SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
F O R M 10 - Q
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-10702
Terex Corporation
(Exact name of registrant as specified in its charter)
Delaware 34-1531521
(State of Incorporation) (IRS Employer Identification No.)
500 Post Road East, Suite 320, Westport, Connecticut 06880
(Address of principal executive offices)
(203) 222-7170
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES [ ] NO [X]
Number of outstanding shares of common stock: 10,358,817 as of June 30, 1995.
The Exhibit Index appears on page 20.
INDEX
TEREX CORPORATION AND SUBSIDIARIES
Page No.
PART I FINANCIAL INFORMATION
Item 1 Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Operations --
Three months and six months ended June 30, 1995 and 1994 3
Condensed Consolidated Balance Sheets --
June 30, 1995 and December 31, 1994 4
Condensed Consolidated Statements of Cash Flows --
Three months and six months ended June 30, 1995 and 1994 5
Notes to Condensed Consolidated Financial Statements --
June 30, 1995 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II OTHER INFORMATION
Item 1 Legal Proceedings 18
Item 4 Submission of Matters to a Vote of Security Holders 18
Item 6 Exhibits and Reports on Form 8-K 18
SIGNATURES 19
PART 1. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Net sales $ 269,409 $ 198,249 $ 483,485 $ 366,287
Cost of goods sold 245,175 178,748 438,039 331,608
Gross profit 24,234 19,501 45,446 34,679
Engineering, selling and
administrative expenses:
Third parties 23,190 16,713 38,400 36,916
Related parties --- --- --- 2,245
Total engineering,
selling and
administrative expenses 23,190 16,713 38,400 39,161
Severance and exit costs 3,478 4,549 3,478 4,549
Income (loss) from
operations (2,434) (1,761) 3,568 (9,031)
Other income (expense):
Interest income 168 126 499 317
Interest expense (9,582) (7,892) (16,582) (15,443)
Gain on sale of
Fruehauf stock --- 15,486 1,032 20,106
Gain on sale of
Drexel business --- 4,244 --- 4,244
Property impairment
charge (3,000) --- (3,000) ---
Gain (loss) on sale of
property, plant and
equipment 127 10 173 (50)
Amortization of debt
issuance costs (576) (617) (1,053) (1,237)
Other income (expense) (1,054) 1,474 (2,823) 1,358
Income (loss) before
income taxes and
extraordinary items (16,351) 11,070 (18,186) 264
Income tax provision (65) (816) (115) (834)
Income (loss) before
extraordinary items (16,416) 10,254 (18,301) (570)
Extraordinary losses
on retirement of debt (7,452) (233) (7,452) (233)
NET INCOME (LOSS) (23,868) 10,021 (25,753) (803)
Less preferred stock
accretion (1,789) (1,444) (3,518) (2,824)
Income (loss) applicable
to common stock $ (25,657) $ 8,577 $(29,271) $ (3,627)
PER COMMON AND COMMON EQUIVALENT SHARE:
Primary:
Income (loss) before
extraordinary items $ (1.76) $ 0.64 $ (2.12) $ (0.33)
Extraordinary items (0.72) (0.02) (0.72) (0.02)
Net income (loss) $ (2.48) $ 0.62 $ (2.84) $ (0.35)
Fully diluted:
Income (loss) before
extraordinary items $ (1.76) $ 0.60 $ (2.12) $ (0.33)
Extraordinary items (0.72) (0.01) (0.72) $ (0.02)
Net income (loss) $ (2.48) $ 0.59 $ (2.84) $ (0.35)
Weighted average common
shares outstanding
including dilutive
securities
(See Exhibit 11.1)
Primary 10,322 13,839 10,316 10,303
Fully diluted 10,322 16,961 10,316 10,303
The accompanying notes are an integral part of these financial statements.
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
1995 1994
ASSETS
Current assets
Cash and cash equivalents $ 13,323 $ 9,727
Cash securing letters of credit 4,538 6,688
Trade receivables (less allowance of
$8,616 at June 30 and $6,114 at
December 31) 132,090 91,717
Net inventories 257,005 164,245
Other current assets 18,732 5,775
Total current assets 425,688 278,152
Property, plant and equipment - net 109,917 86,160
Goodwill - net 69,762 5,222
Debt issuance costs - net 15,376 3,382
Other assets 21,136 28,700
Total assets $ 641,879 $ 401,616
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities
Notes payable $ 6,711 $ 2,078
Current portion of long-term debt 15,996 25,806
Trade accounts payable 160,567 112,213
Accrued compensation and benefits 16,957 10,823
Accrued warranties and product liability 38,465 27,629
Accrued interest 5,102 8,969
Accrued income taxes 3,398 1,328
Other current liabilities 53,171 32,732
Total current liabilities 300,367 221,578
Long-term debt less current portion 326,269 162,987
Accrued warranties and product
liability - long-term 35,031 31,846
Accrued pension 19,460 16,456
Other long-term liabilities 12,959 7,225
Total liabilities 694,086 440,092
Minority interest, including
redeemable preferred stock of a
subsidiary (liquidation preference
$26,051, subject to adjustment)
(Note B) 9,684 ---
Redeemable convertible preferred stock
(liquidation preference $39,083 at
June 30 and $36,578 at December 31) 20,780 17,262
Commitments and contingencies (Note E)
Stockholders' investment
Warrants to purchase common stock 17,240 17,564
Common stock, $.01 par value -
authorized 30,000,000 shares;
issued and outstanding 10,359 at
June 30 and 10,303 at December 31 103 103
Additional paid-in capital 40,451 40,127
Accumulated deficit (137,889) (108,395)
Pension liability adjustment (1,778) (1,778)
Unrealized holding gain on
equity securities 844 1,825
Cumulative translation adjustment (1,642) (5,184)
Total stockholders' investment (82,671) (55,738)
Total liabilities and stockholders'
investment $ 641,879 $ 401,616
The accompanying notes are an integral part of these financial statements.
