(Source: Business Wire)
Terex Corporation (NYSE: TEX) today announced a net loss for the third
quarter of 2009 of $103.1 million, or $0.95 per share, compared to net
income of $93.8 million, or $0.96 per share, for the third quarter of
2008. Net sales were $1,226.1 million in the third quarter of 2009, a
decrease of 51.2% from $2,514.6 million in the third quarter of 2008.
Net sales decreased approximately 49% from the comparable prior year
period when adjusting for the translation effect of foreign currency
exchange rate changes which more than offset the net sales relating to
the acquisition of the port equipment businesses of Fantuzzi Industries
and Noell Crane since late July 2009. During the third quarter of 2009,
the Company incurred after-tax charges of approximately $19 million, or
$0.18 per share, associated with restructuring programs and a continued
reduction in production levels. All per share amounts are on a fully
diluted basis.
"This was a disappointing quarter but we feel that we are turning the
corner to better performance," commented Ron DeFeo, Terex Chairman and
Chief Executive Officer. "We have built a company that is both
geographically and product diverse, but virtually no part of our
business has weathered these market conditions unscathed. Fortunately,
we see signs that certain markets have stabilized, and even a few signs
that point to growth."
"We are continuing to aggressively reduce costs as our business will be
roughly half the size in terms of net sales than it was in 2008," added
Mr. DeFeo. "Manufacturing spending in the third quarter of 2009 was down
52% from the peak spending levels during the second quarter of 2008 and
7% sequentially from the second quarter of 2009. When combined with
further reductions of selling, general and administrative expenses
("SG&A"), these actions resulted in a $265 million quarterly run-rate
spending reduction in the third quarter of 2009 versus spending levels
in the second quarter of 2008. We continue to target a $300 million
quarterly run-rate reduction by year end."
"We added the Fantuzzi and Noell businesses this quarter, and going
forward this will be known as Terex Port Equipment within our Cranes
segment," Mr. DeFeo continued. "In the short term, we expect the results
of this business to reflect the globally challenging environment for
marine trade. Consequently, we have implemented aggressive restructuring
activities. Longer term, we expect that this will be a great business,
with a leading position in the global port equipment industry."
"We are at an inflection point in this business cycle and I believe it
is now time to focus on growth while continuing to hold the line on
costs," added Mr. DeFeo. "We have obviously taken a defensive posture to
preserve the enterprise during this period of incredible economic
uncertainty, but we believe progress can be made from here going
forward. We recently held a North American dealer and customer event,
and what we heard reinforces our views that the current business
environment has stabilized and optimism is beginning to build for 2010
and 2011."
Tom Riordan, Terex President and Chief Operating Officer, commented,
"Our third quarter performance reflected both the reduced demand
environment and our global restructuring effort. Most of our factories
were working on reduced schedules, with a build-to-order approach in
order to reduce inventory. We have made good progress in reducing our
finished goods inventory, but it is an ongoing process. In some specific
product categories we may actually be a bit too low. As a result, we
will need to produce for new orders, which should lessen the negative
impact of underabsorption on our financial results. While we do not
expect any near term material increase in demand, when it occurs we will
be in a good position to capitalize. Our short term cash management
focus has led to inventory reductions that generated cash of
approximately $497 million year to date, substantially delivering on our
$500 million goal for the year in the first three quarters."
Mr. Riordan added, "Additionally, we announced the closure of several
facilities this quarter as we strive to lower costs and eliminate
underutilized capacity. While closing an operation is always a difficult
decision, these actions were necessary steps to bring our operating
costs in line with our current net sales level. The Construction
segment, while evidencing improved performance over recent financial
quarters, still generated a large operating loss during the third
quarter. While the Construction segment continues to aggressively work
down existing inventory levels, the global competitive situation and
weak demand for many of its product categories continues to hamper its
progress."
Mr. Riordan continued, "The balance of our businesses posted mixed
results in the third quarter, with Mining and Cranes generating modest
profitability. The large crane business remains generally healthy, with
the large crawler crane business being the most stable. The Mining
business began to see a rebound in parts and service activity in the
quarter, although September was slower than expected. The Aerial Work
Platforms (AWP) segment continues to feel pressure from the cash
management actions of its rental customer base, and we expect that this
trend will continue into the spring of 2010. Materials Processing
bookings continue to improve slightly when compared to recent activity
levels."
