<PAGE>
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -------------------------------------------------------------------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _______ to _________
COMMISSION FILE NUMBER 1-12557
CASCADE CORPORATION
(Exact name of registrant as specified in its charter)
OREGON 93-0136592
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2201 N.E. 201ST AVE., FAIRVIEW, OREGON 97024-9718
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
Registrant's telephone number, including area code: (503) 669-6300
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___
The number of shares outstanding of the registrant's common stock as of
October 31, 1999 was 11,439,890.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
PART I
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
October 31 January 31
1999 1999
---------------- ---------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 17,907 $ 11,460
Accounts receivable, less allowance
for doubtful accounts of $1,124 and $1,009 69,909 72,354
Inventories, at average cost
which is lower than market:
Finished goods and components 30,881 44,496
Goods in process 2,749 2,309
Raw materials 12,844 15,210
---------------- ---------------
46,474 62,015
Deferred income taxes 232 254
Prepaid expenses and other current assets 1,712 7,640
---------------- ---------------
Total current assets 136,234 153,723
Property, plant and equipment, at cost less
accumulated depreciation 88,270 100,075
Deferred income taxes 6,147 3,370
Goodwill 74,093 86,462
Other assets 9,960 4,227
---------------- ---------------
Total assets $ 314,704 $ 347,857
================ ===============
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable to banks $ 9,050 $ 9,817
Current portion of long-term debt 7,610 6,510
Accounts payable 21,688 26,789
Accrued payroll and payroll taxes 6,214 6,954
Other accrued expenses 9,463 9,105
---------------- ---------------
Total current liabilities 54,025 59,175
Long-term debt 114,108 142,783
Accrued environmental expenditures 7,228 7,228
Other liabilities 4,240 3,228
---------------- ---------------
Total liabilities 179,601 212,414
---------------- ---------------
Mandatorily redeemable convertible preferred stock and minority
interest 11,674 15,949
Shareholders' equity:
Common stock, $.50 par value, authorized
20,000,000 shares; 11,567,388 and 11,715,488 outstanding 5,784 5,858
Additional paid-in capital 399 --
Retained earnings 129,295 125,065
Accumulated other comprehensive income:
Cumulative foreign currency translation adjustments (11,820) (11,200)
Treasury stock, at cost, 127,498 shares (229) (229)
---------------- ---------------
Total shareholders' equity 123,429 119,494
Total liabilities and
shareholders' equity
---------------- ---------------
$ 314,704 $ 347,857
================ ===============
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(unaudited - in thousands, except per share and average share figures)
<TABLE>
<CAPTION>
Three months ended Nine months ended
October 31 October 31
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 82,470 $ 105,660 $ 249,678 $ 317,945
------------ ------------ ------------ ------------
Costs and expenses:
Cost of goods sold, excluding depreciation 55,357 72,340 164,225 219,060
Depreciation and amortization 4,933 5,450 14,961 16,090
Selling and administrative expenses 16,182 16,835 47,040 51,970
------------ ------------ ------------ ------------
76,472 94,625 226,226 287,120
------------ ------------ ------------ ------------
Operating income 5,998 11,035 23,452 30,825
Interest expense 2,184 3,050 6,845 8,235
Interest income (158) (240) (687) (555)
Other expense (income), net 1,991 (760) 2,192 (4,050)
------------ ------------ ------------ ------------
Income before taxes 1,981 8,985 15,102 27,195
Income taxes 641 2,960 5,210 8,865
------------ ------------ ------------ ------------
Net income $ 1,340 $ 6,025 $ 9,892 $ 18,330
============ ============ ============ ============
Basic earnings per share $ 0.11 $ 0.50 $ 0.84 $ 1.52
============ ============ ============ ============
Diluted earnings per share $ 0.11 $ 0.46 $ 0.79 $ 1.39
============ ============ ============ ============
Diluted weighted average shares outstanding 12,349,454 13,103,833 12,500,487 13,212,987
============ ============ ============ ============
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited - in thousands)
<TABLE>
<CAPTION>
Nine months ended
October 31
-----------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,892 $ 18,330
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 14,961 16,090
Deferred income taxes (2,816) 1,353
Loss (gain) on disposal of property 890 (3,125)
Changes in operating assets and liabilities:
Accounts receivable 2,445 (10,452)
Inventories 15,541 (6,981)
Prepaid expenses 5,928 (1,154)
Accounts payable and accrued expenses (5,483) 5,097
Accrued environmental expenditures -- (2,000)
