- Sales of $1.4 billion
increased 30% year-over-year
- Income from operations of $210
million, up 102% year-over-year
- Operating profit margin of 15.0% improved 540bps
year-over-year
- EPS of $2.35 more than doubled
year-over-year
- Raising full-year 2023 EPS outlook to ~$7.00
NORWALK,
Conn., Aug. 1, 2023 /PRNewswire/ -- Terex
Corporation (NYSE: TEX) today announced its results for the second
quarter 2023.
CEO Commentary
"The Terex team delivered another quarter of outstanding
performance" said Terex Chairman and Chief Executive Officer
John L. Garrison, Jr. "I want to
thank our team members for their continued commitment to our Zero
Harm safety culture and for improving deliveries to our customers
and dealers. We successfully overcame supply chain challenges to
deliver a 30% increase in sales over the prior year. Our team
delivered innovative new products combined with disciplined
pricing, expense management, and manufacturing efficiency
initiatives to improve operating margins by 540 basis points. As a
result of the team's exceptional execution and the strength of our
customer backlog, we are raising our full-year EPS outlook to
~$7.00."
"Terex continues to be exceptionally well-positioned to provide
solutions to meet the increasing requirements of our customers and
dealers. We continue to see growing evidence of onshoring in
North America manufacturing and an
increased focus by global players to achieve their sustainability
goals. Our MP team is focused on developing innovative solutions
for growing aggregate, material handling, and environmental and
waste recycling markets. Our Utilities team is helping customers
meet rising challenges related to ongoing infrastructure
modernization, which remains critical to driving electrification
and reducing carbon emissions. The Genie team has been executing
extremely well, introducing innovative new products, taking
significant cost reduction actions to streamline operations to
increase profitability while ensuring the product transfers to our
new permanent Monterrey facility remain on track. Looking ahead, we
are increasing our full-year revenue and operating margin guidance
ranges for both MP and AWP as a result of their strong
performance."
Second Quarter Operational and Financial
Highlights
- Net sales of $1.4 billion
increased 30.3%, up from $1.1 billion
in the second quarter of 2022. The increase was primarily driven by
healthy demand for our products across multiple businesses and all
major geographies, and improved price realization necessary to
mitigate rising costs, which was partially offset by a $10 million negative impact from changes in
foreign exchange rates.
- Income from operations of $209.9
million, or 15.0% of net sales improved from $103.9 million, or 9.6% of net sales during the
prior year. The year-over-year increase of $106.0 million was primarily due to incremental
margin achieved on higher sales volume, price realization,
favorable mix and improved manufacturing efficiencies, which was
partially offset by cost increases.
- Income from continuing operations was $159.8 million, or $2.35 per share, compared to $74.1 million, or $1.07 per share, in the second quarter of 2022.
EPS increased 119.6%, more than doubling on a year-over-year
basis.
Business Segment Review
Materials Processing
- Net sales of $577.4 million were
up 20.1% or $96.7 million
year-over-year, primarily driven by strong demand for our products
across multiple businesses and price realization necessary to
mitigate rising costs. Excluding the impact of foreign exchange
rates of approximately $9 million,
net sales increased 21.9% year-over-year.
- Income from operations increased to $98.2 million or 17.0% of net sales, compared to
$79.5 million, or 16.5% of net sales,
in the prior year. The increase was primarily due to incremental
margin achieved on higher sales volume, favorable mix and improved
manufacturing efficiencies, partially offset by cost
increases.
Aerial Work Platforms
- Net sales of $824.9 million were
up 38.0% or $227.2 million
year-over-year. The increase was primarily driven by improved
supply chain, higher demand and price realization necessary to
mitigate rising costs.
- Income from operations increased to $133.6 million or 16.2% of net sales, compared to
$46.2 million, or 7.7% of net sales
in the prior year. The increase was primarily due to incremental
margin achieved on higher sales volume, price realization,
favorable mix, cost reduction initiatives and manufacturing
efficiencies, partially offset by cost increases.
