BUCY Bucyrus International, Inc. (MM)

Bucyrus International, Inc. Announces Summary Unaudited Results for the Three and Nine Months Ended September 30, 2004 SOUTH MILWAUKEE, Wis., Oct. 15 /PRNewswire-FirstCall/ -- Bucyrus International, Inc. (NASDAQ:BUCY) announced on Oct. 14 summary unaudited results for the three and nine months ended September 30, 2004. The following are the summary unaudited results for these periods. References to "Bucyrus" and the "Company" refer to Bucyrus International, Inc. and its consolidated subsidiaries. For the three months For the nine months ended September 30, ended September 30, Dollars in thousands, except per share amounts 2004 2003 2004 2003 Consolidated Statements of Operations: Sales $111,509 $ 84,754 $325,604 $232,589 Cost of products sold 87,194 66,647 256,845 183,519 Gross profit 24,315 18,107 68,759 49,070 Selling, general and administrative expenses 13,237 11,455 41,499 30,206 Research and development expenses 1,270 1,144 3,904 3,228 Amortization of intangible assets 412 411 1,235 1,235 Operating earnings 9,396 5,097 22,121 14,401 Interest expense 2,054 4,339 10,345 13,334 Other expense - net 149 208 867 601 Loss on extinguishment of debt (1) 7,316 - 7,316 - Earnings (loss) before income taxes (123) 550 3,593 466 Income tax expense 885 2,057 3,987 3,791 Net loss $ (1,008) $ (1,507) $(394) $ (3,325) Net loss per share: Basic and diluted $ (.06) $ (.13) $ (.03) $ (.29) Weighted average shares outstanding 17,671,362 11,790,296 13,943,044 11,593,008 Other Financial Data: EBITDA (2) $12,535 $ 8,221 $31,587 $23,775 AIP management fee and expenses (3) 132 1,864 1,182 2,663 Non-cash stock compensation expense 2,590 (8) 10,031 630 Restructuring charges (severance) 31 139 201 421 Loss on sale of fixed assets 260 407 273 479 (1) Includes prepayment penalty and write-off of deferred financing costs related to the Company's 9.75% Senior Notes which were retired upon completion of the Company's initial public equity offering on July 28, 2004. (2) EBITDA is defined as earnings (loss) before interest, loss on extinguishment of debt, income taxes, depreciation and amortization. EBITDA, a measure used by management to measure liquidity and performance, is reconciled to net loss and net cash provided by (used in) operating activities in the following table. The Company's management believes EBITDA is useful to the investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is not a recognized term under generally accepted accounting principles, or GAAP, and does not purport to be an alternative to net earnings (loss) as an indicator of operating performance or to net cash provided by (used in) operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. 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. The amounts shown for EBITDA as presented herein differ from the amounts calculated under the definition of EBITDA used in the Company's debt instruments. The definition of EBITDA used in the Company's debt instruments is further adjusted for certain cash and non-cash charges and is used to determine compliance with financial covenants and the Company's ability to engage in certain activities such as incurring additional debt and making certain payments. For the three months For the nine months ended September 30, ended September 30, Dollars in thousands 2004 2003 2004 2003 Net loss $ (1,008) $ (1,507) $(394) $ (3,325) Interest income (149) (121) (263) (228) Interest expense 2,054 4,339 10,345 13,334 Income taxes 885 2,057 3,987 3,791 Depreciation 2,725 2,710 8,228 8,083 Amortization 712 743 2,368 2,120 Loss on extinguishment of debt 7,316 -- 7,316 -- EBITDA 12,535 8,221 31,587 23,775 Changes in assets and liabilities (28,212) 290 (21,830) 3,922 Non-cash stock compensation expense 2,590 (8) 10,031 630 Loss on sale of fixed assets 260 407 273 479 Interest income 149 121 263 228 Interest expense (2,054) (4,339) (10,345) (13,334) Income tax expense (885) (2,057) (3,987) (3,791) Net cash provided by (used in) operating activities $(15,617) $2,635 $5,992 $ 11,909 (3) Excludes fees paid to American Industrial Partners ("AIP") or its affiliates and advisors for services performed for the Company outside the scope of the Management Services Agreement for the three months ended September 30, 2004 and 2003 and the nine months ended September 30, 2004 and 2003 of $0, $43,000, $107,000 and $241,000, respectively. This Management Services Agreement was terminated in July, 2004. Dollars in thousands September 30, December 31, 2004 2003 Consolidated Balance Sheets Assets Cash and cash equivalents $16,718 $6,075 Receivables-net 71,616 73,111 Inventories 121,296 115,898 Prepaid expenses and other current assets 7,070 8,209 Total current assets 216,700 203,293 Restricted funds on deposit 524 578 Goodwill 55,860 55,860 Intangible assets-net 35,247 35,724 Other assets 10,926 9,255 102,557 101,417 Property, plant and equipment 53,095 57,433 $372,352 $362,143 Liabilities and Common Shareholders' Investment Accounts payable and accrued expenses $62,928 $59,591 Liabilities to customers on uncompleted contracts and warranties 7,376 19,030 Income taxes 2,100 4,314 Borrowings under senior secured revolving credit facility and other short-term obligations 734 37,420 Current