SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
Form 10-Q
QUARTERLY REPORT
PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1996
Commission File Number: 1-871
__________________________________________
BUCYRUS INTERNATIONAL, INC.
DELAWARE 39-0188050
P. O. BOX 500
1100 MILWAUKEE AVENUE
SOUTH MILWAUKEE, WISCONSIN 53172
(414) 768-4000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _____
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding November 1, 1996
Common Stock, par value $.01 per share 10,234,574
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. FINANCIAL INFORMATION:
Item 1 - Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets -
September 30, 1996 and December 31, 1995 3
Consolidated Condensed Statements of Operations -
Quarters and nine months ended September 30, 1996
and 1995 4
Consolidated Condensed Statements of Cash Flows -
Nine months ended September 30, 1996 and 1995 5-6
Notes to Consolidated Condensed Financial
Statements 7-8
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 9-13
Part II. OTHER INFORMATION:
Item 1 - Legal Proceedings 14
Item 6 - Exhibits and Reports on Form 8-K 14
Signature Page 15
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars In Thousands, Except Per Share Amounts)
September 30, December 31, September 30, December 31,
1996 1995 1996 1995
ASSETS LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT ASSETS: CURRENT LIABILITIES:
Cash and cash Accounts payable and
equivalents $ 15,580 $ 11,150 accrued expenses $ 39,490 $ 37,487
Receivables 35,733 35,603 Liabilities to customers
Inventories 69,108 73,566 on uncompleted contracts
Prepaid expenses and and warranties 4,769 8,222
other current assets 2,247 1,414 Income taxes 1,313 3,463
________ ________ Short-term obligations 2,770 5,573
Total Current Assets 122,668 121,733 Current maturities of
long-term debt 421 1,658
OTHER ASSETS: ________ ________
Restricted funds Total Current
on deposit 1,077 2,877 Liabilities 48,763 56,403
Intangible assets - net 8,664 9,021
Other assets 5,857 4,760 LONG-TERM LIABILITIES:
________ ________ Deferred income taxes 192 183
15,598 16,658 Liabilities to customers on
uncompleted contracts
PROPERTY, PLANT AND EQUIPMENT: and warranties 3,071 3,127
Cost 42,265 39,387 Postretirement benefits 11,068 11,527
Less accumulated Deferred expenses
depreciation (6,552) (3,740) and other 11,551 10,097
________ ________ ________ ________
35,713 35,647 25,882 24,934
LONG-TERM DEBT, less
current maturities 62,614 58,021
COMMON SHAREHOLDERS' INVESTMENT:
Common stock - par value
$.01 per share, authorized
20,000,000 shares, issued
and outstanding 10,234,574
shares 102 102
Additional paid-in capital $ 57,742 $ 54,259
Unearned stock compensation (3,090) -
Accumulated deficit (16,919) (19,324)
Cumulative translation
adjustment (1,115) (357)
________ ________
36,720 34,680
________ ________ ________ ________
$173,979 $174,038 $173,979 $174,038
<FN>
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars In Thousands, Except Per Share Amounts)
Quarter Ended September 30, Nine Months Ended September 30,
1996 1995 1996 1995
Revenues:
Net sales $ 68,077 $ 61,408 $ 198,897 $ 173,990
Other income 236 314 700 933
__________ __________ __________ __________
68,313 61,722 199,597 174,923
__________ __________ __________ __________
Costs and Expenses:
Cost of products sold 55,292 58,625 162,315 156,102
Product development, selling,
administrative and
miscellaneous expenses 9,224 9,761 27,078 26,188
Interest expense 1,756 1,558 5,929 4,574
Restructuring expenses - 2,577 - 2,577
Reorganization items - 446 - 919
__________ __________ __________ __________
66,272 72,967 195,322 190,360
__________ __________ __________ __________
Earnings (loss) before
income taxes 2,041 (11,245) 4,275 (15,437)
Income taxes 546 806 1,870 1,658
__________ __________ __________ __________
Net earnings (loss) $ 1,495 $ (12,051) $ 2,405 $ (17,095)
Weighted average number of
common shares outstanding 10,234,574 10,234,574 10,234,574 10,192,978
Net earnings (loss) per share
of common stock $ .14 $ (1.18) $ .23 $ (1.68)
<FN>
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)
Nine Months Ended September 30,
1996 1995
Cash Flows From Operating Activities
Net earnings (loss) $ 2,405 $ (17,095)
