-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WYAlDvoVUfrWLNXUSdqTFgMy/yv381N83w+EVPACMbFUJxXZrTCmrCEozGSs+d8B FDTTIbAiXV8PPJVvHr+JZA== /in/edgar/work/0001005229-00-000011/0001005229-00-000011.txt : 20001115 0001005229-00-000011.hdr.sgml : 20001115 ACCESSION NUMBER: 0001005229-00-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001001 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBUS MCKINNON CORP CENTRAL INDEX KEY: 0001005229 STANDARD INDUSTRIAL CLASSIFICATION: [3531 ] IRS NUMBER: 160547600 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-27618 FILM NUMBER: 763074 BUSINESS ADDRESS: STREET 1: 140 JOHN JAMES AUDUBON PKWY CITY: AMHERST STATE: NY ZIP: 14228-1197 BUSINESS PHONE: 7166895400 MAIL ADDRESS: STREET 1: 140 JOHN JAMES AUDUBON PARKWAY CITY: AMHERST STATE: NY ZIP: 14228-1197 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LICO STEEL INC CENTRAL INDEX KEY: 0001062622 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] STATE OF INCORPORATION: MO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-53759-04 FILM NUMBER: 763075 BUSINESS ADDRESS: STREET 1: 140 JOHN JAMES AUDUBON PARKWAY CITY: AMHERST STATE: NY ZIP: 19228-1197 BUSINESS PHONE: 7166895400 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOMATIC SYSTEMS INC CENTRAL INDEX KEY: 0001062623 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 430978181 STATE OF INCORPORATION: MO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-53759-05 FILM NUMBER: 763076 BUSINESS ADDRESS: STREET 1: 140 JOHN JAMES AUDUBON PARKWAY CITY: AMHERST STATE: NY ZIP: 19228-1197 BUSINESS PHONE: 7166895400 FILER: COMPANY DATA: COMPANY CONFORMED NAME: YALE INDUSTRIAL PRODUCTS INC CENTRAL INDEX KEY: 0001062624 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 710585582 STATE OF INCORPORATION: MO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-53759-06 FILM NUMBER: 763077 BUSINESS ADDRESS: STREET 1: 140 JOHN JAMES AUDUBON PARKWAY CITY: AMHERST STATE: NY ZIP: 19228-1197 BUSINESS PHONE: 7166895400 10-Q 1 0001.txt SECOND QUARTER OF 2001 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 For the quarterly period ended October 1, 2000 or [ ] 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: 0-27618 ------- Columbus McKinnon Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York 16-0547600 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 140 John James Audubon Parkway, Amherst, NY 14228-1197 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (716) 689-5400 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last last report.) 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. : [X] Yes [ ] No The number of shares of common stock outstanding as of October 31, 2000 was: 14,896,172 shares. FORM 10-Q INDEX COLUMBUS McKINNON CORPORATION OCTOBER 1, 2000 PAGE # ------ PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) Condensed consolidated balance sheets - October 1, 2000 and March 31, 2000 2 Condensed consolidated statements of income and retained earnings - Three months and six months ended October 1, 2000 and October 3, 1999 3 Condensed consolidated statements of cash flows - Six months ended October 1, 2000 and October 3, 1999 4 Condensed consolidated statements of comprehensive income - Three months and six months ended October 1, 2000 and October 3, 1999 5 Notes to condensed consolidated financial statements - October 1, 2000 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 14 PART II. OTHER INFORMATION Item 1. Legal Proceedings - none. 19 Item 2. Changes in Securities - none. 19 Item 3. Defaults upon Senior Securities - none. 19 Item 4. Submission of Matters to a Vote of Security Holders - none. 19 Item 5. Other Information 19 Item 6. Exhibits and Reports on Form 8-K 19 - 1 - PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited)
COLUMBUS McKINNON CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) OCTOBER 1, MARCH 31, 2000 2000 ---------- --------- ASSETS: (IN THOUSANDS) Current assets: Cash and cash equivalents .................... $ 5,446 $ 7,582 Trade accounts receivable .................... 145,923 143,401 Unbilled revenues ............................ 34,581 24,447 Inventories .................................. 111,406 108,291 Net assets held for sale ..................... 9,013 9,272 Prepaid expenses ............................. 6,289 6,181 --------- --------- Total current assets ............................... 312,658 299,174 Net property, plant, and equipment ................. 88,149 87,297 Goodwill and other intangibles, net ................ 330,040 339,603 Marketable securities .............................. 24,272 23,193 Deferred taxes on income ........................... 4,653 4,237 Other assets ....................................... 6,460 6,320 --------- --------- Total assets ....................................... $ 766,232 $ 759,824 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Notes payable to banks ....................... $ 1,738 $ 2,677 Trade accounts payable ....................... 36,567 49,621 Excess billings .............................. 6,493 4,288 Accrued liabilities .......................... 56,113 51,246 Current portion of long-term debt ............ 811 3,493 --------- --------- Total current liabilities .......................... 101,722 111,325 Senior debt, less current portion .................. 219,149 210,684 Subordinated debt .................................. 199,601 199,574 Other non-current liabilities ...................... 36,922 34,788 --------- --------- Total liabilities .................................. 557,394 556,371 --------- --------- Shareholders' equity: Common stock ................................. 149 149 Additional paid-in capital ................... 107,080 106,884 Retained earnings ............................ 121,915 113,582 ESOP debt guarantee .......................... (8,285) (8,703) Unearned restricted stock .................... (2,396) (2,843) Total accumulated other comprehensive loss ... (9,625) (5,616) --------- --------- Total shareholders' equity ......................... 208,838 203,453 --------- --------- Total liabilities and shareholders' equity ......... $ 766,232 $ 759,824 ========= ========= SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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COLUMBUS McKINNON CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED ------------------------ ----------------------- OCTOBER 1, OCTOBER 3, OCTOBER 1, OCTOBER 3, 2000 1999 2000 1999 ---- ---- ---- ---- (IN THOUSANDS, EXCEPT PER SHARE DATA) Net sales ............................................................ $ 188,994 $ 182,008 $ 377,372 $ 363,609 Cost of products sold ................................................ 144,004 142,276 285,168 276,764 --------- --------- --------- --------- Gross profit ......................................................... 44,990 39,732 92,204 86,845 --------- --------- --------- --------- Selling expenses ..................................................... 12,332 12,412 24,814 25,170 General and administrative expenses .................................. 9,961 10,912 20,301 20,269 Proxy contest related expenses ....................................... - 835 - 965 Amortization of intangibles .......................................... 4,017 4,000 8,031 8,002 --------- --------- --------- --------- 26,310 28,159 53,146 54,406 --------- --------- --------- --------- Income from operations ............................................... 18,680 11,573 39,058 32,439 Interest and debt expense ............................................ 9,710 8,294 18,991 16,573 Interest and other income ............................................ 671 306 1,612 553 --------- --------- --------- --------- Income before income taxes ........................................... 9,641 3,585 21,679 16,419 Income tax expense ................................................... 