<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 2-23666
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CASCADE CORPORATION
AN OREGON CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NUMBER 93-0136592
2020 S.W. 4TH AVENUE
PORTLAND, OREGON 97201
503-227-0024
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Not applicable
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common stock: Over the counter market
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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: Yes X No
----- -----
State the aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 31, 1995: $159,131,228. As of this date there
were 397 shareholders, including blocks of shares held by various depositories.
It is the Company's belief that when the shares held by the depositories are
attributed to the beneficial owners the total number of shareholders exceeds
1,500.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the close of the latest practicable date: Common
shares outstanding 12,009,904, net of treasury shares.
DOCUMENTS INCORPORATED BY REFERENCE
Definitive Proxy Statement dated April 7, 1995-Parts I and III
1994 Annual Report to Shareholders-Part II
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<PAGE>
TABLE OF CONTENTS
PART I PAGE
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ITEM 1. BUSINESS 1
Products and Marketing 1
Competition 1
Customers and Suppliers 1
Patents and Licenses 2
Research and Development 2
Foreign Operations 2
ITEM 2. PROPERTIES 3
ITEM 3. LEGAL PROCEEDINGS 3
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 3
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 4
ITEM 6. SELECTED FINANCIAL DATA 4
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 4
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 6
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 6
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 6
ITEM 11. EXECUTIVE COMPENSATION 6
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 6
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 6
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K 7
SIGNATURES 8
NOTE: All references to the fiscal year (i.e. Fiscal 1992, 1993 and 1994) refer
to the period ended January 31 of the year subsequent to the fiscal year (i.e.
January 31, 1993, January 31, 1994, and January 31, 1995).
<PAGE>
PART I
ITEM 1. BUSINESS
PRODUCTS AND MARKETING
Cascade Corporation and its subsidiaries ("the Company") are engaged in the
business of designing, manufacturing and selling hydraulically actuated
equipment used almost exclusively in materials handling applications. Products
include lift truck attachments, masts, hose reels, hydraulic cylinders and
replacement parts for the aforementioned products. The Company's manufacturing
activities are conducted in its plants at Portland, Oregon; Springfield, Ohio;
Warner Robins, Georgia and Westminster, South Carolina. Subsidiaries also
conduct manufacturing activities in The Netherlands and the United Kingdom.
Subsidiaries conduct sales, engineering and warehousing operations in Canada,
Korea, Germany, France, Finland, Spain, Sweden, South Africa and Japan.
Executive offices are in Portland, Oregon. There are 993 people employed by the
Company and its subsidiaries.
The Company manufactures an extensive line of hydraulically actuated
attachments designed for mounting on industrial lift trucks. The primary
function of these products is to increase the scope and efficiency of materials
handling applications normally performed by lift trucks. The Company presently
offers a wide variety of functionally different attachments, each of which has
several models, capacities and optional combinations. These attachments have
been designed to clamp, lift, rotate, push, pull, tilt and sideshift a variety
of loads such as appliances, paper rolls, baled materials, textiles, beverage
containers, drums, canned goods, bricks, masonry blocks, lumber, plywood and
boxed, packaged, palletized and containerized products of virtually all types.
During the last five years, attachments, masts and hose reels have
accounted for 71% to 78% of the Company's consolidated sales. During this same
period, hydraulic cylinders accounted for approximately 8% to 19% of the
Company's consolidated sales. Replacement parts and other sales amounted to
approximately 9% to 14% of total sales between 1990 and 1994.
The Company's lift truck attachments, masts and hose reels are sold to
equipment dealers and manufacturers. Products are marketed throughout the
United States, Canada, Latin America, Europe, the Middle East, Australia, New
Zealand, South Africa, and Asia.
Hydraulic cylinders are used primarily as components to transmit power in
lift trucks and other types of machinery and industrial equipment. A
substantial number of cylinders are utilized in the Company's proprietary lift
truck attachments and masts. In the United Kingdom, hydraulic cylinders are
also sold to manufacturers of various types of materials handling and other
mobile equipment, usually through negotiations with the customer's purchasing
and engineering departments.
COMPETITION
The Company believes that in all marketing areas, it is one of the leading
independent suppliers of hydraulically actuated materials handling equipment
designed for mounting on industrial lift trucks. Several of the lift truck
manufacturers, who are customers of the Company, are also competitors in varying
degrees to the extent that they manufacture a portion of their attachment
requirements. Since the Company offers a broad line of attachments capable of
supplying a significant part of the total requirements for the entire lift truck
industry, it believes that its relatively high unit volume results in lower
costs which would be difficult for any individual lift truck manufacturer to
achieve.
The Company's order backlog for all products at January 31, 1995, 1994 and
1993 was approximately $27,010,000, $16,520,000 and $11,730,000 respectively.
At January 31,1995 approximately 84% (83% and 87% at January 31, 1994 and 1993)
of the order backlog was due for delivery within 60 days and substantially all
within six months
CUSTOMERS AND SUPPLIERS
Since the Company deals with lift truck manufacturers and their dealers, a
substantial portion of its sales are made to the approximately ten major
companies in the industry. NACCO Industries Inc., is the company's single
largest customer. Sales to it and its subsidiaries, Hyster Company and Yale
Materials Handling Inc., were 10.8%, 9.8% and 10.5% of consolidated sales during
the years ended January 31, 1995, 1994 and 1993, respectively.
1
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The Company purchases materials and components necessary to produce its
products from many different suppliers. The principal items purchased are
rolled products from steel mills, unfinished castings and forgings, hydraulic
motors and hardware items such as fasteners, rollers, hydraulic seals and hose
assemblies. With few exceptions, all raw materials are available from several
domestic and foreign suppliers.
PATENTS AND LICENSES
Patents have been a relatively unimportant factor in the development of the
Company's business. While the Company holds rights under numerous patents, it
believes that the business is not, to any significant degree, dependent on any
patent or group of patents.
RESEARCH AND DEVELOPMENT
Most of the Company's research and product development activities are
performed in a 28,000 square-foot product development center in Portland,
Oregon. The corporate engineering staff develops and designs almost all the
products sold by the Company. This staff numbers approximately 58 engineers and
is continually involved in developing new products and applications in the
materials handling field and improving existing product lines. Consolidated
expenditures for engineering research and development activities in fiscal years
ended January 31, 1995, 1994 and 1993 were approximately $4,500,000, $3,680,000
and $2,906,000, respectively. Substantially all such activities were sponsored
by the Company and its subsidiaries.
FOREIGN OPERATIONS
Cascade N.V. was organized in The Netherlands in 1958 and is engaged in the
business of manufacturing and marketing hydraulically actuated lift truck
attachments. This subsidiary presently has warehouse, sales and service
facilities in Dusseldorf, Germany; Paris, France; Vantaa, Finland; Barcelona,
Spain and Helsingborg, Sweden. Cascade N.V. and its subsidiaries have 196
employees.
Cascade (U.K.) Ltd. was incorporated in the United Kingdom in 1967 and
manufactures and markets hydraulic cylinders and lift truck attachments. This
subsidiary employs 169 people.
Cascade (Canada) Inc. was incorporated in Canada in 1970 and presently
conducts marketing and limited engineering and manufacturing activities from
Toronto, Ontario. This subsidiary presently employs 37 people.
Cascade Corporation (Africa) Pty. Limited, employing 8 people, was
organized in 1967 in South Africa and its activities consist of sales,
engineering and warehousing.
Cascade (Japan) Ltd. was incorporated under the laws of Oregon in 1967, and
carries on engineering, sales and distribution activities in the Japanese
domestic market. A portion of this subsidiary's sales are produced by local
subcontractors. This subsidiary employs 25 people.
Cascade Korea Limited was incorporated under the laws of the Republic of
Korea in 1990. Its activities are limited to sales and service and employs 3
people.
The Company is a joint venture partner in the People's Republic of China
although its investment and the joint venture's contributions to sales and
income are not material.
There are no material risks attendant to the Company's foreign operations
other than those incidental to the regular course of business. For further
information about foreign operations, see Note 8 on page 15 of the 1994 Annual
Report to Shareholders.
2
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ITEM 2. PROPERTIES
The Company owns and leases various types of properties located throughout
the continental United States, Europe, Canada, Australia, South Africa and
Japan. Of the above mentioned properties, the following are considered
principal facilities:
<TABLE>
<CAPTION>
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Building
Square Land
Location Footage Acreage Type of Activity
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<S> <C> <C> <C> <C>
United States
Portland, Oregon Leased 6,000 Office
Portland, Oregon Owned 147,000 48 Manufacturing, Engineering
Research, Office
Springfield, Ohio Owned 185,000 10 Manufacturing, Office
Warner Robins, Georgia Owned 62,000 20 Manufacturing, Office
Westminster, South Carolina Owned 110,000 52 Manufacturing, Office
Europe
Almere, The Netherlands Owned 129,000 3 Manufacturing,Office
Almere, The Netherlands Owned 18,000 1 *
Diemen, The Netherlands Owned 47,000 2 *
Hoorn, The Netherlands Owned 44,000 3 Manufacturing, Office
Dusseldorf, Germany Leased 15,000 2 Warehouse, Office
Paris, France Owned 6,000 2 Warehouse, Office
Newcastle, United Kingdom Owned 88,000 8 Manufacturing, Office
Sheffield, United Kingdom Leased 5,500 1 Warehouse, Office
Other Foreign
Toronto, Canada Leased 42,000 1 Warehouse, Office
Sydney, Australia Owned 9,000 1 Warehouse, Office
Johannesburg, South Africa Leased 10,000 1 Warehouse, Office
Osaka, Japan Leased 16,000 1 Warehouse, Office
*The former European headquarters in Almere and the former manufacturing facility in Diemen are currently held for investment
purposes.
