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| 8-K - 8-K - JOY GLOBAL INC | joy-09012016x8kearningsrel.htm |
Exhibit 99.1
News Release
Contact:
James M. Sullivan
Executive Vice President and Chief Financial Officer
+1 414-319-8509
JOY GLOBAL ANNOUNCES THIRD QUARTER
FISCAL 2016 OPERATING RESULTS
Milwaukee, WI - September 1, 2016 - Joy Global Inc. (NYSE: JOY), a worldwide leader in high-productivity mining solutions, today reported third quarter fiscal 2016 results.
Third Quarter Summary
• | Bookings $527 million, down 17 percent from a year ago |
• | Service bookings $474 million, down 12 percent from a year ago |
• | Net sales $587 million, down 26 percent from a year ago |
• | Earnings per diluted share $0.00, compared to $0.52 a year ago |
• | Adjusted earnings per diluted share $0.10, compared to $0.59 a year ago |
• | Cash from operations $26 million, down $90 million from a year ago |
Third Quarter Operating Results
"Although market conditions and our incoming order rate remain extremely challenged, our team delivered financial results for the quarter in line with expectations," said Ted Doheny, President and Chief Executive Officer. "We continue to drive our strategic growth objectives and surpass our cost savings targets. Our focus in these areas has allowed us to deliver on our commitments to shareholders and customers."
Pending Merger with Komatsu America Corp.
On July 21, 2016, Joy Global entered into an Agreement and Plan of Merger with Komatsu America Corp. (“Komatsu America”), Pine Solutions Inc. (“Merger Sub”) and (solely for the purposes specified in the merger agreement) Komatsu Ltd., providing for the merger of Merger Sub with and into Joy Global, with Joy Global surviving the merger as a wholly owned subsidiary of Komatsu America. At the effective time of the merger, each outstanding share of Joy Global common stock (other than dissenting shares and shares owned by Joy Global, Komatsu America or any of their respective subsidiaries) will be cancelled and converted into the right to receive $28.30 per share in cash, without interest. The completion of the transaction is subject to customary closing conditions, including approval by Joy Global shareholders, the expiration or termination of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976 and regulatory approvals in certain other jurisdictions. The companies expect that this transaction will be completed by mid-2017.
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Bookings - (in millions) | |||||||||||
Quarter Ended | |||||||||||
July 29, 2016 | July 31, 2015 | % Change | |||||||||
Segment: | |||||||||||
Underground | $ | 291 | $ | 366 | (21 | )% | |||||
Surface | 247 | 325 | (24 | )% | |||||||
Eliminations | (11 | ) | (56 | ) | |||||||
Total Bookings by Segment | $ | 527 | $ | 635 | (17 | )% | |||||
Product: | |||||||||||
Service | $ | 474 | $ | 537 | (12 | )% | |||||
Original Equipment | 53 | 98 | (46 | )% | |||||||
Total Bookings by Product | $ | 527 | $ | 635 | (17 | )% | |||||
Consolidated bookings in the third quarter totaled $527 million, a decrease of 17 percent versus the third quarter of last year. Original equipment orders decreased 46 percent while service orders were down 12 percent compared to the prior year. Current quarter bookings include a $40 million unfavorable impact from foreign currency exchange movements versus the year ago period, a $21 million decrease for original equipment and a $19 million decrease for service bookings. After adjusting for foreign currency exchange, orders were down 11 percent compared to the third quarter of last year, with original equipment orders down 25 percent and service orders down 8 percent.
Bookings for underground mining machinery decreased 21 percent in comparison to the third quarter of last year. Original equipment orders decreased 47 percent compared to the prior year, with declines in all regions except Africa and Australia. Service orders decreased 12 percent compared to the prior year, with declines in all regions except Australia. Orders for underground mining machinery were reduced by $37 million from the impact of foreign currency exchange compared to the third quarter of last year.
Bookings for surface mining equipment decreased 24 percent in comparison to the prior year third quarter. Original equipment orders decreased 88 percent compared to the prior year with declines in all regions. Service orders decreased 14 percent compared to the prior year, with declines in all regions. Orders for surface mining equipment were reduced by $3 million from the impact of foreign currency exchange compared to the third quarter of last year.
Backlog at the end of the third quarter was $916 million, up from $873 million at the beginning of the fiscal year.
Net Sales - (in millions) | |||||||||||
Quarter Ended | |||||||||||
July 29, 2016 | July 31, 2015 | % Change | |||||||||
Segment: | |||||||||||
Underground | $ | 318 | $ | 453 | (30 | )% | |||||
Surface | 288 | 363 | (21 | )% | |||||||
Eliminations | (19 | ) | (24 | ) | |||||||
Total Net Sales by Segment | $ | 587 | $ | 792 | (26 | )% | |||||
Product: | |||||||||||
Service | $ | 469 | $ | 592 | (21 | )% | |||||
Original equipment | 118 | 200 | (41 | )% | |||||||
Total Net Sales by Product | $ | 587 | $ | 792 | (26 | )% | |||||
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Consolidated net sales totaled $587 million, a 26 percent decrease versus the third quarter of last year. Original equipment sales decreased 41 percent and service sales decreased 21 percent compared to the prior year. Current quarter net sales included a $23 million unfavorable impact from foreign currency exchange movements versus the year ago period, a $5 million decrease for original equipment and an $18 million decrease for service sales. When adjusting for foreign currency exchange, sales were down 23 percent compared to the third quarter of last year with original equipment sales down 39 percent and service sales down 18 percent.
