WESTPORT, Conn., Aug 03, 2005 (BUSINESS WIRE) -- Terex Corporation (NYSE: TEX) today announced net income
for the second quarter of 2005 of $78.8 million, or $1.54 per share,
compared to net income of $59.1 million, or $1.17 per share, for the
second quarter of 2004. Excluding the impact of special items for the
second quarter of 2005, net income was $80.5 million, or $1.58 per
share, compared to net income of $52.3 million, or $1.03 per share,
for the second quarter of 2004. Special items for the second quarter
of 2005 included charges for investigation costs associated with the
Company's internal review and restatement of its financial statements
for the fiscal years 2000, 2001, 2002, and 2003, and charges relating
to general corporate restructuring. Special items for the second
quarter of 2004 primarily included gains on the sale of real estate
and the favorable settlement of litigation proceedings related to the
Company's acquisition of the O&K mining business, partially offset by
costs related to the restructuring of Terex-Atlas facilities in the UK
and Germany, loss on the sale of certain discontinued service parts
businesses, a write-down of a joint venture investment and accelerated
amortization arising from the early retirement of debt. As discussed
in the "Capital Structure and Taxes" section of this release, for the
period ended June 30, 2005, the Company is using an estimated tax rate
of 33.8%, versus the 19.7% rate used for the second quarter of 2004.
Net sales increased to $1,763.8 million in the second quarter of
2005, an increase of 32% from $1,336.4 million in the second quarter
of 2004. Net debt (consisting of long-term debt, including current
portion of long-term debt, less cash and cash equivalents) at June 30,
2005 decreased by $139 million from March 31, 2005 levels.
For the six months ended June 30, 2005, net sales totaled $3,213.0
million, an increase of 35% from $2,380.2 million for the six months
ended June 30, 2004. Net income for the first six months of 2005 was
$108.7 million, or $2.13 per share, compared to net income of $76.1
million, or $1.50 per share, for the first six months of 2004. Net
income, excluding special items, was $111.1 million, or $2.17 per
share, for the first six months of 2005, compared to net income,
excluding special items, of $69.3 million, or $1.37 per share, for the
first six months of 2004. Net debt decreased by $47 million in the six
months ended June 30, 2005.
"Terex continues to gain momentum, both in the marketplace and
from our internal initiatives," said Ronald M. DeFeo, Terex's Chairman
and Chief Executive Officer. "Our incremental margin (defined as the
year over year change in income from operations divided by the year
over year change in net sales) in the quarter was 13%, well above the
6% we achieved in the first quarter of 2005. We have a commitment to
fulfilling customer demand and growing our products' presence in the
marketplace while improving operating margin through price realization
and enhanced manufacturing efficiencies. We are pleased with the over
50% increase in net income and EPS for the second quarter versus last
year, excluding special items."
Mr. DeFeo added, "I remain optimistic about our prospects for this
year and beyond, and feel that our progress on all fronts,
particularly in profitability, capital structure, and the Terex
Business System implementation, are delivering disproportionately
higher returns on invested capital ("ROIC") versus our peer group.
This will provide meaningful returns to our stakeholders. Many of our
businesses contributed to this strong second quarter earnings
performance, but we still have operational opportunities to improve. A
number of our end-markets have yet to meaningfully contribute to our
overall profitability. As such, we view this quarter as a good step
along the path to our previously stated longer term objectives."
Mr. DeFeo continued, "Additionally, during the second quarter of
2005, we reduced our net debt by $139 million. This results from
continuing efforts to improve our effective use of working capital
(the sum of accounts receivable and inventory less accounts payable),
as well as improving profitability and our corporate focus on
generating strong incremental ROIC. We expect to pay down debt in the
short term, continue to strengthen our capital structure and position
the Company to retire our expensive bonds in 2006 with cash, which has
been another of our previously stated goals."
"We continue to make progress on our financial restatement
process," added Mr. DeFeo. "While I am not able to provide closure to
the process at this point, I believe I can state that resolution of
this matter is a short time away. We again would like to stress that,
although this has been a prolonged process, the expected impact on our
stockholders' equity at December 2003 will not be material."
