UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT 1934
For the quarterly period ended July 4, 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: 0-27618
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COLUMBUS MCKINNON CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 16-0547600
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
140 JOHN JAMES AUDUBON PARKWAY, AMHERST, NY 14228-1197
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(Address of principal executive offices) (Zip code)
(716) 689-5400
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report.)
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. : [X] Yes [ ] 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 [ X ] No
The number of shares of common stock outstanding as of July 31, 2004 was:
14,896,172 shares.
FORM 10-Q INDEX
COLUMBUS MCKINNON CORPORATION
JULY 4, 2004
PAGE #
------
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed consolidated balance sheets -
July 4, 2004 and March 31, 2004 2
Condensed consolidated statements of operations and
accumulated deficit - Three months ended
July 4, 2004 and June 29, 2003 3
Condensed consolidated statements of cash flows -
Three months ended July 4, 2004 and June 29, 2003 4
Condensed consolidated statements of comprehensive income -
Three months ended July 4, 2004 and June 29, 2003 5
Notes to condensed consolidated financial statements -
July 4, 2004 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
Item 4. Disclosure Controls and Procedures 20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - none. 21
Item 2. Changes in Securities - none. 21
Item 3. Defaults upon Senior Securities - none. 21
Item 4. Submission of Matters to a Vote of Security Holders - none. 21
Item 5. Other Information - none. 21
Item 6. Exhibits and Reports on Form 8-K 21
- 1 -
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
JULY 4, MARCH 31,
2004 2004
----------- -----------
ASSETS: (IN THOUSANDS)
Current assets:
Cash and cash equivalents $ 12,064 $ 11,101
Trade accounts receivable 81,802 84,374
Unbilled revenues 5,136 5,160
Inventories 71,161 69,119
Net assets held for sale 2,570 2,790
Prepaid expenses 16,605 15,486
----------- -----------
Total current assets 189,338 188,030
Property, plant, and equipment, net 57,392 58,773
Goodwill and other intangibles, net 192,621 192,963
Marketable securities 25,066 25,355
Deferred taxes on income 4,933 6,388
Other assets 1,931 1,854
----------- -----------
Total assets $ 471,281 $ 473,363
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Notes payable to banks $ 5,437 $ 5,471
Trade accounts payable 24,928 30,076
Accrued liabilities 50,578 48,416
Restructuring reserve 370 561
Current portion of long-term debt 3,386 2,205
----------- -----------
Total current liabilities 84,699 86,729
Senior debt, less current portion 120,613 121,603
Subordinated debt 164,141 164,131
Other non-current liabilities 35,512 37,922
----------- -----------
Total liabilities 404,965 410,385
----------- -----------
Shareholders' equity
Common stock 149 149
Additional paid-in capital 103,827 103,914
Accumulated deficit (21,992) (25,354)
ESOP debt guarantee (4,973) (5,116)
Unearned restricted stock (31) (39)
Accumulated other comprehensive loss (10,664) (10,576)
----------- -----------
Total shareholders' equity 66,316 62,978
----------- -----------
Total liabilities and shareholders' equity $ 471,281 $ 473,363
=========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 2 -
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMLATED DEFICIT
(UNAUDITED)
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29,
2004 2003
----------- -----------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
Net sales $ 121,658 $ 106,575
Cost of products sold 90,207 80,677
----------- -----------
Gross profit 31,451 25,898
----------- -----------
Selling expenses 12,700 11,922
General and administrative expenses 7,485 5,767
Restructuring charges 33 801
Amortization of intangibles 77 142
----------- -----------
20,295 18,632
----------- -----------
Income from operations 11,156 7,266
Interest and debt expense 7,048 9,672
Other expense and (income), net 18 (3,094)
----------- -----------
Income before income tax expense 4,090 688
Income tax expense 728 189
----------- -----------
Net income 3,362 499
Accumulated deficit - beginning of period (25,354) (26,547)
----------- -----------
Accumulated deficit - end of period $ (21,992) $ (26,048)
=========== ===========
Earnings per share data, basic and diluted: $ 0.23 $ 0.03
=========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 3 -
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29,
2004 2003
----------- -----------
(IN THOUSANDS)
OPERATING ACTIVITIES:
Net income $ 3,362 $ 499
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,325 2,735
Deferred income taxes 1,455 498
Gain on sale of real estate/investments - (3,282)
Other 369 496
Changes in operating assets and liabilities:
Trade accounts receivable and unbilled revenues 2,674 1,134
Inventories (2,080) 4,827
Prepaid expenses (1,118) (1,717)
Other assets (129) (66)
Trade accounts payable (5,207) (6,030)
Accrued and non-current liabilities (519) 7,885
----------- -----------
Net cash provided by operating activities 1,132 6,979
----------- -----------
INVESTING ACTIVITIES:
Sale (purchase) of marketable securities, net 208 (415)
Capital expenditures (838) (1,499)
Net assets held for sale 220 3,282
----------- -----------
Net cash (used in) provided by investing activities (410) 1,368
----------- -----------
FINANCING ACTIVITIES:
Net borrowings (payments) under revolving
line-of-credit agreements 1,175 16,602
Repayment of debt (1,078) (21,867)
Reduction of ESOP debt guarantee 143 147
Other (11) (205)
----------- -----------
Net cash provided by (used in) financing activities 229 (5,323)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 12 259
----------- -----------
Net change in cash and cash equivalents 963 3,283
Cash and cash equivalents at beginning of period 11,101 1,943
----------- -----------
Cash and cash equivalents at end of period $ 12,064 $ 5,226
=========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 4 -
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29,
2004 2003
----------- -----------
(IN THOUSANDS)
Net income $ 3,362 $ 499
----------- -----------
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments (7) 3,110
Unrealized gain on derivatives qualifying as hedges - 191
Unrealized (loss) gain on investments:
Unrealized holding (loss) gain arising during the period (150) 1,278
Less: reclassification adjustment for losses
included in net income 69 213
----------- -----------
(81) 1,491
----------- -----------
Total other comprehensive (loss) income (88) 4,792
----------- -----------
Comprehensive income $ 3,274 $ 5,291
=========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 5 -
COLUMBUS MCKINNON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(TABULAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
JULY 4, 2004
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with U.S. generally accepted accounting
principles for interim financial information. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation of the financial position of Columbus
McKinnon Corporation (the Company) at July 4, 2004, and the results of its
operations and its cash flows for the three month periods ended July 4,
2004 and June 29, 2003, have been included. Results for the period ended
July 4, 2004 are not necessarily indicative of the results that may be
expected for the year ended March 31, 2005. The balance sheet at March 31,
2004 has been derived from the audited financial statements at that date,
but does not include all of the information and footnotes required by U.S.
