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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-871
BUCYRUS INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 39-0188050
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
P. O. BOX 500
1100 MILWAUKEE AVENUE
SOUTH MILWAUKEE, WISCONSIN
53172
(Address of Principal Executive Offices)
(Zip Code)
(414) 768-4000
(Registrant's Telephone Number, Including Area Code)
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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding November 8, 2002
Common Stock, $.01 par value 1,435,600
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. FINANCIAL INFORMATION:
Item 1 - Financial Statements (Unaudited)
Consolidated Condensed Statements of Operations -
Quarters and nine months ended September 30, 2002
and 2001 3
Consolidated Condensed Statements of Comprehensive
Loss - Quarters and nine months ended
September 30, 2002 and 2001 4
Consolidated Condensed Balance Sheets -
September 30, 2002 and December 31, 2001 5-6
Consolidated Condensed Statements of Cash Flows -
Nine months ended September 30, 2002 and 2001 7
Notes to Consolidated Condensed Financial
Statements 8-21
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 22-27
Item 3 - Quantitative and Qualitative Disclosures
About Market Risk 28
Item 4 - Disclosure Controls and Procedures 29
Forward-Looking Statements 30
Part II. OTHER INFORMATION:
Item 1 - Legal Proceedings 31
Item 2 - Changes in Securities and Use of Proceeds 31
Item 3 - Defaults Upon Senior Securities 31
Item 4 - Submission of Matters to a Vote of
Security Holders 31
Item 5 - Other Matters 31
Item 6 - Exhibits and Reports on Form 8-K 31
Signature Page 32
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars In Thousands, Except Per Share Amounts)
Quarters Ended September 30, Nine Months Ended September 30,
2002 2001 2002 2001
Revenues:
Net sales $ 75,897 $ 82,219 $ 215,954 $ 214,567
Other income 77 82 218 302
__________ __________ __________ __________
75,974 82,301 216,172 214,869
__________ __________ __________ __________
Costs and Expenses:
Cost of products sold 61,198 68,679 175,054 179,453
Engineering and field
service, selling,
administrative and
miscellaneous expenses 10,417 10,108 30,682 31,193
Interest expense 4,753 5,220 14,028 15,962
__________ __________ __________ __________
76,368 84,007 219,764 226,608
__________ __________ __________ __________
Loss before income taxes (394) (1,706) (3,592) (11,739)
Income taxes 1,632 1,732 3,277 2,325
__________ __________ __________ __________
Net loss $ (2,026) $ (3,438) $ (6,869) $ (14,064)
Net loss per share
of common stock:
Basic $ (1.41) $ (2.39) $ (4.78) $ (9.80)
Diluted $ (1.41) $ (2.39) $ (4.78) $ (9.80)
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
(Dollars in Thousands)
Quarters Ended September 30, Nine Months Ended September 30,
2002 2001 2002 2001
Net loss $ (2,026) $ (3,438) $ (6,869) $ (14,064)
Other comprehensive loss -
foreign currency translation
adjustments (1,721) (3,380) (3,095) (7,100)
__________ __________ __________ __________
Comprehensive loss $ (3,747) $ (6,818) $ (9,964) $ (21,164)
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars In Thousands, Except Per Share Amounts)
September 30, December 31, September 30, December 31,
2002 2001 2002 2001
ASSETS LIABILITIES AND COMMON
CURRENT ASSETS: SHAREHOLDERS' INVESTMENT
Cash and cash CURRENT LIABILITIES:
equivalents $ 7,364 $ 7,218 Accounts payable and
Receivables 51,754 55,554 accrued expenses $ 59,123 $ 47,760
Inventories 111,565 102,008 Liabilities to customers
Prepaid expenses and on uncompleted contracts
other current assets 9,627 5,827 and warranties 5,962 6,008
________ ________ Income taxes 2,996 1,205
Borrowings under revolving
Total Current Assets 180,310 170,607 credit facilities and other
short-term obligations 63,672 566
OTHER ASSETS: Current maturities of
Restricted funds long-term debt 475 732
on deposit 1,506 582 ________ ________
Goodwill - net 55,660 55,660 Total Current
Intangible assets - net 38,366 39,601 Liabilities 132,228 56,271
Other assets 11,819 12,092
________ ________ LONG-TERM LIABILITIES:
Liabilities to customers on
107,351 107,935 uncompleted contracts
and warranties 2,000 2,000
PROPERTY, PLANT AND EQUIPMENT: Postretirement benefits 12,958 13,277
Cost 107,210 115,730 Deferred expenses, pension
Less accumulated and other 27,403 33,775
depreciation (42,677) (38,527) Interest payable to
________ ________ Holdings 16,593 11,062
________ ________
64,533 77,203
58,954 60,114
LONG-TERM DEBT, less
current maturities 153,804 222,188
COMMON SHAREHOLDERS' INVESTMENT:
Common stock - par value
$.01 per share, authorized
1,700,000 shares, issued
1,444,650 shares 14 14
Additional paid-in capital 147,715 147,715
Treasury stock - 9,050
shares, at cost (851) (851)
Accumulated deficit (97,285) (90,416)
Accumulated other
comprehensive loss (42,385) (39,290)
________ ________
7,208 17,172
________ ________ ________ ________
$352,194 $355,745 $352,194 $355,745
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars In Thousands)
Nine Months Ended September 30,
2002 2001
Net Cash Provided By (Used In)
Operating Activities $ 2,679 $ (10,519)
__________ __________
Cash Flows From Investing Activities
(Increase) decrease in restricted
funds on deposit (924) 38
Proceeds from sale of The Principal
Financial Group shares 2,974 -
Purchases of property, plant
and equipment (4,067) (2,410)
Proceeds from sale of property, plant
and equipment 168 547
Net proceeds from sale and
leaseback transaction 6,657 -
__________ __________
Net cash provided by (used in)
investing activities 4,808 (1,825)
__________ __________
Cash Flows From Financing Activities
Net proceeds from (repayments of)
revolving credit facilities (5,160) 10,254
Net decrease in long-term debt and
other bank borrowings (375) (316)
Payment of refinancing expenses (1,939) -
Capital contribution from Bucyrus
Holdings, LLC - 1,093
__________ __________
Net cash provided by (used in)
financing activities (7,474) 11,031
__________ __________
Effect of exchange rate changes
on cash 133 (559)
__________ __________
Net increase (decrease) in cash
and cash equivalents 146 (1,872)
Cash and cash equivalents at
beginning of period 7,218 6,948
__________ __________
Cash and cash equivalents at
end of period $ 7,364 $ 5,076
Supplemental Disclosures of Cash Flow Information
2002 2001
Cash paid during the period for:
Interest $ 10,131 $ 12,441
Income taxes - net of refunds 1,684 779
Supplemental Schedule of Non-Cash Investing and Financing Activities
On March 20, 2001, the Company recorded an equity contribution from Bucyrus
Holdings, LLC ("Holdings"), the Company's parent, and a corresponding
reduction in interest payable to Holdings in the amount of $2,171,000, which
represented accrued interest as of June 30, 2000 on the 9-3/4% Senior Notes
due 2007 acquired by Holdings.