TEREX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
For the Six Months
Ended June 30,
1995 1994
OPERATING ACTIVITIES
Net loss $(25,753) $ (803)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation 8,440 6,452
Amortization 5,858 1,902
(Gain) loss on sale of property,
plant and equipment (173) 50
Gain on sale of Fruehauf stock (1,032) (20,106)
Gain on sale of Drexel business --- (4,244)
Property impairment charge 3,000 ---
Other 337 62
Changes in operating assets
and liabilities:
Restricted cash 2,150 (1,698)
Trade receivables (384) (10,052)
Net inventories (12,937) (32)
Trade accounts payable (6,450) 13,446
Accrued compensation and benefits 5,597 1,531
Accrued warranties and
product liability 2,252 2,011
Accrued interest (3,753) (179)
Accrued income taxes 108 429
Other (1,372) (1,050)
Net cash used in operating
activities (24,112) (12,281)
INVESTING ACTIVITIES
Acquisition of businesses,
net of cash acquired (92,429) ---
Capital expenditures (3,598) (7,021)
Proceeds from sale of property, plant
and equipment 836 106
Proceeds from refinancing note receivable --- 1,000
Proceeds from sale of Fruehauf stock 2,714 11,349
Proceeds from sale of Drexel business --- 10,289
Other 185 5
Net cash from (used in)
investing activities (92,292) 15,728
FINANCING ACTIVITIES
Net borrowings under revolving line of
credit agreements 35,171 11,508
Principal repayments of long-term debt (153,947) (22,281)
Issuance of long-term debt,
net of issuance costs 239,800 ---
Other (446) (380)
Net cash from (used in)
financing activities 120,578 (11,153)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (578) (28)
NET DECREASE IN CASH AND CASH EQUIVALENTS 3,596 (7,734)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 9,727 9,183
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 13,323 $ 1,449
The accompanying notes are an integral part of these financial statements.
TEREX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, unless otherwise denoted)
June 30, 1995
NOTE A -- BASIS OF PRESENTATION
Basis of Presentation. The accompanying condensed consolidated financial
statements of Terex Corporation and subsidiaries as of June 30, 1995 and for
the three and six months ended June 30, 1995 and 1994 have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles. The accompanying
condensed consolidated balance sheet as of December 31, 1994, has been derived
from the audited consolidated balance sheet as of that date.
The condensed consolidated financial statements include the accounts of Terex
Corporation and its majority owned subsidiaries ("Terex" or the "Company").
All material intercompany balances, transactions and profits have been
eliminated. The equity method is used to account for investments in affiliates
in which the Company has an ownership interest between 20% and 50%.
Investments in affiliates in which the Company has an ownership interest of
less than 20% are accounted for on the cost method or at fair value in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."
In the opinion of management, all adjustments considered necessary for a fair
presentation have been made. Such adjustments consist only of those of a
normal recurring nature. Operating results for the three and six months ended
June 30, 1995 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1995. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994.
NOTE B -- REFINANCING AND ACQUISITION
On May 9, 1995, the Company completed the refinancing of substantially all of
its outstanding debt (the "Refinancing") and, through Terex Cranes, Inc.
("Terex Cranes"), a newly formed subsidiary, completed the acquisition of
substantially all of the outstanding stock of PPM, S.A and Legris Industries,
Inc. (together, "PPM") (the "PPM Acquisition"). PPM designs, manufactures and
markets mobile cranes and container stackers primarily in North America and
Western Europe.
The Refinancing included the private placement to institutional investors of
$250,000 of 13.25% Senior Secured Notes due May 15, 2002 (the "New Senior
Secured Notes"), repayment of the Company's old senior secured notes and senior
subordinated notes, totaling approximately $152,600 principal amount, and entry
into a new Credit Facility to replace the Company's existing lending facility
in the U. S. Until such time as the Company completes an exchange of the New
Senior Secured Notes for an equivalent issue of registered notes, or a shelf
registration statement for the New Senior Secured Notes is effective, the
interest rate on the New Senior Secured Notes will be 13.75%. The Indenture
for the New Senior Secured Notes places certain limits on the Company's ability
to incur additional indebtedness; permit the existence of liens; issue, pay
dividends on or redeem equity securities; sell assets; consolidate, merge or
transfer assets to another entity; and enter into transactions with affiliates.
In connection with the issuance of the New Senior Secured Notes, the Company
issued 1,000,000 stock appreciation rights ("SAR") entitling the holders to
receive cash or Terex Corporation common stock, at the option of the Company,
in an amount equal to the average closing sale price of the common stock for 60
trading days prior to the date of exercise less $7.288 for each SAR.
The Company's new Credit Facility provides that the Company will be able to
borrow (in the form of revolving loans and up to $15,000 in outstanding letters
of credit) up to $100,000, subject to borrowing base limitations. The Credit
Facility is secured by substantially all of the Company's domestic receivables
and inventory. The amount of borrowings is limited to the sum of the
following: (i) 75% of the net amount of eligible receivables, as defined, of
the Company's U.S. businesses other than Clark Material Handling Company
("CMHC"), plus (ii) 70% of the net amount of CMHC eligible receivables, plus
(iii) the lesser of 45% of the value of eligible inventory, as defined, or 80%
of the appraised orderly liquidation value of eligible inventory, less (iv) any
availability reserves established by the lenders. The new Credit Facility
expires May 9, 1998 unless extended by the lenders for one additional year. At
the option of the Company, revolving loans may be in the form of prime rate
loans bearing interest at the rate of 1.75% per annum in excess of the prime
rate and eurodollar rate loans bearing interest at the rate of 3.75% per annum
in excess of the adjusted eurodollar rate.
Approximately $92,612 of the proceeds of the New Senior Secured Notes was used
for the PPM Acquisition, including the repayment of certain indebtedness of PPM
required to be repaid in connection with the acquisition. In addition, the
Company estimates that the acquisition costs incurred will total approximately
$3,000. The remainder of the purchase price consisted of the issuance of
redeemable preferred stock of Terex Cranes having an aggregate liquidation
preference of 127 million French francs (approximately $26,051), subject to
adjustment. The purchase price is subject to adjustment calculated by
reference to the consolidated net asset value of PPM as determined by an audit
as of the date of closing. The preferred stock does not bear a
dividend and, accordingly, the Company has valued this stock at approximately
$8,840 (discounted at 15%). The Company has not yet reached agreement with the
sellers about the amount of purchase price adjustment but, based on work
performed, the Company believes that the amount of the preferred stock could
ultimately be reduced.
The PPM Acquisition is being accounted for using the purchase method, with the
purchase price allocated to the assets acquired and liabilities assumed based
upon their respective estimated fair values at the date of acquisition. The
excess of purchase price over the net assets acquired (approximately $63,864)
is being amortized on a straight-line basis over 15 years. The estimated
fair values of assets and liabilities acquired in the PPM Acquisition are
summarized as follows:
Cash $ 974
Accounts receivable 33,816
Inventories 69,107
Other current assets 11,866
Property, plant and equipment 20,516
Other assets 268
Goodwill 63,864
Accounts payable and other
current liabilities (84,458)
Other liabilities (11,501)
$ 104,452
The Company is in the process of obtaining certain evaluations, estimations,
appraisals and actuarial and other studies for purposes of determining certain
values. The Company has also estimated costs related to plans to integrate the
activities of PPM into the Company, including plans to terminate excess
employees, exit certain activities and consolidate and restructure certain
functions. The Company may revise the estimates as additional information is
obtained.
