Operating margin improved 140 basis points to 12.6% on a 5.0% increase in net sales to $151.4million.
The company’s products segment, which represents 92.7% of total revenue, increased sales by 8.7% to $140.3m, more than offsetting the managed hold-back of sales in the much smaller solutions segment, which declined 26.9% to $11.1m.
Net income was $9.5m for the fiscal 2008 second quarter, a 13.7% increase from fiscal 2007 second quarter net income of $8.3m. On a per diluted share basis, second quarter fiscal 2008 net income was $0.49, 11.4% higher than $0.44 in the same period last year.
Tevens added: “We are generating significant levels of cash from operations, enabling continued debt reduction which, along with sales growth and favorable operating leverage, is further enhancing Columbus McKinnon’s profitability.”
During the quarter, the firm redeemed the remaining $22.1m of 10% 2010 notes, “which will reduce our annual interest expense going forward by about $2.2m, with a favourable net effect on future earnings of seven cents per diluted share,” according to Tevens.
He continued: “Excluding the impact of refinancing costs from this redemption, pro forma net income per share of $0.54 in this quarter reflects a 22.7% increase over last year’s second quarter net income per diluted share. The combination of continued improvements in sales, operating profitability and financial condition all contributed to recent upgrades in CMCO’s debt ratings from Standard & Poor’s and Moody’s.”
The company recorded net after-tax charges of $0.9m, or $0.05 per diluted share, in financing costs associated with the redemption of all remaining outstanding 10% senior secured notes due 2010. Excluding the effect of these refinancing charges, fiscal 2008 second quarter pro forma net income per diluted share was $0.54, a 22.7% increase from fiscal 2007.
Tim Tevens, president and CEO tim tevens
