The results cover the three months to September 25. In July, the company announced the disposal of its Univeyor elevator business. The results for this quarter reflect only continuing operations; previous filings have been restated to take this into account. Just after the end of this quarter, CM purchased German manufacturer Pfaff-silberblau, paying $53m out of available cash of $82m.
Net sales for the quarter were $154.74m, up $9.7m (6.7%) on the second quarter of 2008. The company said higher international sales (up 10.7% to $50.3m, and accounting for roughly a third of all sales), improved pricing (including new US hoist prices announced on August 1), and foreign currency translation, had all contributed to the rise.
Gross margins were down 1.7 percentage points year on year, from 31.2% to 29.5%. The company said higher material, freight and utility costs had all impacted margins, but that it had sought to address these through pricing changes, including the August 1 change in US hoist prices. Although steel accounts for 10% of the total cost of goods sold, the company accounts for fluctuations in steel prices through a separate surcharge.
The company’s delivery schedules and costs were stretched by Hurricane Ike in September. It said that the cost of delayed sales amounted to around $600,000, and that costs for September were up $1m compared with an average July and August.
The financial storm of recent weeks hasn’t yet hit the company, with sales backlog up from $62.3m last quarter to $63.8m this quarter. However, CEO Timothy Tevens warned: “We have seen a slowing of orders during October and expect that, given the severity of the global economic crisis, businesses will delay project and purchase decisions until there is more clarity regarding the future.”
The company has maintained its debt to capital ratio at around 30%, even after the cash purchase of Pfaff-silberblau (shortly after the end of the quarter covered in the filing). The company said it believes this allows it “sufficient flexibility for strategic acquisitions and the financial strength needed for capitalising on market downturns.”