Net sales for underground mining machinery decreased 30 percent in comparison to the third quarter of last year. Original equipment sales decreased 40 percent compared to the prior year, with declines in Africa, Australia and China partially offset by increases in Eurasia and North America. Service sales decreased 25 percent compared to the prior year, with an increase in Eurasia more than offset by declines in all other regions. The most significant service sales reduction was in the U.S. coal market which was down approximately $42 million, or 40%, year-over-year. Net sales for underground mining machinery were reduced by $18 million from the impact of foreign currency exchange compared to the prior year third quarter.
Net sales for surface mining equipment decreased 21 percent in comparison to the third quarter of last year. Original equipment sales decreased 31 percent compared to the prior year, with an increase in Australia more than offset by declines in all other regions. Service sales decreased 19 percent compared to the prior year, with declines in all regions except Eurasia. Net sales for surface mining equipment were reduced by $5 million from the impact of foreign currency exchange compared to the third quarter of last year.
Reconciliation of Operating (Loss) Income to Adjusted Operating Income | ||||||||||||||
(in millions) | Quarter Ended | |||||||||||||
July 29, 2016 | July 31, 2015 | Return on Sales | ||||||||||||
2016 | 2015 | |||||||||||||
Underground | $ | (6.7 | ) | $ | 40.3 | (2.1 | )% | 8.9 | % | |||||
Surface | 17.4 | 59.6 | 6.0 | 16.4 | ||||||||||
Corporate Expenses | (12.3 | ) | (12.3 | ) | ||||||||||
Eliminations | (3.6 | ) | (5.4 | ) | ||||||||||
Operating (Loss) Income | (5.2 | ) | 82.2 | (0.9 | )% | 10.4 | % | |||||||
Restructuring and related charges | 24.7 | 7.8 | 4.2 | 1.0 | ||||||||||
Pension related items | 0.1 | — | — | — | ||||||||||
Excess purchase accounting | — | 2.7 | — | 0.3 | ||||||||||
Acquisition costs | — | 0.9 | — | 0.1 | ||||||||||
Merger costs | 2.5 | — | 0.4 | — | ||||||||||
Adjusted Operating Income | $ | 22.1 | $ | 93.6 | 3.8 | % | 11.8 | % | ||||||
Operating loss for the third quarter of fiscal 2016 totaled $5 million, compared to operating income of $82 million in the third quarter of fiscal 2015. The $87 million year-over-year decrease in operating income in the quarter was due to lower sales volumes, unfavorable product mix, lower manufacturing absorption, restructuring charges and merger costs that were partially offset by savings from the company's cost reduction programs, and acquisition related activities that did not repeat in the current quarter. The third quarter of fiscal 2016 included an aggregate negative impact of $27 million from restructuring and restructuring related charges, pension related items and merger costs compared to a net $11 million negative impact in the third quarter of fiscal 2015 for restructuring and related charges, excess purchase accounting and acquisition costs.
During the third quarter of fiscal 2016, we continued restructuring activities to align the company's workforce and overall cost structure with current and anticipated levels of demand. The restructuring activities in the current quarter of $25 million, were primarily in the North America and China regions, and consisted mainly of employee severance and termination costs, impairment charges and accelerated depreciation. Additional restructuring charges of approximately $5 million are expected in the fourth quarter of fiscal 2016 as the company continues to reduce staffing levels and optimize its global manufacturing footprint.
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Reconciliation of Earnings per Share to Adjusted Earnings per Share | ||||||||||||||||
Quarter Ended | ||||||||||||||||
July 29, 2016 | July 31, 2015 | |||||||||||||||
Dollars in millions | Fully Diluted EPS | Dollars in millions | Fully Diluted EPS | |||||||||||||
Operating (loss) income | $ | (5.2 | ) | $ | 82.2 | |||||||||||
Interest expense, net | 11.1 | 13.7 | ||||||||||||||
Income tax (benefit) expense | (16.4 | ) | 17.2 | |||||||||||||
Net income and earnings per share | 0.1 | $ | 0.00 | 51.3 | $ | 0.52 | ||||||||||
Restructuring and related charges | 24.7 | 0.25 | 7.8 | 0.08 | ||||||||||||
Tax benefit on restructuring charges | (5.7 | ) | (0.06 | ) | (2.8 | ) | (0.03 | ) | ||||||||
Pension related items | 0.1 | — | — | — | ||||||||||||
Merger costs | 2.5 | 0.03 | — | — | ||||||||||||
Tax benefit on merger costs | (0.9 | ) | (0.01 | ) | — | — | ||||||||||
Excess purchase accounting | — | — | 2.7 | 0.03 | ||||||||||||
Tax benefit on excess purchase accounting | — | — | (0.9 | ) | (0.01 | ) | ||||||||||
Acquisition costs | — | — | 0.9 | 0.01 | ||||||||||||
Tax benefit on acquisition costs | — | — | (0.3 | ) | — | |||||||||||
Net discrete tax benefit | (11.2 | ) | (0.11 | ) | (0.8 | ) | (0.01 | ) | ||||||||
Adjusted net income and adjusted earnings per share | $ | 9.6 | $ | 0.10 | $ | 57.9 | $ | 0.59 | ||||||||
Fully diluted earnings per share for the third quarter of fiscal 2016 totaled $0.00. This compared to fully diluted earnings per share of $0.52 in the third quarter of fiscal 2015. The third quarter of fiscal 2016 included a net negative impact of $0.10 per share for restructuring and related charges, merger costs and a net discrete tax benefit, compared to a net negative impact of $0.07 per share in the third quarter of fiscal 2015 from a combination of restructuring and related charges, excess purchase accounting, acquisition costs and a net discrete tax benefit.
