UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549


                                 Form 10-Q

   (Mark One)

   [ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended September 30, 2004

                                    OR

   [   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

           For the transition period from __________ to __________


                       Commission file number 1-871


                       BUCYRUS INTERNATIONAL, INC.
          (Exact Name of Registrant as Specified in its Charter)


              DELAWARE                       39-0188050
  (State or Other Jurisdiction of         (I.R.S. Employer
  Incorporation or Organization)         Identification No.)

                               P. O. BOX 500
                           1100 MILWAUKEE AVENUE
                        SOUTH MILWAUKEE, WISCONSIN
                                   53172
                 (Address of Principal Executive Offices)
                                (Zip Code)

                               (414) 768-4000
           (Registrant's Telephone Number, Including Area Code)

   Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [ X ]   No [  ]

   Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [ ]  No [X]

   Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                   Class                        Outstanding October 25, 2004

     Class A Common Stock, $.01 par value                13,002,500

     Class B Common Stock, $.01 par value                 7,021,077




               BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

                                   INDEX


                                                              Page No.

PART I.  FINANCIAL INFORMATION:

       Item 1 - Financial Statements (Unaudited)

         Consolidated Condensed Statements of Operations -
         Quarters and nine months ended September 30, 2004
         and 2003                                                  3

         Consolidated Condensed Statements of
         Comprehensive Income (Loss) - Quarters and
         nine months ended September 30, 2004 and 2003             4

         Consolidated Condensed Balance Sheets -
         September 30, 2004 and December 31, 2003                5-6

         Consolidated Condensed Statements of Cash Flows -
         Nine months ended September 30, 2004 and 2003             7

         Notes to Consolidated Condensed Financial
         Statements                                             8-15

       Item 2 - Management's Discussion and Analysis of
                Financial Condition and Results of Operations  16-28

       Item 3 - Quantitative and Qualitative Disclosures
                About Market Risk                                 29

       Item 4 - Controls and Procedures                           30

       Forward-Looking Statements                                 31

PART II. OTHER INFORMATION:

       Item 1 - Legal Proceedings                                 32

       Item 2 - Changes in Securities, Use of Proceeds
                and Issuer Purchases of Equity Securities         32

       Item 3 - Defaults Upon Senior Securities                   32

       Item 4 - Submission of Matters to a Vote of
                Security Holders                                  32

       Item 5 - Other Information                                 32

       Item 6 - Exhibits and Reports on Form 8-K                  32

       Signature Page                                             33






               BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
                       ITEM 1 - FINANCIAL STATEMENTS
        CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
             (Dollars in Thousands, Except Per Share Amounts)

                                  Quarters Ended      Nine Months Ended
                                   September 30,        September 30,
                                 2004      2003        2004      2003

Sales                          $111,509  $ 84,754    $325,604  $232,589
Cost of products sold            87,194    66,647     256,845   183,519
                               ________  ________    ________  ________

  Gross profit                   24,315    18,107      68,759    49,070

Selling, general and
 administrative expenses         13,237    11,455      41,499    30,206
Research and development
 expenses                         1,270     1,144       3,904     3,228
Amortization of intangible
 assets                             412       411       1,235     1,235
                               ________  ________    ________  ________

  Operating earnings              9,396     5,097      22,121    14,401

Interest expense                  2,054     4,339      10,345    13,334
Other expense - net                 149       208         867       601
Loss on extinguishment
 of debt                          7,316         -       7,316         -
                               ________  ________    ________  ________

Earnings (loss) before
 income taxes                      (123)      550       3,593       466
Income tax expense                  885     2,057       3,987     3,791
                               ________  ________    ________  ________

Net loss                       $ (1,008) $ (1,507)   $   (394) $ (3,325)



Net loss per share
data:
  Basic and diluted net
   loss per share            $ (.06)      $(.13)     $ (.03)      $(.29)
  Weighted average shares  17,671,362  11,790,296  13,943,044  11,593,008




         See notes to consolidated condensed financial statements.




               BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
                       ITEM 1 - FINANCIAL STATEMENTS
                   CONSOLIDATED CONDENSED STATEMENTS OF
                  COMPREHENSIVE INCOME (LOSS) (Unaudited)
                          (Dollars in Thousands)

                                  Quarters Ended      Nine Months Ended
                                   September 30,        September 30,
                                 2004      2003        2004      2003

Net loss                       $ (1,008) $ (1,507)   $   (394) $ (3,325)

Other comprehensive
 income (loss)-
  Foreign currency
  translation adjustments         1,705     2,303      (2,338)    7,835
                               ________  ________    ________  ________

Comprehensive income (loss)    $    697  $    796    $ (2,732) $  4,510




         See notes to consolidated condensed financial statements.



<TABLE>
                                BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
                                       ITEM 1 - FINANCIAL STATEMENTS
                             CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
                              (Dollars in Thousands, Except Per Share Amounts)
<CAPTION>
                              September 30,   December 31,                                  September 30,   December 31,
                                  2004            2003                                          2004            2003
<S>                           <C>             <C>             <C>                           <C>             <C>
                                                              LIABILITIES AND COMMON
ASSETS                                                        SHAREHOLDERS' INVESTMENT
CURRENT ASSETS:                                               CURRENT LIABILITIES:
 Cash and cash                                                 Accounts payable and
  equivalents                   $ 16,718        $  6,075        accrued expenses              $ 62,928        $ 59,591
 Receivables - net                71,616          73,111       Liabilities to customers
 Inventories                     121,296         115,898        on uncompleted contracts
 Prepaid expenses and                                           and warranties                   7,376          19,030
  other current assets             7,070           8,209       Income taxes                      2,100           4,314
                                ________        ________       Borrowings under senior
                                                                secured revolving credit
 Total Current Assets            216,700         203,293        facility and other
                                                                short-term obligations             734          37,420
OTHER ASSETS:                                                  Current maturities of
 Restricted funds                                               long-term debt                   5,359             376
  on deposit                         524             578                                      ________        ________
 Goodwill                         55,860          55,860
 Intangible assets - net          35,247          35,724       Total Current Liabilities        78,497         120,731
 Other assets                     10,926           9,255
                                ________        ________      LONG-TERM LIABILITIES:
                                                               Liabilities to customers on
                                 102,557         101,417        uncompleted contracts
                                                                and warranties                   1,200             800
PROPERTY, PLANT AND EQUIPMENT:                                 Postretirement benefits          13,595          13,130
 Cost                            116,283         112,955       Deferred expenses,
 Less accumulated                                               pension and other               33,445          32,449
  depreciation                   (63,188)        (55,522)      Payable to American
                                ________        ________        Industrial Partners                  -           5,527
                                                               Interest payable to
                                  53,095          57,433        Holdings                             -          25,810
                                                                                              ________        ________

                                                                                                48,240          77,716

                                                              LONG-TERM DEBT, less
                                                               current maturities               98,772         153,973
                                                               (including $75,635 of
                                                               Senior Notes held by
                                                               Holdings at December 31,
                                                               2003)

                                                              COMMON SHAREHOLDERS'
                                                               INVESTMENT:
                                                               Class A common stock - par
                                                                value $.01 per share,
                                                                authorized 41,000,000
                                                                shares, issued 13,074,900
                                                                shares                             131               -
                                                               Class B common stock - par
                                                                value $.01 per share,
                                                                authorized 25,000,000
                                                                shares, issued 7,021,077
                                                                shares                              70               -
                                                               Common stock - par value
                                                                $.01 per share, authorized
                                                                13,600,000 shares, issued
                                                                12,130,800 shares                    -             121
                                                               Additional paid-in capital      289,960         149,472
                                                               Unearned restricted stock
                                                                compensation                      (716)              -
                                                               Treasury stock -
                                                                72,400 shares, at cost            (851)           (851)
                                                               Accumulated deficit            (105,177)       (104,783)
                                                               Accumulated other
                                                                comprehensive loss             (36,574)        (34,236)
                                                                                              ________        ________

                                                                                               146,843           9,723
                                ________        ________                                      ________        ________

                                $372,352        $362,143                                      $372,352        $362,143


                         See notes to consolidated condensed financial statements.
</TABLE>





               BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
                       ITEM 1 - FINANCIAL STATEMENTS
        CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
                          (Dollars in Thousands)

                                          Nine Months Ended September 30,
                                             2004               2003

