NEWS RELEASE
CONTACT:
Robert L. Montgomery, Jr.
Executive Vice President and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5405
COLUMBUS MCKINNON CORPORATION ANNOUNCES FISCAL 2000 FIRST QUARTER RESULTS
GROWTH CONTINUES IN CORE PRODUCTS BUSINESS
Amherst, New York, July 27, 1999 - Columbus McKinnon Corporation
(Nasdaq:CMCO), today announced financial results for the first quarter of
fiscal 2000 which ended on July 4, 1999. Net sales for the first quarter of
fiscal 2000 were $181.6 million, compared to net sales of $184.6 million
and pro forma net sales of $183.7 million in the first quarter of fiscal
1999. Net income for the fiscal 2000 first quarter was $6.4 million,
compared to fiscal 1999 first quarter net income of $6.4 million and pro
forma net income of $6.3 million. Net income per share for the first
quarter of fiscal 2000 met expectations at $0.45 per diluted share on 14.2
million shares, compared to fiscal 1999 first quarter net income per share
of $0.44 per diluted share and pro forma net income of $0.43 per diluted
share, both on 14.5 million shares.
Columbus McKinnon's financial results reflect the effect of CM's merger
with GL International on March 1, 1999, which 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. Pro forma
results shown for fiscal 1999 assume all acquisitions and divestitures
occurred at the beginning of the periods presented.
Timothy T. Tevens, Columbus McKinnon President and Chief Executive Officer
commented, "Columbus McKinnon's first quarter results are on target and
reflect increasing strength in our core Products business. Our Products
segment, which currently makes up about 70% of sales, performed very well
in the quarter, producing solid increases in sales and margins. (Sales up
8.0%, operating margin before amortization expense improved from 13.8% to
16.6%). Results in our Solutions-Automotive segment are still well below
our internal objectives for this business, prompting us to accelerate
integration activities to increase returns from this business segment."
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COLUMBUS MCKINNON ANNOUNCES FIRST QUARTER 2000 RESULTS, PAGE TWO
Tevens discussed the recent actions taken at its Solutions-Automotive
segment, established as a result of its March 1998 acquisition of Automatic
Systems, Inc. ("ASI"), formerly LICO, Inc. "We are accelerating a
comprehensive program to increase synergies and continue the integration of
ASI with CM," Tevens said. "In recent weeks, we have reorganized ASI's
administrative management structure to improve productivity and
effectiveness at lower cost; annual savings of $1 million are expected. Key
business-driving project management and engineering functions have been
strengthened. Over the next few months, ASI will be converted to CM's
integrated computer-based business system, which will enhance both project
management capabilities and management controls. We expect to begin
realizing the favorable financial effect of this program soon after
implementation."
Tevens also noted that David Clark, most recently ASI's Vice President of
Estimating, was named President of ASI, replacing Robert Hoehn, the former
President and principal owner of ASI, who retired in July. Tevens said,
"David Clark will be a strong leader for CM's Solutions-Automotive segment
bringing over 20 years of industry experience with an impressive breadth of
both management and technical experience including estimating, project
management, sales and engineering. He is highly regarded by ASI's customers
and staff and is completely aligned with our integration and business plans
to increase ASI's sales and profitability."
Tevens also commented on CM's outlook for fiscal 2000, "We are beginning to
see a slight increase in sales activity in some of our Products segment
lines, which combined with the results of our integration efforts, has
created an increase in sales and an increase in operating income.
Implementation of CM's CraneMart(TM) strategy is also continuing and we
expect to begin adding independent participants during the next few
quarters. In our Solutions-Automotive segment, we have recognized a
strategic shift in a major customer's focus from modular assembly of small
cars to the retooling of several plants to accommodate increasing demand
for trucks and sport utility vehicles. These factors, combined with our
recent actions at ASI, and other integration efforts that are bearing
fruit, all point to another strong year for CM."
Robert L. Montgomery, Jr., Executive Vice President and Chief Financial
Officer, discussed the strength of the Company's cash flow, noting that
cash flow from operating activities, normally weak in the first quarter due
to interest and bonus payments, was a positive $0.23 per diluted share for
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COLUMBUS MCKINNON ANNOUNCES FIRST QUARTER 2000 RESULTS, PAGE THREE
the quarter, compared to a negative $0.76 per diluted share a year ago.
Tevens concluded by commenting on Columbus McKinnon's upcoming annual
meeting scheduled for August 16,1999. "CM is currently contending with a
dissident shareholder group threatening a proxy contest that is proposing
an alternate slate of directors. CM's management and the Board are
completely committed to increasing value for all of CM's shareholders and
believe that a change in the Board's composition would be highly disruptive
to our business. We are confident in our ability to continue to generate
new value for CM shareholders through continued execution of our strategy
and business plan, which over time has produced significant growth in sales
and earnings (sales and net income have climbed at compound annual growth
rates of 52% and 28% respectively since the February 1996 IPO), as well as
market leadership and product line breadth, while favorably positioning CM
for the future."
Columbus McKinnon's Board of Directors also declared a regular quarterly
dividend of $.07 per common share, payable on October 7, 1999 to
shareholders of record on September 23, 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.
