Terex Corporation (NYSE: TEX) today announced fourth quarter
2017 loss from continuing operations of $31.7 million, or ($0.37)
per share, on net sales of $1.1 billion. The fourth quarter and
full year 2017 results include a one-time $50.4 million charge
associated with the new U.S. tax law. In the fourth quarter of
2016, Terex reported a net loss from continuing operations of
$313.9 million, or ($2.96) per share, on net sales of $1.0 billion.
Income from continuing operations, as adjusted, for the fourth
quarter of 2017 was $28.3 million, or $0.33 per share. This
compares with income from continuing operations, as adjusted, of
$10.7 million or $0.10 per share in the fourth quarter of 2016. The
Glossary at the end of this press release contains further details
regarding these non-GAAP measures.
For the full year 2017, Terex reported income from continuing
operations of $60.0 million, or $0.63 per share, on net sales of
$4.4 billion, compared with a loss from continuing operations of
$193.0 million, or ($1.79) per share, on net sales of $4.4 billion
for the full year 2016. Income from continuing operations, as
adjusted, for the full year 2017 was $128.4 million, or $1.35 per
share, compared with $95.3 million, or $0.88 per share, in
2016.
“The fourth quarter marked an excellent finish to an important
year for Terex,” remarked John L. Garrison, Terex President and
CEO. “We increased operating margins, bookings and backlog in every
segment and significantly improved earnings per share.”
“We delivered on our commitments in 2017. The sales of MHPS and
the remaining Construction businesses concluded the Focus element
of our strategy and created substantial value for our
shareholders,” continued Mr. Garrison. “We continued to Simplify
the company by executing our footprint rationalization plan,
exiting 12 manufacturing locations totaling 2.6 million square
feet. We reduced administrative expenses while increasing
investment in innovation, strategic sourcing, and commercial
excellence. We fundamentally improved our capital structure by
executing our disciplined capital allocation strategy, reducing
debt by $583 million, refinancing at the lowest interest rates in
the Company’s history, and returning capital to shareholders by
repurchasing $924 million of Terex stock.”
Mr. Garrison concluded, “By implementing our strategy,
strengthening the Company, and increasing backlog by 56%, we are
well positioned for what we expect to be an improving global market
environment in 2018. We expect to increase revenue and improve
operating margins in every business segment. We will continue to
implement the Simplify and Execute to Win elements of our strategy,
and follow our disciplined capital allocation strategy. We expect
to deliver 2018 earnings per share of between $2.35 and $2.65,
excluding restructuring, transformation investments, and other
unusual items, on net sales approximately 10% higher than
2017.”
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. Terex now calculates its quarterly adjusted effective
tax rate by multiplying the adjusted forecast full year effective
tax rate by the adjusted pre-tax income. Terex believes this more
closely aligns with how its investors analyze quarterly results.
2016 results have been adjusted using the same approach.
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.
Conference call
The Company has scheduled a one hour conference call to review
the financial results on Wednesday, February 14th, 2018 at 8:30
a.m. ET. John L. Garrison, President and CEO, will host the call. A
simultaneous webcast of this call will be available from the
Investor Relations section of www.terex.com, under Latest Events
& Presentations. 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, Investor Relations section, in
the Event Archive.
