Market Overview

Terex Announces Third Quarter 2019 Results

Share:
  • Q3 Earnings per Share $0.73, $0.82 as adjusted
  • Global Sales of $1.0 billion, down 7% compared to Q3 2018
  • Q3 Cash from Operating Activities of $127 million, Free Cash Flow of $104 million
  • Improved Liquidity to $1.1 billion

WESTPORT, Conn., Oct. 30, 2019 (GLOBE NEWSWIRE) -- Terex Corporation (NYSE:TEX) today announced third quarter 2019 income from continuing operations of $52.4 million, or $0.73 per share, on net sales of $1.0 billion.  In the third quarter of 2018, the reported income from continuing operations was $69.2 million, or $0.92 per share, on net sales of $1.1 billion.  Income from continuing operations, as adjusted, for the third quarter of 2019 was $58.9 million, or $0.82 per share. This compares to income from continuing operations, as adjusted, of $80.8 million or $1.08 per share in the third quarter of 2018. The Glossary at the end of this press release contains further details regarding these non-GAAP measures.

"It has become clear that we are in a softening environment for industrial equipment," stated John L. Garrison, Terex Chairman and CEO. "Demand in the major markets for Aerial Work Platforms (AWP) has declined, putting pressure on sales. We reduced AWP production in the third quarter and have made further reductions in the fourth quarter to align with the market, which is impacting margins. Materials Processing (MP) continued its strong performance in the quarter, however bookings and backlog levels are also pointing to weaker demand in their global markets."

"I was pleased with our cash generation performance in the third quarter, as we achieved $104 million of free cash flow, representing a significant improvement compared to last year," continued Mr. Garrison. "As we enter a more challenging macro environment for industrial equipment we are intensely focused on generating cash and maintaining a strong liquidity profile.  We are well positioned, entering the fourth quarter with approximately $1.1 billion in available liquidity."

Mr. Garrison concluded, "Based on our year-to-date performance, and changes to the outlook for the balance of 2019, we now expect full year EPS to be between $3.00 to $3.20, excluding restructuring, transformation investments, and other unusual items, on net sales of approximately $4.4 billion.  As a result of our updated earnings outlook we are adjusting our full year free cash flow guidance to approximately $110 million. Looking ahead to 2020, we are operationally planning for sales to be approximately 10% lower than 2019 due to the softening macro environment for industrial equipment."

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 calculate due to rounding.

Conference call

The Company has scheduled a one hour conference call to review the financial results on Thursday, October 31, 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 aerial work platforms, materials processing and crane products and services that deliver lifecycle solutions to maximize customer return on investment.  The Company reports in two business segments: Aerial Work Platforms 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
September 30,
  Nine Months Ended
September 30,
   
  2019   2018   2019   2018
Net sales $ 1,024.6     $ 1,098.8     $ 3,468.1     $ 3,468.4  
Cost of goods sold   (815.0 )     (858.7 )     (2,748.9 )     (2,721.1 )
Gross profit   209.6       240.1       719.2       747.3  
Selling, general and administrative expenses   (123.2 )     (135.9 )     (407.1 )     (416.4 )
Income (loss) from operations   86.4       104.2       312.1       330.9  
Other income (expense)                      
Interest income   1.9       1.7       5.4       7.0  
Interest expense   (22.0 )     (18.4 )     (69.6 )     (52.5 )
Other income (expense) – net   1.6       (3.7 )     (2.9 )     (4.1 )
Income (loss) from continuing operations before income taxes   67.9       83.8       245.0       281.3  
(Provision for) benefit from income taxes   (15.5 )     (14.6 )     (53.8 )     (59.2 )
Income (loss) from continuing operations   52.4       69.2       191.2       222.1  
Income (loss) from discontinued operations – net of tax   (10.1 )     (30.8 )     (151.8 )     (80.2 )
Gain (loss) on disposition of discontinued operations- net of tax   (20.9 )     0.2       (9.5 )     4.8  
Net income (loss) $ 21.4     $ 38.6     $ 29.9     $ 146.7  
Basic Earnings (Loss) per Share:                      
Income (loss) from continuing operations $ 0.73     $ 0.94     $ 2.69     $ 2.91  
Income (loss) from discontinued operations – net of tax   (0.14 )     (0.42 )     (2.14 )     (1.05 )
Gain (loss) on disposition of discontinued operations – net of tax   (0.29 )           (0.13 )     0.06  
Net income (loss) $ 0.30     $ 0.52     $ 0.42     $ 1.92  
Diluted Earnings (Loss) per Share:                      
Income (loss) from continuing operations $ 0.73     $ 0.92     $ 2.66     $ 2.85  
Income (loss) from discontinued operations – net of tax   (0.14 )     (0.41 )     (2.11 )     (1.03 )
Gain (loss) on disposition of discontinued operations – net of tax   (0.29 )           (0.13 )     0.06  
Net income (loss) $ 0.30     $ 0.51     $ 0.42     $ 1.88  
Weighted average number of shares outstanding in per share calculation                      
Basic   71.3       73.7       71.0      
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