SOUTH MILWAUKEE, Wis., July 23, 2009 (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, 2009.
Operating Results
Consolidated Condensed Statements of Earnings (Unaudited)
Quarter Ended June 30, Six Months Ended June 30,
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
(Dollars in thousands, except per share amounts)
Sales $724,436 $621,008 $1,330,180 $1,137,989
Cost of products
sold 519,174 446,912 954,733 822,308
------------ ------------ ------------ ------------
Gross profit 205,262 174,096 375,447 315,681
Selling, general
and administra-
tive expenses 63,015 59,383 124,068 118,864
Research and
development
expenses 9,200 10,359 18,576 18,510
Amortization of
intangible assets 4,441 4,610 9,605 11,031
------------ ------------ ------------ ------------
Operating earnings 128,606 99,744 223,198 167,276
Interest income (844) (1,929) (2,430) (4,130)
Interest expense 6,662 8,512 13,526 16,627
Other expense 618 769 5,643 1,536
------------ ------------ ------------ ------------
Earnings before
income taxes 122,170 92,392 206,459 153,243
Income tax expense 39,890 30,075 67,278 49,845
------------ ------------ ------------ ------------
Net earnings $82,280 $62,317 $139,181 $103,398
============ ============ ============ ============
Net earnings per
share:
Basic:
Net earnings
per share $1.11 $0.84 $1.87 $1.39
Weighted
average shares 74,453,660 74,342,810 74,452,561 74,333,624
Diluted:
Net earnings
per share $1.08 $0.83 $1.84 $1.37
Weighted
average shares 76,012,075 75,272,435 75,487,089 75,238,982
Other Financial
Data:
EBITDA (1) $142,982 $114,022 $248,169 $196,960
============ ============ ============ ============
Non-cash stock
compensation
expense (2) $2,606 $2,157 $4,990 $3,979
Severance expenses
(3) 3,385 910 3,681 1,190
Loss on disposal
of fixed assets
(4) 373 5 376 565
Inventory fair
value adjustment
charged to cost
of products sold
(5) -- 3,229 -- 12,088
----------- ------------ ------------ ------------
$6,364 $6,301 $9,047 $17,822
============ ============ ============ ============
------------------
(1) EBITDA is defined as net earnings before interest income,
interest expense, income tax expense, depreciation and
amortization. EBITDA is presented because (i) management uses
EBITDA to measure Bucyrus' liquidity and financial performance
and (ii) management believes EBITDA is frequently used by
securities analysts, investors and other interested parties in
evaluating the performance and enterprise value of companies in
general, and in evaluating the liquidity of companies with
significant debt service obligations and their ability to
service their indebtedness. The EBITDA calculation is not an
alternative to operating earnings under accounting principles
generally accepted in the United States of America ("GAAP") as an
indicator of operating performance or of cash flows as a measure of
liquidity. Additionally, EBITDA is not intended to be a measure of
free cash flow for management's discretionary use, as it does not
consider certain cash requirements such as interest payments, tax
payments and debt service requirements. Because not all companies
use identical calculations, this presentation of EBITDA may not be
comparable to other similarly titled measures of other companies.
The following table reconciles net earnings to EBITDA and EBITDA to
net cash provided by operating activities.
(2) Reflects non-cash stock compensation expense related to equity
incentive plans.
(3) Reflects severance and early retirement expenses for personnel
changes in the ordinary course.
(4) Reflects losses on the disposal of fixed assets in the ordinary
course.
(5) In connection with the acquisition of DBT GmbH in 2007,
inventories purchased were adjusted to estimated fair value.
This adjustment was charged to cost of products sold as the
inventory was sold.
