<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2000
/ / 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
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK, PAR VALUE $.50 PER SHARE
Name of exchange on which registered: NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: NONE
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K. / /
The aggregate market value of common stock held by non-affiliates of the
registrant as of March 31, 2000 was $125,838,790.
The number of shares outstanding of the registrant's common stock as of March
31, 2000 was 11,439,890.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1999 Annual Report to Shareholders are incorporated by
reference into Parts I, II and IV. Portions of the definitive Proxy Statement
dated April 2000 to be delivered to shareholders in connection with the
Annual Meeting of Shareholders to be held May 11, 2000 are incorporated by
reference into Parts I and III.
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I
ITEM 1. BUSINESS 1
General 1
Attachment Products 1
Fork Products 2
Other 3
ITEM 2. PROPERTIES 4
ITEM 3. LEGAL PROCEEDINGS 4
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 4
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 5
ITEM 6. SELECTED FINANCIAL DATA 5
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 5
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 8
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 8
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 8
ITEM 11. EXECUTIVE COMPENSATION 8
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 8
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 9
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K 9
SIGNATURES 10
</TABLE>
NOTE: All references to the fiscal year (i.e. Fiscal 1997, 1998 and 1999) refer
to the period ended January 31 of the year subsequent to the fiscal year (i.e.
January 31, 1998, January 31, 1999, and January 31, 2000).
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
Cascade Corporation is a corporation organized in 1943 under the
laws of the State of Oregon. The term "the Company" includes Cascade
Corporation and subsidiaries. The Company's headquarters are located at 2201
N.E. 201st Ave. Fairview, Oregon 97024 (telephone number 503-669-6300).
The Company has for many years been one of the world's leading
manufacturers of attachments, hose reels, sideshifters, hydraulic cylinders
and related replacement parts, primarily for the lift truck industry.
Acquisitions in 1996 and 1997 expanded the Company's attachment and hydraulic
cylinder capabilities, and broadened its focus to include forks, also
primarily for the lift truck industry. The Company divested its Mast Division
in January, 1999, and its Industrial Tires Limited subsidiary in April, 1999,
and is now focused on its primary attachment and fork business.
Following these acquisitions and divestitures, the Company
organized itself into two basic divisions: Attachment Products and Fork
Products, however both divisions serve the lift truck industry. A description
of each group follows:
ATTACHMENT PRODUCTS
The Attachment Products division 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 Attachment Products division 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.
In addition, the Attachment Products division manufactures
hydraulic cylinders, which are used 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 attachment
products. Hydraulic cylinders are also sold to manufacturers of various types
of materials handling and other mobile equipment, usually through the
customer's purchasing and engineering departments.
The Company believes its Attachment Products division is one of
the leading domestic and foreign independent suppliers of hydraulically
actuated materials handling equipment designed for mounting on industrial
lift trucks. Several 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 Attachment
Products division offers a broad line of attachments capable of supplying a
significant part of the total requirements for the entire lift truck
industry, the Company believes lower costs resulting from its relatively high
unit volume would be difficult for any individual lift truck manufacturer to
achieve.
This division's products are sold to both original equipment
manufacturers (OEMs) and equipment dealers. Products are marketed throughout
the United States, Canada, Latin America, Europe, the Middle East, Australia,
Africa and Asia.
Since the Attachment Products division deals with lift truck
manufacturers and their dealers, a substantial portion of its sales are to a
few major customers, none of which account for more than 10% of the
division's total sales.
1
<PAGE>
The Attachment Products division purchases raw materials and
components, principally rolled products from steel mills, unfinished castings
and forgings, hydraulic motors and hardware items such as fasteners, rollers,
hydraulic seals and hose assemblies. The division is not currently
experiencing any shortages in obtaining raw materials or purchased parts. A
significant portion of rolled steel is purchased from a German steel mill.
With respect to other materials, the division has several domestic and
foreign suppliers. Difficulties in obtaining any of those items could affect
the division's results.
The division's headquarters are located in Portland, Oregon. North
American manufacturing activities are conducted in its plants in Portland,
Oregon; Springfield, Ohio; Beulaville, North Carolina, Warner Robins,
Georgia; and Toronto, Ontario, Canada. Overseas manufacturing sites include
the United Kingdom, The Netherlands, Australia, Sweden and China. In
addition, this division has sales, engineering and warehousing facilities in
Japan, Korea, Germany, France, Spain, Finland, New Zealand and South Africa.
The Attachment Products division maintains an extensive research
and development effort aimed at increasing the efficiency, durability and
capacity range of its product line. The Company does not believe patents are
important to the division's business. The division's products are
manufactured with the Cascade name and symbol, for which the Company has
secured trademark protection.
FORK PRODUCTS
In March 1997, the Company established the Fork Products division
with the purchase of Kenhar Corporation (see note 10 to the 1999 Annual
Report to Shareholders). Forks are certified lifting devices and subject to
strict design, construction and safety requirements established by industry
associations and the International Standards Association. The Fork Products
division continues to market under the Kenhar brand name. Kenhar forks are
carefully designed and engineered products requiring specially formulated
steel, a manufacturing process which strengthens the "heel", certified
welding of the brackets which hold them to the carriage and heat treatment of
the finished product.
The Fork Products division presently offers a wide variety of both
standardized and specialized forks. Fork characteristics are dictated by the
expected capacity to be lifted, the characteristics of the load, the ambient
environment in which they are employed, the terrain over which the load will
be moved and the operational life cycle of the vehicle using the fork.
Accordingly, while there are some standard fork products, the market demands
a wide range of forks in custom sizes and shapes.
The Company believes the Fork Products division is one of the
leading independent manufacturers of forks for lift trucks in the world.
Market share varies by geographic region. In addition to sales to the lift
truck market, the Fork Products division has an increasing market share of
forks sold to OEMs of construction, mining, agricultural and industrial
(other than lift trucks) mobile equipment. The Company believes the Fork
Products segment is the leading manufacturer in North America. It is the
preferred supplier of many OEMs as well as after-market dealers and
distributors. This division also has significant market share in Europe and
is continuing its sales and manufacturing expansion into the Asia/Pacific
region. Since the Fork Products division offers a broad range of both
standard and specialized forks it is capable of supplying a significant part
of the total requirements for the lift truck industry.
As with attachments, the division's sales are primarily related to
the lift truck industry. A substantial portion of its sales are to a few
major customers. During 1999, the division's largest customer accounted for
14.0% of its sales, while sales to its next largest customer were 7.6%.
2
<PAGE>
The Fork Products division purchases material and components
necessary to produce its products. The principal item purchased is bar steel.
The division is not currently experiencing any shortage in obtaining bar
steel. As with other manufactures using bar steel, the Fork Products division
obtains its bar steel from steel mills under long-term purchase contracts.
While the division has alternative suppliers of bar steel identified,
difficulties in obtaining alternative sources of bar steel could affect the
division's operating results should bar steel from one of its primary
suppliers become unavailable.
Headquarters of this division are located in Portland, Oregon.
North American manufacturing activities are conducted in plants in Guelph,
Canada and Findlay, Ohio. Overseas manufacturing sites include Manchester,
United Kingdom; La Machine, France; Brescia, Italy; Hebei, China; and Inchon,
South Korea.
This division's products are primarily sold to OEMs and also to
lift truck dealers. Products are marketed extensively throughout North
America and Europe. In addition, the division is continuing to increase
marketing activities and market share in Asia, Australia and New Zealand.
Patents have been a relatively unimportant factor in the
development of the division's business.
OTHER
RESEARCH AND DEVELOPMENT
Most of the Company's research and development activities are
performed in a 28,000-square-foot product development center in Portland,
Oregon. The engineering staff develops and designs almost all of the products
sold by the Company. This staff is continually involved in developing new
products and applications in the materials handling field and improving
existing lines.
ENVIRONMENTAL QUALITY
From time to time the Company is the subject of investigations,
conferences, discussions, and negotiations with various federal, state, local
and foreign agencies with respect to cleanup of hazardous waste and
compliance with environmental laws and regulations. The balance of the
response to this section of Item 1 is incorporated by reference to Note 12 of
the 1999 Annual Report to Shareholders and the information contained in
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations".
EMPLOYEES
At January 31, 2000 the Company had 1,842 full-time employees
throughout the world. The majority of these employees are not subject to
collective bargaining agreements. The Company believes relations with its
employees are excellent.
FOREIGN OPERATIONS
The Company has substantial operations outside the United States.
There are additional business risks attendant to the Company's foreign
operation such as the risk that the relative value of the underlying local
currencies may weaken when compared to the U.S. dollar. For further
information about foreign operations, please see Note 14 of the 1999 Annual
Report to Shareholders.
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
cycli-
3
<PAGE>
cal nature of, the materials handling 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; effectiveness of the Company's cost reduction
initiatives; and the Company's success in organizationally and operationally
integrating recently acquired businesses.
ITEM 2. PROPERTIES
The Company owns and leases various types of properties located
throughout North America, Europe, Australia, South Africa, China, Korea and
Japan. Of the above mentioned properties, the following are considered
principal facilities:
The Company's principal executive offices are located at 2201 N.E.
201st Ave., Fairview, Oregon 97024. The Company operates sales offices,
manufacturing or warehouse facilities in 16 countries. Its major
manufacturing facilities in the United States are located in Springfield and
Findlay, Ohio; Warner Robins, Georgia; Beulaville, North Carolina and
Portland, Oregon. Major manufacturing facilities located outside the United
States include Almere and Hoorn, The Netherlands; La Machine, France;
Manchester and Newcastle, United Kingdom; Vaggeryd, Sweden; Toronto,
Mississauga and Guelph, Ontario, Canada; Brisbane and Melbourne, Australia;
Inchon, Korea; Xiamen and Hebei, China; and Brescia, Italy. Sales offices and
warehouse facilities are located in Japan, South Africa, New Zealand,
Australia, Sweden, Italy, United Kingdom, France, Germany, Spain, The
Netherlands, China, Canada and the United States. (See Item 1 Business for
more information regarding the location of the principal facilities for each
industry segment.) The Company owns 14 facilities that include major
manufacturing facilities and certain sales and warehouse buildings, four of
which are located in the United States and 10 of which are located in other
countries. The Company leases 33 facilities, 13 of which are located in the
United States and 20 of which are located in other countries.
The Company generally considers the productive capacity of the
plants operated by each of its industry segments adequate and suitable for
the requirements of each such segments.
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 discussed in Note 12 to the Consolidated Financial
Statements included in the 1999 Annual Report to Shareholders, 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
Not applicable
4
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of January 31, 2000, there were 362 holders of the Company's
common stock 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 exceeds 2,500. The remainder
of the response to this Item is incorporated by reference to page 16 of the
1999 Annual Report to Shareholders.
During the year ended January 31, 1998, a Canadian subsidiary of
the Company issued 1,100,000 preference shares in connection with the
acquisition of Kenhar Corporation, each exchangeable for one common share of
the Company. The preference shares were issued in an exempt private offering
transaction. A Form S-3 Registration covering these shares became effective
in October, 1998. A subsidiary of the Company repurchased 300,000 of these
shares in connection with the sale of the Mast Division in January, 1999, and
800,000 shares remain outstanding. Absent registration, Rule 144 would apply
to sales of such common shares.
