WESTPORT, Conn.--(BUSINESS WIRE)--Jul. 23, 2014--
Terex Corporation (NYSE:TEX) today announced income from continuing
operations of $87.8 million, or $0.76 per share, for the second quarter
of 2014. This compared to income from continuing operations of $20.4
million, or $0.17 per share, for the second quarter of 2013. Excluding
the impact of certain items totaling $54.4 million, or $0.47 per share, income
from continuing operations as adjusted in the second quarter
of 2013 was $74.8 million, or $0.64 per share. The glossary at
the end of this press release contains details regarding the impact of
certain items in the second quarter of 2013.
Net sales were $2,055.1 million in the second quarter of 2014, 10.4%
higher than net sales of $1,861.5 million in the second quarter of 2013.
Income from operations was $160.9 million in the second quarter of 2014,
an increase of $77.4 million when compared to income from operations of
$83.5 million in the second quarter of 2013. Excluding the impact of
certain items totaling $64.9 million, income from operations as
adjusted in the second quarter of 2013 was $148.4 million.
“Our results for the second quarter and first six months of the year
were mixed both from a business and geographical perspective,” commented
Ron DeFeo, Terex Chairman and Chief Executive Officer. “Our Aerial Work
Platforms (AWP) segment had a strong quarter but margins were slightly
lower than a year ago due to product mix and planned investments in new
product development and manufacturing footprint. We expect this dynamic
to continue through the remainder of the year, although on increasing
sales versus the prior year. Our Cranes segment is making progress, as
bookings were roughly equal to net sales during the quarter and the
order entry run rate was 12% above the prior year level on a year to
date basis. Our Construction and Material Handling & Port Solutions
(MHPS) segments both delivered quarters roughly in-line with our
expectations, while the Materials Processing (MP) segment had a more
challenging quarter from a sales perspective than originally
anticipated. From a geographical perspective, Western Europe and North
America were the growth drivers with increases of 35% and 15%
respectively, with the rest of world somewhat offsetting these
strengths.”
Outlook: “The Company’s overall outlook for
2014 remains unchanged,” Mr. DeFeo added. “We expect continued strength
from our AWP segment and improvement from our Cranes and MHPS segments
to drive improved performance for the second half of 2014 compared with
the first six months. While we see a slightly weaker end-market than we
originally anticipated, from an EPS perspective, the impact on operating
earnings is expected to be somewhat offset by both a lower effective tax
rate and a lower anticipated share count. We reiterate our annual
outlook for earnings per share of between $2.50 and $2.80, excluding
restructuring and other unusual items, although now on net sales of
between $7.3 billion and $7.5 billion.”
Capital Structure: “During the quarter we
completed the divestiture of our truck business for $160 million,
reporting a gain on discontinued operations of $51.5 million or $0.45
per share.” commented Kevin Bradley, Terex Senior Vice President and
Chief Financial Officer. “We used the proceeds from the sale to pay down
a portion of our revolving credit line. We also repurchased $21 million
of our shares within the quarter for a cumulative total of $84 million
since the inception of the program in December 2013."
The Company’s liquidity at June 30, 2014 stands at $779.5 million, an
increase of $148 million during the quarter. Liquidity was comprised of
$364.3 million in cash and availability under the Company’s revolving
credit facilities of $415.2 million.
Return on Invested Capital (ROIC) was 10.6% for the
trailing twelve months ended June 30, 2014.
Taxes: The effective tax rate for the
second quarter of 2014 was 31.2% as compared to an effective tax rate of
59.7% for the second quarter of 2013. The lower effective tax rate in
the second quarter of 2014 was primarily due to the reduced impact of
losses not benefitted compared to the second quarter of 2013. The
Company now expects the effective tax rate for the full year 2014 to be
between 30% and 33%.
Backlog: Backlog for orders
deliverable during the next twelve months was $2,199.2 million at June
30, 2014, a decrease of 7.0% from March 31, 2014 and an increase of 2.2%
from June 30, 2013. The Glossary contains further details regarding
backlog.
All results are for continuing operations unless directly noted. All
per share amounts are on a fully diluted basis. A comprehensive
review of the quarterly financial performance is contained in the
presentation that will accompany the Company’s earnings conference call.