5,253 3,074 11,345 9,513 --------- --------- --------- --------- Net income ........................................................... 4,388 511 10,334 6,906 Retained earnings - beginning of period .............................. 118,529 105,865 113,582 100,455 Cash dividends of $0.07, $0.07, $0.14 and $0.14 per share ................................................... (1,002) (993) (2,001) (1,978) --------- --------- --------- --------- Retained earnings - end of period .................................... $ 121,915 $ 105,383 $ 121,915 $ 105,383 ========= ========= ========= ========= Earnings per share data, basic ....................................... $ 0.31 $ 0.04 $ 0.72 $ 0.49 ========= ========= ========= ========= Earnings per share data, diluted ..................................... $ 0.31 $ 0.04 $ 0.72 $ 0.49 ========= ========= ========= ========= SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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COLUMBUS McKINNON CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED ---------------- OCTOBER 1, OCTOBER 3, 2000 1999 --------- --------- (IN THOUSANDS) OPERATING ACTIVITIES: Net income ........................................................... $ 10,334 $ 6,906 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ................................... 14,190 14,412 Deferred income taxes ........................................... (416) 172 Other ........................................................... 627 436 Changes in operating assets and liabilities net of effects from businesses purchased: Trade accounts receivable ................................. (2,522) 5,954 Unbilled revenues and excess billings ..................... (7,929) (4,352) Inventories ............................................... (3,115) 2,949 Prepaid expenses .......................................... (108) (572) Other assets .............................................. (219) (92) Trade accounts payable .................................... (13,054) 7,008 Accrued and non-current liabilities ....................... 7,645 (13,094) -------- -------- Net cash provided by operating activities ............................ 5,433 19,727 -------- -------- INVESTING ACTIVITIES: Purchase of marketable securities, net ............................... (1,834) (796) Capital expenditures ................................................. (7,011) (5,130) Purchases of businesses, net of cash ................................. - (6,410) Net assets held for sale ............................................. 259 (589) -------- -------- Net cash used in investing activities ................................ (8,586) (12,925) -------- -------- FINANCING ACTIVITIES: Proceeds from issuance of common stock ............................... - 3 Net borrowings under revolving line-of-credit agreements ............. 6,761 7,524 Repayment of debt .................................................... (1,917) (490) Dividends paid ....................................................... (2,001) (1,978) Reduction of ESOP debt guarantee ..................................... 418 418 Other ................................................................ - (131) -------- -------- Net cash provided by financing activities ............................ 3,261 5,346 Effect of exchange rate changes on cash .............................. (2,244) 1,056 -------- -------- Net (decrease) increase in cash and cash equivalents ................. (2,136) 13,204 Cash and cash equivalents at beginning of period ..................... 7,582 6,867 -------- -------- Cash and cash equivalents at end of period ........................... $ 5,446 $ 20,071 ======== ======== SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
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COLUMBUS McKINNON CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED ------------------ ---------------- OCTOBER 1, OCTOBER 3, OCTOBER 1, OCTOBER 3, 2000 1999 2000 1999 ---- ---- ---- ---- (IN THOUSANDS) Net income ........................................................... $ 4,388 $ 511 $ 10,334 $ 6,906 -------- -------- -------- -------- Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments ........................... (3,545) 528 (3,254) 1,043 Unrealized gains on investments: Unrealized holding gains arising during the period ..................................................... (45) (455) 102 (402) Less: reclassification adjustment for gains included in net income ......................................... (282) (64) (857) (64) -------- -------- -------- -------- (327) (519) (755) (466) -------- -------- -------- -------- Total other comprehensive (loss) income .............................. (3,872) 9 (4,009) 577 -------- -------- -------- -------- Comprehensive income ................................................. $ 516 $ 520 $ 6,325 $ 7,483 ======== ======== ======== ======== SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 5 - COLUMBUS McKINNON CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) OCTOBER 1, 2000 1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company at October 1, 2000, and the results of its operations and its cash flows for the three and six month periods ended October 1, 2000 and October 3, 1999, have been included. Results for the period ended October 1, 2000 are not necessarily indicative of the results that may be expected for the year ended March 31, 2001. For further information, refer to the consolidated financial statements and footnotes thereto included in the Columbus McKinnon Corporation annual report on Form 10-K for the year ended March 31, 2000. Columbus McKinnon Corporation (the Company) is a broad-line designer, manufacturer and supplier of sophisticated material handling products that are widely distributed to industrial, automotive, and consumer markets worldwide; integrated material handling solutions for the automotive markets; and integrated material handling solutions for industrial markets. The Company's material handling products are sold, domestically and internationally, principally to third party distributors through diverse distribution channels, and to a lesser extent directly to manufacturers and other end-users. The Company's integrated material handling solutions automotive business primarily deals with end users and sales are concentrated domestically and internationally (primarily North America), in the automotive industry. The Company's integrated material handling solutions industrial businesses also deal primarily with end users and sales are concentrated, domestically and internationally (primarily Europe), in the consumer products, manufacturing, warehousing and, to a lesser extent, the steel, construction, automotive and other industrial markets. 2. Inventories consisted of the following: OCTOBER 1, MARCH 31, 2000 2000 ----------- ----------- (IN THOUSANDS) At cost - FIFO basis: Raw materials $ 62,803 $ 57,198 Work-in-process 19,082 20,240 Finished goods 37,164 38,329 ----------- ----------- 119,049 115,767 LIFO cost less than FIFO cost (7,643) (7,476) ----------- ----------- $ 111,406 $ 108,291 =========== =========== An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected year-end inventory levels and costs. Because these are subject to many forces beyond management's control, interim results are subject to the final year-end LIFO inventory valuation. - 6 - 3. Property, plant, and equipment is net of $59,046,000 and $52,887,000 of accumulated depreciation at October 1, 2000 and March 31, 2000, respectively. 4. Goodwill and other intangibles, net includes $54,287,000 and $46,256,000 of accumulated amortization at October 1, 2000 and March 31, 2000, respectively. 5. General and Product Liability - The accrued general and product liability costs, which are included in other non-current liabilities, are the actuarial present value of estimated expenditures based on amounts determined from loss reports and individual cases filed with the Company, and an amount, based on past experience, for losses incurred but not reported. The accrual in these condensed consolidated financial statements was determined by applying a discount factor based on interest rates customarily used in the insurance industry. 6. The carrying amount of the Company's senior debt instruments approximates the fair values. The Company's subordinated debt has an approximate fair market value of $168,000,000, which is less than its carrying amount of $199,601,000. 7. The following table sets forth the computation of basic and diluted earnings per share:
THREE MONTHS ENDED SIX MONTHS ENDED ------------------ ---------------- OCTOBER 1, OCTOBER 3, OCTOBER 1, OCTOBER 3, 2000 1999 2000 1999 ---- ---- ---- ---- (IN THOUSANDS) Numerator for basic and diluted earnings per share: Net income .................................. $ 4,388 $ 511 $10,334 $ 6,906 ======= ======= ======= ======= Denominators: Weighted-average common stock outstanding - denominator for basic EPS .................. 14,308 14,153 14,298 14,060 Effect of dilutive employee stock options ... - 75 - 150 ------- ------- ------- ------- Adjusted weighted-average common stock outstanding and assumed conversions - denominator for diluted EPS ................ 14,308 14,228 14,298 14,210 ======= ======= ======= =======
8. Income tax expense for the three-month periods ended October 1, 2000 and October 3, 1999 and also for the six month periods then ended exceeds the customary relationship between income tax expense and income before income taxes due to nondeductible amortization of goodwill of $3,097,000, $3,076,000, $6,171,000, and $6,152,000, respectively. - 7 - 9. On April 29, 1999, the Company acquired all of the outstanding stock of Washington Equipment Company ("WECO"), a regional manufacturer and servicer of overhead cranes. The total cost of the acquisition, which was accounted for as a purchase, was approximately $6.4 million of cash and was financed by proceeds from the Company's revolving debt facility. 10. As a result of the way the Company manages the business, its reportable segments are strategic business units that offer products with different characteristics. The most defining characteristic is the extent of customized engineering required on a per-order basis. In addition, the segments serve different customer bases through differing methods of distribution. The Company has three reportable segments: material handling products, material handling solutions - industrial, and material handling solutions - automotive. The Company's material handling products segment sells hoists, industrial cranes, chain, attachments, and other material handling products principally to third party distributors through diverse distribution channels. The material handling solutions industrial - segment sell engineered material handling systems such as conveyors, manipulators, and lift tables primarily to end-users in the consumer products, manufacturing, warehousing, and, to a lesser extent, the steel, construction, automotive, and other industrial markets. The material handling solutions - automotive segment sells engineered material handling systems, mainly conveyors, primarily to end-users in the automotive industry. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales are not significant. The Company evaluates performance based on operating earnings of the respective business units prior to the effects of amortization. Segment information as of and for the six months ended October 1, 2000 and October 3, 1999, is as follows:
SIX MONTHS ENDED OCTOBER 1, 2000 -------------------------------- SOLUTIONS - SOLUTIONS - PRODUCTS INDUSTRIAL AUTOMOTIVE TOTAL -------- ---------- ---------- ----- (IN THOUSANDS) Sales to external customers . $247,166 $ 34,926 $ 95,280 $377,372 Operating income before amortization............... 38,626 3,135 5,328 47,089 Depreciation and amortization 9,955 1,426 2,809 14,190 Total assets ................ 492,671 65,781 207,780 766,232 Capital expenditures ........ 7,230 (232) 13 7,011 SIX MONTHS ENDED OCTOBER 3, 1999 -------------------------------- SOLUTIONS - SOLUTIONS - PRODUCTS INDUSTRIAL AUTOMOTIVE TOTAL -------- ---------- ---------- ----- (IN THOUSANDS) Sales to external customers . $255,872 $ 31,416 $ 76,321 $363,609 Operating income before amortization............... 39,840 3,230 (2,629) 40,441 Depreciation and amortization 10,014 1,571 2,827 14,412 Total assets ................ 518,195 71,530 187,665 777,390 Capital expenditures ........ 4,471 531 128 5,130
- 8 - The following schedule provides a reconciliation of operating income before amortization with consolidated income before income taxes:
SIX MONTHS ENDED ---------------- OCTOBER 1, 2000 OCTOBER 3, 1999 --------------- --------------- (IN THOUSANDS) Operating income before amortization......... $ 47,089 $ 40,441 Amortization of intangibles ................. (8,031) (8,002) Interest and debt expense ................... (18,991) (16,573) Interest and other income ................... 1,612 553 -------- -------- Income before income taxes .................. $ 21,679 $ 16,419 ======== ========
- 9 - 11. The summary financial information of the parent, domestic subsidiaries (guarantors) and foreign subsidiaries (nonguarantors of the 8.5% senior subordinated notes) follows:
Domestic Foreign Elimina- Consoli- (In thousands) Parent Subsidiaries Subsidiaries tions dated ------------------------------------------------------------- AS OF OCTOBER 1, 2000 Current assets: Cash and cash equivalents ..................... $ 863 $ 1,832 $ 2,751 $ - $ 5,446 Trade accounts receivable ..................... 59,840 60,657 25,426 - 145,923 Unbilled revenues ............................. - 34,581 - - 34,581 Inventories ................................... 49,558 38,410 24,327 (889) 111,406 Other current assets .......................... 3,661 7,498 4,143 - 15,302 ------------------------------------------------------------- Total current assets ......................... 113,922 142,978 56,647 (889) 312,658 Net property, plant, and equipment ............. 35,348 34,691 18,110 - 88,149 Goodwill and other intangibles, net ............ 39,831 242,329 47,880 - 330,040 Intercompany ................................... 202,121 (363,801) (65,044) 226,724 - Other assets ................................... 226,327 161,626 (1,889) (350,679) 35,385 ------------------------------------------------------------- Total assets ................................. $ 617,549 $ 217,823 $ 55,704 $(124,844) $ 766,232 ============================================================= Current liabilities ............................ $ 37,393 $ 49,589 $ 18,044 $ (3,304) $ 101,722 Long-term debt, less current portion ........... 413,421 6 5,323 - 418,750 Other non-current liabilities .................. 15,761 18,532 2,629 - 36,922 ------------------------------------------------------------- Total liabilities ............................ 466,575 68,127 25,996 (3,304) 557,394 Shareholders' equity ........................... 150,974 149,696 29,708 (121,540) 208,838 ------------------------------------------------------------- Total liabilities and shareholders' equity ... $ 617,549 $ 217,823 $ 55,704 $(124,844) $ 766,232 ============================================================= FOR THE SIX MONTHS ENDED OCTOBER 1, 2000 Net sales ...................................... $ 130,369 $ 198,520 $ 60,087 $ (11,604) $ 377,372 Cost of products sold .......................... 89,330 162,662 44,774 (11,598) 285,168 ------------------------------------------------------------- Gross profit ................................... 41,039 35,858 15,313 (6) 92,204 ------------------------------------------------------------- Selling, general and administrative expenses ... 18,870 16,482 9,763 - 45,115 Amortization of intangibles .................... 1,019 5,794 1,218 - 8,031 ------------------------------------------------------------- 19,889 22,276 10,981 - 53,146 ------------------------------------------------------------- Income from operations ......................... 21,150 13,582 4,332 (6) 39,058 Interest and debt expense ...................... 18,648 44 299 - 18,991 Interest and other income ...................... 1,251 120 241 - 1,612 ------------------------------------------------------------- Income before income taxes ..................... 3,753 13,658 4,274 (6) 21,679 Income tax expense ............................. 1,899 7,376 2,073 (3) 11,345 ------------------------------------------------------------- Net income ..................................... $ 1,854 $ 6,282 $ 2,201 $ (3) $ 10,334 =============================================================
