NEWS RELEASE
CONTACT:
Robert L. Montgomery, Jr.
Executive Vice President and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5405
COLUMBUS MCKINNON CORPORATION ANNOUNCES 162% RISE IN FOURTH QUARTER
EARNINGS PER SHARE AND 42% RISE IN FISCAL 1999 EARNINGS PER SHARE
Amherst, New York, May 18, 1999 - Columbus McKinnon Corporation
(Nasdaq:CMCO), today announced record financial results for its 1999 fourth
quarter and fiscal year which ended on March 31, 1999. Net sales for CM's
fiscal fourth quarter were a record $178.5 million, a 17.7% increase from
net sales of $151.6 million in the same quarter of the prior year. Net
income for the fiscal 1999 fourth quarter was $8.7 million, 154.9% above
1998 fourth quarter net income of $3.4 million and 9.6% higher than income
before extraordinary charge of $7.9 million in the 1998 fourth quarter. Net
income per share for the 1999 fourth quarter was $0.62 per diluted share, a
161.7% increase from $0.24 in the fiscal 1998 quarter and 12.5% greater
than income per share before extraordinary charge of $0.55 a year ago.
For fiscal 1999, net sales were a record $735.4 million, 30.9% higher than
$561.8 million in fiscal 1998. Net income for fiscal 1999 rose 41.0% to
$27.4 million. Net income per share for fiscal 1999 was $1.92 per diluted
share, a 42.3% increase from $1.35 for the prior year and 15.5% greater
than income per diluted share before extraordinary charge of $1.66 in
fiscal 1998.
Financial results for the quarter and full year reflect the effect of CM's
merger with GL International on March 1, 1999, which resulted in the
issuance of 897,114 common shares and options to purchase 154,848 CM common
shares to satisfy outstanding GL options. This transaction was accounted
for as a pooling of interests, and resulted in a restatement of all
financial results as though both companies were combined for all periods
presented.
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Columbus McKinnon Announces Record Earnings, Page Two
On a pro forma basis, assuming all acquisitions and divestitures occurred
at the beginning of the periods presented, CM's net sales decreased 9.1% to
$178.5 million for the 1999 fourth quarter and 0.5% to $732.1 million for
fiscal 1999. Pro forma net income rose 131.2% to $8.7 million for the
quarter and 37.9% to $27.4 million for the year, while pro forma net income
per diluted share increased 137.3% to $0.62 for the quarter and 39.2% to
$1.91 for the year.
Timothy T. Tevens, Columbus McKinnon President and Chief Executive Officer
commented, "We're very pleased with CM's fourth quarter and full year
results, particularly in the context of a more difficult industrial
business environment over the last year for our Products,
Solutions-Industrial, and Solutions-Automotive business segments. Our
quarterly and annual results reflect strong gains which are indicative of
the overall strength and diversity of our business and CM's earnings and
cash generating power."
Tevens continued, "This quarter capped another year of progress in all
three of CM's primary strategic focuses--continuing improvement of our core
business, international expansion, and growth by acquisition. Core
businesses advanced through continuing synergistic integration as strategic
supplier relationships helped our results, operating groups accelerated
efficiencies for like businesses, and business systems implementations
expanded administrative integration. The additions of Raccords Gautier in
France and Tigrip/Camlok in England and Germany expanded us
internationally; LICO in Kansas City helped create a new material handling
Solutions-Automotive segment, and Abell-Howe, GL International, and
Washington Equipment Company (completed in April 1999) formed an excellent
foundation for CM's new CraneMart strategy."
Tevens concluded, "Columbus McKinnon enters fiscal year 2000 in a position
of considerable strength with a solid and broad product line, leadership in
key markets, a growing international presence, high market share, and a
track record of successful growth. Five-year compound annual growth rates
of 39% for net sales, 49% for EBITDA, 31% for net income, and 59% for cash
flow from operating activities demonstrate our long-term effectiveness at
profitably building CM into an industry leader. This year is off to a
strong start and we look forward to continue building CM as a leading
global provider of material handling products and solutions."
