What changed in this filing

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Item 1. Financial Statements

2024-12-05 compared with 2024-09-05 · 120 added, 102 removed, 525 unchanged (30% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

Current Assets

31 unchanged sentences

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

23,127,895 shares issued and outstanding at July 31, 2024;

23,125,967 shares issued and outstanding at October 31, 2024;

22,848,138 shares issued and outstanding at January 31, 2024

1 unchanged sentence

Retained earnings 404,075 397,225

Accumulated other comprehensive income (loss) ( 2,707 ) 1,760

Accumulated other comprehensive income 3,114 1,760

Total stockholders' equity 668,200 657,642

4 unchanged sentences

(in thousands, except per share data)

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

15 unchanged sentences

Income from Operations 11,457 46,226 49,802 128,136

Other (Expense) Income

Other Income (Expense)

Interest and other (expense) income 3,097 ( 235 ) ( 4,239 ) 1,129

1 unchanged sentence

Other interest expense ( 4,286 ) ( 1,494 ) ( 10,479 ) ( 4,008 )

(Loss) Income Before Income Taxes ( 4,250 ) 41,591 8,535 77,032

Provision for Income Taxes 54 10,270 3,399 18,745

Net (Loss) Income $ ( 4,304 ) $ 31,321 $ 5,136 $ 58,287

(Loss) Earnings per Share:

Income Before Income Taxes 275 40,452 8,809 117,483

(Benefit) Provision for Income Taxes ( 1,438 ) 10,259 1,959 29,004

Net Income $ 1,713 $ 30,193 $ 6,850 $ 88,479

Earnings per Share:

Basic $ 0.07 $ 1.32 $ 0.30 $ 3.88

7 unchanged sentences

(in thousands)

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Net (Loss) Income $ ( 4,304 ) $ 31,321 $ 5,136 $ 58,287

Net Income $ 1,713 $ 30,193 $ 6,850 $ 88,479

Other Comprehensive (Loss) Income

Foreign currency translation adjustments 5,821 ( 1,938 ) 1,354 ( 292 )

Comprehensive (Loss) Income $ ( 4,246 ) $ 31,871 $ 669 $ 59,933

Comprehensive Income $ 7,534 $ 28,255 $ 8,204 $ 88,187

See Notes to Condensed Consolidated Financial Statements

15 unchanged sentences

Balance at July 31, 2024 23,128 $ — $ 259,911 $ 402,362 $ ( 2,707 ) $ 659,566

Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax ( 2 ) — ( 4 ) — — ( 4 )

Stock-based compensation expense — — 1,104 — — 1,104

Net income — — — 1,713 — 1,713

Other comprehensive income — — — — 5,821 5,821

Balance at October 31, 2024 23,126 $ — $ 261,011 $ 404,075 $ 3,114 $ 668,200

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

11 unchanged sentences

Balance at July 31, 2023 22,864 $ — $ 256,984 $ 343,070 $ ( 3,373 ) $ 596,681

Common stock issued on grant of restricted stock, net of restricted stock forfeitures and restricted stock withheld for employee withholding tax ( 1 ) — 1 — — 1

Stock-based compensation expense — — 896 — — 896

Net income — — — 30,193 — 30,193

Other comprehensive loss — — — — ( 1,938 ) ( 1,938 )

Balance at October 31, 2023 22,863 $ — $ 257,881 $ 373,263 $ ( 5,311 ) $ 625,833

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in thousands)

Six Months Ended July 31,

Nine Months Ended October 31,

Operating Activities

6 unchanged sentences

Noncash interest expense 537 206

Noncash lease expense 6,532 7,004

Sale-leaseback finance modification expense 11,159 —

45 unchanged sentences

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

Therefore, operating results for the six-months ended July 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2025.

Therefore, operating results for the nine-months ended October 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2025.

The information contained in the consolidated balance sheet as of January 31, 2024 was derived from the audited consolidated financial statements of the Company for the fiscal year then ended.

21 unchanged sentences

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.

A federal court has stayed the implementation of the SEC rules, pending the outcome of litigation challenging the rules.

