Terex Cranes posts big Q1

20 March 2008

Net sales in the Terex Cranes segment for the first quarter of 2007 increased $132.1 million to $500.8 million from $368.7 million in the first quarter of 2006.

The April 2006 acquisition of 50% of Chinese crane manufacturer Sichuan Changjiang Engineering Crane Co., Ltd accounts for about 20% of the growth in net sales. Excluding the impact of currency exchange rates and this acquisition, net sales grew about 22%.

Income from operations was positively impacted by higher sales volume and prior pricing actions and increased $27.0 million to $53.0 million, or 10.6% of sales, for the first quarter of 2007, from $26.0 million, or 7.1% of sales, for the first quarter of 2006.

“Overall, the Terex Cranes segment continued to build on the significant internal growth experienced in 2006,” said Steve Filipov, Terex Cranes president. “The market for cranes worldwide remains outstanding, with increasing global demand for our products resulting in a historically high level of backlog. More specifically, demand in North America continues to be strong, and increasing infrastructure and energy-related requirements in emerging economies are also driving demand.”

Filipov said that meeting demand is still a challenge. “Our factory performance continues to improve, best reflected by our income from operations for the first quarter of 2007 having more than doubled from the first quarter of 2006 on sales growth of 36%.

“Despite factory performance improvements in all crane product categories, the unprecedented current demand continues to stress our supply chain and our internal operations, such as welding capabilities.”

The order backlog for Terex Cranes alone more than doubled from $634.2 million to $1.289 billion.

“We have addressed and will continue to address the limited supply of certain components and production bottlenecks through improved coordination with our suppliers and implementation of lean principles to better utilize our manufacturing footprint,” said Filipov.

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