EBITDA Reconciliation (Unaudited)
Quarter Ended June 30, Six Months Ended June 30,
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
(Dollars in thousands)
Net earnings $82,280 $62,317 $139,181 $103,398
Interest income (844) (1,929) (2,430) (4,130)
Interest expense 6,662 8,512 13,526 16,627
Income tax expense 39,890 30,075 67,278 49,845
Depreciation 9,758 9,983 19,193 18,653
Amortization 5,236 5,064 11,421 12,567
------------ ------------ ------------ ------------
EBITDA 142,982 114,022 248,169 196,960
Changes in assets
and liabilities (135,933) (85,811) (167,070) 7,578
Non-cash stock
compensation
expense 2,606 2,157 4,990 3,979
Loss on disposal
of fixed assets 373 5 376 565
Interest income 844 1,929 2,430 4,130
Interest expense (6,662) (8,512) (13,526) (16,627)
Income tax expense (39,890) (30,075) (67,278) (49,845)
------------ ------------ ------------ ------------
Net cash provided
by (used in)
operating
activities ($35,680) ($6,285) $8,091 $146,740
============ ============ ============ ============
Consolidated Condensed Balance Sheets (Unaudited)
June 30, December 31,
2009 2008
------------ ------------
(Dollars in thousands)
Assets
------
Cash and cash equivalents $104,611 $102,396
Receivables - net 669,999 636,486
Inventories 689,686 616,710
Deferred income taxes 40,162 53,133
Prepaid expenses and other 29,265 26,045
------------ ------------
Total current assets 1,533,723 1,434,770
------------ ------------
Goodwill 335,055 330,211
Intangible assets - net 224,232 230,451
Other assets 64,690 68,823
------------ ------------
Total other assets 623,977 629,485
Property, plant and equipment - net 500,070 488,396
------------ ------------
Total assets $2,657,770 $2,552,651
============ ============
Liabilities and Common Stockholders'
Investment
------------------------------------
Accounts payable and accrued expenses $392,672 $438,626
Liabilities to customers on uncompleted
contracts and warranties 189,158 252,304
Income taxes 81,927 70,091
Current maturities of long-term debt and
short-term obligations 95,659 69,291
------------ ------------
Total current liabilities 759,416 830,312
------------ ------------
Deferred income taxes 52,079 52,895
Pension, postretirement benefits and other 202,657 218,181
------------ ------------
Total long-term liabilities 254,736 271,076
Long-term debt, less current maturities 500,865 501,755
Common stockholders' investment 1,142,753 949,508
------------ ------------
Total liabilities and common
stockholders' investment $2,657,770 $2,552,651
============ ============
Segment Information (Unaudited)
Quarter Ended June 30, 2009
--------------------------------------------------------
Depreciation
Operating and Capital Total
Sales Earnings Amortization Expenditures Assets
--------- --------- ------------ ------------ ----------
(Dollars in thousands)
Surface
mining $356,042 $81,205 $5,591 $9,682 $1,109,720
Underground
mining 368,394 55,169 8,608 3,454 1,548,050
---------- -------- ----------- ------------ ----------
Total
operations 724,436 136,374 14,199 13,136 2,657,770
Corporate -- (7,768) -- -- --
---------- -------- ----------- ------------ ----------
Consolida-
ted total $724,436 128,606 14,199 $13,136 $2,657,770
========== ============ ==========
Interest
income (844) --
Interest
expense 6,662 --
Other expense 618 795
-------- -----------
Earnings
before
income taxes $122,170 $14,994
======== ============
Quarter Ended June 30, 2008
--------------------------------------------------------
Depreciation
Operating and Capital Total
Sales Earnings Amortization Expenditures Assets
--------- --------- ------------ ------------ ----------
(Dollars in thousands)
Surface
mining $301,779 $64,259 $5,488 $18,654 $978,881
Underground
mining 319,229 44,298 8,790 4,488 1,358,026
---------- -------- ----------- ------------ ----------
Total
operations 621,008 108,557 14,278 23,142 2,336,907
Corporate -- (8,813) -- -- --
---------- -------- ----------- ------------ ----------
Consolida-
ted total $621,008 99,744 14,278 $23,142 $2,336,907
========== ============ ==========
Interest
income (1,929) --
Interest
expense 8,512 --
Other expense 769 769
-------- -----------
Earnings
before
income taxes $92,392 $15,047
======== ============
Six Months Ended June 30, 2009
--------------------------------------------------------
Depreciation
Operating and Capital Total
Sales Earnings Amortization Expenditures Assets
--------- --------- ------------ ------------ ----------
(Dollars in thousands)
Surface
mining $667,045 $146,237 $11,260 $18,273 $1,109,720
Underground
mining 663,135 92,516 17,538 6,064 1,548,050
---------- -------- ------------ ------------ ----------
Total
operations 1,330,180 238,753 28,798 24,337 2,657,770
Corporate -- (15,555) -- -- --
---------- -------- ------------ ------------ ----------
Consolida-
ted total $1,330,180 223,198 28,798 $24,337 $2,657,770
========== ============ ==========
Interest
income (2,430) --
Interest
expense 13,526 --
Other expense 5,643 1,816
-------- ------------
Earnings
before
income taxes $206,459 $30,614
======== ============
Six Months Ended June 30, 2008
--------------------------------------------------------
Depreciation
Operating and Capital Total
