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8-K - FORM 8-K - CASCADE CORPd447320d8k.htm

Exhibit 99.1

Portland, Oregon

November 28, 2012

FOR IMMEDIATE RELEASE

CASCADE CORPORATION ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED OCTOBER 31, 2012

Cascade Corporation (NYSE: CASC) today reported its financial results for the third quarter ended October 31, 2012.

Third Quarter Fiscal 2013 Summary

 

   

Summary financial results are outlined below (in thousands, except earnings per share):

 

Three Months Ended October 31

   2012     2011     % Change  

Net sales

   $ 137,193      $ 138,024        (1 %) 

Gross profit

     42,088        45,183        (7 %) 

Gross profit %

     31     33  

SG&A

     23,678        21,784        9

Operating income

     18,410        23,399        (21 %) 

Operating income %

     13     17  

Interest expense (income), net

     (56     20        —     

Foreign currency loss

     22        378        (94 %) 

Income before taxes

     18,444        23,001        (20 %) 

Provision for income taxes

     5,153        3,426        50

Effective tax rate

     28     15  

Net income

   $ 13,291      $ 19,575        (32 %) 

Diluted earnings per share

   $ 1.16      $ 1.74        (33 %) 

 

   

Consolidated net sales during the third quarter of fiscal 2013 increased slightly over the third quarter of fiscal 2012, excluding the impact of foreign currency changes, due to higher sales of products related to the construction industry in the Americas region. Details of the change in net sales compared to the prior year are as follows (in thousands):

 

     Amount     Change %  

Net sales change

   $ 1,105            1

Foreign currency change

     (1,936     (2 %) 
  

 

 

   

 

 

 

Total

   $ (831     (1 %) 
  

 

 

   

 

 

 


Cascade Corporation

November 28, 2012

Page 2

 

 

   

Our consolidated gross profit percentage decreased to 31% during the third quarter of fiscal 2013 primarily due to proportionately higher sales of lower margin products.

 

   

Selling and administrative expense increased primarily due to $1.9 million of costs related to the pending acquisition by Toyota Industries Corporation.

 

   

The effective tax rate of 28% in the third quarter of fiscal 2013 was higher than the effective tax rate of 15% in the third quarter of fiscal 2012 primarily due to the release of a $3.6 million tax valuation allowance in The Netherlands in the prior period.

Market Conditions

 

   

Percentage changes in lift truck industry shipments and orders, by region, as compared to the prior year are outlined below. Although lift truck unit data provides an indicator of the general health of the industry and our business over a six- to twelve-month period, it does not necessarily correlate directly with the demand for our products on a quarterly basis.

 

     Shipments
Q3 Fiscal 2013  vs 2012
    Orders
Q3 Fiscal 2013 vs 2012
 

Americas

     (1 %)      5

Europe

     (4 %)      1

Asia Pacific

     —          (1 %) 

China

     (15 %)      (8 %) 

Global

     (5 %)      (1 %) 

 

   

Volatility in the global lift truck market is continuing. The Americas, Europe and Asia Pacific markets experienced flat to lower shipment levels. China’s shipments were well below prior year shipments, which were at record levels.

Americas Summary

 

   

Summary financial results are outlined below (in thousands):

 

Three Months Ended October 31

   2012     2011     % Change  

Net sales

   $ 78,857      $ 73,309        8

Transfers between areas

     5,299        6,946        (24 %) 
  

 

 

   

 

 

   

Net sales and transfers

     84,156        80,255        5

Gross profit

     24,976        26,500        (6 %) 

Gross profit %

     30     33  

SG&A

     14,837        12,373        20
  

 

 

   

 

 

   

Operating income

   $ 10,139      $ 14,127        (28 %) 
  

 

 

   

 

 

   

Operating income %

     12     18  


Cascade Corporation

November 28, 2012

Page 3

 

 

   

Net sales increased 8%, excluding the impact of currency changes. Details of the change in net sales over the prior year quarter follow (in thousands):

 

     Amount      Change %  

Net sales change

   $ 5,499         8

Foreign currency change

     49         —     
  

 

 

    

 

 

 

Total

   $ 5,548         8
  

 

 

    

 

 

 

 

   

Our gross profit percentage was lower compared to the prior year due to proportionately higher sales of lower margin products, including to the construction industry.

