- Sales of $1.3 billion
increased 15% year-over-year
- Income from operations of $163
million, up 35% year-over-year
- Operating profit margin of 12.7% improved 190bps
year-over-year
- EPS of $1.75 increased 46%
year-over-year
- Raising full-year 2023 EPS outlook to ~$7.05
NORWALK,
Conn., Oct. 26, 2023 /PRNewswire/ -- Terex
Corporation (NYSE: TEX) today announced its results for the third
quarter 2023.
CEO Commentary
"We demonstrated strong execution in the third quarter and
delivered a 15% increase in sales and a 46% improvement in EPS over
the prior year," said Terex Chairman and Chief Executive
Officer John L. Garrison, Jr. "I
want to thank all our dedicated team members for their hard work
and continued commitment to our Zero Harm Safety Culture and
improving deliveries to our customers and dealers. As a
result of continued strong performance, we are raising our
full-year 2023 EPS outlook to ~$7.05.
We remain confident in our ability to execute on our strategy to
deliver long-term shareholder value."
Third Quarter Operational and Financial
Highlights
- Net sales of $1.3 billion
increased 15.1%, up from $1.1 billion
in the third quarter of 2022. The increase was primarily driven by
healthy demand for our products across multiple businesses and
price realization necessary to mitigate rising costs. Changes in
foreign exchange rates positively impacted consolidated net sales
by approximately $25 million.
- Income from operations of $163.2
million, or 12.7% of net sales improved from $120.8 million, or 10.8% of net sales during the
prior year. The year-over-year increase of $42.4 million was primarily due to incremental
profit achieved on higher sales volume and improved manufacturing
efficiencies, which was partially offset by cost increases.
- Income from continuing operations was $119.2 million, or $1.75 per share, compared to $81.8 million, or $1.20 per share, in the third quarter of 2022.
EPS increased 46% on a year-over-year basis.
Business Segment Review
Materials Processing
- Net sales of $541.1 million were
up 18.2% or $83.2 million
year-over-year, primarily driven by strong demand for our products
across multiple businesses. Net sales were positively impacted by
the effects of foreign exchange rate changes of approximately
$12 million.
- Income from operations increased to $91.3 million or 16.9% of net sales, compared to
$66.8 million, or 14.6% of net sales,
in the prior year. The increase was primarily due to incremental
profit achieved on higher sales volume, favorable mix and improved
manufacturing efficiencies.
Aerial Work Platforms
- Net sales of $751.0 million were
up 13.3% or $88.4 million
year-over-year. The increase was primarily driven by higher demand,
improvements in the Genie supply chain and price realization
necessary to mitigate rising costs. Net sales were positively
impacted by the effects of foreign exchange rate changes of
approximately $13 million.
- Income from operations increased to $93.6 million or 12.5% of net sales, compared to
$63.5 million, or 9.6% of net sales
in the prior year. The increase was primarily due to incremental
profit achieved on higher sales volume, price realization and cost
reduction initiatives, partially offset by cost increases,
including costs associated with the ramp-up of our Monterrey
facility.
- Terex Utilities was negatively impacted by supply chain issues
resulting in lost production and manufacturing inefficiencies.
Strong Balance Sheet and Liquidity
- As of September 30, 2023, the
Company had liquidity (cash and availability under our revolving
line of credit) of $846 million and
net leverage of 0.5x.
- For the year-to-date period, Terex deployed $55 million for capital expenditures and
investments, net of proceeds from sale of capital assets.
- During the year-to-date period, Terex has returned $66 million to shareholders through share
repurchases and dividends.
CFO Commentary
Julie Beck, Senior Vice President
and Chief Financial Officer, said, "We have delivered a strong year
to date performance with 23% growth in sales, 90% improvement in
earnings per share and a $205 million
increase in free cash flow over the prior year. Our continued solid
performance, coupled with a strong balance sheet, low leverage, and
increasing free cash flow, provide flexibility to support our
growth initiatives."
