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| Over the last several quarters, we've also called out our strong free cash flow and intentions to be judicious in deploying echoing Paul's comments, we're excited to have announced the acquisition of Caraustar this morning |
| Geographic dispersion is mostly North America and they have -- Steve Ferazani [Indiscernible] You obviously you ended the year given the really strong free cash flow with a very significant cash balance |
| We were very pleased to be able to improve our operating cash flow that given the top line headwinds that we experienced throughout the year |
| We are committing to maintain a best-in-class portfolio of products and with farmers increasingly making their decisions based on equipment ROI, our innovations are a significant that's a differentiator for us |
| So, I think the customer base should see this in a favorable manner |
| That is important given the world that we're living in with inflation and things like that, and we're able to really control our costs |
| Titan has done the same at our key segment, large ag, where we offer an unmatched arsenal of wheels and tires with a strong connection to our customers and end users |
| By controlling the things we can control, we have been able to make durable gains in our cost structure, and the result is a higher gross margin floor as our 2023 results show |
| So, the addition of these more retail-centric categories is something we expect will benefit the consistency of our sales, margins, and profitability over time by rates reducing some of that cyclicality |
| And so I think it's an it's an exciting time |
| We've developed of a strong business, good brands, good products, good people and have a strong balance sheet |
| They have a product portfolio that's exceptional |
| Going forward, we really think our combined product line will feature the best in class offerings in these segments |
| We are pleased really pleased to be extending our market leadership there and to be able to offer the product portfolio that I just mentioned |
| While we are excited for these top line opportunities with a broad product base, we are really excited about Caraustar's business model that connects their manufacturing and distribution assets with third-party producers in a very effective and efficient manner |
| Their margin profile is good |
| The Caraustar locations in combination with Titan's, form a manufacturing base that can produce an extensive product portfolio that, as I mentioned earlier, is unmatched in our industry, while also providing value-added risk mitigation to our valued customers |
| So, but overall, the 2023 results for Caraustar were exceptional and they're going to have another good year in 2024 |
| So, it's a high-quality business, it's been performing well |
| Our full year gross margins improved 20 basis points from 16.6% to 16.8% in 2023, despite the sales being driven down year over year through the de-stocking and the other economic factors that have impacted our sales this last year |
| This is a good opportunity for Titan to expand our existing market penetration there |
| That positions us well to capture the improved profitability over the long-term |
| And we do think it's significant and it's accretive right out of the gate, strong opportunities in growth and synergies so I think there's going to be a period of time that the right thing to do is make sure that we get the maximum value out of this transaction |
| I think we've touched on that pretty well, again, 2023 with a very good year as we reported this morning and coming off a really strong 2022 |
| As we've mentioned a number of times, it's a big, a tremendous one-stop shop and exceptional team |
| There -- it's a great opportunity for Titan's shareholders, employees, and customers along with Caraustar, their employees, their customers |
| That bodes well for future prospects as compared to cycles from prior decades |
| Wrap it up, 2023 was a solid year for Titan, and I'm proud of our ability to navigate challenges, serve our customers, and maintain our margins |
| The plan we put into place a number of years ago centered around our One Titan team has proven itself is gaining momentum with our dedication, commitment to each other, and relentless focus on serving our customers |
| A primary theme to emphasize is that these results provide solid evidence that the work we've done to optimize our operations is driving a better durable gross margin profile |
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| Again, back to a 10% to 15% decline for large tractors coming on crude crews call you listen to, but you were down 18% in ag this year, almost entirely on destocking, which accelerated through the second half of the year |
| With that, we expect ag market activity over the balance of the year will be down as driven by commodity prices |
| I think their business, though, is softer for different reasons than what we've seen |
| We don't manufacture in Argentina is, like David said, is just catching up on years of kind of activity, but it makes it seem like it's a terrible business that something tragic happens |
| So, consumer ag construction, I mean, there is some softness in the market compared to 2023 |
| This is really being driven by the expected declines that are taking place in farmer incomes, combined with global uncertainties from grain supply, government actions and really overall geopolitics, all that's just weighed on current demand |
| During the year, we had a couple of nonoperating events impact the income statement that I'd like to mention, there was an unusually high devaluation of the Argentinean peso relative to the U.S |
| You're expanding the ABL, but seems like I know we're getting into a softer year |
| So, it was a -- you have assets that significantly devalued during that period of time |
| SG&A expense for the fourth quarter was $32 million compared to $30.5 million in the prior year, with the change in change due primarily to inflation pressures, especially in employee compensation |
| So, we can going forward a year-to-date with the inventory problem solved, we wouldn't expect massive 20% to 30% declines |
| If you you're already down that significantly in what was an okay year |
| Obviously, as we come into the year, it's certainly not I mean flat isn't probably in the equation but certainly something less than the full impact of the market being down |
| There's general softness in the marketplace and I think everybody that's talked about it so far this year is set similar comments |
| They are exposed to interest rates being more consumer based, but we've talked about in our IT on some of our segments with smaller tractors in the ag space, you know, interest rates have had an impact |
| Yes, you got to remember that the devaluation of the Argentinean peso was very significant during the 2023 |
| And last follow-up, and I know there's no guidance volumes are down are there are there any other headwinds or tailwinds that that we should be thinking about when we forecast 2024? Paul Reitz I don't think so |
| It's no secret that agriculture and construction industries are cyclical |
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