Terex (US:TEX)2022-04-29 17:28Financial Data and Key Metrics Changes - Bookings reached $1.8 billion, a 19% year-over-year increase, with a record backlog of $3.5 billion, up 17% sequentially and 73% compared to the prior year [8] - Sales for the quarter were $1 billion, up 16% year-over-year, with earnings per share of $0.74, representing a 32% increase compared to the prior year [15][36] - Operating margin improved to 7.4%, up 30 basis points year-over-year, with operating profit of $75 million compared to $62 million in the prior year [39] Business Line Data and Key Metrics Changes - The Materials Processing (MP) segment reported sales of $453 million, a 20% increase year-over-year, with a backlog of $1.2 billion, up 66% from a year ago [44] - The Aerial Work Platforms (AWP) segment had sales of $552 million, a 16% increase year-over-year, with bookings of $1.1 billion, also up 16% year-over-year [46] Market Data and Key Metrics Changes - Global demand for MP products remains strong, with a 24% increase in bookings and a record backlog of $1.2 billion [16] - AWP's backlog at the end of the quarter was $2.3 billion, up 77% from the prior year, driven by strong demand in utilities and construction sectors [46][20] Company Strategy and Development Direction - The company is focused on executing its "Execute Innovation and Growth" strategy, expanding into new markets and geographies with high growth potential, including recycling and electrification [22][23] - Recent investments include a new facility in Monterrey, Mexico, and an acquisition of a heavy fabrications manufacturer in Northern Ireland to enhance fabrication capabilities [28][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by geopolitical issues, inflation, and COVID-19 disruptions, particularly in China, which have impacted production and supply chains [30][31][125] - The company reaffirmed its full-year outlook, expecting operating margins to improve as price realization increases throughout the year [52][54] Other Important Information - Free cash flow for the quarter was negative $72 million, consistent with historical patterns for Q1, impacted by increased inventories [43][49] - The company has significantly reduced its gross debt by $738 million since Q1 2019, strengthening its balance sheet [51] Q&A Session Summary Question: How is the price/cost equation looking for the full year? - Management indicated that pricing actions taken in late 2021 were insufficient, necessitating further price increases in 2022 to offset inflationary pressures [66][68] Question: What was better than expected in AWP margins? - A slight increase in volume, favorable product mix, and strong expense management contributed to better-than-expected margins [74] Question: What is the volume and price mix for full year sales growth? - In Q1, approximately two-thirds of the sales growth was due to price increases, with the remainder from volume [83] Question: Can you discuss the Northern Ireland steel fabricator acquisition? - The acquisition is a vertical integration strategy to control fabrication capabilities essential for growth in the MP business [84] Question: What is the current state of the supply chain? - The supply chain remains dynamic, with no significant improvement in supplier on-time delivery performance, and ongoing challenges due to COVID-19 in China [122][125]