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Terex Announces Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

WESTPORT, CT, October 20, 2015-- Terex Corporation (NYSE: TEX) today announced income from continuing operations of $44.8 million, or $0.41 per share for the third quarter of 2015, and excluding certain items,

income from continuing operations as adjusted

was $63.4 million, or $0.58 per share. This compared to income from continuing operations of $58.7 million, or $0.51 per share for the third quarter of 2014,

income from operations as adjusted

was $67.8 million, or $0.59 per share. The Glossary at the end of the release contains more details on these items.

Net sales were $1 ,641.3 million in the third quarter of 2015, a decrease of $168.5 million, or 9.3%, when compared with $1,809.8 million in the third quarter of 2014. Excluding the impact of currency exchange rates, net sales decreased $17.4 million or 1.0%. Income from operations was $111.9 million in the third quarter of 2015 and excluding certain items,

was $126.8 million. This compared to income from operations of $116.8 million in the third quarter of 2014 and excluding certain items,

was $127.5 million.

“Our marketplace remains challenging,” commented Ron DeFeo, Terex Chairman and Chief Executive Officer. “We had another good performance in our Aerial Work Platforms (AWP) business which delivered year over year improvement in profitability in the third quarter as increased productivity and lower material cost more than offset lower sales, mainly in the North American telehandler product category. The Materials Processing (MP) business also had a solid quarter, expanding operating margins on relatively flat sales. The Cranes and Construction businesses continue to experience relatively soft market conditions overall, with customers remaining cautious with their equipment purchasing patterns. The Material Handling and Port Solutions (MHPS) business saw declines driven by a decrease in port automation sales.”

Mr. DeFeo continued, “As mentioned last quarter, we are seeing pricing pressure in the marketplace, which to date we have been able to mostly offset by reductions in material input costs. We continue to execute very well against the cost saving initiatives that we have previously communicated. We also continue to make progress towards the completion of the merger with Konecranes Plc, which when combined with the improvements already underway creates a compelling financial improvement story in an otherwise flat market.”

Outlook

: Mr. DeFeo added, “Given where we are in the year and the challenging environment we are operating in, we believe we will be at or near the low end of our previously announced earnings guidance for the full year 2015.”

Capital Structure

: “We generated approximately $62 million of

free cash flow

in the quarter, which was lower than anticipated, as our net working capital as a percentage of annualized sales remains high at 28%, commented Kevin Bradley, Terex Senior Vice President and Chief Financial Officer. We have more work in front of us to improve our working capital efficiency, but we still believe we have an opportunity to meet our free cash flow target for 2015 of $200 - 250 million."

The Company’s liquidity at September 30, 2015 increased by $11 million compared to June 30, 2015 and totaled $829 million, which was comprised of cash balances of $301 million and borrowing availability under the Company’s revolving credit facilities of $528 million.

Return on Invested Capital

(ROIC)

was 9.7% for the trailing twelve months ended September 30, 2015.

Taxes:

The effective tax rate for the third quarter of 2015 was 40.1% as compared to an effective tax rate of 32.1% for the third quarter of 2014. The higher effective rate for the three months ended September 30, 2015 was primarily due to an increase in the provision for uncertain tax positions compared with a reduction in the provision for uncertain tax positions in the three months ended September 30, 2014.

Backlog

for orders deliverable during the next twelve months was $1,482 million at September 30, 2015, a decrease of 19.2% from June 30, 2015 and a decrease of 13.0% from September 30, 2014. Excluding the impact of foreign exchange rate changes, backlog at September 30, 2015 decreased 5.9% from September 30, 2014 primarily driven by decreases in our MHPS and Cranes backlog which were slightly offset by increases in AWP backlog.

All results are for 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. Certain financial measures are shown in italics the first time referenced and are described in the text or the Glossary at the end of this press release.

Conference call

The Company has scheduled a one hour conference call to review the financial results on Wednesday, October 21, 2015 at 8:30 a.m. ET. Ronald M. DeFeo, Chairman and CEO, will host the call. A simultaneous webcast of this call will be available on the Company’s website, www.terex.com. To listen to the call, select “Investor Relations” in the “About Terex” section on the home page and then click on the webcast microphone link. Participants are encouraged to access the call 10 minutes prior to the starting time. The call will also be archived on the Company’s website under “Audio Archives” in the “Investor Relations” section of the website. For those participants that do not have Internet access, the call-in number is 877-726-6603. International participants should dial 706-634-5517. No pass code is required.

Contact Information:

Tom Gelston

Vice President, Investor Relations

Phone: 203-222-5943

Email: thomas.gelston@terex.com

Forward-Looking Statements

This press release contains forward-looking information regarding future events or the Company’s future financial performance based on the current expectations of Terex Corporation. In addition, when included in this press release, the words “may,” “expects,” “intends,” “anticipates,” “plans,” “projects,” “estimates” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. The Company has based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance.

Because forward-looking statements involve risks and uncertainties, actual results could differ materially. Such risks and uncertainties, many of which are beyond the control of Terex, include among others: Our business is cyclical and weak general economic conditions affect the sales of our products and financial results; the effect of the announcement and pendency of the merger on our customers, employees, suppliers, vendors, distributors, dealers, retailers, operating results and business generally, and the diversion of management’s time and attention while...


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