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 CONTINUED SALES GROWTH AND
MARGIN EXPANSION FOR FOURTH QUARTER AND FISCAL YEAR 2007
o FISCAL YEAR 2007 SALES GROW 6% TO $590 MILLION; OPERATING MARGIN
EXPANDS 120 BASIS POINTS TO 11.6%
o FOURTH QUARTER SALES GROW 7% TO $157 MILLION; OPERATING MARGIN EXPANDS
100 BASIS POINTS TO 12.5%
o FOURTH QUARTER PRODUCTS SEGMENT SALES GROW 9% TO $143 MILLION;
OPERATING MARGIN EXPANDS 230 BASIS POINTS TO 15.0%
o FOURTH QUARTER AND FULL YEAR PRO FORMA NET INCOME OF $11.2 MILLION AND
$36.0 MILLION, RESPECTIVELY; INCREASE 33% AND 50%, RESPECTIVELY,
COMPARED WITH THE FOURTH QUARTER AND FULL YEAR OF FISCAL 2006, ALL ON
A PRO FORMA BASIS
o DEBT, NET OF CASH, AT 33.8% OF TOTAL CAPITALIZATION ON MARCH 31, 2007
COMPARED WITH 44.5% A YEAR AGO
o ANNUAL INTEREST EXPENSE DOWN $8.2 MILLION, OR 33.4%, FROM LOWER DEBT
LEVELS
AMHERST, N.Y., May 29, 2007 - Columbus McKinnon Corporation (NASDAQ: CMCO)
("CMCO"), a leading designer, manufacturer and marketer of material handling
products, today announced financial results for its fourth quarter and fiscal
year 2007 that ended on March 31, 2007. For the quarter, net sales were $156.9
million, up 6.7% from last year's fourth quarter reflecting continued strong
demand for most products. For the full year, net sales were $589.8 million, up
$33.8 million, or 6.1%.
Timothy T. Tevens, Columbus McKinnon's President and Chief Executive Officer,
commented, "Fiscal 2007 marks our third consecutive year of sales growth and
margin expansion, as well as our ninth consecutive year of debt reduction. Pro
forma net income, which excludes a significant tax benefit last year in addition
to some other items, increased 33% in the quarter and 50% for the full year. In
fiscal 2007, we also achieved our goals of operating margin in the 11% to 12%
range and debt, net of cash, below 35% of total capitalization. The drivers of
our steadily improving operating performance and financial strength are the
strong sales and cash flow of our Products segment, which comprises
approximately 90% of CMCO's sales, and our successful refinancing activities. In
the 2007 fourth quarter, we achieved 9% net sales growth and an operating margin
of 15% in the Products segment."
Net income for the fiscal 2007 fourth quarter was $11.1 million, or $0.58 per
diluted share, compared with $47.8 million, or $2.53 per diluted share for the
fiscal 2006 fourth quarter. Net income in the 2006 fourth quarter included a
$38.6 million income tax benefit, as a result of the reversal of a valuation
allowance against deferred tax assets, primarily U.S. federal net operating loss
carryforwards. Adjusting for that, other unusual items, and applying a
normalized tax rate for both periods, pro forma net income for the fiscal 2007
fourth quarter was $11.2 million, or $0.59 per diluted share, a 32.5% increase
from pro forma net income for the fiscal 2006 fourth quarter of $8.5 million, or
$0.45 per diluted share. On a per diluted share basis, pro forma fiscal 2007
fourth quarter net income increased 31.1%.
FY 2007/2006 Q4 RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP PRO FORMA NET INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
------------------------------------------------------ --------------------------- ---------------------
FY 2007 Q4 FY 2006 Q4
------------------------------------------------------ --------------------------- ---------------------
GAAP net income $11,073 $47,798
------------------------------------------------------ --------------------------- ---------------------
Financing costs - 2010 Notes repurchase 246 920
------------------------------------------------------ --------------------------- ---------------------
Income tax expense (86)* (40,243)*
------------------------------------------------------ --------------------------- ---------------------
Non-GAAP pro forma net income $11,233 +32.5% $8,475
------------------------------------------------------ --------------------------- ---------------------
GAAP net income per diluted share** $0.58 $2.53
------------------------------------------------------ --------------------------- ---------------------
Non-GAAP pro forma net income per diluted share** $0.59 +31.1% $0.45
------------------------------------------------------ --------------------------- ---------------------
* Normalized tax rate of approximately 34.9%, excluding $38.6 million FY06 Q4
tax benefit
** Shares in thousands used in per diluted share calculation: FY07 Q4: 19,015
FY06 Q4: 18,865
Net income for fiscal 2007 was $34.1 million, or $1.80 per diluted share,
compared with $59.8 million, or $3.60 per diluted share for fiscal 2006.
