NEWS RELEASE
CONTACT:
Robert R. Friedl
Vice President - Finance and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5479
COLUMBUS MCKINNON REPORTS FISCAL 2004 FOURTH QUARTER AND FULL
YEAR RESULTS NET SALES INCREASE 10% OVER FISCAL 2004 THIRD
QUARTER AND 2.0% OVER PRIOR YEAR QUARTER
AMHERST, N.Y., May 18, 2004 -- Columbus McKinnon Corporation (Nasdaq: CMCO),
a leading designer and manufacturer of material handling products, today
announced its financial results for the fiscal 2004 fourth quarter and full
year, which ended on March 31, 2004.
Columbus McKinnon's fiscal 2004 fourth quarter consolidated net sales
increased to $121.2 million, reflecting a 10% increase over Fiscal 2004
third quarter and a 2.0% increase from a year ago. Adjusting for divestures
and currency translation, sales increased by 3.3% over last year's
comparable quarter. The Company's net loss for the fourth quarter of fiscal
2004 was $(1.5 million) or $(0.10) per diluted share, an improvement of $6.6
million or $0.45 per diluted share from a net loss of ($8.1 million) or
($0.55) per diluted share in the year-ago quarter. Results for the fourth
quarter of fiscal 2004 include a charge of $3.9 million on the sales of its
Positech and Lister divisions previously announced. Results for the fourth
quarter of fiscal 2003 include $4.0 million in pre-tax charges related to
goodwill impairment and $2.9 million of restructuring charges. Income from
operations for the fiscal 2004 fourth quarter was $9.8 million, a $10.4
million improvement from the loss from operations of ($0.6 million) in the
fiscal 2003 fourth quarter.
Net sales for fiscal 2004 were $444.6 million, compared with $453.3 million
in fiscal 2003, which is primarily attributable to the divestiture of
certain businesses. The Company's net income for fiscal 2004 was $1.2
million or $0.08 per diluted share, an improvement of $15.2 million or $1.05
per diluted share from a net loss of ($14.0 million) or ($0.97) per diluted
share in fiscal 2003. In addition to the $3.9 million loss on asset
dispositions noted above, results for fiscal 2004 include restructuring
charges of $1.2 million, a $1.9 million gain on the settlement of an
interest rate swap and a $3.2 million gain related to the sale of real
estate. Results for fiscal 2003 include a total of $12.0 million of goodwill
impairment write-downs and restructuring charges of $3.7 million.
Timothy T. Tevens, President and Chief Executive Officer, commented,
"Columbus McKinnon's financial performance and outlook continues to improve
with fourth quarter sales and operating earnings at their highest level in
fiscal years 2004 and 2003. Net sales increased 10 percent over the previous
quarter and two percent over last year, and represent the highest quarterly
net sales level since the September 2001 quarter. Adjusting for currency
fluctuations during the year, our core Products segment revenues rebounded
from softness earlier in the year, helping to dampen the impact of the
decline in the Solutions segment. Our initiatives to further reduce
operating costs and debt also had a favorable effect on this quarter's
operating results with gross profit margins increasing over last year to
24.2 percent from 22.6 percent, and SG&A and interest expenses declining
significantly. During the quarter, we also divested our Positech and Lister
divisions and we continue to work toward the sale of less synergistic
divisions and surplus real estate."
Consistent with the strategic direction of Columbus McKinnon, the funded
debt, net of $11.1 million of cash at March 31, 2004 was $282.3 million, a
$12.4 million reduction from $294.7 million at December 28, 2003 and a $32.1
million reduction from $314.4 million at March 31, 2003. Net cash provided
by operations increased by $12.2 million to $26.4 million for fiscal 2004
over $14.2 million in 2003.
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Mr. Tevens concluded, "Fiscal 2004 was a year of continued progress in
making Columbus McKinnon's cost structure and manufacturing operations more
competitive, while stabilizing sales, improving operating profitability, and
reducing debt by over $30 million. In fact, Columbus McKinnon has achieved a
$114 million reduction in debt, net of cash over the last three years,
despite one of the worst industrial recessions in the history of the
Company. Columbus McKinnon remains a North American market leader in our key
product lines: hoists, chain and forgings, and cranes. As our next fiscal
year begins, we continue to be encouraged by trends in most areas of our
business and look forward to making further progress in improving CM's
financial performance and competitive position."
