-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GjqI/cDOzk6vHlGpitrbiLbhnSKBTxGRKT28yAuXY+hqnCw2HLJoUfhLK09ZoUEy weRITdE3alC6eRYp0Ex4sg== 0000912057-96-006370.txt : 19960416 0000912057-96-006370.hdr.sgml : 19960416 ACCESSION NUMBER: 0000912057-96-006370 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960412 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASCADE CORP CENTRAL INDEX KEY: 0000018061 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL TRUCKS TRACTORS TRAILERS & STACKERS [3537] IRS NUMBER: 930136592 STATE OF INCORPORATION: OR FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-01960 FILM NUMBER: 96546568 BUSINESS ADDRESS: STREET 1: PO BOX 20187 CITY: PORTLAND STATE: OR ZIP: 97220 BUSINESS PHONE: 5032270024 MAIL ADDRESS: STREET 1: PO BOX 20187 CITY: PORTLAND STATE: OR ZIP: 97220 10-K405 1 FORM 10-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM 10-K (Mark one) ( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 1996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Commission file number 2-23666 ------------------------------ CASCADE CORPORATION AN OREGON CORPORATION I.R.S. Employer Identification Number 93-0136592 2020 S.W. 4th Avenue Portland, Oregon 97201 503-227-0024 - -------------------------------------------------------------------------------- SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Not applicable SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common stock: Over the counter market - -------------------------------------------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- State the aggregate market value of the voting stock held by non-affiliates of the registrant as of March 31, 1996: $169,528,032. As of this date there were 394 shareholders, including blocks of shares held by various depositories. It is the Company's belief that when the shares held by the depositories are attributed to the beneficial owners the total number of shareholders exceeds 2,000. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the close of the latest practicable date: Common shares outstanding - 11,896,704, net of treasury shares. DOCUMENTS INCORPORATED BY REFERENCE Definitive Proxy Statement dated April 10, 1996-Parts I and III 1995 Annual Report to Shareholders-Part II - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TABLE OF CONTENTS Page ---- PART I ITEM 1. BUSINESS 1 Products and Marketing 1 Competition 1 Customers and Suppliers 1 Patents and Licenses 2 Research and Development 2 Foreign Operations 2 ITEM 2. PROPERTIES 2 ITEM 3. LEGAL PROCEEDINGS 3 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 3 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 3 ITEM 6. SELECTED FINANCIAL DATA 4 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 4 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 6 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 6 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 6 ITEM 11. EXECUTIVE COMPENSATION 6 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 7 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 7 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K 7 SIGNATURES 8 NOTE: All references to the fiscal year (i.e. Fiscal 1993, 1994 and 1995) refer to the period ended January 31 of the year subsequent to the fiscal year (i.e. January 31, 1994, January 31, 1995, and January 31, 1996). PART I ITEM 1. BUSINESS PRODUCTS AND MARKETING Cascade Corporation and its subsidiaries ("the Company") are engaged in the business of designing, manufacturing and selling hydraulically actuated equipment used almost exclusively in materials handling applications. Products include lift truck attachments, masts, hose reels, hydraulic cylinders and replacement parts for the aforementioned products. The Company's manufacturing activities are conducted in its plants at Portland, Oregon; Springfield, Ohio; Warner Robins, Georgia and Westminster, South Carolina. Subsidiaries also conduct manufacturing activities in The Netherlands and the United Kingdom. Subsidiaries conduct sales, engineering and warehousing operations in Canada, China, Korea, Germany, France, Finland, Spain, Sweden, South Africa and Japan. Executive offices are in Portland, Oregon. There are 1,103 people employed by the Company and its subsidiaries. The Company manufactures an extensive line of hydraulically actuated attachments designed for mounting on industrial lift trucks. The primary function of these products is to increase the scope and efficiency of materials handling applications normally performed by lift trucks. The Company presently offers a wide variety of functionally different attachments, each of which has several models, capacities and optional combinations. These attachments have been designed to clamp, lift, rotate, push, pull, tilt and sideshift a variety of loads such as appliances, paper rolls, baled materials, textiles, beverage containers, drums, canned goods, bricks, masonry blocks, lumber, plywood and boxed, packaged, palletized and containerized products of virtually all types. During the last five years, attachments, masts and hose reels have accounted for 72% to 78% of the Company's consolidated sales. During this same period, hydraulic cylinders accounted for approximately 8% to 19% of the Company's consolidated sales. Replacement parts and other sales amounted to approximately 9% to 14% of total sales between 1991 and 1995. The Company's lift truck attachments, masts and hose reels are sold to equipment dealers and manufacturers. Products are marketed throughout the United States, Canada, Latin America, Europe, the Middle East, Australia, New Zealand, South Africa and Asia. Hydraulic cylinders are used primarily as components to transmit power in lift trucks and other types of machinery and industrial equipment. A substantial number of cylinders are utilized in the Company's proprietary lift truck attachments and masts. In the United Kingdom, hydraulic cylinders are also sold to manufacturers of various types of materials handling and other mobile equipment, usually through negotiations with the customer's purchasing and engineering departments. COMPETITION The Company believes that in all marketing areas, it is one of the leading independent suppliers of hydraulically actuated materials handling equipment designed for mounting on industrial lift trucks. Several of the lift truck manufacturers, who are customers of the Company, are also competitors in varying degrees to the extent that they manufacture a portion of their attachment requirements. Since the Company offers a broad line of attachments capable of supplying a significant part of the total requirements for the entire lift truck industry, it believes that its relatively high unit volume results in lower costs which would be difficult for any individual lift truck manufacturer to achieve. The Company's order backlog for all products at January 31, 1996, 1995 and 1994 was approximately $24,560,000, $27,010,000 and $16,520,000 respectively. At January 31, 1996 approximately 88% (84% and 83% at January 31, 1995 and 1994) of the order backlog was due for delivery within 60 days and substantially all within six months. CUSTOMERS AND SUPPLIERS Since the Company deals with lift truck manufacturers and their dealers, a substantial portion of its sales are made to the approximately ten major companies in the industry. NACCO Industries Inc., is the company's single largest customer. Sales to it and its subsidiaries, Hyster Company and Yale Materials Handling Inc., were 9.7%, 10.8% and 9.8% of consolidated sales during the years ended January 31, 1996, 1995 and 1994, respectively. 1 The Company purchases materials and components necessary to produce its products from many different suppliers. The principal items purchased are rolled products from steel mills, unfinished castings and forgings, hydraulic motors and hardware items such as fasteners, rollers, hydraulic seals and hose assemblies. With few exceptions, all raw materials are available from several domestic and foreign suppliers. PATENTS AND LICENSES Patents have been a relatively unimportant factor in the development of the Company's business. While the Company holds rights under numerous patents, it believes that the business is not, to any significant degree, dependent on any patent or group of patents. RESEARCH AND DEVELOPMENT Most of the Company's research and product development activities are performed in a 28,000 square-foot product development center in Portland, Oregon. The corporate engineering staff develops and designs almost all the products sold by the Company. This staff numbers approximately 64 engineers and is continually involved in developing new products and applications in the materials handling field and improving existing product lines. Consolidated expenditures for engineering research and development activities in fiscal years ended January 31, 1996, 1995 and 1994 were approximately $4,700,000, $4,500,000 and $3,680,000 respectively. Substantially all such activities were sponsored by the Company and its subsidiaries. FOREIGN OPERATIONS Cascade N.V. was organized in The Netherlands in 1958 and is engaged in the business of manufacturing and marketing hydraulically actuated lift truck attachments. This subsidiary presently has warehouse, sales and service facilities in Dusseldorf, Germany; Paris, France; Vantaa, Finland; Barcelona, Spain and Helsingborg, Sweden. Cascade N.V. and its subsidiaries have 209 employees. Cascade (U.K.) Ltd. was incorporated in the United Kingdom in 1967 and manufactures and markets hydraulic cylinders and lift truck attachments. This subsidiary employs 197 people. Cascade (Canada) Inc. was incorporated in Canada in 1970 and presently conducts marketing and limited engineering and manufacturing activities from Toronto, Ontario. This subsidiary presently employs 43 people. Cascade Corporation (Africa) Pty. Limited, employing 8 people, was organized in 1967 in South Africa and its activities consist of sales, engineering and warehousing. Cascade (Japan) Ltd. was incorporated under the laws of Oregon in 1967, and carries on engineering, sales and distribution activities in the Japanese domestic market. A portion of this subsidiary's sales are produced by local subcontractors. This subsidiary employs 22 people. Cascade Korea Limited was incorporated under the laws of the Republic of Korea in 1990. Its activities are limited to sales and service. Cascade Korea Limited employs 3 people. Cascade Xiamen was incorporated in 1995 as a wholly owned foreign enterprise under the laws in the People's Republic of China. This subsidiary carries on sales, service and manufacturing activities and employs 21 people. There are no material risks attendant to the Company's foreign operations other than those incidental to the regular course of business. For further information about foreign operations, see Note 8 on page 14 of the 1995 Annual Report to Shareholders. ITEM 2. PROPERTIES The Company owns and leases various types of properties located throughout the continental United States, Europe, Canada, Australia, South Africa, China and Japan. Of the above mentioned properties, the following are considered principal facilities: 2
