TEX - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 Terex Corporation Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Randy Wilson, Director of Investor Relations. Thank you. Please go ahead, sir.

Randy Wilson

to first welcome conference XXXX and call. morning the quarter Terex earnings Good

call for website technology the Prevention conducting on release following We’re today’s are slides Centers Copy the using posted social and presentation access. investor guidelines both Disease investors.terex.com. distancing remote and relations for our of press at by and Control

addition, website. the on available our replay In and be slide presentation will

Officer. and The John Garrison, remarks and Chairman John Officer; Duffy by Executive President Sheehan, joined followed I’m Chief be Chief Financial prepared will by Vice Senior and Q&A.

complete the Please few There harbor Slide items X turn a to presentation, of which are cover. reflects our safe I to like statement.

that call contains to be cause to including conference expressed and remarks materially your different today’s from forward-looking the implied. are questions which those answers risks actual First, statements, or results our to subject

In is be Reconciliations be believe materials. conference information useful operating that these call in found non-GAAP addition, we performance. discussing company’s can measures the for the we’ll non-GAAP in evaluating

Please I’ll turn turn to Garrison. Slide to John X, and

John Garrison

Randy. you interest and us joining thank for morning Terex. your in for and Thanks, Good

out to their protocols. team harm for lines together. all world focus this First, and am go with along proud workers, zero adhering the and of I safety, pandemic. with who Terex members to responders by thank commitment on am of this the the I dedicated attention us pleased strength to to well our pandemic COVID-XX and the culture. thoughts who healthcare face gives want first to and affected on safety all their have our dedication, volunteers on Way Values focus were COVID-XX, all our over as front been as The battling our commitment

had It the confirmed office the and open harm State parts That our to China, customers. and service coronavirus. is and global of zero hot cases. in near only said, logistics for we zones Italy, needs corporate remained culture to teams operations have York service of a most Terex City, testimony seven that We our all New our Connecticut have our Washington have

have Although have keep families, a in team will we rigorously to and taken in safe. following that we action our situation. Terex, ourselves we’re quickly may and current we practicing purpose customers we suspect and team we respond more. And the and At helping confidence protocols, conditions. COVID-XX market communities to address members rapidly By to have the as

We are focused can controlling on control. what we

customers, demand essential safely We’re actual in needs, customer providing meeting producing our and constant services. and parts communication the with their equipment,

our maintaining proactively flexibility. financial are We

and Terex Terex facing this highly by Values. will a are experienced pandemic demonstrating resilient And navigate Way team we crisis. successfully our are management We’re team the members this and

the college Watertown, to in Utilities professionals. Minnesota. face shields. for our printer shields were Dakota, parts Approximately needed a the a vocational to use Utilities received team. from for X,XXX healthcare distributed protective X,XXX our helps donated X. brainstorm values, the Please teams after region In produced around is team States. endured their turn the and how Genie which on to Citizenship, world. us of one Slide AWP people major our in request of make medical in In to navigate United XD and local help efforts this shields the The improve providers lives COVID-XX help outbreak our Redmond, to to crisis local of Thanks community first Terex face the South

and value who our assisting pounds purchase thank are to almost salary day of others to our members a voluntarily to over COVID-XX exhibiting supporting a food for contributed I of China is team group Northern community Terex with a team In PPE of teams kitchen XX,XXX that care want hospitals and Ireland Delhi. X,XXX Our in full supplies. India, members, masks community and all donated local citizenship. workers

of priority X. company. Slide to top the remain the and Turning Safety is will

plans have team spread, remotely governmental members doing following place can who from so. in that work We intended or slow are response virus the authorities guidelines to

Changzhou, from implementing at sites. further that customer learned is facilities lessons or our the jobs the be protocols members company Given must to done who safeguard perform team

daily close contact communications in weekly with our each to of have launched the We stay and of status sites.

educate members across the followed We and our practices share and continue Safety best the to financial our is first the team health. priority, our wellbeing of team by company. members company’s

X. Slide to Turning

in significant the a of As pandemic, COVID-XX requested delivery saw of situation, and of this and action. MP In took we cancellations response unprecedented March. number to second result AWP the half swift customer delays

members of customer includes materials, demand team limit to production We and have is with salary and receiving reductions that to implemented program temporarily reduction furloughing force, the manufacturing reductions, suppliers supply what current partnering only incoming schedules. support comprehensive in needed of operations suspending with a cost align to

wellbeing environment team The Terex protect continues committed are of the company. we uncertain, excess be million. While is savings taking cost in financial of to implementing the proper the to $XXX steps the to

to Slide turn Please X.

focused on ample to the business. savings, cost we’re to having addition In liquidity run

As million of liquidity. had in XX, March available we $XXX

are We government programs. participating other tax in relief and

the Germany, company’s we’re all assistance team workforce the indirect members keep also Australia place, effort to reduce expenses. for easing while to in We’re other to Terex. asking look countries UK, talented worker in to United In our financial the We’ve opportunities programs global reduce States, a help and costs. begun short, utilizing burning to

have budget of out XX% XXXX. CapEx for our We taken

a However, targeted we the basis. investing are in future more on

South We of and manufacturing our our funding China Watertown, Changzhou completion of the are facility. facility expansion still Dakota the

banks, Working and amended manufacturing future important is growing with The credit capacity an is market our Changzhou and China they revolving facility. essential extended our for us. successfully is for it the we facility demand. have

dividend for share our repurchases of Additionally, XXXX. the and we remainder suspended

of have of grow we to I am more the confident we other when than the liquidity to downturn get result pandemic. will actions, side sufficient through these we will a that As able this that be and

want to I Duffy. that, it With turn to over

John Duffy Sheehan

John. Thanks,

to Turning Slide X.