The operating results of PPM are included in the Company's consolidated results
of operations since May 9, 1995. The following pro forma summary presents the
consolidated results of operations as though the Company completed the PPM
Acquisition on January 1, 1994, after giving effect to certain adjustments,
including amortization of goodwill, interest expense and amortization of debt
issuance costs on the debt issued in the Refinancing:
Pro Forma for the
Six months ended Year ended
June 30, 1995 December 31, 1994
Net sales $548,325 $966,476
Loss from operations (13,384) (12,904)
Loss before extraordinary items (43,808) (19,321)
Loss before extraordinary items,
per share $(4.59) $(2.45)
The pro forma information is not necessarily indicative of what the actual
results of operations of the Company would have been for the periods indicated,
nor does it purport to represent the results of operations for future periods.
NOTE C -- INVENTORIES
Net inventories consist of the following:
June 30, December 31,
1995 1994
Finished Equipment $ 50,148 $ 26,812
Replacement parts 87,189 68,932
Work-in-process 29,421 13,520
Raw materials and supplies 93,160 57,894
259,918 167,158
Less: Excess of FIFO inventory value
over LIFO cost (2,913) (2,913)
Net inventories $ 257,005 $ 164,245
NOTE D -- PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
June 30, December 31,
1995 1994
Property $ 10,495 $ 8,335
Plant 43,538 32,249
Equipment 100,893 83,419
154,926 124,003
Less: Accumulated depreciation (45,009) (37,843)
Net property, plant and equipment $ 109,917 $ 86,160
NOTE E -- LITIGATION AND CONTINGENCIES
The Company is subject to a number of contingencies and uncertainties including
product liability claims, self-insurance obligations, tax examinations and
guarantees. Many of the exposures are unasserted or proceedings are at a
preliminary stage, and it is not presently possible to estimate the amount or
timing of any cost to the Company. However, management does not believe that
these contingencies and uncertainties will, in the aggregate, have a material
effect on the Company. When it is probable that a loss has been incurred and
possible to make reasonable estimates of the Company's liability with respect
to such matters, a provision is recorded for the amount of such estimate or for
the minimum amount of a range of estimates when it is not possible to estimate
the amount within the range that is most likely to occur.
The Company generates hazardous and nonhazardous wastes in the normal course of
its operations. As a result, the Company is subject to a wide range of
federal, state, local and foreign environmental laws and regulations, including
the Comprehensive Environmental Response, Compensation and Liability Act, that
(i) govern activities or operations that may have adverse environmental
effects, such as discharges to air and water, as well as handling and disposal
practices for hazardous and nonhazardous wastes, and (ii) impose liability for
the costs of cleaning up, and certain damages resulting from, sites of past
spills, disposals or other releases of hazardous substances. Compliance with
such laws and regulations has, and will, require expenditures by the Company on
a continuing basis.
The Internal Revenue Service is currently examining the Company's federal tax
returns for the years 1987 through 1989. In December 1994, the Company
received an examination report from the IRS proposing a substantial tax
deficiency based on this examination. The examination report raises a variety
of issues, including the Company's substantiation for certain deductions taken
during this period, the Company's utilization of certain net operating loss
carryovers ("NOL's") and the availability of such NOL's to offset future
taxable income. If the IRS were to prevail on all the issues raised, the
amount of the tax assessment would be approximately $56,000 plus interest and
penalties. If the Company were required to pay a significant amount to resolve
such assessment, it would have a material adverse impact on the Company and
could exceed the Company's resources. The Company has filed its administrative
appeal to the examination report. Although management believes that the
Company will be able to provide adequate documentation for a substantial
portion of the deductions questioned by the IRS and that there is substantial
support for the Company's past and future utilization of the NOL's, the
ultimate outcome of this matter is subject to significant legal and factual
issues. If the Company's positions are upheld, management believes that the
amounts due would not exceed amounts previously paid or provided; however, the
Company's NOL's could be reduced. No additional accruals have been made for
any amounts which might be due as a result of this matter because the possible
loss ranges from zero to $56,000 plus interest and penalties and the ultimate
outcome cannot presently be determined.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Prior to the PPM Acquisition on May 9, 1995, the Company operated in two
industry segments during the periods presented herein: material handling and
heavy equipment. The addition of the PPM business to the Company's existing
crane and aerial lift business ("Koehring") has created combined mobile crane
operations sufficient in size to constitute a third industry segment referred
to herein as "Mobile Cranes." The comparisons presented below have been
restated to a three segment basis for consistency with the post PPM Acquisition
presentation. The Mobile Cranes segment results for periods prior to June 30,
1995 consist solely of Koehring's operations which were formerly included in
the results of the Heavy Equipment Segment.
Quarter Ended June 30, 1995
The table below is a comparison of net sales, gross profit, selling, general
and administrative expenses, severance and exit costs and income (loss) from
operations, by segment, for the three months ended June 30, 1995 and 1994.
Three Months
Ended
June 30, Increase
1995 1994 (Decrease)
(in millions of dollars)
NET SALES
Material Handling $136.1 $116.6 $19.5
Heavy Equipment 68.2 57.6 10.6
Mobile Cranes 65.4 24.8 40.6
Eliminations (0.3) (0.8) 0.5
Total $269.4 $198.2 $71.2
GROSS PROFIT
Material Handling $ 6.6 $ 7.6 $(1.0)
Heavy Equipment 8.6 8.2 0.4
Mobile Cranes 9.0 3.7 5.3
Total $24.2 $ 19.5 $ 4.7
ENGINEERING, SELLING AND ADMINISTRATIVE
EXPENSES
Material Handling $ 8.5 $ 10.3 $(1.8)
Heavy Equipment 6.1 5.0 1.1
Mobile Cranes 7.8 1.6 6.2
General/Corporate 0.8 (0.2) 1.0
Total $23.2 $ 16.7 $ 6.5
SEVERANCE AND EXIT COSTS
Material Handling $ 3.5 $ 4.3 $(0.8)
Heavy Equipment --- 0.2 (0.2)
Total $ 3.5 $ 4.5 $(1.0)
INCOME (LOSS) FROM OPERATIONS
Material Handling $(5.4) $ (7.0) $ 1.6
Heavy Equipment 2.5 3.0 (0.5)
Mobile Cranes 1.2 2.1 (0.9)
General/Corporate (0.8) 0.2 (1.0)
Total $(2.5) $ (1.7) $(0.8)
Net Sales
Sales increased $71.2 million, or approximately 36%, for the three months ended
June 30, 1995 over the comparable 1994 period.
