Joy Global Inc. (NASDAQ: JOYG), a worldwide leader in
high-productivity mining solutions, today reported results for the
third quarter ended July 29, 2011 and reports that it has entered
into a definitive agreement to sell the drilling products business
of its recently acquired subsidiary, LeTourneau Technologies, Inc.
(“LeTourneau”).
Third quarter bookings increased 49 percent to $1.4 billion and
net sales increased 34 percent to $1.1 billion, compared to the
same period last year. Operating income of $236 million includes
acquisition costs and was 20.8 percent of sales, compared to
operating income of $172 million, or 20.3 percent of sales, in the
third quarter of fiscal 2010. Income from continuing operations was
$172 million or $1.61 per fully diluted share for the third quarter
compared to income from continuing operations of $119 million or
$1.13 per fully diluted share in the third quarter of fiscal
2010.
Results for the third quarter of fiscal 2011 include the
LeTourneau’s mining equipment and specialty steel businesses
(collectively “the mining equipment business”) from June 22, 2011,
the date the acquisition was completed, through the end of the
quarter. For that six-week period, LeTourneau’s mining equipment
business had bookings of $23.6 million, net sales of $43.3 million
and operating income of $6.2 million. This includes a preliminary
estimate of $3.4 million for purchase accounting charges, of which
$1.8 million was attributable to acquired inventories. LeTourneau’s
mining equipment business contributed $0.04 to Joy Global’s third
quarter earnings per fully diluted share. The Joy Global third
quarter results also include $11.7 million of transaction costs
primarily related to the LeTourneau acquisition and $12.1 million
of net favorable discrete tax benefits.
Sale of Drilling Products Business
On August 29, 2011, the Company entered into a definitive
agreement to sell the drilling products business of LeTourneau
(“Drilling Products”) to Cameron International Corporation
(“Cameron”) (NYSE: CAM) for $375 million in cash, subject to
certain post-closing adjustments. The transaction has been approved
by both companies’ boards of directors. Completion of the
transaction is subject to necessary regulatory approvals and other
customary closing conditions and is expected to occur within 60
days. Drilling Products had calendar 2010 revenue and Adjusted
EBITDA* of $515 million and $32.2 million, respectively.
LeTourneau’s drilling products business is a designer of
offshore jack-up drilling rigs as well as a manufacturer of the
primary components for these rigs. It is also a manufacturer of
drilling equipment for large land and offshore rigs. The LeTourneau
facilities in Houston, Texas and Vicksburg, Mississippi will be
part of this transaction while the Longview, Texas facility will
remain with Joy Global. Steel products are not included in this
transaction and will be reported through the P&H surface mining
equipment business. The parties will also enter into a Transition
Manufacturing and Supply Agreement and Steel Supply Agreement. The
Transition Manufacturing and Supply Agreement will allow for the
orderly transfer of Drilling Products work from the Longview
facility to Cameron and the Steel Supply Agreement will allow
Cameron time to develop other sources.
Bank of America Merrill Lynch is serving as exclusive financial
advisor to Joy Global on the divestiture. Covington & Burling
LLP is serving as Joy Global’s legal advisor.
Second Quarter Operating Results
“This has been a particularly good quarter for us,” said Mike
Sutherlin, President and Chief Executive Officer. “Our results
continued the trend of strong operating performance, and we made
two major strategic moves that will add long-term value. Very good
operating leverage on strong sales growth enabled us to deliver
another record for operating margin, before the impact of
LeTourneau.
“We closed on the LeTourneau acquisition in late June, and today
announce the sale of the drilling products business to Cameron
International. Cameron’s leading presence in the oil and gas
industry will allow Cameron to grow and develop LeTourneau’s
drilling applications with greater speed and efficiency. In a short
time, I have gained a strong appreciation for the people that make
up the LeTourneau drilling products business, and it is good to
know that they will have a great home and a bright future at
Cameron,” said Sutherlin.
“For Joy Global, the divestiture enables us to focus on our core
mission of mining equipment and the proceeds will expand our
funding options to complete the acquisition of International Mining
Machinery Holdings Ltd (“IMM”). We indicated that LeTourneau would
be immediately accretive to earnings, and its mining results for a
six-week period added $0.04 to our third quarter earnings per
diluted share.
“After announcing a share purchase agreement for The Jordan
Company’s 41 percent ownership of IMM, we have purchased 18 percent
of IMM’s shares on the open market. This ensures controlling
interest upon MOFCOM approval of our agreement with The Jordan
Company and significantly increases our confidence in a successful
tender offer,” said Sutherlin.
