UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT 1934
For the quarterly period ended July 4, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from to
------------------ ------------------
Commission File Number: 0-27618
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COLUMBUS MCKINNON CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 16-0547600
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
140 JOHN JAMES AUDUBON PARKWAY, AMHERST, NY 14228-1197
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(716) 689-5400
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. : [X] Yes [ ] No
The number of shares of common stock outstanding as of July 31, 1999 was:
14,844,300 shares.
<PAGE>
FORM 10-Q INDEX
COLUMBUS MCKINNON CORPORATION
JULY 4, 1999
PAGE #
------
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed consolidated balance sheets -
July 4, 1999 and March 31, 1999 2
Condensed consolidated statements of income and retained earnings -
Three months ended July 4, 1999 and June 28, 1998 3
Condensed consolidated statements of cash flows -
Three months ended July 4, 1999 and June 28, 1998 4
Condensed consolidated statements of comprehensive income -
Three months ended July 4, 1999 and June 28, 1998 5
Notes to condensed consolidated financial statements -
July 4, 1999 6
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 21
Item 2. Changes in Securities - none. 21
Item 3. Defaults upon Senior Securities - none. 21
Item 4. Submission of Matters to a Vote of Security Holders - none. 21
Item 5. Other Information - none. 21
Item 6. Exhibits and Reports on Form 8-K 21
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
JULY 4, MARCH 31,
1999 1999
--------- ---------
ASSETS: (IN THOUSANDS)
Current assets:
<S> <C> <C>
Cash and cash equivalents ...................................... $ 3,484 $ 6,867
Trade accounts receivable ...................................... 135,797 136,988
Unbilled revenues .............................................. 13,462 9,821
Inventories .................................................... 114,127 115,979
Net assets held for sale ....................................... 8,285 8,214
Prepaid expenses ............................................... 9,006 8,160
--------- ---------
Total current assets ................................................. 284,161 286,029
Net property, plant, and equipment ................................... 90,439 90,004
Goodwill and other intangibles, net .................................. 356,922 357,727
Marketable securities ................................................ 20,346 19,355
Deferred taxes on income ............................................. 5,551 5,627
Other assets ......................................................... 7,920 8,169
--------- ---------
Total assets ......................................................... $ 765,339 $ 766,911
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Notes payable to banks ......................................... $ 4,439 $ 4,590
Trade accounts payable ......................................... 46,175 54,651
Excess billings ................................................ 6,997 5,058
Accrued liabilities ............................................ 48,084 54,331
Current portion of long-term debt .............................. 1,491 1,926
--------- ---------
Total current liabilities ............................................ 107,186 120,556
Senior debt, less current portion .................................... 226,714 222,165
Subordinated debt .................................................... 199,534 199,521
Other non-current liabilities ........................................ 36,633 35,995
--------- ---------
Total liabilities .................................................... 570,067 578,237
Shareholders' equity:
Common stock ................................................... 147 146
Additional paid-in capital ..................................... 105,914 102,313
Retained earnings .............................................. 105,865 100,455
ESOP debt guarantee ............................................ (9,656) (9,865)
Unearned restricted stock ...................................... (4,200) (1,009)
Total accumulated other comprehensive income (loss) ............ (2,798) (3,366)
--------- ---------
Total shareholders' equity ........................................... 195,272 188,674
--------- ---------
Total liabilities and shareholders' equity ........................... $ 765,339 $ 766,911
========= =========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
THREE MONTHS ENDED
------------------
JULY 4, JUNE 28,
1999 1998
--------- ---------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Net sales ............................................................ $ 181,601 $ 184,616
Cost of products sold ................................................ 134,489 137,302
--------- ---------
Gross profit ......................................................... 47,112 47,314
Selling expenses ..................................................... 12,758 12,872
General and administrative expenses .................................. 9,487 9,439
Amortization of intangibles .......................................... 4,002 3,778
--------- ---------
26,247 26,089
--------- ---------
Income from operations ............................................... 20,865 21,225
Interest and debt expense ............................................ 8,279 8,948
Interest and other income ............................................ 247 371
--------- ---------
Income before income taxes ........................................... 12,833 12,648
Income tax expense ................................................... 6,439 6,273
--------- ---------
Net income ........................................................... 6,394 6,375
Retained earnings - beginning of period .............................. 100,455 76,744
Cash dividends of $0.07 per share .................................... (984) (940)
--------- ---------
Retained earnings - end of period .................................... $ 105,865 $ 82,179
========= =========
Earnings per share data, basic ....................................... $ 0.46 $ 0.44
========= =========
Earnings per share data, diluted ..................................... $ 0.45 $ 0.44
========= =========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
------------------
JULY 4, JUNE 28,
1999 1998
--------- ---------
(IN THOUSANDS)
OPERATING ACTIVITIES:
<S> <C> <C>
Net income ........................................................... $ 6,394 $ 6,375
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization .................................. 7,225 6,773