In this press release, Terex refers to various GAAP (U.S. generally
accepted accounting principles) and non-GAAP financial measures. These
non-GAAP measures may not be comparable to similarly titled measures
being disclosed by other companies. Terex believes that this
non-GAAP information is useful to understanding its operating results
and the ongoing performance of its underlying businesses. 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.
Conference call
The Company has scheduled a one hour conference call to review the
financial results on Thursday, July 24, 2014 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; 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 resource planning
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 lifting and material handling solutions company
reporting in five business segments: Aerial Work Platforms,
Construction, Cranes, Material Handling & Port Solutions and Materials
Processing. Terex manufactures a broad range of equipment for use in
various industries, including the construction, infrastructure,
manufacturing, shipping, transportation, refining, energy, utility,
quarrying and mining industries. Terex offers financial products and
services to assist in the acquisition of Terex equipment through Terex
Financial Services. Terex uses its website (www.terex.com)
and its Facebook page (www.facebook.com/TerexCorporation)
to make information available to its investors and the market.
|
|
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
Net sales
|
|
|
$
|
2,055.1
|
|
|
$
|
1,861.5
|
|
|
|
$
|
3,709.7
|
|
|
$
|
3,515.2
|
|
Cost of goods sold
|
|
|
|
(1,631.3
|
)
|
|
|
(1,510.3
|
)
|
|
|
|
(2,952.5
|
)
|
|
|
(2,842.8
|
)
|
Gross profit
|
|
|
|
423.8
|
|
|
|
351.2
|
|
|
|
|
757.2
|
|
|
|
672.4
|
|
Selling, general and administrative expenses
|
|
|
|
(262.9
|
)
|
|
|
(267.7
|
)
|
|
|
|
(521.3
|
)
|
|
|
(523.3
|
)
|
Income (loss) from operations
|
|
|
|
160.9
|
|
|
|
83.5
|
|
|
|
|
235.9
|
|
|
|
149.1
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
1.2
|
|
|
|
1.8
|
|
|
|
|
2.5
|
|
|
|
3.5
|
|
Interest expense
|
|
|
|
(31.7
|
)
|
|
|
(31.4
|
)
|
|
|
|
(62.1
|
)
|
|
|
(64.8
|
)
|
Loss on early extinguishment of debt
|
|
|
|
-
|
|
|
|
(5.2
|
)
|
|
|
|
-
|
|
|
|
(5.2
|
)
|
Other income (expense) – net
|
|
|
|
(2.0
|
)
|
|
|
(2.3
|
)
|
|
|
|
(4.9
|
)
|
|
|
(3.9
|
)
|
Income (loss) from continuing operations before income taxes
|
|
|
|
128.4
|
|
|
|
46.4
|
|
|
|
|
171.4
|
|
|
|
78.7
|
|
(Provision for) benefit from income taxes
|
|
|
|
(40.0
|
)
|
|
|
(27.7
|
)
|
|
|
|
(51.5
|
)
|
|
|
(42.3
|
)
|
Income (loss) from continuing operations
|
|
|
|
88.4
|
|
|
|
18.7
|
|
|
|
|
119.9
|
|
|
|
36.4
|
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
0.5
|
|
|
|
0.9
|
|
|
|
|
1.4
|
|
|
|
2.5
|
|
Gain (loss) on disposition of discontinued operations- net of tax
|
|
|
|
51.5
|
|
|
|
-
|
|
|
|
|
53.0
|
|
|
|
3.0
|
|
Net income (loss)
|
|
|
|
140.4
|
|
|
|
19.6
|
|
|
|
|
174.3
|
|
|
|
41.9