During the year ended January 31, 1998, a Canadian subsidiary of
the Company issued 330,000 shares of preferred stock in connection with the
purchase of Industrial Tires, Limited, each exchangeable for one common share
of the Company. Repurchase of these shares was completed during the year
ended January 31, 2000.
The Company also issued 225,000 common shares in connection with
the acquisition of Hyco-Cascade Ltd., and 29,006 common shares in connection
with the acquisition of minority interests in two subsidiaries of Kenhar, all
in exempt private offering transactions. A Form S-3 Registration covering
these shares became effective in October, 1998. Absent registration, Rule 144
would apply to sales of such common shares.
ITEM 6. SELECTED FINANCIAL DATA
Pages 1 through 15 of the 1999 Annual Report to Shareholders is
incorporated by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET REVENUES
Consolidated net sales for the fiscal year ended January 31, 2000
totaled $324,778,000, a 20.4% decrease from sales of $407,930,000 for the
prior year. Prior year sales include the mast business unit, divested in
January 1999 and the Industrial Tire Division, sold in April 1999. Fourth
quarter sales of $75,099,000 were 16.5% lower than the $89,985,000 reported
in the prior year fourth quarter, also primarily due to the divestitures
noted above. Adjusting for the divestitures, comparable consolidated net
sales for year over year reflects an increase of 2.3% or $314,046,000 for
fiscal year 1999 versus $306,844,000 for fiscal year 1998. Consolidated net
sales for 1998 were 10.3% higher than the $369,865,000 reported in 1997.
COST OF SALES
As a percentage of sales, cost of sales was 66.0% in 1999, 68.9% in
1998, and 70.2% in 1997. The percentage decreased in 1999 as a result of a
combination of selected price increases, cost reduction efforts, additional
manufacturing efficiencies, and the divestitures of the mast business in
5
<PAGE>
January of 1999 and the Industrial Tire Division in April of 1999 which had
incurred a significantly higher cost of sales as a percentage of revenues.
(See Note 1 to the Consolidated Financial Statements included in the 1999
Annual Report.) The percentage decreased in 1998 compared to 1997 as a result
of a combination of selected price increases, cost reduction efforts, and
additional manufacturing efficiencies gernerated from higher factory
throughput.
DEPRECIATION AND AMORTIZATION
Depreciation and Amortization expense was $18,386,000, $21,550,000,
and $20,280,000 in 1999, 1998 and 1997, respectively. As a percentage of
sales, depreciation and amortization was 5.7% in 1999, 5.3% in 1998 and 5.5%
in 1997. The increase in the current year is due to the fact that ITL and the
Mast business, both now divested, had sales that were proportionately greater
than their depreciation and amortization expense. The decrease between 1998
and 1997 resulted from the purchase of Kenhar Corporation in March of 1997. A
full year of Kenhar depreciation was taken in 1998 and only a partial year of
Kenhar depreciation was taken in 1997.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and Administrative Expense was $61,238,000 in 1999,
$68,500,000 in 1998, and $64,100,000 in 1997. The reduction in Selling and
Administrative Expense in 1999 was a result of cost reduction efforts and the
divestiture of the mast business in January of 1999 and the divestiture of
the Industrial Tire Division in April of 1999. The overall increase in 1998
compared to 1997 was to support increased sales growth.
As a percentage of net sales, selling and administrative expenses
were 18.9% in 1999, 16.8% in 1998, and 17.3% in 1997. The increase in 1999
compared to 1998 resulted from the divestitures of the mast business in
January of 1999 and the Industrial Tire Division in April of 1999. These
businesses incurred a significantly lower selling and administrative expense
as a percentage of revenues. The decrease in 1998 compared to 1997 resulted
from the purchase of Kenhar Corporation in March of 1997 which had lower
selling and administrative expense as a percentage of revenues
ENVIRONMENTAL EXPENSES, NET
Environmental expenses in 1999 include a $12,000,000 addition to
the environmental reserve. The charge resulted from a review of potential
environmental exposures including an adverse decision rendered March 24,
2000, by the Ninth Circuit Court of Appeals in a CERCLA recovery action
brought in 1989 by The Boeing Company. The Boeing Company and Cascade are
each remediating groundwater contamination in the vicinity of their
neighboring plant sites. (See Note 12 to the Consolidated Financial
Statements included in the 1999 Annual Report)
NONOPERATING ITEMS
Interest expense was $8,686,000, $10,940,000 and $9,440,000 in
1999, 1998 and 1997, respectively. In 1999 the Company paid down debt from
funds received from divestitures. In 1997, the Company issued additional debt
to fund business acquisitions.
Other expense of $4,039,000 in 1999 included special charges that
stem from the integration of operations acquired over the past three years,
steps taken to assure consistency of global financial reporting and the loss
on the sale of ITL. Other income of $4,755,000 in 1998 included the gain on the
sale of two parcels of land.
TAXES
The effective tax rate decreased from 31.6% in 1998 to 30.6% in
1999 due primarily to the increase in U.S. foreign tax credits attributed to
foreign earnings not yet repatriated. The effective tax rate decreased from
34.4% in 1997 to 31.6% in 1998 due primarily to a one-time tax refund
received in the United Kingdom.
6
<PAGE>
NET INCOME
Net income for the year of $4,934,000 ($.40 per share) was 76.9%
below the $21,370,000 ($1.63 per share) reported in 1998. This year's results
include special charges that stem from the integration of operations acquired
over the past three years, steps taken to assure consistency of global
financial reporting, the sale of the Industrial Tire Division and the
significant environmental charge discussed above.
Adjusting for above noted divestitures and non-recurring items,
comparable operating results were $17,700,000 ($1.42 per share) versus
$17,300,000 ($1.32 per share) or 2.3% higher than the prior year. The 7.6%
increase in earnings per share after the above noted adjustments also
reflects share repurchases during fiscal 1998. We consider the results from
continuing operations to be in line with our expectations for gross margin
improvements and within the framework of our comprehensive restructuring and
ERP implementation programs.
Forecasts for 2000 are for comparable results in both revenues and
margins. The Company has worked hard in 1999 to improve margins and reduce
the cost of doing business, and will continue to take steps to be as
efficient as possible in 2000 and coming years.
Net income for 1997 was $21,040,000 ($1.60 per share), which
included $9,770,000 after tax ($.74 per share) resulting from insurance
settlements related to environmental litigation. 1998 operating results showed
strong improvement over 1997 as a result of improvements in Australia and China.
LIQUIDITY AND CAPITAL RESOURCES
For the year ended January 31, 2000, capital expenditures totaled
$16,834,000, compared to $15,459,000 for 1998 and $15,453,000 for 1997.
Planned capital expenditures for 2000 are $12,000,000.
Dividends declared for each of 1999, 1998 and 1997 totaled $.40 per
share.
The Company's financial condition remains strong. The balance sheet
shows $23,188,000 in cash and cash equivalents at January 31, 2000. Together
with established short-term lines of credit totaling $22,872,000, management
believes these resources are more than sufficient to meet planned short-term
needs and provide for working capital requirements associated with projected
growth.
Net cash provided by operating activities was $50,135,000 in 1999
compared to 20,702,000 in 1998 and $15,701,000 in 1997. The increase in 1999
was pimarily due to decreases in accounts receivable, inventories, and
prepaid expenses and increases in accounts payable and accrued environmental
expenditures. The increase in 1998 was primarily due to a decrease in
deferred income taxes and an increase in accounts payable.
The Company's debt to equity ratio improved from 1.33 to 1.00 at
January 31, 1999, to 1.09 to 1.00 at January 31, 2000.
The US dollar strengthened when compared to most foreign currencies
where the Company has substantial operations. As a result, foreign currency
translation adjustments decreased shareholders' equity by $4,743,000 ($.38
per share) in 1999. Translation adjustments resulted in decreases in
shareholders' equity of $3,184,000 ($.24 per share) and $6,874,000 ($.52 per
share) in 1998 and 1997.
7
<PAGE>
IMPACT OF THE YEAR 2000 ISSUE
The Company experienced no material problems regarding 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 have
recognized a date using "00" as the year 1900 rather than the year 2000.
The Company initiated the implementation of an enterprise-wide
resource planning (ERP) software system to link all of its core business
systems throughout the Company. 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 replaced
those business systems that it believed would encounter the Year 2000 Issue.
The Company plans to complete the ERP project in the year 2002. The total
cost of the ERP project will approximate $16,000,000, including $6,107,000 and
$8,268,000 spent during fiscal 1999 and 1998 and is being funded through
leases and operating cash flows.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pages 3 through 15 of the 1999 Annual Report to Shareholders are
incorporated by reference.
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
The definitive Proxy Statement dated April 13, 2000 is incorporated
by reference.
The term of office of all officers is one year. Names, ages and
positions of all executive officers of Cascade Corporation follow.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Year First
Elected
Name Age Officer Present Position
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert C. Warren, Jr. 51 1984 President, Chief Executive Officer and Director
Gregory S. Anderson 51 1991 Vice President - Human Resources
Richard S. Anderson 52 1996 Senior Vice President - International
Terry H. Cathey 52 1993 Senior Vice President - North America
Robert L. Mott 58 1996 Vice President - OEM Product Group
Kurt G. Wollenberg 50 1997 Senior Vice President - Finance, Chief Financial Officer,
Secretary and Treasurer
Charlie S. Mitchelson 45 1999 Vice President and Managing Director - Europe
Art Otsuka 60 2000 Vice President - Asian Operations
Anthony F. Spinelli 57 1999 Managing Director - Canadian Operations
- -----------------------------------------------------------------------------------------------------
</TABLE>
ITEM 11. EXECUTIVE COMPENSATION
The definitive Proxy Statement dated April, 13 2000 is incorporated
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The definitive Proxy Statement dated April, 13 2000 is incorporated
by reference.
8
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The definitive Proxy Statement dated April 13, 2000 is incorporated
by reference.
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 PricewaterhouseCoopers LLP dated March 28, 2000 appearing on pages
3 to 15 of the accompanying 1999 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 1,3, 5, 6, 7, and 8, the
1999 Annual Report is not to be deemed filed as part of this report.
2. FINANCIAL STATEMENT SCHEDULES--1999, 1998 AND 1997
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, 1999, 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. Bylaws, as amended through February 11, 1999.
2. 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.
- Specimen copy of stock certificate, filed as Exhibit
4-1 to Form S-1, filed with the Commission May 28,
1965.