generally accepted accounting principles for complete financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Columbus McKinnon Corporation annual
report on Form 10-K for the year ended March 31, 2004.
The Company is a leading U.S. designer and manufacturer of material
handling products, systems and services which lift, secure, position and
move material ergonomically, safely, precisely and efficiently. Key
products include hoists, cranes, chain and forged attachments. The
Company's material handling products are sold, domestically and
internationally, principally to third party distributors through diverse
distribution channels, and to a lesser extent directly to manufacturers and
other end-users. The Company's integrated material handling solutions
businesses deal primarily with end users and sales are concentrated,
domestically and internationally (primarily Europe), in the consumer
products, manufacturing, warehousing and, to a lesser extent, the steel,
construction, automotive and other industrial markets.
2. The Company has two stock-based employee compensation plans in effect. The
Company accounts for these plans under the recognition and measurement
principles of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25) and related Interpretations. No
stock-based employee compensation cost is reflected in net income, as all
options granted under these plans had an exercise price equal to the market
value of the underlying common stock on the date of grant and the number of
options granted was fixed. The following table illustrates the effect on
net income and earnings per share if the Company had applied the fair value
recognition of SFAS No. 123 "Accounting for Stock-Based Compensation", to
stock-based employee compensation:
THREE MONTHS ENDED
-------------------------------
JULY 4, 2004 JUNE 29, 2003
-------------------------------
Net income, as reported.................................... $ 3,362 $ 499
Deduct: Total stock based employee compensation
expenses determined under fair value based method
for all awards, net of related tax effects............... (186) (141)
-------------------------------
Net income, pro forma.................................... $ 3,176 $ 358
===============================
Basic and diluted income per share:
As reported.............................................. $ 0.23 $ 0.03
===============================
Pro forma................................................ $ 0.22 $ 0.02
===============================
- 6 -
3. Inventories consisted of the following:
JULY 4, MARCH 31,
2004 2004
---------- -----------
At cost - FIFO basis:
Raw materials.......................... $ 36,401 $ 34,657
Work-in-process........................ 11,953 10,169
Finished goods......................... 30,237 31,205
---------- -----------
78,591 76,031
LIFO cost less than FIFO cost............. (7,430) (6,912)
---------- -----------
Net inventories ........................ $ 71,161 $ 69,119
========== ===========
An actual valuation of inventory under the LIFO method can be made only at
the end of each year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations must necessarily be based on
management's estimates of expected year-end inventory levels and costs.
Because these are subject to many forces beyond management's control,
interim results are subject to the final year-end LIFO inventory valuation.
4. In early fiscal 2002, the Company analyzed its global capacity requirements
and, as a result, began a series of facility rationalization projects and
Corporate-wide reorganization plans. Substantially all projects are
complete at this point. During the first quarter of fiscal 2005, the
Company recorded restructuring costs of $33,000 related to certain employee
termination benefits. All of these costs are related to the Products
segment. As of July 4, 2004, the vast majority of the terminations had
occurred. The liability as of July 4, 2004 consists of severance payments
and costs associated with the preparation and maintenance of non-operating
facilities prior to disposal which were accrued prior to the adoption of
SFAS No. 146 "Accounting for Costs Associated with Exit or Disposal
Activities."
The following table provides a reconciliation of the activity related to
restructuring reserves:
EMPLOYEE FACILITY TOTAL
-----------------------------------------------
Reserve at March 31, 2004 $ 161 $ 400 $ 561
Fiscal 2005 first quarter restructuring charges......... - 33 33
Cash payments........................................... (143) (81) (224)
-----------------------------------------------
Reserve at July 4, 2004................................. $ 18 $ 352 $ 370
===============================================
5. The following table sets forth the components of net periodic pension cost
for the Company's defined benefit pension plans:
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29,
2004 2003
---- ----
Service costs - benefits earned during the period.................. $ 1,190 $ 980
Interest cost on projected benefit obligation...................... 1,755 1,678
Expected return on plan assets..................................... (1,645) (1,351)
Net amortization................................................... 495 494
----------- -----------
Net periodic pension cost.......................................... $ 1,795 $ 1,801
=========== ===========
- 7 -
For additional information on the Company's defined benefit pension plans,
refer to Note 11 in the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended March 31, 2004.
The following table sets forth the components of net periodic
postretirement benefit cost for the Company's defined benefit
postretirement plans:
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29,
2004 2003
---- ----
Service costs - benefits earned during the period.................. $ 4 $ 3
Interest cost on projected benefit obligation...................... 234 217
Amortization of prior service cost................................. - (38)
Amortization of plan net losses.................................... 146 161
----------- -----------
Net periodic pension cost.......................................... $ 384 $ 343
=========== ===========
For additional information on the Company's defined benefit postretirement
benefit plans, refer to Note 13 in the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-K
for the year ended March 31, 2004.