|
|
Net loss (income) attributable to noncontrolling interest
|
|
|
|
(0.6
|
)
|
|
|
1.7
|
|
|
|
|
0.5
|
|
|
|
3.3
|
|
Net income (loss) attributable to Terex Corporation
|
|
|
$
|
139.8
|
|
|
$
|
21.3
|
|
|
|
$
|
174.8
|
|
|
$
|
45.2
|
|
Amounts attributable to Terex Corporation common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
$
|
87.8
|
|
|
$
|
20.4
|
|
|
|
$
|
120.4
|
|
|
$
|
39.7
|
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
0.5
|
|
|
|
0.9
|
|
|
|
|
1.4
|
|
|
|
2.5
|
|
Gain (loss) on disposition of discontinued operations – net of tax
|
|
|
|
51.5
|
|
|
|
-
|
|
|
|
|
53.0
|
|
|
|
3.0
|
|
Net income (loss) attributable to Terex Corporation
|
|
|
$
|
139.8
|
|
|
$
|
21.3
|
|
|
|
$
|
174.8
|
|
|
$
|
45.2
|
|
Basic Earnings (Loss) per Share Attributable to Terex Corporation
Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
$
|
0.80
|
|
|
$
|
0.18
|
|
|
|
$
|
1.09
|
|
|
$
|
0.36
|
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
0.02
|
|
Gain (loss) on disposition of discontinued operations – net of tax
|
|
|
|
0.47
|
|
|
|
-
|
|
|
|
|
0.48
|
|
|
|
0.03
|
|
Net income (loss) attributable to Terex Corporation
|
|
|
$
|
1.27
|
|
|
$
|
0.19
|
|
|
|
$
|
1.58
|
|
|
$
|
0.41
|
|
Diluted Earnings (Loss) per Share Attributable to Terex
Corporation Common Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
$
|
0.76
|
|
|
$
|
0.17
|
|
|
|
$
|
1.03
|
|
|
$
|
0.34
|
|
Income (loss) from discontinued operations – net of tax
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
0.02
|
|
Gain (loss) on disposition of discontinued operations – net of tax
|
|
|
|
0.45
|
|
|
|
-
|
|
|
|
|
0.46
|
|
|
|
0.03
|
|
Net income (loss) attributable to Terex Corporation
|
|
|
$
|
1.21
|
|
|
$
|
0.18
|
|
|
|
$
|
1.50
|
|
|
$
|
0.39
|
|
Weighted average number of shares outstanding in per share
calculation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
110.3
|
|
|
|
111.2
|
|
|
|
|
110.5
|
|
|
|
111.0
|
|
Diluted
|
|
|
|
115.8
|
|
|
|
115.8
|
|
|
|
|
116.4
|
|
|
|
115.8
|
|
|
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in millions, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
364.3
|
|
|
$
|
408.1
|
|
Trade receivables (net of allowance of $43.2 and $47.6 at June 30,
2014 and December 31, 2013, respectively)
|
|
|
|
1,368.4
|
|
|
|
1,176.8
|
|
Inventories
|
|
|
|
1,779.0
|
|
|
|
1,613.2
|
|
Other current assets
|
|
|
|
300.7
|
|
|
|
312.0
|
|
Current assets – discontinued operations
|
|
|
|
-
|
|
|
|
129.3
|
|
Total current assets
|
|
|
|
3,812.4
|
|
|
|
3,639.4
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment – net
|
|
|
|
776.5
|
|
|
|
789.4
|
|
Goodwill
|
|
|
|
1,267.1
|
|
|
|
1,245.6
|
|
Intangible assets – net
|
|
|
|
430.5
|
|
|
|
444.8
|
|
Other assets
|
|
|
|
418.1
|
|
|
|
401.9
|
|
Non-current assets – discontinued operations
|
|
|
|
-
|
|
|
|
15.6
|
|
Total assets
|
|
|
$
|
6,704.6
|
|
|
$
|
6,536.7
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Notes payable and current portion of long-term debt
