Good morning, ladies and gentlemen, and welcome to the Titan International, Inc. Fourth Quarter and Full Year 2018 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to Todd Shoot, Treasurer and Vice President of Investor Relations for Titan. Mr. Shoot, the floor is yours.

Thank you, Alison. Good morning and welcome everyone to our fourth quarter and full year 2018 Earnings call. On the call with me today, I'm pleased to have our President and CEO, Paul Reitz; and David Martin, Senior Vice President and CFO. I will begin with the reminder that the results we are about to review were presented in an earnings release issued this morning along with our Form 10-K, which was also filed with the Securities and Exchange Commission this morning. As a reminder, this morning we will be discussing certain forward-looking information, including the company's plans and projections for the future that involve risks, uncertainties and assumptions that could cause our actual results to differ materially from the forward-looking information. Additional information concerning factors that, either individually or in the aggregate, could cause actual results to differ materially from these forward-looking statements can be found in the safe harbor statement included in today's earnings release attached to the company's Form 8-K filed earlier today, as well as our latest Form 10-K and Forms 10-Q, all of which have been filed with the Securities and Exchange Commission. In addition, today's remarks may refer to non-GAAP financial measures, which are intended to supplement, but not be a substitute for the most directly comparable GAAP measures. The earnings release, which accompanies today's call, contains financial and other quantitative information to be discussed today, as well as a reconciliation of the non-GAAP measures to the most comparable GAAP measures. The earnings release is available on the company's website within the Investor Relations section under News and Events. Please note, today's call is being recorded and a copy of the call transcript will be made available within the Investor Relations portion on our website. I'd now like to turn the call over to Paul.

Thanks Todd. Good morning. We appreciate you joining us today for our call to wrap up 2018. I'm going to run through the business highlights, then our CFO, David Martin will go through the financial aspects, and then we'll provide some additional comments on our recent strategic announcement before concluding with your questions. To start-off as you look back at the past couple of years, I firmly believe Titan International and our global team has accomplished a lot. And the proof of that progress is evidenced in our financial results. Our 2018 sales ended over the 1.6 billion mark and up over 9% from last year or if you back out the negative impact of foreign currency, we actually had an 11% revenue increase. We moved our sale gains well through into EBITDA where adjusted EBITDA finished 2018 at $119 million representing a solid 64% increase over 2017, $72 million. That equates to an incremental adjusted EBITDA margin of 35% this year. Keep in mind these top and bottom line gains came this year within a volatile business landscape that is seen tariff battles, steel prices at decade highs, sluggish commodity prices that have impacted farmer income and that's just to name a few of the challenges. I can't say if this type of market environment represents the new normal or not, but I do know that the financial improvements we posted in 2018 represent a really good year, and definitely reflect our extensive efforts over the past couple of years. As you may recall, we laid out our original 2018 business outlook in November of 2017 as we were preparing to refinance our bonds. When you look now considering the volatility of the current bond market, we're very fortunate to have made that decision to get our bonds refinanced…

Thanks Paul, and good morning to everyone on the call. I will highlight some of the key items from our fourth quarter 2018 performance, while I don't want to repeat all the numbers from the release that we outlined last night. Net sales for the fourth quarter of 2018 were $363 million, which represents a decline of 3% from the prior year, but on a constant currency basis revenues would have been up nearly $8 million from the prior year or 2.1%. This currency impact of $20 million or 5.4% was felt most in the Latin America and the European geographies. Our ITM indicators business performed very well with revenues increasing 13% from Q4, 2017 absent currency valuation that occurred during the quarter. Our North American business primarily tire experienced a decline in sales as a market softening in the aftermarket continued the trend that we saw throughout the second half of 2018 due to a variety of reasons that Paul described earlier. I already talked about the negative impact of currency on net sales but our sales volume on a consolidated basis was essentially flat, while we had a pickup in sales from increased price and mix of 2%. I'd like to take a just a second to discuss our fourth quarter performance relative to our own expectations. We experienced some market softening in Russia and Australia during the quarter which were the two largest drivers of underperformance against our expectations for the quarter in terms of revenue and gross profit. The impact on gross profit from these shortfalls approximated $4 million. Obviously, currency impacts also played a major part in the overall profitability versus expectations, which included the impact from currency losses reported in other expense from revaluation of our inter-company loans and balances which is another $4…

