- Net loss for 2010 reduced 47% from 2009 level to $215.5 million, or $1.98 per share, on net sales of $4,418.2 million
- Adjustments and unusual expenses related to discontinuing mining, Atlas, powertrain and Load King businesses attributed with depressing figures
- Despite strengthening crane demand, the segment is still expected to report an operating loss in 2011
- Forecasting a profit of $220 million to $250 million in 2011 on net sales of $5.0 billion to $5.4 billion
Westport, CT, -- Terex Corporation (NYSE: TEX) today announced net income attributable to the company for the full year 2010 of $358.5 million, or $3.30 per share, reflecting improved operating results versus 2009 and the gain associated with the previously disclosed divestiture of the mining business.
For the fourth quarter of 2010, Terex reported a net loss from continuing operations of $32.5 million, or $0.30 per share, compared to a net loss from continuing operations of $103.0 million, or $0.95 per share, for the fourth quarter of 2009. Contributing to the fourth quarter 2010 net loss were pre-tax expenses of (i) $4.6 million for severance costs and charges associated with restructuring and the accelerated depreciation of certain assets, (ii) $4.5 million related to marking to market the derivative instruments intended to partially mitigate the risks associated with the common stock of Bucyrus International, Inc. received in connection with the mining business divestiture, (iii) $4.1 million for unusual legal expenses, and (iv) $4.0 million for debt retirement. These items were partially offset by a pre-tax reduction of $1.7 million of the company's provision for foreign duty and related obligations. Net sales from continuing operations were $1,326.6 million in the fourth quarter of 2010, an increase of 31.2% from $1,011.4 million in the fourth quarter of 2009. Loss from operations was $0.5 million in the fourth quarter of 2010, an improvement of $74.8 million as compared to a loss from operations of $75.3 million in the fourth quarter of 2009.
For the full year 2010, the company reported a net loss from continuing operations of $215.5 million, or $1.98 per share, on net sales of $4,418.2 million, as compared to a net loss from continuing operations of $407.5 million, or $3.97 per share, on net sales of $3,858.4 million for the full year 2009. Net loss from continuing operations decreased by $192.0 million for the year ended December 31, 2010 versus the comparable period in 2009. The decrease was primarily due to improved net sales volume, increased production activity, the effect of prior cost reductions and lower SG&A costs.
Contributing to the 2010 net loss were items previously identified, including (i) various tax expenses and provisions recorded in the third quarter of approximately $41 million, (ii) restructuring and impairment charges of approximately $27 million, (iii) expense related to marking to market the derivative instruments intended to partially mitigate the risks associated with the Bucyrus common stock of approximately $21 million, (iv) unusual legal expenses of approximately $4 million, and (v) expense associated with debt retirement of approximately $4 million. Discontinued operations include the mining, Atlas, powertrain and Load King businesses.
"For Terex, 2010 was clearly a transitional year as we rebounded from the trough levels of 2009 and completed the sale of our mining business," said Ron DeFeo, Terex chairman and chief executive officer. "We have seen order rates accelerate throughout 2010 for most of our businesses, including a recent sequential upturn in order rates in our cranes segment as we secured several large contracts in the fourth quarter for longer term delivery schedules. Markets in Latin America, India and China are driving large crane and off-highway truck equipment demand."
DeFeo said demand had improved markedly for aerial work platforms in the United States and compact construction equipment in Germany, central European countries and Latin America.
All of the company's segments increased net sales in the fourth quarter and for the year, and increased backlog has lead to increases in production across most business segments.
"Although costs associated with increased production will also rise, we anticipate net sales and our income from operations will outpace these costs on a consolidated basis," DeFeo said, noting that improved business conditions should bring higher input costs.
"The foundation of a business recovery has become visible to us, although we are in the early stages," DeFeo said. "As anticipated, we see improved demand in our early-cycle product categories of aerial work platforms and materials processing. Our construction segment is seeing positive demand from certain markets, such as Central Europe and Brazil. Additionally, we expect that new product offerings, such as our skid steer loaders, will begin to favorably impact our results as we move through 2011.
"Our cranes segment is experiencing some short-term weakness, but the mobile crane product offering has stabilized. Our port equipment business is showing increasing quotation activity; however, we still expect this business to report an operating loss in 2011," DeFeo said. "We continue to restructure this business and expect it to return to profitability in 2012. And while we expect cranes to be an improving story as we move through the year, many of our large crane orders, both in mobile cranes and port equipment, will not ship until the latter part of 2011."
"Our current outlook for net sales in 2011 is $5.0 billion to $5.4 billion, an increase of roughly 13-22% from 2010. Our expectation for Income from Operations is a profit of $220 million to $250 million. As a result, we would expect earnings per share (EPS) for 2011 to be approximately $0.60 to $0.75 per share for the year based on an average share count of approximately 118 million shares, excluding the impact of restructuring and unusual items. We expect to incur a loss of approximately $0.10 to $0.15 per share, excluding the impact of restructuring and unusual items, in the first quarter of 2011, with a return to net profitability in the second quarter. The estimated average share count includes shares that are contingently issuable upon conversion of our outstanding convertible notes and assumes an estimated volume weighted average stock price of $40 per share."