Net Cash Provided By Operating Activities  $  5,992           $ 11,909
                                           ________           ________
Cash Flows From Investing Activities
(Increase) decrease in restricted
  funds on deposit                               54               (200)
Purchases of property, plant
  and equipment                              (3,804)            (1,987)
Proceeds from sale of property, plant
  and equipment                                  90                257
Payment for purchase of company                (559)                 -
                                           ________           ________

Net cash used in investing activities        (4,219)            (1,930)
                                           ________           ________
Cash Flows From Financing Activities
Net repayments of revolving credit
  facility                                  (37,420)            (6,647)
Proceeds from senior secured term loan      100,000                  -
Retirement of Senior Notes                 (155,560)                 -
Payment of deferred interest on
  Senior Notes owned by Holdings            (23,660)                 -
Net increase (decrease) in other long-
  term debt and bank borrowings                 516               (413)
Payment of financing expenses                (4,753)            (1,306)
Net proceeds from issuance of
  common stock                              129,821                 72
                                           ________           ________

Net cash provided by (used in)
  financing activities                        8,944             (8,294)
                                           ________           ________

Effect of exchange rate changes
  on cash                                       (74)               812
                                           ________           ________
Net increase in cash and
  cash equivalents                           10,643              2,497
Cash and cash equivalents at
  beginning of period                         6,075              4,189
                                           ________           ________
Cash and cash equivalents at
  end of period                            $ 16,718           $  6,686



Supplemental Disclosures of Cash Flow Information

                                            2004            2003
Cash paid during the period for:
  Interest                                $ 38,574        $  9,591
  Income taxes - net of refunds              5,518           4,160


         See notes to consolidated condensed financial statements.





               BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
                       ITEM 1 - FINANCIAL STATEMENTS
     NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

1. In the opinion of Bucyrus International, Inc. (the "Company"), the
   consolidated condensed financial statements contain all adjustments
   (consisting only of normal recurring accruals) necessary to present
   fairly the financial results for the interim periods.  Certain items are
   included in these statements based on estimates for the entire year.  The
   Company's operations are classified as one operating segment.

2. Certain notes and other information have been condensed or omitted from
   these interim consolidated condensed financial statements.  Therefore,
   these statements should be read in conjunction with the Company's 2003
   Annual Report on Form 10-K filed with the Securities and Exchange
   Commission on March 30, 2004.

3. On July 28, 2004, the Company completed an initial public offering
   ("IPO") of 12,362,500 shares of its Class A common stock at $18 per
   share, from which the Company received net proceeds, after commissions
   and estimated expenses, of $129,821,000.  The Company sold 7,941,177
   shares in the offering and American Industrial Partners ("AIP") sold
   4,421,323 shares, 1,612,500 of which were sold through exercise by the
   underwriters of their over-allotment option.  The shares sold by AIP were
   Class B shares, which converted to Class A shares upon their sale by AIP.
   As a result, the Company's outstanding capital stock, on an undiluted
   basis, consisted of 7,021,077 shares of Class B common stock, all of
   which are owned by AIP, and 12,978,500 shares of Class A common stock
   upon completion of the IPO.  As a general matter, as to all matters
   submitted to a vote of the stockholders, each share of Class A common
   stock has one vote and each share of Class B common stock has two votes.
   Bucyrus Holdings, LLC ("Holdings"), which was controlled by AIP and
   substantially wholly-owned the Company, was dissolved upon completion of
   the IPO.

   Also, on July 28, 2004, the Company entered into a new senior secured
   credit facility with Goldman Sachs Credit Partners L.P. and GMAC
   Commercial Finance, LLC.  The new senior secured credit facility provides
   the Company with a senior secured term loan of $100,000,000 and a senior
   secured revolving credit facility of $50,000,000.  The senior secured
   term loan is payable in quarterly installments to July, 2010, subject to
   earlier prepayment provisions.  The revolving credit facility matures in
   July, 2009.  There were no borrowings under the revolving credit facility
   at September 30, 2004.

   The net proceeds from the IPO together with the $100,000,000 from the
   senior secured term loan were used to retire the $150,000,000 issue of
   9.75% Senior Notes due 2007 (the "Senior Notes") and accrued interest,
   repay all borrowings under the Company's previous credit facility and pay
   all amounts owed AIP under the Management Services Agreement.  Included
   in the Consolidated Condensed Statements of Operations for the quarter
   and nine months ended September 30, 2004 was a $7,316,000 loss on
   extinguishment of debt, which consisted of a prepayment penalty and the
   write-off of unamortized deferred financing costs related to the Senior
   Notes.

4. Inventories consist of the following:

                                    September 30,  December 31,
                                        2004           2003
                                       (Dollars in Thousands)

   Raw materials and parts            $ 19,160       $ 11,655
   Work in process                      24,841         20,433
   Finished products (primarily
    replacement parts)                  77,295         83,810
                                      ________       ________

                                      $121,296       $115,898


5. Basic and diluted net loss per share of common stock were completed by
   dividing net loss by the weighted average number of shares of common
   stock outstanding.  The net loss per share of common stock for prior
   periods has been calculated on a retroactive basis to reflect an eight-
   for-one stock split on June 9, 2004.

   The weighted average shares outstanding used to compute the diluted loss
   per share exclude outstanding options to purchase 862,400 and 1,022,400
   shares of the Company's common stock as of September 30, 2004 and 2003,
   respectively.  The options were excluded because their inclusion would
   have been antidilutive.

6. The Company accounts for stock options in accordance with Accounting
   Principles Board Opinion No. 25, "Accounting for Stock Issued to
   Employees," as allowed by Statement of Financial Accounting Standards No.
   123, "Accounting for Stock-Based Compensation" ("SFAS 123").  The
   following table illustrates the effect on net earnings (loss) and net
   earnings (loss) per share as if the fair value-based method provided by
   SFAS 123 had been applied for all outstanding and unvested awards in each
   period:

                             Quarters Ended         Nine Months Ended
                              September 30,           September 30,
                            2004        2003         2004        2003
                          (Dollars in Thousands, Except Per Share Amounts)

Reported net loss         $ (1,008)   $ (1,507)    $   (394)   $ (3,325)
Add: Non-cash stock-based
 employee compensation
 expense recorded for
 stock options, net of
 related tax effects         2,590          (8)      10,031         630
Deduct: Total non-cash
 stock-based employee
 compensation expense
 determined under fair
 value based method for
 all awards, net of
 related tax effects          (567)         (5)        (575)        (81)
                          ________    ________     ________    ________
Pro forma net earnings
 (loss)                   $  1,015    $ (1,520)    $  9,062    $ (2,776)



Net earnings (loss) per
 share of common stock:
   As reported:
    Basic                 $   (.06)   $   (.13)    $   (.03)   $   (.29)
    Diluted                   (.06)       (.13)        (.03)       (.29)
   Pro forma:
    Basic                      .06        (.13)         .65        (.24)
    Diluted                    .06        (.13)         .62        (.24)

   On September 22, 2004, the Company issued options to certain employees to
   purchase 60,000 shares of the Company's Class A common stock at $30 per
   share, which was the defined fair market value of the Company's common
   stock as of that date.  Also on September 22, 2004, the Company issued
   24,000 shares of restricted stock to certain employees.  These shares
   become freely transferable and nonforfeitable at the end of four years.
   The unearned stock compensation reported as a debit in Common
   Shareholders' Investment in the Consolidated Condensed Balance Sheets
   will be recognized as compensation expense ratably over the four year
   period.

