NEWS RELEASE
CONTACT:
Karen L. Howard
Vice President and Chief Financial Officer
Columbus McKinnon Corporation
Phone: 716-689-5550
KAREN.HOWARD@CMWORKS.COM
------------------------
COLUMBUS MCKINNON REPORTS SIGNIFICANT INCREASES IN NET AND
OPERATING INCOME FOR FOURTH QUARTER AND FISCAL YEAR 2006
o QUARTERLY IMPROVEMENTS:
- GROSS PROFIT IMPROVES 18.8% TO $41.0 MILLION
- GROSS MARGIN IMPROVES TO 27.9% FROM 23.9%
- OPERATING MARGIN IMPROVES TO 11.5% FROM 7.0%
- NET INCOME PER DILUTED SHARE WAS $2.53; $0.52 EXCLUDING UNUSUAL
ITEMS
o OPERATING LEVERAGE WAS 42% IN FISCAL 2006
o NET DEBT REDUCED $97.3 MILLION FOR THE YEAR TO $164.2 MILLION AT YEAR END
o NEAR TERM GOAL OF 50% FUNDED DEBT TO TOTAL CAPITALIZATION ACHIEVED WITH
50.6% YEAR-END FUNDED DEBT TO TOTAL CAPITALIZATION
AMHERST, N.Y., May 30, 2006 -- Columbus McKinnon Corporation (NASDAQ: CMCO), a
leading designer, manufacturer and marketer of material handling products, today
reported net sales of $147.1 million and net income per diluted share of $2.53
for its fiscal 2006 fourth quarter, which ended March 31, 2006. For the full
year, net sales rose 8.0% to $556.0 million and net income per diluted share was
$3.60. Net income and net income per share for the quarter and full year include
several unusual items described below with a significant net favorable impact.
The Company's consolidated gross profit margin improved 400 basis points to
27.9% in the quarter and 210 basis points to 26.6% for the full year.
Consolidated operating margins improved 450 basis points to 11.5% in the quarter
and 250 basis points to 10.4% for the full year.
Timothy T. Tevens, President and Chief Executive Officer, noted, "Fiscal 2006
was a very rewarding year for Columbus McKinnon. We achieved our near term goal
of 50% debt to total capitalization and made headway in growing our markets
outside the United States. We also realized significant margin and bottom-line
benefits of operating leverage from the many years of effort we placed in
creating a lean operation and rationalizing our facilities and products. Over
the last several years, our focus has been on generating cash to reduce debt,
maintaining our leading U.S. market position and growing our presence in
international markets. We are now in an excellent position to continue expanding
our international presence and market share, and have the financial flexibility
to capitalize on profitable growth opportunities."
FOURTH QUARTER REVIEW
- ---------------------
The $2.6 million, or 1.8%, increase in consolidated net sales in the fiscal 2006
fourth quarter to $147.1 million included a $5.2 million, or 4.1%, increase in
Products segment net sales partially offset by a $2.6 million decline in net
sales for the Solutions segment. The increase in Products segment sales to
$131.6 million reflects expanding market penetration into international markets
and the strength of the U.S. industrial economy, where the Company has leading
market shares for many of its products. Further, the Products segment realized
double-digit growth in several major core product groups, including hoists and
forged attachments, which was partially offset by reductions from strategic
activities in less profitable product groups. The Solutions segment was
adversely affected by $1.0 million of currency translation and $1.6 million from
lower contract revenues, resulting in net sales of $15.6 million for the
quarter. On a consolidated basis, both gross and operating margins improved on
higher volumes, improved product mix and reduced costs.
