EX-99 3 q403pr.txt PRESS RELEASE NEWS RELEASE CONTACT: Robert L. Montgomery, Jr. Executive Vice President and Chief Financial Officer Columbus McKinnon Corporation 716-689-5405 COLUMBUS MCKINNON ANNOUNCES FISCAL 2003 FOURTH QUARTER AND FULL YEAR RESULTS LONG-TERM DEBT REDUCED BY $20.5 MILLION IN FOURTH QUARTER AMHERST, N.Y., May 20, 2002 -- Columbus McKinnon Corporation (Nasdaq: CMCO), a leading U.S. designer and manufacturer of material handling products, today announced its financial results for the fiscal 2003 fourth quarter and full year which ended on March 31, 2003. Columbus McKinnon's fiscal 2003 fourth quarter consolidated net sales from continuing operations were $118.8 million, compared with $114.5 million a year ago, an increase of 3.8%. Income from operations before amortization and restructuring charges was $6.1 million for the fiscal 2003 fourth quarter, compared with $5.8 million in the fourth quarter last year. Fourth quarter fiscal 2003 loss from continuing operations was $8.1 million, or $0.55 per diluted share, compared with a loss from continuing operations of $4.7 million, or $0.33 per diluted share, in the fiscal 2002 fourth quarter. Columbus McKinnon's fiscal 2003 fourth quarter net loss was $8.1 million, or $0.55 per diluted share, compared with a net loss of $129.3 million, or $8.96 per diluted share, for the fiscal 2002 fourth quarter. "We dramatically accelerated our efforts in the latter half of the year to generate cash through divestitures, facility rationalization and reduced working capital. As a result, in the fourth quarter, debt was reduced by $20.5 million. Strategically, we believe the Products Segment is clearly the area in which we have a leading, sustainable competitive advantage in the material handling industry," said Timothy T. Tevens, President and Chief Executive Officer." At March 31, 2003, Columbus McKinnon's long-term debt was $314.1 million, a $20.5 million reduction from $334.6 million at December 29, 2002 and a reduction of $33.8 million from $347.9 million at March 31, 2002. The Company was in compliance with its senior bank debt covenants at March 31, 2003. It is likely, however, that one of the financial covenants will not be met early in fiscal 2004. Accordingly, the Company has reached an agreement in principle with its senior lenders to amend such covenant for fiscal 2004. The fourth quarter of fiscal 2003 was impacted by a $1.3 million loss on the sale of LICO Steel, a steel erection business that was included in the Solutions Segment. The reported quarter also included a $4.0 million non-cash impairment charge related to goodwill of businesses acquired in prior years, restructuring charges of $2.9 million, and a mark-to-market loss in the investment portfolio of the Company's captive insurance subsidiary of $0.5 million. The fourth quarter of fiscal 2002 reflected goodwill amortization of $2.7 million, the loss from discontinued operations of $3.1 million, a mark-to-market loss in the investment portfolio of the Company's captive insurance subsidiary of $2.8 million and a loss on disposition of discontinued operations of $121.5 million. -more- Page 2 Net sales from continuing operations for fiscal 2003 were $453.3 million, compared with $480.0 million in fiscal 2002, a decrease of 5.6%. Operating income before restructuring charges and amortization was $33.3 million for fiscal 2003, compared with $48.7 million in fiscal 2002. The fiscal 2003 loss from continuing operations before cumulative effect of accounting change was $6.0 million, or $0.42 per diluted share, compared with a loss from continuing operations for fiscal 2002 of $6.0 million, or $0.41 per diluted share, including pre-tax restructuring charges of $9.6 million. The net loss for fiscal 2003 was reduced to $14.0 million, or $0.97 per diluted share, from a net loss of $135.4 million, or $9.39 per diluted share, for fiscal 2002. Fiscal 2003 results reflected a cumulative effect of accounting change of $8.0 million related to its initial adoption of Statement of Financial Accounting Standard (SFAS) No. 142, "Goodwill and Other Intangible Assets" as of April 1, 2002 and a further write-down of goodwill of $4.0 million included in write-off/amortization of intangible assets in the fourth quarter and