In this press release Terex refers to various non-GAAP (generally
accepted accounting principles) financial measures. These measures may
not be comparable to similarly titled measures being disclosed by
other companies. The tables below provide a reconciliation of the
reported GAAP numbers for the second quarters and first six months of
2005 and 2004 and the reported numbers excluding special items. Terex
believes that this information is useful to understanding its
operating results and the ongoing performance of its underlying
businesses without the impact of special items. Terex also discloses
EBITDA and net debt, as they are commonly referred to financial
metrics used in the investing community. Terex believes that
disclosure of EBITDA and net debt will be helpful to those reviewing
its performance and that of other comparable companies, as EBITDA and
net debt provide information on Terex's leverage position, ability to
meet debt service and capital expenditure and working capital
requirements, and EBITDA is also an indicator of profitability.
While the Company has not yet completed its audited financial
statements for 2004, it currently does not anticipate that the
financial results for the period ended June 30, 2004 included in this
release will be restated.
A financial summary is shown below:
Three months ended June 30,
--------------------------------------------------------
2005 2004
--------------------------- ----------------------------
(in millions, except per share amounts)
Excluding Excluding
Special Special Special Special
Reported Items(2) Items Reported Items(3) Items
--------------------------- ---------------------------
Net Sales $1,763.8 $ --- $ 1,763.8 $1,336.4 $ --- $ 1,336.4
======== ======== ========= ======== ======== =========
Gross profit $ 283.9 $ 1.1 $ 285.0 $ 195.0 $ 9.9 $ 204.9
SG&A 141.8 (1.4) 140.4 119.2 (1.6) 117.6
-------- -------- --------- -------- -------- ---------
Income from
Operations 142.1 2.5 144.6 75.8 11.5 87.3
Other income
(expense) (23.1) --- (23.1) (2.2) (19.9) (22.1)
Provision for
income taxes (40.2) (0.8) (41.0) (14.5) 1.6 (12.9)
-------- -------- --------- -------- -------- ---------
Net income $ 78.8 $ 1.7 $ 80.5 $ 59.1 $ (6.8)$ 52.3
======== ======== ========= ======== ======== =========
Earnings per
share $ 1.54 $ 1.58 $ 1.17 $ 1.03
EBITDA (1) $ 157.8 $ 160.3 $ 94.9 $ 104.8
Backlog $1,370.6 $ 2.5 $ 1,370.6 $ 916.2 $ 9.9 $ 916.2
Average Fully
Diluted
Shares
Outstanding 51.1 51.1 50.7 50.7
(1) EBITDA is calculated as income from operations plus depreciation
and amortization included in income from operations.
(2) Special items, net of tax, relate to charges for investigation
costs associated with the Company's internal review ($0.3
million), and charges related to restructuring activities, namely
at the corporate level, and at the business units of Cedarapids
and Terex UK ($1.4 million).
(3) Special items, net of tax, relate to the gain on the sale of
facilities ($13.3 million), costs associated with restructuring
activities, mainly in the Terex-Atlas businesses ($6.1 million),
the net gain related to the favorable settlement of litigation
proceedings regarding the O&K acquisition ($3.4 million), the loss
on the sale of discontinued service parts business activities
($1.8 million), the write-down of investments ($0.8 million), and
the accelerated amortization arising from the early retirement of
debt ($1.2 million).