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
1. In the opinion of Bucyrus International, Inc. (the "Company"), the
consolidated condensed financial statements contain all adjustments
(consisting of normal recurring accruals) 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. The Company's
operations are classified as one operating segment. The Company is
currently substantially wholly-owned by Bucyrus Holdings, LLC
("Holdings").
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 2001
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 29, 2002.
3. Inventories consist of the following:
September 30, December 31,
2002 2001
(Dollars in Thousands)
Raw materials and parts $ 17,580 $ 13,646
Work in process 18,528 12,837
Finished products (primarily
replacement parts) 75,457 75,525
-------- --------
$111,565 $102,008
4. Basic and diluted net loss per share of common stock were computed by
dividing net loss by the weighted average number of shares of common
stock outstanding. Stock options outstanding were not included in the
diluted net loss per share calculations because they did not have a
dilutive effect. The numerators and the denominators of the basic and
diluted net loss per share of common stock calculations are as follows:
Quarters Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
(Dollars in Thousands, Except
Per Share Amounts)
Basic and Diluted
Net loss $ (2,026) $ (3,438) $ (6,869) $ (14,064)
Weighted average
shares outstanding 1,435,600 1,435,600 1,435,600 1,435,600
Net loss per share $ (1.41) $ (2.39) $ (4.78) $ (9.80)
5. On June 30, 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 142 establishes accounting and
reporting standards associated with goodwill and other intangible assets.
With the adoption of SFAS 142, goodwill is no longer subject to
amortization, but instead is subject to an evaluation for impairment at
least annually by applying a two-step fair-value-based test.
Additionally, intangible assets with indefinite lives are also no longer
amortized but are subject to an evaluation for impairment at least
annually by applying a lower-of-cost-or-market test. Intangible assets
with finite lives continue to be amortized. The Company adopted SFAS 142
on January 1, 2002. For goodwill, the Company has completed Step 1 of
the goodwill transition impairment test as required. The fair value of
the Company's reporting units exceeds the carrying amounts and an
impairment charge is not required. The Company has also completed an
impairment analysis of its indefinite life intangible assets in
accordance with the provisions of SFAS 142 and has determined that an
impairment charge is not required. The following table summarizes the
effects of SFAS 142 on the Company's net loss and loss per share for the
prior periods presented:
Quarters Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
(Dollars In Thousands, Except Per Share Amounts)
Reported net loss $ (2,026) $ (3,438) $ (6,869) $(14,064)
Goodwill amortization - 540 - 1,621
Trademarks/Trade Names
amortization - 121 - 363
________ ________ ________ ________
Adjusted net loss $ (2,026) $ (2,777) $ (6,869) $(12,080)
Basic and diluted loss
per share:
Reported net loss $ (1.41) $ (2.39) $ (4.78) $ (9.80)
Goodwill amortization - .38 - 1.13
Trademarks/Trade Names
amortization - .08 - .25
________ ________ ________ ________
Adjusted net loss
per share $ (1.41) $ (1.93) $ (4.78) $ (8.42)
Intangible assets consist of the following:
September 30, 2002 December 31, 2001
Gross Gross
Carrying Accumulated Carrying Accumulated
Amount Amortization Amount Amortization
(Dollars in Thousands)
Amortized intangible
assets:
Engineering drawings $ 25,500 $ (6,400) $ 25,500 $ (5,443)
Bill of material
listings 2,856 (717) 2,856 (610)
Software 2,288 (1,148) 2,288 (977)
________ ________ ________ ________
$ 30,644 $ (8,265) $ 30,644 $ (7,030)
Unamortized intangible
assets:
Trademarks/Trade Names $ 12,436 $ 12,436
Intangible pension
asset 3,551 3,551
________ ________
$ 15,987 $ 15,987
The aggregate amortization expense for the quarter and nine months ended
September 30, 2002 was $412,000 and $1,235,000, respectively. The
estimated annual amortization expense in each of the next five years is
$1,647,000.
6. On January 4, 2002, the Company completed a sale and leaseback
transaction for a portion of its land and buildings in South Milwaukee,
Wisconsin. The Company is leasing back the property under an operating
lease over a period of twenty years with options for renewals. Net
proceeds received from this transaction were $7,157,000 less $500,000
required as a security deposit. No gain or loss was recognized on this
transaction.
7. The Company's payment obligations under its 9-3/4% Senior Notes due 2007
(the "Senior Notes") are guaranteed by certain of the Company's wholly-
owned subsidiaries (the "Guarantor Subsidiaries"). Such guarantees are
full, unconditional and joint and several. Separate financial statements
of the Guarantor Subsidiaries are not presented because the Company's
management has determined that they would not be material to investors.
The following supplemental financial information sets forth, on an
unconsolidated condensed basis, statement of operations, balance sheet
and statement of cash flow information for the Company (the "Parent
Company"), for the Guarantor Subsidiaries and for the Company's non-
guarantor subsidiaries (the "Other Subsidiaries"). The supplemental
financial information reflects the investments of the Company in the
Guarantor and Other Subsidiaries using the equity method of accounting.
The Company has determined that it is not practicable to allocate
goodwill, intangible assets and deferred income taxes to the Guarantor
Subsidiaries and Other Subsidiaries. Parent Company amounts for net
earnings (loss) and common shareholders' investment differ from
consolidated amounts as intercompany profit in subsidiary inventory has
not been eliminated in the Parent Company statement but has been
eliminated in the Consolidated Totals.
