NEWS RELEASE
CONTACT:
Robert L. Montgomery, Jr.
Executive Vice President and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5405
COLUMBUS MCKINNON REPORTS FISCAL 2004 THIRD QUARTER RESULTS
NET SALES INCREASED 2.7% TO $110.3 MILLION - PROFITABILITY CONTINUES
AMHERST, N.Y., January 20, 2004 -- Columbus McKinnon Corporation (Nasdaq:
CMCO), a leading designer and manufacturer of material handling products,
today announced its financial results for the fiscal 2004 third quarter,
which ended on December 28, 2003.
Columbus McKinnon's fiscal 2004 third quarter consolidated net sales
increased 2.7% to $110.3 million, compared with $107.4 million a year ago.
The Company's net income for the third quarter of fiscal 2004 was $0.7
million or $0.05 per diluted share, an improvement of $3.2 million or $0.22
per diluted share, from a net loss of ($2.5 million) or ($0.17) per diluted
share in the year-ago quarter. Pre-tax results for the third quarter of
fiscal 2004 include a charge of $2.5 million included in cost of products
sold to increase product liability reserves of the Company's captive
insurance subsidiary, restructuring charges of $0.3 million, investment
gains of $1.0 million, and a favorable adjustment of $1.0 million related to
an interest-rate hedge. Pre-tax results for the third quarter of fiscal 2003
include restructuring charges of $0.8 million, a $1.2 million write-off of
deferred financing costs for a previous credit facility, and $2.7 million
investment losses.
Net sales for the first nine months of fiscal 2004 were $323.4 million,
compared with $334.5 million in the same period last year, a decrease of
3.3%. Net income for the first nine months of fiscal 2004 was $2.8 million
or $0.19 per diluted share, an improvement of $8.8 million or $0.60 per
diluted share, from a net loss of ($6.0 million) or ($0.41) per diluted
share in the same fiscal 2003 period. Pre-tax results for the first nine
months of fiscal 2004 include a charge of $2.5 million included in cost of
products sold noted above, restructuring charges of $1.7 million, a $3.2
million gain related to the sale of real estate, investment gains of $1.7
million, and a $1.0 million gain related to an interest rate hedge. Results
for the first nine months of fiscal 2003 include the cumulative effect of a
change in accounting principle charge of $8.0 million, or $0.55 per diluted
share, related to the April 1, 2002 adoption of FAS 142 and a pre-tax
investment gain of $1.0 million.
Timothy T. Tevens, President and Chief Executive Officer, commented, "We are
pleased to see this quarter's modest improvement in revenues that was driven
by our Products segment, which increased its sales by 5.5% over last year
and contributed over 87% of net sales. The benefit of our initiatives to
reduce and restructure debt over the last year also had a positive impact on
interest and debt expense in the quarter. "
At December 28, 2003, Columbus McKinnon's funded debt, net of $3.1 million
of cash, was $294.7 million, compared with $287.5 million at September 28,
2003 and a reduction of $36.6 million from $331.3 million at December 29,
2002. The fiscal 2004 third quarter included a $7.0 million semi-annual bond
interest payment and a $6.0 million pension contribution. The Company was in
compliance with its senior bank debt covenants at December 28, 2003.
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Page 2
Mr. Tevens concluded, "Columbus McKinnon is in a strong position to benefit
from a recovery in the industrial economy based on the improvements we've
made in our cost structure, our expanded manufacturing and sales presence in
international markets and our leading North American market share in key
product lines. We remain focused on debt reduction, having paid down over
$36.0 million in the last year. We are also making progress toward our
objective of selling several less synergistic businesses and surplus real
estate, and additional cash we generate from these sales will be applied to
debt. We are encouraged by recent trends in the industrial economy and
several markets we serve and are confident that we will continue to make
improvements in Columbus McKinnon's financial condition and 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 .
A teleconference/webcast has been scheduled for January 20, 2004 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/AJWZ396594178GF12.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 March 19, 2004 by dialing 1-800-925-0870.