- -------------------------------------------------------------------------------------------------------------- Building Square Land Location Footage Acreage Type of Activity - -------------------------------------------------------------------------------------------------------------- United States Portland, Oregon Leased 6,000 Office Portland, Oregon Owned 150,000 48 Manufacturing, Engineering Research, Office Springfield, Ohio Owned 185,000 10 Manufacturing, Office Warner Robins, Georgia Owned 62,000 20 Manufacturing, Office Westminster, South Carolina Owned 110,000 52 Manufacturing, Office Europe Almere, The Netherlands Owned 129,000 3 Manufacturing, Office Almere, The Netherlands Owned 18,000 1 * Diemen, The Netherlands Owned 47,000 2 * Hoorn, The Netherlands Owned 44,000 3 Manufacturing, Office Dusseldorf, Germany Leased 15,000 2 Warehouse, Office Paris, France Owned 6,000 2 Warehouse, Office Newcastle, United Kingdom Owned 88,000 8 Manufacturing, Office Sheffield, United Kingdom Leased 5,500 1 Warehouse, Office Other Foreign Toronto, Canada Leased 42,000 1 Warehouse, Office Sydney, Australia Owned 9,000 1 Warehouse, Office Johannesburg, South Africa Leased 10,000 1 Warehouse, Office Osaka, Japan Leased 16,000 1 Warehouse, Office Xiamen, China Leased 31,000 1 Warehouse, Office
*The former European headquarters in Almere and the former manufacturing facility in Diemen are currently held for investment purposes. - -------------------------------------------------------------------------------- Several subsidiary companies are parties to various leases of office and computer equipment, storage space and automobiles which are of minor consequence. ITEM 3. LEGAL PROCEEDINGS Neither the Company nor any of its subsidiaries are involved in any material pending legal proceedings other than litigation related to environmental matters discussed at pages 4 and 5 or matters in the regular course of business. The Company and its subsidiaries are adequately insured against product liability, personal injury and property damage claims which may occasionally arise. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The definitive Proxy Statement dated April 10, 1996 is incorporated by reference. No Matters were submitted to a vote of security holders during the fourth quarter ended January 31, 1996. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Page 16 of the 1995 Annual Report to Shareholders is incorporated by reference. 3 ITEM 6. SELECTED FINANCIAL DATA Page 1 of the 1995 Annual Report to Shareholders is incorporated by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS GENERAL OVERVIEW Consolidated net sales for 1995 (the fiscal year ended January 31, 1996) totaled $234,030,000, a 28% increase over sales of $183,365,000 for 1994 and a 66% increase when compared to 1993. Earnings for 1995, before the effect of a special charge for environmental investigation and remediation expenses, were 50% greater than 1994 and more than triple the 1993 amount. Continued strong market conditions in the lift truck industry contributed to a 22% increase in sales in North America when compared to 1994 levels. Sales in Europe, which accounted for about one third of worldwide sales, increased by 40% over 1994 with strong gains being recorded in nearly all market areas. Sales in Japan experienced solid improvement, while sales in Korea and South Africa were significantly greater than the prior year. Increased manufacturing capacity, very strong lift truck sales and improved market penetration contributed to achieve record results for 1995. Our strength in both Europe and North America have kept the rate of incoming orders and our backlog at relatively high levels. We continue to expand our global marketing efforts, increase our product offerings and invest in state-of-the-art manufacturing technologies to enhance our market leadership position. Revenue for 1994 was substantially greater than 1993 due mostly to the increase in North American materials handling equipment sales and strong hydraulic cylinder sales in Europe. RESULTS OF OPERATIONS Net income for the year ended January 31, 1996 after the special provision for environmental expenses was $10,550,000 or $.88 per share. However, for purposes of comparison with prior years, income for the year ended January 31, 1996 before the special charge was $18,350,000 ($1.53 per share). This represents a return on shareholder's equity of 20.7% and an increase of 50% when compared to 1994 net income of $12,250,000 ($1.02 per share). All operations recorded significant improvements over 1994 operating results, with Europe reporting 64% greater profits and North America reporting a 42% increase. These outstanding results reflect the higher sales volume, improved operating efficiencies and prudent expense controls. The Company has recorded a special charge of $12,000,000 in the fourth quarter in anticipation of future expenses associated with environmental investigation and remediation activities which may be incurred over a period of up to 30 years. Although these costs are associated with manufacturing processes which were discontinued over twenty years ago, this charge is reflected as an operating expense in the Consolidated Statement of Income and Retained Earnings. The after tax effect on net income of the special charge is $7,800,000 or $.65 per share. Recognition 4 of these estimated future costs in fiscal 1995 will relieve future operating results of the burden of absorbing these expenses which amounted to $2,795,000, $2,400,000 and $1,640,000 in 1995, 1994 and 1993, respectively, and which have totaled $11,270,000 since 1988. Among potential costs reflected in the special charge is a judgment rendered February 6, 1996, by judge Malcolm F. Marsh of the United States District Court for the District of Oregon, finding Cascade liable for 70% of past and future costs incurred by Cascade and The Boeing Company in connection with groundwater contamination of one aquifer in the area of their respective plants east of Portland, Oregon, subject to certain offsets for amounts to be received by Boeing from prior owners of its property. Boeing was awarded $1,565,392 for past costs. The judgment is being appealed to the Ninth Circuit Court of Appeals. We remain confident that the Company will recover all or a substantial portion of these past and future costs from our liability insurers, against whom legal action is presently proceeding. Earnings for fiscal 1994 of $12,250,000 increased by 109% when compared to 1993 income of $5,865,000 ($.49 per share) before the effect of an accounting change. Net income for 1993 was adversely affected by a $1,980,000 net after tax charge due to the adoption of Statement of Financial Accounting Standards Board No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions". Over the three year period from fiscal year 1993 to fiscal year 1995, both cost of goods sold and selling and administrative expenses, as indicated in the Consolidated Statement of Income and Retained Earnings on page seven of the 1995 Annual Report have increased in absolute dollars as sales volumes increased. In 1995 cost of goods sold as a percentage of sales increased to 65.5% from 64.6% in 1994 due to start-up costs associated with our new manufacturing plant in The Netherlands as well as more aggressive global pricing strategies. Cost of goods sold decreased slightly from 65.0% in 1993 to 64.6% in 1994. Selling and administrative expenses as a percent of net sales decreased to 17.1% for 1995 compared to 19.1% in 1994 and 21.6% in 1993. Inflation and changing prices have not had a material impact on the Company's income in fiscal 1993 through 1995. During 1995 the currencies of most of the countries in which our subsidiaries operate weakened against the U.S. dollar, resulting in a decrease of $120,000 ($.01 per share) in shareholders' equity for the year. These translation adjustments resulted in an increase of $3,041,000 ($.25 per share) for fiscal 1994 and a decrease of $1,181,000 ($.10 per share) for fiscal 1993. LIQUIDITY AND CAPITAL RESOURCES For the year ended January 31, 1996 capital expenditures totaled $11,800,000 compared to $21,900,000 for 1994 and $8,100,000 for 1993. Expenditures in 1995 were primarily targeted at investments in enhanced manufacturing, engineering and information systems equipment, tooling and advanced technology. During 1994 and 1993 approximately $14,300,000 was incurred in purchasing land, constructing and equipping our new European manufacturing and headquarters facility in The Netherlands. Planned capital expenditures for 1996 of $19,325,000 are also being directed at productivity and quality improvements, and include $4,400,000 for a major addition, renovation and consolidation of our Portland office. This project will enable us to bring all corporate functions under one roof in an environment which facilitates cross-functional teams working more efficiently. The funds for this new facility have been committed with construction to begin during the first quarter of 1996. 5 Based on the Company's strong earnings and cash flow, dividends were increased to $.45 during 1995. In addition to the regular $.09 quarterly dividend, the Board of Directors also declared a $.09 special dividend which was paid with the fourth quarter dividend. In 1994 dividends totaled $.375 including the regular $.075 quarterly dividend and a special year-end dividend of $.075. Dividends in 1993 consisted of the regular quarterly dividends of $.075 and totaled $.30. All per share amounts include the effect of the 100% stock dividend declared in February 1995. Cash generated from operating activities resulted in a substantial increase in cash and cash equivalents to $23,326,000 at January 31, 1996. This is an increase of $6,123,000 over the prior year end balance of $17,203,000. Current assets at January 31, 1996 were 2.3 times current liabilities. Short and Long- term debt increased during the year from $13,864,000 to $17,486,000. The increase in long-term debt reflects the final portion of the mortgage financing of the new European facility. Combined short and long-term debt amounts to about 19% of shareholders' equity. Our strong cash position, together with our available borrowing capacity, is more than sufficient to meet our short-term requirements. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Pages 7 through 15 to the 1995 Annual Report to Shareholders are incorporated by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The definitive Proxy Statement dated April 10, 1996 is incorporated by reference. The term of office of all officers is one year. Names, ages and position of all executive officers of Cascade Corporation follow.
