Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Sidoti Small Cap Conference 2023
35 slides from Columbus Mckinnon's conference presentation, Dec 7, 2023
Slide 1: Sidoti Small Cap Conference
Sidoti Small Cap Conference Gregory P. Rustowicz Executive Vice President Finance & Chief Financial Officer December 7, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement These slides, and the accompanying oral discussion (together, this “presentation”), 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 expected g
Slide 3: Leader in Intelligent Motion Solutions for Material Handling
Leader in Intelligent Motion Solutions for Material Handling Transforming from a legacy cyclical industrial company to a top-tier, secular growth, intelligent motion solutions company Strategic priorities • Strengthen and build upon CMCO’s core • Invest in high-growth, high margin platforms • Increa
Slide 4: © 2023 COLUMBUS MCKINNON CORPORATION
© 2023 COLUMBUS MCKINNON CORPORATION
Slide 5: Lifting Solutions
Lifting Solutions Lifting Solutions: Leading global position in lifting solutions Lifting capacity from 1/8 ton to ~140 tons Manual chain, electric chain and wire rope hoists Reliable, high-quality products End-to-end digital solutions Global Leader In Intelligent Motion Solutions For Material Handl
Slide 6: Precision Conveyance Solutions
Precision Conveyance Solutions Specialty conveying provides growth platform: ~$4B TAM growing at 6% to 8% CAGR Higher margin profile Strong secular growth drivers and markets: Automation, e-commerce, EV, life sciences Fragmented market provides target rich acquisition environment Established platfor
Slide 7: Automation Solutions
Automation Solutions Automation Solutions: Design and develop drives and controls for lifting, linear motion and conveying systems Used in intelligent material handling solutions from ceiling to floor across entire product portfolio Solutions designed to increase uptime, enhance productivity and imp
Slide 8: Linear Motion Solutions
Linear Motion Solutions Linear Motion Solutions: Linear actuators with lifting capacity up to 50 tons, screw jacks, rotary unions and super cylinders Demonstrated leadership and differentiated offering Serving a breadth of end markets from rail to warehousing to defense Global Leader In Intelligent
Slide 9: Unlocking CMCO's Potential
Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO CMBS GROWTH FRAMEWORK TRANSFORMATION Framework To Deliver Differentiated Growth, Financial Performance And Shareholder Value 9 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 10: CMCO Transformation Strategy
CMCO Transformation Strategy EVOLVES THE ENTERPRISE FROM CYCLICAL INDUSTRIAL TO A TOP-TIER, SECULAR GROWTH, INTELLIGENT MOTION SOLUTIONS BUSINESS ADVANCES CMCO TO ~$1.5 BILLION IN REVENUE AND 21% ADJUSTED EBITDA TARGETS MID-SINGLE DIGIT ORGANIC GROWTH AND $220 MILLION OF M&A GROWTH INCREASES DIGITAL
Slide 11: Executing Plan and Delivering Results
Executing Plan and Delivering Results On track for FY227 Goals REVENUE ~$1,500 REVENUE GROWTH DRIVERS Organic Growth $936 $978 ~$1,000 • Commercial initiatives $907 • New product development $650 • Customer experience improvement M&A Growth • Expand precision conveyance platform • Opportunistic with
Slide 12: Advancing Along our Transformation Path
Advancing Along our Transformation Path Targeting $1.5 Billion In Revenue and ~21% EBITDA Margin in FY2027 FUTURE REVENUE GROWTH RATE FY23 Pro-forma1 Specialty Conveying Linear Motion Linear Automation Motion 13% 9% FY21 Specialty Automation Conveying 19% Lifting Linear Motion Solutions & Automation
Slide 13: Strong Track Record Creating Value Through M&A
Strong Track Record Creating Value Through M&A September 2015 January 2017 April 2021 December 2021 May 2023 Acquisition of STAHL Acquisition of Dorner for Acquisition of Magnetek, CraneSystems from $485M advances Intelligent Acquisition of Garvey for Acquisition of montratec® for Inc. for ~$182M ad
Slide 14: Building Precision Conveyance Platform
Building Precision Conveyance Platform Acquired montratec® on May 31, 2023 Revenue Profile 4% 11% 20% 35% 60% 22% 20% 28% Europe U.S. APAC Auto/EV Semi/Elec Life Sci Other Aero • Develops and manufactures complex intralogistics solutions connecting robots and workspaces with asynchronous conveying t
Slide 15: Financial Targets
Financial Targets ($ in millions) SALES & ADJUSTED EBITDA & ADJUSTED GROSS MARGIN ADJUSTED EBITDA MARGIN 550 28.0% $2,000 $1,800 ~40% 39.0% 450 ~21% 23.0% $1,600 36.5% 36.8% $1,500 36.1% $1,400 34.1% $313 350 15.8% 16.0% ~$315 18.0% 15.4% 34.0% $1,200 11.9% $77 250 13.0% $1,000 0 0 29.0% $800 150 8.
