Joy Global Inc JOY
Q4 2012 Earnings Call Transcript

Transcript Call Date 12/12/2012

Operator: Good day, everyone, and welcome to the Joy Global, Inc. Fourth Quarter Earnings Fiscal 2012 Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference to Mr. Mike Olsen, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Michael S. Olsen - EVP, CFO and Treasurer: Thank you, Augusta. Good morning and welcome everyone. Thank you for participating in today's conference call and for your continued interest in our company. Joining me on the call this morning is Mike Sutherlin, President and Chief Executive Officer; Sean Major, Executive Vice President, General Counsel and Secretary; Jim Sullivan, Executive Vice President; and Ted Doheny, Executive Vice President, President and Chief Operating Officer of the Company's Underground Mining Equipment's business.

This morning I will begin with some brief comments which expand upon our press release and which provide some additional background on the results for our fourth quarter. Mike Sutherlin will then provide an overview of our operations and our market outlook. After Mike's comments we will conduct a question-and-answer session. During this session we ask you to limit yourselves to one question and one follow-up question before going to the back of the queue. This will allow us to accommodate as many questioners as possible.

During the call today we will be making forward-looking statements. These statements should be considered along with the various risk factors detailed in our press release and other SEC filings. We encourage you to read and become familiar with these risk factors. We may also be referring to a number of non-GAAP measures, which we believe are important to understanding our business. For a reconciliation of non-GAAP metrics to GAAP, as well as other investor information, we refer you to our website at

Now, let's spend a few moments reviewing the fourth quarter of the 2012 fiscal year. In our press release, we include tables to provide information which makes it easier to compare the current period results to the prior year on a consistent basis. These tables provide the results for the Surface and Underground Mining Equipment businesses on an historical basis, and lists the LeTourneau and IMM results separately, along with unusual charges, included in the calculation of operating profit. My comments this morning will focus on the legacy historical results for the Company's Surface and Underground Mining Equipment businesses, excluding unusual charges listed individually in the press release and will breakout separately the LeTourneau and IMM results.

Legacy bookings in the fourth quarter were $1.1 billion and were 15% lower than they were last year. The decrease in bookings was a result of a 5% decrease in aftermarket orders and a 27% decrease in the original equipment bookings. Aftermarket equipment bookings for the Underground Mining Equipment business was approximately 9% less than they were a year ago, due to fewer rebuilds in parts in the U.S. coal market and lower order rates in China, where parts orders are typically very large and sporadic in their timing and in Eurasia. The decrease in underground market orders was partially offset as Surface Mining Equipment aftermarket bookings increased 3% with small increases from the prior year and aftermarket orders in South America, Australia and Africa. The decrease in original equipment bookings was attributable to a 47% decrease in the Surface Mining Equipment business from an exceptionally strong OE bookings quarter last year, which was partially offset by a 21% increase for Underground Mining Equipment business. Surface original equipment orders were down in all regions except Africa and Australia. Underground original equipment orders were up in China, Africa and Australia where an order for longwall equipment was received during the current quarter, partially offset by lower orders in the U.S. due to the soft coal market.

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