Terex Corporation (NYSE:TEX) today announced a fourth quarter
2016 loss from continuing operations of $313.9 million, or ($2.96)
per share, on net sales of $1.0 billion. In the fourth quarter of
2015, the reported income from continuing operations was $23.8
million, or $0.22 per share, on net sales of $1.2 billion.
Excluding after-tax charges of $321.3 million, income from
continuing operations, as adjusted, for the fourth quarter of 2016
was $7.4 million, or $0.07 per share. This compares to income from
continuing operations, as adjusted, of $32.0 million or $0.29 per
share in the fourth quarter of 2015. The Glossary at the end of
this press release contains further details regarding these
non-GAAP measures.
For the full year 2016, Terex reported a loss from continuing
operations of $193.0 million, or ($1.79) per share, on net sales of
$4.4 billion, compared to income from continuing operations of
$128.4 million, or $1.17 per share, on net sales of $5.0 billion
for the full year 2015. Income from continuing operations, as
adjusted, for the full year 2016 was $95.3 million, or $0.88 per
share, compared to $154.6 million, or $1.41 per share, in 2015.
“Our fourth quarter results were in line with our expectations
and reflect the challenging global market conditions,” said John L.
Garrison, Terex President and CEO.
“We have taken significant steps to better position Terex for
the future,” continued Mr. Garrison. “We completed the sale of our
MHPS business, initiated major restructuring actions within our
Cranes segment, and dramatically improved our balance sheet. We
continue to implement our strategy, to focus and simplify the
company, and build capabilities in key commercial and operational
areas.”
Mr. Garrison continued, “Looking ahead to 2017, we expect our
primary global markets to remain challenging. We anticipate lower
fleet replacement demand from North American AWP rental customers.
The global Crane market remains challenging and we expect a further
decline in 2017. We anticipate modest growth in our Materials
Processing business. Combined with our cost reduction actions and
capital structure improvements, we expect to deliver 2017 earnings
per share of between $0.60 and $0.80, excluding restructuring,
impact from our ownership interest in Konecranes, and other unusual
items, on net sales of approximately $3.9 billion.”
Re-segmentation and Non-GAAP Measures
The current and prior period results reflect the re-segmentation
of our scrap material handling, concrete mixer trucks and concrete
paver business from our former Construction segment into MP, and
part of the North American services business from Cranes to MHPS
and AWP. Our MHPS business is reported as a discontinued operation.
Remaining product lines of our former Construction segment, such as
mini-excavators, loader backhoes and site dumpers are included in
Corporate and Other.
Results of operations reflect 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.
The Company provides guidance on a non-GAAP basis as the Company
cannot predict with a reasonable degree of certainty some elements
that are included in reported GAAP results, such as the timing and
impact of our ownership interest in Konecranes and future
restructuring charges.
The Glossary at the end of this press release contains further
details about this subject.
Conference call
The Company has scheduled a one hour conference call to review
the financial results on Wednesday, February 22, 2017 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” from the home page and 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 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 highly 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 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.
About Terex
Terex Corporation is a global manufacturer of lifting and
material processing products and services that deliver lifecycle
solutions to maximize customer return on investment. The company
reports in three business segments: Aerial Work Platforms, Cranes,
and Materials Processing. Terex delivers lifecycle solutions to a
broad range of 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
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS(unaudited)(in millions, except per share data)
Three Months Full Year Ended December 31,
Ended December 31, 2016 2015 2016 2015 Net sales $
974.7 $ 1,167.6 $ 4,443.1 $ 5,021.7 Cost of goods sold
(870.0) (952.3) (3,730.7) (4,050.5) Gross
profit 104.7 215.3 712.4 971.2 Selling, general and administrative
expenses (200.8) (158.1) (684.2) (647.5) Goodwill Impairment
(176.0) — (176.0) — Income (loss) from
operations (272.1) 57.2 (147.8) 323.7 Other income (expense)
Interest income 1.0 1.0 4.3 3.8 Interest expense (26.4) (25.6)
(102.0) (108.1) Other income (expense) – net (11.5)
(5.9) (25.2) (23.7) Income (loss) from continuing
operations before income taxes (309.0) 26.7 (270.7) 195.7