Deferred income taxes ........................................... 141 (404)
Other .......................................................... 190 106
Changes in operating assets and liabilities net of effects
from businesses purchased:
Trade accounts receivable ................................. 2,918 (19,794)
Unbilled revenues and excess billings ..................... (1,702) (1,057)
Inventories ............................................... 2,823 2,230
Prepaid expenses .......................................... (844) 48
Other assets .............................................. 168 (436)
Trade accounts payable .................................... (9,775) (10,737)
Accrued and non-current liabilities ....................... (4,242) 5,800
--------- ---------
Net cash provided by (used in) operating activities .................. 3,296 (11,096)
--------- ---------
INVESTING ACTIVITIES:
Purchase of marketable securities, net of sales ...................... (2,138) (1,055)
Capital expenditures ................................................. (2,323) (2,227)
Purchases of businesses, net of cash ................................. (6,366) (304)
Net assets held for sale ............................................. (71) (33)
--------- ---------
Net cash used in investing activities ................................ (10,898) (3,619)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock ............................... 1 -
Net borrowings under revolving line-of-credit agreements ............. 4,849 4,143
Repayment of debt .................................................... (886) (5,629)
Dividends paid ....................................................... (984) (940)
Reduction of ESOP debt guarantee ..................................... 209 219
Other ................................................................ (131) (841)
--------- ---------
Net cash provided by (used in) financing activities .................. 3,058 (3,048)
Effect of exchange rate changes on cash .............................. 1,161 (467)
--------- ---------
Net increase in cash and cash equivalents ............................ (3,383) (18,230)
Cash and cash equivalents at beginning of period ..................... 6,867 22,861
--------- ---------
Cash and cash equivalents at end of period ........................... $ 3,484 $ 4,631
========= =========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
THREE MONTHS ENDED
------------------
JULY 4, JUNE 28,
1999 1998
------- -------
(IN THOUSANDS)
<S> <C> <C>
Net income ............................................................ $ 6,394 $ 6,375
------- -------
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments ............................ 515 (269)
Unrealized gains on investments:
Unrealized holding gains arising during the period ................ 53 47
Less: reclassification adjustment for gains included in net income -- (76)
------- -------
53 (29)
------- -------
Total other comprehensive income (loss) ............................... 568 (298)
------- -------
Comprehensive income .................................................. $ 6,962 $ 6,077
======= =======
See accompanying notes to condensed consolidated financial statements.
</TABLE>
-5-
<PAGE>
COLUMBUS MCKINNON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JULY 4, 1999
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 July 4,
1999, and the results of its operations and its cash flows for the three
month periods ended July 4, 1999 and June 28, 1998, have been included.
Results for the period ended July 4, 1999 are not necessarily indicative of
the results that may be expected for the year ended March 31, 2000. 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, 1999.
Columbus McKinnon Corporation (the Company) is a leading broad-line
designer, manufacturer and supplier of sophisticated material handling
products and integrated material handling solutions that are widely
distributed to industrial, automotive, and consumer markets worldwide. The
Company's material handling products are sold, domestically and
internationally, principally to third party distributors in commercial and
consumer distribution channels, and to a lesser extent directly to
manufacturers and other end-users. The Company's integrated material
handling solutions businesses primarily deal with end users. Material
handling solution sales are concentrated, domestically and internationally
(primarily Europe), in the automotive industry, and consumer products,
manufacturing, warehousing and, to a lesser extent, the steel,
construction, and other industrial markets.
2. Inventories consisted of the following:
JULY 4, MARCH 31,
1999 1999
------------------------------
(IN THOUSANDS)
At cost - FIFO basis:
Raw materials $ 59,767 $ 54,648
Work-in-process 21,274 21,663
Finished goods 38,139 45,042
----------- -----------
119,180 121,353
LIFO cost less than FIFO cost (5,053) (5,374)
------------ ------------
$ 114,127 $ 115,979
=========== ===========
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.
-6-
<PAGE>
3. Property, plant, and equipment is net of $45,271,000 and $42,048,000 of
accumulated depreciation at July 4, 1999 and March 31, 1999, respectively.
4. Goodwill and other intangibles, net includes $33,866,000 and $29,864,000 of
accumulated amortization at July 4, 1999 and March 31, 1999, respectively.
5. General and Product Liability - The accrued general and product liability
costs, which are included in other non-current liabilities, are the
actuarial present value of estimated expenditures based on amounts
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.
Yale was self-insured for product liability claims up to a maximum of
$500,000 per occurrence and maintained product liability insurance with a
$100 million cap per occurrence through July 31, 1997 when Yale was added
to the Company's coverage as described above. The general and product
liability accrual continues to include provisions related to that
pre-acquisition time period.
6. To manage its exposure to interest rate fluctuations, the Company has an
interest rate swap with a notional value of $3.5 million from January 2,
1999 through July 2, 2000, based on LIBOR at 5.9025%. The Company also has
a LIBOR-based interest rate cap on $49.5 million of debt through December
16, 1999 at 10%. Net payments or receipts under the swap and cap agreements
are recorded as adjustments to interest expense. The carrying amount of the
Company's senior debt instruments approximates the fair values. The
Company's subordinated debt has an approximate fair value of $186,000,000
which is less than its carrying amount of $199,534,000.
