Cascade Corporation Announces Financial Results for the First Quarter Ended April 30, 2006.PORTLAND Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Ore. -- Cascade A connected series of devices or images. It often implies that the second and subsequent device takes over after the previous one is used up. For example, cascading tapes in a dual-tape backup system means the second tape is written after the first one is full. Corporation (NYSE NYSE See: New York Stock Exchange :CAE (1) (Computer-Aided Engineering) Software that analyzes designs which have been created in the computer or that have been created elsewhere and entered into the computer. ) today reported its financial results for the first quarter ended April 30, 2006. Overview --Net sales of $117.8 million for the first quarter of fiscal 2007 were 3% higher than net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $114.5 million for the prior year quarter. --Net income of $11.0 million ($0.84 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share) for the first quarter of fiscal 2007 was 10% lower than net income of $12.2 million ($0.95 per diluted share) for the first quarter of fiscal 2006. --First quarter of fiscal 2007 includes a $715,000 gain ($0.05 per share) on the sale of a manufacturing facility in The Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. . First Quarter Fiscal 2007 Summary --Summary financial results for the first quarter are outlined below (in thousands, except earnings per share): Quarter ended April 30, 2006 2005 % Change ---------------------------------------------------------------------- Net sales $ 117,774 $ 114,515 3% Gross profit 36,689 37,488 (2%) Gross profit % 31% 33% SG&A 19,852 18,118 10% Operating Income 17,197 19,222 (11%) Income before tax 17,054 18,781 (9%) Provision for income taxes 6,020 6,573 Effective tax rate 35% 35% - Net income $ 11,034 $ 12,208 (10%) Diluted earnings per share $ 0.84 $ 0.95 --Higher sales in the first quarter of fiscal 2007 were primarily the result of strong lift truck markets throughout the world. Details of the sales increase for the first quarter of fiscal 2007 over the prior year first quarter follow (in millions):
Revenue growth $5.4 5%
Foreign currency changes (2.2) (2%)
--------- ---------
Total $3.2 3%
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--The consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: gross profit percentage of 31% in the first quarter was down from 33% in the first quarter of the prior year. This decrease reflects lower shipment volumes for certain products sold in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and higher manufacturing costs in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . In addition, we have
continued to experience higher costs for certain grades of steel parts
and components globally.--The majority of the increase in SG&A was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to share-based compensation costs related to the new accounting standard for share-based compensation which we adopted in the second quarter of fiscal 2006. --The effective tax rate of 35% is consistent with the rate in the first quarter of the prior year. Market Conditions --Percentage increases in first quarter lift truck industry shipments, by region, as compared to the same quarter in the prior year are outlined below. Although lift truck shipments are an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of the general health of the industry, they do not necessarily correlate with the demand for Cascade's products.
First Quarter(a)
----------------
North America 6%
Europe 13%
Asia Pacific, excluding China 10%
China 23%
(a) Represents calendar year data
--We are continuing to see increases in the cost of certain steel parts and components, although the overall increase in material costs has been less significant than we experienced in prior years. In addition, we anticipate the costs of other components to be increasing in fiscal 2007. We will continue our efforts to aggressively mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the effect of increases to the cost of parts and components through a
variety of means, although there is no assurance we will be able to
mitigate the full impact of all material cost increases.
North America Summary
Quarter ended April 30, 2006 2005 % Change
-----------------------------------------------------------------
Net sales $ 66,615 $ 61,617 8%
Gross profit 25,958 23,992 8%
Gross profit % 39% 39%
SG&A 11,468 10,428 10%
Loss on sale of assets 4 - -
Amortization 89 37 -
--------- ---------
Operating income $ 14,397 $ 13,527 6%
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--Revenue growth reflected the strong North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. lift truck market in the first quarter of fiscal 2007. Details of the revenue increase for the quarter over the prior year quarter follow (in millions):
Revenue growth $4.5 7%
Foreign currency changes 0.5 1%
--------- ---------
Total $5.0 8%
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--The gross profit percentage of 39% was consistent with the prior year first quarter. The effect of price increases, which went into effect beginning in the second quarter of fiscal 2006 and through the remainder of that year, have offset increased material and other costs. --Increased SG&A expense was primarily attributable to share-based compensation costs.