Sales Earnings Amortization Expenditures Assets
--------- --------- ------------ ------------ ----------
(Dollars in thousands)
Surface
mining $585,837 $118,603 $10,080 $34,243 $978,881
Underground
mining 552,152 63,547 19,604 10,084 1,358,026
---------- -------- ------------ ------------ ----------
Total
operations 1,137,989 182,150 29,684 44,327 2,336,907
Corporate -- (14,874) -- -- --
---------- -------- ------------ ------------ ----------
Consolida-
ted total $1,137,989 167,276 29,684 $44,327 $2,336,907
========== ============ ==========
Interest
income (4,130) --
Interest
expense 16,627 --
Other expense 1,536 1,536
-------- ------------
Earnings
before
income taxes $153,243 $31,220
======== ============
Sales consisted of the following:
Quarter Ended June 30, Six Months Ended June 30,
-------------------------- ------------------------------
% %
2009 2008 Change 2009 2008 Change
--------- --------- ------ ----------- ----------- ------
(Dollars in thousands)
Surface
mining:
Original
equip-
ment $150,327 $139,069 8.1% $297,303 $282,077 5.4%
After-
market
parts and
service 205,715 162,710 26.4% 369,742 303,760 21.7%
--------- --------- ----------- -----------
356,042 301,779 18.0% 667,045 585,837 13.9%
--------- --------- ----------- -----------
Underground
mining:
Original
equipment 216,522 185,500 16.7% 397,590 326,616 21.7%
After-
market
parts and
service 151,872 133,729 13.6% 265,545 225,536 17.7%
--------- --------- ----------- -----------
368,394 319,229 15.4% 663,135 552,152 20.1%
--------- --------- ----------- -----------
Total:
Original
equipment 366,849 324,569 13.0% 694,893 608,693 14.2%
After-
market
parts and
service 357,587 296,439 20.6% 635,287 529,296 20.0%
--------- --------- ----------- -----------
$724,436 $621,008 16.7% $1,330,180 $1,137,989 16.9%
========= ========= =========== ===========
The increase in surface mining original equipment sales for the quarter and six months ended June 30, 2009 compared to the same periods for 2008 was due to the timing of revenue recognized during the manufacture and assembly of walking draglines in Australia and Canada. Electric mining shovel sales in the second quarter of 2009 decreased slightly compared to the second quarter of 2008 and electric mining shovel sales for the first six months of 2009 were generally consistent with the first six months of 2008. Blasthole drill sales for the quarter and six months ended June 30, 2009 were generally consistent with the quarter and the six months ended June 30, 2008.
The increase in surface mining aftermarket parts and service sales for the quarter and six months ended June 30, 2009 compared to the same periods for 2008 was primarily in the Chilean, Australian and United States markets with a moderate increase in the Chinese market and, for the second quarter, the Canadian market. Surface mining sales for the six months ended June 30, 2009 were negatively impacted by $28.7 million due to the effect of the stronger U.S. dollar on sales denominated in foreign currencies compared to the six months ended June 30, 2008.
The increase in underground mining original equipment sales for the quarter and six months ended June 30, 2009 compared to the same periods for 2008 was primarily the result of moderate increases in the longwall, room and pillar and belt systems product lines. The increase in underground mining aftermarket parts and service sales for the quarter and six months ended June 30, 2009 compared to the same periods for 2008 was primarily due to increased longwall projects in the United States, offset by a decline in the Australian market resulting from reduced mining activities as a result of lower coal prices. Underground mining sales for the six months ended June 30, 2009 were negatively impacted by $54.3 million due to the effect of the stronger U.S. dollar on sales denominated in foreign currencies compared to the six months ended June 30, 2008.
Gross profit for the second quarter of 2009 was $205.3 million, or 28.3% of sales, compared to $174.1 million, or 28.0% of sales, for the second quarter of 2008. Gross profit for the six months ended June 30, 2009 was $375.4 million, or 28.2% of sales, compared to $315.7 million, or 27.7% of sales, for the six months ended June 30, 2008. Gross profit was affected by purchase accounting adjustments as a result of the acquisition of DBT GmbH ("DBT") in 2007 as follows:
Quarter Ended Six Months Ended
June 30, June 30,
---------------- ---------------
2009 2008 2009 2008
------ ------ ------ ------
(Dollars in thousands)
(Increase) decrease due to
purchase accounting
adjustments ($464) $3,144 ($949) $11,891
Gross margin increase (reduction) -- (0.5) -- (1.1)
The increase in gross profit was primarily due to increased sales in both the surface and underground mining segments. Excluding the effect of the DBT purchase accounting adjustments, gross profit was 28.3% of sales for the second quarter of 2009 compared to 28.5% of sales for the second quarter of 2008 and was 28.2% of sales for the six months ended June 30, 2009 compared to 28.8% of sales for the six months ended June 30, 2008. The year-to-date decrease was due primarily to the mix of original equipment orders in the underground mining segment.
