What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-30 compared with 2022-04-01 · 67 added, 43 removed, 312 unchanged (26% of the section changed)

15 unchanged sentences

We also believe our scale, customer service, diverse and stable customer base, centralized resources, and experienced management team provide us with a competitive advantage in many of our local markets.

Throughout our 41-year operating history, we have built an extensive, geographically contiguous network of 74 stores in the United States and 35 stores in Europe.

Throughout our 42-year operating history, we have built an extensive network of 86 stores in the United States and 35 stores in Europe.

Our Agriculture stores in the U.S.

are located in Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Wyoming and include several highly productive farming regions, such as the Red River Valley in eastern North Dakota and northwestern Minnesota, portions of the corn belt in Iowa, eastern South Dakota and southern Minnesota, and along the I-80 corridor in Nebraska, which sits on top of the Ogallala Aquifer.

are located in Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Washington, Wisconsin, and Wyoming and include several highly productive farming regions, such as the Red River Valley in eastern North Dakota and northwestern Minnesota, portions of the corn belt in Iowa, eastern South Dakota and southern Minnesota, along the I-80 corridor in Nebraska, which sits on top of the Ogallala Aquifer, and the Snake River Valley in eastern Idaho.

Our Construction stores are located in Colorado, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin.

1 unchanged sentence

We have a history of growth through acquisitions.

Since January 1, 2003, we have completed the acquisition of over 50 dealerships located in 11 U.S.

Those acquisitions vary from a single dealership to larger dealership groups with locations in multiple states.

Since January 1, 2003, we have completed over 55 acquisitions located in 15 U.S.

states and four European countries, along with establishing a new network of dealership stores in Ukraine.

6 unchanged sentences

The used equipment we sell is primarily acquired through trade-ins from our customers.

The agricultural equipment we sell and service includes machinery and attachments for uses ranging from large-scale farming to home and garden purposes.

The agricultural equipment we sell and service includes machinery and attachments for uses ranging from large-scale commercial farming to home and garden purposes.

The construction equipment we sell and service includes heavy construction machinery, light industrial machinery for commercial and residential construction, and road and highway construction machinery.

Equipment sales generate cross-selling opportunities by populating our markets with equipment in need of service and parts.

Equipment sales generate cross-selling opportunities by populating our markets with equipment in

Table of Conten ts

need of service and parts.

Equipment revenue represented 77.5%, 75.4% and 72.0% of total revenue for the fiscal years ended January 31, 2023, 2022 and 2021.

Table of Content

We maintain an extensive in-house parts inventory to provide timely parts and repair and maintenance support to our customers.

17 unchanged sentences

Agricultural Equipment Industry

Agricultural equipment is purchased primarily by commercial farmers for the production of crops used for food, fiber, feed grain and feedstock for renewable energy.

Agricultural equipment is purchased primarily by commercial farmers and cooperatives for the production of crops used for food, fiber, feed grain and feedstock for renewable energy.

Agricultural equipment is also purchased by "life-style farmers" and for home and garden applications, and for maintenance of commercial, residential and government properties.

Deere & Company ("Deere"), CNH Industrial, and Agco Corporation ("AGCO") are the largest global manufacturers of agricultural equipment, and they each manufacture a full line of equipment and parts that supply the primary machinery requirements of farmers.

Deere & Company ("Deere"), CNH Industrial, AGCO Corporation ("AGCO"), and Kubota Corporation ("Kubota"), are the largest global manufacturers of agricultural equipment, and they each manufacture a full line of equipment and parts that supply the primary machinery requirements of farmers.

In addition to the major manufacturers, several short-line manufacturers produce specialized equipment that satisfies various niche requirements of farmers.

9 unchanged sentences

We believe that these various federal policies reduce financial volatility in the agriculture industry and assist farmers in continuing to operate their farms during economic down cycles and through the adverse headwinds caused by trade policies and tariffs.

Table of Content

Table of Conten ts

Construction Equipment Industry

20 unchanged sentences

Our training program involves active participation in all manufacturer-sponsored training programs, the use of industry experts for customized training programs, and a centralized training team to assist in training programs and the integration of newly-acquired dealerships.

