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 June 30, 2003
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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding August 13, 2003
Common Stock, $.01 par value 1,471,449
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. FINANCIAL INFORMATION:
Item 1 - Financial Statements (Unaudited)
Consolidated Condensed Statements of Operations -
Quarters and six months ended June 30, 2003
and 2002 3
Consolidated Condensed Statements of Comprehensive
Income (Loss) - Quarters and six months ended
June 30, 2003 and 2002 4
Consolidated Condensed Balance Sheets -
June 30, 2003 and December 31, 2002 5-6
Consolidated Condensed Statements of Cash Flows -
Six months ended June 30, 2003 and 2002 7
Notes to Consolidated Condensed Financial
Statements 8-22
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 23-27
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 Information 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 June 30, Six Months Ended June 30,
2003 2002 2003 2002
Revenues:
Net sales $ 86,953 $ 75,627 $ 147,835 $ 140,057
Other income 103 87 148 141
__________ __________ __________ __________
87,056 75,714 147,983 140,198
__________ __________ __________ __________
Costs and Expenses:
Cost of products sold 70,548 61,685 116,872 113,856
Engineering and field service,
selling, administrative and
miscellaneous expenses 11,594 10,573 22,200 20,265
Interest expense 4,472 4,676 8,995 9,275
__________ __________ __________ __________
86,614 76,934 148,067 143,396
__________ __________ __________ __________
Earnings (loss) before
income taxes 442 (1,220) (84) (3,198)
Income taxes 928 1,039 1,734 1,645
__________ __________ __________ __________
Net loss $ (486) $ (2,259) $ (1,818) $ (4,843)
Net loss per share of
common stock:
Basic $ (.34) $ (1.57) $ (1.27) $ (3.37)
Diluted $ (.34) $ (1.57) $ (1.27) $ (3.37)
See notes to consolidated condensed financial statements.
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(Dollars in Thousands)
Quarters Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
Net loss $ (486) $ (2,259) $ (1,818) $ (4,843)
Other comprehensive income (loss) -
foreign currency translation
adjustments 3,956 (1,050) 5,532 (1,374)
__________ __________ __________ __________
Comprehensive income (loss) $ 3,470 $ (3,309) $ 3,714 $ (6,217)
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)
June 30, December 31, June 30, December 31,
2003 2002 2003 2002
ASSETS LIABILITIES AND COMMON
CURRENT ASSETS: SHAREHOLDERS' INVESTMENT
Cash and cash (DEFICIENCY IN ASSETS)
equivalents $ 6,653 $ 4,189 CURRENT LIABILITIES:
Receivables 55,597 52,770 Accounts payable and
Inventories 117,939 114,312 accrued expenses $ 52,549 $ 59,216
Prepaid expenses and Liabilities to customers
other current assets 6,493 6,186 on uncompleted contracts
________ ________ and warranties 17,017 7,850
Income taxes 2,930 3,443
Total Current Assets 186,682 177,457 Short-term obligations - 495
Current maturities of
OTHER ASSETS: long-term debt 297 431
Restricted funds ________ ________
on deposit 1,381 1,485 Total Current
Goodwill 55,860 55,860 Liabilities 72,793 71,435
Intangible assets - net 36,839 37,662
Other assets 10,692 11,935 LONG-TERM LIABILITIES:
________ ________ Liabilities to customers on
uncompleted contracts
104,772 106,942 and warranties 2,000 2,000
Post retirement benefits 12,650 12,751
PROPERTY, PLANT AND EQUIPMENT: Deferred expenses, pension
Cost 109,500 106,565 and other 41,607 42,583
Less accumulated Interest payable to Holdings 22,123 18,436
depreciation (50,252) (44,086) ________ ________
________ ________
78,380 75,770
59,248 62,479
LONG-TERM DEBT, less
current maturities 203,271 207,804
COMMON SHAREHOLDERS' INVESTMENT
(DEFICIENCY IN ASSETS):
Common stock - par value
$.01 per share, authorized
1,700,000 shares, issued
1,480,499 and 1,444,650
shares, respectively 15 14
Additional paid-in capital 148,389 147,715
Treasury stock - 9,050
shares, at cost (851) (851)
Accumulated deficit (103,020) (101,202)
Accumulated other
comprehensive loss (48,275) (53,807)
________ ________
(3,742) (8,131)
________ ________ ________ ________
$350,702 $346,878 $350,702 $346,878
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)
Six Months Ended June 30,
2003 2002
Net Cash Provided By (Used In)
Operating Activities $ 9,274 $ (6,009)
__________ __________
Cash Flows From Investing Activities
(Increase) decrease in restricted funds
on deposit 104 (1,036)
Proceeds from sale of The Principal
Financial Group shares - 2,974
Purchases of property, plant
and equipment (1,086) (2,898)
Net proceeds from sale and
leaseback transaction - 6,657
Proceeds from sale of property, plant
and equipment 15 80
__________ __________
Net cash provided by (used in)
investing activities (967) 5,777
__________ __________
Cash Flows From Financing Activities
Net repayments of revolving
credit facilities (4,784) (437)
Net increase (decrease) in long-term
debt and other bank borrowings (378) 394
Payment of refinancing expenses (1,303) (1,627)
Proceeds from issuance of common stock 36 -
__________ __________
Net cash used in financing activities (6,429) (1,670)
__________ __________
Effect of exchange rate
changes on cash 586 416
__________ __________
Net increase (decrease) in cash
and cash equivalents 2,464 (1,486)
Cash and cash equivalents at
beginning of period 4,189 7,218
__________ __________
Cash and cash equivalents at
end of period $ 6,653 $ 5,732
Supplemental Disclosures of Cash Flow Information
2003 2002
Cash paid during the period for:
Interest $ 5,259 $ 5,527
Income taxes - net of refunds 2,891 1,274
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 2002
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 31, 2003.