7. Intangible assets consist of the following:

                             September 30, 2004          December 31, 2003
                            Gross                      Gross
                           Carrying   Accumulated     Carrying    Accumulated
                            Amount    Amortization     Amount     Amortization
                                        (Dollars in Thousands)
Amortized intangible
 assets:
   Engineering drawings    $ 25,500    $ (8,950)      $ 25,500     $ (7,994)
   Bill of material
    listings                  2,856      (1,002)         2,856         (895)
   Software                   2,288      (1,606)         2,288       (1,434)
   Other                        758           -              -            -
                           ________    ________       ________     ________
                           $ 31,402    $(11,558)      $ 30,644     $(10,323)


Unamortized intangible
 assets:
   Trademarks/Trade names  $ 12,436                   $ 12,436
   Intangible pension
    asset                     2,967                      2,967
                           ________                   ________

                           $ 15,403                   $ 15,403


   The estimated future amortization expense of intangible assets as of
   September 30, 2004 is as follows:

                                         (Dollars in Thousands)

         2004 (remaining three months)          $    538
         2005                                      1,798
         2006                                      1,798
         2007                                      1,737
         2008                                      1,569
         2009                                      1,443
         Future                                   10,961
                                                ________

                                                $ 19,844


8. The Company's operations and properties are subject to a broad range of
   federal, state, local and foreign laws and regulations relating to
   environmental matters, including laws and regulations governing
   discharges into the air and water, the handling and disposal of solid and
   hazardous substances and wastes, and the remediation of contamination
   associated with releases of hazardous substances at the Company's
   facilities and at off-site disposal locations.  These laws are complex,
   change frequently and have tended to become more stringent over time.
   Future events, such as compliance with more stringent laws or
   regulations, more vigorous enforcement policies of regulatory agencies or
   stricter or different interpretations of existing laws, could require
   additional expenditures by the Company, which may be material.

   Environmental problems have not interfered in any material respect with
   the Company's manufacturing operations to date.  The Company has an
   ongoing program to address any potential environmental problems.  While
   no assurance can be given, the Company believes that expenditures for
   compliance and remediation will not have a material effect on its capital
   expenditures, results of operations or competitive position.

   Warranty Liability

   The Company recognizes the cost associated with its warranty policies on
   its products at the time of sale.  The amount recognized is based on
   historical experience.  The following is a reconciliation of the changes
   in accrued warranty costs for the nine months ended September 30, 2004
   and 2003:

                                         Nine Months Ended
                                           September 30,
                                      2004              2003
                                      (Dollars in Thousands)

   Balance at January 1             $  4,311          $  3,597
   Provision                           2,809             2,799
   Charges                            (1,772)           (1,153)
                                    ________          ________

   Balance at September 30          $  5,348          $  5,243


   Product Liability

   The Company is normally subject to numerous product liability claims,
   many of which relate to products no longer manufactured by the Company or
   its subsidiaries, and other claims arising in the ordinary course of
   business.  The Company has insurance covering most of said claims,
   subject to varying deductibles up to $3,000,000, and has various limits
   of liability depending on the insurance policy year in question.  It is
   the view of management that the final resolution of said claims and other
   similar claims which are likely to arise in the future will not
   individually or in the aggregate have a material effect on the Company's
   financial position, results of operations or cash flows, although no
   assurance to that effect can be given.

   Asbestos Liability

   The Company has been named as a co-defendant in approximately 295
   personal injury liability cases alleging damages due to exposure to
   asbestos and other substances, involving approximately 1,483 plaintiffs.
   The cases are pending in courts in eleven states.  In all of these cases,
   insurance carriers have accepted or are expected to accept defense.
   These cases are in various pre-trial stages.  The Company does not
   believe that costs associated with these matters will have a material
   effect on its financial position, results of operations or cash flows,
   although no assurance to that effect can be given.

   Other Litigation

   A wholly-owned Australian subsidiary of the Company is a defendant in a
   suit pending in the Supreme Court of Queensland in Australia, brought on
   May 5, 2002, relating to a contractual claim.  The plaintiff, pursuant to
   a contract with the Company's subsidiary, agreed to erect a dragline sold
   by the Company to a customer for use at its mine site.  The plaintiff
   asserts various contractual claims related to breach of contract damages
   and other remedies for approximately $3,600,000 Australian dollars
   related to its contention that it is owed amounts for services rendered
   under the contract.  The Company's subsidiary has asserted counterclaims
   against the plaintiff in connection with certain aspects of the work
   performed.  The Company has established a reserve for its estimate of the
   resolution of this matter.  At this time discovery is ongoing and it is
   not possible to evaluate the outcome of the claim nor the range of
   potential loss, if any.

9. Statement of Financial Accounting Standards No. 130, "Reporting
   Comprehensive Income," requires the reporting of comprehensive income
   (loss) in addition to net loss from operations.  Comprehensive income
   (loss) is a more inclusive financial reporting method that includes
   disclosure of financial information that historically has not been
   recognized in the calculation of net loss.  The Company reports
   comprehensive income (loss) and accumulated other comprehensive income
   (loss) which includes net loss, foreign currency translation adjustments
   and minimum pension liability adjustments.  Information on accumulated
   other comprehensive loss is as follows:

                                             Minimum     Accumulated
                              Cumulative     Pension        Other
                              Translation   Liability   Comprehensive
                              Adjustments  Adjustments      Loss
                                        (Dollars in Thousands)

Balance at December 31, 2003   $ (9,028)    $(25,208)     $(34,236)
Changes - Nine months ended
  September 30, 2004             (2,338)           -        (2,338)
                               ________     ________      ________

Balance at September 30, 2004  $(11,366)    $(25,208)     $(36,574)


10.   The Company has several pension and retirement plans covering
      substantially all of its employees in the United States.  The Company
      also provides certain health care benefits to age 65 and life insurance
      benefits for certain eligible retired United States employees.

   The components of net periodic pension cost consisted of the following:

                          Quarters Ended         Nine Months Ended
                           September 30,           September 30,
                         2004        2003         2004        2003
                                   (Dollars in Thousands)

Service cost           $    420    $    448       $  1,307  $  1,233
Interest cost             1,269       1,451          3,911     3,989
Expected return on
 plan assets             (1,211)     (1,151)        (3,733)   (3,166)
Amortization of prior
 service cost                51          56            153       153
Amortization of
 actuarial loss             372         551            944     1,516
                       ________    ________       ________  ________

Net cost               $    901    $  1,355       $  2,582  $  3,725


   The components of other net periodic postretirement benefits cost (health
   care and life insurance) consisted of the following:

                          Quarters Ended         Nine Months Ended
                           September 30,           September 30,
                         2004        2003         2004        2003
                                   (Dollars in Thousands)

Service cost           $    193    $    220       $    578  $    493
Interest cost               285         381            856       852
Amortization of prior
 service cost               (56)        (74)          (166)     (165)
Amortization of
 actuarial loss              84          94            252       210
                       ________    ________       ________  ________

   Net cost            $    506    $    621       $  1,520  $  1,390


   During the first nine months of 2004, the Company contributed
   approximately $3,505,000 to its pension plans and $1,078,000 for the
   payment of benefits from its postretirement benefit plan.  The Company
   presently anticipates contributing an additional $594,000 to its pension
   plans and $360,000 for the payment of benefits from its postretirement
   benefit plan during the remainder of 2004.





               BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
             ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

   Business

   The Company designs, manufactures and markets large excavation machinery
used for surface mining, and provides comprehensive aftermarket services,
supplying replacement parts and offering maintenance and repair contracts and
services for these machines.  The Company manufactures its OEM products and
the majority of its aftermarket parts at its facility in South Milwaukee,
Wisconsin.  The Company's principal OEM products are draglines, electric
mining shovels and rotary blasthole drills, which are used primarily by
customers who mine copper, coal, oil sands and iron ore throughout the world.
In addition, the Company provides aftermarket services in mining centers
throughout the world, including Argentina, Australia, Brazil, Canada, Chile,
China, England, India, Peru, South Africa and the United States.  The largest
markets for this mining equipment have been in the United States, South
America, Australia, South Africa and Canada.  In the future, China, India and
Canada are expected to be increasingly important markets.

   The market for OEM machines is closely correlated with customer
expectations of sustained strength in prices of surface-mined commodities.
Growth in demand for these commodities is a function of, among other things,
economic activity, population increases and continuing improvements in
standards of living in many areas of the world.  In 2001 and 2002, the market
prices of many surface-mined commodities were generally weak.  In 2003 and
during the first nine months of 2004, market prices for copper, coal, iron ore
and oil increased.  Factors that could support sustained demand for these key
commodities include continued economic growth in China, India and the
developing world, and renewed economic strength in industrialized countries.

   The Company's aftermarket parts and service operations, which have
accounted for approximately 70% of sales over the past ten years, tend to be
more consistent than OEM machine sales, however, recent pronounced strength in
commodity markets has positively affected aftermarket sales.  The Company's
complex machines are typically kept in continuous operation from 15 to 40
years, requiring regular maintenance and repair throughout their productive
lives.  The size of the Company's installed base of surface mining equipment
and its ability to provide on-time delivery of reliable parts and prompt
service are important drivers of aftermarket sales.

