Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jason Ursaner - CJS Securities.
Jason Ursaner – CJS Securities
Komatsu and Manitowoc both had very cautious views for their end market demand going forward. I realize it’s not a direct comparison for Columbus McKinnon, but do you expect to see further volume declines from your end markets in the U.S. and possibly a switch to declining volume from slower growth in Europe as you catch up utilization?
Tim Tevens
I think we would have the same view from the end markets. As you know, we follow industrial capacity utilization which is a number that’s published here in the States and that number did hit 70%; in December it hit 70%. We’d lag it by a quarter or two.
Actually, I think it’s a little tighter than two quarters, probably closer to one quarter given the lack of inventory in the channel, generally speaking, but I would say that our channel partners are feeling it and directly, very shortly thereafter we feel it and given the lack of activity and the bookings that we’re seeing right now, that’s a fair statement that it’s probably going to get weaker. I also think that Europe will get weaker, especially given a negative industrial production number that we’ve just seen in December. Although we saw some good growth in most of the European economies, they’re clearly slowing.
Jason Ursaner – CJS Securities
Okay and when you acquired Pfaff at the end of Q2, you spoke to a $90 million annual revenue number. Effective $26.8 million in Q3, even with currency as a headwind and Germany, I think you said was the only country in Europe to actually already see volume declines. So is their unusual seasonality in Pfaff or should we be extrapolating this number out?
Tim Tevens
Yes. I mentioned a Chinese order that they received in the fourth quarter. This is for an actuator lifting system that lifts high-speed trains for maintenance purposes. They got that order and they fulfilled the order, because it was basically a transfer of technology drawings and other things in the quarter which we can call that abnormal; that was EUR 4 million or so. So US $6 million, five point something million U.S. dollars.
So we’re still going to be most likely on a go-forward basis in the $90 million area. However, their overall business in Germany is slowing as well as the old Columbus McKinnon business is slowing. I would expect that to be a touch less than the $90 million we originally thought it would be for the full fiscal year of ?09.
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