Milwaukee-based Joy Global Inc. today reported a more than $800 million drop in revenue in fiscal 2016, the largest percentage drop in the company’s current four-year stretch of declining sales.
The company has been challenged by weak commodity markets, particularly in coal, and sales have been steadily falling since hitting a peak of $5.7 billion in 2012. This year’s top-line figure was $2.4 million, according to financial results reported Wednesday.
Joy Global also completed the sale of its Orchard Street plant this week to a national real estate firm that specializes in acquiring and handling industrial buildings, according to state real estate records.
The 220,000-square-foot facility was sold to an affiliate of New York-based Reich Brothers LLC for $4.38 million. The two properties included in the sale have a combined assessed value of roughly $2.1 million, according to city tax records.
Joy announced in November 2015 it would close the plant, where its motor assembly and electrical wiring work was done. The company moved the work to a facility in Longview, Texas.
The Dickman Company, Inc. is marketing the property for Reich Brothers. The company hopes to find one or multiple manufacturers to occupy the space.
Joy’s full-year results showed the company narrowing its loss from $1.2 billion in 2015 to $58.4 million this year. The company last posted a profit in 2014, with $338.1 million in net income.
“Although some commodity prices have recovered in recent months, our customers remain cautious and are very selective with capital deployment, which will continue to impact the timing and level of incoming orders, and lead to the expected fifth consecutive year of decreased capital expenditures for the industry,” said Ted Doheny, Joy Global president and chief executive officer.
One of the biggest challenges for Joy has been falling coal production in the United States. Doheny said the company continues to focus on expanding into other markets and now has 50 percent of its business coming from non-coal sources.
Joy announced earlier this year it had agreed to be acquired by a subsidiary of Japan-based Komatsu Ltd. The company has stopped holding quarterly earnings calls, citing the acquisition. In announcing its latest results, Joy said the deal is on pace to close in mid-2017, but may occur earlier depending on regulatory approvals.
Joy’s fourth quarter results included a 24 percent drop in revenue to $656.6 million. The company reported a net loss of $8.5 million, an improvement over the $1.3 billion loss reported in last year’s fourth quarter. That loss included a $1.2 billion goodwill impairment charge.
Joy’s adjusted earnings, which removed restructuring costs, impairment charges and other costs, did not paint the same improving picture. The company had adjusted earnings of 17 cents per diluted share in the fourth quarter this year, down from 43 cents last year.
For the full year, Joy reported adjusted earnings of 13 cents per diluted share, down from $1.96 last year.
Sales in the Joy’s underground segment were down by 31 percent in the fourth quarter, while the surface segment was off by 13 percent. Services accounted for $514 million in sales, down 21 percent, while original equipment accounted for $142 million, a 33 percent drop.
Bookings followed a similar trend, with the underground segment down 21 percent to $287 million. The surface segment was down 2 percent to $289 million. The service business was off 7 percent, to $483 million, while original equipment was down 22 percent to $76 million.