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; 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 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; our providing financing and credit support for
some of our customers; we may experience losses in excess of
recorded reserves; 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,
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; 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 Full Year Ended December 31, Ended
December 31, 2017 2016 2017 2016 Net sales $ 1,063.6
$ 974.7 $ 4,363.4 $ 4,443.1 Cost of goods sold
(859.6) (870.0) (3,547.4) (3,730.7) Gross
profit 204.0 104.7 816.0 712.4 Selling, general and administrative
expenses (164.2) (376.8) (642.4)
(860.2) Income (loss) from operations 39.8 (272.1) 173.6 (147.8)
Other income (expense) Interest income 1.7 1.0 6.9 4.3 Interest
expense (15.5) (26.4) (67.5) (102.0) Loss on early extinguishment
of debt — — (52.6) (0.4) Other income (expense) – net (0.6)
(11.5) 51.6 (24.8) Income (loss) from
continuing operations before income taxes 25.4 (309.0) 112.0
(270.7) (Provision for) benefit from income taxes (57.1)
(5.1) (52.0) 77.4 Income (loss) from
continuing operations (31.7) (314.1) 60.0 (193.3)
Income (loss) from discontinued operations
– net of tax
— 47.7 — 14.3 Gain (loss) on disposition of discontinued
operations- net of tax 5.0 — 68.7 3.5
Net income (loss) (26.7) (266.4) 128.7 (175.5) Net loss (income)
from continuing operations attributable to non-controlling interest
— 0.2 — 0.3
Net loss (income) from discontinued
operations attributable to non-controlling interest
— (1.0) — (0.9) Net income (loss)
attributable to Terex Corporation $ (26.7) $ (267.2) $ 128.7 $
(176.1) Amounts attributable to Terex Corporation common
stockholders: Income (loss) from continuing operations $ (31.7) $
(313.9) $ 60.0 $ (193.0) Income (loss) from discontinued operations
– net of tax — 46.7 — 13.4 Gain (loss) on disposition of
discontinued operations – net of tax 5.0 —
68.7 3.5 Net income (loss) attributable to Terex Corporation
$ (26.7) $ (267.2) $ 128.7 $ (176.1) Basic Earnings (Loss) per
Share Attributable to Terex CorporationCommon Stockholders: Income
(loss) from continuing operations $ (0.38) $ (2.96) $ 0.65 $ (1.79)
Income (loss) from discontinued operations – net of tax — 0.44 —
0.13 Gain (loss) on disposition of discontinued operations – net of
tax 0.06 — 0.74 0.03 Net income (loss)
attributable to Terex Corporation $ (0.32) $ (2.52) $ 1.39 $ (1.63)
Diluted Earnings (Loss) per Share Attributable to Terex
CorporationCommon Stockholders: Income (loss) from continuing
operations $ (0.37) $ (2.96) $ 0.63 $ (1.79) Income (loss) from
discontinued operations – net of tax — 0.44 — 0.13 Gain (loss) on
disposition of discontinued operations – net of tax 0.06
— 0.73 0.03 Net income (loss) attributable to
Terex Corporation $ (0.31) $ (2.52) $ 1.36 $ (1.63) Weighted
average number of shares outstanding in per share calculation Basic
82.7 105.9 92.8 107.9 Diluted
85.0 105.9 94.9 107.9
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEET
(unaudited)
(in millions, except par value)
December 31, December 31, 2017 2016 Assets Current
assets Cash and cash equivalents $ 626.5 $ 428.5 Other current
assets 1,752.9 1,539.1 Current assets held for sale 3.6
732.9 Total current assets 2,383.0 2,700.5 Non-current
assets Property, plant and equipment – net 311.0 304.6 Other
non-current assets 768.5 830.4 Non-current assets held for sale
— 1,171.3 Total non-current assets 1,079.5
2,306.3 Total assets $ 3,462.5 $ 5,006.8 Liabilities
and Stockholders’ Equity Current liabilities Notes payable and
current portion of long-term debt $ 5.2 $ 13.8 Other current
liabilities 1,028.3 939.4 Current liabilities held for sale
2.0 453.8 Total current liabilities 1,035.5
1,407.0 Non-current liabilities Long-term debt, less current
portion 979.6 1,562.0 Other non-current liabilities 223.9 204.5
Non-current liabilities held for sale 1.0 312.1 Total
non-current liabilities 1,204.5 2,078.6 Total
liabilities 2,240.0 3,485.6 Total stockholders’ equity
1,222.5 1,521.2 Total liabilities and stockholders’
equity $ 3,462.5 $ 5,006.8
TEREX CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
(unaudited)
(in millions)
Full Year Ended December 31, 2017
2016
Operating Activities Net income (loss) $ 128.7 $ (175.5)
Depreciation and amortization 66.5 96.7 Changes in operating assets