7. The following table sets forth the computation of basic and diluted
earnings per share before extraordinary charge for debt extinguishment:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
JULY 4, JUNE 28,
1999 1998
----------- -----------
Numerator for basic and diluted earnings per share:
<S> <C> <C>
Net income .......................................... $ 6,394,000 $ 6,375,000
=========== ===========
Denominators:
Weighted-average common stock outstanding -
denominator for basic EPS ............................ 13,972,000 14,329,000
Effect of dilutive employee stock options .............. 222,000 209,000
----------- -----------
Adjusted weighted-average common stock outstanding
and assumed conversions - denominator for diluted EPS 14,194,000 14,538,000
=========== ===========
</TABLE>
-7-
<PAGE>
8. Income tax expense for the three-month periods ended July 4, 1999 and June
28, 1998 exceeds the customary relationship between income tax expense and
income before income taxes due to nondeductible amortization of goodwill of
$4,002,000, and $3,778,000, respectively.
9. On April 29, 1999, the Company acquired all of the outstanding stock of
Washington Equipment Company ("WECO"), a regional manufacturer and servicer
of overhead cranes. The total cost of the acquisition, which was accounted
for as a purchase, was approximately $6.4 million of cash and was financed
by proceeds from the Company's revolving debt facility.
On March 1, 1999, GL International, Inc. ("GL"), was merged with and into
the Company through the issuance of 897,114 shares of newly issued Company
stock and options to purchase 154,848 shares of Company stock for all
issued and outstanding stock and options of GL. GL is a full-service
designer and builder of industrial overhead bridge and jib cranes and
related components. The merger was accounted for as a pooling of interests
and, accordingly, the fiscal 1999 consolidated financial statements have
been restated to include the accounts of GL from the date of GL's
formation, April 1, 1997. The fair market value of the stock and options
exchanged was approximately $20.6 million.
Net sales and net income of the separate companies were as follows:
THREE MONTHS ENDED
JUNE 28, 1998
-------------
(IN THOUSANDS)
Net sales:
Columbus McKinnon, as reported............ $ 170,503
GL International, Inc..................... 15,931
Intercompany eliminations................. (1,818)
-------------
Combined.................................. $ 184,616
=============
Net income:
Columbus McKinnon, as reported............ $ 6,083
GL International, Inc..................... 245
Intercompany eliminations................. 47
-------------
Combined.................................. $ 6,375
=============
On January 29, 1999, the Company acquired all of the outstanding stock of
Camlok Lifting Clamps Limited ("Camlok") and the net assets of the Tigrip
product line ("Tigrip") for $10.6 million in cash. The acquisition was
accounted for as a purchase and was financed through cash, a revolving
credit facility, and a $4 million term note. Camlok manufactures plate
clamps, crane weighers and related products and is based in Chester,
England, while the Tigrip line of standard and specialized plate clamps is
produced in Germany.
-8-
<PAGE>
On December 4, 1998, the Company acquired all of the outstanding stock of
Societe D'Exploitation des Raccords Gautier ("Gautier"), a French-based
manufacturer of industrial components. The total cost of the acquisition,
which was accounted for as a purchase, was approximately $3 million in
cash, consisting of $2.4 million financed by proceeds from the Company's
revolving debt facility and the assumption of certain debt.
On August 21, 1998 the Company acquired the net assets of Abell-Howe Crane
division ("Abell-Howe") of Abell-Howe Company, a regional manufacturer of
jib, gantry, and bridge cranes. The total cost of the acquisition, which
was accounted for as a purchase, was approximately $7 million of cash,
which was financed by proceeds from the Company's revolving debt facility.
On August 7, 1998 the Company sold its Mechanical Products division, a
producer of circuit controls and protection devices, for $11.5 million,
consisting of $9.1 million in cash and a $2.4 million note receivable, to
Mechanical Products' senior management team. The selling price approximated
the net book value of the division.
The following table presents pro forma summary information for the three
month period ended June 28, 1998 as if the fiscal 1999 and 2000
acquisitions and related borrowings and the sale of Mechanical Products had
occurred as of April 1, 1998, which is the beginning of fiscal 1999. 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
JUNE 28, 1998
-------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Pro forma:
Net sales $ 183,674
Income from operations 20,919
Net income 6,251
Earnings per share, basic 0.44
Earnings per share, diluted 0.43
-9-
<PAGE>
10. As a result of the way the Company manages the business, its reportable
segments are strategic business units that offer products and services with
different characteristics. The most defining characteristic is the extent
of customized engineering required on a per-order basis. In addition, the
segments serve different customer bases through differing methods of
distribution. The Company has three reportable segments: material handling
products, integrated material handling solutions - industrial, and
integrated material handling solutions - automotive. The Company's material
handling products segment sells hoists, chains, attachments, and other
material handling products principally to third party distributors in
commercial and consumer distribution channels. The material handling
solutions segments sell engineered material handling systems such as
conveyors, manipulators, and lift tables primarily to end-users in the
consumer products manufacturing, warehousing, and general manufacturing
industries or the automotive segment. The accounting policies of the
segments are the same as those described in the summary of significant
accounting policies. Intersegment sales are not significant. The Company
evaluates performance based on operating earnings of the respective
business units prior to the effects of amortization.