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
Quarter Ended September 30, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $ 36,201 $ 12,743 $ 42,412 $(15,459) $ 75,897
Other income 490 1 249 (663) 77
________ ________ ________ ________ ________
36,691 12,744 42,661 (16,122) 75,974
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 29,426 12,629 33,670 (14,527) 61,198
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 5,877 487 4,053 - 10,417
Interest expense 4,880 368 168 (663) 4,753
________ ________ ________ ________ ________
40,183 13,484 37,891 (15,190) 76,368
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and
equity in net earnings of
consolidated subsidiaries (3,492) (740) 4,770 (932) (394)
Income taxes (benefit) (345) 19 1,958 - 1,632
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (3,147) (759) 2,812 (932) (2,026)
Equity in net earnings of
consolidated subsidiaries 2,053 - - (2,053) -
________ ________ ________ ________ ________
Net earnings (loss) $ (1,094) $ (759) $ 2,812 $ (2,985) $ (2,026)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
Quarter Ended September 30, 2001
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $ 40,106 $ 14,471 $ 41,177 $(13,535) $ 82,219
Other income 598 (1) 222 (737) 82
________ ________ ________ ________ ________
40,704 14,470 41,399 (14,272) 82,301
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 35,629 13,081 33,504 (13,535) 68,679
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 6,435 47 3,626 - 10,108
Interest expense 5,186 406 365 (737) 5,220
________ ________ ________ ________ ________
47,250 13,534 37,495 (14,272) 84,007
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and
equity in net earnings of
consolidated subsidiaries (6,546) 936 3,904 - (1,706)
Income taxes (benefit) (217) 358 1,591 - 1,732
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (6,329) 578 2,313 - (3,438)
Equity in net earnings of
consolidated subsidiaries 2,891 - - (2,891) -
________ ________ ________ ________ ________
Net earnings (loss) $ (3,438) $ 578 $ 2,313 $ (2,891) $ (3,438)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
Nine Months Ended September 30, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $109,610 $ 38,200 $112,752 $(44,608) $215,954
Other income 2,537 2 667 (2,988) 218
________ ________ ________ ________ ________
112,147 38,202 113,419 (47,596) 216,172
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 90,348 36,872 90,688 (42,854) 175,054
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 17,123 1,462 12,097 - 30,682
Interest expense 14,245 1,018 1,753 (2,988) 14,028
________ ________ ________ ________ ________
121,716 39,352 104,538 (45,842) 219,764
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and
equity in net earnings of
consolidated subsidiaries (9,569) (1,150) 8,881 (1,754) (3,592)
Income taxes (benefit) (84) 18 3,343 - 3,277
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (9,485) (1,168) 5,538 (1,754) (6,869)
Equity in net earnings of
consolidated subsidiaries 4,370 - - (4,370) -
________ ________ ________ ________ ________
Net earnings (loss) $ (5,115) $ (1,168) $ 5,538 $ (6,124) $ (6,869)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
Nine Months Ended September 30, 2001
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $115,113 $ 34,194 $106,297 $(41,037) $214,567
Other income 3,676 50 634 (4,058) 302
________ ________ ________ ________ ________
118,789 34,244 106,931 (45,095) 214,869
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 100,813 31,539 88,248 (41,147) 179,453
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 19,775 432 10,986 - 31,193
Interest expense 15,793 1,332 2,895 (4,058) 15,962
________ ________ ________ ________ ________
136,381 33,303 102,129 (45,205) 226,608
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and
equity in net earnings of
consolidated subsidiaries (17,592) 941 4,802 110 (11,739)
Income taxes 137 376 1,812 - 2,325
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (17,729) 565 2,990 110 (14,064)
Equity in net earnings of
consolidated subsidiaries 3,555 - - (3,555) -
________ ________ ________ ________ ________
Net earnings (loss) $(14,174) $ 565 $ 2,990 $ (3,445) $(14,064)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Balance Sheets
September 30, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ - $ 1,225 $ 6,139 $ - $ 7,364
Receivables 14,886 8,234 28,634 - 51,754
Intercompany receivables 90,324 270 20,985 (111,579) -
Inventories 65,166 8,553 43,370 (5,524) 111,565
Prepaid expenses and
other current assets 2,653 839 6,135 - 9,627
________ ________ ________ _________ ________
Total Current Assets 173,029 19,121 105,263 (117,103) 180,310
OTHER ASSETS:
Restricted funds on deposit 772 - 734 - 1,506
Goodwill - net 55,660 - - - 55,660
Intangible assets - net 38,366 - - - 38,366
Other assets 10,419 - 1,400 - 11,819
Investment in subsidiaries 8,759 - - (8,759) -
________ ________ ________ _________ ________
113,976 - 2,134 (8,759) 107,351
PROPERTY, PLANT AND
EQUIPMENT - net 47,281 7,040 10,212 - 64,533
________ ________ ________ _________ ________
$334,286 $ 26,161 $117,609 $(125,862) $352,194
LIABILITIES AND COMMON
SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable and
accrued expenses $ 42,634 $ 2,557 $ 14,592 $ (660) $ 59,123
Intercompany payables 409 31,205 75,046 (106,660) -
Liabilities to customers
on uncompleted contracts
and warranties 2,796 - 3,166 - 5,962
Income taxes 264 17 2,715 - 2,996
Borrowings under revolving
credit facilities
and other short-term
obligations 63,672 - - - 63,672
Current maturities of
long-term debt 187 44 244 - 475
________ ________ ________ _________ ________
Total Current Liabilities 109,962 33,823 95,763 (107,320) 132,228
LONG-TERM LIABILITIES:
Liabilities to customers
on uncompleted contracts
and warranties 2,000 - - - 2,000
Postretirement benefits 12,576 - 382 - 12,958
Deferred expenses, pension
and other 26,164 244 995 - 27,403
Interest payable to Holdings 16,593 - - - 16,593
________ ________ ________ _________ ________
57,333 244 1,377 - 58,954
LONG-TERM DEBT, less
current maturities 150,000 1,214 2,590 - 153,804
COMMON SHAREHOLDERS'
INVESTMENT 16,991 (9,120) 17,879 (18,542) 7,208
________ ________ ________ _________ ________
$334,286 $ 26,161 $117,609 $(125,862) $352,194
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Balance Sheets