Good job, David, appreciate it. I want to close with a few comments on our strategic announcement last week regarding ITM. As you may recall, it was April of 2016 that Titan received a letter of interest for ITM that triggered the formation of a Special Committee to engage in advisory discussions with leading investment bank. I won't repeat all that. The one thing that came out of it that we did then announce publicly in March of 2017 is that we announced Titan had determined that selling ITM was not in the best interest of our shareholders at that time. Our strategic focus then became to continue to pursue growth in ITMs business and overall financial performance and as you've heard from both of us this morning, that's exactly what we have successfully done. Since 2016, ITM has been on a strong path that has continued to see excellent growth in sales, operating income and EBITDA. We don't divulge ITM's financial performance separately in our financial filings, but I will say, as a reminder, and this is what some of the comments we've made previously as well, our undercarriage business operates primarily outside North America, and predominantly in the earthmoving construction segment. As we announced last week, we are now, once again, evaluating strategic alternatives for ITM, we've engaged advisers to assist us with that process. And this does now include the option of a public listing in Europe. I firmly believe that based on ITM's performance the past couple of years, ITM is now worth a much higher value than the offers we received in 2016. We are not declaring ITM a noncore asset and it's not a foregone conclusion that we'll dispose this business, but I want to add that ITM can be split apart from Titan…

[Operator Instructions] Our first question will come from Steve Volkmann of Jefferies. Please go ahead.

So, I guess maybe lots of questions, but maybe I'll start on David with some cash flow questions. And, I guess, I'm trying to figure out - it sounds like we're going to bring down working capital a little bit in 2019. I don't know if this is sort of an order of magnitude. Can we talk about maybe free cash flow relative to net income maybe as a way to think about that?

Our expectation is that from a working capital perspective that while there'll be some sales growth that we will be able to drawdown to a certain extent from the levels that we saw last year, particularly in inventory. While you may not see a big downturn in it, but with the growth levels and the profit levels that we see increase, we should be able to see significantly different operating cash flow number. Then, of course, our targets are to see free cash flow in the range of 1x net income. And, I expect that we can potentially get pretty close to that this year.

And then I think you mentioned $30 million to $50 million in idle assets that you could potentially dispose of, can you say a little bit more about what that is and is the $30 million to $50 million what you'd expect in proceeds or just a little more detail there?

Yes, that's a good question. We certainly have some properties and some assets that we have that have not been producing anything lately. And so there are some opportunities to make the sales of such properties, in addition to the potential for us as we look at TTRC operations in Canada.

And again, is that $30 million to $50 million what you're expecting in proceeds or is that what the value of the assets on the books are or…?

That would be proceeds.

Proceeds, okay, good right I'll pass on and get back in line. Thanks.

Our next question will come from Joe Mondillo of Sidoti & Company. Please go ahead.

So just sort of add-on to that questioning in terms of liquidity, just wondering if you could expand on the liquidity you went through sort of fast on the prepared commentary. So, it sounded like you owe some current debt of about $52 million, you paid the $25 million for RDIF and you have a probably some sort of a liability at 46 million to 1 equity. Are those the biggest buckets of liability this year?

Yes, I think you outlined that correctly. OEP's for $46 million that would be settled at this time, I mean I guess we still have the optionality of stock or cash, but we have missed some deadlines. I guess I would say in regards to notified OEP, we would use stock. So at this juncture that would be $46 million worth of cash. With RDIF like you said, we've already paid them, the $25 million as announced. We will be issuing $25 million worth of restricted stock, but – the optionality exists to trade that restricted stock in using cash, which would be another $25 million. So the total cash exposure between the two would be right around that $70 million mark.

And just add to that Joe, if you look at the $52 million in other debt that we have outside of any capital leases that we have or anything related to the senior notes. Those are demand on demand there, obviously the working capital and overdraft facilities in our international locations and not expected to see any significant repayments of those because they're just ongoing demand type of lines of credit, if you will. So it's not immediately do and we often roll these over with cash flow each year.

And so in terms of the paying for the RDIF in one equity in the beginning of the year, I imagine – if anything you’ll ramp up working capital a little bit to seasonally, whether it's not as strong as last year what not what means, do you have to compensate I guess, the biggest portion being the RDIF in one equity?

Yes.

I'm just sort of looking at near-term liquidity?

