i agree, but at this stage of game, even if management is replaced, the new management (the company) will still be on the hook for the long term lease agreements ($100 million) that were made with the outside entities that the current top execs have an interest in.
Not sure there will be a long line of candidates who would want to run a company in the Heart of America selling foreign equipment and competing with American Made Manufacturers CAT & DE
The business model of Titan Machinery can't really be compared to DE, CNH or CAT.
DE,CNH and Cat are manufacturers with their own financing arms, while TITN is nothing more than a reseller. The space is under pressure and competition is fierce which is squeezing margins, more so on a reseller who has is at a major disadvantage against behemoth manufacturers.
Titan's bigger problem is that their management has signed ridiculously high lease contracts with outside entities that they personally have interest in (over $100million). Just in the past 12 months alone they increased these contracts from $50 million to over $100million.) top execs make money with these outside entities make money even if titan doesn't do well.)
The top two execs have also increased their annual salaries by 48% each this year.
all the new construction TITN has been spending money on is bleeding the company and is really only profiting the top exec's brother-in-law who owns the construction company doing the building.
the high debt is another obstacle. Its hard enough to earn a profit, paying nearly $6 million annually just on the Convertible Note alone is a major drain on the stockholders (profits).
If you read the new Q3 10Q you'll see some last minute (desperate type) debt restructuring (extensions) they created.
On the inventory front, the tractors building up in inventory are depreciating assets (and with the new technologies, GPS, Fuel friendly machines etc ) and favorable terms being offered by manufacturers to buy new equipment, the used equipment is becoming obsolete.
Just look at the statement of cash flow and you'll see the results of a poor business model.