Strong Balance Sheet and Liquidity
- As of June 30, 2023, the Company had liquidity (cash and
availability under our revolving line of credit) of $763.2 million and net leverage of
0.7x.
- For the year-to-date period, Terex deployed $21.4 million for capital expenditures and
investments, net of proceeds from sale of capital assets. In
the second quarter, Terex received proceeds of $32.8 million associated with the sale of its
Oklahoma City facility.
- During the year-to-date period, Terex has returned $54.1 million to shareholders through share
repurchases and dividends.
CFO Commentary
Julie Beck, Senior Vice President
and Chief Financial Officer, said "We are proud of our financial
results this quarter with improving sales and expanding margins.
The 31% increase in our dividend since the start of 2023 reflects
our continued confidence in our strong financial position and
optimism for the future. We are raising our full-year financial
outlook, due to our excellent performance in the first half of the
year combined with our robust backlog."
2023 Outlook
(in millions, except per share
data)
Terex Outlook
(1)
|
PREVIOUS
Outlook
|
UPDATED
Outlook
|
Net Sales
|
$4,800 -
$5,000
|
~$5,100
|
SG&A % to
Sales
|
~10.7%
|
~10.5%
|
Operating
Margin
|
11.4% -
11.8%
|
~13.0%
|
Interest / Other
Expense
|
~$60
|
~$60
|
Tax Rate
|
~21.0%
|
~20.0%
|
EPS
|
$5.60 -
$6.00
|
~$7.00
|
Share Count
|
~69
|
~68.5
|
Depreciation /
Amortization
|
~$50
|
~$50
|
Free Cash Flow
(2)
|
$300 - $350
|
~$375
|
Corp & Other
OP
|
~($80)
|
~($85)
|
Segment
Outlook (1)
|
PREVIOUS
Outlook
|
UPDATED
Outlook
|
Net
Sales
|
Operating Margin
|
Net
Sales
|
Operating Margin
|
Materials
Processing
|
$2,100 -
$2,200
|
~15.8%
|
~$2,200
|
~16.0%
|
Aerial Work
Platforms
|
$2,700 -
$2,800
|
~11.5%
|
~$2,900
|
~13.8%
|
|
|
(1)
|
Excludes the impact of
future acquisitions, divestitures, restructuring and other unusual
items
|
(2)
|
Capital expenditures,
net of proceeds from sale of capital assets: ~$105
million
|
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 Glossary at the end of this press release contains further
details about this subject.
Conference call
The Company has scheduled a conference call to review the
financial results on Wednesday, August 2, 2023 beginning at
8:30 a.m. ET. John L. Garrison, Jr., Chairman and CEO, and
Julie Beck, Senior Vice President
and Chief Financial Officer, 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.
Forward-Looking Statements
Certain information in this press release includes
forward-looking statements (within the meaning of Section 27A of
the Securities Act of 1933, Section 21E of the Securities Exchange
Act of 1934 (the "Exchange Act") and the Private Securities
Litigation Reform Act of 1995) regarding future events or our
future financial performance that involve certain contingencies and
uncertainties, including those discussed in our Annual Report on
Form 10-K for the year ended December 31, 2022, and subsequent
reports we file with the U.S. Securities and Exchange Commission
from time to time, in the sections entitled "Management's
Discussion and Analysis of Financial Condition and Results of
Operations – Contingencies and Uncertainties." In addition,
when included in this press release the words "may," "expects,"
"should," "intends," "anticipates," "believes," "plans,"
"projects," "estimates," "will" 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. We have based these forward-looking
statements on current expectations and projections about future
events. These statements are not guarantees of future
performance. Such statements are inherently subject to a
variety of risks and uncertainties that could cause actual results
to differ materially from those reflected in such forward-looking
statements. Such risks and uncertainties, many of which are
beyond our control, include, among others:
- changes in the availability and price of certain materials
and components, which may result in further supply chain
disruptions;
- consolidation within our customer base and
suppliers;
- our operations are subject to a number of potential risks
that arise from operating a multinational business, including
compliance with changing regulatory environments and political and
economic instability;
- a material disruption to one of our significant
facilities;
- our business is sensitive to government spending;
- our industry is highly competitive and subject to pricing
pressure;
- our ability to successfully implement our strategy and the
actual results derived from such strategy;
- our ability to integrate acquired businesses;
- our consolidated financial results are reported in U.S.