Alternatively, you may access an archive of the call until March 19, 2004 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 March
19, 2004.
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
-----------------------------------------------
12/28/03 12/29/02
-----------------------------------------------
(IN THOUSANDS,
EXCEPT PER SHARE DATA)
Net sales $ 110,253 $ 107,384
Cost of products sold 85,695 81,085
-----------------------------------------------
Gross profit 24,558 26,299
Gross profit margin 22.3% 24.5%
Selling, general and administrative expense 18,552 17,314
Restructuring charges 275 840
Amortization 80 137
-----------------------------------------------
Income from operations 5,651 8,008
Interest and debt expense 6,538 8,887
Interest and other income (expense) 2,212 (2,399)
-----------------------------------------------
Income before income taxes 1,325 (3,278)
Income tax expense (benefit) 620 (805)
-----------------------------------------------
Net (loss) income $ 705 $ (2,473)
===============================================
Average basic and diluted shares outstanding 14,558 14,502
-----------------------------------------------
Basic and diluted income (loss) per share $ 0.05 $ (0.17)
===============================================
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Columbus McKinnon Corporation
Consolidated Statements of Operations
NINE MONTHS ENDED
-----------------------------------------------
12/28/03 12/29/02
-----------------------------------------------
(IN THOUSANDS,
EXCEPT PER SHARE DATA)
Net sales $ 323,412 $ 334,513
Cost of products sold 247,889 254,011
-----------------------------------------------
Gross profit 75,523 80,502
Gross profit margin 23.4% 24.1%
Selling, general and administrative expense 53,489 53,241
Restructuring charges 1,650 840
Amortization 300 400
-----------------------------------------------
Income from operations 20,084 26,021
Interest and debt expense 21,940 23,371
Interest and other income 6,659 1,319
-----------------------------------------------
Income before income tax expense and cumulative
effect of accounting change 4,803 3,969
Income tax expense 2,099 1,928
-----------------------------------------------
Income before cumulative effect of accounting change 2,704 2,041
Cumulative effect of accounting change - (8,000)
-----------------------------------------------
Net income (loss) $ 2,704 $ (5,959)
===============================================
Average basic and diluted shares outstanding 14,549 14,489
Basic and diluted income (loss) per share:
Income before cumulative effect of accounting change
0.19 0.14
Cumulative effect of accounting change - (0.55)
-----------------------------------------------
Net income (loss) $ 0.19 $ (0.41)
===============================================
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COLUMBUS McKINNON CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
12/28/03 3/31/03
----------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,062 $ 1,943
Trade accounts receivable 80,428 79,335
Unbilled revenue 7,453 8,861
Inventories 76,130 78,613
Net assets held for sale 2,786 1,800
Prepaid expenses 13,616 10,819
----------------------------------
Total current assets 183,475 181,371
Net property, plant, and equipment 62,364 67,295
Goodwill and other intangibles, net 194,206 195,129
Marketable securities 25,484 21,898
Deferred taxes on income 13,994 15,245
Other assets 3,116 1,668
----------------------------------
Total assets $ 482,639 $ 482,606
==================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 3,841 $ 2,245
Trade accounts payable 26,646 28,654
Accrued liabilities 48,351 36,540
Restructuring reserve 1,224 2,331
Current portion of long-term debt 7,614 4,981
----------------------------------
Total current liabilities 87,676 74,751
Senior debt, less current portion 122,227 109,355
Subordinated debt 164,120 199,734
Other non-current liabilities 43,996 46,059
----------------------------------
Total liabilities 418,019 429,899
Shareholders' equity:
Common stock 149 149
Additional paid-in capital 104,080 104,412
Accumulated deficit (23,843) (26,547)