We also partner with several technical colleges to sponsor students who we plan to eventually employ as service technicians.

We also partner with several technical colleges to offer scholarships and sponsor students who we plan to eventually employ as service technicians.

Ability to Act on Acquisition Opportunities

We believe that our experienced management team and access to capital enables us to be opportunistic in responding to accretive growth opportunities, primarily arising from the continued consolidation of the equipment dealer network.

Superior Centralized Marketing Systems

Our shared resource group includes a professional marketing team that supports all aspects of brand and solution awareness, customer analytics and targeting, and lead generation through multichannel campaigns that typically incorporate digital marketing (email, website, search, social and syndication), direct mail, and regional and local advertising and sponsorships.

Professional Centralized Marketing Systems

Our centralized shared resource group includes a professional marketing team that supports all aspects of brand and solution awareness, customer analytics and targeting, and lead generation through multichannel campaigns that typically incorporate digital marketing (email, website, search, social and syndication), direct mail, and regional and local advertising and sponsorships.

Our marketing functions also drive increased customer engagement and loyalty through participation in trade shows and industry events and communication and coordination for local store open houses, service clinics, equipment demonstrations, product showcases and customer appreciation outings.

Table of Content

Table of Conten ts

Ability to Attract and Retain Superior Employees

5 unchanged sentences

Diverse and Stable Customer Base Reduces Market Risk

Our large geographic footprint covering eight U.S.

Our large geographic footprint covering thirteen U.S.

states and four European countries provides a diversified customer base.

5 unchanged sentences

Our executive team is led by David Meyer, our Board Chair and Chief Executive Officer, who has over 40 years of industry experience.

Bryan Knutson, our President and Chief Operating Officer, has over 20 years of industry experience ranging from equipment sales to his current executive positions.

Robert Larsen, Chief Financial Officer, also brings 14 years of industry and other finance leadership experience having worked at CNH Industrial, Raven Industries, and PricewaterhouseCoopers prior to joining the Company.

Our other executive team members, managers in the field, and equipment sales consultants also have extensive knowledge and experience in our industry.

7 unchanged sentences

We seek to generate growth in same-store sales and market share through the following:

• employing significant marketing and advertising programs, including targeted direct mailings, internet based marketing, advertising with targeted local media outlets, participation in and sponsorship of trade shows and industry events, our Titan Trader monthly magazine, and by hosting open houses, service clinics, equipment demonstrations, product showcases and customer appreciation outings;

• employing significant marketing and advertising programs, including targeted direct mailings, internet based marketing, advertising with targeted local media outlets, participation in and sponsorship of trade shows and industry events, our Titan Trader semi-annual magazine, and by hosting open houses, service clinics, equipment demonstrations, product showcases and customer appreciation outings;

• supporting and providing customers with training on evolving technologies, such as precision farming and farm data management, which can be difficult for small dealers to support;

2 unchanged sentences

Strategic Acquisitions

Since January 1, 2003, we have completed the acquisition of over 50 dealerships located in 11 U.S.

Since January 1, 2003, we have completed over 55 acquisitions located in 15 U.S.

states and four European countries.

2 unchanged sentences

We believe a favorable climate for dealership consolidation will continue to exist in the future due to several factors, including the competitiveness of our industry, increased dealer capitalization requirements, increased sophistication and complexity of equipment and related technologies, increased expectations from our customers and our equipment suppliers, and the lack of succession alternatives for many current owners.

We intend to pursue acquisitions with the objectives of entering new markets, consolidating distribution within our existing footprint, and strengthening our competitive position.

We intend to pursue acquisitions with the objectives of

Table of Conten ts

consolidating distribution within our existing footprint, entering new markets, and strengthening our competitive position.

We expect that strategic acquisitions will continue to be a component of our long-term growth strategy.

Table of Content

We regularly assess the acquisition landscape, evaluating potential acquisitions in terms of availability and alignment to our long-term growth strategy.

21 unchanged sentences

Except as noted, the following discussion describes each of the North American CNH Industrial Dealer Agreements.

Each of the CNH Industrial Dealer Agreements assign to us a geographically defined area of primary responsibility, providing us with distribution and product support rights within the identified territory for specific equipment products.