   While the Company continues to forecast increased revenues attributable
to increased demand related to both aftermarket parts sales and OEM machine
sales relative to prior periods of weaker OEM sales, the Company maintains
ongoing efforts to improve efficiency and contain costs. The Company has
recorded restructuring charges in recent years.  While the Company does not
anticipate significant restructuring charges in future years, the Company does
continually evaluate all opportunities for reductions of headcount.  The
Company does not believe these previous reductions will impact its ability to
respond to increased demand for its products.

   A substantial portion of the Company's sales and operating earnings is
attributable to operations located outside the United States.  The Company
sells OEM machines, including those sold directly to foreign customers, and
most of its aftermarket parts in United States dollars, with limited
aftermarket parts sales denominated in the local currencies of Australia,
Canada, South Africa, Brazil, Chile and the United Kingdom.  Aftermarket
services are paid for primarily in local currency which is naturally hedged by
the Company's payment of local labor in local currency.  In the aggregate,
approximately 70% of the Company's 2003 sales were priced in United States
dollars.

   Over the past three years, during a period of generally weak commodity
prices, the Company increased gross profits by improving manufacturing
overhead variances, achieving productivity gains and growing its high margin
aftermarket parts and services business.

   Following is a discussion of key measures which contributed to the
Company's operating results.

Key Measures

   Commodity Prices

   Demand for the Company's OEM machines is driven in large part by the
prices of certain commodities, such as copper, coal, oil and iron ore.  The
prices of these commodities have risen in recent periods.  The following table
shows certain commodity prices as of October 15, 2004 and as of December 31,
2003, 2002 and 2001:

                          October 15,          December 31,
                             2004        2003    2002     2001

Copper $/lb.(1)             $ 1.35      $ 1.05  $  .70   $  .66
Japanese coking coal
  $/tonne(2)(3)               N/A (4)   $42.97  $40.97   $42.23
Asian steam coal marker
  $/tonne(3)(5)             $73.89      $54.82  $31.22   $31.46
Heavy oil $/barrel(3)(6)      N/A (7)   $18.39  $19.63   $ 8.57
South American iron ore
 $/tonne (3)(8)             $37.90      $31.95  $29.31   $30.03
_____________________
(1)   Source: London Metal Exchange.
(2)   Source: The Institute for Energy Economics, Japan.
(3)   The price for this commodity is not determinable by reference to a
      commodity exchange.  The referenced source provides indicative contract
      prices which the Company believes are representative of prevailing price
      trends.
(4)   As of the date of this filing, this information was not available.  The
      indicative contract price at August 31, 2004 was $62.71.
(5)   Source: McCloskey Coal News.
(6)   Source: Sproule Associates, Ltd.  The prices quoted are monthly average
      contract prices for Hardisty (Canada) Heavy Crude Oil and were converted
      from Canadian to United States dollars based on the average prevailing
      exchange rate for the applicable month.
(7)   As of the date of this filing, this information was not available.  The
      indicative contract price at September 30, 2004 was $26.23.
(8)   Source: Skillings Mining Review.

   On-Time Delivery and Lead Times

   Due to the high fixed cost structure of the Company's customers, it is
critical that they avoid equipment down-time.  On-time delivery and reduced
lead time of aftermarket parts and services allow customers to reduce downtime
and are therefore key measures of customer service, and the Company believes
they are fundamental drivers of aftermarket customer demand.  The Company's
on-time delivery percentage in the aftermarket, based on achieved promised
delivery dates to customers, has increased from approximately 74% in 2001 to
92% for 2003 and 93% for the first nine months of 2004.  Lead times for
deliveries were approximately the same in the first nine months of 2004 as
compared to 2003.

   The Company increased on-time deliveries in 2003 and the first nine
months of 2004 and reduced lead times from 2001 to 2002 and retained
improvements in 2003 and the first nine months of 2004 despite increasing
component complexity by focusing on development of key shop floor metrics,
improved communication between sales, manufacturing and shipping, instituting
daily or weekly meetings to resolve issues, changing shipment methods and
hiring an additional supervisory person dedicated to on-time delivery.
Information resources useful in accomplishing many of these improvements are
now available from the Company's new enterprise resource planning ("ERP")
system.

   Productivity

   Sales per full time employee is a measure of the Company's operational
efficiency.  Sales per full time equivalent employee were $256,000 for the
first nine months of 2004 and $219,000 for 2003 compared with $186,000 for
2001.  This productivity increase is primarily due to the application of
worldwide sales and inventory ERP systems, and personnel upgrades which
collectively allowed sales to grow with minimal changes in headcount.

   Warranty Claims

   Product quality is another key driver of customer satisfaction and, as a
result, sales.  Management uses warranty claims as a percentage of total sales
as one objective benchmark to evaluate product quality.  During 2003 and the
first nine months of 2004, warranty claims as a percentage of total sales were
less than 1%.

   Backlog

   Backlog is a tool which allows management to forecast sales and
production requirements.  Due to the high cost of some OEM products, backlog
is subject to volatility, particularly over relatively short periods.  A
portion of the Company's backlog is related to multi-year contracts that will
generate revenue in future years.  The following table shows backlog at
September 30, 2004 and December 31, 2003 as well as the portion of backlog
which is or was expected to be recognized within 12 months of these dates:


                           September 30,     December 31,
                               2004              2003
                               (Dollars in Thousands)

   Next 12 months            $143,094          $122,263
   Total                     $259,772          $233,642

   Inventory

   Inventory is one of the Company's significant assets.  As of
September 30, 2004 the Company had $121,296,000 in inventory.  The Company
turned its inventory at an annual rate of approximately 2.3 times in 2003,
which the Company believes was in line with other manufacturers of surface
mining equipment.  Inventory turns increased to approximately 2.8 times during
the first nine months of 2004.   Inventory turns is calculated based on cost
of sales and the average inventory balance during the prior twelve months.
The Company believes that it has appropriately recorded at the lower of cost
or market any slow moving or obsolete inventory in its financial statements.
The factors that could reduce the carrying value of inventory include reduced
demand for aftermarket parts due to decreased sales volumes attributable to
new or improved technology or customers discontinuing the use of older model
machines, which could render inventory obsolete or excess.  With the exception
of the normal inventory obsolescence provision recorded in the ordinary course
of business, the Company does not anticipate recording any significant
inventory impairments.

Results of Operations

   Quarter And Nine Months Ended September 30, 2004 Compared to Quarter And
   Nine Months Ended September 30, 2003

   Sales

   Sales for the quarter and nine months ended September 30, 2004 were
$111,509,000 and $325,604,000, respectively, compared with $84,754,000 and
$232,589,000, for the quarter and nine months ended September 30, 2003,
respectively.  Sales of aftermarket parts and services for the third quarter
of 2004 were $86,722,000, an increase of 17.0% from $74,106,000 for the third
quarter of 2003.  Sales of aftermarket parts and services for the nine months
ended September 30, 2004 were $239,371,000, an increase of 25.2% from
$191,256,000 for the nine months ended September 30, 2003.  Machine sales for
the third quarter of 2004 were $24,787,000, an increase of 132.8% from
$10,648,000 for the third quarter of 2003.  Machine sales for the nine months
ended September 30, 2004 were $86,233,000, an increase of 108.6% from
$41,333,000 for the nine months ended September 30, 2003.  The increase in
machine sales for the quarter and nine months ended September 30, 2004 was in
all product lines.  The higher level of sales for both the quarter and nine
months ended September 30, 2004 as compared to prior year periods resulted
from an increase in customer discretionary spending and equipment utilization,
primarily due to higher commodity prices.  In addition, aftermarket sales have
increased due to the Company's initiatives and strategies to capture
additional market share.  Approximately $2,581,000 and $9,826,000 of the
increases in sales for the quarter and nine months ended September 30, 2004,
respectively, was attributable to a weakening United States dollar, which
primarily impacted aftermarket sales (see "Foreign Currency Fluctuations"
below).

