What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-04-07 compared with 2024-04-03 · 348 added, 214 removed, 1067 unchanged (34% of the section changed)

30 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Inventories – Valuation of Used Equipment Inventories — Refer to Notes 1 and 5 to the financial statements

1 unchanged sentence

The majority of the Company’s used equipment inventories are acquired through trade-ins from customers.

Used equipment acquired through a trade-in or during business combinations is recorded at fair value less a normal gross profit margin.

The Company determines fair value for the traded-in equipment through internal and third-party data that considers various factors including the age and condition of the equipment, hours of use, and market conditions.

Used equipment acquired through a trade-in is recorded based on the estimated future selling price, less a gross profit amount to be realized when the trade-in asset is sold and an estimate of any reconditioning work required to ready the asset for sale.

The Company determines net realizable value for the traded-in equipment through internal and third-party data that considers various factors including the age and condition of the equipment, hours of use, and market conditions.

The Company’s used equipment inventories are stated at the lower of cost (specific identification) or net realizable value.

11 unchanged sentences

• 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.

Goodwill Impairment Assessment – Agriculture and Australia Reporting Units – Refer to Notes 1 and 7 to the financial statements

Critical Audit Matter Description

The Company’s annual evaluation of goodwill for impairment involved the comparison of the Agriculture and Australia reporting units’ fair value to their carrying value.

The Company determined the fair value of each reporting unit using a combination of income and market approaches.

The income approach is based on discounted cash flow models that use reporting unit estimates for forecasted future financial performance, including revenues, margins, operating expenses, capital expenditures, depreciation, amortization, tax and discount rates.

As of January 31, 2025, the goodwill balance for the Agriculture reporting unit was $37.8 million, and the goodwill balance for the Australia reporting unit was $23.4M.

The fair value of the Agriculture and Australia reporting units exceeded their carrying values, and therefore, no impairment was recognized.

Given the significant judgements made by management to estimate the fair value of the Agriculture and Australia reporting units and the differences between their fair value and carrying value, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions regarding forecasts of future equipment revenue, profit margins, long-term growth rate, discount rate, and the selection of EBITDA and revenue multiples required a high degree of auditor judgment and an increased extent of effort, including the need to involve fair value specialists.

How the Critical Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future equipment revenue, profit margins, long-term growth rate, discount rate, and EBITDA and revenue multiples for the Agriculture and Australia reporting units included the following, amount others:

• We tested the effectiveness of controls over the evaluation of goodwill for impairment, including those over the underlying assumptions to forecast future equipment revenue, profit margins, long-term growth rate, the selection of the discount rate, and the selection of EBITDA and revenue multiples.

• We evaluated management’s ability to accurately forecast future equipment revenues and profit margins by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s forecasted equipment revenue and profit margins by comparing the forecasts to (1) historical results, (2) internal communications between management and the Board of Directors, and (3) information included in Company press releases as well as in analyst and industry reports.

• We performed a sensitivity analysis of certain assumptions such as revenue, profit margins, long-term growth rate, and the discount rate to evaluate the potential change in the fair value resulting from changes in underlying assumptions.

• With the assistance of our fair value specialists, we evaluated the valuation methodologies, the long-term growth rate and discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the long-term growth rate and discount rate selected by management.

• With the assistance of our fair value specialists, we evaluated the EBITDA and revenue multiples used in estimating fair value, including testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to its guideline companies and guideline transactions.

/s/ DELOITTE & TOUCHE LLP

9 unchanged sentences

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, 2025, of the Company and our report dated April 7, 2025, 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

49 unchanged sentences

Operating lease liabilities 25,588 50,964

Finance lease liabilities 44,894 1,406

Deferred income taxes 8,818 22,607

30 unchanged sentences

Operating Expenses 389,780 362,509 301,516

Impairment of Goodwill 531 — —

Impairment of Intangible and Long-Lived Assets 1,311 — —

1 unchanged sentence

Other Income (Expense)

Interest and other income 3,300 3,862 2,431

Interest and other income (expense) ( 4,178 ) 3,300 3,862

Floorplan interest expense ( 34,710 ) ( 13,802 ) ( 1,875 )

Other interest expense ( 15,105 ) ( 7,303 ) ( 5,069 )

Income Before Income Taxes 151,040 135,241 86,901

Provision for Income Taxes 38,599 33,373 20,854

Net Income $ 112,441 $ 101,868 $ 66,047

Earnings per Share:

Income (Loss) Before Income Taxes ( 49,985 ) 151,040 135,241

(Benefit from) Provision for Income Taxes ( 13,074 ) 38,599 33,373

Net (Loss) Income $ ( 36,911 ) $ 112,441 $ 101,868

(Loss) Earnings per Share:

Basic $ ( 1.63 ) $ 4.93 $ 4.50

9 unchanged sentences

2025 2024 2023

Net Income $ 112,441 $ 101,868 $ 66,047

Other Comprehensive Income (Loss)