“Finally, our strong bookings this quarter indicate that the
industry fundamentals remain intact. This is further supported by
our growing list of qualified order prospects, as customers
continue to move mine expansion projects forward and into the final
stages for selection of mining equipment,” he added.
Bookings - (in millions)
Quarter Ended July 29, July 30, % 2011 2010 Change
Underground Mining Machinery $ 742.9 $ 634.5 17.1 % Surface Mining
Equipment 732.1 369.9 97.9 % Eliminations (51.3 )
(31.2 )
Subtotal 1,423.7 973.2 46.3
% LeTourneau Mining Equipment 23.6
- Total $ 1,447.3 $ 973.2 48.7 %
Excluding LeTourneau, bookings increased 46 percent to $1.4
billion in the third quarter of fiscal 2011, from $973 million in
the prior year quarter. Original equipment bookings were up 78
percent, while aftermarket orders were 22 percent higher than they
were in last year’s third quarter. The weaker U.S. dollar resulted
in a $79 million increase in bookings in the current quarter.
Orders for underground mining machinery increased 17 percent,
with original equipment up 22 percent and aftermarket up 13
percent. Original equipment orders increased in the United States,
Eurasia and Australia. Aftermarket bookings were up across all
markets, led by the United States, Eurasia, South Africa and
Australia.
Bookings for surface mining equipment almost doubled from the
third quarter last year. Original equipment orders of $419 million
were more than three times the amount reported a year ago, while
aftermarket bookings increased 31 percent. Original equipment and
aftermarket orders were received in the current quarter from
customers across all major commodities and geographic markets.
Backlog at the end of the third quarter was $3.2 billion,
compared to $1.8 billion at the beginning of fiscal 2011. The
increase reflected positive book to bill ratios for both surface
and underground business segments. Backlog at the end of the third
quarter increased $227 million as a result of the LeTourneau
acquisition, including orders booked in the quarter.
Net Sales - (in millions) Quarter Ended
July 29, July 30, % 2011 2010 Change Underground
Mining Machinery
$ 669.2
$
510.8 31.0 % Surface Mining Equipment 464.3 372.9 24.5 %
Eliminations (40.4 ) (33.7 )
Subtotal 1,093.1
850.0 28.6 % LeTourneau Mining
Equipment 43.3 - Total
$ 1,136.4
$ 850.0 33.7 %
Net sales increased 29 percent to $1.1 billion in the third
quarter, excluding LeTourneau. Original equipment shipments
increased 34 percent and aftermarket sales were up 25 percent over
the prior year period. Changes in foreign exchange rates increased
net sales by $43 million in the third quarter compared to a year
ago.
Net sales of underground mining equipment rose 31 percent in the
third quarter compared to a year ago, with a 33 percent increase in
original equipment shipments and a 29 percent increase in
aftermarket sales. The higher original equipment sales were from
increased shipments of equipment in the United States, Eurasia,
South Africa and Australia. Aftermarket sales increased in
substantially all of the underground mining machinery markets.
Net sales of surface mining equipment were 24 percent higher in
the third quarter than they were a year ago. Original equipment
shipments increased 35 percent and aftermarket sales were up 19
percent. The increase in original equipment sales was due to higher
sales in all markets except for North America. The increase in
aftermarket sales was led by South America and the other
international markets.
Operating Profit - (in millions)
Quarter Ended July 29, July 30, Return on Sales 2011
2010 2011 2010 Underground Mining Machinery $ 156.4 $
107.1 23.4 % 21.0 % Surface Mining Equipment 107.6 82.9 23.2 % 22.2
% Corporate Expenses (12.7 ) (9.6 ) Eliminations (9.8 )
(8.0 )
Subtotal 241.5 172.4 22.1
% 20.3 % Acquisition Costs (11.7
) -
Subtotal 229.8 172.4
21.0 % 20.3 % LeTourneau Mining
Equipment 6.2 - 14.3 % NA Total
$ 236.0 $ 172.4 20.8 % 20.3 %
Excluding LeTourneau, operating profit was $230 million for the
third quarter, compared to $172 million in the third quarter of
last year. Return on sales was 21.0 percent in the third quarter,
compared to 20.3 percent last year. The third quarter results
include $11.7 million of transaction costs primarily related to the
LeTourneau acquisition. Excluding acquisition costs, the return on
sales was 22.1 percent for the third quarter and incremental
profitability was 28.4 percent.
The increased operating profit was due to the higher sales
volume, favorable price realization, customer contract cancellation
fees and favorable manufacturing overhead absorption. These items
were partially offset by an increase in selling, engineering and
administrative expenses, along with the acquisition costs. Changes
in foreign exchange rates compared to a year ago added $10 million
to third quarter operating profit.
