Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Barrington Research Spring Investment Conference 2021
37 slides from Columbus Mckinnon's conference presentation, May 27, 2021
Slide 1: Barrington Research Spring Investment Conference
Barrington Research Spring Investment Conference May 27, 2021 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer 1
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: Who We Are: Columbus McKinnon
Who We Are: Columbus McKinnon LEADING WORLDWIDE SUPPLIER OF INTELLIGENT MOTION SOLUTIONS FOR MATERIAL HANDLING Market Capitalization $1.5 billion Average Volume (3 mo.) 170,890 Recent Price / 52-Week Range $51.36 / $26.87 - $57.06 Common Shares Outstanding 28.3 million • Headquartered in Buffalo, Ne
Slide 4: Blueprint for Growth 2.0
Blueprint for Growth 2.0 Pivot Columbus McKinnon toward growth: Organic and Inorganic Strategy to deliver growth, financial performance and shareholder value 4
Slide 5: Columbus McKinnon Business System
Columbus McKinnon Business System Strategic Framework and Core Competencies 1. People & Values 6. Commercial / Selling 7. Product Development 2. Strategic Planning 8. Operations 3. Marketing 9. Finance 4. Product Management 10. Data & Systems 5. M&A A connected Columbus McKinnon Business System (CMB
Slide 6: Our Growth Framework
Our Growth Framework Rethink current addressable markets and target further strategic expansion through innovative approaches Improve vertical market, channel and geographic access Take greater marker share through product localization, new product development and advancements in automation Strength
Slide 7: Business Model Evolution
Business Model Evolution Growth Strategy Substantially Advances Underlying Portfolio Revenue Pro forma Growth Rate with Dorner Lifting Solutions 85% Organic CMCO Industrial Products 42% Conveying Solutions 15% Crane Solutions 46% Engineered Products 12% EBITDA Multiple Strategy evolving Columbus McK
Slide 8: Lifting Solutions
Lifting Solutions Lifting Solutions 85% Crane Solutions, Industrial Products and Engineered Products Lifting capacity from 1/8 ton to ~140 tons Standard Products: #1 U.S. market position in hoists Most advanced, high quality products Engineered Solutions: Large tonnage projects Compass™ configure, p
Slide 9: New: Conveying Solutions
New: Conveying Solutions Conveying Solutions 15% High-Precision Conveying Systems for Attractive Growth Markets Specialty conveying platform for growth… ✓ $5B TAM growing at 6% to 8% CAGR ✓ Strong secular growth drivers • Supply chain automation • Acceleration of e-commerce adoption ✓ Fragmented mar
Slide 10: Global Enterprise
Global Enterprise AMERICAS EMEA APAC ~64% OF REVENUE ~30% OF REVENUE ~6% OF REVENUE Buffalo, NY Headquarters Milwaukee, WI Brighton, MI Chester, UK Power Control Workstations Hoist, Plate Clamps Conveyor Systems Hangzhou, CN Damascus, VA Wuppertal and Hoist Julich , DE Kunzelsau, DE Hoist Lexington,
Slide 11: Acquired Dorner Manufacturing Corporation
Acquired Dorner Manufacturing Corporation High-Precision Conveying Systems • Headquartered in Hartland, WI with approximately 400 global employees Product & Customer Examples Flexible Chain Low Profile • 85% of revenue generated in North America • Differentiated solutions enhance productivity, quali
Slide 12: Acquisition Advances Intelligent Motion Strategy
Acquisition Advances Intelligent Motion Strategy Innovation and Differentiated Technology Provides Competitive Advantages Provides a platform to accelerate profitable growth… High- Replace- Platform Growing New product growth ment for further installed development end cycle M&A base markets ✓ Dorner
Slide 13: Conveying Systems Expand Reach in Industrial Automation