Our Case IH commercial sprayer application distribution rights, related to our Heartland acquisition, were granted to us by CNH Industrial at the time of the closing of the Heartland transaction.

For our full-line distribution footprint existing as of the time of closing, these distribution rights were granted through amendments to our full-line dealer agreements that added floaters and sprayers as authorized products permitted to be sold to commercial application customers.

For those Heartland territories outside of our full-line dealership territory existing as of the time of closing, we entered into new Case IH dealer agreements granting us distribution rights to sell floaters and sprayers to commercial application customers for those territories.

For purposes of this Form 10-K, the granted distribution rights for the commercial application sprayers and floaters in territories outside of Titan’s full-line footprint as of the date of closing of the Heartland transaction are referred to as the “Non-Footprint Commercial Application Distribution Rights”.

Each of the CNH Industrial Dealer Agreements assigns to us a geographically defined area of primary responsibility, providing us with distribution and product support rights within the identified territory for specific equipment products.

Although the dealer appointment is non-exclusive, in each territory there is typically only one dealer responsible for retail sales to end-users and for after-sales product support of the equipment.

2 unchanged sentences

Under our CNH Industrial Dealer Agreements, we have both the right and obligation to sell CNH Industrial equipment and related parts and products and to provide customers with repair services.

The CNH Industrial Dealer Agreements impose various requirements on us regarding the location and appearance of facilities, satisfactory levels of new equipment and parts inventories, the training of personnel, adequate business enterprise and information technology systems, adequate working capital, a maximum adjusted debt to tangible net worth ratio, development of annual sales and marketing goals, and furnishing of monthly and annual financial information to CNH Industrial.

The CNH Industrial Dealer Agreements impose

Table of Conten ts

various dealer standards on us regarding the location and appearance of facilities, satisfactory levels of new equipment and parts inventories, the training of personnel, adequate business enterprise and information technology systems, adequate working capital, a maximum adjusted debt to tangible net worth ratio, development of annual sales and marketing goals, and furnishing of monthly and annual financial information to CNH Industrial.

We must obtain the approval or consent of CNH Industrial in the event of proposed fundamental changes to our ownership, governance or business structure (defined as "change in control" events) including, among other things, (i) a merger, consolidation or reorganization, unless securities representing more than 50% of the total combined voting power of the successor corporation are immediately owned, directly or indirectly, by persons that owned our securities prior to the transaction;

2 unchanged sentences

(iv) a substantial disposition of shares of our common stock by certain named executives;

(v) certain significant changes in the

Table of Content

composition of our Board of Directors;

(v) certain significant changes in the composition of our Board of Directors;

and (vi) replacement of our Chief Executive Officer.

2 unchanged sentences

The New Holland dealership agreement is a 12-month agreement, with automatic 1-year renewals unless either party notifies the other party of its intention not to renew or otherwise exercises its termination rights under the agreement.

The Non-Footprint Commercial Application Distribution Rights expire on August 1, 2030, at which time these distribution rights are ceded back to Case IH, unless the term therefor is further extended by the parties.

If we seek to sell our commercial sprayer application business or any portion thereof related to the Non-Footprint Commercial Application Distribution Rights prior to the expiration date of August 1, 2030 (or such later date as agreed to by the parties), then we are required to pay to CNH Industrial the sales consideration paid by such buyer for the applicable commercial application distribution rights;

provided, that Titan will receive sales consideration from the buyer in an amount not less than the fair value of the facilities, fixed assets, current assets, and other investments applicable to the location and market being sold.

If Titan acquires a Case IH full-line dealer within any of the territories in which Titan then possesses the Non-Footprint Commercial Application Distribution Rights, as part of its approval process, Case IH may require Titan to pay an agreed upon amount for the inclusion of the commercial application sprayer distribution rights in the new dealer agreement for the acquired location.

CNH Industrial has the right to terminate its dealer agreements with us immediately in certain circumstances, including in the event of (i) our insolvency or bankruptcy, (ii) a material breach by us of the provisions of a CNH Industrial Dealer Agreement or (iii) our failure to secure the consent of CNH Industrial prior to the occurrence of a “change in control” event.

