Exhibit 99.1
BUCYRUS INTERNATIONAL, INC.
ANNOUNCES SUMMARY UNAUDITED RESULTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006
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South Milwaukee, Wisconsin - October 23, 2006 - Bucyrus International,
Inc. today announced its summary unaudited results for the three and nine months
ended September 30, 2006. The following includes 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 2006 2005 2006 2005
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Consolidated Statements of Earnings
Sales ................................................ $ 184,980 $ 157,358 $ 532,437 $ 402,916
Cost of products sold ................................ 137,086 120,930 396,736 306,468
----------- ----------- ----------- -----------
Gross profit ......................................... 47,894 36,428 135,701 96,448
Selling, general and administrative expenses ......... 18,728 13,931 52,266 38,377
Research and development expenses .................... 2,182 1,583 7,155 4,393
Amortization of intangible assets .................... 446 449 1,347 1,352
----------- ----------- ----------- -----------
Operating earnings ................................... 26,538 20,465 74,933 52,326
Interest expense ..................................... 804 1,278 2,050 3,640
Other expense - net .................................. 83 123 202 238
----------- ----------- ----------- -----------
Earnings before income taxes ......................... 25,651 19,064 72,681 48,448
Income tax expense ................................... 8,931 6,287 19,881 16,322
----------- ----------- ----------- -----------
Net earnings ......................................... $ 16,720 $ 12,777 $ 52,800 $ 32,126
=========== =========== =========== ===========
Net earnings per share (2):
Basic:
Net earnings per share ........................... $ .53 $ .42 $ 1.69 $ 1.06
=========== =========== =========== ===========
Weighted average shares .......................... 31,289,478 30,651,359 31,255,652 30,400,182
=========== =========== =========== ===========
Diluted:
Net earnings per share ........................... $ .53 $ .41 $ 1.67 $ 1.03
=========== =========== =========== ===========
Weighted average shares .......................... 31,498,745 31,278,852 31,547,086 31,233,156
=========== =========== =========== ===========
Other Financial Data
EBITDA (1) ........................................... $ 30,151 $ 23,897 $ 85,837 $ 62,448
Non-cash stock compensation expense .................. 1,063 45 2,807 135
Severance ............................................ 571 251 1,312 324
(Gain) loss on sale of fixed assets .................. (19) (62) 36 91
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(1) EBITDA is defined as earnings before interest, income taxes, depreciation
and amortization. EBITDA, a measure used by management to measure
liquidity and performance, is reconciled to net earnings 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 ("GAAP")
and does not purport to be an alternative to net earnings 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.
(2) Adjusted for three-for-two stock split effective as of March 29, 2006.
For the three months For the nine months
ended September 30, ended September 30,
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Dollars in thousands 2006 2005 2006 2005
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EBITDA Reconciliation
Net earnings .............................................. $ 16,720 $ 12,777 $ 52,800 $ 32,126
Interest income ........................................... (174) (121) (415) (479)
Interest expense .......................................... 804 1,278 2,050 3,640
Income taxes .............................................. 8,931 6,287 19,881 16,322
Depreciation .............................................. 3,166 2,971 9,406 8,755
Amortization .............................................. 704 705 2,115 2,084
-------- -------- -------- --------
EBITDA .................................................... 30,151 23,897 85,837 62,448
Changes in assets and liabilities ......................... (34,275) (8,750) (48,509) (29,772)
Non-cash stock compensation expense ....................... 1,063 45 2,807 135
(Gain) loss on sale of fixed assets ....................... (19) (62) 36 91
Interest income ........................................... 174 121 415 479
Interest expense .......................................... (804) (1,278) (2,050) (3,640)
Income tax expense ........................................ (8,931) (6,287) (19,881) (16,322)
-------- -------- -------- --------
Net cash provided by (used in) operating activities ....... $(12,641) $ 7,686 $ 18,655 $ 13,419
======== ======== ======== ========
September 30, December 31,
Dollars in thousands 2006 2005
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Consolidated Balance Sheets
Assets
Cash and cash equivalents ..................................... $ 12,787 $ 12,451
Receivables-net ............................................... 163,259 155,547
