SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended March 31, 2007
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number: 0-27618
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A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Restatement Effective April 1, 1989
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
COLUMBUS McKINNON CORPORATION
140 John James Audubon Parkway
Amherst, NY 14228-1197
FINANCIAL STATEMENTS AND SCHEDULE
Columbus McKinnon Corporation Employee Stock Ownership Plan
Years Ended March 31, 2007 and 2006
With Report of Independent Registered Public Accounting Firm
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Financial Statements and Schedule
Years Ended March 31, 2007 and 2006
CONTENTS
Report of Independent Registered Public Accounting Firm.......................1
Financial Statements
Statements of Net Assets Available for Benefits...............................2
Statements of Changes in Net Assets Available for Benefits....................3
Notes to Financial Statements.................................................4
Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)...............10
Report of Independent Registered Public Accounting Firm
The Benefits Committee
Columbus McKinnon Corporation
Employee Stock Ownership Plan
We have audited the accompanying statements of net assets available for benefits
of the Columbus McKinnon Corporation Employee Stock Ownership Plan as of March
31, 2007 and 2006, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
March 31, 2007 and 2006, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of March 31, 2007, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
September 25, 2007
1
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Statements of Net Assets Available for Benefits
MARCH 31, 2007 MARCH 31, 2006
-------------------------------------------- --------------------------------------------
ALLOCATED UNALLOCATED TOTAL ALLOCATED UNALLOCATED TOTAL
-------------------------------------------- --------------------------------------------
ASSETS
Investment in sponsor company
common stock, at fair value $ 15,555,719 $ 4,784,005 $ 20,339,724 $ 19,472,785 $ 6,727,680 $ 26,200,465
Investment in money market fund,
at fair value 51,893 - 51,893 53,918 - 53,918
Receivables:
Employer contributions - 91,151 91,151 - 93,139 93,139
Interest 228 - 228 206 - 206
Cash 448 - 448 502 - 502
-------------------------------------------- --------------------------------------------
Total assets 15,608,288 4,875,156 20,483,444 19,527,411 6,820,819 26,348,230
-------------------------------------------- --------------------------------------------
LIABILITIES
Interest payable - 91,151 91,151 - 93,139 93,139
Loans payable - 4,419,461 4,419,461 - 5,019,461 5,019,461
-------------------------------------------- --------------------------------------------
Total liabilities - 4,510,612 4,510,612 - 5,112,600 5,112,600
-------------------------------------------- --------------------------------------------
Net assets available for plan benefits $ 15,608,288 $ 364,544 $ 15,972,832 $ 19,527,411 $ 1,708,219 $ 21,235,630
============================================ ============================================
SEE ACCOMPANYING NOTES.
2
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Statements of Changes in Net Assets Available for Benefits
MARCH 31, 2007 MARCH 31, 2006
-------------------------------------------- --------------------------------------------
ALLOCATED UNALLOCATED TOTAL ALLOCATED UNALLOCATED TOTAL
-------------------------------------------- --------------------------------------------
ADDITIONS
Interest $ 2,748 $ - $ 2,748 $ 1,929 $ - $ 1,929
Employer contributions - 984,112 984,112 - 954,102 954,102
-------------------------------------------- --------------------------------------------
Total additions 2,748 984,112 986,860 1,929 954,102 956,031
-------------------------------------------- --------------------------------------------
DEDUCTIONS
Interest expense - 384,112 384,112 - 354,102 354,102
Distributions to participants 1,241,466 - 1,241,466 1,813,105 - 1,813,105
Transfer to other qualified plan 180,889 - 180,889 390,658 - 390,658
Administrative expense 476 - 476 520 - 520
-------------------------------------------- --------------------------------------------
Total deductions 1,422,831 384,112 1,806,943 2,204,283 354,102 2,558,385
Net (depreciation) appreciation
in fair value of investments (3,308,528) (1,134,187) (4,442,715) 9,897,305 3,789,291 13,686,596
Transfer for shares released
and allocated 809,488 (809,488) - 939,157 (939,157) -
-------------------------------------------- --------------------------------------------
Net (decrease) increase (3,919,123) (1,343,675) (5,262,798) 8,626,909 3,450,134 12,077,043
Net assets (deficiency in net
assets) available for benefits:
Beginning of year 19,527,411 1,708,219 21,235,630 10,900,502 (1,741,915) 9,158,587
-------------------------------------------- --------------------------------------------
End of year $ 15,608,288 $ 364,544 $ 15,972,832 $ 19,527,411 $ 1,708,219 $ 21,235,630
============================================ ============================================
SEE ACCOMPANYING NOTES.
