Terex crane sales down 29%

28 April 2009

Net sales in the Terex Cranes segment for the first quarter of 2009 were down 28.9% (US$187.5 million) to $461.4 million on the same period of 2008.

Rough terrain and tower crane sales were particularly hard-hit while demand continued for large crawler and all terrain cranes, especially for infrastructure and energy projects. Included in the crane segment figures for the first time are the truck mounted articulated hydraulic crane business formerly part of the Construction segment.

Cranes segment order backlog decreased 41.1% compared to 31 March 2008 and was down 32.6% on the level 31 December 2008. Operating profit for the first quarter of 2009 was $25.4 million, a decrease of $58.2 million compared with the $83.6 million of Q1 2008.

As a whole, Terex Corporation had a net loss of US$ 75 million for the first quarter, compared to a net profit of US$ 163 million for the first quarter of 2008. Sales were US$ 1.30 billion, a decrease of 45% from US$ 2.36 billion in the first quarter of 2008.

Commenting on the results, Ron DeFeo, Terex chairman and CEO, said, "The turmoil from the global credit crisis and economic slowdown has quickly and deeply impacted sales for our industry, with certain sectors down almost 75% from year ago levels.

"In response, we are aggressively reducing costs, with manufacturing spending in the first quarter of 2009 down 39% from the peak spending level in the second quarter of 2008 and down 16% sequentially, and selling, general and administrative spending both excluding restructuring, down 26% and 14%, respectively, for the same periods.

"Combined, this results in a US$ 208 million quarterly spending reduction, and we expect to exceed a US$ 300 million per quarter spending reduction by year end. We continue to operate at reduced production levels, in many instances at levels well below our current demand, with a primary objective to reduce inventory where we saw progress in the quarter with a solid reduction in raw material deliveries."

Tom Riordan, Terex president and COO said, "We are operating with a build-to-order approach as we tightly manage inventory levels."

Riordan continued, "The balance of our businesses posted mixed results for the first quarter, with our Mining and Cranes businesses generating solid profitability as end markets remained healthy, although these businesses have begun to experience the effects of the economic downturn. This performance was offset by continued challenges with our Aerial Work Platforms and Materials Processing businesses as net sales declined more quickly than costs were taken out of these operations. Significant cost reduction actions have been taken and are continuing in both of these businesses."
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