Titan International, Inc. has reported results for the third quarter ended Sept. 30, 2022.
"The Titan team continues to execute well throughout our businesses as we delivered a strong performance again this quarter," stated Paul Reitz, President and Chief Executive Officer. "This quarter we experienced sales growth of 18% compared to the third quarter last year that was supported with healthy volume gains. I want to remind everyone that when looking at quarters sequentially our third quarter production days are impacted by our normal plant maintenance shutdowns and the traditional summer vacation in US and August holidays in Europe. With that being said, we delivered solid margins this period with adjusted EBITDA of $61 million this quarter that compares to $35 million last year. This strong performance reflects all of our business units continuing to execute at a high-level. I've stated numerous times throughout the many global challenges of the past couple years that our Titan team has been exceptional with our determination and resilience, and we are proud of the results that we have produced."
Results of Operations
Net sales for the third quarter ended Sept. 30, 2022, were $530.7 million, compared to $450.4 million in the comparable quarter of 2021, an increase of 17.8%. The net sales increase was across all segments and driven by price/product mix and volume, with price having a greater impact in the most recent quarter. The increase in net sales was unfavorably impacted by foreign currency translation of 4.7% or $21 million, primarily due to the weakening euro and Turkish lira. On a constant currency basis, net sales for the third quarter 2022 would have been $551.8 million.
Gross profit for the third quarter ended Sept. 30, 2022 was $87.6 million, compared to $60.3 million in the comparable prior year period. Gross margin was 16.5% of net sales for the quarter, compared to 13.4% of net sales in the comparable prior year period. The solid growth in gross profit and margin during the third quarter as compared to the prior year period was across all segments and was driven by the impact of increases in net sales, as described previously, and improved operating leverage in our production facilities. In addition, cost reduction and productivity initiatives continue to be executed across global production facilities.
Selling, general, administrative, research and development (SGARD) expenses for the third quarter of 2022 were $33.8 million, compared to $34.6 million for the comparable prior year period. As a percentage of net sales, SGARD was 6.4% compared to 7.7% for the comparable prior year period. The decrease in SGARD during the quarter as compared to the prior year was driven primarily by a decrease in legal fees and variable expenses associated with Australian wheel business that was sold in the first quarter of 2022.
Income from operations for the third quarter of 2022 was $50.5 million, or 9.5% of net sales, compared to income of $22.9 million, or 5.1% of net sales, for the third quarter of 2021. The increase in income from operations during the quarter as compared to the prior year was primarily due to the higher sales and improvements in gross profit margins.
During the quarter ended Sept. 30, 2022, net sales increased 18% driven by increased market activity through all of our global operations. Volume increased from healthy demand in the global agricultural market, reflective of high farm commodity prices and increased farmer income, the need for replacement of an aging large equipment fleet and the need to replenish equipment inventory levels within the equipment dealer channels.
The increase in gross profit and margin is primarily attributable to the impact of increases in net sales as described previously and cost reduction and productivity initiatives executed across global production facilities. The Company balanced the increases of related raw materials and other inflationary cost impacts with corresponding price increases to protect profitability.