On a U.S. GAAP basis, the effective income tax rate was 101 percent for the third quarter of fiscal 2016. Excluding restructuring charges, merger costs and a net discrete tax benefit in the third quarter of fiscal 2016, the effective income tax rate was 13 percent. In the third quarter of 2016 we recognized discrete tax benefits of $11 million primarily associated with the recognition of previously uncertain tax benefits. The effective income tax rate for the quarter was impacted by an increase in the amount of losses in jurisdictions with no currently recognizable benefit.
Liquidity
Cash provided by continuing operations was $26 million for the third quarter of fiscal 2016, compared to $116 million provided by continuing operations in the third quarter of fiscal 2015. The decrease in cash from continuing operations during the third quarter versus the year ago period was primarily due to lower earnings and reduced cash from trade working capital.
Capital expenditures were $11 million in the third quarter of fiscal 2016, compared to $18 million in the third quarter of fiscal 2015.
As of the end of the fiscal third quarter 2016, we had $739 million available for borrowings under our credit agreement. In December 2015, the credit agreement was amended to increase the maximum consolidated leverage ratio starting in the second quarter of 2016 and continuing through to the first quarter of 2018, with a maximum ratio of 4.5x for the fourth quarter of 2016 through the second quarter of 2017. As of the end of the third quarter of 2016, we were in compliance with all financial covenants under our credit agreement.
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Market Outlook
Although global economic growth showed signs of marginal improvement at the start of the third quarter, activity for most of the year has remained sluggish with global growth tracking below expectations. Continued challenges across most emerging economies, along with marginal growth in developed economies, has resulted in a growth profile tracking just under 3 percent for the year, a slight decline from 2015.
Copper markets have proven to be resilient in recent months, with prices averaging $2.15 per pound since June. Strong supply growth of over 5 percent year-to-date has kept a ceiling on prices despite Chinese imports increasing 19 percent through July. While global copper markets are expected to return to a deficit in 2018, the next two years are expected to be in surplus and will likely keep prices range bound between $2.00 and $2.40 per pound.
U.S. coal markets have remained under immense pressure for over four years. Natural gas prices have averaged $2.70/mmBtu since June, which contributed to 64 million tons of coal being used for electricity generation during June; the highest monthly total since last September. Further helping domestic coal markets has been the recent rise in U.S. temperatures with year-over-year increases in cooling degree days observed in seven of the last eight weeks. Although regulatory pressures on U.S. coal markets persist and production is still expected to track around 700 million tons in 2016, down 21 percent from 2015, these current dynamics are slowly helping to reduce inventories and rebalance markets.
Global steel production during the second quarter was flat versus the year ago period but up modestly sequentially driven by normal seasonal construction patterns as well as global stimulus programs. The sequential rebound had been expected and provided support to global metallurgical coal and iron ore markets during the quarter.
Metallurgical coal spot prices have increased in recent weeks to over $105 per tonne driven by tighter supply and sequentially improving demand. However, the market remains delicately balanced and given that Chinese imports are unlikely to continue to grow at the 25 percent annual pace they have to date, a pullback in metallurgical coal spot prices over the next three to six months is expected.
Conditions in iron ore markets have improved in the past two months, largely driven by the sequential improvement in steel production. Year-to-date Chinese iron ore imports have increased 8 percent over 2015, which has supported spot prices that have averaged $57 per tonne since July. While modestly improved demand has contributed to the recent price increase, iron ore prices are expected to average $50 per tonne in the second half of the calendar year as new seaborne supply reaches the market.
Despite the headwinds to global growth during the first half of the year, certain commodity prices have recently improved. However, this development has been driven more by supply rationalization as opposed to strengthening demand and should be viewed in that context. As commodity markets continue to rebalance, some volatility in pricing will likely remain as conditions in individual markets vary. Notwithstanding recent modest commodity price increases, the mining industry continues to face many challenges and market conditions are expected to remain weak through 2017. Over the past quarter, the global mining equipment capital spending outlook has worsened with the current projection for 2017 now reflecting a year-over-year decline in spending approaching 10 percent.
Company Outlook
"Safety performance in the mining industry continues to be a critically important metric that our customers monitor, and it is at the heart of what we do, as well," Doheny said. "Over the last 12 months, we’ve had 15 manufacturing and service facilities that have achieved zero recordable incidents over that period. It’s a great achievement for our company and a core focus for us as we continue to see our facility footprint change around the world.
"Our teams remain focused on driving our strategic objectives and we realized several successes during the quarter. In hard rock, we saw strong order rates in the quarter on our Montabert drifter (rock drill) product line and our underground 22 tonne LHD (load-haul dump) continued to perform well in trials. Additionally we delivered our heavy continuous miner systems into salt and gypsum mines during the quarter. The growth we are driving in underground hard rock and a variety of industrial mineral applications is helping to partially mitigate significant pressures in our coal markets around the world.
"While the recent increase in certain commodity prices is positive, the outlook remains tepid and the financial condition of our customers is challenged, which will continue to impact both the timing and level of our incoming orders through 2017.