3. Inventories consist of the following:
June 30, December 31,
2003 2002
(Dollars in Thousands)
Raw materials and parts $ 14,553 $ 15,509
Work in process 19,096 17,817
Finished products (primarily
replacement parts) 84,290 80,986
$117,939 $114,312
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. The shares outstanding used to compute the diluted
loss per share exclude outstanding options to purchase 163,651 and
200,000 shares of the Company's common stock as of June 30, 2003 and
2002, respectively. The options were excluded because their inclusion
would have been antidilutive. The numerators and the denominators of the
basic and diluted net loss per share of common stock calculations are as
follows:
Quarters Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
(Dollars in Thousands, Except
Per Share Amounts)
Basic and Diluted
Net loss $ (486) $ (2,259) $ (1,818) $ (4,843)
Weighted average
shares outstanding 1,437,570 1,435,600 1,436,590 1,435,600
Net loss per share $ (.34) $ (1.57) $ (1.27) $ (3.37)
5. The Company accounts for stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees," as allowed by Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). The
following table illustrates the effect on net loss and net loss per share
as if the fair value-based method provided by SFAS 123 had been applied
for all outstanding and unvested awards in each period:
Quarters Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
(Dollars In Thousands, Except Per Share Amounts)
Reported net loss $ (486) $ (2,259) $ (1,818) $ (4,843)
Add: Stock-based employee
compensation expense
recorded for stock
options, net of
related tax effects 638 - 638 -
Deduct: Total stock-based
employee compensation
expense determined under
fair value based method
for all awards, net of
related tax effects (73) (73) (145) (145)
________ ________ ________ ________
Pro forma net
earnings (loss) $ 79 $ (2,332) $ (1,325) $ (4,988)
Net earnings (loss) per
share of common stock
(basic and diluted):
As reported $ (.34) $ (1.57) $ (1.27) $ (3.37)
Pro forma .05 (1.62) (.92) (3.47)
6. Intangible assets consist of the following:
June 30, 2003 December 31, 2002
Gross Gross
Carrying Accumulated Carrying Accumulated
Amount Amortization Amount Amortization
(Dollars in Thousands)
Amortized intangible
assets:
Engineering drawings $ 25,500 $ (7,356) $ 25,500 $ (6,719)
Bill of material
listings 2,856 (824) 2,856 (752)
Software 2,288 (1,320) 2,288 (1,206)
________ ________ ________ ________
$ 30,644 $ (9,500) $ 30,644 $ (8,677)
Unamortized intangible
assets:
Trademarks/Trade Names $ 12,436 $ 12,436
Intangible pension
asset 3,259 3,259
________ ________
$ 15,695 $ 15,695
The aggregate intangible amortization expense for the quarters ended
June 30, 2003 and 2002 was $412,000. The aggregate intangible
amortization expense for the six months ended June 30, 2003 and 2002 was
$823,000. The estimated future amortization expense of intangible assets
as of June 30, 2003 is as follows:
(Dollars in Thousands)
2003 (remaining six months) $ 824
2004 1,647
2005 1,647
2006 1,647
2007 1,585
2008 1,417
Future 12,377
________
$ 21,144
7. Expenditures for ongoing compliance with environmental regulations that
relate to current operations are expensed or capitalized as appropriate.