|
|
|
$
|
190.7
|
|
|
$
|
86.8
|
|
Trade accounts payable
|
|
|
|
800.8
|
|
|
|
689.1
|
|
Accrued compensation and benefits
|
|
|
|
243.4
|
|
|
|
234.3
|
|
Accrued warranties and product liability
|
|
|
|
92.6
|
|
|
|
96.2
|
|
Customer advances
|
|
|
|
334.5
|
|
|
|
302.1
|
|
Other current liabilities
|
|
|
|
333.3
|
|
|
|
270.1
|
|
Current liabilities – discontinued operations
|
|
|
|
-
|
|
|
|
46.1
|
|
Total current liabilities
|
|
|
|
1,995.3
|
|
|
|
1,724.7
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
|
1,731.8
|
|
|
|
1,889.9
|
|
Retirement plans
|
|
|
|
383.8
|
|
|
|
388.2
|
|
Other non-current liabilities
|
|
|
|
231.2
|
|
|
|
259.5
|
|
Non-current liabilities – discontinued operations
|
|
|
|
-
|
|
|
|
5.7
|
|
Total liabilities
|
|
|
|
4,342.1
|
|
|
|
4,268.0
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
|
-
|
|
|
|
53.9
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
Common stock, $.01 par value – authorized 300.0 shares; issued 124.5
and 123.7 shares at June 30, 2014 and December 31, 2013, respectively
|
|
|
|
1.2
|
|
|
|
1.2
|
|
Additional paid-in capital
|
|
|
|
1,239.7
|
|
|
|
1,247.5
|
|
Retained earnings
|
|
|
|
1,851.7
|
|
|
|
1,688.1
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(75.4)
|
|
|
|
(116.5)
|
|
Less cost of shares of common stock in treasury – 15.1 and 13.8
shares at June 30, 2014 and December 31, 2013, respectively
|
|
|
|
(685.6)
|
|
|
|
(630.2)
|
|
Total Terex Corporation stockholders’ equity
|
|
|
|
2,331.6
|
|
|
|
2,190.1
|
|
Noncontrolling interest
|
|
|
|
30.9
|
|
|
|
24.7
|
|
Total stockholders’ equity
|
|
|
|
2,362.5
|
|
|
|
2,214.8
|
|
Total liabilities, redeemable noncontrolling interest and
stockholders’ equity
|
|
|
$
|
6,704.6
|
|
|
$
|
6,536.7
|
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in millions)
|
|
|
|
|
|
|
|
Six Months
|
|
|
Ended June 30,
|
|
|
|
2014
|
|
|
2013
|
Operating Activities
|
|
|
|
|
|
|
Net income
|
|
|
$
|
174.3
|
|
|
$
|
41.9
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
80.0
|
|
|
|
78.3
|
Changes in operating assets and liabilities (net of effects of
acquisitions and divestitures):
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
(183.6)
|
|
|
|
(130.3)
|
Inventories
|
|
|
|
(162.4)
|
|
|
|
(71.8)
|
Trade accounts payable
|
|
|
|
108.2
|
|
|
|
120.9
|
Customer advances
|
|
|
|
33.7
|
|
|
|
25.0
|
Other, net
|
|
|
|
(25.7)
|
|
|
|
65.9
|
Net cash provided by (used in) operating activities
|
|
|
$
|
24.5
|
|
|
$
|
129.9
|
Investing Activities
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(37.3)
|
|
|
|
(41.4)
|
Proceeds from disposition of discontinued operations
|
|
|
|
162.2
|
|
|
|
0.7
|
Other investing activities, net
|
|
|
|
(4.8)
|
|
|
|
39.3
|
Net cash (used in) provided by investing activities
|
|
|
|
120.1
|
|
|
|
(1.4)
|
Financing Activities
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
(189.1)
|
|
|
|
(240.2)
|
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
|
|
0.7
|
