WESTPORT, Conn.--(BUSINESS WIRE)--April 23, 2002--Terex
Corporation (NYSE: TEX) today announced first quarter 2002 net income
of $16.9 million or $0.44 per share, compared to $10.1 million or
$0.37 per share for the first quarter of 2001.
Excluding special items, income for the first quarter of 2002 was
$7.0 million, or $0.18 per share, compared to $12.4 million, or $0.45
per share, for the first quarter of 2001. Special items in the first
quarter of 2002 include a $1.2 million restructuring charge and $10.7
million of income related to the write-off of negative goodwill, while
the first quarter of 2001 includes $2.3 million related to a loss on
retirement of debt. Fully diluted weighted average shares outstanding
for the first quarter of 2002 was 38.7 million, compared to 27.4
million for the first quarter of 2001. Net sales for the first quarter
of 2002 were $582.0 million, a 22% increase over the first quarter of
2001.
A financial summary is shown below:
Terex Corporation:
-----------------
First Quarter
-----------------------------------------------------
(Dollars in millions, except per share amounts)
2002 2001
------------------- ----------------------
% of % of
Sales Sales
-------- ---------
Sales $ 582.0 $ 477.4
======= =======
Gross profit (1) $ 91.3 15.7% $ 78.6 16.5%
SG&A 59.8 10.3% 40.6 8.5%
------- -------
Operating profit (1) 31.5 5.4% 38.0 8.0%
Interest & other (22.4) 3.8% (19.8) 4.1%
Income taxes (2.9) 0.5% (5.8) 1.2%
Loss on retirement
of debt --- --- (2.3) 0.5%
Change in accounting
principle (2). 10.7 1.8% --- ---
------- ------- -------
Net income $ 16.9 2.9% $ 10.1 2.1%
======= ========
Earnings per share $ 0.44 $ 0.37
Earnings per share,
excluding special
items (3) $ 0.18 $ 0.45
Backlog $ 299.9 $ 191.5
EBITDA (4) $ 40.0 6.9% $ 47.2 9.9%
Shares outstanding 38.7 27.4
(1) Includes $1.2 million in restructuring charges for the first
quarter of 2002.
(2) Represents the write-off of negative goodwill related to the
adoption of FAS 141 "Business Combinations."
(3) Excludes $1.2 million ($0.8 million, net of income taxes) in
restructuring charges and $10.7 million income for change in
accounting principle in 2002 and $2.3 million in loss on retirement of
debt for 2001.
(4) Excludes $1.2 million in restructuring charges in 2002.
First Quarter 2002
Net sales for the first quarter reached $582.0 million, compared
to $477.4 million during the first quarter of 2001, an increase of
22%. The growth in the first quarter was driven primarily by
acquisitions, as the results of Atlas Terex and CMI Terex were
included for a full quarter and the results of Schaeff and Pacific
Utility Equipment Company were added during the first quarter of 2002.
Pacific Utility Equipment Company, based in Portland, Oregon, performs
final assembly, distribution, equipment rental, and after-market
service for the utility, telecommunications and municipal markets.
Excluding the impact of acquisitions, net sales decreased
approximately 4% quarter over quarter. Operating expenses increased to
$59.8 million, or 10.3% of revenues, from $40.6 million, or 8.5% of
revenues, in the first quarter of last year. Excluding acquisitions,
operating expenses decreased to $38.4 million, or 8.5% of revenues,
reflecting management's continued emphasis on cost control. Operating
profit was $31.5 million during the quarter compared to $38.0 million
in the first quarter of last year, due to a $1.2 million restructuring
charge related to the previously announced consolidation of Terex's
hot mix asphalt plant businesses, double digit revenue declines in the
North American mobile hydraulic crane and Cedarapids businesses, a
shift in product mix and a competitive pricing environment in some end
markets. Net interest expense increased to $21.2 million during the
quarter from $19.0 million in the first quarter of 2001, as higher
average debt balances more than offset the effects of lower interest
rates. Other expense for the quarter was ($1.2) million compared to
($0.8) million in the first quarter of 2001, primarily related to the
amortization of debt issuance costs. The effective tax rate for the
first quarter of 2002 was 32%, equal to last year's first quarter
rate. Fully diluted average shares outstanding was 38.7 million for
the quarter, compared to 27.4 million in the first quarter of 2001,
reflecting the impact of the Company's offering of 5.75 million shares
in December 2001 and certain stock issued in connection with the
Company's recent acquisitions.
