Columbus McKinnon has warned that the downturn in the US economy mean that it will report lower than expected earnings for the fourth quarter of fiscal 2001 when it reports its results next month.
"The continuing recession in the manufacturing economy, which worsened during our fourth fiscal quarter, combined with the widespread uncertainty it has created, is delaying capital spending and reducing demand for industrial products significantly more than we earlier anticipated," said Timothy Tevens, president and chief executive officer.
"While CM’s fourth quarter revenues are expected to be up modestly from the fiscal third 2001 quarter, they will be well below last year’s strong fourth quarter. That decline combined with tighter margins, higher energy costs, and the unusual costs associated with our recently concluded strategic alternatives process, will result in lower than expected earnings for the quarter." Tevens continued: "We are moving quickly to implement our strategic initiatives, including adoption of lean manufacturing at a number of key facilities to position us for greater profitability going forward. We are also continuing to further reduce both variable and fixed costs to lessen the impact of this broad-based economic slowdown on our financial results in the upcoming fiscal year. While the near-term business environment appears likely to continue to be difficult, Columbus McKinnon’s ability to generate significant operating cash flow and its leading market share in many product lines better enable it to endure the effects of this business cycle."