   Gross Profit

   Gross profit for the third quarter of 2004 was $24,315,000 or 21.8% of
sales compared with $18,107,000 or 21.4% of sales for the third quarter of
2003.  Gross profit for the nine months ended September 30, 2004 was
$68,759,000 or 21.1% compared with $49,070,000 or 21.1% for the nine months
ended September 30, 2003.  The increase in gross profit was primarily due to
an increase in sales.  Gross profit for the nine months ended September 30,
2004 and 2003 was reduced by $3,689,000 and $3,626,000, respectively, of
additional depreciation expense as a result of the purchase price allocation
to plant and equipment in connection with AIP's acquisition of the Company.
Approximately $496,000 and $1,774,000 of the increase in gross profit in the
quarter and nine months ended September 30, 2004, respectively, was
attributable to a weakening United States dollar (see "Foreign Currency
Fluctuations" below).

   Selling, General and Administrative Expenses

   Selling, general and administrative expenses for the quarter ended
September 30, 2004 were $13,237,000 or 11.9% of sales compared to $11,455,000
or 13.5% of sales for the quarter ended September 30, 2003.  Selling, general
and administrative expenses for the nine months ended September 30, 2004 were
$41,499,000 or 12.7% of sales compared to $30,206,000 or 13.0% of sales for
the nine months ended September 30, 2003.  Selling, general and administrative
expenses for quarter and nine months ended September 30, 2004 include
$2,590,000 and $10,031,000, respectively, related to non-cash stock-based
employee compensation compared to $630,000 for the nine months ended
September 30, 2003.  No non-cash stock-based employee compensation was
recognized during the third quarter of 2003.  Non-cash stock compensation
expense represents the charge recorded related to stock options issued prior
to the date of the IPO on July 28, 2004.  At the time of the IPO, the plan
required certain modifications to the determination of fair market value for
these previously issued options.  In accordance with EITF Issue No. 87-23, in
periods subsequent to September 30, 2004, no further compensation expense will
be recorded related to stock options issued under this plan prior to the IPO
on July 28, 2004.  Under existing accounting standards, provision for
compensation expense related to the 24,000 shares of restricted stock issued
under the 2004 Equity Incentive Plan in September 2004 will be approximately
$180,000 annually over the next four years.  Included in the expense for the
third quarter of 2004 was $4,000 related to the restricted stock issued on
September 22, 2004.  AIP expenses pursuant to the Management Services
Agreement for the quarter and nine months ended September 30, 2004 were
$132,000 and $1,182,000, respectively, compared with $1,864,000 and $2,663,000
for the quarter and nine months ended September 30, 2003, respectively.
Foreign currency transaction gains for the quarter and nine months ended
September 30, 2004 were $374,000 and $1,218,000, respectively, compared with a
$198,000 gain and $83,000 loss for the quarter and nine months ended
September 30, 2003, respectively.

   Research and Development Expenses

   Research and development expenses for the quarter and nine months ended
September 30, 2004 were $1,270,000 and $3,904,000, respectively, compared with
$1,144,000 and $3,228,000 for the quarter and nine months ended September 30,
2003, respectively.

   Amortization of Intangible Assets

   Amortization of intangible assets, consisting primarily of engineering
drawings, bill of material listings and software, was $412,000 and $1,235,000
for the quarter and nine months ended September 30, 2004, respectively,
compared with $411,000 and $1,235,000 for the quarter and nine months ended
September 30, 2003, respectively.

   Operating Earnings

   Operating earnings for the third quarter of 2004 were $9,396,000 or 8.4%
of sales, compared with $5,097,000 of 6.0% of sales, for the third quarter of
2003.  Operating earnings for the nine months ended September 30, 2004 were
$22,121,000 or 6.8% of sales, compared with $14,401,000 or 6.2% of sales for
the quarter ended September 30, 2003.  The improvement in 2004 was primarily
due to increased gross profit resulting from increased sales volume.  This
improvement was partially offset by the increase in non-cash stock
compensation expense as discussed in Selling, General and Administrative
Expenses above.

   Interest Expense

   Interest expense for the quarter and nine months ended September 30, 2004
was $2,054,000 and $10,345,000, respectively, compared with $4,339,000 and
$13,334,000 for the quarter and nine months ended September 30, 2003,
respectively.  The decrease in interest expense in 2004 was due to the
refinancing of the Company's capital structure in connection with the IPO
completed on July 28, 2004 (see "Liquidity and Capital Resources" below).  In
addition, the Company had reduced borrowings in 2004 under its previous
revolving credit facility prior to the IPO and has had no borrowings under the
revolving credit facility portion of the new senior secured credit facility
subsequent to the IPO.

   Other Expense - Net

   Other expense - net was $149,000 and $867,000 for the quarter and nine
months ended September 30, 2004, respectively, compared with $208,000 and
$601,000 for the quarter and nine months ended September 30, 2003,
respectively.  Debt issuance cost amortization was $300,000 and $1,133,000 for
the quarter and nine months ended September 30, 2004 compared with $325,000
and $866,000 for the quarter and nine months ended September 30, 2003,
respectively.  These amounts include costs related to the Company's credit
facilities (see "Liquidity and Capital Resources - Financing Cash Flows"
below).

   Income Taxes

   Income tax expense for the quarters and nine months ended September 30,
2004 and 2003 consists primarily of foreign taxes at applicable statutory
rates.  As of September 30, 2004, the Company had approximately $17,820,000 of
federal net operating loss carryforwards that expire in the years 2008 and
2009 to offset against future federal taxable income.

Foreign Currency Fluctuations

   The following table summarizes the approximate effect of changes in
foreign currency exchange rates on the Company's sales, gross profit and
operating earnings for the quarters and nine months ended September 30, 2004
and 2003, in each case compared to the same period in the prior year:

                              Quarters Ended         Nine Months Ended
                               September 30,            September 30,
                             2004        2003         2004        2003
                                       (Dollars in Thousands)

Increase in sales          $  2,581    $  4,296     $  9,826    $  9,300
Increase in gross profit        496         869        1,774       1,699
Increase in
  operating earnings            180         707          349       1,138

EBITDA

   Earnings before interest, taxes, depreciation and amortization ("EBITDA")
for the quarter and nine months ended September 30, 2004 was $5,219,000 and
$24,271,000, respectively, compared with $8,221,000 and $23,775,000 for the
quarter and nine months ended September 30, 2003, respectively.  EBITDA is
presented (i) because EBITDA is used by the Company to measure its liquidity
and financial performance and (ii) because the Company believes EBITDA is
frequently used by securities analysts, investors and other interested parties
in evaluating the performance and enterprise value of companies in general,
and in evaluating the liquidity of companies with significant debt service
obligations and their ability to service their indebtedness.  The EBITDA
calculation is not an alternative to operating earnings under generally
accepted accounting principles, or GAAP, as an indicator of operating
performance or of cash flows as a measure of liquidity.  The following table
reconciles Net Loss as shown in the Consolidated Condensed Statements of
Operations to EBITDA and reconciles EBITDA to Net Cash Provided by (Used In)
Operating Activities as shown in the Consolidated Condensed Statements of Cash
Flows:

                              Quarters Ended          Nine Months Ended
                               September 30,            September 30,
                             2004        2003          2004      2003
                                         (Dollars in Thousands)

Net loss                   $ (1,008)   $ (1,507)    $   (394)  $ (3,325)
Interest income                (149)       (121)        (263)      (228)
Interest expense              2,054       4,339       10,345     13,334
Income taxes                    885       2,057        3,987      3,791
Depreciation                  2,725       2,710        8,228      8,083
Amortization (1)                712         743        2,368      2,120
                           ________    ________     ________   ________

EBITDA (2)(3)                 5,219       8,221       24,271     23,775
Changes in assets
 and liabilities            (28,212)        290      (21,830)     3,922
Loss on extinguishment
 of debt                      7,316           -        7,316          -
Non-cash stock
 compensation expense (4)     2,590          (8)      10,031        630
Loss on sale of fixed
 assets                         260         407          273        479
Interest income                 149         121          263        228
Interest expense             (2,054)     (4,339)     (10,345)   (13,334)
Income tax expense             (885)     (2,057)      (3,987)    (3,791)
                           ________    ________     ________   ________
Net cash provided by (used
 in) operating activities  $(15,617)   $  2,635     $  5,992   $ 11,909


Net cash used in
 investing activities      $ (1,945)   $   (963)    $ (4,219)  $ (1,930)


Net cash provided by
 (used in) financing
 activities                $ 27,507    $ (1,865)    $  8,944   $ (8,294)


