Terex Corp. today announced income from continuing operations of $103.6 million, or $0.91 per share, on net sales of $7.35 billion for the full year 2012, as compared to income from continuing operations of $38.6 million, or $0.35 per share, on net sales of $6.5 billion for the full year 2011.
However, net sales for the AWP segment for the fourth quarter of 2012 increased $22.0 million, or 5.0 percent, to $459.4 million versus the fourth quarter of 2011. This increase was primarily the result of continued fleet replenishment in North America and stronger price realization. Increased service penetration in the aerials and utilities businesses also contributed to the increase. This was partially offset by lower sales of telehandlers because of a planned production shutdown as the business converted to a new product design that is now in production and shipping.
For the fourth quarter of 2012 loss from continuing operations was $30.7 million, or $0.28 per share, compared to a loss from continuing operations of $4.2 million, or $0.04 per share for the fourth quarter of 2011.
Net sales were $1.7 billion in the fourth quarter of 2012, a decrease of 13.3 percent from $1.96 billion in the fourth quarter of 2011. Income from operations was $27.9 million in the fourth quarter of 2012, a decrease of $3.2 million when compared to income from operations of $31.1 million in the fourth quarter of 2011.
“We made significant progress in 2012,” said Ron DeFeo, Terex chairman and CEO. “Our primary goals were margin improvement, cash generation and the integration of Demag Cranes AG. We made excellent advancement in these areas and more during the year. We were impacted in the second half of the year by challenging end markets in Europe and Asia but we still meaningfully improved our profitability, generated approximately $554 million of free cash flow, restructured and reduced our debt, and began to realize integration savings as planned.
“We are optimistic about our business as we begin 2013. We are seeing improvements in many of our end markets and believe the macro-economic uncertainty that affected our fourth-quarter performance will abate by the middle of 2013. Three segments performed well in 2012 and we expect this to continue in 2013. Our Aerial Work Platforms segment is continuing to benefit from North American rental channel demand. Cranes performance is expected to remain strong in North America and in certain developing market regions. The Materials Processing segment performance remains solid. Both the Cranes and MP segments delivered double-digit operating margin in the fourth quarter of 2012.”
Income from operations in the fourth quarter of 2012 was $42.6 million, or 9.3 percent of net sales, compared to income from operations of $26.2 million, or 6.0 percent of net sales, during the fourth quarter of 2011. Income from operations was negatively impacted by increased inventory charges which was more than offset by benefits from improved price realization and customer mix.
Net sales for the Construction segment for the fourth quarter of 2012 decreased $142.6 million, or 34.9 percent, to $266.4 million versus the fourth quarter of 2011. The company continued to see weakness primarily caused by weak order intake earlier in 2012 for various types of construction equipment, particularly with softness in material handlers resulting from low steel scrap prices and decreased utilization on existing equipment. The company’s compact construction equipment in Western Europe and rigid trucks in developing markets also experienced decreased sales when compared with the same period in 2011.
Loss from operations in the fourth quarter of 2012 was $44.9 million, or 16.9 percent of net sales, compared to a loss from operations of $2.8 million, or 0.7 percent of net sales, during the fourth quarter of 2011. Operating results were negatively impacted with a fourth quarter charge of $33 million related to the decision to exit or sell certain compact construction component manufacturing businesses in Germany and roadbuilding businesses in the U.S. and Brazil. Lower sales volumes, partially offset by improved price realization and cost savings initiatives taken in 2011 and 2012, also negatively impacted operating results. The company has taken further actions to decrease production to match current market demand during the first quarter of 2013.
“We continue to take strategic actions in our Construction segment,” DeFeo said. “We recently announced an agreement to sell or exit the majority of our roadbuilding product lines. In addition, we plan to exit a number of compact construction component manufacturing businesses in Germany. Many of these businesses were generating poor returns and we expect these actions to improve operating results as the year progresses. We will continue to rationalize costs in our Construction businesses while pursuing non-traditional distribution channels such as the recently announced supply agreement with Takeuchi.
“While balancing the different demand environments in each of our businesses, we are expecting 2013 earnings per share to be between $2.40 and $2.70 (excluding restructuring and unusual items) on net sales of between $7.9 billion and $8.3 billion. Similar to 2012, we expect to generate more than $500 million in free cash flow during 2013, with an aim to further reduce outstanding indebtedness.”
Backlog for orders deliverable during the next 12 months was approximately $2.01 billion at Dec. 31, 2012 an increase of approximately 17 percent from Sept. 30, 2012 and a decrease of approximately 7 percent from Dec. 31, 2011.
Headquartered in Westport, Conn., Terex Corp. manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, quarrying, manufacturing, mining, shipping, transportation, refining, energy and utility industries.