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</TABLE>
Several subsidiary companies are parties to various leases of office and
computer equipment, storage space and automobiles which are of minor
consequence.
ITEM 3. LEGAL PROCEEDINGS
Neither the Company nor any of its subsidiaries are involved in any
material pending legal proceedings other than litigation related to
environmental matters or matters in the regular course of business. The Company
and its subsidiaries are adequately insured against product liability, personal
injury and property damage claims which may occasionally arise.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Incorporated by reference to definitive Proxy Statement dated April 7,
1995. No matters were submitted to a vote of security holders during the fourth
quarter ended January 31, 1995.
3
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Incorporated by reference to 1994 Annual Report to Shareholders, Page 17.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference to 1994 Annual Report to Shareholders, Page 1.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL OVERVIEW
Earnings for 1994 (the year ended January 31, 1995) were substantially
higher than either 1993 or 1992. Consolidated sales for 1994 totaled
$183,365,000, an increase of 30% when compared to sales of $141,325,000 in 1993
and a 24% increase compared to 1992 sales of $148,435,000.
In fiscal year 1994, North American sales of materials handling
products were 33% greater than in 1993, reflecting extremely strong market
conditions in the lift truck industry. Sales in Europe increased 34% over 1993,
a result of substantially increased hydraulic cylinder shipments along with
solid improvement in attachment sales in most European markets. Sales in Japan
and South Africa were slightly lower than in 1993, reflecting continued weakness
in those markets.
Improved market penetration, record increases in lift truck sales and new
product introductions have contributed to record results in our primary lift
truck attachment business. While we see improvements in the important European
market, we continue to face depressed business conditions in Japan, our other
key international market. Due primarily to our strength in the domestic market
our current rate of incoming orders and our backlog are at record levels. We
continue to expand and strengthen our new product development, sales and
customer service activities.
Revenue for 1993 declined from 1992 results. A 10% increase in North
American materials handling equipment sales was offset by a 21% decrease in
Europe and a 12% decrease in Japan.
RESULTS OF OPERATIONS
Net income for the year ended January 31, 1995 was $12,250,000 ($1.02 per
share). Please note that all per share amounts reported are based on 12,009,904
shares, the number of shares outstanding after the 100% stock dividend that was
distributed on March 15, 1995.
Net income for fiscal 1994 increased by 109% when compared to 1993 income
of $5,865,000 ($.49 per share) before the effect of an accounting change. It was
an increase of 59% when compared to net income of $7,695,000 ($.64 per share) in
1992. Net income for 1993 was adversely affected by a $1,980,000 net after tax
charge due to the adoption of Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions".
Net income in fiscal 1994 represents a 15.8% return on shareholders' equity
compared to 4.9% in 1993 and 9.8% in 1992. Expressed as a return on sales, net
income was 6.7% in 1994 versus 2.8% in 1993 and 5.2% in 1992.
The Company continues to be involved with environmental investigations,
evaluations and remediation efforts relating to trace levels of
trichloroethylene by-products associated with manufacturing processes that were
discontinued nearly 20 years ago. In 1994 charges for these purposes were
approximately $2,400,000. Future investigation and remediation costs are
subject to many
4
<PAGE>
uncertainties and we are unable to determine the ultimate aggregate monetary
liability. Future expenses are estimated to be within a range of $3,000,000 to
$4,000,000, most of which is likely to be incurred in the next two to years. We
remain confident that a substantial portion of past and future costs will be
covered by applicable insurance policies, and legal action has been initiated
against a number of insurers to enforce the terms of their policies.
Fiscal 1993 and 1992 earnings were adversely impacted by low sales volumes
in European and Japanese operations. In addition, environmental regulatory
compliance costs of $1,640,000 and $1,550,000 also adversely effected earnings
in 1993 and 1992, respectively.
The Cascade WORLD MAST-TM- product line continues to enjoy excellent
customer acceptance, and 1994 sales in the U.S. increased by 45% over 1993
results. Compared to 1992 volumes, this represents an 81% increase. These
increased sales volumes, together with improved production processes, produced a
meaningful contribution to 1994 earnings.
Over the three year period from fiscal year 1992 to fiscal year 1994, both
cost of goods sold and selling, general and administrative expenses, as
indicated in the Consolidated Statement of Income and Retained Earnings on page
8 of the 1994 Annual Report, have increased in absolute dollars as volumes
increased. In 1994, cost of goods sold as a percent of net sales decreased to
64.6% from 65.0% in 1993. Cost of sales increased from 64.2% in 1992 to 65.0%
in 1993 due to low manufacturing volumes in Europe. Selling and administrative
expenses as a percent of net sales decreased to 19.1% in 1994 compared to 21.6%
in 1993 and 20.8% in 1992. Inflation and changing prices have not had a
material impact on the Company's income in fiscal 1992 through 1994.
During 1994 the currencies of most of the countries in which our
subsidiaries operate strengthened against the U.S. dollar, resulting in an
increase of $3,041,000 ($.25 per share) in shareholders' equity for the year.
In fiscal 1993 and 1992, these translation adjustments resulted in decreases of
$1,181,000 ($.1O per share) and $2,165,000 ($.18 per share), respectively.
LIQUIDITY AND CAPITAL RESOURCES
Capital expenditures for 1994 totaled $21,900,000 compared to $8,100,000
and $7,800,000 for 1993 and 1992, respectively. During 1994, construction was
completed on a new manufacturing and European headquarters facility in Almere,
The Netherlands accounting for approximately $13,000,000 of total expenditures
for the year. During 1992, land for the new facility in Europe was acquired at
a cost of $1,300,000. Planned capital expenditures for 1995 of $12,100,000
reflect the Company's practice of investing 130% to 150% of depreciation in
advanced manufacturing, engineering and information systems technology.
Dividends totaled $.375 for 1994 consisting of the regular $.075 quarterly
dividends as well as a special year-end dividend of $.075. The Board of
Directors also declared a 100% stock dividend distributed on March 15, 1995.
Dividends totaled $.30 for 1993 consisting of the regular $.075 quarterly
dividends. In 1992 a special year-end dividend of $.05 was declared in addition
to the regular quarterly dividends of $.075 for a total of $.35.
Cash generated from operating activities resulted in a substantial increase
in cash to $17,203,000 at January 31, 1995. Current assets at January 31, 1995
were 2.2 times current debt. Short and long-term debt increased during the year
from $4,193,000 at January 31, 1994 to $13,864,000. Long-term debt of
$7,809,000 reflects mortgage financing for the new European facility. Combined
short and long-term debt amounts to about 16% of shareholders' equity. This
strong financial position, together with available borrowing capacity, is more
than sufficient to meet our projected short term needs.
5
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference to 1994 Annual Report to Shareholders, pages 8 to 16.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information on Directors is incorporated by reference to definitive Proxy
Statement dated April 7, 1995.
The term of office of all officers is one year. Names, ages and position
of all executive officers of Cascade Corporation follow.
<TABLE>
<CAPTION>
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Year First
Elected
Name Age Officer Present Position
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<S> <C> <C> <C>
Joseph J. Barclay 62 1968 Chairman, Chief Executive Officer and Director
Robert C Warren, Jr. 46 1984 President, Chief Operating Officer and Director
Gregory S. Anderson 46 1991 Vice President-Human Resources
Gerald M. Bitz 60 1974 Vice President-Finance and Secretary
Terry H. Cathey 47 1993 Vice President-Manufacturing
Zouhdi M. Derhalli 62 1993 Vice President-Engineering
Lawrence S. Maunder 62 1990 Vice President-Marketing
James P. Miller 47 1992 Treasurer
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</TABLE>
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference to definitive Proxy Statement dated April 7, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Incorporated by reference to definitive Proxy Statement dated April 7, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
6
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
INDEX TO FINANCIAL STATEMENTS
(a) 1. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements, together with the report thereon of
Price Waterhouse dated March 17, 1995, appearing on pages 8 to 16 of the
accompanying 1994 Annual Report are incorporated by reference in this Form 10-K
Annual Report. With the exception of the aforementioned information and
information incorporated in Items 5, 6 and 8, the 1994 Annual Report is not to
be deemed filed as part of this report.
2. FINANCIAL STATEMENT SCHEDULES--1994, 1993 AND 1992
Financial statement schedules not included in this Form 10-K Annual Report
have been omitted because they are not applicable or not required.
The individual financial statements of the registrant and its subsidiaries
have been omitted since the registrant is primarily an operating company and all
subsidiaries included in the consolidated financial statements, in the
aggregate, do not have minority equity interests and/or indebtedness to any
person other than the registrant or its consolidated subsidiaries in amounts
which together exceed 5% of the total consolidated assets at January 31, 1995,
except indebtedness incurred in the ordinary course of business which is not
overdue and which matures within one year from the year of its creation.
3. EXHIBITS
1. Copy of Notice of Annual Meeting dated April 7, 1995.
2. Copy of Form of Proxy for Annual Meeting.
3. Basic documents incorporated by reference:
Articles of Incorporation filed with the Commission May 28, 1965.
Amendment to Articles of Incorporation filed in Proxy Statement for
annual meeting of shareholders May 12, 1987, filed with the
Commission April 14, 1988.
Amendment to Articles of Incorporation filed in Proxy Statement for
annual meeting of shareholders May 9, 1989, filed with the
Commission April 27, 1990.
By-Laws, as amended to February 8, 1989, filed with the Commission
April 27,1990.
Specimen copy of stock certificate, filed as Exhibit 4-1 to Form S-1,
filed with the Commission May 28, 1965.
(b) REPORTS ON FORM 8-K
During the quarter ended January 31, 1995, the Company was not required to
file a Form 8-K with the Commission.
