NEWS RELEASE
CONTACT:
Karen L. Howard
Vice President-Finance and Chief Financial Officer
Columbus McKinnon Corporation
Phone: 716-689-5550
karen.howard@cmworks.com
COLUMBUS MCKINNON REPORTS 13.6% INCREASE IN OPERATING INCOME
ON 6.5% INCREASE IN SALES FOR THIRD QUARTER FISCAL 2007
o NET INCOME OF $9.1 MILLION, OR $0.48 PER DILUTED SHARE IN QUARTER
o PRO FORMA NET INCOME OF $7.1 MILLION IN QUARTER, OR $0.38 PER DILUTED
SHARE, INCREASED 47.0% FROM FISCAL 2006 THIRD QUARTER PRO FORMA NET
INCOME
o PRODUCTS SEGMENT OPERATING INCOME UP 31.6% ON 7.6% INCREASE IN SALES
o INTEREST EXPENSE DOWN 35.6%, OR $2.2 MILLION ON REDUCED, HIGHER COST
BORROWINGS
o DEBT, NET OF CASH, REDUCED $10.8 MILLION IN QUARTER TO 37.7% OF TOTAL
CAPITALIZATION COMPARED WITH 44.5% AT MARCH 31, 2006
AMHERST, N.Y., January 23, 2007 - Columbus McKinnon Corporation (NASDAQ: CMCO),
a leading designer, manufacturer and marketer of material handling products,
today announced financial results for its fiscal 2007 third quarter that ended
on December 31, 2006. For the quarter, net sales were $142.0 million, up 6.5%
from last year's third quarter reflecting continued strong demand for most
products and an additional shipping day.
Net income for the fiscal 2007 third quarter was $9.1 million compared with net
income of $1.4 million in the same quarter last year. Net income per share for
the fiscal 2007 third quarter was $0.48 on 19.0 million average diluted shares.
Net income per share for the fiscal 2006 third quarter was $0.08 per share on
17.3 million average diluted shares. Favorable results in the Company's Products
segment (89.3% of consolidated net sales) were partially offset by unfavorable
mix and pricing pressure within the Solutions segment (10.7% of consolidated net
sales).
Included in this quarter's results was income of $3.8 million primarily from the
sale of marketable securities in the Company's self-insurance entity due to
asset reallocation, compared with $0.4 million of investment income realized in
last year's quarter. Also included in last year's third quarter were $5.0
million in charges associated with the partial redemption of 10% Senior Secured
Notes due 2010. Excluding these tax-affected unusual items from the 2007 and
2006 third quarters and applying a normalized effective tax rate of 39.0% to
fiscal 2006, pro forma net income for the fiscal 2007 third quarter was $7.1
million, or $0.38 per diluted share, a 47.9% increase from pro forma net income
for the fiscal 2006 third quarter of $4.9 million, or $0.28 per diluted share.
(See reconciliation between GAAP net income and non-GAAP pro forma net income
included in the final table of this news release).
Timothy T. Tevens, Columbus McKinnon's President and Chief Executive Officer,
commented, "Overall, we are pleased with this quarter's results as the strength
of our Products segment and further debt reduction enabled us to achieve
continued improvement in sales and profitability despite disappointing results
from our Solutions business. The Products segment continues to see mid-to-high
single digit sales growth and improving margins. Within this segment, we are
especially pleased with the 33% growth in sales in our Columbus McKinnon Europe
operations. To support current and future sales growth, we continue to
strategically increase our domestic and international sales and marketing
efforts and resources as well as new product development investments around the
globe. Accordingly, our outlook for our Products segment remains positive on a
global basis. Further, we still have room for improvement by continuing to
decrease our working capital requirements as a percent of sales, by shortening
the leadtime in the order-to-delivery cycle in our Products segment and by
stepping up the pace of our new product introductions."
He continued, "We are not pleased with the recent performance of the Univeyor
conveyor systems business within our Solutions segment and are accelerating the
migration of its business model to be more products-oriented with more
consistent order flow, higher margins and stronger operating capabilities. We
have begun to evaluate strategic alternatives for this business."
THIRD QUARTER FISCAL 2007 REVIEW
On a sequential basis, third quarter fiscal 2007 net sales declined by $2.2
million from the second quarter of fiscal 2007, reflecting normal seasonality of
the third quarter, including four fewer shipping days, offset by continued
growth in demand for material handling products.