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"In light of persistent difficult market conditions, we remain focused on reducing our cost base, accelerating the implementation of our footprint optimization plans and actively monetizing non-core assets. Due to the pending merger transaction with Komatsu America, the company will no longer provide quarterly updated annual financial guidance."
Quarterly Conference Call
In light of the pending merger with Komatsu America, the company will not hold a conference call to discuss quarterly financial results.
Non-GAAP Financial Measures
We include non-GAAP financial measures in this press release, including adjusted sales, adjusted operating income from continuing operations, adjusted net (loss) income from continuing operations and adjusted diluted (loss) earnings per share from continuing operations, adjusted income from continuing operations before income taxes and adjusted effective income tax rate. These measures remove the effect of certain items and are provided to present consistency to aid investors in comparing our operating results across periods. These measures are not purported to be alternatives to net sales, operating income (loss) from continuing operations, net income (loss) from continuing operations, diluted (loss) earnings per share from continuing operations or effective income tax rate as presented in accordance with GAAP. Reconciliations of the non-GAAP financial measures to the Company's comparable GAAP financial measures for the periods presented are set forth in this press release.
About Joy Global Inc.
Joy Global Inc. is a worldwide leader in mining equipment and services for surface and underground mining.
Additional Information and Where to Find It
Joy Global has filed with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement in connection with its contemplated merger with Komatsu America. The definitive proxy statement will be sent or given to Joy Global shareholders and will contain important information about the contemplated transactions. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE. Investors and security holders may obtain a free copy of the preliminary proxy statement and the definitive proxy statement (when it is available) and other documents filed with the SEC at the SEC’s website at www.sec.gov.
Certain Information Concerning Participants
Joy Global and its directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the contemplated merger with Komatsu America. Information about Joy Global’s directors and executive officers is set forth in its preliminary proxy statement in connection with the contemplated transactions, its proxy statement for its 2016 Annual Meeting of Shareholders and its most recent Annual Report on Form 10-K. These documents may be obtained for free at the SEC’s website at www.sec.gov.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Terms such as "anticipate," "around," "believe," "could," "estimate," "expect," "forecast," "indicate," "intend," "may be," "objective," "plan," "potential," "predict," "project," "should," "will be," and similar expressions are intended to identify forward-looking statements. The forward-looking statements in this press release are based on our current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from any forward-looking statement. In addition, certain market outlook information and other market statistical data contained herein is based on third party sources that we cannot independently verify, but that we believe to be reliable. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update forward-looking statements to reflect new information. We cannot assure you the projected results or events will be achieved. Because forward-looking statements involve risks and uncertainties, they are subject to change at any time. Important factors that could cause our actual results to differ materially from the results anticipated by the forward-looking statements include (i) risks associated with general economic conditions and cyclical economic conditions affecting the global mining industry, (ii) risks associated with the international and U.S. commodity markets for coal, copper and other materials mined by our customers, (iii) risks of international operations, including currency fluctuations, (iv) risks associated with acquisitions or divestitures, (v)
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risks associated with indebtedness, (vi) risks associated with access to major purchased items, such as steel, castings, forgings and bearings, (vii) risks associated with labor markets and other risks, (viii) risks arising from regulations affecting the global mining industry, as well as the risks, uncertainties and cautionary statements set forth in our public filings with the Securities and Exchange Commission, and (ix) risks and uncertainties associated with our proposed merger with Komatsu America.