--more--
Columbus McKinnon Announces Record Earnings, Page Three
In discussing the continued strength of the Company's cash flow, Robert L.
Montgomery, Jr., Executive Vice President and Chief Financial Officer, said
that cash flow from operating activities was strong at $4.02 per diluted
share for the year, up from $2.66 per diluted share last year. He also
noted that the Company repaid $36 million of funded debt during the year.
Columbus McKinnon's Board of Directors also declared a regular quarterly
dividend of $.07 per common share, payable on July 1, 1999 to shareholders
of record on June 17, 1999.
Columbus McKinnon Corporation is a broad-line designer, manufacturer and
supplier of sophisticated material handling products and integrated
material handling systems that are widely distributed to industrial and
consumer markets worldwide. Those items that reflect the highest sales of
Columbus McKinnon's Products segment are hoists, steel welded chain and
attachments, and industrial components. Integrated material handling
solutions are systems that are designed to meet specific applications of
end users to increase productivity through material handling. Comprehensive
information on Columbus McKinnon is available on its Web site at
http://www.cmworks.com/
This press release contains "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, statements concerning future revenue and
earnings, involve known and unknown risks, uncertainties and other factors
that could cause the actual results of the Company to differ materially
from the results expressed or implied by such statements, including general
economic and business conditions, conditions affecting the industries
served by the Company and its subsidiaries, conditions affecting the
Company's customers and suppliers, competitor responses to the Company's
products and services, the overall market acceptance of such products and
services and other factors disclosed in the Company's periodic reports
filed with the Securities and Exchange Commission.
--more--
Page Four
Columbus McKinnon Corporation
Consolidated Financial Information
THREE MONTHS ENDED **
-----------------------
3/31/99 3/31/98
-------------------- --------------------------------
ACTUAL AND PRO FORMA ACTUAL PRO FORMA *
-------------------- ------ -----------
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
Net sales ................................................... $ 178,477 $ 151,576 $ 196,389
Cost of products sold ....................................... 127,758 107,337 145,197
--------- --------- ---------
Gross profit ................................................ 50,719 44,239 51,192
Gross profit margin ......................................... 28.4% 29.2% 26.1%
Selling, general and
administrative expense .................................. 24,685 20,785 23,316
--------- --------- ---------
Income from operations before
amortization ............................................ 26,034 23,454 27,876
Amortization ................................................ 4,155 2,623 3,714
--------- --------- ---------
Income from operations ...................................... 21,879 20,831 24,162
Interest and other expense, net ............................. 7,721 5,662 8,401
--------- --------- ---------
Income before income taxes .................................. 14,158 15,169 15,761
Income tax expense .......................................... 5,465 7,239 7,481
--------- --------- ---------
Income before extraordinary
charge .................................................. 8,693 7,930 8,280
Extraordinary debt
extinguishment charge ................................... -- (4,520) (4,520)
--------- --------- ---------
Net income .................................................. $ 8,693 $ 3,410 $ 3,760
========= ========= =========
Average basic shares outstanding ............................ 13,925 14,294 14,294
Basic income per share
Before extraordinary charge ............................. $ 0.62 $ 0.55 $ 0.58
Net ..................................................... $ 0.62 $ 0.24 $ 0.26
========= ========= =========
Average diluted shares outstanding .......................... 14,075 14,447 14,447
Diluted income per share
Before extraordinary charge ............................. $ 0.62 $ 0.55 $ 0.57
Net ..................................................... $ 0.62 $ 0.24 $ 0.26
========= ========= =========
*Pro Forma assumes that the Abell-Howe, LICO, Univeyor A/S, and Camlok acquisitions and Mechanical Products divestiture
occurred as of April 1, 1997 for comparative purposes instead of actual acquisition dates of August 21, 1998, March 31, 1998,
January 7, 1998, and January 29, 1999 respectively, and divestiture date of August 10, 1998.
