Columbus McKinnon(US:CMCO)2019-05-29 20:44Financial Performance - Fiscal 2019 sales were $876.3 million, an increase of 4.4% compared to $839.4 million in fiscal 2018, driven by increased sales volume and price increases [151]. - Gross profit for fiscal 2019 was $305.0 million, representing 34.8% of net sales, up from $285.0 million or 34.0% in fiscal 2018, reflecting a 7.0% increase [152]. - Net income for fiscal 2019 was $42.6 million, compared to $22.1 million in fiscal 2018, reflecting a significant improvement in profitability [135]. - Net income increased significantly to $42.577 million in 2019, up from $22.065 million in 2018, marking an increase of approximately 93.5% [247]. - Basic income per share rose to $1.83 in 2019, compared to $0.97 in 2018, indicating a substantial increase of 88.7% [247]. Expenses and Costs - Selling expenses decreased to $97.9 million in fiscal 2019, accounting for 11.2% of net sales, down from 12.1% in fiscal 2018 [153]. - General and administrative expenses decreased to $83,567,000 in fiscal 2019 from $85,605,000 in fiscal 2018, representing 9.5% of net sales compared to 10.2% [154]. - Research and development expenses were $13,491,000 in fiscal 2019, down from $13,617,000 in fiscal 2018, accounting for 1.5% of consolidated net sales versus 1.6% [155]. - Interest and debt expense decreased to $17,144,000 in fiscal 2019 from $19,733,000 in fiscal 2018, primarily due to lower average borrowings [157]. - The company incurred approximately $1.7 million in increased tariffs, impacting overall costs [148]. Assets and Liabilities - Total assets at the end of the period were $1,061.6 million, down from $1,142.4 million in the previous year [135]. - Total debt decreased to $300.3 million from $363.3 million, indicating improved financial leverage [135]. - Total liabilities were $630.412 million in 2019, down from $734.217 million in 2018, representing a reduction of approximately 14.2% [244]. - Shareholders' equity increased to $431.159 million in 2019, compared to $408.229 million in 2018, an increase of about 5.6% [244]. Cash Flow - Cash flow from operating activities increased to $79,499,000 in fiscal 2019 from $69,661,000 in fiscal 2018, driven by net income and non-cash adjustments [179]. - Net cash used by investing activities was $2,486,000 in fiscal 2019, a significant improvement from $(32,592,000) in fiscal 2018 [181]. - Net cash used by financing activities was $(67,778,000) in fiscal 2019, compared to $(59,502,000) in fiscal 2018, primarily due to repayments on the Term Loan [183]. - Cash and cash equivalents at the end of the year were $71,343,000, up from $63,565,000 at the beginning of the year, indicating an increase of 12.8% [257]. Market and Geographic Diversity - Approximately 46% of revenue was derived from customers outside the U.S., highlighting the company's geographic diversity [145]. - The company’s sales in the United States accounted for approximately 54% of total sales during fiscal 2019 [260]. Strategic Focus and Investments - The company is focused on expanding its market share in North America and emerging markets through strategic investments and acquisitions [146]. - The Company expects capital expenditures for fiscal 2020 to be approximately $20,000,000, an increase from $12,288,000 in fiscal 2019 [201]. Revenue Recognition and Accounting Practices - The company adopted ASU No. 2014-09 for revenue recognition effective April 1, 2018, impacting financial reporting practices [238]. - Revenue from standard products is recognized at the time of shipment, while custom engineered products are recognized upon project completion [309][310]. - The Company recognizes revenue when control of goods or services is transferred to customers, following a five-step process outlined in ASC 606 [302][307]. Tariffs and Foreign Operations - The Company has estimated its exposure related to tariffs to be approximately $1,700,000, which will result in increased cost of products sold [223]. - In fiscal 2019, 46% of net sales were from manufacturing plants and sales offices in foreign jurisdictions [224]. Financial Instruments and Hedging - The notional amount of cross currency swap agreements designated as cash flow hedges is $198,260,000 [225]. - The notional amount of foreign currency forward agreements designated as cash flow hedges for forecasted inventory purchases is $11,185,000 [227].