JOY-F
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JOY GLOBAL INC.
SUMMARY OF CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Quarter Ended | Nine Months Ended | ||||||||||||||
July 29, 2016 | July 31, 2015 | July 29, 2016 | July 31, 2015 | ||||||||||||
Net sales | $ | 586,552 | $ | 792,183 | $ | 1,714,837 | $ | 2,306,579 | |||||||
Costs and expenses: | |||||||||||||||
Cost of sales | 454,594 | 574,838 | 1,351,329 | 1,668,633 | |||||||||||
Product development, selling and administrative expenses | 114,377 | 128,553 | 341,433 | 390,089 | |||||||||||
Restructuring charges | 24,431 | 7,775 | 84,484 | 19,550 | |||||||||||
Other income | (1,681 | ) | (1,234 | ) | (7,828 | ) | (5,347 | ) | |||||||
Operating (loss) income | (5,169 | ) | 82,251 | (54,581 | ) | 233,654 | |||||||||
Interest expense, net | 11,107 | 13,676 | 34,802 | 39,905 | |||||||||||
(Loss) income before income taxes | (16,276 | ) | 68,575 | (89,383 | ) | 193,749 | |||||||||
(Benefit) provision for income taxes | (16,404 | ) | 17,239 | (33,985 | ) | 55,930 | |||||||||
Income (loss) from continuing operations | 128 | 51,336 | (55,398 | ) | 137,819 | ||||||||||
Income from discontinued operations, net of income taxes | — | — | 5,466 | — | |||||||||||
Net income (loss) | $ | 128 | $ | 51,336 | $ | (49,932 | ) | $ | 137,819 | ||||||
Basic earnings per share: | |||||||||||||||
Continuing operations | $ | 0.00 | $ | 0.53 | $ | (0.57 | ) | $ | 1.41 | ||||||
Discontinued operations | 0.00 | 0.00 | 0.06 | 0.00 | |||||||||||
Basic earnings (loss) per share | $ | 0.00 | $ | 0.53 | $ | (0.51 | ) | $ | 1.41 | ||||||
Diluted earnings per share: | |||||||||||||||
Continuing operations | $ | 0.00 | $ | 0.52 | $ | (0.57 | ) | $ | 1.41 | ||||||
Discontinued operations | 0.00 | 0.00 | 0.06 | 0.00 | |||||||||||
Diluted earnings (loss) per share | $ | 0.00 | $ | 0.52 | $ | (0.51 | ) | $ | 1.41 | ||||||
Dividends per share | $ | 0.01 | $ | 0.20 | $ | 0.03 | $ | 0.60 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 98,160 | 97,480 | 97,977 | 97,481 | |||||||||||
Diluted | 99,224 | 98,033 | 97,977 | 98,052 | |||||||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
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JOY GLOBAL INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(In thousands)
July 29, 2016 | October 30, 2015 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 182,825 | $ | 102,885 | ||||
Accounts receivable, net | 647,017 | 812,073 | ||||||
Inventories | 896,257 | 1,007,925 | ||||||
Other current assets | 91,400 | 145,559 | ||||||
Assets held for sale | 33,724 | — | ||||||
Total current assets | 1,851,223 | 2,068,442 | ||||||
Property, plant and equipment, net | 673,943 | 792,032 | ||||||
Other intangible assets, net | 229,703 | 255,710 | ||||||
Goodwill | 350,740 | 354,621 | ||||||
Deferred income taxes | 202,463 | 118,913 | ||||||
Other assets | 125,345 | 122,728 | ||||||
Total assets | $ | 3,433,417 | $ | 3,712,446 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings, including current portion of long-term obligations | $ | 32,545 | $ | 26,321 | ||||
Trade accounts payable | 231,713 | 275,789 | ||||||
Employee compensation and benefits | 76,340 | 90,335 | ||||||
Advance payments and progress billings | 197,437 | 229,470 | ||||||
Accrued warranties | 41,288 | 52,146 | ||||||
Other accrued liabilities | 209,869 | 225,277 | ||||||
Current liabilities of discontinued operations | — | 11,582 | ||||||
Total current liabilities | 789,192 | 910,920 | ||||||
Long-term obligations | 974,247 | 1,060,643 | ||||||
Other liabilities: | ||||||||
Liability for postretirement benefits | 17,546 | 19,540 | ||||||
Accrued pension costs | 160,894 | 175,699 | ||||||
Other non-current liabilities | 118,692 | 125,635 | ||||||
Total other liabilities | 297,132 | 320,874 | ||||||
Shareholders' equity | 1,372,846 | 1,420,009 | ||||||
Total liabilities and shareholders' equity | $ | 3,433,417 | $ | 3,712,446 | ||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
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JOY GLOBAL INC.
SUMMARY OF CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Quarter Ended | Nine Months Ended | |||||||||||||||
July 29, 2016 | July 31, 2015 | July 29, 2016 | July 31, 2015 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net income (loss) | $ | 128 | $ | 51,336 | $ | (49,932 | ) | $ | 137,819 | |||||||
Income from discontinued operations | — | — | (5,466 | ) | — | |||||||||||
Depreciation and amortization | 40,509 | 36,738 | 117,902 | 102,914 | ||||||||||||
Impairment charges | 1,816 | — | 18,962 | |||||||||||||
Other adjustments to continuing operations, net | (6,144 | ) | 801 | 6,406 | 22,747 | |||||||||||
