Terex Corporation (NYSE: TEX) today announced second quarter
2017 income from continuing operations of $95.4 million, or $0.98
per share, on net sales of $1.2 billion. In the second quarter of
2016, the reported income from continuing operations was $109.6
million, or $1.00 per share, on net sales of $1.3 billion.
Excluding a net after-tax benefit of $47.0 million largely related
to the investment in Konecranes shares, income from continuing
operations, as adjusted, for the second quarter of 2017 was $49.6
million, or $0.51 per share. This compares to income from
continuing operations, as adjusted, of $60.6 million or $0.55 per
share in the second quarter of 2016. The Glossary at the end of
this press release contains further details regarding these
non-GAAP measures.
“We continue to make progress,” said John L. Garrison, Terex
President and CEO. “Our Cranes segment returned to profitability in
the second quarter, realizing benefits from its restructuring
program. Our Materials Processing (MP) segment continued its
excellent performance, growing sales and operating margin for the
third consecutive quarter. Aerial Work Platforms (AWP) sales were
better than expected on the strength of the North American market,
however, operating margins compressed on pricing dynamics, higher
steel costs and the strength of the US dollar.”
“Looking forward, backlog in our three segments grew
substantially, up 36% year-over-year. This is the second
consecutive quarter that we increased backlog in each segment,”
continued Mr. Garrison. “AWP backlog grew 46% including growth in
North America, Europe and Asia. MP backlog was up 33% and Cranes
backlog grew 29%.”
“We continue to implement our strategy to focus and simplify the
Company, and build capabilities in key commercial and operational
areas,” added Mr. Garrison. “By completing the sales of our UK and
Indian back-hoe loader businesses, we delivered on our commitment
to focus our portfolio on our three core segments. In Germany, we
signed an agreement to sell our Cranes manufacturing location in
Bierbach, and reached agreement with the Works Council to proceed
with our footprint rationalization and cost reduction plans. Our
on-going efforts to expand our capabilities in sales execution and
account management through our Commercial Excellence initiative is
starting to be reflected in our growing bookings and backlog.”
“We continue to follow our disciplined capital allocation
strategy. We monetized $277 million of Konecranes shares for a
year-to-date total of $549 million. We repaid the $254 million
remaining on our 6.5% notes and repurchased 9.4 million Terex
shares for $316 million, bringing our total to 15.9 million shares
for $517 million for the first six months of the year.”
Mr. Garrison concluded, “Combining our first half results, with
our current view of market and operational expectations in the
second half and our on-going capital market actions, we are
increasing our full year adjusted EPS guidance to $1.05 to $1.15.
This reflects improved net sales and operating profit
guidance.”
Re-segmentation and Non-GAAP Measures
The current and prior period results reflect the re-segmentation
of our concrete mixer trucks and concrete paver business from our
former Construction segment into MP. 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. Terex now calculates its quarterly adjusted effective
tax rate by multiplying the adjusted forecast full year effective
tax rate by the adjusted pre-tax income. Terex believes this more
closely aligns with how its investors analyze quarterly results.
2016 results have been adjusted using the same approach.
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 impact from
periodic adjustments to fair value in our ownership interest in
Konecranes, the impact of the release of tax valuation allowances
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, August 2, 2017 at 10:30 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 “Investor
Events”. 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 “Investor Events” in the “Investor
Relations” section.