Net (Loss) Income $ ( 36,911 ) $ 112,441 $ 101,868

Other Comprehensive (Loss) Income

Foreign currency translation adjustments ( 10,094 ) 6,779 ( 2,847 )

Comprehensive Income $ 119,220 $ 99,021 $ 62,376

Comprehensive (Loss) Income $ ( 47,005 ) $ 119,220 $ 99,021

See Notes to Consolidated Financial Statements

8 unchanged sentences

Stock-based compensation expense — — 3,230 — — 3,230

Cumulative-effect adjustment of adopting ASC 326, Financial Instruments - Credit Losses

— — — — — ( 204 )

Net income — — — 101,868 — 101,868

8 unchanged sentences

Stock-based compensation expense — — 4,292 — — 4,292

Net income — — — 112,441 — 112,441

Net loss — — — ( 36,911 ) — ( 36,911 )

Other comprehensive income — — — — ( 10,094 ) ( 10,094 )

7 unchanged sentences

Operating Activities

Net income $ 112,441 $ 101,868 $ 66,047

Net (loss) income $ ( 36,911 ) $ 112,441 $ 101,868

Adjustments to reconcile net income to net cash provided by operating activities

4 unchanged sentences

Noncash interest expense 1,069 292 245

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

Noncash lease expense 8,067 9,430 9,099

Sale-leaseback financing expense 9,650 — —

(Gain) loss on extinguishment of debt ( 3,585 ) — —

Other, net 3,575 ( 2,811 ) ( 218 )

6 unchanged sentences

Accounts payable, accrued expenses and other and other long-term liabilities ( 28,657 ) ( 17,845 ) ( 13,933 )

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

Net Cash Provided by (Used for) Operating Activities 70,291 ( 32,280 ) 10,816

Investing Activities

9 unchanged sentences

Principal payments on long-term debt and finance leases ( 18,500 ) ( 13,045 ) ( 7,637 )

Payment of debt issuance costs ( 3,864 ) ( 121 ) ( 9 )

Other, net ( 853 ) ( 1,004 ) ( 1,144 )

Net Cash Provided by (Used for) Financing Activities 188,577 21,959 ( 35,335 )

Net Cash (Used for) Provided by Financing Activities ( 23,619 ) 188,577 21,959

Effect of Exchange Rate Changes on Cash ( 1,094 ) 1,228 ( 946 )

7 unchanged sentences

Supplemental Disclosures of Noncash Investing and Financing Activities

Net property and equipment financed with long-term debt, capital leases, accounts payable and accrued liabilities $ 17,911 $ 6,404 $ 14,626

Long-term debt to acquire finance leases $ 2,471 $ 7,119 $ 11,000

Net property and equipment financed with long-term debt, leases, accounts payable and accrued liabilities $ 35,963 $ 17,911 $ 6,404

Finance lease debt to acquire finance asset $ 65,638 $ 2,471 $ 7,119

Net transfer of assets from (to) property and equipment to (from) inventories $ ( 6,765 ) $ ( 497 ) $ ( 3,767 )

5 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, Europe, and Australia.

and its subsidiaries (collectively, “Titan Machinery,” the “Company,” “we,” or us”) 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.

21 unchanged sentences

Although no change in suppliers is anticipated, the occurrence of such a change could cause a possible loss of sales and adversely affect operating results.

The Company is the holder of authorized dealerships granted by CNH Industrial America, LLC and CNHI International SA (collectively referred to "CNH Industrial") whereby it has the right to act as an authorized dealer for the entity's equipment at specified locations.

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.

The Company is the holder of authorized dealerships granted by CNH Industrial America, LLC and CNHI International SA (collectively referred to "CNH Industrial") whereby it has the right to act as an

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

authorized dealer for the entity's equipment at specified locations.

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.

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:

10 unchanged sentences

Equipment revenue transactions include the sale of new and used agricultural and construction equipment.

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

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

Once a product is delivered, 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 asset.

50 unchanged sentences

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

All new and used equipment inventories, including that which has been rented, are subject to periodic lower of cost or net realizable value evaluations that consider various factors including aging and condition of the equipment and market conditions.

The majority of our used equipment inventory is acquired through trade-ins from our customers and is initially measured and recognized based on the estimated future selling price of the equipment, less a gross profit amount to be realized when the trade-in asset is sold and an estimate of any reconditioning work required to ready the asset for sale.

Subsequent to the initial recognition, all new and used equipment inventories are subject to lower of cost or net realizable value assessments.

We estimate net realizable value using internal information, management judgment and third-party data that considers various factors including age and condition of equipment, hours of use and market conditions.

Generally, used equipment prices are more volatile to changes in market conditions than prices for new equipment due to incentive programs that may be offered by manufacturers to assist in the sale of new equipment.

Equipment inventory values are adjusted whenever the carrying amount exceeds the net realizable value.

19 unchanged sentences

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 fair value is in excess of 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.

See Note 7 for details and results of the Company's impairment testing.

See Note 7, Intangible Assets and Goodwill , for details and results of the Company's impairment testing.