- Amendment to Articles of Incorporation included in the
Proxy Statement for Annual Meeting of Shareholders
May 13, 1997, filed with the Commission April 13,
1997.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of fiscal
1999.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the
Securities Exchange Act of 1934, the registrant, CASCADE CORPORATION has duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
CASCADE CORPORATION
/s/ Kurt G. Wollenberg
-----------------------------------------------
By: Kurt G. Wollenberg
SENIOR VICE PRESIDENT - FINANCE AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
Pursuant to the requirements of the Securities Exchange Act of 1934
this report has been signed below by the following persons on behalf of the
registrant and in the capacities on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
/s/ C. Calvert Knudsen April 27, 2000 /s/ Robert C. Warren, Jr. April 27, 2000
- ---------------------------------------- ----------------------------------------
C. Calvert Knudsen, DIRECTOR Date Robert C. Warren, Jr. Date
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
DIRECTOR
/s/ Eric Hoffman April 27, 2000 /s/ Greg H. Kubicek April 27, 2000
- ---------------------------------------- ----------------------------------------
Eric Hoffman, DIRECTOR Date Greg H. Kubicek, DIRECTOR Date
/s/ Nicholas R. Lardy April 27, 2000 /s/ Ernest C. Mercier April 27, 2000
- ---------------------------------------- ----------------------------------------
Nicholas R. Lardy, DIRECTOR Date Ernest C. Mercier, DIRECTOR Date
/s/ James S. Osterman April 27, 2000 /s/ Jack B. Schwartz April 27, 2000
- ---------------------------------------- ----------------------------------------
James S. Osterman, DIRECTOR Date Jack B. Schwartz, Date
ASSISTANT SECRETARY, DIRECTOR
/s/ Henry W. Wessinger II April 27, 2000 /s/ Nancy Wilgenbusch April 27, 2000
- ---------------------------------------- ----------------------------------------
Henry W. Wessinger II, DIRECTOR Date Nancy Wilgenbusch, DIRECTOR Date
</TABLE>
10
<PAGE>
BYLAWS
OF
CASCADE CORPORATION
(AS AMENDED FEBRUARY 11, 1999)
ARTICLE I
NAME AND PRINCIPAL OFFICE
Section 1. The Name of this corporation is CASCADE CORPORATION, organized
and existing under the laws of the State of Oregon.
Section 2. The principal office and place of business of the Company shall
be located at Portland, Oregon. The Company may have offices and places of
business at such other places, within or without the State of Oregon, as the
Board of Directors may from time to time determine.
ARTICLE II
CORPORATE SEAL
The seal of the Company shall be an impression stamp with the following
inscription: CASCADE CORPORATION - Oregon - Corporate Seal. An impression of
said seal so adopted is as shown below.
ARTICLE III
SHAREHOLDERS
Section 1. The annual meeting of the shareholders shall be held on the
second Thursday in May of each year (except the second Tuesday in May of 1997)
at the principal office of the Company in Portland, Oregon at 10:00 a.m., when
the shareholders shall elect a Board of Directors and transact such other
business as may properly come before the meeting.
Section 2. Special meetings of the shareholders of the Company shall be
called by the Secretary on the request of the Chairman or on the request in
writing of three Directors, or on demand in writing by shareholders of record
holding not less than
PAGE 1 - BYLAWS
<PAGE>
one-tenth of all shares entitled to vote at such meeting.
Section 3. Written or printed notice stating the place, day and hour of the
meeting and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than 10 nor more than 50 days
before the date of the meeting, either personally or by mail, by or at the
direction of the Secretary, or the person or persons calling the meeting, to
each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
addressed to the shareholder concerned at his address as it appears on the stock
books of the Company, with postage thereon prepaid.
ARTICLE IV
COMMITTEES
Section 1. There are hereby established as committees of the Board of
Directors an Audit Committee, a Compensation Committee, and a Nominating and
Governance Committee, each of which shall have the powers and functions set
forth herein, and such additional powers as may be delegated by the Board of
Directors. The size and membership of the committees shall be determined by the
Board of Directors, and, in the case of the Audit and Compensation Committees,
shall be composed solely of Directors independent of management.
Section 2. The Audit Committee shall select, on behalf of the Company,
independent public accountants to (1) audit the books of account and other
Corporate records; and (2) perform such other duties as the Committee may from
time to time prescribe. The Committee shall transmit financial statements
certified by such independent public accountants to the Board of Directors after
the close of each fiscal year. The Committee shall confer with such accountants
and approve the scope of the audit of the records. The Committee shall have the
power to confer with and direct the officers of the Company to the extent
necessary to review the internal controls, accounting practices, financial
structure and reporting of the Company. From time to time, the Committee shall
report to and advise the Board of Directors concerning the results of its
consultation and review such other matters as the Committee believes merit
review by the Board of Directors.
Section 3. The Compensation Committee shall fix the compensation of members
of the Board of Directors who are officers and other members of senior
management.
Section 4. The Nominating and Governance Committee shall consider and make
recommendations to the Board of Directors with respect to the management
PAGE 2 - BYLAWS
<PAGE>
of the Company and the nominations or elections of directors and officers of the
Company. The Committee from time to time shall consider the size and composition
of the Board of Directors and make recommendations to the Board with respect to
such matters.
ARTICLE V
DIRECTORS
Section 1. The business and affairs of the Company shall be managed by a
Board of not less than nine, nor more than fourteen Directors. Each Director
shall be a Shareholder of the Company and, at the time of election, shall be
under the age of 70 (Directors serving as of February 11, 1999, are exempt from
the age limitation). A Director who ceases to be a Shareholder in the Company
shall likewise cease to be a Director. Commencing with the 1999 Annual Meeting
of Shareholders, nominees for election to the Board of Directors shall be
divided into three groups. The terms of Directors in Group 1 expire at the first
Annual Shareholders' meeting after their election, the terms of Group 2 expire
at the second Annual Shareholders Meeting after their election, and the terms of
Group 3 expire at the third Annual Shareholders' Meeting after their election.
At each Annual Shareholders' Meeting held thereafter, Directors shall be chosen
for a term of three years, to succeed those whose terms expire. Each Director
shall hold office until his or her successor has been elected and qualified.
Section 2. Any vacancy occurring in the Board of Directors, including any
Directorship to be filled by reason of an increase in the number of Directors,
may be filled by the affirmative vote of the majority of the remaining
Directors, though less than a quorum, of the Board of Directors. Any Director so
elected shall serve until the next annual meeting of shareholders and until his
successor has been elected and has qualified.
Section 3. A majority of the number of Directors shall constitute a quorum
for the transaction of business at any meeting of the Board of Directors. If any
meeting of the Directors cannot be organized for want of a quorum, a majority of
the Directors there present may adjourn the meeting from time to time without
notice until a quorum shall attend.
Section 4. The Board of Directors may appoint an Executive Committee
consisting of the President and not less than two other officers of the Company,
to coordinate the Company's operations and to exercise general supervision over
all the property, business and affairs of the Company. The President shall
preside over the Executive Committee, which shall be subject to the authority of
the Board of Directors and the President.
PAGE 3 - BYLAWS
<PAGE>
Section 5. Immediately after each annual election of Directors, the newly
elected Directors shall meet for the purpose of organization, the election of
officers of the Board of Directors and the transaction of other business. No
notice of such meeting shall be required, and the meeting shall be held at the
same place as the shareholders' meeting unless otherwise designated by the
Chairman.
Section 6. Special meetings of the Board of Directors shall be called by
the Secretary, when he is requested to do so by the Chairman, upon two days'
notice to each Director. Special meetings shall be called in like manner on the
request of the majority of the members of the Board. Such notice may be by
telephone, telegraph or mail. Special meetings of the Directors may be held at
one time and at any place, without notice, when all members of the Board are
present and consent thereto. The Board of Directors shall meet at such places,
either within or without the State of Oregon, as may be designated in the notice
of the meeting. Any business authorized or required to be transacted by the
Directors may be transacted at any special meeting.
ARTICLE VI
COMPENSATION OF DIRECTORS AND OFFICERS
No officer or Director of the Company shall be entitled to any salary or
other compensation for any services rendered the Company, except when fixed or
otherwise authorized and approved by resolution of the Board of Directors, or
when services are rendered as a consultant to the Corporation under compensation
arrangements approved by the Board of Directors or the President.
ARTICLE VII
OFFICERS
Section 1. The officers of the Company shall include a Chairman, a
President, one or more Vice Presidents as may from time to time be deemed
advisable by the Board of Directors, a Secretary, a Treasurer and such other
officers as may from time to time be appointed by the Board of Directors.
Section 2. In case of the absence of any officer of the Company, or for any
other reason that may seem sufficient to the Board, the Board of Directors may
delegate his powers and duties to any other officer or to any Director.
Section 3. In addition to the specific duties set forth below, the officers
shall have such other authorities and perform such other duties as may elsewhere
in these Bylaws be required of them or that may be usual for their officers or
that may be
PAGE 4 - BYLAWS
<PAGE>
designated by resolution of the Board of Directors.
ARTICLE VIII
CHAIRMAN
The Chairman shall preside at all meetings of the shareholders and
Directors; he shall be the inspector of all elections of Directors and certify
who are elected; he shall also act as inspector of the voting on any other
matter or resolution unless the meeting appoints special inspectors for such
purposes. The Chairman may also represent the company in any manner requested by
the Board of Directors or the President.
ARTICLE IX
PRESIDENT
Section 1. The President shall be the chief executive officer and head of
the Company and shall have the general control of its business affairs.
Section 2. The President may sign, on behalf of the Company, all deeds,
contracts and promissory notes, unless otherwise expressly directed by the Board
of Directors, and shall have general supervision over all the property, business
and interests of the Company as well as over its officers, employees and agents.
Section 3. The President shall make annual reports showing the condition of
the affairs of the Company, making such recommendations as he thinks proper,
submitting the same to the Board of Directors, and subsequently, to the annual
meeting of the shareholders; and he shall, from time to time, bring before the
Directors such information as may be required touching upon the business and
property of the Company.
ARTICLE X
SECRETARY
The Secretary shall issue all notices of Directors' and shareholders'
meetings, shall have the charge of the corporate seal and the Company's stock
and minute books, shall countersign all certificates of stocks, bonds, deeds,
mortgages and other documents requiring the seal of the Company, shall affix the
corporate seal to all such documents, shall prepare and issue all certificates
of stock and register and record
PAGE 5 - BYLAWS
<PAGE>
the same in the stock books and shall properly record therein all transfers,
shall produce the stock books whenever required to do so by any shareholder, and
shall prepare and submit at every meeting of the shareholders a certified list
of the shareholders of the Company and of those shareholders entitled to vote at
such meeting, which list shall be prima facie evidence of the right to vote. The
Board of Directors may designate one or more Assistant Secretaries to carry out
the duties of the Secretary until such vacancy is regularly filled as required.
ARTICLE XI
TREASURER
The Treasurer shall have custody of all funds, securities and other
valuables of the Company that may come into his possession and he shall deposit
the same to the credit of the Company in such banks or depositories as the Board
of Directors may designate. He shall bring to the attention of the Board of
Directors any and all measures which in his judgment are necessary and proper to
be taken for the preservation and renewal of securities in his custody and for
the enforcement of the rights secured thereby and shall render a statement of
the accounts of the Company whenever required by the Board of Directors.