Slide 16: FY2027 Financial Targets
FY2027 Financial Targets Key Assumptions Growing Sales by >10% CAGR • Organic growth of ~5% driven by go-to-market structure and strategic initiatives SALES • Inorganic growth of ~6% from programmatic M&A inclusive of market growth • No material changes to current market conditions Expanding Gross M
Slide 17: Revenue Bridge
Revenue Bridge ($ in millions) REVENUE FY23 TO FY27E $30M+ of growth from M&A expected from montratec® over 4 ~$30M realized from years montratec® acquisition (May 2023) Strategy Expected to Deliver >10% Revenue Growth 17 © 2023 COLUMBUS MCKINNON CORPORATION
Slide 18: Adjusted EBITDA Margin Bridge
Adjusted EBITDA Margin Bridge ($ in millions) ADJUSTED EBITDA MARGIN FY23 to FY27E ~21% Actions Complete Expanding Adjusted EBITDA Margins ~550 bps Driven by Cost Actions & Scale 18 © 2023 COLUMBUS MCKINNON CORPORATION
Slide 19: Free Cash Flow and Net Leverage
Free Cash Flow and Net Leverage ($ in millions) FREE CASH FLOW GENERATION & NET DEBT & CONVERSION(1) NET LEVERAGE RATIO(2) 5.00 951% 1000.0 200 4.00 800% 2.8x 2.7x $160 3.00 800.0 2.2x 2.0x 150 163% 147% 116% 300% 1.7x 2.00 98% 1.1x $630 158% 121% 600.0 0.6x 1.00 $97 100 $87 -200% $466 0.00 $67 $71
Slide 20: Cash Flow
Cash Flow ($ in millions) (2) Three Months Ended Year-to-Date Free Cash Flow & Conversion 9/30/23 9/30/22 9/30/23 9/30/22 Net cash provided by (used $86.6 for) operating activities $ 16.7 $ 17.3 $(0.6) $6.1 $71.0 CapEx 5.0 2.3 10.3 5.3 $59.3 Free cash flow (FCF) $ 11.7 $ 15.0 $(10.9) $0.8 Note: Comp
Slide 21: CMCO Peer Group Comparison
CMCO Peer Group Comparison Industrial Peers vs. Motion Control Peers (Based on Peer Group Averages. Peer Financials Represent TTM Ending 6/30/23, CMCO Financials Represent TTM Ending 9/30/23) YOY SALES GROWTH GROSS MARGIN^ ADJ. EBITDA LTM EBITDA MARGIN TRADING MULTIPLE* Motion Control 9.8% 33.6% 18.