Adjustments to reconcile net earnings
(loss) to net cash provided by
operating activities:
Inventory obsolescence adjustment - 4,416
Depreciation 2,955 2,773
Amortization 863 896
Stock compensation 393 -
In kind interest on the Secured
Notes due December 14, 1999 3,767 4,180
Loss (gain) on sale of property,
plant and equipment 278 (26)
Changes in assets and liabilities:
Receivables (752) (5,233)
Inventories 3,875 404
Other current assets (835) 260
Other assets (1,019) (53)
Current liabilities other than
income taxes, short-term
obligations and current
maturities of long-term debt 1,574 10,209
Income taxes (2,098) 53
Long-term liabilities other
than deferred income taxes (2,420) (731)
_________ _________
Net cash provided by operating activities 8,986 53
_________ _________
Cash Flows From Investing Activities
Decrease in restricted funds on deposit 1,800 798
Purchases of property, plant
and equipment (3,715) (2,205)
Proceeds from sale of property, plant
and equipment 806 76
_________ _________
Net cash used in investing activities (1,109) (1,331)
_________ _________
Cash Flows From Financing Activities
Proceeds from issuance of project
financing obligations 5,402 3,581
Reduction of project financing
obligations (8,104) (6,861)
Net (decrease) increase in other
bank borrowings (1,337) 149
Proceeds from issuance of
long-term debt 849 -
_________ _________
Net cash used in financing activities (3,190) (3,131)
_________ _________
Effect of exchange rate
changes on cash (257) 16
_________ _________
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars In Thousands)
Nine Months Ended September 30,
1996 1995
Net increase (decrease) in cash and
cash equivalents 4,430 (4,393)
Cash and cash equivalents at
beginning of period 11,150 16,209
_________ _________
Cash and cash equivalents at
end of period $ 15,580 $ 11,816
Supplemental Disclosures of Cash Flow Information
1996 1995
Cash paid during the period for:
Interest $ 417 $ 171
Income taxes - net of refunds 3,162 1,079
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of Bucyrus International, Inc. (the "Company"), the
consolidated condensed financial statements contain all adjustments
(consisting of normal recurring accruals and other adjustments as stated
in Notes 4 and 5) necessary to present fairly the financial results for
the interim periods. Certain items are included in these statements
based on estimates for the entire year. Certain reclassifications have
been made to the 1995 consolidated condensed financial statements to
present them on a basis consistent with the current year.
2. Certain notes and other information have been condensed or omitted from
these interim consolidated condensed financial statements. Therefore,
these statements should be read in conjunction with the Company's 1995
annual report on Form 10-K filed with the Securities and Exchange
Commission on April 1, 1996.
3. Inventories consist of the following:
September 30, December 31,
1996 1995
(Dollars in Thousands)
Raw materials and parts $ 12,060 $ 12,138
Costs relating to
uncompleted contracts 8,753 5,861
Customers' advances offset
against costs incurred on
uncompleted contracts (4,288) (2,440)
Work in process 9,555 13,511
Finished products (primarily
replacement parts) 43,028 44,496
$ 69,108 $ 73,566
During the third quarter of 1995, the Company completed an evaluation of
its inventory and recorded a charge of $4,416,000 to cost of products
sold for the scrapping and disposal of excess inventory which related to
certain older and discontinued machine models.
4. Restructuring expenses included in the Consolidated Condensed Statements
of Operations for the quarter and nine months ended September 30, 1995
consist of employee severance expenses recorded to reflect the cost of
reduced employment and the severance costs related to the resignation of
three officers of the Company.
5. Reorganization items included in the Consolidated Condensed Statements of
Operations for the nine months ended September 30, 1995 consist of
additional legal and professional fees incurred in connection with the
bankruptcy proceedings in 1994.
6. Net earnings (loss) per share of common stock is based on the weighted
average number of common shares outstanding during the period. Common
stock equivalents are not significant.