7
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CASCADE CORPORATION
NOTICE OF ANNUAL MEETING
MAY 9, 1995
To the Shareholders:
The 1995 Annual Meeting will be held at the Red Lion Motor Inn, Portland
Center, 310 S.W. Lincoln Street, Portland, Oregon, on Tuesday, May 9, 1995, at
10:00 a.m., Pacific Daylight Time, for the following purposes:
1. The election of Directors for the ensuing year.
2. To consider and vote upon a proposal to establish the 1995 Cascade
Corporation Senior Managers' Incentive Stock Option Plan.
3. To consider and vote upon a proposal to establish the Cascade
Corporation Employee Stock Ownership Plan.
4. To consider and act upon any other business that may properly come
before the meeting.
Shareholders of record at the close of business on April 3, 1995 will be
entitled to vote at the meeting.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE SO THAT YOUR SHARES WILL
BE VOTED. THE ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
GERALD M. BITZ
Secretary
Portland, Oregon
April 7, 1995
PROXY STATEMENT
This proxy statement and the accompanying proxy form are being mailed to
security holders April 7, 1995.
MATTERS TO BE PRESENTED AT THE MEETING
The election of Directors, the proposal to establish the 1995 Cascade
Corporation Senior Managers' Incentive Stock Option Plan and the proposal to
establish the Cascade Corporation Employee Stock Ownership Plan are the only
matters the management intends to present at the Annual Meeting of
Shareholders. The management is not informed of any matters that may be
presented by others.
OUTSTANDING VOTING SECURITIES
There are outstanding and eligible to vote at the meeting 12,009,904 shares
of common stock of the Corporation, each entitled to one vote. As of April 3,
1995, the only persons known to the Corporation to be beneficial owners of more
than 5% of the outstanding common stock of the Corporation were Robert C. Warren
and Nani S. Warren, c/o 2020 S.W. Fourth Avenue, Portland, Oregon 97201, (see
table under "Election of Directors"), and FMR Corporation, 82 Devonshire Street,
Boston, Massachusetts 02109, beneficial owner of 858,200 shares, or 7.1% of the
total common stock outstanding, through its subsidiaries, Fidelity Management &
Research Company and Fidelity Management Trust Company.
PROXY SOLICITATION AND REVOCATION
The solicitation of the enclosed proxy is being made on behalf of the Board
of Directors of the Corporation. Regular employees of the Corporation may
solicit proxies personally or by telephone or facsimile. In addition,
arrangements may be made with brokerage houses and other custodians to send
proxies and proxy-soliciting materials to their principals, and the Corporation
may reimburse them for their expense in so doing.
The enclosed proxy will be voted on each matter management intends to
present at the Annual Meeting as indicated in the discussion of such matters
below. Should any other matters requiring a vote of the shareholders be
properly raised at the meeting, the persons named on the proxy intend to use
their best judgment in exercising the discretion given them.
Anyone who gives a proxy may revoke the proxy at any time before it has
been exercised by delivering written notice of the revocation to the Secretary
of the Corporation, or may still vote in person.
The record date for determination of shareholders entitled to vote at the
annual meeting was April 3, 1995.
1
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1. ELECTION OF DIRECTORS
Each nominee listed below is a candidate for election to the Board of
Directors to serve until the 1996 Annual Meeting or until his successor is
elected. All nominees except Mr. Schwartz were elected to the Board at the 1994
Annual Meeting. Unless otherwise directed, the accompanying proxy will be voted
for the election of the ten individuals listed below as nominees to the Board of
Directors (except that, in the event any nominee is unable to serve, the proxy
will be voted for a substituted nominee). Directors are elected by a plurality
of the votes cast. Abstentions or broker non-votes will not effect the
determination of a plurality. Further information follows with respect to each
nominee.
<TABLE>
<CAPTION>
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SHARES OF COMMON PERCENTAGE
STOCK OF THE COR- OF
DIRECTOR PRINCIPAL PORATION OWNED OUTSTANDING
NAME AND AGE SINCE OCCUPATION BENEFICIALLY AS COMMON
OF APRIL 3, 1995 STOCK
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<S> <C> <C> <C> <C>
Joseph J. Barclay, 62 1972 Chairman and Chief Executive Officer
of the Corporation since August, 1993; formerly
President and Chief Executive Officer,
Director, Granite Construction Incorporated 420,214 3.5%
Robert C. Warren, Jr., 46(1) 1982 President and Chief Operating Officer
of the Corporation since August, 1993; formerly
Vice President -- Marketing (beginning 1990) and
Vice President -- Administration 51,980 .4%
Rob Spaans, 46 1994 Managing Director, Cascade Corporation Europe
commencing May 1, 1994; Director of Manufacturing,
Cascade NV until that date -- --
Richard C. Hire, 67 1972 Retired Vice President-Finance
and Secretary of the Corporation 32,856 .3%
Eric Hoffman, 71 1980 Chairman, Hoffman Corporation,
General Contractors 8,000 --
C. Calvert Knudsen, 70 1974 Director, and retired Chairman, Chief
Executive Officer, MacMillan Bloedel, Ltd.,
Director, Penwest, Ltd., Safeco Corporation. 8,000 --
Nicholas R. Lardy, 49 1993 Director, Henry M. Jackson School of
International Studies, University of Washington -- --
James S. Osterman, 57 1994 President, Oregon Cutting Systems Division,
Blount, Inc., a diversified manufacturer 500 --
Jack B. Schwartz, 58 -- Partner, Newcomb, Sabin, Schwartz & Landsverk,
Attorneys, since 1968; Assistant Secretary of the
Corporation since 1972; Director, Macheezmo
Mouse Restaurants, Inc. 143,600(2) 1.2%
Robert C. Warren, 77 1946 Chairman, Stair Assist Corporation; Chairman
Emeritus of the Corporation since August, 1993 2,111,232(2)(3) 16.4%
16 Directors and Officers as a Group(4) 2,701,646 22.5%
<FN>
(1) Robert C. Warren, Jr., is the son of Robert C. Warren.
(2) Includes shared voting and investment powers as to 140,000 shares, or 1.2%
of those outstanding, beneficially owned by a charitable foundation.
(3) Includes 216,640 shares, or 1.8% of those outstanding, owned by a trust of
which Mr. Warren is co-trustee for the benefit of certain members of the
family of Nani S. Warren and 1,754,592 shares, or 14.4% of those
outstanding, owned by Mr. and Mrs. Warren as trustees of a revocable trust
established by them.
(4) Includes the following share totals held by Executive Officers listed on
page 6 and not listed above: G.M. Bitz, 41,200 and L.S. Maunder, 2,627.
</TABLE>
2
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The Board of Directors met five times during the year. The Board has a
standing Audit Committee, consisting of Messrs. Knudsen, Hire and Hoffman, and a
standing Compensation Committee consisting of Messrs. Warren, Hoffman, and
Knudsen. The Audit Committee and the Compensation Committee each met twice
during the year. Each Director attended at least 75% of the aggregate number of
meetings of the Board and committees on which he served which were held during
the year.
The Audit Committee recommends annually to the Board the engagement of
independent certified public accountants; determines their independence; reviews
their professional services and the fees charged; and reviews the scope of the
audit and matters relating to it. A description of the Compensation Committee's
responsibilities is included in the Committee's Report on Executive Compensation
on page 7. The Board does not have a standing nominating committee.
DIRECTORS' FEES
Directors who are not employees of the Corporation received a $9,000
retainer, an attendance fee of $750 for each board meeting and a $500 fee for
each committee meeting attended during the year ended January 31, 1995. For the
year ending January 31, 1996, each non-employee Director will receive a $10,000
annual retainer, attendance fees of $750 for each Board meeting and $500 for
each committee meeting.
OTHER TRANSACTIONS
Newcomb, Sabin, Schwartz and Landsverk, a firm in which Jack B. Schwartz, a
nominee for Director, is a partner, renders legal services to the Corporation in
the ordinary course of business. During the year ended January 31, 1995, the
Corporation paid the firm fees approximating $375,440 for such services and
additional services in connection with environmental matters and related
litigation.
2. PROPOSAL TO APPROVE 1995 SENIOR MANAGERS' INCENTIVE STOCK OPTION PLAN
In March, 1995, the Board of Directors adopted the Cascade Corporation 1995
Senior Managers' Incentive Stock Option Plan, subject to approval by the
Shareholders at the 1995 Annual Meeting. The Corporation presently has no stock
option plan in effect, and there are no outstanding options under prior plans.
A copy of the Plan is attached as Appendix A.
MATERIAL FEATURES OF THE PLAN
The Plan will be administered by a Stock Option Committee consisting of
three non-employee Directors. The Committee will determine eligible management
employees, the number of shares for which each will be granted options, and
other option terms not specified by the Plan. A maximum of 800,000 shares of
common stock of the Corporation may be issued pursuant to the exercise of
options granted under the Plan. The maximum is subject to appropriate
adjustment in the event of a share dividend, stock split, or similar event.
Under the Plan, options to purchase common shares of the Corporation will
be awarded to eligible management employees of the Corporation and its
subsidiaries. The option price will be 100% of the fair market value of the
optioned shares at the date of grant (110% for employees owning 10% or more of
the Corporation's shares, including shares as to which ownership is attributed
under the Internal Revenue Code).
The Plan will terminate, and no further options will be granted, 10 years
following shareholder approval. Options will normally be exercisable three
years after they are granted, although the Plan grants the Stock Option
Committee authority to waive or modify the three-year period. Options must
expire no more than 10 years after they are granted (five years for 10%
shareholders), such lesser period as the Committee may establish, or, if
shorter, three months after termination of employment (one year in case of
disability termination or death while employed).
An individual participant may not be granted options covering shares for
which options are first exercisable in any one year exceeding $100,000 in market
value at date or dates of grant.
