Ladies and gentlemen, welcome to the Titan International third quarter 2015 earnings conference call. During this session, all lines will be muted until the question-and-answer portion of the call. [Operator Instructions]. Any statements made in the course of this conference call that states the Company or management's intentions, hopes, beliefs, expectations and/or predictions for the future are considered forward-looking statements. Please note that the Safe Harbor statements contained in the company's latest Form 10-K and Form 10-Q filed with the Securities and Exchange Commission extend to this conference call and any forward-looking statements involve risks and uncertainties as detailed therein. At this time, I would like to introduce Titan Chairman and CEO, Maurice Taylor.

Good morning, everyone. I take it all of you have gotten the press release and everything. So let's just start right in on the third quarter which had some good and some bad. The big bad was that most of Titan's OEs extended their summer shutdowns which caused lower sales which throws off production in our plants and the efficiency gets hit real hard. Their schedules for the rest of the year -- their year, went down on all the big iron, which is not hard when you go out and see what's going on. We expect, though, that the bottom will probably hit within the next six months for all the major OEs, as they try to get where the farmer, where the construction and everything else is going. The one item that most of the analyst are missing is when they talk about the volume of the tractors over a 100 horsepower as big iron. Big iron really is from 200 horsepower and above. This past year, I believe it was [indiscernible] became the number one in North America in the 100 horsepower and under. Now they're moving up their situation to be able to offer I believe up to 150 horsepower. This market grew last year and we believe it will be slightly up next year. This market is what we would called dominated by imports and Titan has a big market share of this and the reason being is of course we make the wheel and the tire and they ship them over without wheels and tires. But we also look to this next year now, we've came up with a new line on our LSWs and we believe that once that gets out to the farmers, especially if they have -- or the nurseries wherever,…

Yes, certainly Maury. Good morning everybody. This quarter was a tough quarter when you look at our bottom line financial results. At the end of the day, that's the scorecard we play for, but I want to spend the time this morning and definitely want to say that our third quarter results don't demonstrate the real score of what's going on here at Titan and the positive strides that we're making. I'll talk more about that little bit later, but let's start with the current quarter. During Q3, the significant pullback in large ag -- which has been well publicized by this point and we definitely continue to see it get worse during the period -- really had a strong impact on our efficiency this quarter. But along with that it's the impact of the strong dollar that continues to negatively impact our North American pricing. And for us the fall-off in global large ag volumes combined with the traditional August holiday period in Europe along with our normal U.S. shutdowns in early July, really impacted our operational efficiency this quarter. All of our locations experienced a reduction in operating income on a percentage basis except for our Russian operation that continues to get more efficient and improve their performance. I'll take more about that a little bit later. As a result our plants in Q3 that are more heavily OEM focused were operating at production levels that negatively impacted their results and their efficiency levels. We've taken additional actions to mitigate the lower volume impact including taking numerous days out of our production schedule just like the OEMs have done. However, each day we take out of the plant does cost us approximately $200,000 in a hit to the bottom line. The other difficult aspect of the reduced volumes…

Thanks, Paul. Good morning everyone. Before I get into the results, I'd like to address the 8-K and subsequent restatements that we're filed today. This past November 2, the Audit Committee of the Board of Directors of Titan International concluded that the previously issued consolidated financial statements for the years ending December 31, 2013 and 2014 and quarters ending March 31, 2014 and 2015, June 30, 2014 and 2015 and September 30, 2014, should no longer be relied upon due to errors in the accounting for the shareholders' agreement and related redeemable non-controlling interest in the company's investment in Voltyre-Prom. Titan did not correctly classify the redeemable non-controlling interest on the balance sheet as mezzanine equity, which is presented below liabilities and above equity. The earnings per share calculation was also affected due to the redeemable non-controlling interest balance exceeding the carrying value of the investment. I want to make this point, the corrections to earnings per share are not operational as they do not effect revenue, operating expenses, net income or cash flows. So with that, let's turn our attention to the operations of the business. Q3 was a challenging quarter for Titan, as has been noted by both Morry and Paul. But despite the difficult quarter we've adapted well by continuing to reduce our headcounts commensurate with volume and as Paul indicated going well beyond headcount reduction in terms of improving profitability of the business. Our profit optimization efforts that materialized in the first half are still hard at work. While we were down significantly in sales to both prior year Q3 and year to date, our gross margin rate performance in Q3 eroded only 120 basis points and for year-to-date has actually improved 100 basis points. So, let's begin talking about revenue. Sales for the quarter were…