December 31, 2001
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ - $ 28 $ 7,190 $ - $ 7,218
Receivables 24,407 7,146 24,001 - 55,554
Intercompany receivables 79,336 1,127 12,529 (92,992) -
Inventories 53,365 9,025 43,237 (3,619) 102,008
Prepaid expenses and
other current assets 542 282 5,003 - 5,827
________ ________ ________ _________ ________
Total Current Assets 157,650 17,608 91,960 (96,611) 170,607
OTHER ASSETS:
Restricted funds on deposit 42 - 540 - 582
Goodwill - net 55,660 - - - 55,660
Intangible assets - net 39,601 - - - 39,601
Other assets 10,203 - 1,889 - 12,092
Investment in subsidiaries 7,103 - - (7,103) -
________ ________ ________ _________ ________
112,609 - 2,429 (7,103) 107,935
PROPERTY, PLANT AND
EQUIPMENT - net 60,172 5,904 11,127 - 77,203
________ ________ ________ _________ ________
$330,431 $ 23,512 $105,516 $(103,714) $355,745
LIABILITIES AND COMMON
SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable and
accrued expenses $ 30,732 $ 2,533 $ 14,730 $ (235) $ 47,760
Intercompany payables 44 27,771 60,532 (88,347) -
Liabilities to customers
on uncompleted contracts
and warranties 2,800 522 2,686 - 6,008
Income taxes 234 29 942 - 1,205
Borrowings under revolving
credit facilities and
other short-term
obligations - - 566 - 566
Current maturities of
long-term debt 237 8 487 - 732
________ ________ ________ _________ ________
Total Current Liabilities 34,047 30,863 79,943 (88,582) 56,271
LONG-TERM LIABILITIES:
Liabilities to customers
on uncompleted contracts
and warranties 2,000 - - - 2,000
Postretirement benefits 12,863 - 414 - 13,277
Deferred expenses,
pension and other 32,032 249 1,494 - 33,775
Interest payable to
Holdings 11,062 - - - 11,062
________ ________ ________ _________ ________
57,957 249 1,908 - 60,114
LONG-TERM DEBT, less
current maturities 213,226 352 8,610 - 222,188
COMMON SHAREHOLDERS'
INVESTMENT 25,201 (7,952) 15,055 (15,132) 17,172
________ ________ ________ _________ ________
$330,431 $ 23,512 $105,516 $(103,714) $355,745
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Cash Flows
Nine Months Ended September 30, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Net Cash Provided By (Used
In) Operating Activities $ (5,859) $ 1,843 $ 6,695 $ - $ 2,679
________ ________ ________ ________ ________
Cash Flows From Investing
Activities
(Increase) decrease
in restricted funds
on deposit (730) - (194) - (924)
Proceeds from sale of
The Principal Financial
Group shares 2,974 - - - 2,974
Purchases of property,
plant and equipment (1,627) (1,544) (896) - (4,067)
Proceeds from sale of
property, plant and
equipment 27 - 141 - 168
Net proceeds from sale and
leaseback transaction 6,657 - - - 6,657
________ ________ ________ ________ ________
Net cash provided by (used
in) investing activities 7,301 (1,544) (949) - 4,808
________ ________ ________ ________ ________
Cash Flows From Financing
Activities
Net proceeds from (repayments
of) revolving credit
facilities 572 - (5,732) - (5,160)
Net increase (decrease)
in long-term debt and
other bank borrowings (176) 898 (1,097) - (375)
Payment of refinancing
expenses (1,838) - (101) - (1,939)
________ ________ ________ ________ ________
Net cash provided by
(used in) financing
activities (1,442) 898 (6,930) - (7,474)
________ ________ ________ ________ ________
Effect of exchange rate
changes on cash - - 133 - 133
________ ________ ________ ________ ________
Net increase (decrease) in
cash and cash equivalents - 1,197 (1,051) - 146
Cash and cash equivalents
at beginning of period - 28 7,190 - 7,218
________ ________ ________ ________ ________
Cash and cash equivalents
at end of period $ - $ 1,225 $ 6,139 $ - $ 7,364
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Cash Flows
Nine Months Ended September 30, 2001
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Net Cash Provided By (Used
In) Operating Activities $(10,461) $ 183 $ (241) $ - $(10,519)
________ ________ ________ ________ ________
Cash Flows From Investing
Activities
Decrease (increase)
in restricted funds
on deposit 350 - (312) - 38
Purchases of property,
plant and equipment (1,342) (192) (876) - (2,410)
Proceeds from sale of
property, plant and
equipment 17 - 530 - 547
________ ________ ________ ________ ________
Net cash used in
investing activities (975) (192) (658) - (1,825)
________ ________ ________ ________ ________
Cash Flows From Financing
Activities
Proceeds from revolving
credit facilities 10,675 - (421) - 10,254
Net increase (decrease)
in long-term debt and
other bank borrowings (332) - 16 - (316)
Capital contribution from
Bucyrus Holdings, LLC 1,093 - - - 1,093
________ ________ ________ ________ ________
Net cash provided by
(used in) financing
activities 11,436 - (405) - 11,031
________ ________ ________ ________ ________
Effect of exchange rate
changes on cash - - (559) - (559)
________ ________ ________ ________ ________
Net decrease in cash
and cash equivalents - (9) (1,863) - (1,872)
Cash and cash equivalents
at beginning of period - 36 6,912 - 6,948
________ ________ ________ ________ ________
Cash and cash equivalents
at end of period $ - $ 27 $ 5,049 $ - $ 5,076
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
the Company's operations for the quarters and nine months ended September 30,
2002 and 2001.
In connection with acquisitions involving the Company in 1997, assets and
liabilities have been adjusted to their estimated fair values. The
consolidated financial statements include the related amortization charges
associated with the fair value adjustments.
Liquidity and Capital Resources
Liquidity
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, 2002 and December 31, 2001
were as follows:
September 30, December 31,
2002 2001
(Dollars in Thousands)
Working capital $ 48,082 $114,336
Current ratio 1.4 to 1 3.0 to 1
The decrease in working capital and current ratio in 2002 was primarily
due to the classification of borrowings under the Company's Loan and Security
Agreement with GMAC Business Credit, LLC (the "Loan and Security Agreement")
at September 30, 2002 as a current liability since these borrowings are due
January 2, 2003. At December 31, 2001, borrowings under the Company's
previous credit agreement were classified as long-term debt. Also, fees
payable to American Industrial Partners of $5,452,000 under a management
services agreement are included in current liabilities at September 30, 2002.
