Terex Reports Q2 Numbers

August 5, 2005 — Terex Corp., Westport, Conn., recently announced net income of $78.8 million for the second quarter of 2005, or $1.54 per share, compared to $59.1 million, or $1.17 per share, for the same quarter last year. Excluding the impact of special items for the second quarter of 2005, net income was $80.5 million, or $1.58 per share, compared to net income of $52.3 million, or $1.03 per share, for the second quarter of 2004.

 

Special items for the second quarter of 2005 included charges for investigation costs associated with the company's internal review and restatement of its financial statements for the fiscal years 2000, 2001, 2002, and 2003, and charges relating to general corporate restructuring. For the period ended June 30, 2005, the company is using an estimated tax rate of 33.8%, versus the 19.7% rate used for the second quarter of 2004.

 

Net sales increased to $1,763.8 million in the second quarter of 2005, an increase of 32% from $1,336.4 million in the second quarter of 2004. Net debt (consisting of long-term debt, including current portion of long-term debt, less cash and cash equivalents) at June 30, 2005 decreased by $139 million from March 31, 2005 levels.

 

"Terex continues to gain momentum, both in the marketplace and from our internal initiatives," said Ronald M. DeFeo, Terex's chairman and CEO. "Our incremental margin (defined as the year over year change in income from operations divided by the year over year change in net sales) in the quarter was 13%, well above the 6% we achieved in the first quarter of 2005. We have a commitment to fulfilling customer demand and growing our products' presence in the marketplace while improving operating margin through price realization and enhanced manufacturing efficiencies. We are pleased with the over 50% increase in net income and EPS for the second quarter versus last year, excluding special items."

 

DeFeo also noted that the company reduced its net debt by $139 million during the second quarter of 2005. “This results from continuing efforts to improve our effective use of working capital (the sum of accounts receivable and inventory less accounts payable), as well as improving profitability and our corporate focus on generating strong incremental ROIC,” he said. “We expect to pay down debt in the short term, continue to strengthen our capital structure and position the company to retire our expensive bonds in 2006 with cash, which has been another of our previously stated goals."