Segment information as of and for the quarters ended July 4, 1999 and June
28, 1998, is as follows:
<TABLE>
<CAPTION>
QUARTER ENDED JULY 4, 1999
--------------------------
SOLUTIONS - SOLUTIONS - ELIMINATIONS/
PRODUCTS INDUSTRIAL AUTOMOTIVE OTHER TOTAL
-------- ---------- ---------- ------------- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Sales to external customers . $138,788 $ 13,256 $ 35,548 $ (5,991) $181,601
Operating income ............ 23,087 1,117 587 76 24,867
before
amortization
Depreciation and amortization 3,601 2,201 1,423 - 7,225
Total assets ................ 516,366 66,665 182,308 - 765,339
Capital expenditures ........ 2,067 211 45 - 2,323
</TABLE>
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 28, 1998
---------------------------
SOLUTIONS - SOLUTIONS - ELIMINATIONS/
PRODUCTS INDUSTRIAL AUTOMOTIVE OTHER TOTAL
-------- ---------- ---------- ------------- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Sales to external customers . $128,514 $ 15,516 $ 40,179 $ 407 $184,616
Operating income ............ 17,749 1,625 4,666 963 25,003
before
amortization
Depreciation and amortization 4,428 767 1,366 212 6,773
Total assets ................ 500,527 68,651 197,474 20,035 786,687
Capital expenditures ........ 1,866 302 57 2 2,227
</TABLE>
-10-
<PAGE>
The following schedule provides a reconciliation of operating income before
amortization with consolidated income before income taxes:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
JULY 4, 1999 JUNE 28, 1998
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Operating income before amortization ............ $ 24,867 $ 25,003
Amortization of intangibles ..................... 4,002 3,778
Interest and debt expense ....................... 8,279 8,948
Interest and other income ....................... (247) (371)
-------- --------
Income before income taxes ...................... $ 12,833 $ 12,648
======== ========
</TABLE>
-11-
<PAGE>
11. The summary financial information of the parent, domestic subsidiaries
(guarantors) and foreign subsidiaries (nonguarantors of the 8.5% senior
subordinated notes) follows:
<TABLE>
<CAPTION>
Domestic Foreign Elimina- Consoli-
(In thousands) Parent Subsidiaries Subsidiaries tions dated
------------------------------------------------------------
AS OF JULY 4, 1999 Current assets:
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents ..................... $ 803 $ 1,143 $ 1,538 $ - $ 3,484
Trade accounts receivable ..................... 54,740 57,287 23,770 - 135,797
Unbilled revenues ............................. - 13,462 - - 13,462
Inventories ................................... 48,372 39,520 27,239 (1,004) 114,127
Other current assets .......................... 3,529 10,322 3,440 - 17,291
-------------------------------------------------------------
Total current assets ......................... 107,444 121,734 55,987 (1,004) 284,161
Net property, plant, and equipment ............. 36,859 33,571 20,009 - 90,439
Goodwill and other intangibles, net ............ 42,499 261,396 53,027 - 356,922
Intercompany ................................... 213,795 (375,176) (65,517) 226,898 -
Other assets ................................... 221,271 162,491 (1,266) (348,679) 33,817
-------------------------------------------------------------
Total assets ................................. $ 621,868 $ 204,016 $ 62,240 $(122,785) $ 765,339
=============================================================
Current liabilities ............................ $ 39,797 $ 48,837 $ 21,666 $ (3,114) $ 107,186
Long-term debt, less current portion ........... 419,725 - 6,523 - 426,248
Other non-current liabilities .................. 11,623 22,042 2,968 - 36,633
-------------------------------------------------------------
Total liabilities ............................ 471,145 70,879 31,157 (3,114) 570,067
Shareholders' equity ........................... 150,723 133,137 31,083 (119,671) 195,272
-------------------------------------------------------------
Total liabilities and shareholders' equity ... $ 621,868 $ 204,016 $ 62,240 $(122,785) $ 765,339
=============================================================
FOR THE THREE MONTHS ENDED JULY 4, 1999
Net sales ...................................... $ 68,814 $ 88,921 $ 29,857 $ (5,991) $ 181,601
Cost of products sold .......................... 46,430 72,563 21,445 (5,949) 134,489
-------------------------------------------------------------
Gross profit ................................... 22,384 16,358 8,412 (42) 47,112
-------------------------------------------------------------
Selling, general and administrative expenses ... 8,715 7,393 6,137 - 22,245
Amortization of intangibles .................... 489 2,861 652 - 4,002
-------------------------------------------------------------
9,204 10,254 6,789 - 26,247
-------------------------------------------------------------
Income from operations ......................... 13,180 6,104 1,623 (42) 20,865
Interest and debt expense ...................... 8,098 2 179 - 8,279
Interest and other income ...................... 113 77 57 - 247
-------------------------------------------------------------
Income before income taxes ..................... 5,195 6,179 1,501 (42) 12,833
Income tax expense ............................. 2,177 3,431 848 (17) 6,439
-------------------------------------------------------------
Net income ..................................... $ 3,018 $ 2,748 $ 653 $ (25) $ 6,394
=============================================================
FOR THE THREE MONTHS ENDED JULY 4, 1999
OPERATING ACTIVITIES:
Net cash (used in) provided by operating
activities...................................... $ (1,824) $ 7,345 $ (2,363) $ 138 $ 3,296
-------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of marketable securities, net ......... (2,138) - - - (2,138)
Capital expenditures ........................... (1,692) (355) (276) - (2,323)
Purchases of businesses, net of cash ........... (6,317) - (49) (6,366)
Other .......................................... - (71) - - (71)
-------------------------------------------------------------
Net cash used in investing activities .......... (3,830) (6,743) (276) (49) (10,898)
-------------------------------------------------------------
-12-
<PAGE>
FINANCING ACTIVITIES:
Proceeds from issuance of common stock ......... 1 136 - (136) 1
Net borrowings (payments) under revolving
line-of-credit agreements .................... 5,000 - (151) - 4,849
Repayment of debt .............................. (750) - (136) - (886)
Dividends paid ................................. (981) (3) - - (984)
Other .......................................... 78 - - - 78
-------------------------------------------------------------