Columbus McKinnon's net income for the fourth quarter of fiscal 2006 was $47.8
million, an increase of $39.4 million from $8.3 million in the prior year. On a
diluted basis, earnings per share were $2.53 on 18.9 million average shares
outstanding in the fourth quarter of fiscal 2006 compared with $0.56 on 15.0
million average shares outstanding in the fourth quarter of fiscal 2005. This
comparison was affected by the following unusual items:
o Fiscal 2006 fourth quarter results include the reversal of a $38.6
million valuation allowance against deferred tax assets, primarily
U.S. federal net operating loss carryforwards that existed since March
2004. The effect of this reversal was an increase in deferred tax
assets on the balance sheet and a corresponding income tax benefit on
the income statement, of $38.6 million. Excluding this valuation
allowance reversal, the effective tax rate would have been 24.2%.
o The fiscal 2006 fourth quarter includes $0.6 million of after-tax
expenses ($0.9 million pre-tax) related to debt refinancing activities
during the period. On a going forward basis, the refinancing
activities will save the Company $0.7 million of annual pre-tax
interest expense.
o As a result of the November 2005 equity offering and additional
options that were in the money during the quarter, there were 3.8
million, or 25.5%, additional diluted shares outstanding in the fiscal
2006 fourth quarter compared with the prior year's fourth quarter.
o The fiscal 2005 fourth quarter included a $1.1 million one-time,
non-cash after-tax charge ($2.0 million pre-tax) related to an
increase to the pension reserve for the Company's German operations.
The charge was included in cost of products sold ($0.7 million),
selling expense ($0.3 million) and general and administrative expense
($1.0 million).
o Also included in the fiscal 2005 fourth quarter net income was a $3.9
million after-tax gain (equivalent to $3.9 million pre-tax due to the
impact of the valuation allowance against deferred tax assets) from
the sale of underutilized real estate.
Excluding the above unusual items, net income for the fiscal 2006 and 2005
fourth quarters would have been $9.7 million and $5.5 million, respectively,
representing 76.4% improvement. Applying that net income for both periods to the
18.9 million diluted shares currently outstanding would result in $0.52 and
$0.29 pro forma net income per share for the fiscal 2006 and 2005 fourth
quarters, respectively, or 79.3% improvement.
Gross margin in the fourth quarter of fiscal 2006 increased to 27.9%, primarily
due to improved operational leverage on increased sales volume. The gross margin
compares with 23.9% and 26.2% in the prior year fourth quarter and the third
quarter of fiscal 2006, respectively. Selling, general and administrative
expenses were $22.8 million, or 15.5% of revenues, in the fiscal 2006 fourth
quarter, compared with $23.8 million, or 16.5% of revenues a year ago. External
costs for Sarbanes-Oxley Section 404 compliance were $0.5 million lower than
last year's fourth quarter. As noted above, last year's fourth quarter included
a $1.3 million charge in these categories for the Company's German operations'
pension reserve.
During the fiscal 2006 fourth quarter, the Company incurred $1.3 million in
restructuring costs as a result of exiting a non-profitable product line and for
environmental charges at an inactive facility.
2
As a result of reduced debt levels, interest and debt expense for the fourth
quarter of fiscal 2006 was down $1.5 million to $5.1 million from $6.6 million
in the fiscal 2005 fourth quarter.
Working capital, excluding cash and funded debt, as a percent of full-year
revenue was 17.4% at the end of this fiscal year, improved from 20.2% and 22.0%
at the end of fiscal years 2005 and 2004, respectively. Cash from operations and
from refinancing activities was used to reduce funded debt by $61.2 million
during fiscal 2006, to $209.8 million at March 31, 2006, resulting in a year-end
funded debt to total capitalization ratio of 50.6%. Debt net of cash was reduced
$97.3 million for the year to $164.2 million at March 31, 2006, representing a
net debt to total capitalization ratio of 44.5% compared with 76.2% and 81.8% at
March 31, 2005 and 2004, respectively. Subsequent to March 31, 2006, the Company
applied available cash and further reduced funded debt by $32.1 million, to
$177.7 million.
The Company's availability on its line of credit with its bank group at March
31, 2006 was approximately $64.8 million. As previously announced, on March 16,
2006, the Company amended its credit facility and expanded its borrowing
availability from $65 million to $75 million, with the ability to further expand
its borrowing availability to $125 million. The new facility improves the
Company's capital structure, reduces its cost of capital and provides financial
flexibility to execute its strategic growth plans.
