Contact:
Karen L. Howard
Vice President - Finance and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5550
karen.howard@cmworks.com
------------------------
COLUMBUS MCKINNON REPORTS FISCAL 2008 THIRD QUARTER EPS OF $0.52 REFLECTING
CONTINUED MARGIN EXPANSION AND STRONG REVENUE GROWTH
o THIRD QUARTER REVENUE INCREASED 9.3% TO $155.2 MILLION ON STRONG
GLOBAL PERFORMANCE; PRODUCTS SEGMENT SALES INCREASED 10.7% TO $140.5
MILLION
o GROSS MARGIN IMPROVED 290 BASIS POINTS COMPARED WITH THE YEAR-AGO
QUARTER TO 30.1%; OPERATING MARGIN UP 180 BASIS POINTS TO 12.3%
o QUARTERLY DILUTED EPS OF $0.52, UP 8.3% FROM LAST YEAR AND 39.5%
HIGHER ON A PRO FORMA BASIS
o DEBT, NET OF CASH, REDUCED 11.8% IN QUARTER TO $88.8 MILLION, 24.1% OF
TOTAL CAPITALIZATION
AMHERST, N.Y., January 24, 2008 - Columbus McKinnon Corporation (NASDAQ: CMCO),
a leading designer, manufacturer and marketer of material handling products,
today announced financial results for its fiscal 2008 third quarter that ended
on December 30, 2007. Net sales for the period were $155.2 million, up 9.3% over
the same period in the prior year. International sales were $55.8 million, or
36% of total net sales, up $6.4 million, or 13% from the third quarter of fiscal
2007. Products segment sales, which represented 90.5% of total revenue,
increased $13.6 million, or 10.7%, to $140.5 million on strong sales reported by
CMCO Europe's operations as well as the Company's domestic hoists, cranes and
rigging products. The Solutions segment reported a revenue decline of $0.4
million to $14.7 million, due to planned revenue reduction in the Company's
Univeyor business. Columbus McKinnon announced earlier this month that it is
pursuing strategic alternatives for Univeyor, including the possible sale of the
business.
Timothy T. Tevens, President and Chief Executive Officer, commented, "Strong
performance in the quarter, particularly from domestic hoists, cranes, rigging
products and Columbus McKinnon Europe, resulted in robust growth in revenue,
margins and core earnings. Demand from our target markets continues, both by
industry and geography. Also, our continued focus on debt reduction, combined
with our strong operating performance, resulted in a further upgrade in our debt
rating from Moody's during the quarter."
Net income of $10.0 million for the fiscal 2008 third quarter increased 9.5%
from fiscal 2007 third quarter net income of $9.1 million. On a per diluted
share basis, fiscal 2008 third quarter net income was $0.52, $0.04 or 8.3%
higher than $0.48 in the same period last year. Excluding the net-of-tax effect
of $2.2 million of investment income from an asset reallocation in the fiscal
2007 third quarter and bond redemption costs from both periods, fiscal 2008
third quarter pro forma net income per diluted share of $0.53 represents a 39.5%
increase from fiscal 2007 pro forma net income per diluted share of $0.38.
FY 2008/2007 Q3 RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP PRO FORMA NET INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
- ----------------------------------------------------------------- ---------------------------------- --------------------------
FY 2008 Q3 FY 2007 Q3
- ----------------------------------------------------------------- ---------------------------------- --------------------------
GAAP net income $9,994 +9.5% $9,126
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Financing costs - Notes repurchases 177 359
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Captive insurance gains from asset reallocation -- (3,410)
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Income tax (expense)/benefit (62) 1,068
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Non-GAAP pro forma net income $10,109 +41.5% $7,143
- ----------------------------------------------------------------- ---------------------------------- --------------------------
GAAP net income per diluted share* $0.52 +8.3% $0.48
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Non-GAAP pro forma net income per diluted share* $0.53 +39.5% $0.38
- ----------------------------------------------------------------- ---------------------------------- --------------------------
* SHARES IN THOUSANDS USED IN Q3 PER DILUTED SHARE CALCULATIONS -- FY08: 19,200;
FY07: 18,954
THIRD QUARTER FISCAL 2008 REVIEW
- --------------------------------
Gross margin improved 290 basis points to 30.1% compared with 27.2% in the third
quarter of fiscal 2007, resulting in a 20.8% increase in gross profit on the
9.3% increase in sales. Operating income of $19.2 million for the fiscal 2008
third quarter was up from $14.9 million for the fiscal 2007 third quarter,
generating 32.4% operating leverage on the incremental sales, surpassing the
Company's long-term sustainable operating leverage target of 20%-30%. As a
percent of sales, operating income produced a 12.3% margin in the fiscal 2008
third quarter, up 180 basis points from the same period last year. The Products
segment's volume growth and the Univeyor stabilization, as well as strength in
the remainder of the Solutions segment, primarily the Shredder business,
contributed to the improvement.
