TITN - NASDAQ

Greetings, and welcome to the Titan Machinery Inc. fourth quarter fiscal 2026 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. It is now my pleasure to introduce your host, Jeff Sonnek of ICR. Thank you. You may begin.

Thank you. Welcome to the Titan Machinery Inc. fourth quarter fiscal 2026 earnings conference call. On the call today from the company are Bryan J. Knutson, President and Chief Executive Officer, and Bo Larsen, Chief Financial Officer. By now, everyone should have access to the earnings release for the fiscal fourth quarter and full year ended 01/31/2026. If you have not received the release, it is available on the investor relations tab of Titan Machinery Inc.’s website at ir.titanmachinery.com. This call is being webcast, and a replay will be available on the company’s website as well. In addition, we are providing a presentation to accompany today’s prepared remarks, which can be found on Titan Machinery Inc.’s website at ir.titanmachinery.com. The presentation is directly below the webcast information in the middle of the page. We would like to remind everyone that the prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. These forward-looking statements are based on current expectations of management and involve inherent risks and uncertainties, including those identified in today’s earnings release and presentation, and in the Risk Factors section and other of Titan Machinery Inc.’s reports filed with the SEC. These risk factors contain a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements. Except as may be required by applicable law, Titan Machinery Inc. assumes no obligation to update any forward-looking statements that may be made in today’s release or call. Please note that during today’s call, we may discuss non-GAAP financial measures including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and greater insight into Titan Machinery Inc.’s ongoing financial performance, particularly when comparing underlying results from period to period. We have included reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures in today’s release. At the conclusion of our prepared remarks, we will open the call to take your questions. I will now turn the call over to the company’s President and CEO, Bryan J. Knutson. Please go ahead, Bryan.

Thank you, Jeff, and good morning to everyone on the call. I will start today with an update on our inventory optimization progress and operational focus areas, and then discuss the current environment across our segments before turning the call over to Bo for his financial review and comments on our fiscal 2027 modeling assumptions. Fiscal 2026 was a year where our team executed at a high level in a difficult environment. For the full fiscal year, we reduced total inventory more than $200 million, surpassing our $100 million target that we announced at the beginning of our fiscal year and our updated $150 million target we revised last quarter. Our inventory peaked in 2025 due to the heavy influx of equipment shipments as some supply chains normalized post-pandemic, and since that time, we have reduced total inventory by $625 million over this eighteen-month period. I am extremely proud of the disciplined work our team has done across all of our locations to make that happen in what continues to be a very challenging demand environment. This progress illustrates our intense focus on creating a more resilient enterprise and positions us well for strong results when market conditions improve. Importantly, the quality of our inventory has improved meaningfully. It is leaner, it is fresher, and it has a better mix of in-demand categories. But we are not done. We still have work to do across certain used equipment categories and some of our slower-moving seasonal new equipment categories. As we head into fiscal 2027, our focus shifts from inventory reduction toward product mix optimization as we look to continue to improve inventory turns through minimizing aged inventory and thus decreasing interest expense. Our customer care initiative remains central to our operating strategy and continues to demonstrate its value while at the bottom of the equipment cycle. Our parts and service businesses are currently generating over half of our gross profit dollars, providing critical stability in these tough times our industry is currently facing. Our customer care initiative keeps us closely engaged with our customers, allowing us to add value to their operations and positioning us well for when equipment demand eventually recovers. With our hard work and dedication to superior customer service, we expect stability in our parts and service business in fiscal 2027 despite another expected decline in equipment industry volume in North America. With that, I will turn to our segments. In domestic ag, the environment continues to be very challenging for our grower customers ahead of the upcoming planting season. Our OEM partners are calling this year the trough of the cycle, and the guidance we are providing today reflects that. Commodity prices remain well below breakeven for most growers, which continues to be the fundamental issue facing the industry. When you add in persistently high interest expense, increased input costs, and limited government support, we expect many growers to remain conservative in 2027 in terms of their equipment purchasing decisions. With respect to potential government support, seeing E15 passed into law is currently our customers’ biggest priority, followed by further adoption of biodiesel and sustainable aviation fuel, or SAF. Allowing E15 usage year-round would help alleviate the ongoing oversupply of corn and assist with energy independence. Furthermore, recent spikes in diesel prices highlight the need for increased production of domestic biodiesel. In construction, infrastructure and data center work continues to provide a solid baseline of activity, but residential demand remains softer. Many of our customers are cautiously optimistic as they look at their schedules for the year ahead. Despite the mixed outlook in the end markets we serve, we remain optimistic about the long-term fundamentals of this business, which is underpinned by ongoing housing shortages, infrastructure spending, and continued data center construction. In Australia, the market conditions have been similar to what we are seeing domestically but exacerbated by elevated input costs for diesel fuel and urea. However, after two years of historically low industry volumes, we are starting to see some more encouraging signs, and recent rainfall has helped improve soil conditions and farmer sentiment after an extended period of dry weather. Overall, our expectations are for modest industry volume growth in fiscal 2027. We continue to like our position in Australia. It is a major agricultural export market with strong fundamentals, and our dual brand strategy with Case IH and New Holland, which is now available in six of our fifteen rooftops, gives us more reach and more ways to serve our customers across our footprint. In Europe, we are pleased to have the majority of our German divestiture behind us, with some remaining wind-down activities carrying into the first quarter. As we head into the spring planting season in our Eastern European markets, we are cautiously optimistic that we will see modest improvement in industry volumes coming off of trough levels but expect them to remain well below historical averages in Romania and Bulgaria. The modest overall industry volume growth should partially offset an expected year-over-year decline given the normalization of our Romanian business, which had an exceptionally strong prior year driven by the EU subvention programs. In closing, I want to express my sincere appreciation to our entire team. We dramatically surpassed our inventory reduction goals and made meaningful improvements to our operations, and we did it while maintaining the exceptional customer service that differentiates us in the market. Our team’s focus and dedication throughout this year is what made our successes possible. We are executing on our initiatives, managing what we can control, and positioning the business to perform well as market conditions improve. With the actions we have taken thus far, we will emerge from this period a stronger company. I will now turn the call over to Bo for his financial review.

