Terex Corp., Westport, Conn., last week reported net sales were $1.82 billion in the first quarter of 2012, an increase of 44.8 percent compared to the first quarter of 2011. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased about 16 percent from the comparable prior year period.
Income from operations was $63.8 million in the first quarter of 2012, an improvement of $73.1 million when compared to a loss from operations of $9.3 million in the first quarter of 2011. Excluding the impact of a write down of an acquisition related note receivable of about $12 million, income from operations as adjusted was $76.1 million. Excluding certain items from the first quarter of 2011, loss from operations as adjusted was about $3.8 million.
“We are pleased that 2012 is developing as planned,” said Ron DeFeo, Terex chairman and CEO. “While we still have a significant amount of work ahead of us, we have taken a solid step towards our margin expansion and cash flow objectives for the year. In fact, this is the first time in almost 10 years that we have generated positive operating cash flow in the first quarter, excluding the tax payment made this quarter as a result of the divestiture of the mining business. We have traditionally used cash in operations in the first quarter, but our improved profitability combined with progress in factory efficiency and inventory focus, helped deliver our improved cash flow,” he said.
“Overall, net sales were consistent with our expectations. North America was a strong market for most product categories, with the exception of our roadbuilding products. We believe the global business environment continues to support growth and increased equipment sales. Although the Chinese market has softened somewhat, this was not unexpected and was built into our expectations for the year. We continue to be cautious about European markets where economic activity has been strong in some areas and weak in others,” DeFeo said.
“In terms of segment performance, we are encouraged by the performances of our aerial work platform (AWP) and materials processing (MP) businesses, both of which achieved operating margins in the high single digits, giving us confidence that we will achieve our 2012 targets. Our cranes business improved significantly versus the prior year, with a positive operating margin of approximately 5 percent in the quarter versus a negative 4 percent in the prior year period on a similar net sales level, excluding the effects of the write-down of receivables in both periods. Our construction segment is on target for the year, with a breakeven first quarter and a backlog and order book that supports a profitable second quarter. Our MHPS segment’s operating results were in line with what we anticipated for the quarter,” he said.
Specifically, net sales for Terex Aerial Work Platforms sales for the first quarter increased 35.7 percent to $513.4 million versus the first quarter of 2011. The company said it continues to see recovery in the North American rental channels for its AWP products with demand continuing to strengthen. Income from operations in the first quarter of 2012 was $42.6 million, or 8.3 percent of net sales, as compared to income from operations of $5.7 million, or 1.5 percent of net sales, during the first quarter of 2011.