Terex Corporation (NYSE:TEX) today announced a first quarter
2017 loss from continuing operations of $60.3 million, or ($0.57)
per share, on net sales of $1.0 billion. In the first quarter of
2016, the reported loss from continuing operations was $22.0
million, or $0.20 per share, on net sales of $1.1 billion.
Excluding after-tax charges of $65.8 million, income from
continuing operations, as adjusted, for the first quarter of 2017
was $5.5 million, or $0.05 per share. This compares to income from
continuing operations, as adjusted, of $5.0 million or $0.05 per
share in the first quarter of 2016. The after-tax charges in the
first quarter of 2017 were primarily for deal related costs and the
Company’s refinancing activities. The Glossary at the end of this
press release contains further details regarding these non-GAAP
measures.
“We are encouraged by our start to 2017,” said John L. Garrison,
Terex President and CEO. “Our Material Processing (MP) segment had
an excellent first quarter, growing sales and operating margin. Our
Cranes segment results were consistent with our expectation that
volumes would be down in the first half of 2017. In Aerial Work
Platforms (AWP) sales were down as expected, and operating margins
compressed on lower sales and the strength of the US dollar.”
“Looking forward, we see positive momentum in our backlog, which
grew year-over-year for the first time in eight quarters,”
continued Mr. Garrison. “Overall backlog grew 10%, rising in each
of our segments. In particular, the North American market for AWP
products is stronger than we anticipated, with positive customer
sentiment tempering the impact of the replacement cycle.
Year-over-year, AWP backlog grew 21% and bookings rose 38%. In
addition, MP backlog grew 29%.”
“We made substantial progress executing our strategy to focus
and simplify the Company, and build capabilities in key commercial
and operational areas,” added Mr. Garrison. “In January we
completed the MHPS sale. We also closed the sale of our loader
backhoe business based in Coventry, England, and announced the sale
of our India loader backhoe business. Our Cranes restructuring
program is making progress, with the closing of our Jinan facility,
and we continue to address structural costs. The Commercial
Excellence program is providing greater visibility to sales
opportunities and helping to improve our bookings and backlog.”
“We significantly improved our capital structure, reducing our
debt by approximately $600 million, improving interest rates, and
extending our maturities. We expect interest savings of
approximately $35 million on an annualized basis.”
Mr. Garrison continued, “In the first quarter we earned a
dividend on our Konecranes shares of $13.5 million, contributing
$0.09 to our earnings per share. We also repurchased approximately
6.5 million shares of Terex stock through our previously announced
programs. Including the full year impact of the Konecranes
dividends and our share repurchases, we are increasing our full
year adjusted EPS guidance to $0.80 to $0.95.”
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. 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, May 3, 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
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
(unaudited)
(in millions, except per share data)
Three MonthsEnded March 31, 2017 2016 Net
sales $ 1,006.9 $ 1,114.3 Cost of goods sold (854.6)
(932.6) Gross profit 152.3 181.7 Selling, general and
administrative expenses (158.6) (170.4) Income (loss)
from operations (6.3) 11.3 Other income (expense) Interest income
1.8 1.2 Interest expense (21.4) (24.7) Loss on early extinguishment
of debt (45.4) — Other income (expense) – net (17.3)
(5.9) Income (loss) from continuing operations before income taxes
(88.6) (18.1) (Provision for) benefit from income taxes 28.3
(3.9) Income (loss) from continuing operations (60.3) (22.0)
Income (loss) from discontinued operations – net of tax — (52.4)
Gain (loss) on disposition of discontinued operations- net of tax
55.7 3.4 Net income (loss) (4.6) (71.0) Net (income)
loss from Discontinuing Operations attributable to non-controlling
interest — 0.2 Net income (loss) attributable to
Terex Corporation $ (4.6) $ (70.8) Amounts attributable to Terex
Corporation common stockholders: Income (loss) from continuing
operations $ (60.3) $ (22.0) Income (loss) from discontinued
operations – net of tax — (52.2) Gain (loss) on disposition of
discontinued operations – net of tax 55.7 3.4 Net
income (loss) attributable to Terex Corporation $ (4.6) $ (70.8)
Basic Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ (0.57) $ (0.20) Income (loss) from discontinued
operations – net of tax — (0.48) Gain (loss) on disposition of
discontinued operations – net of tax 0.53 0.03 Net
