Columbus McKinnon's turnaround continued to pick up speed, with the Amherst material handling equipment maker reporting Tuesday that its second-quarter profits surged by 73 percent.
Buoyed by a 15 percent jump in sales, improved efficiency stemming from the company's extensive restructuring over the last few years and a shrinking U.S. tax bill, Columbus McKinnon's quarterly profits were its second-highest in the last 14 quarters. Its sales were the company's highest since the spring quarter in 2002.
With the global economy gaining steam, company officials said they were cautiously upbeat that the improvement would continue, although they warned that rising interest rates, higher oil prices and soaring health care costs could dampen the recovery.
"I think that this is going to continue, but I'm going to be cautious here because I don't know how these things will play out down the road," said Timothy T. Tevens, Columbus McKinnon's president and chief executive officer, during a conference call.
The improved health of Columbus McKinnon's markets also has allowed the company to push through a price increase, averaging 4 percent to 5 percent on hoist products, earlier this month.
Columbus McKinnon's profits soared to $2.6 million, or 18 cents per share, from $1.5 million, or 10 cents per share, a year ago. Sales improved to $122.7 million during the quarter that ended on Oct. 3, compared with $106.6 million a year earlier.
The improvement in sales was fairly evenly split between its main businesses, with product sales, which account for about 89 percent of the company's revenues, rising by 15 percent as demand swelled in advance of the price increase, while sales at its solutions business grew by 14 percent. Columbus McKinnon's tax bill also dropped by 24 percent, as the company started cashing in on some of the $147 million in tax-loss credits it accumulated, mainly from the big loss it took on the sale of its automotive assembly line design business, said Robert Friedl, vice president of finance and chief financial officer.
Tevens said the company continues to try to sell most of the businesses in its solutions segment, although it has backed off on efforts to sell its restructured American Lifts unit, which has become profitable again and increased its sales by more than 45 percent during the quarter.