Item 2. Management’s Discussion and Analysis
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023.
Overview
We own and operate a network of full service agricultural and construction equipment stores in the United States and Europe. Based upon information provided to us by CNH Industrial N.V. or its U.S. subsidiary CNH Industrial America, LLC, we are the largest retail dealer of Case IH Agriculture equipment in the world, one of the largest retail dealers of Case Construction equipment in North America and one of the largest retail dealers of New Holland Agriculture and New Holland Construction equipment in the United States. We operate our business through three reportable segments: Agriculture, Construction and International. Within each segment, we have four principal sources of revenue: new and used equipment sales, parts sales, service, and equipment rental and other activities.
Demand for agricultural equipment and, to a lesser extent, parts and service support, is impacted by agricultural commodity prices and net farm income. Based o n February 2023 U.S. Department of Agriculture publications, the estimate of net farm income for calendar year 2023 indicated an approximate 15.9% decrease as compared to calendar year 2022, and an approximate 15.5% increase in net farm income for calendar year 2022 as compared to calendar year 2021.
For the first quarter of fiscal 2024, our net income was $27.0 million, or $1.19 per diluted share, compared to a fiscal 2023 first quarter net income of $17.5 million, or $0.78 per diluted share. Significant factors impacting the quarterly comparisons were:
• Revenue in the first quarter of fiscal 2024 increased by 23.6% compared to the first quarter of fiscal 2023. The revenue increase was primarily driven by the acquisitions of Mark's Machinery, the Heartland Companies, and Pioneer Farm Equipment in April 2022, August 2022, and February 2023, respectively. Total Company same store sales, (for a description of how we compute same store sales, see discussion under Results of Operations), also increased by 3.8% compared to the prior year first quarter.
• Gross profit in the first quarter of fiscal 2024 increased 33.7% compared to the first quarter of fiscal 2023. The increase in gross profit was primarily the result of increased sales due to the aforementioned acquisitions and strong gross profit margins particularly in equipment where margins increased to 14.2% in the first quarter of fiscal 2024 from 12.9% in the first quarter of fiscal 2023. Parts gross profit margins also increased to 32.6% in the first quarter of fiscal 2024 from 31.0% in the first quarter of fiscal 2023.
Supply Chain
Equipment availability continues to be constrained as supply chain disruptions and labor shortages have caused many manufacturers to be unable to produce enough of certain product categories to meet demand. Meanwhile, customer demand has remained strong, driven by favorable agriculture fundamentals. This has caused certain product categories to be supplied on an allocation basis with abnormally long lead times. While we continue to experience less than desired shipments of certain product categories, primarily cash crop equipment, there are other product categories that we have been able to receive enough to meet demand and have stock available for sale. We will continue to work with our manufacturers to source the high demand equipment to fulfill as much customer demand as possible.
Russian-Ukrainian Conflict
In February 2022, Russian military forces invaded Ukraine, and although the length, impact, and outcome of the ongoing conflict in Ukraine is highly unpredictable, this conflict has led, and could continue to lead, to significant market and other disruptions, including instability in financial markets, supply chain interruptions, political and social instability, and increases in cyberattacks. We are actively monitoring the situation in Ukraine and assessing its impact on our business. For the three months ended April 30, 2023, Titan Machinery Ukraine's revenues are down approximately 10.7% from the prior year period.
As of April 30, 2023, the Company had total assets of $29.1 million in Ukraine. The physical assets (e.g. inventory and fixed assets) are almost exclusively located in central and western areas of the country. Total assets in Ukraine as of January 31, 2023, was $27.4 million.
20
Table of Contents
If the Company cannot provide efficient and uninterrupted services to its customers, this could worsen the conflict's adverse effect on the Company's operations and business in Ukraine. In addition, the Company's ability to maintain adequate liquidity for our operations in Ukraine is dependent on a number of factors, including Titan Machinery Ukraine's revenue and earnings, which have been and could continue to be significantly impacted by the conflict. Further, any major breakdown or closure of utility services, any major threat to civilians in our footprint, disruption of commodity exports from Ukraine, or international banking disruption could materially impact the operations and liquidity of Titan Machinery Ukraine.