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Domestic Foreign Elimina- Consoli- (In thousands) Parent Subsidiaries Subsidiaries tions dated ------------------------------------------------------------- FOR THE SIX MONTHS ENDED OCTOBER 1, 2000 OPERATING ACTIVITIES: Net cash (used in) provided by operating ....... $ (5,524) $ 8,003 $ 2,954 $ - $ 5,433 activities ..................................... ------------------------------------------------------------- INVESTING ACTIVITIES: Purchase of marketable securities, net ......... (1,834) - - - (1,834) Capital expenditures ........................... (2,368) (4,712) 69 - (7,011) Other .......................................... - 259 - - 259 ------------------------------------------------------------- Net cash (used in) provided by investing ....... (4,202) (4,453) 69 - (8,586) activities ------------------------------------------------------------- FINANCING ACTIVITIES: Proceeds from issuance of common stock ......... - - - - - Net borrowings (payments) under revolving line-of-credit agreements .................... 7,700 - (939) - 6,761 Repayment of debt .............................. (1,282) (17) (618) - (1,917) Dividends paid ................................. (2,001) - - - (2,001) Other .......................................... 418 - - - 418 ------------------------------------------------------------- Net cash provided by (used in) financing activities.................................... 4,835 (17) (1,557) - 3,261 Effect of exchange rate changes on cash ........ - - (2,244) - (2,244) ------------------------------------------------------------- Net change in cash and cash equivalents ........ (4,891) 3,533 (778) - (2,136) Cash and cash equivalents at beginning of period 5,754 (1,701) 3,529 - 7,582 ------------------------------------------------------------- Cash and cash equivalents at end of period ..... $ 863 $ 1,832 $ 2,751 $ - $ 5,446 ============================================================= AS OF OCTOBER 3, 1999 Current assets: Cash and cash equivalents ..................... $ 9,522 $ 5,264 $ 5,285 $ - $ 20,071 Trade accounts receivable ..................... 51,152 56,998 24,612 - 132,762 Unbilled revenues ............................. - 16,209 - - 16,209 Inventories ................................... 48,308 39,570 27,134 (1,011) 114,001 Other current assets .......................... 2,893 10,966 3,678 - 17,537 ------------------------------------------------------------- Total current assets ......................... 111,875 129,007 60,709 (1,011) 300,580 Net property, plant, and equipment ............. 36,588 33,094 20,377 - 90,059 Goodwill and other intangibles, net ............ 41,849 258,569 53,010 - 353,428 Intercompany ................................... 206,658 (371,663) (67,193) 232,198 - Other assets ................................... 221,004 162,472 (1,474) (348,679) 33,323 ------------------------------------------------------------- Total assets ................................. $ 617,974 $ 211,479 $ 65,429 $(117,492) $ 777,390 ============================================================= Current liabilities ............................ $ 31,992 $ 56,845 $ 22,859 $ 1,654 $ 113,350 Long-term debt, less current portion ........... 423,280 - 6,816 - 430,096 Other non-current liabilities .................. 12,233 22,055 3,136 - 37,424 ------------------------------------------------------------- Total liabilities ............................ 467,505 78,900 32,811 1,654 580,870 Shareholders' equity ........................... 150,469 132,579 32,618 (119,146) 196,520 ------------------------------------------------------------- Total liabilities and shareholders' equity ... $ 617,974 $ 211,479 $ 65,429 $(117,492) $ 777,390 =============================================================
- 11 -
Domestic Foreign Elimina- Consoli- (In thousands) Parent Subsidiaries Subsidiaries tions dated ------------------------------------------------------------- FOR THE SIX MONTHS ENDED OCTOBER 3, 1999 Net sales ...................................... $ 132,442 $ 180,063 $ 61,618 $ (10,514) $ 363,609 Cost of products sold .......................... 90,973 152,089 44,179 (10,477) 276,764 ------------------------------------------------------------- Gross profit ................................... 41,469 27,974 17,439 (37) 86,845 ------------------------------------------------------------- Selling, general and administrative expenses ... 19,761 14,867 11,776 - 46,404 Amortization of intangibles .................... 980 5,732 1,290 - 8,002 ------------------------------------------------------------- 20,741 20,599 13,066 - 54,406 ------------------------------------------------------------- Income from operations ......................... 20,728 7,375 4,373 (37) 32,439 Interest and debt expense ...................... 16,204 5 364 - 16,573 Interest and other income ...................... 292 157 104 - 553 ------------------------------------------------------------- Income before income taxes ..................... 4,816 7,527 4,113 (37) 16,419 Income tax expense ............................. 2,261 5,311 1,956 (15) 9,513 ------------------------------------------------------------- Net income ..................................... $ 2,555 $ 2,216 $ 2,157 $ (22) $ 6,906 ============================================================= FOR THE SIX MONTHS ENDED OCTOBER 3, 1999 OPERATING ACTIVITIES: Net cash provided by operating activities ...... $ 3,994 $ 12,720 $ 2,862 $ 151 $ 19,727 -------------------------------------------------------------- INVESTING ACTIVITIES: Purchase of marketable securities, net ......... (796) - - - (796) Capital expenditures ........................... (2,892) (1,045) (1,193) - (5,130) Purchases of businesses, net of cash ........... - (6,361) - (49) (6,410) Other .......................................... - (589) - - (589) -------------------------------------------------------------- Net cash used in investing activities .......... (3,688) (7,995) (1,193) (49) (12,925) -------------------------------------------------------------- FINANCING ACTIVITIES: Proceeds from issuance of common stock ......... 3 136 - (136) 3 Net payments under revolving line-of-credit agreements .................... 8,800 - (1,276) - 7,524 Repayment of debt .............................. (1,009) - 519 - (490) Dividends paid ................................. (1,974) (5) 1 - (1,978) Other .......................................... 287 - - - 287 ------------------------------------------------------------- Net cash (used in) provided by financing activities.................................... 6,107 131 (756) (136) 5,346 Effect of exchange rate changes on cash ........ - - 1,022 34 1,056 ------------------------------------------------------------- Net change in cash and cash equivalents ........ 6,413 4,856 1,935 - 13,204 Cash and cash equivalents at beginning of period 3,109 408 3,350 - 6,867 ------------------------------------------------------------- Cash and cash equivalents at end of period ..... $ 9,522 $ 5,264 $ 5,285 $ - $ 20,071 =============================================================
