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Joy Global Inc. Announces Fourth Quarter And Fiscal 2012 Year-End Operating Results

Net sales of underground mining machinery, excluding IMM, rose 4 percent in the fourth quarter compared to a year ago. Original equipment shipments were flat and aftermarket shipments were up 6 percent over the prior fourth quarter. The original equipment sales were driven by higher shipments in Australia and China offset by lower shipments in the U.S. and Africa. Aftermarket sales increased in China with reductions in all other regions.

Net sales of surface mining equipment, excluding LeTourneau, were 35 percent higher than the same period last year. Original equipment sales increased 90 percent, with aftermarket sales up 7 percent. Original equipment sales increases were led by strong results in all regions. Aftermarket sales were up in all regions except China and Australia compared to the prior fourth quarter.
Operating Profit - (in millions)        
Quarter Ended
October 26, October 28, Return on Sales
2012 2011 2012 2011
Underground Mining Machinery, before unusuals $ 176.7 $ 188.5 22.8 % 25.2 %
Restructuring charges (6.1 ) -
Pension curtailment   (1.1 )   -      
Underground Mining Machinery 169.5 188.5 21.9 % 25.2 %
Surface Mining Equipment, before unusuals 168.0 114.7 23.7 % 21.9 %
Restructuring charges (2.4 ) -
Pension curtailment   (10.3 )   -      
Surface Mining Equipment 155.3 114.7 21.9 % 21.9 %
Corporate Expenses (14.8 ) (12.3 )
Restructuring charges (1.0 ) -
Eliminations   (15.3 )   (8.8 )    
Legacy Business 293.7 282.1 20.8 % 22.9 %
LeTourneau 30.0 23.6 23.2 % 23.2 %
IMM   4.1     -   7.9 %  
Subtotal 327.8 305.7 20.6 % 22.9 %
Excess Purchase Accounting
LeTourneau - (6.5 )
IMM (2.0 ) -
IMM Equity Accounting - 3.3
Acquisition Costs   0.1     (6.2 )    
Total Operating Profit $ 325.9   $ 296.3   20.4 % 22.2 %

Operating profit for the legacy business was $294 million for the fourth quarter of 2012, compared to $282 million in the fourth quarter of last year. The increase in operating profit, before acquisition activities, was due to higher sales volume offset by pension curtailment charges, restructuring costs and an increase in period costs in the fourth quarter. Return on sales was 21 percent in the fourth quarter, compared to 23 percent last year. Excluding charges for restructuring and the pension curtailment, incremental profitability was 18 percent on a 15 percent increase in net sales. This low incremental profitability is largely due to the exceptionally strong performance by the underground business last year, which is the basis of comparison. Restructuring activities were undertaken to better align the business cost structure to our anticipated future requirements. The pension curtailments were the result of completed negotiations with certain of our U.S. bargaining units which will freeze their respective defined benefit plans at the end of the calendar year.

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