WESTPORT, Conn.--(BUSINESS WIRE)--Jul. 22, 2009--
Terex Corporation (NYSE: TEX) today announced a net loss for the second
quarter of 2009 of $77.6 million, or $0.78 per share, compared to net
income of $236.3 million, or $2.32 per share, for the second quarter of
2008. Net sales were $1,320.2 million in the second quarter of 2009, a
decrease of 55.0% from $2,935.9 million in the second quarter of 2008.
Adjusting for the translation effect of foreign currency exchange rate
changes, net sales decreased approximately 49% from the comparable prior
year period. During the second quarter of 2009, the Company incurred
after-tax charges of $31.4 million, or $0.32 per share, associated with
restructuring programs and a continued reduction in production levels.
Additionally, as previously disclosed, the Company and the U.S.
Securities and Exchange Commission (“SEC”) Staff have reached a
tentative agreement in principle to resolve the SEC’s concerns which
would require, among other things, that the Company pay a penalty.
Accordingly, a charge of $8.0 million, or $0.08 per share, was taken
during the second quarter of 2009 in anticipation of the proposed
settlement with the SEC, which is still subject to SEC and court
approval. All per share amounts are on a fully diluted basis.
“The turmoil from the ongoing recession continues to deeply impact sales
for our industry,” commented Ron DeFeo, Terex Chairman and Chief
Executive Officer. “Certain markets have stabilized, but at low levels,
such as Aerial Work Platforms (“AWP”) and Materials Processing. Other
markets, such as Mining and large capacity cranes, have begun to weaken,
but at less dramatic rates. We are responding by aggressively reducing
costs. Manufacturing spending in the second quarter of 2009 was down 49%
from the second quarter of 2008 and 16% sequentially from the first
quarter. When combined with further reductions of selling, general and
administrative expenses (“SG&A”), these actions resulted in a $246
million quarterly run-rate spending reduction in the second quarter of
2009 versus spending levels in the second quarter of 2008. We continue
to target a $300 million quarterly run-rate reduction by year end.”
“We are still managing the company for cash, and we made good progress
this quarter,” Mr. DeFeo continued. “Our capital markets activity this
quarter, plus cash generated from operations, resulted in an improved
liquidity position with cash and borrowing availability of approximately
$939 million and $486 million, respectively, at June 30, 2009. We
believe that we are increasingly well positioned to weather the current
economic storm.”
Tom Riordan, Terex President and Chief Operating Officer, commented, “We
are continuing to operate through some very challenging times. Our
factories are working on reduced schedules, with a build-to-order
approach, as we aggressively manage our business to further reduce
inventory levels. During the second quarter, inventory reductions
generated cash of approximately $278 million, and we are working toward
exceeding our $500 million target for the year. We anticipate that
further cost savings initiatives will need to be undertaken in order to
eliminate operating losses by the end of 2009 in our most challenged
businesses. However, for our AWP business specifically, we may not see
operating profitability until the demand environment improves, which in
our estimate may not occur for another 12 months.”
Mr. Riordan added, “The Construction segment generated a large operating
loss during the second quarter, as additional restructuring activities
resulted in substantial charges. We are addressing the problems of
dramatic net sales reductions as rapidly as possible. At some operating
locations, headcount reductions have taken longer to implement than we
would have liked, but we will make the necessary changes in the near
term. Many of the headcount actions for which restructuring charges have
already been incurred will be made effective during the third quarter,
and should result in improved income statement performance through the
balance of 2009 and into 2010.”
Mr. Riordan continued, “The balance of our businesses posted mixed
results in the second quarter, with Mining and Cranes generating modest
profitability. The large crane business remains generally healthy, with
the large crawler crane business being the most stable. The Mining
business began to see a rebound in parts and service activity in June,
which was a favorable development not experienced in recent quarters.
While the overall environment remains difficult for Materials
Processing, we are excited by the startup of our Hosur, India facility
and its successful launch of production in July. With the commitment of
the Indian government to infrastructure investment, the opportunity for
crushing and screening sales in that market over the next few years is
expected to be substantial.”
Highlights for the Second Quarter of 2009
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. Certain
financial measures are shown in italics the first time referenced and
are described in a Glossary at the end of this press release.
Net Sales: Net sales were $1,320.2
million in the second quarter of 2009, a decrease of $1,615.7 million,
or 55.0%, from $2,935.9 million in the second quarter of 2008. Each of
the Company’s segments experienced lower net sales due to the global
economic uncertainty that has caused customers to remain very cautious
about purchasing equipment. Approximately $175 million of the net sales
decrease was due to the translation effect of foreign currency exchange
rate changes, primarily the strength of the U.S. Dollar relative to the
Euro, British Pound and Australian Dollar.
(Loss)/Income from Operations and
Operating Margin: Loss from operations was $85.7 million in the
second quarter of 2009, as compared to income from operations of $370.9
million in the second quarter of 2008. The second quarter of 2009 operating
margin was negative 6.5%, versus the operating margin from the
second quarter of 2008 of 12.6%. Lower total net sales negatively
impacted profitability by approximately $501 million. Costs, primarily
related to reductions in production levels and headcount, negatively
impacted profitability by approximately $44 million. Additionally, the
previously mentioned $8.0 million charge taken in anticipation of the
proposed SEC settlement (which remains subject to SEC and court
approval) also negatively impacted profitability, as did manufacturing
underabsorption of $42 million. Offsetting these negative results was a
reduction in SG&A and other costs by approximately $138 million.
Interest and Other Income/Expense:
Higher debt levels from the Company’s recent capital markets activity,
described below, increased interest expense for the second quarter of
2009 by $1.0 million compared to the prior year period, while interest
income decreased $4.1 million due to lower interest rates. Other income
increased for the second quarter of 2009 by $2.6 million, due primarily
to foreign currency translation gains. The Company also incurred a $3.3
million charge related to a loss on the early extinguishment of debt.
Taxes: The effective tax rate for
the second quarter of 2009 was 28.4%, compared to the effective tax rate
of 33.0% for the second quarter of 2008. The decrease in tax rates
between the second quarter of 2009 and the second quarter of 2008 was
principally due to the relative impact of accruals and releases for
uncertain tax positions, the tax treatment of the proposed SEC
settlement (which remains subject to SEC and court approval) and changes
in the jurisdictional mix of income.
Capital Structure: During the
second quarter of 2009, the Company raised approximately $608 million of
total net proceeds from three capital markets issuances: 1) $300 million
principal amount of 10.875% Senior Notes due 2016 at an issue price of
97.633%; 2) 12.65 million shares of common stock, priced at $13.00 per
share; and 3) $172.5 million principal amount of 4.00% Convertible
Senior Subordinated Notes due 2015. A portion of these proceeds was used
to pre-pay $58.4 million of the Company’s term loans and to repay
borrowings of revolving loans under the Company’s credit facility.
Upon completion of the financing, the Company’s credit facility was
amended to eliminate financial covenants based on the Company’s
consolidated leverage ratio and consolidated fixed charge coverage
ratio, and instead added requirements that the Company maintain
liquidity of not less than $250 million on the last day of each fiscal
quarter through June 30, 2011, and thereafter, maintain a specified
senior secured debt leverage ratio.