Adjusting for the $38.6 million income tax benefit in fiscal 2006, other unusual
items and applying a normalized tax rate for both periods, pro forma net income
for fiscal 2007 was $36.0 million, or $1.90 per diluted share, a 49.8% increase
from pro forma net income for fiscal 2006 of $24.1 million, or $1.45 per diluted
share. On a per diluted share basis, pro forma fiscal 2007 net income increased
31.0%.
FY 2007/2006 RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP PRO FORMA NET INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
------------------------------------------------------ --------------------------- ---------------------
FY 2007 FY 2006
------------------------------------------------------ --------------------------- ---------------------
GAAP net income $34,085 $59,796
------------------------------------------------------ --------------------------- ---------------------
Financing costs - 2010 & 2008 Notes repurchase 5,188 9,201
------------------------------------------------------ --------------------------- ---------------------
Stock option expense 798 -
------------------------------------------------------ --------------------------- ---------------------
Securities gains: captive insurance unit (3,410) -
------------------------------------------------------ --------------------------- ---------------------
Income tax expense (622)* (44,938)*
------------------------------------------------------ --------------------------- ---------------------
Non-GAAP pro forma net income $36,039 +49.8% $24,059
------------------------------------------------------ --------------------------- ---------------------
GAAP net income per diluted share** $1.80 $3.60
------------------------------------------------------ --------------------------- ---------------------
Non-GAAP pro forma net income per diluted share** $1.90 +31.0% $1.45
------------------------------------------------------ --------------------------- ---------------------
* Normalized tax rate of approximately 37.5%, excluding $38.6 million FY06 Q4
tax benefit
** Shares in thousands used in per diluted share calculation: FY07: 18,951
FY06: 16,628
FOURTH QUARTER FISCAL 2007 REVIEW
Gross margin improved 60 basis points to 28.5% for the quarter compared with
27.9% in the fourth quarter of fiscal 2006, resulting in a 9.0% increase in
gross profit on the 6.7% increase in sales. Income from operations grew 16.7%,
or $2.8 million, to $19.7 million for the fiscal 2007 fourth quarter compared
with the year ago quarter. Driving margin expansion was strong operating
leverage from higher sales in the Products segment, successful cost management
and continued improvement in operational processes through lean manufacturing
and other strategic initiatives. These improvements were partially offset by
lower sales and operating losses in the Solutions segment. As a percent of
sales, operating income produced a 12.5% margin in the fiscal 2007 quarter
compared with 11.5% in the same period last year, amounting to $0.29 of
operating income for each incremental sales dollar over the prior year quarter.
Selling expenses increased $2.4 million, or 16.9%, of which $1.5 million
reflects CMCO's increased sales and marketing activities. More than half of the
spending on sales and marketing was for programs in Europe, to advance the
Company's strategic initiative to expand in that region. The rest of the
increase was due to general sales activities in North America and currency
conversion. General and administrative expenses were down $0.6 million to $7.9
million, due primarily to lower variable compensation. Combined, selling,
general and administrative (SG&A) expenses increased to 15.6% of sales compared
with 15.5% in the fiscal 2006 fourth quarter.
Lower debt levels, especially higher cost debt, resulted in a $1.3 million, or
26.6%, decrease in interest expense this quarter compared with the prior year's
quarter.
The favorable effective tax rate of 34.9% in the fiscal 2007 fourth quarter
reflects the benefit of some unusual non-taxable income items. The Company's
normal effective tax rate is 38% to 39%. CMCO continues to realize the cash flow
benefits of its U.S. net operating loss (NOL) carryforward, of which $38.6
million, representing approximately $13.5 million of cash tax savings, remained
available at the end of fiscal 2007.
