INDEX
COLUMBUS McKINNON CORPORATION
Page #
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed consolidated balance sheets -
September 29, 1996 and March 31, 1996 2
Condensed consolidated statements of income and retained earnings -
Three months and six months ended September 29, 1996 and
October 1, 1995 3
Condensed consolidated statements of cash flows -
Six months ended September 29, 1996 and October 1, 1995 4
Notes to condensed consolidated financial statements -
September 29, 1996 5
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 8
Part II. Other Information
Item 1. Legal Proceedings - none. 12
Item 2. Changes in Securities - none. 12
Item 3. Defaults upon Senior Securities - none. 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information - none. 12
Item 6. Exhibits and Reports on Form 8-K 12
1
<PAGE>
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
<TABLE>
<CAPTION>
COLUMBUS McKINNON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 29, March 31,
1996 1996
-----------------------------
(In thousands)
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $11,238 $10,171
Trade accounts receivable 37,724 38,741
Inventories 48,464 48,303
Prepaid expenses 1,770 1,788
-------- ---------
Total current assets 99,196 99,003
Net property, plant, and equipment 31,799 30,909
Goodwill and other intangibles, net 43,348 42,951
Marketable securities 12,356 11,174
Deferred taxes on income 3,481 2,881
Other assets 1,741 1,816
--------- ---------
Total assets $191,921 $188,734
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Notes payable to banks $0.00 $1,635
Trade accounts payable 12,794 15,661
Accrued liabilities 14,557 15,803
Current portion of long-term debt 1,276 1,446
--------- ---------
Total current liabilities 28,627 34,545
Long-term debt, less current portion 7,234 8,298
Other non-current liabilities 8,971 8,269
--------- ---------
Total liabilities 44,832 51,112
Shareholders' equity:
Common stock 137 137
Additional paid-in capital 94,843 94,283
Retained earnings 57,910 49,386
ESOP debt guarantee (4,772) (5,238)
Other (1,029) (946)
--------- ---------
Total shareholders' equity 147,089 137,622
--------- ---------
Total liabilities and shareholders' equity $191,921 $188,734
========= =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS McKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
------------------------- -------------------------
September 29, October 1, September 29, October 1,
1996 1995 1996 1995
------------- ---------- ------------- ----------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $64,426 $44,534 $130,161 $89,066
Cost of products sold 45,242 31,848 90,960 64,047
------ ------ ------ ------
Gross profit 19,184 12,686 39,201 25,019
Selling expenses 5,310 4,061 11,312 7,997
General and administrative expenses 4,507 2,641 9,399 5,668
Amortization of intangibles 457 17 899 40
Environmental remediation costs 0 620 0 624
------ ------ ------- ------
10,274 7,339 21,610 14,329
------ ------ ------- ------
Income from operations 8,910 5,347 17,591 10,690
Interest and debt expense 223 614 479 1,213
Interest and other income 232 120 415 240
------ ------ ------- ------
Income before income taxes 8,919 4,853 17,527 9,717
Income tax expense 3,708 1,853 7,284 3,715
------ ------ ------- ------
Net income 5,211 3,000 10,243 6,002
Retained earnings - beginning of period 53,632 41,037 49,386 38,443
Cash dividends of $0.07, $0.059, $0.13 and $0.118 per share (933) (406) (1,719) (812)
Cash dividends on preferred shares 0 (3) 0 (5)
------ ------ ------ ------
Retained earnings - end of period $57,910 $43,628 $57,910 $43,628
======= ======= ======= =======
Earnings per share, both primary and fully diluted $0.39 $0.42 $0.77 $0.85
======= ======= ======= =======
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS McKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
--------------------------
September 29, October 1,
1996 1995
---------- ---------
(In thousands)
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $10,243 $6,002
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,338 1,510
Other 161 45
Changes in operating assets and liabilities:
Trade accounts receivable 1,201 2,001
Inventories (217) (1,919)
Prepaid expenses 11 (188)
Other assets (426) 45
Trade accounts payable (2,788) 544
Accrued and non-current liabilities (1,123) (2,793)
-------- --------
Net cash provided by operating activities 10,400 5,247
INVESTING ACTIVITIES:
Acquisition of patents (186) (71)
Yale acquisition costs (603) 0
Purchases of marketable securities, net of sales (996) (589)
Capital expenditures (3,281) (3,641)
-------- --------
Net cash used in investing activities (5,066) (4,301)
FINANCING ACTIVITIES:
Net (payments) borrowings under revolving
line-of-credit agreements (1,624) 3,218
Repayment of debt (1,231) (1,819)
Deferred financing costs incurred (500) (615)
Dividends paid (1,572) (1,257)
Reduction of ESOP debt guarantee 723 598
Other 0 (312)
-------- --------
Net cash used in financing activities (4,204) (187)
Effect of exchange rate changes on cash (63) 0
-------- --------
Net increase in cash and cash equivalents 1,067 759
Cash and cash equivalents at beginning of period 10,171 387
-------- --------
Cash and cash equivalents at end of period $11,238 $1,146
======== ========
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
4
<PAGE>
COLUMBUS McKINNON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 29, 1996
1. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the financial position
of the Company at September 29, 1996, and the results of its
operations and its cash flows for the three and six month periods
ended September 29, 1996 and October 1, 1995 have been included.
