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CASCADE CORPORATION ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED JULY 31, 2010

Cascade Corporation (NYSE: CASC) today reported its financial results for the second quarter ended July 31, 2010.

Overview

·Net sales of $97.7 million for the second quarter of fiscal 2011 were 28% higher than net sales of $76.6 million for the second quarter of fiscal 2010, excluding the impact of changes in foreign currency exchange
rates.

·Pre-tax income was $9.7 million for the quarter as compared to a pre-tax loss of $11.1 million in the prior year.

·Our net income for the second quarter of fiscal 2011 was $3.2 million ($0.29 per diluted share) compared to a net loss of $12.3 million ($1.14 loss per diluted share) for the second quarter of fiscal 2010. The
current year includes $3.4 million ($0.31 per diluted share) of income tax expense related to noncash reserves recorded in Italy and England. The prior year includes $11.6 million of European restructuring costs.

Second Quarter Fiscal 2011 Summary

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



·Consolidated net sales increased 28% during the second quarter of fiscal 2011, excluding the impact of foreign currency changes, due to higher sales volumes as a result of improving economic conditions and
an improving lift truck market. Details of the change in net sales compared to the prior year second quarter follow (in thousands):



·The consolidated gross profit percentage increased during the second quarter of fiscal 2011 from 24% to 30%, primarily as a result of improved cost absorption due to increased sales volumes.

·Selling and administrative expenses increased 9%, excluding foreign currency changes, due to increased personnel, selling and engineering costs.

·The provision for income taxes in the second quarter of fiscal 2011 includes a $3.4 million provision for recording valuation allowances against deferred tax assets in Italy and England. These deferred tax assets
relate to net operating losses in these countries.

·The provision for income taxes in the second quarter of fiscal 2010 was primarily a result of taxes due in countries where we generated income. We were unable to realize a tax benefit in several European
countries where we incurred losses.


Market Conditions

·Percentage changes in lift truck industry shipments and orders, by region, as compared to the prior year are outlined below. Although lift truck unit data provides an indicator of the general health of the industry
and our business over a six to twelve month period, they do not necessarily correlate directly with the demand for our products on a quarterly basis.

Shipments
Q2 FY11 vs Q2 FY10
Orders
Q2 FY11 vs Q2 FY10
North America
(7%)
42%
Europe
24%
41%
Asia Pacific
47%
38%
China
93%
69%
Global
47%
53%
·Generally global lift truck markets are recovering based on order and shipment rates. However, it is difficult to predict with certainty the pace and extent of the recovery. The following is our view of the lift truck
industry markets globally based on current conditions:

North America Summary

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



·Net sales increased 29%, excluding the impact of currency changes, primarily due to higher sales volumes as a result of improving economic conditions. Details of the change in net sales over the prior year
quarter follow (in thousands):



·Our gross profit percentage increased due to improved absorption of costs as a result of higher sales volumes during the current year and a reduction of overhead costs reflecting headcount reductions and other
cost cutting measures implemented in the prior year. Our gross profit during the second quarter of fiscal 2011 was consistent with the first quarter of fiscal 2011.

·Selling and administrative costs increased primarily due to higher executive incentive and other personnel costs in the current year.

Europe Summary

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



·Net sales increased 15%, excluding the impact of currency changes, due to higher sales volumes as a result of a stronger lift truck market. Details of the change in net sales over the prior year quarter follow (in
thousands):



·During the second quarter of fiscal 2011, our gross profit margin increased to 13% from 9% experienced in the first quarter of fiscal 2011 as efficiencies from the restructuring of our production and distribution
activities were more fully realized. The 13% gross profit margin, the highest in Europe since fiscal 2009, is a result of our recent restructuring efforts, which included closing production facilities in Germany, The
Netherlands and France, other workforce reductions within Europe and the movement of certain production activities to Italy.

·Restructuring costs in the prior year were primarily a result of the cessation of production at our facility in the Netherlands. These costs included severance costs of $7.3 million, fixed asset write downs of $4.0
million and legal and other restructuring costs of $0.3 million.

Asia Pacific Summary

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



·Net sales increased 20%, excluding the impact of currency changes, due to higher sales volumes as a result of an improvement in economic conditions and a strong lift truck market. Details of the change in net
sales over the prior year quarter follow (in thousands):



·Our gross profit percentage remained consistent compared to the prior year, however it decreased slightly compared to the first quarter of fiscal 2011 due primarily to fluctuations in foreign currency rates.

·Selling and administrative costs were 9% higher due to warranty and other general costs.

China Summary

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



·Net sales increased 70%, excluding currency changes, primarily due to the recovery of the Chinese economy and lift truck market. Details of the change in net sales over the prior year quarter follow (in
thousands):



·The gross profit percentage in China decreased due to changes in product mix and higher intercompany transfers, which carry lower gross margins.

·Sales and administrative costs increased 24% due to higher selling and engineering costs.

Other Matters:

·On August 31, 2010, our Board of Directors declared a quarterly dividend of $0.10 per share, payable on October 14, 2010 to shareholders of record as of September 29, 2010.

·Free cash flow, a non-GAAP measure, is defined as cash flow from operating activities less capital expenditures. The following table presents a summary of our free cash flow for the three and six months ended
July 31, 2010 and 2009.



The decrease in free cash flow during fiscal 2011 is primarily a result of higher levels of accounts receivable due to increased sales volumes. Free cash flow levels in fiscal 2010 were primarily the result of lower accounts receivable balances and inventory reductions.

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 2, 2010 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 (866) 225-8754, International callers can access the call by dialing (480) 629-9692. 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) 406-7325 and entering passcode 4303489, or internationally, by dialing (303) 590-3030 and entering passcode 4345839.

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
Email: investorrelations@cascorp.com


















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