Joy Global, Inc. (
JOYG)
Q3 2008 Earnings Call
September 3, 2008, 11:00 AM ET
Executives
Sara Leuchter Wilkins – Vice President of Investor Relations and Corporate Communications
Michael S. Olsen - Chief Accounting Officer
Michael W. Sutherlin – Chief Executive Officer and President
Analysts
Terry Darling - Goldman Sachs
Charles Brady - BMO Capital Markets
Ann Duignan - JP Morgan
Michael W. Gallo - C. L. King & Associates
Henry Kirn – UBS
Kurt – Cleveland Research
Andy Kaplowitz - Lehman Brothers
Joel Tiss - Buckingham Research
Robert F. McCarthy Jr. - Robert W. Baird & Co.
Joe Berkson - KeyBanc Capital Markets
Seth Weber - Banc of America Securities
Barry Bannister - Stifel Nicolaus
Presentation
Operator
Good morning. My name is Cynthia, and I''ll be your conference operator today. At this time, I''d like to welcome everyone to Joy Global Incorporated Third Quarter 2008 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers'' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press “*” then the number “1” on your telephone keypad. If you have already done so, please press the “#” sign now, press “*1” again now to ensure your question is registered. Thank you. I''ll now like to turn today''s call over to Sara Wilkins, Vice President of Investor Relations and Corporate Communications for Joy Global. Please go ahead ma''am.
Sara Leuchter Wilkins
Good morning and welcome everyone. Thank you for participating in today''s conference call and for your continued interest in our Company.
Joining me on today''s call are Mike Sutherlin, President and Chief Executive Officer of Joy Global; Jim Tate, our Chief Financial Officer; Mike Olsen, our Chief Accounting Officer; Sean Major, our General Counsel and Secretary, and Gene Furman, our Corporate Controller.
This morning, Mike Olsen will begin with some brief comments which expand upon our press release, and which provide the results of the third quarter of our 2008 fiscal year. Mike Sutherlin will then provide his insights into our operations and our market outlook. We will then conduct a question-and-answer session and would appreciate it, if you would limit yourself to one question and one follow-up, before going back into the queue. This will allow us to accommodate as many questioners as possible.
During the call today, our executives 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 be referring 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, I would like to turn the call over to Mike Olsen. Please go ahead, Mike.
Michael S. Olsen
Thank you, Sara. Let''s take a minute and review some of the highlights from our third quarter results.
After exceeding $1 billion of new orders for the first time in the Company''s history in the second quarter of 2008, bookings in the third quarter totaled $1.5 billion, an $872 million increase over bookings in the third quarter last year. This increase was a result of a $410 million and a $350 million increase in new orders for the surface mining equipment business and the underground mining equipment business respectively, combined with a $112 million of bookings for the crushing and conveyor business. This growth represents a 147% increase for the surface mining equipment business, and an 89% increase for the underground mining machinery business.
Orders for new equipment were up over $700 million, while the aftermarket bookings were up $170 million or 40%. The increase in orders for underground mining equipment was led by the continuing recovery in the North American market while the improvement for the surface mining equipment was achieved across most of our global markets.
Backlog at the end of the third quarter was almost $3 billion and was more than $1.3 billion greater than backlog at the beginning of the 2008 fiscal year.
Net sales for the third quarter were $904 million compared to $622 million in the third quarter last year. Excluding sales from the Continental acquisition of $85 million, net sales increased by 32% over last year. Sales increased by 33% and 30% for the surface equipment and underground equipment businesses respectively.