Thanks, Bryan, and good morning, everyone. Starting with our consolidated results for the fiscal 2026 fourth quarter, total revenue was $641,800,000 compared to $759,900,000 in the prior-year period, reflecting a 14.6% decrease in same-store sales driven by weaker demand in our domestic ag, construction, and Europe segments, partially offset by growth in our Australia segment. Gross profit for the fourth quarter was $87,000,000 compared to $51,000,000 in the prior-year period, and gross profit margin was 13.5%, approximately double last year’s rate. The year-over-year improvement primarily reflects the lapsing of inventory impairments and other inventory reduction efforts in the fourth quarter of the prior year that significantly compressed equipment margins. Equipment margins in the fiscal 2026 fourth quarter continued to face pressure from softer retail demand and remaining aged inventory; however, margins have improved as inventory has returned toward healthier levels. This equipment margin improvement is expected to continue in fiscal 2027. Operating expenses were $95,700,000 for the fourth quarter of 2026, down slightly from the prior-year period. Our headcount and discretionary spending continue to be down year over year as a result of disciplined expense management. Floorplan and other interest expense was $9,600,000, representing a decrease of approximately 27% on a year-over-year basis and a decrease of 13% on a sequential basis. This progress reflects the significant reduction in interest-bearing inventory levels over the past year. In the fourth quarter, net loss was $36,200,000 with loss per diluted share of $1.59, which includes the recognition of a $0.78 non-cash valuation allowance that resulted in an increase in income tax expense. Importantly, I would note that this allowance was greater than our initial expectation, which called for a $0.35 to $0.45 headwind that was built into our adjusted EPS guidance on the third quarter call. Big picture, it is non-cash and does not impact our operating performance or our cash flows. However, it is an important variable influencing our reported results versus the expectations we set; hence, my emphasis to ensure the linkage is clear. Adjusted net loss, which excludes charges related to our German divestiture and related wind-down activities but includes recognition of the $17,800,000 non-cash valuation allowance I just mentioned, was $32,500,000, or a loss of $1.43 per diluted share. This compares to last year’s fourth quarter adjusted net loss of $44,900,000, or $1.98 per diluted share. To summarize, our underlying revenue and profitability was in line with what we had expected, as evidenced by looking at our pretax loss, which, in addition to being consistent with our expectations, has improved significantly versus the prior-year period. Now turning to a brief overview of our segment results for the fourth quarter. Our Domestic Agriculture segment realized sales of $406,700,000, reflecting a same-store sales decline of 22.8%, driven by continued softening in equipment demand as a result of weak grower profitability. Segment pretax loss improved to $9,900,000 compared to adjusted pretax loss of $56,300,000 in the fourth quarter of the prior year, reflecting the actions we have taken to accelerate inventory reductions and the resulting improvement that we have achieved over the past twelve months. In our Construction segment, same-store sales decreased 4.6% to $90,200,000, driven by lower equipment sales. Our inventory reduction initiatives have weighed on equipment margins in this segment as well. Adjusted pretax loss was $1,000,000 compared to a $1,100,000 loss in the fourth quarter of the prior year. In our Europe segment, sales increased 5.2% to $68,800,000, which included a $4,300,000 net benefit related to foreign currency fluctuations. On a constant currency basis, revenue was more or less flat year over year, reflecting the normalization of demand following the EU Subvention Fund-driven strength, which ended in the third quarter of this year. Pretax income for the segment was $1,800,000 compared to a pretax loss of $1,800,000 in the fourth quarter of the prior year. Excluding restructuring and impairment charges associated with the Germany divestiture, adjusted pretax income was $5,400,000 in this year’s fourth quarter. In our Australia segment, sales increased 16.7% to $76,100,000 compared to $65,300,000 in the fourth quarter last year, including a negligible foreign currency impact. Pretax income for the fourth quarter of 2026 was $2,500,000 compared to $2,300,000 last year. Now briefly summarizing our full-year fiscal 2026 results, total revenue was $2,400,000,000 for fiscal 2026 compared to $2,700,000,000 for fiscal 2025. Adjusted net loss for fiscal 2026 was $50,600,000, or a $2.22 loss per diluted share, which includes the non-cash valuation allowance but excludes the charges related to the Germany divestiture I discussed earlier. This compares to an adjusted prior-year net loss of $29,700,000, or a $1.31 loss per diluted share. Now on to our balance sheet and inventory position. We had cash of $28,000,000 and an adjusted debt to tangible net worth ratio of 1.7 times as of 01/31/2026, which remains well below