<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
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 October 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 2-23666
-------------------------------
CASCADE CORPORATION
AN OREGON CORPORATION
I.R.S. Employer Identification Number 93-0136592
2020 S.W. 4th Avenue
Portland, Oregon 97201
(503) 227-0024
- --------------------------------------------------------------------------------
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
11,666,704, net of treasury shares.
<PAGE>
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 Nine months ended
October 31 October 31
-------------------------- ---------------------------
1996 1995 1996 1995
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 54,870 $ 58,480 $ 166,685 $ 174,280
----------- ----------- ----------- -----------
Costs and expenses:
Cost of goods sold, excluding depreciation 35,710 38,605 108,820 114,470
Depreciation 2,440 2,315 7,715 7,360
Selling and administrative expenses 9,920 9,585 29,685 29,065
Environmental expenses - 445 - 1,315
----------- ----------- ----------- -----------
48,070 50,950 146,220 152,210
----------- ----------- ----------- -----------
Operating income 6,800 7,530 20,465 22,070
Interest expense 210 270 620 865
Interest income (180) (260) (650) (695)
Other expense, net 330 700 945 1,135
----------- ----------- ----------- -----------
Income before income taxes 6,440 6,820 19,550 20,765
Income taxes 2,075 2,140 6,460 7,190
----------- ----------- ----------- -----------
Net income 4,365 4,680 13,090 13,575
----------- ----------- ----------- -----------
Retained earnings, beginning of period 90,388 86,643 85,083 79,910
Stock repurchase (1,317) - (2,607) -
Cash dividends (1,051) (1,081) (3,181) (3,243)
----------- ----------- ----------- -----------
Retained earnings, end of period $ 92,385 $ 90,242 $ 92,385 $ 90,242
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income per share $ .37 $ .39 $ 1.11 $ 1.13
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Dividends per share $ .09 $ .09 $ .27 $ .27
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average shares outstanding 11,744,856 12,009,904 11,818,164 12,009,904
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
PART 1
CONSOLIDATED BALANCE SHEET
(in thousands)
October 31 January 31
1996 1996
------------ ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 14,786 $ 23,326
Accounts receivable, less allowance
for doubtful accounts of $750 and $967 38,808 38,574
Inventories, at average cost
which is lower than market:
Finished goods and components 17,868 16,142
Goods in process 4,148 4,083
Raw materials 4,497 4,990
----------- -----------
26,513 25,215
Prepaid expenses 1,304 849
----------- -----------
Total current assets 81,411 87,964
Property, plant and equipment, at cost less
accumulated depreciation 67,556 63,214
Deferred income taxes 1,796 58
Other assets 2,527 1,954
----------- -----------
Total assets $ 153,290 $ 153,190
----------- -----------
----------- -----------
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable to banks $ 5,035 $ 5,015
Current portion of long-term debt 2,034 2,940
Accounts payable 13,142 17,126
Accrued payroll and payroll taxes 4,979 5,654
Other accrued expenses 3,910 6,418
Income taxes 954 982
----------- -----------
Total current liabilities 30,054 38,135
Long-term debt 8,891 9,531
Accrued environmental expenditures 10,500 10,500
Deferred income taxes 1,786 -
Other liabilities 3,037 2,967
----------- -----------
Total liabilities 54,268 61,133
----------- -----------
Shareholders' equity:
Common stock, $.50 par value,
authorized 20,000,000 shares-
issued 12,048,208 and 12,278,208 shares 6,024 6,139
Additional paid-in capital - 568
Retained earnings 92,385 85,083
Cumulative foreign currency
translation adjustments 1,299 953
Treasury stock, at cost
(381,504 common shares) (686) (686)
----------- -----------
Total shareholders' equity 99,022 92,057
Total liabilities and ----------- -----------
shareholders' equity $ 153,290 $ 153,190
----------- -----------
----------- -----------
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited - in thousands) Nine months ended
October 31,
-------------------------
1996 1995
--------- ---------
Cash flows from operating activities:
Net income $ 13,090 $ 13,575
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 7,715 7,360
Deferred income taxes (19) (487)
Changes in operating assets and liabilities:
Accounts receivable (234) (6,074)
Inventories (1,298) (4,080)
Prepaid expenses (455) 271
Accounts payable and accrued expenses (7,167) (805)
Income taxes (28) 2,164
Other liabilities 70 46
--------- ---------
Cash provided by operating activities 11,674 11,970
--------- ---------
Cash flows from investing activities:
Acquisition of property, plant and equipment (12,074) (9,037)
Other assets (573) (735)
--------- ---------
Net cash used in investing activities (12,647) (9,772)
--------- ---------
Cash flows from financing activities:
Notes payable to banks 20 52
Long-term debt, including current portion (1,378) 6,033
Stock repurchase (3,286) -
Cash dividends (3,181) (3,243)
--------- ---------
Net cash (used in) provided by
financing activities (7,825) 2,842
--------- ---------
Effect of exchange rate changes 258 377
--------- ---------
(Decrease) increase in cash and cash equivalents (8,540) 5,417
Cash and cash equivalents at
beginning of period 23,326 17,203
--------- ---------
Cash and cash equivalents at end of period $ 14,786 $ 22,620
--------- ---------
--------- ---------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 574 $ 854
Income taxes $ 6,376 $ 5,355
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - RECLASSIFICATIONS
Certain reclassifications have been made to October 31, 1995 amounts to conform
with the October 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 October 31, 1996 totaled
$54,870,000, a decrease of 6% compared to sales of $58,480,000 recorded in the
third quarter of 1995. Net income for the third quarter of 1996 was $4,365,000
($.37 per share) or 7% lower than net income of $4,680,000 ($.39 per share) for
the corresponding 1995 period.
