Bucyrus International, Inc. Announces Summary Financial Results for the Quarter and Six Months Ended June 30, 2010

SOUTH MILWAUKEE, Wis., July 22, 2010 (GLOBE NEWSWIRE) -- Bucyrus International, Inc. (Nasdaq:BUCY), a leading designer, manufacturer and marketer of high productivity mining equipment for surface and underground mining, announced today its summary unaudited financial results for the quarter and six months ended June 30, 2010.

Operating Results

On February 19, 2010, Bucyrus completed its previously announced acquisition of Terex Corporation's mining equipment business ("Terex Mining") for $1.0 billion in cash and 5,809,731 shares of Bucyrus' common stock, subject to certain post-closing net assets, net debt and other adjustments. Also on February 19, 2010, Bucyrus entered into an amendment to its existing credit agreement to provide for an additional new secured term loan of $1.0 billion and $167.5 million of additional revolving credit facilities. The term loan was used to fund the cash portion of the purchase price for Terex Mining and the revolving credit facility will be used to support Bucyrus' future working capital needs and its capital expenditure plan.

The financial results for the quarter and six months ended June 30, 2010 include the net assets and results of operations of Terex Mining since the February 19, 2010 date of acquisition as well as the preliminary acquisition accounting adjustments and acquisition costs related to the Terex Mining acquisition. As a result, the financial results for the quarter and six months ended June 30, 2010 are not necessarily comparative to the results for the quarter and six months ended June 30, 2009 or as of December 31, 2009 and may not be indicative of future results. Terex Mining has been integrated into the surface mining segment. For this quarter, Bucyrus has disclosed certain financial information for Terex Mining.

Terex Mining results included in the table above were as follows: 

Terex Mining results included in the table above were as follows:  

Sales consisted of the following:

The increase in surface mining original equipment sales for the quarter and six months ended June 30, 2010 compared to the same periods of 2009 was primarily due to the inclusion of $133.5 million and $168.9 million of Terex Mining sales in 2010, respectively. Excluding the impact of Terex Mining, original equipment sales decreased by approximately 1% and 4% for the quarter and six months ended June 30, 2010, respectively, compared to the same periods of 2009.

The increase in surface mining aftermarket parts and service sales for the quarter and six months ended June 30, 2010 compared to the same periods of 2009 was primarily due to the inclusion of $143.6 million and $200.4 million of Terex Mining sales in 2010, respectively. Excluding the impact of Terex Mining, aftermarket parts and service sales decreased by approximately 13% and 5% for the quarter and six months ended June 30, 2010, respectively, compared to the same periods of 2009, primarily due to lower sales in the United States market, partially offset by increases in the South American market.

The decrease in underground mining original equipment sales for the quarter and six months ended June 30, 2010 compared to the same periods of 2009 was in all product lines.

The decrease in underground mining aftermarket parts and service sales for the quarter and six months ended June 30, 2010 compared to the same periods of 2009 was primarily in the United States and eastern European markets.

Gross profit and gross margin were as follows:

Gross profit and gross margin were affected by preliminary acquisition accounting adjustments related to the acquisition of Terex Mining as follows: 

Operating earnings were as follows:

Operating earnings for the quarter and six months ended June 30, 2010 for the surface mining segment included Terex Mining earnings of $42.4 million and $50.7 million, respectively, before amortization of preliminary acquisition accounting adjustments. Operating earnings for the quarter and six months ended June 30, 2010 were reduced by $24.6 million and $35.9 million, respectively, as a result of amortization of preliminary acquisition accounting adjustments and $1.7 million and $15.7 million, respectively, of acquisition costs relating to the acquisition of Terex Mining.

Net earnings were as follows:

Net earnings were reduced (increased) by amortizations of preliminary acquisition accounting adjustments related to the acquisition of Terex Mining in 2010 as follows:

Net earnings for the quarter and six months ended June 30, 2010 were reduced by increased amortization of bank fees related to the amended credit agreement of $1.7 million and $2.8 million, respectively.

EBITDA and Adjusted EBITDA were as follows:

Capital expenditures for the first six months of 2010 were $30.4 million, excluding costs incurred to acquire Terex Mining. Capital expenditures for 2010 are expected to be between $70 million and $80 million, excluding the costs incurred to acquire Terex Mining.

Backlog at June 30, 2010 and December 31, 2009, as well as the portion of backlog which was then expected to be recognized within 12 months of these dates, was as follows:

A portion of the surface mining backlog at June 30, 2010 and December 31, 2009 was related to multi-year contracts that will generate revenue in future years.  Included in surface mining backlog and next 12 months backlog at June 30, 2010 was $337.3 million and $260.4 million, respectively, for Terex Mining.

New orders were as follows:

The increase in surface mining original equipment new orders for the quarter and six months ended June 30, 2010 compared to the same periods of 2009 was primarily due to the inclusion of $162.1 million and $190.6 million, respectively, of Terex Mining new orders and increased electric mining shovel new orders.