Intangible Assets

6 unchanged sentences

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

See Note 7 for details and results of the Company's impairment testing.

See Note 7, Intangible Assets and Goodwill , for details and results of the Company's impairment testing.

Impairment of Long-Lived Assets

9 unchanged sentences

Other long-lived assets shared across stores within a segment or shared across segments are reviewed for impairment on a segment or consolidated level as appropriate.

During the year ended January 31, 2024, the Company determined that certain events or circumstances, including a current period operating loss combined with historical losses and anticipated future operating losses, within certain of its stores was an indication that the long-lived assets of these stores may not be recoverable.

The aggregate carrying value of such assets totaled $11.0 million.

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 the year ended January 31, 2024.

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

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.

See Note 6, Property and Equipment , for details and results of the Company's impairment testing.

Construction of Leased Assets and Sale-Leaseback Accounting

17 unchanged sentences

Changes in the fair value of derivative instruments that are not designated as hedging instruments or do not qualify for hedge accounting treatment are reported currently in earnings.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company uses the asset and liability method to account for income taxes.

7 unchanged sentences

The Company's policy is to recognize interest and penalties related to income tax matters within its provision for income taxes.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Advertising Costs

14 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 gain (loss) of $ 1.0 million, $( 1.2 ) million, and $( 0.1 ) million for the years ended January 31, 2024, 2023, and 2022 respectively.

The Company recognized, in interest and other income in its consolidated statements of operations, a net foreign currency transaction (loss) gain of $( 4.0 ) million, $ 1.0 million, and $( 1.2 ) million for the years ended January 31, 2025, 2024, and 2023 respectively.

Business Combinations

7 unchanged sentences

Level 2—Values derived from observable inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets in markets that are not active.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Level 3—Values derived from unobservable inputs for which there is little or no market data available, thereby requiring the reporting entity to develop its own assumptions.

5 unchanged sentences

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

Recent Accounting Guidance

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounting Guidance Not Yet Adopted

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):

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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.

1 unchanged sentence

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.

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.

Additionally, in January 2025, FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date to clarify the effective date of ASU 2024-03.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the provisions of the amendments 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):

Disclosure of Supplier Finance Program Obligations.

This new standard requires that the buyer in a supplier finance program discloses information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented.

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.

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.

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

In November 2023, the FASB issued ASU 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.

On January 31, 2025, the Company adopted ASU No.

2023-07 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:

2 unchanged sentences

(in thousands, except per share data)

Net income $ 112,441 $ 101,868 $ 66,047

Net (loss) income $ ( 36,911 ) $ 112,441 $ 101,868

Allocation to participating securities — ( 1,519 ) ( 1,295 )

4 unchanged sentences

Diluted weighted-average common shares outstanding 22,606 22,499 22,380

Earnings per Share:

(Loss) Earnings per Share:

Basic $ ( 1.63 ) $ 4.93 $ 4.50

Diluted $ ( 1.63 ) $ 4.93 $ 4.49

Anti-dilutive shares excluded from diluted weighted-average common shares outstanding:

Stock options and restricted stock units 12 — —

TITAN MACHINERY INC.

13 unchanged sentences

Year Ended January 31, 2024

Agriculture Construction Europe Total

Agriculture Construction Europe Australia Total

(in thousands)

107 unchanged sentences

Such assets had gross carrying values totaling $ 53.0 million and $ 18.4 million, and accumulated amortization balances totaling $ 6.4 million and $ 9.7 million, as of January 31, 2025 and 2024, 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 groups) may not be recoverable.

The Company performed the impairment analyses for these assets which have a combined carrying value of $51.6 million.

The Company determined, based on changing expectations regarding the future use of certain long-lived assets, that the $18.4 million carrying value of these assets may not be fully recoverable.

The Company performed an impairment assessment of these asset groups and as a result recognized an impairment charge of $1.3 million, of which $0.2 million was within the Agriculture segment, $0.2 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.

The Company did not have similar impairments in fiscal 2024 or fiscal 2023.

NOTE 7 - INTANGIBLE ASSETS AND GOODWILL

Definite-Lived Intangible Assets

The following is a summary of definite-lived intangible assets as of January 31, 2024 and 2023:

Finite-Lived Intangible Assets

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 as of January 31, 2025 and 2024:

January 31, 2025 January 31, 2024

6 unchanged sentences

$ 12,262 $ ( 2,920 ) $ 9,342 $ 13,445 $ ( 1,157 ) $ 12,288

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.

Intangible asset amortization expense was $ 1.9 million, $ 0.7 million and $ 0.2 million for the years ended January 31, 2025, 2024 and 2023, respectively.

The covenants not to compete and customer relationships assets for the year ended January 31, 2025 have a weighted-average amortization period of 4.7 years and 6.9 years, 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 groups) may not be recoverable.