Net cash used in financing activities .......... 3,348 133 (287) (136) 3,058
-------------------------------------------------------------
Effect of exchange rate changes on cash ........ - - 1,114 47 1,161
-------------------------------------------------------------
Net change in cash and cash equivalents ........ (2,306) 735 (1,812) - (3,383)
Cash and cash equivalents at beginning of period 3,109 408 3,350 - 6,867
-------------------------------------------------------------
Cash and cash equivalents at end of period ..... $ 803 $ 1,143 $ 1,538 $ - $ 3,484
=============================================================
</TABLE>
<TABLE>
<CAPTION>
Domestic Foreign Elimina- Consoli-
(In thousands) Parent Subsidiaries Subsidiaries Tions Dated
---------------------------------------------------------------
AS OF JUNE 28, 1998 Current assets:
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents ..................... $ 6,367 $ (3,117) $ 1,381 $ - $ 4,631
Trade accounts receivable ..................... 52,143 70,029 23,627 - 145,799
Unbilled revenues ............................. - 19,891 - - 19,891
Inventories ................................... 44,988 44,863 24,098 (1,052) 112,897
Other current assets .......................... 1,981 11,766 3,714 - 17,461
-------------------------------------------------------------
Total current assets ......................... 105,479 143,432 52,820 (1,052) 300,679
Net property, plant, and equipment ............. 33,707 34,867 18,319 - 86,893
Goodwill and other intangibles, net ............ 44,079 273,727 48,389 - 366,195
Intercompany ................................... 241,610 (407,481) (62,640) 228,511 -
Other assets ................................... 218,964 168,067 (2,115) (351,996) 32,920
-------------------------------------------------------------
Total assets ................................. $ 643,839 $ 212,612 $ 54,773 $(124,537) $ 786,687
=============================================================
Current liabilities ............................ $ 37,442 $ 54,549 $ 22,476 $ (1,286) $ 113,181
Long-term debt, less current portion ........... 443,921 3,562 3,332 - 450,815
Other non-current liabilities .................. 11,373 31,248 3,276 - 45,897
-------------------------------------------------------------
Total liabilities ............................ 492,736 89,359 29,084 (1,286) 609,893
Shareholders' equity ........................... 151,103 123,253 25,689 (123,251) 176,794
-------------------------------------------------------------
Total liabilities and shareholders' equity ... $ 643,839 $ 212,612 $ 54,773 $(124,537) $ 786,687
=============================================================
FOR THE THREE MONTHS ENDED JUNE 28, 1998
Net sales ...................................... $ 66,761 $ 92,888 $ 29,902 $ (4,935) $ 184,616
Cost of products sold .......................... 47,435 72,780 22,099 (5,012) 137,302
-------------------------------------------------------------
Gross profit ................................... 19,326 20,108 7,803 77 47,314
-------------------------------------------------------------
Selling, general and administrative expenses ... 8,663 8,683 4,965 - 22,311
Amortization of intangibles .................... 488 2,763 527 - 3,778
-------------------------------------------------------------
9,151 11,446 5,492 - 26,089
-------------------------------------------------------------
Income from operations ......................... 10,175 8,662 2,311 77 21,225
Interest and debt expense ...................... 8,463 299 186 - 8,948
Interest and other income ...................... 469 29 (127) - 371
-------------------------------------------------------------
Income before income taxes ..................... 2,181 8,392 1,998 77 12,648
Income tax expense ............................. 1,065 4,178 1,000 30 6,273
-------------------------------------------------------------
Net income ..................................... $ 1,116 $ 4,214 $ 998 $ 47 $ 6,375
=============================================================
-13-
<PAGE>
FOR THE THREE MONTHS ENDED JUNE 28, 1998
OPERATING ACTIVITIES:
Net cash (used in) provided by operating
activities...................................... $ (7,188) $ (3,110) $ (827) $ 29 $ (11,096)
-------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of marketable securities, net ......... (1,055) - - - (1,055)
Capital expenditures ........................... (1,515) (511) (201) - (2,227)
Other .......................................... - (337) - - (337)
-------------------------------------------------------------
Net cash used in investing activities .......... (2,570) (848) (201) - (3,619)
--------------------------------------------------------------
FINANCING ACTIVITIES:
Net payments under revolving
line-of-credit agreements .................... - 5,589 (1,446) - 4,143
Repayment of debt .............................. (304) (5,536) 211 - (5,629)
Dividends paid ................................. (940) - - - (940)
Other .......................................... (622) - - - (622)
-------------------------------------------------------------
Net cash used in financing activities .......... (1,866) 53 (1,235) - (3,048)
-------------------------------------------------------------
Effect of exchange rate changes on cash ........ - - (438) (29) (467)
-------------------------------------------------------------
Net change in cash and cash equivalents ........ (11,624) (3,905) (2,701) - (18,230)
Cash and cash equivalents at beginning of period 17,991 788 4,082 - 22,861
-------------------------------------------------------------
Cash and cash equivalents at end of period ..... $ 6,367 $ (3,117) $ 1,381 $ - $ 4,631
=============================================================
</TABLE>
12. The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133 "Accounting for Derivative Financial
Instruments and Hedging Activities," in June of 1998 which is effective for
fiscal 2002. Statement No. 133 establishes accounting and reporting
standards for hedging activities. It requires that entities recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The intended use of
the derivative and its designation as either (1) a hedge of the exposure to
changes in the fair value of a recognized asset or liability or a firm
commitment (a fair value hedge) (2) a hedge of the exposure to variable
cash flows of a forecasted transaction (a cash flow hedge), or (3) a hedge
of the foreign currency exposure of a net investment in a foreign operation
(a foreign currency hedge), will determine when the gains and losses on the
derivatives are reported in earnings and when they are to be reported as a
component of other comprehensive income. The impact of compliance with this
Statement has not yet been determined by the Company.
