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The Amherst material-handling equipment maker's earnings tumbled by 62 percent as the company was hit by restructuring costs and a write-down of some of its self-insurance fund's investments. Still, its earnings, excluding those charges, were far stronger than analysts expected.
That sparked a rally by Columbus McKinnon's stock on Thursday, shooting up by 12 percent, or $1.44, to $13.16.
While Columbus McKinnon executives said the recession has weakened the company's business, especially in the United States, the impact was less than expected. The company's earnings of 54 cents per share, excluding one-time charges, easily topped the 41 cents per share that analysts surveyed by Thomson Financial/First Call were expecting.
Timothy T. Tevens, Columbus McKinnon's president and chief executive officer, said the company's markets are weakening as U. S. factories are running at ever-lower capacity.
"It's probably going to get weaker," he said. "I also think Europe is going to get weaker."
To meet the declining demand, which reduced the company's sales volume by 6 percent in the third quarter, Columbus McKinnon eliminated about 200 jobs, or roughly 7 percent of its global work force. Those moves, which cost the company $1 million in the third quarter, are expected to save about $4 million a year.
Tevens said the company is prepared to make even deeper cuts in the current quarter if the decline continues. The company is targeting another 200 or so job cuts, along with further plant closings, possible wage and hiring freezes and the potential for eliminating the company match of employee 401(k) plan contributions.
Those steps, if implemented, could save another $6 million a year, at a price of $2 million to $3 million against the current quarter's earnings, he said.
Columbus McKinnon's profits fell to $3.8 million, or 20 cents per share, from $10 million, or 52 cents per share, a year earlier.
Much of the decline was due to 34 cents per share in onetime charges that Columbus McKinnon absorbed during the quarter. Excluding those expenses, the company's operating profits fell by 23 percent to $14.9 million from $19.4 million.
Columbus McKinnon's sales rose by 13 percent to $165.1 mil-lion, mainly because of its Pfaffsilberblau acquisition in October, which brought in an extra $26.8 million in revenues during the quarter. That offset the $9 million drop in revenues from the decline in sales volumes as the economy weakened, especially in its North American markets. The sales were $5 million more than analysts expected.
drobinson@buffnews.com
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