Six months ended June 30,
---------------------------------------------------------
2005 2004
---------------------------- ----------------------------
(in millions, except per share amounts)
Excluding Excluding
Special Special Special Special
Reported Items(2) Items Reported Items(3) Items
--------------------------- ---------------------------
Net Sales $3,213.0 $ --- $ 3,213.0 $2,380.2 $ - $ 2,380.2
======== ======== ========= ======== ======== =========
Gross profit $ 490.6 $ 1.2 $ 491.8 $ 355.3 $ 9.9 $ 365.2
SG&A 278.2 (2.1) 276.1 231.2 (1.6) 229.6
-------- -------- --------- -------- -------- ---------
Income from
Operations 212.4 3.3 215.7 124.1 11.5 135.6
Other income
(expense) (47.5) --- (47.5) (26.1) (19.9) (46.0)
Provision
for income
taxes (56.2) (1.1) (57.1) (21.9) 1.6 (20.3)
-------- -------- --------- -------- -------- ---------
Net income $ 108.7 $ 2.2 $ 111.1 $ 76.1 $ (6.8)$ 69.3
======== ======== ========= ======== ======== =========
Earnings per
share $ 2.13 $ 2.17 $ 1.50 $ 1.37
EBITDA (1) $ 243.5 $ 246.8 $ 160.1 $ 170.0
Backlog $1,370.6 $ 3.3 $ 1,370.6 $ 916.2 $ 9.9 $ 916.2
Average
Fully
Diluted
Shares
Outstanding 51.1 51.1 50.6 50.6
(1) EBITDA is calculated as income from operations plus depreciation
and amortization included in income from operations.
(2) Special items, net of tax, relate to charges for investigation
costs associated with the Company's internal review ($0.7
million), charges related to restructuring activities, namely at
the corporate level, and at the business units of Cedarapids and
Terex UK ($1.4 million), and charges relating to the closure of
certain Terex Utilities branch locations $(0.1 million).
(3) Special items, net of tax, relate to the gain on the sale of
facilities ($13.3 million), costs associated with restructuring
activities, mainly in the Terex-Atlas businesses ($6.1 million),
the net gain related to the favorable settlement of litigation
proceedings regarding the O&K acquisition ($3.4 million), the loss
on the sale of discontinued service parts business activities
($1.8 million), the write-down of investments ($0.8 million), and
the accelerated amortization arising from the early retirement of
debt ($1.2 million).
Segment Performance
As previously announced, starting with the third quarter of 2004,
Terex has realigned certain operations in an effort to strengthen its
ability to service customers and to recognize certain organizational
efficiencies. The Materials Processing Group, formerly part of the
Terex Roadbuilding, Utility Products and Other Segment, is now
consolidated with the Terex Mining Group under the Terex Materials
Processing & Mining Segment. The Terex Light Construction and Load
King businesses, formerly part of the Terex Roadbuilding, Utility
Products and Other Segment, are now part of the Terex Aerial Work
Platforms Segment.
The comparative segment performance data below reflects this
current organization, and prior period amounts have been reclassified
to conform to this presentation. Comparative segment performance data
also excludes special items.
Terex Construction
Second Quarter Year-to-Date
--------------------------- -----------------------------
(dollars in millions)
2005 2004 2005 2004
------------- ------------- --------------- -------------
% of % of % of % of
Sales Sales Sales Sales
----- ----- ----- -----
Net sales $604.5 $475.0 $1,073.0 $864.7
======= ======= ========= =======
Gross profit $ 90.8 15.0% $ 71.0 15.0% $ 148.9 13.9% $123.4 14.3%
SG&A 42.5 7.0% 39.5 8.3% 84.5 7.9% 75.7 8.8%
------- ------- --------- -------
Operating
profit $ 48.3 8.0% $ 31.5 6.6% $ 64.4 6.0% $ 47.7 5.5%
======= ======= ========= =======
Backlog $232.3 $216.5 $ 232.3 $216.5
Net sales in the Terex Construction group for the second quarter
of 2005 increased $129.5 million to $604.5 million from $475.0 million
in the second quarter of 2004. The 27% increase in net sales was
primarily driven by the heavy construction equipment businesses,
including the scrap handler business, and the mobile crushing and
screening businesses. Gross margin in the second quarter of 2005 was
15.0%, flat compared with the second quarter of 2004. SG&A expenses
for the second quarter of 2005 were $42.5 million, or 7.0% of sales,
compared to $39.5 million, or 8.3% of sales, in the second quarter of
2004, with the increase being mainly due to higher sales and marketing
costs related to increased sales volume. Income from operations for
the quarter was $48.3 million, or 8.0% of sales, an increase of 53%
when compared to $31.5 million, or 6.6% of sales, for the second
quarter of 2004.
