http://www.morningstar.com/earnings/52735709-joy-global-inc-joy-q2-2013.aspx

Joy Global Inc JOY
Q2 2013 Earnings Call Transcript

Transcript Call Date 05/30/2013

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

At this time, I would like to turn the conference over to Jim Sullivan, Executive Vice President and 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 are 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 Mining business; and Sean Major, Executive Vice President and General Counsel.

This morning I will begin with some brief comments on our results for the second quarter of 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 limit yourselves to one question and one follow-up 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 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 our second quarter results. Bookings of $1.1 billion in the current quarter were down 8% versus the year ago period with currency translation accounting for nearly half of the decline. Orders for original equipment were up 2%, while aftermarket orders were down 15%. The decline in new order bookings was comprised of a 28% decrease for the Surface Mining Equipment partially offset by an 8% increase for our Underground Mining machinery. The 28% decrease in Surface Mining Equipment bookings was comprised of a 57% decrease in original equipment orders and 9% decrease in aftermarket bookings. Aftermarket bookings in the second quarter of 2013 decreased year-over-year in North America and Australia and were partially offset by increases in South Africa, China and Eurasia. Current quarter aftermarket bookings increased 10% compared to the first quarter and we continue to see a decline in order lead times as our customers carefully manage their operating costs, mine site inventories and capital spending.

The 8% increase in Underground Mining machinery bookings was comprised of a 51% increase in original equipment orders and a 20% decline in aftermarket bookings. The original equipment bookings improvement compared to the second quarter of 2012 was due to a longwall system in the U.S. recorded in the current quarter. Excluding this longwall system order, Underground original equipment bookings increased 5%.

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