dollars while certain assets and other reported items are
denominated in the currencies of other countries, creating currency
exchange and translation risk;
- our business is affected by the cyclical nature of markets
we serve;
- 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;
- the financial condition of customers and their continued
access to capital;
- exposure from providing credit support for some of our
customers;
- we may experience losses in excess of recorded
reserves;
- our ability to attract, develop, engage and retain team
members;
- possible work stoppages and other labor matters;
- increased cybersecurity threats and more sophisticated
computer crime;
- changes in import/export regulatory regimes, imposition of
tariffs, escalation of global trade conflicts and unfairly traded
imports, particularly from China, could continue to negatively
impact our business;
- compliance with environmental regulations could be costly
and failure to meet environmental, social and governance ("ESG")
expectations or standards or achieve our ESG goals could adversely
impact our business;
- litigation, product liability claims and other
liabilities;
- our compliance with the United
States ("U.S.") Foreign Corrupt Practices Act and similar
worldwide anti-corruption laws;
- increased regulatory focus on privacy and data security
issues and expanding laws;
- our ability to comply with an injunction and related
obligations imposed by the U.S. Securities and Exchange Commission
("SEC"); and
- other factors.
Actual events or our actual future results may differ
materially from any forward-looking statement due to these and
other risks, uncertainties and material factors. The
forward-looking statements contained herein speak only as of the
date of this press release. We expressly disclaim any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statement contained in this press
release to reflect any change in our expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based.
About Terex
Terex Corporation is a global manufacturer of materials
processing machinery and aerial work platforms. We design, build
and support products used in construction, maintenance,
manufacturing, energy, recycling, minerals and materials management
applications. Certain Terex products and solutions enable
customers to reduce their impact on the environment including
electric and hybrid offerings that deliver quiet and emission-free
performance, products that support renewable energy, and products
that aid in the recovery of useful materials from various types of
waste. Our products are manufactured in North America, Europe, Australia and Asia and sold worldwide. We engage with
customers through all stages of the product life cycle, from
initial specification to parts and service support.
Contact Information
Paretosh
Misra
Head of Investor Relations
Phone:
203-604-3977
Email: paretosh.misra@terex.com
TEREX CORPORATION
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
|
(unaudited)
|
(in millions, except
per share data)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
|
1,403.1
|
|
$
|
1,077.1
|
|
$
|
2,638.8
|
|
$
|
2,079.6
|
Cost of goods
sold
|
|
(1,060.2)
|
|
|
(864.2)
|
|
|
(2,017.2)
|
|
|
(1,680.9)
|
Gross profit
|
|
342.9
|
|
|
212.9
|
|
|
621.6
|
|
|
398.7
|
Selling, general and
administrative expenses
|
|
(133.0)
|
|
|
(109.0)
|
|
|
(264.0)
|
|
|
(220.3)
|
Income (loss) from
operations
|
|
209.9
|
|
|
103.9
|
|
|
357.6
|
|
|
178.4
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
1.1
|
|
|
0.4
|
|
|
3.1
|
|
|
1.0
|
Interest
expense
|
|
(15.4)
|
|
|
(11.8)
|
|
|
(30.3)