 

   

Selling and administrative expense increased primarily due to $1.9 million of costs related to the pending acquisition by Toyota Industries Corporation (TICO).

Europe Summary

 

   

Summary financial results are outlined below (in thousands):

 

Three Months Ended October 31

   2012     2011     % Change  

Net sales

   $ 22,495      $ 27,184        (17 %) 

Transfers between areas

     222        107        107
  

 

 

   

 

 

   

Net sales and transfers

     22,717        27,291        (17 %) 

Gross profit

     4,079        5,767        (29 %) 

Gross profit %

     18     21  

SG&A

     4,014        4,658        (14 %) 
  

 

 

   

 

 

   

Operating income

   $ 65      $ 1,109        (94 %) 
  

 

 

   

 

 

   

Operating income %

     —          4  

 

   

Net sales decreased 10%, excluding the impact of currency changes, primarily as a result of a weakening lift truck market reflective of economic conditions in Europe. Details of the change in net sales over the prior year quarter follow (in thousands):

 

     Amount     Change %  

Net sales change

   $ (2,813     (10 %) 

Foreign currency change

     (1,876     (7 %) 
  

 

 

   

 

 

 

Total

   $ (4,689     (17 %) 
  

 

 

   

 

 

 

 

   

The decrease in our gross profit percentage is a result of lower cost absorption due to decreased sales volumes and higher product costs.


Cascade Corporation

November 28, 2012

Page 4

 

Asia Pacific Summary

 

   

Summary financial results are outlined below (in thousands):

 

Three Months Ended October 31

   2012     2011     % Change  

Net sales

   $ 19,741      $ 20,158        (2 %) 

Transfers between areas

     15        15        —     
  

 

 

   

 

 

   

Net sales and transfers

     19,756        20,173        (2 %) 

Gross profit

     5,752        5,912        (3 %) 

Gross profit %

     29     29  

SG&A

     3,111        3,007        3
  

 

 

   

 

 

   

Operating income

   $ 2,641      $ 2,905        (9 %) 
  

 

 

   

 

 

   

Operating income %

     13     14  

 

   

Net sales in the region remained flat, excluding the impact of foreign currencies, as an increase in sales in Australia was offset by sales decreases in Japan and Korea. Details of the change in net sales over the prior year quarter follow (in thousands):

 

     Amount     Change %  

Net sales change

   $ (104     —     

Foreign currency change

     (313     (2 %) 
  

 

 

   

 

 

 

Total

   $ (417     (2 %) 
  

 

 

   

 

 

 

 

   

In general, operating results during the third quarter of fiscal 2012 were relatively consistent with the prior year as economic conditions in this region remained stable.

China Summary

 

   

Summary financial results are outlined below (in thousands):

 

Three Months Ended October 31

   2012     2011     % Change  

Net sales

   $ 16,100      $ 17,373        (7 %) 

Transfers between areas

     7,590        9,016        (16 %) 
  

 

 

   

 

 

   

Net sales and transfers

     23,690        26,389        (10 %) 

Gross profit

     7,281        7,004        4

Gross profit %

     31     27  

SG&A

     1,716        1,746        (2 %) 
  

 

 

   

 

 

   

Operating income

   $ 5,565      $ 5,258        6
  

 

 

   

 

 

   

Operating income %

     23     20  


Cascade Corporation

November 28, 2012

Page 5

 

 

   

Net sales decreased 8%, excluding currency changes, primarily due to a slowdown in the Chinese economy and lift truck industry. Details of the change in net sales over the prior year quarter follow (in thousands):

 

     Amount     Change %  

Net sales change

   $ (1,477     (8 %) 

Foreign currency change

     204        1
  

 

 

   

 

 

 

Total

   $ (1,273     (7 %) 
  

 

 

   

 

 

 

 

   

Our gross profit percentage increased due to an increased percentage of higher margin product sales and to a lesser extent a reduction in the cost of steel.