year, restructuring charges of $3.7 million and the early write-off of deferred finance charges associated with the Company's former senior credit facility of $1.2 million. Fiscal 2002 results reflected restructuring charges of $9.6 million, the loss from discontinued operations of $7.9 million, and goodwill amortization of $11.0 million. "While economic conditions remain soft, we are intent upon producing profits and reducing debt despite the sustained weakness in the industrial markets. Our fourth quarter 2003 sales reflect a level of stabilization and we are confident we continue to hold a leading market position in our key product lines," said Tevens. "In addition to reducing debt, we accomplished a great deal in 2003, including o we initiated the rationalization of our chain and crane-building operations and that process is now nearly complete. o we completed the rationalization of 11 facilities companywide and most of the real estate associated with these rationalized facilities is now being actively marketed for sale. o we implemented Lean Manufacturing at 15 of Columbus McKinnon's North American facilities and reduced inventory by over $10.0 million at those facilities. o we began the divestiture of less synergistic businesses to further reduce costs and debt, with LICO Steel being the first completed divestiture." Tevens concluded, "Accelerating the paydown of debt remains a top priority for Columbus McKinnon. We remain confident in our ability to achieve this goal based on the strength of our business and the cash flow it generates as well as our numerous initiatives to further reduce costs, which will all support further debt reduction and strengthen Columbus McKinnon's future financial position and operating performance." Columbus McKinnon is a leading worldwide designer and manufacturer of material handling products, systems and services which efficiently and ergonomically move, lift, position or secure material. Key products include hoists, cranes, chain and forged attachments. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available on its web site at HTTP://WWW.CMWORKS.COM . -more- Page 3 A teleconference/webcast has been scheduled for May 20, 2003 at 10:00 AM Eastern Time at which the executive officers of Columbus McKinnon will discuss the company's financial results and strategy. The webcast will be accessible at Columbus McKinnon's web site: HTTP://WWW.CMWORKS.COM. It will also be broadcast over the FirstCall Events web site at: Thomson Financial Network at: HTTP://WWW.FIRSTCALLEVENTS.COM/SERVICE/AJWZ382084953GF12.HTML. You must have Windows Media Player or RealPlayer's audio software on your computer to listen to the call. Both are available for downloading on the Columbus McKinnon web site and the FirstCall Events web site at no charge. An audio recording of the call will be available two hours after its completion and until July 18, 2003 by dialing 1-800-925-0870. Alternatively, you may access an archive of the call until July 18, 2003 on Columbus McKinnon's web site at: HTTP://WWW.CMWORKS.COM/WEBCAST/ARCHIVE.ASP. The call will also be archived on the FirstCall Events web site until July 18, 2003. This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning future revenue and earnings, 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 Company's ability to amend its debt covenants with its lenders, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to update the forward-looking information contained in this release. -more- Page 4
COLUMBUS MCKINNON CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED ----------------------------------------------- 3/31/03 3/31/02 ----------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Net sales $ 118,807 $ 114,478 Cost of products sold 91,975 88,592 ----------------------------------------------- Gross profit 26,832 25,886 Gross profit margin 22.6% 22.6% Selling, general and administrative expense 20,770 20,076 Restructuring charges 2,857 8 ----------------------------------------------- Income from operations before amortization 3,205 5,802 Write-off/amortization of intangible assets 3,846 2,729 ----------------------------------------------- (Loss) income from operations (641) 3,073 Interest and other expense, net 7,807 8,707 ----------------------------------------------- (Loss) from continuing operations before income tax (benefit) (8,448) (5,634) Income tax (benefit) (396) (923) ----------------------------------------------- (Loss) from continuing operations (8,052) (4,711) (Loss) from discontinued operations - (3,095) (Loss) on disposal of discontinued operations - (121,475) ----------------------------------------------- Net (loss) $ (8,052) $ (129,281) =============================================== Average basic and diluted shares outstanding 14,517 14,436 Basic and diluted (loss) income per share: Continuing operations $ (0.55) $ (0.33) Discontinued operations - (0.21) (Loss) on disposal of discontinued operations - (8.42) ----------------------------------------------- Net (loss) $ (0.55) $ (8.96) ===============================================
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COLUMBUS MCKINNON CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS FISCAL YEAR ENDED ----------------------------------------------- 3/31/03 3/31/02 ----------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Net sales $ 453,320 $ 480,028 Cost of products sold 345,986 359,551 ----------------------------------------------- Gross profit 107,334 120,477 Gross profit margin 23.7% 25.1% Selling, general and administrative expense 74,011 71,767 Restructuring charges 3,697 9,569 ----------------------------------------------- Income from operations before amortization 29,626 39,141 Write-off/amortization of intangible assets 4,246 11,013 ----------------------------------------------- Income from operations 25,380 28,128 Interest and other expense, net 29,859 31,845 ----------------------------------------------- (Loss) from continuing operations before income tax expense and cumulative effect of accounting change (4,479) (3,717) Income tax expense 1,532 2,301 ----------------------------------------------- (Loss) from continuing operations before cumulative effect of accounting change (6,011) (6,018) (Loss) from discontinued operations - (7,873) (Loss) on disposal of discontinued operations - (121,475) ----------------------------------------------- (Loss) before cumulative effect of accounting change (6,011) (135,366) Cumulative effect of accounting change (8,000) - ----------------------------------------------- Net (loss) $ (14,011) $ (135,366) =============================================== Average basic and diluted shares outstanding 14,496 14,414 Basic and diluted (loss) per share: Continuing operations $ (0.42) $ (0.41) Discontinued operations - (0.55) (Loss) on disposal of discontinued operations - (8.43) ----------------------------------------------- (Loss) before cumulative effect of accounting change (0.42) (9.39) Cumulative effect of accounting change (0.55) - ----------------------------------------------- Net (loss) $ (0.97) $ (9.39) ===============================================
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COLUMBUS McKINNON CORPORATION CONSOLIDATED BALANCE SHEET (In Thousands) 3/31/03 3/31/02 ---------------------------------- ASSETS Current assets: Cash and cash equivalents $ 1,943 $ 13,068 Trade accounts receivable 79,335 82,266 Inventories 87,474 89,656 Net assets held for sale 1,800 4,290 Net current assets of discontinued operations - 21,497 Prepaid expenses 16,456 8,543 ---------------------------------- Total current assets 187,008 219,320 Net property, plant, and equipment 67,295 70,742 Goodwill and other intangibles, net 195,129 200,801 Marketable securities 21,898 24,634 Deferred taxes on income - 3,133 Other assets 1,668 5,665 ---------------------------------- Total assets $ 472,998 $ 524,295 ================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable to banks $ 2,245 $ 2,518 Trade accounts payable 28,654 31,617 Accrued liabilities 45,402 39,533 Restructuring reserve 2,331 949 Current portion of long-term debt 4,981 146,663 ---------------------------------- Total current liabilities 83,613 221,280 Senior debt, less current portion 109,355 1,509 Subordinated debt 199,734 199,681 Other non-current liabilities 27,589 30,214 ---------------------------------- Total liabilities 420,291 452,684 ---------------------------------- Shareholders' equity: Common stock 149 149 Additional paid-in capital 104,412 104,920 Accumulated deficit (26,547) (12,536) ESOP debt guarantee (5,709) (6,514) Unearned restricted stock (208) (414) Accumulated other comprehensive loss (19,390) (13,994) ---------------------------------- Total shareholders' equity 52,707 71,611 ---------------------------------- Total liabilities and shareholders' equity $ 472,998 $ 524,295 ==================================