Debt, net of cash at March 31, 2007, was $123.4 million, or 33.8% of total
capitalization, compared with $164.2 million, or 44.5% of total capitalization,
at the end of the prior fiscal year. At the end of fiscal 2007, funded debt was
$172.1 million, or 41.6% of total capitalization, compared with $209.8 million
at the end of fiscal 2006, or 50.6% of total capitalization. During the fiscal
2007 fourth quarter, the Company purchased $3.0 million of its 10% notes,
leaving $22.1 million outstanding that are callable in August 2007. CMCO's
availability on its line of credit with its bank group at March 31, 2007 was
$64.8 million. The Company's financial strategy is to maintain a conservative
capital structure with the flexibility to support its growth strategies,
including acquisitions, regardless of the point in the economic cycle. Its
long-term goal for its funded debt to total capitalization ratio is 30%, flexing
to 50% for acquisitions.
Capital expenditures for the fourth quarter and full year of fiscal 2007 were
$3.8 million and $10.7 million, respectively, compared with $3.7 million and
$8.4 million for the same periods 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.
On March 5, 2007, CMCO announced the sale of Larco Industrial Services, Ltd.
(Larco), which did not have a material financial impact on the Company's fiscal
2007 fourth quarter financial results. The Company estimates that the effect of
the Larco sale in fiscal 2008 will be a reduction of approximately $9 million in
consolidated net sales with no meaningful impact on earnings as Larco was
operating near breakeven.
PRODUCTS SEGMENT
- ----------------
Products segment net sales grew 8.8% to $143.1 million for the fourth quarter of
fiscal 2007, an increase of $11.6 million compared with the fourth quarter of
fiscal 2006.
Variances between quarters are summarized as follows, in millions:
Volume $ 10.6 8.0%
Number of shipping days (2.0) (1.5%)
Price 2.4 1.8%
Foreign currency translation 0.6 0.5%
------ ----
Total $ 11.6 8.8%
Gross margin for this segment reached 30.9% compared with 29.7% in last year's
fourth quarter. Income from operations, as a percent of sales, was 15.0% for
this period, a 230 basis point improvement over 12.7% in the fiscal 2006 fourth
quarter. Operating leverage was 40.9% in the quarter.
Backlog was $53.2 million at the end of the year. Backlog at the end of fiscal
2006 and the fiscal 2007 third quarter was $53.6 million and $54.7 million,
respectively. The lower backlog reflects CMCO's efforts to increase production
out of certain facilities to meet demand in a timely manner. 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.
SOLUTIONS SEGMENT
- -----------------
Net sales for the Solutions segment were $13.8 million in the fiscal 2007 fourth
quarter, down 11.3% from sales of $15.6 million in the same period last year.
Gross margin was 3.6% compared with 12.5% last year. Income from operations as a
percent of sales was a negative (13.1%) for this period compared with 0.7% in
the fiscal 2006 fourth quarter. Weak performance by the Company's European
material handling systems business, Univeyor, which represented approximately
68% of this segment's quarterly sales, and overall contributed approximately 5%
to consolidated net sales, resulted from performance issues on some projects, a
challenging pricing environment and an unfavorable sales mix. Restructuring
activities, which began in the third quarter of fiscal 2007 and continued into
the fourth quarter, have not yet produced sufficient improvements to complete
the change in Univeyor's business model, which is to increase its focus on
offering products as packaged solutions rather than engineered-to-order systems.
This change is expected to reduce the volatility of this unit's performance and
improve the return on invested capital.
Mr. Tevens noted, "Our efforts to improve Univeyor's operations and better
capitalize on market opportunities did not progress quickly enough in the fourth
quarter. As a result, there have been more changes made at the organization and
a more aggressive restructuring plan is being implemented. We have assigned an
experienced executive from our Products segment to reevaluate the business
situation and to lead the implementation of the restructuring and business
improvement plan. Further, we have recently appointed a new Managing Director
and they will work together to carry out the plan. Additional restructuring
costs are expected to be $0.2 million to $0.3 million in the first quarter of
fiscal 2008. We are not ruling out the possibility of monetizing the assets of
this business, yet we are keenly interested in being able to realize the benefit
of innovative new products being developed by Univeyor."
Quoting activity for the Solutions segment has been strong, and backlog improved
to $9.6 million at year-end compared with $9.2 million at the end of the third
quarter of fiscal 2007. For this segment, the average cycle time for backlog to
convert to sales generally ranges from one to six months.
FISCAL 2007 REVIEW
Net sales for the year were $589.8 million, up 6.1%, or $33.8 million compared
with fiscal 2006. Gross profit of $164.6 million was 11.5% higher in fiscal 2007
resulting in a 130 basis point improvement to a 27.9% gross margin. SG&A
expenses were $95.8 million in fiscal 2007 compared with $87.9 million in the
prior fiscal year. As a percent of sales, SG&A was 16.2% and 15.8% for fiscal
2007 and 2006, respectively. The increase was primarily due to investments made
to support CMCO's strategic growth initiatives through expansion of market share
in North America, Europe, Central and South America and Asia.