Acquisitions
Fiscal 2024
On February 1, 2023, the Company acquired certain assets of Pioneer Farm Equipment Co. The acquired business consists of five agriculture equipment stores in American Falls, Blackfoot, Idaho Falls, Rexburg, and Rupert, Idaho. These locations will be included in the Company's Agriculture segment. The total consideration transferred for the acquired business was $10.1 million paid in cash. The Company has agreed to acquire the real estate of Pioneer Farm Equipment Co., subject to customary closing conditions, for a purchase price of $9.4 million. The Company anticipates completing the one remaining real estate acquisition by July 31, 2023.
In connection with the acquisition, the Company acquired from CNH Industrial and certain other manufacturers, equipment and parts inventory previously owned by Pioneer Farm Equipment Co. Upon acquiring such inventories, the Company has been offered floorplan financing by the manufacturer. In total, the Company acquired inventory and recognized a corresponding liability of $12.7 million. The recognition of these inventories and associated financing liabilities are not included as part of the accounting for the business combination.
Fiscal 2023
On August 1, 2022, the Company acquired all interests of three entities, Heartland Agriculture, LLC, Heartland Solutions, LLC, and Heartland Leveraged Lender, LLC, (collectively referred to as "Heartland Companies") for $ 94.4 million in cash consideration. The Heartland Companies consist of twelve CaseIH commercial application agriculture locations, in Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Washington, and Wisconsin. The Heartland Companies have been a successful CaseIH commercial application dealer group and our acquisition of these entities provides the Company the opportunity for synergies due to the overlap of our footprints, which will allow us to package deals that will include both commercial application equipment as well as other agricultural and construction equipment to commercial customers within our core footprint. The Heartland Companies are included in the Agriculture segment. In the most recent completed fiscal year prior to the acquisition, the Heartland Companies generated revenue of approximately $214 million.
On April 1, 2022, the Company acquired certain assets of Mark's Machinery, Inc. The acquired business consisted of two agricultural equipment stores in Wagner and Yankton, South Dakota. These locations are included in the Company's Agriculture segment. In its most recent fiscal year prior to the acquisition, Mark's Machinery, Inc. generated revenue of approximately $34.0 million. The total cash consideration paid for the acquired business was $ 7.7 million.
ERP Transition
The Company is in the process of converting to a new Enterprise Resource Planning ("ERP") application. The new ERP application is expected to provide data-driven and mobile-enabled sales and support tools to improve employee efficiency and deliver an enhanced customer experience. The Company has implemented a phased roll-out plan to integrate all of its domestic stores to the new ERP. We will continue the phased rollout until all remaining domestic locations have been transitioned to the new ERP.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are included in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. There have been no changes in our critical accounting policies and estimates since January 31, 2023.
21
Table of Contents
Results of Operations
The results presented below include the operating results of any acquisition made during these periods, from the date of acquisition, as well as the operating results of any stores closed or divested during these periods, up to the date of the store closure. The period-to-period comparisons included below are not necessarily indicative of future results. Segment information is provided later in the discussion and analysis of our results of operations.
Same-store sales for any period represent sales by stores that were part of the Company for the entire comparable period in the current and preceding fiscal years. We do not distinguish between relocated or recently expanded stores in this same-store analysis. Closed stores are excluded from the same-store analysis. Stores that do not meet the criteria for same-store classification are described as excluded stores throughout this Results of Operations section.
Comparative financial data for each of our four sources of revenue are expressed below.