(Provision for) benefit from income taxes (5.1) (3.0)
77.4 (67.5) Income (loss) from continuing operations
(314.1) 23.7 (193.3) 128.2 Income (loss) from discontinued
operations – net of tax 47.7 (9.0) 14.3 17.4 Gain (loss) on
disposition of discontinued operations- net of tax —
1.9 3.5 3.4 Net income (loss) (266.4) 16.6 (175.5)
149.0 Net loss (income) from continuing operations attributable to
non-controlling interest 0.2 0.1 0.3 0.2 Net (income) loss from
discontinued operations attributable to non-controlling interest
(1.0) (0.2) (0.9) (3.3) Net income
(loss) attributable to Terex Corporation $ (267.2) $ 16.5 $ (176.1)
$ 145.9 Amounts attributable to Terex Corporation common
stockholders: Income (loss) from continuing operations $ (313.9) $
23.8 $ (193.0) $ 128.4 Income (loss) from discontinued operations –
net of tax 46.7 (9.2) 13.4 14.1 Gain (loss) on disposition of
discontinued operations – net of tax — 1.9 3.5
3.4 Net income (loss) attributable to Terex Corporation $
(267.2) $ 16.5 $ (176.1) $ 145.9 Basic Earnings (Loss) per Share
Attributable to Terex CorporationCommon Stockholders: Income (loss)
from continuing operations $ (2.96) $ 0.22 $ (1.79) $ 1.20 Income
(loss) from discontinued operations – net of tax 0.44 (0.09) 0.13
0.13 Gain (loss) on disposition of discontinued operations – net of
tax — 0.02 0.03 0.03 Net income (loss)
attributable to Terex Corporation $ (2.52) $ 0.15 $ (1.63) $ 1.36
Diluted Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ (2.96) $ 0.22 $ (1.79) $ 1.17 Income (loss) from
discontinued operations – net of tax 0.44 (0.09) 0.13 0.13 Gain
(loss) on disposition of discontinued operations – net of tax
— 0.02 0.03 0.03 Net income (loss)
attributable to Terex Corporation $ (2.52) $ 0.15 $ (1.63) $ 1.33
Weighted average number of shares outstanding in per share
calculation Basic 105.9 108.5 107.9
107.4 Diluted 105.9 109.4 107.9 109.6
TEREX CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEET(unaudited)(in millions)
December 31, December 31, 2016 2015
Assets Current assets Cash and cash equivalents $ 428.5 $ 371.2
Other current assets 1,539.1 2,019.4 Current assets held for sale
732.9 749.6 Total current assets 2,700.5 3,140.2
Non-current assets Property, plant and equipment – net 304.6 371.9
Other non-current assets 830.4 943.4 Non-current assets held for
sale 1,171.3 1,160.5 Total non-current assets
2,306.3 2,475.8 Total assets $ 5,006.8 $ 5,616.0
Liabilities and Stockholders’ Equity Current liabilities Notes
payable and current portion of long-term debt $ 13.8 $ 66.4 Other
current liabilities 939.4 946.2 Current liabilities held for sale
453.8 446.0 Total current liabilities 1,407.0
1,458.6 Non-current liabilities Long-term debt, less current
portion 1,562.0 1,729.8 Other non-current liabilities 204.5 217.1
Non-current liabilities held for sale 312.1 298.5
Total non-current liabilities 2,078.6 2,245.4 Total
liabilities 3,485.6 3,704.0 Total stockholders’ equity
1,521.2 1,912.0 Total liabilities and stockholders’
equity $ 5,006.8 $ 5,616.0
TEREX CORPORATION AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS(unaudited)(in millions)
Full Year Ended December 31, 2016 2015
Operating Activities Net income (loss) $ (175.5) $ 149.0
Depreciation and amortization 96.7 132.4 Changes in operating
assets and liabilities and non-cash charges 445.8
(68.5) Net cash provided by (used in) operating activities 367.0
212.9 Investing Activities Capital expenditures (73.0) (103.8)
Other investing activities, net 61.2 (68.9) Net cash
(used in) provided by investing activities (11.8) (172.7) Financing
Activities Net cash provided by (used in) financing activities
(300.1) (14.4) Effect of exchange rate changes on cash and cash
equivalents (19.7) (37.5) Net increase (decrease) in
cash and cash equivalents 35.4 (11.7) Cash and cash equivalents at
beginning of period 466.5 478.2 Cash and cash
equivalents at end of period $ 501.9 $ 466.5
TEREX CORPORATION AND
SUBSIDIARIESSEGMENT RESULTS DISCLOSURE(unaudited)(in
millions)
Q4 Year-to-Date 2016 2015 2016
2015 % of % of % of
% of Net Sales Net Sales Net Sales Net Sales
Consolidated Net sales $ 974.7 $ 1,167.6 $ 4,443.1 $ 5,021.7
Income (loss) from operations $ (272.1) (27.9%) $ 57.2 4.9% $
(147.8) (3.3%) $ 323.7 6.4%
AWP Net sales $ 379.0 $
459.3 $ 1,977.8 $ 2,246.0 Income from operations $ 18.2 4.8% $ 41.6
9.1% $ 177.4 9.0% $ 270.2 12.0%
Cranes Net sales $
327.0 $ 406.2 $ 1,274.5 $ 1,566.5 Income (loss) from operations $
(280.2) (85.7%) $ 20.5 5.0% $ (321.7) (25.2%) $ 56.3 3.6%
MP Net sales $ 236.3 $ 241.5 $ 944.5 $ 940.1 Income from
operations $ 22.4 9.5% $ 13.8 5.7% $ 86.3 9.1% $ 68.6 7.3%
Corp and Other / Eliminations Net sales $ 32.4 $ 60.6 $
246.3 $ 269.1 Loss from operations $ (32.5) n/m $ (18.7) (30.9%) $
(89.8) (36.5%) $ (71.4) (26.5%)
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 share data and percentages), and
are as of or for the period ended December 31, 2016, unless
otherwise indicated.