"The second quarter overall performance was quite positive. While
our businesses continue to be negatively impacted by the relatively
weak U.S. dollar and steel cost pressures, both situations appear to
be improving," commented Colin Robertson, President - Terex
Construction. "The positive impact of pricing actions taken earlier in
the year has helped mitigate cost pressures, and we expect this trend
to continue as the new pricing levels flow through our backlog. This
pricing action impact is evident by comparing our gross margin in the
second quarter of 15.0% with the 12.4% delivered in the first quarter
of this year and with the incremental operating margin in the second
quarter of approximately 13%."
Mr. Robertson continued, "The crushing and screening businesses
continued to be the most affected by increased steel pricing, and
although operating margin was down slightly, their operating profit
was up over 15% on an absolute dollar basis. Our heavy construction
business continues to show improvements, with the group posting
revenue gains of over 35%."
Terex Cranes
Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2005 2004 2005 2004
------------- ------------- ------------- -------------
% of % of % of % of
Sales Sales Sales Sales
----- ----- ----- -----
Net sales $341.5 $276.9 $641.0 $486.1
======= ======= ======= =======
Gross profit $ 44.8 13.1% $ 34.2 12.4% $ 76.9 12.0% $ 64.0 13.2%
SG&A 29.1 8.5% 21.9 7.9% 54.9 8.6% 45.3 9.3%
------- ------- ------- -------
Operating
profit $ 15.7 4.6% $ 12.3 4.4% $ 22.0 3.4% $ 18.7 3.8%
======= ======= ======= =======
Backlog $314.7 $285.4 $314.7 $285.4
Net sales in the Terex Cranes group for the second quarter of 2005
increased $64.6 million to $341.5 million from $276.9 million in the
second quarter of 2004, reflecting improvement in all businesses,
particularly in the tower crane business. SG&A expenses increased in
the second quarter of 2005 to $29.1 million, or 8.5% of sales,
compared to SG&A expenses in the second quarter of 2004 of $21.9
million, or 7.9% of sales, mainly due to increased sales and marketing
costs related to increased sales volume, an increase in the Company's
bad debt provision, as well an increase in an employee profit sharing
program. Income from operations increased $3.4 million to $15.7
million, or 4.6% of sales, for the second quarter of 2005 from $12.3
million, or 4.4% of sales, for the second quarter of 2004.
"The Terex Cranes group continued its improvement over last year's
performance," commented Steve Filipov, President - Terex Cranes. "As
in the first quarter of 2005, our business experienced an increase in
sales due to generally improving market conditions. Our Italian,
French, American, and Australian operations all posted substantially
increased net sales when compared with their 2004 results. In North
America, the growth was mainly attributed to recovering rough terrain
and boom truck crane markets. Also positively impacting our business
were the price increases we put in place late in 2004, which were
intended to recover margin erosion over the past twelve months due to
increased input costs."
Mr. Filipov continued, "As has been the case for the past few
years, much of the North American business struggled to meet our
profitability expectations. We are actively pursuing sourcing
initiatives to reduce the cost of components, with Terex's Acuna,
Mexico facility playing a vital role in this effort. Additionally,
since March 2005, we have increased our direct workforce at our
Waverly, Iowa location by over 40%, and as of June 27, 2005, we have
started production at Waverly on a second shift. These actions should
allow us to better absorb our overhead costs, begin to deliver some of
our higher priced backlog, and position our business for the
anticipated marketplace recovery."