The Company performed an impairment assessment of these asset groups and as a result recognized an impairment charge of $0.1 million with respect to its German subsidiary's assets within the Europe segment, which is reflected in Impairment of Intangible and Long-Lived Assets in the Condensed Consolidated Statements of Operations.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of January 31, 2025, future amortization expense is expected to be as follows:

2 unchanged sentences

Thereafter 1,131

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Indefinite-Lived Intangible Assets

5 unchanged sentences

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

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

Foreign currency translation — — ( 2,104 ) ( 2,104 )

7 unchanged sentences

During the years ended January 31, 2025, 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 $ 40.1 million and accumulated impairments of $1.1 million as of January 31, 2025.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Changes in the carrying amount of goodwill during the years ended January 31, 2025 and 2024 are as follows:

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

1 unchanged sentence

Foreign currency translation — ( 13 ) ( 2,385 ) ( 2,398 )

Impairment — ( 531 ) — (531)

Balance, January 31, 2025 $ 37,820 $ — $ 23,426 $ 61,246

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

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.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Under the quantitative impairment test, the fair value of the reporting units were estimated using an income and market approach.

The income approach is based on discounted cash flow models that use estimates for forecasts of future operating performance for the reporting units.

These forecasts include estimates of revenues, margins, operating expenses, capital expenditures, depreciation, amortization, tax and discount rates.

Projected future cash flows are then discounted to a present value employing a discount rate that properly accounts for the estimated risk-adjusted weighted-average cost of capital relevant to each reporting unit.

The market approach is based on assumptions related to earnings before interest, taxes, depreciation, and amortization multiples or revenue multiples.

These estimates are developed as part of our planning process based on assumed growth rates, along with historical data and various internal estimates.

Due to ongoing losses, an interim test was completed in the second quarter of fiscal 2025, for our German reporting unit.

The results of the Company's impairment test 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 $0.5 million was recognized, which is included in Impairment of Goodwill in the Condensed Consolidated Statement of Operations.

The impairment charge arose as the result of lowered expectations of the future financial performance of this reporting unit, which was impacted by the current year operating performance and challenging industry conditions.

This removed all remaining goodwill in our Europe segment.

The annual impairment testing of the Agriculture and Australia reporting units exceeded their carrying values, therefore there were no impairments in these two reporting units.

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

The gross goodwill balance was $ 63.2 million and $ 65.6 million as of January 31, 2025 and 2024, respectively.

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

The accumulated goodwill impairment loss was $ 2.0 million and $ 1.5 million and as of January 31, 2025 and 2024, respectively , within the Europe segment.

NOTE 8 - FLOORPLAN PAYABLE/LINES OF CREDIT

2 unchanged sentences

As of January 31, 2025, the Company had floorplan lines of credit totaling $ 1.5 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”).

(i) a $ 875.0 million credit facility with CNH Industrial which includes $75.0 million revolver line, (ii) a $ 390.0 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”).

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CNH Industrial Floorplan Payable Line of Credit

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.

As of January 31, 2025, the Company had an $ 875.0 million credit facility with CNH Industrial, of which $ 650.0 million is available for U.S.

domestic financing which includes $75.0 million revolver line, $125.0 million is available for Australian financing, and $ 100.0 million is available for European financing.

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

18 unchanged sentences

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.

It also contains various restrictive covenants that require prior consent of CNH Industrial if the Company desires to engage in any acquisition of, consolidation or merger with, any other business entity in which the Company is not the surviving company;

The credit facility also contains various restrictive covenants that require prior consent of CNH Industrial if the Company desires to engage in any acquisition of, consolidation or merger with, any other business entity in which the Company is not the surviving company;

create subsidiaries;

4 unchanged sentences

The credit facility automatically renews on August 31st of each year unless earlier terminated by either party.

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.

In fiscal year 2025, the Company received various letters from CNH Industrial Capital America LLC that waived the Consolidated Fixed Charge Coverage Ratio covenant for the period January 31, 2025 through January 31, 2026.

As of January 31, 2025, the Company was in compliance with the adjusted debt to tangible net worth and due to the one year waiver of the fixed charge coverage ratio, that covenant was not applicable.

TITAN MACHINERY INC.

1 unchanged sentence

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").

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.

As of January 31, 2025, the Company had a $500.0 million credit facility, consisting of a $ 390.0 million floorplan facility (the "Floorplan Loan") and a $ 110.0 million operating line (the "Revolver Loan").

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.

1 unchanged sentence

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.

In no event shall the SOFR Rate be less than zero.

borrowings under the Bank Syndicate Agreement, the Company elects at the time of any advance to choose a Base Rate Loan or a SOFR Rate Loan.

The SOFR Rate is based upon one-month, three-month or six-month SOFR plus an adjustment ( 0.11 % for one-month term;

0.26 % for three-month term;

and 0.43 % for six-month term), as chosen by the Company, but in no event shall the SOFR Rate be less than zero.

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 %, or (c) the one-month SOFR Rate plus 1 % plus applicable margin, plus 11.4 basis points.

In no event shall the Base Rate be less than zero.

The applicable margin rate is determined based on excess availability under the Bank Syndicate Agreement and ranges from 0.5% to 1.0% for Base Rate Loans.

(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.

