**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

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**FORM 10-Q**

 
| **(Mark One)**                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ý**                                                                                                                                                        | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
|                                                                                                                                                              |   |
| **For the Quarterly Period Ended  July 31, 2003**                                                                                                            |
|                                                                                                                                                              |   |
| **o**                                                                                                                                                             | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934** |
|                                                                                                                                                              |   |
| **For the transition period from             to            ** |
|                                                                                                                                                              |   |
| **Commission file number 1-12557**                                                                                                                                |

 

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| **CASCADE CORPORATION**                                                           |
|-----------------------------------------------------------------------------------|
| (Exact name of registrant as specified in  its charter)                           |
|                                                                              |
| **Oregon**                                                                        |   | **93-0136592** |
| (State or other jurisdiction of  incorporation or organization)                   |   | (I.R.S. Employer Identification No.) |
|                                                                              |
| **2201 N.E. 201st Ave.  Fairview, Oregon**                                        |   | **97024-9718** |
| (Address of principal executive office)                                           |   | (Zip Code) |
|                                                                              |
| Registrant’s telephone number, including  area code: **(503) 669-6300** |

 

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Indicate by check mark whether the registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.  Yes  ý  No  o

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Exchange Act Rule 12b-2). Yes  ý  No  o

 

The number of shares outstanding of the registrant’s common stock as ofAugust 22, 2003 was 12,016,543.

 

 

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**PART I—FINANCIAL INFORMATION**

 

**Item 1. Financial Statements**

 

**CASCADE CORPORATIONCONSOLIDATED BALANCE SHEETS(in thousands, except per share data)**

 
|                                                                                                     |   | **July 31  2003** |    | **January 31  2003** |       |
|----------------------------------------------------------------------------------------------------------|--------|------------------------|---------|---------------------------|------------|
|                                                                                                     |   | **(unaudited)**        |    |                      | ** ** |
| **ASSETS**                                                                                               |   |                   |    |                      |       |
| Current assets:                                                                                          |   |                   |    |                      |       |
| Cash                                                                                                     |   | $                      | 27,988  |                      | $          | 29,501 |   |
| Marketable securities                                                                                    |   | 4,828                  |    | —                    |       |
| Accounts receivable, less allowance for  doubtful accounts of $1,394 and $1,801                          |   | 48,308                 |    | 42,784                    |       |
| Inventories                                                                                              |   | 30,173                 |    | 30,431                    |       |
| Deferred income taxes                                                                                    |   | 2,282                  |    | 2,188                     |       |
| Income taxes receivable                                                                                  |   | 1,166                  |    | 3,727                     |       |
| Notes receivable, current portion                                                                        |   | 8,313                  |    | 1,088                     |       |
| Prepaid expenses and other                                                                               |   | 5,171                  |    | 4,279                     |       |
| Total current assets                                                                                     |   | 128,229                |    | 113,998                   |       |
| Property, plant and equipment, net                                                                       |   | 67,875                 |    | 65,863                    |       |
| Goodwill                                                                                                 |   | 64,528                 |    | 59,355                    |       |
| Notes receivable, net                                                                                    |   | 856                    |    | 8,559                     |       |
| Deferred income taxes                                                                                    |   | 11,671                 |    | 11,627                    |       |
| Other assets                                                                                             |   | 3,811                  |    | 2,915                     |       |
| Total assets                                                                                             |   | $                      | 276,970 |                      | $          | 262,317 |   |
|                                                                                                     |   |                   |    |                      |       |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY**                                                            |   |                   |    |                      |       |
| Current liabilities:                                                                                     |   |                   |    |                      |       |
| Notes payable to banks                                                                                   |   | $                      | 832     |                      | $          | 1,043 |   |
| Current portion of long-term debt                                                                        |   | 12,695                 |    | 12,695                    |       |
| Accounts payable                                                                                         |   | 14,068                 |    | 13,763                    |       |
| Accrued payroll and payroll taxes                                                                        |   | 5,181                  |    | 5,687                     |       |
| Accrued environmental expenses                                                                           |   | 808                    |    | 808                       |       |
| Other accrued expenses                                                                                   |   | 9,036                  |    | 8,801                     |       |
| Total current liabilities                                                                                |   | 42,620                 |    | 42,797                    |       |
| Long-term debt                                                                                           |   | 49,985                 |    | 50,113                    |       |
| Accrued environmental expenses                                                                           |   | 9,046                  |    | 9,389                     |       |
| Deferred income taxes                                                                                    |   | 1,351                  |    | 1,226                     |       |
| Other liabilities                                                                                        |   | 6,469                  |    | 5,514                     |       |
| Total liabilities                                                                                        |   | 109,471                |    | 109,039                   |       |
|                                                                                                     |   |                   |    |                      |       |
| Exchangeable convertible preferred stock  and minority interest                                          |   | —                 |    | 8,530                     |       |
| Shareholders’ equity:                                                                               |   |                   |    |                      |       |
| Common stock, $.50 par value, 20,000  authorized shares; 11,998 and 11,398 shares issued and outstanding |   | 5,999                  |    | 5,699                     |       |
| Additional paid-in capital                                                                               |   | 9,698                  |    | 1,468                     |       |
| Retained earnings                                                                                        |   | 160,641                |    | 151,925                   |       |
| Accumulated other comprehensive loss:                                                                    |   |                   |    |                      |       |
| Cumulative foreign currency translation  adjustments                                                     |   | (8,839                 | )       | (14,344                   | )          |
| Total shareholders’ equity                                                                          |   | 167,499                |    | 144,748                   |       |
| Total liabilities and shareholders’ equity                                                          |   | $                      | 276,970 |                      | $          | 262,317 |   |

 

The accompanying notes are an integral partof the consolidated financial statements.