So we have the – opportunity and our lines of credit that we have in the United States. Overall, we have a $75 million ABL line that we can access and obviously we have, we work closely with our banks to be able to provide sufficient liquidity in the business for any spikes like what we're seeing with respect to these payments to our partners.

Okay so overall…

So near term that we can actually manage these payments so they are accessing that and then as time moves on the cash flow continues to get better we can pay down.

Could you guys repeat the volume price mix and FX for the Ag segment I missed that?

Yes, the overall for the fourth quarter itself, we had a 1% improvement in price and mix and a decline of 4.5% related to volume in a currency negative income currency impact of 6%.

So looking at I guess the volume at the Ag segment and just wanted to sort of expand on that. I think you touched on the aftermarket revenue was a little light there your guidance, certainly suggests that things will bounce back, but just sort of. Could you provide any more color regarding what happened in the fourth quarter and why you sort of have some confidence going into 2019 that things will get better than from where you were in the fourth quarter in terms of that growth rate there in terms of volumes?

Yes, I think Joe, David mentioned, one of the items that – impacted us is the implementation of the ERP systems. So we had some shipments that rolled over from the period into the next as we were going through that implementation process. And the other item of note in the fourth quarter on the volume side is that. If you recall back in Q4 of 2017, there was a much more aggressive ramp up going into 2018 with expectations of a stronger year that was pre-tariffs and commodity prices really doing what they did throughout 2018. And so, we saw more of an inventory build coming from our OEMs in the last quarter of 2017 compared to where we sit today kind of lean into then 2019. Why we feel – good about where we're at and where we're going is that foundation for the Ag sector is still, it's still firm. In fact I think most operators most dealers are used to this type of environment the good ones have gotten better. The weaker ones have continued to have problems and some of them been acquired by either larger farms or larger dealers. And so, what we're seeing from our customers is that cautiously optimistic outlook that even in this tougher environment, the business has continued – can continue to grow and then with that if you get some changes that are favorable. There is definitely pent-up demand. When you look at nearly every type of metric on the replacement side in North America that could drive things even further than what we projected. But with all that being said, I think everybody's cautiously optimistic. We see ourselves outgrowing the market in certain areas. If I look back to some of the initiatives that we put in place that we've talked about and I look back at the dealer meetings that we hosted as we wrapped up 2018. We feel good that our dealer network is strong, the products we're producing our well received in the markets. We're working on how we can continue to push more products into the markets. Again through the 80-20 initiatives and the different activities that we have going, but I think we're going to gain some market share here with our initiatives. And I feel like we're well positioned and definitely our dealers are feeling good about 2019. And so we put out the outlook that I think reflects all that and it's again cautiously optimistic that 2019 will continue on a good path.

And just a follow-up the volume, the share gains that you're referring to is mainly on the aftermarket side then, is that as a correct?

Yes, I would say that I think that's correct. Certainly we also see some opportunities where we position ourselves well with OEMs. And so, but yeah I would agree mainly your comments with 80-20 we’ll have more of a direct impact – your comments are correct at 80-20 we'll have more of a direct impact on what we do with the aftermarket.

And then on the price cost side, the price mix relative to revenue growth actually decelerated from the third quarter, which was I was a little surprised given that I think you put a price increase in September. So I was actually assuming that that might accelerate. I'm not sure what happened with the mix side of things, but on the price cost side of things. Where are we relative to sort of getting back to where we were five or six quarters ago. Do you still see a benefit starting in the first quarter, going forward in terms of that price cost spread?

I think what we projected and how we've built our models for 2019 is that it will be neutral, trying to predict all that is challenging. We've seen the market grow. If you look at the mix side of it, not necessarily price costs element, but just on the mix side, definitely over the last few years, we've seen a smaller horsepower grow quicker than the large. We are well positioned in that market. I think we've got a very good job servicing our customers that play heavy in that arena. So for us, there has been some mix change that's taking place that's actually good as again because that's the part of the market that's been performing well and we've been doing a good job with our customers in that area. On price to mix, I mean I think we're at a better point now as far the lack of volatility in raw materials, I think they stabilized as far as price mix, excuse me price cost, we make the assumption that it's going to be neutral. I don't see us at this point being – getting a benefit or being hurt. And again actually I saw some price increases come out from not competitors that in the off-road space, but on the on road tire space that we're pretty sizable. So, it's a tough question to answer because – at this point, we just don't know where raw materials are going to go. But we do have contracts within the OEM sector that help protect us on the raw materials within aftermarkets. I think at this point we're fairly neutral on pricing, and again, some of these guys stay on top on a regular basis.