11 unchanged sentences

Generally, payment for parts purchased from CNH Industrial entities is due within 30 days.

CNH Industrial makes available to us any floorplan programs, parts return programs, sales or incentive programs or similar plans or programs it offers to its other dealers, and provides us with promotional items and marketing materials.

CNH Industrial makes available to us any floorplan programs, parts return programs,

Table of Conten ts

sales or incentive programs or similar plans or programs it offers to its other dealers, and provides us with promotional items and marketing materials.

The CNH Industrial Dealer Agreements for our European operations, with the exception of Ukraine, grant to us exclusive territories.

9 unchanged sentences

Payment and financing practices with these other suppliers are similar to those practices described above with respect to CNH Industrial.

Table of Content

Our North America agriculture customers vary from small, single machine owners to large farming operations, primarily in the states of Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Wyoming.

Our North America agriculture customers vary from small, single machine owners to large farming operations to large commercial application operations, primarily in the states of Idaho, Iowa, Kansas, Missouri, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Washington, Wisconsin, and Wyoming.

In fiscal 2023, no single agriculture customer accounted for more than 1.0% of our Agriculture revenue.

16 unchanged sentences

In addition, we have other lines of credit offered by various financial institutions as well as floorplan payable financing programs offered by manufacturers and suppliers, or their third party lenders, from which we purchase equipment inventory.

Table of Conten ts

Sales and Marketing

3 unchanged sentences

• our website;

• local and regional advertising efforts, including broadcast, cable, print and web-based media;

• local and regional advertising efforts, including broadcast, cable, direct mail, print and web-based media, social media channels;

• alternative channels, such as auctions, for selling our aged equipment inventories.

3 unchanged sentences

All members of our sales force are expected to participate in internal and external manufacturer-sponsored training sessions to develop product and application knowledge, sales techniques and financial acumen.

Our shared resources group provides centralized sales and marketing support for our field operations, and coordinates centralized media buys, strategic planning, sales support and training.

Our shared resources group provides centralized sales and marketing support for our field operations, and coordinates centralized media buys, strategic planning, sales support, training and files for available cooperative advertising reimbursement from our suppliers.

In addition, we enable our regional and area managers and their sales teams to develop localized sales and marketing strategies.

Table of Content

Parts Managers and Service Managers

Our parts managers and service managers at our stores are involved in our efforts to market our parts and service offerings, taking advantage of our seasonal marketing campaigns in parts and service sales.

As a group, they have won multiple awards from our suppliers for their efforts benefiting both our customers and our key suppliers.

Our used equipment inventories are marketed on our website, www.titanmachinery.com, through an equipment search feature which allows users to search by equipment type, manufacturer, price and/or store.

A picture of each piece of equipment is shown, along with the equipment specifications, price and store location.

Parts manufactured by the CNH Industrial brands are marketed and can be purchased directly through our website.

Our parts sales managers and service managers at our stores are involved in our efforts to market our parts and service offerings, taking advantage of our seasonal marketing campaigns in parts and service sales.

Much of our focus on aftermarket campaigns is promoting proactive equipment inspections designed to spot and address mechanical issues before they result in costly downtime.

Other proactive aftermarket initiatives include offering extended warranty and equipment maintenance packages with the equipment we sell.

These efforts result in improved customer experience and reduced cost of ownership for our customers as well as securing a steady and reliable stream of aftermarket sales.

Our website is the central hub for all our marketing campaigns.

We have built a large amount of content related to the equipment we sell and service, the technology used by our customers in conjunction with the equipment, and information about our Company and what we have to offer prospective employees.

Used equipment inventories are one of the most highly trafficked sections of our website, www.titanmachinery.com .

Customers can search and view equipment based on type, manufacturer, price and/or store location.

Pictures and descriptions of each piece of equipment are displayed, along with the equipment specifications, price and store location.

Parts manufactured by the CNH Industrial brands and other suppliers are marketed and can be purchased directly through our website.

Other sales and financing programs are also marketed through our website.

Customers can view construction rental equipment rates and specifications on the website and submit rental requests by completing a simple form.