The effective income tax rate was 25.3 percent in the third
quarter, compared to 29.6 percent last year. The effective third
quarter tax rate benefitted from $12 million of net discrete tax
benefits. Excluding discrete items, the effective tax rate for the
third quarter was 30.6 percent. The discrete tax benefits were
primarily related to tax strategies that enabled the repatriation
of previously taxed earnings and favorable differences from the
normal reconciliation of estimated to actual taxes for 2010. The
effective tax rate for the fourth quarter is estimated to be
between 29 percent and 31 percent.
Impact of Unusual Items on Earnings Per
Share Quarter Ended July 29, 2011 July 30,
2010 Dollars Fully Dollars Fully in millions Diluted EPS in
millions Diluted EPS Income from Continuing Operations, as reported
$ 171.8 $ 1.61 $ 118.5 $ 1.13
Deduct:
LeTourneau Mining Equipment, net of
tax
4.3 0.04 - - Discrete Tax Benefits 12.1 0.11 1.7 0.02
Add: Acquisition Costs, net of tax 8.1 0.08 - -
Income From Continuing Operations Before Unusual
Items $ 163.5 $ 1.54 $ 116.8 $ 1.11
Income from continuing operations in the third quarter was $172
million or $1.61 per fully diluted share, compared to income from
continuing operations of $119 million or $1.13 per fully diluted
share in the third quarter of the prior year. The table above lists
the unusual items that affected third quarter earnings per share
compared to the same quarter last year.
Cash generated from continuing operations was $96 million in the
third quarter, compared to cash generated from continuing
operations of $203 million a year ago. The reduction in cash
generated from operations during the quarter was due primarily to
an increase in inventories to support the planned increase in
shipments and to support the higher number of machines in the
operating fleet, partially offset by an increase in advanced
payments.
The company used approximately $1.2 billion of cash for
investing activities during the current quarter. Approximately
$1.04 billion was associated with the LeTourneau acquisition, and
$141 million was used for the open-market purchase of approximately
10.5 percent of the outstanding shares of IMM. These expenditures
were financed with $500 million of five-year bank term loans and
$700 million of cash on hand. Subsequent to the end of the quarter,
an additional 7.9 percent of the outstanding shares of IMM were
purchased through open market transactions for approximately $105
million.
Third quarter capital expenditures of $22 million were
approximately the same as in the third quarter of last year.
Capital expenditures for the fiscal year are now expected to be
approximately $120 million.
Market Outlook
The current outlook is a mixture of macro concerns over slowing
economic growth and industry fundamentals that remain strong.
There is increasing evidence that slowing is underway in
economies worldwide, and that growth in the U.S. and Europe may
remain structurally lower for several years. Various indicators of
economic growth are declining and moving toward neutral. Worldwide
trade, measured by new export orders, remained close to the neutral
level in July with the slowing of exports from China, Germany and
Japan. Global manufacturing increased for the 25th consecutive
month in July, but the rate of expansion was the lowest since 2009.
China’s manufacturing index declined in July, but remained
positive. Growth also slowed in India, Brazil and Russia.
The slowing of the global economy is also reflected in economic
forecasts, which have reduced their growth outlook for the balance
of 2011 and the first half of 2012. Another indicator is the equity
markets, which have seen their most significant outflows since
October 2008.
Although comparisons are being made to 2008, there are
differences. Corporations have much stronger balance sheets today
and are sitting on high levels of cash. Industrial inventories that
were brought down in 2009 have remained at historically low levels
in days of supply, and this should mitigate any adverse de-stocking
effect compared to 2008. Banks also have significantly stronger
balance sheets, corporate bond markets have substantial liquidity
and interest rates remain at historic lows. As a result,
corporations are better prepared to manage through any correction
period, and they will have the flexibility to maintain longer-term
strategies and investment programs.
By comparison, the fundamentals in the commodity markets have
continued to remain strong. The seaborne markets for copper, coal
and iron ore continue to be driven by strong demand from China,
India and other emerging markets. Although industrial production
and export growth is showing signs of slowing in China, massive
infrastructure programs should sustain GDP growth at high levels.
Imports were reduced as China worked down inventories of copper and
coal in the first half of this year, but recent increases of
imports have started to replenish these stocks. This move from
de-stocking to restocking for copper and coal will support
commodity demand even if growth slows. Chinese copper imports grew
sequentially in June and July, with June up 10 percent and July up
9.5 percent. Coal imports climbed above the trailing 12-month
average in May, and remained above the average in June and July.
