What changed in this filing

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Item 1. Financial Statements

2022-09-09 compared with 2022-06-03 · 110 added, 82 removed, 462 unchanged (29% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

April 30, 2022 January 31, 2022

July 31, 2022 January 31, 2022

Current Assets

32 unchanged sentences

Common stock, par value $ .00001 per share, 45,000 shares authorized;

22,569 shares issued and outstanding at April 30, 2022;

22,695 shares issued and outstanding at July 31, 2022;

22,588 shares issued and outstanding at January 31, 2022

8 unchanged sentences

(in thousands, except per share data)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2021 2022 2021

Equipment $ 375,216 $ 272,733 $ 731,582 $ 548,713

11 unchanged sentences

Operating Expenses 68,828 57,074 132,980 113,516

Impairment of Intangible and Long-Lived Assets — 1,498 — 1,498

Income from Operations 33,871 16,446 58,413 30,981

16 unchanged sentences

(in thousands)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2021 2022 2021

Net Income $ 24,959 $ 11,249 $ 42,499 $ 21,796

14 unchanged sentences

BALANCE, April 30, 2021 22,520 $ — $ 252,547 $ 127,416 $ ( 880 ) $ 379,083

Common stock issued on grant of restricted stock and exercise of stock options, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax 76 — ( 2 ) — — ( 2 )

Stock-based compensation expense — — 584 — — 584

Net Income — — — 11,249 — 11,249

Other comprehensive income — — — — 938 938

BALANCE, July 31, 2021 22,596 — 253,129 138,665 58 391,852

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

6 unchanged sentences

BALANCE, April 30, 2022 22,569 $ — $ 254,390 $ 200,456 $ ( 3,363 ) $ 451,483

Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax 126 — ( 5 ) — — ( 5 )

Stock-based compensation expense — — 803 — — 803

Net income — — — 24,959 — 24,959

Other comprehensive income — — — — ( 2,963 ) ( 2,963 )

BALANCE, July 31, 2022 22,695 — 255,188 225,415 ( 6,326 ) 474,277

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in thousands)

Three Months Ended April 30,

Six Months Ended July 31,

Operating Activities

2 unchanged sentences

Depreciation and amortization 10,987 10,602

Impairment — 1,498

Deferred income taxes ( 1,005 ) ( 1,645 )

8 unchanged sentences

Accounts payable, accrued expenses and other and other long-term liabilities ( 9,182 ) ( 16,051 )

Net Cash Provided by Operating Activities 5,321 26,956

Net Cash Provided by (Used for) Operating Activities ( 20,953 ) 28,561

Investing Activities

9 unchanged sentences

Principal payments on long-term debt and finance leases ( 3,879 ) ( 5,117 )

Payment of debt issuance costs — —

Other, net ( 689 ) ( 976 )

10 unchanged sentences

Net property and equipment financed with long-term debt, finance leases, accounts payable and accrued liabilities $ 2,667 $ 9,014

Long-term debt to acquire finance leases $ 6,776 $ 7,454

Net transfer of assets from (to) property and equipment to (from) inventories $ ( 2,849 ) $ 1,269

9 unchanged sentences

(the “Company”) are subject to fluctuation due to varying weather patterns, which may impact the timing and amount of equipment purchases, rentals, and after-sales parts and service purchases by the Company’s agriculture, construction and international customers.

Therefore, operating results for the three-month period ended April 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2023.

Therefore, operating results for the six-months ended July 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2023.

The information contained in the consolidated balance sheet as of January 31, 2022 was derived from the audited consolidated financial statements of the Company for the fiscal year then ended.

2 unchanged sentences

The Company is engaged in the retail sale, service and rental of agricultural and construction machinery through its stores in the United States and Europe.

The Company’s North American stores are located in Colorado, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming, and its European stores are located in Bulgaria, Germany, Romania, and Ukraine.

The Company’s North American stores are located in Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Washington, Wisconsin, and Wyoming and its European stores are located in Bulgaria, Germany, Romania, and Ukraine.

Russia/Ukraine Geopolitical Conflict

On February 24, 2022, the ongoing Russia/Ukraine conflict significantly intensified.

In February, 2022, the ongoing Russia/Ukraine conflict significantly intensified, and the sustained conflict and disruption in the region is ongoing.

Titan Machinery Ukraine, LLC ("Titan Machinery Ukraine"), the Company's wholly owned Ukrainian subsidiary, has ten locations throughout Ukraine primarily in western and central Ukraine.