Europe Summary
Quarter ended April 30, 2006 2005 % Change
----------------------------------------------------------------------
Net sales $ 33,221 $ 36,704 (9%)
Gross profit 5,344 8,294 (36%)
Gross profit % 16% 23%
SG&A 5,852 5,495 6%
Loss (gain) on sale of assets (662) 20 -
Amortization 207 132 57%
----------- ---------
Operating income (loss) $ (53) $ 2,647 -
========= =========
--Details of the revenue decrease for the quarter over the prior year quarter follow (in millions):
Revenue decline $(1.1) (3%)
Foreign currency changes (2.4) (6%)
--------- ---------
Total $(3.5) (9%)
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--The decrease in sales in Europe can be primarily attributed to a loss of market share for certain products. We are taking steps to gain back this market share through a reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. of existing sales staff and targeted marketing efforts with certain customers. A primary focus of these efforts will be in the Eastern European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and Middle East markets which have shown strong growth. --Gross profit percentage in Europe was down from 23% in the prior year to 16% in the first quarter of fiscal 2007. This decrease reflects higher manufacturing costs in Europe and a failure to recover material cost increases in certain product segments. A significant portion of these costs relate to our German manufacturing facility. In addition, we have yet to fully realize the benefits from the closure of our Hoorn Hoorn, city (1994 pop. 60,979), North Holland prov., N central Netherlands, on an inlet of the IJsselmeer. It is a commercial and processing center for a vegetable-growing and dairy-farming region. , The Netherlands facility, which was closed in the latter half of fiscal 2006. --The increase in SG&A was primarily due to higher sales and marketing costs. --We recognized a $715,000 gain on the sale of assets in the first quarter of fiscal 2007 related to the sale of a facility in The Netherlands which was closed in fiscal 2006.
Asia Pacific Summary
Quarter ended April 30, 2006 2005 % Change
----------------------------------------------------------------------
Net sales $ 11,137 $ 10,913 2%
Gross profit 2,749 3,151 (13%)
Gross profit % 25% 29%
SG&A 1,948 1,798 8%
Gain on sale of assets (4) (48) -
--------- ---------
Operating income $ 805 $ 1,401 (43%)
========= =========
--The sales increase in the Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). region, which excludes China, was primarily due to strong sales growth in the overall lift truck market. Details of the revenue increase for the quarter over the prior year quarter follow (in millions):
Revenue growth $0.7 7%
Foreign currency changes (0.5) (5%)
--------- ---------
Total $0.2 2%
========= =========
--Gross profit percentage declined due to higher material costs which could not be passed on to customers through higher sales prices. --The increase in SG&A was due to employee costs related to management positions created to support various corporate initiatives.
China Summary
Quarter ended January 31, 2006 2005 % Change
------------------------------------------------------------------
Net sales $ 6,801 $ 5,281 29%
Gross profit 2,638 2,051 29%
Gross profit % 39% 39%
SG&A 584 397 47%
Amortization 6 7 (14%)
--------- ---------
Operating income $ 2,048 $ 1,647 24%
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--The net sales increase in China is due to increasing application rates for our attachment See attach a file. products, and the continued strength in the Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. lift truck market. The application rate relates to the percentage of new lift truck sales which include attachments. Historically, application rates in China and emerging markets have been lower than in more mature markets such as Europe and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Details of the revenue increase for the quarter over the prior year quarter follow (in millions):
Revenue growth $1.3 26%
Foreign currency changes 0.2 3%
--------- ---------
Total $1.5 29%
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--Gross margin percentages in China remained at 39%, which is consistent with the prior year. The effects of any increases in material and other costs have been offset by higher sales volumes. --Selling and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. increased 43% in the first quarter excluding currency changes. This increase is due to additional sales and marketing costs, professional fees and other miscellaneous costs. Dividend --On June June: see month. 6, 2006, Cascade's Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly dividend of $0.15 per share, payable on July July: see month. 21, 2006 to shareholders of record as of July 5, 2006. Forward Looking Statements: This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Readers are cautioned that a number of factors could cause our actual results to differ materially from any results indicated in this release or in any other forward-looking statements made by us, or on our behalf. These include among others factors related to general economic conditions, interest rates, demand for materials handling Materials handling The loading, moving, and unloading of materials. The hundreds of different ways of handling materials are generally classified according to the type of equipment used. products, performance of our manufacturing facilities and the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the materials handling industry. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and 10-Q and other filings with the Securities and Exchange Commission. Earnings Call Information: We will discuss our results in a conference call on Wednesday Wednesday: see week. , June 7, 2006, at 2:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. C. Warren Warren. 