 

2

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**CASCADE CORPORATIONCONSOLIDATED STATEMENTS OF INCOME**

 

**(unaudited—in thousands, except per sharedata)**

 
|                                              |   | **Three Months Ended  July 31** |   | **Six Months Ended********July 31** |   |
|---------------------------------------------------|--------|--------------------------------------|--------|------------------------------------------|--------|
|                                              |   | **2003**                             |   | **2002**                                 |   | **2003** |   | **2002** |   |
|                                              |   |                                 |   |                                     |   |   |   |   |   |
| Net sales                                         |   | $                                    | 75,633 |                                     | $      | 64,272 |   | $ | 144,567 |   | $ | 124,214 |   |
| Cost of  goods sold                               |   | 50,646                               |   | 42,473                                   |   | 96,870 |   | 81,352 |   |
| Gross profit                                      |   | 24,987                               |   | 21,799                                   |   | 47,697 |   | 42,862 |   |
| Selling and  administrative                       |   | 15,316                               |   | 13,966                                   |   | 29,964 |   | 27,270 |   |
| Operating  income                                 |   | 9,671                                |   | 7,833                                    |   | 17,733 |   | 15,592 |   |
| Interest  expense, net                            |   | 894                                  |   | 1,097                                    |   | 1,786 |   | 2,188 |   |
| Other  (income) expense                           |   | 333                                  |   | (331                                     | )      | (399 | ) | (157 | ) |
| Income  before taxes                              |   | 8,444                                |   | 7,067                                    |   | 16,346 |   | 13,561 |   |
| Provision  for income taxes                       |   | 2,702                                |   | 2,609                                    |   | 5,231 |   | 4,882 |   |
| Net income                                        |   | 5,742                                |   | 4,458                                    |   | 11,115 |   | 8,679 |   |
|                                              |   |                                 |   |                                     |   |   |   |   |   |
| Dividends  paid on preferred shares of subsidiary |   | —                               |   | —                                   |   | (30 | ) | — |   |
| Net income  applicable to common shareholders     |   | $                                    | 5,742  |                                     | $      | 4,458 |   | $ | 11,085 |   | $ | 8,679 |   |
|                                              |   |                                 |   |                                     |   |   |   |   |   |
| Basic  earnings per share                         |   | $                                    | 0.48   |                                     | $      | 0.39 |   | $ | 0.94 |   | $ | 0.77 |   |
| Diluted  earnings per share                       |   | $                                    | 0.47   |                                     | $      | 0.36 |   | $ | 0.91 |   | $ | 0.71 |   |
|                                              |   |                                 |   |                                     |   |   |   |   |   |
| Basic  weighted average shares outstanding        |   | 11,995                               |   | 11,325                                   |   | 11,795 |   | 11,309 |   |
| Diluted  weighted average shares outstanding      |   | 12,288                               |   | 12,240                                   |   | 12,225 |   | 12,223 |   |

 

The accompanying notes are an integral partof the consolidated financial statements.

 

3

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**CASCADE CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited—in thousands)**

 
|                                                                               |   | **Six Months Ended********July 31** |    |
|------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                               |   | **2003**                                 |    | **2002** |   |
| Cash flows  from operating activities:                                             |   |                                     |    |   |   |
| Net income                                                                         |   | $                                        | 11,115  |   | $ | 8,679 |   |
| Adjustments  to reconcile net income to net cash provided by operating activities: |   |                                     |    |   |   |
| Depreciation  and amortization                                                     |   | 6,212                                    |    | 5,063 |   |
| Deferred  income taxes                                                             |   | (13                                      | )       | 119 |   |
| Loss on  disposition of fixed assets                                               |   | 207                                      |    | 58 |   |
| Changes in  operating assets and liabilities, net of effects of acquisitions:      |   |                                     |    |   |   |
| Accounts  receivable                                                               |   | (4,445                                   | )       | (4,005 | ) |
| Inventories                                                                        |   | 896                                      |    | 1,295 |   |
| Prepaid  expenses and other receivables                                            |   | 1,715                                    |    | (3,056 | ) |
| Accounts  payable and accrued expenses                                             |   | (1,607                                   | )       | 2,559 |   |
| Other  liabilities                                                                 |   | 628                                      |    | 881 |   |
| Cash  provided by operating activities                                             |   | 14,708                                   |    | 11,593 |   |
| Cash flows  from investing activities:                                             |   |                                     |    |   |   |
| Additions to  property, plant and equipment                                        |   | (5,180                                   | )       | (3,993 | ) |
| Purchase of  marketable securities                                                 |   | (10,331                                  | )       | (13,302 | ) |
| Proceeds  from sale of marketable securities                                       |   | 5,503                                    |    | — |   |
| Business  acquisitions                                                             |   | (3,585                                   | )       | — |   |
| Proceeds  from sale of assets                                                      |   | 406                                      |    | — |   |
| Proceeds  from notes receivable                                                    |   | 268                                      |    | — |   |
| Other assets                                                                       |   | 103                                      |    | (10 | ) |
| Cash used in  investing activities                                                 |   | (12,816                                  | )       | (17,305 | ) |
| Cash flows  from financing activities:                                             |   |                                     |    |   |   |
| Proceeds  from (payments on) long-term debt                                        |   | (128                                     | )       | 219 |   |
| Notes  payable to banks, net                                                       |   | (211                                     | )       | 92 |   |
| Common stock  issued                                                               |   | —                                   |    | 38 |   |
| Cash dividends  paid                                                               |   | (2,399                                   | )       | — |   |
| Cash  provided by (used in) financing activities                                   |   | (2,738                                   | )       | 349 |   |
| Effect of  exchange rate changes                                                   |   | (667                                     | )  | 1,879 |   |
| Change in  cash and cash equivalents                                               |   | (1,513                                   | )       | (3,484 | ) |
| Cash and  cash equivalents at beginning of year                                    |   | 29,501                                   |    | 25,611 |   |
| Cash and  cash equivalents at end of period                                        |   | $                                        | 27,988  |   | $ | 22,127 |   |
|                                                                               |   |                                     |    |   |   |
| Supplemental  disclosure of cash flow information:                                 |   |                                     |    |   |   |
| Cash paid  during period for:                                                      |   |                                     |    |   |   |
| Interest                                                                           |   | $                                        | 2,273   |   | $ | 3,055 |   |
| Income taxes                                                                       |   | $                                        | 2,601   |   | $ | 4,140 |   |
| Business  acquisitions:                                                            |   |                                     |    |   |   |
| Accounts  receivable                                                               |   | $                                        | 1,079   |   | — |   |
| Inventories                                                                        |   | 638                                      |    | — |   |
| Property,  plant and equipment                                                     |   | 2,252                                    |    | — |   |
| Goodwill and  intangible assets                                                    |   | 1,242                                    |    | — |   |
| Accounts  payable assumed                                                          |   | (1,626                                   | )       | — |   |
|                                                                               |   | $                                        | 3,585   |   | — |   |
| Supplemental  disclosure of noncash financing activities:                          |   |                                     |    |   |   |
| Conversion  of exchangeable convertible preferred stock to common stock            |   | $                                        | 8,530   |   | $ | 2,844 |   |

 

The accompanying notes are an integral partof the consolidated financial statements.