our bank covenant of 3.5 times. For the full fiscal year, total equipment inventory decreased by $201,000,000 to $725,000,000. As Bryan described, this more than doubled our $100,000,000 target for the year. It is a meaningful accomplishment in this environment, and it positions us well heading into fiscal 2027. Importantly, as part of that inventory reduction, we saw significant improvement in the amount of aged equipment we have on our lots. Aged equipment, which we consider to be equipment that we have had longer than twelve months, peaked in fiscal 2026 and declined by approximately 45% to $174,000,000 in the second half of this fiscal year. This improvement in the health of our inventories has started to show up in higher equipment margins in the back half of the fiscal year, but we still have work to do on reducing the amount of aged equipment we have, and we are confident we will continue to make progress on that in fiscal 2027. With that, I will finish by sharing our initial outlook for fiscal 2027. Starting with our top-line modeling assumptions across our segments, for the Domestic Agriculture segment, we expect revenue to be down in the range of 15% to 20%, which is consistent with the depressed cash crop industry outlook we have discussed today. Looking ahead, we believe we are back in sync with broader industry dynamics following our aggressive inventory reduction activity over the last year and a half. Our Construction segment is expected to be in the range of flat to up 5%, which aligns to the more favorable industry fundamentals that are benefiting from infrastructure and other sector-specific tailwinds. Our Europe segment is expected to be down in the range of 20% to 25%. This decline reflects our exit from Germany, which contributed approximately $50,000,000 of revenue this past year, and reflects the normalization of sales in Romania following the strong performance of fiscal 2025. As a reminder, this segment grew 45% in fiscal 2026. Excluding this difficult comparison, we expect modest improvements in industry volumes off cyclical lows, but the Eastern European market remains challenged by the same broader ag cycle dynamics as our Domestic Agriculture business. For our Australia segment, we expect revenue to be up in the range of 10% to 15%. This growth includes activity from the acquisition we completed last fall and the modest improvement in industry volumes that Bryan previously mentioned. From a margin perspective, our fiscal 2027 assumptions consider consolidated full-year equipment margin to be approximately 8.4%, which compares to fiscal 2026’s full-year consolidated equipment margin of 7.3%. This margin assumption reflects improved inventory health but still factors in the need to finish driving down aged inventory, and it also reflects broader industry expectations that North America industry volumes will be down 15% to 20%, which implies the lowest level since the 1970s. Given that context, we are happy with how well we are positioned to manage through the trough and confident we will return to normalized equipment margin levels as industry conditions improve. Operating expense dollars are expected to decrease year over year, although we will continue to invest in our customer care strategy, which is supporting stability in our parts and service businesses, and overall operating expenses are expected to be approximately 17% of sales. Floorplan interest expense is expected to decline by approximately 25% following the significant inventory reduction that we achieved last year. In absolute terms, interest expense will continue to decline as we further reduce aged inventory throughout the year. Bringing it all together, we are introducing a fiscal 2027 modeling assumption range of an adjusted loss of $1.25 to $1.75, which compares to the $2.22 adjusted loss we realized in fiscal 2026. It is worth noting that given the U.S. tax valuation allowance that was booked this quarter, we will have a very low tax rate for fiscal 2027, with most of the tax expense and/or benefit being recognized in our international segments. We also thought it would be helpful to provide some specific below-the-line expectations in our press release to help bridge to our adjusted EPS outlook. Further, we have also added adjusted EBITDA to our outlook to help provide a clear view of the operating performance we are achieving today and as we look into the future as the cycle unfolds. So, we are also guiding to adjusted EBITDA in the range of $17,000,000 to $29,000,000, which compares to the $13,900,000 we generated in fiscal 2026. In summary, despite the expectation for historically low industry volumes for our Domestic Agriculture segment, we are positioned to benefit from the aggressive inventory reduction we have taken over the last couple of years. Thematically, this positions us to improve margins this fiscal year and begin building back our earnings power at an accelerated pace as the cycle eventually turns back in our favor. For the time being, we continue to set prudent expectations and look forward to demonstrating our execution in the quarters ahead. This concludes our prepared comments. Operator, we are now ready for the question-and-answer session of our call. Thank you.