- ---------------------------------------------------------------------------------------------------- Year First Elected Name Age Officer Present Position - ---------------------------------------------------------------------------------------------------- Joseph J. Barclay 63 1968 Chairman, Chief Executive Officer and Director Robert C. Warren, Jr. 47 1984 President, Chief Operating Officer and Director Gregory S. Anderson 47 1991 Vice President-Human Resources Gerald M. Bitz 61 1974 Vice President-Finance and Secretary Terry H. Cathey 48 1993 Vice President-Manufacturing Zouhdi M. Derhalli 63 1993 Vice President-Engineering Lawrence S. Maunder 63 1990 Vice President-Marketing James P. Miller 48 1992 Treasurer - ----------------------------------------------------------------------------------------------------
ITEM 11. EXECUTIVE COMPENSATION The definitive Proxy Statement dated April 10, 1996 is incorporated by reference. 6 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The definitive Proxy Statement dated April 10, 1996 is incorporated by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K INDEX TO FINANCIAL STATEMENTS (a) 1. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements, together with the report thereon of Price Waterhouse LLP dated March 15, 1996, appearing on pages 7 to 15 of the accompanying 1995 Annual Report are incorporated by reference in this Form 10-K Annual Report. With the exception of the aforementioned information and information incorporated in Items 5, 6 and 8, the 1995 Annual Report is not to be deemed filed as part of this report. 2. FINANCIAL STATEMENT SCHEDULES-1995, 1994 AND 1993 Financial statement schedules not included in this Form 10-K Annual Report have been omitted because they are not applicable or not required. The individual financial statements of the registrant and its subsidiaries have been omitted since the registrant is primarily an operating company and all subsidiaries included in the consolidated financial statements, in the aggregate, do not have minority equity interests and/or indebtedness to any person other than the registrant or its consolidated subsidiaries in amounts which together exceed 5% of the total consolidated assets at January 31, 1996, except indebtedness incurred in the ordinary course of business which is not overdue and which matures within one year from the year of its creation. 3. EXHIBITS 1. Copy of Notice of Annual Meeting dated April 10, 1996. 2. Copy of Form of Proxy for Annual Meeting. 3. Basic documents incorporated by reference: Articles of Incorporation filed with the Commission May 28, 1965. Amendment to Articles of Incorporation filed in Proxy Statement for annual meeting of shareholders May 12, 1987, filed with the Commission April 14,1988. Amendment to Articles of Incorporation filed in Proxy Statement for annual meeting of shareholders May 9, 1989, filed with the Commission April 27, 1990. By-Laws, as amended to February 8, 1989, filed with the Commission April 27,1990. Specimen copy of stock certificate, filed as Exhibit 4-1 to Form S-1, filed with the Commission May 28, 1965. (b) REPORTS ON FORM 8-K During the quarter ended January 31, 1996, the Company was not required to file a Form 8-K with the Commission. 7 SIGNATURES Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, the registrant, CASCADE CORPORATION has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. CASCADE CORPORATION /s/ G.M. Bitz ------------------------------------ By: G.M. Bitz VICE PRESIDENT-FINANCE AND SECRETARY Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. /s/ Joseph J. Barclay 4/5/96 - ----------------------------------------------------------- Joseph J. Barclay Date CHAIRMAN AND CHIEF EXECUTIVE OFFICER, DIRECTOR /s/ Robert C. Warren, Jr. 4/5/96 - ----------------------------------------------------------- Robert C. Warren, Jr. Date PRESIDENT AND CHIEF OPERATING OFFICER, DIRECTOR /s/ Richard C. Hire 4/5/96 - ----------------------------------------------------------- Richard C. Hire, DIRECTOR Date /s/ Eric Hoffman 4/5/96 - ----------------------------------------------------------- Eric Hoffman, DIRECTOR Date /s/ C. Calvert Knudsen 4/5/96 - ----------------------------------------------------------- C. Calvert Knudsen, DIRECTOR Date /s/ Nicholas Lardy 4/5/96 - ----------------------------------------------------------- Nicholas Lardy, DIRECTOR Date /s/ James S. Osterman 4/5/96 - ----------------------------------------------------------- James S. Osterman, DIRECTOR Date /s/ Jack B. Schwartz 4/4/96 - ----------------------------------------------------------- Jack B. Schwartz, DIRECTOR Date /s/ Rob Spaans 4/5/96 - ----------------------------------------------------------- Rob Spaans, DIRECTOR Date /s/ Robert C. Warren 4/3/96 - ----------------------------------------------------------- Robert C. Warren, DIRECTOR Date 8 EX-99.1 2 EXHIBIT 99.1 FINANCIAL SUMMARY (IN MILLIONS) [GRAPH] FINANCIAL HIGHLIGHTS (IN THOUSANDS EXCEPT WHERE NOTED(*))
January 31 1996 1995 1994 1993 1992 Net sales $234,030 $183,365 $141,325 $148,435 $153,480 Operating income before environmental expenses $ 31,210 $ 21,750 $ 11,375 $ 14,155 $ 14,280 Income excluding environmental charge, net of tax $ 18,350 $ 12,250 $ 3,885(1) $ 7,695 $ 7,205 Net income $ 10,550(2) $ 12,250 $ 3,885(1) $ 7,695 $ 7,205 Per common share Income excluding environmental charge, net of tax(*) $ 1.53 $ 1.02 $ .32(1) $ .64 $ .60 Net income(*) $ .88(2) $ 1.02 $ .32(1) $ .64 $ .60 Book value(*) $ 7.74 $ 7.37 $ 6.47 $ 6.55 $ 6.44 Working capital $ 49,829 $ 40,821 $ 37,337 $ 38,175 $ 35,783 Expenditures for property, plant and equipment $ 11,825 $ 21,921 $ 8,126 $ 7,772 $ 5,659 Total assets $153,190 $137,109 $106,571 $104,987 $110,326 Long-term debt $ 9,531 $ 7,809 $ 682 $ 1,228 $ 1,915 Shareholders' equity $ 92,057 $ 88,538 $ 77,751 $ 78,650 $ 77,323 Number of employees(*) 1,103 993 838 863 875
(1) After $1,980 or $.17 per share charge related to cumulative effect of accounting change. See note 7 to consolidated financial statements. (2) After $12,000 ($7,800 or $.65 per share, net of taxes) charge for environmental expenses. See note 10 to consolidated financial statements 1 ---------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ------------------------------------------------------------ CONSOLIDATED STATEMENT OF INCOME & RETAINED EARNINGS
Year Ended January 31 1996 1995 1994 (Dollars in Thousands) Net Sales $ 234,030 $ 183,365 $ 141,325 ----------- ----------- ----------- Operating expenses: Cost of goods sold 153,345 118,430 91,830 Depreciation 9,540 8,100 7,555 Selling and administrative expenses 39,935 35,085 30,565 ----------- ----------- ----------- (202,820) 161,615 129,950 ----------- ----------- ----------- Operating income before environmental expenses 31,210 21,750 11,375 Environmental expenses (Note 10) 14,795 2,400 1,640 ----------- ----------- ----------- Operating income 16,415 19,350 9,735 Interest expense 1,085 335 475 Interest income (1,045) (535) (435) Other expense, net 315 915 725 ----------- ----------- ----------- Income before income taxes and cumulative effect of accounting change 16,060 18,635 8,970 Income taxes (Note 4) 5,510 6,385 3,105 ----------- ----------- ----------- Income before cumulative effect of accounting change 10,550 12,250 5,865 Cumulative effect of accounting change, net of taxes of $1,020 (Note 7) 1,980 ----------- ----------- ----------- Net Income 10,550 12,250 3,885 Retained earnings, beginning of year 79,910 75,262 74,980 Dividends($.45, $.375 and $.30 per share) (5,377) (4,504) (3,603) Stock distribution (3,098) ----------- ----------- ----------- Retained earnings, end of year $ 85,083 $ 79,910 $ 75,262 ----------- ----------- ----------- ----------- ----------- ----------- Income per share before cumulative effect of accounting change $ .88 $ 1.02 $ .49 ----------- ----------- ----------- ----------- ----------- ----------- Net income per share $ .88 $ 1.02 $ .32 ----------- ----------- ----------- ----------- ----------- ----------- Weighted average shares outstanding 11,990,447 12,009,904 12,009,904 ----------- ----------- ----------- ----------- ----------- -----------
The accompanying notes to consolidated financial statements are an integral part of this statement. 7 ---------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ----------------------------------------------------------- CONSOLIDATED BALANCE SHEET