3
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements
March 31, 2007 and 2006
1. DESCRIPTION OF THE PLAN
The Columbus McKinnon Corporation Employee Stock Ownership Plan (ESOP or the
Plan), is a defined contribution employee stock ownership plan and a stock bonus
plan within the meanings of the applicable sections of the Internal Revenue Code
of 1986, as amended. It is also an eligible individual account plan as defined
in the applicable section of the Employee Retirement Income Security Act of 1974
(ERISA). Refer to the Plan Document or the Summary Plan Description for a
complete description of the ESOP's provisions.
The Plan covers all domestic nonunion employees of Columbus McKinnon Corporation
(the Company/CMCO), and its domestic subsidiaries.
In accordance with the plan document, employees who have attained 55 years of
age and ten years of participation in the Plan have the option to diversify the
investments in their stock accounts by selling a specified percentage of their
shares at the current market value and transferring the sale proceeds to another
defined contribution plan maintained by the Company. For the years ended March
31, 2007 and 2006, $180,889 and $390,658, respectively, had been transferred to
the Company's Thrift 401(k) Plan.
A summary of the ESOP's provisions is as follows:
PARTICIPATION
Substantially all of the Company's domestic nonunion employees are eligible
to participate in the ESOP.
ELIGIBILITY
Eligible employees must have attained age 21 and completed one year of
service (minimum of 1,000 hours) to be a participant.
4
1. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS
Each plan year (each 12-month period ending March 31) the Company
contributes to the ESOP for each participant (a) who is actively employed
as an employee on December 31 and who has earned at least 1,000 hours of
service as an employee in the calendar year ending December 31, or (b) who
terminates employment on or after January 1 during a plan year after
attaining age 55 and completing at least five years of eligibility service.
Contributions shall be made in cash or in shares of stock as determined by
the Company, and need not be made out of current or accumulated earnings
and profits.
VESTING
A participant's account balance shall become fully vested and
nonforfeitable on the date the participant completes five years of vesting
service (excluding any service rendered prior to the calendar year in which
the participant attained age 18), or if sooner, on the date the participant
attains normal retirement age while in the employ of the Company or any
affiliated company.
DISTRIBUTIONS
Upon a vested participant's termination, the value of his or her account
will be distributed if the value of the account is less than $1,000 or, at
the participant's option, either immediately or at any valuation date until
retirement, as provided in the ESOP. A retiree may elect to defer
distribution up to 70 1/2 years of age. The account of a participant who is
not a 5% owner and who has not separated from service but has attained the
age of 70 1/2 will commence distribution unless the participant elects to
defer distribution until employment ceases. Valuation dates for
distributions are September 30 or March 31.
During the year ended March 31, 2007, $1,241,466, which includes 54,644
shares, was distributed to vested participants in cash and stock
certificates ($1,813,105, or 90,976 shares, distributed in the year ended
March 31, 2006). This resulted in the sale of 33 shares held by the ESOP
back to the Company for $782 during the year ended March 31, 2007 as a
result of fractional shares (48 shares for $885 in the year ended March 31,
2006). As of March 31, 2007 and 2006, $796,927 and $748,008, respectively,
is included in the ESOP assets for terminated participants who have
requested distributions.
5
1. DESCRIPTION OF THE PLAN (CONTINUED)
Forfeiture of a nonvested interest shall occur in the fifth consecutive
calendar year following a break in service. The forfeited accounts will be
allocated among the accounts of active participants. At March 31, 2007 and
2006, the ESOP assets include $35,513 and $19,503, respectively, of
undistributed forfeited accounts.
ALLOCATION TO PARTICIPANT ACCOUNTS
As of each March 31 valuation date, each participant account is
appropriately adjusted to reflect any contributions or stock to be
allocated as of such date, the income of the trust fund during the period
and the increase or decrease in the fair market value of the trust fund
during the period. The allocation of contributions is based on the
fraction, the numerator of which is the participant's annual earnings for
the preceding calendar year and the denominator of which is the aggregate
annual earnings for such calendar year of all participants entitled to an
allocation.
DIVIDENDS
Dividends paid on stock allocated to a participant's stock account will be
allocated to the participant's nonstock account. The Company's benefits
committee may direct that such dividends shall be either (a) paid directly
to the participant, former participant, or beneficiary within 90 days after
the close of the plan year in which such dividend was paid, or (b) applied
as payment on the exempt loans. Dividends paid on unallocated stock held by
the trustee and acquired with the proceeds of an exempt loan shall be held
by the trustee until the end of the plan year in which it was paid, and
then, along with any interest or earnings, be applied as payment on the
exempt loans which shall trigger a release of stock from the suspense
account. No dividends were paid on the Company's common stock, including
shares held by the Plan, during the years ended March 31, 2007 and 2006.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements are presented on the accrual basis of accounting.