At December 31, 2001, these accrued fees totalled $4,364,000 and were
classified as long-term. Payment of these fees is subject to certain
restrictions in the Loan and Security Agreement.
The Company is presenting below a calculation of earnings before interest
expense, income taxes, depreciation, amortization and (gain) loss on sale of
fixed assets ("Adjusted EBITDA"). The Company is required to maintain certain
minimum EBITDA levels under its Loan and Security Agreement. EBITDA as
defined under this agreement does not differ materially from Adjusted EBITDA
as calculated 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 following table reconciles Loss Before Income Taxes to Adjusted EBITDA:
Quarters Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
(Dollars in Thousands)
Loss before
income taxes $ (394) $ (1,706) $ (3,592) $(11,739)
Non-cash expenses:
Depreciation 2,585 2,773 7,924 8,399
Amortization 1,308 1,331 3,314 4,083
(Gain) loss on
sale of fixed
assets 3 14 (5) 745
Interest expense 4,753 5,220 14,028 15,962
-------- -------- -------- --------
Adjusted EBITDA $ 8,255 $ 7,632 $ 21,669 $ 17,450
On March 7, 2002, the Company entered into the Loan and Security
Agreement which provided the Company with an $85,000,000 senior secured
revolving credit facility. Provisions in the Loan and Security Agreement have
reduced the maximum availability to $82,000,000 at September 30, 2002. The
Loan and Security Agreement expires on January 2, 2003. Outstanding
borrowings bear interest equal to either the prime rate plus an applicable
margin (2% to 2.25%) or LIBOR plus an applicable margin (3.5% to 3.75%) and
are subject to a borrowing base formula based on receivables and inventory.
Borrowings under the Loan and Security Agreement at September 30, 2002 were
$63,672,000 at a weighted average interest rate of 5.7% and were classified as
a current liability. Proceeds from the Loan and Security Agreement were used
to repay in full all outstanding borrowings under the Company's previous
credit agreement with Bank One, Wisconsin (the "Credit Agreement") and under
the Bucyrus Canada Limited revolving term loan (see below). Substantially all
of the domestic assets of the Company (excluding real property) and the
receivables and inventory of the Company's Canadian subsidiary are pledged as
collateral under the Loan and Security Agreement. In addition, all
outstanding capital stock of the Company and its domestic subsidiaries as well
as 65% of the capital stock of the Company's foreign subsidiaries are pledged
as collateral. At September 30, 2002, the amount available for borrowings
under the Loan and Security Agreement was $10,198,000. This amount must be
reduced by $5,000,000 which is the minimum availability the Company must
maintain at all times.
The Company has outstanding $150,000,000 of 9-3/4% Senior Notes due 2007
(the "Senior Notes"). Interest thereon is payable each March 15 and
September 15. During 2000, Holdings acquired $75,635,000 of the Company's
Senior Notes. Holdings agreed as part of the Loan and Security Agreement, and
previously the Credit Agreement, to defer the receipt of interest on these
Senior Notes during the life of the two agreements. At September 30, 2002 and
December 31, 2001, $16,593,000 and $11,062,000, respectively, of interest was
accrued and payable to Holdings. An amendment to the Credit Agreement dated
March 20, 2001 required Holdings to contribute to equity of the Company a
portion of the accrued interest. As a result, on March 20, 2001, the Company
recorded an equity contribution from Holdings and a corresponding reduction in
interest payable to Holdings in the amount of $2,171,000, which represented
accrued interest as of June 30, 2000 on the Senior Notes acquired by Holdings.
In addition, during the second quarter of 2001, Holdings made a cash capital
contribution to the Company in the amount of $1,093,000.
Both the Loan and Security Agreement and the Senior Notes indenture
contain certain covenants which may affect the Company's liquidity and capital
resources. The Loan and Security Agreement contains a number of financial
covenants which, among other items, require the Company (A) to maintain
certain financial ratios, including: (i) leverage ratio (as defined); and
(ii) fixed charge coverage ratio; and (B) to maintain minimum levels of EBITDA
(as defined). At September 30, 2002, the Company was in compliance with all
covenants.
On April 30, 2002, Bucyrus Canada Limited, a wholly-owned subsidiary of
the Company, entered into a new C$3,510,000 mortgage loan on its facility.
The term of the mortgage loan is 15 years at an initial rate of 7.55% which is
fixed for the first five years. The balance outstanding at September 30, 2002
was C$3,457,000. Previously, Bucyrus Canada Limited had a C$15,000,000 credit
facility with The Bank of Nova Scotia. On March 7, 2002, the outstanding
balance of C$9,083,000 under the C$10,000,000 revolving term loan portion of
this facility was paid in full with proceeds from the Loan and Security
Agreement. On April 30, 2002, Bucyrus Canada Limited paid the remaining non-
revolving term loan portion in full with proceeds from the new mortgage loan.
The mortgage loan contains a number of financial covenants which, among other
items, require the Company to maintain certain financial ratios on an annual
basis. At September 30, 2002, Bucyrus Canada Limited was in compliance with
all applicable covenants.
In December 2001, the Company, as a policyholder, received an allocation
of 369,918 shares as a result of the demutualization of The Principal
Financial Group. Net proceeds from the sale of these shares by the Company
were $8,704,000. Of the net proceeds, $2,974,000 was received on January 2,
2002 for shares sold in 2001 and is included in Receivables in the
Consolidated Condensed Balance Sheet at December 31, 2001.
On January 4, 2002, the Company completed a sale and leaseback
transaction for a portion of its land and buildings in South Milwaukee,
Wisconsin. The term of the lease is twenty years with options for renewals.
Net proceeds received from this transaction were $7,157,000 less $500,000
required as a security deposit.
Operating Losses
The Company is highly leveraged and low sales volumes in recent years
have had an adverse effect on the Company's liquidity. While the Company
believes that current levels of cash and liquidity, together with funds
generated by operations and funds available from the Loan and Security
Agreement, will be sufficient to permit the Company to satisfy its debt
service requirements and fund operating activities for the foreseeable future,
there can be no assurances to this effect and the Company continues to closely
monitor its operations. The Company is currently in discussions with various
existing parties to the Loan and Security Agreement as well as several other
financial institutions. The Company's current plan is to finalize these
discussions and sign a new multi-year credit facility in mid December of 2002.
