What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-04-03 compared with 2023-03-30 · 232 added, 276 removed, 1049 unchanged (33% of the section changed)

12 unchanged sentences

Notes to Consolidated Financial Statements 54

Table of Conten ts

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Titan Machinery Inc.

To the stockholders and Board of Directors of Titan Machinery Inc.

Opinion on the Financial Statements

2 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2024, and 2023, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated Marc h 30, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 3, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

21 unchanged sentences

The Company estimates net realizable value using internal and third-party data that considers various factors including the age and condition of the equipment, hours of use, and market conditions.

The used equipment inventories balance as of January 31, 2023 was $164.8 million.

Given the significant judgments made by management to determine the initial fair value and subsequent net realizable value of used equipment inventories, performing audit procedures to evaluate these judgments to determine the valuation of used equipment inventories required a high degree of auditor judgment and an increased extent of effort.

Table of Conten ts

How the Critical Audit Matter Was Addressed in the Audit

4 unchanged sentences

• Evaluating the reasonableness and consistency of the methodology and assumptions used by management to determine fair value or net realizable value, as applicable.

• Testing the underlying determination of the fair value or net realizable value by obtaining sales documentation containing the age of the equipment and hours of use and comparing it to comparable internal and external data.

• Testing the underlying determination of the fair value or net realizable value by obtaining documentation containing the age of the equipment and hours of use and comparing it to comparable internal and external data.

• Performing a retrospective lookback analysis of management’s process by comparing the actual selling prices of used equipment inventories units sold in the current year to the selling prices estimated by management for those units in the prior year, as applicable.

1 unchanged sentence

Minneapolis, Minnesota

March 30 , 2023

April 3, 2024

We have served as the Company's auditor since 2013.

Table of Conten ts

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

4 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended January 31, 2023, of the Company and our report dated March 30, 2023, expressed an unqualified opinion on those financial statements.

As detailed in Management's Report on Internal Control Over Financial Reporting , management excluded from its assessment the internal control over financial reporting at Heartland Agriculture, LLC, Heartland Solutions, LLC, Heartland Leveraged Lender, LLC (“collectively the Heartland Companies”), which were acquired on August 1, 2022, and whose financial statements constitute 5.7% of total assets and 4.7% of total revenue of the consolidated financial statement amounts as of and for the year ended January 31, 2023.

Accordingly, our audit did not include the internal control over financial reporting at the Heartland Companies.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended January 31, 2024, of the Company and our report dated April 3, 2024, expressed an unqualified opinion on those financial statements.

As detailed in Management’s Report on Internal Control Over Financial Reporting , management excluded from its assessment the internal control over financial reporting at J.J.

O’Connor & Sons Pty.

(“O’Connors”), which was acquired on October 2, 2023, and whose financial statements constitute 11.3% of total assets and 2.3% of total revenue of the consolidated financial statement amounts as of and for the year ended January 31, 2024.

Accordingly, our audit did not include the internal control over financial reporting for O’Connors.

Basis for Opinion

16 unchanged sentences

Minneapolis, Minnesota

Ma rch 30, 2023

Table of Conten ts

April 3, 2024

TITAN MACHINERY INC.

26 unchanged sentences

Accrued expenses and other 74,400 62,004

Income taxes payable 3,845 4,700

Total current liabilities 1,152,401 498,151

16 unchanged sentences

See Notes to Consolidated Financial Statements

Table of Conten ts

TITAN MACHINERY INC.

16 unchanged sentences

Operating Expenses 362,509 301,516 241,044

Impairment of Goodwill — — 1,453

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

14 unchanged sentences

See Notes to Consolidated Financial Statements

Table of Conten ts

TITAN MACHINERY INC.

8 unchanged sentences

See Notes to Consolidated Financial Statements

Table of Conten ts

TITAN MACHINERY INC.

23 unchanged sentences

See Notes to Consolidated Financial Statements

Table of Conten ts

TITAN MACHINERY INC.

11 unchanged sentences

Noncash interest expense 292 245 218

Gain on sale of property & equipment ( 502 ) ( 4,525 ) ( 863 )

Gain on sale of property and equipment ( 1,349 ) ( 502 ) ( 4,525 )

Other, net 7,968 9,383 10,593

Changes in assets and liabilities

Receivables, prepaid expenses and other assets 9,886 ( 37,037 ) 4,469

Changes in assets and liabilities, net of effects of acquisitions

Receivables ( 48,091 ) 5,267 ( 12,399 )

Prepaid expenses and other assets 615 4,619 (24,638)

Inventories ( 476,389 ) ( 180,929 ) 5,799

2 unchanged sentences

Accounts payable, accrued expenses and other and other long-term liabilities ( 17,845 ) ( 13,933 ) ( 1,162 )

Net Cash Provided by Operating Activities 10,816 158,916 172,996

Net Cash (Used for) Provided by Operating Activities ( 32,280 ) 10,816 158,916

Investing Activities

29 unchanged sentences

Titan Machinery Inc.

and its subsidiaries (collectively, the "Company") are 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, 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, 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 nine locations throughout Ukraine primarily in western and central Ukraine.

The conflict has caused disruptions in our Ukrainian operations, with our revenues for fiscal 2023 down 40.5% from the prior fiscal year.

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 Titan Machinery Ukraine in future periods.

For the fiscal year ended January 31, 2023, the Company had total assets of $27.4 million in Ukraine compared to $32.7 million as of January 31, 2022.

The physical assets (e.g.

inventory and fixed assets) are almost exclusively located in central and western areas of the country.

The Company continues to monitor Titan Machinery Ukraine's net monetary asset position, and while the currency and payment controls imposed by the National Bank of Ukraine have been relaxed, the controls have limited our ability to manage our net monetary asset position in the past and could limit our ability in the future.

and its subsidiaries (collectively, the "Company") are engaged in the retail sale, service and rental of agricultural and construction machinery through its stores in the United States, Europe, and Australia.

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, its European stores are located in Bulgaria, Germany, Romania, and Ukraine, and its Australian stores are located in New South Wales, South Australia, and Victoria.

The agricultural and construction equipment businesses are highly seasonal, which causes the Company's quarterly results and cash flows to fluctuate during the year.

The Company's customers generally purchase and rent equipment in preparation for, or in conjunction with, their busy seasons, which for farmers are the spring planting and fall harvesting seasons, and for construction customers is dependent on weather seasons in their respective regions, which is typically the second and third quarters of the Company's fiscal year for much of its Construction footprint.

The Company's customers generally purchase and rent equipment in preparation for, or in conjunction with, their busy seasons, which for farmers are the planting and harvesting seasons, and for construction customers is dependent on weather seasons in their respective regions, which is typically the second and third quarters of the Company's fiscal year for much of its Construction footprint.

The Company's parts and service revenues are also typically highest during its customers' busy seasons, due to the increased use of their equipment during this time, which generates the need for more parts and service work.

9 unchanged sentences

Actual results could differ from those estimates, particularly related to realization of inventory, impairment of long-lived assets, goodwill, indefinite-lived intangible assets, collectability of receivables, and income taxes.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Concentrations of Credit Risk

The Company's sales are to agricultural and construction equipment customers principally in the states in which it has stores as well as in the European countries in which its stores are located.

The Company's sales are to agricultural and construction equipment customers principally in the U.S.

states in which it has stores as well as in the European countries and Australian states in which its stores are located.

