COLUMBUS MCKINNON CORP, DEFA14A, 1999-07-16

COLUMBUS MCKINNON CORP
DEFA14A, 1999-07-16
CONSTRUCTION MACHINERY & EQUIP

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Check the appropriate box:

[_] Preliminary Proxy Statement

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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[_] Definitive Proxy Statement

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[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

Columbus McKinnon Corporation
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

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[_] Check box if any part of the fee is offset as provided by Exchange
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Notes:

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[PHOTO] [PHOTO] [PHOTO] [PHOTO]

[GRAPHIC] [GRAPHIC]
PRODUCTS SOLUTIONS

LOGO
CM(R)

Columbus McKinnon Corporation

Material Handling Products & Solutions

Shareholder Presentations

July & August, 1999

<PAGE>

Senior Management
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[GRAPHIC]
Timothy T. Tevens
President & CEO

Robert L. Montgomery, Jr.
Executive Vice President & CFO

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Columbus McKinnon Corporation CM
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<PAGE>

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These slides contain (and the accompanying oral discussion will contain)
"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 Securities and Exchange 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 obligations 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.

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Columbus McKinnon Corporation CM
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<PAGE>

Columbus McKinnon
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Products Segment

[PHOTO]

. Leading developer, manufacturer and distributor of hoists and other related
material handling products in North America

. Dominant market position with 81% of domestic Products sales into markets
where Company is #1 supplier

. 75% of Products sales are for maintenance, repair, operating and production
supplies, as contrasted with more cyclical higher cost capital goods

. Global presence with international sales of approximately 24%

Columbus McKinnon
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Solutions - Automotive & Solutions - Industrial Segments

[PHOTO]

. Recently diversified into facility-wide material handling systems

. Complete service to end-users; design, manufacturing and installation

. Automotive focus on model changeover and productivity improvement

. Broad based application for all industries

Company History
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. Established in 1875

. Acquired by Management-led investor group in 1986

. Completed IPO in 1996 - Officers and Directors own 22%

. Created critical mass with acquisitions of Lift-Tech in 1995 and Yale in
1996

. Expanded capabilities into design and installation of material handling
systems with acquisitions of Univeyor and LICO in 1998

. Recent expansion into Crane Building market

General Industry Trends
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. More outsourcing

. Increased productivity, decreased cycle time

. More safety conscious

. More workforce diversity

. Fewer, larger, more diversified suppliers

CM is there.

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Columbus McKinnon Corporation CM
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Material Handling Industry
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. Now $64.1 billion in size*

. Overhead material handling & lifting devices [BOLD PRINT]

. Continuous materials movement [BOLD PRINT]

. Wheeled handling devices [BOLD PRINT]

. Pallets, containers & packaging

. Storage equipment & shop furniture

. Automation systems & robots [BOLD PRINT]

. Services & unbundled software [BOLD PRINT]

CM offers great diversity
-----

CM participates in bold print industry sectors.
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Columbus McKinnon Corporation CM
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*As reported by Material Handling Industry of America

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Investment Highlights
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. Dominant market position with strong brand names

. Diversified segments: Products and Solutions; markets and customers

. Extensive and expanding global distribution network

. Preferred provider to major distributors and end-users

. Growing international presence

. Experienced senior management with significant ownership

Strong Financial Performance
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($ in millions)
[GRAPHIC] [GRAPHIC] [GRAPHIC]
Revenue EBITDA Net Income (1)
FYE 3/31/99 $735.4 $113.9 $27.4

39% 49% 31%
CAGR CAGR CAGR

FYE 3/31/94 $142.3 $15.5 $7.0

(1) Before extraordinary charges.
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Columbus McKinnon Corporation CM
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<PAGE>

What Do...
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. Indianapolis 500 Race Winners

. Garth Brooks

. The Olympic Flags

. 50 pounds to 350 tons

... Have in Common?