Changes in working capital items attributed to continuing operations: | ||||||||||||||||
Accounts receivable, net | 11,867 | 93,071 | 156,759 | 198,081 | ||||||||||||
Inventories | 29,474 | 12,689 | 84,469 | (126,730 | ) | |||||||||||
Trade accounts payable | (4,765 | ) | (24,362 | ) | (39,081 | ) | (60,936 | ) | ||||||||
Advance payments and progress billings | (25,432 | ) | (22,464 | ) | (30,991 | ) | 35,462 | |||||||||
Other working capital items | (21,441 | ) | (31,856 | ) | (80,245 | ) | (140,643 | ) | ||||||||
Net cash provided by operating activities of continuing operations | 26,012 | 115,953 | 178,783 | 168,714 | ||||||||||||
Investing Activities: | ||||||||||||||||
Acquisition of businesses, net of cash acquired | — | (114,353 | ) | — | (114,353 | ) | ||||||||||
Property, plant, and equipment acquired | (10,890 | ) | (18,026 | ) | (31,984 | ) | (57,821 | ) | ||||||||
Proceeds from sale of property, plant and equipment | 9,491 | 113 | 20,078 | 4,071 | ||||||||||||
Other investing activities, net | 181 | 252 | 184 | 625 | ||||||||||||
Net cash used by investing activities | (1,218 | ) | (132,014 | ) | (11,722 | ) | (167,478 | ) | ||||||||
Financing Activities: | ||||||||||||||||
Common stock issued | — | 293 | — | 2,853 | ||||||||||||
Dividends paid | (995 | ) | (19,492 | ) | (2,972 | ) | (58,456 | ) | ||||||||
Financing fees | — | — | (1,011 | ) | — | |||||||||||
Treasury stock purchased | — | — | — | (50,000 | ) | |||||||||||
Payments on credit agreement | — | — | (58,600 | ) | — | |||||||||||
Repayments of term loan | — | — | (18,750 | ) | — | |||||||||||
Changes in short term and other long term obligations, net | (49 | ) | (12,149 | ) | (3,214 | ) | (11,545 | ) | ||||||||
Other financing activities, net | — | — | — | 261 | ||||||||||||
Net cash used by financing activities | (1,044 | ) | (31,348 | ) | (84,547 | ) | (116,887 | ) | ||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (1,803 | ) | (3,782 | ) | (2,574 | ) | (13,640 | ) | ||||||||
Increase (Decrease) in Cash and Cash Equivalents | 21,947 | (51,191 | ) | 79,940 | (129,291 | ) | ||||||||||
Cash and Cash Equivalents at the Beginning of Period | 160,878 | 192,091 | 102,885 | 270,191 | ||||||||||||
Cash and Cash Equivalents at the End of Period | $ | 182,825 | $ | 140,900 | $ | 182,825 | $ | 140,900 | ||||||||
Supplemental cash flow information: | ||||||||||||||||
Interest paid | $ | 7,833 | $ | 15,413 | $ | 32,016 | $ | 46,137 | ||||||||
Income taxes paid | 17,082 | 35,976 | 25,467 | 85,273 | ||||||||||||
Depreciation and amortization by segment: | ||||||||||||||||
Underground | $ | 17,419 | $ | 22,826 | $ | 62,342 | $ | 60,538 | ||||||||
Surface | 22,253 | 13,726 | 52,876 | 40,672 | ||||||||||||
Corporate | 837 | 186 | 2,684 | 1,704 | ||||||||||||
Total depreciation and amortization | $ | 40,509 | $ | 36,738 | $ | 117,902 | $ | 102,914 | ||||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
10
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA
(Unaudited)
(In thousands)
Quarter Ended | |||||||||||||||
July 29, 2016 | July 31, 2015 | Change | |||||||||||||
Net Sales By Segment: | |||||||||||||||
Underground | $ | 318,106 | $ | 453,302 | $ | (135,196 | ) | (30 | )% | ||||||
Surface | 288,273 | 362,559 | (74,286 | ) | (20 | )% | |||||||||
Eliminations | (19,827 | ) | (23,678 | ) | 3,851 | ||||||||||
Total Sales By Segment | $ | 586,552 | $ | 792,183 | $ | (205,631 | ) | (26 | )% | ||||||
Net Sales By Product: | |||||||||||||||
Service | $ | 468,624 | $ | 592,420 | $ | (123,796 | ) | (21 | )% | ||||||
Original Equipment | 117,928 | 199,763 | (81,835 | ) | (41 | )% | |||||||||
Total Sales By Product | $ | 586,552 | $ | 792,183 | $ | (205,631 | ) | (26 | )% | ||||||
Net Sales By Geography: | |||||||||||||||
United States | $ | 150,774 | $ | 225,685 | $ | (74,911 | ) | (33 | )% | ||||||
Rest of World | 435,778 | 566,498 | (130,720 | ) | (23 | )% | |||||||||
Total Sales By Geography | $ | 586,552 | $ | 792,183 | $ | (205,631 | ) | (26 | )% | ||||||
Operating (Loss) Income By Segment: | % of Net Sales | ||||||||||||||
Underground | $ | (6,686 | ) | $ | 40,334 | (2.1 | )% | 8.9 | % | ||||||
Surface | 17,388 | 59,604 | 6.0 | % | 16.4 | % | |||||||||
Corporate | (12,274 | ) | (12,307 | ) | |||||||||||
Eliminations | (3,597 | ) | (5,380 | ) | |||||||||||
Total Operating (Loss) Income | $ | (5,169 | ) | $ | 82,251 | (0.9 | )% | 10.4 | % | ||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
11
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA
(Unaudited)
(In thousands)
Nine Months Ended | |||||||||||||||
July 29, 2016 | July 31, 2015 | Change | |||||||||||||
Net Sales By Segment: | |||||||||||||||
Underground | $ | 935,203 | $ | 1,261,904 | $ | (326,701 | ) | (26 | )% | ||||||
