UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended March 31, 2000
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Restatement Effective April 1, 1989
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
COLUMBUS McKINNON CORPORATION
140 John James Audubon Parkway
Amherst, NY 14228-1197
<PAGE>
Financial Statements and Schedules
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Years ended March 31, 2000 and 1999
with Report of Independent Auditors
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Financial Statements and Schedules
Years ended March 31, 2000 and 1999
CONTENTS
Report of Independent Auditors ..............................................1
Financial Statements
Statements of Net Assets Available for Benefits..............................2
Statements of Changes in Net Assets Available for Benefits...................3
Notes to Financial Statements................................................4
Schedules
Schedule H, Line 4(i) - Schedule of Assets Held for Investment Purposes
at End of Year...........................................................10
Schedule H, Line 4(j) - Schedule of Reportable Transactions.................11
<PAGE>
Report of Independent Auditors
The Pension Committee
Columbus McKinnon Corporation
Employee Stock Ownership Plan
We have audited the accompanying statements of net assets available for benefits
of the Columbus McKinnon Corporation Employee Stock Ownership Plan as of March
31, 2000 and 1999, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the ESOP's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Columbus
McKinnon Corporation Employee Stock Ownership Plan at March 31, 2000 and 1999,
and the changes in its net assets available for benefits for the years then
ended in conformity with accounting principles generally accepted in the United
States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes at end of year as of March 31, 2000, and reportable
transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ ENRST & YOUNG LLP
Buffalo, New York
June 9, 2000
1
<PAGE>
<TABLE>
<CAPTION>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Statements of Net Assets Available for Benefits
MARCH 31
2000 1999
---------------------------------------------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL ALLOCATED UNALLOCATED TOTAL
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investment in sponsor company
common stock, at fair value ...... $11,675,409 $ 7,961,087 $19,636,496 $17,844,495 $14,256,148 $32,100,643
Investment in stable asset fund,
at fair value ................... 110,966 - 110,966 100,166 - 100,166
Receivables:
Employer contributions ........... - 10,573 10,573 - 29,975 29,975
Interest ......................... 2,631 - 2,631 2,137 - 2,137
Cash .............................. 4,544 - 4,544 4,544 - 4,544
--------------------------------------------------------------------------------------------
Total assets ...................... $11,793,550 $ 7,971,660 $19,765,210 $17,951,342 $14,286,123 $32,237,465
--------------------------------------------------------------------------------------------
LIABILITIES
Interest payable .................. - 10,573 10,573 - 29,975 29,975
Loans payable ..................... - 9,516,651 9,516,651 - 10,523,255 10,523,255
--------------------------------------------------------------------------------------------
Total liabilities ................. - 9,527,224 9,527,224 - 10,553,230 10,553,230
--------------------------------------------------------------------------------------------
Net assets available (deficit)
for plan benefits ................ $11,793,550 $(1,555,564) $10,237,986 $17,951,342 $ 3,732,893 $21,684,235
============================================================================================
See accompanying notes.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Statements of Changes in Net Assets Available for Benefits
MARCH 31
2000 1999
--------------------------------------------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL ALLOCATED UNALLOCATED TOTAL
<S> <C> <C> <C> <C> <C> <C>
Investment (loss) income:
Net unrealized depreciation
in fair market value
of investments .................. $(4,493,413) $(6,086,506) $(10,579,919) $(4,397,730) $(2,163,162) $(6,560,892)
Dividends ........................ 229,970 206,049 436,019 226,694 128,814 355,508
Interest ......................... 4,346 - 4,346 3,219 - 3,219
Employer contributions ............ - 1,444,861 1,444,861 - 1,186,271 1,186,271
--------------------------------------------------------------------------------------------
Total investment loss ............. (4,259,097) (4,435,596) (8,694,693) (4,167,817) (848,077) (5,015,894)
--------------------------------------------------------------------------------------------
Interest expense .................. - 852,861 852,861 - 594,271 594,271
Distributions to participants ..... 1,825,572 - 1,825,572 1,383,517 - 1,383,517
Transfer to other qualified plan .. 65,958 - 65,958 101,600 - 101,600
Administrative expense ............ 7,165 - 7,165 5,273 - 5,273
--------------------------------------------------------------------------------------------
Total deductions .................. 1,898,695 852,861 2,751,556 1,490,390 594,271 2,084,661
--------------------------------------------------------------------------------------------
Net decrease ...................... (6,157,792) (5,288,457) (11,446,249) (5,658,207) (1,442,348) (7,100,555)
--------------------------------------------------------------------------------------------
Net assets (deficit) available
for benefits:
Beginning of year ................. 17,951,342 3,732,893 21,684,235 23,609,549 5,175,241 28,784,790
--------------------------------------------------------------------------------------------
End of year ....................... $11,793,550 $(1,555,564) $ 10,237,986 $17,951,342 $ 3,732,893 $21,684,235
============================================================================================
See accompanying notes.