ESOP debt guarantee (5,268) (5,709)
Unearned restricted stock (190) (208)
Accumulated other comprehensive loss (10,308) (19,390)
----------------------------------
Total shareholders' equity 64,620 52,707
----------------------------------
Total liabilities and shareholders' equity $ 482,639 $ 482,606
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COLUMBUS McKINNON CORPORATION - BUSINESS SEGMENT DATA
PRODUCTS SOLUTIONS CONSOLIDATED
-----------------------------------------------------------
(IN THOUSANDS, EXCEPT FOR PERCENTAGES)
Quarter ended 12/28/03
Net sales 96,524 13,729 110,253
Gross profit 22,791 1,767 24,558
Margin 23.6% 12.9% 22.3%
Income (loss) from operations before
amortization and restructuring charges 6,081 (75) 6,006
Margin 6.3% (0.5%) 5.4%
Quarter ended 12/29/02
Net sales 91,477 15,907 107,384
Gross profit 24,285 2,014 26,299
Margin 26.5% 12.7% 24.5%
Income (loss) from operations before
amortization and restructuring charges 9,180 (195) 8,985
Margin 10.0% (1.2%) 8.4%
Nine Months ended 12/28/03
Net sales 283,052 40,360 323,412
Gross profit 70,164 5,359 75,523
Margin 24.8% 13.3% 23.4%
Income (loss) from operations before
amortization and restructuring charges 22,280 (246) 22,034
Margin 7.9% (0.6%) 6.8%
Nine Months ended 12/29/02
Net sales 286,295 48,218 334,513
Gross profit 73,383 7,119 80,502
Margin 25.6% 14.8% 24.1%
Income (loss) from operations before
amortization and restructuring charges 26,531 730 27,261
Margin 9.3% 1.5% 8.1%
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COLUMBUS McKINNON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
NINE MONTHS ENDED
-------------------------------------
12/28/03 12/29/02
-------------------------------------
(IN THOUSANDS)
OPERATING ACTIVITIES:
Net income before cumulative accounting change $ 2,704 $ 2,041
Adjustments to reconcile net income before cumulative accounting
change to net cash provided by operating activities:
Depreciation and amortization 7,979 8,470
Deferred income taxes 1,251 107
Other (3,744) 251
Changes in operating assets and liabilities:
Trade accounts receivable 2,140 3,366
Unbilled revenues 1,920 600
Inventories 5,184 1,727
Prepaid expenses (1,340) 34
Other assets (1,354) 3,912
Trade accounts payable (4,012) (11,433)
Accrued and non-current liabilities 6,921 (12,683)
-------------------------------------
Net cash provided by (used in) operating activities 17,649 (3,608)
-------------------------------------
INVESTING ACTIVITIES:
(Purchase) sale of marketable securities, net (530) 2,347
Capital expenditures (3,096) (3,623)
Proceeds from sale of business - 15,950
Proceeds from sale of assets 387 -
Net assets held for sale 3,380 1,990
-------------------------------------
Net cash used in investing activities of continuing operations 141 16,664
-------------------------------------
FINANCING ACTIVITIES:
Net payments under revolving line-of-credit agreements (3,103) (11,954)
Repayment of debt (125,264) (1,675)
Payment of deferred financing costs (4,361) (7,565)
Proceeds from issuance of long-term debt 115,000 -
Other 441 444
-------------------------------------
Net cash used in financing activities of continuing operations (17,287) (20,750)
Effect of exchange rate changes on cash 616 (9)
-------------------------------------
Net cash provided by (used in) continuing operations 1,119 (7,703)
Net cash provided by discontinued operations - 504
-------------------------------------
Net change in cash and cash equivalents 1,119 (7,199)
Cash and cash equivalents at beginning of period 1,943 13,068
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Cash and cash equivalents at end of period $ 3,062 $ 5,869
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COLUMBUS McKINNON CORPORATION
OTHER CONSOLIDATED INFORMATION
DECEMBER 28, 2003 DECEMBER 29, 2002
----------------- -----------------
Backlog (in millions)
Products segment $ 45,285 $ 43,019
Solutions segment 6,871 18,809
Trade accounts receivable -
Days sales outstanding 65.7 69.2
Inventory turns per year (based on
cost of products sold) 4.5x 3.5x
Trade accounts payable -
Days payables outstanding 28.0 24.5
Debt to total capitalization percentage 82.2% 82.5%