The increase in surface mining aftermarket parts and service new orders for the quarter and six months ended June 30, 2010 compared to the same periods of 2009 was primarily due to the inclusion of $150.2 million and $212.0 million, respectively, of Terex Mining new orders. Excluding the impact of Terex Mining, surface mining aftermarket parts and service new orders decreased approximately 7% and 15% for the quarter and six months ended June 30, 2010, respectively. The largest decrease for the quarter ended June 30, 2010 compared to the same period of 2009 was in the African market. The largest decreases for the six months ended June 30, 2010 compared to the same period of 2009 were in the United States and Chinese markets.

Total surface mining new orders for the quarter and six months ended June 30, 2010 were negatively impacted by approximately $27 million and $25 million, respectively, due to the effect of the stronger U.S. dollar on orders and beginning of period backlog denominated in foreign currencies.

The increase in underground mining original equipment new orders for the quarter ended June 30, 2010 compared to the same period of 2009 was primarily due to increased longwall new orders. The increase for the six months ended June 30, 2010 compared to the same period of 2009 was due to increased new orders in all product lines. 

The increase in underground mining aftermarket parts and service new orders for the quarter and six months ended June 30, 2010 compared to the same periods of 2009 was in substantially all markets.

Total underground mining new orders for the quarter and six months ended June 30, 2010 were negatively impacted by approximately $60 million and $76 million, respectively, due to the effect of the stronger U.S. dollar on orders and beginning of period backlog denominated in foreign currencies.

Conference Call

Bucyrus will hold a telephone conference call pertaining to this news release at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) on Friday, July 23, 2010. Interested parties should call (888) 680-0869 ((617) 213-4854 for international callers), participant passcode 17067094. A replay of the call will be available until August 23, 2010 at (888) 286-8010 ((617) 801-6888 for international callers), passcode 23305908. The conference call will also be available as a webcast, which can be accessed through the link provided on the Investor Relations page of Bucyrus' website at www.bucyrus.com and will be available until August 23, 2010.

Special Note Regarding Online Availability of Bucyrus Releases and Filings

All Bucyrus financial news releases and SEC filings are posted to Bucyrus' website, www.bucyrus.com. Automatic email alerts for these postings, corporate and general releases as well as product information also are available at www.bucyrus.com.

Forward-Looking Statements and Cautionary Factors

This press release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of predictive, future tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "intends," "may," "will" or similar terms. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those contained in the forward-looking statements as a result of various factors, some of which are unknown. The factors that could cause actual results to differ materially from those anticipated in such forward-looking statements and could adversely affect Bucyrus' actual results of operations and financial condition include, without limitation:

• the ability to integrate the acquired operations of Terex Mining and to realize expected synergies and expected levels of sales and profit from this acquisition;
• the availability of operating cash to service indebtedness, including the substantial indebtedness incurred to acquire Terex Mining;
• liabilities relating to Terex Mining which are unknown;
• dependence on Terex Mining internal control systems for compliance with Section 404 of the Sarbanes-Oxley Act of 2002;
• the ability to fulfill certain employment obligations in connection with the acquisition of Terex Mining; 
• entering into a new line of business in which certain competitors have substantially more experience than Bucyrus does as a result of the acquisition of Terex Mining;
• the cyclical nature of the sale of original equipment due to fluctuations in market prices for coal, copper, oil, iron ore and other minerals, changes in general economic conditions, changes in interest rates, changes in customers' replacement or repair cycles, consolidation in the mining industry and competitive pressures;
• changes in global financial markets and global economic conditions;
• disruption of plant operations due to equipment failures, natural disasters or other reasons;
• dependence on the commodity price of coal and other conditions in the coal market;
• the highly competitive nature of the mining industry;
• reliance on significant customers;
• the loss of key customers or key members of management;
• the risks and uncertainties of doing business in foreign countries, including emerging markets, and foreign currency risks;
• costs and risks associated with regulatory compliance and changing regulations affecting the mining industry and/or electric utilities;
• customers deferring, delaying or canceling capital investments due to volatility and tightening of credit markets, unprecedented financial market conditions and a global recession;
• the ability of our customers to obtain loan guarantees or other financing from the Export-Import Bank of the United States or other sources;
• the ability to attract and retain skilled labor;
• reliance on local partners in foreign countries;
• the ability to continue to offer products containing innovative technology that meets the needs of customers;
• work stoppages at the company, its customers, its suppliers or providers of transportation;
• the ability to protect intellectual property;
• the ability to successfully implement a new enterprise resource planning system in the surface mining segment;
• the ability to satisfy underfunded pension and postretirement obligations;
• production capacity;
• product liability, environmental and other potential litigation; and
• the ability to purchase component parts or raw materials from key suppliers at acceptable prices and/or on the required time schedule.

The foregoing factors do not constitute an exhaustive list of factors that could cause actual results to differ materially from those anticipated in forward-looking statements, and should be read in conjunction with the other cautionary statements and risk factors included in Bucyrus' Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on March 1, 2010. All forward-looking statements attributable to Bucyrus are expressly qualified in their entirety by the foregoing cautionary statements. Bucyrus undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.