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CASCADE CORPORATION ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED JULY 31, 2008

Cascade Corporation (NYSE: CAE) today reported its financial results for the second quarter ended July 31, 2008.

Overview

·Net sales of $150.1 million for the second quarter of fiscal 2009 were 5% higher than net sales of $143.2 million for the prior year second quarter.

·Net income of $10.5 million ($0.94 per diluted share) for the second quarter of fiscal 2009 was 31% lower than net income of $15.1 million ($1.21 per diluted share) for the second quarter of fiscal 2008.

Second Quarter Fiscal 2009 Summary

·Summary financial results are outlined below (in thousands, except earnings per share):

·Consolidated net sales decreased 1% during the second quarter of fiscal 2009, excluding the impact of foreign currency changes. This decrease was primarily the result of lower sales volumes in North America and Europe. Details of the change in net sales compared to the prior year second quarter follow (in millions):

·The consolidated gross profit percentage decreased 4% due primarily to material price increases in all geographic segments and lower sales volumes.

·Selling and administrative expenses increased 1%, excluding foreign currency changes, due to costs to support our expanded Chinese operations and higher marketing costs in Europe.

·The effective tax rate increased to 38% for the second quarter of fiscal 2009 from 33% for fiscal 2008. This increase was primarily related to an increase in valuation allowances for losses in Europe.

Market Conditions

·Percentage changes in lift truck industry shipments, by region, as compared to the prior year are outlined below. Although lift truck unit shipments are an indicator of the general health of the industry, they do not necessarily correlate directly with the demand for our products.



		Second Quarter
North America		(13%)
Europe		14%
Asia Pacific		10%
China		19%


·The market in North America is expected to be down 10-15% compared to the prior year, which is consistent with the second quarter’s shipments.

·Europe's shipment levels for the remainder of the year are expected to be similar or down slightly in comparison with the second quarter.

·We expect the growth rate in the Asia Pacific market will be consistent with the second quarter.

·The market in China is expected to grow at a rate similar to that experienced in the second quarter of fiscal 2009.

North America Summary

·Summary financial results are outlined below (in thousands):

·Net sales decreased 7%, excluding the impact of currency changes, primarily due to the downturn in the construction market. Details of the change in net sales over the prior year quarter follow (in millions):



·The gross profit percentage was 4% lower than the prior year second quarter due to higher material costs, lower sales volumes and changes in product mix.

·The decrease in selling and administrative costs was due to a reduction in personnel, consulting and other general costs.

·During the second quarter of fiscal 2008, we realized a $1.1 million pre-tax gain on the sale of land in Fairview, Oregon.

Europe Summary

·Summary financial results are outlined below (in thousands):



·Net sales decreased 1% excluding the impact of currency changes. Given the current industry statistics, we may have lost some market share in Europe. Delivery delays also factored into our lower sales. Details of the change in net sales over the prior year quarter follow (in millions):



·The gross profit percentage was 2% lower than the prior year second quarter. The decrease is primarily due to material price increases, higher personnel costs and other general costs.

·Excluding the impact of currency changes, selling and administrative expenses increased 10% in Europe due to higher marketing and reorganization costs.

Asia Pacific Summary

·Summary financial results are outlined below (in thousands):



·Net sales increase is primarily a result of strong lift truck markets in Australia and Japan and our initiative to produce a wider selection of products in China for sale in the region. Details of the change in net sales over the prior year quarter follow (in millions):



·The gross profit percentage in Asia Pacific remained unchanged at 24%. Although increasing material costs have impacted this region, we have been able to mitigate the increase with sourcing of product from within Asia Pacific and China.

·Selling and administrative costs increased 8% in the current year, excluding the impact of currency changes, due to higher personnel and selling expenses.

China Summary

·Summary financial results are outlined below (in thousands):



·The net sales increase in China is due to a strong Chinese lift truck market and our expansion in China. Details of the change in net sales over the prior year quarter follow (in millions):



·Gross margin percentages in China decreased to 31% from 34% in the prior year. This decrease is primarily the result of material price increases, changes in product mix and higher intercompany transfers, which carry lower gross margins. We are also continuing to see increased competition from Chinese companies.

·Selling and administrative costs increased 33%, excluding currency changes. This increase is due to additional costs to support our expanded Chinese operations.

Other Matters:

·On September 3, 2008, our Board of Directors declared a quarterly dividend of $0.20 per share, payable on October 17, 2008 to shareholders of record as of October 2, 2008.

·During the first quarter of the prior year we settled an insurance litigation matter which resulted in a $16 million increase in operating income and a $10 million increase in net income ($0.80 per diluted share).

Forward Looking Statements:

This press release contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that a number of factors could cause our actual results to differ materially from any results indicated in this release or in any other forward-looking statements made by us, or on our behalf. These include among others, factors related to general economic conditions, interest rates, demand for materials handling products and construction equipment, performance of our manufacturing facilities and the cyclical nature of the materials handling and construction equipment industries. Further, historical information should not be considered an indicator of future performance. Additional considerations and important risk factors are described in our reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission.

Earnings Call Information:

We will discuss our results in a conference call on Thursday, September 4, 2008 at 2:00 pm PDT. Robert C. Warren, Jr., President and Chief Executive Officer will host the call. The conference call can be accessed in the U.S. and Canada by dialing (800) 366-3908, International callers can access the call by dialing (303) 262-2141. Participants are encouraged to dial-in 15 minutes prior to the beginning of the call. A replay will be available for 48 hours after the live broadcast and can be accessed by dialing (800) 405-2236 and entering passcode 11117819#, or internationally, by dialing (303) 590-3000 and entering passcode 11117819#.

The call will be simultaneously webcast and can be accessed on the Investor Relations page of the company’s website, www.cascorp.com. Listeners should go to the website at least 15 minutes early to register, download and install any necessary audio software.

About Cascade Corporation:

Cascade Corporation, headquartered in Fairview, Oregon, is a leading international manufacturer of materials handling products used primarily on lift trucks. Additional information on Cascade is available on its website, www.cascorp.com.

Contact
Joseph G. Pointer
Chief Financial Officer
Cascade Corporation
Phone (503) 669-6300

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