28.04.2007

Genie rises 19%

Terex Aerial Work Platforms, which is largely made up of Genie aerials and telehandlers, saw revenues in the first quarter of 2007 rise by 19.5 percent to $548 million.

Strong demand from Europe helped fuel the increase while the North American market held firm,

Gross margins for the period rose to 26.7 percent from 25.5 percent in the same period of 2006. SG&A expenses for the period rose to 8.6 percent of net sales, from 8.1 percent in 2006. The company says that the increase was due to expenditures to support the growth of its European business, including the recently opened Middle East sales and service office, combined with increased trade show expense in the United States.

Income from operations increased by almost $20 million to $99.3 million, or 18.1 percent of sales compared to 17.4 percent last year.

"The Terex AWP team is pleased with the overall results achieved for the first quarter," said Tim Ford, president - Terex Aerial Work Platforms.

"With regard to the U.S. market, demand remains quite favorable. However, unlike the previous two years, where customers ordered early in the year to ensure delivery, industry wide supply has generally come into balance with demand.

“International demand is exceedingly strong. In response, we allocated a significant amount of our first quarter production to international markets, particularly Western Europe”.

“We continue to forecast strong international growth for 2007, favorably driving results for our segment. One of our challenges, however, is the time required to ship products from U.S. manufacturing sites to our overseas customers.

“We are addressing this by producing aerial work platforms in Europe. We began production this April of a Z-boom product at our facility in Italy, and a second Z-boom model is slated to begin production there later in the year."

"Reflective of this shift in demand, our working capital has increased as the amount of finished goods in transit to international markets has increased. We expect to operate with a higher level of working capital than we have historically required until we achieve a more significant level of production in Europe."




Terex group rises by 19 percent
At Group level Terex increased its revenues by over 19 percent as net sales exceeded $2 billion in the first quarter of 2007, an increase of 18.8 percent from the same quarter in 2006. 1.7 percent of the increase in sales was the result of an acquisition, while 4.7 percent resulted from more favourable exchange rates.
Debt, less cash and cash equivalents, increased in the first quarter of 2007 by $187 million from December 31, 2006 levels.

Net income was $113.8 million, or $1.09 per share, compared to $76.9 million, or $0.75 per share, for the first quarter of 2006.
First quarter income included a $12.5 million pretax charge related to the early extinguishment of the company's 9-1/4 percent Senior Subordinated loan Notes.

"We continue to be very pleased with the strong performance of our overall business," said Ron DeFeo, Terex chairman and chief executive officer.
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Ron De Feo at the Terex press conference this week, Tom Riordan is seated

"Terex continues to mature, strengthen and be a more capable enterprise in all facets of its business. Given these continued steps forward, and a global economy that we anticipate to remain robust for the foreseeable future, we remain positive in the outlook for our financial performance."

"We gauge our financial progress as an organization by certain key metrics. Of note this quarter, we made a 2.3 percentage point improvement in our gross margin, driven by a combination of better manufacturing leverage and the positive impact of pricing initiatives in excess of cost pressures. This results in an incremental gross margin of almost 33 percent.

The improvements in gross margin translated to a strong increase in overall operating profitability, with operating margin increasing 1.6 percentage points over the comparable 2006 quarter, and results in a Return on Capital of 39.7% for the twelve months ended March 2007."

Tom Riordan, Terex’s recently appointed president and chief operating officer, said "While the overall performance of our business was positive, we need to increase our vigilance and focus on reducing working capital in our businesses.

Our working capital remains higher than we would like, highlighting the operational and production challenges that we need to face going forward, including improving production and supplier scheduling coordination and capability."

"We continue to benefit from an operating environment that is poised to produce another year of significant growth, as evidenced by our backlog of approximately $3.4 billion at the end of the first quarter of 2007, up 56 percent from the backlog of March 31, 2006.
Our North American Crane businesses, specifically rough terrain cranes and boom trucks, rebounded sharply in terms of demand compared with this same time last year”.