Highlights for the Third Quarter of 2009
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 a Glossary at the end of this press release.
Net Sales: Net sales were $1,226.1
million in the third quarter of 2009, a decrease of $1,288.5 million, or
51.2%, from $2,514.6 million in the third quarter of 2008. Each of the
Company's segments experienced lower net sales due to continued global
economic uncertainty that has caused customers to remain very cautious
about purchasing equipment.
(Loss)/Income from Operations and
Operating Margin: Loss from operations was $94.5 million in the
third quarter of 2009, as compared to income from operations of $167.2
million in the third quarter of 2008. The third quarter of 2009 operating
margin was negative 7.7%, versus operating margin from the third
quarter of 2008 of 6.6%. Lower total net sales negatively impacted
profitability by approximately $379 million. Costs, primarily related to
reductions in production levels and restructuring charges, negatively
impacted profitability by approximately $24 million. Offsetting these
negative results was a reduction in SG&A and other costs of
approximately $141 million.
Interest and Other Income/Expense:
Higher debt levels from the Company's capital markets activity executed
in the second quarter of 2009 combined with acquisition related debt
incurred in the port equipment transaction completed in late July to
increase interest expense for the third quarter of 2009 by $6.2 million
compared to the prior year period, while interest income decreased by
$3.0 million compared to the prior year period due to lower interest
rates. Other expense decreased for the third quarter of 2009 by $4.6
million compared to the prior year period, due primarily to foreign
currency translation gains.
Taxes: The effective tax rate for
the third quarter of 2009 was 19.3%, compared to the effective tax rate
of 32.2% for the third quarter of 2008. The decrease in the tax rate
between the third quarter of 2009 and the third quarter of 2008 was
principally due to the impact of the port equipment business acquisition
and acquisition related expenses for which no tax benefit was
recognizedand changes in the provision for uncertain tax positions.
Capital Structure: The Company's
liquidity at September 30, 2009 totaled $1,503.9 million, which was
comprised of cash balances of $1,033.2 million and borrowing
availability under the Company's revolving credit facility of $470.7
million. Liquidity at September 30, 2009 increased by $79.5 million as
compared to June 30, 2009 levels of $1,424.4 million, reflecting cash
generation from working capital reductions, partially offset by
operating losses incurred during the quarter.
Phil Widman, Terex Senior Vice President and Chief Financial Officer,
commented, "Our defensive posture and focus on cash management has
resulted in a cash balance of over $1 billion, which provides a comfort
level during this period of uncertainty, but at a short term cost, as
there exists a large difference in the interest rate we pay on our debt
versus the interest rate we earn on our cash balance. As we emerge from
this period of uncertainty, we will look to put this cash to better use,
to find areas of growth and outperform the cost of that capital."
"We have made significant progress on generating cash with $497 million
created from inventory reduction so far this year, but still have more
work and opportunity ahead of us," continued Mr. Widman. "We are active
in managing our credit exposures, and are working with our customers in
several markets that remain challenged."
Return on Invested Capital (ROIC) was a negative 4.2% for
the trailing twelve months ended September 30, 2009, compared to 2.2%
for the trailing twelve months ended June 30, 2009, mainly influenced by
the operating losses and cash flow from operations in recent periods.
Cash flow from operations in the third quarter of 2009 totaled $21.2
million, as working capital reductions of $199.1 million were partially
offset by the net loss in the period. For the comparable period in 2008,
cash flow from operations was $21.0 million. Debt, less cash and
cash equivalents, increased $171.6 million in the third quarter of 2009,
compared to the second quarter of 2009, to $969.7 million, primarily due
to the addition of acquisition related debt. This results in a ratio of
Debt, less cash and cash equivalents, to Total Capitalization of
34.8% at the end of the third quarter of 2009, versus 30.0% at the end
of the second quarter of 2009.