Operating margin for fiscal 2007 was 11.6% compared with 10.4% for fiscal 2006,
representing 31.3% operating leverage.
Interest expense in fiscal 2007 was down $8.2 million, or 33.4%, to $16.4
million reflecting the $38 million year-over-year reduction in average funded
debt outstanding.
Net cash provided by operations was $45.5 million for fiscal 2007 compared with
$46.4 million in fiscal 2006. Higher working capital requirements on increased
sales volume somewhat affected cash generation for the year.
The Company realized modest improvements in some key working capital metrics
this year, including days sales outstanding of 56.4 days at March 31, 2007
compared with 59.2 days at March 31, 2006, and inventory turns of 5.8 times at
March 31, 2007 compared with 5.7 times at March 31, 2006. Despite these
improvements, overall working capital as a percentage of latest twelve months'
revenues increased to 20.1% at March 31, 2007 compared with 17.4% at March 31,
2006. This increase was partially due to an accounting change for pension
liability classification reducing accrued liabilities and increasing other
non-current liabilities by $6.3 million. Additionally, the increase was driven
by a reduction in days payable outstanding and various accrued liabilities.
SUMMARY
Mr. Tevens noted, "We continue to be optimistic as we look forward into fiscal
2008. Bookings for the fourth quarter were up in the mid-single digits range
over last year's fourth quarter. We are focused on further increasing our
international market share as we expand in higher growth foreign markets with a
broader array of our products while continuing to lead North American markets.
We also continue to search for strategic, bolt-on acquisitions to complement our
organic growth around the world. Our primary use of cash will be debt reduction
and acquisitions, and we continue to work on improving our margins and cash
flows by improving order-to-delivery cycle times and strengthening working
capital management through our Lean Manufacturing culture. As we look forward,
we expect that operating leverage from sales growth projected in the mid-single
digit range, combined with resolution of the issues within our Solutions
segment, should drive our operating leverage to exceed our 30% goal, continuing
operating margin expansion."
He concluded, "We are well positioned to grow Columbus McKinnon, with a strong
balance sheet and cash flows, to leverage our market leadership position and
grow in new markets. We will continue to work towards being the global leader in
material handling products as we help our customers move, secure or position
material in an easy and safe manner. "
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 May 29, 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 July 20, 2007 by dialing 1-800-873-2068. Alternatively, you may access
an archive of the call until July 20, 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
------------------
MARCH 31, 2007 MARCH 31, 2006 CHANGE
-------------- -------------- ------
NET SALES $ 156,885 $ 147,096 6.7%
Cost of products sold 112,208 106,106 5.8%
-----------------------------------------------
Gross profit 44,677 40,990 9.0%
Gross profit margin 28.5 % 27.9 %
Selling expense 16,636 14,236 16.9%
General and administrative expense 7,902 8,534 -7.4%
Restructuring charges 411 1,289 -68.1%
Amortization 52 65 -20.0%
-----------------------------------------------
INCOME FROM OPERATIONS 19,676 16,866 16.7%
-----------------------------------------------
Interest and debt expense 3,708 5,050 -26.6%
Cost of bond redemptions 246 921 -73.3%
Investment income (697) (386) 80.6%
Other income (381) (739) -48.4%
-----------------------------------------------
Income from continuing operations before income tax
expense 16,800 12,020 39.8%
Income tax expense 5,866 (35,725) -116.4%
-----------------------------------------------
Income from continuing operations 10,934 47,745 -77.1%
Income from discontinued operations 139 53 162.3%
-----------------------------------------------
NET INCOME $ 11,073 $ 47,798 -76.8%
===============================================
Average basic shares outstanding 18,595 18,174 2.3%
Basic income per share:
Continuing operations $ 0.59 $ 2.63 -77.6%