(1)   Includes amortization of intangible assets and debt issuance costs.
(2)   This calculation varies from the calculation in the Company's senior
      secured credit facility.
(3)   EBITDA is reduced by AIP expenses pursuant to the Management Services
      Agreement as well as fees paid to AIP or its affiliates and advisors for
      services performed for the Company outside the scope of the Management
      Services Agreement.  These amounts for the quarters ended September 30,
      2004 and 2003 and the nine months ended September 30, 2004 and 2003
      totaled $132,000, $1,907,000, $1,289,000 and $2,904,000, respectively.
      EBITDA is also reduced by restructuring charges (severance) for the
      quarters ended September 30, 2004 and 2003 and nine months ended
      September 30, 2004 and 2003 of $31,000, $139,000, $201,000 and $421,000,
      respectively.
(4)   Non-cash stock compensation expense represents the charge recorded
      related to stock options issued prior to the date of the IPO on July 28,
      2004.  At the time of the IPO, the plan required certain modifications to
      the determination of fair market value for these previously issued
      options.  In accordance with EITF Issue No. 87-23, in periods subsequent
      to September 30, 2004, no further compensation expense will be recorded
      related to stock options issued under this plan prior to the IPO on
      July 28, 2004.

      Under existing accounting standards, provision for compensation expense
      related to the 24,000 shares of restricted stock issued under the 2004
      Equity Incentive Plan in September 2004 will be approximately $180,000
      annually over the next four years.

Liquidity and Capital Resources

   Initial Public Offering (IPO)

   On July 28, 2004, the Company completed an initial public offering of
12,362,500 shares of its Class A common stock at $18 per share, from which the
Company received net proceeds, after commissions and estimated expenses, of
$129,821,000.  The Company sold 7,941,177 shares in the offering and AIP sold
4,421,323 shares, 1,612,500 of which were sold through exercise by the
underwriters of their over-allotment option.  On July 28, 2004, the net
proceeds from the stock sale together with $100,000,000 from a new senior
secured credit facility were used to retire all of the Senior Notes and
accrued interest, repay all borrowings under the Company's previous senior
secured credit facility and pay all amounts owed AIP under the Management
Services Agreement which was terminated prior to the IPO.  The following is a
summary of the sources and uses of proceeds related to the IPO:

                                                                   Source
                                                                   (Use)
                                                                 (Dollars in
                                                                 thousands)

Net proceeds from sale of common stock                           $ 129,821
Proceeds from new senior secured credit facility                   100,000
Retirement of Senior Notes (includes prepayment penalty)          (155,560)
Payment of deferred interest on Senior Notes held by Holdings      (23,660)
Payment of other accrued interest on Senior Notes                   (5,382)
Payment of amounts owed to AIP under Management
  Service Agreement                                                 (6,355)
Repayment of obligations under previous credit facility            (18,940)
Payment of refinancing expenses                                     (4,546)
                                                                 _________

Balance used for general corporate purposes                      $  15,378


   Cash Requirements

   During the remainder of 2004, the Company anticipates strong cash flows
from operations due to continued strength in aftermarket parts sales as well
as increased demand for new machines.  In expanding markets, customers are
generally contractually obligated to make progress payments under purchase
contracts for machine orders.  As a result, the Company does not anticipate
significant outside financing requirements to fund production of these
machines and does not believe that new machine sales will have a material
negative effect on its liquidity.  If additional borrowings are necessary
during 2004, the Company believes it has sufficient capacity under its new
senior secured credit facility.

   The terms of the Company's new senior secured credit facility permit it
to make capital expenditures, including during 2004, of up to $7,000,000 per
year, plus a carryover of up to $2,000,000 per year of amounts not spent up to
such limit in the prior year.  The Company believes that this limitation will
not hinder its ability to make appropriate capital expenditures.  The Company
believes cash flows from operating activities will be sufficient to fund
capital expenditures.

   The following table summarizes the Company's contractual obligations with
respect to long-term debt and short-term obligations as of September 30, 2004:

                           1 Year
                 Total     or Less      2-3 Years   4-5 Years   Thereafter

Long-term debt  $104,131   $ 5,359(1)   $ 15,643    $ 15,465     $ 67,664
Short-term
 obligations         734       734             -           -            -
                ________   _______      ________    ________     ________

                $104,865   $ 6,093      $ 15,643    $ 15,465     $ 67,664


(1) As of October 15, 2004, the Company has paid $1,250,000 related to its
    first mandatory payment due under the term loan portion of the new senior
    secured credit facility.

   There have been no material changes to the contractual obligations with
respect to purchase obligations and operating leases and rental and service
agreements as presented in the Company's 2003 Annual Report on Form 10-K.

   The Company's capital expenditures for the nine months ended
September 30, 2004 were $3,804,000 compared with $1,987,000 for the nine
months ended September 30, 2003.  The Company expects an increase in capital
expenditures over the next twelve months as a result of increased sales
activity.

   At September 30, 2004, there were $17,661,000 of standby letters of
credit outstanding under all Company bank facilities.

   The Company's long-term liabilities consist of warranty and product
liability accruals, pension and postretirement benefit accruals and management
service accruals.  For the year 2004, the Company expects to contribute
$4,100,000 to its pension plans and $1,400,000 for the payment of benefits
from its postretirement benefit plan.  In 2004, the Company paid $7,100,000
under the Management Services Agreement, which was terminated in July 2004.

   Payments of warranty and product liability claims are not subject to a
definitive estimate by year.  Management does not anticipate cash requirements
for warranty claims to be materially different than historical funding levels.
The Company expects the payment of product liability claims for 2004 to be
approximately $1,000,000 to $2,000,000 higher than historical levels due to
the October 2004 payment of one large claim.

   In addition to the obligations noted above, the Company anticipates cash
funding requirements for interest and income taxes of approximately
$40,000,000 (which includes $23,660,000 of deferred interest paid to AIP) and
$7,000,000, respectively, during the year 2004.

   The Company believes that cash flows from operations will be sufficient
to fund its cash requirements outlined above for the next twelve months.

   During the first nine months of 2004, the Company repaid $37,420,000 in
borrowings under the previous senior secured credit facility.  The Company
believes that cash flows from operations will be sufficient to repay any
additional borrowings under the new senior secured credit facility in the next
twelve months.

   Sources and Uses of Cash

   While the Company had $16,718,000 of cash and cash equivalents as of
September 30, 2004, $3,926,000 of this cash was located at various foreign
subsidiaries to be used for working capital purposes.

   Operating Cash Flows

   During the first nine months of 2004, the Company generated cash from
operating activities of $5,992,000 compared to cash generated of $11,909,000
in the first nine months of 2003.  The decrease in cash flows from operating
activities was driven primarily by the payment of obligations to AIP under the
Management Services Agreement which was terminated in July 2004 and the
recognition of revenue on long-term machine contracts for which customer
payments were received in 2003.

      Receivables

      The Company recognizes revenues on its machine orders using the
percentage-of-completion method.  Accordingly, accounts receivable are
generated when revenue is recognized, which can be before the funds are
collected or in some cases, before the customer is billed.  As of
September 30, 2004 the Company had $71,616,000 of accounts receivable compared
to $73,111,000 of accounts receivable at December 31, 2003.  This decrease was
primarily due to high fourth quarter sales in 2003 that were collected in
2004.

      Liabilities to Customers on Uncompleted Contracts and Warranties

      Customers generally make down payments at the time of the order for a
new machine as well as progress payments throughout the manufacturing process.
In accordance with SOP No. 81-1, these payments are recorded as Liabilities to
Customers on Uncompleted Contracts and Warranties.  The decrease of
$11,254,000 from December 31, 2003 to September 30, 2004 was due to the
recognition of revenue on long-term machine contracts for which customer
payments were received in 2003.