Terex Aerial Work Platforms
Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2005 2004 2005 2004
------------- ------------- ------------- -------------
% of % of % of % of
Sales Sales Sales Sales
----- ----- ----- -----
Net sales $376.3 $257.0 $671.4 $442.0
======= ======= ======= =======
Gross profit $ 70.6 18.8% $ 52.5 20.4% $121.6 18.1% $ 92.3 20.9%
SG&A 21.8 5.8% 18.1 7.0% 45.1 6.7% 36.1 8.2%
------- ------- ------- -------
Operating
profit $ 48.8 13.0% $ 34.4 13.4% $ 76.5 11.4% $ 56.2 12.7%
======= ======= ======= =======
Backlog $420.5 $120.3 $420.5 $120.3
Net sales for the Terex Aerial Work Platforms group for the second
quarter of 2005 increased $119.3 million to $376.3 million from $257.0
million in the second quarter of 2004. The increase in sales was
driven primarily by continued strong order activity in the rental
channel. Gross margin was negatively impacted by continued cost
pressures on components used in production. However, pricing actions
have begun to contribute to overall profitability, with income from
operations increasing to $48.8 million, or 13.0% of sales, in the
second quarter of 2005 from $34.4 million, or 13.4% of sales, in the
second quarter of 2004.
"We continue to operate in an extremely positive environment for
AWP and related products," said Bob Wilkerson, President-Terex Aerial
Work Platforms. "Our second quarter sales were up just under 50%, and
our backlog is up 250% when compared to the second quarter of 2004.
Our telehandler business posted year over year revenue increases in
excess of 75%, as we have continued to penetrate key accounts with
this product, as well as adjusted our production to take advantage of
this growing product category."
Mr. Wilkerson continued, "This quarter reflects a continuation of
the trends we have seen over the past year. Cost pressures, namely
steel, are easing somewhat, but they still weigh on our business when
compared to the prior year. We improved our operating margin to 13.0%
versus the 9.4% delivered in the first quarter of 2005, a full point
better than we had targeted in our first quarter earnings release. For
product ordered now and shipped after January 1, 2006, we have begun
to introduce a new, greatly simplified pricing structure designed to
ensure more consistent pricing across our product lines. In addition,
this new structure better reflects the value this segment's products
deliver and makes it easier for customers to do business with Terex."
Terex Materials Processing & Mining
Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2005 2004 2005 2004
------------- ------------- ------------- -------------
% of % of % of % of
Sales Sales Sales Sales
----- ----- ----- -----
Net sales $222.3 $133.0 $418.8 $229.3
======= ======= ======= =======
Gross profit $ 40.9 18.4% $ 23.5 17.7% $ 73.3 17.5% $ 38.8 16.9%
SG&A 20.9 9.4% 13.9 10.5% 40.9 9.8% 26.2 11.4%
------- ------- ------- -------
Operating
profit $ 20.0 9.0% $ 9.6 7.2% $ 32.4 7.7% $ 12.6 5.5%
======= ======= ======= =======
Backlog $235.6 $156.4 $235.6 $156.4
Net sales for the Terex Materials Processing & Mining group for
the second quarter of 2005 increased $89.3 million to $222.3 million
from $133.0 million in the second quarter of 2004. As in the first
quarter of 2005, the increase in sales is attributable to the overall
strong demand for mining products, mainly the mining hydraulic
excavators manufactured in Dortmund, Germany, as well as to the
acquisition of the Reedrill mining business in the fourth quarter of
2004. Excluding the acquisition of Reedrill, net sales increased 43%
compared to the comparable year ago period. This increased sales
volume had a positive impact on operating income, as income from
operations increased to $20.0 million, or 9.0% of sales, in the second
quarter of 2005 from $9.6 million, or 7.2% of sales, in the second
quarter of 2004.
"The Materials Processing & Mining group continues to see the
benefits from a rapidly improving end-market, mainly attributable to
the commodity demand for coal and steel," commented Rick Nichols,
President - Terex Materials Processing & Mining. "The demand for
Terex's hydraulic shovel and electric drive mining trucks continue to
drive our revenue growth. Additionally, the increasing population of
our fleet has significantly improved our parts and service sales,
which posted a year over year increase in excess of 45%. We continue
to feel that the mining cycle is stable at a level where we should
continue to see solid demand for our machines and parts, and expect
this positive cycle to continue for a few years. In addition to our
core mining products, our Reedrill business provided another excellent
quarter of performance, and our North American Materials Processing
business continues its favorable trends, with net sales improving
approximately 19% and operating profits increasing by 57% versus the
year ago period."