Operating earnings were as follows:
Quarter Ended June 30, Six Months Ended June 30,
-------------------------- ------------------------------
% %
2009 2008 Change 2009 2008 Change
--------- --------- ------ ----------- ----------- ------
(Dollars in thousands)
Surface
mining $81,205 $64,259 26.4% $146,237 $118,603 23.3%
Underground
mining 55,169 44,298 24.5% 92,516 63,547 45.6%
--------- --------- ----------- -----------
Total
opera-
tions 136,374 108,557 25.6% 238,753 182,150 31.1%
Corporate (7,768) (8,813) 11.9% (15,555) (14,874) (4.6%)
--------- --------- ----------- -----------
Consoli-
dated
total $128,606 $99,744 28.9% $223,198 $167,276 33.4%
========= ========= =========== ===========
Operating earnings for the underground mining segment were reduced by amortization of purchase accounting adjustments related to the acquisition of DBT of $3.4 million and $7.5 million for the quarter and six months ended June 30, 2009, respectively, compared to $7.4 million and $21.7 million for the quarter and six months ended June 30, 2008, respectively.
Other expense for the quarter and six months ended June 30, 2009 was $0.6 million and $5.6 million, respectively, compared to $0.8 million and $1.5 million for the quarter and six months ended June 30, 2008, respectively. The increase for the first six months of 2009 was primarily due to $3.8 million of losses that were reclassified from accumulated other comprehensive income into earnings due to the discontinuance of cash flow hedges. The cash flow hedges were concurrently settled and extended because an original forecasted transaction did not occur within the original specified time period as a result of customer requested delays of two orders in the underground mining segment. It is anticipated that the losses will be recovered in 2010 when the hedges come due.
Net earnings for the second quarter of 2009 were $82.3 million, or $1.08 per share on a fully diluted basis, compared to $62.3 million, or $0.83 per share on a fully diluted basis, for the second quarter of 2008. Net earnings for the six months ended June 30, 2009 were $139.2 million, or $1.84 per share on a fully diluted basis, compared to $103.4 million, or $1.37 per share on a fully diluted basis, for the six months ended June 30, 2008. Net earnings were reduced (increased) by amortizations of purchase accounting adjustments related to the acquisition of DBT as follows:
Quarter Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
(Dollars in thousands)
Inventory fair value adjustment
charged to cost of product sold $ -- $ 3,229 $ -- $12,088
Amortization of intangible assets 4,029 4,462 8,744 10,258
Depreciation of fixed assets (627) (327) (1,282) (682)
------- ------- ------- -------
Operating earning 3,402 7,364 7,462 21,664
Income tax benefit 1,143 2,293 2,476 7,075
------- ------- ------- -------
Total $ 2,259 $ 5,071 $ 4,986 $14,589
======= ======= ======= =======
EBITDA was as follows:
Quarter Ended June 30, Six Months Ended June 30,
------------------------- -------------------------
% %
2009 2008 Change 2009 2008 Change
-------- -------- ------ -------- -------- ------
(Dollars in thousands)
EBITDA $142,982 $114,022 25.4% $248,169 $196,960 26.0%
EBITDA as
a percent
of sales 19.7% 18.4% 18.7% 17.3%
EBITDA includes the impact of non-cash stock compensation expense, severance expenses, loss on disposal of fixed assets and the inventory fair value purchase accounting adjustment charged to cost of products sold as set forth in the Other Financial Data table beneath the Consolidated Condensed Statements of Earnings.
Capital expenditures for the first six months of 2009 were $24.3 million, which included $8.6 million related to the expansion and additional renovation of Bucyrus' South Milwaukee facilities. Bucyrus' capital expenditures for 2009 are still expected to be between $60 million and $70 million.
Backlog as of June 30, 2009 and December 31, 2008, as well as the portion of backlog which is expected to be recognized within 12 months of these dates, was as follows:
June 30, Dec. 31,
2009 2008 % Change
---------- ---------- -------
(Dollars in thousands)
Surface Mining:
Total $1,146,534 $1,367,242 (16.1%)
Next 12 months $ 652,642 $ 906,884 (28.0%)
Underground Mining:
Total $ 838,336 $1,135,212 (26.2%)
Next 12 months $ 576,060 $ 806,074 (28.5%)
Total:
Total $1,984,870 $2,502,454 (20.7%)
Next 12 months $1,228,702 $1,712,958 (28.3%)
A portion of the surface mining backlog as of June 30, 2009 and December 31, 2008 was related to multi-year contracts that will generate revenue in future years.