ELIGIBLE PARTICIPANTS
Management employees who, in the Stock Option Committee's judgment, hold
positions of responsibility and are able to contribute substantially to the
Corporation's success will be eligible for option grants under the Plan. The
Committee has not yet determined any option awards under the Plan. The Board
believes approximately 40 employees may eventually participate.
3
<PAGE>
TAX TREATMENT
The Plan is intended to qualify as an incentive stock option plan within
the meaning of Section 422 of the Internal Revenue Code. Under Section 422,
optionees will normally recognize no income on the grant or exercise of options,
and will be taxed at capital gains rates on the difference between the exercise
and sale prices upon sale of shares acquired through the exercise of options.
(Grantees subject to the alternative minimum tax under Section 55 of the
Internal Revenue Code would include the difference between the option price and
the fair market value of shares acquired through the exercise of options as
income for that purpose in the year of exercise.)
In the event of a "disqualifying disposition" (sale within two years of
grant or one year of exercise), an optionee will recognize ordinary income, and
the Corporation will receive a corresponding deduction, equal to the difference
between the option price of shares and the fair market value of those shares at
the date the option is exercised. Any balance realized on sale would be taxed
at capital gains rates.
ADOPTION OF PROPOSAL
Adoption of this proposal requires the affirmative vote of a majority of
shares represented in person or by proxy at the Annual Meeting. Unless
otherwise indicated, the accompanying proxy will be voted for the proposal.
Abstentions and broker non-votes will be treated as if the shares were not
voted. THE DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
1995 CASCADE CORPORATION SENIOR MANAGERS' INCENTIVE STOCK OPTION PLAN.
3. PROPOSAL TO APPROVE CASCADE EMPLOYEE STOCK OWNERSHIP PLAN
In March, 1995, the Board of Directors adopted the Cascade Employee Stock
Ownership Plan (ESOP). The Plan is intended to be a qualified retirement plan
investing primarily in shares of the Corporation under Sections 401 and 409 of
the Internal Revenue Code. Qualification will permit the Corporation to make
tax deductible contributions which are tax-deferred to participating employees.
Although shareholder approval of the ESOP is not legally required, the Directors
determined to put the Plan into effect only if it receives shareholder approval.
Plan implementation will be subject to an Internal Revenue Service determination
that it is a qualified plan under the Internal Revenue Code.
The Board of Directors adopted the Plan to (a) provide additional means of
promoting share ownership among employees of the Corporation and (b) furnish a
method of acquiring blocks of shares which may become available for the benefit
of all employees.
Funding of the Plan is discretionary with the Board. The Board is not
required to make contributions each year, and intends to exercise its discretion
in a manner consistent with overall employee compensation policies. The
Directors may contribute reacquired shares presently held as treasury shares,
authorized but unissued shares, or cash to be used for the purchase of shares.
The Plan permits acquisition of shares in the future on the open market or
through private transactions at market prices, which could include, in addition
to other shareholders, transactions with officers or directors. The Plan is
authorized to borrow to acquire shares. No share purchases are presently
contemplated.
MATERIAL FEATURES OF THE PLAN
Shares contributed to or acquired by the Plan will be allocated among
employees at the Corporation's domestic manufacturing facilities and its
corporate staff. Shares allocated to employees at a particular facility or
corporate staff will then be allocated to accounts in the name of each
participant and held by trustees appointed by the Board until the participant
retires or otherwise terminates employment. Allocations will be in proportion
to compensation up to $150,000 annually, or such other maximum as is permitted
for tax-qualified plans under Section 417 of the Internal Revenue Code. The
trustees may pay dividends on shares allocated to a participant's account
directly to the participant.
Participants' accounts will vest at the rate of 20% for each year of
Cascade employment; any account balances forfeited at termination of employment
will be divided among remaining participants.
Participants may direct the Trustees as to the voting of shares held in
their accounts on matters placed before the shareholders. Shares as to which no
direction is received will be voted in the same proportion as those for which
directions are received.
4
<PAGE>
In the event the Plan borrows money to purchase shares, shares will be
allocated ratably as the borrowings are repaid. Lenders may require the
Corporation's guaranty as a condition of any such borrowing.
ELIGIBLE PARTICIPANTS
All domestic employees of the Corporation are eligible to participate in
the Plan. The Corporation has 555 domestic employees at this time.
TAX TREATMENT
The Corporation may deduct contributions to a tax-qualified ESOP and its
existing 401(k) plan to an aggregate maximum of 15% of compensation paid covered
employees. In addition, the Corporation may deduct contributions used to repay
principal on ESOP borrowings for share acquisitions; however, an aggregate
maximum of 25% will then apply. The Corporation may also deduct dividends paid
to a tax-qualified ESOP if the ESOP pays them to participants or uses them to
repay principal or interest on borrowings to purchase Corporation shares and may
deduct contributions used to pay interest on ESOP share acquisition loans.
Participants pay no tax on ESOP contributions or accounts until they are
distributed. Dividends paid to ESOP participants are subject to tax when
received. Participants terminating employment may elect to have their ESOP
accounts distributed directly to Individual Retirement Accounts (IRA's), and
have taxes deferred until they receive IRA distributions.
AMENDMENT
The Plan provides for amendment by vote of the Board of Directors. The
Internal Revenue Service may require technical amendments as a condition of tax
qualification. Future amendments might concern extension of the Plan to
employees of foreign subsidiaries, plan eligibility, vesting, benefits or other
matters. The Board is not required to refer amendments to the shareholders.
OTHER PLANS
The Corporation presently has in effect a retirement plan which, pursuant
to Section 401(k) of the Internal Revenue Code, provides for employee deferral
contributions and Corporation discretionary matching contributions. In 1994,
the Corporation matched 50% of employee deferral contributions, but no more than
3% of each participant's compensation, and 50% of employee deferral
contributions to separate retirement medical accounts up to 1% of each
participant's compensation. The Plan also provides for discretionary non-
matching Corporation contributions. In 1994, the Corporation contributed for
each eligible employee an amount equal to 4% of each employee's compensation.
For additional information as to other plans, see "Retirement Plans" under
"Executive Compensation".
ADOPTION OF PROPOSAL
Adoption of this proposal requires the affirmative vote of a majority of
shares represented in person or by proxy at the Annual Meeting. Unless
otherwise indicated, the accompanying proxy will be voted for the proposal.
Abstentions and broker non-votes will be treated as if the shares were not
voted. THE DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
CASCADE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN.
The Corporation will furnish a complete copy of the Plan via first class
mail to shareholders who so request by writing or calling G.M. Bitz, Secretary,
2020 S.W. Fourth Avenue, Suite 600, Portland Oregon, 97204 (Telephone (503) 227-
0024; Fax (503) 274-1705).
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the
compensation of the Corporation's Chief Executive Officer and each of its four
other most highly compensated executive officers (the "named executive
officers") during each of the years in the three-year period ended January 31,
1995.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Long Term
Compensation
Annual Compensation -----------------
Name and ---------------------------- Stock Option Plan All Other
Principal Position Year Salary Incentive Payment Payout(1) Compensation(2)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joseph J. Barclay 1994 $180,000 $322,137 $11,820
Chairman and Chief 1993 179,475 167,992 11,706
Executive Officer 1992 166,708 208,825 $379,798 11,340
Robert C. Warren, Jr. 1994 130,000 257,709 9,820
President and Chief 1993 109,716 103,080 7,788
Operating Officer 1992 91,731 83,530 62,462 6,421
Gerald M. Bitz 1994 92,400 128,855 7,368
Vice President- 1993 89,738 67,197 6,357
Finance & Secretary 1992 86,072 83,530 139,075 6,025
Terry H. Cathey 1994 93,000 128,855 7,416
Vice President- 1993 90,333 67,197 6,398
Manufacturing(3)
Lawrence S. Maunder 1994 94,200 128,855 7,500
Vice President- 1993 90,336 49,047 6,399
Marketing 1992 87,000 41,400 95,689 6,090
- -----------------------------------------------------------------------------------------------------------
<FN>
(1) Pursuant to amendments to the Corporation's 1982 Senior Management Stock
Option Plan, which were ratified at the 1992 Annual Meeting of
Shareholders, all options outstanding under the plan were retired for cash
payments equal to the difference between the option price and the
Corporation's book value as of the end of the quarter preceding the offer.
No options remain outstanding under the Plan, which expired May 9, 1993.
(2) The amounts shown are contributions by the Corporation to the Cascade
Corporation Savings and Investment Plan, a qualified plan under Section
401(k) of the Internal Revenue Code of 1986, for the benefit of the named
executive officers.
(3) Mr. Cathey was elected an officer of the Company effective February 1,
1993.
</TABLE>
In December, 1993, the Corporation and Mr. Barclay entered into an
agreement providing for Mr. Barclay's employment by the Corporation through
March 31, 1998. Under the agreement, the Corporation will pay Mr. Barclay a
minimum annual salary of $180,000 (subject to annual review), annual incentive
compensation payments based upon the same formula and percentage participation
then in effect, and certain employee benefits and expense reimbursements.
Should the Corporation terminate Mr. Barclay's employment prior to March 31,
1998, for reasons other than misconduct, the Corporation is to pay him $31,000
per month until that date or, if earlier, his death or disability.
RETIREMENT PLANS
Certain employees of the Corporation will receive retirement benefits under
the Cascade Corporation Retirement Plan. Benefits are limited to those accrued
through December 31, 1988, and are based upon compensation for the five highest
consecutive years of compensation during the 10 years of employment ending
December 31, 1988.
The Corporation also provides a supplemental, unfunded severance benefit to
certain Retirement Plan participants. A participant's supplemental benefit will
be equal to the difference, if any, between (a) benefits which would have been
payable under the Retirement Plan, had benefit accruals continued after December
31, 1988, and (b) the actuarial value of benefits payable under the Retirement
Plan and benefits attributable to employer contributions, including earnings,
under the Corporation's 401(k) Plan.