maturities of long-term debt 5,359 376 Dollars in thousands September 30, December 31, 2004 2003 Total current liabilities 78,497 120,731 Liabilities to customers on uncompleted contracts and warranties 1,200 800 Postretirement benefits 13,595 13,130 Deferred expenses, pension and other 33,445 32,449 Payable to AIP 0 31,337 48,240 77,716 Long-term debt 98,772 153,973 Common shareholders' investment 146,843 9,723 $372,352 $362,143 The results for the three months ended September 30, 2004 include an increase in sales of $26.8 million or 31.6% as compared to the three months ended September 30, 2003. New machine sales were $24.8 million, an increase of $14.2 million or 132.8% from $10.6 million for the three months ended September 30, 2003, and aftermarket parts and service sales were $86.7 million, an increase of $12.6 million or 17.0% from $74.1 million for the three months ended September 30, 2003. The results for the nine months ended September 30, 2004 include an increase in sales of $93.0 million or 40.0% as compared to the nine months ended September 30, 2003. New machine sales were $86.2 million, an increase of $44.9 million or 108.6% from $41.3 million for the nine months ended September 30, 2003, and aftermarket parts and service sales were $239.4 million, an increase of $48.1 million or 25.2% from $191.3 million for the nine months ended September 30, 2003. The higher level of sales for both the three and nine months ended September 30, 2004 as compared to prior year periods resulted from an increase in customer discretionary spending and equipment utilization, primarily due to higher commodity prices. In addition, aftermarket sales have increased due to our initiatives and strategies to capture additional market share. The Company achieved operating earnings of $9.4 million for the three months ended September 30, 2004 and $22.1 million for the nine months ended September 30, 2004. Operating earnings for the three month and nine month periods ended September 30, 2004 included non-cash stock compensation expense of $2.6 million and $10.0 million, respectively, representing the charges recorded related to the Company's previous book-value stock option plan. Operating earnings for the three and nine month periods ended September 30, 2004 increased from 2003 primarily due to increased gross profit resulting from increased sales volume. This improvement was partially offset by the increase in non-cash stock compensation expense. Interest expense for the three and nine months ended September 30, 2004 decreased $2.3 million and $3.0 million, respectively, compared to prior year periods. The decrease in interest expense was due to reduced borrowings as well as the refinancing that was effective with the completion of the Company's initial public equity offering on July 28, 2004. As of September 30, 2004, the Company's total backlog was $259.8 million, $143.1 million of which was expected to be recognized within twelve months of such date. This represents a 3.0% and 5.5% decrease from the June 30, 2004 total backlog of $267.7 million and twelve months backlog of $151.5 million, respectively, and a 11.2% and 17.0% increase from the December 31, 2003 total backlog of $233.6 million and twelve months backlog of $122.3 million, respectively. The decrease from June 30, 2004 was primarily due to the recognition of sales on machine orders received earlier in the year. The increase from December 31, 2003 was primarily due to an increase in new machine orders and an increase in aftermarket parts and service orders in 2004, partially offset by the recognition of sales on multi-year maintenance and repair contracts. As of September 30, 2004, the Company had aggregate outstanding indebtedness of $104.9 million. The Company had no borrowings under its revolving credit facility as of September 30, 2004 and cash and cash equivalents were $16.7 million as of that date. Bucyrus is one of the world's leading manufacturers of large-scale excavation equipment used in surface mining and had $337.7 million in sales in 2003. Bucyrus machines are used throughout the world by customers mining copper, coal, oil sands, iron ore and other minerals. An important part of the Company's business consists of aftermarket sales in support of its large installed base (almost $10 billion based on estimated replacement value) of machines which have service lives from fifteen to forty years. Statements contained in this press release that are not based on current or historical fact are forward-looking in nature. Such forward-looking statements are based on current plans, estimates and expectations and are made pursuant to the Private Securities Litigation Reform Act of 1995. Forward- looking statements are based on known and unknown risks, assumptions, uncertainties and other factors. Bucyrus' actual results, performance, or achievements may differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Bucyrus undertakes no obligation to publicly update or revise any forward-looking statements. DATASOURCE: Bucyrus International, Inc. CONTACT: Kent Henschen, Director of Marketing of Bucyrus International, Inc., +1-414-768-4626, Web site: http://www.bucyrus.com/

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