For the nine months ended October 31, 1996, consolidated net sales of
$166,685,000 reflect a 4% decrease from sales of $174,280,000 for the
corresponding prior year period. Net income for the nine months of $13,090,000
($1.11 per share) was 4% below the comparable $13,575,000 ($1.13 per share) for
the first nine months of 1995. Expressed as a return on sales, net income for
the first nine months was 7.9%, which represents a slight improvement from last
year.
Sales in Europe and North America for the first nine months declined by 10.2%
and 2.0%, respectively, compared with the comparable 1995 period. Global trends
in the third quarter are essentially unchanged from earlier in the year. Some
European markets continue to show slow growth, and the key German market may
have turned the corner from its depressed condition. North American results are
improving slightly and operations in Asia continue to report significant growth
from prior year levels.
As part of our growth strategy previously announced, the Company has purchased
the assets of EML Industry AB, a subsidiary of Finnveden AB. EML manufactures a
line of large fork lift truck masts and other accessories at its facility in
Vaggeryd, Sweden, and distributes them internationally. Its revenues for the
last twelve months were approximately $8,500,000. Current management continues
with the operation.
The Company has also reached a definitive agreement to acquire Industrial Tires
Limited ("ITL") and has agreed in principle to acquire Hyco-Cascade Pty., Ltd.
ITL is based in Mississauga, Ontario, Canada, and is a leading manufacturer of
solid tires for fork lift trucks and the materials handling industry. It had
sales in 1995 of approximately $31,500,000 and has been consistently profitable.
ITL's products fit nicely with Cascade's strategy of being the "One Stop
Shopping Center" for the fork lift truck industry. Hyco-Cascade has been the
Company's distributor in Australia and New Zealand for the past three years, and
during this time has dramatically increased our market share in this market.
Acquisition of Hyco-Cascade will bring new products to the Company in container
handling and completes the current phase of our Asian strategy with the planned
appointment of Mike Dobbins, Hyco-Cascade's Managing Director as Cascade's
Managing Director, Asia-Pacific. Hyco-Cascade had revenues last year of
approximately $17,000,000. It is expected that both of these acquisitions
should be completed in January, 1997.
<PAGE>
In 1995 the Directors authorized the repurchase of up to 400,000 shares of
Cascade common stock. During the third quarter the Company repurchased an
additional 110,000 shares, bringing the total number of shares repurchased
under this plan to 343,200 at an average cost of $14.04.
During the third quarter the U.S. dollar strengthened modestly against most
foreign currencies affecting our financial consolidations. However, for the
nine months ended October 31, 1996 the U.S. dollar has weakened against both
the British pound sterling and the Canadian dollar. As a result, the adjustment
for currency translation in our financial statements reflects a decrease of
$143,000 ($.01 per share) for the current quarter and an increase of $346,000
($.03 per share) for the nine months ended October 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
$12,074,000 have been recorded during the first nine months of this fiscal year.
This is higher than the $9,037,000 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 .16 to 1.00 and
working capital approximated $51,360,000 at October 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 October 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
12/10/96 /s/James P. Miller
------------ ------------------------
Date James P. Miller
Executive Vice President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 14,786
<SECURITIES> 0
<RECEIVABLES> 39,558
<ALLOWANCES> 750
<INVENTORY> 26,513
<CURRENT-ASSETS> 81,411
<PP&E> 142,775
<DEPRECIATION> 75,219
<TOTAL-ASSETS> 153,290
<CURRENT-LIABILITIES> 30,054
<BONDS> 0
0
0
<COMMON> 6,024
<OTHER-SE> 92,998
<TOTAL-LIABILITY-AND-EQUITY> 153,290
<SALES> 166,685
<TOTAL-REVENUES> 166,685
<CGS> 108,820
<TOTAL-COSTS> 108,820
<OTHER-EXPENSES> 945
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 620
<INCOME-PRETAX> 19,550
<INCOME-TAX> 6,460
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,090
<EPS-PRIMARY> 1.11
<EPS-DILUTED> 1.11
</TABLE>