- 12 - 12. The Financial Accounting Standards Board (FASB) issued Statement of Financial Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," in June of 1998. The FASB issued SFAS 137 in June of 1999 which defers the effective date of SFAS 133 to fiscal years beginning after June 15, 2000. Statement No. 133 establishes accounting and reporting standards for derivatives and hedging activities. It requires that entities recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Compliance with this statement would not have a material impact on the Company at the present time. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements (SAB No. 101) in December of 1999. SAB No. 101 provides the Commission's views in applying generally accepted accounting principles to selected revenue recognition issues. The Company has reviewed the requirements of SAB No. 101 and has determined that it is in compliance with SAB No. 101. - 13 - Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION OVERVIEW The Company is a broad-line designer, manufacturer, and supplier of sophisticated material handling products that are widely distributed to industrial, automotive and consumer markets worldwide; integrated material handling solutions for the automotive markets; and integrated material handling solutions for industrial markets worldwide. The Company's material handling products are sold, domestically and internationally, principally to third party distributors through diverse distribution channels. Distribution channels include general distributors, specialty distributors, crane end users, service-after-sale distributors, original equipment manufacturers ("OEMs"), government, consumer and international. The general distributors are comprised of industrial distributors, rigging shops and crane builders. Specialty distributors include catalog houses, material handling specialists and entertainment equipment riggers. The service-after-sale network includes repair parts distribution centers, chain service centers, and hoist repair centers. Consumer distribution channels include mass merchandisers, hardware distributors, trucking and transportation distributors, farm hardware distributors and rental outlets. The Company's integrated material handling solutions segments primarily deal directly with end-users. Material handling solutions - automotive sales are concentrated, domestically and internationally (primarily North America) in the automotive industry. Material handling solutions - industrial sales are concentrated, domestically and internationally (primarily Europe), in consumer products manufacturing, warehousing and, to a lesser extent, the steel, construction, automotive, and other industrial markets. RESULTS OF OPERATIONS THREE MONTHS AND SIX MONTHS ENDED OCTOBER 1, 2000 AND OCTOBER 3, 1999 Net sales in the fiscal 2001 quarter ended October 1, 2000 were $188,994,000, a increase of $6,986,000 or 3.8% over the fiscal 2000 quarter ended October 3, 1999. Net sales for the six months ended October 1, 2000 were $377,372,000, an increase of $13,763,000 or 3.8% over the six months ended October 3, 1999. Sales in the Products segment decreased by $2,901,000 or 2.3% from the previous year's quarter and $8,706,000 or 3.4% for the six months ended October 1, 2000 over the prior year period due to continued softness in the engineered hoist, crane builder, and general industrial markets. Sales in the Solutions-Industrial segment rose 6.4% or $1,049,000 for the three months ended October 1, 2000 and 11.2% or $3,510,000 for the six months ended October 1, 2000 as a result of expanding markets. The Solutions-Automotive segment had a sales increase of 21.7% or $8,838,000 for the quarter and 24.8% or $18,959,000 for the six months ended October 1, 2000 as its largest customer resumes more normal capital spending levels. Sales in the individual segments were as follows, in thousands of dollars and with percentage changes for each group:
THREE MONTHS ENDED SIX MONTHS ENDED ------------------ ---------------- OCT. 1, OCT. 3, CHANGE OCT. 1, OCT. 3, CHANGE ------ ------ 2000 1999 AMOUNT % 2000 1999 AMOUNT % ---- ---- ------ - ---- ---- ------ - (IN THOUSANDS, EXCEPT PERCENTAGES) Products ........... $ 121,970 $ 124,871 $ (2,901) (2.3) $ 247,166 $ 255,872 $ (8,706) (3.4) Solutions-Industrial 17,413 16,364 1,049 6.4 34,926 31,416 3,510 11.2 Solutions-Automotive 49,611 40,773 8,838 21.7 95,280 76,321 18,959 24.8 --------- --------- -------- --------- --------- -------- Net sales ...... $ 188,994 $ 182,008 $ 6,986 3.8 $ 377,372 $ 363,609 $ 13,763 3.8 ========= ========= ======== ========= ========= ========
- 14 - The Company's gross profit margins were 23.8%, 21.8%, 24.4%, and 23.9% for the fiscal 2001 and 2000 quarters and the six-month periods then ended, respectively. The increase in the current quarter and six-month period margins relative to the respective periods in the prior year is the result of varying effects among the Company's segments. The gross profit margin in the Products segment for the quarter and six month periods ended October 1, 2000 showed continued improvement over the respective periods in the prior year as a result of the continued integration of acquisitions and in particular the effects of the purchasing council efforts. The Solutions-Industrial segment experienced a decrease in margin for the current quarter and six-month period when compared to the respective periods in the prior year as a result of contract mix, increased competition for projects and learning curve associated with turnover in personnel. Gross margins in the Solutions-Automotive segment increased significantly for the quarter and six-month period ended October 1, 2000 as a result of a return to normal volume with its major customer and the absence of the effects of cost overruns on several foreign jobs that occurred in the second quarter of the prior fiscal year. Selling expenses were $12,332,000, $12,412,000, $24,814,000 and $25,170,000 in the fiscal 2001 and 2000 quarters and the six months then ended, respectively. As a percentage of consolidated net sales, selling expenses were 6.5%, 6.8%, 6.6%, and 6.9% in the fiscal 2001 and 2000 quarters and the six-month periods then ended, respectively. General and administrative expenses were $9,961,000, $10,912,000, $20,301,000, and $20,269,000 in the fiscal 2001 and 2000 quarters and the six-month periods then ended, respectively. As a percentage of consolidated net sales, general and administrative expenses were 5.3%, 6.0%, 5.4% and 5.6% in the fiscal 2001 and 2000 quarters and the six-month periods then ended, respectively. The Company incurred proxy contest related expenses amounting to $835,000 and $965,000, respectively in the quarter and six months ended October 3, 1999 relative to the August 16, 1999 annual shareholders meeting and annual director elections. Amortization of intangibles was $4,017,000, $4,000,000, $8,031,000 and $8,002,000 in the fiscal 2001 and 2000 quarters and the six months then ended, respectively. As a result of the above, income from operations increased $7,107,000 or 61.4% in the fiscal 2001 quarter and increased $6,619,000 or 20.4% in the fiscal 2001 six month period compared to the respective periods in fiscal 2000. This is based on income from operations of $18,680,000, $11,573,000, $39,058,000, and $32,439,000 in the fiscal 2001 and 2000 quarters and six-month periods then ended, respectively. Interest and debt expense was $9,710,000, $8,294,000, $18,991,000, and $16,573,000 in the fiscal 2001 and 2000 quarters and the six months then ended, respectively. The fiscal 2001 increase is solely the result of increasing interest rates. As a percentage of consolidated net sales, interest and debt expense was 5.1%, 4.6%, 5.0%, and 4.6% in the fiscal 2001 and 2000 quarters and the six-month periods then ended, respectively. Interest