Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q1 2024 Earnings Presentation
29 slides from Columbus Mckinnon's earnings presentation, Aug 2, 2023
Slide 1: Q1 Fiscal Year 2024 Financial Results Conference Call
Q1 Fiscal Year 2024 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer August 2, 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: Continued Execution Delivers Results
Continued Execution Delivers Results Solid start to Fiscal 2024 with strong sales and orders Sales increased 7% driven by 6% organic growth y/y from price and volume • Q1 FY24 sales of $235.5 million, up $15.2 million including $2.7 million from montratec® • EMEA/APAC had strength in all product lin
Slide 4: Operational Performance
Operational Performance Continued progress with 80/20 and gross margin expansion ADJUSTED GROSS MARGIN PROGRESSION GROSS MARGIN LEVERS ~40% Operating Initiatives • Operational Excellence 36.5% 36.9% • Volume/scale/pricing 36.1% 35.4% • Product line simplification 35.0% 34.1% 33.7% Strategic Initiati
Slide 5: Net Sales
Net Sales ($ in millions) Q1 sales up 6.7% on constant currency from prior-year Quarter Sales Bridge • U.S.: 5.1% pricing increase and 7.1% volume decrease • Non-U.S.: 1.7% pricing and 16.5% volume increase Quarter ($ in millions) $ Change % Change Fiscal 2023 Sales $ 220.3 Pricing 8.5 3.9% $253.8 V
Slide 6: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge $91.2 $86.3 $86.6 ($ in millions) Quarter $82.5 $82.0 Fiscal 2023 Gross Profit $ 82.5 Price, net of material cost inflation 6.5 37.5% 37.2% Acquisition 0.8 36.9% Foreign currency translation 0.1 35.9% Current year business realignment
Slide 7: RSG&A
RSG&A ($ in millions) Q/Q Comparison: RSG&A as • Additional $0.8 million from montratec acquisition % of sales: 24.1% 22.7% 24.1% 22.5% 24.8% Y/Y Comparison: $57.2 $58.3 • Incremental $2.5 million of acquisition costs $55.4 $53.2 $52.5 • HQ relocation expenses of $1.2 million $5.5 $5.9 • Higher stoc
Slide 8: Operating Income
Operating Income ($ in millions) Operating Income & Margin Y/Y operating income and margin impacted by net non-operating adjustments of $2.6 million $27.4 $27.5 $22.8 $20.2 $21.4 • Acquisition deal & integration costs of $2.5 million • HQ relocation of $1.2 million • NA warehouse consolidation $0.1
Slide 9: Earnings Per Share
Earnings Per Share GAAP Diluted EPS Q1 FY24 net income increased 10.5% to $9.3 million, up $0.03 per diluted share y/y $0.49 $0.48 • Prior-year quarter impacted by Investment and FX losses as $0.42 well as discrete items in tax expense $0.29 $0.32 Adj. net income of $17.9 million in the quarter Add
Slide 10: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA and Margin Targeting 21% EBITDA margin in FY2027 $149.4 • Expect 80/20 initiatives, factory simplification, and operating $147.8 leverage on increased scale to drive margin expansion $140.1 15.4% 15.8% 15.7% Transforming business with strategic investments FY22
Slide 11: Cash Flow
Cash Flow ($ in millions) (2) Free Cash Flow & Conversion Three Months Ended 6/30/23 6/30/22 Net cash provided by (used for) $ (17.2) $ (11.2) $86.6 operating activities $71.0 CapEx 5.3 3.0 $62.6 Free cash flow (FCF) $ (22.5) $ (14.1) Note: Components may not add to totals due to rounding $35.8 Firs
Slide 12: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Net debt leverage ratio of ~2.9x(1) June 30, March 31, • Plan to continue to pay down debt and grow EBITDA 2023 2023 • Expect net leverage of <2.5x by end of fiscal year Cash and cash equivalents $ 107.0 $ 133.2 Paid down $10 million in debt in Q1 FY2
Slide 13: Orders and Backlog
Orders and Backlog ($ in millions) Strong Sequential Order Growth Record Backlog of $355.3 million • Orders up 5% sequentially with strong demand in North America • Short term backlog grew 7% sequentially • Excluding montratec, precision conveyance orders grew 28% sequentially • Long-term backlog gr