We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key. One moment please while we poll for questions. Our first question comes from the line of Liam Burke with B. Riley Securities. Please proceed with your question.

Thank you. Good morning, Bryan. Good morning, Bo.

Morning.

We are looking—I mean, we were looking at a best case in the corn pricing of about $5. It is inching up there. It is improving directionally. Not at $5 yet, obviously. But is there any movement by the farmer community to start getting interested in loosening the purse strings? Or does it have to be at $5 and above where everybody gets comfortable on the equipment purchase?

Yes. There has definitely been some upside here in the last week or two in the market, so that has been positive to see. Like you said, for a lot of growers, we are still below breakeven at these levels. And then you just take some of the uncertainty as well. So, you know, possibly somewhere between another $0.50 and a buck on corn here, which, with certain fundamentals coming together, looks like there is a possibility for at this point. So that too looks more optimistic than even a month ago, so we will see where that tracks. And then just consistency as well, just at this point with the long-term fundamentals that are in place, the current supply and demand, and the oversupply we have of corn and soybeans, directionally they are looking at, you know, just a short-term spike does not give them a lot of confidence. But as things progress here, if the conflict continues on and we see increased stability there and, again, prices uptick further, that definitely will help confidence, and that is something that we are monitoring closely. You know, we have also been to D.C. quite a bit in the last year lobbying for our farmers and trying to do what we can for commodity prices. We will be there again next week. Friday, March 27 next week, there is a Celebration of Agriculture Day at the White House that we are looking forward to. And as we get near the end of the month here, there should be some stuff coming out with the RVOs, and we have been really pushing for E15, passing that into law and greater adoption, and all the benefits that could come with that for reducing prices at the pump as well as energy independence, and, again, helping alleviate some of the ongoing oversupply of corn.

Great. Thank you. And understanding that the timing of an upcycle is difficult to predict, but you are comfortable in some future upcycle that you are sized right to maximize the leverage in how the business is run? Obviously, you have been managing for the down cycle, but you are in a position to maximize the upside leverage?

Yes, absolutely. I mean, as we stand here today, we are excited as we look forward. Just for a little bit of context in terms of the guidance for this year, North America industry volume down 15% to 20%—what does that really mean? Well, calendar year 2025, the year that just ended, industry volume on the major categories that help drive our business was already 10% lower than the trough in calendar years 2015–2016, and so this year, if you assume that down 15% to 20%, you are talking about industry volume 25% lower than the prior trough. So as we stand here as well positioned as we are, obviously, we want the P&L to reflect more, but we are extremely confident in terms of how quick that can turn around and really flexing our muscle on the upside as things improve even modestly in the right direction. So, sure, everything we have been working towards the last two years is not just about managing the downside, but it is about making sure that we are running things ready for when things do turn around. All of our efforts on customer care strategy, driving the parts and service business—how do we support customers well, how do we gain maximum share of wallet by delivering what they need—all of that stuff is coming along, and I can appreciate that it is not necessarily something that you or investors get to see every day. But we just get more and more confidence and more excitement about the team we have, the playbook that we have been executing, and how well positioned we are to really show our strength as ultimately, you know, growers get support in the right direction and they see improved profitability.

