UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended March 31, 2001
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Restatement Effective April 1, 1989
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
COLUMBUS McKINNON CORPORATION
140 John James Audubon Parkway
Amherst, NY 14228-1197
FINANCIAL STATEMENTS AND SCHEDULES
Columbus McKinnon Corporation Employee Stock Ownership Plan
Years ended March 31, 2001 and 2000 with Report of Independent Auditors
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Financial Statements and Schedules
Years ended March 31, 2001 and 2000
CONTENTS
Report of Independent Auditors ..............................................1
Financial Statements
Statements of Net Assets Available for Benefits..............................2
Statements of Changes in Net Assets Available for Benefits...................3
Notes to Financial Statements................................................4
Schedules
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)............10
Schedule H, Line 4(j) - Schedule of Reportable Transactions.................11
Report of Independent Auditors
The Pension Committee
Columbus McKinnon Corporation
Employee Stock Ownership Plan
We have audited the accompanying statements of net assets available for benefits
of the Columbus McKinnon Corporation Employee Stock Ownership Plan as of March
31, 2001 and 2000, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the ESOP's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Columbus
McKinnon Corporation Employee Stock Ownership Plan at March 31, 2001 and 2000,
and the changes in its net assets available for benefits for the years then
ended in conformity with accounting principles generally accepted in the United
States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of March 31, 2001, and reportable transactions for the
year then ended, are presented for purposes of additional analysis and are not a
required part of the financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures applied in
our audits of the financial statements and, in our opinion, are fairly stated in
all material respects in relation to the financial statements taken as a whole.
/S/ ERNST & YOUNG LLP
Buffalo, New York
May 25, 2001
1
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Statements of Net Assets Available for Benefits
MARCH 31, 2001 MARCH 31, 2000
-------------------------------------------------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL ALLOCATED UNALLOCATED TOTAL
ASSETS
Investment in sponsor company
common stock, at fair value ... $ 7,452,438 $ 3,943,963 $11,396,401 $11,675,409 $ 7,961,087 $19,636,496
Investment in stable asset
fund, at fair value ........... 133,397 - 133,397 110,966 - 110,966
Receivables:
Employer contributions ........ 34,929 25,860 60,789 - 10,573 10,573
Interest ...................... 2,676 - 2,676 2,631 - 2,631
Cash ........................... 2,101 - 2,101 4,544 - 4,544
-------------------------------------------------------------------------------------------------
Total assets ................... $ 7,625,541 $ 3,969,823 $11,595,364 $11,793,550 $ 7,971,660 $19,765,210
-------------------------------------------------------------------------------------------------
LIABILITIES
Interest payable ............... - 25,860 25,860 - 10,573 10,573
Loans payable .................. - 8,527,301 8,527,301 - 9,516,651 9,516,651
-------------------------------------------------------------------------------------------------
Total liabilities .............. - 8,553,161 8,553,161 - 9,527,224 9,527,224
-------------------------------------------------------------------------------------------------
Net assets available (deficit)
for plan benefits ............. $ 7,625,541 $(4,583,338) $ 3,042,203 $11,793,550 $(1,555,564) $10,237,986
=================================================================================================
SEE ACCOMPANYING NOTES.
2
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Statements of Changes in Net Assets Available for Benefits
MARCH 31, 2001 MARCH 31, 2000
---------------------------------------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL ALLOCATED UNALLOCATED TOTAL
Investment (loss) income:
Net unrealized depreciation in
fair value of investments ... $(3,946,992) $ (3,794,966) $ (7,741,958) $ (4,493,413) $ (6,086,506) $(10,579,919)
Dividends ..................... 246,335 175,192 421,527 229,970 206,049 436,019
Interest ...................... 8,639 - 8,639 4,346 - 4,346
Employer contributions ......... 34,929 1,456,565 1,491,494 - 1,444,861 1,444,861
-------------------------------------------------------------------------------------------------
Total investment loss .......... (3,657,089) (2,163,209) (5,820,298) (4,259,097) (4,435,596) (8,694,693)
-------------------------------------------------------------------------------------------------
Interest expense ............... - 864,565 864,565 - 852,861 852,861
Distributions to participants .. 491,625 - 491,625 1,825,572 - 1,825,572
Transfer to other qualified plan 14,896 - 14,896 65,958 - 65,958
Administrative expense ......... 4,399 - 4,399 7,165 - 7,165
-------------------------------------------------------------------------------------------------
Total deductions ............... 510,920 864,565 1,375,485 1,898,695 852,861 2,751,556
-------------------------------------------------------------------------------------------------
Net decrease ................... (4,168,009) (3,027,774) (7,195,783) (6,157,792) (5,288,457) (11,446,249)
Net assets (deficit) available
for benefits:
Beginning of year .............. 11,793,550 (1,555,564) 10,237,986 17,951,342 3,732,893 21,684,235
-------------------------------------------------------------------------------------------------
End of year .................... $ 7,625,541 $ (4,583,338) $ 3,042,203 $ 11,793,550 $ (1,555,564) $ 10,237,986
=================================================================================================
SEE ACCOMPANYING NOTES.