Let amendment. me by our reviewing credit recently begin completed

The this by short-term the our group needed flexibility concern company the our the bank revolving of demonstrated regarding support amendment the credit addresses us extension the is important extra with financial of and and with through layer period provides stakeholders provides financial comfort confidence manage It during an during these pleased have that the strength challenging and environment. current are operational manage uncertainty. The amendment to We times. facility. the that Terex’s to successfully covenant our of has Terex amendment

considered quarter year to not walk January the liquidity debt. ahead, position of me you where early long-term Let and want is existing objectives. of in Planning revolver through was current amendment part instead liability the January we some highlights. in a one XXXX The from of of did extension our be enhancement XXXX to the a XXXX revolver

It XXXX. That secured important result does liquidity that provides X, and During stakeholders, covenant including January and only manage customers, and on the amendment this are financial financial a covenant. the we during are revert investors members, to is to XX% the of covenant XXXX, strength have period is subject XXXX, Terex amendment, us. at Terex’s applicable only to or a is credit existing operational as confidence suppliers, of exactly team to credit maximum has successfully that, a uncertainty. subject Then more agreement revolver of what The this equity that both through leverage minimum utilization. we

results. QX would to X call to review financial reporting attention your I our consolidated our Turning Slide to structure.

specific report we called not notice, QX will impacts did results. XXXX financial Instead, adjusted financial out COVID-XX. you As from we

the will provide easily going more We results information have our that forward. sought community year-over-year to help investment compare

prior sales than Looking revenue revenue the financial fell were in $XXX to at line was the results, our of We lower market but quarter million tracking quarter in XX% first were our be operationally our during or January month first year above expectations, February, for dramatically of slightly year-over-year. down and off the March. planning and

during we investments QX in February. were planning February, in which earnings as our XXXX, started strategic to in call January also, Well discussed we and make

investment substantial However, back to structure to our those we steps up onward. will cost April SG&A overall our in show since and have reductions reduce and cut taken from on

several Gross was by $X due related profit impacts. to COVID-XX impacted million,

against reserves exports, tariff U.S. duty established government the for product a of draw-back recoveries, First, as qualifying recoveries. anticipated lower were result

$X with cost other of charges facilities. from resulting reserve to on for record temporary required by and a a were the SG&A items financing primarily to we Also, associated impacted COVID-XX. million, customer Second, manufacturing was receivable adversely the closure due

quarter, operating charges loss impacted The loss income publicly $X operating operating $XXX as adjusted million compared last lower an quarter. $X by million COVID-XX income from quarter a as related was recorded of traded Other marking-to-market the to $XXX year. million first resulted related the of well we holding. million in of the QX For the in to XXXX, versus the revenues

use flow year-over-year improved basis approximately a on It free of note, QX in the QX from cash XXXX. is despite important very of The $XXX resulted in of three free approximately month approximately challenging year-over-year a million of free March, from the $XXX flow million cash cash flow use million improvement $XXX factors. to

flow cash continuing offset free $XX expenditures plus as million by increased networking lower First, from higher capital. approximately lower than more capital were earnings operations

the businesses $XX cranes Second, cash in approximately we used our third, XXXX payments approximately result decreased in businesses, and as other of million. the operating QX of And repeat million. taxes costs cash sale a for did interest, these of mobile $XX not

flow demand. During retail QX our operations XXXX, benefited our cash from free continuing below producing

which our As our a aggressively QX cash COVID-XX we benefited within demand flow. reduced especially March, manufacturing free on commercial in the impact further, result of segment, production AWP further

be a source of for of the will We XXXX. liquidity expect capital networking remainder

We and to in Slide to challenging building delays cancellation contracted inventory. the line XX End we or U.S. driven by year excess with not were by despite to of compared AWP. $XXX markets by sales million starting last global reducing Turning markets. aggressively the customer contracted year, XX% production with continued in our expectations. sharply stopping in Europe March, responded starting to ensure and AWP

facility reduced shut most quarter. or operating Changzhou, level will of China for down as a the Our

areas the in rate softened gradually China up quarter, experienced we the starting not ramped that Utilities production. the the but has at in visit business. However, in same March, market

the AWP approximately first $XXX million net of of end bookings XX% XX% than lower the which down are Backlog canceled at customers. quarter quarter $XXX from prior million The bookings XXXX. in quarter by million were QX year. was were orders, of $XXX

using quarter, we by the orders ready be customers services their when customers to shifting of provides customer are construction opportunity The increasing from and machine our normalized. reduction utilization downtime experienced machines half our as in the the to offering perform maintenance a of of to the XXXX. During markets QX for parts an second