Results for the period ended September 29, 1996 are not necessarily
indicative of the results that may be expected for the year ended
March 31, 1997. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Columbus
McKinnon Corporation annual report on Form 10-K for the year ended
March 31, 1996.
2. Inventories consisted of the following at September 29, 1996 and
March 31, 1996 (in thousands):
At cost--FIFO basis:
Raw materials $ 22,906 $ 24,596
Work-in-process 11,984 11,533
Finished goods 16,913 15,180
------------------ -----------------
51,803 51,309
LIFO cost less than FIFO cost (3,339) (3,006)
------------------ -----------------
$ 48,464 $ 48,303
================== =================
An actual valuation of inventory under the LIFO method can be made only
at the end of each year based on the inventory levels and costs at that
time. Accordingly, interim LIFO calculations must necessarily be based
on management's estimates of expected year-end inventory levels and
costs. Because these are subject to many forces beyond management's
control, interim results are subject to the final year-end LIFO
inventory valuation.
3. Property, plant, and equipment is net of $17,989,000 and $15,656,000 of
accumulated depreciation at September 29, 1996 and March 31, 1996,
respectively.
4. Goodwill and other intangibles, net includes $1,569,000 and $690,000
of accumulated amortization at September 29, 1996 and March 31, 1996,
respectively.
5. The accrued general and product liability costs which are included in
other non-current liabilities are the actuarial present value of
estimated reserves based on an amount determined from loss reports and
individual cases filed with the Company and an amount, based on past
experience, for losses incurred but not reported. The accrual in these
condensed consolidated financial statements was determined by applying
a discount factor based on interest rates customarily used in the
insurance industry.
5
<PAGE>
6. Primary and fully diluted earnings per share were based on the
following (in thousands):
Three Months Ended Six Months Ended
-------------------- ------------------
Sept. 29 Oct. 1, Sept. 29, Oct. 1,
1996 1995 1996 1995
---- ---- ---- ----
Weighted-average common stock
outstanding 13,236 7,011 13,218 7,020
Common stock equivalents - - - -
7. Income tax expense for the three and six month periods ended September
29, 1996 exceeds the customary relationship between income tax expense
and income before income taxes due to nondeductible amortization of
goodwill of $414,000 and $827,000, respectively.
8. On November 1, 1995, the Company acquired all of the outstanding stock
of LTI Holdings, Inc. ("Lift-Tech"), a hoist manufacturer, and has
accounted for the acquisition as a purchase. The total cost of the
acquisition was approximately $63 million, consisting of $43 million
in cash and $20 million for the refinancing of Lift-Tech bank debt.
The funding required to complete the transaction was financed through
borrowings under bank credit facilities, which consisted of $50
million of seven-year term debt with interest payable at prime plus 1%
and $25 million revolving debt with interest payable at prime plus
1/2% which would have expire November 1, 1998. The obligations
outstanding under these debt instruments were paid in full by
application of proceeds received from the Company's initial public
offering which commenced on February 22, 1996.
The condensed consolidated statements of income and retained earnings
for the three and six month periods ended September 29, 1996 and the
condensed consolidated statement of cash flows for the six months ended
September 29, 1996 include the Lift-Tech activity.
The following table presents pro forma summary information for the
three and six month periods ended October 1, 1995 as if the Lift-Tech
acquisition and related borrowings, and the initial public offering,
had occurred as of April 1, 1995, which is the beginning of fiscal
1996. The pro forma information is provided for informational purposes
only. It is based on historical information and does not necessarily
reflect the actual results that would have occurred nor is it
necessarily indicative of future results of operations of the combined
enterprise:
Three Months Ended Six Months Ended
------------------ ----------------
October 1, 1995
--------------------------------------
(In thousands, except per share data)
Pro forma:
Net sales $ 62,986 $ 125,490
Income from operations 8,116 15,596
Net income 4,518 9,117
Earnings per share, both
primary and fully diluted 0.35 0.70
6
<PAGE>
9. On October 17, 1996, through a tender offer, the Company acquired
approximately 72% of the outstanding stock of Spreckels Industries,
Inc., now known as Yale International, Inc. ("Yale"), a manufacturer of
a wide range of industrial products, including hoists, scissor lifts,
mechanical jacks, rotating joints, actuators and circuit protection
devices. The Company is in the process of acquiring the remaining
outstanding shares and effecting a merger, and will account for the
acquisition as a purchase. The total cost of the acquisition will be
approximately $270 million, consisting of $200 million of cash and $70
million of acquired Yale debt. The funding required to complete the
transactions is being financed through borrowings under a bank credit
facility, which consists of: 1) $125 million of five year term debt
with interest payable at varying rates based on the Company's leverage
ratio, currently at a Eurodollar rate based on LIBOR ("Eurodollar
rate") plus 250 basis points, 2) $75 million of seven year term debt
with interest also payable at varying rates, currently at a Eurodollar
rate plus 300 basis points, and 3) $125 million of five year revolving
debt, of which $75 million is designated for the potential refinancing
of the acquired Yale debt, with interest also payable at varying rates,
currently at a Eurodollar rate plus 250 basis points. This new debt is
secured by all equipment, inventory, receivables, subsidiary stock
(limited to 65% for foreign subsidiaries), and intellectual property.