The Company has no material debt maturities until 2012. Total debt of
$1,736.6 million at the end of the second quarter of 2009 was comprised
of $136.2 million of senior bank debt, $1,510.5 million of notes and
$89.9 million of other debt.
The Company’s liquidity at June 30, 2009 totaled $1,424.4 million, which
was comprised of cash balances of $938.5 million and borrowing
availability under the Company’s revolving credit facility of $485.9
million. Liquidity at June 30, 2009 increased by $525.1 million as
compared to March 31, 2009 levels of $899.3 million, reflecting the
proceeds from the capital markets transactions combined with cash
generation from working capital reductions, partially offset by
operating losses incurred during the second quarter of 2009.
Phil Widman, Terex Senior Vice President and Chief Financial Officer,
commented, “Through our recent capital markets activity, we have
strengthened our balance sheet and our liquidity position while removing
the uncertainty associated with the earnings-based financial covenants
under our credit agreement. We were pleased with the level of investor
interest in the offerings. We will continue to aggressively pursue cash
generation opportunities, including reductions in costs and working
capital, reviewing alternatives for under-utilized assets, and remaining
selective with investments in our business.”
Return on Invested Capital (ROIC) was 2.2% for the
trailing twelve months ended June 30, 2009, compared to 11.8% for the
trailing twelve months ended March 31, 2009, mainly due to the operating
losses and cash flow from operations in the recent periods. Cash flow
from operations in the second quarter of 2009 totaled $102.9 million, as
working capital reductions more than offset the net loss. For the
comparable period in 2008, cash flow from operations was $134.3 million. Debt,
less cash and cash equivalents, decreased $340.4 million in the second
quarter of 2009 to $798.1 million, compared to the first quarter of
2009, due to the previously discussed capital markets activity and
operating cash flow generation. This results in a ratio of Debt, less
cash and cash equivalents, to Total Capitalization of 30.0% at
the end of the second quarter of 2009, versus 42.0% at the end of the
first quarter of 2009.
Working capital: Working Capital
as a percent of Trailing Three Month Annualized Sales was 40.2%
at June 30, 2009, as compared to 22.1% at June 30, 2008. Continued weak
end market demand has resulted in net sales slowing more quickly than
working capital has been reduced. Excluding the translation effect of
foreign currency exchange rate changes, cash generated from working
capital was $219.1 million during the second quarter of 2009.
The continued focus on reducing inventory resulted in cash generation of
$278.3 million during the second quarter of 2009, excluding the
translation effect of foreign currency exchange rate changes. Year to
date, the Company has generated approximately $304 million in cash from
inventory, with the full year goal to exceed $500 million.
Days sales outstanding decreased to 44 days at June 30, 2009 from
49 days at March 31, 2009 as the Company continued to focus on
collection activities and cautious credit practices. Cash generated from
trade receivables was $122.1 million during the second quarter of 2009,
excluding the translation effect of foreign currency exchange rate
changes.
The continued curtailment of raw material deliveries resulted in a use
of cash from accounts payable of $181.3 million during the second
quarter of 2009, excluding the translation effect of foreign exchange
rate changes. Days payable outstanding of 40 days at June 30,
2009 declined as compared to 51 days at March 31, 2009, as the level of
incoming material was significantly reduced relative to the outflow of
finished goods.
Backlog: Backlog for orders
deliverable during the next twelve months was $1,651.2 million at June
30, 2009, a decrease of 60.9% from June 30, 2008, and a decrease of
16.7% from March 31, 2009. The decrease in backlog reflects lower net
order intake across each of the Company’s segments. Excluding the
translation effect of foreign currency exchange rate changes, backlog
decreased 56.5% year-over-year.
2009 Update:
The Company currently expects its 2009 net sales to decline
approximately 50% when compared with 2008, approximately 7% of which is
due to the estimated translation effect of foreign currency exchange
rate changes. Previous guidance was for 2009 net sales to decline in the
range of 40-45%, which included an estimated translation effect of
foreign currency exchange rate changes of approximately 14%. The
anticipated further decline in net sales reflects weak global
end-markets combined with continued constrained credit availability
worldwide.
The impact of restructuring activities is expected to result in improved
financial results for the second half of 2009; however, the current
end-market demand for machinery in general makes it unlikely that the
Company will be profitable, excluding charges relating to ongoing
restructuring activities, in the second half of 2009.
As illustrated below, manufacturing and SG&A spending are being reduced
to realign the cost structure with lower net sales, and further actions
are underway that are not yet fully reflected in the Company’s run rate
of spending.
(USD millions)
|
|
|
|
Terex Corporation
|
|
|
|
Terex AWP
|
|
|
|
Terex Construction
|
|
|
|
Terex Cranes
|
|
|
|
Terex MPM
|
|
|
|
|
Q2 2009 vs
Q1 2009
|
|
Q2 2009 vs
Q2 2008
|
|
|
|
Q2 2009
vs
Q1 2009
|
|
Q2 2009 vs
Q2 2008
|
|
|
|
Q2 2009 vs
Q1 2009
|
|
Q2 2009 vs
Q2 2008
|
|
|
|
Q2 2009 vs
Q1 2009
|
|
Q2 2009 vs
Q2 2008
|
|
|
|
Q2 2009 vs
Q1 2009
|
|
Q2 2009 vs
Q2 2008
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Change
|
|
|
|
1%
|
|
(55
|
%)
|
|
|
|
(8
|
%)
|
|
(72
|
%)
|
|
|
|
(16
|
%)
|
|
(68
|
%)
|
|
|
|
6
|
%
|
|
(41
|
%)
|
|
|
|
12
|
%
|
|
(39
|
%)
|
Dollar Change
|
|
$
|
|
18
|
|
(1,616
|
)
|
|
$
|
|
(19
|
)
|
|
(545
|
)
|
|
$
|
|
(42
|
)
|
|
(471
|
)
|
|
$
|
|
30
|
|
|
(343
|
)
|
|
$
|
|
43
|
|
|
(265
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing spending (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Change
|
|
|
|
(16%)
|
|
(49
|
%)
|
|
|
|
(23
|
%)
|
|
(59
|
%)
|
|
|
|
(17
|
%)
|
|
(58
|
%)
|
|
|
|
(8
|
%)
|
|
(22
|
%)
|
|
|
|
(23
|
%)
|
|
(58
|
%)
|
Dollar Change
|
|
$
|
|
(35)
|
|
(170
|
)
|
|
$
|
|
(14
|
)
|
|
(67
|
)
|
|
$
|
|
(7
|
)
|
|
(48
|
)
|
|
$
|
|
(6
|
)
|
|
(20
|
)
|
|
$
|
|
(7
|
)
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A less restructuring
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Change
|
|
|
|
(2%)
|
|
(27
|
%)
|
|
|
|
(7
|
%)
|
|
(35
|
%)
|
|
|
|
(8
|
%)
|
|
(35
|
%)
|
|
|
|
(6
|
%)
|
|
(19
|
%)
|
|
|
|
(4
|
%)
|
|
(21
|
%)
|
Dollar Change
|
|
$
|
|
(3)
|
|
(76
|
)
|
|
$
|
|
(3
|
)
|
|
(23
|
)
|
|
$
|
|
(4
|
)
|
|
(26
|
)
|
|
$
|
|
(3
|
)
|
|
(11
|
)
|
|
$
|
|
(2
|
)
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Manf. Spending + SG&A less restructuring
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Change
|
|
|
|
(9%)
|
|
(39
|
%)
|
|
|
|
(16
|
%)
|
|
(50
|
%)
|
|
|
|
(12
|
%)
|
|
(47
|
%)
|
|
|
|
(7
|
%)
|
|
(21
|
%)
|
|
|
|
(12
|
%)
|
|
(39
|
%)
|
Dollar Change
|
|
$
|
|
(38)
|
|
(246
|
)
|
|
$
|
|
(17
|
)
|
|
(90
|
)
|
|
$
|
|
(12
|
)
|
|
(74
|
)
|
|
$
|
|
(9
|
)
|
|
(32
|
)
|
|
$
|
|
(9
|
)
|
|
(47
|
)
|
(1) Manufacturing spending includes manufacturing salaries, wages,
fixed and variable overhead costs; totals for Terex Corporation include
the impact of Corporate/eliminations.