And then, so, in terms of price mix aspect relative to the revenue growth, I assume the mix off - the unfavorable mix. I guess, in the fourth quarter, offset the price increases that you put in September?

Yes, I think we - what were we, David? Was it 1%?

Yes. Well, that was just for ag. It was 2% for the overall business. We saw a little bit better impact in our AMC segment. But yeah, I think it's fair to say any - a portion of our price increases was impacted by unfavorable mix.

And just a clarification on the guidance in terms of the EBITDA; do you guys - is the other non-operating income included in that EBITDA guidance that you provided?

Yes.

And can you quantify how much you're sort of looking for, for that non-operating income?

You're talking about other kind of below the line or the operating line?

Yes.

Yes, I would expect, obviously, last year we had some significant one-time things during the year, so that number is not reasonable. But I don't know, normal basis you would expect to see about $5 million to $6 million.

We don't have built into our 2019 EBITDA expectation the large number that you see in 2018. We - what we forecast in the outlook would be the standardized routine things that are cemented by either cash flow or a contract, something like that.

And the other thing would be our joint venture income and some of our minority investments that we have all over the world. So that's what that represents as well.

Our next question will come from Komal Patel of Goldman Sachs. Please go ahead.

First, if I could just clarify, I might have misheard it earlier, but the missed deadlines on the OEP side, does that mean you're definitely using cash to settle it and not restricted stock or anything? Again, apologies, I might have missed it.

Yes, I mean, at this time it's really just, it's - we're in the middle of discussions. We've not settled with OEP. But what I meant by my comments is legally we had a deadline where if we were going to utilize stock, we had to notify OEP of that. And we did not make that notice to them. So, on a strict legal basis the answer would be, yes. It would have to be settled in cash.

And I guess the follow-up question is that, could you consider settling them - with them in a manner similar to RDIF, as in trying to keep them in the business and maybe that's why discussions have been lasting longer than maybe originally anticipated?

At this point I can't make any comments on that.

And I guess just maybe touch on the ITM business as well. What's kind of a rationale for selling the business now? Is it fair to think about it as a way to increase some of the liquidity that you need or just given how much growth that you've experienced already, are you expecting slower growth in Europe for next year or beyond?

No, I think it would be more of the liquidity question or liquidity issue. Clearly, as David has highlighted and what we've been talking about with the put option, we've made a lot of good investments in working capital that will translate into positive cash flows as we move to 2019. But clearly there is a lot of debt is required to settle the put options. And so, you look at the this business, we certainly see great prospects with ITM, not just what we've seen the last couple of years, but well into the future, the business has become very well positioned in the areas where we were seeking expansion, we do believe we can continue to grow in those areas. We believe that the valuation is much higher than what it was in 2016. So, at this point, we just believe it's the right time to seek some strategic alternatives, possibly with ITM and have those discussions with the advisors. But clearly the liquidity issue is something that would drive us to make the announcement, we did here last week.

And then if I could just switch gears a bit, some of the cost cutting comments that you made, can you talk a little bit about the cadence of some of the cuts that you're expecting back half weighted, is it beyond that, any kind of just quarter-to-quarter information that you could share with us and what kind of cost do you expect to incur to achieve some of these savings?

So, in terms of some of the cost reductions, we talk about are related to fixed cost absorption in our plans and so forth. So, that cadence is more ratable, if you will, as we go through the year. It wasn't - is anything significant that we have to do one quarter versus another one, it comes over time. And I'll also say that there's a 80-20 initiative, which is basically - basically helps us achieve better production runs, long production runs versus small runs that take up a lot of time in our facilities today, create a lot of indirect cost in the business and changeovers and so forth. And so these are the kind of costs that we're looking to avoid moving forward. As far as SG&A costs go, we're not looking at any significant cuts here, but we are actually being more prudent with how we invest our SG&A and directing them towards those value-added activities. So you maybe see some trade-offs. As far as significant cost to achieve the savings, I wouldn't say it's anything significant at this point.

And last one from me, how, I guess recent discussions politically on the tariff side of things changed or updated the outlook at all for your customers, any kind of willingness to invest in the equipment, any kind of change in sentiment that you've seen so far.