6. Income tax expense as a percentage of income before income tax expense was
17.8% and 27.5% in the fiscal 2005 and 2004 quarters, respectively. The
fiscal 2005 percentage varies from the U.S. statutory rate due to the
benefit from the utilization of domestic net operating loss carry-forwards
that had been fully reserved and jurisdictional mix. Therefore, income tax
expense primarily results from non-U.S. taxable income and state taxes on
U.S. taxable income. The fiscal 2004 percentage varies from the U.S.
statutory rate due to jurisdictional mix.
7. The following table sets forth the computation of basic and diluted
earnings per share:
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29,
2004 2003
----------- -----------
Numerator for basic and diluted earnings per share:
Net income........................................................... $ 3,262 $ 499
=========== ===========
Denominators:
Weighted-average common stock outstanding -
denominator for basic EPS......................................... 14,576 14,539
Effect of dilutive employee stock options............................ 24 -
----------- -----------
Adjusted weighted-average common stock outstanding
and assumed conversions - denominator for diluted EPS.............. 14,600 14,539
=========== ===========
- 8 -
8. As a result of the way the Company manages the business, its reportable
segments are strategic business units that offer products with different
characteristics. The most defining characteristic is the extent of
customized engineering required on a per-order basis. In addition, the
segments serve different customer bases through differing methods of
distribution. The Company has two reportable segments: Products and
Solutions. The Company's Products segment sells hoists, industrial cranes,
chain, attachments, and other material handling products principally to
third party distributors through diverse distribution channels, and to a
lesser extent directly to end-users. The Solutions segment sells engineered
material handling systems such as conveyors and lift tables primarily to
end-users in the consumer products, manufacturing, warehousing, and, to a
lesser extent, the steel, construction, automotive, and other industrial
markets. Intersegment sales are not significant. The Company evaluates
performance based on operating income of the respective business units
prior to the effects of restructuring charges and amortization because
management believes this to be the most appropriate measure of operating
performance.
Segment information as of and for the three months ended July 4, 2004 and
June 29, 2003, is as follows:
THREE MONTHS ENDED JULY 4, 2004
-------------------------------
PRODUCTS SOLUTIONS TOTAL
-------- --------- -----
Sales to external customers...................... $ 108,557 $ 13,101 $ 121,658
Operating income before restructuring
Charges and amortization...................... 10,921 345 11,266
Depreciation and amortization.................... 2,088 237 2,325
Total assets..................................... 443,925 27,356 471,281
THREE MONTHS ENDED JUNE 29, 2003
--------------------------------
PRODUCTS SOLUTIONS TOTAL
-------- --------- -----
Sales to external customers...................... $ 91,957 $ 14,618 $ 106,575
Operating income before restructuring
Charges and amortization...................... 8,148 61 8,209
Depreciation and amortization.................... 2,441 294 2,735
Total assets..................................... 451,357 34,015 485,372
The following schedule provides a reconciliation of operating income before
restructuring charges and amortization with income from operations before
income tax expense:
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29,
2004 2003
---- ----
Operating income before restructuring
charges and amortization........................................ $ 11,266 $ 8,209
Restructuring charges.............................................. (33) (801)
Amortization of intangibles........................................ (77) (142)
Interest and debt expense.......................................... (7,048) (9,672)
Other (expense) and income, net.................................... (18) 3,094
----------- -----------
Income before income tax expense................................... $ 4,090 $ 688
=========== ===========
- 9 -
9. The following information sets forth the condensed consolidating summary
financial information of the parent and guarantors, which guarantee the 10%
Senior Secured Notes and the 8 1/2% Senior Subordinated Notes, and the
nonguarantors. The guarantors are wholly owned and the guarantees are full,
unconditional, joint and several.
(In thousands) Parent Guarantors Nonguarantors Eliminations Consolidated
-------------------------------------------------------------------
AS OF JULY 4, 2004
Current assets:
Cash and cash equivalents $ 8,266 $ (1,025) $ 4,823 $ - $ 12,064
Trade accounts receivable and unbilled revenues 54,147 (47) 32,838 - 86,938
Inventories 31,695 18,811 21,627 (972) 71,161
Net assets held for sale 1,800 770 - - 2,570
Other current assets 9,753 641 6,211 - 16,605
-------------------------------------------------------------------
Total current assets 105,661 19,150 65,499 (972) 189,338
Property, plant, and equipment, net 25,294 13,522 18,576 - 57,392
Goodwill and other intangibles, net 95,759 57,325 39,537 - 192,621
Intercompany 36,593 (40,228) (68,680) 72,315 -
Other assets 49,444 198,751 23,930 (240,195) 31,930
-------------------------------------------------------------------
Total assets $ 312,751 $ 248,520 $ 78,862 $ (168,852) $ 471,281
===================================================================
Current liabilities $ 46,032 $ 12,858 $ 28,409 $ (2,600) $ 84,699
Long-term debt, less current portion 283,962 - 792 - 284,754
Other non-current liabilities 2,335 10,483 22,694 - 35,512
-------------------------------------------------------------------
Total liabilities 332,329 23,341 51,895 (2,600) 404,965
Shareholders' equity (19,578) 225,179 26,967 (166,252) 66,316
-------------------------------------------------------------------
Total liabilities and shareholders' equity $ 312,751 $ 248,520 $ 78,862 $ (168,852) $ 471,281
===================================================================
FOR THE THREE MONTHS ENDED JULY 4, 2004
Net sales $ 60,503 $ 33,971 $ 33,471 $ (6,287) $ 121,658
Cost of products sold 45,821 26,513 24,160 (6,287) 90,207
-------------------------------------------------------------------
Gross profit 14,682 7,458 9,311 - 31,451
-------------------------------------------------------------------
Selling, general and administrative expenses 9,968 3,253 6,964 - 20,185
Restructuring charges 33 - - - 33
Amortization of intangibles 59 1 17 - 77
-------------------------------------------------------------------
10,060 3,254 6,981 - 20,295
-------------------------------------------------------------------
Income from operations 4,622 4,204 2,330 - 11,156
Interest and debt expense 7,248 (297) 97 - 7,048
Other income and (expense), net (6) (2) 26 - 18