New orders were as follows:
Quarter Ended June 30, Six Months Ended June 30,
--------------------------- ---------------------------
% %
2009 2008 Change 2009 2008 Change
--------- --------- ------- --------- ---------- ------
(Dollars in thousands)
Surface
mining:
Original
equipment $ 32,616 $ 194,390 (83.2%) $ 128,173 $ 455,180 (71.8%)
Aftermarket
parts and
service 171,574 265,080 (35.3%) 318,165 619,789 (48.7%)
--------- --------- --------- ----------
204,190 459,470 (55.6%) 446,338 1,074,969 (58.5%)
--------- --------- --------- ----------
Underground
mining:
Original
equipment 23,526 144,007 (83.7%) 121,543 497,115 (75.6%)
Aftermarket
parts and
service 139,898 173,071 (19.2%) 244,715 297,455 (17.7%)
--------- --------- --------- ----------
163,424 317,078 (48.5%) 366,258 794,570 (53.9%)
--------- --------- --------- ----------
Total:
Original
equipment 56,142 338,397 (83.4%) 249,716 952,295 (73.8%)
Aftermarket
parts and
service 311,472 438,151 (28.9%) 562,880 917,244 (38.6%)
--------- --------- --------- ----------
$ 367,614 $ 776,548 (52.7%) $ 812,596 $1,869,539 (56.5%)
========= ========= ========= ==========
The decrease in surface mining original equipment new orders for the quarter and six months ended June 30, 2009 compared to the same periods for 2008 was primarily due to a decline in electric mining shovel and blasthole drill new orders, which was attributable to the reduced demand for the commodities mined by Bucyrus equipment as a result of current global economic conditions. Surface mining aftermarket parts and service new orders for the quarter and six months ended June 30, 2009 have declined in most markets compared to the same periods for 2008 as a result of current global economic conditions. Included in surface mining aftermarket parts and service new orders for the second quarter of 2009 was $9.7 million related to multi-year contracts that will generate revenue in future years, compared to $70.0 million in the second quarter of 2008. Surface mining aftermarket parts and service new orders related to multi-year contracts was $15.5 million for the first six months of 2009 compared to $278.7 million for the first six months of 2008. Multi-year contracts vary in size and are not typically received on a regular basis.
The decrease in underground mining original equipment new orders for the second quarter of 2009 compared to the second quarter of 2008 was primarily due to larger longwall new orders with customers in the United States and Russia during the second quarter of 2008 and reduced longwall and room and pillar new orders in 2009 as a result of current global economic conditions. The decrease in underground mining original equipment new orders for the first six months of 2009 compared to the first six months of 2008 was primarily due to the sale of five longwall systems to a customer in the Czech Republic in the first quarter of 2008. Longwall and room and pillar new orders have been negatively impacted in 2009 as a result of current global economic conditions. The decrease in underground mining aftermarket parts and service new orders for the quarter and six months ended June 30, 2009 compared to the same periods for 2008 was primarily in Australia and South Africa due to high order levels related to longwall equipment in 2008. Current global economic conditions have resulted in moderate declines in all markets for underground mining aftermarket new orders.
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 24, 2009. Interested parties should call (888) 679-8034 ((617) 213-4847 for international callers), participant passcode 39245672. A replay of the call will be available until August 23, 2009 at (888) 286-8010 ((617) 801-6888 internationally), passcode 58315291. The conference call will also be available as a web cast, 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, 2009.
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 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; * our customers deferring, delaying or canceling capital investments due to volatility and tightening of credit markets, unprecedented financial market conditions and a global recession; * disruption of our plant operations due to equipment failures, natural disasters or other reasons; * our ability to attract and retain skilled labor; * our production capacity; * our ability to purchase component parts or raw materials from key suppliers at acceptable prices and/or on the required time schedule; * our dependence on the commodity price of coal and other conditions in the coal market; * our 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; * the highly competitive nature of the mining industry; * our ability to continue to offer products containing innovative technology that meets the needs of our customers; * costs and risks associated with regulatory compliance and changing regulations affecting the mining industry and/or electric utilities; * product liability, environmental and other potential litigation; * work stoppages at our company, our customers, our suppliers or providers of transportation; * our ability to satisfy underfunded pension and postretirement obligations; * our ability to protect intellectual property; and * the availability of operating cash to service our indebtedness.
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' 2008 Form 10-K filed with the Securities and Exchange Commission on March 2, 2009. 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.