All external job openings are listed as well as detailed information about our internship program, tech school sponsorships and other student programs.

Finally, our website provides dealer locator search functions and provides the contact information for the various departments at each of our stores.

5 unchanged sentences

In certain circumstances, we sell aged equipment inventories through the use of alternative channels such as onsite and online auctions.

Table of Conten ts

The agricultural and construction equipment sales and distribution industries are highly competitive and fragmented, with large numbers of companies operating on a regional or local scale.

Our competitors range from multi-location, regional operators to single-location dealers and include dealers and distributors of competing equipment brands, including Deere, Caterpillar and the AGCO brands, as well as other dealers and distributors of the CNH Industrial family of brands.

Our competitors range from multi-location, regional operators to single-location dealers and include dealers and distributors of competing equipment brands, including Deere, Caterpillar, Kubota, and the AGCO brands, as well as other dealers and distributors of the CNH Industrial family of brands.

Competition among equipment dealers, whether they offer agricultural or construction products or both, is primarily based on the price, value, reputation, quality and design of the products, technology, customer service including repair and maintenance service provided by the dealer, the availability of equipment and parts, and the accessibility of stores.

8 unchanged sentences

We maintain a website at www.titanmachinery.com .

Our SEC filings are available on the Investor Relations page of our website or at www.sec.gov.

We make available, free of charge, copies of our annual report on Form 10-K (the "Form 10-K"), quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, on our website, www.titanmachinery.com , as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the Securities and Exchange Commission ("SEC").

We are not including the information on our website as a part of, or incorporating it by reference into, this Form 10-K.Our SEC filings are also available at www.sec.gov.

Intellectual Property

3 unchanged sentences

We also license trademarks and trade names from other suppliers of equipment to us.

Table of Content

Product Warranties

9 unchanged sentences

For farmers, the busy seasons are spring planting and fall harvesting.

For construction customers, the busy season is typically the second and third quarters of our fiscal year for much of our Construction footprint, subject to weather conditions.

For construction customers, the busy season is typically the second and third quarters of our fiscal year for much of our footprint, subject to weather conditions.

Our parts and service revenues are typically highest during our customers' busy seasons as well, due to the increased use of their equipment during this time, which generates the need for more parts and service work.

2 unchanged sentences

because of our customers’ year-end tax planning considerations, the timing of dealer incentives and the increase in availability of funds from completed harvests and construction projects.

Seasonal weather trends, particularly severe wet or dry conditions, can have a significant impact on regional agricultural and construction market performance by affecting crop production yields and the ability to undertake construction projects.

Table of Conten ts

Weather conditions that adversely affect the agricultural or construction markets would have a negative effect on the demand for our products and services.

16 unchanged sentences

Members of our training and development team collaborate with employees from our various operations teams to identify our strategic training needs and prioritize the development of appropriate training content.

Table of Content

Employee Engagement and Retention

8 unchanged sentences

We strongly believe that a safe work environment will help us gain a competitive advantage, and that doing what is right, honest and ethical is essential to developing trust with our partners.

This includes providing a safe place to works, safety training relevant to the employee's position, and following all safety and environmental regulations.

This includes providing a safe place to work, safety training relevant to the employee's position, and following all safety and environmental regulations.

We ensure that safety performance data is tracked, aggregated, and reviewed on an ongoing basis across our organization.

4 unchanged sentences

employee wellness program is to help educate, motivate and reward our employees for maintaining healthy lifestyles.

Table of Conten ts

Performance Management

17 unchanged sentences

Our employees are not covered by a collective bargaining agreement.

Table of Content

Environmental and Other Governmental Regulation

9 unchanged sentences

None of our dealerships have been subject to any material liabilities in the past, nor do we know of any fact or condition that would result in any material liabilities being incurred in the future.

In addition to the environmental regulations discussed above, we are subject to numerous federal, state, and local laws regulating the conduct of our business, including those relating to sales and marketing, taxation, employment practices, working conditions, data privacy, and corruption.

Table of Conten ts

conditions, data privacy, and corruption.

The foreign countries and domestic states that we operate in, subject us to a significant number of regulatory jurisdictions.

1 unchanged sentence

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-K

Item 1. Business