Working capital: Working Capital
as a percent of Trailing Three Month Annualized Net Sales was
42.2% at September 30, 2009, as compared to 25.2% at September 30, 2008.
Excluding the impact of the port equipment business acquisition, Working
Capital as a percent of Trailing Three Month Annualized Sales was 40.9%.
Backlog: Backlog for orders
deliverable during the next twelve months was $1,522.0 million at
September 30, 2009, a decrease of 58% from September 30, 2008, and a
decrease of 8% from June 30, 2009. The decrease in backlog reflects
lower net order intake across each of the Company's segments. As in
recent quarters, the majority of the backlog is comprised of orders in
the Company's Cranes segment.
2009 Update: The Company continues
to expect its 2009 net sales to decline approximately 50% when compared
with 2008, approximately 5% of which is due to the estimated translation
effect of foreign currency exchange rate changes. The anticipated year
over year decline in net sales reflects weak global end-markets combined
with continued constrained credit availability worldwide.
The impact of restructuring activities is expected to result in improved
financial results for the fourth quarter of 2009; however, the current
end-market demand for machinery in general makes it unlikely that the
Company will be profitable, excluding charges relating to ongoing
restructuring activities, in the fourth quarter of 2009.
As illustrated below, the Company's manufacturing and SG&A spending are
being reduced to realign its cost structure with lower net sales levels,
and further actions are underway that are not yet fully reflected in the
Company's run rate of spending.
(USD millions) Terex Corporation Terex AWP Terex Construction Terex Cranes Terex MPM
Increase in / (Decrease in) Q3 2009vs Q2 2009 Q3 2009vs Q2 2008 Q3 2009 vs Q2 2009 Q3 2009vs Q2 2008 Q3 2009vs Q2 2009 Q3 2009vs Q2 2008 Q3 2009vs Q2 2009 Q3 2009vs Q2 2008 Q3 2009vs Q2 2009 Q3 2009vs Q2 2008
Net Sales
Percentage Change (9%) (59%) (4%) (73%) 7% (66%) (12%) (48%) (19%) (50%)
Dollar Change $ (117) (1,732) $ (9) (555) $ 16 (455) $ (59) (402) $ (78) (343)
Manufacturing spending (1)
Percentage Change (7%) (52%) (12%) (64%) (2%) (59%) (9%) (29%) 4% (56%)
Dollar Change $ (12) (181) $ (6) (73) $ (1) (49) $ (6) (26) $ 1 (33)
SG&A less restructuring
Percentage Change (3%) (30%) 6% (31%) 4% (32%) 5% (15%) (2%) (23%)
Dollar Change $ (7) (83) $ 3 (20) $ 2 (24) $ 2 (9) $ (1) (14)
Total Manf. Spending + SG&Aless restructuring
Percentage Change (5%) (42%) (3%) (52%) 1% (46%) (3%) (23%) 0% (39%)
Dollar Change $ (18) (265) $ (3) (93) $ 1 (73) $ (4) (36) $ 0 (47)
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(1) Manufacturing spending includes manufacturing salaries, wages,
fixed and variable overhead costs; totals for Terex Corporation include
the impact of Corporate/eliminations; all numbers exclude acquisitions.
Additional commentary regarding cost reduction actions will be provided
in the presentation that will accompany the earnings release conference
call that is scheduled for 8:30 am, Thursday, October 22, 2009 and will
be available at the Investor Relations section of the Terex website,
www.terex.com.
Third Quarter Segment Performance Review
Aerial Work Platforms: Net sales
for the AWP segment for the third quarter of 2009 decreased $397.7
million, or 66.5%, to $200.5 million versus the third quarter of 2008.
Excluding the translation effect of foreign currency exchange rate
changes, net sales decreased approximately 65%. Rental customers in the
North American and European markets continued to age and reduce their
fleets, deferring the purchase of new products.
