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Terex Announces Second Quarter 2012 Results

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.

As a result of the final court decree in August 2009 that formalized the settlement of an investigation of Terex by the SEC, Terex cannot rely on the safe harbor provisions regarding forward-looking statements provided by the regulations issued under the Securities Exchange Act of 1934 until August 2012.

Terex Corporation is a diversified global manufacturer reporting in five business segments: Aerial Work Platforms, Construction, Cranes, Material Handling & Port Solutions and Materials Processing. Terex manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, quarrying, manufacturing, mining, shipping, transportation, refining, energy and utility industries. Terex offers 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 INCOME

(unaudited)

(in millions, except per share data)

 
Three Months

Ended June 30,

Six Months

Ended June 30,

2012       2011 2012       2011
Net sales $ 2,011.5 $ 1,488.2 $ 3,830.9 $ 2,744.4
Cost of goods sold   (1,582.9)   (1,273.3)   (3,071.5)   (2,362.3)
Gross profit 428.6 214.9 759.4 382.1
Selling, general and administrative expenses   (253.6)   (208.1)   (520.6)   (384.6)
Income (loss) from operations 175.0 6.8 238.8 (2.5)
Other income (expense)
Interest income 2.5 3.0 5.1 5.1
Interest expense (46.9) (27.9) (87.4) (56.1)
Loss on early extinguishment of debt (2.4) - (2.4) (6.3)
Other income (expense) – net   (3.6)   34.6   0.9   86.5
Income (loss) from continuing operations before income taxes 124.6 16.5 155.0 26.7
(Provision for) benefit from income taxes   (44.1)   (16.3)   (52.9)   (22.3)
Income (loss) from continuing operations 80.5 0.2 102.1 4.4
Income (loss) from discontinued operations – net of tax - (0.6) 2.5 5.8

Gain (loss) on disposition of discontinued operations- net      of tax

  2.3   (0.8)   2.3   (0.5)
Net income (loss) 82.8 (1.2) 106.9 9.7
Net (income) loss attributable to noncontrolling interest   3.1   0.7   2.0   1.5
Net income (loss) attributable to Terex Corporation $ 85.9 $ (0.5) $ 108.9 $ 11.2
Amounts attributable to Terex Corporation common stockholders:
Income (loss) from continuing operations $ 83.6 $ 0.9 $ 104.1 $ 5.9
Income (loss) from discontinued operations – net of tax - (0.6) 2.5 5.8

Gain (loss) on disposition of discontinued operations – net      of tax

  2.3   (0.8)   2.3   (0.5)
Net income (loss) attributable to Terex Corporation $ 85.9 $ (0.5) $ 108.9 $ 11.2

Basic Earnings (loss) Per Share Attributable to Terex Corporation      Common Stockholders:

Income (loss) from continuing operations $ 0.76 $ 0.01 $ 0.95 $ 0.05
Income (loss) from discontinued operations – net of tax - - 0.02 0.05

Gain (loss) on disposition of discontinued operations – net      of tax

  0.02   (0.01)   0.02   -
Net income (loss) attributable to Terex Corporation $ 0.78 $ - $ 0.99 $ 0.10
Diluted Earnings (loss) Per Share Attributable to Terex Corporation Common Stockholders:
Income (loss) from continuing operations $ 0.75 $ 0.01 $ 0.94 $ 0.05
Income (loss) from discontinued operations – net of tax - - 0.02 0.05

Gain (loss) on disposition of discontinued operations – net      of tax

  0.02   (0.01)   0.02   -
Net income (loss) attributable to Terex Corporation $ 0.77 $ - $ 0.98 $ 0.10

Weighted average number of shares outstanding in per share      calculation

Basic   110.4   109.5   110.2   109.4
Diluted   111.4   114.8   111.5   115.0
 

TEREX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(unaudited)

(in millions, except par value)

           
June 30,

2012

December 31, 2011

Assets
Current assets
Cash and cash equivalents $ 841.5 $ 774.1

Trade receivables (net of allowance of $35.9 and $42.5 at June 30, 2012 and     December 31, 2011, respectively)

1,266.7 1,178.1
Inventories 1,734.8 1,758.1
Deferred taxes 103.0 121.5
Other current assets   222.2   221.4
Total current assets 4,168.2 4,053.2
Non-current assets
Property, plant and equipment - net 801.7 835.5
Goodwill 1,208.9 1,232.9
Intangible assets – net 480.7 519.5
Deferred taxes 67.4 69.0
Other assets   360.6   353.3
Total assets $ 7,087.5 $ 7,063.4
 
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable and current portion of long-term debt $ 60.5 $ 77.0
Trade accounts payable 829.8 764.6
Accrued compensation and benefits 220.9 222.3
Accrued warranties and product liability 102.7 111.0
Customer advances 222.9 223.2
Income taxes payable 71.0 185.2
Other current liabilities   290.4   307.6
Total current liabilities 1,798.2 1,890.9
Non-current liabilities
Long-term debt, less current portion 2,342.3 2,223.4
Retirement plans 329.8 344.6
Other non-current liabilities   376.1   416.1
Total liabilities   4,846.4   4,875.0
 
Commitments and contingencies
Redeemable noncontrolling interest 229.5 -
Stockholders’ equity

Common stock, $.01 par value – authorized 300.0 shares; issued 122.7 and 121.9     shares at June 30, 2012 and December 31, 2011, respectively

1.2 1.2
Additional paid-in capital 1,266.1 1,271.8
Retained earnings 1,472.1 1,361.9
Accumulated other comprehensive (loss) income (152.1) (125.5)