2023 Outlook
(in millions, except per share data)
Terex Outlook
(1)
|
PREVIOUS
Outlook
|
UPDATED
Outlook
|
Net Sales
|
~$5,100
|
~$5,150
|
SG&A % to
Sales
|
~10.5%
|
~10.3%
|
Operating
Margin
|
~13.0%
|
~13.0%
|
Interest / Other
Expense
|
~$60
|
~$60
|
Tax Rate
|
~20.0%
|
~20.0%
|
EPS
|
~$7.00
|
~$7.05
|
Share Count
|
~68.5
|
~68.5
|
Depreciation /
Amortization
|
~$50
|
~$50
|
Free Cash Flow
(2)
|
~$375
|
~$375
|
Corp & Other
OP
|
~($85)
|
~($85)
|
|
Segment Outlook
(1)
|
PREVIOUS
Outlook
|
UPDATED
Outlook
|
Net
Sales
|
Operating
Margin
|
Net
Sales
|
Operating
Margin
|
Materials
Processing
|
~$2,200
|
~16.0%
|
~$2,225
|
~16.1%
|
Aerial Work
Platforms
|
~$2,900
|
~13.8%
|
~$2,925
|
~13.3%
|
|
|
(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 Friday, October 27, 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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
|
1,290.1
|
|
$
|
1,120.5
|
|
$
|
3,928.9
|
|
$
|
3,200.1
|
Cost of goods
sold
|
|
(997.6)
|
|
|
(883.4)
|
|
|
(3,014.8)
|
|
|
(2,564.3)
|
Gross profit
|
|
292.5
|
|
|
237.1
|
|
|
914.1
|
|
|
635.8
|
Selling, general and
administrative expenses
|
|
(129.3)
|
|
|
(116.3)
|
|
|
(393.3)
|
|
|
(336.6)
|
Income (loss) from
operations
|
|
163.2
|
|
|
120.8
|
|
|
520.8
|
|
|
299.2
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
2.1
|
|
|
1.1
|
|
|
5.2
|
|
|
2.1
|
Interest
expense
|
|
(17.0)
|
|
|
(13.5)
|
|
|
(47.3)
|
|
|
(35.8)
|
Other income (expense)
– net
|
|
0.7
|
|
|
(1.0)
|
|
|
(4.7)
|
|
|
(4.7)
|
Income (loss) from
continuing operations before income taxes
|
|
149.0
|
|
|
107.4
|
|
|
474.0
|
|
|
260.8
|
(Provision for)
benefit from income taxes
|
|
(29.8)
|
|
|
(25.6)
|
|
|
(85.2)
|
|
|
(52.6)
|
Income (loss) from
continuing operations
|
|
119.2
|
|
|
81.8
|
|
|
388.8
|
|
|
208.2
|
Gain (loss) on
disposition of discontinued operations- net of tax
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
(0.4)
|
Net income
(loss)
|
$
|
119.2
|
|
$
|
81.8
|
|
$
|
391.1
|
|
$
|
207.8
|
Basic earnings (loss)
per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
1.77
|
|
$
|
1.21
|
|
$
|
5.75
|
|
$
|
3.03
|
Gain (loss) on
disposition of discontinued operations – net of tax
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
(0.01)
|
Net income
(loss)
|
$
|
1.77
|
|
$
|
1.21
|
|
$
|
5.79
|
|
$
|
3.02
|
Diluted earnings (loss)
per Share:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
1.75
|
|
$
|
1.20
|
|
$
|
5.69
|
|
$
|
2.99
|
Gain (loss) on
disposition of discontinued operations – net of tax
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
—
|
Net income
(loss)
|
$
|
1.75
|
|
$
|
1.20
|
|
$
|
5.72
|
|
$
|
2.99
|
Weighted average number
of shares outstanding in per share calculation
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
67.4
|
|
|
67.8
|
|
|
67.6
|
|
|
68.8
|
Diluted
|
|
68.2
|
|
|
68.4
|
|
|
68.4
|
|
|
69.6
|
TEREX CORPORATION
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET
(unaudited)
(in millions,
except par value)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
352.3
|
|
$
|
304.1
|
Other current
assets
|
|
1,892.2
|
|
|
1,657.9
|
Total current
assets
|
|
2,244.5
|
|
|
1,962.0
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment – net
|
|
500.5
|
|
|
465.6
|
Other non-current
assets
|
|
716.1
|
|
|
690.5
|
Total non-current
assets
|
|
1,216.6
|
|
|
1,156.1
|
Total assets
|
$
|
3,461.1
|
|
$
|
3,118.1
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Current portion of
long-term debt
|
$
|
2.4
|
|
$
|
1.9
|
Other current
liabilities
|
|
1,059.7
|
|
|
996.7
|
Total current
liabilities
|
|
1,062.1
|
|
|
998.6
|
Non-current
liabilities
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
706.3
|
|
|
773.6
|
Other non-current