The Company extends credit to its customers in the ordinary course of business and monitors its customers' financial condition to minimize its risks associated with trade receivables;

6 unchanged sentences

The dealership authorizations and floorplan payable facilities can be canceled by the respective entity if the Company does not observe certain established guidelines and covenants.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In addition, the Company believes that the following factors related to concentrations in suppliers, and in particular CNH Industrial, have a significant impact on its operating results:

1 unchanged sentence

• CNH Industrial's product prices and incentive and discount programs;

• Supply of inventory from CNH Industrial and ability to meet delivery timelines;

• CNH Industrial's implementation of an equipment allocation methodology for use in determining production slots in calendar year 2023;

• Supply of inventory from CNH Industrial and ability to match demand levels and delivery timelines;

• CNH Industrial provides floorplan payable financing for the purchase of a substantial portion of the Company's inventory;

18 unchanged sentences

The Company satisfies its performance obligation and recognizes revenue at a point in time, upon delivery of the product to the customer.

Once a product is delivered, the Company has a present right to payment, the customer has physical possession of the asset, can direct the use of the asset, and has the significant risks and rewards of ownership of the

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In many cases, customers tender payment at the time of delivery.

14 unchanged sentences

Balances not paid at the time of invoicing are typically due in full within 30 days.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Rental and Other Revenue.

11 unchanged sentences

Payments of trade receivables are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

Trade accounts receivable due from manufacturers relate to discount programs and incentive programs.

Trade accounts receivable due from manufacturers relate to warranty work, discount programs and incentive programs.

Trade accounts receivable due from finance companies primarily consist of contracts in transit with finance companies and balances due from credit card companies.

4 unchanged sentences

Account balances are charged off after all appropriate means of collection have been exhausted and the potential for recovery is considered remote.

New and used equipment are stated at the lower of cost (specific identification) or net realizable value.

New and used equipment are stated at the lower of cost or net realizable value, determined for each piece of equipment (specific identification).

Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

2 unchanged sentences

Parts inventories are valued at the lower of average cost or net realizable value.

The Company estimates its lower of average cost or net realizable value adjustments on its parts inventories based on various factors including aging and sales of each type

The Company estimates its lower of average cost or net realizable value adjustments on its parts inventories based on various factors including aging and sales of each type of parts inventory.

Work in process represents costs incurred in the reconditioning and preparation for sale of our equipment inventories.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of parts inventory.

Work in process represents costs incurred in the reconditioning and preparation for sale of our equipment inventories.

Property and Equipment

12 unchanged sentences

A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component.

The goodwill impairment analysis is a single-step quantitative assessment that identifies both the existence of impairment and the amount of impairment loss by comparing the estimated fair value of a reporting unit to its carrying value, with any excess carrying value over the fair value being recognized as an impairment loss, limited to the total amount of goodwill allocated to that reporting unit.

Evaluating goodwill for impairment involves the determination of the fair value of each reporting unit in which goodwill is recorded using a qualitative or quantitative analysis.

If fair value excess the carrying value, impairment is not indicated.

If the carrying amount of a reporting unit is higher than its estimated fair value, the excess is recorded as an impairment expense.

The Company performs its annual goodwill impairment test as of December 31st of each year.

2 unchanged sentences

Intangible assets with a finite life consist of customer relationships and covenants not to compete, and are carried at cost less accumulated amortization.

The Company amortizes the cost of identified intangible assets on a straight-line basis over the expected period of benefit, which is generally five years for customer relationships and the contractual term for covenants not to compete, which range from three to five years.

The Company amortizes the cost of identified intangible assets on a straight-line basis over the expected period of benefit, which generally range from five to ten years for customer relationships and the contractual term for covenants not to compete, which range from three to five years.

Intangible assets with an indefinite life consist of distribution rights with manufacturers.

18 unchanged sentences

In light of these circumstances, the Company performed a long-lived asset impairment analysis for these assets and concluded that the carrying value was recoverable.

Accordingly, the Company did not recognize any impairment charges in year ended January 31, 2023.

Accordingly, the Company did not recognize any impairment charges in the year ended January 31, 2024.

We performed similar impairment analyses at the end of fiscal 2023 and 2022.

The Company recognized impairment charges totaling $ 0.4 million on long-lived assets during the year ended January 31, 2022, which were related to the International segment.

The Company recognized impairment charges totaling $ 0.9 million on long-lived assets during the year ended January 31, 2021, of which $ 0.3 million related to the Agriculture segment and $ 0.6 million related to the Construction segment.

The Company did not recognize impairment charges during the year ended January 31, 2023.

The Company recognized impairment charges totaling $ 0.4 million on long-lived assets during the year ended January 31, 2022, which was related to the Europe segment.

All impairment charges recognized are included in the Impairment of Intangible and Long-Lived Assets line item in the consolidated statements of operations.

45 unchanged sentences

Foreign currency remeasurement adjustments are included in the statement of operations.

The Company recognized, in interest and other income in its consolidated statements of operations, a net foreign currency transaction loss of $ 1.2 million, $ 0.1 million, and $ 2.8 million for the years ended January 31, 2023, 2022, and 2021 respectively.

The Company recognized, in interest and other income in its consolidated statements of operations, a net foreign currency transaction gain (loss) of $ 1.0 million, $( 1.2 ) million, and $( 0.1 ) million for the years ended January 31, 2024, 2023, and 2022 respectively.

Business Combinations

12 unchanged sentences

Segment Reporting

The Company operates its business in three reportable segments, the Agriculture, Construction and International segments.

The Company operates its business in four reportable segments, the Agriculture, Construction, Europe and Australia segments.

The segment formerly known as "International" has been updated to "Europe" as of October 31, 2023 and a fourth segment "Australia" was created as a result of the Company's acquisition of J.J.

O’Connor & Sons Pty.

("O’Connors"), refer to Note 19 - Business Combinations for further details.

Recent Accounting Guidance

Accounting guidance not yet adopted

In September of 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires additional income tax disclosures in the rate reconciliation table for federal, state and foreign income taxes, in addition to more details about the reconciling items in some categories when items meet a certain quantitative threshold.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements.

In March 2024, the SEC adopted new rules that will require registrants to provide certain climate-related information in their registration statements and annual reports.

The rules require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.

The required information about climate-related risks will also include disclosure of a registrant's greenhouse gas emissions.

In addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements.

The Company is currently evaluating the rules and the impact on its future consolidated statements.

Recently Adopted Accounting Guidance

In September 2022, FASB issued ASU No.

2022-04, Supplier Finance Programs (Subtopic 405-50):

2 unchanged sentences

This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023.

Early adoption of this ASU is permitted.

Entities must apply the amendments of this ASU retrospectively to all periods in which a balance sheet is presented, with the exception of the amendment on disclosure of rollforward information, which entities only need to apply prospectively.

Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

On February 1, 2023, the Company adopted ASU No.

2022-04 to our consolidated financial statements.

The Company has agreements with financial institutions to facilitate the purchase of inventory from designated suppliers under certain terms and conditions.

Under these agreements, the Company receives extended payment terms and agrees to pay the financial institution a stated amount of confirmed invoices from its designated suppliers.

The Company may incur interest in accordance with the terms of the agreements.

Additionally, the Company has no involvement in establishing the terms or conditions of the arrangements between its suppliers and the financial institution.

The amounts outstanding under these agreements as of January 31, 2024 and 2023 were $47.0 million and $13.0 million, respectively, and are presented as Floorplan payable on the Company's consolidated balance sheets.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2 - EARNINGS PER SHARE

9 unchanged sentences

All anti-dilutive securities were excluded from the computation of diluted EPS.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table sets forth the calculation of basic and diluted EPS:

12 unchanged sentences

Diluted $ 4.93 $ 4.49 $ 2.92

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3 - REVENUE

1 unchanged sentence

Year Ended January 31, 2024

Agriculture Construction International Total

Agriculture Construction Europe Australia Total

(in thousands)

7 unchanged sentences

Year Ended January 31, 2023

Agriculture Construction International Total

Agriculture Construction Europe Total

(in thousands)

6 unchanged sentences

Total revenues $ 1,601,720 $ 308,457 $ 299,129 $ 2,209,306

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended January 31, 2022

Agriculture Construction International Total

Agriculture Construction Europe Total

(in thousands)

6 unchanged sentences

Total revenues $ 1,076,751 $ 317,164 $ 317,991 $ 1,711,906

Deferred revenue from contracts with customers totaled $ 118.1 million and $ 132.2 million as of January 31, 2023 and January 31, 2022.