Gross margin improved 100 basis points to 27.2% for the quarter compared with
26.2% in the third quarter of fiscal 2006, resulting in a 10.6% increase in
gross profit on the 6.5% increase in sales. Income from operations grew 13.6%,
or $1.8 million, to $14.9 million for the fiscal 2007 third quarter compared
with the year ago quarter. Driving margin expansion was continued improvement in
operational processes through lean manufacturing and higher sales, partially
offset by operating losses in the Solutions segment. As a percent of sales,
operating income produced a 10.5% margin in the fiscal 2007 quarter compared
with 9.8% in the same period last year, amounting to $0.20 of operating income
for each incremental sales dollar over the prior year quarter. An increase in
selling expenses of $1.7 million, or 12.9%, reflects continued strategic
investments in sales and marketing activities. General and administrative
expenses were up $0.2 million, or 2.1%, when compared with the prior year's
third quarter.
Lower debt levels, especially higher cost debt, resulted in a $2.2 million, or
35.6%, decrease in interest expense this quarter compared to the prior year's
quarter. Also, investment income for the fiscal 2007 third quarter reflects a
gain of $3.8 million in the quarter primarily as a result of the Company's
self-insurance entity, CM Insurance Company ("CMIC"), liquidating marketable
securities in the process of asset reallocation. The third quarter of fiscal
2006 had $0.4 million in investment income from CMIC.
Debt, net of cash at December 31, 2006, was $141.1 million, or 37.7% net debt to
total capitalization compared with 44.5% at the end of the prior fiscal year. At
the end of the quarter, funded debt was $173.2 million, or 42.7% of total
capitalization, compared with $209.8 million at the end of fiscal 2006, or 50.6%
of total capitalization. During the fiscal 2007 third quarter, the Company
purchased $3.7 million of its 10% notes, leaving $25.1 million outstanding.
CMCO's availability on its line of credit with its bank group at December 31,
2006 was $64.3 million. The Company's financial strategy is to attain a
conservative capital structure with the flexibility to support its growth
strategies, regardless of the point in the economic cycle. Its long-term goal
for its debt to total capitalization ratio is 30.0%.
Capital expenditures for the third quarter of fiscal 2007 were $2.5 million
compared with $1.0 million for the same period in fiscal 2006. Capital spending
continues to be focused on new product development and the purchase of
productivity-enhancing equipment along with normal maintenance items. The
Company anticipates capital spending to be in the $10 million area for the full
fiscal year of 2007.
CMCO continues to realize the cash flow benefits of its U.S. net operating loss
(NOL) carryforward, of which $48.4 million, representing approximately $16.9
million of cash tax savings, remained available at the end of the fiscal 2007
third quarter.
PRODUCTS SEGMENT
- ----------------
Products segment net sales of $126.9 million for the third quarter of fiscal
2007 increased $9.0 million, or 7.6%, when compared with the third quarter of
fiscal 2006. Variances between quarters are summarized as follows, in millions:
Volume $3.7 3.1%
Number of shipping days 2.0 1.7%
Price 2.0 1.7%
Foreign currency translation 1.3 1.1%
---- ----
Total $9.0 7.6%
==== ====
Gross margin for this segment was 29.7% compared with 27.3% in last year's third
quarter. Income from operations, as a percent of sales, was 12.7% for this
period, up from 10.4% in the fiscal 2006 third quarter, with operating leverage
being 43.0% in the quarter.
Backlog was at $54.7 million at the end of the quarter. Backlog at the end of
the fiscal 2006 third quarter and fiscal 2007 second quarter was $46.5 million
and $54.9 million, respectively. The higher backlog compared with the prior year
period reflects the growth of orders in specific product lines. The time to
convert the majority of Products segment backlog to sales averages from a few
days to a few weeks, and backlog for this segment on average normally represents
four to five weeks of shipments. The backlog at third quarter end represented
approximately five and one-half weeks in shipments.
SOLUTIONS SEGMENT
- -----------------
Net sales for the Solutions segment were $15.2 million in the fiscal 2007 third
quarter, down 1.9% from sales of $15.5 million in the same period last year.
Gross margin was 6.4% compared with 18.0% last year. Income from operations as a
percent of sales was a negative (8.2%) for this period compared with 5.5% in the
fiscal 2006 third quarter. This year's third quarter was affected by the weak
performance of the Company's European powered-roller conveyor business,
Univeyor. Univeyor represents approximately 62% of the sales of this segment
which overall contributes approximately 11% to consolidated net sales.
