Terex Corp. reported second quarter 2020 net sales of $690.5 million compared $1,306.9 million in the second quarter of 2019, a 47-percent plunge caused by the COVID-19 pandemic. Reported a second quarter 2020 loss from continuing operations of $3.2 million, compared to income from continuing operations of $81.6 million in the year-ago second quarter. Terex’s AWP division posted $413.9 million in sales compared to $870.4 million in the second quarter a year ago, the income less than half year over year.
The Materials Processing division fared a bit better comparatively, with $263.6 million compared to $430.9 million in the year-ago quarter.
"We continue to vigilantly follow the necessary COVID-19 safety protocols to protect the health and safety of our team members and their families, while safely serving our customers,” said Terex Corp. chairman and CEO John Garrison. “Our commitment to a Zero-Harm Safety Culture is resolute and I am proud of our team members' rigor in following the necessary safety protocols. While the COVID-19 pandemic continues, global economic activity has gradually recovered but remains below pre-COVID-19 levels. In response to lower customer demand, we are closely aligning our production plans.
"Aerial Work Platforms rapidly reduced aerials production in response to lower customer bookings in North America and Europe but saw commercial demand return in China. In addition, the Utilities team has moved into its new, state-of-the-art facility, which will improve production efficiency and enable future growth. Materials Processing demonstrated strong execution by delivering high single-digit operating margin despite significantly lower demand in commercial end markets. MP continues to position its business for future growth by expanding into new geographies and delivering innovative, new products."
Positive free cash flow generation in the quarter of $71 million resulted in the company maintaining liquidity of approximately $1 billion which provides Terex with the financial flexibility to successfully operate the business through the pandemic and be well positioned for future growth.
"Our financial performance reflects the efforts of the entire Terex team to swiftly reduce and remove costs from the business," said John Sheehan, Terex Corp. senior vice president and chief financial officer. "Strong cost management and disciplined working capital management will continue to be a focus of all Terex team members."
Based on the company's current expectations of the markets for the remainder of 2020, the company anticipates sales in the second half of 2020 to be similar to the first half of the year. Although the full severity and duration of the global pandemic is unknown, Terex anticipates that its operating results will continue to be impacted. Also, net working capital is expected to be a source of cash in the second half of 2020 as production will be closely aligned with customer demand.
"While the economic outlook remains uncertain, by producing in-line with customer demand and aggressively managing costs, Terex is confident it will successfully navigate these challenging times," said Garrison.