Capital expenditures for fiscal 2006 were $8.4 million compared with $5.9
million in 2005. Higher capital expenditures were the result of new product
development and productivity-enhancing equipment along with normal maintenance
items.
PRODUCTS SEGMENT
- ----------------
Products segment sales for the fiscal 2006 fourth quarter represented 89.4% of
our consolidated net sales. The segment realized a favorable benefit of $1.9
million, or 1.5%, due to higher pricing and was negatively impacted by $0.3
million due to currency translation, when compared with the fiscal 2005 quarter.
Within lower profitability product groups, sales volume was negatively impacted
by a repositioning of pricing practices. In some instances, these strategic
activities resulted in reduced revenues but improved margins.
Fourth quarter fiscal 2006 gross margin for this segment was 29.7%, compared
with 25.7% and 27.3% in last year's fourth quarter and the third quarter of
fiscal 2006, respectively. Income from operations, as a percent of sales, was
12.7% for this period, up from 8.1% and 10.4% in the fiscal 2005 fourth quarter
and fiscal 2006 third quarter, respectively.
For fiscal year 2006, sales for the Products segment were $493.9 million, up
9.0% from the prior year, and represented 88.8% of consolidated sales. Fiscal
2006 international sales for this segment were $151.4 million compared with
$145.1 million in the prior year, representing a 4.3% increase. This segment's
gross and operating margins for fiscal year 2006 were 28.0% and 11.3%,
respectively, improving 220 and 260 basis points over the gross and operating
margins, respectively, for the Products segment in fiscal 2005.
Backlog for the Products segment was $53.6 million at March 31, 2006. Backlog at
the end of the fiscal 2005 fourth quarter and fiscal 2006 third quarter was
$42.3 million and $46.5 million, respectively. The fluctuation was primarily due
to a rapid increase in orders at the end of the March 2006 quarter. Typically,
the time to convert Products segment backlog to sales ranges from a few days to
a few weeks.
SOLUTIONS SEGMENT
- -----------------
Solutions segment sales for the fiscal 2006 fourth quarter represented 10.6% of
consolidated net sales. The segment's revenue reduction included $1.6 million
due to volatility of project timing. This segment's sales are contract-driven
and variations in sales are not uncommon quarter to quarter due to the nature
and timing of projects. Gross margin for the segment was 12.5%, reflecting
3
improvement over the 11.0% reported in the prior year's fourth quarter.
Operating margin in the fiscal 2006 fourth quarter was 0.7%, compared with a
negative 0.2% in the prior year.
For fiscal year 2006, sales for the Solutions segment were $62.1 million, up
0.8% from the prior year and representing 11.2% of consolidated sales. Solutions
segment gross and operating margins for fiscal year 2006 were 15.4% and 3.3%,
respectively. Gross and operating margins in fiscal 2005 were 14.3% and 2.1%,
respectively.
Backlog for the Solutions segment at March 31, 2006 was $13.0 million, up from
backlog of $9.6 million at the end of the fiscal 2005 fourth quarter and $12.8
million at the end of the fiscal 2006 third quarter. For this segment, the cycle
time for backlog to convert to sales can range from one to six months, on
average.
FISCAL 2006 REVIEW
- ------------------
Sales for fiscal 2006 were $556.0 million, up $41.3 million, or 8.0%, over the
prior year. Net income for fiscal 2006 of $59.8 million, or $3.60 per diluted
share, was significantly greater than net income of $16.7 million, or $1.13 per
diluted share, for the previous fiscal year. Similar to the quarterly
comparison, the annual comparison was affected by the following unusual items:
o Excluding the $38.6 million deferred tax asset valuation allowance
reversal which was recorded in the fiscal 2006 fourth quarter and
described above, the effective tax rate would have been 27.3% for
fiscal 2006.
o Fiscal 2006 includes $5.5 million of after-tax expenses ($9.2 million
pre-tax) related to debt refinancing activities. On a going forward
basis, the refinancing activities will save the Company $4.8 million
of pre-tax annual interest expense.
o As a result of the November 2005 equity offering and additional
options that were in the money during the year, there were 1.8
million, or 12.3%, additional diluted shares outstanding in fiscal
2006 compared with the prior year.
o Fiscal 2005 was impacted by a $1.1 million after-tax charge ($2.0
million pre-tax) relating to the pension reserve for the Company's
German operations, which was recorded in the fiscal 2005 fourth
quarter and described previously.
o Also included in fiscal 2005 net income was a $3.9 million after-tax
gain ($3.9 million pre-tax) from the sale of underutilized real
estate, which was recorded in the fiscal 2005 fourth quarter and
described above.