7. Jackson National Life Insurance Company ("JNL"), currently the holder of
approximately 41.31% of Common Stock, has filed a claim (the "JNL 503(b)
Claim") against the Company for reimbursement of approximately $3,300,000
for professional fees and disbursements incurred in connection with the
Company's chapter 11 proceedings pursuant to Section 503(b) of the
Bankruptcy Code. Pursuant to a settlement agreement dated May 23, 1995,
JNL agreed that, in the event that the JNL 503(b) Claim is allowed in
whole or in part by the Bankruptcy Court, in lieu of requiring payment of
any award in cash, JNL will accept payment in Common Stock at a price
equal to $5.6375 per share (the average closing price of such stock on
the NASDAQ Stock Market on June 20, 21, 22, 23 and 26, 1995). By order
dated June 3, 1996, the Bankruptcy Court ruled that JNL would be awarded
the sum of $500. JNL has appealed the decision. The Company has been
advised by its reorganization counsel that in said counsel's opinion the
JNL 503(b) Claim is without merit; however, the ultimate outcome of this
matter cannot presently be determined. Accordingly, no provision for any
loss that may result upon resolution of this matter has been made in the
Consolidated Condensed Financial Statements.
Concurrently with the trial of the JNL 503(b) Claim, the Bankruptcy Court
considered the final fee application of the law firm of Milbank, Tweed,
Hadley & McCloy ("Milbank"), who rendered services as reorganization
counsel for the Company in connection with the chapter 11 proceedings.
The Milbank claim was approximately $2,330,000, of which 80% had
previously been paid by the Company on an interim basis. By order dated
June 3, 1996, the Bankruptcy Court ruled that Milbank would receive 80%
of the claimed amount as full and final compensation, thereby resulting
in no further payments being due and owing to Milbank on the claim. JNL
appealed the decision of the Bankruptcy Court not to order disgorgement
of amounts already paid to Milbank. Milbank has not appealed the
decision.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information is provided to assist in the understanding of
Bucyrus International, Inc.'s (the "Company") operations for the quarters and
nine months ended September 30, 1996 and 1995.
The reorganization of the Company under chapter 11 of the Bankruptcy Code
was effective December 14, 1994 (the "Effective Date"). The reorganization
was accounted for using the principles of fresh start reporting, as required
by AICPA Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code". Under the principles of fresh
start reporting, total assets were recorded at their assumed reorganization
value, with the reorganization value allocated to identifiable tangible and
intangible assets on the basis of their estimated fair value, and liabilities
were adjusted to the present values of amounts to be paid where appropriate.
The consolidated condensed financial statements include the related
amortization charges associated with the fair value adjustments.
Net Sales
Net sales for the quarter and nine months ended September 30, 1996 were
$68,077,000 and $198,897,000, respectively, compared with $61,408,000 and
$173,990,000 for the quarter and nine months ended September 30, 1995,
respectively. Sales of repair parts and services for the quarter and nine
months ended September 30, 1996 were $39,166,000 and $120,963,000,
respectively, which is a decrease of .2% and an increase of 3.3% from the
quarter and nine months ended September 30, 1995, respectively. The increase
in repair parts and service sales for the nine months ended September 30, 1996
was primarily due to increased sales at Minserco, Inc., a mining service
subsidiary of the Company. Machine sales for the quarter and nine months
ended September 30, 1996 were $28,911,000 and $77,934,000, respectively, which
is an increase of 30.4% and 37.1% from the quarter and nine months ended
September 30, 1995, respectively. The increases in machine sales were
primarily due to increased electric mining shovel sales, primarily in copper
markets.
Cost of Products Sold
Cost of products sold for the quarter ended September 30, 1996 was
$55,292,000 or 81.2% of net sales compared with $58,625,000 or 95.5% of net
sales for the quarter ended September 30, 1995. For the nine months ended
September 30, 1996, cost of products sold was $162,315,000 or 81.6% of net
sales compared with $156,102,000 or 89.7% of net sales for the nine months
ended September 30, 1995. Included in cost of products sold for the quarter
and nine months ended September 30, 1995 was $2,813,000 and $8,530,000,
respectively, as a result of the fair value adjustment to inventory. This
adjustment was made in accordance with the principles of fresh start reporting
adopted in 1994 and was charged to cost of products sold as the inventory was
sold. Also included in cost of products sold for the quarter and nine months
ended September 30, 1995 was a charge of $4,416,000 for the scrapping and
disposal of excess inventory which related to certain older and discontinued
machine models. Excluding the effects of the inventory fair value adjustment
and excess inventory charge, cost of products sold as a percentage of net
sales for the quarter and nine months ended September 30, 1995 was 83.7% and
82.3%, respectively. The increases in gross margin percentages for the
quarter and nine months ended September 30, 1996, not including the fair value
and excess inventory adjustments, were primarily due to improved margins on
machine sales.