The Company will continue to monitor the litigation process.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The amendments in ASU 2024-03 require public entities to disclose specified information about certain costs and expenses.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 with early adoption permitted.

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

NOTE 2 - EARNINGS PER SHARE

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

(in thousands, except per share data)

Net (loss) income $ ( 4,304 ) $ 31,321 $ 5,136 $ 58,287

Net income $ 1,713 $ 30,193 $ 6,850 $ 88,479

Allocation to participating securities ( 37 ) ( 465 ) ( 119 ) ( 1,153 )

Net (loss) income attributable to Titan Machinery Inc.

Net income attributable to Titan Machinery Inc.

common stockholders $ 1,676 $ 29,728 $ 6,731 $ 87,326

2 unchanged sentences

Diluted weighted-average common shares outstanding 22,631 22,517 22,599 22,493

(Loss) Earnings Per Share:

Earnings Per Share:

Basic $ 0.07 $ 1.32 $ 0.30 $ 3.88

6 unchanged sentences

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

Three Months Ended July 31, 2024

Three Months Ended October 31, 2024

Agriculture Construction Europe Australia (1)

7 unchanged sentences

Total revenue $ 482,022 $ 85,285 $ 62,382 $ 50,135 $ 679,824

(1) Australia segment was created through the J.J.

(1) Australia segment was created through the Company's acquisition of J.J.

O’Connor & Sons Pty.

("O’Connors") acquisition that closed in October 2023.

Six Months Ended July 31, 2024

("O’Connors") in October 2023.

Nine Months Ended October 31, 2024

Agriculture Construction Europe Australia Total

7 unchanged sentences

Total revenue $ 1,353,744 $ 236,971 $ 195,633 $ 155,852 $ 1,942,200

Three Months Ended July 31, 2023

Three Months Ended October 31, 2023

Agriculture Construction Europe Total

7 unchanged sentences

Total revenue $ 531,404 $ 77,508 $ 85,203 $ 694,115

Six Months Ended July 31, 2023

Nine Months Ended October 31, 2023

Agriculture Construction Europe Total

8 unchanged sentences

Unbilled Receivables and Deferred Revenue

Unbilled receivables from contracts with customers amounted to $ 30.8 million and $ 22.3 million as of July 31, 2024 and January 31, 2024, respectively.

Unbilled receivables from contracts with customers amounted to $ 35.0 million and $ 22.3 million as of October 31, 2024 and January 31, 2024, respectively.

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

Deferred revenue from contracts with customers amounted to $ 57.0 million and $ 114.6 million as of July 31, 2024 and January 31, 2024, respectively.

Deferred revenue from contracts with customers amounted to $ 41.7 million and $ 114.6 million as of October 31, 2024 and January 31, 2024, respectively.

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

During the six months ended July 31, 2024 and 2023, the Company recognized $ 85.6 million and $ 107.7 million, respectively, of revenue that was included in the deferred revenue balance as of January 31, 2024 and January 31, 2023, respectively.

No material amount of revenue was recognized during the six months ended July 31, 2024 or 2023 from performance obligations satisfied in previous periods.

During the nine months ended October 31, 2024 and 2023, the Company recognized $ 112.1 million and $ 118.0 million, respectively, of revenue that was included in the deferred revenue balance as of January 31, 2024 and January 31, 2023, respectively.

No material amount of revenue was recognized during the nine months ended October 31, 2024 or 2023 from performance obligations satisfied in previous periods.

NOTE 4 - RECEIVABLES

9 unchanged sentences

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

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

(in thousands)

22 unchanged sentences

Foreign exchange impact — — 10 2 12

Balance at July 31, 2024 $ 266 $ 199 $ 2,546 $ 65 $ 3,076

(1) Australia segment was created through the O'Connors acquisition that closed in October 2023.

Balance at October 31, 2024 $ 428 $ 252 $ 2,667 $ 66 $ 3,413

(1) Australia segment was created through the Company's acquisition of "O’Connors in October 2023.