Less cost of shares of common stock in treasury – 13.0 and 13.1 shares at June 30,     2012 and December 31, 2011, respectively

  (597.7)   (599.1)
Total Terex Corporation stockholders’ equity 1,989.6 1,910.3
Noncontrolling interest   22.0   278.1
Total stockholders’ equity   2,011.6   2,188.4
Total liabilities and stockholders’ equity $ 7,087.5 $ 7,063.4
 

TEREX CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited) (in millions)

     
Six Months

Ended June 30,

2012       2011
Operating Activities of Continuing Operations
Net income $ 106.9 $ 9.7

Adjustments to reconcile net income to net cash provided by (used in) operating     activities of continuing operations:

Discontinued operations (4.8) (5.3)
Depreciation and amortization 76.6 53.1
Deferred taxes 15.0 (5.2)
Gain on sale of assets (9.5) (92.2)
Stock-based compensation expense 15.5 13.7

Changes in operating assets and liabilities (net of effects of acquisitions and     divestitures):

Trade receivables (87.9) (132.2)
Inventories (83.6) (212.4)
Trade accounts payable 91.6 55.6
Other, net   (102.0)   96.3
Net cash provided by (used in) operating activities of continuing operations   17.8   (218.9)
Investing Activities of Continuing Operations
Capital expenditures (35.3) (32.8)
Purchase of marketable securities - (11.5)
Other investments (14.1) -
Proceeds from sale of assets 13.6 294.6
Other investing activities, net   (5.2)   (3.7)
Net cash (used in) provided by investing activities of continuing operations   (41.0)   246.6
Financing Activities of Continuing Operations
Principal repayments of debt (212.3) (376.5)
Proceeds from issuance of debt 321.1 100.8
Payment of debt issuance costs (5.3) (0.6)
Distributions to noncontrolling interest (4.9) -
Other financing activities, net   2.3   4.7
Net cash provided by (used in) financing activities of continuing operations   100.9   (271.6)
Effect of Exchange Rate Changes on Cash and Cash Equivalents   (10.3)   51.7
Net Increase (Decrease) in Cash and Cash Equivalents 67.4 (192.2)
Cash and Cash Equivalents at Beginning of Period   774.1   894.2
Cash and Cash Equivalents at End of Period $ 841.5 $ 702.0
 
               

TEREX CORPORATION AND SUBSIDIARIES

SEGMENT RESULTS DISCLOSURE

(unaudited)

(in millions)

Second Quarter Year-to-Date
2012         2011 2012         2011
       

% of

Net Sales

       

% of

Net Sales

       

% of

Net Sales

       

% of

Net Sales

Consolidated
Net sales $ 2,011.5 $ 1,488.2 $ 3,830.9 $ 2,744.4
Gross profit 428.6 21.3% 214.9 14.4% 759.4 19.8% 382.1 13.9%
SG&A   253.6 12.6%   208.1 14.0%   520.6 13.6%   384.6 14.0%
Income (loss) from operations $ 175.0 8.7% $ 6.8 0.5% $ 238.8 6.2% $ (2.5) (0.1%)
 
AWP
Net sales $ 605.7 $ 485.7 $ 1,119.1 $ 863.9
Gross profit 136.5 22.5% 74.7 15.4% 229.2 20.5% 124.5 14.4%
SG&A   53.3 8.8%   47.3 9.7%   103.4 9.2%   91.4 10.6%
Income from operations $ 83.2 13.7% $ 27.4 5.6% $ 125.8 11.2% $ 33.1 3.8%
 
Construction
Net sales $ 388.8 $ 359.7 $ 751.9 $ 701.2
Gross profit 48.7 12.5% 44.4 12.3% 85.6 11.4% 82.7 11.8%
SG&A   39.1 10.1%   50.4 14.0%   76.0 10.1%   91.9 13.1%
Income (loss) from operations $ 9.6 2.5% $ (6.0) (1.7%) $ 9.6 1.3% $ (9.2) (1.3%)
 
Cranes
Net sales $ 484.2 $ 464.1 $ 903.6 $ 862.4
Gross profit 95.6 19.7% 50.4 10.9% 164.4 18.2% 90.9 10.5%
SG&A   52.1 10.8%   84.4 18.2%   113.6 12.6%   147.4 17.1%
Income (loss) from operations $ 43.5 9.0% $ (34.0) (7.3%) $ 50.8 5.6% $ (56.5) (6.6)%
 
MHPS
Net sales $ 361.0 $ - $ 728.5 $ -
Gross profit 94.1 26.1% - - 186.7 25.6% - -
SG&A   82.3 22.8%   - -   172.0 23.6%   - -
Income from operations $ 11.8 3.3% $ - - $ 14.7 2.0% $ - -
 
MP
Net sales $ 190.3 $ 188.7 $ 359.5 $ 340.9
Gross profit 45.9 24.1% 40.8 21.6% 81.0 22.5% 73.6 21.6%
SG&A   17.3 9.1%   19.7 10.4%   37.1 10.3%   40.2 11.8%
Income from operations $ 28.6 15.0% $ 21.1 11.2% $ 43.9 12.2% $ 33.4 9.8%
 
Corporate/Eliminations
Net sales $ (18.5) $ (10.0) $ (31.7) $ (24.0)
Gross profit 7.8 (42.2%) 4.6 (46.0%) 12.5 (39.4%) 10.4 (43.3%)
SG&A   9.5 (51.4%)   6.3 (63.0%)   18.5 (58.4%)   13.7 (57.1%)
Loss from operations $ (1.7) 9.2% $ (1.7) 17.0% $ (6.0) 18.9% $ (3.3) 13.8%

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.

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