Deferred revenue from contracts with customers totaled $ 114.6 million and $ 118.1 million as of January 31, 2024 and January 31, 2023, 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.

The decrease in deferred revenue from January 31, 2022 to January 31, 2023, was primarily due to lower trade-in activity on pending equipment sale transactions as customer's are less willing to give up their trade until their new equipment is delivered, due to the delays in getting new equipment over the past year.

During the year ended January 31, 2024, the Company recognized substantially all of the revenue that was included in the deferred revenue balance as of January 31, 2023.

5 unchanged sentences

$ 115,852 $ 119,845

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

No material amount of revenue was recognized during the year ended January 31, 2024 from performance obligations satisfied in previous periods.

12 unchanged sentences

Trade and unbilled receivables from rental contracts are primarily in the United States and are specifically excluded from the accounting guidance in determining an allowance for expected losses.

The Company provides an allowance for these

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

receivables based on historical experience and using credit information obtained from continued monitoring of customer accounts.

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

January 31, 2024 January 31, 2023

5 unchanged sentences

102,473 63,982

Trade receivables due from finance companies 11,212 17,937

Short-term receivables due from finance companies 28,486 11,212

Trade and unbilled receivables from rental contracts

10 unchanged sentences

Following is a summary of allowance for credit losses on trade and unbilled accounts receivable by segment:

Agriculture Construction International Total

Agriculture Construction Europe Australia Total

(in thousands)

10 unchanged sentences

Balance at January 31, 2024 $ 164 $ 177 $ 2,638 $ 59 $ 3,038

The increase in the credit loss provision in the International segment, during the twelve months ended January 31, 2023, was driven by a $1.0 million bad debt provision placed on the accounts receivables due from customers of Titan Machinery Ukraine.

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

1 unchanged sentence

(in thousands)

Impairment losses (recoveries) on:

Impairment losses on:

Receivables from sales contracts with customers $ 669 $ 1,490

1 unchanged sentence

$ 916 $ 1,617

The increase in impairment losses on receivables from sales contracts with customers was primarily driven by an increase in the bad debt provision on accounts receivables due from customers of Titan Machinery Ukraine.

NOTE 5 - INVENTORIES

19 unchanged sentences

$ 298,774 $ 217,782

The Company includes depreciation expense related to its rental fleet and its trucking fleet, for hauling equipment, in cost of revenue, which was $ 8.2 million, $ 8.6 million, and $ 10.3 million for the years ended January 31, 2023, 2022 and 2021.

The Company includes depreciation expense related to its rental fleet and its trucking fleet, for hauling equipment, in Cost of Revenue, which was $ 8.7 million, $ 8.2 million, and $ 8.6 million for the years ended January 31, 2024, 2023 and 2022, respectively.

All other depreciation expense is included in Operating Expenses, which totaled $ 21.3 million, $ 15.9 million, and $ 12.2 million for the years ended January 31, 2024, 2023 and 2022, respectively.

The Company had assets related to sale-leaseback financing obligations and finance leases associated with real estate of store locations, which are included in the land, buildings and leasehold improvements balance above.

Such assets had gross carrying values totaling $ 18.8 million and $ 26.3 million, and accumulated amortization balances totaling $ 8.6 million and $ 8.3 million, as of January 31, 2023 and 2022.

Such assets had gross carrying values totaling $ 18.4 million and $ 18.8 million, and accumulated amortization balances totaling $ 9.7 million and $ 8.6 million, as of January 31, 2024 and 2023, respectively.

NOTE 7 - INTANGIBLE ASSETS AND GOODWILL

9 unchanged sentences

$ 13,445 $ ( 1,157 ) $ 12,288 $ 1,563 $ ( 402 ) $ 1,161

Intangible asset amortization expense was $ 0.2 million for the year ended January 31, 2023, and $0.1 million for the two years ended January 31, 2022 and 2021.

Intangible asset amortization expense was $ 0.7 million for the year ended January 31, 2024, and $ 0.2 million for the each of the years ended January 31, 2023 and 2022.

The covenants not to compete and customer relationships assets for the year ended January 31, 2024 have a weighted-average amortization period of 4.7 years and 6.9 years, respectively.

2 unchanged sentences

(in thousands)

Thereafter 2,905

TITAN MACHINERY INC.

3 unchanged sentences

Changes in the carrying amount of distribution rights during the years ended January 31, 2024 and 2023 are as follows:

Agriculture Construction International Total

Agriculture Construction Australia Total

(in thousands)

1 unchanged sentence

Arising from business combinations 7,042 — — 7,042

Foreign currency translation — — ( 22 ) ( 22 )

Impairment — — 1,139 1,139

Balance, January 31, 2023 $ 17,178 $ 72 $ — $ 17,250

Arising from business combinations 976 — — 21,470 22,446

Foreign currency translation — — 1,372 1,372

Balance, January 31, 2024 $ 18,154 $ 72 $ 22,842 $ 41,068

5 unchanged sentences

The results of the Company's annual distribution rights impairment test for the year ended January 31, 2024, indicated no impairment.

The results of the Company's impairment testing for the Germany distribution rights intangible assets for the quarter ended July 31, 2021, indicated that the estimated fair value of the tested distribution rights was below the carrying value of such assets, thus requiring an impairment to be recognized.

Impairment charges of $ 1.1 million were recognized and are included in the Impairment of Intangibles and Long-lived Assets amount in the consolidated statements of operations.

The impairment charges arose as the result of lowered expectations of the future financial performance of this reporting unit.

The Company's assumptions about future financial performance were impacted by the current year operating performance of this reporting unit and by the anticipated impact that challenging industry conditions, including COVID-19, may have on the future financial performance of this reporting unit.

The results of the Company's impairment testing for the Germany distribution rights intangible assets for the quarter ended October 31, 2020, indicated that the estimated fair value of the tested distribution rights was below the carrying value of such assets, thus requiring an impairment to be recognized.

Impairment charges of $0.9 million were recognized and are included in the Impairment of Intangibles and Long-lived Assets amount in the consolidated statements of operations.

The impairment charges arose as the result of lowered expectations of the future financial performance of this reporting unit.

During the year ended January 31, 2023, no impairment charges were recognized in association with indefinite-lived intangible assets.

During the years ended January 31, 2022 and 2021, the Company recognized $ 1.1 million and $0.9 million of impairment charges associated with its distribution rights in its German reporting unit.

During the years ended January 31, 2024 and 2023, no impairment charges were recognized in association with indefinite-lived intangible assets.

During the year ended January 31, 2022, the Company recognized $ 1.1 million of impairment charges associated with its distribution rights in its German reporting unit.

The Company had gross indefinite-lived intangible assets of $ 42.2 million and accumulated impairments of $ 1.1 million as of January 31, 2024.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Changes in the carrying amount of goodwill during the years ended January 31, 2024 and 2023 are as follows:

Agriculture Total

Agriculture Europe Australia Total

(in thousands)

3 unchanged sentences

Arising from business combinations 7,198 471 24,261 31,930

Foreign currency translation — 3 1,550 1,553

Balance, January 31, 2024 $ 37,820 $ 474 $ 25,811 $ 64,105

The Company performs an annual impairment testing of goodwill as of December 31st of each year.

Under the impairment test, the fair value of the reporting unit is estimated using an income approach in which a discounted cash flow analysis is utilized, which includes a five-year forecast of future operating performance for the reporting unit and a terminal value that estimates sustained long-term growth.