Terex Roadbuilding, Utility Products and Other
Second Quarter Year-to-Date
--------------------------- ---------------------------
(dollars in millions)
2005 2004 2005 2004
------------- ------------- ------------- -------------
% of % of % of % of
Sales Sales Sales Sales
----- ----- ----- -----
Net sales $252.9 $215.1 $470.9 $389.2
======= ======= ======= =======
Gross profit $ 33.7 13.3% $ 24.0 11.2% $ 67.9 14.4% $ 46.9 12.1%
SG&A 23.0 9.1% 21.3 9.9% 46.1 9.8% 40.9 10.5%
------- ------- ------- -------
Operating
profit $ 10.7 4.2% $ 2.7 1.3% $ 21.8 4.6% $ 6.0 1.5%
======= ======= ======= =======
Backlog $190.4 $147.8 $190.4 $147.8
Net sales for the Terex Roadbuilding, Utility Products and Other
group for the second quarter of 2005 increased $37.8 million to $252.9
million from $215.1 million for the second quarter of 2004, with
substantially all the sales growth coming from the concrete mixing
truck and Tatra businesses. SG&A expenses for the second quarter of
2005 were $23.0 million, or 9.1% of sales, compared to $21.3 million,
or 9.9% of sales, in the second quarter of 2004. Income from
operations increased to $10.7 million, or 4.2% of sales, from $2.7
million, or 1.3% of sales, in the second quarter of 2004. The
improvement in profitability is primarily attributed to the
roadbuilding business, as improvement initiatives taken over the past
few years began to positively impact financial performance.
"The Roadbuilding, Utility Products and Other group had another
positive quarter," commented Mr. DeFeo. "The improvement in the
performance of these businesses is, however, more the result of an
internal focus on production and distribution issues than any dramatic
move in the end market condition. This is most evident in our Terex
Roadbuilding group, who had revenue improvement of just over 4%, but
accounted for substantially all of the improvement in profitability.
The Terex Utilities team, much as the roadbuilding business did over
the past few years, continues to focus on Terex Business System
implementation and extracting incremental value out of its
distribution network. This should evolve over the next twelve months
and provide substantial upside to the financial profile of this group
of businesses."
Mr. DeFeo continued, "Specifically, strong results this quarter
were realized in our concrete focused businesses, such as the concrete
mixing truck, concrete paver and batch plant businesses. The asphalt
business is showing modest improvements, although the asphalt plant
business remains a challenging market, as buyers were waiting for the
recent passage of a new long term federal highway bill. The utility
business has seen some pickup in order activity coming off almost four
years of anemic activity. With a slowly improving telecommunications
and utility customer base, we expect this business to improve
substantially in 2006. Lastly, the military and special truck program
incurred a slight loss in the quarter, mainly impacted by the costs
relating to the LVSR U.S. Marine Corp truck bid."
Capital Structure and Taxes
"Net debt at the end of the second quarter of 2005 decreased $139
million to $733 million, from $872 million at the end of the first
quarter of 2005, as the Company continued to concentrate on its level
of working capital investment," commented Phil Widman, Senior Vice
President and Chief Financial Officer. "As stated in the first
quarter, we expected our cash flow to closely reflect the seasonal
trends of our business. We are pleased with the position of our
balance sheet at this time of year, as we are ahead of where we
planned to be going into 2005. We continue to target 18% working
capital as a percentage of trailing three months annualized sales for
the end of 2005, and 15% for the end of 2006. Working capital as a
percent of trailing three month annualized sales was approximately 17%
at the end of the second quarter of 2005, as compared to approximately
18% at the end of the second quarter in 2004."
Commenting on the effective tax rate used in this release, Mr.
