Columbus McKinnon Reports Gross Margin Expanded To 31.9% In Fiscal 2014 Second Quarter
Columbus McKinnon Corporation (NASDAQ:CMCO), a leading designer,
manufacturer and marketer of material handling products, today announced
financial results for its fiscal 2014 second quarter which ended
Columbus McKinnon Corporation (NASDAQ:CMCO), a leading designer, manufacturer and marketer of material handling products, today announced financial results for its fiscal 2014 second quarter which ended September 30, 2013. Timothy T. Tevens, President and Chief Executive Officer, commented, “We continue to realize the benefits of our lean manufacturing processes and continuous improvement efforts as demonstrated by the level of gross margin we achieved despite lower sales volume. Our growth in Asia, specifically China, continues to outpace the rest of the geographic markets we serve. We are also making excellent progress on the new facilities we are building to better serve that region. The facilities will enable us to compete in China on a better cost basis and provide more capacity to address this important market.” Net sales for the second quarter of fiscal 2014 were $138.9 million, down $7.6 million, or 5.2%, from the prior-year period as pricing improvements were more than offset by reductions in volume. Volume declines were mostly driven by reduced levels of investment on major capital projects by end users and the continued poor economy in Europe. The net effect of acquisitions and divestitures offset the impact of foreign currency translation. U.S. sales, which comprised 57% of total sales, were down by $6.1 million, or 7.1%, to $78.9 million compared with the second quarter of fiscal 2013. Lower volume and the impact of the crane business divestiture in August 2012 more than offset pricing improvements. Sales outside of the U.S. were down $1.6 million, or 2.5%, to $60.0 million, as growth in emerging markets, improved pricing and the $1.4 million contribution from the June 2013 Austrian acquisition were not sufficient to offset lower volume, primarily in Europe. Foreign currency translation had a positive impact of $0.3 million on sales during the quarter. The fluctuation in sales for the second quarter of fiscal 2014 compared with the second quarter of fiscal 2013 is summarized as follows:
($ in millions)
Acquisitions & divestitures
Foreign currency translation
Improved Gross Margin Gross profit in the second quarter of fiscal 2014 increased to $44.3 million, up $1.9 million from the prior-year period. Improved pricing net of raw material inflation and acquisitions and divestitures had a positive effect on gross profit. This more than offset the negative impact of lower volume and higher product liability costs resulting from a favorable reserve adjustment in the prior-year period. As a percentage of sales, gross margin improved 300 basis points to 31.9% compared with 28.9% for the prior-year period.
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Shares of Columbus McKinnon Corporation (Nasdaq:CMCO) were gapping up Thursday morning with an open price 13.5% higher than Wednesday's closing price. The stock closed at $13.88 yesterday and opened today's trading at $15.75.