6
<PAGE>
Estimated annual Retirement Plan benefits and estimated lump sum
supplemental plan benefits, respectively, payable to named executive officers as
of January 31, 1995, are as follows: Mr. Barclay, $68,244 and $569,747; Mr.
Warren, Jr., $15,977 (Retirement Plan only); Mr. Bitz, $22,565 and $299,051;
Mr. Cathey, $9,816 (Retirement Plan only); and Mr. Maunder, $25,752 and
$230,913. Retirement plan estimates assume retirement at age 65. Supplemental
plan estimates assume retirement at age 65; compensation for the 10 years
prior to retirement equal to compensation for the 10 years ending January 31,
1995; 401(k) Plan employer contributions equal to those for the year ended
January 31, 1995; and an average rate of return on 401(k) Plan employer
contributions balances and future employer contributions equal to the return for
the 12-month period December 31, 1994.
Mr. Warren, Jr. and Mr. Cathey do not participate in the supplemental
plan.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES
The Compensation Committee is responsible for formulating the Corporation's
executive compensation policy, subject to approval by the Board of Directors.
Mr. Warren, a member of the Committee, was formerly Chairman of the Corporation
and has served as Chief Executive Officer in the past.
For the year ended January 31, 1995, all executive officers were paid a
base salary and an incentive bonus equal to an assigned percentage of the
Corporation's pretax profits, computed without deducting incentive compensation
and certain extraordinary items. The Board of Directors approved salary and
bonus participation levels for the year at its February, 1994, meeting.
By tying compensation in significant part to profits, the Compensation
Committee believes the Corporation has assured that compensation directly
reflect corporate performance for the period involved. The Committee believes
the Corporation should also provide a compensation element linked to the
Corporation's longer-term results and share performance, and has proposed the
1995 Cascade Corporation Incentive Stock Option Plan for this purpose (see
Proposal 2 above).
In recommending salary and bonus participation levels, the Compensation
Committee also considered the Corporation's relatively successful performance in
recent years despite changing and at times difficult conditions in the domestic
and international markets the Corporation serves.
COMPANY PERFORMANCE AND CEO COMPENSATION
Mr. Barclay's base salary and incentive bonus participation were
established by an agreement entered into in December, 1993, and summarized under
"Executive Compensation" above. The Committee believes compensation paid
pursuant to the agreement fairly reflects Mr. Barclay's contribution to the
Corporation's operating performance and is within the general range of
compensation for executives with like responsibilities in the Portland, Oregon,
area and in comparable companies and industries.
COMPENSATION COMMITTEE MEMBERS
Robert C. Warren
Eric Hoffman
C. Calvert Knudsen
7
<PAGE>
PERFORMANCE GRAPH
The following graph compares the annual percentage change in the cumulative
shareholder return on the Corporation's Common Stock with the cumulative total
return of the NASDAQ Non-Financial Index, and the cumulative total return of an
industry group of peer companies in each case assuming investment of $100 on
January 31, 1990, and reinvestment of dividends.
<TABLE>
<CAPTION>
TOTAL RETURN CHART
CASCADE PEER NASDAQ
JANUARY 31, CORPORATION GROUP* NON-FINANCIAL
- ----------- ----------- ------ -------------
<S> <C> <C> <C>
1990 $100 $100 $100
1991 105 93 108
1992 136 141 164
1993 144 154 174
1994 143 202 201
1995 168 209 186
<FN>
* The peer group includes the following companies: Agco Corp., Alamo Group Inc.,
Arts Way Mfg. Inc., Astec Inds. Inc., Farr Co., Gehl Co., Gencor Inds. Inc.,
Jlg Inds., Lindsay Mfg. Co., Newpark Res. Inc., Nordson Corp., Peerless Mfg.
Co., Raymond Corp., Rexwork Inc., Si Handling Sys. Inc., Utilx Corp., Valmont
Inds. Inc.
</TABLE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Price Waterhouse, an independent certified public accounting firm, has been
selected to continue to serve the Corporation in that capacity for the current
fiscal year. The Corporation expects representatives of Price Waterhouse to be
present at the annual meeting. They will have an opportunity to make a
statement, if they desire to do so, and will be available to respond to
appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual meeting
must be received by the Corporation no later than January 31, 1996, in order to
be included in the proxy materials for such meeting.
ANNUAL REPORT
The Annual Report of the Corporation is being mailed to the shareholders
with the Notice of Annual Meeting and Proxy Statement. The Annual Report is not
incorporated in the Proxy Statement by reference, nor is it part of the proxy-
soliciting material.
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE TO RECORD OR
BENEFICIAL SHAREHOLDERS AS OF THE RECORD DATE. REQUESTS FOR THE FORM 10-K
SHOULD BE ADDRESSED TO THE SECRETARY, CASCADE CORPORATION, 2020 S.W. FOURTH
AVENUE, PORTLAND, OREGON 97201, THE EXECUTIVE OFFICES OF THE CORPORATION.
8
<PAGE>
APPENDIX A
CASCADE CORPORATION
1995 SENIOR MANAGERS' INCENTIVE
STOCK OPTION PLAN
SECTION 1. PURPOSES
The purposes of this 1995 Cascade Corporation Senior Managers' Incentive
Stock Option Plan (the Plan) are to strengthen the Corporation's ability to
attract, motivate and retain employees in senior management positions and to
closely align their interests and efforts to the long-term interests of the
Corporation's shareholders by granting them options to purchase common stock
qualifying as incentive stock options under Section 422 of the Internal Revenue
Code.
SECTION 2. STOCK
The Stock subject to options under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired common stock. Subject to
the adjustments described in Section 6 of the Plan, the aggregate number of
shares that may be issued pursuant to the Plan shall not exceed 800,000. Shares
allocable to the unexercised portion of an option which expires or terminates
under the Plan shall again be available for the granting of options.
SECTION 3. ELIGIBILITY
Management employees (including officers, whether or not they are
directors) of the Corporation and its subsidiaries who, in the judgment of the
Committee, hold positions of responsibility and are able to contribute
substantially to the Corporation's success shall be eligible to be granted
options under the Plan.
SECTION 4. ADMINISTRATION
The Plan shall be administered by a Stock Option Committee, which shall be
composed of not less than three members of the Board who are not eligible to
receive options under the Plan. The Committee shall have full power and
authority, subject to the provisions of the Plan, to:
(a) Designate participants;
(b) Determine the number of options to be granted to each participant;
(c) Determine the terms of option agreements for each option;
(d) Supervise administration of the Plan;
(e) Interpret the provisions of the Plan and option agreements granted
under it; and
(f) Take all action in connection with the Plan it deems necessary or
advisable.
Decisions of the Committee as to interpretation of, and rights granted
pursuant to, the Plan shall be final. More than one option may be granted to
the same employee. No member of the Committee or the Board shall be liable for
any action or determination made in good faith with respect to the Plan or any
option granted under it.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be evidenced by stock option
agreements in such form as the Committee shall from time to time approve, and
shall comply with and be subject to the following terms and conditions:
5.1 NUMBER OF SHARES. Each option agreement shall state the number of
shares of Stock subject to the option.
5.2 OPTION PRICE. Each option agreement shall state the option price,
which shall be not less than 100% (110% for 10% Shareholders) of the fair
market value, on the date the option is granted, of the shares of Stock subject
to the option. A 10% Shareholder is any person who, at the time an option is
granted, owns stock of the Corporation possessing more than 10% of the combined
voting power of all classes of stock of the Corporation or any affiliate,
determined in accordance with applicable Internal Revenue Code provisions.
5.3 AGGREGATE FAIR MARKET VALUE. No employee may be granted an option
under the Plan if the terms of such option would cause the aggregate fair market
value, on the date of grant, of the Stock with respect to which
9
<PAGE>
options are exercisable for the first time by that employee during any calendar
year under the Plan and under any other incentive stock option plan (within the
meaning of Section 422 of the Internal Revenue Code) of the Corporation to
exceed $100,000.
5.4 DETERMINATION OF FAIR MARKET VALUE. The fair market value per share
of Stock shall be determined by the Board or Committee in good faith at the time
the option is granted.
5.5 OPTION PERIOD AND LIMITATIONS ON EXERCISE. Optionees may exercise
options granted under the Plan only after completing three years of continuous
employment with the Corporation or a subsidiary following the date of grant.
This three-year requirement shall be waived in the event of death or disability
(as defined in Section 22(e)(3) of the Internal Revenue Code) before completion
of the required period, and may be waived or modified in the Agreement
evidencing the option or by Committee resolution; however, an option may in no
event be exercised prior to six months after date of grant. Agreements may
provide schedules for exercise of options.
Each option shall expire and shall not be exercisable after the expiration
of 10 years (five years for 10% Shareholders) from the date the option is
granted, or such lesser period as may be established by the Committee at the
time the option is granted.
Options shall be exercisable only while the optionee remains an employee of
the Corporation or, in the case of retirement at age 65 or later, within three
months of the date of termination of employment; however, in the event of an
optionee's (a) termination of employment with the Corporation by reason of
disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code), or (b) death while an employee of the Corporation, the option agreement
may allow the option to remain exercisable by the optionee or the estate or
devisee of the decedent, until the expiration date of the term of the option or
one year after the date of the optionee's termination of employment or death,
whichever date is earlier.
5.6 SECURITIES LAW REQUIREMENTS. No shares shall be issued and delivered
under any option unless and until the Committee is satisfied that all applicable
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery have been met. Certificates representing shares shall
bear such legend as the Committee may determine is appropriate stating any
restrictions on their transfer.
