Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Barry Bannister - Stifel Nicolaus.
Barry Bannister - Stifel Nicolaus
Let me ask you a question about 2010, I know it is a little premature but you probably had some board meetings and done some thinking about next year, when I look back at past cycle peaks for Bucyrus and you have a lot of history going back about 70 years, the peaks tend to be more gradual they don’t suddenly plunge they just plateau.
Could you give us a flavor for where you are leaning towards on next year EBITDA and revenues, which look like if they do 2.5, 2.65 they will be flat for two years in a row?
Tim Sullivan
Well as Barry, we give guidance in February, but let me state our strategy which has been fairly consistent from this past February. When we saw this market correction occurring, our full intention for 2009 was to try to level off our revenue nine based on eight and it looks like obviously were effectively going to be able to do that.
Part and parcel to that strategy was also then to move towards that same type of leveling off number for 2010 and by moving some of the backlog that we had in nine into ten achieving now we are guiding to 2.6 billion type number.
We’ve effectively flattened eight to nine, and obviously our strategy would be, and if we can do this would be obviously very pleased that we could flatten nine to 10, and that would be our intention right now on all things, both revenue and EBITDA.
Barry Bannister - Stifel Nicolaus
It would look like a lot of the past chart, that’s great news. The other and last question is, when steel prices declined in the last couple of quarters, because ostensibly there was recession although you and a lot of companies didn’t seem to feel it. Did you capture some of the contingencies that you might have had or benefit from the float down particularly, underground where you might not lock in the plate.
Has steel really helped you on that COGS margin, or was it more margins driven by good after market pricing environment.
Tim Sullivan
Yes, there is a combination of things, we did obviously pickup margin based on raw material cost reductions over the last couple of quarters. What’s interesting though we are really trying to quantify exactly what we’ve been able to achieve efficiency wise, moving some of the sub contract back into our shops and really running a very optimum level at all of our shops. That’s always a little bit complicated to quantify, but we know that that had a big part of it.
- To read the full transcript on Seeking Alpha, click here »