Material Handling Segment sales were $136.1 million for the three months ended
June 30, 1995, an increase of $19.5 from $116.6 million in the year earlier
period. The sales mix was approximately 18% parts in the three months ended
June 30, 1995 compared to 20% in the comparable 1994 period. Machine sales
increased 17%, primarily because of increased output resulting from
reorganization of work flows and other actions taken by management during 1994
and continued strong industry demand. Parts sales increased 4% because of
improved parts inventory availability, but were adversely affected by a labor
strike at the Company's parts distribution center. Management believes that
the strike will not have a material continuing effect on parts sales.
Material Handling Segment bookings for the three months ended June 30, 1995
were $111.9 million, an increase of $10.7 million, or 11%, from the year
earlier period, as customer demand, especially in North America, continued to
be strong. Bookings for parts sales for the three months ended June 30, 1995,
from which the Company generally realized higher margins than machine sales,
increased 14% from the year earlier period. Machine order bookings for the
three months ended June 30, 1995 increased 10% from the year earlier period,
reflecting the favorable acceptance of the Company's new Genesis line of
internal combustion ("IC") trucks, introduced in December 1994. Material
Handling Segment backlog was $123.6 million at June 30, 1995 compared to $135.9
million at December 31, 1994 and $141.1 million at June 30, 1994.
Heavy Equipment Segment sales increased $10.6 million for the three months
ended June 30, 1995 from the three months ended June 30, 1994. Machines sales
increased 27%, and parts sales increased 3%. The sales mix was approximately
31% parts for the three months ended June 30, 1995 compared to 36% parts for
the comparable 1994 period.
Heavy Equipment Segment bookings for the three months ended June 30, 1995 were
$49.4 million, a decrease of $21.6 million, or 30%, from the year earlier
period. Bookings for parts sales, from which the Company generally realizes
higher margins than machine sales, increased 19% from the three months ended
June 30, 1994. Machine bookings for the three months ended June 30, 1995
decreased 46% from the comparable 1994 period reflecting continuing weak demand
in the mining industry served by the Company's Unit Rig business. Heavy
Equipment Segment backlog was $32.5 million at June 30, 1995 compared to $67.8
million at December 31, 1994 and $66.6 million at June 30, 1994.
Mobile Crane Segment sales were $65.4 million for the three months ended June
30, 1995, an increase of $40.6 million from $24.8 million in the year earlier
period reflecting two months operations of the PPM businesses acquired in May
1995. Mobile Crane Segment backlog was $60.2 million at June 30, 1995,
reflecting the additional PPM backlog acquired, compared to $11.7 million at
December 31, 1994 and $10.8 million at June 30, 1994.
Gross Profit
Gross profit for the three months ended June 30, 1995 increased $4.7 million
compared to the three months ended June 30, 1994.
The Material Handling Segment's gross profit decreased $1.0 million to $6.6
million for the three months ended June 30, 1994 compared to $7.6 million for
the prior year's period. The gross profit percentage in the Material Handling
Segment decreased to 5% for the three months ended June 30, 1995 from 7% for
the comparable 1994 period. The decrease is due to lower overall margins
caused by increased material prices, manufacturing inefficiencies related to
vendors' continuing inability to meet demand, and the price pressures on
certain of the electric line models.
The Heavy Equipment Segment's gross profit increased $0.4 million to $8.6
million for the three months ended June 30, 1995 compared to $8.2 million for
the comparable 1994 period. The gross profit percentage in the Heavy Equipment
Segment decreased to 13% for the three months ended June 30, 1995 from 14% for
the three months ended June 30, 1994, reflecting continuing improvements in
manufacturing efficiency, offset by a decrease in the sales mix of higher
margin parts sales during the three months ended June 30, 1995.
Mobile Crane Segment's gross profit increased $5.3 million to $9.0 million for
the three months ended June 30, 1995, compared to $3.7 million for the prior
year's period, reflecting the PPM Acquisition and improved performance at
Koehring.
Engineering, Selling and Administrative Expenses
Engineering, selling and administrative expenses increased to $23.2 million
for the three months ended June 30, 1995 from $16.7 million for the three
months ended June 30, 1994, reflecting the PPM Acquisition in May 1995.
Material Handling Segment engineering, selling and administrative expenses
decreased to $8.5 million for the three months ended June 30, 1995 from $10.3
million for the comparable 1994 period, primarily as a result of severance
actions taken by management during the second half of 1994. Heavy Equipment
Segment engineering, selling and administrative expenses increased to $6.1
million for the three months ended June 30, 1995 from $5.0 million for the
comparable 1994 period primarily due to costs associated with the start up of a
new parts sales office. Mobile Crane Segment engineering, selling and
administrative expenses increased to $7.8 million for the three months ended
June 30, 1995 from $1.6 million for the comparable 1994 period, reflecting the
PPM Acquisition in May 1995.
Severance and Exit Costs
The Company announced personnel reductions totaling approximately 134 employees
in the Material Handling Segment's North American operations during the second
quarter of 1995 as a continuation of the Company's programs to increase
manufacturing efficiency, reduce costs and improve liquidity. The Company
recorded a combined charge of $3.5 million in the second quarter of 1995 for
severance costs associated with these actions and additional costs associated
with the closing of certain administrative and warehouse facilities.
During the second quarter of 1994, the Company recorded a charge of $4.5
million principally related to severance costs in the Material Handling
Segment's North American and European operations. In June 1994, the Company
announced personnel reductions in plant supervision, engineering, marketing and
administration totaling approximately 160 employees. The $4.5 million charge
represents severance costs associated with these actions.
Income (Loss) from Operations
The Material Handling Segment loss from operations of $5.4 million for the
three months ended June 30, 1995 represents a $1.6 million improvement over the
$7.0 million loss in the comparable 1994 period. As discussed above,
increased sales and reduced costs contributed to the reduction in loss from
operations for the three months ended June 30, 1995.
Heavy Equipment Segment income from operations decreased by $0.5 million to
$2.5 million for the three months ended June 30, 1995 from $3.0 million in the
comparable 1994 period, primarily due to costs associated with the start up of
a new parts service business.
Mobile Crane Segment income from operations of $1.2 million for the three
months ended June 30, 1995 decreased by $0.9 million over the comparable 1994
period, primarily due to losses of the PPM businesses acquired in May 1995.