Additional commentary regarding cost reduction actions will be provided
in the presentation that will accompany the earnings release conference
call that is scheduled for 8:30 am, Thursday, July 23, 2009 and will be
available at the Investor Relations section of the Terex website, www.terex.com.
Second Quarter Segment Performance Review
Aerial Work Platforms: Net sales
for the AWP segment for the second quarter of 2009 decreased $545.5
million, or 72.2%, to $209.9 million versus the second quarter of 2008.
Excluding the translation effect of foreign currency exchange rate
changes, net sales decreased 70.5%. Rental customers continue to age and
reduce their fleets, and as a result, are deferring the purchase of new
aerial and telehandler products. The core markets for aerials in North
America and Europe remain at very depressed levels. The Utility business
is continuing to see similar levels of order inquiries when compared
with the comparable period in 2008.
An operating loss of $32.8 million was incurred during the second
quarter of 2009 as compared to an operating profit of $131.4 million
earned during the second quarter of 2008, primarily driven by lower net
sales. The negative impact on profitability stemming from lower net
sales when compared with the prior year period was approximately $188
million. Costs, primarily related to reductions in production levels and
restructuring, negatively impacted profitability by approximately $13
million. Due to the significant production volume reduction, net
manufacturing unabsorbed costs for the period increased by approximately
$22 million. These negative factors continued to be partially offset by
reductions in SG&A and other costs of approximately $25 million and $38
million, respectively.
Construction: Net sales for the
Construction segment for the second quarter of 2009 decreased $471.1
million, or 68.2%, to $219.9 million versus the second quarter of 2008.
Excluding the translation effect of foreign currency exchange rate
changes, net sales decreased 63.7%. Global weakness negatively impacted
the net sales volume of the entire Construction segment. Most
Construction segment businesses have made progress reducing their
inventory, especially finished goods inventory in the dealer channel.
However, the environment remains challenging as dealers continue to be
reluctant to invest in stock inventory for their dealerships and the
tightness of commercially available credit continues to impact the
ability to finance projects and equipment.
An operating loss of $79.7 million was incurred during the second
quarter of 2009 as compared to an operating profit of $23.0 million
earned during the second quarter of 2008. Lower net sales compared to
the prior year period negatively impacted profitability by approximately
$113 million. Costs, primarily related to headcount reductions,
negatively impacted profitability by approximately $20 million. Due to
the significant production volume reduction, net manufacturing
unabsorbed cost and capacity variance for the period increased by
approximately $9 million and $4 million, respectively. These negative
factors were partially offset by reductions in SG&A and other costs of
approximately $18 million and $14 million, respectively.
Cranes: Net sales for the Cranes
segment for the second quarter of 2009 decreased $342.8 million, or
41.1%, to $491.0 million versus the second quarter of 2008. Excluding
the translation effect of foreign currency exchange rate changes, net
sales decreased 32.5%. Rough terrain and tower crane net sales during
the second quarter of 2009 were at levels substantially below those
achieved during the second quarter of 2008, as commercial construction
projects were postponed or halted and oil related energy demand for
rough terrain cranes slowed. High capacity crawler and all-terrain
cranes continue to be needed for infrastructure projects and energy
related projects such as wind power and power plant construction,
although there has been some softening of demand in the lower capacity
all-terrain crane market.
Operating profit for the second quarter of 2009 totaled $20.0 million, a
decrease of $106.3 million compared with the operating profit of $126.3
million earned during the second quarter of 2008. Operating margin
decreased to 4.1% as compared to 15.1% in the second quarter of 2008.
Profitability was negatively impacted by approximately $106 million due
to lower net sales compared to the prior year period. Additionally,
underabsorption of manufacturing costs of approximately $5 million and a
negative impact from foreign currency exchange rate changes of
approximately $6 million were offset by a reduction in the segment’s
SG&A expense of approximately $5 million and reductions in other costs
of approximately $7 million.
Materials Processing & Mining:
Net sales for the Materials Processing & Mining (MPM) segment for the
second quarter of 2009 decreased $264.9 million, or 38.9%, to $416.6
million versus the second quarter of 2008. Excluding the translation
effect of foreign currency exchange rate changes, net sales decreased
30.2%. Net sales of materials processing equipment remained weak during
the second quarter of 2009, although production cuts have succeeded in
reducing finished goods inventory levels and order intake has
stabilized, although at low levels. Substantial year-over-year declines
in sales of materials processing equipment were partially offset by
mining equipment sales that benefitted from a favorable product mix
oriented towards larger trucks. The Mining business has begun to see a
reversal of the spare parts decline experienced over the past half year,
with spare parts activity noticeably improving in June.
Operating profit for the second quarter of 2009 totaled $22.8 million, a
decrease of $87.8 million compared with the operating profit of $110.6
million earned during the second quarter of 2008. Operating margin for
the second quarter of 2009 was 5.5%, as compared to 16.2% for the second
quarter of 2008, reflecting the deterioration in Materials Processing
end markets, partially offset by continued strength in Mining. The
reduction in net sales negatively impacted profitability by
approximately $94 million when compared with the prior year period.
Favorably influencing the results was an approximate $12 million
improvement in other cost of sales, driven primarily by the realization
of profits previously tied up in inventory.
Corporate and Other/ Eliminations:
The loss from operations of $16.0 million decreased $4.4 million or
21.6% compared to the prior year period. The decrease reflects the
favorable impact of cost reduction activities, including salary and
benefit cuts and reduced professional fees, partially offset by the $8.0
million charge taken during the second quarter of 2009 in anticipation
of the previously mentioned proposed SEC settlement (which remains
subject to SEC and court approval).
