Market Overview

Terex Announces Fourth Quarter and Full Year 2018 Results and Provides 2019 Guidance

Share:
  • Q4 Sales up 16%
  • Q4 Operating Profit up 14%, as adjusted up 30%
  • Q4 EPS $(0.42), as adjusted Q4 EPS $0.51 - up 55%
  • FY Sales up 18%, Backlog up 19%
  • FY Operating Profit up 63%, as adjusted up 52%
  • FY EPS $1.45, as adjusted FY EPS $2.71 - up 101%
  • 2019 Guidance Highlights: Sales of ~$4.7 billion, EPS improves to $3.60-$4.20

WESTPORT, Conn., Feb. 24, 2019 (GLOBE NEWSWIRE) -- Terex Corporation (NYSE:TEX) today announced fourth quarter 2018 loss from continuing operations of $(30.6) million, or $(0.42) per share, on net sales of $1.2 billion. The fourth quarter and full year 2018 results include a one-time, non-cash charge of $67 million related to the annuitization of its U.S. pension. In the fourth quarter of 2017, the reported loss from continuing operations was $(31.7) million, or $(0.38) per share, on net sales of $1.1 billion. The fourth quarter and full year 2017 results included a one-time $50.4 million charge associated with U.S. tax law changes. Income from continuing operations, as adjusted, for the fourth quarter of 2018 was $37.7 million, or $0.51 per share. This compares to income from continuing operations, as adjusted, of $28.3 million or $0.33 per share in the fourth quarter of 2017. The Glossary at the end of this press release contains further details regarding these non-GAAP measures.

For the full year 2018, Terex reported income from continuing operations of $111.3 million, or $1.45 per share, on net sales of $5.1 billion compared with income from continuing operations of $60.0 million, or $0.63 per share, on net sales of $4.4 billion for the full year 2017. Income from continuing operations, as adjusted, for the full year 2018 was $208.6 million, or $2.71 per share, compared with $128.4 million, or $1.35 per share for the full year 2017.

"Overall, our global team executed well in the fourth quarter, completing a strong year for Terex," remarked John L. Garrison, Terex Chairman and CEO. "In 2018, we grew sales by 18%, improved operating margins, and significantly increased EPS. AWP grew sales 24% for the year and expanded operating margins by 200 basis points. MP had an excellent year, growing sales by 17% and increasing full year operating margin to 13.3%, up 160 basis points. Cranes continued to make operational improvements and returned to profitability on an adjusted basis in the fourth quarter."

Mr. Garrison continued, "We continued to implement the Focus, Simplify and Execute to Win elements of our strategy and made significant progress in our Commercial Excellence, Lifecycle Solutions, and Strategic Sourcing priority areas. We also continued to follow our disciplined capital allocation strategy, investing to improve and grow our businesses, and returning capital to shareholders through higher dividends and by repurchasing approximately 14% of our outstanding shares in 2018."

Mr. Garrison continued, "The sale of the Demag® Mobile Crane business and the decision to exit the mobile crane product lines manufactured at our Oklahoma City facility, will dramatically improve Terex's operating results by Focusing the portfolio on our high performing businesses." 

Mr. Garrison concluded, "We entered 2019 with 29% higher backlog, on a comparable basis, with growth in AWP and MP, and we expect our global markets to remain strong. We will continue to execute our strategy to Focus and Simplify Terex while building capabilities in our Execute to Win priority areas, and will continue to follow our disciplined capital allocation strategy. As a result, we expect to significantly increase continuing operations EPS again in 2019, to between $3.60 and $4.20, excluding restructuring, transformation investments, and other unusual items, on net sales of approximately $4.7 billion."

Non-GAAP Measures and Other Items

Results of operations reflect continuing operations. 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.

The Company provides guidance on a non-GAAP basis as the Company cannot predict with a reasonable degree of certainty the timing and magnitude of future charges that would be included in the reported GAAP results.

The Glossary at the end of this press release contains further details about this subject.

Total amounts in tables of this release may not add due to rounding.

Conference Call

The Company has scheduled a one hour conference call to review the financial results on Monday February 25th, 2019 at 8:30 a.m. ET. John L. Garrison, Chairman and CEO, will host the call. A simultaneous webcast of this call can be accessed at https://investors.terex.com. Participants are encouraged to access the call 10 minutes prior to the starting time. The call will also be archived in the Event Archive at https://investors.terex.com.

Contact Information:

Terex Corporation
Brian J. Henry, Senior Vice President
Business Development & Investor Relations
(203) 222-5954
brian.henry@terex.com
https://investors.terex.com

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; changes in import/export regulatory regimes and the escalation of global trade conflicts could continue to negatively impact sales of our products and our financial results; our financial results could be adversely impacted by the United Kingdom's departure from the European Union; our 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 highly competitive and is affected by our cost structure, pricing, product initiatives and other actions taken by competitors; our retention of key management personnel; the financial condition of suppliers and customers, and their continued access to capital; exposure from providing financing and credit support for some of our customers; we may experience losses in excess of recorded reserves; we are dependent upon third-party suppliers, making us vulnerable to supply shortages and price increases; our business is global and subject to changes in exchange rates between currencies, commodity price changes, 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, intellectual property claims, class action lawsuits and other liabilities; our ability to comply with an injunction and related obligations imposed by the United States Securities and Exchange Commission ("SEC"); disruption or breach in our information technology systems and storage of sensitive data; our ability to successfully implement our Execute to Win strategy; 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.

About Terex
Terex Corporation is a global manufacturer of lifting and material processing products and services that deliver lifecycle solutions to maximize customer return on investment. The company reports in three business segments: Aerial Work Platforms, Cranes, and Materials Processing. Terex delivers lifecycle solutions to a broad range of 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 OPERATIONS
(unaudited)
(in millions, except per share data)
 
  Three Months Ended
December 31,

  Twelve Months Ended
December 31,

  2018   2017   2018   2017
Net sales $ 1,233.1     $ 1,063.6     $ 5,125.0     $ 4,363.4  
Cost of goods sold   (1,009.3 )     (859.6 )     (4,158.2 )     (3,547.4 )
Gross profit   223.8       204.0       966.8       816.0  
Selling, general and administrative expenses   (177.1 )     (163.0 )     (673.5 )     (636.1 )
Income (loss) from operations   46.7       41.0       293.3       179.9  
Other income (expense)                      
Interest income   1.8       1.7       8.9       6.9  
Interest expense   (20.4 )     (15.5 )     (73.1 )     (67.5 )
Loss on early extinguishment of debt               (0.7 )     (52.6 )
Other income (expense) – net   (73.9 )     (1.8 )     (79.7 )     45.3  
Income (loss) from continuing operations before income taxes   (45.8 )     25.4       148.7       112.0  
(Provision for) benefit from income taxes   15.2       (57.1 )     (37.4 )     (52.0 )
Income (loss) from continuing operations   (30.6 )     (31.7 )     111.3       60.0  
Gain (loss) on disposition of discontinued operations- net of tax   (2.4 )     5.0       2.4       68.7  
Net income (loss) $ (33.0 )   $ (26.7 )   $ 113.7     $ 128.7  
Basic Earnings (Loss) per Share:                      
Income (loss) from continuing operations $ (0.42 )   $ (0.38 )   $ 1.48     $ 0.65  
Gain (loss) on disposition of discontinued operations – net of tax   (0.03 )     0.06       0.03    
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