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Columbus McKinnon Corporation CM
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Columbus McKinnon Products
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[PHOTO] [PHOTO]

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Columbus McKinnon Corporation CM
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Columbus McKinnon Products
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[PHOTO] [PHOTO]

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Columbus McKinnon Corporation CM
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Columbus McKinnon Solutions
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-Industrial -Industrial
[PHOTO] [PHOTO]

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Columbus McKinnon Corporation CM
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Columbus McKinnon Solutions
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-Automotive -Industrial
[PHOTO] [PHOTO]

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Columbus McKinnon Corporation CM
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Broadest Product Offering...
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Net Sales by Product Type

[GRAPHIC]

Solutions
- -Automotive &
- -Industrial

Scissor Lifts Manipulators Tire Shredders Hoists Cranes Chain
- ------------- ------------ -------------- ------ ------ ------
2% 1% 1% 39% 10% 8%

Forged Products Industrial Components Conveyor Systems
- --------------- --------------------- ----------------
8% 5% 26%
Products

No single Products comprise more than 1% of sales
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Columbus McKinnon Corporation CM
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<PAGE>

Serving a Wide Range of End-Users...
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General Manufacturing [GRAPHIC]
Marine [GRAPHIC]
Agricultural [GRAPHIC]
Power Generation [GRAPHIC]
Automobile Assembly [GRAPHIC]
Entertainment [GRAPHIC]
Construction [GRAPHIC]
Mining [GRAPHIC]
Crane Building [GRAPHIC]
Transportation [GRAPHIC]
Logging [GRAPHIC]

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Columbus McKinnon Corporation CM
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Through Extensive Distribution Network...
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Net Products Sales by Distribution Channel

[GRAPHIC]

Consumer General Distributors International Specialty Distributors
- -------- -------------------- ------------- ----------------------
5% 40% 24% 11%

Crane End Users OEM/Government Service-After-Sale
- --------------- -------------- ------------------
10% 5% 5%

Network of over 10,000 distributors and customers with no single customer
accounting for more than 5% of net sales

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Columbus McKinnon Corporation CM
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With a Dominant Market Position...
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Domestic Market % of Domestic
Products Market Share Position Products Net Sales***
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Electric Chain Hoists 88%* 1st 18%
Wire Rope Electric Hoists 54%* 1st 9%
Hand Chain Hoists 77%* 1st 5%
Lever Hoists 64%* 1st 5%
Trolleys 84%* 1st 1%
Grade 43 Chain 24%* 1st 5%
Grade 70 Chain 31%* 1st 7%
Grade 80 Chain 30%* 1st 6%
Misc. Chain (Hoist Lifting Chain) 45%* 1st 10%
Hoist Parts 60%** 1st 9%
Mechanical Actuators 40%** 1st 5%
Jib Cranes 45%** 1st 1%
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Total: 81%

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81% of domestic Products sales are into markets where Company is #1 supplier
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More overhead hoists in use in North America than all competitors combined
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* As reported by industry associations.
** Estimated - Data not reported.
*** Data as of March 31, 1999

That Can Be Leveraged Globally...
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[MAP]
Canada ##+++
Mexico +
China ++
England ++
Denmark +
Netherlands #
Germany +
France ++
United States of America *#######++++++++++++++++++++++++

* Headquarters
+ Manufacturing Facility
# Warehouse Facility

Plus sales offices in Australia, Austria, South Africa and Thailand
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Columbus McKinnon Corporation CM
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To Further Expand International Sales
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($ in millions)
Net Sales - All Segments

FYE 3/31/94 FYE 3/31/99

[GRAPHIC] [GRAPHIC]

International Domestic International Domestic
------------- -------- ------------- --------

$20.3 $122.0 $191.6 $543.9
----- ------- ------ ------
14% 86% 26% 74%

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Columbus McKinnon Corporation CM
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Growth Strategy
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. Strengthen existing business

