Columbus McKinnon reports year-end results

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 CEO.

At Mar. 31, 2003, Columbus McKinnon's long-term debt was $314.1 million, a $20.5 million reduction from $334.6 million at Dec. 29, 2002 and a reduction of $33.8 million from $347.9 million at Mar. 31, 2002. The Company was in compliance with its senior bank debt covenants at Mar. 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.

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

''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:

We initiated the rationalization of our chain and crane-building operations and that process is now nearly complete.

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.

We implemented Lean Manufacturing at 15 of Columbus McKinnon's North American facilities and reduced inventory by over $10.0 million at those facilities.

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 .