SOUTH MILWAUKEE, Wis., April 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 ended March 31, 2009.
Operating Results
Consolidated Condensed Statements of Earnings (Unaudited)
Quarters Ended
March 31,
----------------------
2009 2008
---------- ----------
(Dollars in thousands,
except per share
amounts)
Sales $605,744 $516,981
Cost of products sold 435,559 375,396
---------- ----------
Gross profit 170,185 141,585
Selling, general and administrative expenses 61,053 59,481
Research and development expenses 9,376 8,151
Amortization of intangible assets 5,164 6,421
---------- ----------
Operating earnings 94,592 67,532
Interest income (1,586) (2,202)
Interest expense 6,864 8,116
Other expense 5,025 767
---------- ----------
Earnings before income taxes 84,289 60,851
Income tax expense 27,388 19,770
---------- ----------
Net earnings $56,901 $41,081
========== ==========
Net earnings per share:
Basic:
Net earnings per share $0.76 $0.55
Weighted average shares 74,451,449 74,340,258
Diluted:
Net earnings per share $0.76 $0.55
Weighted average shares 74,956,271 75,205,158
Other Financial Data:
EBITDA(1) $105,187 $82,938
========== ==========
Non-cash stock compensation expense(2) $2,384 $1,822
Severance expense(3) 296 280
Loss on disposal of fixed assets(4) 3 560
Inventory fair value adjustment charged to
cost of products sold(5) -- 8,859
---------- ----------
$2,683 $11,521
========== ==========
---------------------
(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)
Quarters Ended
March 31,
----------------------
2009 2008
---------- ----------
(Dollars in thousands)
Net earnings $56,901 $41,081
Interest income (1,586) (2,202)
Interest expense 6,864 8,116
Income tax expense 27,388 19,770
Depreciation 9,435 8,670
Amortization 6,185 7,503
---------- ----------
EBITDA 105,187 82,938
Changes in assets and liabilities (31,137) 93,389
Non-cash stock compensation expense 2,384 1,822
Loss on disposal of fixed assets 3 560
Interest income 1,586 2,202
Interest expense (6,864) (8,116)
Income tax expense (27,388) (19,770)
---------- ----------
Net cash provided by operating activities $43,771 $153,025
========== ==========
Consolidated Condensed Balance Sheets (Unaudited)
March 31, December 31,
2009 2008
---------- ------------
(Dollars in thousands)
Assets
------
Cash and cash equivalents $64,786 $102,396
Receivables - net 584,041 636,486
Inventories 673,523 616,710
Deferred income taxes 42,478 53,133
Prepaid expenses and other 32,843 26,045
---------- ----------
Total current assets 1,397,671 1,434,770
---------- ----------
Goodwill 325,124 330,211
Intangible assets - net 218,319 230,451
Other assets 65,593 68,823
---------- ----------
Total other assets 609,036 629,485
---------- ----------
Property, plant and equipment - net 481,161 488,396
---------- ----------
Total assets $2,487,868 $2,552,651
========== ==========
Liabilities and Common Stockholders'
------------------------------------
Investment
----------
Accounts payable and accrued expenses $408,078 $438,626
Liabilities to customers on uncompleted
contracts and warranties 268,630 252,304
Income taxes 71,482 70,091
Current maturities of long-term debt and
short-term obligations 14,619 69,291
---------- ----------
Total current liabilities 762,809 830,312
---------- ----------
Deferred income taxes 47,669 52,895
Pension, postretirement benefits and other 193,614 218,181
---------- ----------
Total long-term liabilities 241,283 271,076
---------- ----------
Long-term debt, less current maturities 496,021 501,755
---------- ----------
Common stockholders' investment 987,755 949,508
---------- ----------
Total liabilities and common stockholders'
investment $2,487,868 $2,552,651
========== ==========
Segment Information (Unaudited)
Quarter Ended March 31, 2009
--------------------------------------------------------
Depreciation
Operating and Capital Total
Sales Earnings Amortization Expenditures Assets
-------- --------- ------------ ------------ ----------
(Dollars in thousands)
Surface
mining $311,003 $65,032 $5,669 $8,591 $1,082,901