Other liabilities 1,012 567
--------------- ---------------
Net cash provided by operating activities 42,370 17,725
--------------- ---------------
Cash flows from investing activities:
Acquisition of property, plant and equipment (13,246) (13,886)
Proceeds from dispositions of property, plant and equipment 23,890 3,480
Other assets (7,529) 1,997
--------------- ---------------
Net cash provided by (used in) investing activities 3,115 (8,409)
--------------- ---------------
Cash flows from financing activities:
Payments on long-term debt (27,168) (115)
Notes payable to banks (767) 9,050
Repurchase of manditorily redeemable convertible
preferred stock (3,863) (375)
Repurchase of common stock (1,846) (4,064)
Issuance of common stock -- 271
Cash dividends (3,904) (3,952)
--------------- ---------------
Net cash (used in) provided by financing activities (37,548) 815
--------------- ---------------
Effect of exchange rate changes (1,490) (5,442)
--------------- ---------------
Increase in cash and cash equivalents 6,447 4,689
Cash and cash equivalents at
beginning of year 11,460 12,966
--------------- ---------------
Cash and cash equivalents at end of period $ 17,907 $ 17,655
=============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 5,325 $ 5,246
Income taxes $ 7,874 $ 10,755
Non-cash
Conversion of preferred stock into common stock $ 413 $ --
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
Common Stock Additional
-------------------------- Paid-In Treasury
Shares Amount Capital Stock
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at January 31,1999 11,588 $ 5,858 $ -- $ (229)
Net income -- -- -- --
Dividends -- -- -- --
Common stock repurchased (176) (88) -- --
Conversion of preferred stock 28 14 399 --
Translation Adjustment -- -- -- --
-----------------------------------------------------------
Balance at October 31, 1999 11,440 $ 5,784 $ 399 $ (229)
=========================== ============= ============
Accumulated
Other
Retained Comprehensive Comprehensive
Earnings Loss Income
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 31,1999 $ 125,065 $ (11,200) $ --
Net income 9,892 -- 9,892
Dividends (3,904) -- --
Common stock repurchased (1,758) -- --
Conversion of preferred stock -- -- --
Translation Adjustment -- (620) (620)
------------------------------------------------------------
Balance at October 31, 1999 $ 129,295 $ (11,820) $ 9,272
================ ================== ===================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
CASCADE CORPORATION
NOTE 1 - INFORMATION ABOUT OPERATIONS
(In thousands)
<TABLE>
<CAPTION>
Nine months ended
October 31, 1999 North America Europe Other Eliminations Consolidation
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales to unaffiliated customers $ 155,214 $ 68,154 $ 26,310 $ -- $ 249,678
Transfer between areas 19,472 25,604 352 (45,428) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenue 174,686 93,758 26,662 (45,428) 249,678
- ----------------------------------------------------------------------------------------------------------------------------------
Net income 9,773 417 (298) -- 9,892
- ----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets $ 175,567 $ 95,957 $ 43,180 $ -- $ 314,704
- ----------------------------------------------------------------------------------------------------------------------------------
October 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $ 205,273 $ 87,722 $ 24,950 $ -- $ 317,945
Transfer between areas 20,127 9,373 308 (29,808) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenue 225,400 97,095 25,258 (29,808) 317,945
- ----------------------------------------------------------------------------------------------------------------------------------
Net income 14,078 3,853 399 18,330
- ----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets $ 221,242 $ 112,618 $ 34,207 $ -- $ 368,067
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 2 - DIVESTITURES
The consolidated financial statements for the nine months ended October 31,
1999, reflect the sale of assets and the purchasers assumption of certain
liabilities of the Company's Industrial Tire Division and the wheel and baseband
manufacturing operations of its Kenhar Division in Guelph, Ontario to Maine
Rubber Company on April 29, 1999. The sale price for the assets was $38,892,651
(US). Of this Maine Rubber Company paid (1) $26,808,737 (US) in cash, and (2)
$7,307,552 (US) in the form of a junior subordinated note to be paid over four
years, and assumed $4,776,362 (US) in liabilities. The note bears interest at a
rate of 8% per annum and is unsecured. During the year ended January 31, 1999
the Industrial Tire and wheel and baseband divisions contributed approximately
$45,158,000 in net sales. For the nine months ended October 31, 1999 and 1998
net sales were approximately $10,145,000 and $33,324,000 respectively.
