NEWS RELEASE
CONTACT:
Robert L. Montgomery, Jr.
Executive Vice President and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5405
COLUMBUS MCKINNON ANNOUNCES FISCAL 2003 FOURTH QUARTER AND FULL YEAR RESULTS
LONG-TERM DEBT REDUCED BY $20.5 MILLION IN FOURTH QUARTER
AMHERST, N.Y., May 20, 2002 -- Columbus McKinnon Corporation (Nasdaq: CMCO), a
leading U.S. designer and manufacturer of material handling products, today
announced its financial results for the fiscal 2003 fourth quarter and full year
which ended on March 31, 2003.
Columbus McKinnon's fiscal 2003 fourth quarter consolidated net sales from
continuing operations were $118.8 million, compared with $114.5 million a year
ago, an increase of 3.8%. Income from operations before amortization and
restructuring charges was $6.1 million for the fiscal 2003 fourth quarter,
compared with $5.8 million in the fourth quarter last year. Fourth quarter
fiscal 2003 loss from continuing operations was $8.1 million, or $0.55 per
diluted share, compared with a loss from continuing operations of $4.7 million,
or $0.33 per diluted share, in the fiscal 2002 fourth quarter. Columbus
McKinnon's fiscal 2003 fourth quarter net loss was $8.1 million, or $0.55 per
diluted share, compared with a net loss of $129.3 million, or $8.96 per diluted
share, for the fiscal 2002 fourth quarter.
"We dramatically accelerated our efforts in the latter half of the year to
generate cash through divestitures, facility rationalization and reduced working
capital. As a result, in the fourth quarter, debt was reduced by $20.5 million.
Strategically, we believe the Products Segment is clearly the area in which we
have a leading, sustainable competitive advantage in the material handling
industry," said Timothy T. Tevens, President and Chief Executive Officer."
At March 31, 2003, Columbus McKinnon's long-term debt was $314.1 million, a
$20.5 million reduction from $334.6 million at December 29, 2002 and a reduction
of $33.8 million from $347.9 million at March 31, 2002. The Company was in
compliance with its senior bank debt covenants at March 31, 2003. It is likely,
however, that one of the financial covenants will not be met early in fiscal
2004. Accordingly, the Company has reached an agreement in principle with its
senior lenders to amend such covenant for fiscal 2004.
The fourth quarter of fiscal 2003 was impacted by a $1.3 million loss on the
sale of LICO Steel, a steel erection business that was included in the Solutions
Segment. The reported quarter also included a $4.0 million non-cash impairment
charge related to goodwill of businesses acquired in prior years, restructuring
charges of $2.9 million, and a mark-to-market loss in the investment portfolio
of the Company's captive insurance subsidiary of $0.5 million. The fourth
quarter of fiscal 2002 reflected goodwill amortization of $2.7 million, the loss
from discontinued operations of $3.1 million, a mark-to-market loss in the
investment portfolio of the Company's captive insurance subsidiary of $2.8
million and a loss on disposition of discontinued operations of $121.5 million.
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Net sales from continuing operations for fiscal 2003 were $453.3 million,
compared with $480.0 million in fiscal 2002, a decrease of 5.6%. Operating
income before restructuring charges and amortization was $33.3 million for
fiscal 2003, compared with $48.7 million in fiscal 2002. The fiscal 2003 loss
from continuing operations before cumulative effect of accounting change was
$6.0 million, or $0.42 per diluted share, compared with a loss from continuing
operations for fiscal 2002 of $6.0 million, or $0.41 per diluted share,
including pre-tax restructuring charges of $9.6 million. The net loss for fiscal
2003 was reduced to $14.0 million, or $0.97 per diluted share, from a net loss
of $135.4 million, or $9.39 per diluted share, for fiscal 2002.
Fiscal 2003 results reflected a cumulative effect of accounting change of $8.0
million related to its initial adoption of Statement of Financial Accounting
Standard (SFAS) No. 142, "Goodwill and Other Intangible Assets" as of April 1,
2002 and a further write-down of goodwill of $4.0 million included in
write-off/amortization of intangible assets in the fourth quarter and year,
restructuring charges of $3.7 million and the early write-off of deferred
finance charges associated with the Company's former senior credit facility of
$1.2 million. Fiscal 2002 results reflected restructuring charges of $9.6
million, the loss from discontinued operations of $7.9 million, and goodwill
amortization of $11.0 million.
