Mr. DeFeo continued, “The continuing strength in many of our markets, combined with our persistent focus on margin improvement, cash generation, and the integration of our MHPS segment, provide us with continued confidence for favorable long term growth and profitability. However, macro events have created some near term softening of demand and uncertainty for our Construction and MP segments. In addition, order timing and seasonal order patterns have impacted our AWP segment on a near term basis. This is apparent in the backlog for these segments. In the short term, balancing the different demand environments that each of our businesses are facing and the benefits of our recent capital structure activities, we now expect full year 2012 sales of approximately $7.5 billion and hold constant our full year earnings per share outlook for 2012 of $1.95 - $2.05 based on an average share count of approximately 114 million shares and excluding the impact of debt repayments, restructuring and unusual items.”
Mr. DeFeo added, “We do not view this near term uncertainty as evidence of a protracted slowdown. We will remain focused in 2013 on margin improvement and cash generation, as well as the integration of MHPS into our global team. When combined with approximately $44 million in reduced interest expense associated with recent debt repayments and re-pricing, we expect 2013 to be a year of moderate top line growth along with meaningful improvement in earnings per share and return on invested capital.”
Third Quarter Performance Review
In this press release, Terex refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. Terex believes that this non-GAAP information is useful to understanding its operating results and the ongoing performance of its underlying businesses. Certain financial measures are shown in italics the first time referenced and are described in a Glossary at the end of this press release. Effective July 1, 2012, the Company realigned certain operations to provide a single source for serving port equipment customers. The Company’s Port Equipment Business and French reach stacker business, both formerly reported in the Company’s Cranes segment, were consolidated within the MHPS segment and the results of those businesses are now included in the results of MHPS. The historical results have been reclassified to give effect to this change.Terex Aerial Work Platforms : Net sales for the AWP segment for the third quarter of 2012 increased $77.4 million, or 17.2%, to $526.1 million versus the third quarter of 2011. Continued replacement demand in the North American rental channel combined with some evidence of fleet growth for aerial work platforms drove this increase. Net sales from an acquired business and moderate growth in European and Latin American markets also contributed to the increase. Income from operations in the third quarter of 2012 was $59.3 million, or 11.3% of net sales, as compared to income from operations of $27.0 million, or 6.0% of net sales, during the third quarter of 2011. Income from operations benefited primarily from improved price realization, volume and customer mix. The Company recently announced an average price increase of 3.4% effective for deliveries commencing in January 2013.