CMCO closing North American sites as it tightens its belt
21 May 2009US materials handling products and services giant Columbus McKinnon Corporation (CMCO) recorded a “rapid and substantial” downturn in its results during its fourth quarter to 31 March. As a result CMCO is restructuring its North American hoist and rigging manufacturing facilities, which will see it close two sites and “significantly downsizing a third”.
This move will generate annual savings up to USD10m and reduce its manufacturing footprint by 500,000 sq ft.
In its results, against the period ended 31 March, 2008, net sales were down 15% to USD135m, gross profit was down 32% to USD34m, selling expenses were down 13% to USD17m, general and administrative expenses were up 10% to USD9m, restructuring charges rose 172% to USD776,000 and amortization/impairment went up 325,721% to USD107m. This resulted in a loss from operations of USD100m, a 553% fall from the period ended 31 March, 2008.
Continuing operations generated a 725% downturn in income, falling from USD16m to a loss of USD102m, with discontinued operations improving 104% from a loss of USD8m to an income of USD369,000. Net income for the period stood at a loss of USD102m, a fall of 1,322% year-on-year.
For the year ended 31 March, net sales rose 2.2% to USD606m, gross profit was down 6.4% to USD173m, income from operations fell 157% to a loss of USD46m and net income was down 309% to a loss of USD78m.
These results include input from Pfaff-silberblau, which was acquired on 1 October, 2008. CMCO said Pfaff contributed USD16m to fourth quarter net sales,
CMCO’s order backlog was recorded at USD70m as of 31 March, compared to USD79m at 31 December, 2008 and USD57m at 31 March, 2008. Year-on-year growth was attributed to the addition of Pfaff to CMCO’s books, with a backlog value of USD27m generated by that business.
“The fourth quarter turned down rapidly and substantially as our channel partners felt the full brunt of the global recession and orders became extremely weak,” said president and CEO Timothy Tevens.
“In addition to pursuing the cost control activities we would normally perform in any downturn, we’re strategically consolidating manufacturing capacity.
“Although we are taking action to position the company to address the economic challenges of today, these measures are designed to strategically fortify the organisation to be a stronger, more profitable business in the future, as well as provide greater flexibility to adjust quickly to market volatility. We consolidated our manufacturing space while increasing our output between 2001 and 2004 during the last economic downturn and we recognised significant positive operating leverage when the economy recovered. Importantly, we are maintaining our investments that will drive future revenue growth and profitability, such as new product development and emerging market penetration activities.”
