WESTPORT, Conn.--(BUSINESS WIRE)--Apr. 24, 2013--
Terex Corporation (NYSE: TEX) today announced income from continuing
operations of $20.9 million, or $0.18 per share for the first quarter of
2013, as compared to income from continuing operations of $20.5 million,
or $0.18 per share for the first quarter of 2012. Excluding the impact
of a charge related to the divestiture of certain roadbuilding assets of
approximately $3.9 million, or $0.03 per share, and a charge related to
the Material Handling & Port Solutions (MHPS) business of $1.9 million,
or $0.02 per share, income from continuing operations as
adjusted was $26.7 million, or $0.23 per share in the first quarter
of 2013. Excluding the write down of an acquisition related note
receivable of $12.3 million, income from continuing operations as
adjusted was $32.8 million, or $0.29 per share, in the first quarter of
2012.
Net sales were $1,723.1 million in the first quarter of 2013, a decrease
of 5.3% from $1,819.4 million in the first quarter of 2012. Income from
operations was $68.4 million in the first quarter of 2013, an
improvement of $4.6 million when compared to income from operations of
$63.8 million in the first quarter of 2012. Excluding the impact of a
write down of a charge related to the divestiture of the roadbuilding
assets of approximately $3.4 million and a charge related to the MHPS
business of $2.7 million, income from operations as adjusted was
$74.5 million in the first quarter of 2013. Excluding the write down of
an acquisition related note receivable of $12.3 million, income from
operations as adjusted was approximately $76.1 million in the first
quarter of 2012.
All results are for continuing operations, unless stated otherwise. All
per share amounts are on a fully diluted basis. A comprehensive review
of the quarterly financial performance is contained in the presentation
that will accompany the Company’s earnings conference call.
“Our business performance was mixed in the first quarter,” commented Ron
DeFeo, Terex Chairman and Chief Executive Officer. “We are encouraged by
the performance of our Aerial Work Platform (AWP) business, which
continues to reflect the strong end-market dynamics of the rental
channel, particularly in North America. Our Cranes and Materials
Processing businesses also positively contributed to our results and
performed generally as expected. However, we have seen significant
global revenue shortfalls in our MHPS business, with particular weakness
in Europe and India. Our Construction business is also reflecting the
challenges of a less certain customer base in Europe. As a result, we
are initiating additional actions in the second quarter to further
adjust the cost structure of the MHPS and Construction organizations to
better reflect the reduced demand for certain of their products. We
anticipate that we will be incurring restructuring and related charges
of approximately $30-$50 million in the MHPS segment in the second
quarter, and expect to realize a similar amount in savings over the next
12 to 24 months.”
Outlook : The Company’s overall outlook for
fiscal year 2013 financial performance is consistent with our prior
view, although our segment guidance now reflects the new reporting
structure. Mr. DeFeo added, “Terex remains focused on improving profit
through organic means, integrating the businesses more thoroughly, and
generating consistent free cash flow. We reiterate our annual outlook of
earnings per share to be between $2.40 and $2.70 per share, excluding
restructuring and other unusual items, on net sales of between $7.9
billion and $8.3 billion.”
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 the text or the Glossary at the end of this press
release. The Utilities business, formerly part of the AWP
segment, the Crane America Services business, formerly part of the MHPS
segment, and the legacy AWP services business, formerly part of the AWP
segment, are now all consolidated within the Cranes segment.
Capital Structure: The Company’s liquidity
at March 31, 2013 increased by approximately $52.3 million compared to
December 31, 2012 and totaled $1,184.9 million, which comprised cash
balances of $729.7 million and borrowing availability under the
Company’s revolving credit facilities of approximately $455.2 million.
Kevin Bradley, Terex Senior Vice President and Chief Financial Officer,
commented, “We generated free cash flow in the first quarter of
2013 of approximately $135 million. We are pleased with this result as
we normally consume cash early in the year. We continue to anticipate
improved cash generation throughout the remainder of the year.”
