Terex Corporation

Ladies and gentlemen, thank you for standing by and welcome to the Q1 2020 Terex Corporation Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Randy Wilson, Director, Investor Relations. Thank you. Please go ahead, sir.

Good morning and welcome to the Terex first quarter 2020 earnings conference call. We're conducting today's call following the Centers for Disease Control and Prevention guidelines by using both social distancing and technology for remote access. Copy of the press release and presentation slides are posted on our investor relations website at investors.terex.com. In addition, the replay and slide presentation will be available on our website. I'm joined by John Garrison, Chairman and Chief Executive Officer, and John Duffy Sheehan, Senior Vice President and Chief Financial Officer. The prepared remarks will be followed by Q&A. Please turn to slide two of the presentation, which reflects our complete Safe Harbor Statement. There are a few items I'd like to cover. First, today's conference call, including our remarks and answers to your questions, contains forward-looking statements which are subject to risks that cause actual results to be materially different from those expressed or implied. In addition, we'll be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures can be found in the conference call materials. Please turn to slide three and I'll turn it to John Garrison. Thanks, Randy. Good morning.

Thank you for joining us and for your interest in Terex. First, our thoughts go out to all who have been affected by COVID-19, as well as the dedicated health care workers, first responders, and volunteers who are on the front lines all over the world battling this pandemic. The Terraceway values, along with our commitment to safety, gives us strength to face this pandemic together. I am proud of and want to thank all of our team members for their dedication Commitment and focus on our zero harm safety culture. I am pleased with their attention and focus on adhering to the COVID-19 protocols. We have operations in China, Italy, Washington State, and our Connecticut corporate office near New York City, all hot zones for the coronavirus. That said, most of our Terex Global parts and service and logistics teams have remained open to service the needs of our customers. It is a testimony to our zero harm culture that we have only had seven confirmed cases, although we suspect we may have more. By practicing and rigorously following the COVID-19 protocols, we are helping to keep team members and families, customers and communities safe. At Terex, we have confidence in ourselves and in our purpose. that as a team we have quickly taken action to address the current situation. And we will rapidly respond to market conditions. We are focused on controlling what we can control. We're in constant communication with our customers, safely meeting their needs, producing the actual customer demand, and providing essential equipment, parts, and services. We are proactively maintaining our financial flexibility. We're a highly experienced management team and we will successfully navigate this crisis. And our Terex team members are resilient and are facing this pandemic by demonstrating the Terex Way values. Please turn to slide four. Citizenship, which is one of our values, helps us navigate this crisis and improve the lives of people around the world. In Redmond, Our AWP teams brainstormed on how to help the community after their region endured the first major COVID-19 outbreak in the United States. The GENIE team produced and donated 4,500 protective face shields for local medical professionals. In Watertown, Terrace 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 utilities team, approximately 1,000 shields were distributed to healthcare providers in South Dakota and Minnesota. Our China and Northern Ireland teams donated over 5,000 masks to a COVID-19 community group that is supporting local hospitals and care workers with PPE supplies. In India, Terex team members voluntarily contributed a full day's salary to purchase almost 20,000 pounds of food for a community kitchen in Delhi. I want to thank all of our team members who are assisting others and exhibiting our value of citizenship. Turning to slide five, safety is and will remain the top priority of the company. We have response plans in place following guidelines from governmental authorities that are intended to slow the virus spread. Team members who can work remotely are doing so. Given the lessons learned from Changzhou, the company is implementing protocols to further safeguard team members who perform jobs that must be done at our facilities or customer sites. We have launched daily and weekly communications to stay in close contact with the status of each of our sites. We continue to educate our team members and share best practices across the company. Safety and the well-being of our team members is our first priority, followed by the company's financial health. Turn to slide six. As a result of the COVID-19 pandemic, AWP and MP saw a significant number of customer cancellations and requested delivery delays in the second half of March. In response to this unprecedented situation, we took swift action. We have implemented a comprehensive cost reduction program that includes salary reductions, furloughing of team members, and reductions in force, temporarily suspending manufacturing operations to align with customer demand, and partnering with suppliers to limit the incoming supply of materials receiving only what is needed to support current production schedules. While the environment continues to be uncertain, we are implementing cost savings in excess of $100 million. The Terex team is committed to taking the proper steps to protect the financial well-being of the company. Please turn to slide seven. In addition to cost savings, we are focused on having ample liquidity to run the business. As of March 31st, we had $945 million in available liquidity. We are participating in tax and other government relief programs. We're also utilizing worker assistance programs in the United States, UK, Germany, Australia, and other countries to help keep our talented workforce in place while easing the financial burden to Terex. We've begun a global effort to reduce indirect expenses. In short, we're asking all team members to look for opportunities to reduce the company's cost. We have taken 35% out of our CapEx budget for 2020. However, we are investing in the future on a more targeted basis. We are still funding the completion of our Watertown, South Dakota manufacturing facility and the expansion of our Changzhou, China facility. Chengzhou is an important manufacturing facility for us. The China market is growing, and it is essential to have the capacity for future demand. Working with our banks, we successfully extended and amended our revolving credit facility. Additionally, we suspended our dividend and share repurchases for the remainder of 2020. As a result of these actions, I am confident that we will have more than sufficient liquidity through the downturn and that we will be able to grow when we get to the other side of this pandemic. With that, I want to turn it over to Duffy.