In conjunction with this financing transaction, the Company's existing
domestic line of credit was retired, and the interest rate on the
Company's ESOP loans was changed to that consistent with the new five
year term loan previously referred to above.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
Three Months and Six Months Ended September 29, 1996 and October 1, 1995
Net sales in the fiscal 1997 quarter ended September 29, 1996 were $64,426,000,
an increase of $19,892,000 or 44.7% over the fiscal 1996 quarter ended October
1, 1995. Net sales for the six months ended September 29, 1996 were
$130,161,000, an increase of 46.1% over the six months ended October 1, 1995.
Sales growth during the current quarter was due primarily to the November 1995
Lift-Tech acquisition which affected the general distribution,
service-after-sale, and original equipment manufacturers distribution channels.
The Company also experienced increased sales volume primarily in the following
distribution channels: 1) specialty distributors due primarily to new product
introductions and an expanding customer base and 2) general distributors due to
increased market share. Sales volume in the current quarter was less than the
same quarter last year primarily in the following distribution channels: 1)
waste management due to temporary delays in orders resulting from state
legislation, 2) original equipment manufacturers due to timing of orders, and 3)
consumer due to foreign-lead price competition and a relatively flat economy. In
addition, list price increases of approximately 4% were introduced in November
of 1995 affecting many of the Company's hoist, chain and forged products sold in
its domestic commercial markets. Sales in the commercial and the consumer
distribution channel groups were as follows, in thousands of dollars and with
percentage changes for each group:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Sept. 29, Oct. 1, Change Sept. 29, Oct. 1, Change
1996 1995 Amount % 1996 1995 Amount %
------------------------------------- --------------------------------------
(In thousands, except percentages)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial sales:
Domestic $ 48,673 $ 32,471 $ 16,202 49.9 $ 97,058 $ 63,210 $ 33,848 53.5
International 9,683 5,916 3,767 63.7 19,995 12,715 7,280 57.3
-------- -------- ------- --------- --------- --------
58,356 38,387 19,969 52.0 117,053 75,925 41,128 54.2
Consumer sales:
Domestic 5,465 5,671 (206) (3.6) 11,877 11,985 (108) (0.9)
International 605 476 129 27.1 1,231 1,156 75 6.5
-------- -------- -------- --------- --------- ---------
6,070 6,147 (77) (1.3) 13,108 13,141 (33) (0.3)
-------- -------- -------- --------- --------- ---------
Net sales $ 64,426 $ 44,534 $ 19,892 44.7 $ 130,161 $ 89,066 $ 41,095 46.1
======== ======== ======== ========= ========= =========
</TABLE>
The Company's gross profit margins were approximately 29.8%, 28.5%, 30.1% and
28.1% for the fiscal 1997 and 1996 quarters and the six months then ended,
respectively. The increase in gross profit margin in the current quarter
resulted from the effects of the Company's cost control efforts and changes in
product mix.
Selling expenses were $5,310,000, $4,061,000, $11,312,000 and $7,997,000 in the
fiscal 1997 and 1996 quarters and the six months then ended, respectively. The
1997 expenses were impacted by the addition of Lift-Tech sales. As a percentage
of consolidated net sales, selling expenses were 8.2%, 9.1%, 8.7% and 9.0% in
the fiscal 1997 and 1996 quarters and the six months then ended, respectively.
The lower percentages in fiscal 1997 are due primarily to the timing of various
marketing related expenses.
8
<PAGE>
General and administrative expenses were $4,507,000, $2,641,000, $9,399,000 and
$5,668,000 in the fiscal 1997 and 1996 quarters and the six months then ended,
respectively. The 1997 expenses were impacted by the addition of Lift-Tech
activities. As a percentage of consolidated net sales, general and
administrative expenses were 7.0%, 5.9%, 7.2% and 6.4% in the fiscal 1997 and
1996 quarters and the six months then ended, respectively. In fiscal 1997, these
expenses include a provision for corporate-wide incentive compensation.