3
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements
March 31, 2001 and 2000
1. DESCRIPTION OF THE PLAN
The Columbus McKinnon Corporation Employee Stock Ownership Plan (ESOP or the
Plan), is a defined contribution employee stock ownership plan and a stock bonus
plan within the meanings of the applicable sections of the Internal Revenue Code
of 1986, as amended. It is also an eligible individual account plan as defined
in the applicable section of the Employee Retirement Income Security Act of 1974
(ERISA). Refer to the Plan Document or the Summary Plan Description for a
complete description of the ESOP's provisions.
The Plan covers all domestic non-union employees of Columbus McKinnon
Corporation (the Company/CMC), of Yale Industrial Products, Inc., and Automatic
Systems, Inc., subsidiaries of the Company. The Plan was amended to extend
coverage to all domestic non-union employees of Abell-Howe Crane, Inc., a
subsidiary of the Company, effective September 1, 1999; Washington Equipment
Company, a subsidiary of the Company, effective January 1, 2000; and Gaffey,
Inc. and Handling Systems and Conveyors, Inc., subsidiaries of GL International,
which in turn is a subsidiary of the Company, effective January 1, 2000.
In accordance with the Plan document, employees who have attained 55 years of
age and ten years of participation in the Plan have the option to diversify the
investments in their stock accounts by selling a specified percentage of their
shares at the current market value and transferring the sale proceeds to another
defined contribution plan maintained by the Company. In 2001, $14,896 has been
transferred to the Company's Thrift 401(k) plan ($65,958 in 2000).
A summary of the ESOP's provisions is as follows:
PARTICIPATION
Substantially all of the Company's domestic non-union employees are eligible to
participate in the ESOP.
4
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
ELIGIBILITY
Eligible employees must have attained age 21 and completed one year of service
(minimum of 1,000 hours) to be a participant.
CONTRIBUTIONS
Each Plan year (each 12 month period ending March 31) the Company contributes to
the ESOP for each participant (a) who is actively employed as an employee on
December 31 and who has earned at least 1,000 hours of service as an employee in
the calendar year ending December 31, or (b) who terminates employment on or
after January 1 during a plan year after attaining age 55 and completing at
least five years of eligibility service. Contributions shall be made in cash or
in shares of stock as determined by the Company, and need not be made out of
current or accumulated earnings and profits.
VESTING
A participant's account balance shall become fully vested and non-forfeitable on
the date the participant completes five years of vesting service (excluding any
service rendered prior to the calendar year in which the participant attained
age 18), or if sooner, on the date the participant attains normal retirement age
while in the employ of the Company or any affiliated company.
DISTRIBUTIONS
Upon a vested participant's termination, the value of his/her account will be
distributed if the value of the account is less than $5,000 or, at the
participant's option, either immediately or at any valuation date until
retirement, as provided in the ESOP. A retiree may elect to defer distribution
up to 70 1/2 years of age. The account of a participant who is not a 5-percent
owner and who has not separated from service but has attained the age of 70 1/2
will commence distribution unless the participant elects to defer distribution
until employment ceases. Valuation dates for distributions are September 30 or
March 31.
