WESTPORT, Conn., July 30, 2020 /PRNewswire/ -- Terex
Corporation (NYSE: TEX) today announced a second quarter 2020 loss
from continuing operations of $(3.2)
million, or $(0.05) per share,
on net sales of $690.5 million. In
the second quarter of 2019, the reported income from continuing
operations was $81.6 million, or
$1.14 per share, on net sales of
$1.3 billion. This compares to
income from continuing operations, as adjusted, of $86.9 million or $1.21 per share in the second quarter of 2019.
The Glossary at the end of this press release contains further
details regarding these non-GAAP measures.
John L. Garrison, Jr., Terex
Corporation Chairman and CEO, commented, "We continue to vigilantly
follow the necessary COVID-19 safety protocols to protect the
health and safety of our team members and their families, while
safely serving our customers. Our commitment to a Zero-Harm Safety
Culture is resolute and I am proud of our team members' rigor in
following the necessary safety protocols."
Mr. Garrison continued, "While the COVID-19 pandemic continues,
global economic activity has gradually recovered but remains below
pre-COVID-19 levels. In response to lower customer demand, we are
closely aligning our production plans."
"Aerial Work Platforms (AWP) rapidly reduced Aerials production
in response to lower customer bookings in North America and Europe but saw commercial demand return in
China," commented Mr. Garrison.
"In addition, the Utilities team has moved into its new,
state-of-the-art facility, which will improve production efficiency
and enable future growth," said Mr. Garrison.
Mr. Garrison continued, "Materials Processing (MP) demonstrated
strong execution by delivering high single digit operating margin
despite significantly lower demand in commercial end markets. MP
continues to position its business for future growth by expanding
into new geographies and delivering innovative, new products."
Positive free cash flow generation in the quarter of
$71 million resulted in the company
maintaining liquidity of approximately $1
billion which provides Terex with the financial flexibility
to successfully operate the business through the pandemic and be
well positioned for future growth.
"Our financial performance reflects the efforts of the entire
Terex team to swiftly reduce and remove costs from the business,"
said John D. Sheehan, Terex
Corporation Senior Vice President and Chief Financial Officer.
"Strong cost management and disciplined working capital management
will continue to be a focus of all Terex team members," continued
Mr. Sheehan.
Based on the Company's current expectations of the markets for
the remainder of 2020, the Company anticipates sales in the second
half of 2020 to be similar to the first half of the year.
Although the full severity and duration of the global pandemic is
unknown, it is anticipated that our operating results will continue
to be impacted. Also, net working capital is expected to be a
source of cash in the second half of 2020 as production will be
closely aligned with customer demand.
Mr. Garrison concluded, "While the economic outlook remains
uncertain, by producing in-line with customer demand and
aggressively managing costs, Terex is confident it will
successfully navigate these challenging times."
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.
The Glossary at the end of this press release contains further
details about this subject.
Total amounts in tables of this release may not calculate due to
rounding.
Conference Call
The Company has scheduled a conference call to review the
financial results on Friday, July 31,
2020 at 10:00 a.m. ET.
John L. Garrison,Jr., Terex Chairman and CEO, will host the
call. A webcast of this call can be accessed at
https://investors.terex.com. Participants are encouraged to
access the call 15 minutes prior to the starting time. The call
will also be archived in the Event Archive at
https://investors.terex.com.
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," "should," "intends,"
"anticipates," "believes," "plans," "projects," "estimates",
"will", 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 has been, and could be further,
adversely impacted by an outbreak of a new strain of coronavirus
("COVID-19"); our business is cyclical and weak general economic
conditions affect the sales of our products and financial results;
changes in import/export regulatory regimes and the escalation of
global trade conflicts could continue to negatively impact sales of
our products and our financial results; our financial results could
be adversely impacted by the United
Kingdom's departure from the European Union; changes
affecting the availability of the London Interbank Offered Rate may
have consequences on us that cannot yet reasonably be predicted;
our 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;
exposure from providing financing and credit support for some of
our customers; we may experience losses in excess of recorded
reserves; we are dependent upon third-party suppliers, making us
vulnerable to supply shortages and price increases; 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, 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 storage of sensitive data;
our ability to successfully implement our strategy; 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 is a global manufacturer of aerial work platforms and
materials processing machinery. The Company designs, builds and
supports products used in construction, maintenance, manufacturing,
energy, minerals and materials management applications. Terex's
products are manufactured in North and South America, Europe, Australia and Asia and sold worldwide. The Company engages
with customers through all stages of the product life cycle, from
initial specification and financing to parts and service support.