Segment Backlog
AWP segment backlog decreased 73.4% as compared to June 30, 2008, and
decreased 7.4% as compared to March 31, 2009, reflecting the impact of
the global economic slowdown. Demand has exhibited signs of stability
during the last six months, although at low levels. Due to continuing
economic uncertainty, customers are ordering equipment when needed,
rather than planning purchases in advance as they did in prior periods,
resulting in minimal levels of backlog.
Construction segment backlog decreased 79.0% versus the comparable prior
year period and decreased 2.0% as compared to March 31, 2009, reflecting
the global slowdown in construction activity. Order intake is slow for
all types of construction equipment and customers are only purchasing
equipment when they are ready to put it immediately to work, rather than
planning orders in advance, as was common practice a year ago.
Cranes segment backlog decreased 48.8% compared to June 30, 2008 levels,
and decreased 18.4% as compared to March 31, 2009 levels. Tower crane
and rough terrain crane demand is down substantially from levels of one
year ago, driving the majority of the decrease in backlog. Demand for
high capacity cranes, including crawler and all-terrain cranes, is
softening, but there is continuing demand as infrastructure and energy
related projects utilize these high capacity cranes. Smaller capacity
crane demand continues to remain weak.
MP&M segment backlog decreased 67.9% versus June 30, 2008, and decreased
20.1% as compared to March 31, 2009. Materials Processing backlog was
basically unchanged sequentially as some stability has been reached in
end markets, although at a low level. Mining truck backlog remained
relatively unchanged from March 31, 2009 levels due to orders received
in June for 20 trucks in total from two Chinese coal mining companies
and an African based customer. Mining shovel and drill backlog was down
sequentially as demand for the smaller end of the product line slowed.
The drill backlog decline reflects slowing exploratory work and the
shovel backlog decline reflects reduced quarrying demand.
The Glossary contains further details regarding backlog.
Safe Harbor Statement
This press release contains forward-looking information based on the
current expectations of Terex Corporation. 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, particularly in the key industries the
Company serves, may affect the sales of our products and financial
results; uncertainties regarding the duration or severity of the current
global economic downturn and disruptions in the financial markets; our
ability to access the capital markets to raise funds and provide
liquidity; our business is sensitive to fluctuations in government
spending; our business is very competitive and may be affected by our
cost structure, pricing, product initiatives and other actions taken by
competitors; a material disruption to one of our significant facilities;
our retention of key management personnel; the financial condition of
suppliers and customers, and their continued access to capital; our
ability to obtain parts and components from suppliers on a timely basis
at competitive prices; our ability to timely manufacture and deliver
products to customers; the need to comply with restrictive covenants
contained in our debt agreements; our business is global and subject to
changes in exchange rates between currencies, as well as international
politics, particularly in developing markets; the effects of changes in
laws and regulations; possible work stoppages and other labor matters;
compliance with applicable environmental laws and regulations;
litigation and product liability claims and other liabilities;
investigations by the SEC and the Department of Justice; our
implementation of a global enterprise system and its performance; 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.
Terex Corporation is a diversified global manufacturer with 2008 net
sales of $9.9 billion. Terex operates in four business segments: Terex
Aerial Work Platforms, Terex Construction, Terex Cranes, and Terex
Materials Processing & Mining. Terex manufactures a broad range of
equipment for use in various industries, including the construction,
infrastructure, quarrying, surface mining, shipping, transportation,
refining and utility industries. Terex offers a complete line of
financial products and services to assist in the acquisition of Terex
equipment through Terex Financial Services. Terex uses its website to
make information available to its investors and the market at www.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,
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,320.2
|
|
|
$
|
2,935.9
|
|
|
$
|
2,622.8
|
|
|
$
|
5,298.6
|
|
Cost of goods sold
|
|
|
(1,192.3
|
)
|
|
|
(2,284.7
|
)
|
|
|
(2,350.4
|
)
|
|
|
(4,133.4
|
)
|
Gross profit
|
|
|
127.9
|
|
|
|
651.2
|
|
|
|
272.4
|
|
|
|
1,165.2
|
|
Selling, general and administrative expenses
|
|
|
(213.6
|
)
|
|
|
(280.3
|
)
|
|
|
(430.6
|
)
|
|
|
(538.0
|
)
|
(Loss) income from operations
|
|
|
(85.7
|
)
|
|
|
370.9
|
|
|
|
(158.2
|
)
|
|
|
627.2
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
0.9
|
|
|
|
5.0
|
|
|
|
2.1
|
|
|
|
14.1
|
|
Interest expense
|
|
|
(25.3
|
)
|
|
|
(24.3
|
)
|
|
|
(48.8
|
)
|
|
|
(49.8
|
)
|
Loss on early extinguishment of debt
|
|
|
(3.3
|
)
|
|
|
---
|
|
|
|
(3.3
|
)
|
|
|
---
|
|
Other income (expense) – net
|
|
|
4.9
|
|
|
|
2.3
|
|
|
|
1.2
|
|
|
|
9.8
|
|
(Loss) income before income taxes
|
|
|
(108.5
|
)
|
|
|
353.9
|
|
|
|
(207.0
|
)
|
|
|
601.3
|
|
Benefit from (provision for) income taxes