   Financing Cash Flows

   On July 28, 2004, the Company entered into a new senior secured credit
facility with Goldman Sachs Credit Partners L.P. and GMAC Commercial Finance,
LLC.  The new senior secured credit facility provides the Company with a
senior secured term loan of $100,000,000 and a senior secured revolving credit
facility of $50,000,000.  The senior secured term loan is payable in quarterly
installments to July 2010, subject to earlier prepayment provisions, and bears
interest at the prime rate plus an applicable margin (1% to 1.25%) or LIBOR
plus an applicable margin (2% to 2.25%).  The weighted average interest rate
on term loan borrowings at September 30, 2004 was 3.9%.  The senior secured
revolving credit facility expires on July 28, 2009 and bears interest at the
prime rate plus 1.25% or LIBOR plus 2.25%.  Borrowings under the revolving
portion of the facility are subject to a borrowing base formula based on the
value of eligible receivables and inventory.  There were no borrowings under
the revolving portion of the facility at September 30, 2004.

   The new senior secured credit facility contains covenants limiting the
discretion of management with respect to key business matters and places
significant restrictions on, among other things, the Company's ability to
incur additional indebtedness, create liens or other encumbrances, make
certain payments or investments, loans and guarantees, and sell or otherwise
dispose of assets and merge or consolidate with another entity.  All of the
Company's domestic assets and the receivables and inventory of its Canadian
subsidiary are pledged as collateral under the new senior secured credit
facility.  In addition, the outstanding capital stock of the Company's
domestic subsidiaries as well as the majority of the capital stock of its
foreign subsidiaries will be pledged as collateral.  The Company is also
required to maintain compliance with certain covenants, including financial
ratios and minimum levels of EBITDA (as defined).  The Company was in
compliance with these covenants as of September 30, 2004.

Critical Accounting Policies and Estimates

   See the Company's critical accounting policies discussed in the
Management's Discussion and Analysis of the Company's 2003 Annual Report on
Form 10-K.  There have been no material changes to these policies.






ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   The Company's market risk is impacted by changes in interest rates and
foreign currency exchange rates.

Interest Rates

   The Company's interest rate exposure relates primarily to floating rate
debt obligations in the United States.  The Company manages its borrowings
under credit facilities through the selection of LIBOR-based borrowings or
prime-rate based borrowings.  If market conditions warrant, interest rate
swaps may be used to adjust interest rate exposures, although none have been
used to date.

   At September 30, 2004, a sensitivity analysis was performed for the
Company s floating rate debt obligations.  Based on this sensitivity analysis,
the Company has determined that a 10% change in the Company's weighted average
interest rate at September 30, 2004 would have the effect of changing the
Company's interest expense on an annual basis by approximately $390,000.

Foreign Currency

   The Company sells new machines, including those sold directly to foreign
customers, and most of its aftermarket parts in United States dollars.  A
limited amount of aftermarket parts sales are denominated in the local
currencies of Australia, Canada, Chile, South Africa, Brazil and the United
Kingdom which subjects the Company to foreign currency risk. Aftermarket sales
and a portion of the labor costs associated with such activities are
denominated or paid in local currencies.  As a result, a relatively strong
United States dollar could decrease the United States dollar equivalent of the
Company's sales without a corresponding decrease of the United States dollar
value of certain related expenses.  The Company utilizes some foreign currency
derivatives to mitigate foreign exchange risk.

   Currency controls, devaluations, trade restrictions and other disruptions
in the currency convertibility and in the market for currency exchange could
limit the Company's ability to timely convert sales earned abroad into United
States dollars, which could adversely affect the Company's ability to service
its United States dollar indebtedness, fund its United States dollar costs and
finance capital expenditures and pay dividends on its common stock.

   Based on the Company's derivative instruments outstanding at
September 30, 2004, a 10% change in foreign currency exchange rates would not
have a material effect on the Company's financial position, results of
operations or cash flows.




               BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
                     ITEM 4 - CONTROLS AND PROCEDURES


   As of the end of the period covered by this Report, an evaluation was
carried out under the supervision and with the participation of the Company's
management, including its Chief Executive Officer and President and its Chief
Financial Officer, Controller and Secretary, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act")).  Based upon their evaluation of these disclosure controls
and procedures, the Chief Executive Officer and President and Chief Financial
Officer, Secretary and Controller concluded that the disclosure controls and
procedures were effective as of the end of the quarter ended September 30,
2004 to ensure that material information relating to the Company including its
consolidated subsidiaries, was made known to them by others within those
entities, particularly during the period in which this Report was being
prepared.

   There were no changes in the Company's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the quarter ended September 30, 2004 that
have materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

   It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system are met.  In addition, the design of any control
system is based in part upon certain assumptions about the likelihood of
future events.  Because of these and other inherent limitations of control
systems, there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions, regardless of how
remote.





                        FORWARD-LOOKING STATEMENTS


   This Report includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended.  Discussions
containing such forward-looking statements may be found in this section and
elsewhere within this Report.  Forward-looking statements include statements
regarding the intent, belief or current expectations of the Company, primarily
with respect to the future operating performance of the Company or related
industry developments.  When used in this Report, terms such as "anticipate,"
"believe," "estimate," "expect," "indicate," "may be," "objective," "plan,"
"predict," and "will be" are intended to identify such statements.  Readers
are cautioned that any such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual
results may differ from those described in the forward-looking statements as a
result of various factors, many of which are beyond the control of the
Company.  Forward-looking statements are based upon management's expectations
at the time they are made.  Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from
such expectations ("Cautionary Statements") are described generally below and
disclosed elsewhere in this Report.  All subsequent written or oral forward-
looking statements attributable to the Company or persons acting on behalf of
the Company are expressly qualified in their entirety by the Cautionary
Statements.

   Factors that could cause actual results to differ materially from those
contemplated include:

   Factors affecting customers' purchases of new equipment, rebuilds, parts
and services such as: production capacity, stockpiles, and production and
consumption rates of coal, copper, iron, gold and other ores and minerals; the
cash flows of customers; the cost and availability of financing to customers
and the ability of customers to obtain regulatory approval for investments in
mining projects; consolidations among customers; work stoppages at customers
or providers of transportation; and the timing, severity and duration of
customer buying cycles.

   Factors affecting the Company's general business, such as: unforeseen
patent, tax, product, environmental, employee health or benefit, or
contractual liabilities; nonrecurring restructuring and other special charges;
changes in accounting or tax rules or regulations; reassessments of asset
valuations for such assets as receivables, inventories, fixed assets and
intangible assets; leverage and debt service; the Company's success in
recruiting and retaining managers and key employees; and the Company's wage
stability and cooperative labor relations; plant capacity and utilization.

   Additional factors that could cause results to differ materially from
those contemplated are set forth under the caption "Risk Factors" in the
prospectus forming a part of the Company's registration statement on
Form S-1/A filed with the Securities and Exchange Commission on July 22, 2004.






                                  PART II
                             OTHER INFORMATION


  Item 1. Legal Proceedings.

          There have been no material changes to the information set forth
          in Item 3 - Legal Proceedings and Other Contingencies of the
          Company's Annual Report on Form 10-K for the year ended
          December 31, 2003 except as included in Other Litigation in
          Note 8 to the September 30, 2004 consolidated condensed financial
          statements.

  Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of
          Equity Securities.

          Not applicable.

  Item 3. Defaults Upon Senior Securities.

          Not applicable.

  Item 4. Submission of Matters to a Vote of Security Holders.

          No matters were submitted to a vote of security holders during
          the quarter covered by this Report.

  Item 5. Other Information.

          Not applicable.

  Item 6. Exhibits and Reports on Form 8-K.

          (a) Exhibits: See Exhibit Index on last page of this report,
              which is incorporated herein by reference.

          (b) Reports on Form 8-K:

              -  A report on Form 8-K was filed on July 16, 2004 to
                 disclose the issuance of a press release announcing
                 summary unaudited results for the three and six months
                 ended June 30, 2004.

              -  A report on Form 8-K was filed on July 23, 2004 to
                 disclose the issuance of a press release announcing the
                 pricing of the Company's IPO.

              -  A report on Form 8-K was filed on July 29, 2004 to
                 disclose the issuance of a press release announcing the
                 completion of the Company's IPO of shares of its Class A
                 common stock.