-14-
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OVERVIEW
The Company is a broad-line designer, manufacturer, and supplier of
sophisticated material handling products and integrated material handling
solutions that are widely distributed to industrial, automotive and consumer
markets worldwide. The Company's material handling products are sold,
domestically and internationally, principally to third party distributors in
commercial and consumer distribution channels, and to a lesser extent directly
to manufacturers and other end-users. Commercial distribution channels include
general distributors, specialty distributors, service-after-sale distributors,
original equipment manufacturers ("OEMs"), and the U.S. and Canadian
governments. The general distributors are comprised of industrial distributors,
rigging shops and crane builders. Specialty distributors include catalog houses,
material handling specialists and entertainment equipment riggers. The
service-after-sale network includes repair parts distribution centers, chain
service centers, and hoist repair centers. Company products are also sold to
OEMs, and to the U.S. and Canadian governments. Consumer distribution channels
include mass merchandisers, hardware distributors, trucking and transportation
distributors, farm hardware distributors and rental outlets. The Company's
integrated material handling solutions businesses primarily deal with end-users.
Material handling solution sales are concentrated, domestically and
internationally (primarily Europe), in the automotive industry, and consumer
products manufacturing, warehousing and, to a lesser extent, the steel,
construction and other industrial markets.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JULY 4, 1999 AND JUNE 28, 1998
Net sales in the fiscal 2000 quarter ended July 4, 1999 were $181,601,000, a
decrease of $3,015,000 or 1.6% from the fiscal 1999 quarter ended June 28, 1998.
Sales in the Products segment were up roughly 8% as a result of the additions of
WECO and Abell-Howe and increases in our specialty distribution channels as
customers continue to shift their focus to catalog buying. Sales in the
Solutions-Industrial segment fell 14.6% as a result of softness in the
Scandinavian and manipulator markets. The Solutions-Automotive segment had a
sales decrease of 11.5% as a result of the lagging impact of the 1998 General
Motors strike and a shift in GM's capital spending projects. The decrease in the
Eliminations/Other segment is a result of the sale of Mechanical Products in
August of 1998. Sales in the individual segments were as follows, in thousands
of dollars and with percentage changes for each group:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
JULY 4, JUNE 28, CHANGE
------
1999 1998 AMOUNT %
---- ---- ------ -
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C>
Products ............... $ 138,788 $ 128,514 $ 10,274 8.0
Solutions-Industrial ... 13,256 15,516 (2,260) (14.6)
Solutions-Automotive ... 35,548 40,179 (4,631) (11.5)
Eliminations/Other ..... (5,991) 407 (6,398) NM
--------- --------- ---------
Consolidated net sales.. $ 181,601 $ 184,616 $ (3,015) (1.6)
========= ========= =========
</TABLE>
-15-
<PAGE>
The Company's gross profit margins were approximately 25.9% and 25.6% for the
fiscal 2000 and 1999 quarters, respectively. The consistent margin is a
combination of offsetting fluctuations in the various segments. The gross profit
margin increased in the Products segment as a result of the continued
integration of recent acquisitions. The Solutions-Industrial segment experienced
static margins for the fiscal 2000 and 1999 quarters. Gross margin in the
Solutions-Automotive segment decreased for the first quarter of 2000 as a result
of warranty issues and project mix.
Selling expenses were $12,758,000 and $12,872,000 in the fiscal 2000 and 1999
quarters, respectively. As a percentage of consolidated net sales, selling
expenses were 7.0% in both the fiscal 2000 and 1999 quarters. General and
administrative expenses were $9,487,000, and $9,439,000 in the fiscal 2000 and
1999 quarters, respectively. As a percentage of consolidated net sales, general
and administrative expenses were 5.2% and 5.1% in the fiscal 2000 and 1999
quarters, respectively.
Amortization of intangibles was $4,002,000 and $3,778,000 in the fiscal 2000 and
1999 quarters, respectively. The fiscal 2000 increase is due to the amortization
of goodwill resulting from the acquisitions of Abell-Howe, Gautier,
Camlok-Tigrip, and WECO.
Income from operations decreased $360,000 or 1.7% in the fiscal 2000 quarter,
compared to the fiscal 1999 quarter. This is based on income from operations of
$20,865,000 and $21,225,000 or 11.5% of consolidated net sales in both the
fiscal 2000 and 1999 quarters.
