Terex Corporation (NYSE:TEX) today announced a
first quarter 2016 loss from continuing operations of $74.2
million, or $0.68 per share, on net sales of $1.4 billion. In the
first quarter a year ago, the reported loss from continuing
operations was $2.1 million, or $0.02 per share, on net sales of
$1.5 billion. On an as adjusted basis, the first quarter loss from
continuing operations was $5.6 million, or $0.05 per share,
excluding after-tax charges totaling $59.7 million related to
severance and restructuring actions, as well as $8.9 million
related to ongoing merger and acquisition activities. The Glossary
at the end of this press release contains further details regarding
these items.
“Our first quarter results were in-line with
our expectations,” said John L. Garrison, Terex President and CEO.
“Our Cranes and Material Handling & Port Solutions (MHPS)
segments had a challenging quarter, impacted by soft markets. Our
Aerial Work Platforms (AWP), Materials Processing (MP) and
Construction segments executed well and delivered results that were
consistent with or better than last year, on an adjusted
basis.”
Mr. Garrison continued, “Our customers remain
cautious in the current global environment. Overall the markets are
challenging, but there are pockets of opportunity. Most of our AWP
North American rental customers are cautious about their capital
requirements, managing time utilization of their fleet and rental
rates. The impact from the oil and gas and resource sector declines
continue to constrain global demand for many of our products, Crane
products in particular. We remain focused on what we can control
and have initiated a broad-based restructuring program in the
quarter to reduce our SG&A costs and align production capacity
with demand. We maintain our full year guidance, expecting 2016
earnings per share to be between $1.30 and $1.60, excluding
restructuring and other unusual items, and net sales to be about
10% lower than 2015.”
The current and prior period results reflect
the re-segmentation of our scrap material handling business from
Construction into MP, and part of the North American services
business from Cranes to MHPS and AWP.
All results are for continuing operations. All
per share amounts are on a fully diluted basis. A comprehensive
review of the quarterly financial performance is contained in the
presentation that will accompany the Company’s earnings conference
call.
In this press release, Terex refers to various
GAAP (U.S. generally accepted accounting principles) and non-GAAP
financial measures. These non-GAAP measures may not be comparable
to similarly titled measures being disclosed by other companies.
Terex believes that this non-GAAP information is useful to
understanding its operating results and the ongoing performance of
its underlying businesses. Certain financial measures are shown in
italics the first time referenced and are described in the text or
the Glossary at the end of this press release.
Conference call
The Company has scheduled a one hour conference
call to review the financial results on Wednesday, April 27, 2016
at 8:30 a.m. ET. John L. Garrison, President and CEO, will host the
call. A simultaneous webcast of this call will be available on the
Company’s website, www.terex.com. To listen to the call, select
“Investor Relations” in the “About Terex” section on the home page
and then click on the webcast microphone link. Participants are
encouraged to access the call 10 minutes prior to the starting
time. The call will also be archived on the Company’s website under
“Audio Archives” in the “Investor Relations” section of the
website.
Forward-Looking Statements
This press release contains forward-looking
information regarding future events or the Company’s future
financial performance based on the current expectations of Terex
Corporation. In addition, when included in this press release, the
words “may,” “expects,” “intends,” “anticipates,” “plans,”
“projects,” “estimates” and the negatives thereof and analogous or
similar expressions are intended to identify forward-looking
statements. However, the absence of these words does not mean that
the statement is not forward-looking. The Company has based these
forward-looking statements on current expectations and projections
about future events. These statements are not guarantees of future
performance.
Because forward-looking statements involve
risks and uncertainties, actual results could differ materially.
Such risks and uncertainties, many of which are beyond the control
of Terex, include among others: Our business is cyclical and weak
general economic conditions affect the sales of our products and
financial results; the effect of the announcement and pendency of
the merger with Konecranes Plc (“Konecranes”) and the non-binding
proposal from Zoomlion Heavy Industry Science and Technology Co. on
our customers, employees, suppliers, vendors, distributors, dealers
retailers, operating results and business generally, and the
diversion of management’s time and attention; our ability to
successfully integrate acquired businesses, including the pending
merger with Konecranes; the need to comply with restrictive
covenants contained in our debt agreements; our ability to generate
sufficient cash flow to service our debt obligations and operate
our business; our ability to access the capital markets to raise
funds and provide liquidity; our business is sensitive to
government spending; our business is very competitive and is
affected by our cost structure, pricing, product initiatives and
other actions taken by competitors; our retention of key management
personnel; the financial condition of suppliers and customers, and
their continued access to capital; our providing financing and
credit support for some of our customers; we may experience losses
in excess of recorded reserves; the carrying value of goodwill and
other indefinite-lived intangible assets could become impaired; our
ability to obtain parts and components from suppliers on a timely
basis at competitive prices; our business is global and subject to
changes in exchange rates between currencies, commodity price
changes, regional economic conditions and trade restrictions; our
operations are subject to a number of potential risks that arise
from operating a multinational business, including compliance with
changing regulatory environments, the Foreign Corrupt Practices Act
and other similar laws and political instability; a material
disruption to one of our significant facilities; possible work
stoppages and other labor matters; compliance with changing laws
and regulations, particularly environmental and tax laws and
regulations; litigation, product liability claims, intellectual
property claims, class action lawsuits and other liabilities; our
ability to comply with an injunction and related obligations
imposed by the United States Securities and Exchange Commission
(“SEC”); disruption or breach in our information technology
systems; and other factors, risks and uncertainties that are more
specifically set forth in our public filings with the SEC.