Return on Invested Capital (ROIC) was 7.7% for the
trailing twelve months ended March 31, 2013.
Taxes: The effective tax rate for the first
quarter of 2013 was 44.2% as compared to an effective tax rate of 28.9%
for the first quarter of 2012.
Working Capital: Working Capital as
a percent of Trailing Three Month Annualized Net Sales was 25.7%
at March 31, 2013, as compared to 27.2% at December 31, 2012. This
decrease was primarily attributable to increased accounts payable and
customer deposits, reflecting the acceleration of production in
anticipation of upcoming deliveries in the Company’s seasonally stronger
period. This was offset slightly by higher accounts receivable,
reflecting a solid end to the first quarter of 2013. The Company
continues to target its Working Capital as a percent of Trailing Three
Month Annualized Net Sales to be approximately 22% at the end of 2013.
Backlog: Backlog for orders
deliverable during the next twelve months was approximately $2,166.1
million at March 31, 2013, an increase of approximately 7.8% from
December 31, 2012 and a decrease of approximately 5.9% from March 31,
2012. Strong demand for AWP products contributed positively to the
backlog, offset by softer demand for Construction, mainly as a result of
continued European softness.
The Glossary contains further details regarding backlog.
Conference call
The Company will host a conference call to review the financial results
on Thursday, April 25, 2013 at 8:30 a.m. ET. Ronald M. DeFeo, Chairman
and CEO, will host the call. A simultaneous webcast of this call will be
available on the Company’s website, www.terex.com.
To listen to the call, select “Investor Relations” in the “About Terex”
section on the home page and then click on the webcast microphone link.
Participants are encouraged to access the call 10 minutes prior to the
starting time. The call will also be archived on the Company’s website
under “Audio Archives” in the “Investor Relations” section of the
website.
Forward-Looking Statements
This press release contains forward-looking information regarding future
events or the Company’s future financial performance based on the
current expectations of Terex Corporation. In addition, when included in
this press release, the words “may,” “expects,” “intends,”
“anticipates,” “plans,” “projects,” “estimates” and the negatives
thereof and analogous or similar expressions are intended to identify
forward-looking statements. However, the absence of these words does not
mean that the statement is not forward-looking. The Company has based
these forward-looking statements on current expectations and projections
about future events. These statements are not guarantees of future
performance.
Because forward-looking statements involve risks and uncertainties,
actual results could differ materially. Such risks and uncertainties,
many of which are beyond the control of Terex, include among others: Our
business is cyclical and weak general economic conditions affect the
sales of our products and financial results; our ability to successfully
integrate acquired businesses, including Demag Cranes AG; the need to
comply with restrictive covenants contained in our debt agreements; our
ability to generate sufficient cash flow to service our debt obligations
and operate our business; our ability to access the capital markets to
raise funds and provide liquidity; our business is sensitive to