Excluding the above unusual items, net income for fiscal 2006 and 2005 would
have been $26.7 million and $13.9 million, respectively, representing 92.1%
improvement. Applying that net income for both periods to the 16.6 million
average diluted shares outstanding for fiscal 2006, would result in $1.60 and
$0.84 pro forma net income per share for fiscal 2006 and 2005, respectively, or
90.5% improvement.
Gross margin for 2006 was 26.6%, a 210 basis point improvement over 2005, while
income from operations was $57.9 million, up $17.2 million. Selling, general &
administrative expense was $87.9 million, or 15.8% of consolidated fiscal 2006
sales, compared with $84.0 million, or 16.3% of consolidated fiscal 2005 sales.
In fiscal 2006, higher costs for compensation and new market penetration were
partially offset by a $0.9 million, or 68.0%, reduction in external costs for
Sarbanes-Oxley Act Section 404 compliance. Income from operations improved to
$57.9 million, or 10.4% of sales, in fiscal 2006 from $40.7 million, or 7.9% of
fiscal 2005 sales and $29.9 million, or 6.7% of fiscal 2004 sales. The 250 basis
point improvement in income from operations as a percent of sales in fiscal 2006
was primarily the result of operational leverage on higher volume combined with
continued improvement in efficiencies. Adding back the fiscal 2005 German
4
pension charge to the fiscal 2005 operating income, would have resulted in
operating income of $42.7 million, or 8.3% of revenues for fiscal 2005.
Interest and debt expense declined $3.0 million to $24.7 million on lower debt
levels.
In addition to the $9.2 million of refinancing costs described above, fiscal
2006 other (income) and expense included $2.0 investment income from the
Company's insurance subsidiary (CMIC) through which it provides products
liability self insurance, $0.8 million gain on sale of underutilized real estate
and $0.7 million income from excess cash investments. The prior year's other
(income) and expense included net gains on sales of underutilized real estate of
$3.7 million and $1.2 million of investment income from CMIC assets.
At March 31, 2006, the Company had U.S federal net operating loss carryforwards
of $83.1 million to be utilized against future U.S. taxable income. Going
forward, the Company will record a normal tax provision between 38% and 39%
including non-cash income tax expense related to U.S.-generated taxable income
which will result in cash flow continuing to benefit from utilization of the
remaining U.S. federal net operating loss carryforwards.
On April 1, 2006, the Company adopted FASB Statement No. 123R Share-based
Payment (SFAS 123R) and beginning in the fiscal 2007 first quarter will record
compensation expense associated with stock options in its financial results. The
Company estimates the pre-tax compensation expense related to issued and
outstanding stock options will approximate $1.1 million in fiscal year 2007
which began on April 1, 2006.
OUTLOOK
- -------
Mr. Tevens commented, "We continue to be encouraged by the strength we see in
industrial economies around the world. We believe that our Products segment
sales should continue to achieve mid- to high-single digit growth in fiscal
2007. Further, when we achieve $600 million in revenues, we anticipate annual
operating margins in the 11%-12% range. New product introductions and expansion
of our international distribution channels will be continued areas of focus for
us to further accelerate top line growth. Additionally, we will continue to
focus on making further improvements in working capital utilization. Regarding
capital expenditures, we'll continue to invest in our new product development
activities, our growing low-cost international facilities, productivity
improvement and normal maintenance. We expect capital expenditures to be in the
$8-$10 million range for fiscal 2007. Our strategic objectives remain to:
o Increase our domestic organic sales growth by introducing new products
and maximizing market coverage,
o Increase our global sales and market share by expanding our presence
in emerging and existing international industrial markets,
o Increase our profitability through lean manufacturing and facility
rationalization while increasing effective capacity on a reduced
manufacturing footprint,
o Pay down debt to reduce interest expense and enhance our strategic
flexibility, and
o Pursue strategic acquisitions and alliances."