</TABLE>
3
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements
March 31, 2000 and 1999
1. DESCRIPTION OF THE PLAN
The Columbus McKinnon Corporation Employee Stock Ownership Plan (ESOP or the
Plan), is a defined contribution employee stock ownership plan and a stock bonus
plan within the meanings of the applicable sections of the Internal Revenue Code
of 1986, as amended. It is also an eligible individual account plan as defined
in the applicable section of the Employee Retirement Income Security Act of 1974
(ERISA). Refer to the Plan Document or the Summary Plan Description for a
complete description of the ESOP's provisions.
The Plan was amended effective April 1, 1998, to extend coverage to all domestic
non-union employees of Columbus McKinnon Corporation (the Company/CMC), and all
domestic non-union employees of Yale Industrial Products, Inc., a subsidiary of
the Company. The Plan was also amended to extend coverage to all domestic
non-union employees of Automatic Systems, Inc., a subsidiary of the Company,
effective April 1, 1999; Abell-Howe Crane, Inc., a subsidiary of the Company,
effective September 1, 1999; Washington Equipment Company, a subsidiary of the
Company, effective January 1, 2000; and Gaffey, Inc. and Handling Systems and
Conveyors, Inc., subsidiaries of GL International, which in turn is a subsidiary
of the Company, effective January 1, 2000.
In accordance with the Plan document, employees who have attained 55 years of
age and ten years of participation in the Plan have the option to diversify the
investments in their stock accounts by selling a specified percentage of their
shares at the current market value and transferring the sale proceeds to another
defined contribution plan maintained by the Company. In 2000, $65,958 has been
transferred to the Company's Thrift 401(k) plan ($101,600 in 1999).
A summary of the ESOP's provisions is as follows:
PARTICIPATION
Substantially all of the Company's domestic non-union employees are eligible to
participate in the ESOP.
4
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
ELIGIBILITY
Eligible employees must have attained age 21 and completed one year of service
(minimum of 1,000 hours) to be a participant.
CONTRIBUTIONS
The Company contributes to the ESOP on the allocation date (March 31) for each
participant (a) who is actively employed as an employee on December 31 and who
has earned at least 1,000 hours of service as an employee in the calendar year
ending December 31, or (b) who terminates employment on or after January 1
during a plan year after attaining age 55 and completing at least five years of
eligibility service, or (c) who dies on or after January 1 during a plan year,
after attaining age 60 and completing at least five years of eligibility
service. Contributions shall be made in cash or in shares of stock as determined
by the Company, and need not be made out of current or accumulated earnings and
profits.
VESTING
A participant's account balance shall become fully vested and non-forfeitable on
the date the participant completes five years of vesting service (excluding any
service rendered prior to the calendar year in which the participant attained
age 18), or if sooner, on the date the participant attains normal retirement age
while in the employ of the Company or any affiliated company.
DISTRIBUTIONS
Upon a vested participant's termination, the value of his/her account will be
distributed if the value of the account is less than $5,000 or, at the
participant's option, either immediately or at any valuation date until
retirement, as provided in the ESOP. A retiree may elect to defer distribution
up to 70 1/2 years of age. Valuation dates for distributions are September 30 or
March 31.
During 2000, $1,825,572 or 95,108 shares, were distributed to vested
participants in the form of stock certificates ($1,383,517, or 58,739 shares,
distributed in 1999). This resulted in the sale of 37 shares held by the ESOP
back to the Company for $688 in 2000 as a result of fractional shares (27 shares
for $637 in 1999). As of March 31, 2000, $238,763 ($1,249,077 as of March 31,
1999) is included in the ESOP assets for terminated participants who have
requested distributions.