The Company's continued strategic investments in selling and marketing expenses
drove a $2.0 million increase in those expenses, with currency translation
contributing an additional $0.8 million increase, both compared with the third
quarter of fiscal 2007. As a percent of revenue, selling and marketing expenses
were 11.5% for this year's quarter, compared with 10.6% last year.
A $1.0 million increase in general and administrative expenses also reflects
continued investments to support the Company's global expansion, including
increases in staffing for new product engineering and development and also $0.3
million of currency translation.
Lower debt in this year's third quarter resulted in a $0.6 million, or 14.6%,
decrease in interest and debt expense for the current quarter and reflects the
Company's activities to strengthen its capital structure by eliminating or
efficiently refinancing higher cost debt.
During the quarter, the Company redeemed $3.0 million of its 8 7/8% notes,
incurring a one-time cost of $0.2 million to save $0.3 million of interest
expense annually. Similarly during last year's quarter, the Company redeemed
$3.7 million of its 10% notes, incurring a one-time cost of $0.4 million to save
$0.4 million in annual interest expense.
Investment income in the fiscal 2008 third quarter was $0.3 million, down from
$3.8 million in the fiscal 2007 third quarter. Last year's quarter reflected
$3.4 million in one-time pre-tax gains in the Company's captive insurance
company portfolio due to an asset reallocation.
The Company realized $0.8 million of other income in this year's quarter
compared with $0.2 million last year, primarily from interest on invested cash.
Working capital as a percent of sales was 19.7% at the end of the fiscal 2008
third quarter compared with 19.6% at the end of the prior year's third quarter
and 21.2% at the end of the fiscal 2008 second quarter. CMCO's long term
objective is to reduce working capital as a percent of sales to 15%.
Page 2 of 12
Debt, net of cash, at December 30, 2007, was $88.8 million, or 24.1% of total
capitalization, a reduction of $52.3 million from $141.1 million, or 37.7% of
total capitalization, a year ago. At fiscal 2008 third quarter end, gross debt
was $149.9 million, or 34.9% of total capitalization, a reduction of $23.3
million from $173.2 million, or 42.7% of total capitalization a year ago. The
Company's availability on its $75 million line of credit with its bank group at
December 30, 2007 was $63.6 million.
The Company continues to realize the cash flow benefits of its U.S. net
operating loss (NOL) carryforward, of which $6.2 million, representing
approximately $2.2 million of cash tax savings, remained available as of
December 30, 2007 and is expected to be fully utilized in the fiscal fourth
quarter. The effective tax rate for the quarter was 40.8% compared with 38.2%
for the prior year's quarter. The increase was primarily due to the recording of
a valuation allowance against deferred tax assets of the Company's Univeyor
business. The Company expects the rate to be in the 38% to 39% range for normal
ongoing operations.
Capital expenditures for the third quarter of fiscal 2008 were $2.4 million,
relatively consistent with last year's $2.5 million. Capital spending is focused
on new product development, the purchase of productivity-enhancing equipment and
capital maintenance items at various manufacturing facilities. The Company
anticipates capital spending to total approximately $11 to $12 million in fiscal
2008.
PRODUCTS SEGMENT
- ----------------
Products segment net sales for the third quarter of fiscal 2008 increased 10.7%
compared with last year's third quarter and represented 90.5% of consolidated
net sales. The fluctuation compared with last year's quarter is summarized as
follows, in millions:
Increased volume $ 8.5 6.7%
Additional shipping day 2.1 1.7%
Improved pricing 1.6 1.3%
Foreign currency translation 3.7 2.9%
Divested business * (2.3) (1.9%)
--------- ------
Total $ 13.6 10.7%
========= ======
* Divested business is Larco Industrial Services, Ltd.; sale announced
March 5, 2007
Products segment sales growth included significant contributions from Columbus
McKinnon Europe operations as well as solid demand from the domestic hoist,
crane and rigging businesses.