The discount rate applied to the estimated future cash flows reflects an estimate of the weighted-average cost of capital of comparable companies.

For the year ended January 31, 2024, the Company performed a qualitative (Step 0) assessment and we concluded the that it was more likely than not that the fair value of the reporting units under the Agriculture and Australia reporting units exceeded its carrying value.

Therefore, we were not required to perform a quantitative analysis.

However, management elected to perform a quantitative analysis for the goodwill in our German reporting unit, within our Europe segment.

which was completed for the year ended January 31, 2023.

Under the quantitative impairment test, the fair value of the reporting unit was estimated using an income approach and it was determined that the fair value exceeded the carrying value, so no impairment was recognized.

During the years ended January 31, 2024, 2023 and 2022, the Company did not recognize any impairment charges.

During the year ended January 31, 2021, the quantitative goodwill impairment analysis for the German reporting unit indicated that the estimated fair value of the reporting unit was less than the carrying value.

The implied fair value of the goodwill associated with the reporting unit approximated zero, thus requiring a full impairment charge of the goodwill carrying value of the reporting unit.

As such, a goodwill impairment charge of $1.5 million was recognized, which is included in Impairment of Goodwill in the consolidated statements of operations.

The impairment charge arose as the result of lowered expectations of the future financial performance of this reporting unit.

This removed all of the remaining goodwill in the International segment during the year ended January 31, 2021, the Agriculture segment is the only segment with goodwill on its balance sheet.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The gross goodwill balance was $ 65.6 million and $ 32.1 million as of January 31, 2024 and 2023, respectively.

The accumulated goodwill impairment loss was $ 1.5 million as of January 31, 2024 and 2023.

NOTE 8 - FLOORPLAN PAYABLE/LINES OF CREDIT

1 unchanged sentence

In the consolidated statements of cash flows, the Company reports cash flows associated with manufacturer floorplan financing as operating cash flows and cash flows associated with non-manufacturer floorplan financing as financing cash flows.

As of January 31, 2023, the Company had floorplan lines of credit totaling $ 781.0 million, which is primarily comprised of three significant floorplan lines of credit:

As of January 31, 2024, the Company had floorplan lines of credit totaling $ 1.4 billion, which is primarily comprised of three significant floorplan lines of credit:

(i) a $ 875.0 million credit facility with CNH Industrial, (ii) a $ 275.0 million line of credit with a group of banks (the "Bank Syndicate"), and (iii) a $ 80.0 million credit facility with DLL Finance LLC (“DLL Finance”).

CNH Industrial Floorplan Payable Line of Credit

As of January 31, 2023, the Company had a $ 500.0 million credit facility with CNH Industrial, of which $ 410.0 million is available for domestic financing and $ 90.0 million is available for European financing.

The domestic financing facility offers financing for new and used equipment inventories.

Available borrowings under the credit facility are reduced by outstanding floorplan payable balances and other acquisition-related financing arrangements with CNH Industrial.

The credit facility charges interest at a rate dependent on the Company's Retail Finance Market Share, as defined in the credit facility agreement, and ranges from 0.5% to 2.75 % plus the prime rate for the financing of new and used equipment inventories and rental fleet assets.

As of January 31, 2024, the Company had a $ 875.0 million credit facility with CNH Industrial, of which $ 640.0 million is available for U.S.

domestic financing, $140.0 million is available for Australian financing, and $ 95.0 million is available for European financing.

domestic financing facility offers financing for new and used equipment inventories.

Available borrowings under this credit facility are reduced by outstanding floorplan payable balances and other acquisition-related financing arrangements with CNH Industrial.

This credit facility charges interest at the prime rate plus or minus an agreed upon percentage, but not less than zero, for the financing of new and used equipment inventories and rental fleet assets.

CNH Industrial offers periods of reduced interest rates and interest-free periods.

Repayment terms vary, but generally payments are made from sales proceeds or rental revenue generated from the related inventories or rental fleet assets.

Balances under the outstanding CNH Industrial credit facility are secured by the inventory or rental fleet purchased with the floorplan proceeds.

Balances under the outstanding CNH Industrial U.S.

domestic credit facility are secured by the inventory or rental fleet purchased with the floorplan proceeds.

The European financing facility offers financing for new equipment inventories.

Available borrowings under the credit facility are reduced by outstanding floorplan payable balances.

Available borrowings under this credit facility are reduced by outstanding floorplan payable balances.

Amounts outstanding are generally due approximately 75 days after the date of invoice by CNH Industrial.

Generally, no interest is charged on outstanding balances.

However, in certain international markets the Company receives extended terms from CNH

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Industrial similar to what we receive domestically with reduced interest and interest free periods.

Amounts outstanding are secured by the inventory purchased with the floorplan proceeds.

However, in certain international markets the Company receives extended terms from CNH Industrial similar to what we receive domestically with reduced interest and interest free periods.

Amounts outstanding under European financing facility are secured by the inventory purchased with the floorplan proceeds.

The Australian financing facility offers financing for new and used equipment inventories.

Available borrowings under the credit facility are reduced by outstanding floorplan payable balances.

CNH Industrial offers periods of reduced interest rates and interest-free periods.

Repayment terms vary, but generally payments are made from sales proceeds.

The credit facility charges interest at the CNH Industrial prime rate plus or minus an agreed upon spread, but not less than zero, for the financing of new and used equipment inventories and rental fleet assets.

Amounts outstanding under the Australian financing facility are secured by the inventory purchased with the floorplan proceeds.

The CNH Industrial credit facility contains financial covenants that impose a maximum level of adjusted debt to tangible net worth of 3.50 :1.00 and minimum fixed charge coverage ratio of 1.10 :1.00.

7 unchanged sentences

As of January 31, 2024, the Company was in compliance with the adjusted debt to tangible net worth and fixed charge coverage ratio financial covenants under this credit facility.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Bank Syndicate Credit Agreement - Floorplan Payable and Working Capital Lines of Credit

As of January 31, 2024, the Company had a $350.0 million credit facility under a Third Amended and Restated Credit Agreement (the "Bank Syndicate Agreement"), consisting of a $ 275.0 million floorplan facility (the "Floorplan Loan") and a $ 75.0 million operating line (the "Revolver Loan").

The amounts available under the Bank Syndicate Agreement are subject to base calculations and reduced by outstanding standby letters of credit and certain reserves.

The amounts available under the Bank Syndicate Agreement are subject to borrowing base calculations and reduced by outstanding standby letters of credit and certain reserves.

The Bank Syndicate Agreement includes a variable interest rate on outstanding balances, charges a 0.25 % non-usage fee on the average monthly unused amount, and requires monthly payments of accrued interest.

The Company elects at the time of any advance to choose a Base Rate Loan or a Secured Overnight Financing Rate ("SOFR") Rate Loan.

The default loan type is a Secured Overnight Financing Rate ("SOFR") Rate Loan and only if the Company actively selects a Base Rate Loan would the Base Rate Loan be used.

The SOFR Rate is based upon one-month, three-month, or six-month SOFR, as chosen by the Company, plus an applicable margin, plus 11.4 basis points for one-month, 26.2 basis points for three-month, and 42.8 basis points for six-month loans.

12 unchanged sentences

The Revolver Loan is used to finance rental fleet equipment and for general working capital requirements of the Company.

Amounts outstanding are typically recorded as long-term debt, within long-term liabilities on the consolidated balance sheets, as the Company does not have the intention or obligation to repay amounts borrowed within one year.

Amounts outstanding are typically recorded as long-term debt, within long-term liabilities on the consolidated balance sheets, as the Company does not have the obligation to repay amounts borrowed within one year.