Product Development, Selling, Administrative and Miscellaneous Expenses
Product development, selling, administrative and miscellaneous expenses
for the quarter ended September 30, 1996 were $9,224,000 or 13.5% of net sales
compared with $9,761,000 or 15.9% of net sales for the quarter ended
September 30, 1995. The amounts for the nine months ended September 30, 1996
and 1995 were $27,078,000 or 13.6% of net sales and $26,188,000 or 15.1% of
net sales, respectively. The dollar increase for the nine months ended
September 30, 1996 was primarily due to higher product development and service
costs to provide increased support to customers.
Interest Expense
Interest expense for the quarter and nine months ended September 30, 1996
was $1,756,000 and $5,929,000, respectively, compared with $1,558,000 and
$4,574,000 for the quarter and nine months ended September 30, 1995,
respectively. The increase for the nine months ended September 30, 1996 was
primarily due to an increase in the interest rate on the Secured Notes due
December 14, 1999 ("Secured Notes") from 10.5% to 13% effective December 14,
1995 for interest paid in kind by adding the interest to the principal
balance. Also, interest on the Secured Notes was accrued on a higher
principal balance in 1996 since all interest paid to date has been paid in
kind. The Company has the option of paying interest on the Secured Notes in
cash at 10.5% or in kind at 13%. For the six months ended June 30, 1996,
interest was accrued at 13% since the Company paid this interest in kind. For
the quarter ended September 30, 1996, interest was accrued at 10.5% since the
Company currently intends to pay this interest in cash.
Income Taxes
Income tax expense consists primarily of foreign taxes at applicable
statutory rates.
Net Earnings (Loss)
Net earnings for the quarter and nine months ended September 30, 1996
were $1,495,000 and $2,405,000, respectively, compared with a net loss of
$12,051,000 and $17,095,000 for the quarter and nine months ended
September 30, 1995, respectively. During the third quarter of 1995, the
Company undertook a restructuring of its corporate headquarters and foreign
subsidiaries and completed an evaluation of its inventories and other items.
The Company, in evaluating its inventory, determined that excess levels
existed for certain older and discontinued machine models. Accordingly, a
charge of $4,416,000 was made in the quarter ended September 30, 1995 for the
eventual scrapping and disposal of this inventory. Severance costs of
$2,577,000 were also recorded to reflect the cost of reduced employment at the
corporate headquarters and foreign subsidiaries, and the resignation of three
former officers. In addition, a $1,018,000 charge resulting from the
reestimation of certain customer warranty reserves was recorded and charges of
$446,000 and $919,000 for the quarter and nine months ended September 30,
1995, respectively, were made for reorganization items related to issues
continuing from the bankruptcy proceedings. Net loss for the quarter and nine
months ended September 30, 1995 also included $2,431,000 and $7,309,000 (net
of income taxes), respectively, of the inventory fair value adjustment related
to fresh start reporting.
Backlog and New Orders
The Company's consolidated backlog on September 30, 1996 was $173,243,000
compared with $118,024,000 at December 31, 1995 and $90,879,000 at
September 30, 1995. Machine backlog at September 30, 1996 was $78,547,000,
which is an increase of 19.4% from December 31, 1995 and an increase of 152.5%
from September 30, 1995. The increase in machine backlog from December 31,
1995 was primarily in blast hole drill volume. The increase in machine
backlog from September 30, 1995 was in both electric mining shovel and blast
hole drill volume. Repair parts and service backlog at September 30, 1996 was
$94,696,000, which is an increase of 81.4% from December 31, 1995 and an
increase of 58.4% from September 30, 1995. The increases in repair parts and
service backlog were primarily at foreign locations and reflect new orders
related to long-term maintenance and repair contracts which will be completed
in the next three to five years.
New orders for the quarter and nine months ended September 30, 1996 were
$57,203,000 and $254,116,000, respectively, which is a decrease of 29.1% and
an increase of 32.0% from the quarter and nine months ended September 30,
1995, respectively. New machine orders for the quarter and nine months ended
September 30, 1996 were $14,499,000 and $90,671,000, respectively, which is a
decrease of 59.8% and an increase of 45.6% from the quarter and nine months
ended September 30, 1995, respectively. The decrease in new machine orders
for the quarter ended September 30, 1996 was due to the timing of new machine
orders. The increase in new machine orders for the nine months ended
September 30, 1996 was in both electric mining shovel and blast hole drill
volume and represented strong machine sales activity during the first half of
1996, primarily related to copper markets. Blast hole drill and electric
mining shovel inquiries from South America and China remain steady. New
repair parts and service orders for the quarter and nine months ended
September 30, 1996 were $42,704,000 and $163,445,000, respectively, which is a
decrease of 4.3% and an increase of 25.5% from the quarter and nine months
ended September 30, 1995, respectively. The increase in repair parts and
service orders for the nine months ended September 30, 1996 was primarily due
to large maintenance and repair contract orders at foreign locations in the
first quarter of 1996.
