Gross margin improved 80 basis points to 29.6% compared with 28.8% in the first quarter of fiscal 2007 on a 1.0% increase in net sales to $148.1million. Strong performance in the products segment, representing 92.3% of total revenue, included sales growth of 6.7%, and operating margin expansion of 70 basis points, more than offsetting declines in sales and profits in its solutions segment.
Products segment sales increased $8.6m with significant contributions reported by both domestic and European hoist operations, while solutions segment revenue was intentionally held back to facilitate the transition of the business model for its Univeyor business from engineered-to-order projects to a more “standard” products-oriented offering.
Tevens added: “The positive effect of operating leverage from our products segment, combined with lower interest expense, is enabling us to continue increasing Columbus McKinnon’s profitability even while we restructure our solutions business for improved performance. Consolidated operating leverage rose to 34% in the quarter, continuing a strong trend of generating significant additional profit on increased sales,” he said.
Net income for the fiscal 2008 first quarter was $9.5m compared with fiscal 2007 first quarter net income of $5.6m. On a per diluted share basis, first quarter fiscal 2008 net income was $0.50 compared with $0.29 in the same period last year.
In last year’s first quarter, the company recorded net after-tax charges of $3m, or $0.16 per diluted share, in financing costs associated with the repurchase of $38.5m of 10% notes. Excluding the net effect of the refinancing, fiscal 2007 first quarter pro forma net income per diluted share was $0.45.
Tim Tevens, CM president and CEO Tim Tevens, CM president and CEO
