Terex AWP, which includes Genie and Terex Utilities, reported a 29.7% drop in net sales to $511.7 million in the first quarter of its 2020 financial year.
Income from operations showed a $5.9 million loss in the quarter, or -1.2% of net sales, compared to $59.68 million profit, or 8.2% of sales, in the first quarter of 2019. Globally, the division’s backlog totalled $717 million and bookings in the quarter were $498 million.
Matt Fearon, president of Terex AWP, said, “Production was quickly reduced in our global facilities due to customer demand and local government mandates. We are beginning to gradually and safely resume operations in response to customer demand and as permitted by government mandate. The current status of our operations can be found on the Terex website under the Covid-19 resources section.”
Fearon added, “In response to the Covid-19 pandemic, the Genie team brainstormed on how to help our local communities in Washington State, which endured the first major Covid-19 outbreak in the US. The team produced and donated 4,500 protective face shields for local medical professionals in Seattle. In Watertown, South Dakota, Terex Utilities received a request from a local vocational college to use our 3D printer to help make parts needed for face shields. Thanks to the efforts of our Terex Utilities team, approximately 1,000 shields were distributed to healthcare providers in South Dakota and Minnesota.”
Across the group, Terex Corporation saw a first quarter loss from continuing operations of $24.7 million, or -$0.35 per share, based on net sales of $833.6 million for the quarter. Income from continuing operations stood at $57.2 million, or $0.79 per share. This compares to a 2019 first quarter figure of $62.3 million or $0.87 per share. Total net sales for that period were $1.1 billion.
In recent weeks the corporation has undertaken significant cost reduction actions, including suspending its dividend and share repurchases, reducing team member compensation, temporary furloughs, and permanent layoffs of team members.
The company withdrew its 2020 financial guidance on 25 March and will not issue revised guidance due to the economic uncertainties resulting from the Covid-19 pandemic. The company added that the full severity and duration of the related global economic crisis is not known, but it is expected to continue to negatively impact operating results.
John L Garrison, Terex chairman and CEO, said, “While the first two months of the year met our expectations, during March, global economic activity, including customer capital equipment purchases, sharply contracted. In response to this unprecedented situation, we swiftly implemented safety, financial, and production actions.”
”Production was quickly reduced in our global facilities due to customer demand and local government mandates. We are beginning to gradually and safely resume operations in response to customer demand and as permitted by government mandate.”
As of 31 March, the company had $945 million of available liquidity. To maintain its strong liquidity, Terex completed an amendment and waiver of its revolving credit facility with its bank. This provides continued access to ample liquidity and the flexibility to successfully operate the business during this period of economic uncertainty.
Garrison concluded, “I am proud of the determination and dedication of our Terex team members, who continue to follow our Zero Harm Safety Program and safely serve our customers despite difficult market conditions. Terex will emerge well positioned to continue to serve our customers and participate in the future economic recovery.”