China’s imports of both copper and coal are expected to remain
strong for the balance of the year. Imports of iron ore are up 8
percent over last year, which is consistent with the 9 percent
growth in China steel production. Although iron ore inventories
have increased in tons, they remain near their historical average
in days of supply.
India’s domestic thermal coal production is down 3 percent year
to date, and imports continue to increase. Coal imports are
expected to grow by almost 20 percent this year and next, reaching
105 million metric tons in 2012. As a result, India’s coal imports
will begin to rival those of China.
Japan continues to have an impact on the seaborne markets as it
works through the after effects of the earthquake and tsunami.
Currently, 34 gigawatts of nuclear generating capacity are idled
and 12 gigawatts of that is expected to be prolonged, resulting in
as much as five million tons of additional demand for coal. Thermal
coal power generating capacity of eight gigawatts was also taken
off line. Three of the five impacted coal power plants will soon be
coming back on line, returning around 10 million tons to annual
coal demand.
The United States coal market is increasingly becoming more
balanced between domestic consumption and exports. With natural gas
prices remaining near $4.00 per million BTUs, more natural gas is
being dispatched for power generation in the U.S. However, coal
demand remains stable for base-load generation, and coal stockpiles
at utilities continue to run below the levels of 2010. The lower
stockpiles, combined with increased production costs due to
regulatory requirements, are supporting higher thermal coal prices.
In addition, U.S. producers are increasingly turning to exports for
growth. Strong seaborne markets and a weak U.S. dollar have
increased thermal coal exports by over 100 percent year over year.
Total U.S. coal exports are at their highest level since 1992 and
are expected to reach 100 million tons this year. At least two
producers are making significant investments in western port
capacity to enable Powder River Basin coal to enter the seaborne
trade, which would open significant new markets for U.S. thermal
coal.
With the help of these strong fundamentals, commodity prices
have held steady at high levels, despite concerns over the slowing
of the global economy. Met coal and iron ore prices are expected to
remain near current levels, while copper and seaborne thermal coal
prices are expected to increase in 2012. As a result, prices
continue to support mine capacity expansion programs. On average,
there is very little excess mine capacity versus current production
levels. With the longer lead times required in starting up new
greenfield mines, demand will exceed current capacity even under
slower growth scenarios. With strong commodity prices, positive
demand outlook and risk generally to the upside, mining companies
continue to move forward with expansion programs. In addition,
mining customers have been allocating a higher percentage of their
free cash flow to capital expenditures for projects, rather than to
acquisitions or capital returns. Capex increases in 2010 and 2011
have returned customer capital expenditures to 2008 levels, and
further increases are expected in 2012.
Company Outlook
“Our third quarter performance reflects three important
dimensions that impact future results,” continued Sutherlin. “First
is the continued improvement in operational efficiencies. Our
Operational Excellence programs are improving productivity, quality
and safety, and are achieving cycle-time reductions that are giving
us a very significant competitive advantage. This is also a major
factor in enabling us to deliver strong operating leverage.
“The second factor is the strategic investments we have made in
LeTourneau mining equipment and International Mining Machinery.
LeTourneau adds a key product that complements our shovels for
surface loading applications, and IMM gives us a leading presence
in a major high-growth market. LeTourneau is already accretive,
excluding transaction costs and excess first year purchase
accounting charges. In addition, both businesses have strong growth
potential,” said Sutherlin.
“Finally, commodity and energy fundamentals remain intact
despite expectations of slowing industrial production and global
economic growth. We have not encountered any instances of projects
being deferred, delayed or de-prioritized. In fact, discussions
with customers continue to be focused on project planning,
production slots and delivery availability. One of the more
quantitative measures of the current market comes from our prospect
list. This is a qualified list of major machine projects that are
expected to become industry-wide orders in the next 12 months. The
list continued to grow in our third quarter, as more machine
prospects moved inside the 12-month window than were taken off the
list via bookings. This indicates that customers are not just
completing older projects, but are also advancing more recent
projects. In addition to projects, another dimension of industry
fundamentals is aftermarket revenue, which continues to experience
strong growth rates. The aftermarket growth is due to a number of
factors, including higher mine production levels, lower ore grades,
tougher geological conditions and a growing working fleet. These
factors are expected to continue to support strong aftermarket
demand.
“Even with strong fundamentals, there is a real possibility of
some slowing of demand growth going forward. However, we do not
expect the macro concerns to lead to a major market correction. We
will use this as an opportunity to trim up our business. Planning
early and planning often served us well in 2008, and we will start
that process again—just in case. We will increase the scrutiny of
normal costs and routine increases, but will maintain our focus and
funding on key strategic programs, such as the next step of
capacity addition and major R&D programs.