Amortization of intangibles was $457,000, $17,000, $899,000 and $40,000 in the
fiscal 1997 and 1996 quarters and the six months then ended, respectively;
increases are due to the amortization of goodwill resulting from the acquisition
of Lift-Tech.
Environmental remediation costs were $620,000 in the fiscal 1996 quarter and
$624,000 for the six months then ended, with no corresponding expense in fiscal
1997. Those costs related primarily to a specific project which is substantially
complete.
Interest and debt expense was $223,000, $614,000, $479,000 and $1,213,000 in the
fiscal 1997 and 1996 quarters and the six months then ended. The fiscal 1997
decrease is due to debt repayment funded by proceeds from the Company's initial
public offering in February 1996. As a percentage of consolidated net sales,
interest and debt expense was 0.3%, 1.4%, 0.4% and 1.4% in the fiscal 1997 and
1996 quarters and the six months then ended, respectively.
Interest and other income was $232,000, $120,000, $415,000 and $240,000 in the
fiscal 1997 and 1996 quarters and the six months then ended, respectively. The
fiscal 1997 increase is due to additional investment holdings to fund the
Company's general and products liability self-insurance reserves.
Income taxes as a percentage of pre-tax accounting income were 41.6%, 38.2%,
41.6% and 38.2% in the fiscal 1997 and 1996 quarters and the six months then
ended, respectively. The fiscal 1997 percentages reflect the effect of
nondeductible amortization of goodwill resulting from the Lift-Tech acquisition.
As a result of the above, net income increased $2,211,000 or 73.7% for the
quarter and $4,241,000 or 70.7% for the six months then ended. As a percentage
of consolidated net sales, net income was 8.1%, 6.7%, 7.9% and 6.7% in the
fiscal 1997 and 1996 quarters and the six months then ended, respectively.
9
<PAGE>
Liquidity and Capital Resources
On October 17, 1996, through a tender offer, the Company acquired approximately
72% of the outstanding stock of Spreckels Industries, Inc., now known as Yale
International, Inc. ("Yale"), a manufacturer of a wide range of industrial
products, including hoists, scissor lifts, mechanical jacks, rotating joints,
actuators and circuit protection devices. The Company is in the process of
acquiring the remaining outstanding shares and effecting a merger, and will
account for the acquisition as a purchase. The total cost of the acquisition
will be approximately $270 million, consisting of $200 million of cash and $70
million of acquired Yale debt. The funding required to complete the transactions
is being financed through borrowings under a bank credit facility, which
consists of: 1) $125 million of five year term debt with interest payable at
varying rates based on the Company's leverage ratio, currently at a Eurodollar
rate plus 250 basis points, 2) $75 million of seven year term debt with interest
also payable at varying rates, currently at a Eurodollar rate plus 300 basis
points, and 3) $125 million of five year revolving debt, of which $75 million is
designated for the potential refinancing of the acquired Yale debt, with
interest also payable at varying rates, currently at a Eurodollar rate plus 250
basis points. This new debt is secured by all equipment, inventory, receivables,
subsidiary stock (limited to 65% for foreign subsidiaries), and intellectual
property. In conjunction with this financing transaction, the Company's existing
domestic line of credit was retired, and the interest rate on the Company's ESOP
loans was changed to that consistent with the new five year term loan previously
referred to above.
At September 29, 1996 there were no borrowings outstanding under the then
existing revolving credit facility.
The Company believes that its cash on hand, cash flows, and borrowing capacity
under its revolving credit facility will be sufficient to fund its ongoing
operations, debt service and budgeted capital expenditures for the next twelve
months.
Net cash provided by operating activities increased to $10,400,000 for the six
months ended September 29, 1996 from $5,247,000 for the six months ended October
1, 1995. The $5,153,000 increase in net cash provided by operating activities
resulted primarily from improved operating results of $4,241,000.
Net cash used in investing activities increased to $5,066,000 for the six months
ended September 29, 1996 from $4,301,000 for the six months ended October 1,
1995. The $765,000 increase is due to primarily to $603,000 of costs related to
the acquisition of Yale.
Net cash used in financing activities increased to $4,204,000 for the six months
ended September 29, 1996 from $187,000 for the six months ended October 1, 1995.
The fluctuation is primarily due to a net repayment of $1,624,000 under
revolving line-of-credit agreements in the fiscal 1997 period, compared to a net
borrowing of $3,218,000 in the fiscal 1996 period.
Capital Expenditures
In addition to keeping its current equipment and plants properly maintained, the
Company is committed to replacing, enhancing, and upgrading its property, plant,
and equipment to reduce production costs, increase flexibility to respond
effectively to market fluctuations and changes, meet environmental requirements,
enhance safety, and promote ergonomically correct work stations. Consolidated
capital expenditures for the six months ended September 29, 1996 and October 1,
1995 were $3,281,000 and $3,641,000, respectively.