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 May 18, 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/ajwz406649560gf12.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 16, 2004 by dialing 1-800-925-0870. Alternatively,
you may access an archive of the call until July 16, 2004 on Columbus
McKinnon's web site at: http://www.cmworks.com/invrel/presentation.asp. The
call will also be archived on the FirstCall Events web site until July 16,
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
-----------------------------------------------
3/31/04 3/31/03
-----------------------------------------------
(In thousands, except
per share and percentage data)
Net sales $ 121,179 $ 118,807
Cost of products sold 91,856 91,975
-----------------------------------------------
Gross profit 29,323 26,832
Gross profit margin 24.2% 22.6%
Selling, general and administrative expense 19,868 20,770
Restructuring charges (411) 2,857
Amortization 83 3,846
-----------------------------------------------
Income from operations 9,783 (641)
Interest and debt expense 6,916 8,637
Interest and other income (expense) (2,468) 830
-----------------------------------------------
Income (loss) before income tax 399 (8,448)
Income tax expense (benefit) 1,910 (396)
-----------------------------------------------
Net loss $ (1,511) $ (8,052)
===============================================
Average basic and diluted shares outstanding 14,558 14,516
Basic and diluted loss per share $ (0.10) $ (0.55)
===============================================
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Columbus McKinnon Corporation
Consolidated Statements of Operations
YEAR ENDED
-----------------------------------------------
3/31/04 3/31/03
-----------------------------------------------
(In thousands, except
per share and percentage data)
Net sales $ 444,591 $ 453,320
Cost of products sold 339,745 345,986
-----------------------------------------------
Gross profit 104,846 107,334
Gross profit margin 23.6% 23.7%
Selling, general and administrative expense 73,357 74,011
Restructuring charges 1,239 3,697
Amortization 383 4,246
-----------------------------------------------
Income from operations 29,867 25,380
Interest and debt expense 28,856 32,008
Interest and other income 4,191 2,149
-----------------------------------------------
Income (loss) before income tax expense and cumulative
effect of accounting change 5,202 (4,479)
Income tax expense 4,009 1,532
-----------------------------------------------
Income (loss) before cumulative effect of accounting change 1,193 (6,011)
Cumulative effect of accounting change - (8,000)
-----------------------------------------------
Net income (loss) $ 1,193 $ (14,011)
===============================================
Average basic shares outstanding 14,553 14,496
Average diluted shares outstanding 14,554 14,496
Basic and diluted income (loss) per share:
Income (loss) before cumulative effect of accounting
change $ 0.08 $ (0.42)
Cumulative effect of accounting change - (0.55)
-----------------------------------------------
Net income (loss) $ 0.08 $ (0.97)
===============================================
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COLUMBUS McKINNON CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
3/31/04 3/31/03
----------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 11,101 $ 1,943
Trade accounts receivable 84,374 79,335
Unbilled revenues 5,160 8,861
Inventories 69,119 78,613
Net assets held for sale 2,790 1,800
Prepaid expenses 15,486 10,819
----------------------------------
Total current assets 188,030 181,371
Net property, plant, and equipment 58,773 67,295
Goodwill and other intangibles, net 192,963 195,129
Marketable securities 25,355 21,898
Deferred taxes on income 6,388 15,245
Other assets 1,854 1,668
----------------------------------
Total assets $ 473,363 $ 482,606
==================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 5,471 $ 2,245
Trade accounts payable 30,076 28,654
Accrued liabilities 48,416 36,540
Restructuring reserve 561 2,331
Current portion of long-term debt 2,205 4,981
----------------------------------
Total current liabilities 86,729 74,751
Senior debt, less current portion 121,603 109,355
Subordinated debt 164,131 199,734
Other non-current liabilities 37,922 46,059
----------------------------------
Total liabilities 410,385 429,899
----------------------------------