Actual events or the actual future results of
Terex may differ materially from any forward-looking statement due
to these and other risks, uncertainties and significant factors.
The forward-looking statements speak only as of the date of this
release. Terex expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statement included in this release to reflect any changes in
expectations with regard thereto or any changes in events,
conditions, or circumstances on which any such statement is
based.
Terex Corporation is a lifting and material
handling solutions company reporting in five business segments:
Aerial Work Platforms, Cranes, Material Handling & Port
Solutions, Materials Processing and Construction. Terex
manufactures a broad range of equipment for use in various
industries, including the construction, infrastructure,
manufacturing, shipping, transportation, refining, energy, utility,
quarrying and mining industries. Terex offers financial products
and services to assist in the acquisition of Terex equipment
through Terex Financial Services. Terex uses its website
(www.terex.com) and its Facebook page
(www.facebook.com/TerexCorporation) to
make information available to its investors and the market.
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
(unaudited)
(in millions, except per share data)
Three Months Ended March 31,
2016
2015
Net sales $ 1,426.9 $ 1,495.6 Cost of goods sold (1,203.4)
(1,219.0) Gross profit 223.5 276.6 Selling, general and
administrative expenses (265.2) (232.4) Income (loss)
from operations (41.7) 44.2 Other income (expense) Interest income
1.3 1.0 Interest expense (25.2) (29.5) Other income (expense) – net
(3.8) (5.6) Income (loss) from continuing operations
before income taxes (69.4) 10.1 (Provision for) benefit from income
taxes (5.0) (11.6) Income (loss) from continuing
operations (74.4) (1.5) Gain (loss) on disposition of discontinued
operations- net of tax 3.4 3.1 Net income (loss)
(71.0) 1.6 Net loss (income) attributable to noncontrolling
interest 0.2 (0.6) Net income (loss) attributable to
Terex Corporation $ (70.8) $ 1.0 Amounts attributable to Terex
Corporation common stockholders: Income (loss) from continuing
operations $ (74.2) $ (2.1) Gain (loss) on disposition of
discontinued operations – net of tax 3.4 3.1 Net
income (loss) attributable to Terex Corporation $ (70.8) $ 1.0
Basic Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ (0.68) $ (0.02) Gain (loss) on disposition of
discontinued operations – net of tax 0.03 0.03 Net
income (loss) attributable to Terex Corporation $ (0.65) $ 0.01
Diluted Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ (0.68) $ (0.02) Gain (loss) on disposition of
discontinued operations – net of tax 0.03 0.03 Net
income (loss) attributable to Terex Corporation $ (0.65) $ 0.01
Weighted average number of shares outstanding in per share
calculation Basic 108.8 106.3 Diluted 108.8
106.3
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEET
(unaudited)
(in millions, except par value)
March 31, December 31, 2016 2015 Assets Current assets Cash
and cash equivalents $ 323.6 $ 466.5
Trade receivables (net of allowance of
$24.9 and $29.6 at March 31, 2016 and December
31,2015,respectively)
1,018.6 939.2 Inventories 1,554.3 1,445.7 Prepaid assets 256.9
221.4 Other current assets 6.8 67.4 Total current
assets 3,160.2 3,140.2 Non-current assets Property, plant and
equipment – net 689.1 675.8 Goodwill 1,062.6 1,023.2 Intangible
assets – net 255.3 249.5 Other assets 570.3 527.3
Total assets $ 5,737.5 $ 5,616.0 Liabilities and
Stockholders’ Equity Current liabilities Notes payable and current
portion of long-term debt $ 162.0 $ 80.2 Trade accounts payable
751.9 737.7 Accrued compensation and benefits 217.5 188.2 Accrued
warranties and product liability 73.0 68.3 Customer advances 162.5
142.7 Other current liabilities 267.7 241.5 Total
current liabilities 1,634.6 1,458.6 Non-current
liabilities Long-term debt, less current portion 1,668.9 1,729.9
Retirement plans 387.5 375.7 Other non-current liabilities
157.3 139.8 Total liabilities 3,848.3 3,704.0
Commitments and contingencies Stockholders’ equity
Common stock, $.01 par value – authorized
300.0 shares; issued 129.5 and 128.8 shares atMarch 31, 2016 and
December 31, 2015, respectively
1.3 1.3 Additional paid-in capital 1,269.9 1,273.3 Retained
earnings 2,026.1 2,104.6 Accumulated other comprehensive income