Forward Looking Statements:

This press release contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 which include, among others, statements relating to our expectations with respect to global lift truck demand, future levels of business activity, and the proposed acquisition by TICO. Readers are cautioned that a number of factors could cause our actual results to differ materially from any results indicated in this release or suggested by any other forward-looking statements made by us. These include among others, factors related to our pending acquisition by TICO (including the potential for diversion of management attention and disruption of our operations and customer relationships, as well as the possibility that conditions to completion of the acquisition may not be satisfied or waived, which could delay or prevent the acquisition), general economic conditions, interest rates, the impact of the European debt crisis on our European market and the global economy, performance of our manufacturing facilities and the cyclical nature of the materials handling and construction equipment industries. Further, historical information should not be considered an indicator of future performance. Additional considerations and important risk factors are described in our reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission.

About Cascade Corporation:

Cascade Corporation, headquartered in Fairview, Oregon, is a leading international manufacturer of materials handling products used primarily on lift trucks. Additional information on Cascade is available on its website, www.cascorp.com.

Contact

Joseph G. Pointer

Chief Financial Officer

Cascade Corporation

Phone (503) 669-6300

Email: investorrelations@cascorp.com


Cascade Corporation

November 28, 2012

Page 6

 

CASCADE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited — in thousands, except per share amounts)

 

     Three Months Ended      Nine Months Ended  
     October 31      October 31  
     2012     2011      2012      2011  

Net sales

   $ 137,193      $ 138,024       $ 414,838       $ 409,843   

Cost of goods sold

     95,105        92,841         287,396         276,976   
  

 

 

   

 

 

    

 

 

    

 

 

 

Gross profit

     42,088        45,183         127,442         132,867   

Selling and administrative expenses

     23,678        21,784         68,282         63,984   
  

 

 

   

 

 

    

 

 

    

 

 

 

Operating income

     18,410        23,399         59,160         68,883   

Interest expense (income), net

     (56     20         155         477   

Foreign currency loss

     22        378         257         1,037   
  

 

 

   

 

 

    

 

 

    

 

 

 

Income before provision for income taxes

     18,444        23,001         58,748         67,369   

Provision for income taxes

     5,153        3,426         17,610         17,519   
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income

   $ 13,291      $ 19,575       $ 41,138       $ 49,850   
  

 

 

   

 

 

    

 

 

    

 

 

 

Basic earnings per share

   $ 1.19      $ 1.78       $ 3.71       $ 4.54   
  

 

 

   

 

 

    

 

 

    

 

 

 

Diluted earnings per share

   $ 1.16      $ 1.74       $ 3.61       $ 4.42   
  

 

 

   

 

 

    

 

 

    

 

 

 

Basic weighted average shares outstanding

     11,124        11,016         11,090         10,979   

Diluted weighted average shares outstanding

     11,423        11,256         11,392         11,280   

Cash dividends per share

   $ 0.35      $ 0.25       $ 1.05       $ 0.65   
  

 

 

   

 

 

    

 

 

    

 

 

 


Cascade Corporation

November 28, 2012

Page 7

 

CASCADE CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited - in thousands, except per share amounts)

 

     October 31      January 31  
     2012      2012  
ASSETS      

Current assets:

     

Cash and cash equivalents

   $ 35,248       $ 24,928   

Accounts receivable, less allowance for doubtful accounts of $1,149 and $1,211

     84,048         77,752   

Inventories

     89,461         86,660   

Deferred income taxes

     4,470         3,822   

Assets available for sale

     —           7,572   

Prepaid expenses and other

     13,635         11,353   
  

 