|
|
|
(18.1)
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
|
|
(43.8)
|
|
|
|
(129.8)
|
Cash and Cash Equivalents at Beginning of Period
|
|
|
|
408.1
|
|
|
|
678.0
|
Cash and Cash Equivalents at End of Period
|
|
|
$
|
364.3
|
|
|
$
|
548.2
|
|
|
TEREX CORPORATION AND SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(unaudited)
(in millions)
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
Year-to-Date
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
% of
|
|
|
|
|
% of
|
|
|
|
|
% of
|
|
|
|
|
% of
|
|
|
|
Net Sales
|
|
|
Net Sales
|
|
|
Net Sales
|
|
|
Net Sales
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
2,055.1
|
|
|
|
$
|
1,861.5
|
|
|
|
$
|
3,709.7
|
|
|
|
$
|
3,515.2
|
|
|
Gross profit
|
|
|
|
423.8
|
|
20.6%
|
|
|
351.2
|
|
18.9%
|
|
|
757.2
|
|
20.4%
|
|
|
672.4
|
|
19.1%
|
SG&A
|
|
|
|
262.9
|
|
12.8%
|
|
|
267.7
|
|
14.4%
|
|
|
521.3
|
|
14.1%
|
|
|
523.3
|
|
14.9%
|
Income from operations
|
|
|
$
|
160.9
|
|
7.8%
|
|
$
|
83.5
|
|
4.5%
|
|
$
|
235.9
|
|
6.4%
|
|
$
|
149.1
|
|
4.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
717.9
|
|
|
|
$
|
606.6
|
|
|
|
$
|
1,302.8
|
|
|
|
$
|
1,115.7
|
|
|
Gross profit
|
|
|
|
164.2
|
|
22.9%
|
|
|
147.0
|
|
24.2%
|
|
|
297.3
|
|
22.8%
|
|
|
265.5
|
|
23.8%
|
SG&A
|
|
|
|
50.7
|
|
7.1%
|
|
|
45.8
|
|
7.6%
|
|
|
101.6
|
|
7.8%
|
|
|
91.9
|
|
8.2%
|
Income from operations
|
|
|
$
|
113.5
|
|
15.8%
|
|
$
|
101.2
|
|
16.7%
|
|
$
|
195.7
|
|
15.0%
|
|
$
|
173.6
|
|
15.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
227.2
|
|
|
|
$
|
228.1
|
|
|
|
$
|
422.9
|
|
|
|
$
|
438.5
|
|
|
Gross profit
|
|
|
|
26.5
|
|
11.7%
|
|
|
25.8
|
|
11.3%
|
|
|
45.6
|
|
10.8%
|
|
|
40.4
|
|
9.2%
|
SG&A
|
|
|
|
22.5
|
|
9.9%
|
|
|
31.0
|
|
13.6%
|
|
|
46.6
|
|
11.0%
|
|
|
60.1
|
|
13.7%
|
Income (loss) from operations
|
|
|
$
|
4.0
|
|
1.8%
|
|
$
|
(5.2)
|
|
(2.3)%
|
|
$
|
(1.0)
|
|
(0.2)%
|
|
$
|
(19.7)
|
|
(4.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cranes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
503.5
|
|
|
|
$
|
521.2
|
|
|
|
$
|
897.1
|
|
|
|
$
|
992.1
|
|
|
Gross profit
|
|
|
|
89.9
|
|
17.9%
|
|
|
84.8
|
|
16.3%
|
|
|
149.9
|
|
16.7%
|
|
|
170.7
|
|
17.2%
|
SG&A
|
|
|
|
60.2
|
|
12.0%
|
|
|
61.4
|
|
11.8%
|
|
|
120.4
|
|
13.4%
|
|
|
114.8
|
|
11.6%
|
Income from operations
|
|
|
$
|
29.7
|
|
5.9%
|
|
$
|
23.4
|
|
4.5%
|
|
$
|
29.5
|
|
3.3%
|
|
$
|
55.9
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MHPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
431.4
|
|
|
|
$
|
369.8
|
|
|
|
$
|
799.6
|
|
|
|
$
|
709.0
|
|
|
Gross profit
|
|
|
|
97.2
|
|
22.5%
|
|
|
48.6
|
|
13.1%
|
|
|
181.8
|
|
22.7%
|
|
|
117.3
|
|
16.5%
|
SG&A
|
|
|
|
94.5
|
|
21.9%
|
|
|
105.8
|
|
28.6%
|
|
|
185.4
|
|
23.2%
|
|
|
203.6
|
|
28.7%
|
Income (loss) from operations
|
|
|
$
|
2.7
|
|
0.6%
|
|
$
|
(57.2)
|
|
(15.5)%
|
|
$
|
(3.6)
|
|
(0.5)%
|
|
$
|
(86.3)
|
|
(12.2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
183.1
|
|
|
|
$
|
176.3
|
|
|
|
$
|