Before we turn it over John -- this is Morry. Before we turn it over, I thought I should also mention on this phone call, because it will be coming out in trade rags in the next few weeks. As everybody knows, the currencies in China and the currencies in various countries but also India, have turned and they dropped them to help their exports. Well, a number of years ago, we sued our government under the international trade agreements about dumping and of course no one in the rags gave us much of the chance, but we won that. And so, we have teamed up, I believe they've finished the paper work, with our friends at United Steelworkers and we are going back and we'll be filing the papers against the Chinese and Indians for dumping, and we also have -- going to add to it, the possibility that there has been some fraudulence to evade duties by certain Chinese companies that put a wheel in it and then shipped it in. So, slap a little teeny wheel in it and they had duties of over a 100%. So, the wheel meant nothing because it had a different number and it was coming through, we've tracked that. And a good thing about that is if we can prove that this was a not an accidental situation, but they did it purposely to bypass the customs, we not only get the duties, but that company -- the Chinese company have big problems and the US importer, we can get hit with triple damages. So you will see the trade rags, the moment the final papers, and they've been working on them. We've engaged everybody and they're due to come out at this month and this thing will move fast. And we only did this because we think we have a very strong case and I have an aversion they have to pay all these lawyers and so we wouldn't have done it without that. So you will see that and you will also see as I mentioned in my note all six reactors for our PTRC are up in the oil sands on the concrete slab with the buildings going over and there will be again -- trade rags and various things -- we were also been requested to make sure we send out press releases as that goes and we will be doing that. So with that let's turn it over to questions.

[Operator Instructions]. And our first question comes from Larry DeMaria of William Blair. Please go ahead.

On the Goodyear deal can you just update us, remind us of the financials? What kind of payments you have to make to them, et cetera, first of all? And then secondly, when would you guys start to build inventories, start getting back into the aftermarket distribution in the OE channels with Goodyear?

The first part as you know it's just came down, okay? We made the mention we got the -- we have molds at Goodyear's facilities in Turkey and in Poland, and those will start moving probably this next week. And so it's going to take us probably into the first quarter, we can start up -- we have to figure out, we have people on the road right now to meet with dealers all over. In fact what we're trying to do is negotiate to bring some of the other Goodyear distributors that distributed the Goodyear brand, they do the -- all the other Goodyear. I think our marketing people have been scheduling meetings with them, but in reality we -- I would say first quarter so we see -- we start pushing the tires up until then. It's getting the specs, making sure what we have. There are some OE, that there is no question now with this announcement out, we'll receive orders for them and that will be able to react, but you got a big OE market that's on the down side. So, that's the situation. I don't know if they're building right now for shipment over into Europe or wherever they're going to ship it.

Is the royalty the same? Is the royalty the same, Morry?

Yes, the royalty. What we did is, this royalty -- because your advance payment, it started at $1 million, so they already got their $1 million and next year that gets trued up. In other words, that's on the 2% and then the new agreement it falls under everything because it was separate now because of the year, in three years it just rolls in as an agreement we have right now for North and South America.

Just one last thing, can you remind us of -- you talked about ITM or one of the guys talked about ITM, doing it a little bit better maybe. How are we thinking about divestitures at this point given all the moving parts and your commitment to European ag, obviously with Goodyear. Are we thinking that there is possibility for divestitures and streamlining the business even more from that perspective? And then I'll jump out. Thanks, Morry?