Gross margin for the segment improved 180 basis points to 31.5% compared with
29.7% in last year's third quarter. Income from operations, as a percent of
sales, was 13.5% for this period, an 80 basis point improvement over 12.7% in
the fiscal 2007 third quarter. Despite increased selling and marketing
investments, the Company continues to penetrate new markets and launch new
products, driving revenue that more than offsets the effect of higher spending.
Backlog stood at $54.9 million at the end of the quarter compared with backlog
of $58.4 million and $63.0 million at the end of the fiscal 2008 second and
first quarters, respectively. The decrease is primarily due to the fulfillment
of large crane orders received in the fiscal first quarter. The time to convert
the majority of Products segment backlog to sales averages from one day to a few
weeks, and backlog for this segment normally represents four to five weeks of
shipments, with backlog at December 30 representing approximately five weeks of
shipments.
SOLUTIONS SEGMENT
- -----------------
Net sales for the Solutions segment were $14.7 million in the fiscal 2008 third
quarter, slightly below last year's $15.2 million, driven primarily by the
Company's tire shredder operation offsetting the decline in the Univeyor
Page 3 of 12
business. Gross margin improved 1040 basis points to 16.8% compared with 6.4%
last year. Further, operating income improved 1000 basis points to 1.8% compared
with last year's negative 8.2% operating loss. Improved profitability was
significantly affected by the results of operational restructuring at the
Company's Univeyor business.
Backlog for the Solutions segment at December 30, 2007 was $17.0 million, an
increase from backlog of $15.7 million and $8.5 million at the end of the fiscal
2008 second and first quarters, respectively. The increase was driven primarily
by strong demand within the segment's tire shredder business. For this segment,
the average cycle time for backlog to convert to sales generally ranges from one
to six months.
Mr. Tevens stated, "The Solutions segment has been steadily improving over the
last three quarters with our restructuring of the Univeyor business. However,
because Univeyor's customer base and channels to market differ from our Products
segment, we have concluded that Univeyor no longer strategically aligns with the
rest of our business and recently announced that we are pursuing the possible
sale of this business. We are pleased that the remainder of our Solutions
business, specifically the tire shredder operation which sells a product that
addresses tire waste regulatory requirements, is performing well."
NINE-MONTH FISCAL 2008 REVIEW
- -----------------------------
Net sales for the first nine months of fiscal 2008 were $454.7 million, up 5.0%,
or $21.7 million compared with the first nine months of fiscal 2007. Gross
profit of $136.6 million was 13.9% higher for this fiscal year's first nine
months resulting in a 230 basis point improvement in gross profit margin to
30.0%. Selling, general and administrative (SG&A) expenses combined were $79.0
million in the first nine months of fiscal 2008 compared with $71.3 million in
the prior fiscal year. As a percent of sales, SG&A was 17.4% and 16.5% for the
fiscal 2008 and 2007 nine-month periods, respectively. As previously noted, the
increase was primarily due to investments made to support the Company's
strategic growth initiatives. Operating margin for the first nine months of
fiscal 2008 was 12.4% compared with 11.3% for the first nine months of fiscal
2007, representing 35.8% operating leverage. Interest expense in the first nine
months of fiscal 2008 was down $1.5 million, or 11.6%, to $11.2 million
reflecting a $16.7 million year-over-year reduction in average debt outstanding.
Net income was $29.0 million for the first nine months of fiscal 2008 compared
with net income of $23.0 million for the first nine months of fiscal 2007. On a
per diluted share basis, first nine months fiscal 2008 net income was $1.51
compared with $1.22 in the same period last year. During the fiscal 2008 period,
the Company recorded net after-tax charges of $1.1 million, or $0.06 per diluted
share, in financing costs. Similarly, during the first nine months of fiscal
2007, the Company recorded net after-tax charges of $3.2 million, or $0.17 per
diluted share, in financing costs. Additionally, during fiscal 2007 the Company
recorded a $3.4 million pre-tax investment gain, or a net after-tax gain of $2.2
million, representing $0.12 per diluted share, upon an asset reallocation.
Excluding the effect of these unusual items, fiscal 2008 year-to-date pro forma
net income per diluted share was $1.57, a 23.6% increase from fiscal 2007
year-to-date pro forma net income per diluted share of $1.27.