<PAGE>
CASCADE CORPORATION AND SUBSIDIARY COMPANIES
PART II OTHER INFORMATION
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
(A) EXHIBITS
11. Computation of Earnings Per Share
(B) REPORTS ON FORM 8-K
Cascade Corporation filed no reports on Form 8-K during
the quarter ended October 31, 1999.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated net sales for the three months ended October 31, 1999 totaled
$82,470,000, a decrease of 21.9% compared to sales of $105,660,000 recorded
in the third quarter of 1998. The lower consolidated net sales reflect the
divestiture of the mast business unit in January 1999 and the Industrial Tire
and baseband operating divisions in April 1999. Sales for the divested
divisions were approximately $23,176,000 and $69,671,000 for the three months
and nine months ended October 31, 1998. Net income for the third quarter of
1999 was $1,340,000 ($.11 per share) or 77.8% lower than net income of
$6,025,000 ($.46 per share) for the corresponding 1998 period. Net income for
the third quarter reflects charges of $3,286,000 stemming from the
integration of operations acquired over the past three years and steps taken
to assure consistency of global financial reporting. Net income for the
quarter prior to the charges was $4,626,000 ($.37 per share) and was an
improvement over second quarter net income of $4,442,000 and prior year's
income after adjustment for the divestitures of $4,492,000. Expressed as a
return on sales, net income for the third quarter of 1999 was 1.6% (5.6%
prior to charges) compared to 5.7% for the corresponding 1998 quarter.
Consolidated net sales for the first nine months of 1999 totaled
$249,678,000; a decrease of 21.5% compared to sales of $317,945,000 recorded
in the first nine months of 1998. The sales decrease is due primarily to the
divestitures noted above. Net income for the first nine months of 1999 was
$9,892,000 ($.79 per share). Earnings for the nine months included a
$1,085,000 loss ($.09 per share after tax) from the sale of the Industrial
Tire and baseband operating divisions and charges of $3,286,000 ($.26 per
share after tax) stemming from the integration of operations acquired over
the past three years and steps taken to assure consistency of global
financial reporting. Neither of these items are expected to have a material
impact on future periods. Net income for the first nine months of 1998 was
$18,330,000 ($1.39 per share) which included a land sale gain of $1,628,000
($.12 per share after tax). Net income excluding items that are not expected
to have a future impact on earnings for the first three-quarters was lower by
14.6% in 1999, $14,263,000 compared with $16,702,000 for 1998.
Excluding divested operations, sales for the nine months of 1999 were
$239,533,000 a decrease of 3.5% from sales of $248,274,000 in the comparable
1998 period. Gross profit percentage excluding the divested operations
increased slightly to 34.8% in 1999 from 33.9% in 1998.
Third quarter sales increased 6.1% over second quarter sales, $82,470,000
compared with $77,709,000. Sales in the North America market strengthened
while the European lift industry remained flat from second quarter levels.