5
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Forfeiture of a non-vested interest shall occur in the fifth consecutive
calendar year following a break in service. The forfeited accounts will be
allocated among the accounts of active participants. At March 31, 2000, the ESOP
assets include $169,782 ($218,335 at March 31, 1999) of undistributed forfeited
accounts.
ALLOCATION TO PARTICIPANT ACCOUNTS
As of each valuation date (March 31), each participant account is appropriately
adjusted to reflect any contributions or stock to be allocated as of such date,
the income of the trust fund during the period and the increase or decrease in
the fair market value of the trust fund during the period. The allocation is
based on the fraction, the numerator of which is the participant's annual
earnings for the preceding calendar year and the denominator of which is the
aggregate annual earnings for such calendar year of all participants entitled to
an allocation.
DIVIDENDS
Dividends paid on stock allocated to a participant's stock account will be
allocated to the participant's nonstock account. The pension committee may
direct that such dividends shall be either (a) paid directly to the participant,
former participant, or beneficiary within 90 days after the close of the plan
year in which such dividend was paid, or (b) applied as payment on the exempt
loans. Dividends paid on unallocated stock held by the trustee and acquired with
the proceeds of an exempt loan shall be held by the trustee until the end of the
plan year in which it was paid, and then, along with any interest or earnings,
be applied as payment on the exempt loans which shall trigger a release of stock
from the suspense account.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
RECLASSIFICATION
Prior year amounts have been reclassified to conform with current year
presentation.
6
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
3. PLAN TERMINATION
The Company intends to continue the ESOP indefinitely, but reserves the right to
terminate the Plan at any time. If the ESOP is terminated, each participant
shall be fully and nonforfeitably vested in his interest in the ESOP trust fund.
4. INVESTMENTS
At March 31, 2000 and 1999, the assets of the ESOP Plan consist of CMC common
stock and a stable asset fund with Fleet Bank. The ESOP's investment in CMC
common stock is reported at fair market value as of March 31, 2000 and 1999
based on quoted market prices. The investment in the stable asset fund is also
reported at fair market value as determined by open trading.
5. LOANS PAYABLE AND SHARE RELEASE
On October 27, 1994, the ESOP obtained $6,000,000 of new debt ($2,000,000 from
Marine Midland Bank and $4,000,000 from Fleet Bank). The Fleet loan is payable
in quarterly installments of $103,000 through January 2002, and $770,627 in
April 2002, plus interest at a Eurodollar rate based upon LIBOR plus a spread
determined by the Company's leverage ratio (8.18% and 6.62% at March 31, 2000
and 1999, respectively). The Marine loan is payable in quarterly installments of
$45,000 through January 2002, and $328,257 in April 2002, plus interest at a
Eurodollar rate based upon LIBOR plus a spread determined by the Company's
leverage ratio (8.18% and 6.62% at March 31, 2000 and 1999, respectively).
On October 13, 1998, the ESOP obtained $7,682,281 of new debt from the Company.
The CMC loan is payable in quarterly installments of interest only through April
2002, and thereafter quarterly installments of $150,000 through July 2014, and
$298,371 in October 2014, plus interest at the prime rate (9.0% and 7.75% at
March 31, 2000 and 1999, respectively).
In October 1994 and October 1998, the ESOP purchased 609,144 and 479,900 shares,
respectively, of common stock of the Company with the debt proceeds, which were
recorded by the trustee in the suspense account. Such stock ceases to be
collateral and is released from the suspense account as the loans are repaid. In
each year prior to full payment of the loans, the number of shares of stock
released will equal the number of shares of stock held as collateral immediately
before the release for such plan year multiplied by the release fraction.
7
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
5. LOANS PAYABLE AND SHARE RELEASE (CONTINUED)
The loans, which are guaranteed by the Company, are collateralized by an
equivalent number of shares of common stock recorded by the trustees in a
suspense account.