Terex uses its website (www.terex.com) to make information
available to its investors and the market.
Contact Information:
Randy
Wilson
Director, Investor Relations
(203) 221-5415
randy.wilson@terex.com
TEREX CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (unaudited)
(in millions, except per share data)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
$
|
690.5
|
|
|
$
|
1,306.9
|
|
|
$
|
1,524.1
|
|
|
$
|
2,443.5
|
|
Cost of goods
sold
|
|
(583.4)
|
|
|
|
(1,035.1)
|
|
|
|
(1,280.3)
|
|
|
|
(1,933.9)
|
|
Gross
profit
|
|
107.1
|
|
|
|
271.8
|
|
|
|
243.8
|
|
|
|
509.6
|
|
Selling, general and
administrative expenses
|
|
(99.7)
|
|
|
|
(145.8)
|
|
|
|
(243.5)
|
|
|
|
(283.9)
|
|
Income (loss) from
operations
|
|
7.4
|
|
|
|
126.0
|
|
|
|
0.3
|
|
|
|
225.7
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
0.8
|
|
|
|
1.8
|
|
|
|
1.7
|
|
|
|
3.5
|
|
Interest
expense
|
|
(16.5)
|
|
|
|
(24.6)
|
|
|
|
(34.2)
|
|
|
|
(47.6)
|
|
Other income (expense)
– net
|
|
2.1
|
|
|
|
(1.3)
|
|
|
|
0.5
|
|
|
|
(4.5)
|
|
Income (loss) from
continuing operations before income taxes
|
|
(6.2)
|
|
|
|
101.9
|
|
|
|
(31.7)
|
|
|
|
177.1
|
|
(Provision for)
benefit from income taxes
|
|
3.0
|
|
|
|
(20.3)
|
|
|
|
3.8
|
|
|
|
(38.3)
|
|
Income (loss) from
continuing operations
|
|
(3.2)
|
|
|
|
81.6
|
|
|
|
(27.9)
|
|
|
|
138.8
|
|
Income (loss) from
discontinued operations – net of tax
|
|
(1.0)
|
|
|
|
(17.3)
|
|
|
|
(1.2)
|
|
|
|
(141.7)
|
|
Gain (loss) on
disposition of discontinued operations- net of tax
|
|
(5.0)
|
|
|
|
10.8
|
|
|
|
(5.0)
|
|
|
|
11.4
|
|
Net income
(loss)
|
$
|
(9.2)
|
|
|
$
|
75.1
|
|
|
$
|
(34.1)
|
|
|
$
|
8.5
|
|
Basic Earnings (loss)
per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
(0.05)
|
|
|
$
|
1.14
|
|
|
$
|
(0.40)
|
|
|
$
|
1.96
|
|
Income (loss) from
discontinued operations – net of tax
|
|
(0.01)
|
|
|
|
(0.24)
|
|
|
|
(0.02)
|
|
|
|
(2.00)
|
|
Gain (loss) on
disposition of discontinued operations – net of tax
|
|
(0.07)
|
|
|
|
0.15
|
|
|
|
(0.07)
|
|
|
|
0.16
|
|
Net income
(loss)
|
$
|
(0.13)
|
|
|
$
|
1.05
|
|
|
$
|
(0.49)
|
|
|
$
|
0.12
|
|
Diluted Earnings
(loss) per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
(0.05)
|
|
|
$
|
1.14
|
|
|
$
|
(0.40)
|
|
|
$
|
1.93
|
|
Income (loss) from
discontinued operations – net of tax
|
|
(0.01)
|
|
|
|
(0.24)
|
|
|
|
(0.02)
|
|
|
|
(1.97)
|
|
Gain (loss) on
disposition of discontinued operations – net of tax
|
|
(0.07)
|
|
|
|
0.15
|
|
|
|
(0.07)
|
|
|
|
0.16
|
|
Net income
(loss)
|
$
|
(0.13)
|
|
|
$
|
1.05
|
|
|
$
|
(0.49)
|
|
|
$
|
0.12
|
|
Weighted average
number of shares outstanding in per share calculation
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
69.3
|
|
|
|
71.2
|
|
|
|
69.9
|
|
|
|
70.9
|
|
Diluted
|
|
69.3
|
|
|
|
71.7
|
|
|
|
69.9
|
|
|
|
71.8
|
|
TEREX CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEET (unaudited)
(in millions, except par value)
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
426.0
|
|
$
|
535.1
|
Other current
assets
|
|
1,281.1
|
|
|
1,484.6
|
Total current
assets
|
|
1,707.1
|
|
|
2,019.7
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment – net
|
|
400.8
|
|
|
389.4
|
