Cascade Corporation (NYSE: CASC) today reported its financial results for the fourth quarter ended January 31, 2013.

Fourth Quarter Fiscal 2013 Summary

  • Summary financial results are outlined below (in thousands, except earnings per share):
                                 
Three Months Ended January 3120132012% Change
Net sales $ 123,570 $ 125,924 (2 %)
Gross profit 34,926 36,420 (4 %)
Gross profit % 28 % 29 %
SG&A 22,551 20,759 9 %
Environmental 4,000 - -
Australia flood proceeds, net - (2,871 ) -
Operating income 8,375 18,532 (55 %)
Operating income % 7 % 15 %
Interest expense (income), net (36 ) 65 -
Foreign currency loss, net 55 16 -
Income before taxes 8,356 18,451 (55 %)
Provision for income taxes 2,642 5,255 (50 %)
Effective tax rate 32 % 28 %
Net income $ 5,714 $ 13,196 (57 %)
Diluted earnings per share $ 0.50 $ 1.16 (57 %)
 
  • Consolidated net sales during the fourth quarter of fiscal 2013 decreased compared to the fourth quarter of fiscal 2012, excluding the impact of foreign currency changes, primarily due to lower sales volumes in Europe. Details of the net sales decrease over the prior year fourth quarter follow (in thousands):
                               
2013 Change %
Net sales change $ (2,176 ) (2 %)
Foreign currency change   (178 ) 0 %
Total $ (2,354 ) (2 %)
 
  • Our consolidated gross profit percentage was slightly lower during the fourth quarter of fiscal 2013 compared to fiscal 2012 primarily as a result of decreased sales volumes.
  • Selling and administrative expense increased during the fourth quarter of fiscal 2013 due to additional costs related to the pending acquisition by Toyota Industries Corporation ($0.8 million) and other costs in the Americas and China.
  • During the fourth quarter of fiscal 2013, we recorded a $4.0 million charge related to the expansion of our existing long-term environmental remediation plans at our Fairview, Oregon and Springfield, Ohio locations.
  • Our facility in Australia was significantly damaged by flooding in January 2011. During the fourth quarter of fiscal 2012, we received net flood insurance proceeds of $2.9 million. The after tax impact of the proceeds was $2.0 million ($.18 per diluted share).
  • The effective income tax rate was higher primarily due to a larger reduction in the valuation allowance on The Netherlands deferred tax assets in fiscal 2012.

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, they do not necessarily correlate directly with the demand for our products on a quarterly basis.
                               
Shipments Orders
Q4 FY13 vs Q4 FY12 Q4 FY13 vs Q4 FY12
Americas (1%) 5%
Europe (8%) (12%)
Asia Pacific (2%) (7%)
China (8%) 6%
Global (5%) (2%)
 

Fiscal Year Ended January 31, 2013 Summary

  • Summary financial results for the fiscal years ended January 31, 2013 and 2012 are as follows (in thousands, except earnings per share):
                                 
Year Ended January 3120132012% Change
Net sales $ 538,408 $ 535,767 -
Gross profit 162,368 169,287 (4 %)
Gross profit % 30 % 32 %
SG&A 90,833 85,009 7 %
Environmental 4,000 - -
Australia flood proceeds, net - (3,137 ) -
Operating income 67,535 87,415 (23 %)
Operating income % 13 % 16 %
Interest expense, net 119 542 (78 %)
Foreign currency loss, net 312 1,053 (70 %)
Income before taxes 67,104 85,820 (22 %)
Provision for income taxes 20,252 22,774 (11 %)
Effective tax rate 30 % 27 %
Net income $ 46,852 $ 63,046 (26 %)
Diluted earnings per share $ 4.10 $ 5.58 (27 %)
 
  • SG&A expenses in fiscal 2013 were 9% higher, excluding the impact of currency changes, primarily due to costs related to the pending acquisition by Toyota Industries Corporation ($2.7 million), our new subsidiary in Brazil and increased personnel, insurance and consulting costs.
  • The effective income tax rate was higher primarily due to a larger reduction in the valuation allowance on The Netherlands deferred tax assets in fiscal 2012.

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. Readers are cautioned that a number of factors could cause our actual results to differ materially from results expressed or implied by forward-looking statements in this release or in any other forward-looking statements made by us, or on our behalf. These factors include among others, the effects of general economic conditions, interest rates, demand for materials handling products and construction equipment, performance of our manufacturing facilities and the cyclical nature of the materials handling and construction equipment industries, and any failure to satisfy the conditions to the completion of our transaction with TICO or otherwise complete the transaction. 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.

