Terex Expects 2008 Earnings to be Down 5 Percent

February 5, 2009 – Westport, Conn.-based Terex Corporation announced this week that it expects its earnings for 2008 to be approximately 5 percent below the low end of its previous full year guidance of between $5.69 and $5.79 per fully diluted share. This revised guidance excludes charges associated with the reduction of production levels, asset impairments and certain other items. Comparable earnings for the full year 2007 were $5.85 per fully diluted share.

Although not yet finalized, the company expects to record a non-cash impairment charge of certain of the company's goodwill, identifiable intangibles and other non current assets principally related to its construction, road building and utilities businesses. This impairment charge is estimated to be approximately $600 million, only a portion of which will be tax affected. The company said it is currently in compliance with all of the financial covenants under its bank credit facilities and indentures and this impairment charge will not affect compliance.

 

“Our fourth quarter 2008 results were affected by the rapid change in global economic conditions more than we anticipated, as well as continued input cost pressure,” said Ron DeFeo, Terex chairman and CEO, commenting on the new guidance. “We continue to feel the negative effect that credit availability has on customer sentiment and demand for our products, particularly in our construction, materials processing and aerial work platforms businesses, as well as our smaller crane and tower crane product lines."

 

DeFeo said the company is taking aggressive actions to reduce costs and inventories. Actions include reductions in force, significantly curtailed production schedules in affected businesses, including temporary and permanent factory shutdowns, facility consolidations, the rescheduling of incoming raw materials and reducing executive compensation costs.

 

Terex will release its fourth quarter and year-end 2008 financial results on Feb. 11 after market close.  The company will host a conference call to review the financial results on Feb. 12 at 8:30 a.m. EST. To access the call, dial 877-726-6603.