Performance on a few specific projects, a challenging pricing environment and
unfavorable sales mix contributed to Univeyor's results in the quarter.
Restructuring activities began in the third quarter which will continue in the
fourth quarter and into fiscal 2008 to change Univeyor's business model,
increasing its focus on offering products as packaged solutions rather than
engineered-to-order, to reduce volatility and improve the return on invested
capital. During the fiscal 2007 third quarter, $0.1 million of restructuring
charges were recorded for these activities and approximately $0.3 million to
$0.4 million of additional charges are anticipated in the fiscal 2007 fourth
quarter.
Quoting activity for the Solutions segment continues to be strong, and backlog
was up $4.8 million sequentially, or 111%, over the end of the second quarter of
this fiscal year. Backlog at December 31, 2006, was $9.2 million, down from
backlog of $12.8 million at the end of the fiscal 2006 third quarter. For this
segment, the average cycle time for backlog to convert to sales ranges from one
to six months.
NINE-MONTH FISCAL 2007 REVIEW
Net sales for the first nine months of fiscal 2007 were $433.0 million, up 5.9%,
or $24.1 million compared with the first nine months of fiscal 2006. Gross
profit of $119.9 million was 12.5% higher for this fiscal year's first nine
months resulting in a 160 basis point improvement in gross profit margin to
27.7%. Selling, general and administrative (SG&A) expenses were $71.3 million in
the fiscal 2007 nine-months compared with $65.1 million in the prior fiscal
year. As a percent of sales, SG&A was 16.5% and 15.9% for the fiscal 2007 and
2006 nine-month periods, respectively. As previously noted, the increase was
primarily due to investments made to support CMCO's strategic growth
initiatives. Interest expense in the nine-months of fiscal 2007 was down $6.9
million, or 35.1%, to $12.7 million reflecting the $35 million year-over-year
reduction in average funded debt outstanding.
Operating margin for the nine-months of fiscal 2007 was 11.3% compared with
10.0% for the nine-months of fiscal 2006, representing 32.3% operating leverage.
Net income for the first nine months of fiscal 2007 was $23.0 million, or $1.22
per diluted share compared with $12.0 million, or $0.75 per diluted share in the
fiscal 2006 nine months. For the first nine months of fiscal 2007, net income
grew by 91.8% while diluted earnings per share increased 62.7%. The differential
results from higher weighted average shares outstanding in fiscal 2007.
Excluding tax-affected unusual items in both nine-month periods, and normalizing
the fiscal 2006 effective tax rate results in pro forma net income of $24.8
million, or $1.31 per diluted share for the first nine months of fiscal 2007, a
59.0% increase from pro forma net income of $15.6 million, or $0.98 per diluted
share for the same period in fiscal 2006. (See reconciliation between GAAP net
income and non-GAAP pro forma net income included in the final table of this
news release).
Net cash provided by operations was $27.2 million for the fiscal 2007 nine-month
period compared with $38.5 million in the fiscal 2006 nine-month period. Higher
working capital requirements affected cash generation but are expected to
improve in the fiscal 2007 fourth quarter.
SUMMARY
Mr. Tevens noted, "We are encouraged by solid order growth in the mid-single
digit range over a very strong level of growth last year. Bookings for the third
quarter were up 5% over last year's third quarter. We believe we can continue to
improve our margins and cash flows by improving order-to-delivery cycle time and
strengthening working capital management.
Our strategy for continued growth is to leverage our market leadership in North
America and to expand and deepen our reach into Europe, Asia and Latin America,
including the growth opportunities presented by the emerging economies of those
regions. We intend to achieve this through:
o Product innovation,
o Speed to market,
o Expanded sales channels,
o Enhanced marketing, and
o Acquisitions of small, bolt-on businesses that provide value-added
geographic and product line extensions and expand our penetration in
higher growth U.S. markets such as construction and energy.
Overall, the fiscal 2007 fourth quarter sales are expected to reflect the trend
we have realized during the first nine months of this fiscal year and we
anticipate maintaining a full year operating margin in our goal range of
11%-12%."
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.
- ----------------------
TELECONFERENCE AND WEBCAST
A teleconference and webcast have been scheduled for January 23, 2007 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 March 23, 2007 by dialing 1-866-433-1147. Alternatively, you may
access an archive of the call until March 23, 2007 on Columbus McKinnon's web
site at: http://www.cmworks.com/invrel/presentation.asp.