On a consolidated basis, the Company realized an operating loss of $2.5 million
for the three months ended June 30, 1995, compared to an operating loss of $1.7
million for the comparable 1994 period.
Other Income (Expense)
Interest expense increased to $9.6 million for the three months ended June 30,
1995 from $7.9 million in the comparable 1994 period as a result of incremental
borrowings associated with the PPM Acquisition in May 1995. The Company
realized gains in the three months ended June 30, 1994 of $15.5 million from
the sale of shares of Fruehauf common stock and of $4.2 million from the sale
of its subsidiary, Drexel Industries, Inc. ("Drexel"). The Company owns
250,000 shares of Fruehauf common stock which it received in settlement of
certain obligations of Fruehauf. Foreign currency transaction losses were $0.6
million in the three months ended June 30, 1995 compared to gains of $0.1
million in the comparable 1994 period. The Company recorded a charge of $3.0
million in the three months ended June 30, 1995 to recognize the impairment in
value of certain properties held for sale.
In the three months ended June 30, 1994, the Company recorded a provision for
state income taxes of $0.5 million in connection with the sale of Drexel. The
balance of the provision for income taxes generally represents taxes withheld
on foreign royalties and dividends, and the fluctuation in the provision for
income tax is due to fluctuations in these items.
Six Months Ended June 30, 1995
The table below is a comparison of net sales, gross profit, selling, general
and administrative expenses, severance and exit costs, and income (loss) from
operations, by segment, for the six months ended June 30, 1995 and 1994.
Six Months
Ended
June 30, Increase
1995 1994 (Decrease)
(in millions of dollars)
NET SALES
Material Handling $270.0 $207.5 $62.5
Heavy Equipment 125.7 115.9 9.8
Mobile Cranes 88.6 44.5 44.1
Eliminations (0.8) (1.7) 0.9
Total $483.5 $366.2 $117.3
GROSS PROFIT
Material Handling $15.9 $ 11.6 $ 4.3
Heavy Equipment 17.2 16.5 0.7
Mobile Cranes 12.3 6.6 5.7
Total $45.4 $ 34.7 $10.7
ENGINEERING, SELLING AND ADMINISTRATIVE
EXPENSES
Material Handling $17.1 $ 23.3 $(6.2)
Heavy Equipment 11.4 10.7 0.7
Mobile Cranes 9.3 3.3 6.0
General/Corporate 0.6 1.9 (1.3)
Total $38.4 $ 39.2 $(0.8)
SEVERANCE AND EXIT COSTS
Material Handling $ 3.5 $ 4.3 $(0.8)
Heavy Equipment --- 0.2 (0.2)
Total $ 3.5 $ 4.5 $(1.0)
INCOME (LOSS) FROM OPERATIONS
Material Handling $(4.7) $(16.0) $11.3
Heavy Equipment 5.8 5.6 0.2
Mobile Cranes 3.0 3.3 (0.3)
General/Corporate (0.6) (1.9) 1.3
Total $ 3.5 $ (9.0) $12.5
Net Sales
Sales increased $117.3 million, or approximately 32%, for the six months ended
June 30, 1995 over the comparable 1994 period.
Material Handling Segment sales were $270.0 million for the six months ended
June 30, 1995, an increase of $62.5 from $207.5 million in the year earlier
period. The sales mix was approximately 17% parts in the six months ended June
30, 1995 compared to 21% in the comparable 1994 period. Machine sales
increased 34%, primarily because of increased output resulting from
reorganization of work flows and other actions taken by management during 1994
and continued strong industry demand especially for the new Genesis line.
Machine sales in the first quarter of 1994 were adversely affected by lack of
supplies and materials caused primarily by liquidity constraints. Parts sales
increased 9% because of improved parts inventory availability partially offset
by the adverse effects of a labor strike at the Company's parts distribution
center. During January and February, above average absenteeism and below
average productivity resulted in lower shipment rates. During March, the
Company staffed the parts distribution center with replacement workers and
sales volume reached normal levels. Management believes that the strike will
not have a material continuing effect on parts sales.
Material Handling Segment bookings for the six months ended June 30, 1995 were
$247.4 million, an increase of $42.3 million, or 21%, from the year earlier
period, as customer demand, especially in North America, continued to be
strong. Bookings for parts sales for the six months ended June 30, 1995, from
which the Company generally realized higher margins than machine sales,
increased 6% from the year earlier period. Machine order bookings for the six
months ended June 30, 1995 increased 25% from the year earlier period,
reflecting the favorable acceptance of the Company's new Genesis line of IC
trucks, introduced in December 1994. Material Handling Segment backlog was
$123.6 million at June 30, 1995 compared to $135.9 million at December 31, 1994
and $141.1 million at June 30, 1994.
Heavy Equipment Segment sales increased $9.8 million for the six months ended
June 30, 1995 from the six months ended June 30, 1994. Machines sales
increased 6%, and parts sales increased 13%. The sales mix was approximately
34% parts for the six months ended June 30, 1995 compared to 33% parts for the
comparable 1994 period. Heavy Equipment Segment parts sales were also
adversely affected by the strike at the parts distribution center, to a lesser
degree than the Material Handling Segment.
Heavy Equipment Segment bookings for the six months ended June 30, 1995 were
$90.3 million, a decrease of $29.8 million, or 25%, from the year earlier
period. Bookings for parts sales, from which the Company generally realizes
higher margins than machine sales, increased 25% from the six months ended June
30, 1994. Machine bookings for the six months ended June 30, 1995 decreased
46% from the comparable 1994 period, reflecting continuing weak demand in the
mining industry served by the Company's Unit Rig business. Heavy Equipment
Segment backlog was $32.5 million at June 30, 1995 compared to $67.8 million at
December 31, 1994 and $66.6 million at June 30, 1994.
Mobile Crane segment sales were $88.6 million for the six months ended June 30,
1995, an increase of $44.1 million from $44.5 million in the year earlier
period due to the PPM Acquisition in May 1995. Mobile Crane Segment backlog
was $60.2 million at June 30, 1995, reflecting the additional PPM backlog
acquired, compared to $11.7 million at December 31, 1994 and $10.8 million at
June 30, 1994.
Gross Profit
Gross profit for the six months ended June 30, 1995 increased $10.7 million
compared to the six months ended March 31, 1994.