"It is encouraging that we completed the first quarter somewhat
ahead of our expectations, but our environment remains challenging and
we must continue to execute our growth plan while keeping our costs in
line," commented Ronald M. DeFeo, Terex Chairman and Chief Executive
Officer. "The initiatives underway within Terex support both our short
and long-term goals. We are building a broader, more geographically
diverse company with significant franchise value while continuing to
improve our balance sheet."
Mr. DeFeo added, "We believe the company is positioned to take
advantage of the eventual economic recovery. The integration of our
acquisitions is on schedule and contributed in excess of $125 million
in revenues and, as expected, the acquisitions in total were slightly
dilutive to earnings for the first quarter. Plant consolidations and
restructurings and other cost saving initiatives are on or ahead of
schedule. We are growing our market share where we see opportunities
and holding share in virtually all of our product groups. Our recent
equity offering of 5.35 million shares in April 2002 positions the
Company to seize growth opportunities that may from time to time
present themselves in the market place. We believe that achieving our
goal of doubling the size of the Company by 2005 will be financed
through a balance between debt and equity, which is consistent with
our commitment to maintain a balance between growth and leverage."
Segment Performance
Terex Americas
First Quarter
----------------------------------------------
(Dollars in millions)
2002 2001
------------------ -----------------------
% of % of
Sales Sales
--------- --------
Net Sales $ 290.0 $ 238.3
======= =======
Gross profit $ 40.8 14.1% $ 35.4 14.9%
SG&A 25.7 8.9% 16.3 6.8%
------- ------- -------
Operating profit $ 15.1 5.2% $ 19.1 8.0%
======= =======
Backlog $ 115.1 $ 102.5
Net sales in the Terex Americas group for the quarter increased
$51.7 million to $290.0 million from $238.3 million in the first
quarter of 2001. Excluding the impact of acquisitions, sales declined
approximately 4% compared to the first quarter of last year. Net sales
were impacted by double digit declines within the mobile hydraulic
crane and Cedarapids businesses, partially offset by growth in the
off-highway construction truck and lattice boom businesses as well as
the continued growth and penetration of the Terex loader backhoe in
the North American market.
Operating profit for the quarter was $15.1 million, or 5.2% of
revenues, compared to $19.1 million, or 8.0% of revenues, in the first
quarter of 2001. Operating profit and operating margins were
negatively impacted by a $1.2 million restructuring charge related to
the previously announced consolidation of Terex's hot mix asphalt
plant businesses and volume declines in the mobile hydraulic crane,
Cedarapids and light construction businesses. Product mix also had an
impact during the quarter, as products that are distributed but not
manufactured in the Americas made up a larger portion of the total
revenue base. Operating expenses increased to $25.7 million, or 8.9%
of revenues, from $16.3 million, or 6.8% of revenues, in the first
quarter of 2001. Excluding acquisitions, operating expenses decreased
to $15.5 million, or 6.8% of revenues.
"The market in the Americas remains challenging, with a mixture of
results across our businesses," commented Ernie Verebelyi, Group
President - Terex Americas. "The plant consolidations and
restructurings announced in the third quarter of 2001 are on or ahead
of schedule and cost reductions and operating improvements are well
underway in the Americas with our recent acquisitions of Schaeff,
Fuchs, and Pacific Utility. Even in these difficult times, however, we
still see opportunities to grow our franchise. Our distribution
business in the Americas, which includes the off-highway construction
truck business, the Powerscreen group and the Terex loader backhoe
business, is up approximately 65% quarter over quarter. Our loader
backhoe business has received almost as many orders in the first
quarter of 2002 as in all of last year. The products from the recent
acquisitions of Atlas Terex and Schaeff have been introduced, where
appropriate, under the Terex brand name in the Americas, and our rigid
truck business is off to a good start in 2002. We will continue to
grow the Terex franchise as we focus on penetrating and growing those
markets where we have relatively low share and significant growth
opportunity."
"The integration of CMI Terex is well underway," commented Fil
Filipov, Terex Executive Vice President. "Through our facility
rationalizations and cost saving initiatives, we have achieved annual
cost savings of $25 million. Our focus now is increasing production
and growing the business. We believe we have a great product offering
and will look to expand and grow market share."
