Entering 2013, the Company remains committed to profitable growth, generating cash and realizing the integration benefits of MHPS.
Mr. DeFeo commented, “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.”
“Over the past several years, we have been diversifying and repositioning our business portfolio to strengthen the competitiveness of our Company. We have moved from what was predominantly a mining and construction equipment company to a more diverse provider of lifting and material handling solutions that serve numerous end markets where we have leadership positions. We have established a 2015 earnings per share goal of $5 from $10 billion in net sales and with a 15%
return on invested capital
. We believe these targets can be achieved through organic growth and operational improvements.”
Fourth 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.
Subsequent to December 31, 2012, the Company realigned certain operations in an effort to strengthen its ability to service customers and to recognize certain organizational efficiencies.
The Utilities business, formerly part of the AWP segment, will be consolidated within the Cranes segment for financial reporting periods beginning on or after January 1, 2013.
The Crane America Services business, formerly part of the MHPS segment, and the legacy services business, formerly part of the AWP segment, will both be consolidated within the Cranes segment for financial reporting periods beginning on or after January 1, 2013 and will be run together as the Company’s North America Services business.
Terex Aerial Work Platforms
Net sales for the AWP segment for the fourth quarter of 2012 increased $22.0 million, or 5.0%, to $459.4 million versus the fourth quarter of 2011. This increase was primarily due to 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 due to a planned production shutdown as the business converted to a new product design that is now in production and shipping.
Income from operations in the fourth quarter of 2012 was $42.6 million, or 9.3% of net sales, compared to income from operations of $26.2 million, or 6.0% 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.