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COLUMBUS McKINNON CORPORATION - CONTINUING BUSINESS SEGMENTS PRODUCTS SOLUTIONS CONSOLIDATED ---------------------------------------------------------- (IN THOUSANDS, EXCEPT FOR PERCENTAGES) Quarter ended 3/31/03 Net sales 101,781 17,026 118,807 Gross profit 25,369 1,463 26,832 Margin 24.9% 8.6% 22.6% Income (loss) from operations before write-off/amortization of intangible assets and restructuring charges 7,062 (1,000) 6,062 Margin 6.9% (5.9%) 5.1% Quarter ended 3/31/02 Net sales 96,372 18,106 114,478 Gross profit 23,049 2,837 25,886 Margin 23.9% 15.7% 22.6% Income from operations before amortization and restructuring charges 5,479 331 5,810 Margin 5.7% 1.8% 5.1% Fiscal Year ended 3/31/03 Net sales 388,076 65,244 453,320 Gross profit 98,752 8,582 107,334 Margin 25.4% 13.2% 23.7% Income from operations before write-off/amortization of intangible assets and restructuring charges 33,593 (270) 33,323 Margin 8.7% (0.4%) 7.4% Fiscal Year ended 3/31/02 Net sales 404,731 75,297 480,028 Gross profit 109,277 11,200 120,477 Margin 27.0% 14.9% 25.1% Income from operations before amortization and restructuring charges 47,045 1,665 48,710 Margin 11.6% 2.2% 10.1%
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COLUMBUS McKINNON CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW YEAR ENDED ------------------------------------- 3/31/03 3/31/02 ------------------------------------- (IN THOUSANDS) OPERATING ACTIVITIES: Net (loss) from continuing operations before cumulative effect of accounting change $ (6,011) $ (6,018) Adjustments to reconcile net (loss) from continuing operations to net cash provided by operating activities: Depreciation and amortization 14,730 22,462 Deferred income taxes 4,667 166 Other 2,059 4,934 Changes in operating assets and liabilities: Trade accounts receivable 4,010 14,644 Inventories 6,154 18,876 Prepaid expenses (6,163) (1,276) Other assets 3,915 1,328 Trade accounts payable (4,820) 3,677 Accrued and non-current liabilities (4,436) (8,996) ------------------------------------- Net cash provided by operating activities 14,105 49,797 ------------------------------------- INVESTING ACTIVITIES: Sale (purchase) of marketable securities, net (672) (1,794) Capital expenditures (4,968) (4,753) Proceeds from sale of businesses 17,262 890 Proceeds from sale of fixed assets - 1,750 Proceeds from net assets held for sale 4,418 2,280 ------------------------------------- Net cash provided by (used in) investing activities 16,040 (1,627) ------------------------------------- FINANCING ACTIVITIES: Net (payments) under revolving line-of-credit agreements (33,130) (43,678) Repayment of debt (1,395) (3,047) Deferred financing costs incurred (8,188) (794) Dividends paid - (1,976) Other 805 1,013 ------------------------------------- Net cash used in financing activities (41,908) (48,482) Effect of exchange rate changes on cash 134 (306) ------------------------------------- Net cash used in continuing operations (11,629) (618) Cash provided by (used in) discontinued operations 504 (329) ------------------------------------- Net change in cash and cash equivalents (11,125) (947) Cash and cash equivalents at beginning of year 13,068 14,015 ------------------------------------- Cash and cash equivalents at end of year $ 1,943 $ 13,068 =====================================
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COLUMBUS McKINNON CORPORATION OTHER CONSOLIDATED INFORMATION MARCH 31, 2003 MARCH 31, 2002 -------------- -------------- Backlog (in millions) Products segment $ 41.7 $ 41.3 Solutions segment 12.9 15.0 Trade accounts receivable - Days sales outstanding 61.3 64.7 Inventory turns per year (based on cost of products sold) 4.1x 4.0x Trade accounts payable - Days payables outstanding 28.7 32.1 Debt to total capitalization percentage 85.6 82.4