An operating loss of $50.1 million was incurred during the third quarter
of 2009 as compared to an operating profit of $24.2 million earned
during the third quarter of 2008. The negative impact on profitability
stemming from lower net sales when compared with the prior year period
was approximately $125 million. Costs, primarily related to reductions
in production levels and restructuring, negatively impacted
profitability by approximately $18 million. These negative factors were
partially offset by reduced SG&A expense of approximately $20 million
and net manufacturing unabsorbed costs for the period deceasing by $12
million. Additionally, favorably influencing the results was an
improvement in other costs of $39 million driven by transactional
currency, the realization of profits previously tied up in inventory and
reduced input costs. Included in the manufacturing and SG&A spending
amounts above are other charges taken in the quarter of approximately
$10 million for a field repair program, a supplier credit exposure and
the termination of a distributor.
Construction: Net sales for the
Construction segment for the third quarter of 2009 decreased $298.8
million, or 55.9%, to $236.2 million versus the third quarter of 2008.
Excluding the translation effect of foreign currency exchange rate
changes, net sales decreased approximately 52%. Demand for both compact
and heavy construction products remained weak during the third quarter
of 2009 as construction activity continued to slow globally and
commercial financing availability for projects and equipment remained
tight. Most Construction segment businesses and their independent
distribution networks continued to make progress on reducing finished
goods inventory.
An operating loss of $59.8 million was incurred during the third quarter
of 2009 as compared to an operating loss of $23.7 million incurred
during the third quarter of 2008. Continued cost reduction efforts have
lessened the level of operating losses as compared to the second quarter
of 2009. In particular, labor reductions in Germany have been initiated
and will continue through the remainder of the year. Lower net sales
compared to the prior year period negatively impacted profitability by
approximately $60 million. The current quarter's other costs and SG&A
were reduced by approximately $14 million versus the same period in
2008. Included in the manufacturing and SG&A spending amount above are
charges relating to exiting certain product lines in the North American
market and certain asset impairment charges which negatively impacted
profitability by approximately $6 million.
Cranes: Net sales for the Cranes
segment for the third quarter of 2009 decreased $282.3 million, or
38.3%, to $454.6 million versus the third quarter of 2008. Net sales
decreased approximately 37% from the comparable prior year period when
adjusting for the translation effect of foreign currency exchange rate
changes which more than offset the net sales relating to the acquisition
of the port equipment businesses since late July 2009. Net sales of
rough terrain and tower cranes remained significantly below levels
achieved during the third quarter of 2008, as global commercial
construction continued to slow and oil-related energy demand for rough
terrain cranes remained soft. Sales of lower capacity all-terrain cranes
have also weakened, although demand continued for high capacity crawler
and all-terrain cranes for global infrastructure projects and energy
related projects such as wind power and power plant construction.
Operating profit for the third quarter of 2009 totaled $12.1 million, a
decrease of $73.5 million compared with the operating profit of $85.6
million earned during the third quarter of 2008. Operating margin
decreased to 2.7% as compared to 11.6% in the third quarter of 2008.
Profitability was negatively impacted by approximately $93 million due
to lower net sales compared to the prior year period. Additionally,
increased underabsorption of manufacturing costs of approximately $11
million negatively impacted profitability. Favorably influencing these
results was a $33 million year over year improvement in other costs,
primarily influenced by the non-reoccurrence of a prior period warranty
item and the realization of profits previously tied up in inventory and
reduced input costs.
Materials Processing & Mining:
Net sales for the Materials Processing & Mining (MPM) segment for the
third quarter of 2009 decreased $323.2 million, or 48.8%, to $338.8
million versus the third quarter of 2008. Excluding the translation
effect of foreign currency exchange rate changes, net sales decreased
approximately 44%. Materials Processing demand appears to have
stabilized, with modest sequential improvement in sales each quarter
during 2009. However, Materials Processing sales remain substantially
below 2008 levels, with net sales in the third quarter of 2009 down over
60% as compared to the third quarter of 2008. Net sales for Mining
decreased during the third quarter of 2009 as compared to the third
quarter of 2008, reflecting lower sales of hydraulic excavators and
drills. Mining truck demand remained stable during the same timeframes.
Hydraulic excavator sales during the third quarter of 2008 included two
of the world's largest excavators, the Terex ® RH400. There were no
comparable Terex ® RH 400 sales during the third quarter of 2009. Demand
for mining aftermarket customer support was down during the third
quarter of 2009 as compared to the comparable 2008 period, but was up
sequentially as compared to the second quarter of 2009.
