Terex Corporation (NYSE:TEX) today announced third quarter 2017
income from continuing operations of $56.6 million, or $0.63 per
share, on net sales of $1.1 billion. In the third quarter of 2016,
the reported income from continuing operations was $33.3 million,
or $0.31 per share, on net sales of $1.1 billion. Income from
continuing operations, as adjusted, for the third quarter of 2017
was $45.0 million, or $0.50 per share. This compares to income from
continuing operations, as adjusted, of $19.0 million or $0.17 per
share in the third quarter of 2016. The Glossary at the end of this
press release contains further details regarding these non-GAAP
measures.
“Our third quarter financial results demonstrate the
accelerating momentum across Terex,” said John L. Garrison, Terex
President and CEO. “All three segments increased sales, improved
operating margin and grew backlog. Aerial Work Platforms (AWP) grew
in North America and Europe, and expanded its operating margin.
Cranes continued to be profitable in the third quarter, realizing
benefits from its restructuring program. Materials Processing (MP)
continued its excellent performance, growing sales and operating
margin for the fourth consecutive quarter.”
“Having completed the first element of our strategy - focusing
the portfolio on our three core segments, our strategy deployment
efforts are concentrated on simplifying the Company and
implementing our Execute to Win business system,” added Mr.
Garrison. “Footprint consolidation progress in the quarter included
completing the sale of manufacturing locations in Jinan, China and
Bierbach, Germany. A fundamental component of Execute to Win is
improving our commercial capabilities. In addition to enhancing our
performance management tools and increasing process discipline in
sales pipeline and account management we made key additions to our
commercial leadership team.”
“We continue to follow our disciplined capital allocation
strategy. We monetized our remaining holdings of Konecranes shares
for proceeds of $221 million, bringing the total consideration
received by Terex for the disposition of MHPS to approximately $1.6
billion. This demonstrates the significant value to Terex
shareholders that was created by the sale of our MHPS segment. In
addition, we repurchased 6.4 million Terex shares for $254 million
in the third quarter, bringing the total to 22.3 million shares
repurchased for $770 million for the first nine months of the
year.”
Mr. Garrison concluded, “Considering our year to date results,
our current view of market dynamics, operational expectations for
the fourth quarter, and our capital market actions, we are
increasing our full year adjusted EPS guidance to $1.20 to
$1.30.”
Non-GAAP Measures and Other Items
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, November 1, 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 Months EndedSeptember 30,
Nine Months EndedSeptember 30, 2017 2016 2017
2016 Net sales $ 1,111.2 $ 1,056.4 $ 3,299.8 $ 3,468.4 Cost
of goods sold (892.2 ) (872.5 ) (2,687.8 )
(2,860.7 ) Gross profit 219.0 183.9 612.0 607.7 Selling,
general and administrative expenses (154.8 ) (144.3 )
(478.2 ) (483.4 ) Income (loss) from operations 64.2
39.6 133.8 124.3 Other income (expense) Interest income 1.9 1.0 5.2
3.3 Interest expense (15.5 ) (25.4 ) (52.0 ) (75.6 ) Loss on early
extinguishment of debt (0.7 ) — (52.6 ) (0.4 ) Other income
(expense) – net 6.8 (1.3 ) 52.2
(13.3 ) Income (loss) from continuing operations before
income taxes 56.7 13.9 86.6 38.3 (Provision for) benefit from
income taxes (0.1 ) 19.3 5.1
82.5 Income (loss) from continuing operations 56.6
33.2 91.7 120.8 Income (loss) from discontinued operations – net of
tax — 64.1 — (33.4 ) Gain (loss) on disposition of discontinued
operations- net of tax 2.6 —
63.7 3.5 Net income (loss) 59.2 97.3 155.4
90.9 Net (income) loss from Continuing Operations attributable to
non-controlling interest — 0.1 — 0.1 Net (income) loss from
Discontinuing Operations attributable to non-controlling interest
— (0.6 ) — 0.1 Net
income (loss) attributable to Terex Corporation $ 59.2 $
96.8 $ 155.4 $ 91.1 Amounts attributable to