"While economic conditions remain soft, we are intent upon producing profits and
reducing debt despite the sustained weakness in the industrial markets. Our
fourth quarter 2003 sales reflect a level of stabilization and we are confident
we continue to hold a leading market position in our key product lines," said
Tevens. "In addition to reducing debt, we accomplished a great deal in 2003,
including
o we initiated the rationalization of our chain and crane-building
operations and that process is now nearly complete.
o we completed the rationalization of 11 facilities companywide and most
of the real estate associated with these rationalized facilities is
now being actively marketed for sale.
o we implemented Lean Manufacturing at 15 of Columbus McKinnon's North
American facilities and reduced inventory by over $10.0 million at
those facilities.
o we began the divestiture of less synergistic businesses to further
reduce costs and debt, with LICO Steel being the first completed
divestiture."
Tevens concluded, "Accelerating the paydown of debt remains a top priority for
Columbus McKinnon. We remain confident in our ability to achieve this goal based
on the strength of our business and the cash flow it generates as well as our
numerous initiatives to further reduce costs, which will all support further
debt reduction and strengthen Columbus McKinnon's future financial position and
operating performance."
Columbus McKinnon is a leading worldwide designer and manufacturer of material
handling products, systems and services which efficiently and ergonomically
move, lift, position or secure material. Key products include hoists, cranes,
chain and forged attachments. The Company is focused on commercial and
industrial applications that require the safety and quality provided by its
superior design and engineering know-how. Comprehensive information on Columbus
McKinnon is available on its web site at HTTP://WWW.CMWORKS.COM .
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A teleconference/webcast has been scheduled for May 20, 2003 at 10:00 AM Eastern
Time at which the executive officers of Columbus McKinnon will discuss the
company's financial results and strategy. The webcast will be accessible at
Columbus McKinnon's web site: HTTP://WWW.CMWORKS.COM. It will also be broadcast
over the FirstCall Events web site at: Thomson Financial Network at:
HTTP://WWW.FIRSTCALLEVENTS.COM/SERVICE/AJWZ382084953GF12.HTML. You must have
Windows Media Player or RealPlayer's audio software on your computer to listen
to the call. Both are available for downloading on the Columbus McKinnon web
site and the FirstCall Events web site at no charge.
An audio recording of the call will be available two hours after its completion
and until July 18, 2003 by dialing 1-800-925-0870. Alternatively, you may access
an archive of the call until July 18, 2003 on Columbus McKinnon's web site at:
HTTP://WWW.CMWORKS.COM/WEBCAST/ARCHIVE.ASP. The call will also be archived on
the FirstCall Events web site until July 18, 2003.
This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, statements concerning future revenue and
earnings, involve known and unknown risks, uncertainties and other factors
that could cause the actual results of the Company to differ materially
from the results expressed or implied by such statements, including general
economic and business conditions, conditions affecting the industries
served by the Company and its subsidiaries, conditions affecting the
Company's customers and suppliers, competitor responses to the Company's
products and services, the overall market acceptance of such products and
services, the Company's ability to amend its debt covenants with its
lenders, and other factors disclosed in the Company's periodic reports
filed with the Securities and Exchange Commission. The Company assumes no
obligation to update the forward-looking information contained in this
release.