-------------------------------------------------------------------
Income before income taxes (2,620) 4,503 2,207 - 4,090
Income tax expense (137) 248 617 - 728
-------------------------------------------------------------------
Net (loss) income $ (2,483) $ 4,255 $ 1,590 $ - $ 3,362
===================================================================
- 10 -
(In thousands) Parent Guarantors Nonguarantors Eliminations Consolidated
-------------------------------------------------------------------
FOR THE THREE MONTHS ENDED JULY 4, 2004
OPERATING ACTIVITIES:
Net cash provided by (used in) operating
activities $ 1,542 $ (854) $ 444 $ - $ 1,132
-------------------------------------------------------------------
INVESTING ACTIVITIES:
Sale of marketable securities, net - - 208 - 208
Capital expenditures (692) (173) 27 - (838)
Net assets held for sale - 220 - - 220
-------------------------------------------------------------------
Net cash (used in) provided by investing
activities (692) 47 235 - (410)
-------------------------------------------------------------------
FINANCING ACTIVITIES:
Net borrowings (payments) under revolving
line-of-credit agreements 1,260 - (85) - 1,175
Repayment of debt (1,000) - (78) - (1,078)
Deferred financing costs incurred (11) - - - (11)
Other 143 - - - 143
-------------------------------------------------------------------
Net cash provided by (used in) financing
activities 392 - (163) - 229
Effect of exchange rate changes on cash 43 111 (142) - 12
-------------------------------------------------------------------
Net change in cash and cash equivalents 1,285 (696) 374 - 963
Cash and cash equivalents at beginning of period 6,981 (329) 4,449 - 11,101
-------------------------------------------------------------------
Cash and cash equivalents at end of period $ 8,266 $ (1,025) $ 4,823 $ - $ 12,064
===================================================================
AS OF JUNE 29, 2003
Current assets:
Cash and cash equivalents $ 1,901 $ (917) $ 4,242 $ - $ 5,226
Trade accounts receivable and unbilled revenues 50,855 (10) 37,011 - 87,856
Inventories 35,935 18,909 21,376 (972) 75,248
Other current assets 9,553 (53) 4,871 - 14,371
-------------------------------------------------------------------
Total current assets 98,244 17,929 67,500 (972) 182,701
Property, plant, and equipment, net 31,329 16,018 19,740 - 67,087
Goodwill and other intangibles, net 98,569 57,364 39,184 - 195,117
Intercompany 37,999 (68,577) (41,488) 72,066 -
Other assets 207,515 174,335 32,115 (373,498) 40,467
-------------------------------------------------------------------
Total assets $ 473,656 $ 197,069 $ 117,051 $ (302,404) $ 485,372
===================================================================
Current liabilities $ 45,943 $ 9,955 $ 28,808 $ (2,849) $ 81,857
Long-term debt, less current portion 283,697 - 15,514 - 299,211
Other non-current liabilities 27,565 14,286 4,437 - 46,288
-------------------------------------------------------------------
Total liabilities 357,205 24,241 48,759 (2,849) 427,356
Shareholders' equity 116,451 172,828 68,292 (299,555) 58,016
-------------------------------------------------------------------
Total liabilities and shareholders' equity $ 473,656 $ 197,069 $ 117,051 $ (302,404) $ 485,372
===================================================================
- 11 -
(In thousands) Parent Guarantors Nonguarantors Eliminations Consolidated
-------------------------------------------------------------------
FOR THE THREE MONTHS ENDED JUNE 29, 2003
Net sales $ 53,053 $ 27,661 $ 30,792 $ (4,931) $ 106,575
Cost of products sold 40,356 22,016 23,236 (4,931) 80,677
-------------------------------------------------------------------
Gross profit 12,697 5,645 7,556 - 25,898
-------------------------------------------------------------------
Selling, general and administrative expenses 8,370 2,971 6,348 - 17,689
Restructuring charges 747 - 54 - 801
Amortization of intangibles 58 - 84 - 142
-------------------------------------------------------------------
9,175 2,971 6,486 - 18,632
-------------------------------------------------------------------
Income from operations 3,522 2,674 1,070 - 7,266
Interest and debt expense 9,172 - 500 - 9,672
Other expense and (income), net 198 (3,282) (10) - (3,094)
-------------------------------------------------------------------
Income before income taxes (5,848) 5,956 580 - 688
Income tax expense (2,322) 2,368 143 - 189
-------------------------------------------------------------------
Net (loss) income $ (3,526) $ 3,588 $ 437 $ - $ 499
===================================================================
FOR THE THREE MONTHS ENDED JUNE 29, 2003
OPERATING ACTIVITIES:
Net cash provided by (used in) operating
activities $ 17,587 $ (3,282) $ (7,326) $ - $ 6,979
-------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of marketable securities, net (415) - - - (415)
Capital expenditures (1,020) (86) (393) - (1,499)
Other - 3,282 - - 3,282
-------------------------------------------------------------------
Net cash (used in) provided by investing
activities (1,435) 3,196 (393) - 1,368
-------------------------------------------------------------------
FINANCING ACTIVITIES:
Net borrowings under revolving
line-of-credit agreements 7,324 - 9,278 - 16,602
Repayment of debt (21,472) - (395) - (21,867)
Other (58) - - - (58)
-------------------------------------------------------------------
Net cash (used in) provided by financing
activities (14,206) - 8,883 - (5,323)
Effect of exchange rate changes on cash (101) (2) 362 - 259
-------------------------------------------------------------------
Net change in cash and cash equivalents 1,845 (88) 1,526 - 3,283
Cash and cash equivalents at beginning of period 56 (829) 2,716 - 1,943
-------------------------------------------------------------------
Cash and cash equivalents at end of period $ 1,901 $ (917) $ 4,242 $ - $ 5,226
===================================================================
- 12 -
10. Like most industrial manufacturers, the Company is involved in
asbestos-related litigation. In continually evaluating its estimated
asbestos-related liability, the Company reviews, among other things, the
incidence of past and recent claims, the historical case dismissal rate,
the mix of the claimed illnesses and occupations of the plaintiffs, its
recent and historical resolution of the cases, the number of cases pending
against it, the status and results of broad-based settlement discussions,
and the number of years such activity might continue. Based on this review,
the Company has estimated its share of liability to defend and resolve
probable asbestos-related personal injury claims. This estimate is highly
uncertain due to the limitations of the available data and the difficulty
of forecasting with any certainty the numerous variables that can affect
the range of the liability. The Company will continue to study the
variables in light of additional information in order to identify trends
that may become evident and to assess their impact on the range of
liability that is probable and estimable.