|
|
|
(22.4)
|
Other income (expense)
– net
|
|
(3.8)
|
|
|
(3.3)
|
|
|
(5.4)
|
|
|
(3.6)
|
Income (loss) from
continuing operations before income taxes
|
|
191.8
|
|
|
89.2
|
|
|
325.0
|
|
|
153.4
|
(Provision for)
benefit from income taxes
|
|
(32.0)
|
|
|
(15.1)
|
|
|
(55.3)
|
|
|
(27.0)
|
Income (loss) from
continuing operations
|
|
159.8
|
|
|
74.1
|
|
|
269.7
|
|
|
126.4
|
Gain (loss) on
disposition of discontinued operations- net of tax
|
|
(0.4)
|
|
|
—
|
|
|
2.3
|
|
|
(0.4)
|
Net income
(loss)
|
$
|
159.4
|
|
$
|
74.1
|
|
$
|
272.0
|
|
$
|
126.0
|
Basic earnings (loss)
per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
2.36
|
|
$
|
1.08
|
|
$
|
3.98
|
|
$
|
1.82
|
Gain (loss) on
disposition of discontinued operations – net of tax
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
Net income
(loss)
|
$
|
2.36
|
|
$
|
1.08
|
|
$
|
4.02
|
|
$
|
1.82
|
Diluted earnings (loss)
per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
2.35
|
|
$
|
1.07
|
|
$
|
3.94
|
|
$
|
1.80
|
Gain (loss) on
disposition of discontinued operations – net of tax
|
|
(0.01)
|
|
|
—
|
|
|
0.03
|
|
|
—
|
Net income
(loss)
|
$
|
2.34
|
|
$
|
1.07
|
|
$
|
3.97
|
|
$
|
1.80
|
Weighted average number
of shares outstanding in per share calculation
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
67.6
|
|
|
68.9
|
|
|
67.7
|
|
|
69.3
|
Diluted
|
|
68.1
|
|
|
69.3
|
|
|
68.5
|
|
|
70.1
|
TEREX CORPORATION
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
(unaudited)
|
(in millions,
except par value)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
297.7
|
|
$
|
304.1
|
Other current
assets
|
|
1,920.1
|
|
|
1,657.9
|
Total current
assets
|
|
2,217.8
|
|
|
1,962.0
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment – net
|
|
490.7
|
|
|
465.6
|
Other non-current
assets
|
|
706.7
|
|
|
690.5
|
Total non-current
assets
|
|
1,197.4
|
|
|
1,156.1
|
Total assets
|
$
|
3,415.2
|
|
$
|
3,118.1
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
2.4
|
|
$
|
1.9
|
Other current
liabilities
|
|
1,071.2
|
|
|
996.7
|
Total current
liabilities
|
|
1,073.6
|
|
|
998.6
|
Non-current
liabilities
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
734.3
|
|
|
773.6
|
Other non-current
liabilities
|
|
175.1
|
|
|
164.7
|
Total non-current
liabilities
|
|
909.4
|
|
|
938.3
|
Total
liabilities
|
|
1,983.0
|
|
|
1,936.9
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
1,432.2
|
|
|
1,181.2
|
Total liabilities and
stockholders' equity
|
$
|
3,415.2
|
|
$
|
3,118.1
|
|
|
|
|
|
|
TEREX CORPORATION
AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(unaudited)
|
|
(in
millions)
|
|
|
|
|
Six Months
Ended
June
30,
|
|
|
|
2023
|
|
2022
|
|
Operating
Activities
|
|
|
|
|
Net income
(loss)
|
$
|
272.0
|
|
$
|
126.0
|
|
Depreciation and
amortization
|
|
24.9
|
|
|
23.5
|
|
Changes in operating
assets and liabilities and non-cash charges
|
|
(167.1)
|
|
|
(130.2)
|
|
Net cash provided by
(used in) operating activities
|
|
129.8
|
|
|
19.3
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
(39.1)
|
|
|
(47.0)
|
|
Other investing
activities, net
|
|
18.1
|
|
|
(7.8)
|
|
Net cash provided by
(used in) investing activities
|
|
(21.0)
|
|
|
(54.8)
|
|
Financing
Activities
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
(119.0)
|
|
|
38.0
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
3.8
|
|
|
(16.1)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(6.4)
|
|
|
(13.6)
|
|
Cash and cash
equivalents at beginning of period
|
|
304.1
|
|
|
266.9
|
|
Cash and cash
equivalents at end of period
|
$
|
297.7
|
|
$
|
253.3
|
|
|
|
|
|
|
|
|
TEREX CORPORATION
AND SUBSIDIARIES
