http://www.morningstar.com/earnings/49114774-joy-global-inc-joy-q1-2013.aspx

Joy Global Inc JOY
Q1 2013 Earnings Call Transcript

Transcript Call Date 02/27/2013

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

At this time, I would like to turn the conference over to Mr. Jim Sullivan, Chief Financial Officer. Please go ahead, sir.

James M. Sullivan - EVP and CFO: Thank you. Good morning and welcome to 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; Ted Doheny, President and Chief Operating Officer of the Underground business; Randy Baker, President and Chief Operating Officer of our Surface business; and finally Sean Major, Executive Vice President, General Counsel and Secretary.

This morning I will begin with some brief comments on our results for the first quarter of fiscal year 2013. 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 that you to limit yourselves to one question and one follow-up question before going back into 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 refer 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 for other investor information, we refer you to our website at www.joyglobal.com.

Now, let's spend a few moments reviewing first quarter results. Bookings of $1 billion in the current quarter were down 29% versus the year ago period. Orders for original equipment were down 36% and aftermarket orders were down 22%. The decline in new order bookings was comprised of a 25% increase for our Surface Mining Equipment and a 27% decrease for Underground Mining machinery inclusive of the full quarter results of IMM.

The prior year quarter contained only one month of IMM results. Excluding IMM, Underground Mining machinery orders were down 33%. The 25% decrease in Surface Mining Equipment bookings reflects the drop from the record first quarter of 2012 and includes a 34% decrease in original equipment orders and an 18% decrease in aftermarket bookings.

Prior year bookings reflected increases across all geographies on a more optimistic outlook for commodities in the economy. Surface Mining original equipment and aftermarket bookings in the first quarter of 2013 decreased year-over-year in all markets. Current quarter aftermarket bookings reflect a lower order rate typical of the seasonally slower first quarter as well as a decrease in customer lead times on orders as they continue to carefully manage operating costs and capital spending.

The 27% decrease in Underground Mining machinery bookings was comprised of a 30% decrease in original equipment orders and a 24% decline in aftermarket bookings. The original bookings decline compared to the first quarter of 2012 is due to a structurally smaller U.S. core market and orders for longwall systems in Australia and the U.S. which did not repeat in 2013.

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