Expenditures that relate to an existing condition caused by past
operations and which do not contribute to current or future revenue
generation are expensed. Liabilities are recorded when environmental
assessments indicate that remedial efforts are probable and the costs can
be reasonably estimated. Estimates of the liability are based upon
currently available facts, existing technology and presently enacted laws
and regulations. These liabilities are included in the Consolidated
Condensed Balance Sheets at their undiscounted amounts. Recoveries are
evaluated separately from the liability and, if appropriate, are recorded
separately from the associated liability in the Consolidated Condensed
Balance Sheets.
The Company records provisions for estimated warranty and other related
costs at the time of sale based on historical warranty loss experience
and periodically adjusts these provisions to reflect actual experience.
The following is a reconciliation of the changes in accrued warranty
costs for the six months ended June 30, 2003:
(Dollars in Thousands)
Balance at December 31, 2002 $ 3,597
Expense provision 1,428
Charges to reserve (581)
________
Balance at June 30, 2003 $ 4,444
The Company is normally subject to numerous product liability claims,
many of which relate to products no longer manufactured by the Company or
its subsidiaries, and other claims arising in the ordinary course of
business. The Company has insurance covering most of said claims,
subject to varying deductibles up to $3,000,000, and has various limits
of liability depending on the insurance policy year in question. It is
the view of management that the final resolution of said claims and other
similar claims which are likely to arise in the future will not
individually or in the aggregate have a material effect on the Company's
financial position, results of operations or cash flows, although no
assurance to that effect can be given.
The Company has been named as a co-defendant in 286 personal injury
liability asbestos cases, involving approximately 1,400 plaintiffs, which
are pending in various state courts. In all of these cases, insurance
carriers have accepted or are expected to accept the defense of such
cases. These cases are in preliminary stages and the Company does not
believe that costs associated with these matters will have a material
effect on the Company's financial position, results of operations or cash
flows, although no assurance to that effect can be given.
8. Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income," requires the reporting of comprehensive income
(loss) in addition to net income (loss) from operations. Comprehensive
income (loss) is a more inclusive financial reporting method that
includes disclosure of financial information that historically has not
been recognized in the calculation of net income (loss). The Company
reports comprehensive income (loss) and accumulated other comprehensive
loss which includes net loss, foreign currency translation adjustments
and minimum pension liability adjustments. Information on accumulated
other comprehensive loss is as follows:
Minimum Accumulated
Cumulative Pension Other
Translation Liability Comprehensive
Adjustments Adjustments Loss
(Dollars in Thousands)
Balance at December 31, 2002 $(24,614) $(29,193) $(53,807)
Changes - Six Months ended
June 30, 2003 5,532 - 5,532
________ ________ ________
Balance at June 30, 2003 $(19,082) $(29,193) $(48,275)
9. In July 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities" ("SFAS 146").
SFAS 146 requires companies to recognize costs associated with exit or
disposal activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. Examples of costs covered by
SFAS 146 include lease termination costs and certain employee severance
costs that are associated with a restructuring, discontinued operations,
plant closing, or other exit or disposal activity. SFAS 146 is to be
applied prospectively to exit or disposal activities initiated after
December 31, 2002. The Company adopted SFAS 146 on January 1, 2003.
Adoption of SFAS 146 did not have a material effect on the Company's
consolidated financial position, results of operations or cash flows.
In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." Interpretation No. 45 requires
that a guarantor must recognize, at the inception of a guarantee, a
liability for the fair value of the obligation that it has undertaken in
issuing a guarantee. Interpretation No. 45 also addresses the disclosure
requirements that a guarantor must include in its financial statements
for guarantees issued. The disclosure requirements in this
interpretation are effective for financial statements ending after
December 15, 2002. The initial recognition and measurement provisions of
this interpretation are applicable on a prospective basis to guarantees
issued or modified after December 31, 2002. The Company adopted the
recognition and measurement provisions of Interpretation No. 45 on
January 1, 2003. Adoption of Interpretation No. 45 did not have a
material effect on the Company's financial position, results of
operations or cash flows.