Discontinued operations 0.01 -
-----------------------------------------------
Net income $ 0.60 $ 2.63 -77.2%
===============================================
Average diluted shares outstanding 19,015 18,865 0.8%
Diluted income per share:
Continuing operations $ 0.57 $ 2.53 -77.5%
Discontinued operations 0.01 -
-----------------------------------------------
Net income $ 0.58 $ 2.53 -77.1%
===============================================
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
YEAR ENDED
----------
MARCH 31, 2007 MARCH 31, 2006 CHANGE
-------------- -------------- ------
NET SALES $ 589,848 $ 556,007 6.1%
Cost of products sold 425,248 408,385 4.1%
-----------------------------------------------
Gross profit 164,600 147,622 11.5%
Gross profit margin 27.9 % 26.6 %
Selling expense 61,731 54,255 13.8%
General and administrative expense 34,097 33,640 1.4%
Restructuring charges 133 1,609 -91.7%
Amortization 183 249 -26.5%
-----------------------------------------------
INCOME FROM OPERATIONS 68,456 57,869 18.3%
-----------------------------------------------
Interest and debt expense 16,430 24,667 -33.4%
Cost of bond redemptions 5,188 9,201 -43.6%
Investment income (5,257) (2,017) 160.6%
Other income (1,825) (2,136) -14.6%
-----------------------------------------------
Income from continuing operations before income tax
expense 53,920 28,154 91.5%
Income tax expense 20,539 (30,946) -166.4%
-----------------------------------------------
Income from continuing operations 33,381 59,100 -43.5%
Income from discontinued operations 704 696 1.1%
-----------------------------------------------
NET INCOME $ 34,085 $ 59,796 -43.0%
===============================================
Average basic shares outstanding 18,517 16,052 15.4%
Basic income per share:
Continuing operations $ 1.80 $ 3.69 -51.2%
Discontinued operations 0.04 0.04
-----------------------------------------------
Net income $ 1.84 $ 3.73 -50.7%
===============================================
Average diluted shares outstanding 18,951 16,628 14.0%
Diluted income per share:
Continuing operations $ 1.76 $ 3.56 -50.6%
Discontinued operations 0.04 0.04
-----------------------------------------------
Net income $ 1.80 $ 3.60 -50.0%
===============================================
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 31, 2007 MARCH 31, 2006
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 48,655 $ 45,598
Trade accounts receivable 97,269 95,726
Unbilled revenues 15,050 12,061
Inventories 77,179 74,845
Prepaid expenses 18,029 15,676
---------------------------------------
Total current assets 256,182 243,906
---------------------------------------
Net property, plant, and equipment 55,231 55,132
Goodwill and other intangibles, net 185,903 187,327
Marketable securities 28,920 27,596
Deferred taxes on income 34,460 46,065
Other assets 4,942 6,018
---------------------------------------
TOTAL ASSETS $ 565,638 $ 566,044
=======================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 9,598 $ 5,798
Trade accounts payable 35,896 39,311
Accrued liabilities 52,344 61,264
Restructuring reserve 599 793
Current portion of long-term debt 297 127
---------------------------------------
Total current liabilities 98,734 107,293
---------------------------------------
Senior debt, less current portion 26,168 67,841
Subordinated debt 136,000 136,000
Other non-current liabilities 63,411 50,489
---------------------------------------
Total liabilities 324,313 361,623
---------------------------------------
Shareholders' equity:
Common stock 188 185
Additional paid-in capital 174,654 170,081
Retained earnings 85,237 51,152
ESOP debt guarantee (3,417) (3,996)
Unearned restricted stock - (22)
Accumulated other comprehensive loss (15,337) (12,979)
---------------------------------------
Total shareholders' equity 241,325 204,421
---------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 565,638 $ 566,044
=======================================
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
YEAR ENDED
----------
MARCH 31, 2007 MARCH 31, 2006
-------------- --------------
OPERATING ACTIVITIES:
Income from continuing operations $ 33,381 $ 59,100
Adjustments to reconcile income from continuing operations