The applicable margin is determined based on excess availability as determined under the Bank Syndicate Agreement and ranges from 0.75 % to 1.25 % for Base Rate Loans and 1.75 % to 2.25 % for SOFR Rate Loans.

The applicable margins for the U.S.

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

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

The Australian Bill Rate is based on the Bank Bill Swap Reference Bid Rate with an equivalent term of the loan, but in no event shall the Australian Bill Rate be less than zero.

The Australian Base Rate is the sum of 1% plus the interbank overnight cash rate calculated by the Reserve Bank of Australia (but in no event shall the Australian cash rate be less than zero).

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

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

The Bank Syndicate Agreement does not obligate the Company to maintain financial covenants, except in the event that excess availability (each as defined in the Bank Syndicate Agreement) is less than 15% of the lower of the borrowing base or the size of the maximum credit line, at which point the Company is required to maintain a fixed charge coverage ratio of at least 1.10 :1.00.

1 unchanged sentence

The Bank Syndicate Agreement includes various restrictions on the Company and its subsidiaries' activities, including, under certain conditions, limitations on the Company’s ability to make certain cash payments including for cash dividends and stock repurchases, issuance of equity instruments, acquisitions and divestitures, and entering into new indebtedness transactions.

As of January 31, 2024, under these provisions of the Bank Syndicate Agreement, the Company had an unrestricted dividend availability of approximately $ 80.4 million.

The Bank Syndicate Agreement matures on April 3, 2025.

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%.

As of January 31, 2025, under these provisions of the Bank Syndicate Agreement, the Company did not have any unrestricted dividend availability.

The Bank Syndicate Agreement matures on May 17, 2029.

The Floorplan Loan is used to finance equipment inventory purchases.

3 unchanged sentences

As of January 31, 2025 and 2024, 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

As of January 31, 2024, the Company had a $ 80.0 million credit facility with DLL Finance, of which $ 60.0 million is available for domestic financing and $ 20.0 million is available for financing in certain of our European markets.

As of January 31, 2025, the Company had a $ 80.0 million credit facility with DLL Finance, of which $ 47.3 million, $ 20.0 million and $12.7 million is available for domestic, European and Australian financing, respectively.

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 between 3.00 % and 6.00%.

Amounts outstanding for domestic financing bear interest on outstanding balances of one-month SOFR plus 2.37 % spread.

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

Amounts outstanding for Australian financing bear interest on outstanding balances of DLL Base Rate plus 1.59% spread.

The credit facility allows for increase, decrease or termination of the facility by DLL Finance in its sole discretion at any time.

3 unchanged sentences

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

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

The Company received various letters from DLL Finance LLC that waived the Minimum Consolidated Fixed Charge Coverage Ratio covenant for the period January 31, 2025 through January 31, 2026.

As of January 31, 2025, the Company was in compliance with the net leverage ratio and due to the one year waiver of the fixed charge coverage ratio, that covenant was not applicable.

Other Lines of Credit

3 unchanged sentences

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

17 unchanged sentences

$ 59,492 $ 74,400

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 - LONG-TERM DEBT

5 unchanged sentences

$ 129,604 $ 88,669

Sale-leaseback financing obligations Various through December 2030 3.4 % to 10.3 %

10,043 11,252

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

Sale-leaseback financing obligations December 2028 to December 2030 6.1 % to 6.2 %

Vehicle loans, secured Various through January 2031 2.1 % to 7.4 %

27,198 14,433

Other Various through July 2039 1.2% to 3.6 %

Other Various through September 2029 2.4% to 7.4 %

Total debt 168,687 120,113

1 unchanged sentence

Long-term debt, net $ 157,767 $ 106,407

In fiscal 2025, the Company signed an agreement to purchase 13 of its leased facilities at the end of the respective lease terms or earlier, resulting in a sale-leaseback finance modification expense of $9.7 million, which was recorded to Interest and other income (expense) in the Condensed Consolidated Statements of Operations.

In fiscal 2025, the Company purchased and subsequently financed several locations that it previously leased including sale-leaseback financing locations, creating an increase in mortgage loans as of January 31, 2025 compared to January 31, 2024.

Additionally, the Company decreased the Other debt balance by $3.6 million for the debt cancellation in relation to the U.S.

Treasury Department's New Market Tax Credit Program.

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

Long-term debt maturities are as follows:

3 unchanged sentences

Thereafter 50,612

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - DERIVATIVE INSTRUMENTS

6 unchanged sentences

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.

The notional value of outstanding foreign currency contracts was $46.1 million and $25.3 million as of January 31, 2025 and 2024, respectively.

As of January 31, 2025, and 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 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, 2025, 2024 and 2023.

20 unchanged sentences

In the event that an indemnification claim is asserted, the Company's liability would be limited by the terms of the applicable agreement.

See additional information on operating lease commitments in Note 13.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

See additional information on operating lease commitments in Note 13, Leases .