 

4

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**CASCADE CORPORATIONCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY(unaudited—in thousands)**

 
|                                                                |   | **Common Stock** |   | **Additional  Paid-In  Capital** |        | **Retained  Earnings** |   | **Accumulated  Other  Comprehensive  Income** |   | **Annual  Comprehensive  Income** |          |
|---------------------------------------------------------------------|--------|------------------|--------|----------------------------------|-------------|------------------------|--------|-----------------------------------------------|--------|-----------------------------------|---------------|
|                                                                |   | **Shares**       |   | **Amount**                       |
| **Balance at  January 31, 2003**                               |   | 11,398           |   | $                                |  5,699 |                   | $      |  1,468                                   |   | $                                 |  151,925 |   | $ |  (14,344 | ) |   |   |
|                                                                |   |             |   |                             |        |                   |   |                                          |   |                              |          |   |   |
| Net income                                                          |   | —           |   | —                           |        | —                 |   | 11,115                                        |   | —                            |          | $ |  11,115 |   |
| Dividends ($.20 per share)                                          |   | —           |   | —                           |        | —                 |   | (2,399                                        | )      | —                            |          | — |   |
| Exchangeable convertible preferred stock  converted to common stock |   | 600              |   | 300                              |        | 8,230                  |   | —                                        |   | —                            |          | — |   |
| Translation adjustment                                              |   | —           |   | —                           |        | —                 |   | —                                        |   | 5,505                             |          | 5,505 |   |
|                                                                |   |             |   |                             |        |                   |   |                                          |   |                              |          |   |   |
| **Balance at  July 31, 2003**                                  |   | 11,998           |   | $                                |  5,999 |                   | $      |  9,698                                   |   | $                                 |  160,641 |   | $ | (8,839 | ) | $ |  16,620 |   |

 

The accompanying notes are an integral partof the consolidated financial statements.

 

5

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**CASCADE CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited, in thousands)**

 

**Note 1—Description of Business**

 

Cascade Corporation (the Company or Cascade) is an internationalcompany engaged in the design, manufacture and distribution of materialshandling products that are widely used on industrial forklift trucks and, to alesser extent, mining and agricultural vehicles.  Accordingly, the Company's sales are largely dependent on thesales of lift trucks and on the sales of replacement parts.  The Company's products are produced atplants located in three global regions: North America, Europe and Asia-Pacific.

 

**Note 2—Interim Financial Information**

 

The accompanying consolidated financial statements of CascadeCorporation for the interim periods ended July 31, 2003 and 2002 areunaudited.  In the opinion ofmanagement, the accompanying consolidated financial statements reflect normalrecurring adjustments necessary for a fair statement of the results ofoperations for those interim periods. Results of operations for the interim periods are not necessarilyindicative of the results to be expected for the full year, and these financialstatements do not contain the detail or footnote disclosures concerningaccounting policies and other matters that would be included in full fiscalyear financial statements.  Therefore,these statements should be read in conjunction with the Company’s auditedfinancial statements included in its Annual Report on Form 10-K for thefiscal year ended January 31, 2003.

 

**Note 3—Segment Information**

 

Revenues and operating results are classified according to the countryof origin.  Identifiable assets areattributed to the geographic location in which they are located.  Changes to the amounts of transfers betweenareas for the three and six month periods ended July 31, 2002 have been made toconform to the current year presentation. Net sales, net income and identifiable assets by geographic region wereas follows (in thousands):

 
|                                               |   | **North America** |       | **Europe** |       | **Other** |       | **Eliminations** |       | **Consolidation** |       |
|----------------------------------------------------|--------|-------------------|------------|------------|------------|-----------|------------|------------------|------------|-------------------|------------|
| **For the three months ended July 31, 2003**  |   |              |       |       |       |      |       |             |       |              |       |
| Sales to  unaffliated customers                    |   | $                 | 45,297     |       | $          | 18,921    |       | $                | 11,415     |              | $          | — |   | $ | 75,633 |   |
| Transfers  between areas                           |   | 4,363             |       | 290        |       | 11        |       | (4,664           | )          | —            |       |
| Net sales                                          |   | $                 | 49,660     |       | $          | 19,211    |       | $                | 11,426     |              | $          | (4,664 | ) | $ | 75,633 |   |
| Net income  (loss)                                 |   | $                 | 4,898      |       | $          | (741      | )          | $                | 1,585      |              | —     |   | $ | 5,742 |   |
| Identifiable  assets                               |   | $                 | 155,398    |       | $          | 89,098    |       | $                | 32,474     |              | —     |   | $ | 276,970 |   |
| **For the  three months ended July 31, 2002** |   |              | ** ** |       | ** ** |      | ** ** |             | ** ** |              | ** ** |
| Sales to  unaffliated customers                    |   | $                 | 39,754     |       | $          | 15,427    |       | $                | 9,091      |              | $          | — |   | $ | 64,272 |   |
| Transfers  between areas                           |   | 3,302             |       | 172        |       | 6         |       | (3,480           | )          | —            |       |
| Net sales                                          |   | $                 | 43,056     |       | $          | 15,599    |       | $                | 9,097      |              | $          | (3,480 | ) | $ | 64,272 |   |
| Net income                                         |   | $                 | 2,975      |       | $          | 282       |       | $                | 1,201      |              | —     |   | $ | 4,458 |   |
| Identifiable  assets                               |   | $                 | 165,759    |       | $          | 70,745    |       | $                | 29,273     |              | —     |   | $ | 265,777 |   |
| **For the  six months ended July 31, 2003**   |   |              | ** ** |       | ** ** |      | ** ** |             | ** ** |              | ** ** |
| Sales to  unaffliated customers                    |   | $                 | 85,810     |       | $          | 37,681    |       | $                | 21,076     |              | $          | — |   | $ | 144,567 |   |
| Transfers  between areas                           |   | 8,055             |       | 706        |       | 15        |       | (8,776           | )          | —            |       |
| Net sales                                          |   | $                 | 93,865     |       | $          | 38,387    |       | $                | 21,091     |              | $          | (8,776 | ) | $ | 144,567 |   |
| Net income  (loss)                                 |   | $                 | 8,947      |       | $          | (282      | )          | $                | 2,450      |              | —     |   | $ | 11,115 |   |
| **For the  six months ended July 31, 2002**   |   |              | ** ** |       | ** ** |      | ** ** |             | ** ** |              | ** ** |
| Sales to  unaffliated customers                    |   | $                 | 78,726     |       | $          | 28,763    |       | $                | 16,725     |              | $          | — |   | $ | 124,214 |   |
| Transfers  between areas                           |   | 6,276             |       | 374        |       | 31        |       | (6,681           | )          | —            |       |
| Net sales                                          |   | $                 | 85,002     |       | $          | 29,137    |       | $                | 16,756     |              | $          | (6,681 | ) | $ | 124,214 |   |
| Net income                                         |   | $                 | 6,824      |       | $          | 150       |       | $                | 1,705      |              | —     |   | $ | 8,679 |   |