5
TELECONFERENCE/WEBCAST
- ----------------------
A teleconference and webcast have been scheduled for May 30, 2006 at 10:00 AM
Eastern Time at which the management of Columbus McKinnon will discuss the
Company's financial results and strategy. Interested parties in the United
States and Canada can participate in the teleconference by dialing
1-888-459-1579, and asking to be placed in the "Columbus McKinnon Quarterly
Conference Call" and providing the password "Columbus McKinnon" and identifying
conference leader, "Tim Tevens" when asked. The toll number for parties outside
the United States and Canada is +1-210-234-7695.
The webcast will be accessible at Columbus McKinnon's web site:
http://www.cmworks.com.
An audio recording of the call will be available two hours after its completion
and until July 21, 2006 by dialing 1-866-363-4002. Alternatively, you may access
an archive of the call until July 21, 2006 on Columbus McKinnon's web site at:
HTTP://WWW.CMWORKS.COM/INVREL/PRESENTATION.ASP.
- ----------------------------------------------
ABOUT COLUMBUS MCKINNON
- -----------------------
Columbus McKinnon is a leading worldwide designer, manufacturer and marketer 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.
- ----------------------
SAFE HARBOR STATEMENT
- ---------------------
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 LIKELIHOOD THAT THE COMPANY CAN
ACHIEVE ITS EXPECTED LEVELS OF SALES, THE PACE OF BOOKINGS RELATIVE TO
SHIPMENTS, 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.
6
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
THREE MONTHS ENDED
------------------
MARCH 31, 2006 MARCH 31, 2005 CHANGE
-------------- -------------- ------
NET SALES $ 147,096 $ 144,470 1.8%
Cost of products sold 106,106 109,955 -3.5%
-------------------------------
Gross profit 40,990 34,515 18.8%
Gross profit margin 27.9 % 23.9 %
Selling expense 14,236 13,965 1.9%
General and administrative expense 8,534 9,810 -13.0%
Restructuring charges 1,289 502 156.8%
Amortization 65 81 -19.8%
-------------------------------
INCOME FROM OPERATIONS 16,866 10,157 66.1%
-------------------------------
Interest and debt expense 5,050 6,594 -23.4%
Gain on sale of real estate - (3,928) N/A
Other (204) 54 -477.8%
-------------------------------
Income from continuing operations before
income tax expense 12,020 7,437 61.6%
Income tax expense (35,725) (697) 5025.5%
-------------------------------
Income from continuing operations 47,745 8,134 487.0%
Income from discontinued operations 53 215 -75.3%
-------------------------------
NET INCOME $ 47,798 $ 8,349 472.5%
===============================
Average basic shares outstanding 18,174 14,623 24.3%
Basic income per share:
Continuing operations $ 2.63 $ 0.56 369.6%
Discontinued operations 0.00 0.01
-------------------------------
Net Income $ 2.63 $ 0.57 361.4%
===============================
Average diluted shares outstanding 18,865 15,026 25.5%
Diluted income per share:
Continuing operations $ 2.53 $ 0.55 360.0%
Discontinued operations 0.00 0.01
-------------------------------
Net Income $ 2.53 $ 0.56 351.8%
===============================
7
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
YEAR ENDED
----------
MARCH 31, 2006 MARCH 31, 2005 CHANGE
-------------- -------------- ------
NET SALES $ 556,007 $ 514,752 8.0%
Cost of products sold 408,385 388,844 5.0%
-------------------------------
Gross profit 147,622 125,908 17.2%
Gross profit margin 26.6 % 24.5 %
Selling expense 54,255 52,291 3.8%
General and administrative expense 33,640 31,730 6.0%
Restructuring charges 1,609 910 76.8%
Amortization 249 312 -20.2%