Page 4 of 12
FY 2008/2007 YTD RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP PRO FORMA NET INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
- ----------------------------------------------------------------- ---------------------------------- --------------------------
FY 2008 YTD FY 2007 YTD
- ----------------------------------------------------------------- ---------------------------------- --------------------------
GAAP net income $28,967 +25.9% $23,012
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Financing costs - Notes repurchases 1,620 4,942
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Captive insurance gains from asset reallocation -- (3,410)
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Income tax (expense)/benefit (567) (536)
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Non-GAAP pro forma net income $30,020 +25.0% $24,008
- ----------------------------------------------------------------- ---------------------------------- --------------------------
GAAP net income per diluted share* $1.51 +23.8% $1.22
- ----------------------------------------------------------------- ---------------------------------- --------------------------
Non-GAAP pro forma net income per diluted share* $1.57 +23.6% $1.27
- ----------------------------------------------------------------- ---------------------------------- --------------------------
* SHARES IN THOUSANDS USED IN YTD PER DILUTED SHARE CALCULATIONS -- FY08:
19,144; FY07: 18,929
Net cash provided by operations was $38.0 million for the fiscal 2008 first nine
months, a 39.5% increase from $27.2 million in the fiscal 2007 period due to
increased profits and lower working capital requirements. However, working
capital requirements, particularly inventories, continued to utilize cash during
fiscal 2008.
SUMMARY
- -------
Mr. Tevens concluded, "We see sustained strength in global industrial markets,
along with our diligent focus on profit generation, continuing to drive our
profitable growth for the remainder of fiscal 2008. Products segment bookings
for the third quarter were up in the mid-to-high single digit range over last
year's third quarter. We are also pleased with the market reception of our
various new products designed in accordance with international standards and
suitable for global use, including hoists and rigging products. Our efforts in
international markets including the eastern European emerging markets over the
last two years are resulting in market share gains. In addition, we will
continue to search for small, bolt-on acquisitions around the world to
complement this organic growth while maintaining a conservative capital
structure."
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/WEBCAST
- ----------------------
A teleconference and webcast have been scheduled for January 24, 2008 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 January 31, 2008 by dialing 1-866-395-7239. Alternatively, you may
access an archive of the call until May 21, 2008 on Columbus McKinnon's web site
at: http://www.cmworks.com/news/presentations.aspx.
----------------------------------------------
Page 5 of 12
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.
Page 6 of 12
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
THREE MONTHS ENDED
------------------
DECEMBER 30, 2007 DECEMBER 31, 2006 CHANGE
----------------- ----------------- ------
NET SALES $ 155,196 $ 142,044 9.3%
Cost of products sold 108,522 103,421 4.9%
------------------------------------------------------
Gross profit 46,674 38,623 20.8%
Gross profit margin 30.1 % 27.2 %
Selling expense 17,818 14,989 18.9%
General and administrative expense 9,516 8,566 11.1%
Restructuring charges 149 128 16.4%
Amortization 29 44 -34.1%
------------------------------------------------------
INCOME FROM OPERATIONS 19,162 14,896 28.6%
------------------------------------------------------
Interest and debt expense 3,445 4,034 -14.6%
Cost of bond redemptions 177 359 -50.7%
Investment income (261) (3,774) -93.1%
Other income (835) (151) 453.0%
------------------------------------------------------
Income from continuing operations before income tax
expense 16,636 14,428 15.3%
Income tax expense 6,781 5,510 23.1%
------------------------------------------------------
Income from continuing operations 9,855 8,918 10.5%
Income from discontinued operations 139 208 -33.2%