January 31 1996 1995 ASSETS (Dollars in Thousands) Current assets: Cash and cash equivalents $ 23,326 $ 17,203 Accounts receivable, less allowance for doubtful accounts of $967 and $265 38,574 35,277 Inventories, at average cost which is lower than market: Finished goods and components 16,142 13,934 Goods in process 4,083 3,148 Raw materials 4,990 3,985 --------- --------- 25,215 21,067 Income taxes (Note 4) 151 Prepaid expenses 849 919 --------- --------- Total current assets 87,964 74,617 Property, plant and equipment, at cost less accumulated depreciation (Notes 2 and 3) 63,214 60,607 Deferred income taxes (Note 4) 58 Other assets 1,954 1,885 --------- --------- Total assets $ 153,190 $ 137,109 --------- --------- --------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable to banks (Note 3) $ 5,015 $ 5,812 Current portion of long-term debt (Note 3) 2,940 243 Accounts payable 17,126 16,149 Accrued payroll and payroll taxes 5,654 4,227 Other accrued expenses 7,400 7,365 --------- --------- Total current liabilities 38,135 33,796 Long-term debt (Note 3) 9,531 7,809 Deferred income taxes (Note 4) 4,058 Accrued environmental expenditures (Note 10) 10,500 Other liabilities (Note 7) 2,967 2,908 --------- --------- Total liabilities 61,133 48,571 --------- --------- Shareholders' equity (Note 5): Common stock, $.50 par value, authorized 20,000,000 shares; 12,278,208 and 12,391,408 shares issued 6,139 6,196 Additional paid-in capital 568 2,045 Retained earnings 85,083 79,910 Cumulative foreign currency translation adjustments 953 1,073 Treasury stock, at cost, 381,504 shares (686) (686) --------- --------- Total shareholders' equity 92,057 88,538 --------- --------- Total liabilities and shareholders' equity $ 153,190 $ 137,109 --------- --------- --------- ---------
The accompanying notes to consolidated financial statements are an integral part of this statement. 8 ---------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ----------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended January 31 1996 1995 1994 (Dollars in Thousands) Cash flows from operating activities: Net income $ 10,550 $ 12,250 $ 3,885 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 9,540 8,100 7,555 Gain on sale of property, plant and equipment (150) Deferred income taxes (4,099) (9) (57) Cumulative effect of accounting change 1,980 Changes in operating assets and liabilities: Accounts receivable (3,297) (10,424) (1,364) Inventories (4,148) (1,933) 1,892 Income taxes 1,133 753 (480) Prepaid expenses 70 257 (233) Accounts payable and accrued expenses 1,457 9,905 2,083 Accrued environmental expenditures 10,500 Other liabilities 59 34 (126) --------- --------- --------- Net cash provided by operating activities 21,765 18,783 15,135 --------- --------- --------- Cash flows from investing activities: Acquisition of property, plant and equipment (11,825) (21,921) (8,126) Proceeds from sale of property, plant and equipment 1,849 Other assets (69) (222) (1,386) --------- --------- --------- Net cash used in investing activities (11,894) (20,294) (9,512) --------- --------- --------- Cash flows from financing activities: Long-term debt, including current portion 4,259 6,318 (959) Notes payable to banks (797) 2,447 (379) Repurchase of common stock (1,534) Cash dividends paid (5,377) (4,504) (3,603) --------- --------- --------- Net cash (used) provided by financing activities (3,449) 4,261 (4,941) --------- --------- --------- Effect of exchange rate changes (299) 1,836 (418) --------- --------- --------- Increase in cash and cash equivalents 6,123 4,586 264 Cash and cash equivalents at beginning of year 17,203 12,617 12,353 --------- --------- --------- Cash and cash equivalents at end of year $ 23,326 $ 17,203 $ 12,617 --------- --------- --------- --------- --------- --------- Supplemental disclosure of cash flow information: Cash paid during the year for: Interest $ 1,025 $ 307 $ 397 Income taxes $ 8,434 $ 5,676 $ 3,536
The accompanying notes to consolidated financial statements are an integral part of this statement. 9 ---------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ----------------------------------------------------------- NOTES TO NOTE 1 - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES CONSOLIDATED FINANCIAL The consolidated financial statements include the accounts of the STATEMENTS Company and its subsidiaries, all of which are wholly owned. Intercompany balances and transactions have been eliminated. Cash and cash equivalents consist of cash on deposit and highly liquid investments, including investments classified as trading securities in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Property, plant and equipment are stated at cost. Depreciation is provided on the straight-line basis over the estimated useful lives of the respective assets. In February 1993, the Company adopted Statement of Financial Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes". FAS 109 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The Company plans to adopt Statement of Financial Accounting Standards No. 123 (FAS 123) "Accounting for Stock-Based Compensation". FAS 123 allows companies to choose whether to account for stock-based compensation under the current method as prescribed in Accounting Principles Board Opinion No. 25 (APB 25) or use the fair-value method described in FAS 123. The Company plans to continue to follow the provisions of APB 25. Therefore, management believes that the impact of adoption of FAS 123 in 1996, will not have a significant effect on the Company's financial position or results of operations. The Company translated the balance sheets of its foreign subsidiaries using fiscal year-end exchange rates. The statements of income are translated using the average exchange rates for the fiscal year. The effects of such translations are included in the shareholders' equity account "cumulative foreign currency translation adjustments" as a decrease of $120,000 for the year ended January 31, 1996, an increase of $3,041,000 for the year ended January 31, 1995 and a decrease of $1,181,000 for the year ended January 31, 1994. NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
January 31 1996 1995 (Dollars in Thousands) Land $ 3,890 $ 3,775 Buildings 31,308 31,760 Machinery and equipment 98,521 90,722 --------- --------- 133,719 126,257 Accumulated depreciation (70,505) (65,650) --------- --------- $ 63,214 $ 60,607 --------- --------- --------- ---------
NOTE 3 - BORROWINGS
January 31 1996 1995 (Dollars in Thousands) 7.15%-10.0% mortgage notes, due annually through 1998 $ 239 $ 492 5.5% mortgage note, due annually through 2008 9,292 7,317 -------- -------- Secured by plant and equipment $ 9,531 $ 7,809 -------- -------- -------- --------
Maturities of long-term debt for the years January 31, 1997 through January 31, 2001, respectively, are $2,940,000, $1,028,000, $938,000, $863,000 and $863,000. Borrowing arrange- ments with commercial banks provided short-term lines of credit at January 31, 1996 totalling $16,950,000, of which $11,935,000 was unused. Average interest rates on short-term borrowings were 2.4% and 3.6% at January 31, 1996 and 1995, respectively. 10 --------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ----------------------------------------------------------- NOTES TO NOTE 4 - INCOME TAXES CONSOLIDATED FINANCIAL STATEMENTS
Year Ended January 31 1996 1995 1994 (Dollars in Thousands) Income before taxes was as follows: United States $ 5,295 $ 12,925 $ 5,519 Foreign 10,765 5,710 451 --------- --------- --------- $ 16,060 $ 18,635 $ 5,970 --------- --------- --------- --------- --------- --------- Taxes charged (credited) against operations were as follows: Current Federal $ 5,507 $ 3,824 $ 1,598 State 889 623 304 Foreign 3,740 2,319 418 --------- --------- --------- Total 10,136 6,766 2,320 --------- --------- --------- Deferred Federal (4,038) (274) (178) State (651) (44) (34) Foreign 63 (63) (23) --------- --------- --------- Total (4,626) (381) (235) --------- --------- --------- Total income taxes $ 5,510 $ 6,385 $ 2,085 --------- --------- --------- --------- --------- --------- The federal rate reconciles to the effective rate as follows: Federal statutory rate 35.0% 35.0% 34.0% State income taxes, net of federal tax benefits 1.0 2.0 2.4 Effect of foreign tax rates .2 1.6 4.0 Tax credits and other (1.9) (4.3) (5.5) --------- --------- --------- Effective income tax rate 34.3% 34.3% 34.9% --------- --------- --------- --------- --------- ---------