The Company's ability to maintain adequate liquidity for its operations, in Ukraine, is dependent upon a number of factors, including Titan Machinery Ukraine's revenue and earnings, the impact of the conflict on macroeconomic conditions, and Titan Machinery Ukraine's ability to implement further cost savings measures and cash conservation measures, if necessary.

The conflict could have a significant adverse impact upon the Company.

The conflict has caused disruptions in our Ukrainian operations, with our revenues for the six-months ended July 31, 2022 down 37.7% from the prior year period.

These disruptions have not been material to the Company's consolidated financial statements.

However, if the conflict intensifies in western and central Ukraine, it could significantly increase the adverse effect on the Company in future periods.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

3 unchanged sentences

All material accounts, transactions and profits between the consolidated companies have been eliminated in consolidation.

Accounting Guidance Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update ("ASU") No.

2020-04 , Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No.

2020-04”), which provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022.

The Company has amended most of its credit agreements to include language regarding the successor or alternate rate to LIBOR, and a review of other contracts and agreements is on-going.

The Company does not expect the guidance to have a material impact on its results of operations, financial position, cash flows, or disclosures.

NOTE 2 - EARNINGS PER SHARE

The following table sets forth the calculation of basic and diluted earnings per share (EPS):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2021 2022 2021

(in thousands, except per share data)

13 unchanged sentences

The following tables present our revenue disaggregated by revenue source and segment:

Three Months Ended April 30, 2022

Agriculture Construction International Total

(in thousands)

Three Months Ended July 31, 2022 Six Months Ended July 31, 2022

Agriculture Construction International Total Agriculture Construction International Total

(in thousands) (in thousands)

Equipment $ 270,472 $ 43,184 $ 61,560 $ 375,216 $ 521,565 $ 87,002 $ 123,015 $ 731,582

6 unchanged sentences

Total revenues $ 348,956 $ 70,022 $ 77,565 $ 496,543 $ 667,503 $ 136,986 $ 153,060 $ 957,549

Three Months Ended April 30, 2021

Agriculture Construction International Total

(in thousands)

Three Months Ended July 31, 2021 Six Months Ended July 31, 2021

Agriculture Construction International Total Agriculture Construction International Total

(in thousands) (in thousands)

Equipment $ 156,408 $ 54,020 $ 62,305 $ 272,733 $ 325,664 $ 98,832 $ 124,217 $ 548,713

7 unchanged sentences

Unbilled Receivables and Deferred Revenue

Unbilled receivables from contracts with customers amounted to $ 20.6 million and $ 17.1 million as of April 30, 2022 and January 31, 2022, respectively.

Unbilled receivables from contracts with customers amounted to $ 24.4 million and $ 17.1 million as of July 31, 2022 and January 31, 2022, respectively.

This increase in unbilled receivables is primarily the result of a seasonal increase in the volume of our service transactions in which we recognize revenue as our work is performed and prior to customer invoicing.

Deferred revenue from contracts with customers amounted to $ 128.2 million and $ 132.2 million as of April 30, 2022 and January 31, 2022, respectively.

Deferred revenue from contracts with customers amounted to $ 90.7 million and $ 132.2 million as of July 31, 2022 and January 31, 2022, respectively.

Our deferred revenue most often increases in the fourth quarter of each fiscal year due to a higher level of customer down payments or prepayments and longer time periods between customer payment and delivery of the equipment asset, and the related recognition of equipment revenue, prior to its seasonal use.

During the three months ended April 30, 2022 and 2021, the Company recognized $ 64.6 million and $ 37.9 million, respectively, of revenue that was included in the deferred revenue balance as of January 31, 2022 and January 31, 2021, respectively.

No material amount of revenue was recognized during the three months ended April 30, 2022 or 2021 from performance obligations satisfied in previous periods.

During the six months ended July 31, 2022 and 2021, the Company recognized $ 105.1 million and $ 50.8 million, respectively, of revenue that was included in the deferred revenue balance as of January 31, 2022 and January 31, 2021, respectively.

No material amount of revenue was recognized during the six months ended July 31, 2022 or 2021 from performance obligations satisfied in previous periods.

The Company has elected as a practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of service of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for parts installed and services performed.

The contracts for which the practical expedient has been applied include (i) equipment revenue transactions, which do not have a stated contractual term but are short-term in nature, and (ii) service revenue transactions, which also do not have a stated contractual term but are generally completed within 30 days.

For such service contracts, we recognize revenue over time in the amount for which we have the right to invoice for services completed to date.