The Material Handling Segment's gross profit increased $4.3 million to $15.9
million for the six months ended June 30, 1995 compared to $11.6 million for
the prior year's period. The gross profit percentage in the Material Handling
Segment was 6% for the six months ended June 30, 1995 and for the comparable
1994 period. Favorable efficiencies due to higher production and sales volumes
and the effects of 1994 severance actions were offset by additional costs
associated with the start-up of production of the new Genesis product line and
manufacturing inefficiencies related to vendors' continuing inability to meet
demand.
The Heavy Equipment Segment's gross profit increased $0.7 million to $17.2
million for the six months ended June 30, 1995 compared to $16.5 million for
the comparable 1994 period. The gross profit percentage in the Heavy Equipment
Segment was 14% for the six months ended June 30, 1995 and for the six months
ended June 30, 1994.
Mobile Crane Segment's gross profit increased $5.7 million to $12.3 million for
the six months ended June 30, 1995, compared to $6.6 million for the prior
year's period reflecting the addition of the May and June 1995 results of the
PPM businesses.
Engineering, Selling and Administrative Expenses
Engineering, selling and administrative expenses decreased to $38.4 million
for the six months ended June 30, 1995 from $39.2 million for the six months
ended June 30, 1994. Material Handling Segment engineering, selling and
administrative expenses decreased to $17.1 million for the six months ended
June 30, 1995 from to $23.3 million for the comparable 1994 period, primarily
as a result of severance actions taken by management during the second half of
1994. Heavy Equipment Segment engineering, selling and administrative expenses
increased to $11.4 million for the six months ended June 30, 1995 from $10.7
million for the comparable 1994 period as a result of costs associated with the
start up of a new parts service business. Mobile Crane Segment engineering,
selling and administrative expenses increased to $9.3 million for the six
months ended June 30, 1995 from $3.3 for the comparable 1994 period reflecting
the PPM business acquired in May 1995. The Company recorded a charge of $3.0
million in the three months ended June 30, 1995 to recognize the impairment in
value of certain properties held for sale. Corporate administrative expenses
in 1994 included a charge of $2.2 million in connection with the termination of
a management contract with a related party.
Severance and Exit Costs
The Company announced personnel reductions totaling approximately 134 employees
in the Material Handling Segment's North American operations during the second
quarter of 1995 as a continuation of the Company's programs to increase
manufacturing efficiency, reduce costs and improve liquidity. The Company
recorded a combined charge of $3.5 million in the second quarter of 1995 for
severance costs associated with these actions and additional costs associated
with the closing of certain administrative and warehouse facilities.
During the second quarter of 1994, the Company recorded a charge of $4.5
million principally related to severance costs in the Material Handling
Segment's North American and European operations. In June 1994, the Company
announced personnel reductions in plant supervision, engineering, marketing and
administration totaling approximately 160 employees. The $4.5 million charge
represents severance costs associated with these actions.
Income (Loss) from Operations
The Material Handling Segment loss from operations of $4.7 million for the six
months ended June 30, 1995 represents a $11.3 million improvement over the
$16.0 million loss in the comparable 1994 period. As discussed above,
increased sales and reduced costs contributed to the improvement in income from
operations for the six months ended June 30, 1995.
Heavy Equipment Segment income from operations improved by $0.2 million to $5.8
million for the six months ended June 30, 1995 from $5.6 million in the
comparable 1994 period, primarily as a result of reduced costs, offset by costs
associated with the start up of a new parts service business.
Mobile Crane Segment income from operations of $3.0 million for the six months
ended June 30, 1995 decreased by $0.3 million over the comparable 1994 period,
primarily due to losses of the PPM businesses acquired in May 1995.
On a consolidated basis, the Company realized operating income of $3.5 million
for the six months ended June 30, 1995, compared to an operating loss of $9.0
million for the comparable 1994 period.
Other Income (Expense)
Interest expense increased to $16.6 million for the six months ended June 30,
1995 from $15.4 million in the comparable 1994 period as a result of
incremental borrowings associated with the PPM Acquisition in May 1995. The
Company realized gains of $1.0 million and $20.1 million in the six months
ended June 30, 1995 and 1994, respectively, from the sale of shares of Fruehauf
common stock and a gain of $4.2 million in 1994 from the sale of Drexel. The
Company owns 250,000 shares of Fruehauf common stock which it received in
settlement of certain obligations of Fruehauf. Foreign currency transaction
losses were $1.9 million in the six months ended June 30, 1995 compared to
gains of $0.3 million in the comparable 1994 period.
The Company recorded a charge of $3.0 million in the three months ended June
30, 1995 to recognize the impairment in value of certain properties held for
sale. The balance of the provision for income taxes generally represents taxes
withheld on foreign royalties and dividends, and the fluctuation in the
provision for income tax is due to fluctuations in these items.
LIQUIDITY AND CAPITAL RESOURCES
The Company's businesses are capital intensive and require funding for
purchases of production and replacement parts inventories, capital expenditures
for repair, replacement and upgrading of existing facilities as well as
financing of receivables from customers and dealers. The Company has
significant debt service requirements including semi-annual interest payments
on senior debt.
Net cash of $24.1 million was used in operating activities during the six
months ended June 30, 1995. Net cash used by investing activities was $92.3
million during the six months ended June 30, 1995 principally due to the PPM
Acquisition as described below. Net cash provided by financing activities
during the six months ended June 30, 1995 was $120.6 million, primarily from
the Refinancing discussed below. Cash and cash equivalents totaled $13.3
million at June 30, 1995.
Factors affecting future liquidity
The Company announced personnel reductions totaling approximately 134 employees
in the Material Handling Segment's North American operations during the second
quarter of 1995 as a continuation of the Company's programs to increase
manufacturing efficiency, reduce costs and improve liquidity. The Company
recorded a combined charge of $3.5 million in the second quarter of 1995 for
severance costs associated with these actions and additional costs associated
with the closing of certain administrative and warehouse facilities.
As discussed below, the Company has refinanced its senior and subordinated
debt, established new credit facilities and borrowed additional funds to
complete the PPM Acquisition which will impact future operating results,
sources of liquidity and debt service requirements.
Refinancing and PPM Acquisition
On May 9, 1995, the Company completed the Refinancing and the PPM Acquisition.
The Refinancing included the private placement to institutional investors of
$250 million of 13.25% Senior Secured Notes due May 15, 2002 (the "New Senior
Secured Notes"), repayment of the Company's old senior secured notes and senior
subordinated notes, totaling approximately $152.6 million principal amount, and
entry into a new Credit Facility to replace the Company's existing lending
facility in the U.S. Until such time as the Company completes an exchange of
the New Senior Secured Notes for an equivalent issue of registered notes, or a
shelf registration statement for the New Senior Secured Notes is effective, the
interest rate on the New Senior Secured Notes will be 13.75%. The Indenture
for the New Senior Secured Notes places certain limits on the Company's ability
to incur additional indebtedness; permit the existence of liens; issue, pay
dividends on or redeem equity securities; sell assets; consolidate, merge or
transfer assets to another entity; and enter into transactions with affiliates.