10
<PAGE>
Inflation and Other Market Conditions
The Company's costs are affected by inflation in the U.S. economy, and to a
lesser extent, in foreign economies including those of Canada, Mexico, Europe,
and the Pacific Rim. The Company does not believe that inflation has had a
material effect on results of operations over the periods presented because of
low inflation levels over the periods and because the Company has generally been
able to pass on rising costs through price increases. However, in the future
there can be no assurance that the Company's business will not be affected by
inflation or that it will be able to pass on cost increases.
Effects of New Accounting Pronouncements
In 1997, the Company adopted FAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which has not
had a material effect on the financial statements.
11
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings - none.
Item 2. Changes in Securities - none.
Item 3. Defaults upon Senior Securities - none.
Item 4. Submission of Matters to a Vote of Security Holders
On August 26, 1996, the following directors were elected at an
Annual Meeting of Shareholders with 12,866,976 votes cast for
and 45,450 against:
Edward W. Duffy, Chairman; Herbert P. Ladds, Jr.;
Robert L. Montgomery, Jr.; Randolph A. Marks; and
L. David Black.
Item 5. Other Information - none.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 10.1 - Amendment No. 4 to the Columbus McKinnon Corporation
Employee Stock Ownership Plan
Exhibit 11.1 - Columbus McKinnon Corporation Computation of
Earnings per Share
On October 30, 1996 the Company filed Form 8-K dated October 17, 1996 with
respect to the completion of its cash tender offer for all of the
outstanding shares of Class A Common Stock of Spreckels Industries, Inc.,
now known as Yale International, Inc.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COLUMBUS McKINNON CORPORATION
(Registrant)
Date: November 13, 1996 /s/ Robert L. Montgomery, Jr.
------------------- -----------------------------
Robert L. Montgomery, Jr.
Executive Vice President and Chief
Financial Officer
13
<PAGE>
EXHIBIT INDEX
Exhibit Exhibit Description Location
10.1 Amendment No. 4 to the Columbus McKinnon Corporation
Employee Stock Ownership Plan E - 10.1
11.1 Columbus McKinnon Corporation Computation of Earnings per Share E - 11.1
14
<PAGE>
AMENDMENT NO. 4
TO THE
COLUMBUS MCKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
Columbus McKinnon Corporation (the "Corporation") hereby amends the
Columbus McKinnon Corporation Employee Stock Ownership Plan (the "Plan"), as
amended and restated in its entirety effective April 1, 1989, and as further
amended by Amendment Nos. 1-3, in accordance with Section 11.1 of the Plan, as
follows:
1. Section 1.6, entitled "Eligible Employee", is amended effective as of
October 1, 1996 by amending Section 1.6(a) thereof to read as follows:
"(A) IN GENERAL. "ELIGIBLE EMPLOYEE" MEANS ANY EMPLOYEE WHO IS
EMPLOYED BY AN EMPLOYER, WHO IS REGULARLY EMPLOYED AT A SITE IN THE
UNITED STATES, AND WHO IS:
(1) AN OFFICE EMPLOYEE,
(2) A NONUNION FACTORY EMPLOYEE REGULARLY EMPLOYED AT THE
CORPORATION'S TONAWANDA FACILITY, OR
(3) ANY OTHER NONUNION EMPLOYEE WHO IS COMPENSATED ON
THE BASIS OF A REGULAR SALARY AS DISTINGUISHED FROM AN HOURLY
WAGE."
2. Section 1.22, entitled "Fair Market Value", is amended effective
as of February 23, 1996 to read as follows:
"1.22"FAIR MARKET VALUE" MEANS [1] WITH RESPECT TO STOCK THAT IS
READILY TRADABLE ON AN NATIONAL SECURITIES EXCHANGE THAT IS REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION, THE PRICE OF THE STOCK
PREVAILING ON THE EXCHANGE, [2] WITH RESPECT TO STOCK THAT IS READILY
TRADABLE ON AN ESTABLISHED SECURITIES MARKET THAT IS NOT AN EXCHANGE,
THE OFFERING PRICE FOR THE STOCK AS ESTABLISHED BY CURRENT BID AND
ASKED PRICES QUOTED BY PERSONS INDEPENDENT OF THE CORPORATION, AND [3]
WITH RESPECT TO STOCK THAT IS NOT READILY TRADABLE ON AN ESTABLISHED
SECURITIES MARKET, THE VALUE DETERMINED BY THE COMMITTEE IN ACCORDANCE
WITH TREASURY REGULATION SS.54.4975-11(D)(5) AND BASED UPON, AMONG
OTHER THINGS, AN EVALUATION PERFORMED NOT LESS FREQUENTLY THAN
ANNUALLY BY AN INDEPENDENT APPRAISER HAVING EXPERTISE IN RENDERING
SUCH EVALUATIONS AS PROVIDED IN SECTION 401(A)(28)(C) OF THE CODE."