ARTICLE XII
STOCK
Section 1. Certificates of stock, on a form to be approved by the Board of
Directors, shall be signed by the Chairman, President or any Vice President, and
by the Secretary or an Assistant Secretary, and shall have affixed thereto the
corporate seal. Each certificate shall be numbered in order and shall show on
the face thereof the name of the Company, that it is organized under the laws of
the State of Oregon, the name of the person to whom it is issued, the class and
number of shares represented thereby and the par value of the shares. A stock
book shall be maintained by the Secretary, in which he shall record the name of
each shareholder, the number, certificate number and class of shares held by
him, the dates or issuance and the dates of any transfers of stock.
Section 2. Shares of stock of the Company shall be transferable only on its
books by the holder thereof in person, or by his attorney duly authorized
thereto in writing, and upon the surrender and cancellation of certificates
therefor duly endorsed.
Section 3. In case of the loss or destruction of a certificate, another may
be issued in its place upon proof of such loss or destruction satisfactory to
the
PAGE 6 - BYLAWS
<PAGE>
Board of Directors and the giving of such bond or indemnity or other security as
the Board of Directors may require.
ARTICLE XIII
INDEMNIFICATION
The Company shall indemnify any Director, officer or employee or former
Director, officer or employee of the Company, or any person who may have served
at its request as a Director, officer or employee of another corporation,
partnership, joint venture, or other enterprise, against expenses (including
attorneys fees) judgments, fines and amounts paid in settlement, actually and
necessarily incurred by him in connection with the defense of any action, suit
or proceeding whether civil, criminal or administrative in which he is made a
party by reason of being or having been such Director, officer or employee. Such
indemnification shall not be deemed exclusive of any other rights to which such
Director, officer or employee may be entitled.
The Company shall also have the authority to indemnify any agent of the
Company or any Trustee acting on behalf of the Company to the fullest extent
possible under the Oregon Business Corporation Act.
ARTICLE XIV
ASSESSMENTS
A holder of or subscriber to shares of the capital stock of the Company
shall be subject to assessment therefor by the Board of Directors to the extent,
in the aggregate, of the unpaid portion of the subscription price of the shares
so held or subscribed, except as may be limited by law.
ARTICLE XV
DIVIDENDS
Dividends shall be declared by the Board of Directors in such form, in such
amounts and at such times as the Board of Directors in its sole discretion shall
determine, subject only to the requirements of law, and no dividends shall be
paid or other distribution of earnings made except as directed by the Board of
Directors.
PAGE 7 - BYLAWS
<PAGE>
ARTICLE XVI
SIGNING OF CONTRACTS, CHECKS, NOTES, ETC.
In addition to the authority granted to the President by Article VIII,
Section 2, the Board of Directors may, by resolution, at any time direct in what
manner and by what person or persons, officer or officers all or any of its
contracts, checks, notes, bonds, other evidences of indebtedness or other
written instruments may be executed, and any such authorized execution shall be
deemed the act of the Company.
ARTICLE XVII
NOTICE AND WAIVER
Section 1. Whenever notice is required to be given to any shareholder or
Director, and such notice is given be mail, the time of the giving of such
notice shall be deemed to be the time when the same shall be deposited in the
United States mail addressed to the shareholder or Director at his address as it
appears on the official records of the Company, with postage thereon prepaid.
Section 2. Whenever any notice is required to be given to any shareholder
or Director of the Company, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether signed before or after the time stated
in such notice, shall be equivalent to the giving of such notice to that person
or persons.
ARTICLE XVIII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted at any regular or special meeting of the Board of Directors by a vote of
the majority of the Directors present at such meeting.
PAGE 8 - BYLAWS
<PAGE>
CASCADE-Registered Trademark-
CORPORATION
1999 ANNUAL REPORT
The World's Leading Producer of Lift Truck Attachments, Forks & Accessories
<PAGE>
CASCADE CORPORATION & SUBSIDIARY COMPANIES
FINANCIAL SUMMARY
(Dollars in Thousands)
NET SALES OPERATING INCOME
[GRAPH] [GRAPH]
NET INCOME EARNINGS BEFORE INTEREST, TAXES
DEPRECIATION AND AMORTIZATION (EBITDA).
[GRAPH] [GRAPH]
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31 2000 1999 1998 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(Dollars in Thousands
except where noted*)
Net sales $ 324,778 $407,930 $369,865 $218,485 $234,030
Operating income $ 18,806 $ 36,685 $ 40,770 $ 24,850 $ 16,415
Net income $ 4,934 $ 21,370 $ 21,040 $ 17,420 $ 10,550
EBITDA(1) $ 34,183(2) $ 63,745 $ 61,810(3) $ 36,141 $ 26,685(4)
Cash flow from operations $ 50,135 $ 20,702 $ 15,701 $ 22,374 $ 21,765
Cash flow from investing $ 12,411 $ 3,688 $(87,328) $(39,409) $(11,894)
Cash flow from financing $ (45,675) $(22,501) $ 72,921 $ 9,985 $ (3,449)
Per common share*
Net income:
Basic $ .40 $ 1.77 $ 1.73 $ 1.48 $ .88
Diluted $ .40(2) $ 1.63 $ 1.60(3) $ 1.48 $ .88(4)
Book value $ 9.87(2) $ 10.31 $ 9.32(3) $ 8.46 $ 7.74(4)
Working capital $ 66,167 $ 94,548 $ 81,063 $ 32,750 $ 49,829
Expenditures for property,
plant and equipment $ 16,834 $ 15,459 $ 15,453 $ 16,624 $ 11,825
Total assets $312,694 $347,857 $349,592 $199,493 $153,190
Long-term debt $109,043 $142,783 $144,785 $ 12,810 $ 9,531
Shareholders' equity $112,933 $119,494 $110,551 $ 98,757 $ 92,057
Number of employees 1,842 2,174 2,322 1,293 1,103
Dividend per share .40 .40 .40 .45 .45
</TABLE>
(1) Management believes that Earnings Before Interest Expense, Taxes,
Depreciation and Amorti-zation (EBITDA) is a key measure of cash flow.
EBITDA should not be viewed as a measurement of financial performance under
Generally Accepted Accounting Principles (GAAP) or as a substitute for GAAP
measurements such as net income or cash flow from operations. EBITDA is not
necessarily comparable to other companies due to the lack of uniform
definition of EBITDA by all companies.
(2) After $12,000 ($7,600 or $.61 per share, net of tax) charge for
environmental expenses. See note 12 to consolidated financial statements.
(3) After $14,890 ($9,770 or $.74 per share, net of taxes) credit for
environmental insurance settlements, net of certain expenses. See note 12
to consolidated financial statements.
(4) After $12,000 ($7,800 or $.65 per share, net of taxes) charge for
environmental expenses. See note 12 to consolidated financial statements.
<PAGE>
TO OUR SHAREHOLDERS
Consolidated net sales for the fiscal year ended January 31, 2000 totaled
$324,778,000, a 20.4% decrease from sales of $407,930,000 for the prior year.
Prior year sales include the mast business unit, divested in January 1999 and
the Industrial Tire Division, sold in April 1999. Fourth quarter sales of
$75,099,000 were 16.5% lower than the $89,985,000 reported in the prior year
fourth quarter, also primarily due to the divestitures noted above. Adjusting
for the divestitures, comparable consolidated net sales for year over year
reflects an increase of 2.3% or $314,046,000 for fiscal year 1999 versus
$306,844,000 for fiscal year 1998.
Net income for the year of $4,934,000 ($.40 per share) was 76.9% below the
$21,370,000 ($1.63 per share) for the year ended January 31, 1999. This year's
results include special charges that stem from the integration of operations
acquired over the past three years, steps taken to assure consistency of global
financial reporting, the sale of the Industrial Tire Division and the
significant environmental charge discussed below.
Adjusting for above noted divestitures and non-recurring items, comparable
operating results were $17,700,000 ($1.42 per share) versus $17,300,000 ($1.32
per share) or 2.3% higher than the prior year. We consider the results from
continuing operations to be in line with our expectations for gross margin
improvements and within the framework of our comprehensive restructuring and ERP
implementation programs.
Cascade has added to its environmental reserve a $12,000,000 pretax charge to
income. The charge results from a review of potential environmental exposure
including an adverse decision rendered March 24, 2000 by the Ninth Circuit Court
of Appeals in connection with a lawsuit brought in 1989 by The Boeing Company.
The suit dealt with ongoing environmental cleanup at the two companies' Portland
plant sites.
Management believes that this charge does not alter the fundamental strength
of the Company nor its ability to produce products and serve its markets
throughout the world. Operations are continuing to improve and expand. The
challenges presented by some prior acquisitions and the environmental issues are
not without understandable concern to management but we believe these special
circumstances are largely behind us and above all, they do not deter our
confidence and optimism in the Company's future.
Attachment sales showed strength in North America, rising 9.5%, adjusted for
the mast business unit sale, but remained relatively flat in Europe. Asian
markets continued their recovery with our China subsidiary continuing to make
remarkable progress. Australian markets remain sluggish.
Among the many executive additions we have made, around the globe, we are
fortunate to announce the appointment of Mr. Art Otsuka as Vice President of
Asian Operations. Prior to joining Cascade, Art served as President of Komatsu
Forklift USA where he achieved a remarkable 37-year career. His stature, insight
and ability will be very helpful to our Asian operations. We welcome Art, and
all other new members of the Cascade family.
Chairman C. Calvert Knudsen announced on March 30, 2000
that the Board of Directors has appointed a special committee of independent
directors to consider options to increase shareholder value. I have also advised
the Board that I am working with a management group to explore the possibility
for the Company to be taken private in a management-led leveraged buyout.
We look forward to working with you as we grow and expand our presence in the
global market. We also appreciate the continued support of our customers,
suppliers and shareholders. Rest assured, your faith in us will be rewarded as
we renew our focus on our core business - simply put, building the best forks
and lift truck attachments in the world. Bar none.
/s/ Robert C. Warren
ROBERT C. WARREN, JR.