During 2001, $491,625 or 36,412 shares, were distributed to vested participants
in the form of stock certificates ($1,825,572, or 95,108 shares, distributed in
2000). This resulted in the sale of 67 shares held by the ESOP back to the
Company for $901 in 2001 as a result of fractional shares (37 shares for $688 in
2000). As of March 31, 2001, $329,625 ($238,763 as of March 31, 2000) is
included in the ESOP assets for terminated participants who have requested
distributions.
5
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Forfeiture of a non-vested interest shall occur in the fifth consecutive
calendar year following a break in service. The forfeited accounts will be
allocated among the accounts of active participants. At March 31, 2001, the ESOP
assets include $15,740 ($169,782 at March 31, 2000) of undistributed forfeited
accounts.
ALLOCATION TO PARTICIPANT ACCOUNTS
As of each March 31 valuation date, each participant account is appropriately
adjusted to reflect any contributions or stock to be allocated as of such date,
the income of the trust fund during the period and the increase or decrease in
the fair market value of the trust fund during the period. The allocation of
contributions is based on the fraction, the numerator of which is the
participant's annual earnings for the preceding calendar year and the
denominator of which is the aggregate annual earnings for such calendar year of
all participants entitled to an allocation.
DIVIDENDS
Dividends paid on stock allocated to a participant's stock account will be
allocated to the participant's nonstock account. The pension committee may
direct that such dividends shall be either (a) paid directly to the participant,
former participant, or beneficiary within 90 days after the close of the plan
year in which such dividend was paid, or (b) applied as payment on the exempt
loans. Dividends paid on unallocated stock held by the trustee and acquired with
the proceeds of an exempt loan shall be held by the trustee until the end of the
plan year in which it was paid, and then, along with any interest or earnings,
be applied as payment on the exempt loans which shall trigger a release of stock
from the suspense account.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
6
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
3. PLAN TERMINATION
The Company intends to continue the ESOP indefinitely, but reserves the right to
terminate the Plan at any time. If the ESOP is terminated, each participant
shall be fully and nonforfeitably vested in his interest in the ESOP trust fund.
4. INVESTMENTS
At March 31, 2001 and 2000, the assets of the ESOP Plan consist of 1,458,646 and
1,496,114, respectively, shares of CMC common stock and 13,140 and 10,164,
respectively, shares of a stable asset fund with Fleet Bank. The ESOP's
investment in CMC common stock is reported at fair market value as of March 31,
2001 and 2000 based on quoted market prices. The investment in the stable asset
fund is also reported at fair market value as determined by open trading.
5. LOANS PAYABLE AND SHARE RELEASE
On October 27, 1994, the ESOP obtained $6,000,000 of new debt ($2,000,000 from
HSBC and $4,000,000 from Fleet Bank). The Fleet loan is payable in quarterly
installments of $103,000 through January 2002, and $406,880 in April 2002, plus
interest at a Eurodollar rate based upon LIBOR plus a spread determined by the
Company's leverage ratio (8.51% and 8.18% at March 31, 2001 and 2000,
respectively). The HSBC loan is payable in quarterly installments of $45,000
through January 2002, and $156,891 in April 2002, plus interest at a Eurodollar
rate based upon LIBOR plus a spread determined by the Company's leverage ratio
(8.51% and 8.18% at March 31, 2001 and 2000, respectively).
On October 13, 1998, the ESOP obtained $7,682,281 of new debt from the Company.
The CMC loan is payable in quarterly installments of interest only through April
2002, and thereafter quarterly installments of $150,000 through July 2014, and
$21,529 in October 2014, plus interest at the prime rate (8.0% and 9.0% at March
31, 2001 and 2000, respectively).
In October 1994 and October 1998, the ESOP purchased 609,144 and 479,900 shares,
respectively, of common stock of the Company with the debt proceeds, which were
recorded by the trustee in the suspense account. Such stock ceases to be
collateral and is released from the suspense account as the loans are repaid. In
each year prior to full payment of the loans, the number of shares of stock
released will equal the number of shares of stock held as collateral immediately
before the release for such plan year multiplied by the release fraction.
7
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
5. LOANS PAYABLE AND SHARE RELEASE (CONTINUED)
The loans, which are guaranteed by the Company, are collateralized by an
equivalent number of shares of common stock recorded by the trustees in a
suspense account.