Our actuaries have estimated our asbestos-related liability to range from
$2,800,000 to $12,300,000 through approximately March 31, 2034. The
Company's estimation of its asbestos-related liability that is probable and
estimable through 2013 ranges from $2,800,000 to $4,000,000 as of July 4,
2004. The range of probable and estimable liability reflects uncertainty in
the number of future claims that will be filed and the cost to resolve
those claims, which may be influenced by a number of factors, including the
outcome of the ongoing broad-based settlement negotiations, defensive
strategies, and the cost to resolve claims outside the broad-based
settlement program. The Company has concluded that no amount within that
range is more likely than any other, and therefore has reflected $3,000,000
as a liability in the consolidated financial statements in accordance with
U.S. generally accepted accounting principles. The recorded liability does
not consider the impact of any potential favorable federal legislation such
as the "FAIR Act". Of this amount, management expects to incur asbestos
liability payments of approximately $200,000 over the next 12 months.
Because payment of the liability is likely to extend over many years,
management believes that the potential additional costs for claims will not
have a material after-tax effect on the financial condition of the Company
or its liquidity, although the net after-tax effect of any future
liabilities recorded could be material to earnings in a future period.
11. On December 28, 2003, the Medicare Prescription Drug Improvement and
Modernization Act of 2003 was enacted that introduces a prescription drug
benefit under Medicare as well as a subsidy to sponsors of retiree
healthcare benefit plans. In March 2004, the FASB issued Staff Position No
FAS 106-2 "Accounting and Disclosure Requirements Related to the Medicare
Prescription Drug Improvement and Modernization Act of 2003 ("FSP No
106-2")," which provides accounting guidance on how to account for the
effects of the Act on postretirement plans. The provisions of FSP No. 106-2
are effective for periods beginning after June 15, 2004. Any measures of
the accumulated postretirement benefit obligation or net periodic
postretirement benefit costs in the Company's financial statements do not
reflect the effect of the Act. The Company is currently assessing the
Statement and the impact, if any, that adoption will have on the
consolidated financial statements.
- 13 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(AMOUNTS IN THOUSANDS)
EXECUTIVE OVERVIEW
We are a leading manufacturer and marketer of hoists, cranes, chain, conveyors,
material handling systems, lift tables and component parts serving a wide
variety of commercial and industrial end markets. Our products are used to
efficiently and ergonomically move, lift, position or secure objects and loads.
Our Products segment sells a wide variety of powered and manually operated wire
rope and chain hoists, industrial crane systems, chain, hooks and attachments,
actuators and rotary unions. They are sold, domestically and internationally,
principally to third party distributors through diverse distribution channels,
and to a lesser extent directly to manufacturers and other end-users.
Distribution channels include general distributors, specialty distributors,
crane end users, service-after-sale distributors, original equipment
manufacturers (OEMs), government, consumer and international general line
distributors. Our Solutions segment designs, manufactures, and installs
application-specific material handling systems and solutions for end-users to
improve work station and facility-wide work flow. Sales from that segment are
concentrated, domestically and internationally (primarily Europe), in the
consumer products, manufacturing, warehousing and, to a lesser extent, the
steel, construction, automotive and other industrial markets.
Founded in 1875, we have grown to our current leadership position through
organic growth and also as the result of the 14 businesses we acquired between
February 1994 and April 1999. We developed our leading market position over our
125-year history by emphasizing technological innovation, manufacturing
excellence and superior after-sale service. In addition, the acquisitions
significantly broadened our product lines and services and expanded our
geographic reach, end-user markets and customer base. We continue to further
integrate the operations of the acquired businesses with our previously existing
businesses. The current phase of the ongoing integration of these businesses
includes improving our productivity, further reducing our excess manufacturing
capacity and extending our cross-selling activities to the European marketplace.
This phase is in process through our Lean Manufacturing efforts, facility
rationalization program and European sales initiatives. Our Lean Manufacturing
efforts are fundamentally changing our manufacturing processes to be more
responsive to customer demand, resulting in significant inventory reductions and
improving on-time delivery and productivity. For example, we realized nearly 20%
inventory turn improvement to 5.1 times at July 4, 2004 from 4.3 times at June
29, 2003. Over the past three years, under our facility rationalization program,
we closed 13 facilities and consolidated several product lines, with potential
opportunity for further rationalization. Also, as previously reported, we have
been undergoing assessments for possible divestiture of several less-strategic
businesses, including most of our Solutions segment and certain businesses
within our Products segment. Two businesses were sold in fiscal 2004 and four
others remain as possible divestiture candidates. Furthermore, we are selling
surplus real estate that resulted from our facility rationalization projects.
These divestitures may result in gains or losses. To further expand our global
sales, we continue to introduce certain of our products through our existing
European distribution network that historically have been distributed only in
North America.
Following several years of negative economic conditions we saw some definitive
economic improvement in the first quarter of fiscal 2005. Net sales rebounded
nicely in the first quarter of fiscal 2005, reflecting a 14.2% increase over the
comparable fiscal 2004 quarter. We are encouraged but continue to be cautiously
optimistic that the economic environment, as it impacts our Company, is
recovering. We monitor such indicators as U.S. Industrial Capacity Utilization
and Industrial Production which have been steadily increasing since July 2003.