10. 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 basis, the 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 June 30, 2003
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $ 52,105 $ 9,730 $ 42,148 $(17,030) $ 86,953
Other income 436 1 436 (770) 103
________ ________ ________ ________ ________
52,541 9,731 42,584 (17,800) 87,056
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 42,706 9,296 35,047 (16,501) 70,548
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 7,140 443 4,091 (80) 11,594
Interest expense 4,721 345 176 (770) 4,472
________ ________ ________ ________ ________
54,567 10,084 39,314 (17,351) 86,614
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and equity
in net earnings of
consolidated subsidiaries (2,026) (353) 3,270 (449) 442
Income taxes 60 6 862 - 928
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (2,086) (359) 2,408 (449) (486)
Equity in net earnings of
consolidated subsidiaries 2,049 - - (2,049) -
________ ________ ________ ________ ________
Net earnings (loss) $ (37) $ (359) $ 2,408 $ (2,498) $ (486)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
Quarter Ended June 30, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $ 39,033 $ 13,377 $ 38,563 $(15,346) $ 75,627
Other income 478 1 241 (633) 87
________ ________ ________ ________ ________
39,511 13,378 38,804 (15,979) 75,714
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 31,989 12,790 31,430 (14,524) 61,685
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 5,783 510 4,280 - 10,573
Interest expense 4,755 333 221 (633) 4,676
________ ________ ________ ________ ________
42,527 13,633 35,931 (15,157) 76,934
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and equity
in net earnings of
consolidated subsidiaries (3,016) (255) 2,873 (822) (1,220)
Income taxes 77 - 962 - 1,039
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (3,093) (255) 1,911 (822) (2,259)
Equity in net earnings of
consolidated subsidiaries 1,656 - - (1,656) -
________ ________ ________ ________ ________
Net earnings (loss) $ (1,437) $ (255) $ 1,911 $ (2,478) $ (2,259)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
Six Months Ended June 30, 2003
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $ 87,080 $ 17,280 $ 75,577 $(32,102) $147,835
Other income 1,979 1 785 (2,617) 148
________ ________ ________ ________ ________
89,059 17,281 76,362 (34,719) 147,983
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 68,946 17,232 61,759 (31,065) 116,872
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 12,382 989 8,960 (131) 22,200
Interest expense 9,472 678 1,462 (2,617) 8,995
________ ________ ________ ________ ________
90,800 18,899 72,181 (33,813) 148,067
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and
equity in net earnings of
consolidated subsidiaries (1,741) (1,618) 4,181 (906) (84)
Income taxes 227 12 1,495 - 1,734
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (1,968) (1,630) 2,686 (906) (1,818)
Equity in net earnings of
consolidated subsidiaries 1,056 - - (1,056) -
________ ________ ________ ________ ________
Net earnings (loss) $ (912) $ (1,630) $ 2,686 $ (1,962) $ (1,818)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
Six Months Ended June 30, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Revenues:
Net sales $ 73,409 $ 25,457 $ 70,340 $(29,149) $140,057
Other income 2,047 1 418 (2,325) 141
________ ________ ________ ________ ________
75,456 25,458 70,758 (31,474) 140,198
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 60,922 24,243 57,018 (28,327) 113,856
Engineering and field
service, selling,
administrative
and miscellaneous
expenses 11,246 975 8,044 - 20,265
Interest expense 9,365 650 1,585 (2,325) 9,275
________ ________ ________ ________ ________
81,533 25,868 66,647 (30,652) 143,396
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and
equity in net earnings of
consolidated subsidiaries (6,077) (410) 4,111 (822) (3,198)
Income taxes (benefit) 261 (1) 1,385 - 1,645
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated subsidiaries (6,338) (409) 2,726 (822) (4,843)
Equity in net earnings of
consolidated subsidiaries 2,317 - - (2,317) -
________ ________ ________ ________ ________
Net earnings (loss) $ (4,021) $ (409) $ 2,726 $ (3,139) $ (4,843)
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Balance Sheets
June 30, 2003
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ - $ 25 $ 6,628 $ - $ 6,653
Receivables 23,592 6,906 25,099 - 55,597
Intercompany receivables 81,871 884 24,560 (107,315) -
Inventories 63,165 6,778 53,810 (5,814) 117,939
Prepaid expenses and
other current assets 404 30 6,490 (431) 6,493
________ ________ ________ _________ ________
Total Current Assets 169,032 14,623 116,587 (113,560) 186,682
OTHER ASSETS:
