TEX
#I would say on the steel side we are not yet seeing some of these pricing increases.
Where we do it unequivocally is in the high tensile strength steel, that's the first place it shows up.
But we are going to be working hard to make sure that we can push back on some of these increases.
There's still an oversupply of steel in the global market place.
Thank you.
In terms of the trends, we do believe we'll see ---+ we had a tough first quarter in our utilities segment that's reported under our cranes segment.
We expect that that will come back more as the year progresses.
Some of the action that Ken is taking, near-term actions, I think are going to help later in the year on the margin side.
And then they also, some of the new products that we're introducing, have some better gross margin opportunities as we bring those into the marketplace.
So without question cranes' operating margin and progression is one of the challenges that we have, given our guidance.
But for now we are going to stick to that until we see how the year unfolds a little bit more.
You know the Board and management, we understand the ---+ we want to resolve the uncertainty as quickly as possible, and as I indicated in my prepared remarks, both sides are working diligently to do that.
And again we are focused on the financing, their shareholder approvals, the governmental approvals and security and amount of a reverse breakup fee.
So those discussions are ongoing and we will announce as soon as we can which direction this will go.
Thanks, <UNK>.
In terms of ---+ you are absolutely right.
At this point in time we are intense competitors in the marketplace and we also have a merger agreement.
So there's very strict firewalls that we established as part of the merger planning integration activities.
So there are very strict firewalls in place.
In terms of the market development, I do not believe that customers are delaying their purchase decisions based on the potential outcome of the merger transactions at this time.
I really do think that if you look at the underlying fundamentals in the business, on the material handling side I think it's tracking pretty closely to factory utilization.
It's in the low 80%s in Europe and we are seeing some growth there.
In the United States, factory utilization is in that 75% range, so that's not great, it's not bad, but it's not great.
So I think that's driving the purchase decisions on the material handling side.
And on the port solutions side the slowdown in growth rate in container traffic is really causing ports around the globe to delay some of their purchase decisions and saying we can get by with the existing equipment that we have, that we don't need new equipment.
And so across the product line on the port side we are seeing customers delay their purchase acquisitions.
I am not aware of any situation where a customer has said, I'm delaying this decision because I am uncertain about the acquisition and the merger.
In terms of conversations, most of the conversations that I had at were around Bauma and they inquire just because obviously it's a major issue.
Not an issue, it's a major uncertainty right now in terms of the ownership structure.
But the message that we've conveyed to the customers and frankly to the employees is that in either scenario they are going to be dealing with the same great people they deal with every day.
The same products and service organizations that they've been dealing with.
And so the impact of who owns the equity of the Company is frankly not that significant on a customer's transaction.
And most customers when you talk to them about that, they get that and then they move on to the business.
Yes.
In terms of the $60 million in restructuring, as <UNK> indicated in his remarks, we are anticipating about 40% of that in the year with most of it coming later in the third and fourth quarter.
So I think that's, from a flow standpoint, how we are looking at the benefits from the restructuring.
I would say it was clearly impacted on the rough terrain boom truck market segment.
The large crawler crane market is competitive but we've got a very strong position especially with our 3800 in that market space.
So we can demand a good price because we provide a significant value to the customers.
Also one other thing on pricing that I think is important is, we've said we are going to compete aggressively but we are going to compete intelligently.
Price can't always stimulate incremental demand, and we understand that we are in a capital goods business, so it's the upfront initial price plus the operating cost through the life cycle plus the residual value and resale value.
So as we look at a transaction, we are having our sales team really focus on the value add and being overly aggressive to try to stimulate a market that's not there with an upfront price doesn't help anybody in the value chain.
And so we are going to compete aggressively but we will compete intelligently on the pricing side.
I would say pretty consistent all the way through.
That's a ---+ relative to our other businesses, that's a relatively rapid velocity business in terms of order and ship rates, and so I would say it was pretty consistent through the quarter.
Thank you.
Net working capital is a focus, such a focus that we redesigned our management compensation scheme to put a big part at risk with our net working capital improvements.
We are being rigorous, we have our biweekly cash calls/net working capital calls with all the segments where we focus on all elements of net working capital.
Where we are starting to see some progress, and again I will caution it does take time to implement these changes throughout the organization, but we are seeing improvements in things like APs.
Where we look at the AP terms and making sure we've got contracts that are in the bucket of what we believe are acceptable and the teams are making progress there.
AR on the receivables side, looking at receivables, receivable collections, reducing the days late across the business segments.
We are continuing to make progress there.
On the raw, WIP, and finished goods, that is about improving our S&OP process, and the team's working hard around that on their sales and sales forecasting, and then driving down through the operations with changes in the ERP system so they actually see a reduction in raw, WIP, and finished goods.
And it's going to take some time.
But we are focused on it.
In terms of the percent of sales and absolute dollars we are basically flat on net working capital.
Slightly higher in Q1 to prior year, but again I think that was due to some strategic decisions specifically in AWP that Matt made about positioning some inventory.
I think as we look AWP, I'm sorry, as we look at net working capital to sales on a full year basis, probably in that 24% to 25% of sales range is what we are looking for to drive to by the end of the year.
<UNK>, in terms of the, as I indicated, the Treasury notice did have a significant impact on the savings.
We are going through what the implications of that are to the overall transaction.
In terms of ---+ at that this time I don't want to comment about negotiations or renegotiations with Konecranes, but we are collectively, Konecranes and Terex, working through the implications of the Treasury and tax notices to understand what it means to this transaction.
Correct.
As I said in my prepared remarks, the Board has not changed its recommendation for the Konecranes merger.
We continue with our discussions with Zoomlion across the elements that I've discussed to ensure that we can have a firm and binding commitment proposal going forward.
And so that's what we are working on.
Again, I want to thank you all for your interest in Terex.
If you have any additional questions, please follow-up with <UNK>.
He would be more than happy to address your questions.
And again, thank you and have a good morning.