XX% in products, resulting delaying cautious sentiment, Sales quarter capital XXXX, started driven handlers margins, $XXX lower is strong, of Processing. this as team and environmental operating customer material operating Materials MP the the to from the to positive equipment. solid and delivered extremely relatively the year achieving first down quarter, another margins It of purchases on screening turning revenues. with million despite were strength segment, markets. crushing testament challenging by X% Now a

been MP $XXX The of cancellations Backlog order team elements in million market year, last XX% has aggressively than costs was of the including managing the lower network. dealer from environment. challenging all

customers AWP out of and the our both is will However, current this through with well downturn segments to operate segments MP to their respective grow leading strong businesses in COVID-XX be continue their in positioned being in brands. as existing respective equipment crisis Both very industry They come and utilized. markets. the are we

I’ll with John. to that, turn you, it And back

John Garrison

Duffy. Thanks,

to aggressively managing accelerating by our and are operations AWP SIOP their XX. Turning production Slide cycle. both teams In MP, their

not under bringing normal certain our is customer we And produce The demand. have decremental we Partial an product benefit our times, adversely demand, impact our in minimizing cash to would operations are burn. staff partial lines for thereby efficient can way actual this the operate facilities. margins. where be We

of strategic of number A suppliers. is have we our initiative sourcing reduced benefit the

relationships we to to I’ve closer result, material the collectively coming amount and the been a reduce As into have work plants. of able

teams Our of flow, we while of a ensuring managing continuity job have good doing material also are supply.

as term to new and expanding investments the development. are business term also demand, dynamics, product position our innovation for on parts our improve. Terex important whether focused customer we’re services, in market We’re facility conditions our China it’s but short digital to growth These new Watertown, in responding longer facility,

XX. Free objective our financial Slide to in XXXX. execution cash principle Turning flow is

discussed As Duffy we with business. action took liquidity to manage ensure we have in our detail, decisive ample banks to the

XX% by fund to CapEx important investments future reduced continue growth. also the we for We but

As of conditions returns shareholders. we will to business reinstitute capital improve,

XX. our Slide up, culture our challenging global Terex continues live harm zero To Turning a environment. in to team to wrap

them supporting are for on times. commitments during focused and We intensely difficult customers meeting our these

continue Our businesses strong prepared to a will we have as demand innovative invest returns. in to and future, be market products so services

crisis this navigate Our and and highly management managing and team liquidity. is costs through cycle-tested, by we experienced aggressively will

back it turn me to let Randy. that, With

Randy Wilson

Thanks, John.

As a we reminder, during questions. that, With open time you and to everyone. ask ensure get like to I’d to limit to have a to session, we the to question-and-answer follow-up for questions your Operator? up one

Operator

question of comes Stephen you. Thank Your [Operator Volkmann from first Instructions] Jefferies.

Your line is open.

Stephen Volkmann

morning, guys. Hi. Good

John Garrison

morning, Good healthy. you’re Steve, hopefully

Stephen Volkmann

you to there. same thank and asking Yes, everybody for

John, maybe by surprised for a you we cancellations, So Thank I AWP. to orders net the bit were I’m around start was that about trends talking than the in actually I but I can just expected. the guess little little the seeing you’re trying a better information –

So the you see later there of in much just backlog? that and Or are expecting in what production did off kind that of April broadly, of maybe mostly in quarter is the for any second year? you

John Garrison

Steve. Thanks,

world in X% – COVID to we February, our created now as were To there, were And as we amount knows better. our area. planning it our markets expectation XXXX, worked actually that and be saw well. significant were on in at cancellations. the that down some scrub customers performing ensure we And that basically the and to a did push-outs we had then So slightly you hit, into as orders January And the uncertainty. book so globally. when in order with X% that We of we the have AWP in recall, teams and to came –

increase month in very, it look spread we we the up zero in think back range. at our really And the it, I XX-plus begin then around world. And into of – way illustrative the when think to it’s saw about And markets began the equipment get – almost percent in April, utilization the to pandemic rates March. in utilization very February, saw we to of that China

with We also China. order and in order that activity commensurate saw increase

and but see China So down quarter, to as our market for did first begin we our increase increase. most opening said of the in the was comments, we production