5.7 PAYMENT OF PURCHASE PRICE. The option price upon exercise of an
option under the Plan shall be payable to the Corporation in cash or in shares
of the Corporation's common stock owned by the employee for at least six months
valued at fair market value as of the date of tender of payment, or any
combination of cash and such shares.
5.8 NONTRANSFERABILITY. Options shall not be transferable except by Will
or the laws of descent and distribution, and shall be exercisable during an
optionee's lifetime only by the optionee.
5.9 OTHER PROVISIONS. Any option agreement may contain such other or
additional terms and provisions as may be determined by the Committee to be
consistent with the Plan, or necessary or desirable to comply with the
provisions of applicable laws, rules, or regulations.
SECTION 6. ADJUSTMENT
In the event of any stock split or payment of a dividend on Stock payable
in shares of Stock after the Plan is approved by the Corporation's shareholders,
the shares of Stock then subject to each option (and the maximum number of such
shares which may be issued under the Plan) shall be increased proportionately
without any change in their aggregate purchase price. In the event all the
outstanding shares of Stock shall be changed into or exchanged for a different
number or class of shares of the Corporation, or of another corporation, whether
through reorganization, recapitalization, stock split-up, combination of shares,
merger, consolidation, or otherwise, then there shall be substituted for each
share of Stock then subject to each option (and, if the Corporation is the
surviving corporation in such transaction, for the number of such shares which,
pursuant to Section 2 of the Plan, may be issued under the Plan), the number
and class of shares into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate option price for the shares
then subject to such option. In connection with any adjustment under this
Section 6 resulting in a fractional share interest, such interest may be rounded
down to the nearest whole share if such interest is less than 0.5 share;
otherwise, such fractional share interest may be rounded up to the nearest whole
share.
SECTION 7. PROCEEDS
The proceeds received by the Corporation from the sale of Stock pursuant to
the Plan will be used for general corporate purposes.
10
<PAGE>
SECTION 8. OBLIGATION TO EXERCISE; NO RIGHT TO CONTINUED EMPLOYMENT
The granting of an option shall impose no obligation on the optionee to
exercise the option. The granting of an option does not confer any right to be
continued in the employment of the Corporation.
SECTION 9. AMENDMENT AND DISCONTINUANCE
The Board may alter, amend, suspend, or terminate the Plan, provided that
the Board may not, without further shareholder approval,
(a) Increase the aggregate number of shares of Stock for which options may
be granted under the Plan (except for adjustments pursuant to Section
6);
(b) Decrease the option price at which Stock may be offered;
(c) Materially modify the requirements as to eligibility for participation
in the Plan; or
(d) Otherwise materially increase the benefits accruing to participants
under the Plan.
SECTION 10. TERM OF PLAN AND EFFECTIVE DATE
The Plan shall become effective upon approval by (1) the Board of Directors
and (2) the approval of the Corporation's shareholders within 12 months
thereafter.
No option may be granted pursuant to the Plan more than 10 years after the
date the Plan becomes effective.
11
<PAGE>
CASCADE CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 9, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
The undersigned hereby appoints J.J. Barclay, G.M. Bitz and R.C. Warren,
Jr. as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated hereon, all the shares
of common stock of Cascade Corporation held of record by the undersigned on
April 3, 1995, at the Annual Meeting of Shareholders to be held at the Red Lion
Hotel, 310 S.W. Lincoln, Portland, Oregon 97201, on May 9, 1995 at 10:00 a.m.,
and at any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE TEN NOMINEES FOR ELECTION
AS DIRECTORS, FOR THE PROPOSAL TO ESTABLISH THE CASCADE CORPORATION SENIOR
MANAGERS' INCENTIVE STOCK OPTION PLAN AND FOR THE PROPOSAL TO ESTABLISH THE
CASCADE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN.
THIS PROXY WILL BE VOTED AS SPECIFIED, OR IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE TEN NOMINEES FOR ELECTION AS DIRECTORS AND FOR EACH OF THE TWO
MANAGEMENT PROPOSALS.
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(Continued and to be signed on other side)
- -------------------------------------------------------------------------------
1
<PAGE>
/X/ PLEASE MARK YOUR VOTES AS THIS
-------------
COMMON
- -------------------------------------------------------------------------------
Item 1: Election of Directors
FOR all nominees listed to the right (except as marked to the contrary)
/ /
WITHHOLD AUTHORITY to vote for all nominees listed to the right.
/ /
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE THAT
NOMINEES NAME IN THE SPACE PROVIDED BELOW.
_______________________________________________________________________________
J.J Barclay, R.C. Hire, Eric Hoffman, C.C. Knudsen, N.R. Lardy, J.S. Osterman,
J.B. Schwartz, Rob Spaans, R.C. Warren, R.C. Warren Jr.
- -------------------------------------------------------------------------------
I PLAN TO ATTEND MEETING / /
COMMENTS/ADDRESS CHANGE
(Please mark this box if you have written comments/address change on the reverse
side. / /
- -------------------------------------------------------------------------------
Item 2--Proposal to establish the 1995 Cascade Corporation Senior Managers'
Incentive Stock Option Plan. FOR AGAINST ABSTAIN
/ / / / / /
Item 3--Proposal to establish the Cascade Corporation Employee Stock Ownership
Plan. FOR AGAINST ABSTAIN
/ / / / / /
Item 4-- In their discretion, upon any and all such other matters as may
properly come before the meeting or any adjournment or postponement thereof.
- -------------------------------------------------------------------------------
Please sign exactly as your name appears. When shares are held by joint
tenants, both should sign. When signing as executor, administrator, trustee or
or guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized person.
Date____________________________________, 1995
________________________________________
Signature
________________________________________
Signature
- -------------------------------------------------------------------------------
2
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL
HIGHLIGHTS
(IN THOUSANDS EXCEPT January 31
WHERE NOTED*) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales $183,365 $141,325 $148,435 $153,480 $169,965
Net income $ 12,250 $ 3,885(1) $ 7,695 $ 7,205 $ 9,805
Per common share**
Net income* $ 1.02 $ .32(1) $ .64 $ .60 $ .82
Book value* $ 7.37 $ 6.47 $ 6.55 $ 6.44 $ 6.38
Working capital $ 40,821 $ 37,337 $ 38,175 $ 35,783 $ 31,675
Expenditures for property,
plant and equipment $ 21,921 $ 8,126 $ 7,772 $ 5,659 $ 9,426
Total assets $137,109 $106,571 $104,987 $110,326 $118,662
Long-term debt $ 7,809 $ 682 $ 1,228 $ 1,915 $ 2,729
Shareholders' equity $ 88,538 $ 77,751 $ 78,650 $ 77,323 $ 76,589
Number of employees* 993 838 863 875 1,060
<FN>
(1) Includes $1,980 or $.17 per share charge related to cumulative effect of
accounting change.
** Per share amounts have been restated to reflect a 100% stock dividend
declared in February 1995.
</TABLE>
1
------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- ------------------------------------------------------------------------------------------
CONSOLIDATED
STATEMENT OF
INCOME &
RETAINED EARNINGS
Year Ended January 31
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Net Sales $183,365 $141,325 $148,435
-------- -------- --------
Operating expenses:
Cost of goods sold 118,430 91,830 95,365
Depreciation 8,100 7,555 8,045
Selling and administrative expenses 35,085 30,565 30,870
-------- -------- --------
161,615 129,950 134,280
-------- -------- --------
Operating Income 21,750 11,375 14,155
Interest expense 335 475 885
Interest income (535) (435) (385)
Other expense, net (Note 10) 3,315 2,365 1,810
-------- -------- --------
Income before income taxes and
cumulative effect of accounting change 18,635 8,970 11,845
Income taxes (Note 4) 6,385 3,105 4,150
-------- -------- --------
Income before cumulative effect of
accounting change 12,250 5,865 7,695
Cumulative effect of accounting change
net of taxes of $1,020 (Note 7) 1,980
-------- -------- --------
Net Income 12,250 3,885 7,695
Retained earnings, beginning of year 75,262 74,980 71,488
Dividends ($.375, $.30 and $.35 per share) (4,504) (3,603) (4,203)
Stock distribution (3,098)
-------- -------- --------
Retained earnings, end of year $ 79,910 $ 75,262 $ 74,980
-------- -------- --------
-------- -------- --------
Income per share before cumulative effect
of accounting change* $ 1.02 $ .49 $ .64
-------- -------- --------
-------- -------- --------
Net Income per share* $ 1.02 $ .32 $ .64
-------- -------- --------
-------- -------- --------
Per share figures have been restated on pages 8
through 17 to reflect a 100% stock dividend
declared in February 1995, and accounted for as a
stock split.