Agriculture Construction Europe Total

5 unchanged sentences

Foreign exchange impact — — ( 11 ) ( 11 )

Balance at July 31, 2023 $ 222 $ 192 $ 2,837 $ 3,251

Balance at October 31, 2023 $ 255 $ 191 $ 3,069 $ 3,515

The following table presents impairment losses (recoveries) on receivables arising from sales contracts with customers and receivables arising from rental contracts reflected in Operating Expenses in the Condensed Consolidated Statements of Operations:

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

5 unchanged sentences

NOTE 5 - INVENTORIES

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

(in thousands)

5 unchanged sentences

NOTE 6 - PROPERTY AND EQUIPMENT

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

(in thousands)

7 unchanged sentences

$ 357,056 $ 298,774

The Company includes depreciation expense related to its rental fleet and its trucking fleet, for hauling equipment, in Cost of Revenue, which was $ 2.4 million and $ 2.2 million for the three months ended July 31, 2024 and 2023, respectively, and $ 4.3 million and $ 3.9 million for the six months ended July 31, 2024 and 2023, respectively.

All other depreciation expense is included in Operating Expenses, which was $ 6.1 million and $ 5.2 million for the three months ended July 31, 2024 and 2023, respectively, and $ 12.2 million and $ 10.0 million for the six months ended July 31, 2024 and 2023, respectively.

The Company includes depreciation expense related to its rental fleet and its trucking fleet, for hauling equipment, in Cost of Revenue, which was $ 2.8 million and $ 2.5 million for the three months ended October 31, 2024 and 2023, respectively, and $ 7.1 million and $ 6.5 million for the nine months ended October 31, 2024 and 2023, respectively.

All other depreciation expense is included in Operating Expenses, which was $ 6.3 million and $ 5.3 million for the three months ended October 31, 2024 and 2023, respectively, and $ 18.4 million and $ 15.3 million for the nine months ended October 31, 2024 and 2023, respectively.

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

The Company determined, based on changing expectations regarding the future use of certain long-lived assets, that the $15.4 million carrying value of these assets may not be fully recoverable.

Accordingly, the Company performed step two of the impairment analysis and estimated the fair value of the asset using an income approach.

As a result, the Company recognized an impairment charge of $0.9 million within the Europe segment in the second quarter of fiscal 2025, which is reflected in the Impairment of Intangibles and Long-Lived Assets amount in the Condensed Consolidated Statements of Operations.

The Company performed an impairment assessment of this asset group and as a result recognized an impairment charge of $0.3 million, of which $0.2 million was within the Agriculture segment and $0.1 million was within the Construction segment, for the three months ended October 31, 2024.

For the nine months ended October 31, 2024, the Company recognized total impairment charges of $1.2 million, of which $0.2 million was within the Agriculture segment, $0.1 million was within the Construction segment and $0.9 million was within the Europe segment.

The impairment charge is reflected in the Impairment of Intangibles and Long-Lived Assets amount in the Condensed Consolidated Statements of Operations.

NOTE 7 - INTANGIBLE ASSETS AND GOODWILL

1 unchanged sentence

The Company's finite-lived intangible assets consist of customer relationships and covenants not to compete.

The following is a summary of intangible assets with finite lives as of July 31, 2024 and January 31, 2024:

July 31, 2024 January 31, 2024

The following is a summary of intangible assets with finite lives as of October 31, 2024 and January 31, 2024:

October 31, 2024 January 31, 2024

Cost Accumulated Amortization Net Cost Accumulated Amortization Net

3 unchanged sentences

$ 13,440 $ (2,641) $ 10,799 $ 13,445 $ (1,157) $ 12,288

Total expense related to the amortization of intangible assets, which is recorded in Operating Expenses in the Condensed Consolidated Statements of Operations, was $0.5 million and $0.1 million for the three months ended July 31, 2024 and 2023, respectively.

Total expense related to the amortization of intangible assets, which is recorded in Operating Expenses in the Condensed Consolidated Statements of Operations, was $1.0 million and $0.2 million for the six months ended July 31, 2024 and 2023, respectively.

Total expense related to the amortization of intangible assets, which is recorded in Operating Expenses in the Condensed Consolidated Statements of Operations, was $1.5 million and $0.3 million for the nine months ended October 31, 2024 and 2023, respectively.