|
|
|
30.8
|
|
|
|
(116.8
|
)
|
|
|
54.8
|
|
|
|
(200.0
|
)
|
Net (loss) income
|
|
|
(77.7
|
)
|
|
|
237.1
|
|
|
|
(152.2
|
)
|
|
|
401.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net loss (income) attributable to non-controlling interest
|
|
|
0.1
|
|
|
|
(0.8
|
)
|
|
|
(0.3
|
)
|
|
|
(1.7
|
)
|
Net (loss) income attributable to Terex Corporation
|
|
$
|
(77.6
|
)
|
|
$
|
236.3
|
|
|
$
|
(152.5
|
)
|
|
$
|
399.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings Per Common Share Attributable to Terex Corporation
Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.78
|
)
|
|
$
|
2.35
|
|
|
$
|
(1.57
|
)
|
|
$
|
3.96
|
|
Diluted
|
|
$
|
(0.78
|
)
|
|
$
|
2.32
|
|
|
$
|
(1.57
|
)
|
|
$
|
3.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding in per share
calculation
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
99.1
|
|
|
|
100.5
|
|
|
|
97.0
|
|
|
|
100.8
|
|
Diluted
|
|
|
99.1
|
|
|
|
102.0
|
|
|
|
97.0
|
|
|
|
102.6
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in millions, except par value)
|
|
|
|
|
|
June 30,
2009
|
|
Dec 31,
2008
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
938.5
|
|
|
$
|
484.4
|
|
Trade receivables (net of allowance of $62.4 and $62.8 at June 30,
2009 and December 31, 2008, respectively)
|
|
|
639.8
|
|
|
|
967.5
|
|
Inventories
|
|
|
2,002.1
|
|
|
|
2,234.8
|
|
Deferred taxes
|
|
|
172.9
|
|
|
|
139.0
|
|
Other current assets
|
|
|
188.7
|
|
|
|
215.2
|
|
Total current assets
|
|
|
3,942.0
|
|
|
|
4,040.9
|
|
Non-current assets
|
|
|
|
|
|
|
Property, plant and equipment - net
|
|
|
495.5
|
|
|
|
481.5
|
|
Goodwill
|
|
|
476.3
|
|
|
|
457.0
|
|
Deferred taxes
|
|
|
97.8
|
|
|
|
84.5
|
|
Other assets
|
|
|
365.6
|
|
|
|
381.5
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
5,377.2
|
|
|
$
|
5,445.4
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Notes payable and current portion of long-term debt
|
|
$
|
51.4
|
|
|
$
|
39.4
|
|
Trade accounts payable
|
|
|
518.9
|
|
|
|
983.9
|
|
Accrued compensation and benefits
|
|
|
154.2
|
|
|
|
169.3
|
|
Accrued warranties and product liability
|
|
|
143.4
|
|
|
|
149.3
|
|
Customer advances
|
|
|
94.7
|
|
|
|
119.3
|
|
Other current liabilities
|
|
|
349.4
|
|
|
|
363.4
|
|
Total current liabilities
|
|
|
1,312.0
|
|
|
|
1,824.6
|
|
Non-current liabilities
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
1,685.2
|
|
|
|
1,396.4
|
|
Retirement plans and other
|
|
|
501.3
|
|
|
|
480.5
|
|
Total liabilities
|
|
|
3,498.5
|
|
|
|
3,701.5
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
Common stock, $.01 par value – authorized 300.0 shares; issued 120.2
and
107.1 shares at June 30, 2009 and December 31, 2008, respectively
|
|
|
1.2
|
|
|
|
1.1
|
|
Additional paid-in capital
|
|
|
1,242.5
|
|
|
|
1,046.2
|
|
Retained earnings
|
|
|
1,204.1
|
|
|
|
1,356.6
|
|
Accumulated other comprehensive income (loss)
|
|
|
11.1
|
|
|
|
(82.3
|
)
|
Less cost of shares of common stock in treasury – 13.1 shares at
June 30, 2009 and December 31, 2008
|
|
|
(598.7
|
)
|
|
|
(599.9
|
)
|
Total Terex Corporation stockholders’ equity
|
|
|
1,860.2
|
|
|
|
1,721.7
|
|
Noncontrolling interest
|
|
|
18.5
|
|
|
|
22.2
|
|
Total equity
|
|
|
1,878.7
|
|
|
|
1,743.9
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
5,377.2
|
|
|
$
|
5,445.4
|
|
|
|
|
|
|
|
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in millions)
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
2009
|
|
2008
|
Operating Activities
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(152.2
|
)
|
|
$
|
401.3
|
|
Adjustments to reconcile net (loss) income to cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation
|
|
|
37.5
|
|
|
|
36.4
|
|
Amortization
|
|
|
10.8
|
|
|
|
10.5
|
|
Deferred taxes
|
|
|
(58.5
|
)
|
|
|
19.3
|
|
Loss on early extinguishment of debt
|
|
|
3.3
|
|
|
|
---
|
|
Gain on sale of assets
|
|
|
(0.4
|
)
|
|
|
(1.2
|
)
|
Stock-based compensation
|
|
|
19.1
|
|
|
|
31.9
|
|
Excess tax benefit from stock-based compensation
|
|
|
---
|
|
|
|
(6.5
|
)
|
Changes in operating assets and liabilities (net of effects of
acquisitions and divestitures):
|
|
|
|
|
|
|
Trade receivables
|
|
|
365.5
|
|
|
|
(232.7
|
)
|
Inventories
|
|
|
304.4
|
|
|
|
(446.4
|
)
|
Trade accounts payable
|
|
|
(490.9
|
)
|
|
|
176.6
|
|
Accrued compensation and benefits
|
|
|
(24.1
|
)
|
|
|
(22.7
|
)
|
Income taxes payable
|
|
|
(36.8
|
)
|
|
|
74.0
|
|
Accrued warranties and product liability
|
|
|
(10.9
|
)
|
|
|
8.3
|
|
Customer advances
|
|
|
(31.1
|
)
|
|
|
(78.1
|
)
|
Other, net
|
|
|
28.0
|
|
|
|
(26.8
|
)
|
Net cash used in operating activities
|
|
|
(36.3
|
)
|
|
|
(56.1
|
)
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
---
|
|
|
|
(478.1
|
)
|
Capital expenditures
|
|
|
(34.9
|
)
|
|
|
(63.8
|
)
|
Proceeds from sale of assets
|
|
|
1.2
|
|
|
|
2.8
|
|
Net cash used in investing activities
|
|
|
(33.7
|
)
|
|
|
(539.1
|
)
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
465.4
|
|
|
|
---
|
|
Principal repayments of long-term debt
|
|
|
(58.4
|
)
|
|
|
---
|
|
Proceeds from issuance of common stock
|
|
|
156.3
|
|
|
|
---
|
|
Excess tax benefit from stock-based compensation
|
|
|
---
|
|
|
|
6.5
|
|
Proceeds from stock options exercised
|
|
|
0.1
|
|
|
|
2.0
|
|
Net (repayments) borrowings under revolving line of credit agreements
|
|
|
(30.7
|
)
|
|
|
1.0
|
|
Payment of debt issuance costs
|
|
|
(16.6
|
)
|
|
|
---
|
|
Share repurchases
|
|
|
---
|
|
|
|
(135.6
|
)
|
Acquisition of noncontrolling interest
|
|
|
(1.7
|
)
|
|
|
---
|
|
Other, net
|
|
|
(0.8
|
)
|
|
|
(1.2
|
)
|
Net cash provided by (used in) financing activities