----------------------------------------------
SAFE HARBOR STATEMENT
THIS NEWS 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 EFFECT OF OPERATING LEVERAGE, THE
PACE OF BOOKINGS RELATIVE TO SHIPMENTS, THE ABILITY TO EXPAND INTO NEW MARKETS
AND GEOGRAPHIC REGIONS, THE SUCCESS IN ACQUIRING NEW BUSINESS, THE SPEED AT
WHICH SHIPMENTS IMPROVE, 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.
TABLES FOLLOW.
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
THREE MONTHS ENDED
------------------
DECEMBER 31, 2006 JANUARY 1, 2006 CHANGE
----------------- --------------- ------
NET SALES $ 142,044 $ 133,322 6.5%
Cost of products sold 103,421 98,391 5.1%
------------------------------------
Gross profit 38,623 34,931 10.6%
Gross profit margin 27.2 % 26.2 %
Selling expense 14,989 13,281 12.9%
General and administrative expense 8,566 8,392 2.1%
Restructuring charges 128 83 54.2%
Amortization 44 61 -27.9%
------------------------------------
INCOME FROM OPERATIONS 14,896 13,114 13.6%
------------------------------------
Interest and debt expense 4,034 6,268 -35.6%
Cost of bond redemptions 359 4,950 -92.7%
Investment income (3,774) (364) 936.8%
Other income (151) (409) -63.1%
------------------------------------
Income from continuing operations before income tax
expense 14,428 2,669 440.6%
Income tax expense 5,510 1,471 274.6%
------------------------------------
Income from continuing operations 8,918 1,198 644.4%
Income from discontinued operations 208 215 -3.3%
------------------------------------
NET INCOME $ 9,126 $ 1,413 545.9%
====================================
Average basic shares outstanding 18,544 16,611 11.6%
Basic income per share:
Continuing operations $ 0.48 $ 0.08 500.0%
Discontinued operations 0.01 0.01
------------------------------------
Net income $ 0.49 $ 0.09 444.4%
====================================
Average diluted shares outstanding 18,954 17,287 9.6%
Diluted income per share:
Continuing operations $ 0.47 $ 0.07 571.4%
Discontinued operations 0.01 0.01
------------------------------------
Net income $ 0.48 $ 0.08 500.0%
====================================
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
NINE MONTHS ENDED
-----------------
DECEMBER 31, 2006 JANUARY 1, 2006 CHANGE
----------------- --------------- ------
NET SALES $ 432,963 $ 408,911 5.9%
Cost of products sold 313,040 302,279 3.6%
------------------------------------
Gross profit 119,923 106,632 12.5%
Gross profit margin 27.7 % 26.1 %
Selling expense 45,095 40,019 12.7%
General and administrative expense 26,195 25,106 4.3%
Restructuring charges (278) 320 -186.9%
Amortization 131 184 -28.8%
------------------------------------
INCOME FROM OPERATIONS 48,780 41,003 19.0%
------------------------------------
Interest and debt expense 12,722 19,617 -35.1%
Cost of bond redemptions 4,942 8,279 -40.3%
Investment income (4,560) (1,629) 179.9%
Other income (1,444) (1,398) 3.3%
------------------------------------
Income from continuing operations before income tax
expense 37,120 16,134 130.1%
Income tax expense 14,673 4,779 207.0%
------------------------------------
Income from continuing operations 22,447 11,355 97.7%
Income from discontinued operations 565 643 -12.1%
------------------------------------
NET INCOME $ 23,012 $ 11,998 91.8%
====================================
Average basic shares outstanding 18,491 15,368 20.3%
Basic income per share:
Continuing operations $ 1.21 $ 0.74 63.5%
Discontinued operations 0.03 0.04
------------------------------------
Net income $ 1.24 $ 0.78 59.0%
====================================
Average diluted shares outstanding 18,929 15,906 19.0%
Diluted income per share:
Continuing operations $ 1.19 $ 0.71 67.6%
Discontinued operations 0.03 0.04
------------------------------------
Net income $ 1.22 $ 0.75 62.7%
====================================