. Enhance productivity and realize cost savings

. Leverage dominant market position

. Continue to introduce new products and services

. Increase penetration of international markets

. Expand global operations

. Capitalize on recently acquired platforms

. Pursue selected strategic acquisitions, joint ventures and alliances

Strengthen Existing Business
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. Increase Productivity
. EVA(R)
. CMBIS
. Operating Groups/Business Units

. Reduce Costs & Enhance Coordination
. Purchasing Council
. Internal supplier of raw materials and components
. Credit and collection centralization
. Eliminate redundancies
. Expand low cost sourcing - control the source

. Enhance Revenue
. CraneMart(TM) Strategy
. Complementary product acquisitions - cross selling
. New products and services
. Price control program

Strengthen Existing Business
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. Automatic Systems, Inc. (formerly LICO, Inc.) Strategy

. Robert Hoehn, President, to retire July 16, 1999

. David Cimpl, CFO, to retire July 31, 1999

. David Clark, V.P.-Estimating and Merchandise Sales, to become
President on July 16, 1999

. Mark Kirkpatrick, CFO of GL International is acting, interim
controller; search underway for permanent controller

. Further restructuring to come/Emphasis on improved cost control and
project execution

. Integration process moving ahead

. Systems development will enhance control of operations

. GM Delta projects on hold/Capital shifted to S.U.V. plants

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Columbus McKinnon Corporation CM
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Increase Penetration of International Markets
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. Global organization being formed

. China strategy

. Coordinate ASI & Univeyor

. Chain manufacturing to Mexico

. Univeyor with new presence in Germany, Sweden, France

. Added Camlok/Tigrip, Raccords Gautier

. Stocking sales office in Thailand

. Alliance with manufacturer in Brazil

. Working with GM in China and Mexico

. Egyptian joint venture

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Columbus McKinnon Corporation CM
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Selected Strategic Acquisitions
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. Complementary businesses
-------------

. Integrate with existing business
---------

. Strengthen and diversify in material handling
---------- ---------

. Synergies are available
---------

. Broaden distribution channels
------------

. Increase international presence
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. Enhance shareholder value
-----------------

. Be EVA [trademark] positive
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Columbus McKinnon Corporation CM
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CM's Acquisition River
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Durbin Durco Cady Endor Lift-Tech Lister Yale Coffing Raccords Camlok/
Duff-Norton Gautier Tigrip

CM Products/Solutions [GRAPHIC]

Positech Conco American Lifts Univeyor LICO Abell-Howe GL WECO
(Div. Of Yale)

Throughout its history, CM has acquired complementary businesses
that have increased both its product range and diversity,
while seamlessly enhancing its top and bottom lines through synergies
and innovations.

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Columbus McKinnon Corporation CM
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<PAGE>

Recent Major Acquisitions
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. Lift-Tech (November, 1995) and Yale (October, 1996)
. Initial integration completed ... more to come
. Planned synergies realized ... more to come

. Univeyor (January, 1998)
. Giant strategic step into Solutions - Industrial segment

. LICO (March, 1998)
. Solid U.S. expansion into Solutions - Automotive segment

. Abell-Howe Crane (August, 1998)
. First entry into Products segment, Crane Builder market

. GL International (March, 1999 - merger)
. Foundation of the CraneMart/TM/ strategy

. Washington Equipment (WECO) (April, 1999)
. Expansion of CraneMart/TM/ strategy

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Columbus McKinnon Corporation CM
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Univeyor A/S - January 1998
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. Denmark based

. Facility-wide Solutions-Industrial project focus
. Conception/Design
. Management
. Implementation

. Sophisticated electronic control systems

. Powered roller conveyors

. Sales - $25 million

. Customers - Volvo, Saab-Scania, United Biscuits, Chivas Regal,
Mars, Sony and British Telecom

Automatic Systems, Inc. (ASI) - March 1998
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. Kansas City based

. Facility-wide Solutions-Automotive
project focus [Q.S.P. AWARD APPEARS HERE]

. Substantial engineering capabilities

. Assembly line conveyor systems

. Sales - $165 million

. Customers - General Motors, Ford & other industrial users

. General Motors' 1997/1998 Supplier of the Year Award

. Well established player - One of the largest material handling
suppliers to the automotive industry