** All amounts have been restated to reflect the GL International, Inc. pooling of interests.
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Page Five
Columbus McKinnon Corporation
Consolidated Financial Information
FISCAL YEAR ENDED **
-----------------------
3/31/99 3/31/98
------- -------
ACTUAL PRO FORMA* ACTUAL PRO FORMA *
--------------------------- ---------------------------
(IN THOUSANDS, EXCEPT PER SHARE AND PERCENTAGE DATA)
Net sales ................................. $ 735,445 $ 732,143 $ 561,823 $ 735,525
Cost of products sold ..................... 542,975 540,807 401,669 546,568
--------- --------- --------- -----------
Gross profit .............................. 192,470 191 336 160,154 188,957
Gross profit margin ....................... 26.2% 26.1% 28.5% 25.7%
Selling, general and
administrative expense ................ 91,909 91,225 79,939 91,958
--------- --------- --------- -----------
Income from operations before
amortization .......................... 100,561 100,111 80,215 96,999
Amortization .............................. 15,479 15,409 10,297 15,036
--------- --------- --------- -----------
Income from operations .................... 85,082 84,702 69,918 81,963
Interest and other expense, net ........... 34,358 34,128 23,164 33,936
--------- --------- --------- -----------
Income before income taxes ................ 50,724 50,574 46,754 48,027
Income tax expense ........................ 23,288 23,219 22,776 23,673
--------- --------- --------- -----------
Income before extraordinary
charge ................................ 27,436 27,355 23,978 24,354
Extraordinary debt
extinguishment charge ................. -- -- (4,520) (4,520)
--------- --------- --------- -----------
Net income ................................ $ 27,436 $ 27,355 $ 19,458 $ 19,834
========= ========= ========= ===========
Average basic shares outstanding .......... 14,137 14,137 14,221 14,221
Basic income per share
Before extraordinary charge ........... $ 1.94 $ 1.93 $ 1.69 $ 1.71
Net ................................... $ 1.94 $ 1.93 $ 1.37 $ 1.39
========= ========= ========= ===========
Average diluted shares outstanding ........ 14,294 14,294 14,427 14,427
Diluted income per share
Before extraordinary charge ........... $ 1.92 $ 1.91 $ 1.66 $ 1.69
Net ................................. $ 1.92 $ 1.91 $ 1.35 $ 1.37
========= ========= ========= ===========
*Pro Forma assumes that the Abell-Howe, LICO, Univeyor A/S, and Camlok acquisitions and Mechanical Products divestiture
occurred as of April 1, 1997 for comparative purposes instead of actual acquisition dates of August 21, 1998, March 31, 1998,
January 7, 1998, and January 29, 1999 respectively, and divestiture date of August 10, 1998.