                                 SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                              BUCYRUS INTERNATIONAL, INC.
                              (Registrant)



Date     October 27, 2004     /s/C. R. Mackus
                              Craig R. Mackus
                              Chief Financial Officer, Controller
                               and Secretary
                              Principal Accounting Officer


Date     October 27, 2004     /s/T. W. Sullivan
                              Timothy W. Sullivan
                              President and Chief Executive Officer






                        BUCYRUS INTERNATIONAL, INC.
                               EXHIBIT INDEX
                                    TO
                       QUARTERLY REPORT ON FORM 10-Q
                 FOR THE QUARTER ENDED SEPTEMBER 30, 2004


                                     Incorporated
Exhibit                               Herein By              Filed
Number     Description                Reference             Herewith

 2.1  Agreement and Plan of           Exhibit 1 to
      Merger dated August 21,         Registrant's
      1997, between Registrant,       Tender Offer
      American Industrial             Solicitation/
      Partners Acquisition            Recommendation
      Company, LLC and Bucyrus        Statement on
      Acquisition Corp.               Schedule 14D-9
                                      filed with the
                                      Commission on
                                      August 26, 1997.

 2.2  Certificate of Merger           Exhibit 2.2 to
      dated September 26, 1997,       Registrant's
      issued by the Secretary         Current Report
      of State of the State of        on Form 8-K
      Delaware.                       filed with the
                                      Commission on
                                      October 10, 1997.

 3.1  Corrected Amended and           Exhibit 3.1 to
      Restated Certificate of         Registrant's
      Incorporation.                  Current Report
                                      on Form 8-K
                                      filed with the
                                      Commission on
                                      September 24, 2004.

 3.2  Amended and Restated            Exhibit 3.2 to
      Bylaws, effective               Registrant's
      July 27, 2004.                  Current Report
                                      on Form 8-K
                                      filed with the
                                      Commission on
                                      September 24, 2004.

 4.1  Specimen Class A common         Exhibit 4.1 to
      stock certificate.              Registration
                                      Statement on
                                      Form S-1A of
                                      Registrant
                                      filed with the
                                      Commission on
                                      July 20, 2004.

 4.2  Specimen Class B common         Exhibit 4.2 to
      stock certificate.              Registrant's
                                      Quarterly Report
                                      on Form 10-Q
                                      filed with the
                                      Commission on
                                      August 16, 2004.

10.3  Agreement to Purchase and       Exhibit 10.18
      Sell Industrial Property        to Registrant's
      between Registrant and          Annual Report on
      InSite Real Estate              Form 10-K for
      Development, L.L.C.             the year ended
      dated October 25, 2001.         December 31, 2001.

10.4  Industrial Lease Agreement      Exhibit 10.19
      between Registrant and          to Registrant's
      InSite South Milwaukee, L.L.C.  Annual Report on
      dated January 4, 2002.          Form 10-K for
                                      the year ended
                                      December 31, 2001.

10.5  Termination Benefits Agreement  Exhibit 10.20
      between Registrant and          to Registrant's
      John F. Bosbous dated           Annual Report on
      March 5, 2002.                  Form 10-K for
                                      the year ended
                                      December 31, 2001.

10.6  Termination Benefits Agreement  Exhibit 10.21
      between Registrant and          to Registrant's
      Thomas B. Phillips dated        Annual Report on
      March 5, 2002.                  Form 10-K for
                                      the year ended
                                      December 31, 2001.

10.7  Loan and Security Agreement     Exhibit 10.22
      by and among Registrant,        to Registrant's
      Minserco, Inc., Boonville       Annual Report on
      Mining Services, Inc. and       Form 10-K for
      GMAC Business Credit, LLC,      the year ended
      and Bank One, Wisconsin         December 31, 2001.
      dated March 7, 2002.

      (a) First amendment dated       Exhibit 10.16 (a)
      December 31, 2002 to Loan       to Registrant's
      and Security Agreement.         Annual Report on
                                      Form 10-K for
                                      the year ended
                                      December 31, 2002.

      (b) Second amendment dated      Exhibit 10.16 (b)
      January 9, 2003 to Loan         to Registrant's
      and Security Agreement.         Annual Report on
                                      Form 10-K for
                                      the year ended
                                      December 31, 2002.

      (c) Letter agreement dated      Exhibit 10.16 (c)
      December 31, 2002 amending      to Registrant's
      Loan and Security Agreement.    Annual Report on
                                      Form 10-K for
                                      the year ended
                                      December 31, 2002.

      (d) Third amendment dated       Exhibit 10.10(d)
      November 13, 2003 to Loan       to Registrant's
      and Security Agreement.         Quarterly Report
                                      on Form 10-Q
                                      filed with the
                                      Commission on
                                      November 13, 2003.

      (e) Fourth amendment dated      Exhibit 10.28
      March 8, 2004 to Loan and       to Registrant's
      Security Agreement.             Annual Report on
                                      Form 10-K for
                                      the year ended
                                      December 31, 2003.

10.8  Consulting Agreement            Exhibit 10.30
      between Registrant and          to Registrant's
      Wayne T. Ewing dated            Form 10-K for
      January 1, 2003.                the year ended
                                      December 31, 2003.

10.9  Employment Agreement            Exhibit 10.17 to
      between Registrant and          Registrant's
      C. R. Mackus dated as of        Quarterly Report
      May 21, 1997.                   on Form 10-Q
                                      filed with the
                                      Commission on
                                      August 14, 1997.

10.10 1998 Management Stock Option    Exhibit 10.17 to
      Plan.                           Registrant's
                                      Annual Report on
                                      Form 10-K for
                                      the year ended
                                      December 31, 1997.

10.11 Employment Agreement            Exhibit 10.18 to
      between Registrant and          Registrant's
      F. P. Bruno dated as of         Annual Report on
      December 1, 1997.               Form 10-K for
                                      the year ended
                                      December 31, 1998.

10.12 Board of Directors              Exhibit 10.17
      Resolution dated                to Registrant's
      December 16, 1998               Annual Report on
      amending the 1998               Form 10-K for
      Management Stock                the year ended
      Option Plan.                    December 31, 2002.

10.13 Form of Registration            Exhibit 10.20 to
      Rights Agreement.               Registration
                                      Statement on
                                      Form S-1/A of
                                      Registrant
                                      filed with the
                                      Commission on
                                      July 6, 2004.

10.14 Loan and Security Agreement     Exhibit 99.2 to
      dated July 28, 2004             Registrant's
      by and among Registrant,        Report on Form 8-K
      Minserco, Inc., Boonville       filed with the
      Mining Services, Inc., the      Commission on
      guarantor named therein,        July 29, 2004.
      the lenders party thereto,
      and GMAC Commercial Finance
      LLC and Goldman Sachs Credit
      Partners L.P.

10.15 2004 Equity Incentive          Exhibit 10.22 to
      Plan.                           Registration
                                      Statement on
                                      Form S-1/A of
                                      Registrant
                                      filed with the
                                      Commission on
                                      July 16, 2004.

10.16 2004 Executive Officer          Exhibit 10.23 to
      Incentive Plan                  Registration
                                      Statement on
                                      Form S-1/A of
                                      Registrant
                                      filed with the
                                      Commission on
                                      July 16, 2004.

10.17 Non-Employee Directors          Exhibit 10.24 to
      Deferred Compensation Plan.     Registration
                                      Statement on
                                      Form S-1/A of
                                      Registrant
                                      filed with the
                                      Commission on
                                      July 16, 2004.

10.18 Letter Agreement between        Exhibit 10.21 to
      Registrant and T. W. Sullivan   Registrant's
      dated July 27, 2004.            Quarterly Report
                                      on Form 10-Q
                                      filed with the
                                      Commission on
                                      August 16, 2004.

14    Bucyrus International, Inc.     Exhibit 14 to
      Business Ethics and Conduct     Registrant's
      Policy.                         Annual Report on
                                      Form 10-K for
                                      the year ended
                                      December 31, 2003.

21    Subsidiaries of Registrant.     Exhibit 21 to
                                      Registration
                                      Statement on
                                      Form S-1/A of
                                      Registrant
                                      filed with the
                                      Commission on
                                      June 10, 2004.

31.1  Certification of President                               X
      and Chief Executive Officer
      pursuant to Section 302
      of the Sarbanes-Oxley
      Act and Rules 13a-14(a)/
      15d-14(a).

31.2  Certification of Chief                                   X
      Financial Officer, Secretary
      and Controller pursuant to
      Section 302 of the
      Sarbanes-Oxley Act
      and Rules 13a-14(a)/
      15d-14(a).

32    Certifications pursuant to                               X
      18 U.S.C. Section 1350,
      as adopted pursuant to
      Section 906 of the
      Sarbanes-Oxley Act of 2002.