Abell-Howe Crane, Inc. - August 1998
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. First step into [LOGO OF CRANEMART] strategy

. Chicago based, regional crane designer, fabricator and installer
of jib, gantry and bridge cranes

. Significant service business

. Natural extension of Hoist Products segment

. Natural extension of service into CM hoist parts (Master Parts
Depot - Chicago area)

. Sales $10 million

[PHOTO]

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Columbus McKinnon Corporation CM
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CraneMart [LOGO OF CRANEMART] & GL Int'l - March 1999
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. CraneMart Strategy Announced

. Integrated network of North American, full service crane builders
. Strategic alliances supporting independent, partially or wholly
owned crane builders
. CM will source hoists, crane components, and parts
. Focused effort on building Parts & Service business

. GL International

. Gaffey, Inc., Larco Industrial Services, Ltd. and Handling Systems
& Conveyors, Inc.
. Sales $66.7 million, $5.1 million EBITDA
. Substantial presence in south and southwest U.S. and Canada
. Solidifies excellent supplier-customer relationship
. Excellent base (25% of sales are Parts & Service) to grow
CraneMart
. Pooling of Interests, 1.051 million CMCO shares plus $10.9 million
debt or 5.25 x EBITDA

Washington Equipment ("WECO") - April 1999
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. Expansion of [LOGO OF CRANEMART] Strategy

. Central Illinois based, regional crane designer, fabricator and installer
of jib, gantry and bridge cranes

. Presence in St. Louis, MO and Jacksonville, FL

. Significant service business

. Additional extension of Hoist Products segment

. Sales $16 million

Threatened Proxy Fight Status
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FACTS
-----
. 13d filed - May 6, 1999
.
. Dissidents agree that "operationally the Company has performed well"
. Dissidents' slate of five director nominees filed June 18, 1999
. Jeffrey E. Schwarz - Metropolitan Capital
. Robert F. Lietzow, Jr. - Lakeway Capital
. Jonathan G. Guss - CEO of Bogen Communications International, Inc.
. George G. Raymond, Jr. - Son of founder - ex-Chair of Raymond
Corporation
. Larry N. Katsoulis - was President of Material Handling Division of
Duff-Norton Company, a subsidiary of Spreckels Industries, Inc. d/b/a
Yale International Inc.- terminated 5 months after Spreckels acquired
by CM -- Now CEO of Pillar Corporation

OUR OPINION
-----------
. Now is not the time to sell your company
. CM is operating well and is growing profitably
. Path to greater shareholder value through pursuit of management's strategic
plan

Threatened Proxy Fight Status (cont.)
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. Results speak for themselves:
5 Year CAGRs:
-------------
Sales 39%
Operating income 47%
EBITDA 49%
Net income before debt extinguishment 31%
Net cash flow from operating activities 59%

.CM is continuing to absorb a number of recent acquisitions

.CM has instituted a number of cost reduction initiatives

.Election of dissidents would in no way ensure a superior return

.Little logic in a Board with one goal ... "sell the company"

.Current CM Board and Management interests are completely aligned
with shareholders

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Columbus McKinnon Corporation CM
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<PAGE>

CM Board Slate - Seven Nominees
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. Herbert P. Ladds, Jr. - Chairman - Retired President and CEO of
Columbus McKinnon - 27 years

. Randolph A. Marks- Founder and retired executive of Computer Task
Group and Chairman of American Brass

. L. David Black - President, CEO and Chairman of JLG Industries, Inc.

. Carlos Pascual - Executive Vice President of Xerox Corporation and
Deputy Executive Officer of its Industry Solutions Operations -
extensive international experience

. Richard H. Fleming - Executive Vice President and CFO of USG
Corporation - extensive Wall Street experience

. Timothy T. Tevens - President and CEO of Columbus McKinnon

. Robert L. Montgomery, Jr. - Executive Vice President and CFO of
Columbus McKinnon
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Columbus McKinnon Corporation CM
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Edward W. Duffy does not seek reelection.