Further, we continue to monitor the potential impact of negative global and
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domestic trends, including continued steel price increases, rising interest
rates and uncertainty in end-user markets around the globe. In addition, to
enhance future revenue opportunities, we are increasing our sales and marketing
efforts in international markets and investing in the development of new
products and services.
On the cost side we, like many companies, have been challenged over the past
several years with significantly increased costs for fringe benefits such as
health insurance, workers compensation insurance and pension. Combined, those
benefits cost us almost $30,000 in fiscal 2004 and we work diligently to balance
cost control with the need to provide competitive benefits packages for our
associates. Another cost area of focus is steel pricing and availability. We
utilize approximately $20,000-$25,000 of steel annually in a variety of forms
including rod, wire, bar, structural and others. With increases in worldwide
demand for steel and significant increases in scrap steel prices, we experienced
increases in our costs that we have reflected as price increases and surcharges
to our customers. Our surcharges for certain products went into effect beginning
March 18, 2004 and currently affect most of our chain and forged attachment
products. We continue to monitor steel costs and potential surcharge
requirements on a monthly basis. Another challenging cost area results from
Sarbanes-Oxley internal control documentation and testing compliance. We are
well underway with this initiative and work to control our added internal costs
as well as those of third parties assisting with our efforts and the audit
costs. On the whole, we are encouraged, remaining cautiously optimistic for the
future.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JULY 4, 2004 AND JUNE 29, 2003
Net sales in the fiscal 2004 quarter ended July 4, 2004 were $121,658, an
increase of $15,083 or 14.2% from the quarter ended June 29, 2003. Sales in the
Products segment were up $16,600 or 18.1% primarily as a result of the recovery
of US industrial markets and also include $1,200 attributable to translation of
foreign currencies, particularly the Euro, into U.S. dollars. Sales in the
Solutions segment decreased by $1,517 or 10.4%, primarily as a result of the
divestiture of a subsidiary ($1,400) in February 2004. Sales in the individual
segments were as follows, in thousands of dollars and with percentage changes
for each segment:
THREE MONTHS ENDED
------------------
JULY 4, JUNE 29, CHANGE
2004 2003 AMOUNT %
---- ---- ------ -----
(IN THOUSANDS, EXCEPT PERCENTAGES)
Products segment $ 108,557 $ 91,957 $ 16,600 18.1
Solutions segment 13,101 14,618 (1,517) (10.4)
----------- ----------- ----------
Consolidated net sales $ 121,658 $ 106,575 $ 15,083 14.2
=========== =========== ==========
Gross profits and gross profit margins by operating segment are summarized as
follows:
THREE MONTHS ENDED
------------------
JULY 4, 2004 JUNE 29, 2003
------------ -------------
$ % $ %
- - - -
Products $ 29,245 26.9 $ 23,719 25.8
Solutions 2,206 16.8 2,179 14.9
----------- -----------
Total Gross Profit $ 31,451 25.9 $ 25,898 24.3
=========== ===========
The increase in the gross profit margin for the Products segment is the result
of realization of operational leverage at increased sales volumes and previous
- 15 -
cost containment activities. The improvement in the Solutions segment gross
profit margin was the result of the divestiture of a poor performing,
non-strategic subsidiary in February 2004 as well as improved operating
performance in the remaining businesses.
Selling expenses were $12,700 and $11,922 in the fiscal 2005 and 2004 quarters,
respectively. The increase is primarily attributable to increased variable
costs, mainly commissions as a result of increased sales volume and also the
impact of translation of foreign currencies, particularly the Euro, into U.S.
dollars ($254). As a percentage of consolidated net sales, selling expenses were
10.4% and 11.2% for the fiscal 2005 and 2004 quarters, respectively. The
decrease in percentage is the result of the fixed nature of certain selling
expenses, including investments in new markets, relative to an increase in sales
volume.
General and administrative expenses were $7,485 and $5,767 in the fiscal 2005
and 2004 quarters, respectively. The increase is primarily the result of
variable compensation expense ($669), increased professional costs associated
with regulatory compliance with the Sarbanes-Oxley Act and environmental matters
($480), increased research and development costs related to new product
development ($150) and currency translation impact ($141). As a percentage of
consolidated net sales, general and administrative expenses were 6.2% and 5.4%
in the fiscal 2005 and 2004 quarters, respectively.
In early fiscal 2002, the Company analyzed its global capacity requirements and,
as a result, began a series of facility rationalization projects and
Corporate-wide reorganization plans. Substantially all projects are complete at
this point. During the first quarter of fiscal 2005, the Company recorded
restructuring costs of $33,000 related to certain employee termination benefits.
All of these costs are related to the Products segment. As of July 4, 2004, the
vast majority of the terminations had occurred. The liability as of July 4, 2004
consists of severance payments and costs associated with the preparation and
maintenance of non-operating facilities prior to disposal which were accrued
prior to the adoption of SFAS No. 146 "Accounting for Costs Associated with Exit
or Disposal Activities." We anticipate that our total restructuring charges for
fiscal 2005 in connection with our ongoing facility rationalization and
reorganization initiatives will be between $400 and $700. The majority of these
costs relate to projects initiated subsequent to the adoption of SFAS No. 146
and are therefore expensed as incurred. The Company recorded restructuring
charges of $801 in the first quarter of fiscal 2004 related to this
Corporate-wide reorganization plan for various employee termination benefits.
All of these costs were related to the Products segment, with the exception of
$98.
Amortization of intangibles was $77 and $142 in the fiscal 2005 and 2004
quarters, respectively.