“Our outlook for the remainder of this year has improved from
our results through the third quarter, the momentum carrying into
our fourth quarter and the impact of LeTourneau’s mining equipment
business. We now expect fiscal year revenues to be between $4.3 and
$4.5 billion. This is an increase of $200 million from prior annual
guidance, with approximately $150 million coming from the
LeTourneau mining equipment business. We expect to maintain our
operating leverage at 25 percent, and we expect this to deliver
annual earnings per fully diluted share of $5.70 to $6.00 from
continuing operations for fiscal 2011, a $0.40 per share increase
from prior annual guidance. Of this, $0.10 per share is attributed
to LeTourneau’s mining equipment business, net of $0.04 of
inventory purchase accounting charges. In addition, $0.11 per share
is from discrete tax items recognized in the third quarter, less
$0.12 per share of acquisition transaction costs,” concluded
Sutherlin.
Quarterly Conference Call
Management will host a quarterly conference call to discuss the
Company’s third quarter results at 11:00 a.m. EDT on August 31,
2011. Interested parties can listen to the call by dialing
888-504-7966 in the United States or 719-325-2437 outside of the
United States, access code #7285398, at least 15 minutes prior to
the 11:00 a.m. EDT start time of the call. A rebroadcast of the
call will be available until the close of business on September 21,
2011 by dialing 888-203-1112 or 719-457-0820, access code
#7285398.
Alternatively, interested parties can listen to a live webcast
of the call on the Joy Global Inc. website at
http://investors.joyglobal.com/events.cfm. To listen, please
register and download audio software on the site at least 15
minutes prior to the start of the call. A replay of the webcast
will be available until the close of business on September 30,
2011.
About Joy Global Inc.
Joy Global Inc. is a worldwide leader in manufacturing,
servicing and distributing equipment for surface mining through
P&H Mining Equipment and underground mining through Joy Mining
Machinery.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Terms such as “anticipate,” “believe,” “estimate,” “expect,”
“indicate,” “may be,” “objective,” “plan,” “predict,” “will,” “will
be,” and the like are intended to identify forward-looking
statements. The forward-looking statements in this press release
are based on our current expectations and are made only as of the
date of this press release. In addition, certain market outlook
information is based on third-party sources that we cannot
independently verify, but that we believe reliable. We undertake no
obligation to update forward-looking statements to reflect new
information. We cannot assure you the projected results or events
will be achieved. Because forward-looking statements involve risks
and uncertainties, they are subject to change at any time. Such
risks and uncertainties, many of which are beyond our control,
include, but are not limited to: (i) risks of international
operations, including currency fluctuations, (ii) risks associated
with acquisitions, (iii) risks associated with indebtedness, (iv)
risks associated with the cyclical nature of our business, (v)
risks associated with the international and U.S. coal and copper
commodity markets, (vi) risks associated with access to major
purchased items, such as steel, castings, forgings and bearings,
and (vii) risks associated with labor markets and other risks,
uncertainties and cautionary factors set forth in our public
filings with the Securities and Exchange Commission.
*LeTourneau Drilling Products Adjusted EBITDA Reconciliation
Year Ended December 31, 2010 (USD in Millions)
EBITDA $ (9.8 ) Write down of excess inventory 42.0
Adjusted EBITDA $ 32.2 EBITDA
Reconciliation Year Ended December 31, 2010 (USD in Millions)
EBITDA $ (9.8 ) Depreciation & Amortization
8.6 Loss from Operations $ (18.4 )
Use of Non-GAAP Financial Measures
In this press release “Adjusted EBITDA”, which is a non-GAAP
financial measure, is used as a performance measure for
LeTourneau’s drilling products business. In accordance with SEC
rules, a non-GAAP financial measure is a numerical measure of a
company’s performance, financial position or cash flows that either
excludes or includes amounts that are not normally excluded or
included in the most directly comparable measure, calculated and
prepared in accordance with accounting principles generally
accepted in the United Sates (“GAAP”).