In connection with the issuance of the New Senior Secured Notes, the Company
issued 1,000,000 stock appreciation rights ("SAR") entitling the holders to
receive cash or Common Stock, at the option of the Company, in an amount equal
to the average closing sale price of the common stock for 60 trading days prior
to the date of exercise less $7.288 for each SAR.
Approximately $92.6 million of the proceeds of the New Senior Secured Notes
was used for the PPM Acquisition, including the repayment of certain
indebtedness of PPM required to be repaid in connection with the acquisition.
In addition, the Company estimates that the acquisition costs incurred will
total approximately $3.0 million. The remainder of the purchase price
consisted of the issuance of redeemable preferred stock of Terex Cranes having
an aggregate liquidation preference of 127 million French francs (approximately
$26.1 million), subject to adjustment. The purchase price is subject to
adjustment calculated by reference to the consolidated net asset value of PPM
as determined by an audit as of the date of closing. The preferred stock does
not bear a dividend and, accordingly, the Company has valued this stock at
approximately $8.8 million (discounted at 15%). The Company has not yet
reached agreement with the sellers about the amount of purchase price
adjustment but, based on work performed, the Company believes that the amount
of the preferred stock could ultimately be reduced.
The Company's Credit Facility provides that the Company will be able to borrow
(in the form of revolving loans and up to $15 million in outstanding letters of
credit) up to $100 million. The Credit Facility is secured by substantially
all of the Company's domestic receivables and inventory (including PPM). The
amount of borrowings is limited to the sum of the following: (i) 75% of the
net amount of eligible receivables, as defined, of the Company's U.S.
businesses other than CMHC, plus (ii) 70% of the net amount of CMHC eligible
receivables, plus (iii) the lesser of 45% of the value of eligible inventory,
as defined, or 80% of the appraised orderly liquidation value of eligible
inventory less (iv) any availability reserves established by the lenders. The
Credit Facility expires May 9, 1998 unless extended by the lenders for one
additional year. At the option of the Company, revolving loans may be in the
form of prime rate loans initially bearing interest at the rate of 1.75% per
annum in excess of the prime rate and eurodollar rate loans initially bearing
interest at the rate of 3.75% per annum in excess of the adjusted eurodollar
rate.
The Company's debt service obligations for the remainder of 1995 include an
interest payment of $18.1 million on November 15, 1995 for the New Senior
Secured Notes, as well as interest payments of approximately $0.6 million
monthly for the Credit Facility. Management believes that, together with cash
generated from operations, the Refinancing provides the Company with additional
liquidity to meet the Company's operating and debt service requirements. The
balance outstanding under the Credit Facility as of July 31, 1995 was $62.8
million, and the additional amount the Company could have borrowed was $23.8
million as of that date. During August, the borrowing availability has
continued to increase. Management intends to seek additional working capital
financing facilities for the Company's international operations to provide
additional liquidity worldwide, but there can be no assurances whether, or
under what terms, such additional facilities can be obtained.
CONTINGENCIES AND UNCERTAINTIES
The Internal Revenue Service is currently examining the Company's federal tax
returns for the years 1987 through 1989. In December 1994, the Company
received an examination report from the IRS proposing a substantial tax
deficiency based on this examination. The examination report raises a variety
of issues, including the Company's substantiation for certain deductions taken
during this period, the Company's utilization of certain net operating loss
carryovers ("NOL's") and the availability of such NOL's to offset future
taxable income. If the IRS were to prevail on all the issues raised, the
amount of the tax assessment would be approximately $56 million plus interest
and penalties. If the Company were required to pay a significant amount to
resolve such assessment, it would have a material adverse impact on the Company
and could exceed the Company's resources. The Company has filed its
administrative appeal to the examination report. Although management believes
that the Company will be able to provide adequate documentation for a
substantial portion of the deductions questioned by the IRS and that there is
substantial support for the Company's past and future utilization of the NOL's,
the ultimate outcome of this matter is subject to significant legal and factual
issues. If the Company's positions are upheld, management believes that the
amounts due would not exceed amounts previously paid or provided; however, the
Company's NOL's could be reduced. No additional accruals have been made for
any amounts which might be due as a result of this matter because the possible
loss ranges from zero to $56 million plus interest and penalties and the
ultimate outcome cannot presently be determined.
The Securities and Exchange Commission (the "Commission") in March of 1994
initiated a private investigation, which included the Company and certain of
its affiliates, to determine whether violations of certain aspects of the
Federal securities laws have taken place. The Company is cooperating with the
Commission in its investigation and it is not possible at this time to
determine the outcome of the Commission's investigation.
The Company is subject to a number of contingencies and uncertainties including
product liability claims, self-insurance obligations, tax examinations and
guarantees. Many of the exposures are unasserted or proceedings are at a
preliminary stage, and it is not presently possible to estimate the amount or
timing of any cost to the Company. However, management does not believe that
these contingencies and uncertainties will, in the aggregate, have a material
effect on the Company. When it is probable that a loss has been incurred and
possible to make reasonable estimates of the Company's liability with respect
to such matters, a provision is recorded for the amount of such estimate or for
the minimum amount of a range of estimates when it is not possible to estimate
the amount within the range that is most likely to occur.
The Company generates hazardous and nonhazardous wastes in the normal course of
its operations. As a result, the Company is subject to a wide range of
federal, state, local and foreign environmental laws and regulations, including
the Comprehensive Environmental Response, Compensation and Liability Act, that
(i) govern activities or operations that may have adverse environmental
effects, such as discharges to air and water, as well as handling and disposal
practices for hazardous and nonhazardous wastes, and (ii) impose liability for
the costs of cleaning up, and certain damages resulting from, sites of past
spills, disposals or other releases of hazardous substances. Compliance with
such laws and regulations has, and will, require expenditures by the Company on
a continuing basis.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In December 1992, a Class Action complaint was filed against Fruehauf Trailer
Corporation ("Fruehauf," a former subsidiary of the Company), the Company,
certain of Fruehauf's then officers and directors and certain of the
underwriters of the initial public offering of Fruehauf, in the United States
District Court for the Eastern District of Michigan, Southern Division,
alleging, among other things, violations of certain provisions of the federal
securities laws, and seeking unspecified compensatory and punitive damages.