<PAGE>
Page 2 of Amendment No. 4 of Employee Stock Ownership Plan
3. Section 1.40, entitled "Valuation Date", is amended effective as of
October 1, 1996 to read as follows:
"1.40 "VALUATION DATE" MEANS MARCH 31ST AND SEPTEMBER 30TH, EXCEPT THAT FOR THE
PURPOSE OF ALLOCATING DIVIDENDS ON STOCK, "VALUATION DATE" SHALL MEAN MARCH
31ST. THE COMMITTEE MAY DESIGNATE ADDITIONAL VALUATION DATES FROM TIME TO TIME
IN ORDER TO ASSURE THE ORDERLY ADMINISTRATION OF THE PLAN. THE VALUE OF AN
ACCOUNT ON A VALUATION DATE SHALL BE DEEMED TO BE THE VALUE OF THE ACCOUNT ON
THE LAST BUSINESS DAY PRECEDING SUCH VALUATION DATE."
4. Section 6.1, entitled "Vesting and Forfeiture", is amended effective
as of February 23, 1996 by amending Section 6.1(c)(4) to read as follows:
"(4) VOTING OF ALLOCATED STOCK. THE COMMITTEE RATHER THAN
THE PARTICIPANT SHALL DIRECT THE VOTING THE STOCK ALLOCATED TO THE
PARTICIPANT'S STOCK ACCOUNT IN ACCORDANCE WITH SECTION 8.5."
5. Section 7.1, entitled "Time of Distribution", is amended effective
as of October 1, 1996 by amending Section 7.1(a) thereof to read as follows:
"(A) IN GENERAL. IF A PARTICIPANT'S ACCOUNT BALANCE BECOMES
DISTRIBUTABLE UNDER SECTION 6.2, DISTRIBUTION OF THE ACCOUNT BALANCE
SHALL BE MADE AS SOON AS PRACTICABLE AFTER THE VALUATION DATE NEXT
FOLLOWING THE DATE ON WHICH THE PARTICIPANT CEASES TO BE AN EMPLOYEE
OR DIES, AND AFTER ALL REQUIREMENTS FOR DISTRIBUTION (INCLUDING THE
FILING OF AN APPLICATION FOR DISTRIBUTION) HAVE BEEN MET."
6. Section 7.1, entitled "Time of Distribution", is amended effective
as of October 1, 1996 by amending Section 7.1(d)(2) thereof to read as follows:
"(2) DISTRIBUTION WHERE PARTICIPANT FAILS TO CONSENT. IF THE
PARTICIPANT'S CONSENT IS REQUIRED UNDER THIS SECTION 7.1(d). BUT
IS NOT PROVIDED PRIOR TO THE TIME DISTRIBUTION IS TO BE MADE, THE
PARTICIPANT SHALL BE DEEMED TO HAVE MADE A REVOCABLE ELECTION TO
DEFER THE DISTRIBUTION OF HIS ACCOUNT BALANCE UNTIL HE ATTAINS
NORMAL RETIREMENT AGE (SUBJECT TO ANY DIVERSIFICATION ELECTION
UNDER SECTION 8.4). THE PARTICIPANT MAY REVOKE THE ELECTION AND
REQUEST DISTRIBUTION OF HIS ACCOUNT BALANCE AS OF ANY SUBSEQUENT
VALUATION DATE BY FILING A WRITTEN REQUEST WITH THE COMMITTEE AT
LEAST 15 DAYS PRIOR TO SUCH VALUATION DATE."
<PAGE>
Page 3 of Amendment No. 4 of Employee Stock Ownership Plan
7. Section 7.2, entitled "Form of Distribution", is amended effective
as of October 1, 1996 to read as follows:
"7.2 FORM OF DISTRIBUTION.
(A) DISTRIBUTION OF STOCK ACCOUNT. DISTRIBUTION OF A
PARTICIPANT'S STOCK ACCOUNT SHALL BE MADE IN THE FORM OF STOCK
PLUS CASH IN LIEU OF ANY FRACTIONAL SHARE.
(B) DISTRIBUTION OF NONSTOCK ACCOUNT. DISTRIBUTION OF A
PARTICIPANT'S NONSTOCK ACCOUNT SHALL BE MADE IN THE FORM OF A
CASH LUMP SUM. NOTWITHSTANDING THE PRECEDING SENTENCE, A
PARTICIPANT MAY ELECT TO HAVE HIS NONSTOCK ACCOUNT (OTHER THAN
THE PORTION ATTRIBUTABLE TO AN ELECTION TO DIVERSIFY INVESTMENT
OF HIS STOCK ACCOUNT MADE PURSUANT TO SECTION 8.4) DISTRIBUTED IN
THE FORM OF STOCK PLUS CASH IN LIEU OF ANY FRACTIONAL SHARE.
