Joy Global reported first quarter fiscal 2016 results. Consolidated bookings in the first quarter totaled $550 million, a decrease of 21 percent versus Q1 last year.
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Original equipment orders decreased 33 percent while service orders were down 18 percent compared to the prior year.
Current quarter bookings were reduced by $50 million from the impact of foreign currency exchange movements versus the year ago period, a $15 million decrease for original equipment and a $35 million decrease for service bookings.
After adjusting for foreign currency exchange, orders were down 14 percent compared to the first quarter of last year, with original equipment orders down 24 percent and service orders down 11 percent.
Bookings for underground mining machinery decreased 31 percent in comparison to the first quarter of last year. Original equipment orders decreased 39 percent compared to the prior year. Original equipment orders declined in all regions except in Eurasia and Africa.
Service orders decreased 27 percent compared to the prior year, with decreases in all regions except Eurasia and Australia. Orders for underground mining machinery were reduced by $39 million from the impact of foreign currency exchange compared to the first quarter of last year.
Bookings for surface mining equipment decreased 8 percent in comparison to the prior year first quarter. Original equipment orders decreased 19 percent compared to the prior year. Original equipment orders decreased in all regions except Australia.
Service orders decreased 6 percent compared to the prior year, with declines in all regions except Latin America, which was flat, Eurasia and Australia. Orders for surface mining equipment were reduced by $11 million from the impact of foreign currency exchange compared to the first quarter of last year.
Backlog at the end of the first quarter was $897 million, up from $873 million at the beginning of the year.
Consolidated net sales totaled $526 million, a 25 percent decrease versus the first quarter of last year.
Original equipment sales decreased 39 percent and service sales decreased 20 percent compared to the prior year. Current quarter net sales were reduced by $31 million from the impact of foreign currency exchange movements versus the year ago period, a $4 million decrease for original equipment and a $27 million decrease for service sales.
When adjusting for foreign currency exchange, sales were down 21 percent compared to the first quarter of last year with original equipment sales down 36 percent and service sales down 15 percent.
Net sales for underground mining machinery decreased 29 percent in comparison to the first quarter of last year.
Original equipment sales decreased 43 percent compared to the prior year, with declines in all regions except Eurasia. Service sales decreased 22 percent compared to the prior year, with an increase in Eurasia and a slight increase in Australia more than offset by decreases in all other regions. The most significant reduction was from North America coal
Net sales for underground mining machinery were reduced by $20 million from the impact of foreign currency exchange compared to the prior year first quarter.
Net sales for surface mining equipment decreased 20 percent in comparison to the first quarter of last year.
Original equipment sales decreased 33 percent compared to the prior year, with an increase in North America more than offset by declines in all other regions.
Service sales decreased 16 percent compared to the prior year, with declines in all regions with the most significant reduction coming from North America. Net sales for surface mining equipment were reduced by $11 million from the impact of foreign currency exchange compared to the first quarter of last year.
Operating loss for the first quarter of fiscal 2016 totaled $45 million, compared to operating income of $58 million in the first quarter of fiscal 2015.
The first quarter of fiscal 2016 included an aggregate negative impact of $27 million from restructuring charges compared to a cumulative net $2 million positive impact in the first quarter of fiscal 2015 for restructuring charges, mark to market pension income and excess purchase accounting charges.
The $75 million year over year decrease in adjusted operating income in the quarter, was due to the loss of margin on lower sales volumes, unfavorable product mix, and lower manufacturing absorption which was partially offset by savings from the company's cost reduction programs and lower incentive based compensation.
During the first quarter, we continued restructuring activities to align the company's workforce and overall cost structure with current and anticipated levels of future demand.
The restructuring activities in the current quarter of $27 million were primarily in the underground North America and China regions, and consisted mainly of employee severance and termination costs and accelerated depreciation.
Additional restructuring charges in the range of $20 million to $30 million are expected in fiscal 2016 as the company continues to reduce staffing levels and optimize its global manufacturing and service footprint. ■