Interest and debt expense was $7,048 and $9,672 in the fiscal 2005 and 2004
quarters, respectively. The fluctuation in interest expense is the result of
changes in the various components of the Company's credit facilities over the
course of the last fifteen months, described as follows. The Company
renegotiated its senior credit facility in November of 2002, which included a
$70,000 Senior Second Secured Term Loan facility that was in place from November
22, 2002 through July 22, 2003 with an effective interest rate of approximately
13.8%. On July 22, 2003, the $70,000 Term Loan and $35,700 of Subordinated debt
(8.5% interest rate) was replaced by $115,000 Senior Secured notes having an
interest rate of 10.0%. The fiscal 2005 quarterly decrease is impacted by the
lower average effective interest rate (9.1% versus 9.9%) and lower debt levels
for the quarter ended July 4, 2004. In addition, the Company incurred $1,200 in
the fiscal 2004 first quarter for amendment fees relating to the credit
facilities. As a percentage of consolidated net sales, interest and debt expense
was 5.8% and 9.1% for the fiscal 2005 and 2004 quarters, respectively.
Other (income) and expense, net was $18 and ($3,094) in the fiscal 2005 and 2004
quarters, respectively. The 2004 amount includes $3,300 in proceeds from the
sale of excess real estate.
- 16 -
Income tax expense as a percentage of income before income tax expense was 17.8%
and 27.5% in the fiscal 2005 and 2004 quarters, respectively. The fiscal 2005
percentage varies from the U.S. statutory rate due to the benefit from the
utilization of domestic net operating loss carry-forwards that had been fully
reserved and jurisdictional mix. Therefore, income tax expense primarily results
from non-U.S. taxable income and state taxes on U.S. taxable income. The fiscal
2004 percentage varies from the U.S. statutory rate due to jurisdictional mix.
LIQUIDITY AND CAPITAL RESOURCES
The Company's Revolving Credit Facility provides availability up to a maximum of
$50,000 through March 31, 2007. Availability based on the underlying collateral
at July 4, 2004 amounted to $48,400. The unused portion totaled $36,700, net of
outstanding borrowings of $1,300 and outstanding letters of credit of $10,400.
Interest is payable at varying Eurodollar rates based on LIBOR or prime plus
spreads determined by the Company's leverage ratio, amounting to 250 or 125
basis points applied to each, respectively, at July 4, 2004 (5.50%). The
Revolving Credit Facility is secured by all domestic inventory, receivables,
equipment, real property, subsidiary stock (limited to 65% for foreign
subsidiaries) and intellectual property.
At July 4, 2004, the Company has a Term Loan with a balance of $6,821, which
requires quarterly payments of $500. Interest is payable at varying Eurodollar
rates based on LIBOR plus a spread determined by the Company's leverage ratio
amounting to 300 basis points at July 4, 2004 (4.25%). The Term Loan is secured
by all domestic inventory, receivables, equipment, real property, subsidiary
stock (limited to 65% for foreign subsidiaries) and intellectual property.
The senior subordinated 8 1/2% Notes issued on March 31, 1998 amounted to
$164,141, net of original issue discount and are due March 31, 2008. Provisions
of the 8 1/2% Senior Subordinated Notes (8 1/2% Notes) include, without
limitation, restrictions on liens, indebtedness, asset sales, and dividends and
other restricted payments. The 8 1/2% Notes are redeemable at the option of the
Company, in whole or in part, at prices declining annually from the Make-Whole
Price (as defined in the 8 1/2% Notes agreement) to 100% on and after April 1,
2006. In the event of a Change of Control (as defined in the indenture for such
notes), each holder of the 8 1/2% Notes may require the Company to repurchase
all or a portion of such holder's 8 1/2% Notes at a purchase price equal to 101%
of the principal amount thereof. The 8 1/2% Notes are guaranteed by certain
existing and future domestic subsidiaries and are not subject to any sinking
fund requirements.
The senior secured 10% Notes issued on July 22, 2003 amounted to $115,000 and
are due August 1, 2010. Provisions of the 10% Notes include, without limitation,
restrictions on indebtedness, restricted payments, asset and subsidiary stock
sales, liens, and other restricted transactions. The 10% Notes are not entitled
to redemption at the option of the Company, prior to August 1, 2007 in the
absence of an equity offering. The Company may redeem up to 35% of the
outstanding notes at a redemption price of 110.0% with the proceeds of equity
offerings, subject to certain restrictions. On and after August 1, 2007, they
are redeemable at prices declining annually to 100% on and after August 1, 2009.
In the event of a Change of Control (as defined in the indenture for such
notes), each holder of the 10% Notes may require the Company to repurchase all
or a portion of such holder's 10% Notes at a purchase price equal to 101% of the
principal amount thereof. The 10% Notes are secured by a second-priority
interest in all domestic inventory, receivables, equipment, real property,
subsidiary stock (limited to 65% for foreign subsidiaries) and intellectual
property. The 10% Notes are guaranteed by certain existing and future domestic
subsidiaries and are not subject to any sinking fund requirements.
- 17 -
The corresponding credit agreements associated with the Revolving Credit
Facility and the Term Loan place certain debt covenant restrictions on the
Company including certain financial requirements and a restriction on dividend
payments.
From time to time, the Company manages its debt portfolio by using interest rate
swaps to achieve an overall desired position of fixed and floating rates. The
Company entered into an interest rate swap agreement, which matured in June
2003. The cash flow hedge was considered effective and the gain or loss on the
change in fair value was reported in other comprehensive loss, net of tax and
amounted to a gain of $191 for the fiscal 2004 quarter.
We believe that our cash on hand, cash flows, and borrowing capacity under our
Revolving Credit Facility will be sufficient to fund our ongoing operations and
budgeted capital expenditures for at least the next twelve months. This belief
is dependent upon a steady economy and successful execution of our current
business plan which is focused on cash generation for debt repayment. The
business plan includes continued implementation of Lean Manufacturing, facility
rationalization projects, possible divestiture of excess facilities and certain
non-strategic operations, and improving working capital components, and new
market and new product development.