I wouldn't say there's any dramatic shift yet, but certainly I think there is some optimism that's coming back into the markets with the positive discussions that have been taking place. And I think some of the other comments recently about other noted countries as well, including India and Turkey, are favorable for us and our business. So yes, there is some good trends, but I think overall the good customers, whether again its dealers investing in inventory or OEMs investing in expansion and seen a bright future. The end users that are willing to invest in equipment. I think overall the good ones are continuing to do that. Some of the results coming out of the Kansas City Fed are slightly paint to the other way, where you see some debt being brought onto the books for end users to cover operating expenses and I think that's true for the weaker operators in all parts of our business. But I think overall nothing – things have the potential to get better and I think that's what we’re reflecting in our guidance our overall guidance for 2019 reflects that.

Our next question will come from Justine Ho of Mesirow Financial. Please go ahead.

Actually most of my questions have been answered but I just wanted to double check if I can get clarification. You mentioned that the deadline past regarding notifying OEP about if you were to do with listed stock. So just to make sure I understand it that means you have decided to settle that all in cash the 46 million?

Yes, I mean at this point I really can’t say anything more other than just from a legal standpoint. OEP has exercised the put option which means that we owe them $46 million of consideration up to a certain date a couple weeks ago we could settle that 46 million in either stock or cash. The Board of Directors and myself made a decision that we were not going to notify OPE that we we’re going to utilize stock. So from a strict legal perspective we have let that date pass and so at this point soon as we start just like we do with RDFI as soon as we have a final conclusion on everything and we start transacting the final results with OEP. We certainly will make an update, but at this point, those are just strictly the legal situation is where we stand and we’ll update you as soon as we can.

And can you make any comments regarding ITM in terms of I guess your thoughts on – has there been any interest that you see so far right now or is it too early in the process?

Well we really can't say too much more than what we put in our press release, but clearly putting out the announcement reflects a strong belief that we see a good valuation, a very good valuation for the company. And that clearly we've engaged some advisors that feel pretty good about those prospects as well. But at this point, we won't be able to provide any more updates until we get to a further point in the process as we said in both our comments last week and even with our press release today. I think that's about all we can say at this point.

And lastly, we are in two months into the first quarter, do you from what you're seeing now in current conditions, do you still, I guess I'm just wondering about – particularly the Ag business. Do you feel that it is still and cautiously optimistic that based on your guidance of growth there?

Yes, absolutely I think our outlook reflects that cautious optimism and what we're seeing is certainly reflected in our full year 2019 outlook, we are a cyclical business. So there’ll be ups and downs throughout the year for different reasons, some of them are standard as far as how our business flows throughout the year and some of them are going to be just as the market changes. But I think at this point yeah, we do see things that are moving in a positive direction. Again I think our revenue guidance for next year reflects that it’s a good growth in all areas both earth moving construction. Obviously on a higher end with that single-digit range and then Ag being in the mid-point of it, but I think overall it's definitely good growth. And to answer your question, it reflects what we certainly feel and believe at this point in the year.

Our next question will come from Alex Blanton of Clear Harbor Asset Management. Please go ahead.

I was looking at your change in your gross profit from the third quarter and it was about a $7 million decline from the third quarter and a $21 million decline in sales. So that's 32.9%, which is about what one would expect on that kind of a sales decline 32.9% incremental. So it doesn't look like you had a much greater impact from raw material costs in that quarter then would be normal. Is that correct?

I would say that's correct, yeah.

But how much impact is there, in total, let's say in the past year from the steel cost increases and the other raw materials and what's the prospect for offsetting that. I know you said that your cost increases and your price increases would be about at balance for this year. So, are you saying that there is no re-coping of those price increases?

You got to take it two fold – certainly if you look at steel prices, and there certainly mechanisms built in for how we deal with steel pricing up or down on that. So for the most part, our work were covered with respect to any changes in those prices quarter-to-quarter and so forth. So, but as far as the pricing that you see on other raw materials, we have to be very cautious about how we price our products all the time. And reflecting that in a given period of time, you could see some volatility, but based on what our expectations are and what we saw in the marketplace over the second half of last year we became much closer in line with what our expectations were. We saw some – the first half of the years, where we saw the significance steel price increases and synthetic rubber. The other prices kind of working together in terms of where we think, we can price our products in the market. So I don't if Paul was adding anything to that, but it really is, and we feel like that the forecast for raw materials this year, we believe we can cover within the confines of how we're pricing today, particularly on the tire side.