Widman stated, "The effective tax rate for the second quarter of 2005
is estimated to be 33.8%, compared to 19.7% in the second quarter of
2004. The 2004 rate was lower due to the strong financial performance
of the Fermec business, where it was determined that the Company would
be able to realize the benefits of certain tax assets, and therefore,
the valuation allowance held for this business was released. While the
full year 2005 effective tax rate is expected to be approximately 35%,
the rate can fluctuate quarter to quarter as a result of changes
during the period in the assumptions related to valuation allowances,
the mix of income by jurisdiction, and other discrete items."
Outlook
"We remain enthusiastic about the full year business prospects for
the Company," commented Mr. DeFeo. "We continue to see strong order
activity, as evidenced by both our year to date revenue increase of
35% and the increase in our order backlog of 50% when compared to the
same point last year. Return on invested capital (calculated as the
trailing four quarters operating income divided by the sum of the
trailing four quarters average shareholders' equity and the trailing
four quarter average net debt) was approximately 17% at the end of the
second quarter, demonstrating continued improvement towards our goal
for ROIC of 20% or greater at the end of 2005."
"We are optimistic about the near term performance of just about
every business group, though certain product categories, such as Terex
Roadbuilding, Terex Utilities and Terex Cranes North America, still
operate in challenging, but improving end-market conditions," Mr.
DeFeo continued. "Our general view is for the conditions in our
various end-markets to continue their upward trajectory, with these
lagging segments to begin to meaningfully contribute in 2006."
"In our previous outlook, we expected earnings per share ("EPS")
for 2005 to be in the range of $3.50 to $3.70 per share, excluding
special items. Based on the current trend, we expect improved
performance to result in EPS of between $3.90 and $4.10 for 2005,
excluding special items."
Financial Restatement Update
As previously announced, Terex has not yet finalized its third
quarter 2004, full year 2004 and first and second quarter 2005 results
pending completion of its detailed internal accounting review, the
restatement of Terex's financial statements for the years ended
December 31, 2000, 2001, 2002 and 2003, and the completion of its
audited financial statements for 2004. Terex continues to work
diligently to complete its restatement, audit and assessment of
internal control over financial reporting. Terex believes that it is
nearing completion of this process, and currently anticipates filing
all appropriate documents, including applicable financial statements,
with the SEC in the near future. While no assurance can be made, it is
management's current expectation that the financial statements for the
year ended December 31, 2004 and prior periods will be filed on or
before August 15, 2005.
Safe Harbor Statement
The press release 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, infrastructure and mining activity and products produced
for the military to interest rates and government spending; the
ability to successfully integrate acquired businesses; the retention
of key management personnel; 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; Terex's continued access to capital and ability to obtain
parts and components from suppliers on a timely basis 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 significant amount of debt and
its need to comply with restrictive covenants contained in Terex's
debt agreements; Terex's ability to file its periodic reports with the
SEC on a timely basis; Terex's ability to ensure that all intercompany
transactions will be properly recorded; compliance with applicable
environmental laws and regulations; and other factors, risks,
uncertainties more specifically set forth in Terex's public filings
with the SEC. In addition, until the previously announced review by
Terex of its accounts is concluded, no assurance can be given with
respect to the financial statement adjustments, impacts and periods
resulting from such review, nor can there be assurance that additional
adjustments to the financial statements will not be identified. 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
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 with 2004
net sales of approximately $5 billion. Terex operates in five business
segments: Terex Construction, Terex Cranes, Terex Aerial Work
Platforms, Terex Materials Processing & Mining, and Terex
Roadbuilding, Utility Products and Other. Terex manufactures a broad
range of equipment for use in various industries, including the
construction, infrastructure, quarrying, recycling, surface mining,
shipping, transportation, refining, utility and maintenance
industries. Terex offers a complete line of financial products and
services to assist in the acquisition of Terex equipment through Terex
Financial Services. More information on Terex can be found at
www.terex.com.
SOURCE: Terex Corporation
Terex Corporation
Tom Gelston, 203-222-5943