Net cash provided by operating activities was $1,132 for the three months ended
July 4, 2004 compared to net cash provided by operating activities of $6,979 for
the three months ended June 29, 2003. The $5,847 decrease is due to increases in
net working capital components, primarily accounts payable and accrued
liabilities (including a fiscal 2004 $10,600 tax refund) and inventories, offset
by increased net income of $2,900 and the fiscal 2004 $3,300 gain from the sale
of real estate.
Net cash used in investing activities was $410 for the three months ended July
4, 2004 compared to net cash provided by investing activities of $1,368 for the
three months ended June 29, 2003. The decrease of $1,778 was the result of
$3,300 of proceeds from net assets held for sale in the first quarter of fiscal
2004 offset by reduced capital expenditures of $700 in the first quarter of
fiscal 2005 when compared to the first quarter of fiscal 2004.
Net cash provided by financing activities was $229 for the three months ended
July 4, 2004 compared to net cash used in financing activities of $5,323 for the
three months ended June 29, 2003. The $5,552 decrease is primarily the result of
the receipt of the $10,600 tax refund in the first quarter of fiscal 2004.
CAPITAL EXPENDITURES
In addition to keeping its current equipment and plants properly maintained, the
Company is committed to replacing, enhancing, and upgrading its property, plant,
and equipment to support new product development, reduce production costs,
increase flexibility to respond effectively to market fluctuations and changes,
meet environmental requirements, enhance safety, and promote ergonomically
correct work stations. Consolidated capital expenditures for the three months
ended July 4, 2004 and June 29, 2003 were $838 and $1,499, respectively.
- 18 -
INFLATION AND OTHER MARKET CONDITIONS
The Company's costs are affected by inflation in the U.S. economy and, to a
lesser extent, in foreign economies including those of Europe, Canada, Mexico,
and the Pacific Rim. The Company does not believe that general inflation has had
a material effect on results of operations over the periods presented primarily
due to overall low inflation levels over such periods and the ability to
generally pass on rising costs through price increases. However, in the fourth
quarter of fiscal 2004, we were impacted by high inflation in steel costs which
varied by type of steel. We continue to monitor steel costs and potential
surcharge requirements on a monthly basis. In addition, employee benefit costs
such as health insurance, workers compensation insurance, pensions as well as
energy and business insurance have exceeded general inflation levels. We
generally incorporated those cost increases into our sales price increases
effective in early fiscal 2005 as well as surcharges on certain products that
began in March 2004. In the future, we may be further affected by inflation that
we may not be able to pass on as price increases.
SEASONALITY AND QUARTERLY RESULTS
Quarterly results may be materially affected by the timing of large customer
orders, periods of high vacation and holiday concentrations, restructuring
charges and other costs attributable to our facility rationalization program,
divestitures, acquisitions and the magnitude of rationalization integration
costs. Therefore, the operating results for any particular fiscal quarter are
not necessarily indicative of results for any subsequent fiscal quarter or for
the full fiscal year.
EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
On December 28, 2003, the Medicare Prescription Drug Improvement and
Modernization Act of 2003 was enacted that introduces a prescription drug
benefit under Medicare as well as a subsidy to sponsors of retiree healthcare
benefit plans. In March 2004, the FASB issued Staff Position No FAS 106-2
"Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug Improvement and Modernization Act of 2003 ("FSP No 106-2")," which provides
accounting guidance on how to account for the effects of the Act on
postretirement plans. The provisions of FSP No. 106-2 are effective for periods
beginning after June 15, 2004. Any measures of the accumulated postretirement
benefit obligation or net periodic postretirement benefit costs in the Company's
financial statements do not reflect the effect of the Act. The Company is
currently assessing the Statement and the impact, if any, that adoption will
have on the consolidated financial statements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report may include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements 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 integration of acquisitions and other factors
disclosed in the Company's periodic reports filed with the Commission.
Consequently such forward-looking statements should be regarded as the Company's
current plans, estimates and beliefs. The Company does not undertake and
specifically declines any obligation to publicly release the results of any
revisions to these forward-looking statements that may be made to reflect any
future events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.
- 19 -
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in the reported market risks since the end
of Fiscal 2004.
Item 4. Disclosure Controls and Procedures
As of July 4, 2004, an evaluation was performed under the supervision and with
the participation of the Company's management, including the chief executive
officer and chief financial officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based on that
evaluation, the Company's management, including the chief executive officer and
chief financial officer, concluded that the Company's disclosure controls and
procedures were effective as of July 4, 2004. There were no significant changes
in the Company's internal controls or in other factors during our first quarter
ended July 4, 2004.
- 20 -
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - none.
Item 2. Changes in Securities - none.
Item 3. Defaults upon Senior Securities - none.
Item 4. Submission of Matters to a Vote of Security Holders - none.
Item 5. Other Information - none.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 10.1 Amendment No. 10 to the 1998 Plan Restatement of the
Columbus McKinnon Corporation Thrift [401(k)] Pan,
dated July 12, 2004.
Exhibit 31.1 Certification of Chief Executive Officer pursuant to
Rule 13a-14(a)/15d-14(a) of the Securities Exchange
Act of 1934; as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
Exhibit 31.2 Certification of Chief Financial Officer pursuant to
Rule 13a-14(a)/15d-14(a) of the Securities Exchange
Act of 1934; as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
Exhibit 32 Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
On July 27, 2004, the Company filed a Current Report on Form 8-K
with respect to its financial results for the first quarter of
fiscal 2005.
- 21 -
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.
COLUMBUS MCKINNON CORPORATION
-----------------------------
(Registrant)
Date: AUGUST 4, 2004 /S/ ROBERT R. FRIEDL
-------------- ----------------------------------------
Robert R. Friedl
Vice President and Chief Financial
Officer (Principal Financial Officer)
- 22 -