EBITDA is defined as net income before (a) net interest expense
(b) income taxes and (c) depreciation and amortization. Adjusted
EBITDA is defined as EBITDA as further adjusted to eliminate a
lower of cost or market adjustment related to LeTourneau’s Drilling
Products inventory. We believe that the presentation of Adjusted
EBITDA included in this press release provides useful information
to investors regarding our results of operations because it assists
in analyzing and benchmarking the performance and value of
LeTourneau’s drilling products business. Presenting Adjusted EBITDA
facilitates company-to-company operating performance comparisons
within the same or similar industries by backing out differences
caused by variations in capital structure, taxation and
depreciation of facilities and equipment (affecting relative
depreciation expense), which may vary for different companies for
reasons unrelated to operating performance. These measures provide
an assessment of controllable operating expenses and afford
management the ability to make decisions which are expected to
facilitate meeting current financial goals as well as achieve
optimal financial performance. These measures also provide an
indicator for management to determine if adjustments to current
spending decisions are needed. Furthermore, the presentation of
Adjusted EBITDA has economic substance because it provides
important insight into our profitability trends, as a component of
net income, and allows management and investors to analyze
operating results with and without the impact of depreciation and
amortization, interest and income tax expense, and the abnormal
inventory valuation write-down. Accordingly, these metrics measure
financial performance based on operational factors that management
can impact in the short-term, namely the operational cost structure
and expenses of the business. In addition, Adjusted EBITDA is used
by securities analysts, investors and other interested parties in
evaluating companies, many of which present an EBITDA measure when
reporting their results. Although Adjusted EBITDA is used as a
financial measure to assess the performance of this business, the
use of Adjusted EBITDA is limited because it does not include
certain material costs, such as depreciation, amortization and
interest, necessary to operate the business. The reconciliation
between EBITDA and Adjusted EBITDA and net income above is
disclosed to compensate for this limitation. While net income is
used as a significant measure of profitability, Adjusted EBITDA,
when presented along with net income, provides balanced disclosure
which, for the reasons set forth above, is useful to investors in
evaluating operating performance and profitability. Adjusted EBITDA
included in this press release should be considered in addition to,
and not as a substitute for, net income as calculated in accordance
with GAAP as a measure of performance.
JOYG-F
JOY GLOBAL INC. SUMMARY OF CONSOLIDATED STATEMENT
OF INCOME (Unaudited) (In thousands except per share
amounts) Quarter
Ended Nine Months Ended July 29, July 30,
July 29, July 30, 2011 2010 2011
2010 Net sales $ 1,136,352 $ 850,002 $ 3,068,613 $
2,475,446 Costs and expenses: Cost of sales 739,626 560,217
2,013,615 1,653,427
Product, selling and admin.expenses
165,325 118,262 438,985 354,547 Other income (4,591 ) (903 ) (7,839
) (3,054 ) Operating income 235,992 172,426 623,852 470,526
Interest expense, net (6,032 ) (3,939 ) (13,600 ) (12,865 )
Reorganization items - (145 ) (35 ) (740 ) Income from
continuing operations before income taxes 229,960 168,342 610,217
456,921 Provision for income taxes 58,155 49,839
174,208 141,760 Income from continuing
operations 171,805 118,503 436,009 315,161 Income from
discontinued operations, net of income taxes 1,300 -
1,300 - Net income $ 173,105 $ 118,503
$ 437,309 $ 315,161 Basic earnings per
share: Continuing operations $ 1.63 $ 1.15 $ 4.16 $ 3.06
Discontinued operations 0.01 - 0.01 -
Net income $ 1.64 $ 1.15 $ 4.17 $ 3.06
Diluted earnings per share: Continuing operations $ 1.61 $
1.13 $ 4.09 $ 3.01 Discontinued operations 0.01 -
0.01 - Net income $ 1.62 $ 1.13 $ 4.10
$ 3.01 Dividends per share $ 0.175 $
0.175 $ 0.525 $ 0.525 Weighted average
shares outstanding: Basic 105,204 103,333 104,803
103,084 Diluted 106,735 104,964 106,475
104,732 Note - for complete information,
including footnote disclosures, please refer to the Company's Form
10-Q filing with the SEC.
JOY GLOBAL INC.
SUMMARY CONSOLIDATED BALANCE SHEET (In thousands)
July 29, October 29,
2011 2010 (Unaudited) ASSETS Current assets: Cash and
cash equivalents $ 443,092 $ 815,581 Accounts receivable, net
852,376 674,135 Inventories 1,240,189 764,945 Other current assets
166,526 107,266 Current assets of discontinued operations 351,579 -
Total current assets 3,053,762 2,361,927 Property, plant and
equipment, net 504,384 378,024 Other intangible assets, net 403,283
178,831 Goodwill 393,657 125,686 Investments 134,854 - Deferred
income taxes 141,551 149,654 Other non-current assets 65,787 76,891
Non-current assets of discontinued operations 233,080 - Total
assets $ 4,930,358 $ 3,271,013 LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Short-term notes payable, including
current portion of long-term obligations $ 33,700 $ 1,550 Trade
accounts payable 357,620 291,742 Employee compensation and benefits
129,628 128,132 Advance payments and progress billings 790,570
376,300 Accrued warranties 79,223 62,351 Other accrued liabilities
178,611 163,249 Current liabilities of discontinued operations
200,740 - Total current liabilities 1,770,092 1,023,324
Long-term obligations 873,366 396,326 Accrued pension costs
325,964 428,348 Other non-current liabilities 82,565 80,649
Shareholders' equity 1,878,371 1,342,366 Total liabilities
and shareholders' equity $ 4,930,358 $ 3,271,013 Note - for
complete information, including footnote disclosures, please refer
to the Company's Form 10-Q filing with the SEC.