Inventories ................................................... 169,235 133,476
Deferred income taxes ......................................... 16,612 18,363
Prepaid expenses and other .................................... 7,257 6,982
-------- --------
Total current assets ..................................... 369,150 326,819
-------- --------
Goodwill ...................................................... 47,306 47,306
Intangible assets-net ......................................... 33,149 34,565
Deferred income taxes ......................................... 13,323 10,355
Other assets .................................................. 8,302 8,767
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Total other assets ....................................... 102,080 100,993
-------- --------
Property, plant and equipment - net ........................... 101,935 64,155
-------- --------
Total assets ............................................. $573,165 $491,967
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Liabilities and Common Shareholders' Investment
Accounts payable and accrued expenses ......................... $118,790 $106,747
Liabilities to customers on uncompleted contracts and
warranties ............................................. 25,876 35,239
Income taxes .................................................. 8,949 11,943
Current maturities of long-term debt and other short-term
obligations ............................................ 1,891 1,339
-------- --------
Total current liabilities ................................ 155,506 155,268
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September 30, December 31,
Dollars in thousands 2006 2005
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Postretirement benefits ....................................... 14,895 14,257
Pension and other ............................................. 34,171 34,567
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Total other liabilities .................................. 49,066 48,824
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Long-term debt ................................................ 92,549 66,975
-------- --------
Common shareholders' investment ............................... 276,044 220,900
-------- --------
Total liabilities and common shareholders' investment .... $573,165 $491,967
======== ========
The results for the three months ended September 30, 2006 include an
increase in sales of $27.6 million or 17.6% as compared to the three months
ended September 30, 2005. New machine sales were $74.5 million, an increase of
$30.0 million or 67.3% from $44.5 million for the three months ended September
30, 2005, and aftermarket parts and service sales were $110.5 million, a
decrease of $2.4 million or 2.1% from $112.9 million for the three months ended
September 30, 2005. The results for the nine months ended September 30, 2006
include an increase in sales of $129.5 million or 32.1% as compared to the nine
months ended September 30, 2005. New machine sales were $181.7 million, an
increase of $54.5 million or 42.9% from $127.2 million for the nine months ended
September 30, 2005, and aftermarket parts and service sales were $350.7 million,
an increase of $75.0 million or 27.2% from $275.7 million for the nine months
ended September 30, 2005. The increase in new machine sales for the three and
nine month periods ended September 30, 2006 when compared to the comparable
periods in 2005 was due to increased prices and sustained demand for commodities
that are surface mined by the Company's machines as a result of continued
economic growth in the developing world and renewed economic strength in
industrialized countries. Aftermarket sales also remain strong as the existing
installed fleet of Company machines around the world operates at very high
utilization levels. The Company achieved operating earnings of $26.5 million for
the three months ended September 30, 2006 and $74.9 million for the nine months
ended September 30, 2006. Operating earnings for the three and nine month
periods ended September 30, 2006 increased from the comparable periods in 2005
primarily due to increased gross profit resulting from increased sales volume.
As of September 30, 2006, the Company's total backlog was $755.5 million,
$504.3 million of which was expected to be recognized within twelve months of
such date. This represents a 14.7% and 22.1% increase from the December 31, 2005
total backlog of $658.6 million and twelve months backlog of $413.1 million,
respectively, and a 28.0% and 46.4% increase from the September 30, 2005 total
backlog of $590.2 million and twelve months backlog of $344.4 million,
respectively. The increase from December 31, 2005 and September 30, 2005 was
primarily due to an increase in new machine orders, which totaled $120.5 million
during the third quarter of 2006 and included an 8750AC walking dragline in
Australia. Inquiries for the Company's machines remain at a high level.
As of September 30, 2006, the Company had aggregate outstanding
indebtedness of $94.4 million compared with $68.3 million at December 31, 2005.