2017 Outlook: The Company’s 2017 outlook for earnings per
share is a non-GAAP financial measure because it excludes items
such as restructuring and other related charges, impact from our
ownership interest in Konecranes, deal related costs, the impact of
the release of tax valuation allowances, and gains and losses on
divestitures. The Company is not able to reconcile these
forward-looking non-GAAP financial measures to their most directly
comparable forward-looking GAAP financial measures without
unreasonable efforts because the Company is unable to predict with
a reasonable degree of certainty the exact timing and impact of
such items. The unavailable information could have a significant
impact on the Company’s full-year 2017 GAAP financial results.
After-tax gains or losses and per share amounts 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 ongoing operating activities in the periods. Restructuring and
related charges are a recurring item as Terex’s restructuring
programs usually require more than one year to fully implement and
the Company is continually seeking to take actions that could
enhance its efficiency. Although recurring, these charges are
subject to significant fluctuations from period to period due to
varying levels of restructuring activity and the inherent
imprecision in the estimates used to recognize the costs and taxes
associated with severance and termination benefits in the countries
in which the restructuring actions occur.
Q4 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from
ContinuingOperations**
Earnings (loss)per share***
As Reported (GAAP) $ (309.0 ) (5.1 ) (313.9 ) $ (2.96 ) Deal
Related (9.0 ) 3.0 (6.0 ) (0.06 ) Restructuring & Related 89.2
(5.5 ) 83.7 0.79 Transformation 9.3 (2.6 ) 6.7 0.06 Goodwill/Asset
Impairment 219.6 (16.6 ) 203.0 1.92 Tax Related -
33.9 33.9 0.32
As Adjusted (Non-GAAP) $ 0.1 7.1 7.4 $ 0.07 * Tax
effect on adjustments is calculated using a jurisdictional blended
tax rate ** Excludes $0.2 million net loss attributable to
non-controlling interest *** Based on diluted weighted average
shares outstanding of 105.9 million
Full Year 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from
ContinuingOperations**
Earnings (loss)per share***
As Reported (GAAP) $ (270.7 ) 77.4 (193.0 ) $ (1.79 ) Deal Related
20.5 (3.4 ) 17.1 0.16 Restructuring & Related 137.2 (19.9 )
117.3 1.09 Transformation 9.3 (2.6 ) 6.7 0.06 Goodwill/Asset
Impairment 219.6 (16.6 ) 203.0 1.88 Tax Related -
(55.8 ) (55.8 ) (0.52 ) As
Adjusted (Non-GAAP) $ 115.9 (20.9 ) 95.3 $ 0.88 * Tax effect
on adjustments is calculated using a jurisdictional blended tax
rate ** Excludes $0.3 million net loss attributable to
non-controlling interest *** Based on diluted weighted average
shares outstanding of 107.9 million
Q4 2015
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from
ContinuingOperations**
Earnings (loss)per share***
As Reported (GAAP) $ 26.7 (3.0) 23.8 $ 0.22 Deal Related 5.9 (0.9)
5.0 0.05 Restructuring & Related 4.0 (0.8)
3.2 0.02 As Adjusted (Non-GAAP) $ 36.6 (4.7) 32.0 $ 0.29
* Tax effect on adjustments is calculated using a
jurisdictional blended tax rate ** Excludes $0.1 million net loss
attributable to non-controlling interest *** Based on diluted
weighted average shares outstanding of 109.4 million
Full Year 2015
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from
ContinuingOperations**
Earnings (loss)per share***
As Reported (GAAP) $ 195.7 (67.5 ) 128.4 $ 1.17 Deal Related 14.5
(1.6 ) 12.9 0.12 Restructuring & Related 15.8 (4.1 ) 11.7 0.11
Product Campaign 2.5 (0.9 ) 1.6
0.01 As Adjusted (Non-GAAP) $ 228.5 (74.1 ) 154.6 $ 1.41
* Tax effect on adjustments is calculated using a
jurisdictional blended tax rate ** Excludes $0.2 million net loss
attributable to non-controlling interest *** Based on diluted
weighted average shares outstanding of 109.6 million
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170221006648/en/
Terex CorporationBrian J. Henry, 203-222-5954Senior Vice
PresidentBusiness Development & Investor
Relationsbrian.henry@terex.com
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