|
|
|
513.6
|
|
|
|
(127.3
|
)
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
|
10.5
|
|
|
|
40.1
|
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
|
454.1
|
|
|
|
(682.4
|
)
|
Cash and Cash Equivalents at Beginning of Period
|
|
|
484.4
|
|
|
|
1,272.4
|
|
Cash and Cash Equivalents at End of Period
|
|
$
|
938.5
|
|
|
$
|
590.0
|
|
|
|
|
|
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(in millions)
(unaudited)
|
|
|
|
|
|
|
|
Second Quarter
|
|
Year-to-Date
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
% of
|
|
|
|
|
% of
|
|
|
|
|
% of
|
|
|
|
|
% of
|
|
|
|
|
|
Net sales
|
|
|
|
|
Net sales
|
|
|
|
|
Net sales
|
|
|
|
|
Net sales
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,320.2
|
|
|
|
|
$
|
2,935.9
|
|
|
|
|
$
|
2,622.8
|
|
|
|
|
$
|
5,298.6
|
|
|
|
Gross profit
|
|
$
|
127.9
|
|
|
9.7
|
%
|
|
$
|
651.2
|
|
|
22.2
|
%
|
|
$
|
272.4
|
|
|
10.4
|
%
|
|
$
|
1,165.2
|
|
|
22.0
|
%
|
SG&A
|
|
|
213.6
|
|
|
16.2
|
%
|
|
|
280.3
|
|
|
9.5
|
%
|
|
|
430.6
|
|
|
16.4
|
%
|
|
|
538.0
|
|
|
10.2
|
%
|
(Loss) income from operations
|
|
$
|
(85.7
|
)
|
|
(6.5
|
%)
|
|
$
|
370.9
|
|
|
12.6
|
%
|
|
$
|
(158.2
|
)
|
|
(6.0
|
%)
|
|
$
|
627.2
|
|
|
11.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
209.9
|
|
|
|
|
$
|
755.4
|
|
|
|
|
$
|
438.4
|
|
|
|
|
$
|
1,420.1
|
|
|
|
Gross profit
|
|
$
|
10.2
|
|
|
4.9
|
%
|
|
$
|
196.5
|
|
|
26.0
|
%
|
|
$
|
15.3
|
|
|
3.5
|
%
|
|
$
|
372.9
|
|
|
26.3
|
%
|
SG&A
|
|
|
43.0
|
|
|
20.5
|
%
|
|
|
65.1
|
|
|
8.6
|
%
|
|
|
89.1
|
|
|
20.3
|
%
|
|
|
132.8
|
|
|
9.4
|
%
|
(Loss) income from operations
|
|
$
|
(32.8
|
)
|
|
(15.6
|
%)
|
|
$
|
131.4
|
|
|
17.4
|
%
|
|
$
|
(73.8
|
)
|
|
(16.8
|
%)
|
|
$
|
240.1
|
|
|
16.9
|
%
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
219.9
|
|
|
|
|
$
|
691.0
|
|
|
|
|
$
|
481.6
|
|
|
|
|
$
|
1,191.6
|
|
|
|
Gross profit
|
|
$
|
(24.4
|
)
|
|
(11.1
|
%)
|
|
$
|
96.6
|
|
|
14.0
|
%
|
|
$
|
(48.1
|
)
|
|
(10.0
|
%)
|
|
$
|
164.3
|
|
|
13.8
|
%
|
SG&A
|
|
|
55.3
|
|
|
25.1
|
%
|
|
|
73.6
|
|
|
10.7
|
%
|
|
|
115.2
|
|
|
23.9
|
%
|
|
|
136.8
|
|
|
11.5
|
%
|
(Loss) income from operations
|
|
$
|
(79.7
|
)
|
|
(36.2
|
%)
|
|
$
|
23.0
|
|
|
3.3
|
%
|
|
$
|
(163.3
|
)
|
|
(33.9
|
%)
|
|
$
|
27.5
|
|
|
2.3
|
%
|
|
Cranes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
491.0
|
|
|
|
|
$
|
833.8
|
|
|
|
|
$
|
952.4
|
|
|
|
|
$
|
1,482.7
|
|
|
|
Gross profit
|
|
$
|
70.0
|
|
|
14.3
|
%
|
|
$
|
187.5
|
|
|
22.5
|
%
|
|
$
|
148.5
|
|
|
15.6
|
%
|
|
$
|
328.2
|
|
|
22.1
|
%
|
SG&A
|
|
|
50.0
|
|
|
10.2
|
%
|
|
|
61.2
|
|
|
7.3
|
%
|
|
|
103.1
|
|
|
10.8
|
%
|
|
|
118.3
|
|
|
8.0
|
%
|
Income from operations
|
|
$
|
20.0
|
|
|
4.1
|
%
|
|
$
|
126.3
|
|
|
15.1
|
%
|
|
$
|
45.4
|
|
|
4.8
|
%
|
|
$
|
209.9
|
|
|
14.2
|
%
|
|
MPM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
416.6
|
|
|
|
|
$
|
681.5
|
|
|
|
|
$
|
789.7
|
|
|
|
|
$
|
1,245.8
|
|
|
|
Gross profit
|
|
$
|
71.4
|
|
|
17.1
|
%
|
|
$
|
170.0
|
|
|
24.9
|
%
|
|
$
|
156.0
|
|
|
19.8
|
%
|
|
$
|
297.6
|
|
|
23.9
|
%
|
SG&A
|
|
|
48.6
|
|
|
11.7
|
%
|
|
|
59.4
|
|
|
8.7
|
%
|
|
|
97.5
|
|
|
12.3
|
%
|
|
|
118.3
|
|
|
9.5
|
%
|
Income from operations
|
|
$
|
22.8
|
|
|
5.5
|
%
|
|
$
|
110.6
|
|
|
16.2
|
%
|
|
$
|
58.5
|
|
|
7.4
|
%
|
|
$
|
179.3
|
|
|
14.4
|
%
|
|
Corporate/Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
(17.2
|
)
|
|
|
|
$
|
(25.8
|
)
|
|
|
|
$
|
(39.3
|
)
|
|
|
|
$
|
(41.6
|
)
|
|
|
Gross profit
|
|
$
|
0.7
|
|
|
(4.1
|
%)
|
|
$
|
0.6
|
|
|
(2.3
|
%)
|
|
$
|
0.7
|
|
|
(1.8
|
%)
|
|
$
|
2.2
|
|
|
(5.3
|
%)
|
SG&A
|
|
|
16.7
|
|
|
(97.1
|
%)
|
|
|
21.0
|
|
|
(81.4
|
%)
|
|
|
25.7
|
|
|
(65.4
|
%)
|
|
|
31.8
|
|
|
(76.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
$
|
(16.0
|
)
|
|
93.0
|
%
|
|
$
|
(20.4
|
)
|
|
79.1
|
%
|
|
$
|
(25.0
|
)
|
|
63.6
|
%
|
|
$
|
(29.6
|
)
|
|
71.2
|
%
|
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, and are as of or for the period ended June 30, 2009,
unless otherwise indicated.
Adjusted Net Operating Profit After Tax (NOPAT) is calculated by
multiplying Income from operations, as adjusted, by a figure equal to
one minus the adjusted effective tax rate of the Company. The adjusted
effective tax rate is equal to the (Provision for)/benefit from Income
taxes divided by Income before income taxes as adjusted for the
respective quarter.
Backlog is defined as firm orders that are expected to be filled
within one year. The disclosure of backlog aids in the analysis of the
Company’s customers’ demand for product, as well as the ability of the
Company to meet that demand. The backlog of Terex’s business is not
necessarily indicative of sales to be recognized in a specified future
period.
|
|
|
June 30,
2009
|
|
|
June 30,
2008
|
|
%
change
|
|
|
|
Mar 31,
2009
|
|
%
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Backlog
|
|
$
|
1,651.2
|
|
$
|
4,224.8
|
|
(60.9
|
%)
|
|
$
|
|
1,983.3
|
|
(16.7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWP
|
|
$
|
137.9
|
|
$
|
517.6
|
|
(73.4
|
%)
|
|
$
|
|
148.9
|
|
(7.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
$
|
140.5
|
|
$
|
668.4
|
|
(79.0
|
%)
|
|
$
|
|
143.3
|
|
(2.0
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cranes
|
|
$
|
1,065.8
|
|
$
|
2,083.2
|
|
(48.8
|
%)
|
|
$
|
|
1,306.9
|
|
(18.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPM
|
|
$
|
307.0
|
|
$
|
955.6
|
|
(67.9
|
%)
|
|
$
|
|
384.2
|
|
(20.1
|
%)
|
Days Payable Outstanding is calculated by dividing Trade accounts
payable by the product of the trailing three months Cost of goods sold
multiplied by four, which ratio is multiplied by 365 days.