Three Months Ended April 30,
2023 2022
(dollars in thousands)
Equipment
Revenue $ 429,376 $ 356,366
Cost of revenue 368,262 310,234
Gross profit $ 61,114 $ 46,132
Gross profit margin 14.2 % 12.9 %
Parts
Revenue $ 96,606 $ 68,562
Cost of revenue 65,103 47,310
Gross profit $ 31,503 $ 21,252
Gross profit margin 32.6 % 31.0 %
Service
Revenue $ 34,933 $ 29,523
Cost of revenue 12,409 10,760
Gross profit $ 22,524 $ 18,763
Gross profit margin 64.5 % 63.6 %
Rental and other
Revenue $ 8,716 $ 6,556
Cost of revenue 5,277 4,009
Gross profit $ 3,439 $ 2,547
Gross profit margin 39.5 % 38.9 %
22
Table of Contents
The following table sets forth our statements of operations data expressed as a percentage of total revenue for the periods indicated:
Three Months Ended April 30,
2023 2022
Revenue
Equipment 75.4 % 77.3 %
Parts 17.0 % 14.9 %
Service 6.1 % 6.4 %
Rental and other 1.5 % 1.4 %
Total Revenue 100.0 % 100.0 %
Total Cost of Revenue 79.2 % 80.8 %
Gross Profit Margin 20.8 % 19.2 %
Operating Expenses 14.3 % 13.9 %
Income from Operations 6.5 % 5.3 %
Other Expense (0.3) % (0.2) %
Income Before Income Taxes 6.2 % 5.1 %
Provision for Income Taxes 1.5 % 1.3 %
Net Income 4.7 % 3.8 %
Three Months Ended April 30, 2023 Compared to Three Months Ended April 30, 2022
Consolidated Results
Revenue
Three Months Ended April 30, Increase/ Percent
2023 2022 (Decrease) Change
(dollars in thousands)
Equipment $ 429,376 $ 356,366 $ 73,010 20.5 %
Parts 96,606 68,562 28,044 40.9 %
Service 34,933 29,523 5,410 18.3 %
Rental and other 8,716 6,556 2,160 32.9 %
Total Revenue $ 569,631 $ 461,007 $ 108,624 23.6 %
Total revenue for the first quarter of fiscal 2024 was 23.6% or $108.6 million higher than the first quarter of fiscal 2023 driven primarily our recent acquisitions of Mark's Machinery, the Heartland Companies, and Pioneer Farm Equipment completed in April 2022, August 2022, and February 2023, respectively, as well as an increase in Company-wide same-store sales of 3.8%. Strong same-store sales was primarily driven by agriculture equipment sales, which benefited from high demand levels that were supported by favorable commodity prices and higher net farm income.
23
Table of Contents
Three Months Ended April 30, Increase/ Percent
2023 2022 (Decrease) Change
(dollars in thousands)
Gross Profit
Equipment $ 61,114 $ 46,132 $ 14,982 32.5 %
Parts 31,503 21,252 10,251 48.2 %
Service 22,524 18,763 3,761 20.0 %
Rental and other 3,439 2,547 892 35.0 %
Total Gross Profit $ 118,580 $ 88,694 $ 29,886 33.7 %
Gross Profit Margin
Equipment 14.2 % 12.9 % 1.3 % 10.1 %
Parts 32.6 % 31.0 % 1.6 % 5.2 %
Service 64.5 % 63.6 % 0.9 % 1.4 %
Rental and other 39.5 % 38.8 % 0.7 % 1.8 %
Total Gross Profit Margin 20.8 % 19.2 % 1.6 % 8.3 %
Gross Profit Mix
Equipment 51.5 % 52.0 % (0.5) % (1.0) %
Parts 26.6 % 24.0 % 2.6 % 10.8 %
Service 19.0 % 21.2 % (2.2) % (10.4) %
Rental and other 2.9 % 2.8 % 0.1 % 3.6 %
Total Gross Profit Mix 100.0 % 100.0 %
Gross profit for the first quarter of fiscal 2024 increased 33.7% or $29.9 million, as compared to the same period last year. Gross profit margin also improved to 20.8% in the current quarter from 19.2% in the prior year quarter. The increase in gross profit margin was primarily due to stronger equipment margins, which were positively impacted by favorable end market conditions.
Our Company-wide absorption rate — which is calculated by dividing our gross profit from sales of parts, service and rental fleet by our operating expenses, less commission expense on equipment sales, plus interest expense on floorplan payables and rental fleet debt — increased to 83.5% for the first quarter of fiscal 2024 compared to 80.3% during the same period last year as the increase in gross profit from parts, service, and rental fleet in the first quarter of fiscal 2024 more than offset increased floorplan interest expenses and operating expenses less commission expense on equipment sales.