and other income was $671,000, $306,000, $1,612,000, and $553,000 in the fiscal 2001 and 2000 quarters and the six months then ended, respectively. Income taxes as a percentage of income before income taxes were 54.5%, 85.7%, 52.3% and 57.9% in the fiscal 2001 and 2000 quarters and the six months then ended, respectively. The percentages reflect the effect of nondeductible amortization of goodwill resulting from acquisitions. - 15 - Net income, therefore, increased $3,877,000 or 758.7% for the quarter ended October 1, 2000 and increased $3,428,000 or 49.6% for the six months then ended. This is based on net income of $4,388,000, $511,000, $10,334,000, and $6,906,000 for the quarters and six-month periods ended October 1, 2000 and October 3, 1999, respectively. LIQUIDITY AND CAPITAL RESOURCES On April 29, 1999, the Company acquired all of the outstanding stock of Washington Equipment Company (WECO), a regional manufacturer and servicer of overhead cranes. The total cost of the acquisition, which was accounted for as a purchase, was approximately $6.4 million and was financed by proceeds from the Company's revolving credit facility. The 1998 Revolving Credit Facility provides availability up to $300 million, due March 31, 2003, reduced to $275 million and $250 million effective March 31, 2001 and 2002, respectively, against which $212.7 million was outstanding at October 1, 2000. Interest is payable at varying Eurodollar and Prime rates based on LIBOR plus a spread determined by the Company's leverage ratio, amounting to 225 basis points at November 14, 2000 or the lender's prime rate plus 75 basis points. The 1998 Revolving Credit Facility is secured by all equipment, inventory, receivables, subsidiary stock (limited to 65% for foreign subsidiaries) and intellectual property. The senior subordinated 8 1/2% Notes issued on March 31, 1998 amounted to $199,468,000, net of original issue discount of $532,000 and are due March 31, 2008. Interest is payable semi-annually based on an effective rate of 8.45%, considering $1,902,000 of proceeds from rate hedging in advance of the placement. Provisions of the 8 1/2% Notes include, without limitation, restrictions of liens, indebtedness, asset sales, and dividends and other restricted payments. Prior to April 1, 2003, the 8 1/2% Notes are redeemable at the option of the Company, in whole or in part, at the Make-Whole Price (as defined in the 8 1/2% Notes agreement). On or after April 1, 2003, they are redeemable at prices declining annually to 100% on and after April 1, 2006. In addition, on or prior to April 1, 2001, the Company may redeem up to 35% of the outstanding notes with the proceeds of equity offerings at a redemption price of 108.5%, subject to certain restrictions. In the event of a Change of Control (as defined in the indenture for such notes), each holder of the 8 1/2% Notes may require the Company to repurchase all or a portion of such holder's 8 1/2% Notes at a purchase price equal to 101% of the principal amount thereof. The 8 1/2% Notes are guaranteed by certain domestic subsidiaries and are not subject to any sinking fund requirements. The Company believes that its cash on hand, cash flows, and borrowing capacity under its revolving credit facility will be sufficient to fund its ongoing operations, budgeted capital expenditures, and business acquisitions for the next twelve months. Net cash provided by operating activities was $5,433,000 for the six months ended October 1, 2000, a decrease over the net cash provided by operating activities for the six months ended October 3, 1999 of $19,727,000. The difference of $14,294,000 is due to changes in net working capital components, primarily accounts receivable and inventories. - 16 - Net cash used in investing activities decreased to $8,586,000 for the six months ended October 1, 2000 from $12,925,000 for the six months ended October 3, 1999. The $4,339,000 difference is due primarily to the acquisition of WECO in fiscal 2000 offset by the increase in capital expenditures for fiscal 2001 as a result of the decision to purchase property and a building of a previously leased facility. Net cash provided by financing activities was $3,261,000 for the six months ended October 1, 2000 compared to $5,346,000 for the six months ended October 3, 1999. The $2,085,000 change is primarily due to borrowings used to acquire WECO in the previous year compared to funds used to finance an increase in capital expenditures for fiscal 2001. CAPITAL EXPENDITURES In addition to keeping its current equipment and plants properly maintained, the Company is committed to replacing, enhancing, and upgrading its property, plant, and equipment to reduce production costs, increase flexibility to respond effectively to market fluctuations and changes, meet environmental requirements, enhance safety, and promote ergonomically correct work stations. Consolidated capital expenditures for the six months ended October 1, 2000 and October 3, 1999 were $7,011,000 and $5,130,000, respectively. The increase in fiscal 2001 is due to the purchase of property and a building of a previously leased facility. INFLATION AND OTHER MARKET CONDITIONS The Company's costs are affected by inflation in the U.S. economy, and to a lesser extent, in foreign economies including those of Europe, Canada, Mexico, and the Pacific Rim. The Company does not believe that inflation has had a material effect on results of operations over the periods presented because of low inflation levels over the periods and because the Company has generally been able to pass on rising costs through price increases. However, in the future there can be no assurance that the Company's business will not be affected by inflation or that it will be able to pass on cost increases. SEASONALITY AND QUARTERLY RESULTS Quarterly results may be materially affected by the timing of large customer orders, by periods of high vacation and holiday concentrations, and by acquisitions and the magnitude of acquisition costs. Therefore, the operating results for any particular fiscal quarter are not necessarily indicative of results for any subsequent fiscal quarter or for the full fiscal year. - 17 - EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," in June of 1998. The FASB issued SFAS 137 in June 1999 which defers the effective date of SFAS 133 to fiscal years beginning after June 15, 2000. Statement No.133 establishes accounting and reporting standards for derivatives and hedging activities. It requires that entities recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Compliance with this statement would not have a material impact on the Company at the present time. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements (SAB No. 101) in December of 1999. SAB No. 101 provides the Commission's views in applying generally accepted accounting principles to selected revenue recognition issues. The Company has reviewed the requirements of SAB No. 101 and has determined that it is in compliance with SAB No. 101. SUBSEQUENT EVENT SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This report may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the integration of acquisitions and other factors disclosed in the Company's periodic reports filed with the Commission. Consequently such forward-looking statements should be regarded as the Company's current plans, estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. - 18 - PART II. OTHER INFORMATION Item 1. Legal Proceedings - none. Item 2. Changes in Securities - none. Item 3. Defaults upon Senior Securities - none. Item 4. Submission of Matters to a Vote of Security Holders - none. Item 5. Other Information In connection with its decision to examine various alternatives to enhance shareholder value, the Company has entered into stay agreements (the "Stay Agreements") with Messrs. Tevens, Montgomery and Librock, Ms. Howard, Mr. Owen