expense.”
The company bought back, in privately negotiated transactions, an additional $24 million principal amount of its 3.75% senior convertible notes due 2019 for $20.9 million in cash, and expects to recognize a pre-tax gain of approximately $1.0 million in Q3 of fiscal 2017.
This gain was not considered in the modeling assumptions discussed in the fiscal Q2 earnings release as the company will consider it an adjustment to GAAP income (loss) in Q3 of fiscal 2017.
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