Terex Europe
First Quarter
----------------------------------------------
(Dollars in millions)
2002 2001
------------------ -----------------------
% of % of
Sales Sales
--------- --------
Net Sales $ 294.1 $ 223.9
======== ========
Gross profit $ 44.3 15.1% $ 31.7 14.2%
SG&A 26.1 8.9% 15.7 7.0%
-------- --------
Operating profit $ 18.2 6.2% $ 16.0 7.1%
======== ========
Backlog $ 182.4 $ 89.9
Net sales for the Terex Europe group reached $294.1 million during
the quarter, a 31% increase from $223.9 million in last year's first
quarter. Excluding the impact of acquisitions and divestitures, net
sales were up approximately 4% quarter over quarter, reflecting the
strong performance at the Benford and Powerscreen group businesses and
improvements within the lifting group, primarily in Spain and the
United Kingdom.
Operating profit was $18.2 million, or 6.2% of revenues, compared
to $16.0 million, or 7.1% of revenues, for last year's first quarter.
Excluding acquisitions, operating margin actually increased to 7.8% of
revenues. Operating expenses were $26.1 million, or 8.9% of revenues,
compared to $15.7 million, or 7.0% of revenues, in the first quarter
of 2001, reflecting the higher cost structure of recently acquired
businesses included in the 2002 results. Excluding acquisitions,
operating expenses actually decreased to $15.0 million, or 6.7% of
sales.
"Despite the challenging markets we compete in today, the Terex
Europe group posted solid results for the quarter," commented Colin
Robertson, President - Terex Europe. "The investments we have made in
our lifting distribution are beginning to pay dividends as we have
seen growth in both the U.K. and Spanish markets. The Powerscreen
group continues to grow as we see the market moving more towards
mobile plants from stationary plants to increase flexibility and
productivity. We have seen improvements in the U.K. market for the
Benford products as rental companies began buying again in the first
quarter of 2002. The German market remains weak, but we remain
optimistic about revenue growth within Europe as we broaden the Terex
franchise, continue integrating the recently acquired businesses and
expand cross selling of our products through our worldwide
distribution channels."
"We completed the acquisition of Schaeff in January 2002 and we
are swiftly executing on our integration plan," commented Fil Filipov.
"Schaeff and Atlas Terex provide a strong distribution network for us
in Germany with over 60 dealers. Even though the German market is
down, we see growth opportunities for Terex and have already began
offering other Terex products through this distribution network." Mr.
Filipov added, "We have positioned these companies for growth and see
tremendous opportunities to grow our franchise in those markets where
we have low market share."
Terex Mining
First Quarter
----------------------------------------------
(Dollars in millions)
2002 2001
------------------ -----------------------
% of % of
Sales Sales
--------- --------
Net Sales $ 65.3 $ 61.1
======= ========
Gross profit $ 8.1 12.4% $ 11.7 19.1%
SG&A 6.5 10.0% 8.7 14.2%
------- --------
Operating profit $ 1.6 2.5% $ 3.0 4.9%
======= ========
Backlog $ 43.5 $ 19.2
Net sales in the Terex Mining group were $65.3 million in the
quarter, compared to $61.1 million in the first quarter of 2001,
reflecting increases in both the truck and shovel businesses.
Operating profit for the quarter decreased to $1.6 million, or 2.5% of
revenues, compared to $3.0 million, or 4.9% of revenues, for the first
quarter of 2001. The decrease in operating profit and operating margin
was driven primarily by product mix within the shovel business for
both new machines and spare parts. Also impacting the comparisons
quarter over quarter was the reclassification of service expenses from
operating expenses to cost of sales.
"The general uncertainty in the global economies and depressed
commodity prices has created a very difficult operating environment,"
commented Thys de Beer, President - Terex Mining. "Although there is a
tremendous amount of bidding activity going on in the market, there
have been very few orders placed worldwide on the truck side of the
business. The shovel business, on the other hand, is doing quite well
and has orders through the second quarter of 2002. Although the market
is difficult, we continue to remain customer focused and are looking
for ways to improve our cost structure and increase profitability in
the current economic environment."
Capital Structure
"During the first quarter we used approximately $14 million in
cash from operations, reflecting the general seasonality of our
business as we go into the selling season," commented Joseph F.
Apuzzo, Chief Financial Officer. "Working capital as a percent of
annualized sales decreased to 36% from 38% at year end. Our short-term
goal is still to reduce working capital to 30% of revenues within the
next 12-15 months," Mr. Apuzzo added. "Reducing working capital
remains a focus of management. We are committed to reducing financial
leverage and risk through better asset utilization and conversion of
operating profit into cash flow."