government spending; our business is very competitive and is affected by
our cost structure, pricing, product initiatives and other actions taken
by competitors; our ability to timely manufacture and deliver products
to customers; our retention of key management personnel; the financial
condition of suppliers and customers, and their continued access to
capital; our providing financing and credit support for some of our
customers; we may experience losses in excess of recorded reserves;
impairment in the carrying value of goodwill and other indefinite-lived
intangible assets; our ability to obtain parts and components from
suppliers on a timely basis at competitive prices; our business is
global and subject to changes in exchange rates between currencies,
regional economic conditions and trade restrictions; our operations are
subject to a number of potential risks that arise from operating a
multinational business, including compliance with changing regulatory
environments, the Foreign Corrupt Practices Act and other similar laws
and political instability; a material disruption to one of our
significant facilities; possible work stoppages and other labor matters;
compliance with changing laws and regulations, particularly
environmental and tax laws and regulations; litigation, product
liability claims, patent claims, class action lawsuits and other
liabilities; our ability to comply with an injunction and related
obligations resulting from the settlement of an investigation by the
United States Securities and Exchange Commission (“SEC”); 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 AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in millions, except per share data)
|
|
|
|
|
|
|
Three Months
Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
2012
|
Net sales
|
|
|
|
|
$
|
1,723.1
|
|
|
|
$
|
1,819.4
|
Cost of goods sold
|
|
|
|
|
|
(1,395.6)
|
|
|
|
|
(1,488.6)
|
Gross profit
|
|
|
|
|
|
327.5
|
|
|
|
|
330.8
|
Selling, general and administrative expenses
|
|
|
|
|
|
(259.1)
|
|
|
|
|
(267.0)
|
Income (loss) from operations
|
|
|
|
|
|
68.4
|
|
|
|
|
63.8
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
1.7
|
|
|
|
|
2.6
|
Interest expense
|
|
|
|
|
|
(33.4)
|
|
|
|
|
(40.5)
|
Other income (expense) – net
|
|
|
|
|
|
(2.1)
|
|
|
|
|
4.5
|
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
34.6
|
|
|
|
|
30.4
|
(Provision for) benefit from income taxes
|
|
|
|
|
|
(15.3)
|
|
|
|
|
(8.8)
|
Income (loss) from continuing operations
|
|
|
|
|
|
19.3
|
|
|
|
|
21.6
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
|
|
-
|
|
|
|
|
2.5
|
Gain (loss) on disposition of discontinued operations- net of tax
|
|
|
|
|
|
3.0
|
|
|
|
|
-
|
Net income (loss)
|
|
|
|
|
|
22.3
|
|
|
|
|
24.1
|
Net (income) loss attributable to noncontrolling interest
|
|
|
|
|
|
1.6
|
|
|
|
|
(1.1)
|
Net income (loss) attributable to Terex Corporation
|
|
|
|
|
$
|
23.9
|
|
|
|
$
|
23.0
|
Amounts attributable to Terex Corporation common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
|
$
|
20.9
|
|
|
|
$
|
20.5
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
|
|
-
|
|
|
|
|
2.5
|
Gain (loss) on disposition of discontinued operations – net of tax
|
|
|
|
|
|
3.0
|
|
|
|
|
-
|
Net income (loss) attributable to Terex Corporation
|
|
|
|
|
$
|
23.9
|
|
|
|
$
|
23.0
|
Basic Earnings (loss) Per Share Attributable to Terex Corporation
Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
|
$
|
0.19
|
|
|
|
$
|
0.19
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
|
|
-
|
|
|
|
|
0.02
|
Gain (loss) on disposition of discontinued operations – net of tax
|
|
|
|
|
|
0.03
|
|
|
|
|
-
|
Net income (loss) attributable to Terex Corporation
|
|
|
|
|
$
|
0.22
|
|
|
|
$
|
0.21
|
Diluted Earnings (loss) Per Share Attributable to Terex Corporation
Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
|
|
$
|
0.18
|
|
|
|
$
|
0.18
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
|
|
-
|
|
|
|
|
0.02
|
Gain (loss) on disposition of discontinued operations – net of tax
|
|
|
|
|
|
0.03
|
|
|
|
|
-
|
Net income (loss) attributable to Terex Corporation
|
|
|
|
|
$
|
0.21
|
|
|
|
$
|
0.20
|
Weighted average number of shares outstanding in per share
calculation
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
110.8
|
|
|
|
|
109.9
|
Diluted
|
|
|
|
|
|
116.1
|
|
|
|
|
114.3
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in millions, except par value)
|
|
|
|
|
|
|
March 31,
2013
|
|
|
|
December 31,
2012
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
729.7
|
|
|
|
$
|
678.0
|
Trade receivables (net of allowance of $34.2 and $38.8 at March
31, 2013
and December 31, 2012, respectively)
|
|
|
|
|
|
1,133.9
|
|
|
|
|
1,077.7
|
Inventories
|
|
|
|
|
|
1,702.2
|
|
|
|
|
1,715.6
|
Other current assets
|
|
|
|
|
|
303.9
|
|
|
|
|
326.1
|
Total current assets
|
|
|
|
|
|
3,869.7
|
|
|
|
|
3,797.4
|
Total non-current assets
|
|
|
|
|
|
2,882.1
|
|
|
|
|
2,948.8
|
Total assets
|
|
|
|
|
$
|
6,751.8
|
|
|
|
$
|
6,746.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable and current portion of long-term debt
|
|
|
|
|
$
|
75.8
|
|
|
|
$
|
83.8
|
Trade accounts payable
|
|
|
|
|
|
711.9
|
|
|
|
|
635.5
|
Accrued Expenses
|
|
|
|
|
|
300.1
|
|
|
|
|
323.8
|
Customer advances
|
|
|
|
|
|
350.5
|
|
|
|
|
312.9
|
Other current liabilities
|
|
|
|
|
|
361.6
|
|
|
|
|
352.8
|
Total current liabilities
|
|
|
|
|
|
1,799.9
|
|
|
|
|
1,708.8
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
|
|
|
2,006.7
|
|
|
|
|
2,014.9
|
Other non-current liabilities
|
|
|
|
|
|
714.1
|
|
|
|
|
744.3
|
Total liabilities
|
|
|
|
|
|
4,520.7
|
|
|
|
|
4,468.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
|
|
|
243.8
|
|
|
|
|
246.9
|
Total stockholders’ equity
|
|
|
|
|
|
1,987.3
|
|
|
|
|
2,031.3
|
Total liabilities, redeemable noncontrolling interest and
stockholders’ equity
|
|
|
|
|
$
|
6,751.8
|
|
|
|
$
|
6,746.2
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited) (in millions)
|
|
|
|
|
|
|
Three Months
Ended March 31,
|
|
|
|
|
|
2013
|
|
|
|
2012
|
Operating Activities of Continuing Operations
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
22.3
|
|
|
|
$
|
24.1
|
Adjustments to reconcile net income to net cash provided by (used
in) operating
activities of continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
38.4
|
|
|
|
|
38.8
|
Other adjustments to net income
|
|
|
|
|
|
(5.2)
|
|
|
|
|
6.2
|
Changes in operating assets and liabilities (net of effects of
acquisitions and
divestitures):
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
|
|
(81.1)
|
|
|
|
|
(8.4)
|
Inventories
|
|
|
|
|
|
(44.6)
|
|
|
|
|
(67.0)
|
Trade accounts payable
|
|
|
|
|
|
97.8
|
|
|
|
|
60.5
|
Customer advances
|
|
|
|
|
|
45.4
|
|
|
|
|
0.7