For such service contracts, we recognize revenue at the time we perform the work, in the amount for which we have the right to invoice for services completed to date.

NOTE 4 - RECEIVABLES

9 unchanged sentences

The Company provides an allowance for these receivables based on historical experience and using credit information obtained from continued monitoring of customer accounts.

April 30, 2022 January 31, 2022

July 31, 2022 January 31, 2022

(in thousands)

22 unchanged sentences

Foreign exchange impact — — ( 49 ) ( 49 )

Balance at April 30, 2022 $ 255 $ 166 $ 2,216 $ 2,637

Balance at July 31, 2022 $ 309 $ 135 $ 2,278 $ 2,722

Agriculture Construction International Total

5 unchanged sentences

Foreign exchange impact — — ( 31 ) ( 31 )

Balance at April 30, 2021 $ 241 $ 1,062 $ 1,600 $ 2,903

The increase in the credit loss provision in the International segment, during the three months ended April 30, 2022, was driven by a $ 0.7 million bad debt provision placed on the accounts receivables due from customers of Titan Machinery Ukraine, primarily due to the ongoing Russia-Ukraine conflict.

Balance at July 31, 2021 $ 299 $ 1,050 $ 1,372 $ 2,721

The increase in the credit loss provision in the International segment, during the six months ended July 31, 2022, was driven by a $ 0.7 million bad debt provision placed on the accounts receivables due from customers of Titan Machinery Ukraine, primarily due to the ongoing Russia-Ukraine conflict.

The following table presents impairment losses (recoveries) on receivables arising from sales contracts with customers and receivables arising from rental contracts:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2021 2022 2021

(in thousands)

2 unchanged sentences

Receivables from rental contracts 43 3 32 ( 30 )

$ 229 $ 225 $ 1,031 $ 290

NOTE 5 - INVENTORIES

April 30, 2022 January 31, 2022

July 31, 2022 January 31, 2022

(in thousands)

5 unchanged sentences

NOTE 6 - PROPERTY AND EQUIPMENT

April 30, 2022 January 31, 2022

July 31, 2022 January 31, 2022

(in thousands)

7 unchanged sentences

$ 188,964 $ 178,243

The Company includes depreciation expense related to its rental fleet and its trucking fleet, for hauling equipment, in Cost of Revenue, which was $ 1.5 million and $ 1.7 million for the three months ended April 30, 2022 and 2021, respectively.

All other depreciation expense is included in Operating Expenses, which was $ 3.5 million and $ 3.1 million for the three months ended April 30, 2022 and 2021, respectively.

The Company includes depreciation expense related to its rental fleet and its trucking fleet, for hauling equipment, in Cost of Revenue, which was $ 2.0 million and $ 2.1 million for the three months ended July 31, 2022 and 2021, and $ 3.5 million and $ 3.8 million for the six months ended July 31, 2022 and 2021, respectively.

All other depreciation expense is included in Operating Expenses, which was $ 3.6 million and $ 3.0 million for the three months ended July 31, 2022 and 2021 and $ 7.1 million and $ 6.0 million for the six months ended July 31, 2022 and 2021, respectively.

The Company reviews its long-lived assets for potential impairment whenever events or circumstances indicate that the carrying value of the long-lived asset (or asset group) may not be recoverable.

During the three months ended April 30, 2022, the Company identified one such asset group, Titan Machinery Ukraine, and performed an impairment test, and concluded that no impairment was present.

The Company did not recognize any impairment for the three months ended April 30, 2022 and April 30, 2021 .

During the three months ended July 31, 2022, the Company identified two such asset groups in the Agriculture segment, and performed an impairment test, and concluded that no impairment was present, thus the Company did not recognize any impairment for the three and six months ended July 31, 2022.

The Company did recognize impairment of long-lived assets of $ 0.4 million in its International segment for the three and six months ended July 31, 2021 .

NOTE 7 - INTANGIBLE ASSETS AND GOODWILL

1 unchanged sentence

The Company's indefinite-lived intangible assets consist of distribution rights assets.