Italy, middle of move the and together was here – the go When fell AWP there site Italy. our If Europe, in that, to then in it phenomenon pandemic North for pretty went, delay, utilization from some market you then the hit United saw the March, then pandemic March, we the middle and we Europe, their in cancel Uberti, or was saw where got to actually we’ve lockdown. middle pretty of us, Central saw absolute there in same of And the to up and dramatically it down utilization come – not CONEXPO went out China March. fall kind to started solid. an began But either in Europe we what a saw early that then we the orders. basically then – Southern significantly And were pandemic North. moved in same pretty And utilization States to push the into from that saw was market rates the is and of we was what the us into of to customers in from China. extent dramatically, shutdown, the

understand worked So the our book. with what’s teams the order customers in to

a middle think the into they’re saw several stabilized give the to space, we from level. seen they date as location, on April be it both dependent And independents, canceled can the to of with located. States, confirm my of really couldn’t they in really week traded third we’ve heard in the now of the that AWP middle and I if accounts plummet honest companies national and April March And is the ship United and/or you’ve it utilization in really where – out major at in of that us the moved you, customers or conversations it our the with and April, it. I publicly And

dramatically area having right an good not pretty business that’s actually So an independent impacted a is now. in

conditions an Northeast very Northwest, you’re in the the If the them. for or independent market are very, difficult

it the I forward and the near-term demand talk future demand, it, pandemic go we’re as – around about the are what’s that matching around that order to we think us a how flexible as time. to that’s flowed intermediate trying about we’re the and out we’ll as impacted and all and So customer doing, in we to world, think world production it’s like as and unprecedented in an has behavior possible, look customer trying of very really is figure our realizing be what

it as now. how I are we that’s where kind into So March would unfolded from say of

And Duffy overproduce. comments, our approach said our is reiterate going our going to going be constant we’re in communication as customers I’m to and to their needs. And contact, to with really understand constant their not and to this, meet we are in needs

produce We inventory. are to not going

we below keep unprecedented to a we time, actually going that retail company. or best can match in retail the approach the because demand as production demand think this that’s take We’re to

So Steve, answer, company, learning next we as this an to moved learned the forward. a we’re seeing, that’s world has And applying from but the pandemic we dynamic it’s And the that move global it time. long one as from region lessons unprecedented a impacts see as and we’re been around globally.

Stephen Volkmann

Great.

That’s helpful. you how quick you should mentioned about bookends but would worse we broadly I And SG&A say that how great. I’m around cost And assume didn’t as think decremental actually more, whatever much. Thank I guess down just they trying although get Okay. to margins. you. production goes because follow-up, a about declining, be actions, think

John Garrison

not that and – I And Sure. call times. I’m in room, are same the to take same unprecedented going in the and actually unique only this not and not state. let Duffy is Duffy we’re

really we separate. the thought region prudent to country was so our been for the has of for it you us significant As a coronavirus know, hot bed

So margins? and question take ahead you go that decremental Duffy, would on

John Duffy Sheehan

impact first and during especially of certainly the fall well COVID-XX have look impact very at pandemic our our fast as stopping a in QX the you much, production, of decremental revenues as Sure. Steve. did the results, margin when QX month the the March, that with off on an Thanks quarter. from very on And financial for

target we prepared We savings with cost that or we The do our businesses, remarks believe the presentation all that level. from can we incremental that the effect our of described QX XX% to continue really earnings are in to onwards. out operate And laid margins. take and decremental in

implement them, developed March. the started we of to month we As during them

demand production So demand, QX QX which continue actually will in adjust year those the immediately to begin customer and in immediately we our impacts, or throughout the are as began our environment.

so And will reductions the getting support that taking targets. to margin. XX% we’re achieve to continue to our those we to do decremental cost that The target or working

Stephen Volkmann

and Duffy Thanks, Great. John. pass on. I’ll it

Operator

comes Mig Dobre Your next question Baird. from of

line open. is Your

Mig Dobre

you. Is Thank savings savings. this, I stick line unallocated these us Good understand to discussion And level? morning, maybe this want at at expense everyone. there to maybe to related looking I’m when with you’re also of a thinking way segment cost on about kind item, corporate I help how And this on I are of has what a here pretty run our little year robust. a basis. bit where in that full one the mean, have to last guiding ahead be say, rate QX running discussion been dare on remained you full your I quarter based expenses recall the

how level? color breakdown think million the at do maybe segment we then So some And expenses? corporate about $XXX

John Garrison

to Mig. to to Thanks, ask going I’m that respond Duffy question.

John Duffy Sheehan

Sure.

I both of our beginning QX. segments $XXX XXXX. – is the remainder as of the the million ago, our you at So reduction $XXX immediately our $XXX of similar of million few segments cost across the – moments as And are taking really $XXX actions. at both spread business began QX said The cost through of is a when look reduction million million

about it the the businesses provided in to think the million to allocation specifically haven’t we of proportion respect the with information to contribution to be while tariffs. so those cost the overall across would fair of savings think $XXX I businesses, And

leading on costs – of corporate are there’s first side savings you that the our first of million. year-over-year. of corporate look in corporate, at million, that the to corporate Really, XXXX to cost the quarter quarter the of factors two side, $XX costs $XX the On when sorry, in increase compares unallocated XXXX

positive lower had First not been repeat quarter we XXXX. we care health record in expense care a credit health than a $X the as million first result credit expenses anticipated, is, have did of in similar XXXX, did a of of and that

impact. record, XXXX year-over-year discussed two, a a for reserve then So as we that my number record did in is in remarks, of we specific a prepared QX did And I a on recoverability. COVID-XX customer result a this of the financing financing the – question receivable. the That charge customer from impact and there of of COVID-XX was this receivable and as

really what’s which year-over-year account other full So increase and in the of those driving two corporate QX difference in XXXX. the impacts, for is

