Bucyrus International, Inc. Announces Summary Financial Results For The Quarter And Year Ended December 31, 2010

SOUTH MILWAUKEE, Wis., Feb. 17, 2011 (GLOBE NEWSWIRE) -- Bucyrus International, Inc. (Nasdaq:BUCY), a leading designer, manufacturer and marketer of high productivity mining equipment for surface and underground mining, announced today its summary unaudited financial results for the quarter and year ended December 31, 2010. On January 20, 2011, the stockholders of Bucyrus approved the merger agreement providing for the acquisition of Bucyrus by Caterpillar Inc. Bucyrus anticipates that the merger will be completed in mid-2011.

Operating Results

On February 19, 2010, Bucyrus completed its previously announced acquisition of Terex Corporation's mining equipment business ("Terex Mining"). The financial results for the quarter and year ended December 31, 2010 include the net assets and results of operations of Terex Mining since the February 19, 2010 date of acquisition as well as the acquisition accounting adjustments and acquisition costs related to the Terex Mining acquisition. As a result, the financial results for the quarter and year ended December 31, 2010 are not necessarily comparative to the results for the quarter and year ended December 31, 2009 and may not be indicative of future results. Terex Mining has been integrated into the surface mining segment. For the fourth quarter and the year ended December 31, 2010, Bucyrus has disclosed certain financial information for Terex Mining. 

Consolidated Condensed Statements of Earnings (Unaudited)
	Quarter Ended December 31,		Year Ended December 31,
	2010	2009	2010	2009
	(Dollars in thousands, except per share amounts)
Sales	$1,237,206	$645,822	$3,650,563	$2,651,769
Cost of products sold	868,276	439,513	2,601,209	1,846,170
Gross profit	368,930	206,309	1,049,354	805,599
Selling, general and administrative expenses	131,468	74,066	405,496	269,539
Research and development expenses	17,811	12,053	62,498	41,908
Amortization of intangible assets	11,896	4,701	46,596	18,899
Operating earnings	207,755	115,489	534,764	475,253
Interest income	(1,416)	(1,578)	(5,110)	(5,117)
Interest expense	20,639	6,689	71,620	27,017
Other expense	2,456	386	7,372	6,085
Earnings before income taxes	186,076	109,992	460,882	447,268
Income tax expense	56,123	28,537	145,132	134,565
Net earnings	$129,953	$81,455	$315,750	$312,703
Net earnings per share data
Basic:
Net earnings per share	$1.61	$1.09	$3.96	$4.20
Weighted average shares	80,583,630	74,463,276	79,764,251	74,456,969
Diluted:
Net earnings per share	$1.58	$1.07	$3.88	$4.12
Weighted average shares	82,216,200	76,345,348	81,329,109	75,880,863
Other Financial Data
EBITDA (1)	$234,865	$132,697	$637,295	$532,995
Non-cash stock compensation expense (2)	2,336	4,291	8,756	11,889
(Gain) loss on disposal of fixed assets (3)	(148)	13	1,025	3,704
Terex Mining acquisition costs (4)	3,475	—	19,738	—
Costs associated with the pending merger with Caterpillar Inc. (5).	14,885	—	14,885	—
Inventory fair value adjustment charged to cost of products sold (6)	912	—	38,948	—
Adjusted EBITDA (7)	$256,325	$137,001	$720,647	$548,588
(1) EBITDA is defined as net earnings before net interest expense, income tax expense (benefit), depreciation and amortization. EBITDA is presented because (i) management uses EBITDA to measure Bucyrus' liquidity and financial performance and (ii) management believes EBITDA is frequently used by securities analysts, investors and other interested parties in evaluating the performance and enterprise value of companies in general, and in evaluating the liquidity of companies with significant debt service obligations and their ability to service their indebtedness. The EBITDA calculation is not an alternative to net earnings under accounting principles generally accepted in the United States of America as an indicator of operating performance or of cash flows as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. The following table reconciles net earnings to EBITDA and EBITDA to net cash provided by operating activities.
(2) Reflects non-cash stock compensation expense related to equity incentive plans.
(3) Reflects losses on the disposal of fixed assets in the ordinary course.
(4) Reflects costs related to the acquisition of Terex Mining.
(5) Reflects costs related to the pending merger with Caterpillar Inc.
(6) In connection with the acquisition of Terex Mining, inventories acquired were adjusted to estimated fair value. This adjustment is being charged to cost of products sold as the inventory is sold.
(7) Adjusted EBITDA is a material term in Bucyrus' credit agreement, which management believes is a material agreement, and is used in the calculation of the leverage ratio covenant thereunder.