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

$ 13,584 $ 13,697 $ 15,281

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 $ 31,335 $ 46,578 $ 77,913

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted-average lease term and discount rate as of January 31, 2025 and 2024 are as follows:

6 unchanged sentences

Financing leases 7.8 % 8.8 %

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other lease information is as follows:

22 unchanged sentences

We primarily dispose of our rental assets through the sale of the asset by our retail sales force.

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

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

The following is the balance of our dedicated rental fleet assets of our Construction segment as of January 31, 2025 and 2024, respectively:

7 unchanged sentences

NOTE 14 - INCOME TAXES

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

The components of income (loss) before income taxes for the years ended January 31, 2025, 2024 and 2023 consist of the following:

2025 2024 2023

21 unchanged sentences

Valuation allowances 2.4 % 0.6 % 0.4 %

Debt forgiveness income - Ukraine ( 5.8 ) % — % — %

All other, net 2.1 % 0.5 % ( 1.2 ) %

5 unchanged sentences

Deferred tax assets:

Inventory allowances $ 3,396 $ 2,551

Intangible assets — 290

Right of use lease liability $ 18,992 $ 11,420

Net operating losses 5,946 6,725

Interest 9,343 —

Inventory allowances 6,398 3,396

Accrued liabilities and other 5,821 5,141

Receivables 614 724

Stock-based compensation 1,053 865

Right of use lease liability 11,420 14,238

Other 675 374

Receivables 478 614

Total deferred tax assets 48,031 28,836

7 unchanged sentences

Net deferred tax asset (liability) $ ( 6,266 ) $ ( 22,078 )

As of January 31, 2024, the Company has recorded $ 29.5 million of net operating loss carryforwards within certain of its foreign jurisdictions;

$ 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.

As of January 31, 2025, the Company has recorded $ 38.5 million of net operating loss carryforwards within certain of its domestic and foreign jurisdictions.

The net operating loss carryforward within domestic jurisdictions is $7.2 million with unlimited carryforward period and $10.7 million that expire at various dates between the Company's fiscal years 2035 and 2045.

The net operating carryforward within foreign jurisdictions is $ 16.1 million with unlimited carryforward periods and $4.5 million that expire at various dates between the Company's fiscal years 2037 and 2038.

In assessing the foreign deferred tax assets as of January 31, 2025 and 2024, 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.

1 unchanged sentence

The Company has recorded valuation allowances of $6.3 million and $7.5 million for the international entities as of January 31, 2025 and 2024, respectively.

In fiscal 2025, the Company had a $1.2 million reduction in valuation allowance primarily due the change in the net operating loss from taxable income in Ukraine and taxable loss in Germany.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of January 31, 2025, the Company has recorded a liability for unrecognized tax benefits of $3.0 million.

The liability was recorded as a reduction in the Company's deferred tax assets, mainly, related to its net operating losses and also the Company’s tax liability.

If recognized, the entire $3.0 million of unrecognized tax benefits would affect the Company's effective tax rate.

As of January 31, 2025, the Company did not have accumulated accrued interest and penalties, and for the year ended January 31, 2025 the Company did not recognize interest or penalties in its provision (benefit) for income taxes.

The Company had no unrecognized tax benefits as of January 31, 2024 and January 31, 2023.

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

Year ended January 31,

(in thousands)

Unrecognized tax benefits - February 1 $ —

Gross increases - tax positions in prior period —

Gross decreases - tax positions in prior period —

Gross increases - tax positions in current period 2,995

Lapse of statute of limitations —

Unrecognized tax benefits - January 31 $ 2,995

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

12 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

Stock-Based Compensation Plans

The Company has one stock-based compensation plan, the Amended and Restated Titan Machinery Inc.

The Company has one stock-based compensation plan, the Second Amended and Restated Titan Machinery Inc.

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.

1 unchanged sentence

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.

During the year ended January 31, 2025, the 2014 Equity Incentive Plan was amended and restated to increase the shares available for equity awards from 2,200,000 shares to 3,150,000 shares.

As of January 31, 2025, the Company had 1,027,150 shares authorized and available for future equity awards under the 2014 Equity Incentive Plan.

4 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 approximately 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

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

for members of the Board of Directors.

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

18 unchanged sentences

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, 2025:

6 unchanged sentences

The weighted-average grant date fair value of RSUs granted was $ 18.20 , $ 26.47 , and $ 26.23 for the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

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.

As of January 31, 2025, 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 2.4 years.

Long-Term Cash Incentive Awards

5 unchanged sentences

The percentage of the fair value that is accrued as compensation cost at the end of each period is equal to the percentage of the requisite service that has been rendered at that date.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes activity for long-term cash incentive awards for the year ended January 31, 2025:

8 unchanged sentences

As of January 31, 2025, based on the Company's stock price on that day, there was $ 0.4 million of unrecognized compensation cost related to nonvested awards that is expected to be recognized over a weighted-average period of 1.4 years.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

13 unchanged sentences

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.

The Company matches 50% of the first 8% of the participating employee's contribution.

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.

2 unchanged sentences

NOTE 19 - BUSINESS COMBINATIONS

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

The Company acquired Gose Landtechnik e.K.