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Page Four
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Columbus McKinnon Corporation
Consolidated Financial Information
THREE MONTHS ENDED
-------------------------------------
7/4/99 6/28/98**
---------------------
ACTUAL AND PRO FORMA ACTUAL PRO FORMA *
-------------------- ------ -----------
(In thousands, except per share
and percentage data)
<S> <C> <C> <C>
Net sales ............................... $181,601 $184,616 $183,674
Cost of products sold ................... 134,489 137,303 136,402
-------- -------- --------
Gross profit ............................ 47,112 47,313 47,272
Gross profit margin ..................... 25.9% 25.6% 25.7%
Selling, general and
administrative expense .............. 22,245 22,311 22,562
-------- -------- --------
Income from operations before
amortization ........................ 24,867 25,002 24,710
Amortization ............................ 4,002 3,778 3,791
-------- -------- --------
Income from operations .................. 20,865 21,224 20,919
Interest and other expense, net ......... 8,032 8,576 8,593
-------- -------- --------
Income before income taxes .............. 12,833 12,648 12,326
Income tax expense ...................... 6,439 6,273 6,075
-------- -------- --------
Net income .............................. $ 6,394 $ 6,375 $ 6,251
======== ======== ========
Average basic shares outstanding ........ 13,972 14,329 14,329
Basic income per share .................. $ 0.46 $ 0.44 $ 0.44
Average diluted shares outstanding ...... 14,194 14,538 14,538
Diluted income per share ................ $ 0.45 $ 0.44 $ 0.43
======== ======== ========
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*Pro Forma assumes that the Washington Equipment, Abell-Howe, and Camlok
acquisitions and Mechanical Products divestiture occurred as of April 1, 1998
for comparative purposes instead of actual acquisition dates of April 29, 1999,
August 21, 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
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COLUMBUS McKINNON CORPORATION
CONSOLIDATED BALANCE SHEET
(In Thousands)
JULY 4, 1999 JUNE 28, 1998*
-------------- --------------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 3,484 $ 4,631
Trade accounts receivable 135,797 145,799
Unbilled revenues 13,462 19,891
Inventories 114,127 112,898
Net assets held for sale 8,285 10,429
Prepaid expenses 9,006 7,032
--------- ---------
Total current assets 284,161 300,680
Net property, plant, and equipment 90,439 86,893
Goodwill and other intangibles, net 356,922 366,195
Marketable securities 20,346 17,691
Deferred taxes on income 5,551 8,560
Other assets 7,920 6,669
--------- ---------
Total assets $765,339 $786,688
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 4,439 $ 9,327
Trade accounts payable 46,175 49,272
Excess billings 6,997 3,853
Accrued liabilities 48,084 48,597
Current portion of long-term debt 1,491 2,133
--------- ---------
Total current liabilities 107,186 113,182
Senior debt, less current portion 226,714 251,347
Subordinated debt 199,534 199,468
Other non-current liabilities 36,633 45,897
--------- ---------
Total liabilities 570,067 609,894
--------- ---------
Shareholders' equity:
Common stock 147 146
Additional paid-in capital 105,914 100,845
Retained earnings 105,865 82,179
ESOP debt guarantee ( 9,656) ( 2,984)
Unearned restricted stock ( 4,200) ( 466)
Accumulated other comprehensive loss ( 2,798) ( 2,926)
--------- ---------
Total shareholders' equity 195,272 176,794
--------- ---------
Total liabilities and shareholders'
equity $765,339 $786,688
========= =========
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* All amounts have been restated to reflect the GL International, Inc. pooling
of interests.
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COLUMBUS McKINNON CORPORATION - BUSINESS SEGMENTS
(In Thousands)
ACTUAL
SOLUTIONS - SOLUTIONS - ELIMINATIONS/
PRODUCTS INDUSTRIAL AUTOMOTIVE OTHER CONSOLIDATED
Quarter ended 7/4/99
<S> <C> <C> <C> <C> <C>
Net sales $138,788 $13,256 $35,548 $(5,991) $181,601
Income from operations
before amortization 23,087 1,117 587 76 24,867
Quarter ended 6/28/98*
Net sales 128,514 15,516 40,179 407 184,616
Income from operations
before amortization 17,749 1,625 4,666 962 25,002
PRO FORMA **
SOLUTIONS - SOLUTIONS - ELIMINATIONS/
PRODUCTS INDUSTRIAL AUTOMOTIVE OTHER CONSOLIDATED
Quarter ended 6/28/98*
Net sales $132,913 $15,516 $40,179 $(4,934) $183,674
Income from operations
before amortization 18,342 1,625 4,666 76 24,709
*All amounts have been restated to reflect the GL International, Inc. pooling of interests.
**Proforma assumes that the Washington Equipment, Abell-Howe, and Camlok acquisitions and Mechanical Products
divestiture occurred as of April 1, 1998 for comparative purposes instead of actual acquisition dates of April 29, 1999,
August 21, 1998, and January 29, 1999 respectively, and divestiture date of August 10, 1998.
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