(C) IF PUT OPTION IS AVAILABLE. NOTWITHSTANDING SECTION
7.2(a), IF A PARTICIPANT OR BENEFICIARY IS PERMITTED UNDER
SECTION 8.1 TO EXERCISE A PUT OPTION PRIOR TO THE DISTRIBUTION OF
THE STOCK, AND DOES EXERCISE THE PUT OPTION, THE DISTRIBUTION MAY
BE IN THE FORM OF CASH AND/OR A PROMISSORY NOTE AS PROVIDED IN
SECTION 8.1(e)."
8. Section 8.1, entitled "Distributed Stock Subject to Put Option", is
amended effective as of October 1, 1996 by changing the title to
"NONTRADED STOCK SUBJECT TO PUT OPTION" and by amending subsection (a)
thereof to read as follows:
"(A) WHEN PUT OPTION IS REQUIRED. SHARES OF STOCK THAT ARE
DISTRIBUTED FROM THE PLAN AT A TIME WHEN THE STOCK IS NOT READILY
TRADABLE ON AN ESTABLISHED SECURITIES MARKET WITHIN THE MEANING OF
SECTION 409(h) OF THE CODE SHALL BE SUBJECT TO A PUT OPTION IN
ACCORDANCE WITH THIS SECTION 8.1."
9. Section 8.5, entitled "Voting Rights", is amended effective as of
February 23, 1996 to read as follows:
"8.5 VOTING RIGHTS.
(A) DIRECTION BY PARTICIPANTS.
(1) RIGHT TO DIRECT VOTING. EACH PARTICIPANT SHALL HAVE
THE RIGHT TO DIRECT THE TRUSTEE AS TO THE MANNER IN WHICH STOCK
ALLOCATED TO THE PARTICIPANT'S STOCK ACCOUNT SHALL BE VOTED.
<PAGE>
Page 4 of Amendment No. 4 of Employee Stock Ownership Plan
(2) VOTING PROCEDURE. WHENEVER A VOTE BY COMMON SHAREHOLDERS
OF THE CORPORATION IS TO BE TAKEN, THE COMMITTEE ACTING THROUGH THE
TRUSTEE SHALL FURNISH TO THE PARTICIPANTS THE SAME INFORMATION
CONCERNING THE MATTER TO BE VOTED UPON AS THE INFORMATION FURNISHED TO
SHAREHOLDERS GENERALLY. THE TRUSTEE SHALL TAKE SUCH STEPS AS MAY BE
NECESSARY OR APPROPRIATE UNDER THE CIRCUMSTANCES TO ASSURE THAT SUCH
INFORMATION IS DISTRIBUTED TO PARTICIPANTS IN A TIMELY AND CONVENIENT
MANNER, AND THAT THE VOTING DIRECTIONS OF THE PARTICIPANTS REMAIN
CONFIDENTIAL.
(3) BENEFICIARIES. THE BENEFICIARY OF A DECEASED PARTICIPANT
WHO HAS STOCK ALLOCATED TO A STOCK ACCOUNT SHALL BE TREATED IN THE SAME
MANNER AS A PARTICIPANT FOR PURPOSES OF THIS SECTION 8.5.
(B) DIRECTION BY COMMITTEE. THE COMMITTEE SHALL DIRECT THE
TRUSTEE AS TO THE MANNER IN WHICH THE FOLLOWING DESCRIBED STOCK SHALL BE
VOTED:
(1) UNALLOCATED STOCK. STOCK HELD UNALLOCATED IN THE
LOAN SUSPENSE ACCOUNT,
(2) STOCK SUBJECT TO FORFEITURE. STOCK ALLOCATED TO A
PARTICIPANT'S STOCK ACCOUNT THAT HAS BECOME SUBJECT TO FORFEITURE
IN ACCORDANCE WITH SECTION 6.1,
(3) NO VOTING DIRECTIONS. STOCK ALLOCATED TO A
PARTICIPANT'S STOCK ACCOUNT FOR WHICH THE PARTICIPANT FAILS TO GIVE
TIMELY VOTING DIRECTIONS TO THE TRUSTEE.
(C) VOTING BY TRUSTEE. STOCK HELD IN THE TRUST SHALL BE
VOTED BY THE TRUSTEE IN ACCORDANCE WITH SECTION 8.5(a) OR SECTION
8.5(B), AS APPLICABLE. IN THE EVENT THAT THE PARTICIPANT AND/OR
COMMITTEE BOTH FAIL TO PROVIDE THE TRUSTEE WITH TIMELY DIRECTIONS
CONCERNING THE VOTING OF STOCK, THE TRUSTEE SHALL VOTE THE STOCK
IN THE MANNER DETERMINED BY THE TRUSTEE. THE TRUSTEE SHALL REMAIN
SUBJECT TO APPLICABLE ERISA FIDUCIARY STANDARDS IN VOTING STOCK
REGARDLESS OF WHETHER THE VOTING IS DIRECTED BY THE PARTICIPANTS,
THE COMMITTEE, OR THE TRUSTEE."
