Terex Reports 2014 Financial Results
February 17, 2015 - Fourth quarter and full year 2014 results have been released by Terex Corp., with improved net sales of $7.3 billion and $259 million income from continuing operations, compared to $209.0 million in continuing operaitons and net sales of $7.1 billion for the full year 2013. Excluding per share tax benefit related to the ASV disposition and certain other items, income from continuing operations as adjusted for the full year 2014 was $268.5 million, compared to $261.2 million in 2013.
Fourth quarter 2014 income from continuing operations was $79.9 million on net sales of $1.8 billion, compared to income from continuing operations of $84.8 million on net sales of $1.8 billion for the fourth quarter of 2013. Adusted income from continuing operations was $80.3 million in 2014, compared to $76.8 million in 2013.
“Terex continued to improve in 2014 despite a more challenging operating environment than anticipated entering the year,” said Ron DeFeo, Terex chairman and CEO. “We have streamlined our business portfolio, reduced our cost structure, introduced innovative new products, and simplified operations." He noted that in 2014, Terex repurchased 5.3 million shares, lowered borrowing costs and extended debt maturity dates, as well as generated $329 million of free cash flow. "Consequently, we have announced a new $200 million share repurchase authorization, as well as an increase in our dividend of 20%," he added.
Operations
Performance was mixed during 2014, according to DeFeo. "Our Cranes and Materials Handling & Ports Solutions (MHPS) segments had meaningful adjusted operating profit increases in the fourth quarter, while our Aerial Work Platforms (AWP) segment was substantially below the prior year," he said. "During the fourth quarter of 2013, AWP performance was particularly strong as we focused on producing equipment during that traditionally softer demand period to capture incremental demand in the quarter, as well as level the production load on our factories.
In the fourth quarter of 2014, Terex curtailed production to align its product build schedules more closely with actual demand and machine configuration in the order book. "Importantly, however, AWP backlog increased 137% when compared with the prior year, giving us confidence that 2015 will be another solid year for this segment," he said.
DeFeo continued: “For the full year, adjusted operating profit for the company as a whole was flat with 2013; however, the contribution varied by segment. Performance this year was led by adjusted operating profit improvements of $54 million and $23 million from MHPS and Construction, respectively. Cranes and AWP disappointed with adjusted operating profit performance of $35 million and $25 million below 2013, respectively. Cranes performance was negatively impacted by lower net sales and AWP by productivity, product mix and higher material costs. MP operating profit declined by $11 million during the year, driven by unfavorable mix and investments in growth initiatives. Lastly, we are pleased that our overall working capital as a percentage of sales improved to 22.5% and ROIC for the year was 11.2% or 310 basis points higher than 2013.”
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