Operating Expenses
Three Months Ended April 30, Increase/ Percent
2023 2022 (Decrease) Change
(dollars in thousands)
Operating Expenses $ 81,315 $ 64,152 $ 17,163 26.8 %
Operating Expenses as a Percentage of Revenue 14.3 % 13.9 % 0.4 % 2.9 %
Our operating expenses in the first quarter of fiscal 2024 increased 26.8% as compared to the first quarter of fiscal 2023. The increase in operating expenses was primarily the result of an increase in variable expenses associated with increased sales as well as additional operating expenses due to acquisitions that have taken place in the past year. Operating expenses as a percentage of revenue increased to 14.3% in the first quarter of fiscal 2024 from 13.9% in the first quarter of fiscal 2023. The prior year benefited from a $1.4 million gain on the sale of our consumer products store in March 2022, which offset operating expenses. Operating expenses as a percentage of revenue, net of this one time gain, would have been 14.2% for the first quarter of fiscal 2023.
24
Table of Contents
Three Months Ended April 30, Increase/ Percent
2023 2022 (Decrease) Change
(dollars in thousands)
Interest and other income $ 720 $ 492 $ 228 46.3 %
Floorplan interest expense (1,272) (254) 1,018 n/m
Other interest expense (1,274) (1,196) 78 6.5 %
The increase in floorplan interest expense for the first quarter of fiscal 2024 as compared to the first quarter of fiscal 2023 was primarily due to a higher level of interest-bearing inventory in the first quarter of fiscal 2024.
Provision for Income Taxes
Three Months Ended April 30, Increase/ Percent
2023 2022 (Decrease) Change
(dollars in thousands)
Provision for Income Taxes $ 8,474 $ 6,044 $ 2,430 40.2 %
Our effective tax rate was 23.9 % and 25.6 % for the three months ended April 30, 2023 and April 30, 2022, respectively. The effective tax rates for the three months ended April 30, 2023 and 2022 were subject to various factors such as the impact of certain discrete items, mainly the vesting of share-based compensation and the mix of domestic and foreign income.
Segment Results
Certain financial information for our Agriculture, Construction and International business segments is presented below. “Shared Resources” in the table below refers to the various unallocated income/(expense) items that we have retained at the general corporate level. Revenue between segments is immaterial.
Three Months Ended April 30, Increase/ Percent
2023 2022 (Decrease) Change
(dollars in thousands)
Revenue
Agriculture $ 423,195 $ 318,548 $ 104,647 32.9 %
Construction 71,996 66,964 5,032 7.5 %
International 74,440 75,495 (1,055) (1.4) %
Total $ 569,631 $ 461,007 $ 108,624 23.6 %
Income Before Income Taxes
Agriculture $ 24,152 $ 16,449 $ 7,703 46.8 %
Construction 4,533 3,210 1,323 41.2 %
International 6,384 4,325 2,059 47.6 %
Segment Income Before Income Taxes 35,069 23,984 11,085 46.2 %
Shared Resources 370 (400) 770 n/m
Total $ 35,439 $ 23,584 $ 11,855 50.3 %
Agriculture
Agriculture segment revenue for the first quarter of fiscal 2024 increased 32.9% compared to the first quarter of fiscal 2023. The higher revenue was driven primarily by the recent acquisitions of Mark's Machinery, the Heartland Companies, and Pioneer Farm Equipment, in April 2022, August 2022, and February 2023, respectively, as well as an increase in same-store sales in our Agriculture segment of 3.8%. Same-store sales growth was constrained by availability of key equipment categories due to ongoing supply chain constraints.
25
Table of Contents
Agriculture segment income before income taxes for the first quarter of fiscal 2024 was $24.2 million compared to $16.4 million for the first quarter of fiscal 2023. The improvement in segment results was primarily the result of higher equipment revenue, led by the acquisitions stated above, as well stronger gross profit margin on equipment driven by robust demand.
Construction
Construction segment revenue for the first quarter of fiscal 2024 increased 7.5% compared to the first quarter of fiscal 2023. Same-store sales in our Construction segment increased 9.9% for the first quarter of fiscal 2024, as compared to the first quarter of fiscal 2023, which more than offset the lost sales from the divestiture of our consumer products store in North Dakota. Construction activity in our footprint continued to be elevated, which was the primary factor in the same store sales growth.