<FN>
*Based on 12,009,904 common shares outstanding
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
8
------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- ------------------------------------------------------------------------------------------
CONSOLIDATED
BALANCE SHEET
January 31
<S> <C> <C>
ASSETS 1995 1994
(Dollars in Thousands)
Current assets:
Cash and cash equivalents $ 17,203 $ 12,617
Accounts receivable, less allowance for doubtful accounts
of $265 and $381 35,277 24,853
Inventories, at average cost which is lower than market:
Finished goods and components 13,934 13,127
Goods in process 3,148 3,004
Raw materials 3,985 3,003
-------- --------
21,067 19,134
Income taxes (Note 4) 151 904
Prepaid expenses 919 1,176
-------- --------
Total current assets 74,617 58,684
Property, plant and equipment,
at cost less accumulated depreciation (Notes 2 and 3) 60,607 46,224
Other assets 1,885 1,663
-------- --------
Total assets $137,109 $106,571
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks (Note 3) $ 5,812 $ 3,365
Current portion of long-term debt (Note 3) 243 146
Accounts payable 16,149 9,591
Accrued payroll and payroll taxes 4,227 3,143
Other accrued expenses 7,365 5,102
-------- --------
Total current liabilities 33,796 21,347
Long-term debt (Note 3) 7,809 682
Deferred income taxes (Note 4) 4,058 3,917
Other liabilities (Note 7) 2,908 2,874
-------- --------
Total liabilities 48,571 28,820
-------- --------
Shareholders' equity (Note 5):
Common stock, $.50 par value, authorized
20,000,000 shares--issued 12,391,408 shares 6,196 3,098
Additional paid-in capital 2,045 2,045
Retained earnings 79,910 75,262
Cumulative foreign currency translation adjustments 1,073 (1,968)
Treasury stock, at cost--381,504 shares (686) (686)
-------- --------
Total shareholders' equity 88,538 77,751
-------- --------
Total liabilities and shareholders' equity $137,109 $106,571
-------- --------
-------- --------
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
9
------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- ---------------------------------------------------------------------------------------------------------
CONSOLIDATED
STATEMENT OF
CASH FLOWS
Year Ended January 31
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $12,250 $ 3,885 $7,695
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 8,100 7,555 8,045
Gain on sale of property, plant and equipment (150)
Deferred income taxes (9) (57) 319
Cumulative effect of accounting change 1,980
Changes in operating assets and liabilities:
Accounts receivable (10,424) (1,364) 681
Inventories (1,933) 1,892 3,358
Income taxes 753 (480) (2,115)
Prepaid expenses 257 (233) 71
Accounts payable and accrued expenses 9,905 2,083 (2,193)
Other liabilities 34 (126)
------- ------- -------
Net cash provided by operating activities 18,783 15,135 15,861
------- ------- -------
Cash flows from investing activities:
Acquisition of property, plant and equipment (21,921) (8,126) (7,772)
Proceeds from sale of property, plant and equipment 1,849
Other assets (222) (1,386) (57)
------- ------- -------
Net cash used in investing activities (20,294) (9,512) (7,829)
------- ------- -------
Cash flows from financing activities:
Long-term debt, including current portion 6,318 (959) (665)
Notes payable to banks 2,447 (379) (2,178)
Cash dividends paid (4,504) (3,603) (4,203)
------- ------- -------
Net cash provided (used) in financing activities 4,261 (4,941) (7,046)
------- ------- -------
Effect of exchange rate changes 1,836 (418) (1,078)
------- ------- -------
Increase (decrease) in cash and cash equivalents 4,586 264 (92)
Cash and cash equivalents at beginning of year 12,617 12,353 12,445
------- ------- -------
Cash and cash equivalents at end of year $17,203 $12,617 $12,353
------- ------- -------
------- ------- -------
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 307 $ 397 $ 896
Income taxes $ 5,676 $ 3,536 $ 5,741
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
10
-----------------------------------------------------------------------------
<PAGE>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- --------------------------------------------------------------------------------
NOTES TO
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTE 1 - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly-owned. Intercompany balances and
transactions have been eliminated.
Property, plant and equipment are stated at cost. Depreciation is provided on
the straight-line basis over the estimated useful lives of the respective
assets.
In February 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (FAS 109), "Accounting for Income Taxes". FAS 109 is an asset
and liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns.
The Company translated the balance sheets of its foreign subsidiaries using
fiscal year-end exchange rates. The statements of income are translated using
the average exchange rates for the fiscal year. The effects of such
translations are included in the shareholders' equity account "cumulative
translation adjustments" as an increase of $3,041,000 for the year ended
January 31, 1995 and decreases of $1,181,000 and $2,165,000 for the years ended
January 31, 1994 and 1993 respectively. There are no foreign exchange
restrictions which would have a material effect on the consolidated financial
position or results of operations.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
January 31
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Land $ 3,775 $ 3,901
Buildings 31,760 18,649
Machinery and equipment 90,722 80,899
-------- --------
126,257 103,449
Accumulated depreciation (65,650) (57,225)
-------- --------
$ 60,607 $ 46,224
-------- --------
-------- --------
</TABLE>
NOTE 3 - BORROWINGS
<TABLE>
<CAPTION>
January 31
1995 1994
(Dollars in Thousands)
<S> <C> <C>
7.15%-10.0% mortgage notes, due annually through 1998 $ 492 $ 698
5.75% mortgage note, due annually through 1999 7,317 --
-------- --------
Secured by plant and equipment $ 7,809 $ 698
-------- --------
-------- --------
</TABLE>
Maturities of long-term debt for the years January 31, 1996 through January 31,
2000 respectively are $243,000, $5,183,000, $1,014,000, $921,000, and $691,000.
Borrowing arrangements with commercial banks provided short-term lines of credit
at January 31, 1995 totalling $18,000,000, of which $12,188,000 was unused.
Average interest rates on short-term borrowings were 3.6% and 3.2% at January
31, 1995 and 1994, respectively.
11
-----------------------------------------------------------------------------
<PAGE>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- --------------------------------------------------------------------------------
NOTES TO
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTE 4 - INCOME TAXES
<TABLE>
<CAPTION>
Year Ended January 31
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Income before taxes was as follows:
United States $12,925 $ 5,519 $ 7,021
Foreign 5,710 451 4,824
------- ------- -------
$18,635 $ 5,970 $11,845
------- ------- -------
------- ------- -------
Taxes charged (credited) against operations were as
follows:
Current
Federal $ 3,824 $ 1,598 $ 1,899
State 623 304 362
Foreign 2,319 418 1,687
------- ------- -------
Total 6,766 2,320 3,948
------- ------- -------
Deferred
Federal (274) (178) (98)
State (44) (34) (19)
Foreign (63) (23) 319
------- ------- -------
Total (381) (235) 202
------- ------- -------
Total income taxes $ 6,385 $2,085 $ 4,150
------- ------- -------
------- ------- -------
The federal rate reconciles to the effective rate as
follows:
Federal statutory rate 35.0% 34.0% 34.0%
State income taxes, net of federal tax benefits 2.0 2.4 1.9
Effect of foreign tax rates 1.6 4.0 3.1
Tax credits and other (4.3) (5.5) (4.0)
------- ------- -------
Effective income tax rate 34.3% 34.9% 35.0%
------- ------- -------
------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
January 31
1995 1994
(Dollars in Thousands)
<S> <C> <C>
The deferred tax liabilities (assets) recorded on the
consolidated balance sheet are comprised of
the following:
Accruals not deductible until paid $ (633) $ (778)
Other (103) (172)
------- -------
Current deferred income taxes $ (736) $ (950)
------- -------
------- -------
Depreciation $ 4,999 $ 5,018
Employee benefits (843) (1,064)
Other (98) (37)
------- -------
Noncurrent deferred income taxes $ 4,058 $ 3,917
------- -------
------- -------
</TABLE>
12
-----------------------------------------------------------------------------
<PAGE>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- --------------------------------------------------------------------------------
NOTES TO
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTE 5 - CAPITAL STOCK
There are 200,000 shares authorized of no par value preferred stock; none are
outstanding.
NOTE 6 - BENEFIT PLANS
The Company has a defined benefit plan covering its U.S. employees. The
benefits are based on years of service and average earnings over a specified
five-year period of prior service. The Company's funding policy is to make
annual contributions that are between the minimum amount required by the
Employee Retirement Income Security Act and the maximum amount deductible under
the current tax regulations. Substantially all plan assets are invested in
government or corporate bonds.
Net pension cost, the plan's funded status and significant assumptions include
the following:
<TABLE>
<CAPTION>
Year Ended January 31
1995 1994 1993
(Dollars in Thousands)
<S> <C> <C> <C>
Interest cost on projected benefit obligation $ 271 $ 262 $ 336
Actual return on assets 65 (132) (144)
Net amortization and deferral (96) (2) (95)
------- ------- -------
Net periodic pension cost $ 240 $ 128 $ 97
------- ------- -------
------- ------- -------
Projected and accumulated vested benefit obligation
for service rendered to date $(3,893) $(4,234) $(4,107)
Plan assets at fair value 3,053 2,603 2,750
------- ------- -------
Projected benefit obligation in excess of plan assets (840) (1,631) (1,357)
Unrecognized prior service cost 146 159 172
Unrecognized net loss 1,142 1,270 908
------- ------- -------
Pension cost prepaid (accrued) $ 448 $ (202) $ (277)
------- ------- -------
------- ------- -------
Discount rate 8 1/2% 7% 7 1/4%
Expected long-term rate of return 8% 7% 8%
</TABLE>
In December, 1988, the Company amended the plan to limit benefits to those
accrued through December 31, 1988. Also effective January 1, 1989, the Company
instituted a defined contribution plan and a limited matching contribution
program both pursuant to applicable provisions of the Internal Revenue Code and
contributed $1,195,000, $933,000, and $885,000 for 1994, 1993 and 1992,
respectively.
13
-----------------------------------------------------------------------------
<PAGE>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- --------------------------------------------------------------------------------
NOTES TO
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTE 7 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides health care benefits for eligible retirees. The Company
adopted during 1993, FAS NO. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions". The $3,000.000 obligation as of February 1, 1993
owed to retired employees and certain active employees has been recorded, and
the Company is accruing the future costs of providing such benefits to eligible
active employees during the years they render service.
A corresponding charge was recorded in 1993 as the cumulative effect of a change
in an accounting principle. The net after-tax effect of this charge was
$1,980,000.
The following table sets forth the plan's status reconciled with the amount
included in the Consolidated Balance Sheets:
<TABLE>
<CAPTION>
January 31
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $(2,557) $(2,953)
Fully eligible active plan participants (210) (124)
Other active plan participants (849) (604)
------- -------
(3,616) (3,681)
Plan assets at fair value -- --
------- -------
Accumulated postretirement benefit obligation
in excess of plan assets (3,616) (3,681)
Unrecognized net loss 708 807
------- -------
$(2,908) $(2,874)
------- -------
------- -------
</TABLE>
The net periodic postretirement benefit costs are as follows:
<TABLE>
<CAPTION>
January 31
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Service cost $ 56 $ 39
Internal cost 295 225
Net amortization and deferral 23 --
------- -------
Net periodic postretirement benefit cost $ 374 $ 264
------- -------
------- -------
</TABLE>
To estimate these costs, health care costs were assumed to increase at an annual
rate of 11% after 1994 with the rate of increase declining ratably to 5% by 2001
and thereafter. The weighted average discount rate was assumed to be 8.5% and
6.25% for 1994 and 1993, respectively. If the cost trend rates were increased
by one percentage point, the accumulated postretirement benefit obligation as of
January 31, 1995 would increase by $403,000 and net periodic postretirement
benefit cost would increase by $30,000.
Prior to 1993, the Company recognized health care benefits for retirees in the
year the benefits were provided. For the year ended January 31, 1993 these
benefits amounted to $270,000.
14
-----------------------------------------------------------------------------
<PAGE>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- --------------------------------------------------------------------------------
NOTES TO
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTE 8 - INFORMATION ABOUT OPERATIONS
The Company is engaged in a single line of business; the design, manufacture and
marketing of hydraulically actuated equipment used in materials handling
applications. Sales to the largest single customer were 10.8%, 9.8% and 10.5%
of consolidated sales during the years ended January 31, 1995, 1994 and 1993,
respectively. Information about the Company's operations in different
demographic areas is shown below:
<TABLE>
<CAPTION>
Year ended January 31
(Dollars in Thousands)
UNITED ELIMINA- CONSOLI-
STATES EUROPE OTHER ATIONS DATED
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1995
Sales to unaffiliated customers $107,344 $53,737 $22,284 $ $183,365
Transfers between areas 10,071 119 1,666 (11,856)
-------- -------- -------- -------- --------
Total revenue $117,415 $53,856 $23,950 $(11,856) $183,365
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Net income $ 8,798 $ 2,480 $ 972 $ 12,250
-------- -------- -------- --------
-------- -------- -------- --------
Identifiable assets $ 65,563 $53,210 $18,336 $137,109
-------- -------- -------- --------
-------- -------- -------- --------
1994
Sales to unaffiliated customers $ 80,454 $38,321 $22,550 $ $141,325
Transfers between areas 9,163 80 1,307 (10,550)
-------- -------- -------- -------- --------
Total revenue $ 89,617 $38,401 $23,857 $(10,550) $141,325
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Net income $ 3,755 $ (689) $ 819 $ 3,885
-------- -------- -------- --------
-------- -------- -------- --------
Identifiable assets $ 54,902 $36,387 $15,282 $106,571
-------- -------- -------- --------
-------- -------- -------- --------
1993
Sales to unaffiliated customers $ 74,240 $50,955 $23,240 $ $148,435
Transfers between areas 10,835 120 720 (11,675)
-------- -------- -------- -------- --------
Total revenue $ 85,075 $51,075 $23,960 $(11,675) $148,435
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Net income $ 4,876 $ 1,836 $ 983 $ 7,695
-------- -------- -------- --------
-------- -------- -------- --------
Identifiable assets $ 52,593 $36,937 $15,457 $104,987
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The company leases certain of its facilities and equipment under noncancelable
operating leases. The minimum rental commitments under these leases for the
years ended January 31, 1996 through January 31, 2000 respectively are $638,000,
$430,000, $174,000, $93,000 and $10,000. For the years ended January 31, 1995,
1994 and 1993 total rentals charged to expense amounted to $591,000, $556,000
and $611,000.
NOTE 10 - ENVIRONMENTAL MATTERS
The Company is engaged in environmental investigations and remediation efforts
in its ordinary course of business. In the years ended January 31, 1995, 1994
and 1993, the Company incurred environmental expenses of approximately
$2,400,000, $1,640,000 and $1,555,000 respectively, which have been reported in
other expense. These expenses include response costs for environmental
investigations, provisions for probable future costs, and expenses related to
litigation.
15
-----------------------------------------------------------------------------
<PAGE>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
- --------------------------------------------------------------------------------
NOTES TO
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTE 10 - ENVIRONMENTAL MATTERS CONTINUED
Since future investigation and remediation costs are subject to many
uncertainties, we are unable to determine the ultimate aggregate monetary
liability. Future expenses are estimated to be within a range of $3,000,000 to
$4,000,000, most of which is likely to be incurred in the next two years.
The Company has made claims under various insurance policies. Based upon
current Oregon court decisions and advice from legal counsel, the Company
believes it will recover a substantial portion of the past and future costs of
investigation and remediation. Litigation has been initiated to enforce terms
of these policies.
QUARTERLY
FINANCIAL
INFORMATION
(UNAUDITED)
(IN THOUSANDS EXCEPT
PER SHARE FIGURES)
<TABLE>
<CAPTION>
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 31, 1995
Net sales $40,850 $45,500 $47,360 $49,655
Gross profit before depreciation 14,795 16,220 17,045 16,875
Net income 2,155 3,045 3,325 3,725
Net income per share $ .18 $ .25 $ .28 $ .31
YEAR ENDED JANUARY 31, 1994
Net sales $36,785 $36,315 $34,025 $34,200
Gross profit before depreciation 12,815 13,075 11,920 11,685
Income before cumulative
effect of accounting change 1,745 1,845 1,235 1,040
Net income (loss) (235) 1,845 1,235 1,040
Income per share before
cumulative effect of
accounting change $ .15 $ .15 $ .10 $ .09
Net income (loss) per share (.02) $ .15 $ .10 $ .09
</TABLE>
REPORT OF
INDEPENDENT
ACCOUNTANTS
TO THE
BOARD OF DIRECTORS
& SHAREHOLDERS OF
CASCADE CORPORATION
In our opinion, the consolidated financial statements appearing on pages 8
through 16 of this annual report present fairly, in all material respects, the
financial position of Cascade Corporation and its subsidiaries at January 31,
1995 and 1994, and the results of their operations and their cash flows for each
of the three years in the period ended January 31, 1995, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audits 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Price Waterhouse
Portland, Oregon
March 17, 1995
As discussed in Notes 1 and 7 to the Consolidated Financial Statements, in 1993
the Company changed its method of accounting for income taxes and postretirement
benefits other than pensions.
16
-----------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INVESTOR INFORMATION
TRANSFER AGENT & REGISTRAR
Chemical Trust Company of California
50 California St., 10th Floor
San Francisco, CA 94111
(800) 647-4273
STOCK EXCHANGE LISTING
The Company's stock is traded on the National Market System under the
NASDAQ symbol CASC.
INVESTOR RELATIONS COUNSEL
Gerald A. Parsons
(503) 228-2909
STOCKHOLDER INFORMATION
Cascade Form 10-K Report to the Securities and Exchange Commission for 1994 is
available to stockholders and others who request them.
To obtain copies, please write to Mr. Gerald M. Bitz, Vice President - Finance
and Secretary, Cascade Corporation, 2020 S.W. 4th Avenue, Suite 600, Portland,
Oregon 97201.
ANNUAL MEETING
The Annual Meeting of the Stockholders of Cascade Corporation will be held at
the Red Lion Motor Inn, Portland Center, 310 S.W. Lincoln Street, Portland,
Oregon on Tuesday, May 9, 1995.
A formal notice of the meeting, together with a proxy statement and proxy form,
will be mailed to stockholders.
MARKET INFORMATION
The high and low sales prices of the common stock of Cascade Corporation as
quoted on the NASDAQ during 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
Year ended January 31
1995 1994
----------------- -----------------
HIGH LOW HIGH LOW
----------------- -----------------
<S> <C> <C> <C> <C>
Market price range
First quarter $ 11.13 $ 8.88 $ 12.00 $ 9.25
Second quarter 11.50 9.75 12.13 9.50
Third quarter 12.63 10.75 12.13 9.13
Fourth quarter 12.50 10.50 10.50 8.88
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK DIVIDENDS
Year ended January 31
1995 1994
------------------------
<S> <C> <C>
First quarter 7.5 CENTS 7.5 CENTS
Second quarter 7.5 7.5
Third quarter 7.5 7.5
Fourth quarter 15.0 7.5
---------- ----------
37.5 CENTS 30.0 CENTS
---------- ----------
---------- ----------
</TABLE>
In February 1995 the Company declared a 100% stock dividend.
17
-----------------------------------------------------------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-START> FEB-01-1994
<PERIOD-END> JAN-31-1995
<CASH> 17,203
<SECURITIES> 0
<RECEIVABLES> 35,542
<ALLOWANCES> 265
<INVENTORY> 21,067
<CURRENT-ASSETS> 74,617
<PP&E> 126,257
<DEPRECIATION> 65,650
<TOTAL-ASSETS> 137,109
<CURRENT-LIABILITIES> 33,796
<BONDS> 0
<COMMON> 6,196
0
0
<OTHER-SE> 82,342
<TOTAL-LIABILITY-AND-EQUITY> 137,109
<SALES> 183,365
<TOTAL-REVENUES> 183,365
<CGS> 118,430
<TOTAL-COSTS> 161,615
<OTHER-EXPENSES> 3,315
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 335
<INCOME-PRETAX> 18,635
<INCOME-TAX> 6,385
<INCOME-CONTINUING> 12,250
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,250
<EPS-PRIMARY> 1.02<F1>
<EPS-DILUTED> 1.02<F1>
<FN>
<F1>Per share figures have been restated to reflect a 100% stock dividend declared
in February 1995, and accounted for as a stock split.
</FN>
</TABLE>