Terex Corporation common stockholders: Income (loss) from
continuing operations $ 56.6 $ 33.3 $ 91.7 $ 120.9 Income (loss)
from discontinued operations – net of tax — 63.5 — (33.3 ) Gain
(loss) on disposition of discontinued operations – net of tax
2.6 — 63.7 3.5
Net income (loss) attributable to Terex Corporation $ 59.2
$ 96.8 $ 155.4 $ 91.1 Basic Earnings
(Loss) per Share Attributable to Terex CorporationCommon
Stockholders: Income (loss) from continuing operations $ 0.64 $
0.31 $ 0.96 $ 1.12 Income (loss) from discontinued operations – net
of tax — 0.59 — (0.31 ) Gain (loss) on disposition of discontinued
operations – net of tax 0.03 —
0.66 0.03 Net income (loss) attributable to
Terex Corporation $ 0.67 $ 0.90 $ 1.62 $ 0.84
Diluted Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ 0.63 $ 0.31 $ 0.93 $ 1.10 Income (loss) from
discontinued operations – net of tax — 0.58 — (0.30 ) Gain (loss)
on disposition of discontinued operations – net of tax 0.03
— 0.65 0.03 Net
income (loss) attributable to Terex Corporation $ 0.66 $
0.89 $ 1.58 $ 0.83 Weighted average number of
shares outstanding in per share calculation Basic 88.0
107.6 96.2 108.5
Diluted 90.0 108.6 98.1
109.3
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEET
(unaudited)
(in millions, except par value)
September 30,2017
December 31,2016
Assets Current assets Cash and cash equivalents $ 592.7 $ 428.5
Other current assets 1,858.7 1,539.1 Current assets held for sale
5.7 732.9 Total current assets 2,457.1 2,700.5
Non-current assets Property, plant and equipment – net 300.8 304.6
Other non-current assets 844.8 830.4 Non-current assets held for
sale — 1,171.3 Total non-current assets
1,145.6 2,306.3 Total assets $ 3,602.7 $ 5,006.8
Liabilities and Stockholders’ Equity Current liabilities Notes
payable and current portion of long-term debt $ 4.9 $ 13.8 Other
current liabilities 1,006.5 939.4 Current liabilities held for sale
2.2 453.8 Total current liabilities 1,013.6
1,407.0 Non-current liabilities Long-term debt, less current
portion 980.0 1,562.0 Other non-current liabilities 228.0 204.5
Non-current liabilities held for sale 0.8 312.1 Total
non-current liabilities 1,208.8 2,078.6 Total
liabilities 2,222.4 3,485.6 Total
stockholders’ equity 1,380.3 1,521.2 Total
liabilities and stockholders’ equity $ 3,602.7 $ 5,006.8
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
(unaudited)
(in millions)
Nine Months EndedSeptember 30,
2017 2016 Operating Activities Net income (loss) $ 155.4 $ 90.9
Depreciation and amortization 48.7 77.4 Changes in operating assets
and liabilities and non-cash charges (260.3) (68.0)
Net cash provided by (used in) operating activities (56.2) 100.3
Investing Activities Capital expenditures (27.2) (64.2) Other
investing activities, net 1,577.0 61.5 Net cash
provided by (used in) investing activities 1,549.8 (2.7) Financing
Activities Net cash provided by (used in) financing activities
(1,434.1) (226.8) Effect of exchange rate changes on
cash and cash equivalents 34.3 6.4 Net increase
(decrease) in cash and cash equivalents 93.8 (122.8) Cash and cash
equivalents at beginning of period 501.9 466.5 Cash
and cash equivalents at end of period $ 595.7 $ 343.7
TEREX CORPORATION AND
SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(unaudited)
(in millions)
Q3 Year to Date 2017 2016 2017
2016 % of % of
% of % of
NetSales
NetSales
NetSales
NetSales
Consolidated
Net sales $ 1,111.2 $ 1,056.4 $ 3,299.8 $ 3,468.4 Income (loss)
from operations $ 64.2 5.8% $ 39.6 3.7% $ 133.8 4.1% $ 124.3 3.6%
AWP Net sales $ 556.7 $ 484.4 $ 1,622.1 $ 1,598.8
Income from operations $ 57.5 10.3% $ 48.6 10.0% $ 140.0 8.6% $
159.2 10.0%
Cranes Net sales $ 301.9 $ 282.8 $ 869.6
$ 947.5 Loss from operations $ (1.3) (0.4)% $ (12.1) (4.3)% $ (19.6
) (2.3)% $ (41.5 ) (4.4)%
MP Net sales $ 259.9 $
228.2 $ 789.5 $ 708.2 Income from operations $ 28.4 10.9% $ 19.5
8.5% $ 89.3 11.3% $ 63.9 9.0%
Corp and Other /
Eliminations Net sales $ (7.3) $ 61.0 $ 18.6 $ 213.9 Loss from
operations $ (20.4) 279.5% $ (16.4) (26.9)% $ (75.9 ) (408.1)% $
(57.3 ) (26.8)%
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 September 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.