As of January 31, 2024 and 2023, the Company did not have a need to utilize the revolver loan as the balance was zero for both periods.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DLL Finance Floorplan Payable Line of Credit

1 unchanged sentence

The DLL Finance credit facility may be used to purchase or refinance new and used equipment inventory.

Amounts outstanding for domestic financing bear interest on outstanding balances of one-month SOFR plus an applicable margin of 3.06 %.

Amounts outstanding for domestic financing bear interest on outstanding balances of one-month SOFR plus an applicable margin between 3.00 % and 6.00%.

Amounts outstanding for European financing bear interest on outstanding balances of three-month EURIBOR plus an applicable margin of 2.10 % to 2.50 %.

7 unchanged sentences

The Company’s other lines of credit include various floorplan and working capital lines of credit primarily offered by non-manufacturer financing entities.

Interest charged on outstanding borrowings are generally variable rates of interest most often based on EURIBOR and include interest margins primarily ranging from 1.40% to 2.50%.

Interest charged on outstanding borrowings are generally variable rates, such as EURIBOR and BBSY and include interest margins.

Outstanding balances are generally secured by inventory and other current assets.

In most cases these lines of credit have a one-year maturity, with an annual review process to extend the maturity date for an additional one-year period.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Summary of Outstanding Amounts

7 unchanged sentences

$ 893,846 $ 258,372

As of January 31, 2023, the interest-bearing U.S.

floorplan payables were primarily on the Bank Syndicate Agreement Loan with a variable interest rate of 5.94%.

As of January 31, 2022, generally all U.S.

floorplan payables were non-interest bearing.

As of January 31, 2023, foreign floorplan payables carried various interest rates primarily ranging from 4.16 % to 4.96 %, compared to a range of 1.40 % to 4.79 % as of January 31, 2022.

As of January 31, 2024, the interest-bearing floorplan payables carried a variable interest rate with a range of 5.24 % to 10.70% compared to a range of 4.16 % to 10.25% as of January 31, 2023.

As of January 31, 2024 and 2023, $ 428.3 million and $ 213.0 million, respectively, of outstanding floorplan payables were non-interest bearing.

5 unchanged sentences

Insurance 5,212 4,291

Lease residual value guarantees 193 422

Finance lease liabilities 577 7,466

Interest 487 349

Other 17,738 7,485

$ 74,400 $ 58,159

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 - LONG-TERM DEBT

7 unchanged sentences

10,043 11,252

Vehicle loans, secured Various through November 2028 1.7 % to 5.9 %

Vehicle loans, secured Various through December 2029 2.1 % to 6.8 %

14,433 12,659

Other Various through July 2039 3.6 % 4,591 —

Other Various through July 2039 1.2% to 3.6 %

Total debt 120,113 97,191

4 unchanged sentences

(in thousands)

2025 $ 13,706

Thereafter 42,327

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - DERIVATIVE INSTRUMENTS

5 unchanged sentences

Both the gain or loss on the derivative instrument and the offsetting gain or loss on the underlying intercompany loan are recognized in earnings immediately, thereby eliminating or reducing the impact of foreign currency exchange rate fluctuations on net income.

The Company's foreign currency forward contracts generally have three-month maturities, maturing on the last day of each fiscal quarter.

There were no outstanding foreign currency contracts as of January 31, 2023 and 2022.

As of January 31, 2023, and 2022, the Company had no derivative instruments outstanding.

The Company's foreign currency forward contracts generally have one to three-month maturities.

The notional value of outstanding foreign currency contracts as of January 31, 2024 was $25.3 million and there were no foreign currency forward contracts outstanding as of January 31, 2023.

As of January 31, 2024, and 2023, the fair value of the Company's outstanding derivative instruments was not material.

Derivative instruments recognized as assets are recorded in Prepaid expenses and other in the consolidated balance sheets, and derivative instruments recognized as liabilities are recorded in Accrued expenses and other in the consolidated balance sheets.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table sets forth the gains and (losses) recognized in income related to the Company’s derivative instruments for the years ended January 31, 2024, 2023 and 2022.

21 unchanged sentences

See additional information on operating lease commitments in Note 13.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13 - LEASES

10 unchanged sentences

Our lease agreements do not contain any material non-lease components, residual value guarantees or material restrictive covenants.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company subleases a small number of real estate assets to third parties, primarily dealership locations for which we have ceased operations.

12 unchanged sentences

$ 13,697 $ 15,281 $ 17,473

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

24 unchanged sentences

Present value of lease liabilities $ 61,715 $ 1,965 $ 63,680

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted-average lease term and discount rate as of January 31, 2024 and 2023 are as follows:

6 unchanged sentences

Financing leases 8.8 % 8.3 %

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other lease information is as follows:

32 unchanged sentences

NOTE 14 - INCOME TAXES

The components of income (loss) before income taxes for the years ended January 31, 2023, 2022 and 2021 consist of the following:

The components of income before income taxes for the years ended January 31, 2024, 2023 and 2022 consist of the following:

2024 2023 2022

21 unchanged sentences

Valuation allowances 0.6 % 0.4 % 0.6 %

Impact of Ukraine currency gains or losses ( 0.9 ) % 0.7 % ( 4.0 ) %

All other, net 0.5 % ( 1.2 ) % 0.2 %

19 unchanged sentences

Right of use lease asset ( 9,271 ) ( 12,028 )

Intangible assets ( 11,026 ) —

Total deferred tax liabilities $ ( 43,389 ) $ ( 30,917 )

2 unchanged sentences

$ 24.5 million of net operating loss carryforwards are within foreign jurisdictions with unlimited carryforward periods, and $5.0 million are within foreign jurisdictions that expire at various dates between the Company's fiscal years 2037 and 2038.

In reviewing the foreign deferred tax assets as of January 31, 2023, the Company concluded that a full valuation allowance continued to be warranted in the Company's Ukrainian subsidiary, due to geopolitical concerns in the area.

The Company also concluded a full valuation allowance on the Company's German and Luxembourg subsidiaries continued to be warranted based on the presence of historical losses and our expected future sources of taxable income.

In the third quarter of fiscal 2023, the Company released the remaining valuation allowance on its Bulgarian subsidiary, resulting in a benefit of $0.3 million.

In total, valuation allowances of $6.5 million exist for our international entities as of January 31, 2023.

In reviewing the foreign deferred tax assets as of January 31, 2022, the Company concluded that a full valuation allowance continued to be warranted in the Company's Ukrainian subsidiary, due to geopolitical concerns in the area.

It was also concluded that a full valuation allowance for the Company’s German and Luxembourg subsidiaries was warranted, based on the presence of historical losses and our expected future sources of taxable income, including the anticipated future reversal of our existing deferred tax assets and liabilities.

In the second quarter of fiscal 2022, the Company recorded an additional $2.5 million valuation allowance related to the German and Luxembourg subsidiaries.

It was also concluded that a partial release of the valuation allowance of the Company’s Bulgaria subsidiary is warranted based on the presence of historical income, and our expected future sources of taxable income, including the anticipated future reversal of our existing deferred tax assets and liabilities.

In the fourth quarter of fiscal 2022, the Company recorded a benefit of $1.3 million from the partial release of the valuation allowance related to the Company’s Bulgaria subsidiary.

In total, valuation allowances of $6.0 million exist for our international entities as of January 31, 2022.

At the end of fiscal year ended January 31, 2021, the Company concluded that a full valuation allowance continued to be warranted in certain jurisdictions.

It was also concluded that a full valuation allowance for the Company's Ukrainian subsidiary was warranted and a partial valuation allowance for the Company's German subsidiary was warranted, based on the presence of historical losses and our expected future sources of taxable income, including the anticipated future reversal of our existing deferred tax assets and liabilities.

The Company recorded an additional $3.8 million valuation allowance related to the

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Ukrainian and German subsidiaries.

In total, valuation allowances of $6.1 million existed for our international entities as of January 31, 2021.