333.1
|
|
|
|
$
|
330.6
|
|
|
Gross profit
|
|
|
|
43.7
|
|
23.9%
|
|
|
42.0
|
|
23.8%
|
|
|
75.9
|
|
22.8%
|
|
|
73.7
|
|
22.3%
|
SG&A
|
|
|
|
20.9
|
|
11.4%
|
|
|
17.5
|
|
9.9%
|
|
|
42.2
|
|
12.7%
|
|
|
37.5
|
|
11.3%
|
Income from operations
|
|
|
$
|
22.8
|
|
12.5%
|
|
$
|
24.5
|
|
13.9%
|
|
$
|
33.7
|
|
10.1%
|
|
$
|
36.2
|
|
10.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corp & Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
(8.0)
|
|
|
|
$
|
(40.5)
|
|
|
|
$
|
(45.8)
|
|
|
|
$
|
(70.7)
|
|
|
Gross profit
|
|
|
|
2.3
|
|
(28.8)%
|
|
|
3.0
|
|
(7.4)%
|
|
|
6.7
|
|
(14.6)%
|
|
|
4.8
|
|
(6.8)%
|
SG&A
|
|
|
|
14.1
|
|
(176.3)%
|
|
|
6.2
|
|
(15.3)%
|
|
|
25.1
|
|
(54.8)%
|
|
|
15.4
|
|
(21.8)%
|
Loss from operations
|
|
|
$
|
(11.8)
|
|
147.5%
|
|
$
|
(3.2)
|
|
7.9%
|
|
$
|
(18.4)
|
|
40.2%
|
|
$
|
(10.6)
|
|
15.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun 30,
|
|
|
Mar 31,
|
|
%
|
|
|
Jun 30,
|
|
%
|
|
|
2014
|
|
2014
|
|
change
|
|
2013
|
|
change
|
Consolidated Backlog
|
|
|
$
|
2,199.2
|
|
$
|
2,363.7
|
|
(7.0)%
|
|
$
|
2,151.0
|
|
2.2 %
|
AWP
|
|
|
$
|
418.4
|
|
$
|
522.9
|
|
(20.0)%
|
|
$
|
497.3
|
|
(15.9)%
|
Construction
|
|
|
$
|
187.8
|
|
$
|
214.1
|
|
(12.3)%
|
|
$
|
151.6
|
|
23.9 %
|
Cranes
|
|
|
$
|
661.4
|
|
$
|
673.4
|
|
(1.8)%
|
|
$
|
581.2
|
|
13.8 %
|
MHPS
|
|
|
$
|
864.8
|
|
$
|
878.4
|
|
(1.5)%
|
|
$
|
860.3
|
|
0.5 %
|
MP
|
|
|
$
|
66.8
|
|
$
|
74.9
|
|
(10.8)%
|
|
$
|
60.6
|
|
10.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Six months ended
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
Income (loss) from operations
|
|
|
$
|
160.9
|
|
|
$
|
83.5
|
|
|
|
$
|
235.9
|
|
|
$
|
149.1
|
|
|
|
Depreciation
|
|
|
|
28.7
|
|
|
|
26.3
|
|
|
|
|
55.8
|
|
|
|
51.7
|
|
|
|
Amortization
|
|
|
|
12.0
|
|
|
|
13.4
|
|
|
|
|
23.8
|
|
|
|
26.2
|
|
|
|
Bank fee amortization not included in Income (loss) from operations
|
|
|
|
(2.1
|
)
|
|
|
(2.1
|
)
|
|
|
|
(4.2
|
)
|
|
|
(4.3
|
)
|
|
|
EBITDA
|
|
|
|
199.5
|
|
|
|
121.1
|
|
|
|
|
311.3
|
|
|
|
222.7
|
|
|
|
Operating profit adjustments
|
|
|
|
-
|
|
|
|
64.9
|
|
|
|
|
-
|
|
|
|
71.0
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
199.5
|
|
|
$
|
186.0
|
|
|
|
$
|
311.3
|
|
|
$
|
293.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MHPS - EBITDA
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
Income (loss) from operations
|
|
|
$
|
2.7
|
|
|
$
|
(57.2
|
)
|
|
|
$
|
(3.6
|
)
|
|
$
|
(86.3
|
)
|
|
|
Depreciation
|
|
|
|
10.3
|
|
|
|
9.3
|
|
|
|
|
20.5
|
|
|
|
18.7
|
|
|
|
Amortization
|
|
|
|
6.7
|
|
|
|
7.9
|
|
|
|
|
13.3
|
|
|
|
15.2
|
|
|
|
EBITDA
|
|
|
|
19.7
|
|
|
|
(40.0
|
)
|
|
|
|
30.2
|
|
|
|
(52.4
|
)
|
|
|
Operating profit adjustments
|
|
|
|
-
|
|
|
|
46.5
|
|
|
|
|
-
|
|
|
|
49.2
|
|
|
|
Adjusted EBITDA
|
|
|
$
|
19.7
|
|
|
$
|
6.5
|
|
|
|
$
|
30.2
|
|
|
$
|
(3.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow is defined as net cash provided by (used in)
operating activities less capital expenditures.