Underground
mining 294,741 37,347 8,930 2,610 1,404,967
-------- ------- ------- ------- ----------
Total
operations 605,744 102,379 14,599 11,201 2,487,868
Corporate -- (7,787) -- -- --
-------- ------- ------- ------- ----------
Consolidated
total $605,744 94,592 14,599 $11,201 $2,487,868
======== ======= ==========
Interest
income (1,586) --
Interest
expense 6,864 --
Other
expense 5,025 1,021
------- -------
Earnings
before
income
taxes $84,289 $15,620
======= =======
Quarter Ended March 31, 2008
--------------------------------------------------------
Depreciation
Operating and Capital Total
Sales Earnings Amortization Expenditures Assets
-------- --------- ------------ ------------ ----------
(Dollars in thousands)
Surface
mining $284,058 $54,344 $4,592 $15,589 $885,597
Underground
mining 232,923 19,249 10,814 5,596 1,382,268
-------- ------- ------- ------- ----------
Total
operations 516,981 73,593 15,406 21,185 2,267,865
Corporate -- (6,061) -- -- --
-------- ------- ------- ------- ----------
Consolidated
total $516,981 67,532 15,406 $21,185 $2,267,865
======== ======= ==========
Interest
income (2,202) --
Interest
expense 8,116 --
Other expense 767 767
------- -------
Earnings
before
income taxes $60,851 $16,173
======= =======
Sales consisted of the following:
Quarters Ended
March 31,
----------------------
2009 2008 % Change
---------- ---------- --------
(Dollars in thousands)
Surface Mining:
Original equipment $146,976 $143,008 2.8%
Aftermarket parts and service 164,027 141,050 16.3%
---------- ----------
311,003 284,058 9.5%
---------- ----------
Underground Mining:
Original equipment 181,068 141,116 28.3%
Aftermarket parts and service 113,673 91,807 23.8%
---------- ----------
294,741 232,923 26.5%
---------- ----------
Total:
Original equipment 328,044 284,124 15.5%
Aftermarket parts and service 277,700 232,857 19.3%
---------- ----------
$605,744 $516,981 17.2%
========== ==========
The increase in surface mining original equipment sales for the first quarter of 2009 compared to the first quarter of 2008 was primarily in electric mining shovels, offset by a decrease in sales from draglines. The increase in surface mining aftermarket parts and service sales was primarily in the Chilean and Australian markets. Moderate increases in sales to customers in Brazil and China offset a decline in Canada. First quarter 2009 surface mining sales were negatively impacted by $16.8 million due to the effect of the stronger U.S. dollar on sales denominated in foreign currencies compared to the first quarter of 2008.
The increase in underground mining original equipment sales for the first quarter of 2009 compared to the first quarter of 2008 was primarily the result of strong longwall system sales related to a large order in the Czech Republic received in early 2008. The increase in underground mining aftermarket parts and service sales was primarily in the United States. First quarter 2009 underground mining sales were negatively impacted by $20.6 million due to the effect of the stronger U.S. dollar on sales denominated in foreign currencies compared to the first quarter of 2008.
Gross profit for the first quarter of 2009 was $170.2 million, or 28.1% of sales, compared to $141.6 million, or 27.4% of sales, for the first quarter of 2008. Gross profit was affected by purchase accounting adjustments as a result of the acquisition of DBT GmbH ("DBT") in 2007 as follows:
Quarters Ended
March 31,
----------------------
2009 2008
--------- ---------
(Dollars in thousands)
(Increase) decrease due to purchase
accounting adjustments ($485) $8,747
Gross margin increase (reduction) 0.1% (1.7%)
The increase in gross profit was primarily due to increased surface and underground mining sales. Excluding the effect of purchase accounting adjustments, gross profit was 28.0% of sales for the first quarter of 2009 compared to 29.1% of sales for the first quarter of 2008, with the decrease due primarily to the mix of original equipment orders in the underground mining segment.