Capitalization
The long-term debt to equity ratio as of September 30, 1996 and
December 31, 1995 was 1.7 to 1.
Liquidity and Capital Resources
Working capital and current ratio are two financial measurements which
provide an indication of the Company's ability to meet its short-term
obligations. These measurements at September 30, 1996 and December 31, 1995
were as follows:
September 30, December 31,
1996 1995
(Dollars in Thousands)
Working capital $ 73,905 $ 65,330
Current ratio 2.5 to 1 2.2 to 1
The table below summarizes the Company's cash position at September 30,
1996:
Restricted Unrestricted
Location Cash Cash Total
(Dollars in Thousands)
United States $ - $ 8,728 $ 8,728
Foreign Subsidiaries 21 6,273 6,294
Equipment Assurance Limited 1,056 579 1,635
$ 1,077 $ 15,580 $ 16,657
A portion of the unrestricted cash at the foreign subsidiaries is not
readily repatriatable because it is required for working capital purposes at
these respective locations.
Equipment Assurance Limited has pledged $1,056,000 of its cash to secure
its reimbursement obligations for outstanding letters of credit at
September 30, 1996. This collateral amount is classified as Restricted Funds
on Deposit in the Consolidated Condensed Balance Sheets.
The following table reconciles Earnings (Loss) Before Income Taxes to
earnings before interest, income taxes, depreciation, amortization, loss
(gain) on sale of fixed assets, restructuring expenses, reorganization items
and inventory fair value adjustment charged to cost of products sold
("Adjusted EBITDA"):
Quarter Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
(Dollars in Thousands)
Earnings (loss)
before income taxes $ 2,041 $(11,245) $ 4,275 $(15,437)
Restructuring expenses - 2,577 - 2,577
Reorganization items - 446 - 919
Inventory fair value
adjustment charged
to cost of products
sold - 2,813 - 8,530
Non-cash expenses:
Depreciation 975 953 2,955 2,773
Amortization 279 299 863 896
Loss (gain) on sale
of fixed assets 32 2 278 (26)
In kind interest on
the Secured Notes - 1,445 3,767 4,180
Cash interest
expense 1,756 113 2,162 394
Adjusted EBITDA(1)(2) $ 5,083 $ (2,597) $ 14,300 $ 4,806
(1) Adjusted EBITDA for the quarter and nine months ended September 30, 1995
is reduced by a charge of $4,416,000 to cost of products sold for the
scrapping and disposal of excess inventory which related to certain older
and discontinued machine models.
(2) The Company is presenting a calculation of Adjusted EBITDA to highlight
the effects that fresh start accounting, restructuring expenses and
reorganization items have on reported net earnings. Since cash flow from
operations is very important to the Company's future, the Adjusted EBITDA
calculation provides a summary review of cash flow performance. In
addition, the Company is required to maintain certain minimum Adjusted
EBITDA levels under its bank credit agreement (see below). The Adjusted
EBITDA calculation is not an alternative to operating income under
generally accepted accounting principles as an indicator of operating
performance or to cash flows as a measure of liquidity.
The Company has a Credit Agreement (the "Credit Agreement") with Bank
One, Milwaukee, National Association ("Bank One"). The Credit Agreement, as
amended, contains a credit facility for working capital and general corporate
purposes (the "Loan Facility"), a letter of credit facility (the "L/C
Facility") and a project financing loan facility (the "Project Financing
Facility"). Under the Loan Facility, the Company may borrow up to $2,500,000,
provided that it meets certain earnings before interest, taxes, depreciation
and amortization tests, as defined. Borrowings under the Loan Facility mature
on April 30, 1998. Under the L/C Facility, Bank One has agreed to issue
letters of credit through April 30, 1998 in an aggregate amount not in excess
of $15,000,000 minus the then outstanding aggregate borrowings by the Company
under the Loan Facility, provided that no letter of credit may expire after
April 30, 1999. Under the Project Financing Facility, Bank One may make
project financing loans to the Company from time to time. Borrowings under
the Project Financing Facility bear interest at the Company's option either at
a rate equal to Bank One's reference rate or an adjusted LIBOR rate plus a
variable margin. Borrowings under the Credit Agreement are secured by a
security interest on substantially all of the Company's property (other than
real estate). At September 30, 1996, the Company had $340,000 of borrowings
outstanding under the Loan Facility and $13,006,000 of the L/C Facility was
being used.