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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
(in millions, except per share data)
Three Months Six Months Ended June 30, Ended June 30, 2017
2016 2017 2016 Net sales $ 1,181.7 $ 1,297.7 $
2,188.6 $ 2,412.0 Cost of goods sold (941.0)
(1,055.6) (1,795.6) (1,988.2) Gross profit 240.7
242.1 393.0 423.8 Selling, general and administrative expenses
(164.8) (168.7) (323.4) (339.1) Income
(loss) from operations 75.9 73.4 69.6 84.7 Other income (expense)
Interest income 1.5 1.1 3.3 2.3 Interest expense (15.1) (25.5)
(36.5) (50.2) Loss on early extinguishment of debt (6.5) (0.4)
(51.9) (0.4) Other income (expense) – net 62.7 (6.1)
45.4 (12.0) Income (loss) from continuing operations
before income taxes 118.5 42.5 29.9 24.4 (Provision for) benefit
from income taxes (23.1) 67.1 5.2 63.2
Income (loss) from continuing operations 95.4 109.6 35.1 87.6
Income (loss) from discontinued operations – net of tax — (45.1) —
(97.5) Gain (loss) on disposition of discontinued operations- net
of tax 5.4 0.1 61.1 3.5 Net income
(loss) 100.8 64.6 96.2 (6.4) Net (income) loss from Discontinuing
Operations attributable to non-controlling interest —
0.5 — 0.7 Net income (loss) attributable to Terex
Corporation $ 100.8 $ 65.1 $ 96.2 $ (5.7) Amounts attributable to
Terex Corporation common stockholders: Income (loss) from
continuing operations $ 95.4 $ 109.6 $ 35.1 $ 87.6 Income (loss)
from discontinued operations – net of tax — (44.6) — (96.8) Gain
(loss) on disposition of discontinued operations – net of tax
5.4 0.1 61.1 3.5 Net income (loss)
attributable to Terex Corporation $ 100.8 $ 65.1 $ 96.2 $ (5.7)
Basic Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ 0.99 $ 1.01 $ 0.35 $ 0.81 Income (loss) from
discontinued operations – net of tax — (0.41) — (0.89) Gain (loss)
on disposition of discontinued operations – net of tax 0.06
— 0.61 0.03 Net income (loss) attributable to
Terex Corporation $ 1.05 $ 0.60 $ 0.96 $ (0.05) Diluted Earnings
(Loss) per Share Attributable to Terex CorporationCommon
Stockholders: Income (loss) from continuing operations $ 0.98 $
1.00 $ 0.34 $ 0.80 Income (loss) from discontinued operations – net
of tax — (0.41) — (0.88) Gain (loss) on disposition of discontinued
operations – net of tax 0.06 — 0.60
0.03 Net income (loss) attributable to Terex Corporation $ 1.04 $
0.59 $ 0.94 $ (0.05) Weighted average number of shares outstanding
in per share calculation Basic 95.7 109.2
100.4 109.0 Diluted 97.1 109.6 102.2
109.6
TEREX CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in millions, except par value)
June 30, December 31,
2017 2016 Assets Current assets Cash and cash equivalents $ 555.5 $
428.5 Other current assets 1,840.1 1,539.1 Current assets held for
sale 8.0 732.9 Total current
assets 2,403.6 2,700.5 Non-current assets Property, plant and
equipment – net 303.7 304.6 Other non-current assets 1,052.3 830.4
Non-current assets held for sale 0.4
1,171.3 Total non-current assets
1,356.4 2,306.3 Total assets $ 3,760.0
$ 5,006.8 Liabilities and Stockholders’ Equity Current
liabilities Notes payable and current portion of long-term debt $
11.7 $ 13.8 Other current liabilities 1,005.5 939.4 Current
liabilities held for sale 3.5
453.8 Total current liabilities 1,020.7
1,407.0 Non-current liabilities Long-term debt, less current
portion 980.3 1,562.0 Other non-current liabilities 217.7 204.5
Non-current liabilities held for sale
1.1 312.1 Total non-current liabilities
1,199.1 2,078.6 Total liabilities 2,219.8 3,485.6
Total stockholders’ equity
1,540.2 1,521.2 Total liabilities and stockholders’ equity $
3,760.0 $ 5,006.8
TEREX
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
(unaudited)
(in millions)
Six Months Ended June 30, 2017 2016 Operating
Activities Net income (loss) $ 96.2 $ (6.4) Depreciation and
amortization 31.3 57.7 Changes in operating assets and liabilities
and non-cash charges (286.4) (57.7) Net cash provided
by (used in) operating activities (158.9) (6.4) Investing
Activities Capital expenditures (17.6) (44.1) Other investing
activities, net 1,346.7 0.2 Net cash (used in)
provided by investing activities 1,329.1 (43.9) Financing
Activities Net cash provided by (used in) financing activities
(1,138.7) (122.6) Effect of exchange rate changes on cash and cash
equivalents 25.2 4.5 Net increase (decrease) in cash
and cash equivalents 56.7 (168.4) Cash and cash equivalents at
beginning of period 501.9 466.5 Cash and cash
equivalents at end of period $ 558.6 $ 298.1
TEREX CORPORATION AND SUBSIDIARIES SEGMENT RESULTS
DISCLOSURE
(unaudited)
(in millions)
Q2 Year-to-Date 2017 2016
2017 2016 % of
% of % of %
of Net Sales Net Sales Net Sales Net Sales
Consolidated Net
sales $ 1,181.7 $ 1,297.7 $ 2,188.6 $ 2,412.0 Income from
operations $ 75.9 6.4% $ 73.4 5.7% $ 69.6 3.2% $ 84.7 3.5%
AWP Net sales $ 593.0 $ 593.7 $ 1,065.4 $ 1,114.4 Income
from operations $ 60.8 10.3% $ 72.5 12.2% $ 82.5 7.7% $ 110.6 9.9%
Cranes Net sales $ 303.8 $ 357.4 $ 567.7 $ 664.7
Income (loss) from operations $ 14.5 4.8% $ (12.8) (3.6%) $ (18.3)
(3.2%) $ (29.4) (4.4%)
MP Net sales $ 280.5 $ 256.2 $
529.6 $ 480.0 Income from operations $ 35.4 12.6% $ 28.6 11.2% $
60.9 11.5% $ 44.4 9.3%
Corp and Other / Eliminations
Net sales $ 4.4 $ 90.4 $ 25.9 $ 152.9 Loss from operations $ (34.8)
(790.9%) $ (14.9) (16.5%) $ (55.5) (214.3%) $ (40.9) (26.7%)
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 June 30, 2017, unless otherwise
indicated.