Interest and debt expense was $8,279,000, and $8,948,000 in the fiscal 2000 and
1999 quarters, respectively. The fiscal 2000 decrease is primarily due to the
payment of debt based on strong operating cash flow over the last 12 months less
funds used to finance acquisitions. As a percentage of consolidated net sales,
interest and debt expense was 4.6%, and 4.8% in the fiscal 2000 and 1999
quarters, respectively.
Interest and other income was $247,000, and $371,000 in the fiscal 2000 and 1999
quarters, respectively.
Income taxes as a percentage of income before income taxes were 50.2% and 49.6%
in the fiscal 2000 and 1999 quarters, respectively. The percentages reflect the
effect of nondeductible amortization of goodwill resulting from acquisitions.
Net income, therefore, increased $19,000 or 0.3% for the quarter ended July 4,
1999. This is based on net income of $6,394,000 and $6,375,000 for the quarters
ended July 4, 1999 and June 28, 1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES
On April 29, 1999, the Company acquired all of the outstanding stock of
Washington Equipment Company (WECO) for $6.4 million in cash, financed by the
Company's revolving credit facility.
On March 1, 1999, GL was merged with and into the Company through the issuance
of 897,114 shares of newly issued Company stock and options to purchase 154,848
shares of Company stock for all issued and outstanding stock and options of GL.
The fair market value of the stock and options exchanged was approximately $20.6
million.
-16-
<PAGE>
On January 29, 1999, the Company acquired all of the outstanding stock of Camlok
and the net assets of the Tigrip product line for $10.6 million in cash,
financed by a German subsidiary revolving credit facility and term note.
On December 4, 1998, the Company acquired all of the outstanding stock of
Gautier for $3 million in cash, financed by the Company's revolving credit
facility.
During October 1998, the Company's ESOP borrowed $7,682,000 from the Company and
purchased 479,900 shares of Company common stock on the open market at an
average cost of $16 per share.
On August 21, 1998, the Company acquired the net assets of Abell-Howe for $7
million in cash, financed by the Company's revolving credit facility.
On August 7, 1998, the Company sold its Mechanical Products division for $11.5
million, consisting of $9.1 million in cash and a $2.4 million note receivable.
The 1998 Revolving Credit Facility provides availability up to $300 million, due
March 31, 2003, against which $226.7 million was outstanding at July 4, 1999.
Interest is payable at varying Eurodollar rates based on LIBOR plus a spread
determined by the Company's leverage ratio, amounting to 87.5 basis points at
July 19, 1999. The 1998 Revolving Credit Facility is secured by all equipment,
inventory, receivables, subsidiary stock (limited to 65% for foreign
subsidiaries) and intellectual property. To manage its exposure to interest rate
fluctuations, the Company has an interest rate swap and cap.
The senior subordinated 8 1/2% Notes issued on March 31, 1998 amounted to
$199,468,000, net of original issue discount of $532,000 and are due March 31,
2008. Interest is payable semi-annually based on an effective rate of 8.45%,
considering $1,902,000 of proceeds from rate hedging in advance of the
placement. Provisions of the 8 1/2% Notes include, without limitation,
restrictions of liens, indebtedness, asset sales, and dividends and other
restricted payments. Prior to April 1, 2003, the 8 1/2% Notes are redeemable at
the option of the Company, in whole or in part, at the Make-Whole Price (as
defined). On or after April 1, 2003, they are redeemable at prices declining
annually from 108.5% to 100% on and after April 1, 2006. In addition, on or
prior to April 1, 2001, the Company may redeem up to 35% of the outstanding
notes with the proceeds of equity offerings at a redemption price of 108.5%,
subject to certain restrictions. In the event of a Change of Control (as
defined), each holder of the 8 1/2% Notes may require the Company to repurchase
all or a portion of such holder's 8 1/2% Notes at a purchase price equal to 101%
of the principal amount thereof. The 8 1/2% Notes are not subject to any sinking
fund requirements.
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, budgeted capital expenditures, and business acquisitions for the
next twelve months.
Net cash provided by operating activities was $3,296,000 for the three months
ended July 4, 1999 while net cash used in operating activities was $11,096,000
for the three months ended June 28, 1998. The $14,392,000 change is primarily
due to changes in working capital, reflecting fluctuations in the working
capital needs of Automatic Systems Inc. (ASI), formerly LICO, Inc.
-17-
<PAGE>
Net cash used in investing activities increased to $10,898,000 for the three
months ended July 4, 1999 from $3,619,000 for the three months ended June 28,
1998. The 7,279,000 increase is due primarily to the acquisition of WECO.
Net cash provided by financing activities was $3,058,000 for the three months
ended July 4, 1999 while net cash used in financing activities was $3,048,000
for the three months ended June 28, 1998. The $6,106,000 change is primarily due
to borrowings used to acquire WECO.
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 three months ended July 4, 1999 and June 28, 1998
were $2,323,000 and $2,227,000, respectively.
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 Europe, Canada, Mexico,
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.
SEASONALITY AND QUARTERLY RESULTS
Quarterly results may be materially affected by the timing of large customer
orders, by periods of high vacation concentrations, and by acquisitions and the
magnitude of acquisition costs. Therefore, the operating results for any
particular fiscal quarter are not necessarily indicative of results for any
subsequent fiscal quarter or for the full fiscal year.