Shareholders' equity:
Common stock 149 149
Additional paid-in capital 103,914 104,412
Accumulated deficit (25,354) (26,547)
ESOP debt guarantee (5,116) (5,709)
Unearned restricted stock (39) (208)
Accumulated other comprehensive loss (10,576) (19,390)
----------------------------------
Total shareholders' equity 62,978 52,707
----------------------------------
Total liabilities and shareholders' equity $ 473,363 $ 482,606
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COLUMBUS McKINNON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
YEAR ENDED
-------------------------------------
3/31/04 3/31/03
-------------------------------------
(In Thousands)
OPERATING ACTIVITIES:
Net income (loss) before cumulative accounting change $ 1,193 $ (6,011)
Adjustments to reconcile net income (loss) before cumulative accounting
change to net cash provided (used in) operating activities:
Depreciation and amortization 10,126 14,803
Deferred income taxes 6,413 (713)
Loss on divestitures 3,875 1,357
Gain on sale of real estate/investments (5,143) (1,949)
Gain on early retirement of 2008 bonds (5,590) -
Amortization/write-off of deferred financing costs 6,613 3,696
Other 67 (1,045)
Changes in operating assets and liabilities:
Trade accounts receivable and unbilled revenues 1,140 (1,214)
Inventories 8,351 11,379
Prepaid expenses (1,332) (2,891)
Other assets (181) 3,915
Trade accounts payable (976) (4,820)
Accrued and non-current liabilities 1,813 (2,328)
-------------------------------------
Net cash provided by operating activities of continuing operations 26,369 14,179
-------------------------------------
INVESTING ACTIVITIES:
(Purchase) sale of marketable securities, net 110 (672)
Capital expenditures (3,619) (5,040)
Proceeds from sale of businesses and fixed assets 4,402 17,262
Net assets held for sale 3,376 4,418
-------------------------------------
Net cash provided by investing activities of continuing operations 4,269 15,968
-------------------------------------
FINANCING ACTIVITIES:
Net payments under revolving line-of-credit agreements (332,218) (282,211)
Borrowings under revolving line-of-credit agreements 325,326 249,081
Repayment of debt (125,764) (1,395)
Payment of deferred financing costs (4,432) (8,188)
Proceeds from issuance of long-term debt 115,000 -
Other 593 805
-------------------------------------
Net cash used in financing activities of continuing operations (21,495) (41,908)
Effect of exchange rate changes on cash 15 132
-------------------------------------
Net cash provided by (used in) continuing operations 9,158 (11,629)
Net cash provided by discontinued operations - 504
-------------------------------------
Net change in cash and cash equivalents 9,158 (11,125)
Cash and cash equivalents at beginning of period 1,943 13,068
-------------------------------------
Cash and cash equivalents at end of period $ 11,101 $ 1,943
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COLUMBUS McKINNON CORPORATION - BUSINESS SEGMENT DATA
PRODUCTS SOLUTIONS CONSOLIDATED
--------------------------------------------------------------
(IN THOUSANDS, EXCEPT FOR PERCENTAGES)
Quarter ended 3/31/04
Net sales $ 111,108 $ 10,071 $ 121,179
Gross profit 29,091 232 29,323
Margin 26.2% 2.3% 24.2%
Income (loss) from operations before
amortization and restructuring charges 11,231 (1,776) 9,455
Margin 10.1% (17.6%) 7.8%
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
amortization and restructuring charges 7,062 (1,000) 6,062
Margin 6.9% (5.9%) 5.1%
Year ended 3/31/04
Net sales $ 394,160 $ 50,431 $ 444,591
Gross profit 99,255 5,591 104,846
Margin 25.2% 11.1% 23.6%
Income (loss) from operations before
amortization and restructuring charges 33,511 (2,022) 31,489
Margin 8.5% (4.0%) 7.1%
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 (loss) from operations before
amortization and restructuring charges 33,593 (270) 33,323
Margin 8.7% (0.4%) 7.4%
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COLUMBUS McKINNON CORPORATION
OTHER CONSOLIDATED INFORMATION
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------
Backlog (in thousands)
Products segment $ 45,297 $ 41,670
Solutions segment 9,183 10,514
Trade accounts receivable -
Days sales outstanding 62.9 61.3
Inventory turns per year (based on
cost of products sold) 5.3x 4.6x
Trade accounts payable -
Days payables outstanding 29.6 28.7
Debt to total capitalization percentage 82.3% 85.7%