Operating profit for the third quarter of 2009 totaled $5.4 million, a
decrease of $86.0 million compared with operating profit of $91.4
million earned during the third quarter of 2008. Operating margin for
the third quarter of 2009 was 1.6%, as compared to 13.8% for the third
quarter of 2008, reflecting the deterioration in Materials Processing
end markets and softer hydraulic excavator demand. The reduction in net
sales negatively impacted profitability by approximately $100 million
when compared with the prior year period. Favorably influencing
operating profit was an approximate $9 million improvement in other
costs, reflecting lower input costs, primarily for steel.
Corporate and Other/ Eliminations:
The loss from operations of $2.1 million decreased $8.2 million compared
to the prior year period. The decrease reflects the continuation of cost
reduction activities, including salary and benefit cuts, and reduced
external fees. Management charge allocations to the segments were also
reduced as compared to the third quarter of 2008.
Segment Backlog
AWP segment backlog decreased 60.9% as compared to September 30, 2008,
while increasing 1.4% as compared to June 30, 2009, as some stability
returned to the AWP markets on a sequential basis, although at reduced
levels. Due to continuing economic uncertainty, customers are ordering
equipment when needed.
Construction segment backlog decreased 77.5% versus the comparable prior
year period and decreased 27.8% as compared to June 30, 2009, reflecting
the continued global weakening in construction activity. Order intake is
slow for all types of construction equipment and customers are only
purchasing equipment when they are ready to put it immediately to work,
rather than planning orders in advance, as was common practice one year
ago.
Cranes segment backlog decreased 47.7% compared to September 30, 2008
levels, and decreased 4.4% as compared to June 30, 2009 levels.
Excluding the impact of the port equipment business acquisition, backlog
decreased approximately 59% as compared to September 30, 2008 levels and
25% as compared to June 30, 2009 levels. Tower crane and rough terrain
crane demand is down substantially from levels of one year ago, driving
the majority of the decrease in backlog. Demand for certain high
capacity cranes, including the lower end of the crawler and all-terrain
crane product line, is softening, but there is continuing demand as
infrastructure and energy related projects utilize these high capacity
cranes. Smaller capacity crane demand continues to remain weak.
MPM segment backlog decreased 69.9% versus September 30, 2008, and
decreased 14.6% as compared to June 30, 2009. Materials Processing
backlog remained basically unchanged sequentially, as some stability has
been reached in end markets, although at a low level. Mining truck
backlog decreased from June 30, 2009 levels while hydraulic excavator
and drill backlog remained relatively unchanged from June 30, 2009
levels.
The Glossary contains further details regarding backlog.
Forward Looking Statement
This press release contains forward-looking information based on the
current expectations of Terex Corporation. 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, particularly in the key industries we
serve, may affect the sales of our products and financial results;
uncertainties regarding the duration or severity of the current global
economic downturn and disruptions in the financial markets; our ability
to access the capital markets to raise funds and provide liquidity; our
business is sensitive to fluctuations in government spending; our
business is very competitive and may be affected by our cost structure,
pricing, product initiatives and actions taken by competitors; a
material disruption to one of our significant facilities; our retention
of key management personnel; the financial condition of suppliers and
customers, and their continued access to capital; our ability to obtain
parts and components from suppliers on a timely basis at competitive
prices; our ability to timely manufacture and deliver products to
customers; the need to generate sufficient cash flow to service our debt
obligations and comply with restrictive covenants contained in our debt
agreements; our business is global and subject to changes in exchange
rates between currencies, as well as international politics,
particularly in developing markets; the effects of changes in laws and
regulations; possible work stoppages and other labor matters; compliance
with applicable environmental laws and regulations; litigation and
product liability claims and other liabilities; an investigation by the
Department of Justice; 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 Securities
and Exchange Commission. 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 diversified global manufacturer with 2008 net
sales of $9.9 billion. Terex operates in four business segments: Terex
Aerial Work Platforms, Terex Construction, Terex Cranes, and Terex
Materials Processing & Mining. Terex manufactures a broad range of
equipment for use in various industries, including the construction,
infrastructure, quarrying, surface mining, shipping, transportation,
refining and utility industries. Terex offers a complete line of
financial products and services to assist in the acquisition of Terex
equipment through Terex Financial Services. Terex uses its website to
make information available to its investors and the market at www.terex.com.