The Company performed an interim impairment test in the second quarter of fiscal 2025 with respect to its German subsidiary's assets and recorded an impairment charge of $0.1 million within the Europe segment, which is reflected in Impairment of Intangible and Long-Lived Assets in the Condensed Consolidated Statements of Operations.

Future amortization expense, as of July 31, 2024, is expected to be as follows:

Future amortization expense, as of October 31, 2024, is expected to be as follows:

Fiscal Year Ending January 31,

4 unchanged sentences

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

The following is a summary of the changes in indefinite-lived intangible assets, by segment, for the six months ended July 31, 2024:

The following is a summary of the changes in indefinite-lived intangible assets, by segment, for the nine months ended October 31, 2024:

Agriculture Construction Australia Total

2 unchanged sentences

Foreign currency translation — — 207 207

July 31, 2024 $ 18,154 $ 72 $ 22,220 $ 40,446

The following presents changes in the carrying amount of goodwill, by segment, for the six months ended July 31, 2024:

October 31, 2024 $ 18,154 $ 72 $ 23,049 $ 41,275

The following presents changes in the carrying amount of goodwill, by segment, for the nine months ended October 31, 2024:

Agriculture Europe Australia Total

4 unchanged sentences

Foreign currency translation — ( 13 ) 234 221

July 31, 2024 $ 37,820 $ — $ 25,109 $ 62,929

October 31, 2024 $ 37,820 $ — $ 26,045 $ 63,865

The Company performed an interim impairment test in the second quarter of fiscal 2025 for the German reporting unit.

1 unchanged sentence

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

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.

In second quarter of fiscal year 2025, 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.

1 unchanged sentence

NOTE 8 - FLOORPLAN PAYABLE/LINES OF CREDIT

On May 17, 2024, the Company entered into a Fourth Amended and Restated Credit Agreement (the "Bank Syndicate Agreement") with a group of banks, which replaced the previous Third Amended and Restated Credit Agreement (the "Existing Credit Facility") the Company had entered into in April 2020.

The Credit Agreement provides for a secured credit facility in an amount of up to $500.0 million, consisting of $395.0 million floorplan facility and $105.0 million revolving operating line which can be used by both the U.S.

Borrowers and the Australian Borrower.

The maximum aggregate facility for the Australian Borrower cannot exceed $100.0 million and the U.S.

Borrowers aggregate facility cannot exceed $485.0 million.

outstanding indebtedness under the Credit Agreement matures on May 17, 2029.

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.

On May 17, 2024, the Company entered into a Fourth Amended and Restated Credit Agreement (the "Bank Syndicate Agreement") with a group of banks, which replaced the previous Third Amended and Restated Credit Agreement (the "Prior Credit Facility") the Company had entered into in April 2020.

The Credit Agreement provides for a secured credit facility in an amount of up to $500.0 million.

The outstanding indebtedness under the Credit Agreement matures on May 17, 2029.

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.

4 unchanged sentences

The Base Rate is the greater of (a) the prime rate of interest announced, from time to time, by Bank of America;

(b) the Federal Funds Rate plus 0.5%, and (c) one-month SOFR plus 1.0%, but in no event shall the Base Rate be less than zero.

(b) the Federal Funds Rate plus 0.50%, or (c) one-month SOFR plus 1.0%, but in no event shall the Base Rate be less than zero.

The effective interest rate on the Company’s borrowings is then calculated by adding an applicable margin to the SOFR Rate or Base Rate.

1 unchanged sentence

The applicable margins for the U.S.

loans under the Bank Syndicate Agreement are 0.25% higher than the margins under the Existing Credit Facility.

loans under the Bank Syndicate Agreement are 0.25% higher than the margins under the Prior Credit Facility.

For the Australian borrowings under the Credit Agreement, the Company elects at the time of the advance to choose an Australian Base Rate Loan or an Australian Bill Rate Loan.

3 unchanged sentences

The applicable margin is determined based on excess availability as determined under the Credit Agreement and ranges from 1.75% to 2.25%.