Days Payable Outstanding
|
|
|
|
|
|
|
|
|
|
June 30, 2009
|
|
|
Mar 31, 2009
|
Trade Accounts Payable
|
|
$
|
518.9
|
|
$
|
647.5
|
|
|
|
|
|
|
|
Cost of sales for the three months ended
|
|
$
|
1,192.3
|
|
$
|
1,158.1
|
|
|
|
x 4
|
|
|
x 4
|
Annualized cost of sales
|
|
$
|
4,769.2
|
|
$
|
4,632.4
|
|
|
|
|
|
|
|
Quotient
|
|
|
0.1088
|
|
|
0.1398
|
|
|
|
x 365 days
|
|
|
x 365 days
|
Days Payable Outstanding
|
|
|
40
|
|
|
51
|
Days Sales Outstanding is calculated by dividing Trade
receivables by the trailing three months Net sales multiplied by four,
which ratio is multiplied by 365 days.
Days Sales Outstanding
|
|
|
|
|
|
|
|
|
|
June 30, 2009
|
|
|
Mar 31, 2009
|
Trade Accounts Receivable
|
|
$
|
639.8
|
|
$
|
701.8
|
|
|
|
|
|
|
|
Net sales for the three months ended
|
|
$
|
1,320.2
|
|
$
|
1,302.6
|
|
|
|
x 4
|
|
|
x 4
|
Annualized net sales
|
|
$
|
5,280.8
|
|
$
|
5,210.4
|
|
|
|
|
|
|
|
Quotient
|
|
|
0.1212
|
|
|
0.1347
|
|
|
|
x 365 days
|
|
|
x 365 days
|
Days Sales Outstanding
|
|
|
44
|
|
|
49
|
Debt is calculated using the Consolidated Balance Sheet amounts
for Notes payable and current portion of long-term debt plus Long-term
debt, less current portion. It is a measure that aids in the evaluation
of the Company’s financial condition.
Long term debt, less current portion
|
|
$
|
1,685.2
|
Notes payable and current portion of long-term debt
|
|
|
51.4
|
|
|
|
Debt
|
|
$
|
1,736.6
|
EBITDA is defined as earnings, before interest, taxes,
depreciation and amortization. The Company calculates this by adding the
amount of depreciation and amortization expenses that have been deducted
from income from operations back into income from operations to arrive
at EBITDA. Depreciation and amortization amounts reported in the
Consolidated Statement of Cash Flows include amortization of debt
issuance costs that are recorded in Other income (expense) - net and,
therefore, are not included in EBITDA. Terex believes that disclosure of
EBITDA will be helpful to those reviewing its performance, as EBITDA
provides information on Terex’s ability to meet debt service, capital
expenditure and working capital requirements, and is also an indicator
of profitability.
|
|
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
(Loss) income from operations
|
|
$
|
(85.7
|
)
|
|
$
|
370.9
|
|
|
$
|
(158.2
|
)
|
|
$
|
627.2
|
|
Depreciation
|
|
|
18.2
|
|
|
|
19.2
|
|
|
|
37.5
|
|
|
|
36.4
|
|
Amortization
|
|
|
5.5
|
|
|
|
5.3
|
|
|
|
10.8
|
|
|
|
10.5
|
|
Bank fee amortization not included in (Loss) income from operations
|
|
|
(1.2
|
)
|
|
|
(0.8
|
)
|
|
|
(2.1
|
)
|
|
|
(1.6
|
)
|
EBITDA
|
|
$
|
(63.2
|
)
|
|
$
|
394.6
|
|
|
$
|
(112.0
|
)
|
|
$
|
672.5
|
|
Gross Margin is defined as the ratio of Gross Profit to Net Sales.
Operating Margin is defined as the ratio of Income from
Operations to Net Sales.
Return on Invested Capital, or ROIC, is calculated by Terex by
dividing the sum of the last four quarters’ Adjusted Net Operating
Profit After Tax (as defined above) by the average of the sum of Total
Terex Corporation stockholders’ equity as adjusted plus Debt (as defined
above) less Cash and cash equivalents for the last five quarters ended
Consolidated Balance Sheets. ROIC is calculated by using the last four
quarters’ Adjusted NOPAT, as this represents the most recent twelve
month period at any given point of determination. In order for the
denominator of the ROIC ratio to properly match the operational period
reflected in the numerator, Terex includes the average of five quarters
ending balance sheet amounts so that the denominator includes the
average of the opening through ending balances (on a quarterly basis)
over the same time period as the numerator (four quarters of average
invested capital).
Terex management and the Board of Directors use ROIC as one of the
primary measures to assess operational performance, including in
connection with certain compensation programs. Terex utilizes ROIC as a
unifying metric because our management believes that it measures how
effectively we invest our capital and provides a better measure to
compare ourselves to peer companies to assist in assessing how we drive
operational improvement. ROIC measures return on the full
enterprise-wide amount of capital invested in our business, as opposed
to another metric such as return on Terex Corporation stockholders’
equity that only incorporates book equity, and is thus a more accurate
and descriptive measure of our performance. Terex also believes that
adding Debt less Cash and cash equivalents to Total Terex Corporation
stockholders’ equity provides a better comparison across similar
businesses regarding total capitalization, and that ROIC highlights the
level of value creation as a percentage of capital invested.
See reconciliation of adjusted amounts below on table following ROIC
table. Amounts are as of and for the three months ended for the periods
referenced in the table below.
|
|
|
June 09
|
|
|
Mar 09
|
|
|
Dec 08
|
|
|
Sep 08
|
|
|
Jun 08
|
(Benefit from) provision for income taxes as adjusted
|
|
$
|
(30.8
|
)
|
|
$
|
(24.0
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
44.9
|
|
|
|
|
Divided by: Income before income taxes as adjusted
|
|
|
(108.5
|
)
|
|
|
(98.5
|
)
|
|
|
37.0
|
|
|
|
139.4
|
|
|
|
|
Adjusted effective tax rate
|
|
|
28.4
|
%
|
|
|
24.4
|
%
|
|
|
(2.7
|
%)
|
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations as adjusted
|
|
|
(85.7
|
)
|
|
|
(72.5
|
)
|
|
|
68.1
|
|
|
|
167.2
|
|
|
|
|
Multiplied by: 1 minus adjusted effective tax rate
|
|
|
71.6
|
%
|
|
|
75.6
|
%
|
|
|
102.7
|
%
|
|
|
67.8
|
%
|
|
|
|
Adjusted net operating profit after tax
|
|
$
|
(61.4
|
)
|
|
$
|
(54.8
|
)
|
|
$
|
69.9
|
|
|
$
|
113.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (as defined above)
|
|
$
|
1,736.6
|
|
|
$
|
1,482.8
|
|
|
$
|
1,435.8
|
|
|
$
|
1,568.2
|
|
|
$
|
1,355.9
|
|
Less: Cash and cash equivalents
|
|
|
(938.5
|
)
|
|
|
(344.3
|
)
|
|
|
(484.4
|
)
|
|
|
(487.9
|
)
|
|
|
(590.0
|
)
|
Debt less Cash and cash equivalents
|
|
$
|
798.1
|
|
|
$
|
1,138.5
|
|
|
$
|
951.4
|
|
|
$
|
1,080.3
|
|
|
$
|
765.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Terex Corporation stockholders’ equity as adjusted
|
|
$
|
1,860.2
|
|
|
$
|
1,569.8
|
|
|
$
|
2,181.2
|
|
|
$
|
2,302.9
|
|
|
$
|
2,664.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt less Cash and cash equivalents plus Total Terex Corporation
stockholders’ equity as adjusted (Total capitalization)
|
|
$
|
2,658.3
|
|
|
$
|
2,708.3
|
|
|
$
|
3,132.6
|
|
|
$
|
3,383.2
|
|
|
$
|
3,430.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted NOPAT (4 qtrs)
|
|
$
|
67.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg Net Debt plus Equity (5 qtr ends)
|
|
$
|
3,062.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROIC
|
|
|
2.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Income from operations, effective tax rate and total
stockholders’ equity have been adjusted in the table above to eliminate
the goodwill impairment taken in the fourth quarter of 2008.