In assessing the foreign deferred tax assets as of January 31, 2024 and 2023, the Company concluded that a full valuation allowance is continued to be warranted in the Company's Ukrainian subsidiary, due to geopolitical concerns in the area.

The Company has recorded valuation allowances of $7.5 million and $6.5 million for the international entities as of January 31, 2024 and 2023, respectively.

The Company files income tax returns in the U.S.

2 unchanged sentences

federal tax authorities for fiscal years ended prior to January 31, 2021 and state tax authorities for fiscal years ended prior to January 31, 2020.

Certain foreign jurisdictions are no longer subject to income tax examinations for the calendar year periods ranging between 2016 and 2022, depending on the jurisdiction of the entity.

Certain foreign jurisdictions are subject to income tax examinations for the calendar year periods ranging between 2017 and 2023, depending on the jurisdiction of the entity.

As of January 31, 2024, the Company had accumulated undistributed earnings in non-U.S.

7 unchanged sentences

The Company's certificate of incorporation provides it with the authority to issue 50,000,000 shares of $ 0.00001 par value stock, consisting of 45,000,000 shares of common stock and 5,000,000 shares classified as undesignated.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 16 - STOCK-BASED COMPENSATION

2 unchanged sentences

2014 Equity Incentive Plan (the "2014 Equity Incentive Plan"), to provide incentive compensation to participants for services that have been or will be performed for continuing as employees or members of the Board of Directors of the Company.

Under the 2014 Equity Incentive Plan, which has been approved by the stockholders of the Company, the Company may grant incentive stock options, non-qualified stock options and restricted stock for up to a maximum number of shares of common stock set forth in the 2014 Equity Incentive Plan under all forms of awards.

Under the 2014 Equity Incentive Plan, which has been approved by the stockholders of the Company, the Company may grant stock-based awards for up to a maximum number of shares of common stock set forth in the 2014 Equity Incentive Plan under specified forms of equity award types.

Shares issued for stock-based awards consist of authorized but unissued shares.

During the year ended January 31, 2021, the 2014 Equity Incentive Plan was amended to increase the shares available for equity awards from 1,650,000 shares to 2,200,000 shares.

As of January 31, 2023, the Company has 587,273 shares authorized and available for future equity awards under the 2014 Equity Incentive Plan.

Compensation cost arising from stock-based compensation and charged to operations was $ 3.3 million, $ 2.8 million, $ 2.7 million for the years ended January 31, 2023, 2022 and 2021, respectively.

As of January 31, 2024, the Company had 390,479 shares authorized and available for future equity awards under the 2014 Equity Incentive Plan.

Compensation cost arising from stock-based compensation and charged to operations was $ 3.3 million, $ 3.3 million and $ 2.8 million for the years ended January 31, 2024, 2023 and 2022, respectively.

The related income tax benefit (net) was $ 1.1 million, $ 1.3 million and $ 1.3 million for the years ended January 31, 2024, 2023 and 2022, respectively.

2 unchanged sentences

The fair value of these awards is determined based on the closing market price of the Company's stock on the date of grant.

The RSAs primarily vest over a period of four years for employees and over one year for members of the Board of Directors.

The RSAs primarily vest over a period of approximately four years for employees and over one year for members of the Board of Directors.

The Company recognizes compensation expense ratably over the vesting period of the award.

9 unchanged sentences

Nonvested at January 31, 2024 336 $ 25.48

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted-average grant date fair value of RSAs granted was $ 27.06 , $ 34.24 and $ 10.54 during the years ended January 31, 2023, 2022 and 2021.

The total fair value of RSAs vested was $ 4.6 million, $ 5.0 million and $ 1.6 million during the years ended January 31, 2023, 2022 and 2021.

The weighted-average grant date fair value of RSAs granted was $ 26.48 , $ 27.06 and $ 34.24 during the years ended January 31, 2024, 2023 and 2022, respectively.

The total fair value of RSAs vested was $ 3.7 million, $ 4.6 million and $ 5.0 million during the years ended January 31, 2024, 2023 and 2022, respectively.

As of January 31, 2024, there was $ 6.3 million of unrecognized compensation cost related to nonvested RSAs that is expected to be recognized over a weighted-average period of 2.3 years.

1 unchanged sentence

The Company grants RSUs as part of its long-term incentive compensation to certain employees of the Company in our European operations.

The fair value of these awards is determined based on the closing market price of the Company's stock on the date of grant.

The RSUs primarily vest over a period of four years.

The fair value of these awards is determined based on the closing market price of the Company's common stock on the date of grant.

The RSUs primarily vest over a period of approximately four years.

The Company recognizes compensation expense ratably over the vesting period of the award.

The restricted common stock underlying these awards are not deemed issued or outstanding upon grant, and do not carry any voting or dividend rights.

The common stock underlying these awards are not deemed issued or outstanding upon grant, and do not carry any voting or dividend rights.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes RSU activity for the year ended January 31, 2024:

6 unchanged sentences

The weighted-average grant date fair value of RSUs granted was $ 26.47 , $ 26.23 , and $ 34.59 for the fiscal years ended January 31, 2024, 2023, and 2022, respectively.

As of January 31, 2023, there was $ 0.2 million of unrecognized compensation cost related to nonvested RSUs that is expected to be recognized over a weighted-average period of 1.9 years.

As of January 31, 2024, there was $ 0.2 million of unrecognized compensation cost related to nonvested RSUs that is expected to be recognized over a weighted-average period of two years.

Long-Term Cash Incentive Awards

10 unchanged sentences

Granted 19 26.40

Forfeited ( 1 ) 23.49

Vested ( 13 ) 18.52

17 unchanged sentences

NOTE 18 - EMPLOYEE BENEFIT PLANS

The Company has a 401(k) profit-sharing plan ("401(k) Plan") for all employees at least 19 years of age.

Effective January 1, 2022, the Company amended the 401(k) Plan where the Company matched 50% of the first 6% of the participating employee's contribution, to a company match of 50 % on the first 8 % of the participating employee's contributions.

The Company has a 401(k) profit-sharing plan ("401(k) Plan") for all U.S.

employees at least 19 years of age.

Effective January 1, 2022, the Company amended the 401(k) Plan to increase the Company match from 50% of the first 6% of the participating employee's contribution to 50 % of the first 8 % of the participating employee's contributions.

In addition, the Company may make a discretionary contribution to the 401(k) Plan as determined by the Board of Directors, with a maximum amount equal to the amount allowed under the IRS regulations.

The Company recognized expense for contributions made to the 401(k) Plan totaling $ 5.4 million, $ 3.8 million and $ 3.1 million for the years ended January 31, 2023, 2022 and 2021.

The Company recognized expense for contributions made to the 401(k) Plan totaling $ 7.0 million, $ 5.4 million and $ 3.8 million for the years ended January 31, 2024, 2023 and 2022, respectively.

All amounts contributed during these years reflected matching contributions, as no discretionary contributions were made by the Company to the 401(k) Plan.

Additionally, the 401(k) Plan for the recent acquisition of the Heartland Companies has continued for those employees.

The plan allows all full-time employees at least 21 years of age, to be eligible, and the Company will match 100% of first 4% of the participating employee's contributions.

NOTE 19 - BUSINESS COMBINATIONS

On October 2, 2023, we acquired all of the outstanding equity interests of O’Connors.

The acquired business consisted of 15 Case IH dealership locations and one parts center in the states of New South Wales, South Australia, and Victoria in Southeastern Australia.

O'Connors has been a successful Case IH complex, and our acquisition of O'Connors provides the Company the opportunity to expand our international presence into the large, well-established Australian agricultural market.

Total cash consideration paid for O'Connors was $ 66.5 million, which was financed through available cash resources and line of credit availability.