 

6

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The breakdown of goodwill by geographic region at July 31 andJanuary 31, 2003 is provided in the table below.  The change in balances between periods is primarily due to fluctuationsin foreign currencies and $557,000 of additional goodwill related to businessacquisitions.

 
|                                             |   | **July 31,  2003** |   | **January 31,  2003** |   |
|--------------------------------------------------|--------|-------------------------|--------|----------------------------|--------|
|                                             |   | **(In  thousands)**     |   |
| **Breakdown of goodwill by  geographic region:** |   |                    |   |                       |   |
| North America                                    |   | $                       | 53,480 |                       | $      | 49,459 |   |
| Europe                                           |   | 7,871                   |   | 6,708                      |   |
| Other                                            |   | 3,177                   |   | 3,188                      |   |
|                                             |   | $                       | 64,528 |                       | $      | 59,355 |   |

 

**Note 4—Marketable Securities**

 

Marketable securities consist of asset-backed notes issued by variousstate agencies throughout the United States and guaranteed by the United Statesor state governments or agencies.  TheCompany has classified the notes as current assets in its consolidated balancesheet and considers these assets to be trading securities.

 

7

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**Note 5—Inventories**

 
|                          |   | **July 31,  2003** |   | **January 31,  2003** |   |
|-------------------------------|--------|-------------------------|--------|----------------------------|--------|
|                          |   | **(In  thousands)**     |   |
| Finished goods and components |   | $                       | 20,625 |                       | $      | 20,211 |   |
| Work in process               |   | 769                     |   | 968                        |   |
| Raw materials                 |   | 8,779                   |   | 9,252                      |   |
|                          |   | $                       | 30,173 |                       | $      | 30,431 |   |

 

**Note 6—Stock Based Compensation**

 

The Company accounts for its stock-based compensation under AccountingPrinciples Board Opinion No. 25 (APB 25), “Accounting for Stock Issued toEmployees,” which permits the use of intrinsic value accounting.  No stock-based compensation cost is reflectedin net income, as all options granted had an exercise price equal to the marketprice of the underlying common stock on the date of grant.  The Company has adopted disclosure-onlyprovisions of Statement of Financial Accounting Standards (SFAS) No. 123, “Accountingfor Stock-Based Compensation” and SFAS No. 148, “Accounting forStock-Based Compensation - Transition and Disclosure-an Amendment of FASBStatement No. 123.”

 

The following table illustrates the effect on net income applicable tocommon shareholders and earnings per share if the Company had applied the fairvalue recognition provisions of SFAS 123 to stock-based employeecompensation (in thousands, except per share amounts):

 
|                                                                                                                                       |   | **Three Months Ended**July 31 |       | **Six Months Ended  July 31** |       |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|------------|------------------------------------|------------|
|                                                                                                                                       |   | **2003**                           |       | **2002**                           |       | **2003** |   | **2002** |   |
|                                                                                                                                       |   |                               | ** ** |                               | ** ** |   | ** ** |   | ** ** |
| Net income applicable to common  shareholders—as reported                                                                             |   | $                                  | 5,742      |                               | $          | 4,458 |   | $ | 11,085 |   | $ | 8,679 |   |
| Deduct: total stock-based compensation  expense, net of income taxes of $101, $77, $203 and $149 determined under  fair value based method |   | (216                               | )          | (131                               | )          | (431 | ) | (266 | ) |
| Net income applicable to common  shareholders—pro forma                                                                               |   | $                                  | 5,526      |                               | $          | 4,327 |   | $ | 10,654 |   | $ | 8,413 |   |
|                                                                                                                                       |   |                               |       |                               |       |   |   |   |   |
| Basic earnings per share—as reported                                                                                                  |   | $                                  | 0.48       |                               | $          | 0.39 |   | $ | 0.94 |   | $ | 0.77 |   |
| Basic earnings per share—pro forma                                                                                                    |   | $                                  | 0.46       |                               | $          | 0.38 |   | $ | 0.90 |   | $ | 0.74 |   |
| Diluted earnings per share—as reported                                                                                                |   | $                                  | 0.47       |                               | $          | 0.36 |   | $ | 0.91 |   | $ | 0.71 |   |
| Diluted earnings per share—pro forma                                                                                                  |   | $                                  | 0.45       |                               | $          | 0.35 |   | $ | 0.87 |   | $ | 0.69 |   |

 

**Note 7—Contingencies**

 

The Company is subject to environmental laws and regulations, whichinclude obligations to remove or mitigate environmental effects of pastdisposal and release of certain wastes and substances at various sites.  The Company records liabilities for affectedsites when environmental assessments indicate probable cleanup will be requiredand the costs can be reasonably estimated. Other than for costs of assessments themselves, the timing and amount ofthese liabilities is generally based on the Company’s commitment to a formalplan of action, such as an approved remediation plan.  The reliability and precision of the loss estimates are affectedby numerous factors, such as different stages of site evaluation andreevaluation of the degree of remediation required.  The Company adjusts its liabilities as new remediationrequirements are defined, as information becomes available permittingreasonable estimates to be made and to reflect new and changing facts.  At July 31, 2003 and January 31,2003, the Company has recorded accrued environmental expenses totaling $9.9million and $10.2 million, respectively. Unasserted claims are not reflected in the Company’s environmentalremediation liabilities.