10. Section 9.1, entitled "Establishment of Trust", is amended
effective as of February 23, 1996 by amending Sections 9.1(b)(2) and 9.1(b)(3)
thereof to read as follows:
"(2) PURCHASES OF STOCK. CONTRIBUTIONS (AND OTHER TRUST
<PAGE>
Page 5 of Amendment No. 4 of Employee Stock Ownership Plan
ASSETS) MAY BE USED TO ACQUIRE STOCK FROM ANY CORPORATION SHAREHOLDER
OR FROM THE CORPORATION. PURCHASES OF STOCK BY THE TRUSTEE SHALL BE
MADE ONLY AS DIRECTED BY THE COMMITTEE. PURCHASES OF STOCK SHALL BE
MADE AT NO MORE THAN FAIR MARKET VALUE DETERMINED AS OF THE DATE OF
THE TRANSACTION.
3) SALES OF STOCK. THE COMMITTEE MAY DIRECT THE TRUSTEE TO
SELL SHARES OF CORPORATION STOCK TO ANY PERSON (INCLUDING THE
CORPORATION), PROVIDED THAT ANY SUCH SALE MUST BE AT A PRICE NOT LESS
FAVORABLE TO THE PLAN THAN FAIR MARKET VALUE AS OF THE DATE OF THE
SALE. STOCK PURCHASED WITH THE PROCEEDS OF AN EXEMPT LOAN SHALL NOT BE
SOLD BY THE TRUSTEE UNLESS A DETERMINATION HAS BEEN MADE THAT THE SALE
OF THE STOCK WILL NOT CAUSE THE EXEMPT LOAN INCURRED TO PURCHASE THE
STOCK TO BE OTHER THAN PRIMARILY FOR THE BENEFIT OF THE PARTICIPANTS
AND THEIR BENEFICIARIES."
IN WITNESS WHEREOF, this instrument of amendment has been
executed by a duly authorized officer of the Corporation this 30th day of
September, 1996.
COLUMBUS McKINNON CORPORATION
ATTEST: /s/ LOIS H. DEMLER /s/ ROBERT L. MONTGOMERY, JR.
------------------ -----------------------------
LOIS H. DEMLER By ROBERT L. MONTGOMERY, JR.
Title EXECUTIVE VICE PRESIDENT
<PAGE>
<TABLE>
<CAPTION>
(EPS)
COLUMBUS McKINNON CORPORATION
COMPUTATION OF EARNINGS PER SHARE
Exhibit 11.1
Three Months Ended Six Months Ended
------------------------------------------------
29-Sep-96 01-Oct-95 29-Sep-96 01-Oct-95
------------------------------------------------
<S> <C> <C> <C> <C>
Primary and fully diluted:
Weighted average common
shares outstanding 13,236,000 7,000,000 13,218,000 7,009,000
Weighted average shares issued
in fiscal 1996 (1) 0 116,000 0 119,000
Weighted average shares issued
in fiscal 1996 which can be
repurchased (2) 0 (105,000) 0 (108,000)
----------- ---------- ----------- ----------
Total 13,236,000 7,011,000 13,218,000 7,020,000
=========== ========== =========== ==========
Net income applicable to
common shareholders $5,211,000 $2,997,000 $10,243,000 $5,997,000
Net income per
common share 0.39 0.42 0.77 0.85
<FN>
- --------------------------------------------------------------
(1) Includes shares issued since December 20, 1994 (one year prior to the
initial filing of the IPO registration statement) at $12.69 per share
which is less than the initial public offering price of $15 deemed
outstanding for all periods presented in accordance with Staff
Accounting Bulletin No. 83.
(2) Represents the number of shares assumed to be purchased at $14 per
share, the IPO mid-point price, with proceeds from the shares issued in
1996.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED CONDENSED FINANCIAL STATEMENTS AS OF SEPTEMBER 29, 1996 AND
FOR THE THREE MONTH PERIOD THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001005229
<NAME> COLUMBUS MCKINNON CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-29-1996
<CASH> 11,238
<SECURITIES> 0
<RECEIVABLES> 37,724
<ALLOWANCES> 0
<INVENTORY> 48,464
<CURRENT-ASSETS> 99,196
<PP&E> 49,788
<DEPRECIATION> 17,989
<TOTAL-ASSETS> 191,921
<CURRENT-LIABILITIES> 28,627
<BONDS> 0
0
0
<COMMON> 137
<OTHER-SE> 146,952
<TOTAL-LIABILITY-AND-EQUITY> 191,921
<SALES> 64,426
<TOTAL-REVENUES> 64,426
<CGS> 45,242
<TOTAL-COSTS> 45,242
<OTHER-EXPENSES> 10,274
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 223
<INCOME-PRETAX> 8,919
<INCOME-TAX> 3,708
<INCOME-CONTINUING> 5,211
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,211
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
</TABLE>