Our Construction segment income before taxes was $4.5 million for the first quarter of fiscal 2024 compared to $3.2 million in the first quarter of fiscal 2023. The improvement in segment results was primarily due to an increase in same store sales, as described above as well as an increase in rental fleet utilization, which led to an increase in rental gross profit margin. These items more than offset the gain of $1.4 million on the sale of our consumer products store, in the first quarter of fiscal 2023. The dollar utilization — which is calculated by dividing the rental revenue earned on our rental fleet by the average gross carrying value of our rental fleet (comprised of original equipment costs plus additional capitalized costs) for that period — of our rental fleet increased from 24.5% in the first quarter of fiscal 2023 to 26.8% in the first quarter of fiscal 2024.
International
International segment revenue was $74.4 million for the first quarter of fiscal 2024 compared to $75.5 million in the first quarter of fiscal 2023. The decrease in segment revenues was primarily due to a 4.6% devaluation from the prior year period of the Euro, the functional currency in much of our international footprint, as compared to the U.S. Dollar. Revenue, net of the effect of foreign currency fluctuations, was up $2.1 million or 2.8%. The segment was also negatively impacted by a 10.7% decrease in total revenue from our Ukrainian subsidiary due to the Russia-Ukraine conflict, compared to the first quarter of fiscal 2023.
Our International segment income before income taxes was $6.4 million for the first quarter of fiscal 2024 compared to segment income before income taxes of $4.3 million for the same period last year. The increase in segment pre-tax income was primarily the result of improved gross profit margin of the three main revenue streams, equipment, parts, and service.
Shared Resources/Eliminations
We incur centralized expenses/income at our general corporate level, which we refer to as “Shared Resources,” and then allocate most of these net expenses to our segments. Since these allocations are set early in the year, unallocated balances may occur. Shared Resources income before income taxes was $0.4 million for the first quarter of fiscal 2024 compared to a loss before income taxes of $0.4 million for the same period last year.
Non-GAAP Financial Measures
Change in Non-GAAP Financial Measures
Beginning in the first quarter of fiscal 2024, the Company decided to discontinue the use of a non-GAAP adjustment for Ukraine foreign exchange gains and losses given its immaterial nature. Due to this change, there are no non-GAAP financial measures different from the comparable GAAP financial measure.
Liquidity and Capital Resources
Sources of Liquidity
Our primary sources of liquidity are cash reserves, cash generated from operations, and borrowings under our floorplan and other credit facilities. We expect these sources of liquidity to be sufficient to fund our working capital requirements, acquisitions, capital expenditures and other investments in our business, service our debt, pay our tax and lease obligations and other commitments and contingencies, and meet any seasonal operating requirements for the foreseeable future, provided that our borrowing capacity under our credit agreements is dependent on compliance with various covenants as further described in the "Risk Factors" section of our Annual Report on Form 10-K.
26
Table of Contents
Equipment Inventory and Floorplan Payable Credit Facilities
As of April 30, 2023, the Company had floorplan payable lines of credit for equipment purchases totaling $781.0 million, which is primarily comprised of a $500.0 million credit facility with CNH Industrial, a $185.0 million floorplan payable line under the Bank Syndicate Agreement, and a $50.0 million credit facility with DLL Finance.
Our equipment inventory turnover decreased from 3.5 times for the rolling 12 month period ended April 30, 2022 to 3.0 times for the rolling 12 month period ended April 30, 2023. The decrease in equipment turnover was attributable to an increase in equipment inventory over the rolling 12 month period ended April 30, 2023 as compared to the same period ended April 30, 2022. Our equity in equipment inventory, which reflects the portion of our equipment inventory balance that is not financed by floorplan payables, decreased to 34.8% as of April 30, 2023 from 51.7% as of January 31, 2023. The decrease in our equity in equipment inventory is primarily due to the stocking of new equipment inventories and the higher level of floorplan financing available on such inventories as well as increased borrowing on our floorplan lines of credit.
Adequacy of Capital Resources
Our primary uses of cash have been to fund our operating activities, including the purchase of inventories and providing for other working capital needs, meeting our debt service requirements, making payments due under our various leasing arrangements, and funding capital expenditures, including rental fleet assets, and funding acquisitions. Based on our current operational performance, we believe our cash flow from operations, available cash and available borrowing capacity under our existing credit facilities will adequately provide for our liquidity needs for, at a minimum, the next 12 months.