 

On April 22, 2002, the Circuit Court of the State of Oregon forMultnomah County entered judgment in the Company’s favor for approximately$1.6 million in an action originally brought in 1992 against severalinsurers to recover various expenses incurred in connection with environmentallitigation and related proceedings.  Thejudgment is against two non-settling insurers. Additionally, the judgment requires one of the insurers to defend theCompany in suits alleging liability because of groundwater contaminationemanating from its Fairview, Oregon plant and requires the two insurers to payapproximately 4% of any liability imposed against the Company by judgment orsettlement on or after March 1, 1997 on account of suchcontamination.  The Company and theinsurers have appealed the judgment. The Company has not recorded any amounts that may be recovered fromthe two insurers in its consolidated financial statements.

 

8

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**Note 8—Earnings Per Share**

 

The following table presents the calculation of basic and dilutedearnings per share (in thousands, except per share amounts):

 
|                                                         |   | **Three Months Ended****July 31** |   | **Six  Months Ended  July 31** |   |
|--------------------------------------------------------------|--------|----------------------------------------|--------|-------------------------------------|--------|
|                                                         |   | **2003**                               |   | **2002**                            |   | **2003** |   | **2002** |   |
|                                                         |   |                                   |   |                                |   |   |   |   |   |
| Basic earnings per share:                                    |   |                                   |   |                                |   |   |   |   |   |
| Net income                                                   |   | $                                      | 5,742  |                                | $      | 4,458 |   | $ | 11,115 |   | $ | 8,679 |   |
| Preferred stock dividends                                    |   | —                                 |   | —                              |   | (30 | ) | — |   |
| Net income applicable to common  shareholders                |   | $                                      | 5,742  |                                | $      | 4,458 |   | $ | 11,085 |   | $ | 8,679 |   |
|                                                         |   |                                   |   |                                |   |   |   |   |   |
| Weighted average shares of common stock  outstanding         |   | 11,995                                 |   | 11,325                              |   | 11,795 |   | 11,309 |   |
|                                                         |   | $                                      | 0.48   |                                | $      | 0.39 |   | $ | 0.94 |   | $ | 0.77 |   |
|                                                         |   |                                   |   |                                |   |   |   |   |   |
| Diluted earnings per share:                                  |   |                                   |   |                                |   |   |   |   |   |
| Net income applicable to common  shareholders                |   | $                                      | 5,742  |                                | $      | 4,458 |   | $ | 11,085 |   | $ | 8,679 |   |
| Preferred stock dividends                                    |   | —                                 |   | —                              |   | 30 |   | — |   |
| Net income                                                   |   | $                                      | 5,742  |                                | $      | 4,458 |   | $ | 11,115 |   | $ | 8,679 |   |
|                                                         |   |                                   |   |                                |   |   |   |   |   |
| Weighted average shares of common stock  outstanding         |   | 11,995                                 |   | 11,325                              |   | 11,795 |   | 11,309 |   |
| Assumed conversion of exchangeable  preferred stock          |   | 3                                      |   | 770                                 |   | 203 |   | 784 |   |
| Dilutive effect of stock options                             |   | 290                                    |   | 145                                 |   | 227 |   | 130 |   |
| Diluted weighted average shares of common  stock outstanding |   | 12,288                                 |   | 12,240                              |   | 12,225 |   | 12,223 |   |
|                                                         |   | $                                      | 0.47   |                                | $      | 0.36 |   | $ | 0.91 |   | $ | 0.71 |   |

 

Earnings per share is based on the weighted average number of commonshares and potentially dilutive shares outstanding during the period, computedusing the treasury stock method. Diluted weighted average common shares includes the incremental sharesthat would be issued upon the assumed exercise of stock options, as well as theassumed conversion of exchangeable preferred stock.  For the three month periods ended July 31, 2003 and 2002, 56shares and 329 shares, respectively, of the Company’s stock options wereexcluded from the calculation of diluted earnings per share because they wereantidilutive, but these options could be dilutive in the future.  For the six months ended July 31, 2003and 2002, 188 shares and 492 shares, respectively of the company’s stockoptions were excluded from the calculation of diluted earnings per sharebecause they were antidilutive, but these options could be dilutive in thefuture.

 

**Note 9—Subsequent Event**

 

The Company sold its hydraulic cylinder division, which included amanufacturing facility in Cramlington, Northumberland, United Kingdom andequipment in a leased facility in Beulaville, North Carolina, to PrecisionCylinders, Inc. (Precision) on January 15, 2002.  Under the terms of the sale, the Company received notesreceivable collateralized by the assets of Precision.  On May 12, 2003, the Company was notified that a fire haddestroyed Precision’s factory in Cramlington, United Kingdom.  As required under the terms of the notes,the Company is named as the first loss payee on Precision’s insurancepolicy.  At July 31, 2003, thenotes receivable balance from Precision was $9.2 million.  The Company received an $8.0 million paymenton the notes receivable on August 9, 2003.  The Company believes that the remaining $1.2 million notesreceivable will be fully realized.

 

**Note 10—Recent Accounting Pronouncements**

 

In April 2003, the FASB issued SFAS No. 149 (SFAS 149) “Amendmentof Statement 133 on Derivative Instruments and Hedging Activities.” SFAS 149,which amends and clarifies existing accounting pronouncements, addressesfinancial accounting and reporting for derivative or other hybridinstruments.  This Statement requiresthat contracts with comparable characteristics be accounted for similarly.  This Statement was effective for contractsentered into or modified after June 30, 2003.  The adoption of SFAS 149 did not have a material impact on theconsolidated financial statements.

 

In May 2003, the FASB issued SFAS No. 150 (SFAS 150) “Accountingfor Certain Financial Instruments with Characteristics of both Liabilities andEquity.” SFAS 150 addresses financial accounting and reporting financialinstruments with characteristics of both liabilities and equity.  This Statement requires that an issuerclassify a financial instrument that is within its scope as a liability orasset, as appropriate.  This Statementwas effective for financial instruments entered into or modified afterMay 31, 2003.  The adoption of SFAS150 did not have a material impact on the consolidated financial statements.