The following is a summary of the changes in indefinite-lived intangible assets, by segment, for the three months ended April 30, 2022:

The following is a summary of the changes in indefinite-lived intangible assets, by segment, for the six months ended July 31, 2022:

Agriculture Construction Total

2 unchanged sentences

Arising from business combinations 842 — 842

April 30, 2022 $ 10,978 $ 72 $ 11,050

The following presents changes in the carrying amount of goodwill, by segment, for the three months ended April 30, 2022:

July 31, 2022 $ 10,978 $ 72 $ 11,050

The following presents changes in the carrying amount of goodwill, by segment, for the six months ended July 31, 2022:

Agriculture Total

2 unchanged sentences

Arising from business combinations 583 583

April 30, 2022 $ 9,535 $ 9,535

July 31, 2022 $ 9,535 $ 9,535

NOTE 8 - FLOORPLAN PAYABLE/LINES OF CREDIT

As of April 30, 2022, the Company had floorplan lines of credit totaling $ 751.0 million, which is primarily comprised of three significant floorplan lines of credit:

As of July 31, 2022, the Company had floorplan lines of credit totaling $ 743.0 million, which is primarily comprised of three floorplan lines of credit:

(i) a $ 450.0 million credit facility with CNH Industrial, (ii) a $ 185.0 million line of credit under the Third Amended and Restated Credit Agreement (the "Bank Syndicate Agreement"), and (iii) a $ 50.0 million credit facility with DLL Finance LLC.

The Company's outstanding balances of floorplan lines of credit as of April 30, 2022 and January 31, 2022, consisted of the following:

April 30, 2022 January 31, 2022

Additionally, the Company amended its CNH Industrial floorplan line of credit as of August 1, 2022, increasing the total available domestic limit to $410 million and overall limit to $500 million.

The Company's outstanding balances of floorplan lines of credit as of July 31, 2022 and January 31, 2022, consisted of the following:

July 31, 2022 January 31, 2022

(in thousands)

CNH Industrial $ 177,983 $ 94,054

Bank Syndicate Agreement Floorplan Loan 41,000 —

DLL Finance 9,187 8,558

1 unchanged sentence

$ 274,244 $ 135,415

As of April 30, 2022 and January 31, 2022, the U.S.

floorplan payables were generally all non-interest bearing.

As of April 30, 2022, foreign floorplan payables carried various interest rates primarily ranging from 1.40 % to 6.80 %, compared to a range of 1.40 % to 4.79 % as of January 31, 2022.

The Company had non-interest bearing floorplan payables of $ 159.5 million and $ 106.8 million, on April 30, 2022 and January 31, 2022, respectively.

In anticipation of closing the Heartland acquisition on August 1, 2022, the Company drew $ 41.0 million on its Bank Syndicate Floorplan Loan, which had a variable interest rate of 3.21% as of July 31, 2022.

Generally, all U.S.

CNH Industrial and DLL Finance amounts outstanding are non-interest bearing.

As of July 31, 2022, foreign floorplan payables carried various interest rates primarily ranging from 1.92 % to 8.36 %, compared to a range of 1.40 % to 6.11 % as of January 31, 2022.

The Company had non-interest bearing floorplan payables of $ 210.7 million and $ 106.8 million, on July 31, 2022 and January 31, 2022, respectively.

The Company has a compensating balance arrangement under one of its foreign floorplan credit facilities, which requires a minimum cash deposit to be maintained with the lender in the amount of $ 5.0 million for the term of the credit facility.

NOTE 9 - LONG TERM DEBT

The following is a summary of long-term debt as of April 30, 2022 and January 31, 2022:

Description Maturity Dates Interest Rates April 30, 2022 January 31, 2022

The following is a summary of long-term debt as of July 31, 2022 and January 31, 2022:

Description Maturity Dates Interest Rates July 31, 2022 January 31, 2022

(in thousands)

9 unchanged sentences

NOTE 10 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following is a summary of the changes in accumulated other comprehensive income (loss), by component, for the three month periods ended April 30, 2022 and April 30, 2021:

The following is a summary of the changes in accumulated other comprehensive income (loss), by component, for the six month periods ended July 31, 2022 and July 31, 2021:

Foreign Currency Translation Adjustment Net Investment Hedging Gain Total Accumulated Other Comprehensive Income (Loss)

3 unchanged sentences

Balance, April 30, 2022 ( 6,074 ) 2,711 ( 3,363 )

Other comprehensive income ( 2,963 ) — ( 2,963 )

Balance, July 31, 2022 $ ( 9,037 ) $ 2,711 $ ( 6,326 )

Foreign Currency Translation Adjustment Net Investment Hedging Gain Total Accumulated Other Comprehensive Income (Loss)

3 unchanged sentences

Balance, April 30, 2021 ( 3,591 ) 2,711 ( 880 )

Other comprehensive income 938 — 938

Balance, July 31, 2021 $ ( 2,653 ) $ 2,711 $ 58

NOTE 11 - LEASES

13 unchanged sentences

The components of lease expense were as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

Classification 2022 2021 2022 2021

(in thousands)

(in thousands) (in thousands)

Finance lease cost:

7 unchanged sentences

Right-of-use lease assets and lease liabilities consist of the following:

Classification April 30, 2022 January 31, 2022

Classification July 31, 2022 January 31, 2022

(in thousands)

8 unchanged sentences

Total lease liabilities $ 62,897 $ 74,180

(a) Finance lease assets are recorded net of accumulated amortization of $1.7 million as of April 30, 2022 and January 31, 2022.