We're always -- that got our non-tire than wheel. We always look at that, there is no question. There have been rumblings out there. We would participate if you were to take x, y, and z, and match them up so they had a bigger animal, I think that would be something that we would and the board of directors would consider. So that's always been on our plate. But meanwhile as you know, I can pick off 50 items that I'd like to buy right now but everybody is in such a panic spree thanks [ph] to all of this and coming to an end. So it'll always be there, but meanwhile while we still have it, we're moving big time into the aftermarket which they were never really into and they put the resources to it and it's been a very positive -- it's starting to show some light. The same happened up in the oil sands. We're looking at that every which way. The only thing we can say Larry straight out, is we're just going to grow it and if turns around that we can combine it then we'll look at that.

Our next question comes from David Tamberrino of Goldman Sachs. Please go ahead. I do apologize, our next question comes from Peter Cross from LM Cohen. Please go ahead.

At the present time, you have two of seven directors who own no stock. I think that's just appalling and I would require them to use of major portion of the director fees to buy stock or if they don't want to do that, I would replace them at the next annual meeting.

I hear you and I think speaking for the board, they probably agree with that. The problem lies is that because of certain stuff, they're precluded until they can get an open session.

I understand that.

And I think you'll see that happen in the open session.

You have had a lot of open windows from the last year and --

No, I understand but there was an open periods since I talked with you. I did what you asked.

Secondly Morry, with the market capital of only -- as of today, this morning of only $330 million, it baffles me that Titan still has three planes, when corporations many times your size are trimming their or eliminating their aircraft fleet. And I would -- surely would hope that possibly, you consider that going forward because I think that promotes indiscriminate use and it also sends a bad message to your employees about cost cutting --

While the first thing, Peter, we use those planes mostly between the factories of moving people and if you want to try to drive, you drive a higher cost. The other ones we have taken out a third of the cost out of that, and it is monitored very, very good. So we've looked at that. If you sold all the planes off, you're -- at the price now, you're better to let them just sit there, since they were paid off and you could never replace them and when you're bringing customers in from places that normally they would have to take two days to get to one of our plants. I hear what you're saying, but I don't think it makes with shareholders, one bit of different of benefit. In fact if anything, you're going to stub it.

Well, I mean obviously there's a lot of corporations --.

[Multiple speakers] -- wait, wait, I understand all that, and I understand there are a lot of corporations that what they did was run out and lease. They spent more money, just they wanted to follow someone else, who thought it was politically correct. So you've stated it Peter --

There are other options also Maurice, such as jet cars, which a lot of people use, a lot of corporations use instead of having a staff and pilots onboard.

See Peter our cost to fly per hour is approximately $1,500.

Okay.

You go rent a jet car, which we did look at that and it's almost $7,500. So, assume think a little bit, okay.

The last thing Maury you mentioned that there's 50 things you want to buy, was your own stock one of them? Especially when below $6?

The problem we have -- we cannot buy, I personally bought stock, we -- when I had one chance to buy and I bought at $10something. The other situation is that we have our bank -- not bank, it's the bond covenants in the basket and we don't have enough room and so that was brought up. And then we -- because it did make sense, I think all the directors would agree with you, take excess cash and buy the stock, but if you have a -- you don't want to trigger covenants by that. So, that did not take effect.

[Operator Instructions]. Our next question and I do apologize, our next question now goes to David Tamberrino of Goldman Sachs. Please go ahead.

I'll stick more to the business side of things, just LSW tire shipments, where are we with that for the third quarter or what was the sequential improvements from the second quarter? And have we seen any additional OEs putting it within their books or having the uptake for the 2016 season?

