Columbus McKinnon reduces debt by $17.8 million, ups target for year

By Carlise Newman

Chicago, Oct. 21 - Columbus McKinnon has reduced net debt by $17.8 million to $287.5 million, the company said in its second-quarter conference call Tuesday.

And the company said it expects to reduce debt by $5 to $10 million in the second half of the year using operating cash flow.

Previously Columbus McKinnon had set a target of reducing debt by $10 to $20 million in the last three quarters of fiscal 2004.

During the second quarter, Columbus McKinnon said it also completed a debt refinancing which will reduce its annual interest expense by about $3 million.

"Debt reduction remains a major focus for Columbus McKinnon," said president and chief executive officer Timothy Tevens in a news release.

In addition to cash generated by operations, Tevens said: "Any additional cash we may generate from the sale of surplus property and less synergistic businesses will also be applied to debt.

"Columbus McKinnon is in a much stronger financial position than at the start of this fiscal year, and making additional reductions in debt will further enhance our financial flexibility and profitability."

As of Sept. 28, Columbus McKinnon's funded debt, net of $13.2 million of cash and a $3 million fair value interest rate hedge, was $287.5 million, down from $305.3 million at June 29, a reduction of $33.8 million from the $321.3 million at Sept. 29, 2002.

On July 22, the company completed the sale of $115 million of senior secured 10% notes due 2010. The net proceeds from the offering were used to repay all outstanding borrowing under its senior second secured term loan - $66.8 million plus interest and expenses - to repurchase $30.1 million of senior subordinated notes plus interest and to repay part of its senior credit facility debt - $3.9 million on the term loan and $10 million on the revolver.

The senior subordinated notes repurchased by Columbus McKinnon had a face value of $35.7 million, which resulted in a $5.6 million additional reduction in debt.

Columbus McKinnon is a materials handling company in Amherst, N.Y.

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