JOY GLOBAL INC. SUMMARY OF CONSOLIDATED STATEMENT OF CASH
FLOWS (Unaudited) (In thousands)
Quarter Ended Nine Months Ended
July 29, July 30, July 29, July 30,
2011 2010 2011 2010 Operating
Activities: Net income from continuing operations $ 171,805 $
118,503 $ 436,009 $ 315,161 Net income from discontinued operations
1,300 - 1,300 - Depreciation and amortization 19,021 15,541 50,669
44,870 Other, net (38,057 ) (17,110 ) (107,274 ) (25,877 )
Changes in working capital: Change in accounts receivable, net
(30,292 ) (6,051 ) (64,902 ) (7,231 ) Change in inventories
(106,673 ) (59,252 ) (259,180 ) (21,472 ) Change in trade accounts
payable (6,099 ) 37,248 18,894 50,712 Change in adv payments and
progress billings 81,576 74,236 303,475 30,309 Change in other
working capital items 5,018 41,801 (31,557 ) (13,543
) Net cash provided by operating activities - continuing operations
96,299 204,916 346,134 372,929 Net cash used by operating
activities - discontinued operations (2,444 ) - (2,444 ) -
Investing Activities: Property, plant, and equipment acquired
(22,091 ) (19,201 ) (75,189 ) (51,325 ) Investments in LeTourneau
and IMM (1,181,774 ) - (1,181,774 ) - Other - net 2,350 (26
) 2,514 (1,614 ) Net cash used by investing activities -
continuing operations (1,201,515 ) (19,227 ) (1,254,449 ) (52,939 )
Net cash used by investing activities - discontinued operations
(361 ) - (361 ) - Financing Activities: Share-based payment
awards 2,809 2,249 70,426 24,187 Dividends paid (18,382 ) (18,055 )
(54,870 ) (54,003 ) Financing fees (9,300 ) - (9,435 ) - Debt
borrowings (repayments) 505,710 (4,565 ) 508,861
(13,085 ) Net cash provided (used) by financing activities -
continuing operations 480,837 (20,371 ) 514,982 (42,901 ) Net cash
provided (used) by financing activities - discontinued operations -
- - - Effect of Exchange Rate Changes on Cash and Cash
Equivalents (865 ) 291 23,649 (132 )
(Decrease) Increase in Cash and Cash Equivalents (628,049 ) 165,609
(372,489 ) 276,957 Cash and Cash Equivalents at the
Beginning of Period 1,071,141 583,033 815,581
471,685 Cash and Cash Equivalents at the End of
Period $ 443,092 $ 748,642 $ 443,092 $ 748,642
Supplemental cash flow information: Interest paid $
14,350 $ 13,226 $ 29,312 $ 27,512 Income taxes paid 63,190 13,092
155,995 117,191 Depreciation and amortization by segment:
Underground Mining Machinery $ 10,618 $ 10,329 $ 30,769 $ 29,339
Surface Mining Equipment 8,344 5,179 19,725 15,439 Corporate 59
33 175 92 Total depreciation and
amortization $ 19,021 $ 15,541 $ 50,669 $
44,870 Note - for complete information, including
footnote disclosures, please refer to the Company's Form 10-Q
filing with the SEC.
