Cascade Corporation Announces Financial Results for the Third
Quarter Ended October 31, 2008
PORTLAND, Ore. December 4, 2008: Cascade Corporation today reported its financial results
for the third quarter ended October 31, 2008.
Overview
-
Net sales of $139.1 million for the third quarter of fiscal 2009
were
3% lower than net sales of $143.1 million for the prior year third
quarter.
-
Net income of $10.4 million ($0.94 per diluted share) for the third
quarter of fiscal 2009 was 16% lower than net income of $12.4
million
($1.00 per diluted share) for the third quarter of fiscal 2008.
Third Quarter Fiscal 2009 Summary
-
Summary financial results are outlined below (in thousands, except
earnings per share):
|
Quarter ended October 31,
|
|
|
2008
|
|
|
|
2007
|
|
% Change
|
|
|
Net sales
|
|
$
|
139,134
|
|
|
$
|
143,143
|
|
(3
|
%)
|
|
Gross profit
|
|
|
39,499
|
|
|
|
44,041
|
|
(10
|
%)
|
|
Gross profit %
|
|
|
28
|
%
|
|
|
31
|
%
|
|
|
SG&A
|
|
|
21,003
|
|
|
|
22,656
|
|
(7
|
%)
|
|
Operating income
|
|
|
17,815
|
|
|
|
20,627
|
|
(14
|
%)
|
|
Interest expense, net
|
|
|
1,102
|
|
|
|
792
|
|
39
|
%
|
|
Foreign currency losses, net
|
|
|
1,745
|
|
|
|
746
|
|
134
|
%
|
|
Income before taxes
|
|
|
14,968
|
|
|
|
19,089
|
|
(22
|
%)
|
|
Provision for income taxes
|
|
|
4,553
|
|
|
|
6,669
|
|
(32
|
%)
|
|
Effective tax rate
|
|
|
30
|
%
|
|
|
35
|
%
|
|
|
Net income
|
|
$
|
10,415
|
|
|
$
|
12,420
|
|
(16
|
%)
|
|
Diluted earnings per share
|
|
$
|
0.94
|
|
|
$
|
1.00
|
|
(6
|
%)
|
-
Consolidated net sales decreased 3% during the third quarter of
fiscal
2009, excluding the impact of foreign currency changes. This
decrease
was primarily the result of lower sales volumes in North America,
Europe and China. Details of the change in net sales compared to
the
prior year third quarter follow (in thousands):
|
Net sales change
|
|
$
|
(4,158
|
)
|
|
(3
|
%)
|
|
Foreign currency change
|
|
|
149
|
|
|
0
|
%
|
|
Total
|
|
$
|
(4,009
|
)
|
|
(3
|
%)
|
-
The consolidated gross profit percentage decreased 3% primarily as
a
result of material price increases and lower sales volumes.
-
Selling and administrative expenses decreased 7%, excluding foreign
currency changes, due to a reduction in personnel, consulting,
selling
and other general costs.
-
Foreign currency losses increased $1 million due to significant
changes in foreign currency rates against the U.S. dollar for the
Euro, British Pound, Korean Won and Canadian Dollar.
-
The effective tax rate decreased to 30% for the third quarter of
fiscal 2009 from 35% for fiscal 2008. The current quarter rate
reflects the benefit of an income tax refund received in China
related
to a non-recurring tax exemption.
Market Conditions
-
Percentage changes in lift truck industry shipments, by region, as
compared to the prior year are outlined below. Although lift truck
unit shipments are an indicator of the general health of the
industry,
they do not necessarily correlate directly with the demand for our
products.
|
|
|
Third Quarter Shipments
|
|
North America
|
|
(12
|
%)
|
|
Europe
|
|
11
|
%
|
|
Asia Pacific
|
|
9
|
%
|
|
China
|
|
(1
|
%)
|
-
Percentage changes in lift truck industry orders, by region, for
the
month of October, as compared to the prior year are outlined below:
|
|
|
October Orders
|
|
North America
|
|
(39
|
%)
|
|
Europe
|
|
(30
|
%)
|
|
Asia Pacific
|
|
(29
|
%)
|
|
China
|
|
(14
|
%)
|
-
Based on our review of industry data and general economic
conditions,
we believe the global lift truck market and our sales will be down
as
much as 30% for the remainder of fiscal 2009 and in fiscal 2010.