Maturities of lease liabilities as of April 30, 2022 are as follows:

(a) Finance lease assets are recorded net of accumulated amortization of $1.8 million as of July 31, 2022 and $1.7 million as of January 31, 2022.

Maturities of lease liabilities as of July 31, 2022 are as follows:

Operating Finance

11 unchanged sentences

Present value of lease liabilities $ 60,462 $ 2,435 $ 62,897

The weighted-average lease term and discount rate as of April 30, 2022 are as follows:

April 30, 2022

The weighted-average lease term and discount rate as of July 31, 2022 are as follows:

July 31, 2022

Weighted-average remaining lease term (years):

14 unchanged sentences

The Company accounts for these non-lease components separate from the rental arrangement and recognizes the revenue associated with these components when the service is performed.

The Company has elected to exclude from rental revenue all sales, value added and other taxes collected from our customers concurrent with our rental activities.

The Company has elected to exclude from rental revenue all sales, value

added and other taxes collected from our customers concurrent with our rental activities.

Rental billings most often occur on a monthly basis and may be billed in advance or in arrears, thus creating unbilled rental receivables or deferred rental revenue amounts.

2 unchanged sentences

Revenue generated from leasing activities is disclosed, by segment, in Note 3.

The following is the balance of our dedicated rental fleet assets, included in Property and equipment, net of accumulated depreciation in the condensed consolidated balance sheet, of our Construction segment as of April 30, 2022 and January 31, 2022:

April 30, 2022 January 31, 2022

July 31, 2022 January 31, 2022

(in thousands)

3 unchanged sentences

NOTE 12 - FAIR VALUE MEASUREMENTS

As of April 30, 2022 and January 31, 2022, the fair value of the Company's foreign currency contracts, which are either assets or liabilities measured at fair value on a recurring basis, was not material.

These foreign currency contracts were valued using a discounted cash flow analysis, which is an income approach, utilizing readily observable market data as inputs, which is classified as a Level 2 fair value measurement.

The Company also valued certain long-lived assets at fair value on a non-recurring basis as of January 31, 2022 as part of its long-lived asset impairment testing.

2 unchanged sentences

The most significant unobservable inputs include forecasted net cash generated from the use of the assets and the discount rate applied to such cash flows to arrive at a fair value estimate.

In addition, in certain instances the Company estimated the fair value of long-lived assets to approximate zero as no future cash flows were assumed to be generated from the use of such assets and the expected value to be realized upon disposition was deemed to be nominal.

In addition, in certain instances, in the prior year, the Company estimated the fair value of long-lived assets to approximate zero as no future cash flows were assumed to be generated from the use of such assets and the expected value to be realized upon disposition was deemed to be nominal.

The Company also has financial instruments that are not recorded at fair value in the consolidated balance sheets, including cash, receivables, payables and long-term debt.

The carrying amounts of these financial instruments approximated their fair values as of April 30, 2022 and January 31, 2022.

The carrying amounts of these financial instruments approximated their fair values as of July 31, 2022 and January 31, 2022.

Fair value of these financial instruments was estimated based on Level 2 fair value inputs.

The estimated fair value of the Company's Level 2 long-term debt, which is provided for disclosure purposes only, is as follows:

April 30, 2022 January 31, 2022

July 31, 2022 January 31, 2022

(in thousands)

2 unchanged sentences

NOTE 13 - INCOME TAXES

Our effective tax rate was 25.6 % and 22.9 % for the three months ended April 30, 2022 and 2021, respectively.

The effective tax rate for the three months ended April 30, 2022 and 2021 were subject to various factors such as the impact of certain discrete items, mainly the vesting of share-based compensation, the mix of domestic and foreign income, and recognition of a valuation allowance on certain of our foreign deferred tax asset s.

Our effective tax rate was 24.7 % and 28.0 % for the three months ended July 31, 2022 and 2021, respectively and was 25.1 % and 25.6 % for the six months ended July 31, 2022 and 2021, respectively.