-18-
<PAGE>
YEAR 2000 CONVERSIONS
The Company's corporate-wide Year 2000 initiative is being managed by a team of
internal staff and administered by the Director of Information Services. The
Company has completed the assessment phase of its Year 2000 compliance project
and is currently working on remediation of affected components.
The Company has determined that it needs to modify certain portions of its
corporate business information software so that its computer system will
function properly with respect to dates in the year 2000 and beyond. Both
internal and external resources have been dedicated to identifying,
implementing, and testing corrective action in order to make such programs Year
2000 compliant; all such work is planned to be completed by September 1999 and
is currently on schedule. To date the corporate business information software
has been 100% assessed, approximately 97% has been remedially reprogrammed, and
approximately 83% is now certified to be Year 2000 compliant. The Company
believes that, with modifications to existing software, the Year 2000 issue will
not pose significant operational problems for its computer systems.
The Company has completed a corporate-wide assessment of the Year 2000 readiness
of microprocessor-controlled equipment such as robotics, CNC machines, and
security and environmental systems. This assessment has revealed that at least
98% of all microprocessor-controlled equipment is currently compliant. The
remaining 2%, which includes recent acquisitions, is currently under review. Any
necessary upgrades to ensure Year 2000 readiness are expected to be in place by
the end of September 1999. In addition, the Company has determined that all of
its manufactured products are 100% Year 2000 compliant.
The Company has initiated communications with its suppliers and customers to
determine the extent to which systems, products or services are vulnerable to
failure should those third parties fail to remediate their own Year 2000 issues.
To date the Company has received responses to over 80% of its inquiries and no
Year 2000 compliance problems have been identified from these responses. While
we believe that our Year 2000 compliance plan adequately addresses potential
Year 2000 concerns and to date no significant Year 2000 issues have been
identified with our suppliers and customers, there can be no guarantee that the
systems of other companies on which our operations rely will be compliant an a
timely basis and will not have an effect on our operations.
The Company has conducted preliminary contingency planning and identified the
critical need areas. A high level approach incorporating manual workarounds,
increasing critical inventories, identifying alternate suppliers, and adjusting
staffing levels has been discussed and forms the basis for the initial
contingency planning. The Company believes this level of planning is appropriate
at the current time, however, the planning will be further expanded if warranted
by future events.
The cost of the Year 2000 initiatives is not expected to be material to the
Company's results of operations or financial position.
The forward looking statements contained in the Year 2000 Conversions should be
read in conjunction with the Company's disclosures under the heading "Safe
Harbor Statement under the Private Securities Litigation Reform Act of 1995".
-19-
<PAGE>
EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging
Activities," in June of 1998 which is effective for fiscal 2002. Statement No.
133 establishes accounting and reporting standards for hedging activities. It
requires that entities recognize all derivatives as either assets or liabilities
in the statement of financial position and measure those instruments at fair
value. The intended use of the derivative and its designation as either (1) a
hedge of the exposure to changes in the fair value of a recognized asset or
liability or a firm commitment (a fair value hedge) (2) a hedge of the exposure
to variable cash flows of a forecasted transaction (a cash flow hedge), or (3) a
hedge of the foreign currency exposure of a net investment in a foreign
operation (a foreign currency hedge), will determine when the gains and losses
on the derivatives are reported in earnings and when they are to be reported as
a component of other comprehensive income. The impact of compliance with this
Statement has not yet been determined by the Company.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report may include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements 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 integration of acquisitions and other factors
disclosed in the Company's periodic reports filed with the Commission.
Consequently such forward-looking statements should be regarded as the Company's
current plans, estimates and beliefs. The Company does not undertake and
specifically declines any obligation to publicly release the results of any
revisions to these forward-looking statements that may be made to reflect any
future events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.
-20-
<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 - none.
Item 5. Other Information - none.
Item 6. Exhibits and Reports on Form 8-K
There are no exhibits.
On May 18, 1999, the Company filed Form 8-K dated May 18, 1999 with respect
to restatement of the by-laws.
On May 26, 1999 the Company filed Form 8-K dated May 26, 1999 with respect
to litigation instituted by the registrant.
-21-
<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: AUGUST 18, 1999 /S/ ROBERT L. MONTGOMERY, JR.
--------------- -----------------------------
Robert L. Montgomery, Jr.
Executive Vice President and
Chief Financial Officer (Principal
Financial Officer)
-22-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC
FORM 10-Q 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-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUL-04-1999
<CASH> 3,484
<SECURITIES> 0
<RECEIVABLES> 135,797
<ALLOWANCES> 0
<INVENTORY> 114,127
<CURRENT-ASSETS> 284,161
<PP&E> 135,710
<DEPRECIATION> 45,271
<TOTAL-ASSETS> 765,339
<CURRENT-LIABILITIES> 107,186
<BONDS> 426,248
0
0
<COMMON> 147
<OTHER-SE> 195,125
<TOTAL-LIABILITY-AND-EQUITY> 765,339
<SALES> 181,601
<TOTAL-REVENUES> 181,601
<CGS> 134,489
<TOTAL-COSTS> 134,489
<OTHER-EXPENSES> 26,247
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,279
<INCOME-PRETAX> 12,833
<INCOME-TAX> 6,439
<INCOME-CONTINUING> 6,394
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,394
<EPS-BASIC> .46
<EPS-DILUTED> .45
</TABLE>