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
(in millions, except per share data)
Three MonthsEnded September 30, Nine MonthsEnded September 30,
2009 2008 2009 2008
Net sales $ 1,226.1 $ 2,514.6 $ 3,848.9 $ 7,813.2
Cost of goods sold (1,116.5 ) (2,068.4 ) (3,466.9 ) (6,201.8 )
Gross profit 109.6 446.2 382.0 1,611.4
Selling, general and administrative expenses (204.1 ) (279.0 ) (634.7 ) (817.0 )
(Loss) income from operations (94.5 ) 167.2 (252.7 ) 794.4
Other income (expense)
Interest income 1.4 4.4 3.5 18.5
Interest expense (32.6 ) (26.4 ) (81.4 ) (76.2 )
Loss on early extinguishment of debt - - (3.3 ) -
Other income (expense) -- net (1.2 ) (5.8 ) - 4.0
(Loss) income before income taxes (126.9 ) 139.4 (333.9 ) 740.7
Benefit from (provision for) income taxes 24.5 (44.9 ) 79.3 (244.9 )
Net (loss) income (102.4 ) 94.5 (254.6 ) 495.8
Less: Net income attributable to noncontrolling interest (0.7 ) (0.7 ) (1.0 ) (2.4 )
Net (loss) income attributable to Terex Corporation $ (103.1 ) $ 93.8 $ (255.6 ) $ 493.4
(Loss) Earnings Per Common Share Attributable to TerexCorporation Common Stockholders
Basic $ (0.95 ) $ 0.98 $ (2.54 ) $ 4.97
Diluted $ (0.95 ) $ 0.96 $ (2.54 ) $ 4.89
Weighted average number of shares outstanding in per sharecalculation
Basic 108.1 96.1 100.7 99.2
Diluted 108.1 98.1 100.7 101.0
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TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in millions, except par value)
September 30, 2009 December 31, 2008
Assets
Current assets
Cash and cash equivalents $ 1,033.2 $ 484.4
Trade receivables (net of allowance of $63.7 and $62.8 at September 30,2009 and December 31, 2008, respectively) 678.3 967.5
Inventories 2,018.5 2,234.8
Deferred taxes 176.2 139.0
Other current assets 218.0 215.2
Total current assets 4,124.2 4,040.9
Non-current assets
Property, plant and equipment - net 705.6 481.5
Goodwill 564.7 457.0
Deferred taxes 106.8 84.5
Other assets 406.4 381.5
Total assets $ 5,907.7 $ 5,445.4
Liabilities and Stockholders' Equity
Current liabilities
Notes payable and current portion of long-term debt $ 90.8 $ 39.4
Trade accounts payable 625.9 983.9
Accrued compensation and benefits 183.6 169.3
Accrued warranties and product liability 158.7 149.3
Customer advances 166.2 119.3
Other current liabilities 376.5 363.4
Total current liabilities 1,601.7 1,824.6
Non-current liabilities
Long-term debt, less current portion 1,912.1 1,396.4
Retirement plans and other 551.4 480.5
Total liabilities 4,065.2 3,701.5
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value -- authorized 300.0 shares; issued 120.3 and107.1 shares at September 30, 2009 and December 31, 2008, respectively 1.2 1.1
Additional paid-in capital 1,249.5 1,046.2
Retained earnings 1,101.0 1,356.6
Accumulated other comprehensive income (loss) 66.5 (82.3)
Less cost of shares of common stock in treasury -- 13.1 shares atSeptember 30, 2009 and December 31, 2008 (598.7) (599.9)
Total Terex Corporation stockholders' equity 1,819.5 1,721.7
Noncontrolling interest 23.0 22.2
Total equity 1,842.5 1,743.9
Total liabilities and stockholders' equity $ 5,907.7 $ 5,445.4