Restricted funds on deposit 737 - 644 - 1,381
Goodwill 55,660 - 200 - 55,860
Intangible assets - net 36,839 - - - 36,839
Other assets 9,103 - 1,589 - 10,692
Investment in subsidiaries 20,547 - - (20,547) -
________ ________ ________ _________ ________
122,886 - 2,433 (20,547) 104,772
PROPERTY, PLANT AND
EQUIPMENT - net 41,638 6,413 11,197 - 59,248
________ ________ ________ _________ ________
$333,556 $ 21,036 $130,217 $(134,107) $350,702
LIABILITIES AND COMMON
SHAREHOLDERS' INVESTMENT
(DEFICIENCY IN ASSETS)
CURRENT LIABILITIES:
Accounts payable and
accrued expenses $ 37,265 $ 2,108 $ 13,303 $ (127) $ 52,549
Intercompany payables 280 29,556 73,414 (103,250) -
Liabilities to customers
on uncompleted contracts
and warranties 13,927 203 3,318 (431) 17,017
Income taxes 311 16 2,603 - 2,930
Current maturities of
long-term debt - 44 253 - 297
________ ________ ________ _________ ________
Total Current Liabilities 51,783 31,927 92,891 (103,808) 72,793
LONG-TERM LIABILITIES:
Liabilities to customers
on uncompleted contracts
and warranties 2,000 - - - 2,000
Postretirement benefits 12,300 - 350 - 12,650
Deferred expenses, pension
and other 40,101 427 1,079 - 41,607
Interest payable to
Holdings 22,123 - - - 22,123
________ ________ ________ _________ ________
76,524 427 1,429 - 78,380
LONG-TERM DEBT, less
current maturities 199,239 1,203 2,829 - 203,271
COMMON SHAREHOLDERS'
INVESTMENT (DEFICIENCY
IN ASSETS) 6,010 (12,521) 33,068 (30,299) (3,742)
________ ________ ________ _________ ________
$333,556 $ 21,036 $130,217 $(134,107) $350,702
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Balance Sheets
December 31, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ - $ 24 $ 4,165 $ - $ 4,189
Receivables 20,100 6,006 26,664 - 52,770
Intercompany receivables 76,916 347 24,222 (101,485) -
Inventories 63,648 7,493 49,705 (6,534) 114,312
Prepaid expenses and
other current assets 845 311 5,030 - 6,186
________ ________ ________ _________ ________
Total Current Assets 161,509 14,181 109,786 (108,019) 177,457
OTHER ASSETS:
Restricted funds on deposit 758 - 727 - 1,485
Goodwill 55,660 - 200 - 55,860
Intangible assets - net 37,662 - - - 37,662
Other assets 10,135 - 1,800 - 11,935
Investment in subsidiaries 13,525 - - (13,525) -
________ ________ ________ _________ ________
117,740 - 2,727 (13,525) 106,942
PROPERTY, PLANT AND
EQUIPMENT - net 45,098 6,866 10,515 - 62,479
________ ________ ________ _________ ________
$324,347 $ 21,047 $123,028 $(121,544) $346,878
LIABILITIES AND COMMON
SHAREHOLDERS' INVESTMENT
(DEFICIENCY IN ASSETS)
CURRENT LIABILITIES:
Accounts payable and
accrued expenses $ 40,390 $ 2,103 $ 17,009 $ (286) $ 59,216
Intercompany payables 117 27,915 70,855 (98,887) -
Liabilities to customers
on uncompleted contracts
and warranties 4,584 286 2,980 - 7,850
Income taxes 335 29 3,079 - 3,443
Short-term obligations - - 495 - 495
Current maturities of
long-term debt 126 44 261 - 431
________ ________ ________ _________ ________
Total Current Liabilities 45,552 30,377 94,679 (99,173) 71,435
LONG-TERM LIABILITIES:
Liabilities to customers
on uncompleted contracts
and warranties 2,000 - - - 2,000
Postretirement benefits 12,381 - 370 - 12,751
Deferred expenses,
pension and other 41,240 335 1,008 - 42,583
Interest payable to
Holdings 18,436 - - - 18,436
________ ________ ________ _________ ________
74,057 335 1,378 - 75,770
LONG-TERM DEBT, less
current maturities 204,023 1,226 2,555 - 207,804
COMMON SHAREHOLDERS'
INVESTMENT (DEFICIENCY
IN ASSETS) 715 (10,891) 24,416 (22,371) (8,131)
________ ________ ________ _________ ________
$324,347 $ 21,047 $123,028 $(121,544) $346,878
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Cash Flows
Six Months Ended June 30, 2003
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Net Cash Provided By
Operating Activities $ 6,691 $ 26 $ 2,557 $ - $ 9,274
________ ________ ________ ________ ________
Cash Flows From Investing
Activities
Decrease in restricted
funds on deposit 21 - 83 - 104
Purchases of property,
plant and equipment (655) (5) (426) - (1,086)
Proceeds from sale of
property, plant and
equipment 3 2 10 - 15
Dividends paid to parent 117 - (117) - -
________ ________ ________ ________ ________
Net cash used in
investing activities (514) (3) (450) - (967)
________ ________ ________ ________ ________
Cash Flows From Financing
Activities
Repayments of revolving
credit facilities (4,784) - - - (4,784)
Net decrease in other
long-term debt and
bank borrowings (126) (22) (230) - (378)
Payment of refinancing
expenses (1,303) - - - (1,303)
Proceeds from issuance
of common stock 36 - - - 36
________ ________ ________ ________ ________
Net cash used in
financing activities (6,177) (22) (230) - (6,429)
________ ________ ________ ________ ________
Effect of exchange rate
changes on cash - - 586 - 586