As of July 31, 2024, the Company had floorplan and working capital lines of credit totaling $ 1.5 billion, which is primarily comprised of three floorplan lines of credit:

(i) $ 875.0 million credit facility with CNH Industrial, (ii) $ 410.0 million floorplan line of credit and $90.0 million working capital line of credit under the Fourth Amended and Restated Credit Agreement, and (iii) $ 80.0 million credit facility with DLL Finance LLC.

The Company's outstanding balances of floorplan lines of credit as of July 31, 2024 and January 31, 2024, consisted of the following:

July 31, 2024 January 31, 2024

On December 3, 2024, the Company entered into Amendment No.

1 to the Bank Syndicate Agreement that lowers the adjusted excess availability metric from 15% to 10% for the period December 15, 2024 to March 15, 2025, and thereafter reverts to 15%.

On December 2, 2024, the Company received a letter from CNH Industrial Capital America LLC that waived the Consolidated Fixed Charge Cover Ratio covenant for the period February 1, 2025 through January 31, 2026.

The Company also received a letter from DLL Finance LLC dated December 2, 2024, which waived the Minimum Consolidated Fixed Charge Coverage Ratio covenant for the period April 30, 2025 through January 31, 2026.

On December 2, 2024, the Company amended the Wholesale Floor Plan Credit Facilities with CNH Industrial Capital America LLC to reallocate the global limit of $875.0 million, which consists of a total available domestic limit to $650.0 million, total available Australian limit to $125.0 million and total available European limit to $100.0 million.

As of October 31, 2024, the Company had floorplan and working capital lines of credit totaling $ 1.5 billion, which is primarily comprised of three floorplan lines of credit:

(i) $ 875.0 million credit facility with CNH Industrial, (ii) $ 390.0 million floorplan line of credit and $110.0 million working capital line of credit under the Bank Syndicate Agreement, and (iii) $ 80.0 million credit facility with DLL Finance LLC.

The Company's outstanding balances of floorplan lines of credit as of October 31, 2024 and January 31, 2024, consisted of the following:

October 31, 2024 January 31, 2024

(in thousands)

4 unchanged sentences

$ 1,048,221 $ 893,846

As of July 31, 2024, the interest-bearing U.S.

As of October 31, 2024, the interest-bearing U.S.

floorplan payables carried a variable interest rate with a range of 7.21 % to 10.09 % compared to a range of 7.22 % to 10.70 % as of January 31, 2024.

As of July 31, 2024, foreign floorplan payables carried a variable interest rate with a range of 5.18 % to 7.51 %, compared to a range of 5.24 % to 8.27 % as of January 31, 2024, on multiple lines of credit.

The Company had non-interest-bearing floorplan payables of $ 594.1 million and $ 507.7 million, as of July 31, 2024 and January 31, 2024, respectively.

As of October 31, 2024, foreign floorplan payables carried a variable interest rate with a range of 4.80 % to 7.50 %, compared to a range of 5.24 % to 8.27 % as of January 31, 2024, on multiple lines of credit.

The Company had non-interest-bearing floorplan payables of $ 460.2 million and $ 507.7 million, as of October 31, 2024 and January 31, 2024, respectively.

NOTE 9 - LONG TERM DEBT

The following is a summary of the Company's long-term debt as of July 31, 2024 and January 31, 2024:

Description Maturity Dates Interest Rates July 31, 2024 January 31, 2024

The following is a summary of the Company's long-term debt as of October 31, 2024 and January 31, 2024:

Description Maturity Dates Interest Rates October 31, 2024 January 31, 2024

(in thousands)

3 unchanged sentences

19,481 10,043

Vehicle loans, secured Various through June 2030 2.1% to 7.4%

Vehicle loans, secured Various through September 2030 2.1% to 7.4%

24,336 14,433

3 unchanged sentences

Long-term debt, net $ 131,134 $ 106,407

In the second quarter of fiscal year 2025, the Company signed an agreement to purchase 13 of its leased facilities at the end of the respective lease terms, resulting in an increase of the Sale-leaseback financing obligation by $11.2 million which is recorded to Current maturities of long-term debt and Long-term debt, less current maturities in the Condensed Consolidated Balance Sheet.