|
Other, net
|
|
|
|
|
|
(14.2)
|
|
|
|
|
(133.4)
|
Net cash provided by (used in) operating activities of continuing
operations
|
|
|
|
|
|
58.8
|
|
|
|
|
(78.5)
|
Investing Activities of Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
(22.5)
|
|
|
|
|
(19.6)
|
Other investing activities, net
|
|
|
|
|
|
30.2
|
|
|
|
|
(1.6)
|
Net cash (used in) provided by investing activities of continuing
operations
|
|
|
|
|
|
7.7
|
|
|
|
|
(21.2)
|
Financing Activities of Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities of continuing
operations
|
|
|
|
|
|
0.1
|
|
|
|
|
286.6
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
|
|
|
|
(14.9)
|
|
|
|
|
12.2
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
|
|
|
|
51.7
|
|
|
|
|
199.1
|
Cash and Cash Equivalents at Beginning of Period
|
|
|
|
|
|
678.0
|
|
|
|
|
774.1
|
Cash and Cash Equivalents at End of Period
|
|
|
|
|
$
|
729.7
|
|
|
|
$
|
973.2
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(unaudited)
(in millions)
|
|
|
|
|
|
|
First Quarter
|
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
% of
Net Sales
|
|
|
|
|
|
|
% of
Net Sales
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
1,723.1
|
|
|
|
|
|
$
|
1,819.4
|
|
|
Gross profit
|
|
|
|
|
|
327.5
|
|
19.0%
|
|
|
|
|
330.8
|
|
18.2%
|
SG&A
|
|
|
|
|
|
259.1
|
|
15.0%
|
|
|
|
|
267.0
|
|
14.7%
|
Income from operations
|
|
|
|
|
$
|
68.4
|
|
4.0%
|
|
|
|
$
|
63.8
|
|
3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
509.1
|
|
|
|
|
|
$
|
419.8
|
|
|
Gross profit
|
|
|
|
|
|
118.5
|
|
23.3%
|
|
|
|
|
79.1
|
|
18.8%
|
SG&A
|
|
|
|
|
|
46.1
|
|
9.1%
|
|
|
|
|
39.9
|
|
9.5%
|
Income from operations
|
|
|
|
|
$
|
72.4
|
|
14.2%
|
|
|
|
$
|
39.2
|
|
9.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
279.8
|
|
|
|
|
|
$
|
363.1
|
|
|
Gross profit
|
|
|
|
|
|
20.9
|
|
7.5%
|
|
|
|
|
36.9
|
|
10.2%
|
SG&A
|
|
|
|
|
|
34.0
|
|
12.2%
|
|
|
|
|
36.9
|
|
10.2%
|
Income (loss) from operations
|
|
|
|
|
$
|
(13.1)
|
|
(4.7)%
|
|
|
|
$
|
0.0
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cranes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
470.9
|
|
|
|
|
|
$
|
455.2
|
|
|
Gross profit
|
|
|
|
|
|
85.9
|
|
18.2%
|
|
|
|
|
74.9
|
|
16.5%
|
SG&A
|
|
|
|
|
|
53.4
|
|
11.3%
|
|
|
|
|
61.9
|
|
13.6%
|
Income from operations
|
|
|
|
|
$
|
32.5
|
|
6.9%
|
|
|
|
$
|
13.0
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MHPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
339.2
|
|
|
|
|
|
$
|
438.1
|
|
|
Gross profit
|
|
|
|
|
|
68.7
|
|
20.3%
|
|
|
|
|
100.1
|
|
22.8%
|
SG&A
|
|
|
|
|
|
97.8
|
|
28.8%
|
|
|
|
|
99.5
|
|
22.7%
|
Income (loss) from operations
|
|
|
|
|
$
|
(29.1)
|
|
(8.6)%
|
|
|
|
$
|
0.6
|
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
154.3
|
|
|
|
|
|
$
|
169.2
|
|
|
Gross profit
|
|
|
|
|
|
31.7
|
|
20.5%
|
|
|
|
|
35.1
|
|
20.7%
|
SG&A
|
|
|
|
|
|
20.0
|
|
13.0%
|
|
|
|
|
19.8
|
|
11.7%
|
Income from operations
|
|
|
|
|
$
|
11.7
|
|
7.6%
|
|
|
|
$
|
15.3
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate/Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
$
|
(30.2)
|
|
|
|
|
|
$
|
(26.0)
|
|
|
Gross profit
|
|
|
|
|
|
1.8
|
|
(6.0)%
|
|
|
|
|
4.7
|
|
(18.1)%
|
SG&A
|
|
|
|
|
|
7.8
|
|
(25.8)%
|
|
|
|
|
9.0
|
|
(34.6)%
|
Loss from operations
|
|
|
|
|
$
|
(6.0)
|
|
19.9%
|
|
|
|
$
|
(4.3)
|
|
16.5%
|
|
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.