------------------------------------------------------
NET INCOME $ 9,994 $ 9,126 9.5%
======================================================
Average basic shares outstanding 18,753 18,544 1.1%
Basic income per share:
Continuing operations $ 0.52 $ 0.48 8.3%
Discontinued operations 0.01 0.01
------------------------------------------------------
Net income $ 0.53 $ 0.49 8.2%
======================================================
Average diluted shares outstanding 19,200 18,954 1.3%
Diluted income per share:
Continuing operations $ 0.51 $ 0.47 8.5%
Discontinued operations 0.01 0.01
------------------------------------------------------
Net income $ 0.52 $ 0.48 8.3%
======================================================
Page 7 of 12
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
NINE MONTHS ENDED
-----------------
DECEMBER 30, 2007 DECEMBER 31, 2006 CHANGE
----------------- ----------------- ------
NET SALES $ 454,716 $ 432,963 5.0%
Cost of products sold 318,116 313,040 1.6%
------------------------------------------------------
Gross profit 136,600 119,923 13.9%
Gross profit margin 30.0 % 27.7 %
Selling expense 51,208 45,095 13.6%
General and administrative expense 27,839 26,195 6.3%
Restructuring charges 894 (278) -421.6%
Amortization 82 131 -37.4%
------------------------------------------------------
INCOME FROM OPERATIONS 56,577 48,780 16.0%
------------------------------------------------------
Interest and debt expense 11,250 12,722 -11.6%
Cost of bond redemptions 1,620 4,942 -67.2%
Investment income (812) (4,560) -82.2%
Other income (2,312) (1,444) 60.1%
------------------------------------------------------
Income from continuing operations before income tax
expense 46,831 37,120 26.2%
Income tax expense 18,281 14,673 24.6%
------------------------------------------------------
Income from continuing operations 28,550 22,447 27.2%
Income from discontinued operations 417 565 -26.2%
------------------------------------------------------
NET INCOME $ 28,967 $ 23,012 25.9%
======================================================
Average basic shares outstanding 18,702 18,491 1.1%
Basic income per share:
Continuing operations $ 1.53 $ 1.21 26.4%
Discontinued operations 0.02 0.03
------------------------------------------------------
Net income $ 1.55 $ 1.24 25.0%
======================================================
Average diluted shares outstanding 19,144 18,929 1.1%
Diluted income per share:
Continuing operations $ 1.49 $ 1.19 25.2%
Discontinued operations 0.02 0.03
------------------------------------------------------
Net income $ 1.51 $ 1.22 23.8%
======================================================
Page 8 of 12
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 30, 2007 MARCH 31, 2007
----------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 61,073 $ 48,655
Trade accounts receivable 93,928 97,269
Unbilled revenues 11,181 15,050
Inventories 91,612 77,179
Prepaid expenses 17,753 18,029
------------------------------
Total current assets 275,547 256,182
------------------------------
Net property, plant, and equipment 56,684 55,231
Goodwill and other intangibles, net 186,705 185,903
Marketable securities 30,213 28,920
Deferred taxes on income 20,549 34,460
Other assets 6,595 4,942
------------------------------
TOTAL ASSETS $ 576,293 $ 565,638
==============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 10,356 $ 9,598
Trade accounts payable 36,014 35,896
Accrued liabilities 57,698 52,344
Restructuring reserve 15 599
Current portion of long-term debt 460 297
------------------------------
Total current liabilities 104,543 98,734
------------------------------
Senior debt, less current portion 6,072 26,168
Subordinated debt 133,000 136,000
Other non-current liabilities 53,019 63,411
------------------------------
Total liabilities 296,634 324,313
------------------------------
Shareholders' equity:
Common stock 189 188
Additional paid-in capital 177,296 174,654
Retained earnings 114,018 85,237
ESOP debt guarantee (2,995) (3,417)
Accumulated other comprehensive loss (8,849) (15,337)
------------------------------
Total shareholders' equity 279,659 241,325
------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 576,293 $ 565,638
==============================
Page 9 of 12
COLUMBUS MCKINNON CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
NINE MONTHS ENDED