Q3 2017
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
Earnings (loss)per share (2)
As Reported (GAAP) $ 56.7 (0.1 ) 56.6 $ 0.63 Restructuring &
Related (0.8 ) (0.3 ) (1.1 ) (0.01 ) Deal Related (3.2 ) (2.1 )
(5.3 ) (0.06 ) Transformation 9.1 (1.9 ) 7.2 0.08 Extinguishment of
Debt 0.7 (0.2 ) 0.5 0.01 Tax & Interim Period (3)
— (12.9 ) (12.9 )
(0.15 ) As Adjusted (Non-GAAP) $ 62.5 (17.5 ) 45.0 $ 0.50
(1) Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate (2) Based on diluted
average shares outstanding of 90.0 million (3) 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
YTD 2017
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
Earnings (loss)per share (2)
As Reported (GAAP) $ 86.6 5.1 91.7 $ 0.93 Restructuring &
Related (4.4 ) (0.8 ) (5.2 ) (0.05 ) Deal Related (28.1 ) (11.1 )
(39.2 ) (0.40 ) Transformation 35.4 (7.6 ) 27.8 0.28 Extinguishment
of Debt 53.1 (19.0 ) 34.1 0.35 Asset Impairment (1.6 ) 0.6 (1.0 )
(0.01 ) Tax & Interim Period (3) —
(8.1 ) (8.1 ) (0.08 ) As
Adjusted (Non-GAAP) $ 141.0 (40.9 ) 100.1 $ 1.02
(1) Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate (2) Based on diluted
average shares outstanding of 98.1 million (3) 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
Q3 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
(2)
Earnings (loss)per share (3)
As Reported (GAAP) $ 13.9 19.3 33.3 $ 0.31 Deal Related 6.2 (0.9 )
5.3 0.05 Restructuring & Related 5.8 (1.9 ) 3.9 0.03 Tax &
Interim Period (4) —
(23.5 ) (23.5 ) (0.22 ) As Adjusted
(Non-GAAP)
$
25.9 (7.0 ) 19.0 $ 0.17
(1) Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate (2) Excludes $0.1
million net loss attributable to non-controlling interest (3) Based
on diluted weighted average shares outstanding of 108.6 million (4)
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
YTD
2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
(2)
Earnings (loss)per share (3) As Reported (GAAP) $
38.3 82.5 120.9 $ 1.10 Deal Related 29.5 (6.4 ) 23.1 0.21
Restructuring & Related 48.0 (14.2 ) 33.8 0.31 Tax &
Interim Period (4) —
(93.2 ) (93.2 ) (0.85 ) As Adjusted
(Non-GAAP) $ 115.8 (31.3 ) 84.6 $ 0.77
(1) Tax effect on adjustments is calculated using the
applicable jurisdictional blended tax rate (2) Excludes $0.1
million net loss attributable to non-controlling interest (3) Based
on diluted weighted average shares outstanding of 109.3 million (4)
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
Terex Corporation200 Nyala Farm Road, Westport,
Connecticut 06880Telephone: (203) 222-7170, Fax: (203) 222-7976,
http://www.terex.com
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171031006060/en/
Terex CorporationBrian Henry, 203-222-5954Senior Vice President,
Business Development and Investor
Relationsbrian.henry@terex.com
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