As changes in foreign currency exchange rates have a non-operating
impact on the translation of our financial results, we believe excluding
the effect of these changes assists in the assessment of our business
results between periods. We calculate the translation effect of foreign
currency exchange rate changes by translating the current period results
at the rates that the comparable prior periods were translated to
isolate the foreign exchange component of the fluctuation from the
operational component. Similarly, the impact of changes in our results
from acquisitions that were not included in comparable prior periods is
subtracted from the absolute change in results to allow for better
comparability of results between periods.
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 the various Terex businesses
is not necessarily indicative of sales to be recognized in a specified
future period.
|
|
|
|
|
|
|
|
Mar 31,
2013
|
|
|
|
|
Mar 31,
2012
|
|
|
|
%
change
|
|
|
|
|
Dec 31,
2012
|
|
|
|
%
change
|
Consolidated Backlog
|
|
|
|
|
|
$
|
2,166.1
|
|
|
|
$
|
2,301.3
|
|
|
|
(5.9)%
|
|
|
|
$
|
2,009.1
|
|
|
|
7.8%
|
AWP
|
|
|
|
|
|
$
|
577.3
|
|
|
|
$
|
523.4
|
|
|
|
10.3%
|
|
|
|
$
|
509.9
|
|
|
|
13.2%
|
Construction
|
|
|
|
|
|
$
|
190.6
|
|
|
|
$
|
266.4
|
|
|
|
(28.5)%
|
|
|
|
$
|
209.0
|
|
|
|
(8.8)%
|
Cranes
|
|
|
|
|
|
$
|
634.2
|
|
|
|
$
|
775.7
|
|
|
|
(18.2)%
|
|
|
|
$
|
642.7
|
|
|
|
(1.3)%
|
MHPS
|
|
|
|
|
|
$
|
679.1
|
|
|
|
$
|
631.4
|
|
|
|
7.6%
|
|
|
|
$
|
577.1
|
|
|
|
17.7%
|
MP
|
|
|
|
|
|
$
|
84.9
|
|
|
|
$
|
104.4
|
|
|
|
(18.7)%
|
|
|
|
$
|
70.4
|
|
|
|
20.6%
|
|
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
March 31,
|
|
|
|
|
|
2013
|
|
|
|
2012
|
Income (loss) from operations
|
|
|
|
|
$
|
68.4
|
|
|
|
$
|
63.8
|
Depreciation
|
|
|
|
|
|
25.6
|
|
|
|
|
25.4
|
Amortization
|
|
|
|
|
|
12.8
|
|
|
|
|
13.4
|
Bank fee amortization not included in Income (loss) from
operations
|
|
|
|
|
|
(2.2)
|
|
|
|
|
(2.4)
|
EBITDA
|
|
|
|
|
$
|
104.6
|
|
|
|
$
|
100.2
|
|
Free cash flow is defined as income from operations plus
depreciation and amortization, proceeds from the sale of assets, plus or
minus changes in working capital, less capital expenditures.
|
|
|
|
|
|
Three months
ended
Mar 31, 2013
|
Income from operations
|
|
|
|
|
$
|
68.4
|
|
Depreciation and amortization
|
|
|
|
|
|
38.4
|
|
Proceeds from sale of assets
|
|
|
|
|
|
33.0
|
|
Changes in working capital
|
|
|
|
|
|
17.5
|
|
Capital expenditures
|
|
|
|
|
|
(22.5
|
)
|
Free cash flow
|
|
|
|
|
$
|
134.8
|
|
|
Return on Invested Capital (“ROIC”) is determined by dividing the
sum of Net Operating Profit After Tax (“NOPAT”)(as defined below) for
each of the previous four quarters by the average of the sum of Total
Terex Corporation stockholders’ equity plus Debt (as defined below) less
Cash and cash equivalents for the previous five quarters. 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. NOPAT for each quarter is calculated by multiplying
Income (loss) from continuing operations by a figure equal to one minus
the effective tax rate of the Company. The Company believes that returns
on capital deployed in Terex Financial Services (“TFS”) does not
represent its primary operations and, therefore, TFS finance receivable
assets and results from operations have been excluded from the
calculation below. The effective tax rate is equal to the (Provision
for) benefit from income taxes divided by Income (loss) before income
taxes for the respective quarter. Total Terex Corporation stockholders’
equity is adjusted to include redeemable non-controlling interest as
this item is deemed to be temporary equity and therefore should be
included in the denominator of the ROIC ratio. The Company calculates
ROIC using the last four quarters’ NOPAT as this represents the most
recent 12-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, the Company 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) thereby providing, 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 and in connection
with certain compensation programs. Terex utilizes ROIC as a unifying
metric because management believes that it measures how effectively the
Company invests its capital and provides a better measure to compare the
Company to peer companies to assist in assessing how it drives
operational improvement. ROIC measures return on the amount of capital
invested in the Company’s primary businesses, excluding TFS, 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 the Company’s 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.