The 15 O’Connors stores locations are included within our new Australia segment.

In the most recently completed fiscal year, O'Connors generated revenue of approximately $ 258.0 million .

The results of operations for O’Connors from the October 2, 2023 acquisition closing date through January 31, 2024 were approximately $ 69.8 million of revenue and $ 4.1 million of pre-tax income.

The Company incurred $ 1.1 million in acquisition related expenses in connection with this acquisition, which are included in operating expenses in the consolidated statements of operations for the year ended January 31, 2024.

The Company has completed acquisitions that were not considered material, individually or collectively, to the overall consolidated financial statements during the year ended January 31, 2024.

These acquisitions included five locations of Pioneer Farm Equipment Co.

on February 1, 2023, in the state of Idaho, one location of Midwest Truck Parts Inc.

on June 1, 2023, in the state Minnesota and one location of Scott Supply Co.

on January 10, 2024, in the state of South Dakota., all of which are included in the Agriculture segment.

The Company also acquired MAREP GmbH on May 1, 2023, which included two locations in Germany and is included in the Europe segment.

These acquisitions have been included in the consolidated financial statements from the date of the respective acquisition.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 19 - BUSINESS COMBINATIONS

On August 1, 2022, the Company acquired all outstanding equity interests of three entities, Heartland Agriculture, LLC, Heartland Solutions, LLC, and Heartland Leveraged Lender, LLC, (collectively referred to as the "Heartland Companies") for $ 94.4 million in cash consideration.

The Heartland Companies consist of 12 CaseIH commercial application agriculture locations, in the states of 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.

These locations are included in the Company's Agriculture segment.

In the most recent completed fiscal year, the Heartland Companies generated revenue of approximately $214 million.

The results of operations for the Heartland Companies from the August 1, 2022 closing date through January 31, 2023, were approximate ly $103.2 million of revenue and $4.6 million of pre-tax income.

The Company incurred $1.1 million i n acquisition related expenses in connection with this acquisition, included in operating expenses in the consolidated statements of operations for the year ended January 31, 2023.

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.

The total cash consideration transferred for the acquired business was $ 7.7 million.

In connection with the acquisition, the Company acquired from CNH Industrial and certain other manufacturers equipment and parts inventory previously owned by Mark's Machinery, Inc.

Upon acquiring such inventories, the Company was offered floorplan financing by the respective manufacturers.

In total, the Company acquired inventory and recognized a corresponding financing liability of $3.2 million.

The recognition of these inventories and the associated financing liabilities are not included as part of the accounting for the business combination.

On December 1, 2021, the Company acquired certain assets of Jaycox Implement, Inc.

The acquired business consisted of three agricultural equipment stores in Worthington and Luverne, Minnesota and Lake Park, Iowa.

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 allows 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.

These locations are included in the Company's Agriculture segment.

The total cash consideration transferred for the acquired business was $ 28.2 million.

The Company completed the real estate purchase on December 31, 2021 for a purchase price of $ 5.5 million, which was partially financed with long-term debt and the remainder was paid in cash.

In connection with the acquisition, the Company acquired from CNH Industrial and certain other manufacturers equipment and parts inventory previously owned by Jaycox Implement, Inc.

Upon acquiring such inventories, the Company was offered floorplan financing by the respective manufacturers.

In total, the Company acquired inventory and recognized a corresponding financing liability of $ 5.3 million.

The recognition of these inventories and the associated financing liabilities are not included as part of the accounting for the business combination.

On May 4, 2020, the Company acquired certain assets of HorizonWest Inc.

This acquired CaseIH agriculture dealership complex consisted of three agriculture equipment stores in Scottsbluff and Sidney, Nebraska and Torrington, Wyoming, which expanded the Company's agriculture presence in Nebraska and into Wyoming.

This acquisition occurred within the Company's Agriculture segment.

The total consideration transferred for the acquired business was $ 6.8 million paid in cash.

In connection with the acquisition, the Company acquired from CNH Industrial and certain other manufacturers equipment and parts inventory previously owned by HorizonWest Inc.

Upon acquiring such inventories, the Company was offered floorplan financing by the respective manufacturers.

In total, the Company acquired inventory and recognized a corresponding financing liability of $ 2.7 million.

The recognition of these inventories and the associated financing liabilities are not included as part of the accounting for the business combination.

In the most recently completed fiscal year, prior to acquisition, the Heartland Companies generated revenue of approximately $ 214 million.

The results of operations for the Heartland Companies from the August 1, 2022 acquisition closing date through January 31, 2023, were approximate ly $ 103.2 million of revenue and $ 4.6 million of pre-tax income.

The Company incurred $ 1.1 million i n acquisition related expenses in connection with this acquisition, which are included in operating expenses in the consolidated statements of operations for the year ended January 31, 2023.

The Company has completed another acquisition that was not considered material to the overall consolidated financial statements during the year ended January 31, 2023.

This acquisition included the two locations of Mark's Machinery, Inc.

on April 1, 2022, in the state of South Dakota, which is included in the Agriculture segment.

This acquisition has been included in the consolidated financial statements from the date of the acquisition.

The Company completed an acquisition that was not considered material to the overall consolidated financial statements during the year ended January 31, 2022.

This acquisition included the three locations of Jaycox Implement, Inc.

on December 1, 2021, in the states of Iowa and Minnesota.

These locations are included in the Agriculture segment.

This acquisition has been included in the consolidated financial statements from the date of the acquisition.

TITAN MACHINERY INC.

2 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 January 31, 2023, all business combinations from fiscal years 2023, 2022, and 2021 are complete.

The following table presents the aggregate purchase price allocations for all acquisitions completed during the fiscal years ended January 31, 2023, 2022, and 2021:

Heartland Companies Mark's Machinery Year Ended January 31,

August 1, 2022 April 1, 2022 2023 2022 2021

(in thousands)

As of January 31, 2024, all business combinations from fiscal year 2024 are completed with the exception of the O'Connors acquisition for which we are still finalizing the closing tax balances and intangible asset valuations.

All business combinations from fiscal years 2023 and prior are complete.

The following summarizes the acquisition date fair value of consideration transferred and the acquisition date fair value of the identifiable assets acquired and liabilities assumed, including an amount for goodwill (in thousands):

Heartland Companies

October 2, 2023 August 1, 2022

Assets acquired:

6 unchanged sentences

Intangible assets:

Non-Competition — 700

Customer Relationships 10,928 200

Distribution Rights 21,470 6,200

Goodwill 24,261 21,087

167,015 9,519 176,534 34,904 8,796

Total assets 192,511 167,015

Liabilities Assumed:

7 unchanged sentences

Other Long-term liabilities — 5,152

72,635 1,844 74,479 1,261 2,006

Total liabilities 125,977 72,635

Net assets acquired $ 66,534 $ 94,380

1 unchanged sentence

Agriculture $ — $ 21,087

Australia 24,261 —

Goodwill expected to be deductible for tax purposes — 21,087

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

The Company recognized, in the aggregate, a customer relationship intangible asset of $ 0.2 million, and $ 0.2 million for business combinations occurring during th e years ended January 31, 2023 and 2022, res pectively.

The Company recognized, in the aggregate, a non-competition intangible asset of $ 0.8 million, $ 0.1 million, and $ 0.1 million for business combinations occurring during the years ended January 31, 2023, 2022, and 2021, respectively.

The Company recognized, in the aggregate, a distribution rights intangible asset of $ 7.0 million, $ 3.9 million and $ 0.2 million for business combinations occurring during the years ended January 31, 2023, 2022 and 2021, respectively.

The acquired non-competition and customer relationship intangible assets are being amortized over periods ranging from three to five years.

The acquired non-competition and customer relationship intangible assets are being amortized on a straight line basis over useful lives ranging from five to seven years.