________ ________ ________ ________ ________
Net increase in cash
and cash equivalents - 1 2,463 - 2,464
Cash and cash equivalents
at beginning of period - 24 4,165 - 4,189
________ ________ ________ ________ ________
Cash and cash equivalents
at end of period $ - $ 25 $ 6,628 $ - $ 6,653
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Cash Flows
Six Months Ended June 30, 2002
(Dollars in Thousands)
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
Net Cash Provided By (Used
In) Operating Activities $(11,409) $ 387 $ 5,013 $ - $ (6,009)
________ ________ ________ ________ ________
Cash Flows From Investing
Activities
Increase in restricted
funds on deposit (727) - (309) - (1,036)
Proceeds from sale of
The Principal Financial
Group shares 2,974 - - - 2,974
Purchases of property,
plant and equipment (1,170) (1,231) (497) - (2,898)
Proceeds from sale of
property, plant and
equipment 25 - 55 - 80
Net proceeds from sale and
leaseback transaction 6,657 - - - 6,657
________ ________ ________ ________ ________
Net cash provided by (used
in)investing activities 7,759 (1,231) (751) - 5,777
________ ________ ________ ________ ________
Cash Flows From Financing
Activities
Net proceeds from (repayments
of) revolving credit
facilities 5,295 - (5,732) - (437)
Net increase (decrease) in
other long-term debt
and bank borrowings (116) 843 (333) - 394
Payment of refinancing
expenses (1,529) - (98) - (1,627)
________ ________ ________ ________ ________
Net cash provided by (used
in) financing activities 3,650 843 (6,163) - (1,670)
________ ________ ________ ________ ________
Effect of exchange rate
changes on cash - - 416 - 416
________ ________ ________ ________ ________
Net decrease in cash
and cash equivalents - (1) (1,485) - (1,486)
Cash and cash equivalents
at beginning of period - 28 7,190 - 7,218
________ ________ ________ ________ ________
Cash and cash equivalents
at end of period $ - $ 27 $ 5,705 $ - $ 5,732
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 six months ended June 30, 2003
and 2002.
In connection with acquisitions involving the Company, assets and
liabilities were adjusted to their estimated fair values. The consolidated
condensed 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 June 30, 2003 and December 31, 2002 were
as follows:
June 30, December 31,
2003 2002
(Dollars in Thousands)
Working capital $113,889 $106,022
Current ratio 2.6 to 1 2.5 to 1
EBITDA for the quarters and six months ended June 30, 2003 was $8,325,000
and $15,661,000, respectively, compared with $7,337,000 and $13,422,000 for
the quarter and six months ended June 30, 2002, respectively. EBITDA is
presented (i) because EBITDA is used by the Company to measure its liquidity;
and (ii) because the Company believes EBITDA is frequently used by securities
analysts, investors and other interested parties in the evaluation of
companies in its industry. The EBITDA calculation is not an alternative to
operating income under generally accepted accounting principles ("GAAP") as an
indicator of operating performance or to cash flows as a measure of liquidity.
The following table reconciles Net Cash Provided by (Used in) Operating
Activities as shown in the Consolidated Condensed Statements of Cash Flows to
EBITDA:
Quarters Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
(Dollars in Thousands)
Net cash provided
by (used in)
operating
activities $ 9,352 $ (397) $ 9,274 $ (6,009)
Changes in
assets and
liabilities (5,774) 2,019 (3,632) 8,503
Stock compensation
expense (638) - (638) -
Gain (loss) on sale
of fixed assets (15) - (72) 8
Interest expense 4,472 4,676 8,995 9,275
Income tax
expense 928 1,039 1,734 1,645
________ ________ ________ ________
EBITDA $ 8,325 $ 7,337 $ 15,661 $ 13,422
The Company has a Loan and Security Agreement with GMAC Business
Credit, LLC (the "Loan and Security Agreement") which, as amended, expires on
January 8, 2005 and provides the Company with a $76,000,000 senior secured
revolving credit facility. Outstanding borrowings under the Loan and Security
Agreement 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 at June 30, 2003 and December 31, 2002 were $49,239,000 and
$54,023,000, respectively, at a weighted average interest rate of 5.0% and
6.3%, respectively, and were classified as long-term debt. 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 June 30, 2003, the amount available for borrowings under
the Loan and Security Agreement was $22,103,000. 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 has agreed as part of the Loan and Security Agreement
and a previous credit agreement to defer the receipt of interest on these
Senior Notes during the life of the agreements. At June 30, 2003 and
December 31, 2002, $22,123,000 and $18,436,000, respectively, of interest was
accrued and payable to Holdings.