The effective tax rate for the six months ended July 31, 2022 and 2021 were subject to various factors such as the impact of certain discrete items, mainly the vesting of share-based compensation, the mix of domestic and foreign income, and recognition of a valuation allowance on certain of our foreign deferred tax asset s.

NOTE 14 - BUSINESS COMBINATIONS

18 unchanged sentences

Each of the above acquisitions has been accounted for under the acquisition method of accounting, which requires the Company to estimate the acquisition date fair value of the assets acquired and liabilities assumed.

As of April 30, 2022, all business combinations completed in fiscal years 2023 and 2022 are preliminary.

The following table presents the aggregate purchase price allocations for all acquisitions completed during the fiscal year ended January 31, 2022 and the period ended April 30, 2022:

April 30, 2022 January 31, 2022

As of July 31, 2022, all business combinations completed in fiscal years 2023 and 2022 are preliminary.

The following table presents the aggregate purchase price allocations for all acquisitions completed during the fiscal year ended January 31, 2022 and the period ended July 31, 2022:

July 31, 2022 January 31, 2022

(in thousands)

13 unchanged sentences

The recognition of goodwill in the above business combinations arose from the acquisition of an assembled workforce and anticipated synergies expected to be realized.

For the business combination occurring during the period ended April 30, 2022, the Company recognized a non-competition intangible asset of $ 0.1 million and a distribution rights intangible asset of $0.8 million.

For the business combination occurring during the fiscal year ended January 31, 2022, the Company recognized a non-competition intangible asset of $ 0.1 million and a distribution rights intangible asset of $ 3.9 million.

For the Mark's Machinery acquisition the Company recognized a non-competition intangible asset of $ 0.1 million and a distribution rights intangible asset of $0.8 million.

For the Jaycox acquisition the Company recognized a non-competition intangible asset of $ 0.1 million and a distribution rights intangible asset of $ 3.9 million.

The non-competition assets will be amortized over periods ranging from three to five years.

1 unchanged sentence

The Company estimated the fair value of the intangible assets using a multi-period excess earnings model, which is an income approach.

Acquisition related costs were not material for the periods ended April 30, 2022 or January 31, 2022, and have been expensed as incurred and recognized as Operating Expenses in the condensed consolidated statements of operations.

Acquisition related costs, amounted to $0.5 million for the period ended July 31, 2022, primarily related to the Heartland acquisition, and acquisition related costs for the period ended January 31, 2022, were not material.

All acquisition related costs have been expensed as incurred and recognized as Operating Expenses in the condensed consolidated statements of operations.

NOTE 15 - CONTINGENCIES

10 unchanged sentences

Certain financial information for each of the Company’s business segments is set forth below.

Three Months Ended April 30,

(in thousands)

Three Months Ended July 31, Six Months Ended July 31,

2022 2021 2022 2021

(in thousands) (in thousands)

Agriculture $ 348,956 $ 219,364 $ 667,503 $ 448,915

9 unchanged sentences

Total $ 33,150 $ 15,632 $ 56,734 $ 29,311

April 30, 2022 January 31, 2022

July 31, 2022 January 31, 2022

(in thousands)

5 unchanged sentences

Total $ 1,077,871 $ 946,667

NOTE 17 - SUBSEQUENT EVENTS

On July 8, 2022, the Company entered into a definitive purchase agreement to acquire three entities, Heartland Agriculture, LLC, Heartland Solutions, LLC, and Heartland Leverage Lender, LLC, collectively, the "Heartland Companies", which operate a twelve store CaseIH commercial application agriculture dealership complex .

In its most recently completed fiscal year ended December 31, 2021, Heartland Companies generated revenue of approximately $214 million.

The Company closed on the acquisition, on August 1, 2022 with cash consideration transferred of $94.5 million.

The Company primarily used cash on hand for the funding of the purchase price and drew down on the floorplan loan with the Bank Syndicate for the remaining balance.

The acquisition will be accounted in accordance with Accounting Standards Codification ("ASC") Topic 805, "Business Combinations".

As the acquisition was completed subsequent to July 31, 2022, the consolidated financials statements do not include the results or the financial position of the Heartland Companies.

Because the Company has not completed the work of the purchase price allocation needed under ASC 805, the initial accounting for the business combination was incomplete at the time of the issuance of the financial statements, therefore, the Company did not include all of the information regarding the effect of the business combination as permitted by ASC 805-10-50-4 and ASC 805-30-50-3.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements