<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES 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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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
---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: common shares
outstanding 11,776,704, net of treasury shares.
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CASCADE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
(unaudited - in thousands, except per share and average share figures)
<TABLE>
<CAPTION>
Three months ended Six months ended
July 31 July 31
-------------------------------- --------------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 54,805 $ 58,650 $ 111,815 $ 115,800
------------ ------------ ------------ ------------
Costs and expenses:
Cost of goods sold, excluding depreciation 35,765 38,270 73,110 75,865
Depreciation 2,590 2,530 5,275 5,045
Selling and administrative expenses 9,850 9,355 19,765 18,610
Environmental expenses - 430 - 870
------------ ------------ ------------ ------------
48,205 50,585 98,150 100,390
------------ ------------ ------------ ------------
Operating income 6,600 8,065 13,665 15,410
Interest expense 200 315 410 595
Interest income (235) (260) (470) (435)
Other expense, net 255 705 615 1,305
------------ ------------ ------------ ------------
Income before income taxes 6,380 7,305 13,110 13,945
Income taxes 2,045 2,700 4,385 5,050
------------ ------------ ------------ ------------
Net income 4,335 4,605 8,725 8,895
------------ ------------ ------------ ------------
Retained earnings, beginning of period 88,402 83,119 85,083 79,910
Stock repurchase (1,290) (1,290)
Cash dividends (1,059) (1,081) (2,130) (2,162)
------------ ------------ ------------ ------------
Retained earnings, end of period $ 90,388 $ 86,643 $ 90,388 $ 86,643
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net income per share $ .37 $ .38 $ .74 $ .74
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Dividends per share $ .09 $ .09 $ .18 $ .18
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
(Weighted average shares outstanding) 11,815,834 12,009,904 11,855,825 12,009,904
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
PART 1
CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
July 31, January 31
1996 1996
------------ ------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 17,821 $ 23,326
Accounts receivable, less allowance
for doubtful accounts of $751 and $967 34,092 38,574
Inventories, at average cost
which is lower than market:
Finished goods and components 17,756 16,142
Goods in process 4,253 4,083
Raw materials 4,748 4,990
------------ ------------
26,757 25,215
Prepaid expenses 970 849
------------ ------------
Total current assets 79,640 87,964
Property, plant and equipment, at cost less
accumulated depreciation 66,571 63,214
Deferred income taxes 29 58
Other assets 1,902 1,954
------------ ------------
Total assets $ 148,142 $ 153,190
------------ ------------
------------ ------------
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable to banks $ 6,919 $ 5,015
Current portion of long-term debt 2,080 2,940
Accounts payable 10,723 17,126
Accrued payroll and payroll taxes 3,962 5,654
Other accrued expenses 4,205 6,418
Income taxes 104 982
------------ ------------
Total current liabilities 27,993 38,135
Long-term debt 9,395 9,531
Accrued environmental expenditures 10,500 10,500
Other liabilities 3,031 2,967
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Total liabilities 50,919 61,133
------------ ------------
Shareholders' equity:
Common stock, $.50 par value,
authorized 20,000,000 shares-
issued 12,158,208 and 12,298,208 shares 6,079 6,139
Additional paid-in capital - 568
Retained earnings 90,388 85,083
Cumulative foreign currency
translation adjustments 1,442 953
Treasury stock, at cost
(381,504 shares common) (686) (686)
------------ ------------
Total shareholders' equity 97,223 92,057
Total liabilities and
shareholders' equity $ 148,142 $ 153,190
------------ ------------
------------ ------------
</TABLE>
*For the six months ended July 31, 1996, the cumulative translation adjustment
account reflects a credit of $489 resulting from translation adjustments.
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited-in thousands)
<TABLE>
<CAPTION>
Six months ended
July 31
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,725 $ 8,895
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 5,275 5,045
Deferred income taxes 4 (484)
Changes in operating assets and liabilities:
Accounts receivable 4,482 (6,721)
Inventories (1,542) (3,549)
Prepaid expenses (121) (18)
Accounts payable and accrued expenses (10,308) (3,371)
Income taxes (878) 2,408
Other liabilities 64 25
---------- ----------
Cash provided by operating activities 5,701 2,230
---------- ----------
Cash flows from investing activities:
Acquisition of property, plant and equipment (8,187) (6,406)
Other assets 52 44
---------- ----------
Net cash used in investing activities (8,135) (6,362)
---------- ----------
Cash flows from financing activities:
Long-term debt, including current portion (1,083) 8,109
Notes payable to banks 1,904 3,160
Stock repurchase (1,920)
Cash dividends (2,130) (2,162)
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Net cash (used in) provided by financing activities (3,229) 9,107
---------- ----------
Effect of exchange rate changes 158 785
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(Decrease) increase in cash and cash equivalents (5,505) 5,760
Cash and cash equivalents at beginning of period 23,326 17,203
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Cash and cash equivalents at end of period $ 17,821 $ 22,963
---------- ----------
---------- ----------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 400 $ 575
Income taxes $ 5,270 $ 2,931
</TABLE>
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - RECLASSIFICATIONS
Certain reclassifications have been made to July 31, 1995 amounts to conform
with the July 31, 1996 presentation. Such reclassifications had no impact on
previously reported results of operations or shareholders' equity.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated net sales for the three months ended July 31, 1996 totaled
$54,805,000, a decrease of 7% compared to sales of $58,650,000 recorded in the
second quarter of 1995. Net income for the second quarter of 1996 was
$4,335,000 ($.37 per share) or 6% lower than net income of $4,605,000 ($.38 per
share) for the corresponding 1995 period.
For the six months ended July 31, 1996, consolidated net sales of $111,815,000
reflect a 3% decrease from sales of $115,800,000 for the corresponding prior
year period. Net income for the six months of $8,725,000 ($.74 per share) for
the first six months was 2% below the comparable $8,895,000 ($.74 per share)
for the first six months of 1995. Expressed as a return on sales, net income
for the first six months represents was 7.8% which represents a slight
improvement from last year.
Sales in Europe and North America for the first six months declined by 6.7% and
4.5%, respectively, compared with the first half of 1995. While business
conditions in most major European markets continue to be relatively strong,
industry sales in the important German market remain well below earlier
forecasts. As a consequence, the improvement in European operating results has
fallen short of expectations. Factory shipments of lift trucks in North America
held fairly steady during the second quarter but retail sales at the dealer
level, which historically tend to be a more accurate barometer of Cascade
attachment sales, have declined from record high levels.
We continue to be encouraged by the results of our focused sales and
manufacturing efforts in several Asian markets. Company operations in Korea and
China continue to experience significant growth and the prospects for continued
improvement are excellent. In addition, current year results of our subsidiary
in South Africa are well ahead of last year.
At its August meeting, the Directors approved a more aggressive posture toward
potential acquisitions. In this regard, the Directors approved the purchase of
White Systems International Pty., a niche manufacturer of specialized lift truck
attachments located in Melbourne, Australia. This acquisition both broadens our
product line and positions the Company to expand into this important Asian
Pacific market.
In 1995 the Directors authorized the repurchase of up to 400,000 shares of
Cascade common stock. During the second quarter the Company repurchased an
additional 120,000 shares, bringing the total number of shares repurchased under
this plan to 233,200 at an average cost of $14.80.
During both the three and six month periods ended July 31, 1996, the US dollar
has weakened against the major foreign currencies which effect our financial
consolidations.
<PAGE>
As a result, the adjustment for currency translation in our consolidated balance
sheet has increased $1,088,000 ($.09 per share) for the quarter and $489,000
($.04 per share) for the six months ended July 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
Over the preceding five years, expenditures for new facilities, machinery,
equipment and tooling have totaled nearly $50,000,000. Capital expenditures of
$8,187,000 have been recorded during the first six months of this fiscal year.
This is higher than the $6,406,000 recorded during the corresponding period in
1995. As in the past, funds for capital improvements have been funded from
operations.
No other significant shifts occurred in the balance sheet during the quarter.
The Company's total long and short-term debt to equity ratio was .19 to 1.00 and
working capital approximated $51,650,000 at July 31, 1996.
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
PART II
ITEM 1. LEGAL PROCEEDINGS
Neither the Company nor any of its subsidiaries are involved in any
material pending legal proceedings other than environmental litigation
or litigation incidental to the regular course of business. The
company and its subsidiaries are adequately insured against product
liability, personal injury and property damage claims which may arise
occasionally.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
During the quarter ended July 31, 1996, the company was not required
to file a Form 8-K with the commission.
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
SIGNATURES
The enclosed financial statements have not been certified by independent
accountants. However, to the best of my knowledge and belief these financial
statements have been prepared in conformity with generally accepted accounting
principles and on a basis substantially consistent with audited financial
statements included in the annual report filed with the Commission for the
preceding fiscal year.
The Company believes that all adjustments, consisting of normal recurring
adjustments, necessary for a fair statement of the results of operations, have
been included.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CASCADE CORPORATION
/s/ James P. Miller
--------------- --------------------------------
Date James P. Miller
Vice President - Finance
Secretary and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> JUL-31-1996
<CASH> 17,821
<SECURITIES> 0
<RECEIVABLES> 34,843
<ALLOWANCES> 751
<INVENTORY> 26,757
<CURRENT-ASSETS> 79,640
<PP&E> 141,241
<DEPRECIATION> 74,670
<TOTAL-ASSETS> 148,142
<CURRENT-LIABILITIES> 27,993
<BONDS> 0
0
0
<COMMON> 6,079
<OTHER-SE> 91,144
<TOTAL-LIABILITY-AND-EQUITY> 148,142
<SALES> 111,815
<TOTAL-REVENUES> 111,815
<CGS> 73,110
<TOTAL-COSTS> 73,110
<OTHER-EXPENSES> 615
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 410
<INCOME-PRETAX> 13,110
<INCOME-TAX> 4,385
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,725
<EPS-PRIMARY> .74
<EPS-DILUTED> .74
</TABLE>