Slide 14: Executing to Deliver Strategic Plan Growth Objectives
Executing to Deliver Strategic Plan Growth Objectives Outlook is encouraging (1) • Expect Q2 FY24 net sales of approximately $250 million to $260 million including montratec • FY24 organic growth in low-to-mid single digits; expect to surpass $1 billion in revenue • Executing targeted commercial and
Slide 15: Q1 Fiscal Year 2024 Financial Results Conference Call
Q1 Fiscal Year 2024 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer August 2, 2023
Slide 16: Supplemental Information
OW Supplemental Information INTELLIGENT MOTION PURPOSE IN MOTION
Slide 17: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 10180167 Telephone replay available through August 9, 2023 Webcast / PowerPoint / Replay available at investors.cmco.com Transcript, when available, at investors.cmco.com 17 © 2023 COLUMBUS MCKINNON CORPORATION
Slide 18: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 GAAP gross profit $ 82,519 $ 86,310 $ 82,044 91,218 86,649 Add back (deduct): Business realignment costs — — — — 196 Non-GAAP adjusted gross profit $ 82,519 $ 86,310 $ 82,044 $ 91,218 $ 86,845 Sales
Slide 19: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Fiscal Year TTM 2019 2020 2021 2022 2023 Q1 FY24 GAAP gross profit $ 304,997 $ 283,186 $ 220,225 $ 315,730 $ 342,099 $ 346,221 Add back (deduct): Product liability settlement — — — 2,850 — — Acquisition amortization of backlog — — — 2,100 — — Acq
Slide 20: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Fiscal Year Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 2022 2023 GAAP income from operations $ 22,817 $ 27,372 $ 20,179 $ 27,469 $ 21,448 $ 73,781 $ 97,841 Add back (deduct): Acquisition deal and integration costs 86 19 338 173 2,5
Slide 21: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 FY 2022 FY 2023 GAAP net income (loss) $ 8,391 $ 14,114 $ 12,029 $ 13,895 $ 9,275 $ 29,660 $ 48,429 Add back (deduct): Amortization of intangibles 6,535 6,447 6,459
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year TTM Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 2022 2023 Q1 FY24 GAAP net income (loss) $ 8,391 $ 14,114 $ 12,029 $ 13,895 $ 9,275 $ 29,660 $ 48,429 $ 49,313 Add back (deduct): Income tax expense (benefit) 8,893 4,953 4,701 7,499 3,394
Slide 23: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in thousands) Fiscal Year TTM 2022 2023 Q1 FY24 GAAP income from operations $ 73,781 $ 97,841 $ 96,468 Add back (deduct): Acquisition deal and integration costs 10,473 616 3,117 Acquisition inventory step-up expense 5,042 — — Product liability sett
Slide 24: Free Cash Flow (FCF) & FCF Conversion Reconciliation
Free Cash Flow (FCF) & FCF Conversion Reconciliation ($ in thousands) Fiscal Year TTM 2022 2023 Q1 FY24 Cash from operations $ 48,881 $ 83,636 $ 77,566 Capital expenditures (13,104) (12,632) (14,952) Free cash flow (FCF) $ 35,777 $ 71,004 $ 62,614 GAAP net income $ 29,660 $ 48,429 $ 49,313 Free cash
Slide 25: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 78.0% (Manufacturing) 78.9% (Total) 83% Jun 2023(1) 81% 81.2% Q2 2023 75% 79% 77% 70% 75% 73% 71% 65% 69% 67% 60% 65% Manufacturing Total (1)
Slide 26: ISM Production Index
ISM Production Index Source: Institute for Supply Chain Management 70% 65% 60% 55% 50% 46.7% June 2023 45% 40% 35% 30% 25% 26 © 2023 COLUMBUS MCKINNON CORPORATION
Slide 27: Business Model Transformation
Business Model Transformation Innovation drives strategy and portfolio transformation Revenue FUTURE Growth Rate Specialty FY23 Conveying Linear Motion Linear Automation Motion 14% 10% Automation Specialty Conveying 16% FY21 Lifting Solutions Linear Motion Lifting Solutions & Automation 60% Lifting
Slide 28: 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 28 © 2023 COLUMBUS MCKINNON CORPORATION
Slide 29: Q1 Fiscal Year 2024 Financial Results Conference Call
Q1 Fiscal Year 2024 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer August 2, 2023