Cascade Corporation Announces Operating Results for the First Quarter
PORTLAND, Ore.--June 14, 2001--Robert C. Warren, Jr., President and Chief Executive Officer of Cascade Corporation reported net income for the first quarter ended April 30, 2001 of $4.9 million ($.40 per share), compared to net income of $5.2 million ($.42 per share) in the first quarter of the prior year.Consolidated net sales were $80.5 million, a 9.8% decrease, when compared to consolidated net sales of $89.3 million posted in the prior year first quarter.
Warren attributed the decrease in the Company's net sales to decreases in both order and shipment rates in the lift truck industry, particularly in North America. North American lift truck order and shipment rates have decreased 42% and 6%, respectively, in the first quarter of the current year in comparison with the first quarter of the prior year.
Reported net income in the first quarter decreased 4.7% from the prior year due to lower sales levels, which were partially offset by lower selling and administrative expenses in the first quarter ended April 30, 2001. Selling and administrative expenses decreased 16.7% in the first quarter ended April 30, 2001 as compared to the prior year first quarter, primarily due to $1.5 million of bad debt and restructuring costs incurred in the first quarter of the prior year. The decreased level of selling and administrative expenses in the first quarter also reflects the benefits of the Company's restructuring efforts in Europe and Australia that occurred throughout the prior year and continuing efforts to adjust expenses to reflect sales activity.
Warren added that while the Company has found that changes in its net sales do not correspond directly to percentage changes in lift truck industry order rates and shipments, the industry statistics do provide a strong indication of market activity. Based on industry statistics and Company order rates to date, the Company expects net sales through the remainder of fiscal 2002 (year ending January 31, 2002) to trail the prior year. The Company also expects net income for the remainder of fiscal 2002 to be lower than fiscal 2001 net income for the same period, after excluding the impact of restructuring costs, special board committee costs and environmental charges incurred in fiscal 2001.
At the Company's Annual Meeting on June 14, 2001, Greg H. Kubicek, Cascade's Chairman, made comments on various matters relating to the terminated merger transaction with the Lift Group and the ongoing business focus of the Company. A transcript of Kubicek's presentation is attached.
The Company's Board of Directors, at a meeting following the Annual Meeting, determined not to declare a dividend at this time.
Cascade Corporation, headquartered in Portland, Oregon, is a leading international manufacturer of lift truck attachments, forks and accessories. Additional information on Cascade is available on its web site, www.cascorp.com.
Under the "safe harbor provision" of the Private Securities Litigation Act, Cascade Corporation is required to advise you that this news release contains "forward looking statements" based on assumptions as to future sales and earnings, which in turn are dependant on economic conditions in general including interest rates, and on competitive factors in, and on the cyclical nature of the Materials Handling Industry.
Cascade Corporation & Subsidiary Companies Summary of Earnings
(in thousands except share data)
INCOME STATEMENT Three Months Ended April 30,
2001 2000
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Net Sales $80,477 $89,265
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Operating Expenses:
Cost of Goods Sold 52,605 57,854
Depreciation and Amortization 4,173 4,579
Selling and Administrative Expenses 13,942 16,744
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70,720 79,177
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Operating Income 9,757 10,088
Interest Income (173) (390)
Interest Expense 1,787 1,955
Other Expense, net 195 249
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Income Before Income Taxes 7,948 8,274
Provision For Income Taxes 3,020 3,103
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Net Income $ 4,928 $ 5,171
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Basic Earnings Per Share $ 0.43 $ 0.45
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Diluted Earnings Per Share $ 0.40 $ 0.42
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Diluted Weighted Average Shares
Outstanding 12,293,083 12,239,890
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CONDENSED BALANCE SHEET AS OF APRIL 30, 2001
Assets
Current Assets:
Cash $ 13,766
Receivables 56,339
Inventories 40,064
Other Current Assets 5,186
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Total Current Assets 115,355
Property, Plant & Equipment, Net 73,845
Goodwill and Other Assets, Net 88,641
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Total Assets $277,841
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Liabilities and Shareholders' Equity
Current Liabilities $ 49,577
Long-Term Liabilities:
Long-Term Debt 81,840
Other Long-Term Liabilities 17,830
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Total Liabilities 149,247
--------
Exchangeable Preferred Stock and Minority
Interest
11,374
Shareholders' Equity 117,220
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Total Liabilities & Shareholders' Equity $277,841
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Presentation By Greg H. Kubicek, Chairman
Cascade Corporation Annual Meeting
June 14, 2001
Before getting into our operating performance, I know we've all
been through quite a year, and I want to address a few questions which
are on every shareholder's mind:
Question: Why did the Board turn down the Lift Group's
proposal?
Answer: The Board accepted the original Lift Group proposal
in mid-October, 2000. The target closing date was
January 31, 2001.
The Lift Group was unable to arrange unconditional
financing at any point, particularly after City of
Portland made additional damage claims, and the
target closing date was moved to March 31, 2001.
On March 31, the Lift Group presented a revised
proposal with a lower price, but still subject to a
financing condition. On April 13, the Lift Group
gave us a revised offer, but it still was subject to
a financing condition. It also extended the outside
date for closing to Mid-July.
Given this history, a majority of the Board, with
much thought and discussion, came to the conclusion
that, after six months, it was very uncertain that
the transaction would ever close, and that the best
course for Cascade was to end the uncertainty for
its employees, customers and shareholders by
terminating the transaction.
Question: Is Cascade for sale?
Answer: No. The Board believes close attention to
operations, paying down debt, and resolving the City
of Portland litigation are keys to building real
shareholder value at this point. We are not seeking
other offers.
Question: What if someone makes an offer?
Answer: The Board has a fiduciary responsibility to
carefully and thoughtfully respond to any legitimate
offers that have financing. From my perspective,
without financing, Cascade would have to think long
and hard before submitting to months of due
diligence and uncertainty again.
Question: Have there been any other offers?
Answer: Since the merger agreement was signed, no. Cascade
is a great company, and draws its share of
inquiries, but I've learned that real hard and fast
offers backed by real money are few and far between.
Question: Will Cascade start paying dividends again?
Answer: The Board will be dealing with the dividend question.
Cascade is a great company with an excellent core
business. Our first priority is to maximize our
ability to strengthen our core business.
Question: What is Cascade doing to enhance shareholder value
and get the stock price up?
Answer: The company commands a market share in North America
estimated to be in excess of 75%. In Europe, where
the market for attachments is larger than North
America, our market share is estimated at 20%. In
Asia we have 15% to 20% market share.
With a goal of realizing our potential in Europe and
capturing a substantially greater market share,
Terry Cathey has been promoted from head of North
American operations to Chief Operating Officer with
responsibility for Europe.
We are putting our best people in charge of our
biggest opportunity.