January 31 1996 1995 (Dollars in Thousands) The deferred tax liabilities (assets) recorded on the consolidated balance sheet are comprised of the following: Accruals not deductible until paid $ (1,579) $ (633) Other (421) (103) -------- -------- Current deferred income taxes $ (2,000) $ (736) -------- -------- -------- -------- Depreciation $ 4,645 $ 4,999 Employee benefits (909) (843) Accrued environmental expenditures (3,885) Other 91 (98) -------- -------- Noncurrent deferred income taxes $ (58) $ 4,058 -------- -------- -------- --------
11 --------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ----------------------------------------------------------------- NOTES TO NOTE 5 - CAPITAL STOCK CONSOLIDATED FINANCIAL STATEMENTS There are 200,000 shares authorized of no par value preferred stock; none are outstanding. In 1995 a stock option plan was approved by the shareholders. The plan provides that options to purchase up to 800,000 shares of common stock may be granted to officers and key employees of the Company and its subsidiaries. The exercise price per share is the fair market value on the date each option is granted. Options are exercisable three years from the date of grant and expire ten years from the date of grant. During the year ended January 31, 1996, the Company granted options for 77,353 shares at $16.375 per share, of which none were exercised and 2,102 were forfeited. NOTE 6 - BENEFIT PLANS The Company has a defined benefit plan covering its U.S. employees. The benefits are based on years of service and average earnings over a specified five-year period of prior service. The Company's funding policy is to make annual contributions that are between the minimum amount required by the Employee Retirement Income Security Act and the maximum amount deductible under the current tax regulations. Substantially all plan assets are invested in government or corporate bonds. Net pension cost, the plan's funded status and significant assumptions include the following:
YEAR ENDED JANUARY 31 1996 1995 1994 (Dollars in Thousands) Interest cost on projected benefit obligation $ 314 $ 271 $ 262 Actual return on assets (517) 65 (132) Net amortization and deferral 432 (96) (2) -------- -------- -------- Net periodic pension cost $ 229 $ 240 $ 128 -------- -------- -------- -------- -------- -------- Projected and accumulated vested benefit obligation for service rendered to date $ (4,261) $ (3,893) $ (4,234) Plan assets at fair value 3,866 3,053 2,603 -------- -------- -------- Projected benefit obligation in excess of plan assets (395) (840) (1,631) Unrecognized prior service cost 133 146 159 Unrecognized net loss 1,231 1,142 1,270 -------- -------- -------- Pension cost prepaid (accrued) $ 969 $ 448 $ (202) -------- -------- -------- -------- -------- -------- Discount rate 6.75% 8.5% 7% Expected long-term rate of return 8% 8% 7%
In December, 1988, the Company amended the plan to limit benefits to those accrued through December 31, 1988. Also effective January 1, 1989, the Company instituted a defined contribution plan and a limited matching contribution program both pursuant to applicable provisions of the Internal Revenue Code and contributed $1,318,000, $1,195,000, and $933,000 for 1995, 1994 and 1993, respectively. 12 --------------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ------------------------------------------------------------------ NOTES TO NOTE 7 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS CONSOLIDATED FINANCIAL STATEMENTS The Company provides health care benefits for eligible retirees. The Company adopted during 1993, FAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions". The $3,000,000 obligation as of February 1, 1993 owed to retired employees and certain active employees has been recorded, and the Company is accruing the future costs of providing such benefits to eligible active employees during the years they render service. A corresponding charge was recorded in 1993 as the cumulative effect of a change in an accounting principle. The net after-tax effect of this charge was $1,980,000. The following table sets forth the plan's status reconciled with the amount included in the Consolidated Balance Sheets:
JANUARY 31 1996 1995 1994 (Dollars in Thousands) Accumulated postretirement benefit obligation: Retirees $ (2,551) $ (2,557) $ (2,953) Fully eligible active plan participants (235) (210) (124) Other active plan participants (1,068) (849) (604) --------- --------- --------- (3,854) (3,616) (3,681) Plan assets at fair value -- -- -- --------- --------- --------- Accumulated postretirement benefit obligation in excess of plan assets (3,854) (3,616) (3,681) Unrecognized net loss 887 708 807 --------- --------- --------- $ (2,967) $ (2,908) $ (2,874) --------- --------- --------- --------- --------- --------- The net periodic postretirement benefit costs are as follows: JANUARY 31 1996 1995 1994 (Dollars in Thousands) Service cost $ 56 $ 42 $ 39 Interest cost 295 230 225 Net amoritization and deferral 23 29 - --------- --------- --------- Net periodic postretirement benefit cost $ 374 $ 301 $ 264 --------- --------- ---------
To estimate these costs, health care costs were assumed to increase at an annual rate of 9% after 1995 with the rate of increase declining ratably to 4% by 2000 and thereafter. The weighted average discount rate was assumed to be 6.75%, 8.5% and 6.25% for 1995, 1994 and 1993, respectively. If the cost trend rates were increased by one percentage point, the accumulated postretirement benefit obligation as of January 31, 1996 would increase by $435,000 and net periodic postretirement benefit cost would increase by $45,000. 13 --------------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ------------------------------------------------- NOTES TO NOTE 8 - INFORMATION ABOUT OPERATIONS CONSOLIDATED FINANCIAL STATEMENTS The Company is engaged in a single line of business; the design, manufacture and marketing of hydraulically actuated equipment used in materials handling applications. Sales to the largest single customer were 9.7%, 10.8% and 9.8% of consolidated sales during the years ended January 31, 1996, 1995 and 1994, respectively. Information about the Company's operations in different geographic areas is shown below:
YEAR ENDED JANUARY 31 (Dollars in Thousands) NORTH ELIMIN- CONSOLI- AMERICA EUROPE OTHER ATIONS DATED ------- ------ ----- ------- -------- 1996 Sales to unaffiliated customers $ 139,950 $ 75,375 $ 18,705 $ $ 234,030 Transfers between areas 14,607 587 747 (15,941) --------- --------- --------- --------- --------- Total revenue $ 154,557 $ 75,962 $ 19,452 $ (15,941) $ 234,030 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 5,809 $ 4,078 $ 663 $ 10,550 --------- --------- --------- --------- --------- --------- --------- --------- Identifiable assets $ 72,847 $ 64,367 $ 15,976 $ 153,190 --------- --------- --------- --------- --------- --------- --------- --------- 1995 Sales to unaffiliated customers $ 115,061 $ 53,737 $ 14,567 $ $ 183,365 Transfers between areas 11,016 119 721 (11,856) --------- --------- --------- --------- --------- Total revenue $ 126,077 $ 53,856 $ 15,288 $ (11,856) $ 183,365 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 9,598 $ 2,480 $ 172 $ 12,250 --------- --------- --------- --------- --------- --------- --------- --------- Identifiable assets $ 69,087 $ 53,210 $ 14,812 $ 137,109 --------- --------- --------- --------- --------- --------- --------- --------- 1994 Sales to unaffiliated customers $ 87,078 $ 38,321 $ 15,926 $ $ 141,325 Transfers between areas 9,945 80 525 (10,550) --------- --------- --------- --------- --------- Total revenue $ 97,023 $ 38,401 $ 16,451 $ (10,550) $ 141,325 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 4,289 $ (689) $ 285 $ 3,885 --------- --------- --------- --------- --------- --------- --------- --------- Identifiable assets $ 57,642 $ 36,387 $ 12,542 $ 106,571 --------- --------- --------- --------- --------- --------- --------- ---------