|
|
|
|
|
Three months ended
|
|
|
Six months ended
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
Cash from operating activities
|
|
|
$
|
(0.7)
|
|
$
|
71.1
|
|
|
$
|
24.5
|
|
$
|
129.9
|
|
|
Capital expenditures
|
|
|
|
(18.3)
|
|
|
(18.9)
|
|
|
|
(37.3)
|
|
|
(41.4)
|
|
|
Free Cash Flow
|
|
|
$
|
(19.0)
|
|
$
|
52.2
|
|
|
$
|
(12.8)
|
|
$
|
88.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations as adjusted / Income (loss) from
continuing operations as adjusted - The Company assesses the impact
of certain items when discussing Income (loss) from operations and
Income (loss) from continuing operations and adjusts for items it
believes are not reflective of operating activities in the periods. The
impact of these adjustments are provided below.
Second Quarter 2013
|
|
|
|
Pre-Tax
|
|
Tax Rate
|
|
|
After-Tax
|
|
|
EPS*
|
Construction Restructuring & Other
|
|
|
|
(3.4
|
)
|
|
**
|
|
|
(2.5
|
)
|
|
|
(0.02
|
)
|
Cranes Restructuring & Related
|
|
|
|
(15.0
|
)
|
|
31
|
%
|
|
|
(10.4
|
)
|
|
|
(0.09
|
)
|
MHPS Restructuring & Related
|
|
|
|
(46.5
|
)
|
|
**
|
|
|
(38.1
|
)
|
|
|
(0.33
|
)
|
Total Impact on Income From Operations
|
|
|
$
|
(64.9
|
)
|
|
|
|
$
|
(51.0
|
)
|
|
$
|
(0.44
|
)
|
Corporate Debt Reduction
|
|
|
|
(5.2
|
)
|
|
**
|
|
|
(3.5
|
)
|
|
|
(0.03
|
)
|
Construction Restructuring & Other
|
|
|
|
(4.5
|
)
|
|
**
|
|
|
(3.0
|
)
|
|
|
(0.03
|
)
|
MHPS Redeemable NCI
|
|
|
|
3.1
|
|
|
**
|
|
|
3.1
|
|
|
|
0.03
|
|
Total Impact on Income From Continuing Operations
|
|
|
$
|
(71.5
|
)
|
|
|
|
$
|
(54.4
|
)
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Based on weighted average diluted shares of 115.8M
|
** Based on a jurisdictional blend
|
|
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 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) from continuing operations 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 those 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun '14
|
|
Mar '14
|
|
Dec '13
|
|
Sep '13
|
|
Jun '13
|
Provision for (benefit from) income taxes
|
|
$
|
40.0
|
|
|
$
|
11.5
|
|
|
$
|
22.3
|
|
|
$
|
22.8
|
|
|
|
|
Divided by: Income (loss) before income taxes
|
|
|
128.4
|
|
|
|
43.0
|
|
|
|
106.0
|
|
|
|
106.6
|
|
|
|
|
Effective tax rate
|
|
|
31.2
|
%
|
|
|
26.7
|
%
|
|
|
21.0
|
%
|
|
|
21.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations as adjusted
|
|
$
|
162.6
|
|
|
$
|
76.3
|
|
|
$
|
131.5
|
|
|
$
|
139.4
|
|
|
|
|
Multiplied by: 1 minus Effective tax rate
|
|
|
68.8
|
%
|
|
|
73.3
|
%
|
|
|
79.0
|
%
|
|
|
78.6
|
%
|
|
|
|
Adjusted net operating income (loss) after tax
|
|
$
|
111.9
|
|
|
$
|
55.9
|
|
|
$
|
103.9
|
|
|
$
|
109.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt (as defined above)
|
|
$
|
1,922.5
|
|
|
$
|
2,055.9
|
|
|
$
|
1,976.7
|
|
|
$
|
1,905.9
|
|
|
$
|
1,870.4
|
|
Less: Cash and cash equivalents
|
|
|
(364.3
|
)
|
|
|
(390.5
|
)
|
|
|
(408.1
|
)
|
|
|
(370.6
|
)
|
|
|
(548.2
|
)
|