 

9

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Item 2. Management’s Discussion and Analysis of Financial Condition andResults of Operations

 

All references to fiscal periods are defined as periods ending in theyear ending January 31, 2003 (fiscal 2003) and the year endingJanuary 31, 2004 (fiscal 2004).

 

**Comparison of Second Quarter of Fiscal 2004and 2003**

 

Consolidated net income increased to $5.74 million ($0.47 per share) inthe three months ending July 31, 2003 from $4.5 million ($0.36 per share)in the three months ending July 31, 2002. Consolidated net sales for the second quarter of fiscal 2004 were $75.6million in comparison with $64.3 million for the first three months of fiscal2003.  Net income as a percentage ofconsolidated net sales was 7.6% and 6.9% in the second quarter of fiscal 2004and 2003, respectively.

 

Net sales in the second quarter of fiscal 2004 increased 17.7% ascompared to net sales for the second quarter of fiscal 2003.  This increase reflects stronger sales in thesecond quarter for North America and Asia and the strengthening of foreigncurrencies against the US dollar. Foreign currency fluctuations accounted for approximately 9% of theincrease in consolidated net sales for the second quarter of fiscal 2004 incomparison with fiscal 2003.

 

North America’s sales to unaffiliated customers in the second quarterof fiscal 2004 increased 13.9% in comparison with the second quarter of fiscal2003.  Overall lift truck industryshipments in North America for the second quarter of fiscal 2004 increasedapproximately 10% above shipment levels in the comparable period of fiscal2003.  Historically, the Company hasfound that changes in the level of its net sales do not correspond directly tothe percentage changes in lift truck industry shipments, but industrystatistics do provide a strong indicator of the direction of business activity.

 

The Company’s sales to unaffiliated customers in Europe increased 22.6%in the second quarter of fiscal 2004 as compared to the comparable quarter infiscal 2003.  Excluding the impact offoreign currency changes and business acquisitions, European sales tounaffiliated customers decreased approximately 4% in the second quarter offiscal 2004 as compared to the prior year. The decrease is due to the depressed economic conditions in the majormarkets of Europe, primarily Germany and France.  The European lift truck market activity from quarter to quartercontinues to be unpredictable.

 

The Company’s remaining sales to unaffiliated customers are primarilyin Asia and Australia.  In the secondquarter of fiscal 2004, sales to unaffiliated customers increased 25.6% ascompared to the comparable fiscal 2003 quarter.  This increase is primarily attributable to higher salesthroughout Asia, particularly China. Currency changes accounted for approximately 6% of the increase in netsales.

 

The Company’s gross profit percentage was 33.0% in the second quarterof fiscal 2004, which was lower than the 33.9% gross profit percentageexperienced in the second quarter of fiscal 2003.  The decrease in the gross margin percentage is the result oflower margins due to product mix on sales of certain OEM products in NorthAmerica and Europe.

 

The Company’s selling and administrative costs increased 9.7% in thesecond quarter of fiscal 2004 as compared to the second quarter of fiscal2003.  Substantially all of the increaseis due to changes in foreign currencies. The remaining increase is due to higher costs related to postretirementbenefit costs and costs to comply with Section 404 of the Sarbanes-OxleyAct.  The Sarbanes-Oxley costs totaled$150,000 for the three months ended July 31, 2003.  As a percentage of net sales, selling andadministrative expenses were 20.3% in the second quarter of 2004 and 21.7% inthe second quarter of fiscal 2003.

 

Net interest expense in the second quarter of fiscal 2004 was $894,000as compared to $1.1 million in the second quarter of fiscal 2003.  The decrease is the result of lower overalldebt levels.  Included in net interestexpense is $278,000 and $352,000 of interest income for the second quarter offiscal 2004 and 2003, respectively.

 

Other expense of $333,000 in the second quarter of 2004 relatesprimarily to foreign currency losses.

 

The effective tax rates for the second quarter of fiscal 2004 and 2003were 32.0% and 36.9%, respectively.  Thedecrease in the effective tax rate in fiscal 2004 is primarily due to therealization of foreign tax benefits.

 

**Comparison of the First Six Months of Fiscal2004 and 2003.**

 

Consolidated net income increased to $11.1 million ($0.91 per share) inthe six months ending July 31, 2003 from $8.7 million ($0.71 per share) inthe six months ending July 31, 2002. Consolidated net sales for the first six months of fiscal 2004 were$144.6 million in comparison with $124.2 million for the first six months offiscal 2003.  Net income as a percentageof consolidated net sales was 7.7% and 7.0% in the first six months of fiscal2004 and 2003, respectively.

 

10

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Net sales in the first six months of fiscal 2004 increased 16.4% ascompared to net sales for the first six months of fiscal 2003.  This increase reflects stronger sales forfiscal 2004 in all major markets and the strengthening of foreign currenciesagainst the US dollar. Foreign currency fluctuations accounted forapproximately 8% of the increase in consolidated net sales for the first sixmonths of fiscal 2004.

 

North America’s sales to unaffiliated customers in the first six monthsof fiscal 2004 increased 9.0% in comparison with the first six months of fiscal2003.  Overall lift truck industryshipments in North America for the first six months of fiscal 2004 increasedapproximately 13% above shipment levels in the comparable period of fiscal2003.  Historically, the Company hasfound that changes in the level of its net sales do not correspond directly tothe percentage changes in lift truck industry shipments, but industrystatistics do provide a strong indicator of the direction of business activity.

 

Sales tounaffiliated customers in Europe increased 31.0% for the first six monthsof fiscal 2004 as compared to the comparable period in fiscal 2003.  Excluding the impact of foreign currencychanges and business acquisitions, European sales to unaffiliated customersincreased approximately 4% for the first six months of fiscal 2004 ascompared to the comparable period in fiscal 2003.  The Company has seen a modest increase in overall business levelsin the first six months of fiscal 2004, but the market still continues to beunpredictable from quarter to quarter with depressed economic conditions inseveral of the major markets, primarily France and Germany.

 

The remainingsales to unaffiliated customers in Asia and Australia increased 26.0% for thefirst six months of fiscal 2004 as compared to the comparable fiscal 2003period.  Excluding the impact ofstrengthening foreign currencies, the increase in sales to unaffiliatedcustomers was approximately 18%.   Thisincrease is attributable to sales increases throughout Asia, particularlyChina.