Great. Thank you.

Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.

Thanks very much. I have got a few. I am going to start with the bigger one, then some that are just more around the model. On the larger, you know, in terms of the guidance that you have set, I am curious with regards to what is baked into it rather than just the OEM guides itself. I mean, are you assuming that China comes in and honors its commitments to buy more beans as we roll through 2027? And is there anything baked into it with regards to E15 or the aviation fuel? That is my first question.

Yes. Thanks, Ted. Yes, so generally speaking, what we do have baked in is that China essentially honors the commitments that have been put out there, not materially any more or less than that. Certainly, if they did come to the table with more, that would help. And then nothing on E15, so certainly that would be a shot in the arm and upside to what we have guided.

And then just another one kind of at a macro level. With the war we have with Iran, which is, you know, now we are in the several weeks of it, have you noticed any perceived shift in terms of sentiment within your territories with regards to that? I mean, you know, all I get is stuff out of the paper, and I live in a pretty left-leaning local paper environment, so most of what I get is pretty negative with regards to the farmer, but is the farmer feeling anything in terms of impact at this point with regards to higher fertilizer prices, diesel prices? I mean, we are not even in the planting season. I mean, has there been some kind of shift, some kind of additional concern? Just a little color there.

Yes, certainly a few moving pieces there, and even differences from our U.S. farmers to our Australian farmers. So just looking at some of the routes through the Strait of Hormuz there, and you look at that impacting fertilizer and fuel prices even more for our Australian customers, still able to get it, but certainly a delayed and elevated pricing. And then with similar impacts to Europe and then the U.S. there. So those are some additional increases to input costs that are already high. You look at over the years here, fertilizer has been the input that has generally gone up the most and has the most impact on their P&L. And so with that becoming harder to get here and fertilizer further is also a negative. But overall, actually, as the corn market and other commodities tick up here and kind of follow along with the price of crude, that has an opportunity to be a positive as that expands and maybe potentially here outpaces the increase in inputs, which is certainly a likely scenario. So there is definitely a number of things in play there, Ted, but a scenario where it actually is likely potentially more positive for our growers.

Would you think it would be neutral and it may be more positive? But it sounds like it seems like in your view at worst, it is a net—

Yes. I think it depends how long it lingers on and what happens with the commodity markets there. It does start to spread a bit. So as corn goes to—if corn were to go to six, and then it lingered on further and potentially to seven, as an example, it starts to pull away from what the increase in fertilizer prices has been, especially for a lot of our growers here in the U.S. and the Midwest. They prebuy a good chunk of their fertilizer, so it could end up being more of a 2027 calendar impact for them on that. So, again, as weird as it sounds, there is some upside potential there depending on how this plays out for our growers.

Okay. And then just a couple of model questions, and I will let other people take over. Bo, I was curious what the view was for CapEx for 2027 and then maybe a discussion about tax rate given all the kind of moving parts in there either at a percentage rate or something around a dollar.

Yes. So first for CapEx, I mean, in this environment, as you would imagine, being prudent and pulling back. So excluding any investment in rental fleet, which kind of comes in and out, we are guiding to about $15,000,000 of CapEx, really just pulling back to prudent levels there a little bit on facility and some vehicles, for example, but smaller than I would say would be typical. From a tax rate perspective, there can certainly— I mean, as a general statement, the tax rate in the U.S. is expected to be near zero. There will be a little bit of noise there with some deferred, but essentially, the valuation allowance is largely wiping that out. And given the significance of the U.S. to the rest of it, it really drags the whole thing down near zero. So in the release, we have guided to a range of $0 to $1,000,000 of total tax expense. From an Australia perspective, no real noise there; you can think about their rate in that 30% range. And then from a Europe perspective, again, their blended rate in the high teens is what I would expect. Balancing all out, a lot of this stuff is netting down close to zero would be our expectation for the year. One more thing on that too, I guess, just to make it clear: the need for a valuation allowance is kind of an established standard that has been out there in terms of a three-year rolling loss. We went through the same thing in the last downturn, put on a valuation allowance, and a couple years later took it off. You know, the cyclicality of our business and especially from a dealer P&L perspective, some could certainly argue that this three-year rule is not necessarily accomplishing what it is trying to. And long story short, all I am trying to say is high degree of confidence that a couple years later, we are going to take that back off, and you are going to see a big positive, which, of course, we will call out as releasing the valuation allowance.