NOTE 9 - COMMITMENTS AND CONTINGENCIES The Company leases certain of its facilities and equipment under noncancelable operating leases. The minimum rental commitments under these leases for the years ended January 31, 1997 through January 31, 2001, respectively, are $536,000, $329,000, $235,000, $238,000 and $15,000. For the years ended January 31, 1996, 1995 and 1994 total rentals charged to ex-pense amounted to $705,000, $591,000 and $556,000. NOTE 10 - ENVIRONMENTAL MATTERS The Company is engaged in environmental investigations and remediation efforts in its ordinary course of business. In the year ended January 31, 1996, the Company recorded a charge of $12,000,000 ($7,800,000 after tax) to provide for probable future costs related to its Portland, Oregon manufacturing facility. In the years ended January 31, 1996, 1995 and 1994, the Company incurred total environmental expenses of approximately $14,795,000, $2,400,000 and $1,640,000, respectively, which included response costs for environmental investigations as well as expenses related to litigation. 14 --------------------------------------------------------------- CASCADE CORPORATION & SUBSIDIARY COMPANIES ----------------------------------------------------------------- NOTES TO NOTE 10 - ENVIRONMENTAL MATTERS CONTINUED CONSOLIDATED FINANCIAL STATEMENTS Since future remediation costs are subject to many uncertainties, actual expenses may vary in amount from the charge recorded in the year ended January 31, 1996. The Company has made claims under various insurance policies. Based upon current Oregon court decisions and advice from legal counsel, the Company believes it will recover all or a substantial portion of the past and future costs of investigation and remediation. Litigation has been initiated to enforce terms of these policies. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE FIGURES)
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER YEAR ENDED JANUARY 31, 1996 Net sales $ 57,150 $ 58,650 $ 58,480 $ 59,750 Gross profit before depreciation 19,555 20,380 19,875 20,875 Net income 4,290 4,605 4,680 (3,025) Net income (loss) per share $ .36 $ .38 $ .39 $ (.25) 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER YEAR ENDED JANUARY 31, 1995 Net sales $ 40,850 $ 45,500 $ 47,360 $ 49,655 Gross profit before depreciation 14,795 16,220 17,045 16,875 Net income 2,155 3,045 3,325 3,725 Net income per share $ .18 $ .25 $ .28 $ .31
REPORT OF In our opinion, the consolidated financial statements appearing INDEPENDENT on pages 7 through 15 of this annual report present fairly, in ACCOUNTANTS all material respects, the financial position of Cascade Corpora- tion and its subsidiaries at January 31, 1996 and 1995, and the TO THE results of their operations and their cash flows for each of the BOARD OF three years in the period ended January 31, 1996, in conformity DIRECTORS with generally accepted accounting principles. These financial & SHAREHOLDERS statements are the responsibility of the Company's management; OF CASCADE our responsibility is to express an opinion on these financial CORPORATION statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Portland, As discussed in Notes 1 and 7 to the Consolidated Financial Oregon Statements, in 1993 the Company changed its method of accounting March 15, 1996 for income taxes and postretirement benefits other than pensions. 15 --------------------------------------------------------------- ----------------------------------------------------------------- INVESTOR STOCKHOLDER INFORMATION INFORMATION Cascade's Form 10-K Report to the Securities and Exchange Commission for 1995 is available to stockholders and others who request it. TRANSFER AGENT To obtain copies, please write to the Vice President -- Finance & REGISTRAR and Secretary, Cascade Corporation, 2020 S.W. 4th Avenue, Suite 600, Portland, Oregon 97201. Chemical Mellon Shareholder Services Shareholder Relations P.O. Box 469 Washington Bridge Station New York, NY 10033 1-800-356-2017 ANNUAL MEETING The Annual Meeting of the Stockholders of Cascade Corporation will be held at the Red Lion Motor Inn, Portland Center, 310 S.W. Lincoln Street, Portland, Oregon on Tuesday, May 14, 1996. STOCK EXCHANGE LISTING The Company's stock is traded on the National Market System under the NASDAQ symbol CASC. A formal notice of the meeting, together with a proxy statement and proxy form, will be mailed to stockholders. MARKET INFORMATION INVESTOR RELATIONS COUNSEL Gerald A. Parsons (503) 228-2909 The high and low sales prices of the common stock of Cascade Corporation as quoted on the NASDAQ during 1995 and 1994 were as follows:
YEAR ENDED JANUARY 31 1996 1995 --------------- --------------- HIGH LOW HIGH LOW --------------- --------------- Market price range First quarter $ 17.00 $ 12.00 $ 11.13 $ 8.88 Second quarter 17.25 14.50 11.50 9.75 Third quarter 16.25 13.00 12.63 10.75 Fourth quarter 15.50 11.75 12.50 10.50
COMMON STOCK DIVIDENDS YEAR ENDED JANUARY 31 1996 1995 --------------------- First quarter 9.0CENTS 7.5CENTS Second quarter 9.0 7.5 Third quarter 9.0 7.5 Fourth quarter 18.0 15.0 --------- --------- 45.0CENTS 37.5CENTS --------- --------- --------- --------- In February 1995 the Company declared a 100% stock dividend. 16 --------------------------------------------------------- EX-99.2 3 EXHIBIT 99.2 CASCADE CORPORATION NOTICE OF ANNUAL MEETING MAY 14, 1996 To the Shareholders: The 1996 Annual Meeting will be held at the Red Lion Motor Inn, Portland Center, 310 S.W. Lincoln Street, Portland, Oregon, on Tuesday, May 14, 1996, at 10:00 a.m., Pacific Daylight Time, for the following purposes: 1. The election of Directors for the ensuing year. 2. To consider and act upon any other business that may properly come before the meeting. Shareholders of record at the close of business on April 5, 1996 will be entitled to vote at the meeting. IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE SO THAT YOUR SHARES WILL BE VOTED. THE ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. GERALD M. BITZ Secretary Portland, Oregon April 10, 1996 PROXY STATEMENT This proxy statement and the accompanying proxy form are being mailed to security holders April 10, 1996. MATTERS TO BE PRESENTED AT THE MEETING The election of Directors is the only matter the management intends to present at the Annual Meeting of Shareholders. The management is not informed of any matters that may be presented by others. OUTSTANDING VOTING SECURITIES There are outstanding and eligible to vote at the meeting 11,896,704 shares of common stock of the Corporation, each entitled to one vote. As of April 5, 1996, the only persons known to the Corporation to be beneficial owners of more than 5% of the outstanding common stock of the Corporation were Robert C. Warren and Nani S. Warren, c/o 2020 S.W. Fourth Avenue, Portland, Oregon 97201, (see table under "Election of Directors"), and FMR Corporation, 82 Devonshire Street, Boston, Massachusetts 02109, beneficial owner of 1,121,500 shares, or 9.4% of the total common stock outstanding, through its subsidiaries, Fidelity Management & Research Company and Fidelity Management Trust Company. PROXY SOLICITATION AND REVOCATION The solicitation of the enclosed proxy is being made on behalf of the Board of Directors of the Corporation. Regular employees of the Corporation may solicit proxies personally or by telephone or facsimile. In addition, arrangements may be made with brokerage houses and other custodians to send proxies and proxy-soliciting materials to their principals, and the Corporation may reimburse them for their expense in so doing. Should any matters other than the election of directors requiring a vote of the shareholders be properly raised at the meeting, the persons named on the proxy intend to use their best judgment in exercising the discretion given them. Anyone who gives a proxy may revoke the proxy at any time before it has been exercised by delivering written notice of the revocation to the Secretary of the Corporation, or may still vote in person. The record date for determination of shareholders entitled to vote at the annual meeting was April 5, 1996. ELECTION OF DIRECTORS Each nominee listed below is a candidate for election to the Board of Directors to serve until the 1997 Annual Meeting or until his successor is elected. All nominees except Mr. Maunder were elected to the Board at the 1995 Annual Meeting. Unless otherwise directed, the accompanying proxy will be voted for the election of the eleven individuals listed below as nominees to the Board of Directors (except that, in the event any nominee is unable to serve, the proxy will be voted for a substituted nominee). Directors are elected by a plurality of the votes cast. Abstentions or broker non-votes will not effect the determination of a plurality. Further information follows with respect to each nominee.