2017 Outlook: The Company’s 2017 outlook for earnings per
share and 2017 full year adjusted forecasted tax rate are non-GAAP
financial measures because they exclude items such as restructuring
and other related charges, impact from periodic adjustments to fair
value in 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.
Q2 2017
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from ContinuingOperations
Earnings (loss)per share**
As Reported (GAAP) $ 118.5 (23.1) 95.4 $ 0.98 Deal Related (57.7)
3.7 (54.0) (0.56) Restructuring & Related (12.6) 1.0 (11.6)
(0.12) Transformation 17.9 (2.7) 15.2 0.16 Extinguishment of Debt
6.5 (2.4) 4.1 0.04 Asset Impairment (1.6) 0.6 (1.0) (0.01) Tax
& Interim Period*** - 1.5
1.5 0.02 As Adjusted (Non-GAAP) $ 71.0 (21.4) 49.6 $
0.51 * Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate ** Based on diluted
weighted average shares outstanding of 97.1 million *** Includes
adjustments (1) without related pre-tax amounts, and (2) tax amount
necessary to align tax expense/(benefit) with the forecasted full
year as adjusted effective tax rate
YTD 2017
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from ContinuingOperations
Earnings (loss)per share**
As Reported (GAAP) $ 29.9 5.2 35.1 $ 0.34 Restructuring &
Related (3.6) (0.5) (4.1) (0.04) Deal Related (24.9) (9.0) (33.9)
(0.33) Transformation 26.3 (5.7) 20.6 0.20 Extinguishment of Debt
52.4 (18.8) 33.6 0.33 Asset Impairment (1.6) 0.6 (1.0) (0.01) Tax
& Interim Period*** - 4.7
4.7 0.05 As Adjusted (Non-GAAP) $ 78.5 (23.5) 55.0 $
0.54 * Tax effect on adjustments is calculated using
the applicable jurisdictional blended tax rate ** Based on diluted
weighted average shares outstanding of 102.2 million *** Includes
adjustments (1) without related pre-tax amounts, and (2) tax amount
necessary to align tax expense/(benefit) with the forecasted full
year as adjusted effective tax rate
Q2 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from ContinuingOperations
Earnings (loss)per share**
As Reported $ 42.5 67.1 109.6 $ 1.00 Deal Related 12.8 (3.9) 8.9
0.08 Restructuring & Related 27.7 (8.2) 19.5 0.18 Tax &
Interim Period*** - (77.4)
(77.4) (0.71) As Adjusted $ 83.0 (22.4) 60.6 $ 0.55
* Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate ** Based on diluted
weighted average shares outstanding of 109.6 million *** Includes
adjustments (1) without related pre-tax amounts, and (2) tax amount
necessary to align tax expense/(benefit) with the forecasted full
year as adjusted effective tax rate
YTD 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from ContinuingOperations
Earnings (loss)per share**
As Reported (GAAP) $ 24.4 63.2 87.6 $ 0.80 Deal Related 23.3 (5.5)
17.8 0.16 Restructuring & Related 42.2 (12.3) 29.9 0.27 Tax
& Interim Period*** - (69.7)
(69.7) (0.63) As Adjusted (Non-GAAP) $ 89.9 (24.3)
65.6 $ 0.60 * Tax effect on adjustments is calculated using
the applicable jurisdictional blended tax rate ** Based on diluted
weighted average shares outstanding of 109.6 million *** Includes
adjustments (1) without related pre-tax amounts, and (2) tax amount
necessary to align tax expense/(benefit) with the forecasted full
year as adjusted effective tax rate
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170801006634/en/
Terex CorporationBrian Henry, 203-222-5954Senior Vice President,
Business Development and Investor
Relationsbrian.henry@terex.com
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