|
|
|
|
|
|
|
Mar ‘13
|
|
|
|
Dec ‘12
|
|
|
|
Sept ‘12
|
|
|
|
Jun ‘12
|
|
|
|
Mar ‘12
|
Provision for (benefit from) income taxes
|
|
|
|
|
|
$
|
15.3
|
|
|
|
$
|
(7.5)
|
|
|
|
$
|
8.8
|
|
|
|
$
|
44.1
|
|
|
|
|
|
Divided by: Income (loss) before income taxes
|
|
|
|
|
|
|
34.6
|
|
|
|
|
(36.5)
|
|
|
|
|
37.1
|
|
|
|
|
124.6
|
|
|
|
|
|
Effective tax rate
|
|
|
|
|
|
|
44.2%
|
|
|
|
|
20.5%
|
|
|
|
|
23.7%
|
|
|
|
|
35.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) income from operations as adjusted
|
|
|
|
|
|
$
|
68.9
|
|
|
|
$
|
26.3
|
|
|
|
$
|
132.6
|
|
|
|
$
|
175.5
|
|
|
|
|
|
Multiplied by: 1 minus Effective tax rate
|
|
|
|
|
|
|
55.8%
|
|
|
|
|
79.5%
|
|
|
|
|
76.3%
|
|
|
|
|
64.6%
|
|
|
|
|
|
Adjusted net operating income (loss) after tax
|
|
|
|
|
|
$
|
38.4
|
|
|
|
$
|
20.9
|
|
|
|
$
|
101.2
|
|
|
|
$
|
113.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (as defined above)
|
|
|
|
|
|
$
|
2,082.5
|
|
|
|
$
|
2,098.7
|
|
|
|
$
|
2,063.8
|
|
|
|
$
|
2,402.8
|
|
|
|
$
|
2,608.5
|
Less: Cash and cash equivalents
|
|
|
|
|
|
|
(729.7)
|
|
|
|
|
(678.0)
|
|
|
|
|
(542.6)
|
|
|
|
|
(841.5)
|
|
|
|
|
(973.2)
|
Debt less Cash and cash equivalents
|
|
|
|
|
|
$
|
1,352.8
|
|
|
|
$
|
1,420.7
|
|
|
|
$
|
1,521.2
|
|
|
|
$
|
1,561.3
|
|
|
|
$
|
1,635.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Terex Corporation stockholders’ equity as
adjusted
|
|
|
|
|
|
$
|
2,053.8
|
|
|
|
$
|
2,103.7
|
|
|
|
$
|
2,149.2
|
|
|
|
$
|
2,089.2
|
|
|
|
$
|
1,881.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt less Cash and cash equivalents plus Total
Terex Corporation stockholders’ equity as
adjusted
|
|
|
|
|
|
$
|
3,406.6
|
|
|
|
$
|
3,524.4
|
|
|
|
$
|
3,670.4
|
|
|
|
$
|
3,650.5
|
|
|
|
$
|
3,516.3
|
|
March 31, 2013 ROIC
|
|
|
|
|
|
7.7%
|
Adjusted net operating income (loss) after tax (last 4 quarters)
|
|
|
|
|
$
|
273.9
|
Average Debt less Cash and cash equivalents plus Total Terex
Corporation stockholders’ equity as adjusted (5 quarters)
|
|
|
|
|
$
|
3,553.6
|
|
|
|
|
|
|
Three
months
ended
3/31/13
|
|
|
|
Three
months
ended
12/31/12
|
|
|
Three
months
ended
9/30/12
|
|
|
Three
months
ended
6/30/12
|
|
|
|