Net debt at the end of the quarter increased to $922.3 million
from $805.0 million at year-end, primarily reflecting the impact of
recent acquisitions. Taking into account the effect of the April 2002
equity offering, net debt would decrease to approximately $809 million
and net debt to book capitalization would decrease to 51.5% from 57.5%
at year end.
Outlook
"After the first quarter results, I remain cautiously optimistic
about 2002," stated Ronald DeFeo. "I believe we have reached the
bottom of the trough, but visibility is still difficult in the short
term to predict the specific timing of any recovery. I remain
comfortable with our previous 2002 full year earnings guidance after
you adjust for the recent equity offering, which has a dilutive effect
of approximately 5% on the full year. Furthermore, I would like to
emphasize that we are an overall stronger company today than a year
ago both from a customer and growth potential point of view."
Recent Developments
On April 18, 2002, Terex announced that it had completed the sale
of 5 million shares of common stock at a price to the public of $21.75
per share. The underwriters of the offering subsequently exercised
their option to purchase an additional 346,700 shares of common stock
from the Company. Net proceeds to Terex from this offering of
approximately $113 million will be used to repay outstanding
indebtedness and for general corporate purposes, including potential
acquisitions.
Safe Harbor Statement
The above contains forward-looking information based on Terex's
current expectations. Because forward-looking statements involve risks
and uncertainties, actual results could differ materially. Such risks
and uncertainties, many of which are beyond Terex's control, include
among others: Terex's business is highly cyclical and weak general
economic conditions may affect the sales of its products and its
financial results; the sensitivity of construction and mining activity
to interest rates, government spending and general economic
conditions; the ability to successfully integrate acquired businesses;
the retention of key management personnel; foreign currency
fluctuations; Terex's businesses are very competitive and may be
affected by pricing, product initiatives and other actions taken by
competitors; the effects of changes in laws and regulations; Terex's
business is international in nature and is subject to changes in
exchange rates between currencies, as well as international politics;
the ability of suppliers to timely supply Terex parts and components
at competitive prices; the financial condition of suppliers and
customers, and their continued access to capital; Terex's ability to
timely manufacture and deliver products to customers; Terex's
substantial amount of debt and its need to comply with restrictive
covenants contained in Terex's debt agreements; compliance with
applicable environmental laws and regulations; and other factors,
risks, uncertainties more specifically set forth in Terex's public
filings with the SEC. Actual events or the actual future results of
Terex may differ materially from any forward looking statement due to
those and other risks, uncertainties and significant factors. The
forward-looking statements herein 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 Terex's
expectations with regard thereto or any changes in events, conditions,
or circumstances on which any such statement is based.
Terex Corporation is a diversified global manufacturer based in
Westport, Connecticut, with 2001 annual revenues in excess of $1.8
billion. Terex is involved in a broad range of construction,
infrastructure, recycling and mining-related capital equipment under
the brand names of Advance, American, Amida, Atlas, Bartell, Bendini,
Benford, Bid-Well, B.L. Pegson, Canica, Cedarapids, Cifali, CMI,
Coleman Engineering, Comedil, CPV, Fermec, Finlay, Franna, Fuchs,
Grayhound, Hi-Ranger, Italmacchine, Jaques, Johnson-Ross, Koehring,
Lectra Haul, Load King, Lorain, Marklift, Matbro, Morrison, Muller,
O&K, Payhauler, Peiner, P&H, Powerscreen, PPM, Re-Tech, RO, Royer,
Schaeff, Simplicity, Square Shooter, Telelect, Terex, and Unit Rig.
More information on Terex can be found at www.terex.com.
