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Joy Global Inc. (NASDAQ: JOYG), a worldwide leader in high-productivity mining solutions, today reported results for the third quarter ended July 29, 2011 and reports that it has entered into a definitive agreement to sell the drilling products business of its recently acquired subsidiary, LeTourneau Technologies, Inc. (“LeTourneau”).
Third quarter bookings increased 49 percent to $1.4 billion and net sales increased 34 percent to $1.1 billion, compared to the same period last year. Operating income of $236 million includes acquisition costs and was 20.8 percent of sales, compared to operating income of $172 million, or 20.3 percent of sales, in the third quarter of fiscal 2010. Income from continuing operations was $172 million or $1.61 per fully diluted share for the third quarter compared to income from continuing operations of $119 million or $1.13 per fully diluted share in the third quarter of fiscal 2010.
Results for the third quarter of fiscal 2011 include the LeTourneau’s mining equipment and specialty steel businesses (collectively “the mining equipment business”) from June 22, 2011, the date the acquisition was completed, through the end of the quarter. For that six-week period, LeTourneau’s mining equipment business had bookings of $23.6 million, net sales of $43.3 million and operating income of $6.2 million. This includes a preliminary estimate of $3.4 million for purchase accounting charges, of which $1.8 million was attributable to acquired inventories. LeTourneau’s mining equipment business contributed $0.04 to Joy Global’s third quarter earnings per fully diluted share. The Joy Global third quarter results also include $11.7 million of transaction costs primarily related to the LeTourneau acquisition and $12.1 million of net favorable discrete tax benefits.
Sale of Drilling Products Business
On August 29, 2011, the Company entered into a definitive agreement to sell the drilling products business of LeTourneau (“Drilling Products”) to Cameron International Corporation (“Cameron”) (NYSE: CAM) for $375 million in cash, subject to certain post-closing adjustments. The transaction has been approved by both companies’ boards of directors. Completion of the transaction is subject to necessary regulatory approvals and other customary closing conditions and is expected to occur within 60 days. Drilling Products had calendar 2010 revenue and Adjusted EBITDA* of $515 million and $32.2 million, respectively.