Terex Reviews 2005 Performance, 2006 Outlook
March 15, 2006 — Terex Corp.,
"In general, 2005 was a very good year for Terex, reflecting continued strengthening end markets in many of our product categories and the early stages of a recovery in others," said Ronald M. DeFeo, Terex's chairman and chief executive officer. "In 2003, we set out to achieve $6 billion in revenue by 2006. We have already surpassed that objective in 2005. We continue to benefit from an operating environment that is poised to produce another year of significant growth, as evidenced by our backlog of approximately $1.6 billion at the end of 2005, up 62% from our backlog at the end of 2004. We have maintained our focus on improving the balance sheet, and thus have reduced our net debt by $209 million in 2005 and anticipate a net debt to total capitalization ratio of approximately 33% at December 31, 2005, a significant accomplishment for Terex."
Segment highlights
Terex Construction: 2005 revenue increased approximately 23% as compared with 2004, reflecting generally strong year-over-year performance across many business units, especially the scrap handling, mobile crushing, and screening and European telehandler product categories. Fourth quarter revenue was essentially flat when compared with the prior year, as Terex prepared to introduce several new products in this segment in January 2006. Terex Construction backlog as of December 31, 2005 was approximately $290 million, up approximately 9% from the prior year-end.
Terex Cranes: 2005 revenue increased approximately 18% as compared with 2004, reflecting a continued strong global tower crane market and modest improvement in the North American and international cranes business. Fourth quarter revenue grew approximately 8% as compared with the fourth quarter of 2004. Terex Cranes backlog as of December 31, 2005 was approximately $452 million, up 80% versus the prior year-end, highlighted by the strengthening of the North American market.
Terex Aerial Work Platforms: This segment continued its strong 2005 performance, posting a year-over-year revenue increase of over 56%, continuing to reflect the sharp increase in demand for these products by the rental channel. For the fourth quarter, revenue increased over 60% as compared with the fourth quarter of 2004. Terex aerial work platforms backlog as of December 31, 2005 was approximately $482 million, more than three times the backlog at the prior year-end.
According to DeFeo, this was the second consecutive year for the company to enjoy a sharp increase in demand for many of its products. "Additionally, the pricing actions we have taken and the cost environments of our markets began to yield improvements in margin for many of our businesses,” he said. “We see meaningful growth in revenue in 2006, and our expectation is for the growth to be more broadly based across our segments, as early indications are for a strong start to 2006 for our later cycle businesses, such as Terex Cranes."
He expects the company's total revenue for 2006 to be between $6.7 and $7.1 billion, “as we continue to focus on margin improvement over increases in volume alone, with earnings per share in the range of $5.50 to $6.00 per share, excluding special items such as the costs associated with the early retirement of debt that we plan for 2006."