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
(unaudited)
For the Three Months
Ended March 31,
---------------------------
2002 2001
------------- -------------
Net sales $ 582.0 $ 477.4
Cost of goods sold 490.7 398.8
------------- -------------
Gross profit 91.3 78.6
Selling, general and
administrative expenses 59.8 40.6
------------- -------------
Income from operations 31.5 38.0
Other income (expense):
Interest income 0.8 2.0
Interest expense (22.0) (21.0)
Other income (expense) - net (1.2) (0.8)
------------- -------------
Income before income taxes and
extraordinary items 9.1 18.2
Provision for income taxes (2.9) (5.8)
------------- -------------
Income before
extraordinary items 6.2 12.4
Extraordinary loss on
retirement of debt --- (2.3)
Cumulative effect of change
in accounting principle 10.7 ---
------------- -------------
Net income $ 16.9 $ 10.1
============= =============
EARNINGS PER SHARE:
Basic:
Income before
extraordinary items $ 0.16 $ 0.46
Extraordinary loss on
retirement of debt --- (0.09)
Cumulative effect of change
in accounting principle 0.28 ---
------------- -------------
Net income $ 0.44 $ 0.37
============= =============
Diluted:
Income before
extraordinary items $ 0.16 $ 0.45
Extraordinary loss on
retirement of debt --- (0.08)
Cumulative effect of change
in accounting principle 0.28 ---
------------- -------------
Net income $ 0.44 $ 0.37
============= =============
Weighted average number of common
and common equivalent shares
outstanding in per
share calculation
Basic 38.0 26.8
Diluted 38.7 27.4
TEREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In millions, except par value)
(Unaudited)
March 31, December 31,
2002 2001
---------------- ----------------
CURRENT ASSETS
Cash and cash equivalents $ 158.8 $ 250.4
Trade receivables 437.5 351.1
Inventories 743.3 704.8
Deferred taxes 24.9 23.7
Other current assets 56.6 53.0
---------------- ----------------
Total Current Assets 1,421.1 1,383.0
LONG-TERM ASSETS
Property, plant and equipment 167.6 173.9
Goodwill 712.4 620.1
Deferred taxes 81.2 75.4
Other assets 151.8 134.6
---------------- ----------------
TOTAL ASSETS $ 2,534.1 $ 2,387.0
================ =================
CURRENT LIABILITIES
Notes payable and current
portion of long-term debt $ 50.3 $ 34.7
Trade accounts payable 346.6 291.0
Accrued compensation
and benefits 40.6 37.4
Accrued warranties and
product liability 60.8 62.7
Other current liabilities 202.3 201.3
---------------- ----------------
Total Current Liabilities 700.6 627.1
NON CURRENT LIABILITIES
Long-term debt, less
current portion 1,030.8 1,020.7
Other 154.0 143.8
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Equity rights 0.5 0.5
Common Stock, $0.01 par value --
Authorized 150.0 shares;
issued 39.7 and 37.5 shares at
March 31, 2002 and December 31,
2001, respectively 0.4 0.4
Additional paid-in capital 575.1 532.4
Retained earnings 216.8 199.9
Accumulated other
comprehensive income (126.3) (120.3)
Less cost of shares of common
stock in treasury
(1.2 and 1.1 shares at March 31,
2002 and December 31,
2001, respectively) (17.8) (17.5)
---------------- ----------------
Total Stockholders' Equity 648.7 595.4
---------------- ----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,534.1 $ 2,387.0
================= =================
TEREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(unaudited)
Three Months Ended
March 31,
--------------------------------
2002 2001
------------ ---------------
OPERATING ACTIVITIES
Net income $ 16.9 $ 10.1
Adjustments to reconcile net
income to cash provided by
(used in) operating activities:
Depreciation 6.9 5.6
Amortization 1.4 4.2
Extraordinary loss on
retirement of debt --- 2.3
Gain on sale of fixed assets --- (0.1)
Changes in operating
assets and liabilities
(net of effects of acquisitions):
Trade receivables (53.3) (15.9)
Inventories (12.0) (33.8)
Trade accounts payable 34.3 18.6
Other, net (8.7) (16.6)
------------ ---------------
Net cash used in
operating activities (14.5) (25.6)
------------ ---------------
INVESTING ACTIVITIES
Acquisition of businesses,
net of cash acquired (72.5) (7.7)
Capital expenditures (5.9) (3.6)
Proceeds from sale of assets 0.4 0.8
------------ ---------------
Net cash used in
investing activities (78.0) (10.5)
------------ ---------------
FINANCING ACTIVITIES
Proceeds from issuance of
long-term debt,
net of issuance costs --- 287.9
Principal borrowings (repayments)
of long-term debt 0.7 (194.2)
Net repayments under revolving
line of credit agreements 1.6 (0.5)
Other (0.3) (0.6)
------------ ---------------
Net cash provided by
financing activities 2.0 92.6
------------ ---------------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS (1.1) (1.6)
------------ ---------------
NET (DECREASE) / INCREASE IN
CASH AND CASH EQUIVALENTS (91.6) 54.9
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 250.4 181.4
------------ ---------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 158.8 $ 236.3
============ ===============
CONTACT: |
Terex Corporation, Westport |
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Kevin O'Reilly, 203/222-5943 |
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