Asian markets continue their slow recovery, which is encouraging for our
long-term performance.
<PAGE>
On April 29, 1999, we completed the sale of all the operating assets and
certain liabilities of the Industrial Tire division as well as the Fork
Products division's baseband manufacturing operations to Maine Rubber
Company. Industrial Tire division revenues had increased over 35%, with
improving profitability, since Cascade acquired it. However, we did not see
the prospect of achieving all the synergies originally anticipated and
concluded that our management efforts and investment resources would be more
effective if allocated to enhancing shareholder value through continued focus
on the Company's core attachment and fork businesses. While this divestiture
will reduce revenues in the coming year, division profit margins were low,
and we do not expect a significant impact on future operating results.
The Company continues to strive to lower product costs by improving
manufacturing methods and processes as we focus on core business activities.
The divestiture of the lower margin mast and tire operations has further
contributed to the reduction in cost of goods sold as a percentage of sales.
Cost of sales during the third quarter of 1999 and 1998 was $55,357,000 and
$72,340,000, respectively. For the third quarter of 1999 and 1998, cost of
sales as a percentage of net sales was 67.1% and 68.5%. Third quarter 1999
cost of sales includes a $2,508,000 (3% of sales) for inventory adjustment,
which recognizes changes in manufacturing processes and our customer base.
The reserve is included in the special charges to third quarter 1999 income.
For the nine months ended October 31, 1999 and 1998 cost of goods sold as a
percentage of sales was 65.8% and 68.9%, respectively.
Depreciation and amortization expense decreased to $4,933,000, 6.0% of net
sales during the third quarter of 1999, from $5,450,000, 5.2% of net sales
for the prior year period. For the nine months ended October 31, 1999
depreciation and amortization expense was $14,961,000, 6.0% of sales compared
with $16,090,000 and 5.1% of sales for the prior year period. The decrease in
depreciation and amortization expense resulting from our divestitures was
based to some degree by the impact of heavy spending for the most significant
phase of our enterprise resource planning (ERP) implementation. These
expenditures, combined with the lower sales volume, resulted in the increased
percentage as it relates to net sales.
Selling and administrative expenses increased for the third quarter of 1999
to $16,182,000, 19.6% of net sales, versus $14,643,000, 18.8% of net sales
for the second quarter of the year, and $16,215,000, 18.1% of net sales
during the first quarter of 1999. Year to date selling and administrative
expense was $47,040,000, 18.8% compared with $51,970,000, 16.3% for 1998.
Through management's efforts to build a worldwide infrastructure to support
continuing growth in its core businesses, a charge of $979,000 was included
in selling and administrative expenses relating to enlistment of key
financial management, the combination of two operating divisions in the
United Kingdom and certain other matters. The 1999 results continue to
reflect the implementation of cost controls imposed to reduce selling and
administrative expenses relative to historic sales levels. The divestiture of
the mast and Industrial Tire Divisions further reduced selling and
administrative expenses as compared with the prior year.
<PAGE>
Third quarter 1999 interest expense of $2,184,000 was lower than the
$3,050,000 recorded in the 1998 period. Year to date interest expense was
$6,845,000 compared with $8,235,000 for the prior year. The lower interest
expense reflects reduction in long-term debt from the cash proceeds of the
divestiture of the mast business unit and the Industrial Tire Division.
Other expense for the nine months consists primarily of the loss recognized
on the sale of the Industrial Tire and baseband-manufacturing divisions
offset by currency transaction gains recorded. Other income for 1998 period
resulted primarily from the gain from the sale of an undeveloped parcel of
land and currency transaction gains recorded as result of the strengthening
US dollar.
