CMCO reported net sales for the period of USD119m, including USD17.6m contributed by Pfaff. This equates to a 21.3% fall on the first quarter of the previous financial year, or USD32.3m. However, CMCO said, excluding Pfaff’s contribution, net sales tumbled 32.9% year-on-year.
International sales, again including the USD17.6m from Pfaff, were USD52.6m, or 44% of total net sales. This was up USD3.3m or 6.6% on the previous year.
CMCO’s efforts to restructure and manage its outgoings were evident in the first quarter, with selling expenses down 9.5% to USD16.5m, and general and administrative costs falling 14.5% to USD8.5m.
Overall, CMCO reported a net loss of USD2.4m in the quarter compared to earnings of USD9.7m last year. Backlog at the end of the first quarter had risen from USD63.9m to USD68.6m year-on-year, although falling from the USD70.1m reported at the end of the 2009 fiscal year. CMCO said Pfaff contributed USD27.7m worth of backlog in the current financial year, comfortably offsetting declines from its organic business.
“We are reducing our manufacturing footprint, improving efficiencies and implementing a new go-to-market strategy in our key North American hoist and rigging businesses to even better serve our customers,” said president and CEO Timothy Tevens.
“Additionally, we have successfully reduced expenses across the board and are evaluating further adjustments as necessary. This quarter reflected some of these activities, which we expect to drive approximately USD7m to USD8m in annualised cost savings, beginning in the second quarter. In addition, another USD9m to USD11m in annualised savings is anticipated from the consolidation of our North American hoist and rigging manufacturing operations, beginning in the third and fourth quarters of this fiscal year.
“We expect that as the full force of our reorganisation takes effect by the fourth quarter of fiscal 2010, we should be able to achieve our goal of operating margins in the higher end of the single digit range on measurably lower sales. In the meantime, we expect we will continue to generate cash as well as return to profitability.”