and liabilities and non-cash charges (42.2) 455.9 Net
cash provided by (used in) operating activities 153.0 377.1
Investing Activities Capital expenditures (43.5) (73.0) Other
investing activities, net 1,579.1 61.2 Net cash (used
in) provided by investing activities 1,535.6 (11.8) Financing
Activities Net cash provided by (used in) financing activities
(1,606.5) (310.2) Effect of exchange rate changes on cash and cash
equivalents 46.1 (19.7) Net increase (decrease) in
cash and cash equivalents 128.2 35.4 Cash and cash equivalents at
beginning of period 501.9 466.5 Cash and cash
equivalents at end of period $ 630.1 $ 501.9
TEREX CORPORATION AND
SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(unaudited)
(in millions)
Q4 Year-to-Date 2017 2016 2017
2016 % of % of % of
% of Net Sales Net Sales Net Sales Net Sales
Consolidated Net sales $ 1,063.6 $ 974.7 $ 4,363.4 $ 4,443.1
Income from operations $ 39.8 3.7% $ (272.1) (27.9%) $ 173.6 4.0% $
(147.8) (3.3%)
AWP Net sales $ 449.4 $ 379.0 $
2,071.5 $ 1,977.8 Income from operations $ 30.3 6.7% $ 18.2 4.8% $
170.3 8.2% $ 177.4 9.0%
Cranes Net sales $ 324.4 $
327.0 $ 1,194.0 $ 1,274.5 Income (loss) from operations $ 1.8 0.6%
$ (280.2) (85.7%) $ (17.8) (1.5%) $ (321.7) (25.2%)
MP Net sales $ 283.0 $ 236.3 $ 1,072.5 $ 944.5 Income from
operations $ 35.5 12.5% $ 22.4 9.5% $ 124.8 11.6% $ 86.3 9.1%
Corp and Other / Eliminations Net sales $ 6.8 $ 32.4
$ 25.4 $ 246.3 Loss from operations $ (27.8) N/A $ (32.5) N/A $
(103.7) N/A $ (89.8) N/A
GLOSSARY
In an effort to provide investors with additional information
regarding the Company’s results, Terex refers to various GAAP (U.S.
generally accepted accounting principles) and non-GAAP financial
measures which management believes provides useful information to
investors. These non-GAAP measures may not be comparable to
similarly titled measures being disclosed by other companies. In
addition, the Company believes that non-GAAP financial measures
should be considered in addition to, and not in lieu of, GAAP
financial measures. Terex believes that this non-GAAP information
is useful to understanding its operating results and the ongoing
performance of its underlying businesses. Management of Terex uses
both GAAP and non-GAAP financial measures to establish internal
budgets and targets and to evaluate the Company’s financial
performance against such budgets and targets.
The amounts described below are unaudited, are reported in
millions of U.S. dollars (except share data and percentages), and
are as of or for the period ended December, 2017, unless otherwise
indicated.
2018 Outlook: The Company’s 2018 outlook for earnings per
share and 2018 full year adjusted forecasted tax rate are non-GAAP
financial measures because they exclude items such as restructuring
and other related charges, transformation costs, the impact of the
release of tax valuation allowances, gains and losses on
divestitures and other unusual items. The Company is not able to
reconcile these forward-looking non-GAAP financial measures to
their most directly comparable forward-looking GAAP financial
measures without unreasonable efforts because the Company is unable
to predict with a reasonable degree of certainty the exact timing
and impact of such items. The unavailable information could have a
significant impact on the Company’s full-year 2018 GAAP financial
results.
After-tax gains or losses and per share amounts are
calculated using pre-tax amounts, applying a tax rate based on
jurisdictional rates to arrive at an after-tax amount. This number
is divided by diluted weighted average shares outstanding to
provide the impact on earnings per share. The Company highlights
the impact of these items because when discussing earnings per
share, the Company adjusts for items it believes are not reflective
of ongoing operating activities in the periods. Restructuring and
related charges are a recurring item as Terex’s restructuring
programs usually require more than one year to fully implement and
the Company is continually seeking to take actions that could
enhance its efficiency. Although recurring, these charges are
subject to significant fluctuations from period to period due to
varying levels of restructuring activity and the inherent
imprecision in the estimates used to recognize the costs and taxes
associated with severance and termination benefits in the countries
in which the restructuring actions occur.
