27.04.2007

Terex Crane up 35%

First quarter sales at Terex Cranes jumped by over 35 percent to $500.8 million from $368.7 million in the first quarter of 2006. The improvement was across the board including all main product categories along with and expansion into the Asian market, and favorable impact of currency exchange rates.

The 2006 acquisition of a 50 percent controlling interest in Chinese crane manufacturer, Sichuan Changjiang Engineering Crane, last April accounts for approximately a fifth of the sales growth.

Excluding the benefits of exchange rates and this acquisition, “like for like” sales grew by around 22 percent. SG&A expenses increased in the first quarter of 2007 to $46.6 million, or 9.3 percent of sales, compared to only 7.9 percent in the same period 2006.

This is mainly due to increased investment in sales and administrative infrastructure to support increasing volumes, a $4.5 million increase in the corporate expense allocation, the impact of currency exchange rates, and the Chinese crane acquisition.

Income from operations was hit by higher sales volume and higher pricing actions and increased $27.0 million to $53.0 million, or 10.6 percent of sales.

Up from $26.0 million, or 7.1 percent 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, president - Terex Cranes.

"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."

"The challenge we face is meeting this demand. 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 percent”.

“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.

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.

Our ability to rapidly succeed on these productivity improvement initiatives creates continued room to drive significant financial improvements going forward.”


Filipov added, “Our Chinese crane manufacturer had a terrific quarter and is launching a new 50-ton truck crane at Bauma, the world’s largest construction industry trade show, targeting the African, Middle Eastern and South American markets. This will enable us to better position ourselves in these markets through improved availability and a product suited for current demand.”