EBITDA Reconciliation (Unaudited)
	Quarter Ended December 31,		Year Ended December 31,
	2010	2009	2010	2009
	(Dollars in thousands)
Net earnings	$129,953	$81,455	$315,750	$312,703
Interest income	(1,416)	(1,578)	(5,110)	(5,117)
Interest expense	20,639	6,689	71,620	27,017
Income tax expense	56,123	28,537	145,132	134,565
Depreciation	15,213	12,110	54,051	41,544
Amortization	14,353	5,484	55,852	22,283
EBITDA	234,865	132,697	637,295	532,995
Changes in assets and liabilities	(22,709)	(98,747)	44,449	(253,574)
Non-cash stock compensation expense	2,336	4,291	8,756	11,889
(Gain) loss on disposal of fixed assets	(148)	13	1,025	3,704
Interest income	1,416	1,578	5,110	5,117
Interest expense	(20,639)	(6,689)	(71,620)	(27,017)
Income tax expense	(56,123)	(28,537)	(145,132)	(134,565)
Net cash provided by operating activities	$138,998	$4,606	$479,883	$138,549

Consolidated Condensed Balance Sheets (Unaudited)
	December 31,  2010	December 31,  2009
	(Dollars in thousands)
Assets
Cash and cash equivalents	$473,741	$101,084
Receivables - net	918,828	741,815
Inventories	1,129,484	627,289
Deferred income taxes	80,358	45,024
Prepaid expenses and other	61,856	40,861
Total current assets	2,664,267	1,556,073
Goodwill	927,882	351,333
Intangible assets - net	679,131	220,780
Other assets	122,397	61,505
Total other assets	1,729,410	633,618
Property, plant and equipment - net	626,151	514,421
Total assets	$5,019,828	$2,704,112
Liabilities and Common Stockholders' Investment
Accounts payable and accrued expenses	$746,460	$328,722
Liabilities to customers on uncompleted contracts and warranties	322,051	183,097
Income taxes	46,386	45,811
Current maturities of long-term debt and short-term obligations	28,113	7,566
Total current liabilities	1,143,010	565,196
Deferred income taxes	92,350	82,260
Pension, postretirement benefits and other	258,010	198,000
Total long-term liabilities	350,360	280,260
Long-term debt, less current maturities	1,487,344	499,666
Common stockholders' investment	2,039,114	1,358,990
Total liabilities and common stockholders' investment	$5,019,828	$2,704,112

Segment Information (Unaudited)
	Quarter Ended December 31, 2010
	Sales	Operating  Earnings		Depreciation and Amortization	Capital Expenditures	Total  Assets
	(Dollars in thousands)
Surface mining (1)	$831,095	$160,947	$19,357		$2,285	$3,408,266
Underground mining	406,111	80,296	7,753		9,163	1,596,125
Total operations	1,237,206	241,243	27,110		11,448	5,004,391
Corporate (1)	—	(33,488)	—		15,473	15,437
Consolidated total	$1,237,206	207,755	27,110		$26,921	$5,019,828
Interest income		(1,416)	—
Interest expense		20,639	—
Other expense		2,456	2,456
Earnings before income taxes		$186,076	$29,566
(1) Certain capital expenditures previously reported as surface mining were reclassified to corporate in the fourth quarter.

Terex Mining results included in the table above were as follows: 

	Quarter Ended December 31, 2010
	Sales	Operating Earnings	Depreciation and Amortization	Capital Expenditures	Total Assets
	(Dollars in thousands)
Surface mining (1)	$416,194	$69,392	$10,803	$1,070	$1,964,693
Interest income		(144)	—
Interest expense		20	—
Earnings before income taxes		$69,516	$10,803
(1) Operating earnings include inventory fair value adjustments charged to cost of products sold of $0.9 million. This amount is not included in the depreciation and amortization column.