liabilities
|
|
196.5
|
|
|
164.7
|
Total non-current
liabilities
|
|
902.8
|
|
|
938.3
|
Total
liabilities
|
|
1,964.9
|
|
|
1,936.9
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
1,496.2
|
|
|
1,181.2
|
Total liabilities and
stockholders' equity
|
$
|
3,461.1
|
|
$
|
3,118.1
|
|
|
|
|
|
|
TEREX CORPORATION
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in
millions)
|
|
|
|
|
Nine Months
Ended
September
30,
|
|
|
2023
|
|
2022
|
|
Operating
Activities
|
|
|
|
|
Net income
(loss)
|
$
|
391.1
|
|
$
|
207.8
|
|
Depreciation and
amortization
|
|
37.3
|
|
|
35.1
|
|
Changes in operating
assets and liabilities and non-cash charges
|
|
(159.8)
|
|
|
(138.7)
|
|
Net cash provided by
(used in) operating activities
|
|
268.6
|
|
|
104.2
|
|
Investing
Activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
(71.6)
|
|
|
(78.8)
|
|
Other investing
activities, net
|
|
18.2
|
|
|
(45.6)
|
|
Net cash provided by
(used in) investing activities
|
|
(53.4)
|
|
|
(124.4)
|
|
Financing
Activities
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
(160.6)
|
|
|
13.3
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(6.4)
|
|
|
(28.3)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
48.2
|
|
|
(35.2)
|
|
Cash and cash
equivalents at beginning of period
|
|
304.1
|
|
|
266.9
|
|
Cash and cash
equivalents at end of period
|
$
|
352.3
|
|
$
|
231.7
|
|
|
|
|
|
|
|
|
TEREX CORPORATION
AND SUBSIDIARIES
SEGMENT RESULTS
DISCLOSURE
(unaudited)
(in
millions)
|
|
|
Q3
|
|
Year to
Date
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
% of
|
|
|
% of
|
|
|
|
% of
|
|
|
% of
|
Net
Sales
|
Net
Sales
|
|
Net
Sales
|
Net
Sales
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,290.1
|
|
$
|
1,120.5
|
|
|
$
|
3,928.9
|
|
$
|
3,200.1
|
|
Income from
operations
|
$
|
163.2
|
12.7 %
|
$
|
120.8
|
10.8 %
|
|
$
|
520.8
|
13.3 %
|
$
|
299.2
|
9.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
541.1
|
|
$
|
457.9
|
|
|
$
|
1,672.3
|
|
$
|
1,391.3
|
|
Income from
operations
|
$
|
91.3
|
16.9 %
|
$
|
66.8
|
14.6 %
|
|
$
|
274.8
|
16.4 %
|
$
|
210.8
|
15.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
751.0
|
|
$
|
662.6
|
|
|
$
|
2,261.8
|
|
$
|
1,811.8
|
|
Income from
operations
|
$
|
93.6
|
12.5 %
|
$
|
63.5
|
9.6 %
|
|
$
|
310.3
|
13.7 %
|
$
|
142.2
|
7.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corp and Other /
Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
(2.0)
|
|
$
|
0.0
|
|
|
$
|
(5.2)
|
|
$
|
(3.0)
|
|
Loss from
operations
|
$
|
(21.7)
|
*
|
$
|
(9.5)
|
*
|
|
$
|
(64.3)
|
*
|
$
|
(53.8)
|
*
|
* 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 September 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
September 30,
2023
|
|
Nine Months
Ended
September 30,
2023
|
Net cash provided by
(used in) operating activities
|
|
$
138.8
|
|
$
268.6
|
Capital expenditures,
net of proceeds from sale of capital assets
|
|
(32.4)
|
|
(38.0)
|
Free cash flow
(use)
|
|
$
106.4
|
|
$
230.6
|
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:
|
September 30,
2023
|
Inventories
|
$1,117.0
|
Receivables
|
645.1
|
Less: Trade Accounts
Payables
|
(668.3)
|
Less: Customer
Advances
|
(32.4)
|
Total Working
Capital
|
$1,061.4
|
Trailing Three Months Annualized Net Sales is calculated using
the net sales for the quarter multiplied by four.
3 months
Sales
|
|
$1,290.1
|
Number of
quarters
|
x
|
4.0
|
Annualized Quarterly
Sales
|
|
$5,160.4
|
|
|
|
WC % of Annualized
Quarterly Sales
|
|
20.6 %
|
The ratio is calculated by dividing working capital by trailing
three months annualized net sales. The Company believes this
measures its resource use efficiency.
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SOURCE Terex Corporation