As of April 30, 2023, we were in compliance with the financial covenants under our CNH Industrial and DLL Finance credit agreements and we were not subject to the fixed charge coverage ratio covenant under the Bank Syndicate Agreement as our adjusted excess availability plus eligible cash collateral (as defined therein) was not less than 15% of the lesser of (i) aggregate borrowing base and (ii) maximum credit amount as of April 30, 2023. While not expected to occur, if anticipated operating results were to create the likelihood of a future covenant violation, we would expect to work with our lenders on an appropriate modification or amendment to our financing arrangements.
Cash Flow
Cash Flow Provided by (Used for) Operating Activities
Net cash used for operating activities was $77.7 million for the first three months of fiscal 2024, compared to net cash provided by operating activities of $5.3 million for the first three months of fiscal 2023. The change in net cash provided by (used for) operating activities is primarily the result of an increase in inventories partially offset by an increase in non-interest bearing floorplan lines of credit from manufacturers and higher net income for the first three months of fiscal 2024.
Cash Flow Used for Investing Activities
Net cash used for investing activities was $26.3 million for the first three months of fiscal 2024, compared to $11.9 million for the first three months of fiscal 2023. The increase in cash used for investing activities was primarily the result of the business acquisition of the five store Pioneer Farm Equipment dealership in the first three months of fiscal 2024, compared to the two store Mark's Machinery dealership in the first three months of fiscal 2023.
Cash Flow Provided by Financing Activities
Net cash provided by financing activities was $98.2 million for the first three months of fiscal 2024 compared to $8.0 million for the first three months of fiscal 2023 . The increase in cash provided by financing activities was primarily the result of increased non-manufactured floorplan payables in the first three months of fiscal 2024, as the Company drew on its Bank Syndicate floorplan loan in fiscal 2024, to purchase available inventory.
Information Concerning Off-Balance Sheet Arrangements
As of April 30, 2023, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Therefore, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Forward-looking statements are contained in this Quarterly Report on Form 10-Q, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in our Annual Report on Form 10-K for the year ended
27
Table of Contents
January 31, 2023, and in other materials filed by the Company with the Securities and Exchange Commission (and included in oral statements or other written statements made by the Company).
Forward-looking statements are statements based on future expectations and specifically may include, among other things, statements relating to our expectations regarding the performance of our Ukrainian subsidiary within our International segment, the impact of farm income levels on customer demand for agricultural equipment and services, and the impact of the Russia-Ukraine conflict on our Ukrainian subsidiary, the effectiveness and expected benefits of our new ERP system and the timing of the phased roll-out of the ERP system to the Company's domestic locations, the general market conditions of the agricultural and construction industries, equipment inventory levels, and our primary liquidity sources, and the adequacy of our capital resources and sources of liquidity. Any statements that are not based upon historical facts, including the outcome of events that have not yet occurred and our expectations for future performance, are forward-looking statements. The words “potential,” “believe,” “estimate,” “expect,” “intend,” “may,” “could,” “will,” “plan,” “anticipate,” and similar words and expressions are intended to identify forward-looking statements. These statements are based upon the current beliefs and expectations of our management. These forward-looking statements involve important risks and uncertainties that could significantly affect anticipated results or outcomes in the future and, accordingly, actual results or outcomes may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, the impact of the Russia -Ukraine conflict on our Ukrainian subsidiary, our ability to successfully integrate and realize growth opportunities and synergies in connection with the Heartland acquisition, the risk that we assume unforeseen or other liabilities in connection with the Heartland acquisition and the impact of those conditions and obligations imposed on us under the new CaseIH dealer agreements for the commercial application equipment business, our substantial dependence on CNH Industrial, including CNH Industrial's ability to design, manufacture and allocate inventory to our stores in quantities necessary to satisfy our customer's demands, disruptions of supply chains and associated impacts on the Company's supply vendors and their ability to provide the Company with sufficient and timely inventory to meet customer demand, adverse market conditions in the agricultural and construction equipment industries, and those matters identified and discussed under the section titled “Risk Factors” in our Annual Report on Form 10-K. In addition to those matters, there may exist additional risks and uncertainties not currently known to us or that we currently deem to be immaterial that may materially adversely affect our business, financial condition or results of operations.
28
Table of Contents
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.