Okay. Thanks for the answers. I will get out of line. Thank you.

As a reminder, if anyone has any questions, you may press 1 on your telephone keypad to join the queue. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.

Dang. I own you guys. Well, let us talk about some sports stuff. Now other questions for you, Bo, to turn the model. So again, depreciation and amortization, and then the impairment charges. Can you give some kind of color on what you see there rolling through in 2027? And then over on OpEx, when I think about OpEx, you are going to have OpEx down. You are going to have investments, though, and some other things. So I assume the down is on sales commissions given the volumes, but maybe talk a little bit about how, as you think about sales—typically, you kind of thought about your sales portion of your OpEx or your selling commission being about 25% of equipment gross margin, but does that kind of assumption still hold as we think about 2026? Or given the weak volumes, are you going to have to kind of make up a little bit to make sure those guys get a living? Those are my next two questions.

Yes. So I will break those into pieces. You will have to remind me if I forget one. I will start on the commission side of things. Recently, our commission has been north of that 25% mark. In a healthy environment with normal margins, it is in that 25%. So I would say we are coming down closer to the 25%. We have been elevated above that but kind of normalizing here as our margins are coming up. So that is how I would think about that from a commission perspective. You know, just broadly on OpEx—and, again, this is not just something that changes in a month. We have been at this now over the last couple years as we have looked at where the industry has been going and what we have needed to do. Largely speaking, the rest of our OpEx is people, and it is our people that are helping support our customers. So we have managed headcount down prudently. But back to the question that kind of started all of this—are you guys positioned for when things turn around—and that is the balance that you have to strike. We have got a great team that supports our customers well across our entire footprint and all of our geographies, and just managing prudently down as much as we can but without overdoing it, that is kind of the balance we have struck. So that drives a lot of the decline in OpEx there. So from a 17% perspective, in absolute dollar terms, I feel good about the work we have done. The 17% is more reflective of the pullback we are expecting here in North America ag. Remind me where we started here—you had two others.

Yes. I asked just about, kind of just picking in 2027, how to think about depreciation and amortization as we are driving through towards our EBITDA numbers. And then, you know, for the last several quarters, a lot of impairment charges rolling through. Are we going to continue to see that through 2027? Or is that going to dial back?

Yes. Good question. So a good portion of the impairment charges were specifically related to the Germany divestiture and wind-down activities. There is a small amount of Germany activity left here this year. I do not expect it—it will be a negligible P&L impact. And then from other impairments, I would say expecting that to be a little bit lower as well, I mean, south of $2,000,000 in total is kind of the thought process there, just as you are looking at your normal impairment analysis based on where you are at from an industry perspective. So yes, I guess relief in that regard. And then—sorry, there was one other one here. What did you say before that?

No, I just kind of asked—I had you, and it seems like it is my Q&A. I have just kind of decided I would ask what you thought depreciation, amortization might be.

Yes. Depreciation and amortization has been kind of in the mid-thirties, $35,000,000-ish. Expecting it to come down slightly, really not changing drastically there.

Okay. And then the impairment, just to make sure I understand, when I think about 2027 aggregate across the year, you see like a continued amount of small impairment charges of roughly $2,000,000 across the whole—

Yes, and that is really fairly similar to what this year was ex-Germany activity as well, so not much there.

Okay. I noticed I am the only guy getting Q&A out before and after the—right—prewriting my questions. So, hey, well, you know, one thing, just taking the opportunity for the broader audience and all of the analysts covering us—across our sales mix by geography: ag down 15% to 20%, CE flat to up 5%, Europe down 20% to 25%, Australia up 10% to 15%. Blended average, wise, midpoint of the guidance implies revenue down 14% to 15%. But I would say, as we have thought about it—and it is certainly not a perfect science quarter to quarter—I am thinking more Q1 down like 20%-ish and Q2, Q3, Q4 somewhere in the down 12%–13% range that gets you to the full year. In other words, Q1 comp down sharper, and just wanted to call that out so people work that into their expectations. If you think about just how the cadence of last year was, first half had about 47% of our revenue, whereas historically, it is about 45%, and that was just the theme of last year and kind of softening as we went through the year, so normalizing that a bit. Just wanted to put that out there.