In the second quarter of fiscal 2025, the Company signed an agreement to purchase 13 of its leased facilities at the end of the respective lease terms, resulting in an increase of the Sale-leaseback financing obligation by $11.2 million which is recorded to Current maturities of long-term debt and Long-term debt, less current maturities in the Condensed Consolidated Balance Sheets.

The sale-leaseback finance modification expense was recorded to Interest and other income (expense) in the Condensed Consolidated Statements of Operations.

Additionally, in the second quarter of fiscal year 2025, the Company decreased the Other debt balance by $3.6 million for the debt cancellation in relation to a New Market Tax Credit Program, which is recorded to Current maturities of long-term debt in the Condensed Consolidated Balance Sheet.

Additionally, in the second quarter of fiscal 2025, the Company decreased the Other debt balance by $3.6 million for the debt cancellation in relation to a New Market Tax Credit Program, which is recorded to Current maturities of long-term debt in the Condensed Consolidated Balance Sheets.

The gain in debt cancellation was recorded to Interest and other income (expense) in the Condensed Consolidated Statements of Operations.

6 unchanged sentences

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

The notional value of outstanding foreign currency contracts was $ 65.1 million and $25.3 million as of July 31, 2024 and January 31, 2024, respectively.

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

The notional value of outstanding foreign currency contracts was $ 54.7 million and $25.3 million as of October 31, 2024 and January 31, 2024, respectively.

As of October 31, 2024 and January 31, 2024, 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 Condensed Consolidated Balance Sheets, and derivative instruments recognized as liabilities are recorded in Accrued expenses and other in the Condensed Consolidated Balance Sheets.

The following table sets forth the gains and losses recognized in income from the Company’s derivative instruments for the three and six months ended July 31, 2024 and 2023.

The following table sets forth the gains and losses recognized in income from the Company’s derivative instruments for the three and nine months ended October 31, 2024 and 2023.

Gains and losses are recognized in Interest and other income (expense) in the Condensed Consolidated Statements of Operations:

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

2 unchanged sentences

NOTE 11 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following is a summary of the changes in accumulated other comprehensive income (loss), by component, for the six month periods ended July 31, 2024 and 2023:

The following is a summary of the changes in accumulated other comprehensive income (loss), by component, for the nine month periods ended October 31, 2024 and 2023:

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

5 unchanged sentences

Balance, July 31, 2024 ( 5,418 ) 2,711 ( 2,707 )

Other comprehensive income 5,821 — 5,821

Balance, October 31, 2024 $ 403 $ 2,711 $ 3,114

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

5 unchanged sentences

Balance, July 31, 2023 ( 6,084 ) 2,711 ( 3,373 )

Other comprehensive loss ( 1,938 ) — ( 1,938 )

Balance, October 31, 2023 $ ( 8,022 ) $ 2,711 $ ( 5,311 )

NOTE 12 - LEASES

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

The following is the balance of our dedicated rental fleet assets, included in Property and equipment, net of accumulated depreciation in the condensed consolidated balance sheets, of our Construction segment as of July 31, 2024 and January 31, 2024:

July 31, 2024 January 31, 2024

The following is the balance of our dedicated rental fleet assets, included in Property and equipment, net of accumulated depreciation in the Condensed Consolidated Balance Sheets, of our Construction segment as of October 31, 2024 and January 31, 2024:

October 31, 2024 January 31, 2024

(in thousands)

3 unchanged sentences

NOTE 13 - FAIR VALUE OF FINANCIAL INSTRUMENTS

As of July 31, 2024, the fair value of the Company's foreign currency contracts, which are either assets or liabilities measured at fair value on a recurring basis, was not material.

As of October 31, 2024, the fair value of the Company's foreign currency contracts, which are either assets or liabilities measured at fair value on a recurring basis, was not material.

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

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

The carrying amounts of these financial instruments approximated their fair values as of July 31, 2024 and January 31, 2024.