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TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in millions)
Nine Months Ended September 30,
2009 2008
Operating Activities
Net (loss) income $ (254.6) $ 495.8
Adjustments to reconcile net (loss) income to cash used in operating activities:
Depreciation 59.7 56.2
Amortization 17.3 17.7
Deferred taxes (85.3) 23.7
Loss on early extinguishment of debt 3.3 -
Gain on sale of assets (0.8) (1.8)
Asset impairments 3.9 -
Stock-based compensation 25.6 46.5
Excess tax benefit from stock-based compensation - (7.2)
Changes in operating assets and liabilities (net of effects of acquisitionsand divestitures):
Trade receivables 437.2 (122.1)
Inventories 497.2 (530.1)
Trade accounts payable (556.3) 42.6
Accrued compensation and benefits 4.1 (30.3)
Income taxes payable (58.0) 50.4
Accrued warranties and product liability (16.5) 22.4
Customer advances (28.1) (33.9)
Other, net (63.8) (65.0)
Net cash used in operating activities (15.1) (35.1)
Investing Activities
Acquisition of businesses, net of cash acquired (9.8) (478.1)
Capital expenditures (48.1) (91.6)
Proceeds from sale of assets 2.3 20.4
Net cash used in investing activities (55.6) (549.3)
Financing Activities
Proceeds from issuance of long-term debt 620.6 -
Principal repayments of long-term debt (129.7) -
Proceeds from issuance of common stock 156.3 -
Excess tax benefit from stock-based compensation - 7.2
Proceeds from stock options exercised 0.4 2.3
Net (repayments) borrowings under revolving line of credit agreements (36.3) 204.6
Payment of debt issuance costs (17.2) -
Share repurchases - (395.5)
Acquisition of noncontrolling interest (1.7) -
Other, net (1.2) (1.5)
Net cash provided by (used in) financing activities 591.2 (182.9)
Effect of Exchange Rate Changes on Cash and Cash Equivalents 28.3 (17.2)
Net Increase (Decrease) in Cash and Cash Equivalents 548.8 (784.5)
Cash and Cash Equivalents at Beginning of Period 484.4 1,272.4
Cash and Cash Equivalents at End of Period $ 1,033.2 $ 487.9
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TEREX CORPORATION AND SUBSIDIARIES
SEGMENT RESULTS DISCLOSURE
(unaudited)
(in millions)
Third Quarter Year-to-Date
2009 2008 2009 2008
% ofNetsales % ofNetsales % ofNetsales % ofNetsales
Consolidated
Net sales $ 1,226.1 $ 2,514.6 $ 3,848.9 $ 7,813.2
Gross profit $ 109.6 8.9 % $ 446.2 17.7 % $ 382.0 9.9 % $ 1,611.4 20.6 %
SG&A 204.1 16.6 % 279.0 11.1 % 634.7 16.5 % 817.0 10.5 %
(Loss) income from operations $ (94.5 ) (7.7 %) $ 167.2 6.6 % $ (252.7 ) (6.6 %) $ 794.4 10.2 %
AWP
Net sales $ 200.5 $ 598.2 $ 638.9 $ 2,018.3
Gross profit $ (4.2 ) (2.1 %) $ 90.1 15.1 % $ 11.1 1.7 % $ 463.0 22.9 %
SG&A 45.9 22.9 % 65.9 11.0 % 135.0 21.1 % 198.7 9.8 %
(Loss) income from operations $ (50.1 ) (25.0 %) $ 24.2 4.0 % $ (123.9 ) (19.4 %) $ 264.3 13.1 %
Construction
Net sales $ 236.2 $ 535.0 $ 717.8 $ 1,726.6
Gross profit $ (12.0 ) (5.1 %) $ 50.5 9.4 % $ (60.1 ) (8.4 %) $ 214.8 12.4 %
SG&A 47.8 20.2 % 74.2 13.9 % 163.0 22.7 % 211.0 12.2 %
(Loss) income from operations $ (59.8 ) (25.3 %) $ (23.7 ) (4.4 %) $ (223.1 ) (31.1 %) $ 3.8 0.2 %
Cranes
Net sales $ 454.6 $ 736.9 $ 1,407.0 $ 2,219.6
Gross profit $ 70.8 15.6 % $ 148.4 20.1 % $ 219.3 15.6 % $ 476.6 21.5 %
