Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q1 FY2021 Earnings Presentation
22 slides from Columbus Mckinnon's earnings presentation, Jul 30, 2020
Slide 1: Q1 Fiscal Year 2021 Financial Results Conference Call
July 30, Q1 FISCAL YEAR 2021 2020 FINANCIAL RESULTS CONFERENCE CALL David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer PARTNERS IN MOTION CONTROL
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT These slides, and the accompanying oral discussion, contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning future sales and earnings, involve known a
Slide 3: Self-Help Strategy Delivers in Downturn
SELF-HELP STRATEGY DELIVERS IN DOWNTURN Positive operating income & cash generation despite 35% decline in revenue Solid gross margin of 32.2% due to strategic pricing initiatives, footprint consolidations, overhead reductions and aggressive cost actions Business operating system (E-PAS™) continues
Slide 4: Blueprint Strategy Phase II Delivering Results
BLUEPRINT STRATEGY PHASE II DELIVERING RESULTS Business operating system, E-PAS™, driving performance FY 21 Fiscal 2021 Savings Potential Annualized Savings 80/20 Process including footprint consolidations $6+ million Structural RSG&A and indirect overhead cost reductions $5 million TOTAL $11+ milli
Slide 5: Net Sales
NET SALES ($ in millions) Q1 sales down 33.7%, or $71.6 million Q1 FY21 Sales Bridge (adjusted for FX) U.S.: Pricing of 1.2% partially offset 37.2% Quarter volume decline Q1 FY20 Sales $ 212.7 Non-U.S: Pricing of 1.1% partially offset 32.0% volume decline and 2.0% FX headwind Volume (74.0) (34.8)% P
Slide 6: Gross Profit & Margin
GROSS PROFIT & MARGIN ($ in millions) Quarter Gross Profit Bridge Quarter Q1 FY20 Gross Profit $ 75.6 $75.6 $73.5 Pricing, net of material cost inflation 2.4 $67.9 $66.2 Tariffs 0.7 Insurance settlement (0.3) Business realignment costs (0.3) $44.8 Foreign currency translation (0.6) Factory closures
Slide 7: RSG&A
RSG&A ($ in millions) RSG&A at 28.7% of sales RSG&A Reduced by: as % of 21.2% 21.7% 21.9% 24.4% 28.7% sales . $0.6 million for FX $46.3 . $6.7 million of net cost reductions $45.1 $45.0 $43.8 $39.9 Increased by: $2.9 $2.8 $3.0 $2.6 . $1.0 million CEO expenses $2.8 . $1.1 million bad debt expense $19
Slide 8: Operating Income & Adjusted OI Margin
OPERATING INCOME & ADJUSTED OI MARGIN ($ in millions) Q1 FY21 operating income of $1.8 million $28.1 Began rapid cost reduction efforts in March $26.3 Q1 FY21 expected to be trough $27.0 $23.1 $25.2 $20.2 $20.9 Adjusted operating margin of 3.6% Reduced footprint $16.7 Lowered overhead Strategic pric
Slide 9: Earnings Per Share
EARNINGS PER SHARE ($ in millions) GAAP Diluted EPS Net income impacted by following adjustments: $0.78$0.83 $0.69 $0.63 $2.7 million, or $0.09 per diluted share, $0.39 pension settlement expense related to termination of U.S. pension plan Factory closure costs of $2.3 million ($0.12) Business reali
Slide 10: Adjusted EBITDA & ROIC
ADJUSTED EBITDA & ROIC Adjusted EBITDA Margin Solid adjusted EBITDA margin given market conditions 15.7% 15.1% Continuing to target 19% Adjusted EBITDA margin post COVID-19 recession 14.1% FY19 FY20 Q1 FY21 TTM Return on Invested Capital Return on Invested Capital expected (ROIC)(1) to improve Conti
Slide 11: Cash Flow
CASH FLOW ($ in millions) Three Months Ended Free Cash Flow(1) 6/30/20 6/30/19 Net cash provided by $9.5 $(2.2) operating activities $109.8 $97.4 CapEx (1.1) (1.9) Free cash flow $8.4 $(4.0) (FCF) $67.2 Note: Components may not add to totals due to rounding $55.1 Strong cash generation in Q1 FY21 FY
Slide 12: Capital Structure
CAPITAL STRUCTURE ($ in millions) CAPITALIZATION Debt leverage ratio(1) of 1.2x June 30, March 31, Net debt to net total capital 20.9% 2020 2020 Cash and cash equivalents $ 152.2 $ 114.5 Maintaining financial flexibility in uncertain macroeconomic Total debt 275.7 251.3 environment Total net debt 12
Slide 13: Outlook and Perspective
OUTLOOK AND PERSPECTIVE Q2 FY21 outlook 31% drop in orders in Q1 FY21 Y/Y Expect revenue in Q2 FY21 in range of $150 million to $160 million Expect growth in operating income from Q1 FY21 and positive cash flow Prepared to respond to changes in demand Continuing to carefully monitor customer and mar
Slide 14: Supplemental Information
Supplemental Information © 2020 Columbus McKinnon Corporation 14
Slide 15: Blueprint for Growth Strategy
BLUEPRINT FOR GROWTH STRATEGY Growth Phase III Oriented Evolve business model Industrial • Portfolio optimization Technology • Mergers & acquisitions Phase II Simplify the business Drive profitable growth • 80/20 Process • Operational Excellence • Ramp the Growth Engine Phase I Get control Achieve r
Slide 16: Adjusted Income from Operations Reconciliation
ADJUSTED INCOME FROM OPERATIONS RECONCILIATION ($ in thousands) Quarter Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Income from operations $ 27,043 $ 25,231 $ 20,886 $ 16,664 $ 1,789 Add back (deduct): Factory closures 1,027 470 1,592 1,621 2,256 Business realignment costs — 413 662 1,755 821 Insurance
Slide 17: Adjusted Net Income Reconciliation
ADJUSTED NET INCOME RECONCILIATION ($ in thousands, except per share data) Quarter Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Net income (loss) $ 18,579 $ 16,599 $ 15,250 $ 9,244 $ (2,969) Add back (deduct): Non-cash pension settlement expense — — — — 2,722 Factory closures 1,027 470 1,592 1,621 2,256
Slide 18: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ($ in thousands) Quarter Fiscal Year Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 2020 2019 Net income (loss) $ 18,579 $ 16,599 $ 15,250 $ 9,244 $ (2,969) $ 59,672 $ 42,577 Add back (deduct): Income tax expense (benefit) 5,162 5,141 2,234 4,947 (963) 17,484 10,321 Interest
Slide 19: Industrial Capacity Utilization
INDUSTRIAL CAPACITY UTILIZATION U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 83% 81% 75% 79% 77% 75% 70% 66.9% (Manufacturing) & 73% 68.6% (Total) June 2020(1) 71% 65% 69% 69.7% Q2 2020 67% 60% 65% Manufacturing Total (
Slide 20: ISM Production Index
ISM PRODUCTION INDEX Source: Institute of Supply Chain Management 70% 65% 57.3% June 2020 60% 55% 50% 45% 40% 35% 30% 25% © 2020 Columbus McKinnon Corporation 20
Slide 21: Conference Call Playback Info
CONFERENCE CALL PLAYBACK INFO Replay Number: 412-317-6671 passcode: 13705871 Telephone replay available through August 6, 2020 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com © 2020 Columbus McKinnon Corporation
Slide 22: Q1 Fiscal Year 2021 Financial Results Conference Call
July 30, Q1 FISCAL YEAR 2021 2020 FINANCIAL RESULTS CONFERENCE CALL PARTNERS IN MOTION CONTROL