Q4 2017
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
Earnings (loss)per share (2) As Reported (GAAP) $
25.4 (57.1 ) (31.7) $ (0.37 ) Restructuring & Related (7.8 )
0.3 (7.5 ) (0.09 ) Deal Related 7.2 (0.2 ) 7.0 0.08 Transformation
9.8 (2.5 ) 7.3 0.09 2017 Tax Act — 50.4 50.4 0.59 Tax & Interim
Period (3) — 2.8
2.8 0.03 As Adjusted (Non-GAAP) $ 34.6
(6.3 ) 28.3 $ 0.33 (1) Tax effect on adjustments is calculated
using the applicable jurisdictional blended tax rate (2) Based on
diluted average shares outstanding of 85.0 million
(3) Includes adjustments without related
pre-tax amounts and the tax amount necessary to align quarterly tax
expense
(benefit) with the forecasted full year as
adjusted effective tax rate
YTD 2017
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
Earnings (loss)per share (2)
As Reported (GAAP) $ 112.0 (52.0 )
60.0 $ 0.63 Restructuring & Related (12.2
) (0.5 ) (12.7 ) (0.13 ) Deal Related (20.9 ) (11.3 ) (32.2 ) (0.34
) Transformation 45.2 (10.1 ) 35.1 0.37 Extinguishment of Debt 53.1
(19.0 ) 34.1 0.36 Asset Impairment (1.6 ) 0.6 (1.0 ) (0.01 ) 2017
Tax Act — 50.4 50.4 0.53 Tax Related (3) —
(5.3 ) (5.3 ) (0.06 ) As
Adjusted (Non-GAAP) $ 175.6 (47.2 ) 128.4 $ 1.35 (1) Tax effect on
adjustments is calculated using the applicable jurisdictional
blended tax rate (2) Based on diluted average shares outstanding of
94.9 million (3) Includes adjustments without related pre-tax
amounts and the tax amount necessary to align quarterly tax expense
(benefit) with the forecasted full year as adjusted effective tax
rate
Q4 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
(2)
Earnings (loss)per share (3) As Reported (GAAP)
$ (309.0 ) (5.1 ) (313.9 )
$ (2.96 ) Deal Related (9.0 ) 3.0 (6.0 ) (0.06 )
Restructuring & Related 89.2 (5.5 ) 83.7 0.79
Transformation 9.3 (2.6 ) 6.7 0.06 Goodwill/Asset Impairment 219.6
(16.6 ) 203.0 1.92 Tax & Interim Period (4) —
37.2 37.2
0.35 As Adjusted (Non-GAAP) $ 0.1 10.4 10.7 $ 0.10 (1) Tax
effect on adjustments is calculated using the applicable
jurisdictional blended tax rate (2) Excludes $0.2 million net loss
attributable to non-controlling interest (3) Based on diluted
weighted average shares outstanding of 105.9 million (4) Includes
adjustments without related pre-tax amounts and the tax amount
necessary to align quarterly tax expense (benefit) with the
forecasted full year as adjusted effective tax rate (benefit) with
the forecasted full year as adjusted effective tax rate
YTD 2016
Income (loss) fromContinuing
Operationsbefore Taxes
(Provision for)benefit fromIncome Taxes
(1)
Income (loss)from ContinuingOperations
(2)
Earnings (loss)per share (3) As Reported (GAAP)
$ (270.7 ) 77.4 (193.0 )
$ (1.79 ) Deal Related 20.5 (3.4 ) 17.1 0.16 Restructuring
& Related 137.2 (19.9 ) 117.3 1.09 Transformation 9.3 (2.6 )
6.7 0.06 Goodwill/Asset Impairment 219.6 (16.6 ) 203.0 1.88 Tax
Related (4) — (55.8 )
(55.8 ) (0.52 ) As Adjusted (Non-GAAP) $ 115.9 (20.9
) 95.3 $ 0.88 (1) Tax effect on adjustments is calculate d using
the applicable jurisdictional blended tax rate (2) Excludes $0.3
million net loss attributable to non-controlling interest (3) Based
on diluted weighted average shares outstanding of 107.9 million (4)
Includes adjustments without related pre-tax amounts and the tax
amount necessary to align quarterly tax expense (benefit) with the
forecasted full year as adjusted effective tax rate
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180213006489/en/
Terex CorporationBrian Henry, 203-222-5954Senior Vice President,
Business Development and Investor
Relationsbrian.henry@terex.com
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