	Quarter Ended December 31, 2009
	Sales	Operating  Earnings	Depreciation and Amortization	Capital Expenditures	Total  Assets
	(Dollars in thousands)
Surface mining	$305,058	$68,337	$7,222	$11,955	$1,106,154
Underground mining	340,764	56,503	9,588	8,084	1,597,958
Total operations	645,822	124,840	16,810	20,039	2,704,112
Corporate	—	(9,351)	—	—	—
Consolidated total	$645,822	115,489	16,810	$20,039	$2,704,112
Interest income		(1,578)	—
Interest expense		6,689	—
Other expense		386	784
Earnings before income taxes		$109,992	$17,594

	Year Ended December 31, 2010
	Sales	Operating  Earnings	Depreciation and Amortization	Capital Expenditures	Total  Assets
	(Dollars in thousands)
Surface mining (1)	$2,385,461	$403,465	$67,866	$28,668	$3,408,266
Underground mining	1,265,102	206,062	32,781	27,185	1,596,125
Total operations	3,650,563	609,527	100,647	55,853	5,004,391
Corporate (1)	—	(74,763)	—	15,473	15,437
Consolidated total	$3,650,563	534,764	100,647	$71,326	$5,019,828
Interest income		(5,110)	—
Interest expense		71,620	—
Other expense		7,372	9,256
Earnings before income taxes		$460,882	$109,903
(1) Certain capital expenditures previously reported as surface mining were reclassified to corporate in the fourth quarter.

Terex Mining results included in the table above were as follows: 

	Year Ended December 31, 2010
	Sales	Operating Earnings	Depreciation and Amortization	Capital Expenditures	Total Assets
	(Dollars in thousands)
Surface mining (1)	$1,032,079	$98,147	$36,876	$3,878	$1,964,693
Interest income		(327)	—
Interest expense		39	—
Earnings before income taxes		$98,435	$36,876
(1) Operating earnings include inventory fair value adjustments charged to cost of products sold of $38.9 million. This amount is not included in the depreciation and amortization column.

	Year Ended December 31, 2009
	Sales	Operating  Earnings	Depreciation and Amortization	Capital Expenditures	Total  Assets
	(Dollars in thousands)
Surface mining	$1,284,996	$292,754	$24,536	$37,581	$1,106,154
Underground mining	1,366,773	221,616	35,907	17,001	1,597,958
Total operations	2,651,769	514,370	60,443	54,582	2,704,112
Corporate	—	(39,117)	—	—	—
Consolidated total	$2,651,769	475,253	60,443	$54,582	$2,704,112
Interest income		(5,117)	—
Interest expense		27,017	—
Other expense		6,085	3,384
Earnings before income taxes		$447,268	$63,827

Sales consisted of the following:

	Quarter Ended December 31,			Year Ended December 31,
	2010	2009	% Change	2010	2009	% Change
	(Dollars in thousands)
Surface mining:
Original equipment	$486,126	$117,360	314.2%	$1,202,566	$534,463	125.0%
Aftermarket parts and  service	344,968	187,698	83.8%	1,182,894	750,533	57.6%
	831,094	305,058	172.4%	2,385,460	1,284,996	85.6%
Underground mining:
Original equipment	220,451	207,671	6.2%	680,479	821,019	(17.1%)
Aftermarket parts and service	185,661	133,093	39.5%	584,624	545,754	7.1%
	406,112	340,764	19.2%	1,265,103	1,366,773	(7.4%)
Total:
Original equipment	706,577	325,031	117.4%	1,883,045	1,355,482	38.9%
Aftermarket parts and service	530,629	320,791	65.4%	1,767,518	1,296,287	36.4%
	$1,237,206	$645,822	91.6%	$3,650,563	$2,651,769	37.7%

The increase in surface mining original equipment sales for the quarter and year ended December 31, 2010 compared to the same periods of 2009 was primarily due to the inclusion of $256.6 million and $540.6 million of Terex Mining sales in 2010, respectively. Excluding the impact of Terex Mining, surface mining original equipment sales increased by approximately 96% and 24% for the quarter and year ended December 31, 2010, respectively, compared to the same periods of 2009. The increases were primarily due to increased electric mining shovel sales.