Boosted by strong activity in the AWP segment, Terex Corp. today announced net sales in the quarter were $1.82 billion, an increase of 44.8 percent from $1.26 billion in the first quarter of 2011. Net sales for the AWP segment for the first quarter of 2012 increased $135.2 million, or 35.7 percent, to $513.4 million versus the first quarter of 2011. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased approximately 16 percent from the comparable prior-year period.
Income from continuing operations in the first quarter was $20.5 million, or $0.18 per share, as compared to $5.0 million, or $0.04 per share for the first quarter of 2011. The company continues to see recovery in the North American rental channels for its aerial work platform products with demand continuing to strengthen. The Australian market also continued to demonstrate strong sales growth.
“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.
“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. In terms of segment performance, we are encouraged by the performances of our Aerial Work Platforms and Materials Processing businesses, both of which achieved operating margins in the high single digits giving us confidence that we will achieve our 2012 targets. 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.”
Net sales for the Construction segment for the first quarter of 2012 increased $21.6 million, or 6.3 percent, to $363.1 million versus the first quarter of 2011. Truck and component part sales were significant contributors to the year-over-year increase, particularly to the developing markets in Russia, Africa and China. The company continues to see a lack of government infrastructure spending in North America and Brazil, which negatively impacted the Roadbuilding business.
Net sales for the Materials Processing segment in the quarter increased $17.0 million, or 11.2 percent, to $169.2 million versus the first quarter of 2011. Strength in the North American market was the primary driver of the net sales increase, while demand in Western European markets remained soft. Increased mining and construction activity continued to drive demand for mobile crushing and screening equipment in Australian and Asia Pacific markets.
Backlog for orders deliverable during the next 12 months was approximately $2.3 billionon March 31, 2012, an increase of approximately 28 percent from March 31, 2011 and 7 percent from Dec. 31, 2011.
AWP segment backlog increased approximately 51 percent compared to March 31, 2011 and increased approximately 3 percent as compared to Dec. 31, 2011. Continued replacement of aging fleets was the primary driver of the increase versus the prior periods. In North America, demand for aerial work platform equipment has increased, especially on mid-sized booms and scissors and the customer makeup continues to trend toward a more traditional mix that is more evenly represented by large and small rental houses.
Construction segment backlog increased approximately 11 percent as compared to March 31, 2011, and approximately 10 percent as compared to Dec. 31, 2011. This increase was because of higher demand for trucks, primarily in North America, and compact equipment mainly in Europe.
“We are focused on executing the plan we articulated in February, namely achieving in 2012 approximately $475 to $525 million in operating profit and earnings per share of $1.65 to $1.85 per share (based on an average share count of approximately 116 million shares and excluding the impact of restructuring and unusual items) on sales of $7.5 to $8.0 billion,” DeFeo said. “We believe, based on current economic conditions, that we can achieve these targets, while also continuing the momentum of cash generation started this past quarter.”
Headquartered in Westport, Conn., Terex Corp. operates in five business segments: Aerial Work Platforms, Construction, Cranes, Material Handling & Port Solutions and Materials Processing.