North America Summary
-
Summary financial results are outlined below (in thousands):
|
Quarter ended October 31,
|
|
|
2008
|
|
|
|
2007
|
|
% Change
|
|
|
Net sales
|
|
$
|
69,692
|
|
|
$
|
73,757
|
|
(6
|
%)
|
|
Transfers between areas
|
|
|
7,696
|
|
|
|
8,940
|
|
(14
|
%)
|
|
Net sales and transfers
|
|
|
77,388
|
|
|
|
82,697
|
|
(6
|
%)
|
|
Gross profit
|
|
|
24,355
|
|
|
|
28,393
|
|
(14
|
%)
|
|
Gross profit %
|
|
|
31
|
%
|
|
|
34
|
%
|
|
|
SG&A
|
|
|
11,304
|
|
|
|
12,885
|
|
(12
|
%)
|
|
Loss on disposition of assets, net
|
|
|
15
|
|
|
|
10
|
|
50
|
%
|
|
Amortization
|
|
|
586
|
|
|
|
599
|
|
(2
|
%)
|
|
Operating income
|
|
$
|
12,450
|
|
|
$
|
14,899
|
|
(16
|
%)
|
-
Net sales decreased 5%, excluding the impact of currency changes,
primarily due to the economic slowdown in North America. Details of
the change in net sales over the prior year quarter follow (in
thousands):
|
Net sales change
|
|
$
|
(3,609
|
)
|
|
(5
|
%)
|
|
Foreign currency change
|
|
|
(456
|
)
|
|
(1
|
%)
|
|
Total
|
|
$
|
(4,065
|
)
|
|
(6
|
%)
|
-
The gross profit percentage was 3% lower than the prior year third
quarter due to higher material costs, lower sales volumes, changes
in
product mix and new product introduction costs. The current quarter
gross profit percentage is consistent with the first two quarters
of
fiscal 2009.
-
The decrease in selling and administrative costs was due to a
reduction in personnel, consulting and other general costs.
Europe Summary
-
Summary financial results are outlined below (in thousands):
|
Quarter ended October 31,
|
|
|
2008
|
|
|
|
2007
|
|
|
% Change
|
|
|
Net sales
|
|
$
|
42,144
|
|
|
$
|
43,408
|
|
|
(3
|
%)
|
|
Transfers between areas
|
|
|
460
|
|
|
|
434
|
|
|
6
|
%
|
|
Net sales and transfers
|
|
|
42,604
|
|
|
|
43,842
|
|
|
(3
|
%)
|
|
Gross profit
|
|
|
6,693
|
|
|
|
6,891
|
|
|
(3
|
%)
|
|
Gross profit %
|
|
|
16
|
%
|
|
|
16
|
%
|
|
|
|
SG&A
|
|
|
6,325
|
|
|
|
6,607
|
|
|
(4
|
%)
|
|
Gain on disposition of assets, net
|
|
|
(61
|
)
|
|
|
-
|
|
|
-
|
|
|
Amortization
|
|
|
73
|
|
|
|
165
|
|
|
(56
|
%)
|
|
Operating income
|
|
$
|
356
|
|
|
$
|
119
|
|
|
199
|
%
|
-
Net sales decreased 3%, excluding the impact of currency changes,
due
to weakening economic conditions in Europe. Details of the change
in
net sales over the prior year quarter follow (in thousands):
|
Net sales change
|
|
$
|
(1,213
|
)
|
|
(3
|
%)
|
|
Foreign currency change
|
|
|
(51
|
)
|
|
0
|
%
|
|
Total
|
|
$
|
(1,264
|
)
|
|
(3
|
%)
|
-
The gross profit percentage was consistent with the prior year
third
quarter. We mitigated the impact of material cost increases with
sales
price increases and manufacturing cost reductions.
-
Excluding the impact of currency changes, selling and
administrative
expenses decreased 5% in Europe due to lower personnel, selling and
other general costs.
-
Quarterly operating results for the current year include $1.3
million
of costs related to our European reorganization. The majority of
these
costs relate to the downsizing of our European workforce in
Germany.
