Terex Corporation

Good morning. My name is Marcella, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Tarex Corporation Tech's Q1 2019 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press star and the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. Brian Henry, you may begin your conference.

Good morning, everyone, and thank you for participating in today's first quarter 2019 financial results conference call. Participating on today's call are John Garrison, Chairman and Chief Executive Officer, and John Sheehan, Senior Vice President and Chief Financial Officer. Following the prepared remarks, we will conduct a question and answer session. We have released our first quarter 2019 results, a copy of which is available on terex.com. Today's call is being webcast and is accompanied by a slide presentation which includes a reconciliation of GAAP to non-GAAP financial measures that we will use during this call and is available on our website. All adjusted for share amounts in the presentation are on a fully diluted basis. We will post a replay of this call on the Terex website under events and presentations in the investor relations section. Let me direct your attention to slide two which is our forward-looking statement and description of non-GAAP financial measures. We encourage you to read this as well as other items in our disclosures because the information we will be discussing today does include forward-looking material. With that, please turn to slide three and I'll turn it over to John Garrison.

Good morning and thank you for joining us and for your interest in Terex. First, I want to thank our global team for their continued focus on our customers, which enabled our overall strong start to the year. Our Q1 performance represents a significant improvement compared to last year. The dramatic increase in operating profit in earnings per share versus the results we presented in Q1 2018 clearly demonstrates the value of implementing our strategy. Building on an excellent 2018, MP increased sales and expanded operating margin again in the first quarter. MP's global markets remained strong and backlog continued to grow up 17% on an FX neutral basis. AWP markets got off to a slower start than last year, but gained momentum throughout the quarter. AWP is well positioned heading into the main selling season with backlog of $1.1 billion. The global markets for AWP, MP, and towers and rough terrain cranes are generally stable at healthy levels consistent with 2018. Turning to slide four, the TARIC strategy continues to be focused a portfolio on great businesses, simplified the organization, and improved the capabilities needed to win in the marketplace. The transition to a more focused two-segment structure, combined with the significant progress we made improving processes, tools, and leadership talent in our priority areas, enabled us to refine our corporate operating model. Each functional area is moving forward with plans that will build upon the progress already made and deliver essential services in the most efficient manner. We are transitioning to a simpler operating structure that will reduce corporate operating expenses. Implementation has started in some areas and will continue throughout 2019. Turning to slide five, we continue to make progress implementing our strategy. The sale of the DMEG mobile cranes business is progressing on schedule. Subject to customary regulatory approvals, We continue to expect this transaction to close by mid-year. We completed the wind-down of removal crane production in Oklahoma City and sold the boom truck, truck crane, and crossover product lines. We are working closely with Todano and Custom Truck OneSource to ensure a smooth transition for our customers. We remain committed to the rough terrain and tower crane product lines in North America and around the world. We are investing in our parts and service organization to support our customers into the future. The resegmentation announced in February is complete and reflected in our financial results and operating structure. Terex Utilities is now in the AWP segment and the pick and carry crane business has transitioned to MP. Our global rough terrain and tower crane businesses are included in corporate. We continue to execute our disciplined capital allocation strategy by investing in innovative products and services and global manufacturing capability. MP announced a new UK manufacturing facility where it will manufacture the Terex Ecotech waste management and recycling product lines and Terex mobile conveying systems. This is part of MP's strategy to add capacity to meet growing demand and simplify its operations. These are new adjacent businesses that MP has created that leverage its engineering and distribution capabilities. The new utilities manufacturing facility in South Dakota remains on schedule despite some severe weather conditions in the quarter. Our commercial excellence teams are focused on improving the customer experience and driving process discipline. Another area we are focused on is improving process and tools for the dealer channel as dealers represent an important part of our overall distribution strategy. Finally, on strategic sourcing, teams in each of our manufacturing facilities are making progress implementing their wave one savings. Wave two savings are being identified and detailed plans, including the ability to fast track certain categories, are being developed. We continue to expect savings of approximately $35 million this year. Turning to slide six. While we are maintaining the full year 2019 guidance that we provided in February, as a result of our strong start, we now expect to be in the upper half of the $3.60 to $4.20 EPS range. With that, let me turn it over to John.