** All amounts have been restated to reflect the GL International, Inc. pooling of interests.
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Page Six
COLUMBUS McKINNON CORPORATION
CONSOLIDATED BALANCE SHEET *
(In Thousands)
MARCH 31,
1999 1998
------ ------
ASSETS
Current assets:
Cash and cash equivalents ...................... $ 6,867 $ 22,861
Trade accounts receivable ...................... 136,988 124,637
Unbilled revenues .............................. 9,821 19,634
Inventories .................................... 115,979 115,126
Net assets held for sale ....................... 8,214 10,396
Prepaid expenses ............................... 8,647 10,407
-------- --------
Total current assets .................. 286,516 303,061
Net property, plant, and equipment ...................... 90,004 87,662
Goodwill and other intangibles, net ..................... 357,727 368,946
Marketable securities ................................... 19,355 16,665
Deferred taxes on income ................................ 6,886 7,534
Other assets ............................................ 8,169 5,483
-------- --------
Total assets .......................... $768,657 $789,351
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Notes payable to banks ......................... $ 4,590 $ 5,184
Trade accounts payable ......................... 54,651 58,639
Excess billings ................................ 5,058 4,653
Accrued liabilities ............................ 54,008 44,405
Current portion of long-term debt .............. 1,926 2,180
-------- --------
Total current liabilities ............. 120,233 115,061
Senior debt, less current portion ....................... 222,165 256,929
Subordinated debt ....................................... 199,521 199,468
Other non-current liabilities ........................... 38,064 46,947
-------- --------
Total liabilities ..................... 579,983 618,405
-------- --------
Shareholders' equity:
Common stock ................................... 176 176
Additional paid-in capital ..................... 102,283 100,395
Retained earnings .............................. 100,455 76,744
ESOP debt guarantee ............................ (9,865) (3,203)
Other .......................................... (4,375) (3,166)
-------- --------
Total shareholders' equity ............ 188,674 170,946
-------- --------
Total liabilities and shareholders'
equity ............................ $768,657 $789,351
======== ========
* All amounts have been restated to reflect the GL International, Inc. pooling
of interests.
COLUMBUS McKINNON CORPORATION
BUSINESS SEGMENTS - ACTUAL *
SOLUTIONS- SOLUTIONS- ELIMINATIONS/
PRODUCTS INDUSTRIAL AUTOMOTIVE OTHER ** CONSOLIDATED
Quarter ended 3/31/99
Net sales ...................................... $137,659 $16,039 $ 29,651 $ (4,872) $ 178,477
Income from operations
before amortization.......................... 25,164 1,664 451 (1,245) 26,034
Quarter ended 3/31/98
Net sales ...................................... 139,046 12,905 -- (375) 151,576
Income from operations
before amortization .............................. 23,605 339 -- (490) 23,454
Fiscal year ended 3/31/99
Net sales ...................................... 528,974 58,301 161,443 (13,273) 735,445
Income from operations
before amortization ......................... 81,165 5,592 14,925 (1,121) 100,561
Fiscal year ended 3/31/98
Net sales ...................................... 524,949 39,845 -- (2,971) 561,823
Income from operations
before amortization ......................... 76,188 3,992 -- 35 80,215
* All amounts have been restated to reflect the GL International, Inc. pooling of interests.
**Includes intercompany eliminations and Mechanical Products divestiture in August, 1998.
COLUMBUS McKINNON CORPORATION
BUSINESS SEGMENTS - PRO FORMA **
SOLUTIONS- SOLUTIONS- ELIMINATIONS/
PRODUCTS INDUSTRIAL AUTOMOTIVE OTHER * CONSOLIDATED
Quarter ended 3/31/99
Net sales .......................... $137,659 $16,039 $ 29,651 $ (4,872) $ 178,477
Income from operations
before amortization ............. 25,164 1,664 451 (1,245) 26,034
Quarter ended 3/31/98
Net sales .......................... 140,925 12,905 47,924 (5,365) 196,389
Income from operations
before amortization ............. 23,978 339 4,910 (1,351) 27,876
Fiscal year ended 3/31/99
Net sales .......................... 533,254 58,301 161,443 (20,855) 732,143
Income from operations
before amortization ............. 81,718 5,592 14,925 (2,124) 100,111
Fiscal year ended 3/31/98
Net sales .......................... 534,432 56,510 165,873 (21,290) 735,525
Income from operations
before amortization ............. 77,912 4,973 16,642 (2,528) 96,999
*Includes intercompany eliminations and Mechanical Products divestiture in August, 1998.
** Pro Forma assumes that the Abell-Howe, LICO, Univeyor A/S, and Camlok acquisitions and Mechanical Products divestiture
occurred as of April 1, 1997 for comparative purposes instead of actual acquisition dates of August 21, 1998, March 31, 1998,
January 7, 1998, and January 29, 1999 respectively, and divestiture date of August 10, 1998. All amounts have been restated
to reflect the GL International, Inc. pooling of interests.