The Company is subject to significant business, economic and competitive
uncertainties that are beyond its control. Accordingly, there can be no
assurance that the Company's performance will be sufficient for the Company to
maintain compliance with the financial covenants under the Loan and Security
Agreement and the Senior Notes Indenture, satisfy its debt service obligations
and fund operating activities under all circumstances. At this time, the
Company continues to believe that future cash flows will be sufficient to
recover the carrying value of its long-lived assets.
Capital Resources
At September 30, 2002, the Company had approximately $1,073,000 of open
capital appropriations. The Company's capital expenditures for the nine
months ended September 30, 2002 were $4,067,000 compared with $2,410,000 for
the nine months ended September 30, 2001. Included in capital expenditures
for the first nine months of 2002 are amounts related to the construction of a
new facility in Gillette, Wyoming. In the near term, the Company anticipates
reducing the level of its capital expenditures to the 2001 level.
Capitalization
The long-term debt to equity ratio at September 30, 2002 and December 31,
2001 was 21.3 to 1 and 12.9 to 1, respectively. The long-term debt to total
capitalization ratio at September 30, 2002 and December 31, 2001 was .7 to 1
and .9 to 1, respectively. If borrowings under the Loan and Security
Agreement were classified as long-term, the long-term debt to equity ratio and
long-term debt to total capitalization ratio at September 30, 2002 would have
been 30.2 to 1 and 1.0 to 1, respectively. Total capitalization is defined as
total common shareholders' investment plus long-term debt plus current
maturities of long-term debt and short-term obligations.
Results Of Operations
Net Sales
Net sales for the quarter and nine months ended September 30, 2002 were
$75,897,000 and $215,954,000, respectively, compared with $82,219,000 and
$214,567,000 for the quarter and nine months ended September 30, 2001,
respectively. Net sales of repair parts and services for the quarter and nine
months ended September 30, 2002 were $66,884,000 and $181,500,000,
respectively, which is an increase of .5% and 7.7% from the quarter and nine
months ended September 30, 2001, respectively. Net machine sales for the
quarter and nine months ended September 30, 2002 were $9,013,000 and
$34,454,000, respectively, which is a decrease of 42.6% and 25.2% from the
quarter and nine months ended September 30, 2001, respectively. The changes
between periods were primarily due to fluctuations in volume.
Cost of Products Sold
Cost of products sold for the quarter ended September 30, 2002 was
$61,198,000 or 80.6% of net sales compared with $68,679,000 or 83.5% of net
sales for the quarter ended September 30, 2001. For the nine months ended
September 30, 2002, cost of products sold was $175,054,000 or 81.1% of net
sales compared with $179,453,000 or 83.6% of net sales for the nine months
ended September 30, 2001. The reduction in cost of products sold as a
percentage of net sales for 2002 was primarily due to the improved mix of
aftermarket sales. Also included in cost of products sold for the nine months
ended September 30, 2002 and 2001 was $3,823,000 and $3,932,000, respectively,
of additional depreciation expense as a result of the fair value adjustment to
plant and equipment in connection with acquisitions involving the Company in
1997.
Engineering and Field Service, Selling, Administrative and Miscellaneous
Expenses
Engineering and field service, selling, administrative and miscellaneous
expenses for the quarter ended September 30, 2002 were $10,417,000 or 13.7% of
net sales compared with $10,108,000 or 12.3% of net sales for the quarter
ended September 30, 2001. The amounts for the nine months ended September 30,
2002 and 2001 were $30,682,000 or 14.2% of net sales and $31,193,000 or 14.5%
of net sales, respectively. Included in the amount for the nine months ended
September 30, 2001 was $745,000 of losses on disposals of fixed assets. Also,
as a result of the adoption of SFAS 142, goodwill and intangible asset
amortization expense decreased by $661,000 and $1,984,000 for the quarter and
nine months ending September 30, 2002, respectively.
Interest Expense
Interest expense for the quarter and nine months ended September 30, 2002
was $4,753,000 and $14,028,000, respectively, compared with $5,220,000 and
$15,962,000 for the quarter and nine months ended September 30, 2001,
respectively. The decrease in interest expense in 2002 was primarily due to
reduced interest rates on revolver borrowings. Included in interest expense
for the quarters and nine months ended September 30, 2002 and 2001 was
$3,656,000 and $10,969,000, respectively, related to the Senior Notes. The
interest expense on the Senior Notes for the quarters and nine months ended
September 30, 2002 and 2001 includes $1,844,000 and $5,531,000, respectively,
related to the Senior Notes acquired by Holdings. Holdings agreed as part of
the Loan and Security Agreement, and previously the Credit Agreement, to defer
the receipt of interest on these Senior Notes during the life of the two
agreements.
Income Taxes
Income tax expense consists primarily of foreign taxes at applicable
statutory rates. For United States tax purposes, the Company recorded a
federal income tax benefit of $421,000 in the third quarter of 2002 related to
the carryback of a portion of the 2001 alternative tax net operating loss to
obtain a refund of the entire alternative minimum tax paid for 2000.
Net Earnings (Loss)
Net loss for the quarter and nine months ended September 30, 2002 was
$2,026,000 and $6,869,000, respectively, compared with a net loss of
$3,438,000 and $14,064,000 for the quarter and nine months ended September 30,
2001, respectively. Non-cash depreciation and amortization charges for the
quarter and nine months ended September 30, 2002 were $3,893,000 and
$11,238,000, respectively, compared with $4,104,000 and $12,482,000,
respectively, for the quarter and nine months ended September 30, 2001.
New Orders and Backlog
New orders for the quarter and nine months ended September 30, 2002 were
$143,553,000 and $276,100,000, respectively, compared with $92,170,000 and
$309,574,000 for the quarter and nine months ended September 30, 2001,
respectively. New machine orders for the quarter and nine months ended
September 30, 2002 were $15,842,000 and $40,011,000, respectively, compared
with $48,738,000 and $60,063,000 for the quarter and nine months ended
September 30, 2001, respectively. Copper prices remain at low levels compared
to the mid 1990's which has negatively impacted demand for the Company's
machines. During the third quarter of 2001, the Company received orders for
electric mining shovels to be used in the oil sands area of Western Canada and
in coal mining. New repair parts and service orders for the quarter and nine
months ended September 30, 2002 were $127,711,000 and $236,089,000,
respectively, compared with $43,432,000 and $249,511,000 for the quarter and
nine months ended September 30, 2001, respectively. The increase for the
quarter ended September 30, 2002 was primarily due to orders received related
to two maintenance and repair contracts.