Yes, we have increased the part numbers at the OEs. We have increased our selection and we are -- in fact one fellow just -- he bought, I believe it was 10 or 15 brand new combines and were running with our LSW. So right now what we're trying to do is as mentioned by Paul and mentioned in my deal -- my note, in Brazil we will be shipping a number of containers down to Brazil for our test farms. And we believe that once they have them on, they will want to add more. So we are already in the process of putting up the specs and over the next six months you will have them tooled to make certain sizes and we'll just going to keep going up. As every LSW tire on every vehicle makes it perform better and that's just a fact. We were out and we have a flier that shows a Deere dealer took a brand new quad truck was a 36 inch, 96/20 and I've mentioned this before. Well now, we actually had less ground compaction than the track and we pulled this implement -- same depth, same implement everything, seven miles an hour, they just want a quarter mile down, quarter mile back and they were just the same. If you get on the road, you can go as fast as that tractor can go. Now you pay $70,000 upfront if you want the track over ours and you don't even need the independent suspension with ours either. I have no idea what that costs, but it's probably at least $15,000. So, there is no question it's coming up, I think we'll see a lot, the harvest has been pretty good, I think we'll be seeing a lot as we go into the first of the year.

Somewhat helpful color, maybe Paul or John could you add something quantitatively just on the level of shipments and what the sequential increase has been if there has been one?

I don't think we've report it.

No, we don't at this time. I mean, we're very happy at where we're at in this point. And it's all qualitative, what we've been disclosing. I shared some figures today to we talk about some market surveys.

David, if you start to report that, put that out, why do I want to give, all this data to my competitors?

Yes, we're not going to put this in the hands of our competitors. We do get the take rates from John Deere. I had a meeting with them last week, they did share with me that they're very happy with the take rates that they're getting from their end customers. And again we're very satisfied with the performance we're seeing in the market of the product, we're very satisfied with the brand awareness we have with LSW and that's been qualitatively disclosed on the call today. So, at this point David, that's probably about all we can share and we continue to give updates in that regard.

That's fair, understood, maybe just moving to the cost cutting actions. Obviously, decremental margins more in line with what historically or normally we would think they should be. You guys gave a little bit of color here, but just trying to think about going forward. Are we at a level where we are now going to be normalized and I think I've just hit the gross margin level, not the operating margin level in the mid-teens with decrementals or do you think there really are more actions that you can take to bring that back down or potentially get that, that negative leverage in seeing some gross profit increasing even on the decreasing sales here?

I guess, I'll talk to this. I absolutely believe there is more actions that we can take I mean, Paul, during his conversation, there is smattering of different areas that he touched upon that we're really just in our infancy, I mean the pricing initiative, building the supply chain team, the marketing team, we are in our infancy. We definitely have a longer road ahead of us in terms of improving profitability and ultimately EVA in terms of touching on the balance sheet as well.

I would tell one other thing out there for you too. It's that the unknown is when you see the filings, the rags will have them out and I'm referring to the trade rags in our business, on the dumping. The last time, what happened is once this is filed, the notice goes out. So everybody that has been an importer, now you are responsible if the board and we win our lawsuit. So automatically they are on the hook. So, generally what happens is once you go through this, they turn around and you're going to see -- and it's going to help my competitor basically, my friends at Firestone as well as us, but you'll see in the uptake in that. And you'll see a point were imports stop because you see, if those continues on the water, your importation liability starts the moment this thing hits and we're trying to get it filed and all the paperwork done in the next week to ten days. So, we don't know what -- if that hits, then it will give us a great Christmas present. But we should know pretty close between now and the end of the year, our success in reference to adding the duty. And when you got a political campaign going, and the Obama administration -- it's going to be difficult for anybody to feel sorry for the Chinese or the Indians, as they're subsidizing with the damn things. So, I think our timing is real good and the results will be good.

Okay.

That must have answered it David, but that's a --.

I mean, I don't know, we're talking about cost cutting actions, I don't know how we moved to filing, anti-dumping. Again it's imports, just last from me, is there any -- what anticipated CapEx are you going to see to get the TTRC up and running in April next year? Is there anything or is that all kind of spoken for at this point already?

That's all spoken for, we're coming underneath most of that. The biggest chunk of that has already been paid. So we've already spent that. I've told everybody we should be up and running full board on April 1. And we're going to look at -- it doesn't fit in long-term with what we're planning to do, so that'll be the biggest one in the world. So I'm thinking we'll sell it.

And this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Taylor for any closing remarks.

I think we might have lost Morry. I thank everybody for your attention this morning and look forward to talking to you next quarter. Thank you.