to net cash provided by operating activities:
Depreciation and amortization 8,289 8,824
Deferred income taxes 12,438 (36,968)
(Gain) loss on divestitures (504) 87
Gain on sale of investments/real estate (5,373) (2,100)
Loss on early retirement of bonds 4,263 7,083
Stock option expense 1,457 -
Amortization/write-off of deferred financing costs 1,603 3,297
Changes in operating assets and liabilities:
Trade accounts receivable (1,831) (7,102)
Unbilled revenues and excess billings (1,690) (3,923)
Inventories (2,260) 2,518
Prepaid expenses (2,132) (2,026)
Other assets 921 207
Trade accounts payable (3,849) 6,099
Accrued and non-current liabilities 782 11,267
---------------------------------------
Net cash provided by operating activities 45,495 46,363
---------------------------------------
INVESTING ACTIVITIES:
Sale of marketable securities, net 1,167 (888)
Capital expenditures (10,653) (8,430)
Proceeds from sale of property 5,387 2,091
Proceeds from discontinued operations note receivable 704 857
---------------------------------------
Net cash used by investing activities (3,395) (6,370)
---------------------------------------
FINANCING ACTIVITIES:
Proceeds from stock options exercised 2,601 7,149
Proceeds from stock offering - 56,619
Net borrowings under revolving line-of-credit agreements 3,045 1,361
Repayment of debt (45,964) (205,167)
Proceeds from issuance of long-term debt - 136,000
Deferred financing costs incurred (449) (2,877)
Tax benefit from exercise of stock options 311 2,154
Other 579 558
---------------------------------------
Net cash used by financing activities (39,877) (4,203)
---------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 834 329
---------------------------------------
Net change in cash and cash equivalents 3,057 36,119
Cash and cash equivalents at beginning of year 45,598 9,479
---------------------------------------
Cash and cash equivalents at end of period $ 48,655 $ 45,598
=======================================
COLUMBUS MCKINNON CORPORATION
BUSINESS SEGMENT DATA
(IN THOUSANDS, EXCEPT PERCENTAGE DATA)
QUARTER ENDED MARCH QUARTER ENDED MARCH
31, 2007 31, 2006 % CHANGE
------------------------ ------------------------ -----------
PRODUCTS
Net sales $ 143,050 $ 131,491 8.8%
Gross profit 44,183 39,037 13.2%
MARGIN 30.9 % 29.7 %
Income from operations 21,487 16,760 28.2%
MARGIN 15.0 % 12.7 %
SOLUTIONS
Net sales $ 13,835 $ 15,605 -11.3%
Gross profit 494 1,953 -74.7%
MARGIN 3.6 % 12.5 %
Income from operations (1,811) 106 -1808.5%
MARGIN (13.1) % 0.7 %
CONSOLIDATED
Net sales $ 156,885 $ 147,096 6.7%
Gross profit 44,677 40,990 9.0%
MARGIN 28.5 % 27.9 %
Income from operations 19,676 16,866 16.7%
MARGIN 12.5 % 11.5 %
YEAR ENDED MARCH YEAR ENDED MARCH
31, 2007 31, 2006 % CHANGE
------------------------ ------------------------ -----------
PRODUCTS
Net sales $ 527,089 $ 493,896 6.7%
Gross profit 159,150 138,064 15.3%
MARGIN 30.2 % 28.0 %
Income from operations 71,478 55,849 28.0%
MARGIN 13.6 % 11.3 %
SOLUTIONS
Net sales $ 62,759 $ 62,111 1.0%
Gross profit 5,450 9,558 -43.0%
MARGIN 8.7 % 15.4 %
Income from operations (3,022) 2,020 -249.6%
MARGIN (4.8) % 3.3 %
CONSOLIDATED
Net sales $ 589,848 $ 556,007 6.1%
Gross profit 164,600 147,622 11.5%
MARGIN 27.9 % 26.6 %
Income from operations 68,456 57,869 18.3%
MARGIN 11.6 % 10.4 %
COLUMBUS MCKINNON CORPORATION
ADDITIONAL DATA
MARCH 31, 2007 MARCH 31, 2006 MARCH 31, 2005
-------------- -------------- --------------
BACKLOG (IN MILLIONS)
Products segment $ 53.2 $ 53.6 $ 46.5
Solutions segment $ 9.6 $ 13.0 $ 12.8
TRADE ACCOUNTS RECEIVABLE
days sales outstanding 56.4 days 59.2 days 56.0 days
INVENTORY TURNS PER YEAR
(based on cost of products sold) 5.8 turns 5.7 turns 5.7 turns
DAYS' INVENTORY 62.8 days 64.4 days 64.4 days
TRADE ACCOUNTS PAYABLE
days payables outstanding 29.1 days 33.7 days 27.9 days
WORKING CAPITAL AS A % OF SALES 20.1 % 17.4 % 20.2 %
DEBT TO TOTAL CAPITALIZATION PERCENTAGE 41.6 % 50.6 % 76.8 %
DEBT, NET OF CASH, TO TOTAL CAPITALIZATION 33.8 % 44.5 % 76.2 %
SHIPPING DAYS BY QUARTER
Q1 Q2 Q3 Q4 TOTAL
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FY08 63 63 60 63 249
FY07 63 63 59 64 249
FY06 65 63 58 65 251
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