Mig Dobre

mean used to you how is the year? that Or something still million you’re And number using? item. for this thinking think different? I line it for you Is are that $XX the

John Duffy Sheehan

would you to is providing But what I as last COVID-XX with look, were differential. comments Well, to the otherwise there caused year with factors, my credit bring for Mig, know, guidance that like we’re across specific not or try XXXX. I guess associated that

efficient We’re and our of in have manner. most delivering – to corporate not overhead from to we on continuing cost our of the the segments the And our costs increased structure our team. all focus services corporate controlling

So another way the is your of question segment. maybe haven’t any cost answering we added to corporate that’s

Mig Dobre

for that. year? get might source a you. And about the more be in I’m sales, capital Thank there percentage I me if can on XX%. a as view working Is you to running we to you color of capital. as continue be talked working a wondering at on your of It is exiting question liquidity. see. where would slides, Last

John Duffy Sheehan

they and in than operations million lower offset income flow saw net $XX in a businesses operating for those continuing fact of when take prepared capital I’ll we I reduction that is look know right, from operations, that from first and quarter at points to more year that cash our the by just expenditures $XXX capital operations. in you In cash my working also a higher improved couple you free talked about in by one. this continuing of flow that And so increase – led remarks, our the the – was – million. there, the

we’re producing We be that John few as only demand. ago, – talked minutes customer continuing to a will

inventories course of year. capital be so I And our of the be source the we said, cash. a will net will down working as bringing over And

For forward, reason, future specifically is sales can’t working as I say the about ago capital talked to we a going But moments related can a in quarters. tell what the what I of to is will be to the same few corporate, going has with you of and working throughout the that net source associated with company capital than more has This liquidity cash. XXXX, be – ample uncertainty even operate a XXXX COVID-XX percent pandemic.

Mig Dobre

right. the guys. Good luck, All for color. Thanks

Operator

call next JPMorgan. Your Duignan from comes Ann of

is open. Your line

Ann Duignan

confidence these? see to it What aren’t forward? that going and What of we to Good happened more going segment clarifications, more $X on charge are couple was morning, start you you you million customer give can I How one-off on everybody. that A What questions, – of give more the don’t there details us think. us region Could of more in? there? that’s these receivables? the be

John Garrison

have that to I’m as going cover Duffy well.

John Duffy Sheehan

to that the So follow-on asking Ann and – it’s was Mig point a ago. moment a

financing actually, thing that our financial also equipment. customer extended It’s And we assure we that as of even is which of do as anticipate challenged to take close, we believe before to that book at had COVID-XX we reserve with our customer financially a conjunction charges did that a full for that time, was other XXXX, prices. services quarter. to review will receivables. So was the as we What associated do QX of prudent receivables no result book or did there the in of purchases open the And is particular the that And the August first of that in all current too, it’s we, took of business. well were with as which customer well you customers’ receivables one Financial as Services support I our taking. Terex the we account on our financing financial the on – situation have a a Terex be can all

Ann Duignan

of I’m the you. on said Thank strategically, appreciate color any I then and That’s I canceling peers processing. items ramifications like there Materials dealers and particularly Okay. orders in know that. competitors canceled not just your whether And some think material helpful. more that not do I orders. ticket are for allow maybe for but orders dealers curious to equipment competitors, Processing. large just financial dealers you cancel

going ramifications, cancel a on talk there financial little there? any any And you about for what What’s orders costs can to associated that? more are bit like there? dealers So happened

John Garrison

Ann, if core aggregate business, in there’s the obviously, our not of that core business. screening demand, and given couple so QX, full the on crushing especially backlog overall, and the you Last uncertainty look the this their dynamics. had at the really still level case, a placing we dealers year MP, screening and crushing year, on of was

I’ll that March, they our with concrete replenish of orders States, April, comment in well That market changed. And that to our on mortar as the later, the business some in an Material In specific cancellations had two also in – back as the United with on business, cancellations. order canceled. But saw Handling business, business business. weeks we see some Ann. occurred then we concrete And our did our lower some ordering, came then truck slight customer some the another

go In terms Ann, you crisis that, flag’s the to from is I’d of learned what when penalties, book. We like dealer really penalties, did a order prior environment dealers. – – red got And in up. to delay for there’s lessons with then really and you’d not significant that want And the basically, scrub of one us. work says, hey, to we this the

and and ship want and So when ahead have us you where us to actually go clarity we to the basically cancel date, of said to demand that order to where to. a you dealers, can’t going going the reenter you you we’re give is delivery that if can order

goes our activities in MP distribution about fleet. through out traditional a business dealer a I that specialized not and what for really putting channels. and they’re the Ann, distributors. say, XX% to it distribution. in inventory RPO-type And is business, These would many, I many on cases, dealers also rental call sale. it’s But iron converts their of are would And then rental yellow

levels are believe in their inventory don’t that So channel. excess in shape. there’s We good inventory