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Financial Characteristics
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. Products segment sales growth in excess of GDP
. Internal growth in both price and units
----
. Significant consolidation opportunities

. Solutions segments sales growth should trend more than Products

. Increasing EBITDA margins
. Products - 17.4% for FY1999 vs. 10.9% in FY1994
. Solutions- 10.3% for FY1999

. Significant producer of free cash flow
. Operations not capital intensive
---
. Annual capital expenditures of $13.0 million (less than 2% of sales)

. Benefits of internal growth and acquisitions will result in accelerated
EPS growth
. Fiscal 1997 - $1.39; Fiscal 1998 - $1.66; Fiscal 1999 - $1.92

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Columbus McKinnon Corporation CM
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Financial Highlights
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Net Sales EBITDA

in thousands in thousands

CAGR = 39% CAGR = 49%

[BAR CHART] [BAR CHART]

94 $142,313 94 $15,464
95 $172,330 95 $22,033
96 $209,837 96 $32,164
97 $359,424 97 $57,507
98 $561,823 98 $91,851
99 $735,445 99 $113,903

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Columbus McKinnon Corporation CM
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Financial Highlights
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Income before Cash Flow
Debt Extinguishment from Operations

in thousands in thousands

CAGR = 31% CAGR = 59%

[BAR CHART] [BAR CHART]

94 $ 7,029 94 $ 5,643
95 $10,504 95 $15,529
96 $12,987 96 $18,338
97 $18,352 97 $28,886
98 $23,978 98 $38,420
99 $27,436 99 $57,493

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Columbus McKinnon Corporation CM
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Summary Segment Data
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<TABLE>
($ in millions) FYE March 31, 1999
---------------------------------------------------------
Solutions
----------------------- Eliminations/
Products Industrial Automotive Other* Consolidated
--------- ---------- ---------- ------ ------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 529.0 $ 58.3 $ 161.4 (13.3) $ 735.4

Income from operations
before amortization-
Amount 81.2 5.6 14.9 (1.1) 100.6
Margin 15.3% 9.6% 9.2% 13.7%

Net Income $ 27.4
=========
EPS - diluted $ 1.92
=========
* Includes intercompany eliminations and divestiture of Mechanical Products in August, 1998
</TABLE>
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Columbus McKinnon Corporation CM
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Capitalization - March 31, 1999
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($ in millions)
March 31, 1999
----------------------------
Long-Term Debt:
Senior Bank Debt $224.1
Subordinated Notes due 2008 199.5
-----------
Total Long-Term Debt 423.6

Total Shareholders' Equity 188.7
-----------
Total Capitalization $612.3
===========

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Total Debt / Total Book Capitalization 69.2%

Interest Coverage (EBITDA/Interest) 3.17

Total Debt / Total Market Capitalization/(1) 54.4%

(1) Based on 14.7 million shares and a stock price of $24.125 per share as of
June 18, 1999.
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Columbus McKinnon Corporation CM
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Resistance to Cyclicality
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. Within Products segment, diversified product lines and customer base

. No single industry sector dominates
. No single customer dominates
. 24% international

. Within Solutions segments, products and services driven by model changeover,
productivity improvements

. Products segment profile: 75% MROP, 25% capital goods

. Rapid reaction time to changes in demand for all segments

. Manageable variable vs. fixed cost structure for all segments

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Columbus McKinnon Corporation CM
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<PAGE>

Investment Highlights
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. Dominant market position with strong brand names

. Diversified segments: Products and Solutions;
markets and customers

. Extensive and expanding global distribution network

. Preferred provider to major distributors and end-users

. Growing international presence

. Experienced senior management with significant ownership

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Columbus McKinnon Corporation CM
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[PHOTO] [PHOTO] [PHOTO] [PHOTO]

Products Solutions

CM[R]

Columbus McKinnon Corporation

Questions & Answers