The effective tax rate for the nine months ended October 31, 1999 was 34.5%
compared with 32.6% for the same period of 1998 and 31.6% for the year ended
January 31, 1999. The increase in the rate is due to numerous minor changes
in tax matters including the tax effect of the sale of the Industrial Tire
and wheel and baseband divisions.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended October 31, 1999, the Company generated
$42,370,000 in cash from operating activities, including certain
divestiture-related proceeds, compared with $17,725,000 for 1998. Cash and
cash equivalents at the end of the third quarter of 1999 totaled $17,907,000.
The Company's total long- and short-term debt-to-equity ratio was 1.06 to
1.00, and working capital was $82,209,000 at October 31, 1999. As of October
31, 1999, the Company had revolving loan commitments with commercial banks
totaling $24,352,000 of which $9,050,000 was used. We believe our available
cash and credit facilities are more than sufficient to meet its short-term
requirements.
The Company's loan commitments include restrictive covenants. Its lenders
have waived certain dividend restrictions in connection with open market
stock repurchases during the quarters ended April 30, 1999 and July 31, 1999
and have since amended the dividend covenant. The Company is in compliance
will all covenants.
For the nine months ended October 31, 1999, capital expenditures totaled
$13,246,000 compared with $13,886,000 purchased during the corresponding 1998
period. Capital expenditures for new facilities, machinery, equipment and
tooling over the preceding five years totaled approximately $86,025,000.
Planned capital expenditures for 1999 are estimated at $19,210,000, including
the implementation of phase I of an enterprise-wide software system to link
all of the Company's core business systems. Implementation will be phased-in
throughout the major operating units with completion scheduled for fiscal
2001. The Company plans to use operating cash flows, leases and existing
credit facilities to fund 1999 capital expenditures. Cash flow from investing
activities provided a $3,115,000 cash inflow, consisting primarily of
proceeds from the divestiture of the
<PAGE>
Industrial Tire and the wheel and baseband divisions net of the additional
spending on capital acquisitions relating to the ERP project.
Cash flow from financing activities was a use of $37,548,000 cash, received
primarily from the sale of the Industrial Tire and wheel and baseband
divisions, to pay down long term debt, and the repurchase of Cascade common
shares and exchangeable preferred shares issued by a Canadian subsidiary.
At its August 1998 meeting, the Board authorized the repurchase up to 500,000
Cascade common shares from time to time in the open market. During the first
two quarters the Company repurchased 175,600 shares at an average price of
$10.53. 400,000 shares have been purchased to date at an average price of
$12.09.
During the first nine months, the U.S. dollar strengthened against the major
currencies included in the Company's financial consolidations. The resulting
cumulative translation adjustment in the consolidated balance sheet decreased
shareholders' equity by $620,000 for the first nine months.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Some of the
Company's computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, ship product or engage in any number of similar business
activities.
Based on its own assessment, the Company determined that it would need to
modify or replace portions of its software so that its computer systems will
properly utilize dates beyond December 31, 1999. The Company presently
believes that with modifications to existing software and conversions to new
software, the Year 2000 Issue can be mitigated. However, if such
modifications and conversions are not made, or not completed in time, the
Year 2000 Issue could have a material impact on the operations of the Company.
The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
Issue. This program is ongoing and the Company will continue to monitor
responses received to determine if Year 2000 issues exist with these third
parties. Contingency plans include finding alternative suppliers where
practical. For those suppliers that are not easily replaced, the Company will
maintain adequate supplies to help counteract short-term supply
interruptions. There can be no guarantee that the systems of other companies
on which the Company's systems rely will be converted on schedule; or that a
failure to convert by another company, or a conversion that is incompatible
with the Company's systems, would not have a material adverse effect on the
Company.
<PAGE>
The Company has initiated the implementation of an enterprise-wide resource
planning (ERP) software system to link all of its core business systems. This
implementation was the result of normal business migration to improved and
expanded software systems to increase the Company's ability to improve its
operational efficiency, reduce costs and enhance overall quality. As part of
this implementation, the Company has replaced those software systems that
would have encountered the Year 2000 Issue. The portion of the project that
addresses the Year 2000 issue was scheduled in phase I of the implementation.