|
SEGMENT RESULTS
DISCLOSURE
|
(unaudited)
|
(in
millions)
|
|
|
Q2
|
|
Year to
Date
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
% of
|
|
|
% of
|
|
|
|
% of
|
|
|
% of
|
Net
Sales
|
Net
Sales
|
|
Net
Sales
|
Net
Sales
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,403.1
|
|
$
|
1,077.1
|
|
|
$
|
2,638.8
|
|
$
|
2,079.6
|
|
Income from
operations
|
$
|
209.9
|
15.0 %
|
$
|
103.9
|
9.6 %
|
|
$
|
357.6
|
13.6 %
|
$
|
178.4
|
8.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
577.4
|
|
$
|
480.7
|
|
|
$
|
1,131.2
|
|
$
|
933.4
|
|
Income from
operations
|
$
|
98.2
|
17.0 %
|
$
|
79.5
|
16.5 %
|
|
$
|
183.5
|
16.2 %
|
$
|
144.0
|
15.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
824.9
|
|
$
|
597.7
|
|
|
$
|
1,510.8
|
|
$
|
1,149.2
|
|
Income from
operations
|
$
|
133.6
|
16.2 %
|
$
|
46.2
|
7.7 %
|
|
$
|
216.7
|
14.3 %
|
$
|
78.7
|
6.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corp and Other /
Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
0.8
|
|
$
|
(1.3)
|
|
|
$
|
(3.2)
|
|
$
|
(3.0)
|
|
Loss from
operations
|
$
|
(21.9)
|
*
|
$
|
(21.8)
|
*
|
|
$
|
(42.6)
|
*
|
$
|
(44.3)
|
*
|
* Not a meaningful
percentage
|
|
|
|
|
|
|
|
GLOSSARY
Non-GAAP Measures Definitions
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 June 30, 2023, unless
otherwise indicated.
2023 Outlook
The Company's 2023 outlook for earnings per share is a non-GAAP
financial measure because it excludes the impact of potential
future acquisitions, divestitures, restructuring, and other unusual
items. The Company is not able to reconcile this forward-looking
non-GAAP financial measure to its 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 2023 GAAP financial results. This forward
looking information provides guidance to investors about the
Company's EPS expectations excluding unusual items that the Company
does not believe is reflective of its ongoing operations.
Free Cash Flow
The Company calculates a non-GAAP measure of free cash
flow. The Company defines free cash flow as Net cash provided
by (used in) operating activities less Capital expenditures, net of
proceeds from sale of capital assets. The Company believes
that this measure of free cash flow provides management and
investors further useful information on cash generation or use in
our primary operations. The following table reconciles Net cash
provided by (used in) operating activities to free cash flow (in
millions):
|
|
Three Months
Ended
June 30,
2023
|
|
Six Months
Ended
June 30,
2023
|
Net cash provided by
(used in) operating activities
|
|
$
120.7
|
|
$
129.8
|
Capital expenditures,
net of proceeds from sale of capital assets
|
|
14.1
|
|
(5.6)
|
Free cash flow
(use)
|
|
$
134.8
|
|
$
124.2
|
Working Capital
Working Capital is calculated using the Condensed
Consolidated Balance Sheet amounts for 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,
2023
|
Inventories
|
$1,122.0
|
Receivables
|
681.2
|
Less: Trade Accounts
Payables
|
(690.3)
|
Less: Customer
Advances
|
(34.9)
|
Total Working
Capital
|
$1,078.0
|
Trailing Three Months Annualized Net Sales is calculated using
the net sales for the quarter multiplied by four.
3 months
Sales
|
|
$1,403.1
|
Number of
quarters
|
x
|
4.0
|
Annualized Quarterly
Sales
|
|
$5,612.4
|
|
|
|
WC % of Annualized
Quarterly Sales
|
|
19.2 %
|
The ratio is calculated by dividing working capital by trailing
three months annualized net sales. The Company believes this
measures its resource use efficiency.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/terex-reports-second-quarter-2023-results-301890667.html
SOURCE Terex Corporation