-----------------
DECEMBER 30, 2007 DECEMBER 31, 2006
----------------- -----------------
OPERATING ACTIVITIES:
Income from continuing operations $ 28,550 $ 22,447
Adjustments to reconcile income from continuing operations
to net cash providedby operating activities:
Depreciation and amortization 6,378 6,306
Deferred income taxes 13,911 12,526
Gain on sale of investments/real estate (433) (4,745)
Loss on early retirement of bonds 1,244 4,069
Stock option expense 944 1,040
Amortization/write-off of deferred financing costs 814 1,385
Changes in operating assets and liabilities:
Trade accounts receivable 3,439 5,365
Unbilled revenues and excess billings 4,912 (1,187)
Inventories (13,317) (10,890)
Prepaid expenses 349 (1,564)
Other assets (1,045) (297)
Trade accounts payable (502) (2,033)
Accrued and non-current liabilities (7,259) (5,192)
-------------------------------
Net cash provided by operating activities 37,985 27,230
-------------------------------
INVESTING ACTIVITIES:
(Purchase) sale of marketable securities, net (1,397) 2,052
Capital expenditures (7,421) (6,825)
Proceeds from sale of property 5,504 2,051
Proceeds from discontinued operations note receivable 417 565
-------------------------------
Net cash used by investing activities (2,897) (2,157)
-------------------------------
FINANCING ACTIVITIES:
Proceeds from stock options exercised 1,309 2,334
Net (borrowings) payments under revolving line-of-credit
agreements (182) 2,294
Repayment of debt (27,728) (43,668)
Deferred financing costs incurred (2) (456)
Other 422 438
-------------------------------
Net cash used by financing activities (26,181) (39,058)
-------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 3,511 512
-------------------------------
Net change in cash and cash equivalents 12,418 (13,473)
Cash and cash equivalents at beginning of year 48,655 45,598
-------------------------------
Cash and cash equivalents at end of period $ 61,073 $ 32,125
===============================
Page 10 of 12
COLUMBUS MCKINNON CORPORATION
BUSINESS SEGMENT DATA
(IN THOUSANDS, EXCEPT PERCENTAGE DATA)
QUARTER ENDED QUARTER ENDED
DECEMBER 30, 2007 DECEMBER 31, 2006 % CHANGE
---------------------------- ------------------------- -----------
PRODUCTS
- --------
Net sales $ 140,478 $ 126,863 10.7%
Gross profit 44,199 37,654 17.4%
MARGIN 31.5 % 29.7 %
Income from operations 18,901 16,143 17.1%
MARGIN 13.5 % 12.7 %
SOLUTIONS
- ---------
Net sales $ 14,718 $ 15,181 -3.0%
Gross profit 2,475 969 155.4%
MARGIN 16.8 % 6.4 %
Income from operations 261 (1,247) -120.9%
MARGIN 1.8 % (8.2) %
CONSOLIDATED
- ------------
Net sales $ 155,196 $ 142,044 9.3%
Gross profit 46,674 38,623 20.8%
MARGIN 30.1 % 27.2 %
Income from operations 19,162 14,896 28.6%
MARGIN 12.3 % 10.5 %
NINE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 30, 2007 DECEMBER 31, 2006 % CHANGE
---------------------------- ------------------------- -----------
PRODUCTS
- --------
Net sales $ 417,556 $ 384,039 8.7%
Gross profit 130,530 114,967 13.5%
MARGIN 31.3 % 29.9 %
Income from operations 57,380 49,991 14.8%
MARGIN 13.7 % 13.0 %
SOLUTIONS
- ---------
Net sales $ 37,160 $ 48,924 -24.0%
Gross profit 6,070 4,956 22.5%
MARGIN 16.3 % 10.1 %
Income from operations (803) (1,211) -33.7%
MARGIN (2.2) % (2.5) %
CONSOLIDATED
- ------------
Net sales $ 454,716 $ 432,963 5.0%
Gross profit 136,600 119,923 13.9%
MARGIN 30.0 % 27.7 %
Income from operations 56,577 48,780 16.0%
MARGIN 12.4 % 11.3 %
Page 11 of 12
COLUMBUS MCKINNON CORPORATION
ADDITIONAL DATA
DECEMBER 30, 2007 DECEMBER 31, 2006 MARCH 31, 2007
----------------- ----------------- --------------
BACKLOG (IN MILLIONS)
Products segment $ 54.9 $ 54.7 $ 53.2
Solutions segment $ 17.0 $ 9.2 $ 9.6
TRADE ACCOUNTS RECEIVABLE
days sales outstanding 55.1 days 58.7 days 56.4 days
INVENTORY TURNS PER YEAR
(based on cost of products sold) 4.7 turns 4.8 turns 5.8 turns
DAYS' INVENTORY 77.0 days 76.2 days 62.8 days
TRADE ACCOUNTS PAYABLE
days payables outstanding 30.2 days 33.7 days 29.1 days
WORKING CAPITAL AS A % OF SALES 19.7 % 19.6 % 20.1 %
DEBT TO TOTAL CAPITALIZATION PERCENTAGE 34.9 % 42.7 % 41.6 %
DEBT, NET OF CASH, TO TOTAL CAPITALIZATION 24.1 % 37.7 % 33.8 %
SHIPPING DAYS BY QUARTER
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
FY09 63 63 60 65 251
FY08 63 63 60 63 249
FY07 63 63 59 64 249
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