Other non-current
assets
|
|
756.4
|
|
|
786.5
|
Total non-current
assets
|
|
1,157.2
|
|
|
1,175.9
|
Total
assets
|
$
|
2,864.3
|
|
$
|
3,195.6
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Notes payable and
current portion of long-term debt
|
$
|
7.1
|
|
$
|
6.9
|
Other current
liabilities
|
|
668.5
|
|
|
865.5
|
Total current
liabilities
|
|
675.6
|
|
|
872.4
|
Non-current
liabilities
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,167.4
|
|
|
1,168.8
|
Other non-current
liabilities
|
|
220.9
|
|
|
222.1
|
Total non-current
liabilities
|
|
1,388.3
|
|
|
1,390.9
|
Total
liabilities
|
|
2,063.9
|
|
|
2,263.3
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
800.4
|
|
|
932.3
|
Total liabilities and
stockholders' equity
|
$
|
2,864.3
|
|
$
|
3,195.6
|
|
|
|
|
|
|
TEREX CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS (unaudited)
(in millions)
|
|
|
|
|
Six Months
Ended
June 30,
|
|
|
|
2020
|
|
2019
|
|
Operating
Activities
|
|
|
|
|
Net income
(loss)
|
$
|
(34.1)
|
|
$
|
8.5
|
|
Depreciation and
amortization
|
|
23.6
|
|
|
25.8
|
|
Changes in operating
assets and liabilities and non-cash charges
|
|
22.8
|
|
|
(82.6)
|
|
Net cash provided by
(used in) operating activities
|
|
12.3
|
|
|
(48.3)
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
(42.1)
|
|
|
(35.1)
|
|
Other investing
activities, net
|
|
7.5
|
|
|
9.9
|
|
Net cash provided by
(used in) investing activities
|
|
(34.6)
|
|
|
(25.2)
|
|
Financing
Activities
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
(78.9)
|
|
|
97.9
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(9.0)
|
|
|
(1.9)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(110.2)
|
|
|
22.5
|
|
Cash and cash
equivalents at beginning of period
|
|
540.1
|
|
|
372.1
|
|
Cash and cash
equivalents at end of period
|
$
|
429.9
|
|
$
|
394.6
|
|
|
|
|
|
|
|
|
TEREX CORPORATION
AND SUBSIDIARIES SEGMENT RESULTS
DISCLOSURE (unaudited)
(in millions)
|
|
|
|
|
|
Q2
|
|
Year to
Date
|
|
2020
|
2019
|
|
2020
|
2019
|
|
|
|
%
of
|
|
|
%
of
|
|
|
|
%
of
|
|
|
%
of
|
Net
Sales
|
Net
Sales
|
|
Net
Sales
|
Net
Sales
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
690.5
|
|
$
|
1,306.9
|
|
|
$
|
1,524.1
|
|
|
$
|
2,443.5
|
|
|
Income (loss) from
operations
|
$
|
7.4
|
1.1%
|
$
|
126.00
|
9.6%
|
|
$
|
0.3
|
|
—%
|
$
|
225.7
|
|
9.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
413.9
|
|
$
|
870.4
|
|
|
$
|
925.6
|
|
|
$
|
1,598.3
|
|
|
Income (loss) from
operations
|
$
|
(5.0)
|
(1.2)%
|
$
|
86.3
|
9.9%
|
|
$
|
(10.9)
|
|
(1.2)%
|
$
|
145.9
|
|
9.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
263.6
|
|
$
|
430.9
|
|
|
$
|
579.2
|
|
|
$
|
841.4
|
|
|
Income (loss) from
operations
|
$
|
23.4
|
8.9%
|
$
|
65.3
|
15.2%
|
|
$
|
48.4
|
|
8.4%
|
$
|
124.8
|
|
14.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corp and Other /
Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
13.0
|
|
$
|
5.6
|
|
|
$
|
19.3
|
|
|
$
|
3.8
|
|
|
Loss from
operations
|
$
|
(11.0)
|
*
|
$
|
(25.6)
|
*
|
|
$
|
(37.2)
|
|
*
|
$
|
(45.0)
|
|
*
|
* - Not a meaningful
percentage
|
|
|
|
|
|
|
|
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, 2020, unless
otherwise indicated.