Reconciliation of income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations as reported
|
|
|
|
$
|
68.4
|
|
|
|
|
$
|
27.9
|
|
|
|
$
|
131.9
|
|
|
|
$
|
175.0
|
|
|
|
|
|
(Income) loss from operations for TFS
|
|
|
|
|
0.5
|
|
|
|
|
|
(1.6
|
)
|
|
|
|
0.7
|
|
|
|
|
0.5
|
|
|
|
|
|
Income (loss) from operations as adjusted
|
|
|
|
$
|
68.9
|
|
|
|
|
$
|
26.3
|
|
|
|
$
|
132.6
|
|
|
|
$
|
175.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Terex Corporation stockholders’
equity:
|
|
|
|
As of
3/31/13
|
|
|
|
As of
12/31/12
|
|
|
As of
9/30/12
|
|
|
As of
6/30/12
|
|
|
As of
3/31/12
|
Terex Corporation stockholders’ equity as reported
|
|
|
|
$
|
1,957.5
|
|
|
|
|
$
|
2,007.7
|
|
|
|
$
|
2,054.6
|
|
|
|
$
|
1,989.6
|
|
|
|
$
|
1,996.7
|
|
TFS assets
|
|
|
|
|
(147.5
|
)
|
|
|
|
|
(150.9
|
)
|
|
|
|
(142.3
|
)
|
|
|
|
(129.9
|
)
|
|
|
|
(115.7
|
)
|
Redeemable noncontrolling interest
|
|
|
|
|
243.8
|
|
|
|
|
|
246.9
|
|
|
|
|
236.9
|
|
|
|
|
229.5
|
|
|
|
|
-
|
|
Terex Corporation stockholders’ equity as adjusted
|
|
|
|
$
|
2,053.8
|
|
|
|
|
$
|
2,103.7
|
|
|
|
$
|
2,149.2
|
|
|
|
$
|
2,089.2
|
|
|
|
$
|
1,881.0
|
|
|
Trailing Three Month Annualized Net Sales is calculated using the
net sales for the quarter multiplied by four.
|
First Quarter 2013 Net Sales
|
|
|
|
|
$
|
1,723.1
|
|
|
|
|
|
x
|
4
|
Trailing Three Month Annualized Net Sales
|
|
|
|
|
$
|
6,892.4
|
|
Working Capital is calculated using the Consolidated Balance
Sheet amounts for Trade receivables (net of allowance) plus Inventories
less Trade accounts payable and customer advances. 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 March 31, 2013, working
capital was:
|
Inventories
|
|
|
|
|
$
|
1,702.2
|
|
Trade Receivables
|
|
|
|
|
|
1,133.9
|
|
Less: Trade Accounts Payable
|
|
|
|
|
|
(711.9
|
)
|
Less: Customer Advances
|
|
|
|
|
|
(350.5
|
)
|
Total Working Capital
|
|
|
|
|
$
|
1,773.7
|
|
|
Terex Corporation
200 Nyala Farm Road, Westport, Connecticut 06880
Telephone:
(203) 222-7170, Fax: (203) 222-7976, www.terex.com
Source: Terex Corporation
Terex Corporation
Tom Gelston, 203-222-5943
Vice President,
Investor Relations
thomas.gelston@terex.com