-------------------------------
INCOME FROM OPERATIONS 57,869 40,665 42.3%
-------------------------------
Interest and debt expense 24,667 27,620 -10.7%
Gain on sale of real estate - (3,928) N/A
Other 5,048 (1,290) 291.3%
-------------------------------
Income from continuing operations before
income tax expense 28,154 18,263 54.2%
Income tax expense (30,946) 2,196 -1509.2%
-------------------------------
Income from continuing operations 59,100 16,067 267.8%
Income from discontinued operations 696 643 8.2%
-------------------------------
NET INCOME $ 59,796 $ 16,710 257.8%
===============================
Average basic shares outstanding 16,052 14,594 10.0%
Basic income per share:
Continuing operations $ 3.69 $ 1.10 235.5%
Discontinued operations 0.04 0.04
-------------------------------
Net Income $ 3.73 $ 1.14 227.2%
===============================
Average diluted shares outstanding 16,628 14,803 12.3%
Diluted income per share:
Continuing operations $ 3.56 $ 1.09 226.6%
Discontinued operations 0.04 0.04
-------------------------------
Net Income $ 3.60 $ 1.13 218.6%
===============================
8
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 31, 2006 MARCH 31, 2005
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 45,598 $ 9,479
Trade accounts receivable 95,726 88,974
Unbilled revenues 12,061 8,848
Inventories 74,845 77,626
Prepaid expenses 15,676 14,198
-------------------------------
Total current assets 243,906 199,125
-------------------------------
Net property, plant, and equipment 55,132 57,237
Goodwill and other intangibles, net 187,327 187,285
Marketable securities 27,596 24,615
Deferred taxes on income 46,065 6,122
Other assets 6,018 6,487
-------------------------------
TOTAL ASSETS $ 566,044 $ 480,871
===============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 5,798 $ 4,839
Trade accounts payable 39,311 33,688
Accrued liabilities 61,264 52,328
Restructuring reserve 793 144
Current portion of long-term debt 127 5,819
------------------------------
Total current liabilities 107,293 96,818
-------------------------------
Senior debt, less current portion 67,841 115,735
Subordinated debt 136,000 144,548
Other non-current liabilities 50,489 42,003
-------------------------------
Total liabilities 361,623 399,104
-------------------------------
Shareholders' equity:
Common stock 185 149
Additional paid-in capital 170,081 104,078
Retained earnings (Accumulated deficit) 51,152 (8,644)
ESOP debt guarantee (3,996) (4,554)
Unearned restricted stock (22) (6)
Accumulated other comprehensive loss (12,979) (9,256)
--------------------------------
Total shareholders' equity 204,421 81,767
--------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 566,044 $ 480,871
================================
9
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
YEAR ENDED
----------
MARCH 31, 2006 MARCH 31, 2005
-------------- --------------
OPERATING ACTIVITIES:
Income from continuing operations $ 59,100 $ 16,067
Adjustments to reconcile income from continuing
operations to net cash providedby operating activities:
Depreciation and amortization 8,824 9,171
Deferred income taxes (36,968) (971)
Gain on sale of investments/real estate (2,100) (4,632)
Loss on Divestitures 87 330
Benefit from stock options 2,154 -
Loss on early retirement of bonds 7,083 40
Amortization/Write-off of deferred financing costs 3,297 1,575
Changes in operating assets and liabilities:
Trade accounts receivable (7,102) (3,563)
Unbilled revenues and excess billings (3,923) (3,333)
Inventories 2,518 (6,834)
Prepaid expenses (2,026) 1,796
Other assets 207 10