Under the Project Financing Facility, the Company has a line of credit
for $14,000,000 to support one current order. Bank One has participated a
portion of the Project Financing Facility to The Bank of Nova Scotia.
Availability is based on the amount of inventory being financed and any
accounts receivable relating to such project. Availability at September 30,
1996 is $8,320,000. There were no borrowings under the Project Financing
Facility at September 30, 1996.
The agreements relating to the Secured Notes and the Credit Agreement
permit additional project financing from other lenders to manufacture mining
machinery or other products pursuant to binding purchase contracts. Project
financing borrowings are secured by the inventory being financed and any
accounts receivable relating to such project. Project financing borrowings
mature not later than the date of the final payment by the customer under the
applicable purchase contract. At September 30, 1996, the Company had
$2,431,000 of outstanding project financing borrowings not related to the
Project Financing Facility. These borrowings are classified as Short-Term
Obligations in the Consolidated Condensed Balance Sheets.
At September 30, 1996, the Company had approximately $3,671,000 of open
capital appropriations. Included in open capital appropriations is $1,970,000
for a new service shop facility in Chile which will be financed primarily with
a local bank in Chile and $920,000 for land and a new facility in South Africa
which will be financed primarily with a local bank in South Africa. In
addition, the Company commenced the $2,200,000 first phase of a potential
$14,000,000 machine shop tool modernization project. The first phase
equipment, together with $2,800,000 of machine tools previously ordered, will
be financed or leased.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
Jackson National Life Insurance Company ("JNL"), currently the
holder of approximately 41.31% of the Company's common stock
("Common Stock"), has filed a claim (the "JNL 503(b) Claim")
against the Company for reimbursement of approximately $3,300,000
for professional fees and disbursements incurred in connection with
the Company's chapter 11 proceedings pursuant to Section 503(b) of
the Bankruptcy Code. Pursuant to a settlement agreement dated May
23, 1995, JNL agreed that, in the event that the JNL 503(b) Claim
is allowed in whole or in part by the Bankruptcy Court, in lieu of
requiring payment of any award in cash, JNL will accept payment in
Common Stock at a price equal to $5.6375 per share (the average
closing price of such stock on the NASDAQ Stock Market on June 20,
21, 22, 23 and 26, 1995). By order dated June 3, 1996, the
Bankruptcy Court ruled that JNL would be awarded the sum of $500.
JNL has appealed the decision. The Company has been advised by its
reorganization counsel that in said counsel's opinion the JNL
503(b) Claim is without merit; however, the ultimate outcome of
this matter cannot presently be determined. Accordingly, no
provision for any loss that may result upon resolution of this
matter has been made in the Consolidated Condensed Financial
Statements.
Concurrently with the trial of the JNL 503(b) Claim, the Bankruptcy
Court considered the final fee application of the law firm of
Milbank, Tweed, Hadley & McCloy ("Milbank"), who rendered services
as reorganization counsel for the Company in connection with the
chapter 11 proceedings. The Milbank claim was approximately
$2,330,000, of which 80% had previously been paid by the Company on
an interim basis. By order dated June 3, 1996, the Bankruptcy
Court ruled that Milbank would receive 80% of the claimed amount as
full and final compensation, thereby resulting in no further
payments being due and owing to Milbank on the claim. JNL appealed
the decision of the Bankruptcy Court not to order disgorgement of
amounts already paid to Milbank. Milbank has not appealed the
decision.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
See Exhibit Index on last page of this report, which is
incorporated herein by reference.
(b) Report on Form 8-K:
No reports on Form 8-K were filed during the third quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BUCYRUS INTERNATIONAL, INC.
(Registrant)
Date November 14, 1996 /s/Craig R. Mackus
Craig R. Mackus
Secretary and Controller
Principal Accounting Officer
Date November 14, 1996 /s/Willard R. Hildebrand
Willard R. Hildebrand
President and CEO
BUCYRUS INTERNATIONAL, INC.
EXHIBIT INDEX
TO
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1996
Incorporated Sequential
Exhibit Herein By Filed Page
Number Description Reference Herewith Number
27 Financial Data Schedule X
(EDGAR filing only.)
99 Press Release dated X
November 12, 1996.