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, 2006 MARCH 31, 2006
----------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 32,125 $ 45,598
Trade accounts receivable 91,612 95,726
Unbilled revenues 14,363 12,061
Inventories 86,314 74,845
Prepaid expenses 17,270 15,676
----------------------------------
Total current assets 241,684 243,906
----------------------------------
Net property, plant, and equipment 55,210 55,132
Goodwill and other intangibles, net 188,000 187,327
Marketable securities 27,873 27,596
Deferred taxes on income 33,539 46,065
Other assets 5,283 6,018
----------------------------------
TOTAL ASSETS $ 551,589 $ 566,044
==================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 8,723 $ 5,798
Trade accounts payable 38,329 39,311
Accrued liabilities 57,151 61,264
Restructuring reserve 447 793
Current portion of long-term debt 194 127
----------------------------------
Total current liabilities 104,844 107,293
----------------------------------
Senior debt, less current portion 28,330 67,841
Subordinated debt 136,000 136,000
Other non-current liabilities 49,609 50,489
----------------------------------
Total liabilities 318,783 361,623
----------------------------------
Shareholders' equity:
Common stock 188 185
Additional paid-in capital 173,595 170,081
Retained earnings 74,164 51,152
ESOP debt guarantee (3,558) (3,996)
Unearned restricted stock - (22)
Accumulated other comprehensive loss (11,583) (12,979)
----------------------------------
Total shareholders' equity 232,806 204,421
----------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 551,589 $ 566,044
==================================
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
NINE MONTHS ENDED
-----------------
DECEMBER 31, 2006 JANUARY 1, 2006
----------------- ---------------
OPERATING ACTIVITIES:
Income from continuing operations $ 22,447 $ 11,355
Adjustments to reconcile income from continuing operations to
net cash provided by operating activities:
Depreciation and amortization 6,306 6,809
Deferred income taxes 12,526 1,769
Gain on sale of investments/real estate (4,745) (1,794)
Loss on early retirement of bonds 4,069 6,432
Stock option expense 1,040 -
Amortization/write-off of deferred financing costs 1,385 2,786
Changes in operating assets and liabilities:
Trade accounts receivable 5,365 6,197
Unbilled revenues and excess billings (1,187) (3,539)
Inventories (10,890) 2,139
Prepaid expenses (1,564) 321
Other assets (297) (197)
Trade accounts payable (2,033) 2,141
Accrued and non-current liabilities (5,192) 4,090
--------------------------------------
Net cash provided by operating activities 27,230 38,509
--------------------------------------
INVESTING ACTIVITIES:
Sale of marketable securities, net 2,052 90
Capital expenditures (6,825) (4,738)
Proceeds from sale of property 2,051 2,091
Proceeds from discontinued operations note receivable - revised 565 643
--------------------------------------
Net cash used by investing activities (2,157) (1,914)
--------------------------------------
FINANCING ACTIVITIES:
Proceeds from stock options exercised 2,334 59,944
Net borrowings under revolving line-of-credit agreements - (1,417)
Repayment of debt (41,374) (196,881)
Proceeds from issuance of long-term debt - 136,000
Deferred financing costs incurred (456) (2,357)
Other 438 446
--------------------------------------
Net cash used by financing activities (39,058) (4,265)
--------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 512 (21)
--------------------------------------
Net change in cash and cash equivalents (13,473) 32,309
Cash and cash equivalents at beginning of year 45,598 9,479
--------------------------------------
Cash and cash equivalents at end of period $ 32,125 $ 41,788
======================================