 

The Company’sgross profit percentage was 33.0% for the first six months of fiscal 2004,which is below the 34.5% gross profit percentage experienced in the firstsix months of fiscal 2003.  Thisdecrease is due to lower margins due to product mix on the sale of certain OEMproducts in both North America and Europe.

 

The Company’sselling and administrative expenses increased 9.9% for the firstsix months of fiscal 2004 as compared to the first six months offiscal 2003.  Substantially all of theincrease is due to changes in foreign currencies.  The remaining increase is due to higher costs related topostretirement health care benefits and compliance with Section 404 of theSarbanes-Oxley Act.  During the firstsix months of fiscal 2004, the Company has incurred $250,000 of costs relatedto Sarbanes-Oxley.  As a percentage ofnet sales, selling and administrative expenses were 20.7% for the firstsix months of 2004 and 22.0% for the first six months of fiscal 2003.

 

Interestexpense, net of interest income, for the first six months of fiscal 2004was $1.8 million as compared to $2.2 million for the first six monthsof fiscal 2003. The decrease is the result of lower overall debt levels.  Interest income was  $546,000 and $726,000 in the first sixmonths of fiscal 2004 and 2003, respectively.

 

Other incomeof $399,000 in the first six months of fiscal 2004 relates to the gain on thesale of a building in Germany and the elimination of remaining liabilities fromthe sale of the Company's cylinders division.

 

The effective tax rates for the first six months of fiscal 2004and 2003 were 32.0% and 36.0%, respectively. The decrease in the effective taxrate in fiscal 2004 is primarily due to the realization of foreign taxbenefits.

 

**Liquidity and Capital Resources**

 

During the six months ended July 31, 2003, the Company generated$14.7 million in cash from operations as compared to $11.6 millionfor the six months ended July 31, 2002. The increase in cash provided by operations is due primarily to a higherlevel of net income and depreciation expense, a decrease in prepaid expensesand other receivables and an increase in accounts payable and accruedexpenses.  Cash and cash equivalents atJuly 31, 2003 and January 31, 2003, totaled $28.0 million and$29.5 million, respectively.

 

At July 31, 2003, the Company held marketable securities totaling$4.8 million.  These securitiesconsist of asset-backed notes issued by various state agencies throughout theUnited States and guaranteed by the United States or state governments andagencies.  The notes are long-terminstruments maturing through 2031; however, the interest rates and maturitiesare reset approximately every month, at which time the Company can sell thenotes.  Accordingly, the Company hasclassified the notes as short-term in its consolidated balance sheet.  Tax-free interest rates on the notes rangefrom  0.85% to 0.88%, per annum.

 

Total outstanding debt at July 31, 2003 was $63.5 million ascompared to $63.9 million at January 31, 2003.  The Company’s debt to equity ratio at July 31, 2003decreased to .38 to 1 from .44 to 1 at January 31, 2003.  Any additional payments to prepayoutstanding debt balances in advance of scheduled maturity dates are subject tosignificant penalties.  As ofJuly 31, 2003, the Company had available short-term lines of credit withcommercial banks totaling $32 million. The Company believes its available cash, cash flows from operations andcredit facilities are more than sufficient to meet its short-term requirements.

 

11

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In the first six months of fiscal 2004, the holder of the Company’sexchangeable preferred stock tendered 600,000 shares of exchangeable preferredstock into 600,000 shares of common stock. This non-cash transaction resulted in a reclassification of$8.5 million from exchangeable preferred stock into common stock andadditional paid-in capital and had no effect on earnings per share.

 

On March 31, 2003, the Company completed the acquisition of FEMAForks GmbH (FEMA), a supplier of forks based in Hagen, Germany.  The aggregate purchase price paid in cashfor FEMA, net of assumed liabilities, was $3.6 million.

 

Capital expenditures for the six months ended July 31, 2003,excluding the FEMA acquisition, were $5.2 million compared with $4.0 millionduring the corresponding period in the prior year.  Excluding acquisitions, the Company expects fiscal 2004 capitalexpenditures to be consistent with fiscal 2003.  The Company plans to use cash flows from operations and existingcredit facilities to fund current year capital expenditures.

 

During the first six months of fiscal 2004 the Company paid dividendsof $2.4 million to shareholders.  Nodividends were paid in the first six months of fiscal 2003.  The Company’s Board of Directors reinstatedthe payment of quarterly dividends in the third quarter of fiscal 2003.

 

During the six months ended July 31, 2003, the U.S. dollarweakened against the major currencies included in the Company’s consolidatedfinancial statements.  As a result, thecumulative translation adjustment increased shareholders’ equity by$5.5 million for the six months ended July 31, 2003.

 

The Company sold its hydraulic cylinder division, which included amanufacturing facility in Cramlington, Northumberland, United Kingdom andequipment in a leased facility in Beulaville, North Carolina, to PrecisionCylinders, Inc. (Precision) on January 15, 2002.  Under the terms of the sale, the Company received notesreceivable collateralized by the assets of Precision.  On May 12, 2003, the Company was notified that a fire haddestroyed Precision’s factory in Cramlington, United Kingdom.  As required under the terms of the notes,the Company is named as the first loss payee on Precision’s insurancepolicy.  At July 31, 2003, thenotes receivable balance from Precision was $9.2 million.  The Company received an $8 million paymentagainst the notes receivable on August 9, 2003.  The Company believes the remaining $1.2 million due fromPrecision will be fully realized.

 

**Recent Accounting Pronouncements**

 

In April 2003, the FASB issued SFAS No. 149 (SFAS 149) “Amendmentof Statement 133 on Derivative Instruments and Hedging Activities.” SFAS 149,which amends and clarifies existing accounting pronouncements, addressesfinancial accounting and reporting for derivative or other hybridinstruments.  This Statement requiresthat contracts with comparable characteristics be accounted for similarly.  This Statement was effective for contractsentered into or modified after June 30, 2003.  The adoption of SFAS 149 did not have a material impact on theconsolidated financial statements.

 

In May 2003, the FASB issued SFAS No. 150 (SFAS 150) “Accountingfor Certain Financial Instruments with Characteristics of both Liabilities andEquity.” SFAS 150 addresses financial accounting and reporting financialinstruments with characteristics of both liabilities and equity.  This Statement requires that an issuerclassify a financial instrument that is within its scope as a liability orasset, as appropriate.  This Statementwas effective for financial instruments entered into or modified afterMay 31, 2003.  The adoption of SFAS150 did not have a material impact on the consolidated financial statements.