Going back to the fourth quarter, that was a very negative quarter from many standpoints, the stock market was down and early October Fed came out and said that 25% of executive are expected to recession and by the end of 2019 and 8% expect in the recession by the end of 2020. Had a very negative frame of mind overall among corporate executives and I assume that that extended to your dealers and the people at your OEMs who were probably reducing inventory and so forth. So how much impact was there on the sales because it looks like if you're not seeing a greater negative impact from raw materials increases and you're getting some improvements in efficiencies as indicated by the incremental results from third quarter if the sales improved it ought to have a pretty good bottom line impact, it looks like you're biggest problem here is really the sales volume.

Yes.

Is that correct?

I think, you're exactly right with that Alex. I mean just look at what we've done over the last couple of years on a – I think it's 27% revenue increase EBITDA has more than doubled. And that's because we've driven efficiencies, we've gotten better. We've driven efficiencies in the business we've reduced our cost of quality. We are very well setup, we managed our product portfolio better and we continue to do that as we talked about 80-20 program. And so you're right, I mean it becomes an issue of volume and then when you see that shift in volume. As you mentioned in Q4, were there's a lot of heightened concern for a number of reasons. It seems like in Q4 and early 2019, it was one day they are saying we are going into recession and the next day, they say no, it's not going to happen. So it's just it creates that level of uncertainty, that does impact the order flow. So for us, what we keep focus on is what we control which is getting as much volume as we can and that's exactly what we're doing, but also realizing we got to be prepared to manage a business that is operating in environment that is highly volatile. And again, we've done a good job. When you look at EBITDA in 2016 at $52 million and in 2018 we do a $119 million, and less than 30% revenue growth. I think that continues to get lost at our Company is our stock is down half of what it was at that point and there has been so much focus on RDIF and the put option, the fire at TTRC, and all these negative issues. But if you look at the underlying business like what your question is alluding to, we've done a really good job. And it gets frustrating because that message gets lost in all these other topics and it's unfortunate that the put option has us focusing on liquidity. And that's why we've made this announcement with ITM. We have ways to make sure we are solid. We have a great asset that, again, that we're seeing what the strategic options are. David mentioned that we got $30 million to $50 million of additional liquidity that we can tap with some other assets. We have a line of credit that is ample and that's only based upon North America assets. So AR on inventory. We have access to capital all around the world that we aren't tapping into. So, yeah, it's frustrating. What gets lost in all these comments is what we did in 2018 to leverage this business and do a damn good job growing and performing.

Well, at this point at the current price of the stock, your Company, it's value in the marketplace less than $300 million. And you're the world leader in your business. In the business that's growing on the construction side and has tremendous rebound potential on the ag side. It's this tariff situation never gets revolved; is that a fair assessment?

Absolutely, I mean, like you said, we're $300 million valuation, that's doing a $119 million of EBITDA and we've stated today that we're going to grow that. Yes, again, that's the part that gets -- and the put option, look, it's tough to sit here today and not be able to give all of you clear indication of exactly what's going to happen and how this is going to be settled and what's going to take place, but we can't. And this is unfortunately it's been something we've been talking about for a long time. And it's, again, all these topics take away from the fact that the business has more than doubled and leveraged itself very well. And again, going back to your original question, less than 30% sales more than double in EBITDA, it's completely getting lost in the fact with all the other topics.

One more question. We haven't talked about Latin America, today. Could you just give us a summary of what's going on there?

Yes, David, you had some comments on Latin America. Why don't you kind of echo some of the things you mentioned earlier?

Well, what I would say, and you can maybe give a backdrop to more to the market and what's happening down there with things. But as far as for the year, we held steady with our volume for the year, notwithstanding some of the challenges we saw in the first, call it, the first nine months of the year. We had a fairly significant increase in volume in Q4, which, kind of, offset some of the trends we saw earlier in the year. So, I think the way we look at it right now is that it's getting more steady and some of the uncertainty in the political climate is gone away and there is a little bit more investment going on. So, expectation is that the business is steady to growing now.

Yeah, and the team there, Alex, just to add one thing, I mean, we've done a good job really growing our share, something we've talked about before. But it's worth mentioning again, I mean, we've taken over the top spot in Latin America, done a really good job growing shares. So, amidst all that volatility in 2018, we continue to perform very well, build great products and got a good team out there representing ourselves with the customers there. So, we, like David said, we feel pretty good about the stability and continue to see good trend there.