Conveying Systems Expand Reach in Industrial Automation Creates Multiple Pathways for Future Growth Servo Drive / Motor Overhead Lifting Auto. Storage & Retrieval Controls Robotics Actuators RFID/ Scanners Vision Systems Conveying Systems Sensors Precision conveying systems interface with nearly eve
Slide 14: Enhanced Scale and Margins
Enhanced Scale and Margins ($ in millions) TTM 3/31 REVENUE AND ADJUSTED EBITDA Additional platform of precision conveying solutions to drive greater scale $114 Provides higher margin profile $650 $763 $5 million of annualized cost synergies expected over two years CMCO Dorner Pro forma • Supply cha
Slide 15: Leading Participation in Secular Growth Markets
Leading Participation in Secular Growth Markets Dorner adds attractive vertical markets with enduring tailwinds FOOD PROCESSING 20% OF SALES* LIFE SCIENCES 17% OF SALES* E-COMMERCE 11% OF SALES* Custom designed sanitary and easy to Customizable designs built for precision, Single piece picking, robo
Slide 16: Delivering Innovation
Delivering Innovation Driving organic growth with new products TANDEM HOIST UTILITY LEVER HOIST TECHNOLOGY CONVEYOR • Improved facility safety for large • Safety brake prevents unexpected • Unique, beltless zone control for pallet complex loads load release and tray handling • Available in Compass™
Slide 17: Intelli-Crane Solutions
Intelli-Crane™ Solutions Driving innovation through automation INTELLI-GUIDE™ SYSTEM INTELLI-PROTECT™ SYSTEM INTELLI-LIFT™ AUTO DETECTION INTELLI-CONNECT™ MOBILE APP • Maximized productivity through • Protection boundaries for • Visible and audible warnings • Provides critical crane and hoist automa
Slide 18: Strong Track Record of Creating Value Through M&A
Strong Track Record of Creating Value Through M&A September 2015 January 2017 April 2021 Acquisition of STAHL CraneSystems from Konecranes for ~$218M Acquisition of Dorner for $485M Acquisition of Magnetek, Inc. for strengthens leading global position in advances Intelligent Motion strategy and ~$18
Slide 19: Solid Margins on Lower Volume
Solid Margins on Lower Volume NET SALES OPERATING INCOME & MARGIN $876.3 $89.8 $839.4 $809.2 $68.3 $69.4 $637.1 $649.6 $42.3 $23.7 $601.1 $801.1 $842.1 $809.2 $649.6 3.7% 8.1% 7.9% 11.1% 6.5% 9.4% 11.4% 12.1% 9.1% FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Sales Divestitures FY21 sales and op
Slide 20: Continue to Drive Margin Expansion
Continue to Drive Margin Expansion 80/20 Critical Business Tool 80/20 Embedded in CMBS Focus Area: Product Line Simplification Product Line Simplification Raving fans and priority account program Customer list simplification Purchased parts Product SKUs Business Segmentation, ~400,000 Down to ~40,00
Slide 21: EPS and Adjusted EBITDA
EPS and Adjusted EBITDA EARNINGS PER SHARE Solid adjusted EBITDA margin during $2.74 $2.78 challenging environment $2.01 • Q4 FY2021 Adjusted EBITDA margin of 13.9% down 50 $1.47 basis points from prior year on 6% lower volume $1.16 • Continuing to target 19% Adjusted EBITDA margin post COVID-19 rec
Slide 22: Cash Flow
Cash Flow Strong cash generation ($ in millions) Free Cash Flow(2) FY18 FY19 FY20 FY21 Free cash flow conversion >300% in FY21 3/31/18 3/31/19 3/31/20 12/31/20 Net cash provided by operating $69.7 $79.5 $106.8 $98.9 activities $97.4 $86.6 CapEx (14.5) (12.3) (9.4) (12.3) Free cash flow $67.2 $55.1 $
Slide 23: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Successfully financed acquisition with equity and debt March 31, March 31, Pro forma • Initial bridge loan of $650 million to fund acquisition March 31, 2021 2020 2021 • Issued equity to de-lever balance sheet Cash and cash equivalents $ 202.1 $ 114.5
Slide 24: Orders and Backlog