We is But channel, going equipment, time utilization screening. and down. again, new we’ve crushing the think dealer invested to new seen that we our around our especially in come core distribution have in over technology help that that telematics is

come number what’s is April constant, the relatively we’ve on North And the America, hours interesting XX%. But Europe. in month seen have especially work down the in be in XX% actually machines of of to

the not again, organization, continue we’re in call channel. their with specialized it’s yellow dealers distribution what a a traditional, watch segments. – to so market not going to our I highly it. iron It’s work dealer And are But

how prior And so the to and a good we’ve detail [indiscernible] lesson job from that’s was really book that. in at understand learned a crisis that It order managed it.

Ann Duignan

Thank Okay. you.

cancellations the Just amount quantify can you of NPE? in

John Garrison

we We but didn’t here, quantify lead to backlog right that it that, Ann. I some don’t that saw. did of reduction have the

Ann Duignan

Yes. I was reduction is how That’s backlog was what hoping understand cancellations. of to much the

get in queue. I I can Thanks. appreciate I’ll Well, follow-up back Okay. that. offline.

John Garrison

Ann. Thanks,

Operator

of comes question from Sachs. next Jerry Revich Goldman Your

line is Your open.

Jerry Revich

everyone. Glad to you’re Yes. doing Hi. all hear Good morning, well.

John Garrison

seven, and together were long Jerry. like it from we Great. a weeks was was you, the only Good eight time ago. last seems to It about time real, ago, real hear

So doing well. glad you’re

Jerry Revich

over you we MP just the of the specifically. and us wondering region, conversation giving taking discussion over evolved of to trends operating for aerial and platforms idea telematics that continue course that by I’m if how on the an could April started joined hours business

region wondering we’ve pickup to utilization of customers any helpful. of willing share course if you’d be as and your color nice the in your over one – that And well data shows April. would I’m be by so

John Garrison

it have was China, And had our was in we to North essential climbed for comments, again, climbed clear. Genie the general, February across other the go in Sure. from April, market able our services, no Jerry, some stopped the down. telematics pandemic, similar In our Utilization, month. I’ll March into the heavily in utilization the business. month to based world, In as utilization in February. of China, locked again, In best there invested then a And in customers going we’ve and back from been the to rules my Utilization of of kind on by earlier zero weren’t parts are Europe, there kind XX% around story. And estimates. still rates activity virtually because There operate. they of mark. XX%

down So that middle and time of frame. April to increase in utilization dramatically, stayed fell began

third on increase. North We like. it regulations what stabilized you’re stop the level government it as and maintenance, local and level. pertains sites stabilize construction began similar say up, and then And week still see March companies comment And would story the does really in rental utilization a week second about down to utilization that about impact decline have pretty pretty states in, that they from on other specific think America, I rules at and I saw very maintenance does been April stabilizing second And big a is slightly no week around the the dramatic lower of second kind trending April, of and week but second And – clear of April, sites, the overall. of to to moves. of falling of the really based it significant again, depend the

have saying their telematics in would on rental what is markets. with again, the to the independents, they’re I very consistent we So business independents, level as opening of conversations depends been similar. what markets can really have say I of the the on with very based it in say publicly. companies But And data that

Jerry Revich

you on over products realize rolled that in the past new the And pricing the environment? pricing couple couple in appreciate of have over pushback folks think enabled you in you I any demand color. getting your the really really And environment, features to of what this given of years out And the then pricing, of and the competitors? do telematic change I’m years. folks discipline the terms seeing past the you you’re are wondering that among

John Garrison

really great the customers, set. last to being for question. we’ve excellence years to and provide our with we’re disciplined Thanks. the It’s our benefit And working focused commercial feature really been pricing on tools that disciplined remain value either a and pricing couple in on value-based of here

If you our that’s really GE XC line, think about well. our line, Bloom done

series, is line. XXX-pound And range. Z anti-compliant new to hybrid the then introduced FE Our or a which we J

and pricing. we We’ve been, And increases – transparent were. disciplined been and pertain to what those being are anti-standard we around the So we to will as with have remain be pricing. customers going costs on disciplined it we’re

In discipline be feel the biggest a overproducing improved pricing to the being the about disciplined over that They’re the about and and and disciplined to can we’re time. has pricing, not we lot about pricing inventory pricing. excess thing that of do is action. hearing AWP companies segment, be you’re compelled need rental with building take very disciplined going And to very

I Jerry, being is disciplined. now, think say right the I’d market So

situation price I think recognize this in that is we the this a lever dynamic. lever appropriate to going all is we’re not the

for provide equipment, of that tremendous – AWP tremendous MP. and over our life cycle And value. and that’s value we we customers, over equipment life the the in of is this So the provide cycle

not is upfront demand. looking to So discounting something the stimulate to do purchase price we’re

the in last that the us that place of can over of clearly pricing control very and years, So see give the pricing in visibility tools that in we’re waterfall. team going to and disciplined remain the the we’ve we couple put are

creating So it’s cycle when in course, disciplined focus volume remain value going challenging pricing But the of on always on – the a that we’re to market, over of environment. going and those declines. life we’re to this products it’s

Jerry Revich

John. appreciate I Okay. discussion, the Thanks. Stay well.