and certain other officers and employees of the Company as outlined in Exhibit10.44 on form 10-K for the fiscal year ended March 31, 2000. The Stay agreements have been extended under the same terms and conditions such that no payment under the Agreements will be due and payable if a Sale does not occur by (a) June 30, 2001 or (b) by September 30, 2001, provided that on or before June 30, 2001 negotiations regarding a possible Sale to an identified purchaser with the requisite financing are taking place. Item 6. Exhibits and Reports on Form 8-K Exhibit 10.1 Fifth Amendment, dated as of September 28, 2000, to the Credit Agreement, dated as of March 31, 1998, among Columbus McKinnon Corporation, as the Borrower, the banks, financial institutions and other institutional lenders named therein, as Initial Lenders, Fleet National Bank, as the Initial Issuing Bank, Fleet National Bank, as the Swing Line Bank and Fleet National Bank, as the Administrative Agent. There are no reports on Form 8-K. - 19 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COLUMBUS McKINNON CORPORATION ----------------------------- (Registrant) Date: NOVEMBER 14, 2000 /s/ ROBERT L. MONTGOMERY, JR. ------------------ ----------------------------- Robert L. Montgomery, Jr. Executive Vice President and Chief Financial Officer (Principal Financial Officer) - 20 - EX-10.1 2 0002.txt FIFTH AMENDMENT TO CREDIT AGREEMENT FIFTH AMENDMENT TO CREDIT AGREEMENT THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of September 28, 2000, is by and among COLUMBUS MCKINNON CORPORATION, a New York corporation (the "Borrower"), the banks, financial institutions and other institutional lenders which are parties to the Credit Agreement (as such term is defined below) (the "Lenders"), FLEET NATIONAL BANK, as Initial Issuing Bank (the "Initial Issuing Bank"), FLEET NATIONAL BANK, as the Swing Line Bank (the "Swing Line Bank"; each of the Lenders, the Initial Issuing Bank and the Swing Line Bank, individually, a "Lender Party" and, collectively, the "Lender Parties"), and FLEET NATIONAL BANK, as administrative agent (together with any successor appointed pursuant to Article VII of the Credit Agreement, the "Administrative Agent") for the Lender Parties. W I T N E S S E T H : ------------------- WHEREAS, the Borrower, Lenders, Initial Issuing Bank, Swing Line Bank and Administrative Agent are party to that certain Credit Agreement, dated as of March 31, 1998, as amended by that certain First Amendment to Credit Agreement, dated as of September 23, 1998, that certain Second Amendment to Credit Agreement and Consent, dated as of February 12, 1999, that certain Third Amendment to Credit Agreement and Consent, dated as of November 16, 1999, and that certain Fourth Amendment to Credit Agreement and Waiver, dated as of February 15, 2000 (as so amended and as it may hereafter be further amended, supplemented, restated, extended or otherwise modified from time to time, the "Credit Agreement"); WHEREAS, the Borrower has requested that the Administrative Agent and Lender Parties amend the Credit Agreement as and to the extent set forth in this Amendment; and WHEREAS, the Administrative Agent and Lender Parties are agreeable to the foregoing, in each instance as and to the extent set forth in this Amendment and subject to each of the terms and conditions stated herein. NOW THEREFORE, in consideration of the premises and the mutual covenants set forth herein and of the loans or other extensions of credit heretofore, now or hereafter made to, or for the benefit of, the Borrower and its Subsidiaries by the Lender Parties, the parties hereto hereby agree as follows: 1. DEFINITIONS. Except to the extent otherwise specified herein, capitalized terms used in this Amendment shall have the same meanings ascribed to them in the Credit Agreement. 2. AMENDMENTS. 2.1. Section 1.01 of the Credit Agreement is amended by deleting from the definition of "Applicable Margin" the entire pricing chart contained therein and replacing it with the following chart: Applicable Margin Applicable Margin Applicable Margin Ratio of Funded Debt to for Prime Rate for Eurodollar for Commitment EBITDA Advances Rate Advances Fee - ------------------------ ------------------ ----------------- ----------------- Equal to or greater than 4.00 0.75% 2.250% 0.375% Equal to or greater than 3.50 less than 4.00 0.50% 2.000% 0.350% Equal to or greater than 3.00 less than 3.50 0.25% 1.750% 0.300% Equal to or greater than 2.50 less than 3.00 0.00% 1.500% 0.200% Less than 2.50 0.00% 1.125% 0.150% 2.2. Section 5.04(a) of the Credit Agreement is amended by deleting from the chart contained therein the dates from and including September 30, 2000 and the corresponding ratios for such dates and replacing them with the following: September 30, 2000 4.25 to 1.0 December 31, 2000 4.25 to 1.0 March 31, 2001 4.00 to 1.0 June 30, 2001 3.75 to 1.0 September 30, 2001 3.75 to 1.0 December 31, 2001 3.50 to 1.0 March 31, 2002 and each fiscal quarter end thereafter 3.50 to 1.0. 2.3. Section 5.04(b) of the Credit Agreement is amended by deleting from the chart contained therein the dates from and including September 30, 2000 and the corresponding ratios for such dates and replacing them with the following: Four Fiscal Quarters ending on: Ratio September 30, 2000 2.75 to 1.0 December 31, 2000 2.75 to 1.0 March 31, 2001 2.75 to 1.0 June 30, 2001 2.75 to 1.0 September 30, 2001 3.00 to 1.0 December 31, 2001 3.00 to 1.0 March 31, 2002 and each fiscal quarter end thereafter 3.00 to 1.0. 2 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower hereby represents and warrants as follows: 3.1. Each of the representations and warranties set forth in the Credit Agreement, including, without limitation, in Article IV of the Credit Agreement, and in each other Loan Document, is true, correct and complete on and as of the date hereof as though made on the date hereof. In addition, the Borrower hereby represents, warrants and affirms that the Credit Agreement and each of the other Loan Documents remains in full force and effect. 3.2. As of the date hereof, there exists no Default or Event of Default under the Credit Agreement or any other Loan Document, and no event which, with the giving of notice or lapse of time, or both, would constitute a Default or Event of Default. 3.3. The execution, delivery and performance by each applicable Loan Party of this Amendment or the reaffirmations and confirmations attached hereto and each other Loan Document are within such Loan Party's corporate powers, have been duly authorized by all necessary corporate action, and do not, and will not, (i) contravene such Loan Party's charter or bylaws, (ii) violate any law (including, without limitation, the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended), rule, regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any material contract, loan agreement, indenture, mortgage, deed of trust, lease or other material instrument or agreement binding on or affecting any Loan Party, any of its Subsidiaries or any of their respective properties or (iv) except for the Liens created under the Collateral Documents, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. Neither any Loan Party nor any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument or agreement, the violation or breach of which could reasonably be expected to have a Material Adverse Effect. 3.4. Each of this Amendment and each other Loan Document has been duly executed and delivered by each Loan Party party thereto. Each of this Amendment and each other Loan Document is the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms. 3.5. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of this Amendment, any other Loan Document or any other agreement or document related hereto or thereto or contemplated hereby or thereby to which it is or is to be a party or otherwise bound, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created by the Collateral Documents (including the first priority nature thereof) or (iv) the exercise by the Administrative Agent or any Lender Party of its rights under the Loan Documents or remedies in respect of the Collateral pursuant to the Collateral Documents. 3 4. CONDITIONS PRECEDENT TO THIS AMENDMENT. The effectiveness of this Amendment is subject to the satisfaction, in form and substance satisfactory to the Administrative Agent, of each of the following conditions precedent: 4.1. The Borrower and Required Lenders shall have duly executed and delivered this Amendment. 4.2. No Default or Event of Default shall have occurred and be continuing. 4.3. The representations and warranties contained in Section 3 of this Amendment, the Credit Agreement and each other Loan Document shall be true, correct and complete on and as of the closing date of this Amendment as though made on such date. 4.4. The Borrower shall have paid an amendment fee to the Administrative Agent, for the account of each Lender which has approved this Amendment, as evidenced by such Lender's timely execution and delivery of a counterpart signature page to this Amendment (each such Lender being an "Approving Lender"), in an amount equal to 0.125% (i.e. 12.5 basis points) of such Approving Lender's Revolving Credit Commitment. 4.5. The Borrower and its Subsidiaries shall have delivered such other documents and taken such other actions as the Administrative Agent may reasonably request. 5. EFFECTIVENESS OF AMENDMENT. This Amendment shall not become effective unless and until each of the conditions precedent set forth in Section 4 hereof has been satisfied. 6. RERERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS. 6.1. Except as specifically amended in Section 2 above, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect and each is hereby ratified and confirmed. 6.2. The execution, delivery and effect of this Amendment shall be limited precisely as written and shall not be deemed to (a) be a consent to any waiver of any term or condition or to any amendment or modification of any term or condition of the Credit Agreement or any other Loan Document, except as specifically amended in Section 2 above, or (b) prejudice any right, power or remedy which the Administrative Agent or any Lender Party now has or may have in the future under or in connection with the Credit Agreement or any other Loan Document. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or any other word or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in any other Loan Document to the Credit Agreement or any word or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby. 4 7. COUNTERPARTS. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument. Delivery of an executed counterpart to this Amendment by telecopier shall be as effective as delivery of a manually executed counterpart of this Amendment. 8. COSTS AND EXPENSES. The Borrower shall pay on demand all reasonable fees, costs and expenses incurred by Administrative Agent (including, without limitation, all reasonable attorneys' fees) in connection with the preparation, execution and delivery of this Amendment and the taking of any actions by any Person in connection herewith. 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW YORK. 10. HEADINGS. Article headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. [Signature Pages Follow] 5 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized on the date first above written. COLUMBUS MCKINNON CORPORATION By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Executive Vice President The undersigned hereby acknowledge and agree to this Amendment, and agree that the Guaranty, the Security Agreement, and the Intellectual Property Security Agreement, and each other Loan Document executed by the undersigned shall remain in full force and effect and each is hereby ratified and confirmed by and on behalf of the undersigned, this 28th day of September, 2000. AUTOMATIC SYSTEMS, INC. By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer LICO STEEL, INC. By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer ABELL-HOWE CRANE, INC. By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer G.L. INTERNATIONAL INC. By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer GAFFEY, INC. By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer HANDLING SYSTEMS AND CONVEYORS, INC. By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer YALE INDUSTRIAL PRODUCTS, INC. By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer WASHINGTON EQUIPMENT COMPANY By: /S/ Robert L. Montgomery -------------------------------- Robert L. Montgomery Title: Treasurer FLEET NATIONAL BANK, as Administrative Agent By: /S/ John G. Tierney -------------------------------- John G. Tierney Title: Vice President FLEET NATIONAL BANK, as Initial Issuing Bank By: /S/ John G. Tierney -------------------------------- John G. Tierney Title: Vice President FLEET NATIONAL BANK, as Swing Line Bank By: /S/ John G. Tierney -------------------------------- John G. Tierney Title: Vice President Lenders FLEET NATIONAL BANK By: /S/ John G. Tierney -------------------------------- John G. Tierney Title: Vice President Lenders ABN-AMRO BANK N.V. NEW YORK BRANCH, as a Co-Agent and Lender By: /S/ Juliette Mound -------------------------------- Title: Assistant Vice President -------------------------------- By: /S/ Lisa Megeaski -------------------------------- Title: Group Vice President -------------------------------- Lenders THE BANK OF NOVA SCOTIA, as a Co-Agent and Lender By: /S/ Todd S. Meller -------------------------------- Title: Managing Director -------------------------------- Lenders MANUFACTURERS AND TRADERS TRUST COMPANY, as a Co-Agent and Lender By: /S/ Stephen J. Wydysh -------------------------------- Title: Vice President -------------------------------- Lenders HSBC BANK USA (formerly known as Marine Midland Bank), as a Co-Agent and Lender By: /S/ Desmond C. English -------------------------------- Title: Authorized Signatory -------------------------------- Lenders COMERICA BANK By: /S/ Joel S. Gordon -------------------------------- Title: Account Officer -------------------------------- Lenders FIRST UNION NATIONAL BANK By: /S/ Mark B. Felker -------------------------------- Title: Senior Vice President -------------------------------- Lenders KEYBANK NATIONAL ASSOCIATION By: /S/ Francis W. Lutz, Jr. -------------------------------- Title: Portfolio Officer -------------------------------- Lenders MELLON BANK, N.A. By: /S/ Edward J. Kloecker -------------------------------- Title: Vice President -------------------------------- Lenders BANKERS TRUST COMPANY By: /S/ Gina S. Thompson -------------------------------- Title: Director -------------------------------- Lenders THE BANK OF NEW YORK By: /S/ Mark D. Wrigley -------------------------------- Title: Assistant Vice President -------------------------------- Lenders NATIONAL BANK OF CANADA By: /S/ Michael S. Woodard -------------------------------- Title: Vice President -------------------------------- By: /S/ Jon W. Patterson -------------------------------- Title: Vice President -------------------------------- Lenders NATIONAL CITY BANK OF PENNSYLVANIA By: /S/ William A. Feldmann -------------------------------- Title: Vice President -------------------------------- EX-27 3 0003.txt FINANCIAL DATA SCHEDULE - 10/1/00
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMTION EXTRACTED FROM SEC FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0001005229 COLUMBUS MCKINNON CORPORATION 1,000 6-MOS MAR-31-2001 APR-01-2000 OCT-01-2000 5,446 0 145,923 0 111,406 312,658 147,195 59,046 766,232 101,722 418,750 0 0 149 208,689 766,232 377,372 377,372 285,168 285,168 53,146 0 18,991 21,679 11,345 10,334 0 0 0 10,334 .72 .72
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