1 City (1990 pop. 144,864), Macomb co., SE Mich., a suburb of Detroit; est. 1837, inc. as a city 1957. It is an important metalworking center where steel is processed. , President and Chief Executive Officer, and Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a "Andy" Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic , Senior Vice President and Chief Financial Officer will host the call. The conference call can be accessed in the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of by dialing 800-366-7417, International callers can access the call by dialing 303-262-2211. 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 11061865#, or internationally, by dialing 303-590-3000 and entering passcode 11061865#. The call will be simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics webcast and can be accessed on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page of the company's website, www.cascorp.com. Listeners should go to the website at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. About Cascade Corporation: Cascade Corporation, headquartered in Fairview, Oregon For other places with the same name, see Fairview, Oregon (disambiguation). Fairview is a city in Multnomah County, Oregon, United States. As of the 2000 census, the city population was 7,561. It is the westernmost town on the Oregon side of the Columbia River Gorge. , 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
April 30
-------------------
2006 2005
--------- ---------
Net sales $117,774 $114,515
Cost of goods sold 81,085 77,027
--------- ---------
Gross profit 36,689 37,488
Selling and administrative expenses 19,852 18,118
Gain on sale of assets (662) (28)
Amortization 302 176
--------- ---------
Operating income 17,197 19,222
Interest expense 532 750
Interest income (355) (107)
Other income (34) (202)
--------- ---------
Income before provision for income taxes 17,054 18,781
Provision for income taxes 6,020 6,573
--------- ---------
Net income $ 11,034 $ 12,208
========= =========
Basic earnings per share $ 0.88 $ 1.00
Diluted earnings per share $ 0.84 $ 0.95
Basic weighted average shares outstanding 12,542 12,229
Diluted weighted average shares outstanding 13,174 12,827
CASCADE CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited -- in thousands, except per share amounts)
April 30 Jan. 31
2006 2006
ASSETS --------- ---------
Current assets:
Cash and cash equivalents $ 40,127 $ 35,493
Marketable securities 22,104 23,004
Accounts receivable, less allowance for doubtful
accounts of $1,496 and $1,415 78,920 67,020
Inventories 55,397 56,996
Deferred income taxes 3,399 3,232
Prepaid expenses and other 4,593 5,373
--------- ---------
Total current assets 204,540 191,118
Property, plant and equipment, net 76,485 75,374
Goodwill 80,410 78,820
Deferred income taxes 12,446 11,851
Other assets 3,998 4,120
--------- ---------
Total assets $377,879 $361,283
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 4,532 $ 4,741
Current portion of long-term debt 12,681 12,681
Accounts payable 21,997 25,124
Accrued payroll and payroll taxes 8,988 8,710
Accrued environmental expenses 982 984
Dividends payable 1,882 -
Other accrued expenses 17,220 13,916
--------- ---------
Total current liabilities 68,282 66,156
Long-term debt 12,500 12,500
Accrued environmental expenses 6,764 6,951
Deferred income taxes 4,231 4,009
Other liabilities 12,690 12,261
--------- ---------
Total liabilities 104,467 101,877
--------- ---------
Shareholders' equity:
Common stock, $.50 par value, 20,000
authorized shares; 12,548 and 12,536
shares issued and outstanding 6,274 6,268
Additional paid-in capital 22,652 21,590
Retained earnings 233,019 223,867
Accumulated other comprehensive income 11,467 7,681
--------- ---------
Total shareholders' equity 273,412 259,406
--------- ---------
Total liabilities and shareholders' equity $377,879 $361,283
========= =========
CASCADE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Three Months Ended
April 30
-------------------
2006 2005
--------- ---------
Cash flows from operating activities:
Net income $ 11,034 $ 12,208
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,784 3,730
Share-based compensation 931 (228)
Deferred income taxes (586) (532)
Gain on disposition of assets (662) (28)
Changes in operating assets and liabilities:
Accounts receivable (10,355) (8,915)
Inventories 2,754 (2,116)
Prepaid expenses and other 130 122
Accounts payable and accrued expenses (3,742) (3,323)
Income taxes payable and receivable 3,262 2,564
Other assets and liabilities 85 491
--------- ---------
Net cash provided by operating activities 6,635 3,973
--------- ---------
Cash flows from investing activities:
Capital expenditures (3,251) (2,014)
Sales of marketable securities 7,000 1,000
Purchases of marketable securities (6,100) (12,550)
Proceeds from sale of assets 1,521 163
--------- ---------
Net cash used in investing activities (830) (13,401)
--------- ---------
Cash flows from financing activities:
Cash dividends paid - (1,467)
Payments on long-term debt and capital leases - (13)
Notes payable to banks, net (366) (1,065)
Common stock issued under share-based compensation
plans 114 189
Excess tax benefit from exercise of share-based
compensation awards 23 23
--------- ---------
Net cash used in financing activities (229) (2,333)
--------- ---------
Effect of exchange rate changes (942) 586
--------- ---------
Change in cash and cash equivalents 4,634 (11,175)
Cash and cash equivalents at beginning of period 35,493 30,482
--------- ---------
Cash and cash equivalents at end of period $ 40,127 $ 19,307
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