President & Chief Executive Officer
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
- -------------------------------------------------------------------------------
(Dollars in Thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31 2000 1999 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 324,778 $407,930 $369,865
- --------------------------------------------------------------------------------------------
Operating expenses:
Cost of goods sold 214,348 281,195 259,605
Depreciation and amortization 18,386 21,550 20,280
Selling and administrative expenses 61,238 68,500 64,100
Environmental expenses, net (Note 12) 12,000 - (14,890)
- --------------------------------------------------------------------------------------------
Total operating expenses 305,972 371,245 329,095
- --------------------------------------------------------------------------------------------
Operating income 18,806 36,685 40,770
Interest expense 8,686 10,940 9,440
Interest income (1,030) (755) (610)
Other (income) expense, net 4,039 (4,755) (150)
- --------------------------------------------------------------------------------------------
Income before taxes 7,111 31,255 32,090
Income taxes (Note 4) 2,177 9,885 11,050
- --------------------------------------------------------------------------------------------
Net income $ 4,934 $ 21,370 $ 21,040
============================================================================================
Dividends paid on preferred shares
of subsidiaries $ 423 $ 530 $ 570
============================================================================================
Net income applicable to common
shareholders $ 4,511 $ 20,840 $ 20,470
============================================================================================
Basic earnings per share $ .40 $ 1.77 $ 1.73
============================================================================================
Diluted earnings per share $ .40 $ 1.63 $ 1.60
============================================================================================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
(Dollars in Thousands except share and per share amounts)
<TABLE>
<CAPTION>
AS OF JANUARY 31 2000 1999
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 23,188 $ 11,460
Accounts receivable, less allowance
for doubtful accounts of $1,511 and $1,009 54,934 72,354
Inventories, at average cost which is lower than market:
Finished goods and components 34,712 44,496
Goods in process 1,654 2,309
Raw materials 11,121 15,210
- ---------------------------------------------------------------------------------------------------
47,487 62,015
Deferred income taxes (Note 4) 3,544 254
Prepaid expenses and other current assets 1,693 7,640
- ---------------------------------------------------------------------------------------------------
Total current assets 130,846 153,723
Property, plant and equipment, net (Notes 5 and 9) 86,716 100,075
Deferred income taxes (Note 4) 9,356 3,370
Goodwill 75,179 86,462
Other assets 10,597 4,227
- ---------------------------------------------------------------------------------------------------
Total assets $ 312,694 $ 347,857
===================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks (Note 5) $ 8,408 $ 9,817
Current portion of long-term debt (Note 5) 6,137 6,510
Accounts payable 22,960 26,789
Accrued payroll and payroll taxes 5,707 6,954
Accrued environmental expenditures (Note 12) 7,910 1,000
Other accrued expenses 13,557 8,105
- ---------------------------------------------------------------------------------------------------
Total current liabilities 64,679 59,175
Long-term debt (Note 5) 109,043 142,783
Accrued environmental expenditures (Note 12) 10,405 7,228
Other liabilities 4,260 3,228
- ---------------------------------------------------------------------------------------------------
Total liabilities 188,387 212,414
===================================================================================================
Commitments and contingencies (Notes 11, 12, 13)
Mandatorily redeemable convertible preferred stock and
minority interest (Note 7) 11,374 15,949
Shareholders' equity: (Notes 6 and 7)
Common stock, $.50 par value, authorized
20,000,000 shares; 11,439,890 and 11,587,990 outstanding 5,784 5,858
Additional paid-in capital 399 --
Retained earnings 122,922 125,065
Accumulated other comprehensive income (loss):
Cumulative foreign currency translation adjustments (15,943) (11,200)
Treasury stock, at cost, 127,498 shares (229) (229)
- ---------------------------------------------------------------------------------------------------
Total shareholders' equity 112,933 119,494
- ---------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 312,694 $ 347,857
===================================================================================================
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
- --------------------------------------------------------------------------------
(Dollars in Thousands except per share amounts)
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other Annual
------------------ Paid-In Treasury Retained Comprehensive Comprehensive
Shares Amount Capital Stock Earnings Income Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 31, 1997 11,667 $ 6,024 $ - $ (686) $ 94,561 $ (1,142)
Net income - - - - 21,040 - $21,040
Dividends ($0.40 per share) - - - - (5,505) - -
Common stock repurchased (60) (30) (1,005) - -
Treasury shares issued for acquisitions 254 - 3,711 457 - - -
Translation adjustment - - - - - (6,874) (6,874)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 31, 1998 11,861 5,994 3,711 (229) 109,091 (8,016) $14,166
=======
Net income - - - - 21,370 - $21,370
Dividends ($0.40 per share) - - - - (5,361) - -
Common stock repurchased (289) (145) (3,919) - - - -
Stock options exercised 15 8 239 - - - -
Redemption of mandatorily redeemable
convertible preferred stock - - (54) - (35) - -
Translation adjustment - - - - - (3,184) (3,184)
Other 1 1 23 - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 31, 1999 11,588 5,858 - (229) 125,065 (11,200) $ 18,186
========
Net income - - - - 4,934 - $ 4,934
Dividends ($0.40 per share) - - - - (5,321) - -
Common stock repurchased (176) (88) - - (1,756) - -
Conversion of preferred stock 28 14 399 - - - -
Translation adjustment - - - - - (4,743) (4,743)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 31, 2000 11,440 $ 5,784 $ 399 $ (229) $ 122,922 $ (15,943) $ 191
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
CONSOLIDATED STATEMENT OF CASHFLOWS
- --------------------------------------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year Ended January 31 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,934 $ 21,370 $ 21,040
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 18,386 21,550 20,280
Deferred income taxes (9,373) 1,770 (9,863)
Loss (gain) on sale of property 1,223 (3,873) -
Changes in operating assets and liabilities, net of effects
of acquisitions and dispositions:
Accounts receivable 9,847 (10,083) (963)
Inventories 3,877 (3,735) (6,626)
Prepaid expenses 5,778 (1,629) (3,577)
Accounts payable and accrued expenses 4,344 2,570 (7,018)
Accrued environmental expenditures 10,087 (3,088) 1,403
Other liabilities 1,032 (4,150) 1,025
- --------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 50,135 20,702 15,701
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (16,834) (15,459) (15,453)
Business acquisitions - - (72,534)
Proceeds from sale of assets 29,785 11,375 5,036
Other assets (540) 7,772 (4,377)
- --------------------------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities 12,411 3,688 (87,328)
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt (61,783) (5,241) (36,034)
Proceeds from issuance of long-term debt 28,844 - 135,759
Notes payable to banks, net (1,409) (3,376) (20,264)
Redemption of convertible preferred stock and minority interest (4,162) (4,730) -
Repurchase of common stock (1,844) (4,064) (1,035)
Issuance of common stock - 271 -
Cash dividends paid (5,321) (5,361) (5,505)
- --------------------------------------------------------------------------------------------------------------
Net cash (used) provided by financing activities (45,675) (22,501) 72,921
- --------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES (5,143) (3,395) (3,970)
- --------------------------------------------------------------------------------------------------------------
INCREASE IN CASH AND CASH EQUIVALENTS 11,728 (1,506) (2,676)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11,460 12,966 15,642
- --------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 23,188 $ 11,460 $ 12,966
==============================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 8,515 $ 12,220 $ 8,608
Income taxes $ 8,561 $ 13,925 $ 12,936
Conversion of mandatorily redeemable convertible preferred
stock to common stock $ 413 $ - $ -
Exchangeable preferred stock issued for acquisition $ - $ - $ 15,640
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of this statement.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
THE COMPANY
Cascade Corporation (the Company) is an international company engaged in the
business of designing, manufacturing and selling equipment used primarily in
material handling applications. The Company manufactures an extensive line of
hydraulically actuated attachments designed for mounting on lift trucks. Other
major products include forks for lift trucks and hydraulic cylinders used
primarily in material handling operations. Accordingly, the Company's sales
and the collection of accounts receivable are largely dependent on the sales of
lift trucks and on the sales of replacement parts. In addition, the majority of
the Company's sales are made in North America.
Headquartered in Portland, Oregon, the Company employs more than 1,800
people and maintains operations in 15 countries outside the United States. The
Company was founded in 1943.
PRINCIPLES OF CONSOLIDATION
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.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on deposit and highly liquid
investments with maturities of three months or less.
DEPRECIATION AND AMORTIZATION
Property, plant and equipment are stated at cost. Depreciation is generally
provided on the straight-line basis over the estimated useful lives of the
assets ranging from 15 to 35 years for buildings and 3 to 12 years for
machinery and equipment. Goodwill consists of the cost of acquired businesses
(Note 10) in excess of the fair value of net identifiable assets acquired.
Generally, goodwill is amortized on the straight-line basis over 20 years. On a
periodic basis, the Company reviews the realizability of recorded long-lived
assets based upon expectations of nondiscounted cash flows of the acquired
businesses. As of January 31, 2000, the Company believes that there are no
significantly impaired long-lived assets. Accumulated amortization of goodwill
and other assets was $12,451,000 and $9,518,000 at January 31, 2000 and 1999,
respectively.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs are expensed as incurred. Research and
development expense is related to developing new products and to improving
existing products or processes.
INCOME TAXES
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS 109) "Accounting for Income Taxes." Deferred
income taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory tax rates applicable to future years to
differences between the financial statement carrying amounts and the tax bases
of existing assets and liabilities.
DIVESTITURE OF INDUSTRIAL TIRES LIMITED
On April 29, 1999 the Company completed the sale of its tire, wheel and
baseband business to Maine Rubber Company for approximately $38,108,000
including the assumption of liabilities. The Company recorded an after tax loss
on the sale of approximately $1,085,000. In fiscal 1999 and 1998 the tire,
wheel, and baseband business contributed approximately $10,832,000 and
$47,086,000 in sales respectively.
DIVESTITURE OF WORLDMAST PRODUCT LINE
On January 22, 1999, the Company completed the sale of its Worldmast product
line to Lift Technologies, Inc. for approximately $11,242,000. A former Cascade
officer and director is the principal owner of Lift Technologies, Inc. The
Company recorded a gain on the sale of $582,000. The transaction included the
sale of the Worldmast factory in Westminster, South Carolina as well as other
related manufacturing assets in North America and Europe. In fiscal 1998, the
Worldmast product line contributed approximately $54,000,000 in net sales.
FORWARD EXCHANGE CONTRACTS
The Company enters into foreign exchange contracts to manage its exposure to
foreign currency exchange risk. At January 31, 2000, the Company had
approximately $18,252,000 in contracts to buy or sell foreign currency in the
future. Substantially all of these contracts mature in one month or less. Gains
or losses on such contracts are recognized in income and are measured over the
period of the contract by reference to the forward rate for a contract to be
consummated on the same future date as the original contract.
STOCK-BASED COMPENSATION
The Company accounts for its stock-based compensation under APB 25.
FOREIGN CURRENCY TRANSLATION
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
<PAGE>
fiscal year. The effects of such translations are included in the shareholders'
equity account "cumulative foreign currency translation adjustments" as
decreases of $4,743,000, $3,184,000, and $6,874,000 for the years ended January
31, 2000, 1999 and 1998, respectively
ENVIRONMENTAL REMEDIATION
The Company accrues environmental remediation costs if it is probable that
an asset has been impaired or a liability incurred at the financial statement
date and the amount can be reasonably estimated. Environmental compliance costs
are expensed as incurred. Certain environmental costs are capitalized and
depreciated over their estimated useful lives.
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The fair value of the Company's monetary assets and liabilities are
evaluated based upon the existing interest rates related to such assets and
liabilities compared to current market rates of interest. The carrying value of
all of the Company's monetary assets and liabilities approximates fair value as
of January 31, 2000 and 1999.
REVENUE RECOGNITION
The Company recognizes revenue when products are shipped to customers.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements. Changes in such estimates may affect amounts reported in future
periods. Significant estimates and judgements made by management of the Company
include matters such as the collectibility of accounts receivable,
realizability of deferred income tax assets, realizability of intangible assets
and future costs of environmental matters.