The Company has completed a substantial portion of phase I of the ERP
project. The remaining portion of phase I was completed in the fourth quarter
of 1999. The implementation of the other major operating units is scheduled
for completion in fiscal year 2000 and 2001. The total cost of the ERP
project is estimated to exceed $14,000,000 including the $5,805,000 spent in
the first nine months of 1999. The ERP project is being funded through leases
and operating cash flows.
The costs of the project and the date on which the Company plans to complete
the Year 2000 modifications are based on management's best estimates, which
were derived utilizing numerous assumptions of future events including the
continued availability of certain resources, third party modifications, plans
and other factors. However, there can be no guarantee that these estimates
will be achieved, and actual results could differ materially from those
plans. Specific factors that might cause such material differences include,
but are not limited to, the availability and cost of personnel trained in
this area, the ability to locate and correct all relevant computer codes and
similar uncertainties.
The Company has evaluated data with regard to non-financial software and
embedded chip technology to assess the impact of the Year 2000 on its
non-financial systems such as manufacturing equipment, security equipment,
etc. During the second and third quarters, substantially all upgrades have
been completed. The cost of achieving Year 2000 compliance for its
non-financial systems, have not been and are not expected to be material.
FORWARD-LOOKING STATEMENTS
Forward-looking statements throughout this report are based upon assumptions
involving a number of risks and uncertainties. Factors which could cause
actual results to differ materially from these forward-looking statements
include, but are not limited to competitive factors in, and the cyclical
nature of, the lift truck industry; fluctuations in lift truck orders or
deliveries, availability and cost of raw materials; general business and
economic conditions in North America, Europe and Asia; foreign currency
fluctuations; and the effectiveness of the Company's cost reduction
initiatives.
<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
12/15/99 /s/ Kurt G. Wollenberg
------------------- --------------------------------
Date Kurt G. Wollenberg,
Senior Vice President/
Chief Financial Officer
<PAGE>
CASCADE CORPORATION EXHIBIT 11.
<TABLE>
<CAPTION>
Computation of Earnings Per Share
(In thousands except per share data)
- -----------------------------------------------------------------------------------------------------------------------------------
QUARTER ENDED OCTOBER 31
1999 1998
-------------------------------------------- --------------------------------------------
PER SHARE PER SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
(Numerator) (Denominator) (Numerator) (Denominator)
-------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 1,340 $ 6,025
Less: preferred stock dividend (82) (140)
-------------- --------------
BASIC EPS
Income available to
common shareholders 1,258 11,440 $ 0.11 5,885 11,699 $ 0.50
============= =============
Effect of dilutive securities
Manditorily redeemable convertible
preferred stock 80 800 110 1,100
Exchangeable preferred stock 2 109 30 305
Incentive stock options -- -- -- --
-------------- --------------- -------------- ---------------
DILUTED EPS
Income available to common
shareholder plus assumed
conversions $ 1,340 12,349 $ 0.11 $ 6,025 13,104 $ 0.46
============== =============== ============= ============== =============== =============
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED OCTOBER 31
1999 1998
-------------------------------------------- --------------------------------------------
PER SHARE PER SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
(Numerator) (Denominator) (Numerator) (Denominator)
-------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 9,892 $ 18,330
Less: preferred stock dividend (299) (423)
-------------- --------------
Basic EPS
Income available to
common shareholders 9,593 11,462 $ 0.84 17,907 11,801 $ 1.52
============= =============
Effect of dilutive securities
Manditorily redeemable convertible
preferred stock 240 800 330 1,100
Exchangeable preferred stock 59 238 93 312
Incentive stock options -- -- -- --
-------------- --------------- -------------- ---------------
DILUTED EPS
Income available to common
shareholder plus assumed
conversions $ 9,892 12,500 $ 0.79 $ 18,330 13,213 $ 1.39
============== =============== ============= ============== =============== =============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
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11,374
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