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COLUMBUS MCKINNON CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
-----------------------------------------------
3/31/03 3/31/02
-----------------------------------------------
(IN THOUSANDS,
EXCEPT PER SHARE DATA)
Net sales $ 118,807 $ 114,478
Cost of products sold 91,975 88,592
-----------------------------------------------
Gross profit 26,832 25,886
Gross profit margin 22.6% 22.6%
Selling, general and administrative expense 20,770 20,076
Restructuring charges 2,857 8
-----------------------------------------------
Income from operations before amortization 3,205 5,802
Write-off/amortization of intangible assets 3,846 2,729
-----------------------------------------------
(Loss) income from operations (641) 3,073
Interest and other expense, net 7,807 8,707
-----------------------------------------------
(Loss) from continuing operations before
income tax (benefit) (8,448) (5,634)
Income tax (benefit) (396) (923)
-----------------------------------------------
(Loss) from continuing operations (8,052) (4,711)
(Loss) from discontinued operations - (3,095)
(Loss) on disposal of discontinued operations - (121,475)
-----------------------------------------------
Net (loss) $ (8,052) $ (129,281)
===============================================
Average basic and diluted shares outstanding 14,517 14,436
Basic and diluted (loss) income per share:
Continuing operations $ (0.55) $ (0.33)
Discontinued operations - (0.21)
(Loss) on disposal of discontinued operations - (8.42)
-----------------------------------------------
Net (loss) $ (0.55) $ (8.96)
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COLUMBUS MCKINNON CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FISCAL YEAR ENDED
-----------------------------------------------
3/31/03 3/31/02
-----------------------------------------------
(IN THOUSANDS,
EXCEPT PER SHARE DATA)
Net sales $ 453,320 $ 480,028
Cost of products sold 345,986 359,551
-----------------------------------------------
Gross profit 107,334 120,477
Gross profit margin 23.7% 25.1%
Selling, general and administrative expense 74,011 71,767
Restructuring charges 3,697 9,569
-----------------------------------------------
Income from operations before amortization 29,626 39,141
Write-off/amortization of intangible assets 4,246 11,013
-----------------------------------------------
Income from operations 25,380 28,128
Interest and other expense, net 29,859 31,845
-----------------------------------------------
(Loss) from continuing operations before
income tax expense and cumulative effect of
accounting change (4,479) (3,717)
Income tax expense 1,532 2,301
-----------------------------------------------
(Loss) from continuing operations before cumulative
effect of accounting change (6,011) (6,018)
(Loss) from discontinued operations - (7,873)
(Loss) on disposal of discontinued operations - (121,475)
-----------------------------------------------
(Loss) before cumulative effect of accounting
change (6,011) (135,366)
Cumulative effect of accounting change (8,000) -
-----------------------------------------------
Net (loss) $ (14,011) $ (135,366)
===============================================
Average basic and diluted shares outstanding 14,496 14,414
Basic and diluted (loss) per share:
Continuing operations $ (0.42) $ (0.41)
Discontinued operations - (0.55)
(Loss) on disposal of discontinued operations - (8.43)
-----------------------------------------------
(Loss) before cumulative effect of accounting change
(0.42) (9.39)
Cumulative effect of accounting change (0.55) -
-----------------------------------------------
Net (loss) $ (0.97) $ (9.39)
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COLUMBUS McKINNON CORPORATION
CONSOLIDATED BALANCE SHEET
(In Thousands)
3/31/03 3/31/02
----------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,943 $ 13,068
Trade accounts receivable 79,335 82,266
Inventories 87,474 89,656
Net assets held for sale 1,800 4,290
Net current assets of discontinued operations - 21,497
Prepaid expenses 16,456 8,543
----------------------------------
Total current assets 187,008 219,320
Net property, plant, and equipment 67,295 70,742
Goodwill and other intangibles, net 195,129 200,801
Marketable securities 21,898 24,634
Deferred taxes on income - 3,133
Other assets 1,668 5,665
----------------------------------
Total assets $ 472,998 $ 524,295
==================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 2,245 $ 2,518
Trade accounts payable 28,654 31,617
Accrued liabilities 45,402 39,533