Maturities of loans payable are as follows:
2001 $ 592,000
2002 592,000
2003 1,273,576
2004 600,000
2005 600,000
The numerator of the release fraction is the amount of principal and interest
payments made toward the loan during the plan year and the denominator is the
sum of the numerator plus the principal and interest payments to be made on the
loan in the future, using the interest rate applicable at the end of the plan
year. Shares of stock released from the suspense account for a plan year shall
be held in the trust on an unallocated basis until allocated by the pension
committee as of the last day of that plan year. That allocation shall be
consistent with the method for allocating contributions to participants'
accounts, which is based on a fraction of each participant's annual earnings
during the preceding calendar year to the total earnings of those participants
during such calendar year. The allocation of shares released resulting from
dividends on participants' allocated shares, however, was based upon the
fraction of each participant's allocated shares to the total number of allocated
shares.
As of March 31, 2000, 606,559 shares were held as collateral for the loan
(708,382 shares held as of March 31, 1999); 101,821 shares were released from
the suspense account in 2000 (96,610 shares released in 1999). These shares were
allocated to participant accounts as of March 31, 2000.
8
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
Notes to Financial Statements (continued)
6. TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated July 28, 1997, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code of 1986 (the "Code") and, therefore, the related trust
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan was amended
subsequent to the IRS determination letter. The Plan Administrator believes the
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax exempt.
9
<PAGE>
Schedules
<PAGE>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
EIN: 16-0547600
Plan No. 016
Schedule H, Line 4(i) - Schedule of Assets Held for
Investment Purposes at End of Year
March 31, 2000
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST CURRENT VALUE
----------------- ------------------------- ------------ -------------
Columbus McKinnon Employer Common Stock,
Corporation* 1,496,114 shares $ 15,875,055 $ 19,636,496
Fleet Investment Stable Asset Fund 110,966 110,966
Services* 10,164 shares
* Parties-in-interest
10
<PAGE>
<TABLE>
<CAPTION>
Columbus McKinnon Corporation
Employee Stock Ownership Plan
EIN: 16-0547600
Plan No. 016
Schedule H, Line 4(j) - Schedule of Reportable Transactions
For the year ended March 31, 2000
Current Value
Identity of Description Purchase Selling Cost of Asset on Net
Party Involved of Assets Price Price of Asset Transaction Date Gain (Loss)
------------------------------------------------------------------------------------------------------------------------------------
CATEGORY (III) - SERIES OF TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fleet National Bank* Money Market $ 795,366 $ - $ 795,366 $ 795,366 $ N/A
Deposit Account - 795,366 795,366 795,366 -
Fleet National Bank* Stable Asset Fund 452,778 - 452,778 452,778 N/A
- 788,148 788,148 788,148 -
</TABLE>
There were no category (i), (ii) or (iv) transactions during the year.
*Parties-in-interest
11
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
COLUMBUS McKINNON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
RESTATEMENT EFFECTIVE APRIL 1, 1989
By: /s/ Timothy R. Harvey
----------------------------------
Timothy R. Harvey, Trustee
/s/ Karen L. Howard
----------------------------------
Karen L. Howard, Trustee
/s/ Robert L. Montgomery, Jr.
----------------------------------
Robert L. Montgomery, Jr., Trustee
/s/ Neal E. Wixson
----------------------------------
Neal E. Wixson, Trustee
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in (a) the Registration Statement
(Form S-8 No. 333-3212) pertaining to the Columbus McKinnon Corporation 1995
Incentive Stock Option Plan, the Columbus McKinnon Corporation Non-Qualified
Stock Option Plan, the Columbus McKinnon Corporation Restricted Stock Plan and
the Columbus McKinnon Corporation Employee Stock Ownership Plan Restatement
Effective April 1, 1989 of Columbus McKinnon Corporation and (b) the
Registration Statement (Form S-8 No. 333-81719) pertaining to the Options
assumed by Columbus McKinnon Corporation originally granted under the G.L.
International Inc. 1997 Stock Option Plan and the Larco Industrial Services Ltd.
1997 Stock Option Plan of our report dated June 9, 2000, with respect to the
financial statements and schedules of the Columbus McKinnon Corporation Employee
Stock Ownership Plan included in this Annual Report (Form 11-K) for the year
ended March 31, 2000.
/s/ Ernst & Young LLP
Buffalo, New York
June 29, 2000