COLUMBUS MCKINNON CORPORATION
BUSINESS SEGMENT DATA
(IN THOUSANDS, EXCEPT PERCENTAGE DATA)
QUARTER ENDED QUARTER ENDED
DECEMBER 31, 2006 JANUARY 1, 2006 % CHANGE
----------------- ----------------- --------
PRODUCTS
- --------
Net sales $126,863 $117,850 7.6%
Gross profit 37,654 32,142 17.1%
MARGIN 29.7 % 27.3 %
Income from operations 16,143 12,269 31.6%
MARGIN 12.7 % 10.4 %
SOLUTIONS
- ---------
Net sales $ 15,181 $ 15,472 -1.9%
Gross profit 969 2,789 -65.3%
MARGIN 6.4 % 18.0 %
Income from operations (1,247) 845 -247.6%
MARGIN (8.2)% 5.5 %
CONSOLIDATED
- ------------
Net sales $142,044 $133,322 6.5%
Gross profit 38,623 34,931 10.6%
MARGIN 27.2 % 26.2 %
Income from operations 14,896 13,114 13.6%
MARGIN 10.5 % 9.8 %
NINE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, 2006 JANUARY 1, 2006 % CHANGE
----------------- ----------------- --------
PRODUCTS
- --------
Net sales $384,039 $362,405 6.0%
Gross profit 114,967 99,027 16.1%
MARGIN 29.9 % 27.3 %
Income from operations 49,991 39,089 27.9%
MARGIN 13.0 % 10.8 %
SOLUTIONS
- ---------
Net sales $ 48,924 $ 46,506 5.2%
Gross profit 4,956 7,605 -34.8%
MARGIN 10.1 % 16.4 %
Income from operations (1,211) 1,914 -163.3%
MARGIN (2.5)% 4.1 %
CONSOLIDATED
- ------------
Net sales $432,963 $408,911 5.9%
Gross profit 119,923 106,632 12.5%
MARGIN 27.7 % 26.1 %
Income from operations 48,780 41,003 19.0%
MARGIN 11.3 % 10.0 %
COLUMBUS MCKINNON CORPORATION
ADDITIONAL DATA
DECEMBER 31, 2006 MARCH 31, 2006 JANUARY 1, 2006
----------------- -------------- ---------------
BACKLOG (IN MILLIONS)
Products segment $ 54.7 $ 53.6 $ 46.5
Solutions segment $ 9.2 $ 13.0 $ 12.8
TRADE ACCOUNTS RECEIVABLE
days sales outstanding 58.7 days 59.2 days 56.0 days
INVENTORY TURNS PER YEAR
(based on cost of products sold) 4.8 turns 5.7 turns 5.2 turns
DAYS' INVENTORY 76.2 days 64.4 days 69.6 days
TRADE ACCOUNTS PAYABLE
days payables outstanding 33.7 days 33.7 days 32.5 days
WORKING CAPITAL AS A % OF SALES 19.6 % 17.4 % 16.8 %
DEBT TO TOTAL CAPITALIZATION PERCENTAGE 42.7 % 50.6 % 58.6 %
DEBT, NET OF CASH, TO TOTAL
CAPITALIZATION 37.7 % 44.5 % 53.3 %
SHIPPING DAYS BY QUARTER
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
FY08 63 63 60 63 249
FY07 63 63 59 64 249
FY06 65 63 58 65 251
COLUMBUS MCKINNON CORPORATION
RECONCILIATION BETWEEN GAAP NET INCOME AND NON-GAAP PRO FORMA NET INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA) THREE MONTHS ENDED
------------------
DECEMBER 31, 2006 JANUARY 1, 2006
----------------- ---------------
GAAP NET INCOME $ 9,126 $ 1,413
Reconciliation between GAAP Net Income and
Non-GAAP Pro Forma Net Income:
Financing costs for 2010 Notes repurchase 359 4,950
Captive insurance gains for asset reallocation (3,410) -
Income tax expense 1,068 (1,504)
----------------------------------
NON-GAAP PRO FORMA NET INCOME 7,143 4,859
GAAP NET INCOME PER SHARE - DILUTED $ 0.44 $ 0.08
Shares used in GAAP per diluted share calculation 18,954 17,287
NON-GAAP PRO FORMA NET INCOME PER SHARE - DILUTED $ 0.38 $ 0.28
Shares used in non-GAAP per diluted share calculation 18,954 17,287
NINE MONTHS ENDED
-----------------
DECEMBER 31, 2006 JANUARY 1, 2006
----------------- ---------------
GAAP NET INCOME $ 23,012 $ 11,998
Reconciliation between GAAP Net Income and
Non-GAAP Pro Forma Net Income:
Financing costs for 2010 and 2008 Notes repurchases 4,942 8,279
FAS 123 (R) first quarter adoption (incentive
stock options) expense 798 -
Captive insurance gains for asset reallocation (3,410) -
Income tax expense (536) (4,633)
----------------------------------
NON-GAAP PRO FORMA NET INCOME 24,806 15,644
GAAP NET INCOME PER SHARE - DILUTED $ 1.22 $ 0.75
Shares used in GAAP per diluted share calculation 18,929 15,906
NON-GAAP PRO FORMA NET INCOME PER SHARE - DILUTED $ 1.31 $ 0.98
Shares used in non-GAAP per diluted share calculation 18,929 15,906