Surface | 849,949 | 1,132,981 | (283,032 | ) | (25 | )% | |||||||||
Eliminations | (70,315 | ) | (88,306 | ) | 17,991 | ||||||||||
Total Sales By Segment | $ | 1,714,837 | $ | 2,306,579 | $ | (591,742 | ) | (26 | )% | ||||||
Net Sales By Product: | |||||||||||||||
Service | $ | 1,341,889 | $ | 1,702,580 | $ | (360,691 | ) | (21 | )% | ||||||
Original Equipment | 372,948 | 603,999 | (231,051 | ) | (38 | )% | |||||||||
Total Sales By Product | $ | 1,714,837 | $ | 2,306,579 | $ | (591,742 | ) | (26 | )% | ||||||
Net Sales By Geography: | |||||||||||||||
United States | $ | 430,039 | $ | 761,811 | $ | (331,772 | ) | (44 | )% | ||||||
Rest of World | 1,284,798 | 1,544,768 | (259,970 | ) | (17 | )% | |||||||||
Total Sales By Geography | $ | 1,714,837 | $ | 2,306,579 | $ | (591,742 | ) | (26 | )% | ||||||
Operating (Loss) Income By Segment: | % of Net Sales | ||||||||||||||
Underground | $ | (65,953 | ) | $ | 134,060 | (7.1 | )% | 10.6 | % | ||||||
Surface | 60,823 | 149,786 | 7.2 | % | 13.2 | % | |||||||||
Corporate | (31,531 | ) | (29,642 | ) | |||||||||||
Eliminations | (17,920 | ) | (20,550 | ) | |||||||||||
Total Operating (Loss) Income | $ | (54,581 | ) | $ | 233,654 | (3.2 | )% | 10.1 | % | ||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
12
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA
(Unaudited)
(In thousands)
Quarter Ended | |||||||||||||||
July 29, 2016 | July 31, 2015 | Change | |||||||||||||
Bookings By Segment: | |||||||||||||||
Underground | $ | 290,471 | $ | 365,705 | $ | (75,234 | ) | (21 | )% | ||||||
Surface | 247,289 | 325,617 | (78,328 | ) | (24 | )% | |||||||||
Eliminations | (11,138 | ) | (56,269 | ) | 45,131 | ||||||||||
Total Bookings By Segment | $ | 526,622 | $ | 635,053 | $ | (108,431 | ) | (17 | )% | ||||||
Bookings By Product: | |||||||||||||||
Service | $ | 474,034 | $ | 537,141 | $ | (63,107 | ) | (12 | )% | ||||||
Original Equipment | 52,588 | 97,912 | (45,324 | ) | (46 | )% | |||||||||
Total Bookings By Product | $ | 526,622 | $ | 635,053 | $ | (108,431 | ) | (17 | )% | ||||||
Nine Months Ended | |||||||||||||||
July 29, 2016 | July 31, 2015 | Change | |||||||||||||
Bookings By Segment: | |||||||||||||||
Underground | $ | 933,219 | $ | 1,210,096 | $ | (276,877 | ) | (23 | )% | ||||||
Surface | 872,921 | 980,675 | (107,754 | ) | (11 | )% | |||||||||
Eliminations | (49,062 | ) | (110,812 | ) | 61,750 | ||||||||||
Total Bookings By Segment | $ | 1,757,078 | $ | 2,079,959 | $ | (322,881 | ) | (16 | )% | ||||||
Bookings By Product: | |||||||||||||||
Service | $ | 1,419,090 | $ | 1,656,219 | $ | (237,129 | ) | (14 | )% | ||||||
Original Equipment | 337,988 | 423,740 | (85,752 | ) | (20 | )% | |||||||||
Total Bookings By Product | $ | 1,757,078 | $ | 2,079,959 | $ | (322,881 | ) | (16 | )% | ||||||
Amounts as of: | ||||||||||||||||
July 29, 2016 | April 29, 2016 | January 29, 2016 | October 30, 2015 | |||||||||||||
Backlog By Segment: | ||||||||||||||||
Underground | $ | 539,893 | $ | 567,528 | $ | 548,262 | $ | 541,877 | ||||||||
Surface | 416,982 | 457,966 | 403,391 | 394,010 | ||||||||||||
Eliminations | (41,155 | ) | (49,844 | ) | (54,660 | ) | (62,407 | ) | ||||||||
Total Backlog By Segment | $ | 915,720 | $ | 975,650 | $ | 896,993 | $ | 873,480 | ||||||||
Backlog By Product: | ||||||||||||||||
Service | $ | 470,834 | $ | 465,424 | $ | 414,685 | $ | 393,633 | ||||||||
Original Equipment | 444,886 | 510,226 | 482,308 | 479,847 | ||||||||||||
Total Backlog By Product | $ | 915,720 | $ | 975,650 | $ | 896,993 | $ | 873,480 | ||||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
13
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA
(Unaudited)
(In thousands)
Impact of Foreign Exchange on Bookings | |||||||||||||||||
Quarter ended July 29, 2016 | Quarter ended July 31, 2015 | % Change | |||||||||||||||
As Reported | Impact of Foreign Exchange | Adjusted | As Reported | As Reported | Adjusted | ||||||||||||
Net Bookings by Segment: | |||||||||||||||||
Underground | 290,471 | (36,480 | ) | 326,951 | 365,705 | (21 | )% | (11 | )% | ||||||||
Surface | 247,289 | (3,214 | ) | 250,503 | 325,617 | (24 | )% | (23 | )% | ||||||||
Eliminations | (11,138 | ) | — | (11,138 | ) | (56,269 | ) | ||||||||||
Total Bookings by Segment | 526,622 | (39,694 | ) | 566,316 | 635,053 | (17 | )% | (11 | )% | ||||||||
Net Bookings by Product: | |||||||||||||||||
Service | 474,034 | (19,088 | ) | 493,122 | 537,141 | (12 | )% | (8 | )% | ||||||||
Original Equipment | 52,588 | (20,606 | ) | 73,194 | 97,912 | (46 | )% | (25 | )% | ||||||||
Total Bookings by Product | 526,622 | (39,694 | ) | 566,316 | 635,053 | (17 | )% | (11 | )% | ||||||||
RECONCILAITIONS ON NON-GAAP FINANCIAL MEASURES
Non-GAAP Reconciliation of Adjusted Sales | |||||||||||||||||
Quarter ended July 29, 2016 | Quarter ended July 31, 2015 | % Change | |||||||||||||||