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA (Unaudited) (In
thousands) Quarter
Ended July 29, July 30, 2011 2010
Change Net Sales By Segment: Underground Mining
Machinery $ 669,179 $ 510,817 $ 158,362 31.0 % Surface Mining
Equipment 507,552 372,942 134,610 36.1 % Eliminations (40,379 )
(33,757 ) (6,622 ) -19.6 % Total Sales By Operation $ 1,136,352
$ 850,002 $ 286,350 33.7 %
Net Sales
By Product Stream: Aftermarket Revenues $ 658,855 514,893 $
143,962 28.0 % Original Equipment Revenues 477,497 335,109
142,388 42.5 % Total Sales By Product Stream $
1,136,352 $ 850,002 $ 286,350 33.7 %
Net Sales By Geography: United States $ 506,509 $ 373,123 $
133,386 35.7 % Rest of World 629,843 476,879 152,964
32.1 % Total Sales By Geography $ 1,136,352 $ 850,002
$ 286,350 33.7 %
Quarter Ended July
29, July 30, 2011 2010 % of Net
Sales Operating Income By Segment: Underground Mining
Machinery $ 156,437 $ 107,084 23.4 % 21.0 % Surface Mining
Equipment 113,760 82,857 22.4 % 22.2 % Corporate (24,392 ) (9,541 )
- - Eliminations (9,813 ) (7,974 ) - - Total
Operating Income $ 235,992 $ 172,426 20.8 % 20.3 %
Nine Months Ended July 29,
July 30, 2011 2010 Change Net Sales
By Segment: Underground Mining Machinery $ 1,828,481 $
1,478,835 $ 349,646 23.6 % Surface Mining Equipment 1,333,372
1,084,555 248,817 22.9 % Eliminations (93,240 ) (87,944 ) (5,296 )
-6.0 % Total Sales By Operation $ 3,068,613 $ 2,475,446
$ 593,167 24.0 %
Net Sales By Product
Stream: Aftermarket Revenues $ 1,858,383 $ 1,480,959 $ 377,424
25.5 % Original Equipment Revenues 1,210,230 994,487
215,743 21.7 % Total Sales By Product Stream $ 3,068,613
$ 2,475,446 $ 593,167 24.0 %
Net
Sales By Geography: United States $ 1,402,818 $ 1,122,727 $
280,091 24.9 % Rest of World 1,665,795 1,352,719
313,076 23.1 % Total Sales By Geography $ 3,068,613 $
2,475,446 $ 593,167 24.0 %
Nine
Months Ended July 29, July 30, Operating
Income By Segment: 2011 2010 % of Net
Sales Underground Mining Machinery $ 406,807 $ 284,571 22.2 %
19.2 % Surface Mining Equipment 290,673 240,248 21.8 % 22.2 %
Corporate (50,548 ) (32,677 ) - - Eliminations (23,080 ) (21,616 )
- - Total Operating Income $ 623,852 $ 470,526
20.3 % 19.0 % Note - for complete information,
including footnote disclosures, please refer to the Company's Form
10-Q filing with the SEC.
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA (Unaudited) (In
thousands)
Quarter Ended July 29, July 30, 2011
2010 Change Bookings By Segment: Underground
Mining Machinery $ 742,935 $ 634,465 $ 108,470 17.1 % Surface
Mining Equipment 755,747 369,908 385,839 104.3 % Eliminations
(51,359 ) (31,189 ) (20,170 ) - Total Bookings By Operation
$ 1,447,323 $ 973,184 $ 474,139 48.7 %
Bookings By Product Stream: Aftermarket Bookings $ 686,326
552,893 $ 133,433 24.1 % Original Equipment Bookings 760,997
420,291 340,706 81.1 % Total Bookings By Product
Stream $ 1,447,323 $ 973,184 $ 474,139 48.7 %
Nine Months Ended July 29, July
30, 2011 2010 Change Bookings By
Segment: Underground Mining Machinery $ 2,469,573 $ 1,790,982 $
678,591 37.9 % Surface Mining Equipment 1,862,235 1,123,979 738,256
65.7 % Eliminations (132,180 ) (85,880 ) (46,300 ) - Total
Bookings By Operation $ 4,199,628 $ 2,829,081 $
1,370,547 48.4 %
Bookings By Product Stream:
Aftermarket Bookings $ 2,031,165 1,669,171 $ 361,994 21.7 %
Original Equipment Bookings 2,168,463 1,159,910
1,008,553 87.0 % Total Bookings By Product Stream $
4,199,628 $ 2,829,081 $ 1,370,547 48.4 %
Amounts as of: July 29, April
29, January 28, October 29, 2011
2011 2011 2010 Backlog By Segment:
Underground Mining Machinery $ 1,855,361 $ 1,781,605 $ 1,524,761 $
1,208,181 Surface Mining Equipment 1,405,284 917,718 687,270
637,050 Eliminations (63,829 ) (60,182 ) (34,992 ) (24,973 ) Total
Backlog By Operation $ 3,196,816 $ 2,639,141 $
2,177,039 $ 1,820,258
Backlog By
Product Stream: Aftermarket Backlog $ 810,279 $ 769,230 $
678,442 $ 624,951 Original Equipment Backlog 2,386,537
1,869,911 1,498,597 1,195,307 Total Backlog By
Product Stream $ 3,196,816 $ 2,639,141 $ 2,177,039
$ 1,820,258 Note - for complete
information, including footnote disclosures, please refer to the
Company's Form 10-Q filing with the SEC.
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