John Garrison

Likewise, healthy. Jerry, stay

Operator

comes Your of Evercore David ISI. from next question Raso

Your line is open.

David Raso

much. Thank you very

do get answer. in point, have to AWP toward AWP, on revenue you thinking focuses rest And breakeven back Could about that I appears you of, the we there’s earmarked should the do related how million that, the help question think to of question especially to see us about revenue through be of my where year? about your thinking So light it million a profitability. savings $XX $XX

John Garrison

to Duffy that going David. part, part question, let I’m So take I’ll of the the follow-up on first and second

David Raso

Thank you.

John Duffy Sheehan

Yes.

the when I in think million and small loss and AWP that first you QX had they by result $XXX into quarter. that the right, results And factors think approximately David, the quarter, about of a revenue went that was AWP. for So there’s couple a

to recognize the manufacturing it’s to cost does down all, Genie of production facility into the for that going inefficiency going First volumes quarter lower production in be in their and drive was XX% year-over-year were planning the that the structure. important

look reduced XX% Then When Genie’s you as their was volumes they of first quarter, the the a production result production Genie by even of the volume as retail COVID-XX, producing down further. below end demand. year-over-year were for the quarter

that duty – overhead did financial Genie losses the charge So unabsorbed $X.X bit the reduced operating government in or that, quarter. results. reflected million in of quarter created recoveries, reserved of receivable they the Genie fair their that about record first in with top manufacturing, also the a results, reflected that that the expectation inefficiency that creates contributed to first drawback associated definitely with was associated a On

So about definitely can’t if breakeven be, give while give million. you what specifically I that it’s would point I can’t say would $XXX than you less think specifically those the factors, I it

David Raso

say, usual. XQ. usual to So then for AWP in you when it’s as else XQ XQ. would to equal, All than profitability we would think about Needless be return pattern, the revenues higher normally per not

take XQ certain I’m have me offset take breakeven. your be normally assume in to ships about even let commentary into you I’m I changed of of how XQ savings think the know curious channel there’s your XQ, a to XQ. at what down percentage that if bulk that, are as a when we to So certain the enough revenues XQ customers think about ships those might to and that your But know XQ a say XQ. pushing given and it’s And maybe trying backlog that XQ percentage much end the the machines. really your that percentages customers step fair the

there. believe from of comment I’ll backlog? your XQs leave breakeven XQ guess got much Thank XQ I So that’s and the you versus revenues about a normal shifted two-part The you. for how to it and question,

John Garrison

to Yes. take quarter. David, part. that going QX very I’ll challenging Clearly, is first be a

As the with shut down. basically we’ve discussed, being economy globally

flow So is revenue no unprecedented in there these times. normal

created. just quarter comment us be all going that to say So I Duffy, you would a the about at has comment? dynamics did companies, and is given many want the for to COVID-XX that breakeven very QX challenging

John Duffy Sheehan

revenue those $XXX is going company you that dynamic to million with are certainly that point the be to the to which think cost I just is a made, quarter, when to is savings, in across actions. going going QX, the the implementing the second why be be Well, we that for challenged total

cost structure here is going sit are what this our action in going match say the So I with environment to results that can’t to to are we’re I experiencing. what we we’re revenue we’re line QX to QX, say demand to actions environment in operating. going be challenge we taking a will be – customer taking the can overall our and structure call reduce in that revenue But to be. which be is and cost on

David Raso

loss. just interject, I’m out. was, figure going my know XQ a we I but question trying to sorry be to to mean, I’m look, is

month XQ. backlog it’s a dates today, be? rental might now the But is go have what sequentially. about revenue I’m XQ, no cancellations lot to now is just think again, normal? versus it debate and How and here would AWP? – now the usually change trying decline backlog, up not come that XQ abnormal But abnormal being to abnormal revenue much Now heavier, how the could we sit can We what their the XQ we can we XQ And ships cancellations, and mind. AWP how get percent might XQ, as How an companies think and from a what versus in you it much back XQ percents XQ XQ in doubt. about to normally shipping we in

John Garrison

everything uncertainty has of crisis, David, pushed the The COVID is result out. as created. been a

So out. there’s been push a

right AWP, why can in AWP and to we’re happens we’ve straight around customers utilization has my in to to and going They’re us, we’re And – to opening what are in what indication no production out rates, very terms terms is with a their been going orders step cycle of us there what much especially those as pushed produce with there been taking of straight and So of very is they’ve comments, What needs as actually adjust to for the give in needs. normal now are, that’s and orders. our them. part looking been unique what they – their partial. match

