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CASCADE CORPORATION ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER ENDED APRIL 30, 2008

Cascade Corporation (NYSE: CAE) today reported its financial results for the first quarter ended April 30, 2008.

Overview

·Net sales of $149.9 million for the first quarter of fiscal 2009 were 11% higher than net sales of $135.5 million for the prior year first quarter.

·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).

·Net income of $10.9 million ($0.98 per diluted share) for the first quarter of fiscal 2009 was 54% lower than net income of $23.8 million ($1.90 per diluted share) for the first quarter of fiscal 2008. Excluding the insurance litigation recovery, net income for the first quarter of fiscal 2009 was 21% lower than net income for the first quarter of fiscal 2008.

First Quarter Fiscal 2009 Summary

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

·Consolidated net sales increased 4% during the first quarter of fiscal 2009, excluding an acquisition and the impact of foreign currency changes. This increase was primarily the result of the strength of lift truck markets in China, Asia Pacific and Europe. Details of the net sales increase over the prior year first quarter follow (in millions):

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

·Selling and administrative expenses increased 5%, excluding foreign currency changes and an acquisition, due to costs to support our expanded Chinese operations and higher selling and personnel costs.

·The effective tax rate was consistent at 35% for the first quarter of fiscal 2009 and 2008.

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.




		First Quarter
North America		(6%)
Europe		16%
Asia Pacific		19%
China		30%


·The lift truck market outlook is for shipments to follow current trends through the remainder of the year.

North America Summary

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



·Net sales decreased 5%, excluding the impact of currency changes and an acquisition, primarily due to the general downtown in the United States economy, which is reflected in both the lift truck and construction markets. Details of the decrease over the prior year quarter follow (in millions):



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

·The increase in selling and administrative costs was due to an acquisition and currency changes.

·In the prior year we settled an insurance litigation matter which resulted in a $16 million increase in operating income.

Europe Summary

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



·The increase in sales in Europe can be primarily attributed to a strong European lift truck market. Details of the net sales increase over the prior year quarter follow (in millions):



·The gross profit percentage was 3% lower than the prior year first quarter. The decrease is primarily due to material price increases and operational inefficiencies, which include costs from new product introductions. The gross margin was also negatively affected by delays in approval of Chinese-made products by European OEMs. These delays required us to continue supplying OEMs with European-made products at lower margins.

·Excluding the impact of currency changes, selling and administrative expenses increased 11% in Europe due to higher personnel and other general costs. First quarter costs include $375,000 in initial costs related to our current reorganization efforts.

Asia Pacific Summary

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



·All locations throughout the Asia Pacific region contributed to the sales increase. Details of the net sales increase over the prior year quarter follow (in millions):



·The gross profit percentage in Asia Pacific remained unchanged at 26%. The benefits of sourcing lower cost product from China were offset by increased sales of lower margin products.

·Selling and administrative costs increased 11% in the current year, excluding the impact of currency changes, due to personnel and selling cost increases.

China Summary

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



·The net sales increase in China is due to a very strong Chinese lift truck market and our recent expansion plan in China which enabled us to produce a larger volume of products. Details of the increase over the prior year first 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.

·Selling and administrative costs increased 27%, excluding currency changes. This increase is due to additional costs to support our expanded Chinese operations.

Other Matters:

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

Other Financial Information:

We believe the exclusion of the prior year insurance litigation recovery provides a more appropriate comparison with current year results. The prior year calculation of diluted earnings per share excluding the insurance recovery is as follows (in thousands, except per share amount):



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, June 5, 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 11114869#, or internationally, by dialing (303) 590-3000 and entering passcode 11114869#.

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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