The Company's consolidated backlog on September 30, 2002 was $289,898,000
compared with $229,752,000 at December 31, 2001 and $259,415,000 at
September 30, 2001. Machine backlog at September 30, 2002 was $38,095,000,
compared with $32,538,000 at December 31, 2001 and $36,864,000 at
September 30, 2001. Repair parts and service backlog at September 30, 2002
was $251,803,000, compared with $197,214,000 at December 31, 2001 and
$222,551,000 at September 30, 2001. A portion of this backlog is related to
multi-year contracts which will generate revenue in future years.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk is impacted by changes in interest rates and
foreign currency exchange rates.
Interest Rates
The Company's interest rate exposure relates primarily to debt
obligations in the United States. The Company manages its borrowings under
the Loan and Security Agreement through the selection of LIBOR based
borrowings or prime rate based borrowings. The Company's Senior Notes are at
a fixed rate. If market conditions warrant, interest rate swaps may be used
to adjust interest rate exposures, although none have been used to date. The
Company believes that a 10% change in its weighted average interest rate at
September 30, 2002 would have the effect of changing the Company's interest
expense on an annual basis by approximately $400,000.
Foreign Currency
Changes in foreign exchange rates can impact the Company's financial
position, results of operations and cash flow. The Company manages foreign
currency exchange rate exposure by utilizing some natural hedges to mitigate
some of its transaction and commitment exposures, and may utilize forward
contracts in certain situations. Based on the Company's derivative and other
foreign currency sensitive instruments outstanding at September 30, 2002, the
Company believes that a 10% change in foreign currency exchange rates will not
have a material effect on the Company's financial position, results of
operations or cash flows.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 4 - DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Within the 90 days prior to the date of this Report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and Vice
President-Finance and Secretary, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures, as defined in
Exchange Act Rule 15d-14(c). Based upon that evaluation, the Company's Chief
Executive Officer and Vice President-Finance and Secretary concluded that the
Company's disclosure controls and procedures are effective in enabling the
Company to identify, process, and report information required to be included
in the Company's periodic SEC filings within the required time period.
Changes in Internal Controls
There were no significant changes in the Company's internal controls or
to our knowledge, in other factors that could significantly affect our
disclosure controls and procedures subsequent to the evaluation date.
FORWARD-LOOKING STATEMENTS
This Report includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. Discussions
containing such forward-looking statements may be found in this section and
elsewhere within this Report. Forward-looking statements include statements
regarding the intent, belief or current expectations of the Company, primarily
with respect to the future operating performance of the Company or related
industry developments. When used in this Report, terms such as "anticipate,"
"believe," "estimate," "expect," "indicate," "may be," "objective," "plan,"
"predict," and "will be" are intended to identify such statements. Readers
are cautioned that any such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual
results may differ from those described in the forward-looking statements as a
result of various factors, many of which are beyond the control of the
Company. Forward-looking statements are based upon management's expectations
at the time they are made. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from
such expectations ("Cautionary Statements") are described generally below and
disclosed elsewhere in this Report. All subsequent written or oral forward-
looking statements attributable to the Company or persons acting on behalf of
the Company are expressly qualified in their entirety by the Cautionary
Statements.
Factors that could cause actual results to differ materially from those
contemplated include:
Factors affecting customers' purchases of new equipment, rebuilds, parts
and services such as: production capacity, stockpiles, and production and
consumption rates of coal, copper, iron, gold and other ores and minerals; the
cash flows of customers; the cost and availability of financing to customers
and the ability of customers to obtain regulatory approval for investments in
mining projects; consolidations among customers; work stoppages at customers
or providers of transportation; and the timing, severity and duration of
customer buying cycles.
Factors affecting the Company's general business, such as: unforseen
patent, tax, product, environmental, employee health or benefit, or
contractual liabilities; nonrecurring restructuring and other special charges;
changes in accounting or tax rules or regulations; reassessments of asset
valuations for such assets as receivables, inventories, fixed assets and
intangible assets; leverage and debt service; our success in recruiting and
retaining managers and key employees; and our wage stability and cooperative
labor relations; plant capacity and utilization.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the
quarter covered by this Report.
Item 5. Other Matters.
Not applicable.
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) Reports on Form 8-K:
No reports on Form 8-K were filed during the third quarter of
2002.
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 11, 2002 /s/Craig R. Mackus
Craig R. Mackus
Vice President-Finance and Secretary
Principal Accounting Officer
Date November 13, 2002 /s/Theodore C. Rogers
Theodore C. Rogers
Chief Executive Officer
I, Theodore C. Rogers, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Bucyrus
International, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 13, 2002
/s/Theodore C. Rogers
Theodore C. Rogers
Chief Executive Officer
I, Craig R. Mackus, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Bucyrus
International, Inc.
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 11, 2002
/s/Craig R. Mackus
Craig R. Mackus
Vice President-Finance and Secretary
BUCYRUS INTERNATIONAL, INC.
EXHIBIT INDEX
TO
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2002
Incorporated
Exhibit Herein By Filed
Number Description Reference Herewith
2.1 Agreement and Plan of Exhibit 1 to
Merger dated August 21, Registrant's
1997, between Registrant, Tender Offer
American Industrial Solicitation/
Partners Acquisition Recommendation
Company, LLC and Bucyrus Statement on
Acquisition Corp. Schedule 14D-9
filed with the
Commission on
August 26, 1997.
2.2 Certificate of Merger Exhibit 2.2 to
dated September 26, 1997, Registrant's
issued by the Secretary Current Report
of State of the State of on Form 8-K
Delaware. filed with the
Commission on
October 10, 1997.
2.3 Second Amended Joint Plan Exhibit 2.1 to
of Reorganization of B-E Registrant's
Holdings, Inc. and Bucyrus- Current Report
Erie Company under Chapter on Form 8-K,
11 of the Bankruptcy Code, filed with the
as modified December 1, Commission and
1994, including Exhibits. dated December 1,
1994.
2.4 Order dated December 1, Exhibit 2.2 to
1994 of the U.S. Bankruptcy Registrant's
Court, Eastern District of Current Report
Wisconsin, confirming the on Form 8-K
Second Amended Joint Plan filed with the
of Reorganization of B-E Commission and
Holdings, Inc. and Bucyrus- dated December 1,
Erie Company under Chapter 1994.