Slide 22: Key Takeaways
Key Takeaways Transforming to a Top-tier, Secular Growth, Intelligent Motion Solutions Enterprise EVOLVED STRATEGY “BEYOND BLUEPRINT” TO EXECUTION OF CORE GROWTH FRAMEWORK COLUMBUS MCKINNON BUSINESS SYSTEM – CMBS – ENABLES SCALABILITY CONVEYING SOLUTIONS ADDS GROWTH CATALYST IN ATTRACTIVE MARKETS OP
Slide 23: Sidoti Small Cap Conference
Sidoti Small Cap Conference Gregory P. Rustowicz Executive Vice President Finance & Chief Financial Officer December 7, 2023
Slide 24: Supplemental Information
OW Supplemental Information INTELLIGENT MOTION PURPOSE IN MOTION
Slide 25: Corporate Sustainability Report
Corporate Sustainability Report SOCIAL RESPONSIBILITY PRODUCT QUALITY & INNOVATION CUSTOMER INTIMACY EMPLOYEE HEALTH AND SAFETY DIVERSITY, EQUITY, AND INCLUSION TALENT MANAGEMENT COMMUNITY INVOLVEMENT GOVERNANCE & ETHICS ENTERPRISE RISK MANAGEMENT ETHICS & COMPLIANCE Strategic Initiatives BOARD GOVE
Slide 26: Growing Secular Market Presence
Growing Secular Market Presence Conveying Solutions Serves Less Cyclical Industries FY 2023 Construction Food, Beverage & 6% Consumer Goods 8% Oil & Gas Energy & Aerospace & Government 5% Utilities 5% 8% Chemical & Paper Processing Transportation 4% 13% Life Sciences/Pharma 3% Elevator Material Hand
Slide 27: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 77.2% (Manufacturing) 78.9% (Total) 83% October 2023(1) 81% 80.0% Q3 2023 75% 79% 77% 70% 75% 73% 71% 65% 69% 67% 60% 65% Manufacturing Total
Slide 28: ISM Production Index
ISM Production Index Source: Institute for Supply Chain Management 70% 65% 60% 55% 50% 48.5% November 2023 45% 40% 35% 30% 25% 28 © 2023 COLUMBUS MCKINNON CORPORATION
Slide 29: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Six Months Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 H1 FY24 GAAP gross profit $ 86,310 $ 82,044 $ 91,218 $ 86,649 $ 99,976 $ 186,626 Add back (deduct): Business realignment costs — — — 196 — 196 Non-GAAP adjusted gross profit $ 86,310 $ 82
Slide 30: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Fiscal Year TTM 2019 2020 2021 2022 2023 Q2 FY24 GAAP gross profit $ 304,997 $ 283,186 $ 220,225 $ 315,730 $ 342,099 $ 359,887 Add back (deduct): Product liability settlement — — — 2,850 — — Acquisition amortization of backlog — — — 2,100 — — Acq
Slide 31: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Fiscal Year Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 2022 2023 GAAP income from operations $ 27,372 $ 20,179 $ 27,469 $ 21,448 $ 33,351 $ 73,781 $ 97,841 Add back (deduct): Acquisition deal and integration costs 19 338 173 2,587
Slide 32: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 2022 2023 GAAP net income $ 14,114 $ 12,029 $ 13,895 $ 9,275 $ 15,813 $ 29,660 $ 48,429 Add back (deduct): Amortization of intangibles 6,447 6,459 6,559 6,877 7,508
Slide 33: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year TTM Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 2022 2023 Q2 FY24 GAAP net income $ 14,114 $ 12,029 $ 13,895 $ 9,275 $ 15,813 $ 29,660 $ 48,429 $ 51,012 Add back (deduct): Income tax expense (benefit) 4,953 4,701 7,499 3,394 5,100 8,786
Slide 34: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in thousands) Fiscal Year TTM 2022 2023 Q2 FY24 GAAP income from operations $ 73,781 $ 97,841 $ 102,447 Add back (deduct): Acquisition deal and integration costs 10,473 616 3,606 Acquisition inventory step-up expense 5,042 — — Product liability set
Slide 35: Free Cash Flow (FCF) & FCF Conversion Reconciliation
Free Cash Flow (FCF) & FCF Conversion Reconciliation ($ in thousands) Fiscal Year TTM 2022 2023 Q2 FY24 Cash from operations $ 48,881 $ 83,636 $ 76,929 Capital expenditures (13,104) (12,632) (17,663) Free cash flow (FCF) $ 35,777 $ 71,004 $ 59,266 GAAP net income $ 29,660 $ 48,429 $ 51,012 Free cash