- ------------------------------------------------------------------------------------------------------------ Shares of Common Percentage Stock of the Cor- of poration Owned Outstanding Director Principal Beneficially as Common Name and Age Since Occupation of April 5, 1996 Stock - ------------------------------------------------------------------------------------------------------------ Joseph J. Barclay, 63 1972 Chairman and Chief 420,214 3.5% Executive Officer of the Corporation since August, 1993; formerly President and Chief Executive Officer; Director, Granite Construction Incorporated Robert C. Warren, Jr., 1982 President and Chief 53,632 .5% 47(1) Operating Officer of the Corporation since August, 1993; formerly Vice President - Marketing (beginning 1990) and Vice President - Administration Rob Spaans, 47 1994 Managing Director, -- -- Cascade Corporation Europe commencing May 1, 1994; Director of Manufacturing, Cascade NV until that date Richard C. Hire, 68 1972 Retired Vice President - 32,856 .3% Finance and Secretary of the Corporation Eric Hoffman, 72 1980 Chairman, Hoffman 8,000 -- Corporation, General Contractors C. Calvert Knudsen, 71 1974 Director and retired 8,000 -- Chairman, Chief Executive Officer, MacMillan Bloedel, Ltd., Director, Safeco Corporation. Nicholas R. Lardy, 50 1993 Senior Fellow, The 2,300 -- Brookings Institution, a policy research institution. Lawrence S. Maunder, 63 -- Vice President-Marketing 4,396 -- since August, 1993; Formerly Vice President-U.S. Sales (beginning 1989) and U.S. Sales Manager James S. Osterman, 58 1994 President, Oregon 500 -- Cutting Systems Division, Blount, Inc., a diversified manufacturer Jack B. Schwartz, 59 1995 Partner, Newcomb, 111,100(2) .9% Sabin, Schwartz & Landsverk, Attorneys, since 1968; Assistant Secretary of the Corporation since 1972; Director, Macheezmo Mouse Restaurants, Inc. Robert C. Warren, 78 1946 Chairman Emeritus 1,862,092(2)(3) 15.7% of the Corporation since August, 1993 16 Directors and Officers as a Group(4) 2,457,573 20.7% - --------------------------------------------------------------------------------
(1) Robert C. Warren, Jr., is the son of Robert C. Warren. (2) Includes shared voting and investment powers as to 107,500 shares, or .9% of those outstanding, beneficially owned by a charitable foundation. (3) Includes 1,754,592 shares, or 14.4% of those outstanding, owned by Robert C. and Nani S. Warren as trustees of a revocable trust established by them. (4) Includes the following share totals held by Executive Officer listed on page 4 and not listed above: G.M. Bitz, 40,000. The Board of Directors met five times during the year. The Board has a standing Audit Committee, consisting of Messrs. Knudsen, Hire, and Hoffman, and a standing Compensation Committee consisting of Messrs. Warren, Hoffman, and Knudsen. The Audit Committee met twice and the Compensation Committee met once during the year. Each Director attended at least 75% of the aggregate number of meetings of the Board and 2 committees on which he served which were held during the year. The Audit Committee recommends annually to the Board the engagement of independent certified public accountants; determines their independence; reviews their professional services and the fees charged; and reviews the scope of the audit and matters relating to it. A description of the Compensation Committee's responsibilities is included in the Committee's Report on Executive Compensation on page 4. The Board does not have a standing nominating committee. DIRECTORS' FEES Directors who are not employees of the Corporation received a $10,000 retainer, an attendance fee of $750 for each board meeting and a $500 fee for each committee meeting attended during the year ended January 31, 1996. For the year ending January 31, 1997, each non-employee Director will receive a $12,000 annual retainer, attendance fees of $750 for each Board meeting and $500 for each committee meeting. OTHER TRANSACTIONS Newcomb, Sabin, Schwartz and Landsverk, a firm in which Jack B. Schwartz, a nominee for Director, is a partner, renders legal services to the Corporation in the ordinary course of business. During the year ended January 31, 1996, the Corporation paid the firm fees approximating $300,677 for such services and additional services in connection with environmental matters and related litigation. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth certain information concerning the compensation of the Corporation's Chief Executive Officer and each of its four other most highly compensated executive officers (the "named executive officers") during each of the years in the three-year period ended January 31, 1996.
- ----------------------------------------------------------------------------------------------- ANNUAL COMPENSATION NAME AND ---------------------------------- ALL OTHER PRINCIPAL POSITION YEAR SALARY INCENTIVE PAYMENT COMPENSATION (1) - ----------------------------------------------------------------------------------------------- Joseph J. Barclay 1995 $180,000 $456,515 $11,820 Chairman and Chief 1994 180,000 322,137 11,820 Executive Officer 1993 179,475 167,992 11,706 Robert C. Warren, Jr. 1995 130,000 365,212 9,820 President and Chief 1994 130,000 257,709 9,820 Operating Officer 1993 109,716 103,080 7,788 Gerald M. Bitz 1995 93,600 182,606 7,488 Vice President - 1994 92,400 128,855 7,368 Finance & Secretary 1993 89,738 67,197 6,357 Terry H. Cathey 1995 94,200 182,606 7,536 Vice President - 1994 93,000 128,855 7,416 Manufacturing 1993 90,333 67,197 6,398 Lawrence S. Maunder 1995 96,000 182,606 7,640 Vice President - 1994 94,200 128,855 7,500 Marketing 1993 90,336 49,047 6,399 - -----------------------------------------------------------------------------------------------
(1) The amounts shown are contributions by the Corporation to the Cascade Corporation Savings and Investment Plan, a qualified plan under Section 401(k) of the Internal Revenue Code of 1986, for the benefit of the named executive officers. In December, 1993, the Corporation and Mr. Barclay entered into an agreement providing for Mr. Barclay's employment by the Corporation through March 31, 1998. Under the agreement, the Corporation will pay Mr. Barclay a minimum annual salary of $180,000 (subject to annual review), annual incentive compensation payments based upon the same formula and percentage participation then in effect, and certain employee benefits and expense reimbursements. Should the Corporation terminate Mr. Barclay's employment prior to March 31, 1998, for reasons other than misconduct, the Corporation is to pay him $31,000 per month until that date or, if earlier, his death or disability. 3 OPTIONS GRANTED IN 1995 The following information is furnished for the year ended January 31, 1996 with respect to the named executive officers for stock options which were granted in May 1995 under the 1995 Senior Managers' Incentive Stock Option Plan (the "Stock Option Plan").