And our final question today is a follow-up from Stephen Volkmann of Jefferies. Please go ahead.

So, your stocks now down 29% since we've been chatting here and obviously I think it's a focus on this whole liquidity issue. But I have to confess I'm kind of scratching my head a little bit. So, I was hoping we could just sort of do a little big picture review here. I mean, you guys had 82 million of cash at the end of the year, right?

Yes.

And, we have $63 million of availability on your revolver, correct?

That's correct, at the end of the year, yes.

So, as we stand here today, we must have roughly $145 million kind of liquidity; amI doing this right?

Yes, you got that right.

And you basically said somewhere in the neighborhood of 1 to 1 free cash flow to net income. So it's something we're going to take in $30 million to $35 million of cash this year from the business and then you have $30 million to $50 million of these sort of idle assets where you think you can drive some cash inflows. And, I mean, those things by themselves are plenty to satisfy the $46 million that you owe to one equity. And the other $25 million potentially that goes to RDF. That's up to you. You don't have to do that, correct?

Yes, it is in our sole discretion. Yes.

So, are there any other cash outflows in 2019, besides the $46 million that, I mean I'm assuming, basically you're covering CapEx with D&A. Is there anything else that's a cash outflow in 2019?

No, nothing significant at all. You've outlined it quite well.

So you basically have 145 on the books of liquidity today, plus, call it $40 million in idle assets, that's $185 million, plus $30 million of free cash flow is, what's that, $215? I don't know, I'm not that good at math. But that seems like a fair amount of liquidity relative to the $46 million that you owe. And I guess I just wanted to make sure I had all that right because I don't understand why the stock would be down.

Steve, I totally agree with you. I think - we feel like we have adequate liquidity to manage this business effectively and do the investments that we need to do in the business, and satisfy the obligations that we have for the year. What I - only thing I would extend to exactly that is, is that we also have access with the banks to do change or increase our line of credit if we needed to. There is an accordion agreement that we have and we would look that to do whatever you need from a short-term perspective to get adequate liquidity that we would need just based on timing, but those things that you outlined in and of itself would be more than adequate to handle the things we need to do in the business.

So, I guess just a final point on that then is, you've talked about this ITM potential divestiture and, Paul, you said a couple times that it was driven by a focus on liquidity. But it doesn't seem like you actually need to do that relative to the numbers I just kind of laid out. So, maybe that's part of the mix message here?

It could be, it definitely could be. I think some of the headlines are picking up on some different issues. Yes, it's - all we announced is we're looking at strategically options with ITM, okay. With everything that we've talked about with the put option, and you've outlined it, David outlined it very well, liquidity. It's not a liquidity crunch. And I guess you're right, it's not the way we shouldn't answer the question is liquidity to handle the issues to handle the ongoing liabilities. But to make sure we had - we're positioned well for the future and investing in the future. Like you said, we can handle CapEx through, I mean, everything is lining up very good. We're looking at options for ITM. Maybe I should just leave it at that.

Well, I mean I think it's fair for investors to ask you why you're doing that. But, I guess, again, I'll just put that back to you because I do think that's important. I mean if there's another reason, I don't know, are there other assets out there that you'd rather buy perhaps or something else that might focus you on using that as a source of liquidity?

Not at this point. I think we got to get into the process with ITM, and then we'll look at it, I mean, I think the answer to that could be, we simply shore up the balance sheet so that we can focus on acquisitions and growing the business. So, I think really what I'm trying to say is liquidity, and I should phrase it differently, and I'll kind of just do that now. We're focusing on that we have a strong foundation with the balance sheet for the future. You walk through the equity side of it, we're not any reason to be heightened concern over liquidity. But we would firmly believe we need to have a foundation with a strong balance sheet so that we can continue to grow into the future. And that's what we're looking to do if the valuation is right with ITM. We've made investments in ITM and they've been very good, but we want to continue investing in the business. So in our, our total global business, I mean it's really just having a fortress foundation with the balance sheet instead of liquidity and why we're looking at the strategic options for ITM. That's the best way I'd characterize it.

Ladies and gentlemen, this will conclude our question-and-answer session. At this time, I'd like to turn the conference back over to Mr. Reitz for any closing remarks.

I certainly appreciate everybody's attendance on the call today, and we look forward to catching up with you after the first quarter results. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.