Restructuring reserve 2,331 949
Current portion of long-term debt 4,981 146,663
----------------------------------
Total current liabilities 83,613 221,280
Senior debt, less current portion 109,355 1,509
Subordinated debt 199,734 199,681
Other non-current liabilities 27,589 30,214
----------------------------------
Total liabilities 420,291 452,684
----------------------------------
Shareholders' equity:
Common stock 149 149
Additional paid-in capital 104,412 104,920
Accumulated deficit (26,547) (12,536)
ESOP debt guarantee (5,709) (6,514)
Unearned restricted stock (208) (414)
Accumulated other comprehensive loss (19,390) (13,994)
----------------------------------
Total shareholders' equity 52,707 71,611
----------------------------------
Total liabilities and shareholders' equity $ 472,998 $ 524,295
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COLUMBUS McKINNON CORPORATION - CONTINUING BUSINESS SEGMENTS
PRODUCTS SOLUTIONS CONSOLIDATED
----------------------------------------------------------
(IN THOUSANDS, EXCEPT FOR PERCENTAGES)
Quarter ended 3/31/03
Net sales 101,781 17,026 118,807
Gross profit 25,369 1,463 26,832
Margin 24.9% 8.6% 22.6%
Income (loss) from operations before
write-off/amortization of intangible assets
and restructuring charges 7,062 (1,000) 6,062
Margin 6.9% (5.9%) 5.1%
Quarter ended 3/31/02
Net sales 96,372 18,106 114,478
Gross profit 23,049 2,837 25,886
Margin 23.9% 15.7% 22.6%
Income from operations before
amortization and restructuring charges 5,479 331 5,810
Margin 5.7% 1.8% 5.1%
Fiscal Year ended 3/31/03
Net sales 388,076 65,244 453,320
Gross profit 98,752 8,582 107,334
Margin 25.4% 13.2% 23.7%
Income from operations before
write-off/amortization of intangible assets
and restructuring charges 33,593 (270) 33,323
Margin 8.7% (0.4%) 7.4%
Fiscal Year ended 3/31/02
Net sales 404,731 75,297 480,028
Gross profit 109,277 11,200 120,477
Margin 27.0% 14.9% 25.1%
Income from operations before
amortization and restructuring charges 47,045 1,665 48,710
Margin 11.6% 2.2% 10.1%
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COLUMBUS McKINNON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
YEAR ENDED
-------------------------------------
3/31/03 3/31/02
-------------------------------------
(IN THOUSANDS)
OPERATING ACTIVITIES:
Net (loss) from continuing operations before
cumulative effect of accounting change $ (6,011) $ (6,018)
Adjustments to reconcile net (loss) from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 14,730 22,462
Deferred income taxes 4,667 166
Other 2,059 4,934
Changes in operating assets and liabilities:
Trade accounts receivable 4,010 14,644
Inventories 6,154 18,876
Prepaid expenses (6,163) (1,276)
Other assets 3,915 1,328
Trade accounts payable (4,820) 3,677
Accrued and non-current liabilities (4,436) (8,996)
-------------------------------------
Net cash provided by operating activities 14,105 49,797
-------------------------------------
INVESTING ACTIVITIES:
Sale (purchase) of marketable securities, net (672) (1,794)
Capital expenditures (4,968) (4,753)
Proceeds from sale of businesses 17,262 890
Proceeds from sale of fixed assets - 1,750
Proceeds from net assets held for sale 4,418 2,280
-------------------------------------
Net cash provided by (used in) investing activities 16,040 (1,627)
-------------------------------------
FINANCING ACTIVITIES:
Net (payments) under revolving line-of-credit agreements (33,130) (43,678)
Repayment of debt (1,395) (3,047)
Deferred financing costs incurred (8,188) (794)
Dividends paid - (1,976)
Other 805 1,013
-------------------------------------
Net cash used in financing activities (41,908) (48,482)
Effect of exchange rate changes on cash 134 (306)
-------------------------------------
Net cash used in continuing operations (11,629) (618)
Cash provided by (used in) discontinued operations 504 (329)
-------------------------------------
Net change in cash and cash equivalents (11,125) (947)
Cash and cash equivalents at beginning of year 13,068 14,015
-------------------------------------
Cash and cash equivalents at end of year $ 1,943 $ 13,068
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COLUMBUS McKINNON CORPORATION
OTHER CONSOLIDATED INFORMATION
MARCH 31, 2003 MARCH 31, 2002
-------------- --------------
Backlog (in millions)
Products segment $ 41.7 $ 41.3
Solutions segment 12.9 15.0
Trade accounts receivable -
Days sales outstanding 61.3 64.7
Inventory turns per year (based on
cost of products sold) 4.1x 4.0x
Trade accounts payable -
Days payables outstanding 28.7 32.1
Debt to total capitalization percentage 85.6 82.4