Debt less Cash and cash equivalents
|
|
|
1,558.2
|
|
|
|
1,665.4
|
|
|
|
1,568.6
|
|
|
|
1,535.3
|
|
|
|
1,322.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Terex Corporation stockholders’ equity as adjusted
|
|
|
2,138.5
|
|
|
|
2,012.0
|
|
|
|
2,092.4
|
|
|
|
2,002.2
|
|
|
|
2,042.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt less Cash and cash equivalents plus Total Terex Corporation
stockholders’ equity as adjusted
|
|
$
|
3,696.7
|
|
|
$
|
3,677.4
|
|
|
$
|
3,661.0
|
|
|
$
|
3,537.5
|
|
|
$
|
3,364.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014 ROIC
|
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net operating income (loss) after tax (last 4 quarters)
|
|
$
|
381.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Debt less Cash and cash equivalents plus Total Terex
Corporation stockholders’ equity as adjusted (5 quarters)
|
|
$
|
3,587.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of income (loss) from operations:
|
|
Jun '14
|
Mar '14
|
Dec '13
|
Sep '13
|
Income (loss) from operations as reported
|
|
$
|
160.9
|
|
|
$
|
75.0
|
|
|
$
|
131.4
|
|
|
$
|
138.6
|
|
|
|
|
(Income) loss from operations for TFS
|
|
|
1.7
|
|
|
|
1.3
|
|
|
|
0.1
|
|
|
|
0.8
|
|
|
|
|
Income (loss) from operations as adjusted
|
|
$
|
162.6
|
|
|
$
|
76.3
|
|
|
$
|
131.5
|
|
|
$
|
139.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Terex Corporation stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
Terex Corporation stockholders’ equity as reported
|
|
$
|
2,331.6
|
|
|
$
|
2,183.2
|
|
|
$
|
2,190.1
|
|
|
$
|
2,094.2
|
|
|
$
|
1,955.8
|
|
TFS assets
|
|
|
(193.1
|
)
|
|
|
(171.2
|
)
|
|
|
(151.6
|
)
|
|
|
(149.8
|
)
|
|
|
(139.7
|
)
|
Redeemable noncontrolling interest
|
|
|
-
|
|
|
|
-
|
|
|
|
53.9
|
|
|
|
57.8
|
|
|
|
226.6
|
|
Terex Corporation stockholders’ equity as adjusted
|
|
$
|
2,138.5
|
|
|
$
|
2,012.0
|
|
|
$
|
2,092.4
|
|
|
$
|
2,002.2
|
|
|
$
|
2,042.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Three Month Annualized Net Sales is calculated using the
net sales for the quarter multiplied by four.
|
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
Net Sales
|
|
|
$
|
2,055.1
|
|
|
$
|
1,861.5
|
|
|
|
|
|
|
x
|
4
|
|
|
x
|
4
|
|
|
|
Trailing Three Month Annualized Net Sales
|
|
|
$
|
8,220.4
|
|
|
$
|
7,446.0
|
|
|
|
|
|
|
|
|
|
|
|
|
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. For the periods below, working
capital was:
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
Inventories
|
|
|
$
|
1,779.0
|
|
|
$
|
1,591.4
|
|
|
|
Trade Receivables
|
|
|
|
1,368.4
|
|
|
|
1,150.0
|
|
|
|
Less: Trade Accounts Payable
|
|
|
|
(800.8)
|
|
|
|
(707.0)
|
|
|
|
Less: Customer Advances
|
|
|
|
(334.5)
|
|
|
|
(331.1)
|
|
|
|
Total Working Capital
|
|
|
$
|
2,012.1
|
|
|
$
|
1,703.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Terex Corporation
Terex Corporation
Tom Gelston, 203-222-5943
Vice President,
Investor Relations
thomas.gelston@terex.com