(loss) (591.2) (649.6)
Less cost of shares of common stock in
treasury – 21.0 and 21.1 shares at March 31, 2016 andDecember 31,
2015, respectively
(851.0) (852.2) Total Terex Corporation stockholders’
equity 1,855.1 1,877.4 Noncontrolling interest 34.1
34.6 Total stockholders’ equity 1,889.2 1,912.0 Total
liabilities and stockholders’ equity $ 5,737.5 $ 5,616.0
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
(unaudited)
(in millions)
Three Months Ended March 31, 2016 2015
Operating Activities Net income (loss) $ (71.0) $ 1.6 Adjustments
to reconcile net income to net cash provided by (used in)
operatingactivities: Depreciation and amortization 29.9 32.9
Changes in operating assets and liabilities (net of effects of
acquisitions anddivestitures): Trade receivables (57.7) (101.4)
Inventories (93.3) (132.7) Trade accounts payable 4.2 49.8 Customer
advances 16.6 36.6 Other, net 42.1 2.5 Net cash
provided by (used in) operating activities $ (129.2) $ (110.7)
Investing Activities Capital expenditures (22.2) (26.2) Other
investing activities, net (3.7) (24.1) Net cash (used
in) provided by investing activities (25.9) (50.3)
Financing Activities Net cash provided by (used in) financing
activities 2.7 64.5 Effect of Exchange Rate Changes
on Cash and Cash Equivalents 9.5 (30.4) Net Increase
(Decrease) in Cash and Cash Equivalents (142.9) (126.9) Cash and
Cash Equivalents at Beginning of Period 466.5 478.2
Cash and Cash Equivalents at End of Period $ 323.6 $ 351.3
TEREX CORPORATION AND
SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(unaudited)
(in millions)
Q1 2016 2015 % of
% of Net Sales Net Sales
Consolidated Net sales $ 1,426.9 $
1,495.6 Income (loss) from operations $ (41.7) (2.9%) $ 44.2 3.0%
AWP Net sales $ 520.7 $ 517.5 Income from operations
$ 38.1 7.3% $ 44.6 8.6%
Cranes Net sales $ 307.3 $
353.3 Income (loss) from operations $ (16.6) (5.4%) $ 2.4 0.7%
MHPS Net sales $ 317.7 $ 344.3 Loss from operations $
(61.8) (19.5%) $ (4.4) (1.3%)
MP Net sales $ 177.3 $
181.1 Income from operations $ 10.1 5.7% $ 9.3 5.1%
Construction Net sales $ 142.5 $ 122.2 Income (loss) from
operations $ 1.3 0.9% $ (3.6) (2.9%)
Corp &
Eliminations Net sales $ (38.6) $ (22.8) Loss from operations $
(12.8) 33.2% $ (4.1) 18.0%
GLOSSARY
In an effort to provide investors with
additional information regarding the Company’s results, Terex
refers to various GAAP (U.S. generally accepted accounting
principles) and non-GAAP financial measures which management
believes provides useful information to investors. These non-GAAP
measures may not be comparable to similarly titled measures being
disclosed by other companies. In addition, the Company believes
that non-GAAP financial measures should be considered in addition
to, and not in lieu of, GAAP financial measures. Terex believes
that this non-GAAP information is useful to understanding its
operating results and the ongoing performance of its underlying
businesses. Management of Terex uses both GAAP and non-GAAP
financial measures to establish internal budgets and targets and to
evaluate the Company’s financial performance against such budgets
and targets.
The amounts described below are unaudited, are
reported in millions of U.S. dollars (except per share data and
percentages), and are as of or for the period ended March 31, 2016,
unless otherwise indicated.
After-tax gains or expense and per share
amounts (Loss from continuing operations as adjusted) are
calculated using pre-tax amounts, applying a tax rate based on
jurisdictional rates to arrive at an after-tax amount. This number
is divided by diluted weighted average shares outstanding to
provide the impact on earnings per share. The Company highlights
the impact of these items because when discussing earnings per
share, the Company adjusts for items it believes are not reflective
of operating activities in the periods.
Q1
2016 Pre-Tax Tax
Rate After-Tax
EPS* Merger Related $ (10.5) ** $ (8.9) $ (0.08)
Restructuring & Related (64.1)
** (59.7) (0.55)
Total Effects $ (74.6)
$ (68.6) $ (0.63) * Based on diluted
weighted average shares outstanding of 108.8M ** Based on a
jurisdictional blend
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160426006935/en/
Terex CorporationTom Gelston, 203-222-5943Vice
President, Investor Relationsthomas.gelston@terex.com
Terex (NYSE:TEX)
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