Fourth Quarter 2010 Earnings Release Conference Call
Ron DeFeo - Terex Corporation - Chairman and Chief Executive Officer
Good morning ladies and gentlemen and thank you for your interest in Terex Corporation today.
On the call with me this morning is Phil Widman, our Senior Vice President and Chief Financial Officer and Tom Gelston, Vice President of Investor Relations. Also participating on the call and available for your questions are Kevin Bradley, President of the Cranes segment; Tim Ford, President of the Aerial Work Platforms (AWP) segment; George Ellis, President of the Construction segment; Kieran Hegarty, President of the Materials Processing segment; Steve Filipov, President of Developing Markets; and Ken Lousberg President of China Operations. Many of our management team members are participating on this call from India as there is a significant trade show taking place in Mumbai this week. As you know, India is a growing market for our industry and an important market that is developing for Terex.
A replay of this call will be archived on the Company’s website, www.terex.com under “Audio Archives” in the “Investor Relations” section of the website.
I would like to begin with some overall commentary on our business followed by Phil Widman, who will provide a more detailed financial report. I will return to summarize and open up the call for questions. During the Q & A portion, please ask only one question and a follow-up.
The presentation we will be referring to (“Q4 2010 Terex Corporation Financial Results Conference Call”) is accessible in the “Investor Relations” section the Company’s website. Let me begin by referring to the forward-looking statement commentary on page 2 of the presentation, which I encourage you to read and review, as well as our other disclosures available in our public documents.
And now let me turn to page 3, which is marked as “Overview”.
During 2010, with the sale of our Mining business, we transitioned to a smaller company. The changes required here are substantial and remain underway. Nevertheless, our balance sheet remains strong and our capital structure is healthy. Earnings from our remaining businesses are expected to return and accelerate over the next several years. We believe we have a disciplined process in place relative to acquisitions and, so far, we have not been able to complete a significant acquisition that we felt would be substantially accretive to our future returns on capital.
Consequently, our operating focus is on the basics. Over the next several quarters we will continue to streamline our organization to improve customer responsiveness, build market share and manage costs, including reducing additional cost in some of our segments, while investing in developing markets and the systems required to build Terex solidly for the next several years.
Commenting specifically on the fourth quarter, net sales increased 31% compared with the fourth quarter of 2009 and, fundamentally, all segments saw an increase in sales. Our operating profit was breakeven over the past two quarters, and we have seen our segment backlogs and inquiry rates improve across most, if not all, of our businesses. This has led to increased production and a positive absorption impact from running our factories more regularly.