Orders and Backlog Outstanding orders of $208.8 million Backlog of $171.7 million, up 31% • 24% sequential and 6% year-over-year increases • Year-over-year increase of total backlog driven by both project and short-cycle businesses • Up 32% in project business and 16% short cycle, sequentially • Bac
Slide 25: ESG Priorities
ESG Priorities Aligning stakeholder priorities and what’s critical to CMCO • CLIMATE CHANGE AND • EMPLOYEE HEALTH & • ETHICS & COMPLIANCE ENVIRONMENTAL STEWARDSHIP GOVERNANCE & ETHICS SOCIAL RESPONSIBILITY ENERGY MANAGEMENT SAFETY • ENTERPRISE RISK • WASTE MANAGEMENT & • TALENT MANAGEMENT MANAGEMENT
Slide 26: Outlook and Perspective
Outlook and Perspective Q1 FY2022 outlook • Expect Q1 FY22 net sales in range of $212 million to $217 million with Dorner Dorner entering fiscal 2022 with strong backlog • Strong bookings trend in e-warehousing, life sciences and food processing • Confident in growth and profit potential Addressing
Slide 27: Key Takeaways
Key Takeaways Expanding and Reimagining our Core EVOLVED STRATEGY BLUEPRINT FOR GROWTH 2.0 DEFINES GROWTH FRAMEWORK COLUMBUS MCKINNON BUSINESS SYSTEM – CMBS – ENABLES SCALABILITY CONVEYING SOLUTIONS ADDS GROWTH CATALYST IN ATTRACTIVE MARKETS OPERATIONAL EXCELLENCE DRIVES STRONGER MARGIN PROFILE AS E
Slide 28: Barrington Research Spring Investment Conference
Barrington Research Spring Investment Conference May 27, 2021 28
Slide 29: Supplemental Information
Supplemental Information 29
Slide 30: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 82.5% 83% Q2 2021 81% 75% 79% 77% 70% 75% 74.1% (Manufacturing) & 73% 74.9% (Total) April 2021(1) 71% 65% 69% 67% 60% 65% Manufacturing Total
Slide 31: ISM Production Index
ISM Production Index Source: Institute of Supply Chain Management 70% 62.5% April 2021 65% 60% 55% 50% 45% 40% 35% 30% 25% 31
Slide 32: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Fiscal Year FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 GAAP income from operations $ 23,725 $ 68,331 $ 69,442 $ 89,824 $ 42,255 Add back (deduct): Factory closures — — 1,473 4,709 3,778 Business realignment costs — — 1,906 2,831 1,470 Insu
Slide 33: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Fiscal Year FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Net income (loss) $ 8,984 $ 22,065 $ 42,577 $ 59,672 $ 9,106 Add back: Non-cash pension settlement expense — — — — 19,046 Factory closures — — 1,473 4,709 3,778 Business rea
Slide 34: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Fiscal Year FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 GAAP net income $ 8,984 $ 22,065 $ 42,577 $ 59,672 $ 9,106 Add back (deduct): Income tax expense (benefit) 4,043 27,620 10,321 17,484 970 Interest and debt expense 10,966 19,733 17,144 14,234 12,081 C
Slide 35: Pro-Forma Adjusted EBITDA Reconciliation
Pro-Forma Adjusted EBITDA Reconciliation ($ in thousands) Trailing twelve months ended 3/31/21 Adjusted EBITDA is defined as net income before interest Dorner CMCO Pro-forma expense, income taxes, depreciation, amortization, and GAAP net income (loss) $ 1,139 $ 9,106 $ 10,245 other adjustments. Adju
Slide 36: Transaction Overview
Transaction Overview PURCHASE PRICE $485 million plus cash minus debt with working capital adjustment TRANSACTION COSTS Approximately $11 million excluding financing fees (majority at close) COST SYNERGIES Approximately $5 million in annual cost synergies by end of FY 2023 ONE-TIME COSTS Approximate
Slide 37: Attractive and Diverse End Markets
Industrial ~22% Mobile Industries ~17% Energy/Utilities ~17% Process Industries ~17% Other ~6% ~5% Industrial Automation Construction ~5% Attractive and Diverse End Markets ~3% Entertainment Food Processing ~3% Enduring tailwinds gained with new markets for conveying solutions Life Sciences ~2% Cons
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