The Company had borrowings of $89.0 million under its revolving credit facility
as of September 30, 2006 and cash and cash equivalents were $12.8 million as of
that date. During the third quarter of 2006, the Company's credit agreement was
amended to increase the revolving credit facility from $120.0 million to $200.0
million. Capital expenditures for the nine months ended September 30, 2006 were
$47.8 million, which included $34.0 million related to the Company's expansion
program discussed below. The remaining capital expenditures consisted primarily
of production machinery at the Company's main manufacturing facility.
On July 20, 2006, Bucyrus announced that it will undertake the third phase
of its multi-phase expansion program at its South Milwaukee facility. The first
phase of the expansion provides 110,000 square feet of new space for welding and
machining of large electric mining shovel components and was substantially
complete at the end of the third quarter.
The second phase, announced on February 16, 2006, will expand the
Company's new facility north of Rawson Avenue to over 350,000 square feet of
welding, machining and outdoor hard-goods storage space. Construction is
expected to be completed in mid-2007 and is currently ahead of the original
schedule. The aggregate cost of phase one and two of the expansion project is
expected to be approximately $54 million.
The third phase of the expansion project, which was announced on July 20,
2006, was approved in support of Bucyrus' ongoing efforts to meet the continued
growth of demand for its machines and their components. Phase three will include
the renovation of manufacturing buildings and offices at the Company's existing
facilities south of Rawson Avenue in South Milwaukee, Wisconsin, USA. Its focus
is on modernizing and improving manufacturing and administrative efficiencies
and includes renovation as well as expansion of existing buildings and the
addition of new machine tools. The steps for accomplishing phase three are
scheduled to maximize manufacturing throughput during the renovation and
construction processes. Phase three construction is scheduled to be completed by
the fourth quarter of 2007 and is expected to cost approximately $58 million.
On October 19, 2006, the Company's Board of Directors declared a cash
dividend of $.05 per share on Bucyrus' Class A common stock, which is to be paid
on November 20, 2006 to shareholders of record on November 2, 2006.
Bucyrus will be holding a telephone conference call pertaining to this
news release at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Tuesday,
October 24, 2006. Interested parties should call 800.573.4752 (617.224.4324 for
international callers), participant passcode 37559236. A replay of the call will
be available until November 7, 2006 at 888.286.8010 (617.801.6888
internationally), passcode 97781963.
Bucyrus is one of the world's leading manufacturers of large-scale
excavation equipment used in surface mining. Bucyrus machines are used
throughout the world by customers mining copper, coal, oil sands, iron ore and
other minerals. An important part of Bucyrus' business consists of aftermarket
sales in support of its large installed base (almost $12.5 billion based on
estimated replacement value) of machines which have service lives from fifteen
to forty years.
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 adversely affect the Company's
actual results and performance include, without limitation:
o customers' stockpiles and production capacity, including customer's
ability to procure tires for loading trucks, as well as production
and consumption rates of copper, coal, iron, oil and other ores and
minerals;
o the Company's plant capacity;
o raw material supply and subcontractor capacity;
o the cash flows of customers;
o consolidation among customers and suppliers;
o work stoppages at customers, suppliers or providers of
transportation;
o the timing, severity and duration of customer and industry buying
cycles;
o unforeseen patent, tax, product, environmental, employee health or
benefit, or contractual liabilities that affect the Company;
o litigation;
o nonrecurring restructuring and other special charges incurred by the
Company;
o changes in accounting or tax rules or regulations that affect the
Company;
o changes in the relative values of currencies;
o the Company's leverage and debt service obligations;
o the Company's success in recruiting and retaining key managers and
employees; and
o labor costs and labor relations.
The review of important factors above is not exhaustive, and should be
read in conjunction with the other cautionary statements included in the
Company's 2005 Annual Report to Shareholders and Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 15, 2006 and other
cautionary statements described in Bucyrus' subsequent reports filed with the
Securities and Exchange Commission. All forward-looking statements attributable
to the Company are expressly qualified in their entirety by the foregoing
cautionary statements. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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