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 ("Adjusted EBITDA"). At June 30, 2003, the Company was in
compliance with all covenants. Failure to meet these covenants could impact
the Company's liquidity. The following table reconciles Net Cash Provided by
(Used in) Operating Activities as shown in the Consolidated Condensed
Statements of Cash Flows to Adjusted EBITDA as defined in the Loan and
Security Agreement:
Quarters Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
(Dollars in Thousands)
Net cash provided
by (used in)
operating
activities $ 9,352 $ (397) $ 9,274 $ (6,009)
Changes in
assets and
liabilities (5,774) 2,019 (3,632) 8,503
Interest income (80) (70) (107) (107)
Interest expense 4,472 4,676 8,995 9,275
Income tax
expense 928 1,039 1,734 1,645
Management
fee accrual
adjustment (584) 363 (695) 751
________ ________ ________ ________
Adjusted EBITDA $ 8,314 $ 7,630 $ 15,569 $ 14,058
On April 30, 2002, Bucyrus Canada Limited, a wholly-owned subsidiary of
the Company, entered into a C$3,510,000 mortgage loan collateralized by its
land, buildings and certain building attachments. The balance outstanding at
June 30, 2003 and December 31, 2002 was C$3,356,000 and C$3,425,000,
respectively. 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 mortgage loan contains a
number of financial covenants which, among other items, require Bucyrus Canada
Limited to maintain certain financial ratios on an annual basis. At June 30,
2003, Bucyrus Canada Limited was in compliance with all applicable covenants.
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 subject to significant business, economic and competitive
uncertainties that are beyond its control. See "Forward-Looking Statements."
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, including goodwill and other intangible assets.
Capital Resources
At June 30, 2003, the Company had approximately $1,395,000 of open
capital appropriations. The Company's capital expenditures for the six months
ended June 30, 2003 were $1,086,000 compared with $2,898,000 for the six
months ended June 30, 2002. During the second six months of 2003, the Company
expects to spend closer to 2002 levels.
Capitalization
The long-term debt to total capitalization ratio at June 30, 2003 and
December 31, 2002 was 1.0 to 1. Total capitalization is defined as total
common shareholders' investment (deficiency in assets) plus long-term debt
plus current maturities of long-term debt and other short-term borrowings and
obligations.
Results Of Operations
Net Sales
Net sales for the quarter and six months ended June 30, 2003 were
$86,953,000 and $147,835,000, respectively, compared with $75,627,000 and
$140,057,000 for the quarter and six months ended June 30, 2002, respectively.
Net sales of repair parts and services for the quarter and six months ended
June 30, 2003 were $63,513,000 and $117,150,000, respectively, which was an
increase of .5% and 2.2% from the quarter and six months ended June 30, 2002,
respectively. Net machine sales for the quarter and six months ended June 30,
2003 were $23,440,000 and $30,685,000, respectively, which was an increase of
88.9% and 20.6% from the quarter and six months ended June 30, 2002,
respectively. The changes in net machine sales between periods were primarily
due to fluctuations in volume.
Cost of Products Sold
Cost of products sold for the quarter ended June 30, 2003 was $70,548,000
or 81.1% of net sales compared with $61,685,000 or 81.6% of net sales for the
quarter ended June 30, 2002. For the six months ended June 30, 2003, cost of
products sold was $116,872,000 or 79.1% of net sales compared with
$113,856,000 or 81.3% of net sales for the six months ended June 30, 2002.
The decrease in cost of products sold as a percentage of net sales for 2003
was primarily due to the improved mix of aftermarket sales. Also included in
cost of products sold for the six months ended June 30, 2003 and 2002 was
$2,530,000 and $2,631,000, respectively, of additional depreciation expense as
a result of the fair value adjustment to plant and equipment in connection
with acquisitions involving the Company.
Engineering and Field Service, Selling, Administrative and Miscellaneous
Expenses
Engineering and field service, selling, administrative and miscellaneous
expenses for the quarter ended June 30, 2003 were $11,594,000 or 13.3% of net
sales compared with $10,573,000 or 14.0% of net sales for the quarter ended
June 30, 2002. The amounts for the six months ended June 30, 2003 and 2002
were $22,200,000 or 15.0% of net sales and $20,265,000 or 14.5% of net sales,
respectively. Included in the amounts for the quarter and six months ended
June 30, 2003 was stock-based employee compensation expense of $638,000
related to certain outstanding stock options.