 

    

 

 

 

Total current assets

     226,862         212,087   

Property, plant and equipment, net

     80,510         71,439   

Goodwill

     88,324         88,174   

Deferred income taxes

     22,231         18,964   

Other assets

     5,601         3,895   
  

 

 

    

 

 

 

Total assets

   $ 423,528       $ 394,559   
  

 

 

    

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY      

Current liabilities:

     

Notes payable to banks

   $ —         $ 99   

Current portion of long-term debt

     —           590   

Accounts payable

     27,174         28,280   

Accrued payroll and payroll taxes

     10,042         9,473   

Accrued incentive pay

     2,119         2,496   

Other accrued expenses

     12,821         15,580   
  

 

 

    

 

 

 

Total current liabilities

     52,156         56,518   

Long-term debt, net of current portion

     3,200         4,950   

Accrued environmental expenses

     1,275         2,279   

Deferred income taxes and other tax liabilities

     11,608         8,626   

Employee benefit obligations

     8,384         8,228   

Other liabilities

     2,831         3,231   
  

 

 

    

 

 

 

Total liabilities

     79,454         83,832   
  

 

 

    

 

 

 

Commitments and contingencies

     

Shareholders’ equity:

     

Common stock, $.50 par value, 40,000 authorized shares; 11,199 and 11,088 shares issued and outstanding

     5,600         5,544   

Additional paid-in capital

     17,753         13,252   

Retained earnings

     280,700         251,280   

Accumulated other comprehensive income

     40,021         40,651   
  

 

 

    

 

 

 

Total shareholders’ equity

     344,074         310,727   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 423,528       $ 394,559   
  

 

 

    

 

 

 


Cascade Corporation

November 28, 2012

Page 8

 

CASCADE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)

 

     Three Months Ended     Nine Months Ended  
     October 31     October 31  
     2012     2011     2012     2011  

Cash flows from operating activities:

        

Net income

   $ 13,291      $ 19,575      $ 41,138      $ 49,850   

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation and amortization

     2,673        2,622        7,879        7,508   

Share-based compensation

     785        571        2,141        1,916   

Deferred income taxes

     (693     (1,635     (3,983     (1,445

Tax effect on share-based compensation

     —          439        (1,574     (261

Gain on disposition of assets, net

     (6     (10     (36     (146

Changes in operating assets and liabilities, net of effects of acquisitions:

        

Accounts receivable

     (884     (555     (8,396     (17,794

Inventories

     845        (4,622     (2,174     (16,903

Prepaid expenses and other

     (692     (2,148     (1,780     (6,719

Accounts payable and accrued expenses

     1,929        906        (934     8,679   

Income taxes payable and receivable

     (1,200     3,761        (1,299     2,088   

Other assets and liabilities

     (366     804        1,854        2,172   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     15,682        19,708        32,836        28,945   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

        

Capital expenditures

     (3,604     (3,482     (9,361     (9,190

Proceeds from disposition of assets

     45        122        156        1,174   

Business acquisition

     (68     —          (1,266     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (3,627     (3,360     (10,471     (8,016
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

        

Cash dividends paid

     (3,919     (2,769     (11,718     (7,190

Payments on long-term debt

     (20,821     (37,146     (116,894     (77,423

Proceeds from long-term debt

     9,000        10,500        114,700        57,000   

Notes payable to banks, net

     —          635        (98     635   

Common stock issued under share-based compensation plans

     34        —          842        809   

Tax effect on share-based compensation

     —          (439     1,574        261   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (15,706     (29,219     (11,594     (25,908
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes

     (450     523        (451     (263
  

 

 

   

 

 

   

 

 

   

 

 

 

Change in cash and cash equivalents

     (4,101     (12,348     10,320        (5,242

Cash and cash equivalents at beginning of period

     39,349        32,143        24,928        25,037   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 35,248      $ 19,795      $ 35,248      $ 19,795