 

**Forward-Looking Statements**

 

Forward-looking statements throughout this report are based uponassumptions involving a number of risks and uncertainties.  Factors which could cause actual results todiffer materially from these forward-looking statements include, but are notlimited to competitive factors in, and the cyclical nature of, the lift truckindustry; fluctuations in lift truck orders or deliveries; availability andcost of raw materials; general business and economic conditions in NorthAmerica, Europe, Australia and Asia; foreign currency fluctuations; and theeffectiveness of the Company’s cost reduction initiatives.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Market risk is the potential loss arising from adverse changes inmarket rates and prices, such as foreign currency exchange rate and interestrate fluctuations.  A significantportion of the Company’s revenues and expenses are denominated in currenciesfrom international markets outside the United States.  As a result, the Company’s operating results could become subjectto significant fluctuations based upon changes in the exchange rates of theforeign currencies in relation to the United States dollar.  The Company does enter into foreign currencyforward exchange contracts to offset the impact of currency fluctuations oncertain nonfunctional currency assets and liabilities.  The principal currencies hedged aredenominated in Japanese yen, Canadian dollars, Euros and British pounds.  The Company’s foreign currency forwardexchange contracts have terms lasting up to six months, but generally less thanone month.  The Company does not enterinto derivatives or other financial instruments for trading or speculative purposes.

 

12

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Based on the scheduled debt payments during fiscal 2003 and certainpayment restrictions on its remaining debt, substantially all of the Company’sdebt at July 31, 2003 has a fixed interest rate.  Any additional payments to prepay scheduled amounts of debt aresubject to penalties.  At July 31,2003, the penalties to retire all of the Company’s long-term debt were $6.4million.  A hypothetical 1% increase inmarket interest rates would result in a $1.5 million reduction in the fairmarket value of the Company’s long term outstanding debt at July 31, 2003.

 

Item 4. Controls and Procedures

 

As of July 31, 2003, the end of the period covered by this report, theCompany reviewed and evaluated, under the supervision and with theparticipation of management, including its Chief Executive Officer and ChiefFinancial Officer, the effectiveness of the design and operation of theCompany’s “disclosure controls and procedures” (as defined in Exchange Act Rule13a-15(e) and 15d-15(e)) of the Securities and Exchange Act of 1934 (ExchangeAct).  Based on that evaluation, theChief Executive Officer and Chief Financial Officer have concluded that thedisclosure controls and procedures are effective in ensuring that informationrequired to be disclosed by the Company in reports that it files or submitsunder the Exchange Act is recorded, processed, summarized and reported withinthe time periods specified in the Securities and Exchange Commission’s rulesand forms.

 

There were no changes in the Company’s internal controls over financialreporting that occurred during the period covered by this report that havematerially affected, or are reasonably likely to materially affect, theCompany’s internal controls over financial reporting.

 

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**CASCADE CORPORATION**

 

**PART II—OTHER INFORMATION**

 

Item 1. Legal Proceedings

 

Neither the Company nor any of its subsidiaries are involved in anymaterial pending legal proceedings other than litigation related toenvironmental matters discussed below. The Company and its subsidiaries are insured against product liability,personal injury and property damage claims, which may occasionally arise.

 

On April 22, 2002, the Circuit Court of the State of Oregon forMultnomah County entered judgment in the Company’s favor for approximately$1.6 million in an action originally brought in 1992 against severalinsurers to recover various expenses incurred in connection with environmentallitigation and related proceedings.  Thejudgment is against two non-settling insurers. Additionally, the judgment requires one of the insurers to defend theCompany in suits alleging liability because of groundwater contaminationemanating from its Fairview, Oregon plant and requires the two insurers to payapproximately 4% of any liability imposed against the Company by judgment orsettlement on or after March 1, 1997 on account of suchcontamination.  The Company and theinsurers have appealed the judgment. The Company has not recorded any amounts that may be recovered fromthe two insurers in its consolidated financial statements.

 

Item 2. Changes in Securities and Use of Proceeds

 

None

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4. Submission of Matters to a Vote of Security Holders

 

At the Annual Meeting of Shareholders of the Company, held May 22,2003, the following matter was submitted to a vote of common shareholders:

 

Election of directors:

 
| **Nominee**        |   | **Votes For** |   | **Votes  Withheld** |   |
|--------------------|--------|---------------|--------|---------------------|--------|
| C. Calvert Knudsen |   | 10,524,032    |   | 209,045             |   |
| Duane C. McDougall |   | 10,503,890    |   | 229,187             |   |

 

Item 5. Other Information

 

None

 

14

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Item 6. Exhibit and Reports on Form 8-K

 
| (A)    | **Exhibits**                                                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |
|   | 31.1                                                                                                                                                                                                                       | Certification pursuant to Rule 13a-14(a) and 15d-14(a) of the  Securities and Exchange Act of 1934, as amended. |
|   |
|   | 31.2                                                                                                                                                                                                                       | Certification pursuant to Rule 13a-14(a) and 15d-14(a) of the  Securities and Exchange Act of 1934, as amended. |
|   |                                                                                                                                                                                                                       |   |
|   | 32.1                                                                                                                                                                                                                       | Certification pursuant to 18 U.S.C. Section 1350, As Adopted  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|   |
|   | 32.2                                                                                                                                                                                                                       | Certification pursuant to 18 U.S.C. Section 1350, As Adopted  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|   |
| (B)    | **Reports on Form 8-K**                                                                                                                                                                                               |
|   |
|   | The Company filed a Current Report on Form 8-K dated May 28,  2003, which was amended on May 29, 2003, with respect to the Company’s  press release reporting results for the first fiscal quarter of 2004. |

 

**SIGNATURES**

 

Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

 
|                   | CASCADE CORPORATION                                                                                |
|------------------------|----------------------------------------------------------------------------------------------------|
| September 5, 2003 |                                                                                               |
|                   |                                                                                               |
|                   | /s/ Richard S. Anderson                                                                            |
|                   | Richard S. Anderson                                                                                |
|                   | *Senior Vice President and  Chief Financial Officer  (Principal Financial and Accounting Officer)* |

 

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