As Reported | Impact of Foreign Exchange | Adjusted | As Reported | As Reported | Adjusted | ||||||||||||
Net Sales by Segment: | |||||||||||||||||
Underground | 318,106 | (17,776 | ) | 335,882 | 453,302 | (30 | )% | (26 | )% | ||||||||
Surface | 288,273 | (4,845 | ) | 293,118 | 362,559 | (21 | )% | (19 | )% | ||||||||
Eliminations | (19,827 | ) | — | (19,827 | ) | (23,678 | ) | ||||||||||
Total Sales by Segment | 586,552 | (22,621 | ) | 609,173 | 792,183 | (26 | )% | (23 | )% | ||||||||
Net Sales by Product: | |||||||||||||||||
Service | 468,624 | (18,029 | ) | 486,653 | 592,420 | (21 | )% | (18 | )% | ||||||||
Original Equipment | 117,928 | (4,592 | ) | 122,520 | 199,763 | (41 | )% | (39 | )% | ||||||||
Total Sales by Product | 586,552 | (22,621 | ) | 609,173 | 792,183 | (26 | )% | (23 | )% | ||||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
14
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA
(Unaudited)
(In thousands)
Reconciliation of Operating (Loss) Income to Adjusted Operating Income (Loss) by Segment | |||||||||||||||||||
Quarter ended July 29, 2016 | |||||||||||||||||||
Underground | Surface | Corporate | Eliminations | Total | |||||||||||||||
Operating (Loss) Income | $ | (6,686 | ) | $ | 17,388 | $ | (12,274 | ) | $ | (3,597 | ) | $ | (5,169 | ) | |||||
Restructuring and related charges | 14,601 | 10,130 | — | — | 24,731 | ||||||||||||||
Pension related items | — | 218 | (160 | ) | — | 58 | |||||||||||||
Merger costs | — | — | 2,487 | — | 2,487 | ||||||||||||||
Adjusted Operating Income (Loss) | $ | 7,915 | $ | 27,736 | $ | (9,947 | ) | $ | (3,597 | ) | $ | 22,107 | |||||||
Reconciliation of Operating Income (Loss) to Adjusted Operating Income (Loss) by Segment | |||||||||||||||||||
Quarter ended July 31, 2015 | |||||||||||||||||||
Underground | Surface | Corporate | Eliminations | Total | |||||||||||||||
Operating Income (Loss) | $ | 40,334 | $ | 59,604 | $ | (12,307 | ) | $ | (5,380 | ) | $ | 82,251 | |||||||
Restructuring and related charges | 6,896 | 879 | — | 7,775 | |||||||||||||||
Excess purchase accounting | 2,658 | — | — | — | 2,658 | ||||||||||||||
Acquisition costs | — | — | 868 | — | 868 | ||||||||||||||
Adjusted Operating Income (Loss) | $ | 49,888 | $ | 60,483 | $ | (11,439 | ) | $ | (5,380 | ) | $ | 93,552 | |||||||
Reconciliation of Operating (Loss) Income from Continuing Operations to Adjusted Operating Income (Loss) from Continuing Operations by Segment | |||||||||||||||||||
Nine months ended July 29, 2016 | |||||||||||||||||||
Underground | Surface | Corporate | Eliminations | Total | |||||||||||||||
Operating (Loss) Income from continuing operations | $ | (65,953 | ) | $ | 60,823 | $ | (31,531 | ) | $ | (17,920 | ) | $ | (54,581 | ) | |||||
Restructuring and related charges | 73,917 | 11,778 | 395 | — | 86,090 | ||||||||||||||
Pension related items | — | 218 | (160 | ) | — | 58 | |||||||||||||
Merger costs | — | — | 2,487 | — | 2,487 | ||||||||||||||
Adjusted Operating Income (Loss) from continuing operations | $ | 7,964 | $ | 72,819 | $ | (28,809 | ) | $ | (17,920 | ) | $ | 34,054 | |||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC
15
JOY GLOBAL INC.
SUPPLEMENTAL FINANCIAL DATA
(Unaudited)
(In thousands)
Reconciliation of Operating Income (Loss) from Continuing Operations to Adjusted Operating Income (Loss) from Continuing Operations by Segment | |||||||||||||||||||
Nine months ended July 31, 2015 | |||||||||||||||||||
Underground | Surface | Corporate | Eliminations | Total | |||||||||||||||
Operating Income (Loss) from continuing operations | $ | 134,060 | $ | 149,786 | $ | (29,642 | ) | $ | (20,550 | ) | $ | 233,654 | |||||||
Restructuring and related charges | 12,312 | 6,986 | 252 | — | 19,550 | ||||||||||||||
Mark to market pension income | — | — | (6,353 | ) | — | (6,353 | ) | ||||||||||||
Excess purchase accounting | 2,810 | — | — | — | 2,810 | ||||||||||||||
Acquisition costs | — | — | 868 | — | 868 | ||||||||||||||
Adjusted Operating Income (Loss) from continuing operations | $ | 149,182 | $ | 156,772 | $ | (34,875 | ) | $ | (20,550 | ) | $ | 250,529 | |||||||
Non-GAAP Reconciliation of Effective Income Tax Rate (EITR) | |||||||||||
Quarter ended July 29, 2016 | |||||||||||
(Loss) Income before Income Taxes | (Benefit) Provision for Income Taxes | EITR | Net Income | ||||||||
As reported | (16,276 | ) | (16,404 | ) | 100.8 | % | 128 | ||||
Restructuring and related charges | 24,731 | 5,655 | 19,076 | ||||||||
Pension related items | 58 | 21 | 37 | ||||||||
Merger costs | 2,487 | 928 | 1,559 | ||||||||
Net discrete benefit | — | 11,178 | (11,178 | ) | |||||||
As adjusted | 11,000 | 1,378 | 12.5 | % | 9,622 | ||||||
Note - For complete information, including footnote disclosures, please refer to the Company's Form 10-Q filing with the SEC.
16