     
CASCADE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited -- in thousands, except per share amounts)
                 
Three Months Ended January 31 Twelve Months Ended January 31
2013 2012 2013 2012
Net sales $ 123,570 $ 125,924 $ 538,408 $ 535,767
Cost of goods sold   88,644     89,504     376,040   366,480  
Gross profit 34,926 36,420 162,368 169,287
 
Selling and administrative expenses 22,551 20,759 90,833 85,009
Environmental 4,000 - 4,000 -
Australia flood proceeds, net   -     (2,871 )   -   (3,137 )
 
Operating income 8,375 18,532 67,535 87,415
Interest expense (income), net (36 ) 65 119 542
Foreign currency loss, net   55     16     312   1,053  
 
Income before provision for income taxes 8,356 18,451 67,104 85,820
Provision for income taxes   2,642     5,255     20,252   22,774  
 
Net income $ 5,714   $ 13,196   $ 46,852 $ 63,046  
 
Basic earnings per share $ 0.51   $ 1.20   $ 4.22 $ 5.74  
Diluted earnings per share $ 0.50   $ 1.16   $ 4.10 $ 5.58  
 
Basic weighted average shares outstanding 11,126 11,017 11,099 10,988
Diluted weighted average shares outstanding 11,486 11,329 11,419 11,293
Cash dividends per share $ .35   $ .25   $ 1.40 $ .90  
 
 
 
CASCADE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
                     
January 31,
2013 2012
 
ASSETS
Current assets:
Cash and cash equivalents $ 46,543 $ 24,928
Accounts receivable, less allowance for doubtful accounts of $1,159 and $1,211 75,962 77,752
Inventories 88,297 86,660
Deferred income taxes 5,292 3,822
Assets available for sale - 7,572
Prepaid expenses and other   12,814   11,353
Total current assets 228,908 212,087
Property, plant and equipment, net 80,220 71,439
Goodwill 88,906 88,174
Deferred income taxes 22,764 18,964
Other assets   4,874   3,895
Total assets $ 425,672 $ 394,559
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks and current portion of long-term debt $ - $ 689
Accounts payable 24,582 28,280
Accrued payroll and payroll taxes 9,171 9,473
Accrued incentive pay 1,307 2,496
Other accrued expenses   14,991   15,580
Total current liabilities 50,051 56,518
Long-term debt, net of current portion 3,500 4,950
Accrued environmental expenses 4,976 2,279
Deferred income taxes and other tax liabilities 9,931 8,626
Employee benefit obligations 8,087 8,228
Other liabilities   2,624   3,231
Total liabilities   79,169   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 18,526 13,252
Retained earnings 282,494 251,280
Accumulated other comprehensive income 39,883 40,651
   
Total shareholders' equity   346,503   310,727
Total liabilities and shareholders' equity $ 425,672 $ 394,559
 
 
                       
CASCADE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
 

Three Months Ended

January 31,

Twelve Months Ended

January 31,

2013 2012 2013 2012
Cash flows from operating activities:
Net income $ 5,714 $ 13,196 $ 46,852 $ 63,046

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

Depreciation and amortization 2,923 2,474 10,802 9,982
Share-based compensation 758 570 2,899 2,486
Deferred income taxes (1,165 ) (472 ) (5,148 ) (1,917 )
Tax effect on share-based compensation (16 ) (432 ) (1,590 ) (693 )
Loss (gain) on disposition of assets, net 20 6 (16 ) (140 )
Changes in operating assets and liabilities:
Accounts receivable 8,477 6,759 81 (11,035 )
Inventories 1,683 (2,758 ) (491 ) (19,661 )
Prepaid expenses and other 2,256 6,628 476 (91 )
Accounts payable and accrued expenses (2,447 ) (2,497 ) (3,381 ) 6,182
Income taxes payable and receivable (1,297 ) 596 (2,596 ) 2,684
Environmental liability 3,701 (81 ) 2,697 (832 )
Other assets and liabilities   (2,272 )   1,285     586     4,208  
Net cash provided by operating activities   18,335     25,274     51,171     54,219  
 
Cash flows from investing activities:
Capital expenditures (3,027 ) (4,227 ) (12,388 ) (13,417 )
Proceeds from disposition of assets 131 278 287 1,452
Business acquisitions   -     (1,450 )   (1,266 )   (1,450 )
Net cash used in investing activities   (2,896 )   (5,399 )   (13,367 )   (13,415 )
 
Cash flows from financing activities:
Cash dividends paid (3,920 ) (2,770 ) (15,638 ) (9,960 )
Payments on long-term debt (14,450 ) (31,146 ) (131,344 ) (108,569 )
Proceeds from long-term debt 14,800 14,500 129,500 71,500
Notes payable to banks, net - (533 ) (98 ) 102
Common stock issued under share-based compensation plans - 68 842 877
Tax effect on share-based compensation   16     432     1,590     693  
Net cash used in financing activities   (3,554 )   (19,449 )   (15,148 )   (45,357 )
 
Effect of exchange rate changes   (590 )   4,707     (1,041 )   4,444  
 
Change in cash and cash equivalents 11,295 5,133 21,615 (109 )
Cash and cash equivalents at beginning of period   35,248     19,795     24,928     25,037  
Cash and cash equivalents at end of period $ 46,543   $ 24,928   $ 46,543   $ 24,928  

Cascade Corporation
Joseph G. Pointer
Chief Financial Officer
(503) 669-6300