NOTE 2 - ADOPTION OF FINANCIAL ACCOUNTING STANDARDS NUMBER 133
The Company adopted Statement of Financial Accounting Standards No. 133 (FAS
133), "Accounting for Derivative Instruments and Hedging Activities" in 1998.
The adoption resulted in no material adjustment to the Company's financial
statements.
NOTE 3 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company has operations and sells products to dealers and original
equipment manufacturers throughout the world. The Company's activities expose
it to a variety of market risks, including the effects of changes in foreign
currency exchange rates. These financial exposures are monitored and managed by
the Company within the Company's foreign exchange management policy as approved
by the Board of Directors. The Company's risk-management program focuses on the
unpredictability of financial markets and seeks to reduce the effects that the
volatility of these markets may have on its operating results.
The Company maintains a foreign currency risk-management strategy that uses
derivative instruments to protect its interests from unanticipated fluctuations
in earnings caused by volatility in currency exchange rates. Various amounts of
the Company's payables, receivables and subsidiary royalties are denominated in
foreign currencies, thereby creating exposures to changes in exchange rates.
The Company purchases foreign currency forward-exchange contracts, with
contract terms normally lasting less than one month, to protect against the
adverse effects that exchange rate fluctuations may have on foreign currency
denominated trade receivables and trade payables. These derivatives do not
qualify for hedge accounting, in accordance with FAS 133, because they relate
to existing assets or liabilities denominated in a foreign currency. The gains
and losses on both the derivatives and the foreign currency denominated trade
receivables and payables are recorded as transaction adjustments in current
earnings thereby minimizing the effect on current earnings of exchange-rate
fluctuations.
By using derivative financial instruments to hedge exposures to changes in
exchange rates, the Company exposes itself to credit risk and market risk.
Credit risk is the failure of the counter-party to perform under the terms of
the derivatives contract. When the fair value of a derivative contract is
positive, the counterparty owes the Company, which creates repayment risk for
the Company. When the fair value of a derivative contract is negative, the
Company owes the counterparty and, therefore, it does not possess repayment
risk. The Company minimizes the credit or repayment risk in derivative
instruments by: entering into transactions with counterparties whose credit
ratings are AA or higher; monitoring the amount of exposure to each
counterparty; and monitoring the financial condition of its counterparties.
<PAGE>
Market risk is the adverse effect on the value of a foreign-exchange
contract that results from a change in the underlying exchange rates. The
market risk associated with foreign-exchange contracts is managed by the
establishment and monitoring of parameters that limit the types and degree of
market risk that may be undertaken.
NOTE 4 - INCOME TAXES
<TABLE>
<CAPTION>
Year Ended January 31 2000 1999 1998
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(Dollars in Thousands)
Income before taxes was as follows:
United States $ 3,323 $23,260 $28,260
Foreign 3,788 7,995 3,830
- ------------------------------------------------------------------------------------------------
Total $ 7,111 $31,255 $32,090
- ------------------------------------------------------------------------------------------------
Taxes charged (credited) against operations were as follows:
Current
Federal $ 1,852 $ 6,625 $ 9,105
State 406 1,300 925
Foreign 8,624 1,425 4,260
- ------------------------------------------------------------------------------------------------
Total 10,882 9,350 14,290
- ------------------------------------------------------------------------------------------------
Deferred
Federal (2,353) 150 (430)
State (58) 65 (80)
Foreign (6,294) 320 (2,730)
- ------------------------------------------------------------------------------------------------
Total (8,705) 535 (3,240)
- ------------------------------------------------------------------------------------------------
Total income taxes $ 2,177 $ 9,885 $11,050
- ------------------------------------------------------------------------------------------------
The federal rate reconciles to the effective rate as follows:
Federal statutory rate 35.0% 35.0% 35.0%
State income taxes,
net of federal tax benefits 2.9 2.9 1.7
Effect of foreign tax rates 15.0 (3.8) .6
Foreign sales corporation (3.3) (.4) (.7)
International financing (17.0) (3.9) (.7)
Tax credits and other (2.0) 1.8 (1.5)
- ------------------------------------------------------------------------------------------------
Effective income tax rate 30.6% 31.6% 34.4%
- ------------------------------------------------------------------------------------------------
</TABLE>
The deferred tax liabilities (assets) recorded on the consolidated balance sheet
are comprised of the following:
<TABLE>
<CAPTION>
January 31 2000 1999
- ----------------------------------------------------------------
<S> <C> <C>
(Dollars in Thousands)
Accruals not deductible until paid $ (1,148) $ (968)
Accrued environmental expenditures (2,230) 799
Other (166) (85)
- ----------------------------------------------------------------
Current deferred income taxes $ (3,544) $ (254)
- ----------------------------------------------------------------
Depreciation $ 6,986 $ 4,030
Employee benefits (1,189) (1,178)
Accrued environmental expenditures (4,570) (3,920)
Foreign tax credits (8,085) (2,208)
Net operating losses (791) -
Other (2,498) (94)
- ----------------------------------------------------------------
(10,147) (3,370)
Deferred tax asset valuation allowance 791 -
- ----------------------------------------------------------------
Noncurrent deferred income taxes $(9,356) $ (3,370)
- ----------------------------------------------------------------
</TABLE>
The Company has foreign loss carryforwards of $2,198,000 at January 31,
2000, which do not expire. No benefit for the foreign tax losses has been
recognized in the financial statements.
The Company has recognized the benefit of U.S. foreign tax credit
carryforwards of $493,000 which expire on January 31, 2005. Additionally, a
benefit of $7,592,000 has been recognized for U.S. foreign tax credits
attributed to foreign earnings not yet repatriated. The five-year expiration
period does not begin until the foreign earnings are repatriated.
NOTE 5 - BORROWINGS
<TABLE>
<CAPTION>
January 31 2000 1999
- -----------------------------------------------------------------------------------------
<S> <C> <C>
(Dollars in Thousands)
$50 million Commercial Paper, backed by $100 million
revolving credit facility, sold at discount, interest
at variable rates (6.35% at 1/31/2000) $ 27,844 $ -
$100 million revolving line of credit, interest payable
currently at a variable rate (based on certain
financial ratios of the Company) over prime or LIBOR
(6.73% at 1/31/00); principal payable in 2002 - 59,000
6.7% mortgage note, due quarterly through 2008
secured by plant 5,241 6,856
6.92% series A and series B senior notes, interest
payable currently, principal due annually 2002
through 2007 75,000 75,000
Fixed assets under capital lease, variable interest
(7.3% at 1/31/00), monthly payments through 200l 6,527 5,908
4.1% mortgage note, due semi-annually through
2001, secured by building - 1,031
Other 568 1,498
- -----------------------------------------------------------------------------------------
115,180 149,293
Less current maturities 6,137 6,510
- -----------------------------------------------------------------------------------------
Total long-term debt $109,043 $142,783
- -----------------------------------------------------------------------------------------
</TABLE>
The revolving line of credit agreement, the series A and B senior notes, and
the commercial paper backed by the revolving line of credit contain dividend
restrictions and certain covenants, including covenants related to subsidiary
indebtedness, additional indebtedness, net worth, fixed charges, funded debt
and leverage ratios.
Maturities of long-term debt for the years January 31, 2001 through January
31, 2005, and thereafter, respectively, are $6,137,000, $14,691,000,
$40,960,000, $13,117,000, $13,117,000 and $27,158,000. Borrowing arrangements
with commercial banks provided short-term lines of credit at January 31, 2000
totalling $22,872,000, of which $14,464,000 was unused. Average interest rates
on short-term borrowings were 4.5% and 3.7% at January 31, 2000 and 1999,
respectively.
Commercial paper maturities are 60 days or less. However, it is management's
intention to extend these maturities based on market acceptance.
<PAGE>
NOTE 6 - STOCK OPTION PLAN
The Company has reserved 800,000 shares of common stock for the Cascade
Corporation 1995 Senior Managers' Incentive Stock Option Plan (the Plan). The
Plan permits the award of incentive stock options (ISO) to officers and key
employees. Under the terms of the Plan, the purchase price of shares subject to
each ISO granted must not be less than the fair market value on the date of
grant. Accordingly, no compensation cost has been recognized for the stock
option plan. Outstanding options vest after three or four years and are
exercisable for ten years from the date of grant.
The Company has determined that the pro forma effects of applying SFAS 123
would reduce earnings by $358,000, $362,000, and $247,000 for 1999, 1998, and
1997, respectively, using the following assumptions:
<TABLE>
<CAPTION>
Year Ended January 31 2000 1999 1998
- ---------------------------------------------------------------------
<S> <C> <C> <C>
(Dollars in Thousands)
Risk-free interest rate 5.4% 5.5% 6.5%
Expected life 5 Years 5 Years 5 Years
Expected volatility 33% 35% 30%
Expected dividend yield 3.1% 2.5% 2.5%
</TABLE>
A summary of the Plan's status at January 31, 2000, 1999 and 1998 together with
changes during the periods then ended are presented in the following table:
<TABLE>
<CAPTION>
Weighted Average
Shares Price Per Share
------ ---------------
<S> <C> <C>
Balance January 31, 1997 145,432 $16.17
Granted 136,262 15.25
Forfeited (1,971) 15.25
- ---------------------------------------------------------------------
Balance January 31, 1998 279,723 $15.73
Granted 237,337 16.37
Exercised (15,077) 16.37
Forfeited (122,794) 15.87
- ---------------------------------------------------------------------
Balance January 31, 1999 379,189 $16.00
Granted 49,595 13.00
Exercised - -
Forfeited (89,304) 15.75
- ---------------------------------------------------------------------
Balance January 31, 2000 339,480 $15.70
=====================================================================
</TABLE>
The following table summarizes information about fixed options outstanding at
January 31, 2000.
<TABLE>
<CAPTION>
Exercise Number Weighted Weighted Average
Price of Shares Average Price Contractual Life
<S> <C> <C> <C>
13.00 40,147 13.00 9
15.25 68,355 15.25 7
16.00 31,430 16.00 6
16.38 199,548 16.38 7
</TABLE>
NOTE 7 - CAPITAL STOCK
There were 1,100,000 exchangeable preferred shares of Cascade (Canada) Ltd.
outstanding with an approximate value of $15,640,000. In fiscal 1998, 300,000
exchangeable shares were redeemed for $4,350,000. Holders of exchangeable
shares are entitled to voting rights of an equivalent number of the Company
common shares and are entitled to dividends equivalent to those declared and
paid on like numbers of Cascade common stock. As of January 31, 2000, 800,000
of the shares are still outstanding. Cascade (Canada) Ltd. is a wholly owned
subsidiary of Cascade Corporation. Therefore although the Exchangeable Shares
have rights comparable with the Company's common stock, the Exchangeable Shares
have been accounted for, based on their form, as minority interest on the
Company's balance sheet.