Asia Pacific Summary
-
Summary financial results are outlined below (in thousands):
|
Quarter ended October 31,
|
|
|
2008
|
|
|
|
2007
|
|
|
% Change
|
|
|
Net sales
|
|
$
|
17,291
|
|
|
$
|
15,460
|
|
|
12
|
%
|
|
Transfers between areas
|
|
|
199
|
|
|
|
27
|
|
|
637
|
%
|
|
Net sales and transfers
|
|
|
17,490
|
|
|
|
15,487
|
|
|
13
|
%
|
|
Gross profit
|
|
|
3,640
|
|
|
|
3,966
|
|
|
(8
|
%)
|
|
Gross profit %
|
|
|
21
|
%
|
|
|
26
|
%
|
|
|
|
SG&A
|
|
|
2,206
|
|
|
|
2,129
|
|
|
4
|
%
|
|
Loss (gain) on disposition of assets, net
|
|
|
44
|
|
|
|
(18
|
)
|
|
-
|
|
|
Operating income
|
|
$
|
1,390
|
|
|
$
|
1,855
|
|
|
(25
|
%)
|
-
Net sales increased 14%, excluding the impact of currency changes,
due
to strong business activity in Korea and Australia. Details of the
change in net sales over the prior year quarter follow (in
thousands):
|
Net sales change
|
|
$
|
2,225
|
|
|
14
|
%
|
|
Foreign currency change
|
|
|
(394
|
)
|
|
(2
|
%)
|
|
Total
|
|
$
|
1,831
|
|
|
12
|
%
|
-
The gross profit percentage in Asia Pacific was 5% lower than the
prior year due to material cost increases, fluctuations in foreign
currency rates and increased sales of lower margin products.
-
Selling and administrative costs increased 6% in the current year,
excluding the impact of currency changes, due to higher personnel,
marketing and other general costs.
China Summary
-
Summary financial results are outlined below (in thousands):
|
Quarter ended October 31,
|
|
|
2008
|
|
|
|
2007
|
|
|
% Change
|
|
|
Net sales
|
|
$
|
10,007
|
|
|
$
|
10,518
|
|
|
(5
|
%)
|
|
Transfers between areas
|
|
|
6,701
|
|
|
|
5,258
|
|
|
27
|
%
|
|
Net sales and transfers
|
|
|
16,708
|
|
|
|
15,776
|
|
|
6
|
%
|
|
Gross profit
|
|
|
4,811
|
|
|
|
4,791
|
|
|
-
|
|
|
Gross profit %
|
|
|
29
|
%
|
|
|
30
|
%
|
|
|
|
SG&A
|
|
|
1,168
|
|
|
|
1,035
|
|
|
13
|
%
|
|
Loss on disposition of assets, net
|
|
|
24
|
|
|
|
2
|
|
|
-
|
|
|
Operating income
|
|
$
|
3,619
|
|
|
$
|
3,754
|
|
|
(4
|
%)
|
-
Net sales decreased 15%, excluding currency changes, due to a
slowdown
in the Chinese economy. Details of the change in net sales over the
prior year quarter follow (in thousands):
|
Net sales change
|
|
$ (1,561)
|
|
(15%)
|
|
Foreign currency change
|
|
1,050
|
|
10%
|
|
Total
|
|
$ (511)
|
|
(5%)
|
-
Gross margin percentages in China decreased to 29% from 30% in the
prior year due to material cost increases and changes in product
mix,
which was partially offset by sales price increases.
-
Selling and administrative costs increased 3%, excluding currency
changes, due to marketing, consulting and other general costs.
Other Matters:
-
On December 2, 2008, our Board of Directors declared a quarterly
dividend of $0.20 per share, payable on January 15, 2009 to
shareholders of record as of December 31, 2008.
-
During the first quarter of the prior year we settled an insurance
litigation matter which resulted in a $16 million increase in
operating income and a $10 million increase in net income ($0.80
per
diluted share).
Earnings Call Information:
We will discuss our results in a conference call on Thursday,
December
4, 2008 at 2:00 pm PST. Robert C. Warren, Jr., President and Chief
Executive Officer will host the call. The conference call can be
accessed in the U.S. and Canada by dialing (800) 218-0713,
International
callers can access the call by dialing (303) 262-2131. Participants
are
encouraged to dial-in 15 minutes prior to the beginning of the call.
A
replay will be available for 48 hours after the live broadcast and
can
be accessed by dialing (800) 405-2236 and entering passcode 11122097,
or
internationally, by dialing (303) 590-3000 and entering passcode
11122097.
The call will be simultaneously webcast and can be accessed on the
Investor Relations page of the company’s website, www.cascorp.com.
Listeners should go to the website at least 15 minutes early to
register, download and install any necessary audio software.