The carrying amounts of these financial instruments approximated their fair values as of October 31, 2024 and January 31, 2024.

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

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

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

(in thousands)

2 unchanged sentences

NOTE 14 - INCOME TAXES

Our effective tax rate was 1.3 % and 24.7 % for the three months ended July 31, 2024 and 2023, respectively.

Our effective tax rate was 39.8 % and 24.3 % for the six months ended July 31, 2024 and 2023, respectively.

The effective tax rate for the three and six months ended July 31, 2024 and 2023 were subject to various other factors such as the impact of certain discrete items, mainly the vesting of share-based compensation, the mix of domestic and foreign income , and the change of valuation allowances in certain foreign jurisdictions.

Our effective tax rate was 522.9 % and 25.4 % for the three months ended October 31, 2024 and 2023, respectively.

Our effective tax rate was 22.2 % and 24.7 % for the nine months ended October 31, 2024 and 2023, respectively.

The effective tax rate for the three and nine months ended October 31, 2024 and 2023 were subject to various other factors such as the impact of certain discrete items, mainly the vesting of share-based compensation, the mix of domestic and foreign income , and the change of valuation allowances in certain foreign jurisdictions.

NOTE 15 - BUSINESS COMBINATIONS

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on March 1, 2024, which consists of one location in Germany and is included in the Europe segment.

This acquisition is not considered material to the overall consolidated financial statements during the three and six months ended July 31, 2024 and has been included in the Condensed Consolidated Financial Statements from the date of the acquisition.

This acquisition is not considered material to the overall consolidated financial statements during the three and nine months ended October 31, 2024 and has been included in the Condensed Consolidated Financial Statements from the date of the acquisition.

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

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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 July 31, 2024, the purchase price allocation for all business combinations from fiscal year 2024 and prior are complete with the exception of the O'Connors acquisition for which the Company is in the process of finalizing the closing tax balances and intangible asset valuations.

As of October 31, 2024, the purchase price allocation for all business combinations from fiscal 2025 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):

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Pro Forma Information

The following summarized unaudited pro forma condensed statement of operations information for the three and six months ended July 31, 2024 and 2023, assuming that the O'Connors acquisition occurred as of February 1, 2023.

The following summarized unaudited pro forma Condensed Statement of Operations information for the three and nine months ended October 31, 2024 and 2023, assumes that the O'Connors acquisition occurred as of February 1, 2023.

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, 2023 or that will be attained in the future.

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

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, 2023, or the results that will be attained in the future.

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

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Total Revenues $ 679,824 $ 757,223 $ 1,942,200 $ 2,098,124

Net (Loss) Income $ ( 4,304 ) $ 35,456 $ 5,136 $ 63,162

Net Income $ 1,713 $ 34,027 $ 6,850 $ 99,302

NOTE 16 - CONTINGENCIES

The Company is engaged in legal proceedings incidental to the normal course of business.

Due to their nature, such legal proceedings involve inherent uncertainties, including but not limited to, court rulings, negotiations between affected parties and governmental intervention.

Due to their nature, these legal proceedings involve inherent uncertainties, including but not limited to, court rulings, negotiations between affected parties and governmental intervention.

Based upon the information available to the Company and discussions with legal counsel, it is the Company's opinion that the outcome of these various legal actions and claims will not have a material impact on its financial position, results of operations or cash flows.

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

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Total $ 275 $ 40,452 $ 8,809 $ 117,483

(1) Australia segment was created through the O'Connors acquisition that closed in October 2023.

July 31, 2024 January 31, 2024

(1) Australia segment was created through the Company's acquisition of "O’Connors in October 2023.

October 31, 2024 January 31, 2024

(in thousands)

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Three Months Ended

July 31, Six Months Ended

October 31, Nine Months Ended

2024 2023 2024 2023

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$ 679,824 $ 694,115 $ 1,942,200 $ 1,906,312

(1) Australia segment was created through the O'Connors acquisition that closed in October 2023.

(1) Australia segment was created through the Company's acquisition of "O’Connors in October 2023.

Long-lived assets

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

(in thousands)

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

What changed 10-Q

Item 1. Financial Statements