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 year ended January 31, 2025 and has been included in the Condensed Consolidated Financial Statements from the date of the acquisition.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On October 2, 2023, the Company 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 15 O’Connors store locations are included within the Australia segment.

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.

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

These acquisitions consisted of five locations of Pioneer Farm Equipment Co.

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

2 unchanged sentences

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)

These acquisitions have been included in the Condensed Consolidated Financial Statements from the date of the respective acquisition.

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

These acquisitions consisted of 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 Condensed Consolidated Financial Statements from the date of the respective acquisition.

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.

9 unchanged sentences

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, 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.

As of January 31, 2025, 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):

Heartland Companies

October 2, 2023 August 1, 2022

October 2, 2023

Assets acquired:

Cash $ 4,165 $ 1,583

Receivables 8,323

4 unchanged sentences

Intangible assets:

Non-Competition — 700

Customer Relationships 10,928

10 unchanged sentences

Operating lease liabilities 13,733

Other Long-term liabilities — 5,152

Total liabilities 125,977

1 unchanged sentence

Goodwill recognized by segment:

Agriculture $ — $ 21,087

Australia $ 24,261

Goodwill expected to be deductible for tax purposes —

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

The acquired customer relationship intangible assets are being amortized on a straight line basis over a useful life of 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.

3 unchanged sentences

Pro Forma Information

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 following summarized unaudited pro forma condensed statement of operations information for the twelve months ended January 31, 2025, 2024 and 2023, assumes 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.

4 unchanged sentences

Total Revenues $ 2,702,122 $ 2,951,697 $ 2,595,342

Net Income $ 122,126 $ 120,339 $ 77,664

Net (Loss) Income $ ( 36,911 ) $ 122,126 $ 120,339

NOTE 20 - FAIR VALUE OF FINANCIAL INSTRUMENTS

11 unchanged sentences

Fair value $ 145,010 $ 103,102

NOTE 21 - SEGMENT INFORMATION AND OPERATING RESULTS

The Company has four reportable segments:

NOTE 21 - BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

The Company has four reportable and operating segments:

Agriculture, Construction, Europe and Australia.

This segmentation aligns with the results of operations presented to the Company's chief operating decision maker ("CODM") in reviewing the Company to make decisions regarding the allocation of resources, to assess the Company's operating performance and to make strategic decisions.

The Company identifies the CODM to be the Company's Chief Executive Officer.

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.

The operating results for each segment are reported separately to the Company's Chief Executive Officer to make decisions regarding the allocation of resources, to assess the Company's operating performance and to make strategic decisions.

The performance measure used to evaluate segment performance and allocate resources across segments is segment income (loss) before taxes.

Corporate unallocated expenses are centrally managed costs and are therefore excluded from this profit measure to provide transparency of our segment operating results.

Our CODM considers variances of actual performance to our annual operating plan and periodic forecasts when making decisions.

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.

2 unchanged sentences

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 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)

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.

Net sales and long-lived assets, by geographic area were as follows:

Year Ended January 31,

2025 2024 2023

(in thousands)

United States $ 2,220,002 $ 2,376,726 $ 1,910,177

221,115 69,809 —

Other international countries 261,005 311,910 299,129

$ 2,702,122 $ 2,758,445 $ 2,209,306

Long-lived assets

Year Ended January 31,

(in thousands)

United States $ 363,672 $ 305,512

Australia 24,512 27,637

Other international countries 20,323 21,233

$ 408,507 $ 354,382

TITAN MACHINERY INC.

2 unchanged sentences

Year Ended January 31, 2025

(in thousands)

Agriculture Construction Europe Australia Total

Equipment $ 1,462,204 $ 222,503 $ 188,296 $ 177,295 $ 2,050,298

Parts 288,968 48,768 58,712 32,009 428,457

Service 129,455 27,797 11,911 10,944 180,107

Rental and other 7,801 32,506 2,086 867 43,260

$ 1,888,428 $ 331,574 $ 261,005 $ 221,115 $ 2,702,122

Cost of Revenue

Equipment $ 1,395,384 $ 197,354 $ 162,581 $ 157,484

Parts 194,917 34,681 43,346 21,289

Service 47,840 8,613 6,446 3,924

Rental and other 7,522 22,624 1,351 1,136

Operating expense 254,858 61,517 42,739 30,363

Impairment Charge (1)

201 168 1,473 —

Floorplan interest expense 21,384 5,462 4,159 2,172

Sale-leaseback financing expense 5,139 4,511 — —

Other segment expense (income), net (2)

962 3,294 2,804 1,859

Segment (loss) income before taxes $ ( 39,779 ) $ ( 6,650 ) $ ( 3,894 ) $ 2,888 $ (47,435)

Shared resources unallocated expense ( 2,550 )

Loss before taxes $ ( 49,985 )

Depreciation and amortization $ 14,022 $ 10,518 $ 3,670 $ 3,623

Total Segment Assets (3)

$ 1,060,180 $ 252,471 $ 248,282 $ 192,331 $ 1,753,264

Shared Resources Assets 60,674

Total Assets $ 1,813,938

Total Segment Capital Expenditures $ 41,874 $ 10,076 $ 4,100 $ 3,190 $ 59,240

Shared Resources Assets Capital Expenditures ( 7,395 )

Total Capital Expenditures $ 51,845

(1) Impairment charge related to goodwill, intangible and long-lived assets.