income (loss) attributable to Terex Corporation $ (0.04) $ (0.65)
Diluted Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ (0.57) $ (0.20) Income (loss) from discontinued
operations – net of tax — (0.48) Gain (loss) on disposition of
discontinued operations – net of tax 0.53 0.03 Net
income (loss) attributable to Terex Corporation $ (0.04) $ (0.65)
Weighted average number of shares outstanding in per share
calculation Basic 105.2 108.8 Diluted 105.2
108.8
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEET
(unaudited)
(in millions, except par value)
March 31,2017
December 31,2016 Assets Current assets Cash and cash equivalents $
813.9 $ 428.5 Other current assets 1,756.0 1,539.1 Current assets
held for sale 27.8 732.9 Total current assets 2,597.7
2,700.5 Non-current assets Property, plant and equipment – net
302.7 304.6 Other non-current assets 1,260.3 830.4 Non-current
assets held for sale 2.4 1,171.3 Total non-current
assets 1,565.4 2,306.3 Total assets $ 4,163.1 $
5,006.8 Liabilities and Stockholders’ Equity Current
liabilities Notes payable and current portion of long-term debt $
263.2 $ 13.8 Other current liabilities 998.1 939.4 Current
liabilities held for sale 16.4 453.8 Total current
liabilities 1,277.7 1,407.0 Non-current liabilities
Long-term debt, less current portion 979.6 1,562.0 Other
non-current liabilities 207.5 204.5 Non-current liabilities held
for sale 2.6 312.1 Total non-current liabilities
1,189.7 2,078.6 Total liabilities 2,467.4 3,485.6
Total stockholders’ equity 1,695.7 1,521.2
Total liabilities and stockholders’ equity $ 4,163.1 $ 5,006.8
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
(unaudited)
(in millions)
Three MonthsEnded March 31, 2017 2016
Operating Activities Net income (loss) $ (4.6) $ (71.0)
Depreciation and amortization 16.3 29.9 Changes in operating assets
and liabilities and non-cash charges (207.8) (79.6)
Net cash provided by (used in) operating activities (196.1) (120.7)
Investing Activities Capital expenditures (10.6) (22.2) Other
investing activities, net 1,058.9 (3.7) Net cash
(used in) provided by investing activities 1,048.3 (25.9) Financing
Activities Net cash provided by (used in) financing activities
(544.7) (5.8) Effect of exchange rate changes on cash and cash
equivalents 7.0 9.5 Net increase (decrease) in cash
and cash equivalents 314.5 (142.9) Cash and cash equivalents at
beginning of period 501.9 466.5 Cash and cash
equivalents at end of period $ 816.4 $ 323.6
TEREX CORPORATION AND
SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(unaudited)
(in millions)
Q1 2017 2016
% ofNetSales
% ofNetSales
Consolidated Net sales $ 1,006.9 $ 1,114.3 Income (loss)
from operations $ (6.3) (0.6%) $ 11.3
1.0%
AWP Net sales $ 472.4 $ 520.7 Income from operations
$ 21.7
4.6%
$ 38.1
7.3%
Cranes Net sales $ 263.9 $ 307.3 Loss from operations
$ (32.8) (12.4%) $ (16.6) (5.4%)
MP Net sales $ 249.1
$ 223.8 Income from operations $ 25.5
10.2%
$ 15.8
7.1%
Corp and Other / Eliminations Net sales $ 21.5 $ 62.5
Loss from operations $ (20.7) (96.3%) $ (26.0) (41.6%)
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 March 31, 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.
Q1 2017
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from ContinuingOperations
Earnings (loss)
per share**
As Reported (GAAP) $ (88.6 ) 28.3
(60.3 ) $ (0.57 ) Restructuring &
Related 9.0 (1.5 ) 7.5 0.07 Deal Related 32.8 (12.7 ) 20.1 0.19
Transformation 8.4 (3.0 ) 5.4 0.05 Extinguishment of Debt 45.9
(16.4 ) 29.5 0.28 Tax & Interim Period***
-
3.3 3.3
0.03 As Adjusted (Non-GAAP) $ 7.5 (2.0 ) 5.5 $
0.05 * Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate ** Based on diluted
weighted average shares outstanding of 105.2 million *** Includes
adjustments without related pre-tax amounts and the tax amount
necessary to align quarterly tax expense (benefit) with the
forecasted full year as adjusted effective tax rate
Q1 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome
Taxes*
Income (loss)from ContinuingOperations
Earnings (loss)
per share**
As Reported (GAAP) $ (18.1 ) (3.9 ) (22.0 ) $ (0.20 ) Deal Related
10.5 (1.6 ) 8.9 0.08 Restructuring & Related 14.5 (4.1 ) 10.4
0.10 Tax & Interim Period***
-
7.7 7.7
0.07 As Adjusted (Non-GAAP) $ 6.9 (1.9 ) 5.0 $
0.05 * Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate ** Based on diluted
weighted average shares outstanding of 108.8 million *** Includes
adjustments without related pre-tax amounts and the tax amount
necessary to align quarterly 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/20170502006884/en/
Terex CorporationBrian Henry, 203-222-5954Senior Vice President,
Business Development and Investor
Relationsbrian.henry@terex.com
Terex (NYSE:TEX)
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