Seven years ago, Columbus McKinnon was on the ropes, burdened with a huge debt load and struggling with a costly acquisition that was going sour.
On Monday, shareholders gave Columbus McKinnon's management a standing ovation to recognize the company's comeback, which has made the Amherst material handling equipment maker more profitable than ever and brought its sales close to its 2000 peak.
"The company has gone from struggling a few years ago to being one that is very good shape today," Columbus McKinnon Chairman Ernest R. Verebelyi told shareholders Monday during the firm's annual shareholder's meeting.
Behind that rebound is the company's prolonged restructuring program, which began with the sale of its troubled auto assembly plant design business in 2003 for just a fraction of its purchase price and continued with a streamlining program that saw Columbus McKinnon close 10 plants in recent years.
The company also has made a major effort to pay down its once-smothering debt load, reducing Columbus McKinnon's borrowings by more than half -- and slashing its interest expenses by more than half, as well.
With just under $175 million in debt, Columbus McKinnon's borrowings now are at their lowest point since the company went public in 1996. That debt load will drop by another $22 million early next month when the firm calls a series of its costliest debt in a move that will save the company $2.2 million a year in interest, said Karen L. Howard, the company's vice president of finance.
"The company has performed well, and it's reflected in the stock," which has rebounded from a low of less than $2 a share in March 2003 to close Monday at $26.25, up 56 cents, said Timothy T. Tevens, Columbus McKinnon's president and chief executive officer.
Tevens said Columbus McKinnon is going to stick to what it's been doing in recent years. The company will keep using its spare cash to reduce debt, while looking for small acquisitions in the $5 million to $50 million range that will give the company new products or access to new markets. Tevens is especially interested in pushing into new parts of Europe and the Far East.
"Right now, our focus is on continued debt reduction, with some small acquisitions," he said.
Tevens said the hunt for acquisitions is in the "study mode" now, with no deals imminent. Tevens wants any purchase to add to the company's profits within a year and, with the unhappy experience of its Automatic Systems purchase still fresh in management's minds, he is taking a conservative approach.
That approach has paid off recently, with Columbus McKinnon's $590 million in annual sales last year approaching the company's record high of $609 million in 2000. And the company's $34 million in profits last year already have far surpassed the $22 million it earned in 2000 because of the lower debt levels. Its first-quarter profits jumped 71 percent. Columbus McKinnon also has branched out internationally since then, with foreign product sales growing at a 12 percent pace last year. That allows the company to get more than a third of its sales from international markets, up from 26 percent in 2000.
The one cloud hovering over the business is its Univeyor material handling solutions business, which has been losing money and is in the midst of a restructuring to shift its focus from customized projects to more standardized products.
Tevens said the company plans to decide by the end of this year whether the restructuring is working well enough to keep the Danish business or sell it.