Trade accounts payable 6,099 3,192
Accrued and non-current liabilities 11,267 4,313
-------------------------------
Net cash provided by operating activities 48,517 17,161
-------------------------------
INVESTING ACTIVITIES:
(Purchase) sale of marketable securities, net (888) 1,314
Capital expenditures (8,430) (5,925)
Proceeds from sale of PPE 2,091 6,742
Proceeds from net assets held for sale - 375
Proceeds from discontinued operations note
receivable - revised 857 643
-------------------------------
Net cash (used) provided by investing activities (6,370) 3,149
-------------------------------
FINANCING ACTIVITIES:
Proceeds from stock offering 56,619 -
Proceeds from stock options exercised 7,149 428
Net borrowings under revolving line-of-credit
agreements 1,361 (219)
Repayment of debt (205,167) (22,649)
Proceeds from issuance of long-term debt 136,000 -
Deferred financing costs incurred (2,877) (24)
Other 558 562
-------------------------------
Net cash used by financing activities (6,357) (21,902)
-------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 329 (30)
-------------------------------
Net change in cash and cash equivalents 36,119 (1,622)
Cash and cash equivalents at beginning of year 9,479 11,101
-------------------------------
Cash and cash equivalents at end of period $ 45,598 $ 9,479
===============================
10
COLUMBUS MCKINNON CORPORATION
BUSINESS SEGMENT DATA
($ IN THOUSANDS)
QUARTER ENDED QUARTER ENDED
MARCH 31, 2006 MARCH 31, 2005 % CHANGE
-------------------- -------------------- ----------
PRODUCTS
Net sales $ 131,491 $ 126,258 4.1%
Gross profit 39,037 32,505 20.1%
MARGIN 29.7 % 25.7 %
Income from operations 16,760 10,197 64.4%
MARGIN 12.7 % 8.1 %
SOLUTIONS
Net sales $ 15,605 $ 18,212 -14.3%
Gross profit 1,953 2,010 -2.8%
MARGIN 12.5 % 11.0 %
Income from operations 106 (40) 365.0%
MARGIN 0.7 % (0.2)%
CONSOLIDATED
Net sales $ 147,096 $ 144,470 1.8%
Gross profit 40,990 34,515 18.8%
MARGIN 27.9 % 23.9 %
Income from operations 16,866 10,157 66.1%
MARGIN 11.5 % 7.0 %
YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 % CHANGE
-------------------- -------------------- ----------
PRODUCTS
Net sales $ 493,896 $ 453,105 9.0%
Gross profit 138,064 117,088 17.9%
MARGIN 28.0 % 25.8 %
Income from operations 55,849 39,392 41.8%
MARGIN 11.3 % 8.7 %
SOLUTIONS
Net sales $ 62,111 $ 61,647 0.8%
Gross profit 9,558 8,820 8.4%
MARGIN 15.4 % 14.3 %
Income from operations 2,020 1,273 58.7%
MARGIN 3.3 % 2.1 %
CONSOLIDATED
Net sales $ 556,007 $ 514,752 8.0%
Gross profit 147,622 125,908 17.2%
MARGIN 26.6 % 24.5 %
Income from operations 57,869 40,665 42.3%
MARGIN 10.4 % 7.9 %
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COLUMBUS MCKINNON CORPORATION
ADDITIONAL DATA
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2004
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BACKLOG (IN MILLIONS)
Products segment $ 53.6 $ 42.3 $ 45.3
Solutions segment $ 13.0 $ 9.6 $ 9.2
TRADE ACCOUNTS RECEIVABLE
days sales outstanding 59.2 days 56.0 days 62.9 days
INVENTORY TURNS PER YEAR
(based on cost of products sold) 5.7 turns 5.7 turns 5.3 turns
DAYS' INVENTORY 64.4 days 64.4 days 69.0 days
TRADE ACCOUNTS PAYABLE
days payables outstanding 33.7 days 27.9 days 29.6 days
WORKING CAPITAL AS A % OF SALES 17.4 % 20.1 % 22.0 %
DEBT TO TOTAL CAPITALIZATION PERCENTAGE 50.6 % 76.8 % 82.3 %
NET DEBT TO TOTAL CAPITALIZATION PERCENTAGE 44.5 % 76.2 % 81.8 %
SHIPPING DAYS BY QUARTER
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
FY07 63 63 59 64 249
FY06 65 63 58 65 251
FY05 65 63 58 63 249
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