Maturities of loans payable are as follows:
2002 $ 592,000
2003 1,013,771
2004 600,000
2005 600,000
2006 600,000
The numerator of the release fraction is the amount of principal and interest
payments made toward the loan during the plan year and the denominator is the
sum of the numerator plus the principal and interest payments to be made on the
loan in the future, using the interest rate applicable at the end of the plan
year. Shares of stock released from the suspense account for a plan year shall
be held in the trust on an unallocated basis until allocated by the pension
committee as of the last day of that plan year. That allocation shall be
consistent with the method for allocating contributions to participants'
accounts, which is based on a fraction of each participant's annual earnings
during the preceding calendar year to the total earnings of those participants
during such calendar year. The allocation of shares released resulting from
dividends on participants' allocated shares, however, was based upon the
fraction of each participant's allocated shares to the total number of allocated
shares.
As of March 31, 2001, 504,795 shares were held as collateral for the loan
(606,559 shares held as of March 31, 2000); 101,764 shares were released from
the suspense account in 2001 (101,821 shares released in 2000). These shares
were allocated to participant accounts as of March 31, 2001.
8
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
6. TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated July 28, 1997, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code of 1986 (the "Code") and, therefore, the related trust
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan was amended
subsequent to the IRS determination letter. The Plan Administrator believes the
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax exempt.
9
Schedules
Columbus McKinnon Corporation
Employee Stock Ownership Plan
EIN: 16-0547600
Plan No. 016
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
March 31, 2001
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST CURRENT VALUE
- -------------------------------------------------------------------------------
Columbus McKinnon Employer Common Stock,
Corporation* 1,458,646 shares $ 15,565,314 $ 11,396,401
Fleet Investment Stable Asset Fund
Services* 13,140 shares 133,397 133,397
* Parties-in-interest
10
Columbus McKinnon Corporation
Employee Stock Ownership Plan
EIN: 16-0547600
Plan No. 016
Schedule H, Line 4(j) - Schedule of Reportable Transactions
For the year ended March 31, 2001
Current Value
Identity of Description Purchase Selling Cost of Asset on Net
Party Involved of Assets Price Price of Asset Transaction Date Gain (Loss)
- ---------------------------------------------------------------------------------------------------------------------------------
CATEGORY (III) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
- ----------------------------------------------------------------------
Fleet National Bank* Stable Asset Fund $ 429,597 $ - $ 429,597 $ 429,597 N/A
- 438,941 438,941 438,941 -
There were no category (i), (ii) or (iv) transactions during the year.
*Parties-in-interest
11
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
COLUMBUS McKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
RESTATEMENT EFFECTIVE APRIL 1, 1989
By: /S/ TIMOTHY R. HARVEY
--------------------------
Timothy R. Harvey, Trustee
/S/ KAREN L. HOWARD
-----------------------------
Karen L. Howard, Trustee
S/ ROBERT L. MONTGOMERY, JR.
------------------------------
Robert L. Montgomery, Jr., Trustee
/S/ ROBERT H. MYERS
----------------------------
Robert H. Myers, Trustee
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in (a) the Registration Statement
(Form S-8 No. 333-3212) pertaining to the Columbus McKinnon Corporation 1995
Incentive Stock Option Plan, the Columbus McKinnon Corporation Non-Qualified
Stock Option Plan, the Columbus McKinnon Corporation Restricted Stock Plan and
the Columbus McKinnon Corporation Employee Stock Ownership Plan Restatement
Effective April 1, 1989 of Columbus McKinnon Corporation and (b) the
Registration Statement (Form S-8 No. 333-81719) pertaining to the Options
assumed by Columbus McKinnon Corporation originally granted under the G.L.
International Inc. 1997 Stock Option Plan and the Larco Industrial Services Ltd.
1997 Stock Option Plan of our report dated May 25, 2001, with respect to the
financial statements and schedules of the Columbus McKinnon Corporation Employee
Stock Ownership Plan included in this Annual Report (Form 11-K) for the year
ended March 31, 2001.
/S/ ERNST & YOUNG LLP
Buffalo, New York
June 26, 2001