Interest Expense
Interest expense for the quarter and six months ended June 30, 2003 was
$4,472,000 and $8,995,000, respectively, compared with $4,676,000 and
$9,275,000 for the quarter and six months ended June 30, 2002, respectively.
Included in interest expense for the quarters and six months ended June 30,
2003 and 2002 was $3,657,000 and $7,313,000, respectively, related to the
Senior Notes. The interest expense on the Senior Notes for the quarters and
six months ended June 30, 2003 and 2002 includes $1,844,000 and $3,687,000,
respectively, related to the Senior Notes acquired by Holdings. Holdings has
agreed as part of the Loan and Security Agreement and a previous credit
agreement to defer the receipt of interest on these Senior Notes during the
life of the agreements.
Income Taxes
Income tax expense consists primarily of foreign taxes at applicable
statutory rates.
Net Loss
Net loss for the quarter and six months ended June 30, 2003 was $486,000
and $1,818,000, respectively, compared with a net loss of $2,259,000 and
$4,843,000 for the quarter and six months ended June 30, 2002, respectively.
Non-cash depreciation and amortization charges for the quarter and six months
ended June 30, 2003 were $3,411,000 and $6,750,000, respectively, compared
with $3,881,000 and $7,345,000 for the quarter and six months ended June 30,
2002, respectively.
New Orders and Backlog
New orders for the quarter and six months ended June 30, 2003 were
$92,721,000 and $158,855,000, respectively, compared with $75,629,000 and
$132,547,000 for the quarter and six months ended June 30, 2002, respectively.
New machine orders for the quarter and six months ended June 30, 2003 were
$22,852,000 and $28,995,000, respectively, compared with $24,049,000 and
$24,169,000 for the quarter and six months ended June 30, 2002, respectively.
Copper prices remain at low levels compared to the mid 1990's which has
negatively impacted demand for the Company's machines. New repair parts and
service orders for the quarter and six months ended June 30, 2003 were
$69,869,000 and $129,860,000, respectively, compared with $51,580,000 and
$108,378,000 for the quarter and six months ended June 30, 2002, respectively.
The amounts for the quarter and six months ended June 30, 2003 include orders
received related to machine moves.
The Company's consolidated backlog on June 30, 2003 was $256,715,000
compared with $245,695,000 at December 31, 2002 and $222,242,000 at June 30,
2002. Machine backlog at June 30, 2003 was $32,739,000 compared with
$34,429,000 at December 31, 2002 and $31,266,000 at June 30, 2002. Repair
parts and service backlog at June 30, 2003 was $223,976,000 compared with
$211,266,000 at December 31, 2002 and $190,976,000 at June 30, 2002. 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 the Company's weighted average interest
rate at June 30, 2003 would have the effect of changing the Company's interest
expense on an annual basis by approximately $300,000.
Foreign Currency
Changes in foreign exchange rates can impact the Company's financial
position, results of operations and cash flows. 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 June 30, 2003, 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
As of June 30, 2003, 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 its 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-15(e).
Based upon that evaluation, the Company's Chief Executive Officer and its 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," "could," "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.
There have been no material changes to the information set forth
under Item 3 - Legal Proceedings and Other Contingencies in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2002.
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 Information.
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 second quarter
of 2003.
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 August 13, 2003 /s/Craig R. Mackus
Craig R. Mackus
Vice President-Finance and Secretary
Principal Accounting Officer
Date August 13, 2003 /s/Theodore C. Rogers
Theodore C. Rogers
Chief Executive Officer
BUCYRUS INTERNATIONAL, INC.
EXHIBIT INDEX
TO
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2003
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 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.
10.3 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.
10.4 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.
10.5 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.
10.6 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.
10.7 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.
10.8 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.
10.9 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.
10.10 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.
(a) First amendment dated Exhibit 10.16 (a)
December 31, 2002 to Loan to Registrant's
and Security Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 2002.
(b) Second amendment dated Exhibit 10.16 (b)
January 9, 2003 to Loan to Registrant's
and Security Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 2002.
(c) Letter agreement dated Exhibit 10.16 (c)
December 31, 2002 amending to Registrant's
Loan and Security Agreement. Annual Report on
Form 10-K for
the year ended
December 31, 2002.
10.11 Board of Directors Exhibit 10.17
Resolution dated to Registrant's
December 16, 1998 Annual Report on
amending the 1998 Form 10-K for
Management Stock the year ended
Option Plan. December 31, 2002.
31.1 Certification of Chief X
Executive Officer
pursuant to Section 302
of the Sarbanes-Oxley
Act.
31.2 Certification of Vice X
President-Finance and
Secretary pursuant to
Section 302 of the
Sarbanes-Oxley Act.