Hey, that does bring up one kind of just little tip and tiny question. You know, you typically do have a stronger fourth quarter. You did have one this year. I would assume most of it this year was less about farmers coming in flush and buying and more about Titan Machinery Inc. trying to push off in your efforts to take your working capital to where you want it to be. So, one, am I correct with that? And then, two, as I think about 2027, I mean, we are going to be at a point where I would imagine by the time we exit the year, recovery or not, your inventories are going to be aligned. The trough is well beyond a typical trough of a cycle. Do you see in the fourth quarter of this year—how are you going to have more of an impact with regards to some of the things with big, beautiful build that you would see a little bit more of a flush from the farmer in the fourth quarter 2027? So those are my two. It is kind of a little color maybe on 2026 and how you think about 2027 in the fourth quarter.

As you pointed out, Ted, in Q4—again, I just give tremendous compliments to our team and the discipline that we did. When we came out at the beginning of the year with our $100,000,000 inventory reduction target, that was an extremely lofty goal, and our team more than doubled that reduction. That was due to our efforts in, you know, really boots on the ground and creative marketing campaigns and pulling growers off the sidelines and getting rid of that excess inventory. So, great execution. And like you said, that was not just farmers coming in in Q4 and looking to purchase. And then as we— that does, again, position us tremendously well. Yes, I think you hear that confidence from us, how good we feel about where our business is positioned right now. We have got a little bit of cleanup yet to do in a select few categories and some certain seasonal new equipment categories. We will work through that here throughout this year, but that is really fine-tuning. Every dealer I have ever seen always has a mix of that in any economy. So we are just going beyond even what we normally would do. We are just getting into an extremely healthy state here. So we are positioned when this does uptick, and we have done many of the things internally—very stringent cost controls and expense reductions, as Bo pointed out. And we will stay lean here, and then, as it recovers, which at some point it will, as we talked about, the replacement demand just continues to grow here and just waiting for that uptick in profitability for our growers, as it depends on the commodity prices and, again, how that ties back to the supply and demand ratios. And then our cattle producers, livestock producers, are still sitting quite well, and we look forward to that continuing. The more years that they do well, the more they will start to spend, so there is certainly potential there. And then the fundamentals in construction—you know, there is a big data center that has been going on here for a while two hours south of our office, and an hour and a half here another one going up right in Fargo that is starting here, a $3,000,000,000 data center, and, again, throughout our Midwest footprint. And then just overall, some of the things with infrastructure and, at some point here, we have got to address the residential housing shortage, so that is also a good long-term fundamental for construction. So there are a lot of good fundamentals in play here. Again, we will see what happens with the commodity prices and with the RVOs here, especially in, potentially, as I mentioned, as soon as March here. E15 is a great opportunity for our country, and it is right there, and it would really help alleviate this oversupply. And if we address some fertilizer constraint and price issues, which, again, through further research and development and some other things could help with, then the table is really set. I mean, the American grower can raise a lot of corn if given the opportunity, and we can supply the world a lot of corn and beans and other commodities. And the way the equipment is advancing and how professional our growers are— the stage is set very well here. As we go into 2027, our company has never been positioned better.

One more thing real quick just from a Q4 perspective. Q4 is a big presale quarter, and it was last year as well, so a lot of equipment that was being delivered was deals that were being discussed in the summer and early fall. So I would point to the same thing here. This summer and early fall will really set the stage for what the end of the year looks like. Obviously, there can be some incremental buying at end of the year, and there always is, but that is a big one. We set prudent expectations based on where the market is at today. Bryan mentioned several factors; we have talked about several factors today that can move it north of that. We have set expectations based on what has materialized thus far. But, as usual for every year here, as we really get into the summer and we see what that presale looks like, we work with OEMs to really see where the market is—that will set the stage more for what the back end of the year looks like.

Okay. Thanks for everything.

Thanks.

Thank you.

And we have reached the end of the question-and-answer session. Therefore, I will now turn the call back over to management for closing remarks.

Again, I just want to thank our team for their buy-in, tremendous execution, and discipline to make the hard decisions and put forth all the effort they did to position us where we are today. And I thank everybody on the call for your participation and look forward to updating you next quarter on our results.