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
2019
|
|
Income (loss) from
Continuing Operations before Taxes
|
(Provision for)
benefit from Income Taxes (1)
|
Income (loss) from
Continuing Operations
|
Earnings
(loss)
per share
(2)
|
As Reported
(GAAP)
|
|
$
|
101.9
|
|
(20.3)
|
|
81.6
|
|
$
|
1.14
|
|
Restructuring &
Related
|
|
8.7
|
|
(1.9)
|
|
6.8
|
|
0.09
|
|
Transformation
|
|
4.0
|
|
(0.7)
|
|
3.3
|
|
0.05
|
|
Deal
Related
|
|
(7.0)
|
|
0.3
|
|
(6.7)
|
|
(0.09)
|
|
Other
|
|
2.4
|
|
—
|
|
2.4
|
|
0.03
|
|
Tax & Interim
Period (3)
|
|
—
|
|
(0.5)
|
|
(0.5)
|
|
(0.01)
|
|
As Adjusted
(Non-GAAP)
|
|
$
|
110.0
|
|
(23.1)
|
|
86.9
|
|
$
|
1.21
|
|
|
|
|
|
|
|
(1) Tax effect on
adjustments is calculated using the applicable jurisdictional
blended tax rate
|
(2) Based on diluted
average shares outstanding of 71.7 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
2019
|
|
Income (loss) from
Continuing Operations before Taxes
|
(Provision for)
benefit from Income Taxes (1)
|
Income (loss) from
Continuing Operations
|
Earnings (loss) per
share (2)
|
As Reported
(GAAP)
|
|
$
|
177.1
|
|
(38.3)
|
|
138.8
|
|
$
|
1.93
|
|
Restructuring &
Related
|
|
10.4
|
|
(2.3)
|
|
8.1
|
|
0.11
|
|
Transformation
|
|
8.1
|
|
(1.4)
|
|
6.7
|
|
0.09
|
|
Deal
Related
|
|
(6.8)
|
|
0.3
|
|
(6.5)
|
|
(0.09)
|
|
Tax & Interim
Period (3)
|
|
—
|
|
2.1
|
|
2.1
|
|
0.03
|
|
As Adjusted
(Non-GAAP)
|
|
$
|
188.8
|
|
(39.6)
|
|
149.2
|
|
$
|
2.07
|
|
|
(1) Tax effect on
adjustments is calculated using the applicable jurisdictional
blended tax rate
|
(2) Based on diluted
average shares outstanding of 71.8 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
|
Free Cash Flow The Company calculates a non-GAAP
measure of free cash flow. The Company defines free cash flow
as Net cash provided by (used in) operating activities, plus
(minus) increases (decreases) in Terex Financial Services finance
receivables consisting of sales-type leases and commercial loans
("TFS Assets"), less Capital expenditures, net of proceeds from
sale of capital assets. The Company believes that this
measure of free cash flow provides management and investors further
useful information on cash generation or use in our primary
operations. The following table reconciles Net cash provided
by (used in) operating activities to free cash flow (in
millions):
|
|
Three Months
Ended
6/30/2020
|
|
Six Months
Ended
6/30/2020
|
Net cash provided by
(used in) operating activities
|
|
$
|
101.0
|
|
|
$
|
12.3
|
|
Increase (decrease)
in TFS assets
|
|
(18.1)
|
|
|
(22.1)
|
|
Capital expenditures,
net of proceeds from sale of capital assets
(1)
|
|
(11.7)
|
|
|
(31.9)
|
|
Free cash
flow
|
|
$
|
71.2
|
|
|
$
|
(41.7)
|
|
|
(1) Includes $4.5 million and $9.0
million of proceeds from sale of capital assets within Proceeds
(payments) from the disposition of discontinued operations in the
Condensed Consolidated Statement of Cash Flows for the three and
six months ended June 30, 2020, respectively.
|
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SOURCE Terex Corporation