(2) Balance consists of other interest income (expense) and foreign currency.

(3) Agriculture and Construction cash balances are held at Shared Resources.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended January 31, 2024

(in thousands)

Agriculture $ 2,044,263 $ 1,601,720 $ 1,076,751

Construction 332,463 308,457 317,164

Europe 311,910 299,129 317,991

Australia 69,809 — —

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

Income Before Income Taxes

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

Construction 18,346 18,569 15,543

Europe 16,487 20,197 12,552

Australia 4,115 — —

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

Shared Resources ( 8,980 ) ( 6,258 ) ( 1,761 )

Total $ 151,040 $ 135,241 $ 86,901

Total Impairment

Europe — — 1,498

Total $ — $ — $ 1,498

Capital Expenditures

Agriculture $ 38,734 $ 15,303 $ 13,879

Construction 12,050 10,721 17,941

Europe 6,764 2,767 2,687

Australia 529 — —

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

Shared Resources 4,284 7,691 3,119

Total $ 62,361 $ 36,482 $ 37,626

January 31, 2024 January 31, 2023

Total Assets (in thousands)

Agriculture $ 1,183,367 $ 788,265

Construction 257,142 187,739

Europe 280,354 170,647

Australia 225,421 —

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

Shared Resources 45,977 42,044

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

Agriculture Construction Europe Australia Total

Equipment $ 1,624,010 $ 221,140 $ 245,423 $ 54,743 $ 2,145,316

Parts 293,554 51,019 54,356 11,912 410,841

Service 117,087 26,913 10,437 2,878 157,315

Rental and other 9,612 33,391 1,694 276 44,973

$ 2,044,263 $ 332,463 $ 311,910 $ 69,809 $ 2,758,445

Cost of Revenue

Equipment $ 1,425,414 $ 186,815 $ 204,056 $ 48,273

Parts 197,026 35,850 39,107 7,938

Service 39,930 7,480 5,447 1,124

Rental and other 6,592 20,628 1,085 326

Operating expense 246,514 60,151 42,749 7,147

Floorplan interest expense 8,281 1,816 1,651 406

Other segment expense (income), net (1)

( 564 ) 1,378 1,328 481

Segment income before taxes $ 121,070 $ 18,345 $ 16,487 $ 4,114 $ 160,016

Shared resources unallocated expense ( 8,976 )

Income before taxes $ 151,040

Depreciation and amortization $ 12,244 $ 9,676 $ 3,290 $ 938

Total Segment Assets (2)

$ 1,183,367 $ 257,142 $ 280,354 $ 225,421 $ 1,946,284

Shared Resources Assets 45,977

Total Assets $ 1,992,261

Total Segment Capital Expenditures $ 38,734 $ 12,050 $ 6,764 $ 529 $ 58,077

Shared Resources Assets Capital Expenditures 4,284

Total Capital Expenditures $ 62,361

(1) Balance consists of other interest income (expense) and foreign currency.

(2) Agriculture and Construction cash balances are held at Shared Resources.

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended January 31, 2023

(in thousands)

Agriculture Construction Europe Total

Equipment $ 1,269,298 $ 201,077 $ 241,184 $ 1,711,559

Parts 228,520 50,628 48,048 327,196

Service 96,418 25,079 8,306 129,803

Rental and other 7,484 31,673 1,591 40,748

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

Cost of Revenue

Equipment $ 1,107,195 $ 169,825 $ 200,519

Parts 151,639 35,489 33,290

Service 33,963 7,488 4,757

Rental and other 4,626 19,593 1,083

Operating expense 199,020 56,595 37,730

Floorplan interest expense 2,855 733 646

Other segment expense (income), net (1)

( 309 ) 166 907

Segment income before taxes $ 102,731 $ 18,568 $ 20,197 $ 141,496

Shared resources unallocated expense ( 6,255 )

Income before taxes $ 135,241

Depreciation and amortization $ 9,200 $ 9,170 $ 2,575

Total Segment Assets (2)

$ 788,265 $ 187,739 $ 170,647 $ 1,146,651

Shared Resources Assets 42,044

Total Assets $ 1,188,695

Total Segment Capital Expenditures $ 15,303 $ 10,721 $ 2,767 $ 28,791

Shared Resources Assets Capital Expenditures 7,691

Total Capital Expenditures $ 36,482

(1) Balance consists of other interest income (expense) and foreign currency.

(2) Agriculture and Construction cash balances are held at Shared Resources.

Schedule II—Valuation and Qualifying Accounts and Reserves

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What changed 10-K

Item 8. Financial Statements and Supplementary Data