SG&A 58.7 12.9 % 62.8 8.5 % 161.8 11.5 % 181.1 8.2 %
Income from operations $ 12.1 2.7 % $ 85.6 11.6 % $ 57.5 4.1 % $ 295.5 13.3 %
MPM
Net sales $ 338.8 $ 662.0 $ 1,128.5 $ 1,907.8
Gross profit $ 52.0 15.3 % $ 154.0 23.3 % $ 208.0 18.4 % $ 451.6 23.7 %
SG&A 46.6 13.8 % 62.6 9.5 % 144.1 12.8 % 180.9 9.5 %
Income from operations $ 5.4 1.6 % $ 91.4 13.8 % $ 63.9 5.7 % $ 270.7 14.2 %
Corporate/Eliminations
Net sales $ (4.0 ) $ (17.5 ) $ (43.3 ) $ (59.1 )
Gross profit $ 3.0 (75.0 %) $ 3.2 (18.3 %) $ 3.7 (8.5 %) $ 5.4 (9.1 %)
SG&A 5.1 (127.5 %) 13.5 (77.1 %) 30.8 (71.1 %) 45.3 (76.6 %)
Loss from operations $ (2.1 ) 52.5 % $ (10.3 ) 58.9 % $ (27.1 ) 62.6 % $ (39.9 ) 67.5 %
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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, and are as of or for the period ended September 30, 2009,
unless otherwise indicated.
Adjusted Net Operating Profit After Tax (NOPAT) is calculated by
multiplying Income from operations, as adjusted, by a figure equal to
one minus the adjusted effective tax rate of the Company. The adjusted
effective tax rate is equal to the (Provision for)/benefit from Income
taxes divided by (Loss)/Income before income taxes as adjusted for the
respective quarter.
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 Terex's business is not
necessarily indicative of sales to be recognized in a specified future
period.
Sept 30, 2009 Sept 30, 2008 % change June 30, 2009 % change
Consolidated Backlog $ 1,522.0 $ 3,626.6 (58.0 %) $ 1,651.2 (7.8 %)
AWP $ 139.8 $ 358.0 (60.9 %) $ 137.9 1.4 %
Construction $ 101.4 $ 450.4 (77.5 %) $ 140.5 (27.8 %)
Cranes $ 1,018.5 $ 1,946.9 (47.7 %) $ 1,065.8 (4.4 %)
MPM $ 262.3 $ 871.3 (69.9 %) $ 307.0 (14.6 %)
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Days Payable Outstanding is calculated by dividing Trade accounts
payable by the product of the trailing three months Cost of goods sold
multiplied by four, which ratio is multiplied by 365 days.
Days Payable Outstanding
Sept 30, 2009 June 30, 2009
Trade Accounts Payable $ 625.9 $ 518.9
Cost of sales for the three months ended $ 1,116.5 $ 1,192.3
x 4 x 4
Annualized cost of sales $ 4,466.0 $ 4,769.2
Quotient 0.1401 0.1088
x 365 days x 365 days
Days Payable Outstanding 51 days 40 days
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Days Sales Outstanding is calculated by dividing Trade
receivables by the trailing three months Net sales multiplied by four,
which ratio is multiplied by 365 days.
Days Sales Outstanding
Sept 30, 2009 June 30, 2009
Trade Accounts Receivable $ 678.3 $ 639.8
Net sales for the three months ended $ 1,226.1 $ 1,320.2
x 4 x 4
Annualized net sales $ 4,904.4 $ 5,280.8
Quotient 0.1383 0.1212
x 365 days x 365 days
Days Sales Outstanding 50 days 44 days
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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. It is a measure that aids in the evaluation
of the Company's financial condition.
Long term debt, less current portion $1,912.1
Notes payable and current portion of long-term debt 90.8
Debt $2,002.9
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EBITDA is defined as earnings
A service of YellowBrix, Inc.