We’re opening up plants partially.

can so on everybody we’ve build an retail to And going that’s take. step this to demand. the website, unusual see, posted But we’re our to

on start-up in for bring the run a benefits. may have, the at plant, we members XX% only or customer unemployment and other XX% a that out we it keep plant demand team So and lines

the where flexible. in Washington of is quite state we of One benefits are

members the our say, all retail understand in as now think I bring And normal David, the out fair and middle in no of needed plant team think and I we this right There is crisis. this. But to match so can we demand. it’s to of the

it under So excess demand and we’re going more under not of inventory. circumstances, to to circumstances, these willing the be that some and to circumstances, do efficient. team things the we’re I’ll normal under the run that, build work needs wouldn’t be like because lot you would plant to But But their actual these of inefficient. partially meet take inefficiency just customer a a

I And that’s lot for this is my of thing is for you situation and get top – But crisis to of adjust told So through somewhat these crisis on team to probably it situation. don’t David, got one. not Each is crisis sure having different. taken, the have got one forward many visibility. and fifth that now, a we’ve over is unique approach do the gone – quick, we to that you’ve

we’re possible match so normally our stabilization, customers fourth. be see need. normally they truth But their to have normal pushed we into visibility And increase, have second the need up, flexible just actual stabilization third adjust again, quarter David, they And as they utilizations the to up, the for do we they’re don’t as what going into the to they’re customer that’s that visibility that third is simple looking be quarter going the summing see And no as it is, quarter, have. see going as have was customers There as – equipment. have. we’re the the that to you’re David, we they right. because there economy not have And and don’t And to the to demand. pick

David Raso

it’s is, to is all backlog. profitability. XQ. not still actually a to much try going is that yes. out how That’s get XQ low, number about pushed really question be maybe it yourself the toward to fair, backlog The completely mean, but moving even for there the It’s I back

the for at of just backlog to great. would the April color get real about would sorry, helpful Thank the end all quick. the vitality end versus Lastly, be XQ, of The that of Any some March. sense be you backlog at time. XQ of thinking

John Garrison

And what push-outs Thanks, had we say. bookings basically backlog cancellations Thanks, can month April David. I we’ve will day. is I stopped, the every say the David. this. backlog of say what orders can that We through have stopped, the moved as track has is the stabilized

Operator

Suisse. your from Credit today of Cook final comes Jamie for question And

open. is line Your

Jamie Cook

just Hi. COVID everyone sourcing that I Good component first provide could in be number an to understanding challenging we are strategic hope want use, my morning. initiatives, on of is shortages. question, suppliers that the And you update having we can people reduce when well. the guess

there? trends So risk of color what just is there? what question, that’s my first that sort you’re So seeing performed And how business, just then any Crane seeing the of question. you’re and sort the second there and on Thanks.

John Garrison

Jamie. Thanks,

fewer you will, I product of because we’ve partnership, the us And the put that the this has it. commodities we the sourcing up suppliers, helped communication level dealing In strategic improves with to XX% and remain or of to which in dramatically base. terms supply of the the really initiative, you if with committed leading will process, we’re upwards work crisis done have through we lines that the tell

the at So job. supply has our But a that the team has challenge, done materials continuity world. has that the the need. for has we great ensuring chains over a maintaining really it think a I think And as then great team I been need done job been we it of all have supply, we quantities

based that are they’re seeing the we year. your the volume, terms Jamie into rates anticipated, seeing, second had the of, going question. is sorry, anticipated we’re still savings I’m what we rates we obviously, that In to the actual on that going be the And lower

Jamie Cook

Cranes. just Sorry,

John Garrison

Yes. Okay.

thanks Jamie. So

So obviously now Cranes business. is reporting our MP inside

On – been but and in deemed and the We decent at been take headwinds, the are did meet through with they have on essential, – tower off so it for operate construction crisis. to some some CONEXPO. with have able tower – business did side, they orders the

that. pleased was I with So

European say, slowed, East off little RT have the with side, bit little in slowed Middle it our other a principally but just held a would line have better tower’s Jamie, RT the still I has basically markets slowed. markets business, bit well in But as On pressure. the European more, and under is businesses, as

Jamie Cook

appreciate I Stay Okay. it. well.

John Garrison

Thank you.

Operator

for Mr. today. for I call remarks. now to John question return Garrison was That the final closing will our

John Garrison

that Again, at unprecedented it and thank be that’s during Terex. here follow-up the follow-up safe communities protocols the And one follow pandemic, and the please you any you live your And Terex. help Duffy. this you work. to if have that And family healthy. for not stay questions, of do again, messages stay been stressing hesitate and/or we’ve Randy And with safe, will interest please Please healthy. help because in stay help you, your and

Operator

Ladies call. and gentlemen, you for concludes participating. today’s this conference Thank

You may now disconnect.

Terex (TEX) 1 May 202020 Q1 Earnings call transcript