Reconciliation of the December 2008 Column (above) of ROIC Adjusted
for Goodwill Impairment, as of and for the three months ended December
31, 2008.
|
|
|
Dec 2008
|
Loss before income taxes as reported
|
|
$
|
(422.9
|
)
|
Less: Goodwill impairment
|
|
|
(459.9
|
)
|
Income before income taxes as adjusted
|
|
$
|
37.0
|
|
|
|
|
|
Benefit from income taxes as reported
|
|
$
|
2.7
|
|
Less: Benefit from income taxes on impairment
|
|
|
1.7
|
|
Benefit from income taxes as adjusted
|
|
$
|
1.0
|
|
|
|
|
|
Income before income taxes as adjusted
|
|
$
|
37.0
|
|
Plus: Benefit from income taxes as adjusted
|
|
|
1.0
|
|
Net income as adjusted
|
|
$
|
38.0
|
|
|
|
|
|
Loss from operations as reported
|
|
$
|
(391.8
|
)
|
Less: Goodwill impairment
|
|
|
(459.9
|
)
|
Income from operations as adjusted
|
|
$
|
68.1
|
|
|
|
|
|
Total Terex Corporation stockholders' equity as reported
|
|
$
|
1,721.7
|
|
Less: Net loss as reported
|
|
|
(421.5
|
)
|
Add: Net income as adjusted
|
|
|
38.0
|
|
Total Terex Corporation stockholders' equity as adjusted
|
|
$
|
2,181.2
|
|
|
Effective Tax Rate Reconciliation Excluding Impairment
|
|
|
|
|
Three months ended Dec 31, 2008
|
|
|
|
As Reported
|
|
|
Impairment
|
|
|
Excluding Impairment
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
$
|
(422.9
|
)
|
|
$
|
(459.9
|
)
|
|
$
|
37.0
|
|
|
|
|
|
|
|
|
|
|
|
Benefit from (provision for) income taxes
|
|
|
2.7
|
|
|
|
1.7
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(420.2
|
)
|
|
|
|
|
$
|
38.0
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
0.6
|
%
|
|
|
0.4
|
%
|
|
|
(2.7
|
%)
|
Selling, General & Administrative expenses less Restructuring is
calculated by removing restructuring expenses that are included in
selling, general & administrative expenses.
|
|
Terex
Corporation (1)
|
|
Terex
AWP
|
|
Terex
Construction
|
|
Terex
Cranes
|
|
Terex
MPM
|
|
|
Q2
2009
|
|
Q1
2009
|
|
Q2
2009
|
|
Q1
2009
|
|
Q2
2009
|
|
Q1
2009
|
|
Q2
2009
|
|
Q1
2009
|
|
Q2
2009
|
|
Q1
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
|
|
$
|
213.6
|
|
|
$
|
217.0
|
|
|
$
|
43.0
|
|
|
$
|
46.1
|
|
|
$
|
55.3
|
|
|
$
|
59.9
|
|
|
$
|
50.0
|
|
|
$
|
53.1
|
|
|
$
|
48.6
|
|
|
$
|
48.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Restructuring
|
|
|
(9.7
|
)
|
|
|
(10.0
|
)
|
|
|
(0.8
|
)
|
|
|
(0.7
|
)
|
|
|
(7.3
|
)
|
|
|
(7.5
|
)
|
|
|
(0.3
|
)
|
|
|
(0.3
|
)
|
|
|
(1.7
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A adjusted for restructuring
|
|
$
|
203.9
|
|
|
$
|
207.0
|
|
|
$
|
42.2
|
|
|
$
|
45.4
|
|
|
$
|
48.0
|
|
|
$
|
52.4
|
|
|
$
|
49.7
|
|
|
$
|
52.8
|
|
|
$
|
46.9
|
|
|
$
|
48.8
|
|
(1) Totals for Terex Corporation include the impact of
Corporate/eliminations.
Total Capitalization is a measure that aids in the evaluation of
the Company’s balance sheet. It is an integral component of certain
financial metrics that are often used to evaluate the Company’s
valuation, liquidity and overall health. Total capitalization as of June
30, 2009 is defined as the sum of:
-
Total Terex Corporation stockholders’ equity; and
-
Debt (as defined above);
-
Less: Cash and cash equivalents.
Total Terex Corporation stockholders' equity
|
|
|
$
|
|
1,860.2
|
|
Debt (as defined above)
|
|
|
|
|
1,736.6
|
|
Less: Cash and cash equivalents
|
|
|
|
|
(938.5
|
)
|
|
|
|
|
|
|
Total Capitalization
|
|
|
$
|
|
2,658.3
|
|
Trailing Three Month Annualized Net Sales is calculated using the
net sales for the quarter multiplied by four.
Second Quarter Net Sales
|
|
|
$
|
|
1,320.2
|
x
|
|
|
|
|
4
|
Trailing Three Month Annualized Sales
|
|
|
$
|
|
5,280.8
|
Working Capital is calculated using the Consolidated Balance
Sheet amounts for Trade receivables (net of allowance) plus Inventories
less Trade accounts payable. The Company views excessive working capital
as an inefficient use of resources, and seeks to minimize the level of
investment without adversely impacting the ongoing operations of the
business. As of June 30, 2009, working capital was:
Inventories
|
|
|
$
|
|
2,002.1
|
|
Trade Receivables, net
|
|
|
|
|
639.8
|
|
Less: Trade Accounts Payable
|
|
|
|
|
(518.9
|
)
|
Total Working Capital
|
|
|
$
|
|
2,123.0
|
|
Source: Terex Corporation
Terex Corporation
Tom Gelston, 203-222-5943
Vice President,
Investor Relations
thomas.gelston@terex.com
or
Kurt
Goddard, 203-222-6160
Senior Manager, Investor Relations
kurt.goddard@terex.com