Operating earnings were as follows:
Quarters Ended
March 31,
----------------------
2009 2008 % Change
---------- ---------- --------
(Dollars in thousands)
Surface mining $65,032 $54,344 19.7%
Underground mining 37,347 19,249 94.0%
---------- ----------
Total operations 102,379 73,593 39.1%
Corporate (7,787) (6,061) (28.5%)
---------- ----------
Consolidated total $94,592 $67,532 40.1%
========== ==========
Operating earnings for the underground mining segment were reduced by amortization of purchase accounting adjustments related to the acquisition of DBT of $4.1 million for the first quarter of 2009, compared to $14.3 million for the first quarter of 2008.
Other expense for the first quarter of 2009 was $5.0 million compared to $0.8 million for the first quarter of 2008. The increase in 2009 was primarily due to $4.0 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 discontinued and rolled forward as a result of customer requested delays of two orders in the underground mining segment and it is anticipated that the losses will be recovered in 2010 when the hedges come due.
Net earnings for the first quarter of 2009 were $56.9 million, or $0.76 per share on a fully diluted basis, compared to $41.1 million, or $0.55 per share on a fully diluted basis, for the first quarter of 2008. Net earnings were reduced (increased) by amortizations of purchase accounting adjustments related to the acquisition of DBT as follows:
Quarters Ended
March 31,
----------------------
2009 2008
---------- ----------
(Dollars in thousands)
Inventory fair value adjustment charged to
cost of product sold $ -- $8,859
Amortization of intangible assets 4,715 5,796
Depreciation of fixed assets (655) (355)
---------- ----------
Operating earnings 4,060 14,300
Income tax benefit 1,333 4,782
---------- ----------
Total $2,727 $9,518
========== ==========
EBITDA was as follows:
Quarters Ended
March 31,
----------------------
2009 2008 % Change
---------- ---------- --------
(Dollars in thousands)
EBITDA $105,187 $82,938 26.8%
EBITDA as a percent of sales 17.4% 16.0%
EBITDA includes the impact of non-cash stock compensation expense, severance expenses, loss on disposals 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 quarter of 2009 were $11.2 million, which included $4.1 million related to the expansion and additional renovation of Bucyrus' South Milwaukee facilities. Bucyrus' capital expenditures for 2009 are expected to be between $60 million and $70 million.
Backlog as of March 31, 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:
March 31, December 31,
2009 2008 % Change
------------ ------------ --------
(Dollars in thousands)
Surface Mining:
Total $1,298,387 $1,367,242 (5.0%)
Next 12 months $782,746 $906,884 (13.7%)
Underground Mining:
Total $1,043,305 $1,135,212 (8.1%)
Next 12 months $876,671 $806,074 8.8%
Total:
Total $2,341,692 $2,502,454 (6.4%)
Next 12 months $1,659,417 $1,712,958 (3.1%)
A portion of the surface mining backlog as of March 31, 2009 and December 31, 2008 was related to multi-year contracts that will generate revenue in future years.
New orders were as follows:
Quarters Ended
March 31,
----------------------
2009 2008 % Change
---------- ---------- --------
(Dollars in thousands)
Surface mining:
Original equipment $95,557 $260,790 (63.4%)
Aftermarket parts and service 146,591 354,709 (58.7%)
---------- ----------
242,148 615,499 (60.7%)
---------- ----------
Underground mining:
Original equipment 98,017 353,108 (72.2%)
Aftermarket parts and service 104,817 124,384 (15.7%)
---------- ----------
202,834 477,492 (57.5%)
---------- ----------
Total:
Original equipment 193,574 613,898 (68.5%)
Aftermarket parts and service 251,408 479,093 (47.5%)
---------- ----------
$444,982 $1,092,991 (59.3%)
========== ==========
The decrease in surface mining original equipment new orders in the first quarter of 2009 was primarily due to fewer electric mining shovel orders in the quarter. Included in surface mining aftermarket parts and service new orders for the first quarter of 2009 was $5.8 million related to multi-year contracts that will generate revenue in future years, compared to $209.8 million in the first quarter of 2008. Multi-year contracts vary in size and are not typically received on a regular basis. Underground original equipment new orders for the first quarter of 2008 included an order in the Czech Republic for five longwall systems.
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, April 24, 2009. Interested parties should call (888) 679-8034 ((617) 213-4847 for international callers), participant passcode 33353712. A replay of the call will be available until May 23, 2009 at (888) 286-8010 ((617) 801-6888 internationally), passcode 72720699. 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 May 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.