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Columbus McKinnon's profits in 3rd quarter exceed expectations

Columbus McKinnon Corp.'s third-quarter profits easily topped analyst forecasts as the Amherst material handling equipment maker's sales grew by 11 percent.

Columbus McKinnon said Friday that the improvement reflected renewed strength in its U.S. markets and the company's continued expansion overseas, especially in Europe, Asia and Latin America.

The company's profits improved to $8.5 million, or 44 cents per share, compared with a loss of $39.6 million, or $2.08 per share, a year ago, when Columbus McKinnon's modest operating profits were wiped out by a one-time charge stemming from a revaluation of some of its deferred tax assets.

The company's profits in the latest quarter were bolstered by a $1.5 million gain from the sale of a plant in Cedar Rapids, Iowa, that had been closed as part of the restructuring of its forging operations and a $900,000 gain from a reassessment of its investment in the South African business it recently acquired.

Excluding those one-time items, Columbus McKinnon earned 33 cents per share, which was better than the 24 cents per share that analysts were expecting.

Columbus McKinnon's sales rose to $143 million during the quarter that ended in December, up from $129 million a year earlier, as U.S. revenues grew by 13 percent and foreign sales improved by 9 percent. Price increases and favorable foreign currency valuations accounted for more than $4 million of the increase.

"The United States is beginning to gain some momentum," said Timothy T. Tevens, Columbus McKinnon's president and chief executive officer, during a conference call Friday.

"A year ago, the question was, where is the recovery?" Tevens said. "Now it certainly seems to be gaining momentum."

The company's backlog of orders also swelled, rising to $110.3 million at the end of December, compared with $76.5 million a year earlier.

"We continue to realize double digit order growth globally as the U.S. demonstrates renewed strength and we take market share in Europe, where order growth is strong despite the slowing of those economies," he said.

Columbus McKinnon also is reaping the benefits of its recent restructuring program, which saved the company about $1.2 million during the quarter. Those savings, coupled with the greater efficiency that comes with rising sales, helped Columbus McKinnon's operations become more profitable during the final three months of last year.

Improvement from the company's forging business in Chattanooga, Tenn., which had struggled during the restructuring and accounts for about 8 percent of its overall sales, also contributed to the strengthening of Columbus McKinnon's overall profitability.

Still, Tevens is looking for higher sales volume to yield further savings and earnings from the forging business.

"Our forging business has improved very nicely," he said. "We had a mess, and we're working our way out of the mess We still should be making more money."