The Company has reached an agreement with the plaintiffs to settle this
litigation, which is subject to court approval, and has recorded a provision of
$0.25 million in the quarter ended March 31, 1995.
For information concerning other contingencies see "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Contingencies and
Uncertainties."
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of stockholders held June 23, 1995, Terex stockholders
holding a majority of the shares of Common Stock outstanding as of the close of
business on May 22, 1995 voted to approve each of the three proposals included
in the Company's proxy statement as follows:
Broker
Affirmative Negative Abstentions Non Votes
Proposal 1:
to elect eight
directors to hold
office for one year
or until their
successors are duly
elected and qualified
(all directors stood
for reelection):
Randolph W. Lenz 8,445,011 343,743
Ronald M. DeFeo 8,470,207 318,547
Marvin B. Rosenberg 8,469,155 319,599
G. Chris Andersen 8,463,345 325,409
William H. Fike 8,474,021 314,733
Bruce I. Raben 8,469,815 318,939
David A. Sachs 8,473,805 314,949
Adam E. Wolf 8,463,009 325,745
Proposal 2:
to ratify the
selection of Price
Waterhouse as
independent
accountants of the
Company for 1994
and 1995: 8,748,432 28,791 11,531 0
Proposal 3:
to ratify the 1994
Terex Corporation
Long-Term Incentive
Plan and the initial
awards granted
thereunder: 6,864,890 444,969 29,604 1,449,291
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits have been filed as part of this Form 10-Q:
Exhibit No.
11.1 Computation of earnings per share
27 Financial data schedule
(b) Reports on Form 8-K.
A report on Form 8-K dated May 9, 1995 was filed May 24, 1995
reporting the acquisition of 99.18% of the shares of PPM S.A. and 100% of the
capital stock of Legris Industries, Inc. Financial statements and pro forma
financial information required to be filed in connection with this acquisition
will be filed by amendment to the Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEREX CORPORATION
(Registrant)
Date August 15, 1995 /s/ Ralph T. Brandifino
Ralph T. Brandifino
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date August 15, 1995 /s/ Richard L. Evans
Richard L. Evans, Controller
(Principal Accounting Officer)
EXHIBIT INDEX
Exhibit No.
11.1 Computation of Earnings per Share
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TEREX
CORPORATION JUNE 30, 1995 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 13,323
<SECURITIES> 0
<RECEIVABLES> 140,706
<ALLOWANCES> 8,616
<INVENTORY> 257,005
<CURRENT-ASSETS> 425,688
<PP&E> 154,926
<DEPRECIATION> 45,009
<TOTAL-ASSETS> 641,879
<CURRENT-LIABILITIES> 300,367
<BONDS> 326,269
<COMMON> 103
20,780
0
<OTHER-SE> (82,774)
<TOTAL-LIABILITY-AND-EQUITY> 641,879
<SALES> 483,485
<TOTAL-REVENUES> 483,485
<CGS> 438,039
<TOTAL-COSTS> 438,039
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,582
<INCOME-PRETAX> (18,186)
<INCOME-TAX> 115
<INCOME-CONTINUING> (18,301)
<DISCONTINUED> 0
<EXTRAORDINARY> (7,452)
<CHANGES> 0
<NET-INCOME> (25,753)
<EPS-PRIMARY> (2.84)
<EPS-DILUTED> (2.84)
</TABLE>
EXHIBIT 11.1
(Page 1 of 2)
TEREX CORPORATION AND SUBSIDIARIES
Computation of Earnings per Common Share
In Thousands except per share amounts
Three Months Six Months
Ended Ended
June 30, June 30,
1995 1994 1995 1994
PRIMARY:
Income (loss) before
extraordinary item (16,416) 10,254 (18,301) (570)
Less: Accretion of
Preferred Stock (1,789) (1,444) (3,518) (2,824)
Income (loss) before
extraordinary item
applicable to
common stock (18,205) 8,810 (21,819) (3,394)
Extraordinary gain (loss)
on retirement of debt (7,452) (233) (7,452) (233)
Net income applicable
to common stock (25,657) 8,577 (29,271) (3,627)
Weighted average shares
outstanding during
the period 10,322 10,303 10,316 10,303
Assumed exercise of
warrants at ratio
determined as of
June 30, 1994 0 (a) 3,536 0 (a) 0 (a)
Assumed exercise of
stock options 0 (a) 0 (a) 0 (a) 0 (a)
Primary shares outstanding 10,322 13,839 10,316 10,303
Primary income (loss) per
common share
Income (loss) before
extraordinary item ($1.76) $0.64 ($2.12) ($0.33)
Extraordinary gain (loss) (0.72) (0.02) (0.72) (0.02)
Net income (loss) ($2.48) $0.62 ($2.84) ($0.35)
(a) Excluded from the computation because the effect is anti-dilutive.
EXHIBIT 11.1
(Page 2 of 2)
TEREX CORPORATION AND SUBSIDIARIES
Computation of Earnings per Common Share
In Thousands except per share amounts
Three Months Six Months
Ended Ended
June 30, June 30,
1995 1994 1995 1994
FULLY DILUTED:
Income (loss) before
extraordinary item (16,416) 10,254 (18,301) (570)
Less: Accretion of
Preferred Stock (1,789) (1,444) (3,518) (2,824)
Income (loss) before
extraordinary item
applicable to
common stock (18,205) 8,810 (21,819) (3,394)
Add: Accretion of
Preferred stock
assumed converted
at beginning of period 0 1,444 0 0
(18,205) 10,254 (21,819) (3,394)
Extraordinary gain
(loss) on retirement
of debt (7,452) (233) (7,452) (233)
Net income (loss)
applicable to
common stock (25,657) 10,021 (29,271) (3,627)
Weighted average shares
outstanding during
the period 10,322 10,303 10,316 10,303
Assumed exercise of
warrants at ratio
reflecting maximum
dilution 0 (a) 3,958 0 (a) 0 (a)
Assumed conversion of
Preferred Stock 0 (a) 2,700 0 (a) (a)
Assumed exercise of
stock options 0 (a) 0 (a) 0 (a) 0 (a)
Fully diluted shares
outstanding 10,322 16,961 10,316 10,303
Fully diluted income
(loss) per common share
Income (loss) before
extraordinary item ($1.76) $0.60 ($2.12) ($0.33)
Extraordinary gain (loss) (0.72) (0.01) (0.72) (0.02)
Net income (loss) ($2.48) $0.59 ($2.84) ($0.35)
(a) Excluded from the computation because the effect is anti-dilutive.