330,000 shares of Cascade (Ontario), Inc. preferred stock have been
repurchased by the Company. Each share of preferred stock was convertible into
one share of the Company's common stock at the holders' option. The preferred
stock gave the holder the ability to require the Company to repurchase the
shares on or after January 13, 2002 at the original issuance price of
approximately $15 per share, for a maximum repurchase obligation of
approximately $4,950,000. Therefore, the Preferred Stock was classified as
"Mandatorily Redeemable Convertible Preferred Stock". The provisions of the
preferred stock also entitled the holder to cumulative dividends paid on the
common shares of Cascade Corporation and to a liquidation preference equal to
approximately $15 per share in priority to any payment on any shares ranking
junior to the Preferred Stock. As of January 31, 2000 no shares were
outstanding.
There are 200,000 shares authorized of no par value preferred stock. As of
January 31, 2000 no shares were outstanding.
<PAGE>
NOTE 8 - EARNINGS PER SHARE
The Company calculates earnings per share in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS 128) "Earnings Per Share."
Accordingly, basic earnings per share is computed by dividing income available
to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects potential
dilution that could occur if convertible securities or stock options were
exercised or converted into common stock.
<TABLE>
<CAPTION>
Year Ended January 31 2000 1999 1998
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
(Dollars and Shares in Thousands
Except Per Share Amounts)
Basic Earnings Per Share:
Net income $ 4,934 $ 21,370 $21,040
Preferred stock dividends (423) (530) (570)
- ----------------------------------------------------------------------------
Income available
to common shareholders 4,511 20,840 20,470
- ----------------------------------------------------------------------------
Basic weighted-average shares
of common stock outstanding 11,402 11,748 11,858
- ----------------------------------------------------------------------------
Basic EPS $ .40 $ 1.77 $ 1.73
============================================================================
Diluted Earnings Per Share:
Income available
to common shareholders 4,511 20,840 $20,470
Effect of dilutive securities:
Mandatorily redeemable
convertible preferred stock 320 410 440
Exchangeable preferred stock 103 120 130
- ----------------------------------------------------------------------------
Net income $ 4,934 $ 21,370 $21,040
============================================================================
Weighted-Average shares of
common stock outstanding 11,402 11,748 11,858
Assumed conversion of mandatorily
convertible preferred stock 800 1,091 985
Exchangeable preferred stock 183 309 330
Dilutive effect of stock options - - 17
- ----------------------------------------------------------------------------
Diluted weighted-average shares
of common stock outstanding 12,385 13,148 13,190
- ----------------------------------------------------------------------------
Diluted EPS $ .40 $ 1.63 $ 1.60
============================================================================
</TABLE>
NOTE 9 - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
January 31 2000 1999
- ----------------------------------------------------------------
<S> <C> <C>
(Dollars in Thousands)
Land $ 4,850 $ 5,261
Construction in progress 442 99
Buildings 39,394 43,146
Machinery and equipment 143,090 162,194
- ----------------------------------------------------------------
187,776 210,700
Accumulated depreciation (101,060) (110,625)
- ----------------------------------------------------------------
$ 86,716 $ 100,075
================================================================
</TABLE>
NOTE 10 - ACQUISITIONS
In February 1997, the Company purchased all of the outstanding capital stock
of Hyco-Cascade Pty., Ltd., an Australian manufacturer and distributor of lift
truck attachments and accessories. The amount paid in connection with this
purchase was $12,603,000, which consisted of $7,447,000 in debt, $3,656,000 in
common stock and $1,500,000 in cash.
On March 11, 1997 the Company acquired all of the outstanding capital stock
of Kenhar Corporation. Kenhar Corporation is the world's leading manufacturer of
forks for lift trucks with sales and manufacturing locations in North America,
Europe and Asia. The aggregate purchase price for this acquisition was
approximately $71,944,000 and included $56,304,000 in debt and 1,100,000
exchangeable preferred shares of Cascade (Canada) Ltd.
(Exchangeable Shares valued at approximately $15,640,000.)
The Company also made other acquisitions during 1997 totaling $10,377,000.
When the Company purchased Kenhar Corporation, a number of Kenhar's subsidiaries
had minority interest holders. The Company has now acquired all of these
minority interests. In addition, during 1997, the Company purchased a U.S.
manufacturer of hydraulic cylinders and a European fork manufacturer.
NOTE 11 - 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 ending January 31, 2001 through January 31, 2005,
respectively, are $3,896,000, $2,396,000, $1,675,000, $917,000 and $316,000.
For the years ended January 31, 2000, 1999 and 1998 total rentals charged to
expense amounted to $1,986,000, $4,800,000 and $2,042,000.
NOTE 12 - ENVIRONMENTAL MATTERS
The Company is engaged in environmental investigations and remediation
efforts in its ordinary course of business. The Company has sued a number of
its insurers to enforce policies it contends provide coverage for expenses
associated with these efforts. Earnings for the year ended January 31, 2000
include a charge for $12,000,000 resulting from the Company's change in
estimate regarding its environmental exposures. This change in estimate was
caused by a number of factors, including an adverse legal decision rendered in
March 2000 in connection
<PAGE>
with a lawsuit brought by the Boeing Corporation. The after-tax impact of this
accrual on net income was approximately $7,600,000. Earnings for the year ended
January 31, 1998 include the effect of settlements with several insurers
totaling $23,750,000. The impact of these settlements on 1998 net income, after
adjusting for certain litigation and environmental expenses and income taxes,
was approximately $9,770,000. Litigation against two remaining insurers
resulted in a jury verdict in the Company's favor. As issues involving damages,
prejudgment interest, attorneys fees, and declaratory relief are pending before
the trial court, the financial statements have not been adjusted to account for
the jury verdict.
The Company's accrued environmental liability at January 31, 2000 totalled
$18,315,000, of which $7,910,000 is expected to be spent in 2000. The Company
believes this accrual is adequate and fairly approximates known future
remediation costs. However, since future remediation costs are subject to many
uncertainties, company estimates may continue to be revised and therefore,
actual expenses may exceed the amount recorded at January 31, 2000.
NOTE 13 - PENSION AND OTHER POSTRETIREMENT BENEFITS
The Company has defined benefit plans covering certain employees. In
December 1988, the Company amended the plan covering its U.S. employees to
limit benefits to those accrued through December 31, 1988. During 1997, the
Company settled the U.S. pension obligation under this plan by funding lump sum
distributions or non-participating annuity contracts.
The Company's funding policy for the foreign pension plan is to make annual
contributions based on actuarially determined funding requirements. The pension
benefits are based on years of service and average earnings over a specified
five-year period of time.
The Company sponsors a number of defined contribution plans covering
substantially all North American employees. Employees may contribute to these
plans and the Company matches these contributions in varying degrees. The
Company also makes contributions to certain plans based on a percentage of
wages. Defined contribution pension expense for the Company was $2,243,000,
$2,267,000, and $1,901,000 for the years ended January 31, 2000, 1999 and 1998,
respectively.
The Company provides health care benefits for eligible retirees. The Company
accounts for such costs under Statement of Financial Accounting Standards
No.106 "Employers' Accounting for Postretirement Benefits Other Than Pensions."
Therefore, the Company is accruing the future costs of providing such benefits
to eligible active employees during the years they render service.
To estimate the costs of health care benefits for eligible retirees, health
care costs were assumed to increase at an annual rate of 10% with the rate of
increase declining ratably to 4% by 2005 and thereafter. If the cost trend
rates were increased by one percentage point, the accumulated post-retirement
benefit obligation as of January 31, 2000 would increase by $491,469 and net
periodic post-retirement benefit cost would increase by $52,783.
<PAGE>
NOTE 13 - PENSION AND OTHER POSTRETIREMENT BENEFITS (continued)
The status of employee pension and other postretirement benefit plans is
summarized below:
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
Year Ended January 31 2000 1999 1998 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year $ 7,904 $ 6,001 $ 5,629 $ 5,120 $ 4,890 $ 4,007
Service cost 193 289 237 83 83 69
Interest cost 310 392 529 324 320 281
Participant contributions 94 134 187 - - -
Plan amendments - - - - - -
Acquisition and divestitures (2,578) (142) 3,653 - - -
Exchange rate changes - (10) - - - -
Settlements 8 - (4,603) - - -
Benefits paid (452) (230) (625) (540) (470) (403)
Actuarial (gain) or loss 366 1,470 994 (395) 297 936
- ------------------------------------------------------------------------------------------------------------------------------------
Benefit obligation at end of year $ 5,845 $ 7,904 $ 6,001 $ 4,592 $ 5,120 $ 4,890
====================================================================================================================================
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year $ 7,185 $ 6,070 $ 5,656 $ - $ - $ -
Actual return on plan assets 529 1,129 468 - - -
Acquisition and divestitures (2,482) (261) 3,691 - - -
Settlements - - (4,603) - - -
Employer contributions 376 374 1,296 540 470 403
Participant contributions 87 134 187 - - -
Benefits paid (452) (230) (625) (540) (470) (403)
Exchange rate changes - (31) - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year $ 5,243 $ 7,185 $ 6,070 $ - $ - $ -
====================================================================================================================================
RECONCILIATION OF FUNDED STATUS
Funded status $ (602) $ (719) $ 69 $ (4,592) $(5,120) $ (4,890)
Unrecognized actuarial (gain) or loss 751 19 - 1,461 2,021 1,860
Unrecognized prior service cost - - - - - -
Prepaid costs - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Net amount recognized at year-end $ 149 $ (700) $ 69 $ (3,131) $(3,099) $ (3,030)
====================================================================================================================================
AMOUNTS RECOGNIZED IN THE STATEMENT
OF FINANCIAL POSITION CONSIST OF:
Prepaid benefit cost $ 149 $ - $ 69 $ - $ - $ -
Accrued benefit liability - (700) - (3,131) (3,099) (3,030)
- ------------------------------------------------------------------------------------------------------------------------------------
Net amount recognized at year-end $ 149 $ (700) $ 69 $ (3,131) $(3,099) $ (3,030)
====================================================================================================================================
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost $ 193 $ 289 $ 237 $ 83 $ 83 $ 69
Interest cost 310 392 529 324 320 281
Expected return on plan assets (370) (312) (425) - - -
Amortization of prior service cost - - 5 - - -
Amortization of transitional (asset) or obligation - - 25 - - -
Recognized net actuarial (gain) or loss 3 - - 165 136 49
- ------------------------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost $ 136 $ 369 $ 371 $ 572 $ 539 $ 399
====================================================================================================================================
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DEC. 31
Discount rate 5.75% 6.50% 7.50% 7.50% 6.50% 6.75%
Expected long-term rate of return on plan 7.00% 6.50% 8.00% N/A N/A N/A
assets
</TABLE>
<PAGE>
NOTE 14 - INFORMATION ABOUT OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31 NORTH AMERICA EUROPE OTHER ELIMINATIONS CONSOLIDATED
- ---------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
2000
Sales to unaffiliated customers $ 201,710 $ 89,307 $ 33,761 $ - $ 324,778
Transfers between areas 26,071 34,406 508 (60,985) -
- ---------------------------------------------------------------------------------------------------------------------------------
Total revenue $ 227,781 $ 123,713 $ 34,269 $ (60,985) $ 324,778
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $ 6,462 $ 74 $ (1,602) $ - $ 4,934
- ---------------------------------------------------------------------------------------------------------------------------------
Identifiable assets $ 186,397 $ 90,905 $ 34,899 $ - $ 312,201
- ---------------------------------------------------------------------------------------------------------------------------------
1999
Sales to unaffiliated customers $ 264,625 $ 111,245 $ 32,060 $ - $ 407,930
Transfers between areas 15,626 7,679 352 (23,657) -
- ---------------------------------------------------------------------------------------------------------------------------------
Total revenue $ 280,251 $ 118,924 $ 32,412 $ (23,657) $ 407,930
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $ 18,135 $ 3,605 $ (370) $ - $ 21,370
- ---------------------------------------------------------------------------------------------------------------------------------
Identifiable assets $ 183,943 $ 130,390 $ 33,524 $ - $ 347,857
- ---------------------------------------------------------------------------------------------------------------------------------
1998
Sales to unaffiliated customers $ 230,140 $ 102,570 $ 37,155 $ - $ 369,865
Transfers between areas 17,500 1,020 310 (18,830) -
- ---------------------------------------------------------------------------------------------------------------------------------
Total revenue $ 247,640 $ 103,590 $ 37,465 $ (18,830) $ 369,865
- ---------------------------------------------------------------------------------------------------------------------------------
Net income $ 19,125 $ 2,895 $ (980) $ - $ 21,040
- ---------------------------------------------------------------------------------------------------------------------------------
Identifiable assets $ 220,194 $ 95,894 $ 33,504 $ - $ 349,592
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NOTE 15 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
- ---------------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands except per share amounts)
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 31, 2000
Net sales $ 89,500 $ 77,709 $ 82,470 $ 75,099
Gross profit before depreciation $ 30,670 $ 27,671 $ 27,113 $ 24,976
Net income (loss) $ 4,110 $ 4,442 $ 1,340 $ (4,958)
Net income (loss) per share:
Basic $ .35 $ .38 $ .11 $ (.44)
Diluted $ .33 $ .35 $ .11 $ (.44)
YEAR ENDED JANUARY 31, 1999
Net sales $ 107,125 $ 105,160 $ 105,660 $ 89,985
Gross profit before depreciation $ 33,490 $ 32,075 $ 33,320 $ 27,850
Net income $ 6,815 $ 5,490 $ 6,025 $ 3,040
Net income per share:
Basic $ .56 $ .45 $ .50 $ .26
Diluted $ .51 $ .41 $ .46 $ .24
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS & SHAREHOLDERS OF CASCADE CORPORATION
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statement of income, of changes in shareholders' equity and of cash
flows present fairly, in all material respects, the financial position of
Cascade Corporation and its subsidiaries at January 31, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended January 31, 2000 in conformity with accounting principles
generally accepted in the United States. 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 auditing standards generally
accepted in the United States, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, 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.