The distribution rights assets are indefinite-lived intangible assets not subject to amortization, but are tested for impairment annually, or more frequently upon the occurrence of certain events or when circumstances indicate that impairment may be present.

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

Acquisition related costs for the fiscal year ended January 31, 2023, amounted to $1.1 million and acquisition related

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

costs for the fiscal years ended January 31, 2022 and 2021, were not material.

All acquisition related costs have been expensed as incurred and recognized as operating expenses in the consolidated statements of operations.

Pro Forma Information

The following summarized unaudited pro forma condensed statement of operations information for the twelve months ended January 31, 2023 and 2022 assumes that the Heartland Companies acquisition occurred as of February 1, 2021.

The following summarized unaudited pro forma condensed statement of operations information for the twelve months ended January 31, 2024, 2023 and 2022, assumes that the Heartland Companies acquisition occurred as of February 1, 2021 and O’Connors acquisition occurred as of February 1, 2022.

The Company prepared the following summarized unaudited pro forma financial results for comparative purposes only.

The summarized unaudited pro forma information may not be indicative of the results that would have occurred had the Company completed the acquisition as of February 1, 2021 or that will be attained in the future.

The summarized unaudited pro forma information may not be indicative of the results that would have occurred had the Company completed the acquisitions as of these dates or that will be attained in the future.

Year Ended January 31,

2024 2023 2022

(in thousands)

15 unchanged sentences

NOTE 21 - SEGMENT INFORMATION AND OPERATING RESULTS

The Company has three reportable segments:

Agriculture, Construction and International.

The Company has four reportable segments:

Agriculture, Construction, Europe and Australia.

The Company's segments are determined based on management structure, which is organized based on types of products sold and geographic areas, as described in the following paragraphs.

1 unchanged sentence

The Company's Agriculture segment sells, services, and rents machinery, and related parts and attachments, for uses ranging from large-scale farming to home and garden use in North America.

This segment also includes ancillary sales and services related to agricultural activities and products such as equipment transportation, Global Positioning System ("GPS") signal subscriptions and finance and insurance products.

This segment also includes ancillary sales and services related to agricultural activities and products such as equipment transportation, GPS signal subscriptions and finance and insurance products.

The Company's Construction segment sells, services, and rents machinery, and related parts and attachments, for uses ranging from heavy construction to light industrial machinery use to customers in North America.

This segment also includes ancillary sales and services related to construction activities such as equipment transportation, GPS signal subscriptions and finance and insurance products.

The Company’s International segment sells, services, and rents machinery, and related parts and attachments, for uses ranging from large-scale farming and construction to home and garden use to customers in Eastern Europe.

The Company’s Europe segment sells, services, and rents machinery, and related parts and attachments, for uses ranging from large-scale farming and construction to home and garden use to customers in Eastern Europe and Germany.

Similar to the Agriculture segment, this segment also includes ancillary sales and services related to agricultural activities and products such as equipment transportation, GPS signal subscriptions and finance and insurance products.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue generated from sales to customers outside of the United States was $ 299.1 million, $ 318.0 million and $ 219.0 million for the years ended January 31, 2023, 2022 and 2021.

As of January 31, 2023 and 2022, $ 14.5 million and $ 15.6 million of the Company's long-lived assets were held in its European subsidiaries and the remaining were held in the United States.

The Company’s Australian segment sells, services, and rents machinery, and related parts and attachments, for uses ranging from large-scale farming and construction to home and garden use to customers in Southeastern Australia.

This segment also includes ancillary sales and services related to agricultural activities and products such as equipment transportation, GPS signal subscriptions and finance and insurance products.

Revenue generated from sales to customers in the United States was $ 2.4 billion, $ 1.9 billion and $ 1.4 billion for the years ended January 31, 2024, 2023 and 2022, respectively, no other individual country exceeded ten percent of total revenue.

As of January 31, 2024 and 2023, $ 305.5 million and $ 254.5 million of the Company's long-lived assets were held in United States, respectively, and the remaining were held in the European and Australian subsidiaries.

The Company retains various unallocated income/(expense) items and assets at the general corporate level, which the Company refers to as "Shared Resources" in the table below.

1 unchanged sentence

Revenue between segments is immaterial.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

4 unchanged sentences

Construction 332,463 308,457 317,164

International 299,129 317,991 218,992

Europe 311,910 299,129 317,991

Australia 69,809 — —

Total 2,758,445 2,209,306 1,711,906

Income (Loss) Before Income Taxes

Income Before Income Taxes

Agriculture $ 121,072 $ 102,733 $ 60,567

Construction 18,346 18,569 15,543

International 20,197 12,552 ( 6,025 )

Europe 16,487 20,197 12,552

Australia 4,115 — —

Segment income before income taxes 160,020 141,499 88,662

2 unchanged sentences

Total Impairment

Agriculture $ — $ — $ 272

Construction — — 597

International — 1,498 2,311

Total $ — $ 1,498 $ 3,180

Interest Income

Agriculture $ 79 $ 37 $ 72

Construction 110 114 135

International 133 113 46

Segment interest income 322 264 253

Shared Resources 17 65 16

Total $ 339 $ 329 $ 269

Interest Expense

Agriculture $ 3,573 $ 2,564 $ 4,884

Construction 2,218 2,614 5,552

International 1,345 2,128 2,796

Segment interest expense 7,136 7,306 13,232

Shared Resources ( 192 ) ( 1,594 ) ( 6,050 )

Total $ 6,944 $ 5,712 $ 7,182

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended January 31,

2023 2022 2021

Depreciation and Amortization

Agriculture $ 9,035 $ 5,942 $ 5,337

Construction 9,262 10,482 12,197

International 2,730 2,858 2,645

Segment depreciation and amortization 21,027 19,282 20,179

Shared Resources 4,170 2,857 3,522

Europe — — 1,498

Total $ — $ — $ 1,498

2 unchanged sentences

Construction 12,050 10,721 17,941

International 2,767 2,687 2,124

Europe 6,764 2,767 2,687

Australia 529 — —

Segment capital expenditures 58,077 28,791 34,507

5 unchanged sentences

Construction 257,142 187,739

International 170,647 155,275

Europe 280,354 170,647

Australia 225,421 —

Segment assets 1,946,284 1,146,651

1 unchanged sentence

Total $ 1,992,261 $ 1,188,695

NOTE 22 - SUBSEQUENT EVENTS

On February 1, 2023, the Company acquired certain assets of Pioneer Equipment.

The acquired business consists of five agricultural equipment stores in American Falls, Blackfoot, Idaho Falls, Rexburg, and Rupert, Idaho.

These locations will be included in the Company's Agriculture segment.

In its most recently available completed fiscal year, ended December 31, 2021, Pioneer Equipment generated revenue of approximately $60.0 million.

The total cash consideration paid for the acquired business was $10.1 million, and the Company used cash on hand to fund the acquisition.

The Company has committed to acquire the real estate of Pioneer Equipment subject to customary closing conditions, for a purchase price of $9.4 million.

The Company closed on three of the properties on March 8, 2023 and anticipates closing on the remaining locations on or before April 30, 2023.

The Company has considered the disclosure requirements of ASC 805-10-50-2 and ASC 805-10-50-4 but has not included certain required disclosures in this report due to determination that it is not a material transaction.

Schedule II—Valuation and Qualifying Accounts and Reserves

Titan Machinery Inc.

Classification Beginning Balance Additions Charged to Expenses Additions from CECL Adoption Deductions for Write-offs, Net of Recoveries Foreign Currency Translation Adjustments Ending Balance

Classification Beginning Balance Additions Charged to Expenses Deductions for Write-offs, Net of Recoveries Foreign Currency Translation Adjustments Ending Balance

(in thousands)

5 unchanged sentences

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 8. Financial Statements and Supplementary Data