6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
3. PLAN TERMINATION
The Company intends to continue the ESOP indefinitely, but reserves the right to
terminate the Plan at any time. If the ESOP is terminated, each participant
shall be fully and nonforfeitably vested in his interest in the ESOP trust fund.
4. INVESTMENTS
At March 31, 2007 and 2006, the assets of the ESOP Plan consist of 908,429
shares and 972,910 shares, respectively, of CMCO common stock. At March 31, 2007
and 2006, the fair market value of the ESOP's money market fund was $51,893 and
$53,918, respectively. The ESOP's investment in CMCO common stock is reported at
fair market value as of March 31, 2007 and 2006 based on quoted market prices.
The investment in the money market fund is also reported at fair market value as
determined by open trading.
The Plan's investments are exposed to various risks such as interest rate,
market and credit risks. Due to the level of risk associated with these
investment securities, it is at least reasonably possible that changes in the
value of investment securities will occur in the near term and that such changes
could materially affect participants' account balances and the amounts reported
in the statements of net assets available for benefits.
5. LOANS PAYABLE AND SHARE RELEASE
On October 13, 1998, the ESOP obtained $7,682,281 of new debt from the Company.
The loan balance was $4,419,461 and $5,019,461 at March 31, 2007 and 2006,
respectively, and is payable in quarterly installments of $150,000 through April
2014, and $69,461 in July 2014, plus interest at the prime rate (8.25% at March
31, 2007).
7
5. LOANS PAYABLE AND SHARE RELEASE (CONTINUED)
In October 1994 and October 1998, the ESOP purchased 609,144 and 479,900 shares,
respectively, of common stock of the Company with the debt proceeds, which were
recorded by the trustee in the suspense account. Such stock ceases to be
collateral and is released from the suspense account as the loans are repaid. In
each year prior to full payment of the loans, the number of shares of stock
released will equal the number of shares of stock held as collateral immediately
before the release for such plan year multiplied by the release fraction.
The loan is collateralized by an equivalent number of shares of common stock
recorded by the trustees in a suspense account.
Maturities of loans payable over the next five years ended March 31 are as
follows:
2008 $ 600,000
2009 600,000
2010 600,000
2011 600,000
2012 600,000
The numerator of the release fraction is the amount of principal and interest
payments made toward the loan during the plan year and the denominator is the
sum of the numerator plus the principal and interest payments to be made on the
loan in the future, using the interest rate applicable at the end of the plan
year. Shares of stock released from the suspense account for a plan year shall
be held in the trust on an unallocated basis until allocated by the benefits
committee as of the last day of that plan year. That allocation shall be
consistent with the method for allocating contributions to participants'
accounts, which is based on a fraction of each participant's annual earnings
during the preceding calendar year to the total earnings of those participants
during such calendar year. The allocation of shares released resulting from
dividends on participants' allocated shares, however, was based upon the
fraction of each participant's allocated shares to the total number of allocated
shares.
As of March 31, 2007 and 2006, 213,667 shares and 249,821 shares, respectively,
were held as collateral for the loan; during the years ended March 31, 2007 and
2006, 36,154 shares and 34,874 shares, respectively, were released from the
suspense account and allocated to participant accounts.
8
6. TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated February 9, 2004, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code of 1986 (the Code) and, therefore, the related
trust is exempt from taxation. Subsequent to this issuance of the determination
by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan
is required to operate in conformity with the Code to maintain its
qualification. The Plan Sponsor has indicated that it will take the necessary
steps, if any, to maintain the Plan's qualified status.
9
Columbus McKinnon Corporation
Employee Stock Ownership Plan
EIN: 16-0547600 Plan No. 016
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
March 31, 2007
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST CURRENT VALUE
- --------------------------------------------------------------------------------
Columbus McKinnon Employer Common Stock,
Corporation* 908,429 shares $10,256,163 $20,339,724
Bank of America Columbia Money Market Fund
Investment Services* 51,893 shares 51,893 51,893
* Parties-in-interest
10
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
COLUMBUS McKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
RESTATEMENT EFFECTIVE APRIL 1, 1989
Date: SEPTEMBER 25, 2007
------------------
By: /S/ TIMOTHY R. HARVEY
--------------------------------
Timothy R. Harvey, Trustee
/S/ KAREN L. HOWARD
--------------------------------
Karen L. Howard, Trustee
/S/ RICHARD A. STEINBERG
--------------------------------
Richard A. Steinberg, Trustee