11 of the Bankruptcy Code,
as modified December 1, 1994,
including Exhibits.
3.1 Restated Certificate Exhibit 3.6 to
of Incorporation of Registrant's
Registrant. Annual Report on
Form 10-K for
the year ended
December 31, 1998.
3.2 By-laws of Registrant. Exhibit 3.5 to
Registrant's
Annual Report on
Form 10-K for
the year ended
December 31, 1998.
3.3 Certificate of Amendment Exhibit 3.3
to Certificate of to Registrant's
Formation of Bucyrus Quarterly Report
Holdings, LLC, effective on Form 10-Q
March 25, 1999. filed with the
Commission on
May 15, 2000.
4.1 Indenture of Trust dated Exhibit 4.1 to
as of September 24, 1997 Registration
among Registrant, Boonville Statement on
Mining Services, Inc., Form S-4 of
Minserco, Inc. and Von's Registrant,
Welding, Inc. and Harris Boonville Mining
Trust and Savings Bank, Services, Inc.,
Trustee. Minserco, Inc. and
Von's Welding, Inc.
(SEC Registration
No. 333-39359)
(a) Letter dated Exhibit 4.1(a)
February 15, 2000 to Registrant's
evidencing change of Quarterly Report
Indenture Trustee. on Form 10-Q
filed with the
Commission on
November 6, 2000.
4.2 Form of Guarantee of Included as
Boonville Mining Services, Exhibit E
Inc., Minserco, Inc. and to Exhibit 4.1
Von's Welding, Inc. dated above.
as of September 24, 1997
in favor of Harris Trust
and Savings Bank as Trustee
under the Indenture.
4.3 Form of Registrant's Exhibit 4.3 to
9-3/4% Senior Note due 2007. Registration
Statement on
Form S-4 of
Registrant, Boonville
Mining Services, Inc.,
Minserco, Inc. and
Von's Welding, Inc.
(SEC Registration
No. 333-39359)
10.1 Credit Agreement, dated Exhibit 10.1 to
September 24, 1997 between Registrant's
Bank One, Wisconsin and Current Report
Registrant. on Form 8-K
filed with the
Commission on
October 10, 1997.
(a) First amendment dated Exhibit 10.1(a)
July 21, 1998 to Credit to Registrant's
Agreement. Quarterly Report
on Form 10-Q
filed with the
Commission on
November 16, 1998.
(b) Second amendment dated Exhibit 10.1(b)
September 30, 1998 to to Registrant's
Credit Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 1998.
(c) Third amendment dated Exhibit 10.1(c)
April 20, 1999 to Credit to Registrant's
Agreement. Quarterly Report
on Form 10-Q
filed with the
Commission on
August 12, 1999.
(d) Fourth amendment dated Exhibit 10.1(a)
September 30, 1999 to to Registrant's
Credit Agreement. Quarterly Report
on Form 10-Q
filed with the
Commission on
November 12, 1999.
(e) Fifth amendment dated Exhibit 10.1(e)
March 14, 2000 to Credit to Registrant's
Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 1999.
(f) Sixth amendment dated Exhibit 10.1(f)
September 8, 2000 to to Registrant's
Credit Agreement. Quarterly Report
on Form 10-Q
filed with the
Commission on
November 6, 2000.
(g) Seventh amendment dated Exhibit 10.1(g)
March 20, 2001 to Credit to Registrant's
Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 2000.
(h) Eighth amendment dated Exhibit 10.1(h)
January 4, 2002 to Credit to Registrant's
Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 2001.
(i) Ninth amendment dated Exhibit 10.1(i)
January 22, 2002 to Credit to Registrant's
Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 2001.
10.2 Employment Agreement Exhibit 10.16
between Registrant and to Registrant's
M. W. Salsieder dated Annual Report on
June 23, 1999. Form 10-K for
the year ended
December 31, 1999.
10.3 Secured Promissory Note Exhibit 10.17
between Registrant and to Registrant's
M. W. Salsieder dated Annual Report on
June 23, 1999. Form 10-K for
the year ended
December 31, 1999.
10.4 Pledge Agreement Exhibit 10.18
between Registrant and to Registrant's
M. W. Salsieder dated Annual Report on
June 23, 1999. Form 10-K for
the year ended
December 31, 1999.
10.5 Consulting Agreement Exhibit 10.19
between Registrant and to Registrant's
Wayne T. Ewing dated Annual Report on
February 1, 2000. Form 10-K for
the year ended
December 31, 1999.
10.6 Letter Agreement Exhibit 10.7
between Registrant and to Registrant's
Timothy W. Sullivan Quarterly Report
dated August 8, 2000. on Form 10-Q
filed with the
Commission on
August 14, 2000.
10.7 Agreement of Debt Exhibit 10.21
Conversion between to Registrant's
Registrant and Annual Report on
Bucyrus Holdings, LLC Form 10-K for
dated March 22, 2001. the year ended
December 31, 2000.
10.8 Consulting Agreement Exhibit 10.8
between Registrant and to Registrant's
Willard R. Hildebrand Quarterly Report
dated July 25, 2001. on Form 10-Q
filed with the
Commission on
November 14, 2001.
10.9 Agreement to Purchase and Exhibit 10.18
Sell Industrial Property to Registrant's
between Registrant and Annual Report on
InSite Real Estate Form 10-K for
Development, L.L.C. the year ended
dated October 25, 2001. December 31, 2001.
10.10 Industrial Lease Agreement Exhibit 10.19
between Registrant and to Registrant's
InSite South Milwaukee, L.L.C. Annual Report on
dated January 4, 2002. Form 10-K for
the year ended
December 31, 2001.
10.11 Termination Benefits Agreement Exhibit 10.20
between Registrant and to Registrant's
John F. Bosbous dated Annual Report on
March 5, 2002. Form 10-K for
the year ended
December 31, 2001.
10.12 Termination Benefits Agreement Exhibit 10.21
between Registrant and to Registrant's
Thomas B. Phillips dated Annual Report on
March 5, 2002. Form 10-K for
the year ended
December 31, 2001.
10.13 Loan and Security Agreement Exhibit 10.22
by and among Registrant, to Registrant's
Minserco, Inc., Boonville Annual Report on
Mining Services, Inc. and Form 10-K for
GMAC Business Credit, LLC, the year ended
and Bank One, Wisconsin December 31, 2001.
dated March 7, 2002.