/s/ PricewaterhouseCoopers LLP
Portland, Oregon March 28, 2000
<PAGE>
SHAREHOLDER INFORMATION
Cascade's Form 10-K Report to the Securities and Exchange Commission is
available to shareholders and others who request it. To obtain copies, please
write to Cascade Corporation, P.O. Box 20187, Portland, Oregon 97294-0187.
Or visit our website at www.cascorp.com.
ANNUAL MEETING
The Annual Meeting of the shareholders of Cascade Corporation will be held at
Cascade Corporation Corporate Headquarters, 2201 N.E. 201st Ave, Fairview,
Oregon at 10:00 a.m. on Thursday, May 11, 2000. A formal notice of the meeting,
together with a proxy statement and proxy form, will be mailed to shareholders.
MARKET INFORMATION
The high and low sales prices of the common stock of Cascade Corporation during
2000 and 1999 were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31 2000 1999
- -------------------------------------------------------------------------------------------------------------------
HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
Market price range
First quarter $ 17.25 $ 9.94 $ 18.25 $ 14.31
Second quarter 14.88 12.94 18.44 15.08
Third quarter 13.38 8.94 16.94 11.63
Fourth quarter 11.13 8.00 16.25 13.00
</TABLE>
COMMON STOCK DIVIDENDS
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31 2000 1999
- ---------------------------------------------------------------
<S> <C> <C>
First quarter $ .10 $ .10
Second quarter .10 .10
Third quarter .10 .10
Fourth quarter .10 .10
- ---------------------------------------------------------------
Total $ .40 $ .40
===============================================================
</TABLE>
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
materials handling 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; effectiveness
of the Company's cost reduction initiatives; and the Company's success in
organizationally and operationally integrating recently acquired businesses.
INVESTOR
INFORMATION
TRANSFER AGENT &
REGISTRAR
ChaseMellon
Shareholder Services, L.L.C.
Shareholder Relations
P.O. Box 3315
South Hackensack,
N. J. 07606
(800) 522-6645
www.chasemellon.com
STOCK EXCHANGE LISTING
The Company's stock is
traded on the New York Stock Exchange under the symbol CAE.
<PAGE>
THE BOARD
C. CALVERT KNUDSEN
Chairman
Director, West Fraser Timber Co., Ltd.;
Trustee, Washington Research Foundation;
ROBERT C. WARREN, JR.
President & Chief Executive Officer of
the Corporation
Director, Esco Corporation, manufacturers and
distributors of high-alloy steel products.
ERIC HOFFMAN
Chairman, Hoffman Corporation, general contractors.
GREG H. KUBICEK
President, The Holt Company, a commercial real estate
development company; President, Holt Homes, Inc., and Affiliates; Director,
Bay Audio, an in-home audio and electronics firm.
NICHOLAS R. LARDY
Senior Fellow, The Brookings Institution,
a policy research institution.
ERNEST C. MERCIER
Chairman, Oxford Properties Group Inc.,a company owning and managing
commercial real estate; Director, Camvec Corporation, a transportation
company; Director, Golden Star Resources Ltd., a gold and diamond
exploration company.
JAMES S. OSTERMAN
President, Outdoor Products Group,
Oregon Cutting Systems, Division of
Blount, Inc., a diversified manufacturer.
JACK B. SCHWARTZ
Partner, Newcomb, Sabin, Schwartz & Landsverk, LLP, Attorneys; Assistant
Secretary of the Corporation.
HENRY W. WESSINGER II
Senior Vice President, Ragen MacKenzie Inc., a brokerage firm;
Trustee, Oregon Graduate Institute of Science and Technology;
Trustee, Catlin Gabel School Foundation. Director, River View Cemetery.
NANCY A. WILGENBUSCH
President, Marylhurst University; Director,
Pacificorp, an energy company;
Director, Power Cor, an Australian subsidiary of Pacificorp;
Director and Chairman, Portland branch of the Federal Reserve Bank of
San Francisco.
CORPORATE OFFICERS
ROBERT C. WARREN, JR.
President & Chief Executive Officer
RICHARD S. ANDERSON
Senior Vice President - International
TERRY H. CATHEY
Senior Vice President - Americas
KURT G. WOLLENBERG
Senior Vice President - Finance,
Secretary and Treasurer
GREGORY S. ANDERSON
Vice President - Human Resources
CHARLIE S. MITCHELSON
Vice President and Managing Director - Europe
ROBERT L. MOTT
Vice President - OEM Group
ART OTSUKA
Vice President - Asian Operations
ANTHONY F. SPINELLI
Managing Director - Canadian Operations
<PAGE>
GLOBAL NETWORK
AUSTRALIA
Adelaide
Brisbane
Melbourne
Perth
Sydney
CANADA
Guelph, Ontario
Mississauga, Ontario
CHINA
Xiamen
Hebei
ENGLAND
Cramlington
Manchester
Sheffield
FINLAND
Vantaa
FRANCE
La Machine
Paris
GERMANY
Monchengladbach
ITALY
Brescia
JAPAN
Osaka
KOREA
Inchon
NEW ZEALAND
Auckland
SOUTH AFRICA
Johnannesburg
SPAIN
Barcelona
SWEDEN
Vaggeryd
THE NETHERLANDS
Almere
Hoorn
UNITED STATES
CALIFORNIA
Los Angeles
San Francisco
GEORGIA
Atlanta
Warner Robins
ILLINOIS
Chicago
NEW YORK
Buffalo
NORTH CAROLINA
Beulaville
OHIO
Findlay
Springfield
OREGON
Portland
TENNESSEE
Memphis
TEXAS
Dallas
A TOP 100
COMPANY
For the second year in a row, Cascade has been selected as one of the
100 Best Companies to Work For in Oregon for the year 2000 by Oregon Business
Magazine. Cascade ranked in the top third of companies selected.
Companies are judged on five criteria: pay and benefits; employee
involvement; community involvement; advancement and training; and workplace
culture.
<PAGE>
1999 ANNUAL REPORT
[LOGO]
CORPORATE
HEADQUARTERS
2201 NE 201st
Fairview, OR 97024
MAILING ADDRESS
P.O. Box 20187
Portland, OR
97294-0187
800 CASCADE
(227-2233)
www.cascorp.com
- -C- 2000 Cascade is a registered trademark of Cascade Corporation -C- 2000 All
Rights Reserved.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1999
ANNUAL REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS 12-MOS
<FISCAL-YEAR-END> JAN-31-2000 JAN-31-1999 JAN-31-1998
<PERIOD-END> JAN-31-2000 JAN-31-1999 JAN-31-1998
<CASH> 23,188 11,460 12,966
<SECURITIES> 0 0 0
<RECEIVABLES> 54,934 72,354 62,271
<ALLOWANCES> 1,511 1,009 743
<INVENTORY> 47,487 62,015 52,280
<CURRENT-ASSETS> 130,846 153,723 140,693
<PP&E> 187,776 210,700 200,425
<DEPRECIATION> 101,060 110,625 99,278
<TOTAL-ASSETS> 312,694 347,857 349,592
<CURRENT-LIABILITIES> 64,679 59,175 59,630
<BONDS> 109,043 142,783 144,785
11,374 15,949 20,590
0 0 0
<COMMON> 5,784 5,858 5,994
<OTHER-SE> 107,149 113,636 104,557
<TOTAL-LIABILITY-AND-EQUITY> 312,694 347,857 349,592
<SALES> 324,778 407,930 369,865
<TOTAL-REVENUES> 324,778 407,930 369,865
<CGS> 214,348 281,195 259,605
<TOTAL-COSTS> 305,972 371,245 329,095
<OTHER-EXPENSES> 4,039 (4,755) (150)
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 8,686 10,940 9,440
<INCOME-PRETAX> 7,111 31,255 32,090
<INCOME-TAX> 2,177 9,885 11,050
<INCOME-CONTINUING> 4,934 21,370 21,040
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 4,934 21,370 21,040
<EPS-BASIC> .40 1.77 1.73
<EPS-DILUTED> .40 1.63 1.60
</TABLE>