- --------------------------------------------------------------------------------------------------------- NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE OF SECURITIES OPTIONS ASSUMED ANNUAL RATES OF UNDERLYING GRANTED TO EXERCISE STOCK PRICE APPRECIATION FOR OPTIONS EMPLOYEES PRICE EXPIRATION OPTION TERM (2) ----------------------------- NAME GRANTED IN 1995 IN 1995 PER SHARE DATE (1) 5% 10% - -------------------------------------------------------------------------------------------------------- Joseph J. Barclay 6,595 8.53% $16.375 5/9/2005 $67,916 $172,113 Robert C. Warren, Jr. 4,330 5.60% 18.013 5/9/2005 37,501 105,912 Gerald M. Bitz 3,430 4.43% 16.375 5/9/2005 35,323 89,515 Terry H. Cathey 3,452 4.46% 16.375 5/9/2005 35,549 90,089 Lawrence S. Maunder 3,518 4.55% 16.375 5/9/2005 36,229 91,811 - --------------------------------------------------------------------------------------------------------
(1) Under the terms of the Stock Option Plan, options are granted at fair market value and generally may not be exercised until the employee has completed three years of continuous employment with Company or its subsidiaries from the grant date. Options have a term of ten years and generally terminate on the date of the optionee's termination of employment with the corporation, or in the event of death or disability, on the first anniversary of the optionee's termination of employment. (2) Potential Realizable Value calculation assumes appreciation at the rate shown beginning on the date of grant through the option expiration date. RETIREMENT PLANS Certain employees of the Corporation will receive retirement benefits under the Cascade Corporation Retirement Plan. Benefits are limited to those accrued through December 31, 1988, and are based upon compensation for the five highest consecutive years of compensation during the 10 years of employment ending December 31, 1988. The Corporation also provides a supplemental, unfunded severance benefit to certain Retirement Plan participants. A participant's supplemental benefit will be equal to the difference, if any, between (a) benefits which would have been payable under the Retirement Plan, had benefit accruals continued after December 31, 1988, and (b) the actuarial value of benefits payable under the Retirement Plan and benefits attributable to employer contributions, including earnings, under the Corporation's 401(k) Plan. Estimated annual Retirement Plan benefits and estimated lump sum supplemental plan benefits, respectively, payable to named executive officers as of January 31, 1996, are as follows: Mr. Barclay, $68,244 and $731,540; Mr. Warren, Jr., $15,977 (Retirement Plan only); Mr. Bitz, $22,565 and $374,050; Mr. Cathey, $9,816 (Retirement Plan only); and Mr. Maunder, $25,752 and $357,820. Retirement plan estimates assume retirement at age 65. Supplemental plan estimates assume retirement at age 65; compensation for the 10 years prior to retirement equal to compensation for the 10 years ending January 31, 1996; 401(k) plan employer contributions equal to those for the year ended January 31, 1996; and an average rate of return on 401(k) Plan employer contributions balances and future employer contributions equal to the return for the 12-month period ended December 31, 1995. Mr. Warren, Jr. and Mr. Cathey do not participate in the supplemental plan. COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION POLICIES The Compensation Committee is responsible for formulating the Corporation's executive compensation policy, subject to approval by the Board of Directors. Mr. Warren, a member of the Committee, was formerly Chairman of the Corporation and has served as Chief Executive Officer in the past. For the year ended January 31, 1996, all executive officers were paid a base salary and an incentive bonus equal to an assigned percentage of the Corporation's pretax profits, computed without deducting incentive compensation and certain extraordinary items. The Board of Directors approved salary and bonus participation levels for the year at its February, 1995, meeting. By tying compensation in significant part to profits, the Compensation Committee believes the Corporation has assured a close correllation between executive compensation and corporate performance for the period involved. In the committee's view, the Corporation's fiscal 1995 performance was to a significant degree a reflection of prior years' efforts on the part of its executive team. 4 The 1995 Cascade Incentive Stock Option Plan provides an additional compensation element linked to the Corporation's longer-term results and share performance. COMPANY PERFORMANCE AND CEO COMPENSATION Mr. Barclay's base salary and incentive bonus participation were established by an agreement entered into in December, 1993, and summarized under "Executive Compensation" above. The Committee believes compensation paid pursuant to the agreement fairly reflects Mr. Barclay's contribution to the Corporation's operating performance and is within the general range of compensation for executives with like responsibilities in the Portland, Oregon, area and in comparable companies and industries. COMPENSATION COMMITTEE MEMBERS Robert C. Warren Eric Hoffman C. Calvert Knudsen PERFORMANCE GRAPH The following graph compares the annual percentage change in the cumulative shareholder return on the Corporation's Common Stock with the cumulative total return of the NASDAQ Non-Financial Index, and the cumulative total return of an industry group of peer companies in each case assuming investment of $100 on January 31, 1991, and reinvestment of dividends. TOTAL RETURN CHART (DOLLARS) 1/91 1/92 1/93 1/94 1/95 1/96 ---- ---- ---- ---- ---- ---- CASCADE CORPORATION 100 130 137 137 161 186 PEER GROUP* 100 149 164 219 220 286 NASDAQ NON-FINANCIAL 100 152 161 187 173 240 (*) The peer group includes the following companies: Agco Corp., Alamo Group Inc., Arts Way Mfg. Inc., Astec Inds. Inc., Farr Co., Gehl Co., Gencor Inds. Inc., Jlg Inds. Inc., Lindsay Mfg. Co., Nordson Corp., Peerless Mfg. Co., Raymond Corp., Rexwork Inc., SI Handling Sys. Inc., Utilx Corp., Valmont Inds. Inc. 5 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Price Waterhouse, an independent certified public accounting firm, has been selected to continue to serve the Corporation in that capacity for the current fiscal year. The Corporation expects representatives of Price Waterhouse to be present at the annual meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions from shareholders. SHAREHOLDER PROPOSALS Shareholder proposals intended to be presented at the next annual meeting must be received by the Corporation no later than January 31, 1997, in order to be included in the proxy materials for such meeting. ANNUAL REPORT The Annual Report of the Corporation is being mailed to the shareholders with the Notice of Annual Meeting and Proxy Statement. The Annual Report is not incorporated in the Proxy Statement by reference, nor is it part of the proxy- soliciting material. A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE TO RECORD OR BENEFICIAL SHAREHOLDERS AS OF THE RECORD DATE. REQUESTS FOR THE FORM 10-K SHOULD BE ADDRESSED TO THE SECRETARY, CASCADE CORPORATION, 2020 S.W. FOURTH AVENUE, PORTLAND, OREGON 97201, THE EXECUTIVE OFFICES OF THE CORPORATION. 6 PROXY CASCADE CORPORATION PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 14, 1996 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints J.J. Barclay, G.M. Bitz and R.C. Warren, Jr. as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated hereon, all the shares of common stock of Cascade Corporation held of record by the undersigned on April 5, 1996, at the Annual Meeting of Shareholders to be held at the Red Lion Hotel, 310 S.W. Lincoln, Portland, Oregon 97201, on May 14, 1996 at 10:00 a.m., and at any adjournment or postponement thereof. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELEVEN NOMINEES FOR ELECTION AS DIRECTORS. THIS PROXY WILL BE VOTED AS SPECIFIED, OR IN NO CHOICE IS SPECIFIED, WILL BE VOTED FOR THE ELEVEN NOMINEES FOR ELECTION AS DIRECTORS. (CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE) - -------------------------------------------------------------------------------- FOLD AND DETACH HERE PLEASE MARK YOUR VOTES AS [X] INDICATED IN THIS EXAMPLE - -------------------------------------------------------------------------------- ITEM 1: ELECTION OF DIRECTORS INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE THAT NOMINEES FOR ALL NOMINEES WITHHOLD NAME IN THE SPACE PROVIDED BELOW. LISTED TO THE RIGHT AUTHORITY (EXCEPT AS MARKED TO TO VOTE FOR ---------------------------------------------- THE CONTRARY) ALL J.J. Barclay, R.C. Hire, Eric Hoffman, C.C. NOMINEES Knudsen, N.R. Lardy, L.S. Maunder, J.S. LISTED TO Osterman, J.B. Schwartz, Rob Spaans, R.C. THE RIGHT Warren, R.C. Warren, Jr. [ ] [ ] I PLAN TO ATTEND MEETING [ ] COMMENTS/ADDRESS CHANGE [ ] PLEASE MARK THE BOX AND INDICATE COMMENTS/ ADDRESS CHANGE BELOW. Please sign exactly as your name appears. When shares are held by joint tenants, both should sign. When signing as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized person. Date , 1996 ------------------------ - ---------------------------------- Signature - ---------------------------------- Signature - -------------------------------------------------------------------------------- FOLD AND DETACH HERE EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000 YEAR JAN-31-1996 FEB-01-1995 JAN-31-1996 23,326 0 39,541 967 25,215 87,964 133,719 70,505 153,190 38,135 0 0 0 6,139 85,918 153,190 234,030 234,030 153,345 153,345 315 0 40 16,060 5,510 0 0 0 0 10,550 .88 .88
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