Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q4 FY2019 Earnings Presentation
23 slides from Columbus Mckinnon's earnings presentation, May 29, 2019
Slide 1: Q4 Fiscal Year 2019 Investor Presentation Financial Results Conference Call
May Sept 29, Q4 Fiscal Year 2019 Investor Presentation 2019 2017 Financial Results Conference Call Mark D. Morelli President and Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer
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: Strong Financial Results
Strong Financial Results Blueprint for Growth strategy driving earnings power Diluted earnings per share: $0.83 in quarter and $1.80 for FY19 • Non-GAAP EPS +35% in quarter and +36% for FY19 Adjusted EBITDA margin expanded 140 bps to 15.1% and ROIC up 250 bps to 11.2% Sales grew 7% for the quarter a
Slide 4: Tracking Blueprint Phase II Progress
Tracking Blueprint Phase II Progress Simplify the Business 80/20 Process driving results • Contributed $8.5 million to operating income in FY19, well ahead of plan • Sharpened customer focus delivered significant growth Divested three non-core businesses Operational Excellence Operational effectiven
Slide 5: Net Sales
Net Sales ($ in millions) Q4 sales up 7.3% (adjusted for divestitures and FX) $225.0 U.S. sales up 10.4%, adjusted for divestitures $217.1 $217.4 $216.7 $214.1 Quarter Sales Bridge Quarter Q4 FY18 Sales $ 214.1 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Divestitures (5.9) Q4 FY18 Sales adjusted for div
Slide 6: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge Quarter $79.6 $75.9 $73.4 $76.0 Q4 FY18 Gross Profit $ 74.7 $74.7 Sales volume and mix 4.1 Pricing, net of material cost inflation 2.1 Productivity, net of other cost changes 1.2 34.9% 35.4% 35.0% 33.8% 35.1% Product liability 0.3 Q4
Slide 7: RSG&A
RSG&A ($ in millions) $54.9 Q4 RSG&A at 22.6% of sales, $51.1 $49.0 $47.3 $47.5 300 bps improvement $3.7 $3.7 $3.1 $3.4 $3.3 $23.6 $21.8 $19.7 $20.4 $21.7 FY19 RSG&A at 22.3% of sales, $27.6 $25.6 $24.5 $23.9 $24.0 170 bps improvement Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Prior year pro-forma adju
Slide 8: Operating Income & Non-GAAP Margin
Operating Income & Non-GAAP Margin ($ in millions) Q4 FY19 operating income increased $26.5 $25.5 $24.9 $8.7 million, or 54.8% $22.9 $20.1 $24.8 $24.5 Adjusted operating income* grew 24.0% $15.8 $13.5 Adjusted operating margin* of 11.5% $6.6 expanded 210 bps 9.4% 11.8% 11.7% 10.5% 11.5% Q4 FY18 Q1 F
Slide 9: Quarterly Earnings Per Share
Quarterly Earnings Per Share ($ in millions) GAAP Diluted EPS Net income: $0.83 $19.7 million, 133% increase Y/Y $0.67 $0.36 $0.33 $0.83 per diluted share, up 131% Y/Y ($0.03) Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Adjusted EPS* Adjusted net income*: $0.74 $0.70 $0.69 $16.4 million, 37% increase Y/
Slide 10: FY19 Earnings Per Share
FY19 Earnings Per Share ($ in millions) GAAP and Adjusted EPS* Net income was $42.6 million Adjusted net income* was $64.9 million $2.74 Full year tax rate was 19.5% $2.01 Better than previous guidance of 27% to 29% due to federal tax credits and other Tax Cuts and Jobs Act adjustments $1.80 $0.95 F
Slide 11: Adjusted EBITDA & ROIC
Adjusted EBITDA* & ROIC Adjusted EBITDA Margin* Adjusted EBITDA margin expanded 15.1% in FY19, expanded 140 bps 15.1% 13.7% 11.4% FY17 FY18 FY19 Adjusted ROIC net of cash increased (1) Return on Invested Capital (ROIC) 11.2% in FY19, expanded 250 bps 11.2% 8.7% 6.4% FY17 FY18 FY19 GOAL: Adjusted EBI
Slide 12: Working Capital
Working Capital Working Capital Working capital as a percent of as a Percent of Sales sales improved 70 bps from trailing quarter to 17.2% Driven by an approximate 6 day improvement in DPO 19.4% 19.7% 17.9% 17.9% 17.2% (1) (2) 3/31/18 6/31/18 9/30/18 12/31/18 3/31/19 Improving working capital utiliz
Slide 13: Cash Flow
Cash Flow Fiscal Year Ended Note: Components may not add to totals due to rounding March 31, 2019 2018 Net cash provided by operating activities $ 79.5 $ 69.7 Capital expenditures (CapEx) (12.3) (14.5) Operating free cash flow $ 67.2 $ 55.1 Generated $67.2 million in operating free cash flow (FCF) i
Slide 14: De-levering Balance Sheet
De-levering Balance Sheet CAPITALIZATION Debt reduction continues March 31, March 31, Paid down $15 million in debt in 2019 2018 quarter; $65 million in FY19 Cash and cash equivalents $ 71.1 $ 63.0 Net Debt / Adjusted TTM EBITDA* Total debt 300.3 363.3 • Reduced to 1.7x and better than target Total
Slide 15: Outlook
Outlook Q1 FY20 Outlook: Markets mixed, but solid Expect Q1 FY20 sales in range of $214 million to $216 million, up 3% adjusted • Headwind from FX expected to be approximately 2% to 3% • $11.1 million of sales in prior-year from divestitures FY20 Outlook: Double down on Phase II in FY20 80/20 Proces
Slide 16: Investor & Analyst Day
Investor & Analyst Day Thursday, June 13, 2019 8:00am to 1:30pm Management team update on Blueprint for Growth strategy Convene at 810 Seventh Avenue New York, New York © 2019 Columbus McKinnon Corporation 16
Slide 17: Supplemental Information
Supplemental Information © 2019 Columbus McKinnon Corporation 17
Slide 18: Businesses Sold
Businesses Sold Q1 Q2 Q3 Q4 ($ in thousands) FY19 FY19 FY19 FY19 FY19 Sales 11,104 9,233 8,983 4,875 34,195 Income from operations 665 1,461 1,007 532 3,665 1. The Tire Shredder business was divested December 28, 2018. 2. Crane Equipment & Service, Inc. was divested February 28, 2019. 3. Stahlhammer
Slide 19: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Fiscal Year Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 2019 2018 Income from operations $ 15,807 $ 13,503 $ 24,825 $ 6,646 $ 24,468 $ 69,442 $ 68,331 Add back (deduct): Net (gain) loss on sales of businesses — 11,100 — 15,550 (978)
Slide 20: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 2019 2018 Net income (loss) $ 8,466 $ 7,706 $ 15,912 $ (782) $ 19,741 $ 42,577 $ 22,065 Add back (deduct): Net (gain) loss on sales of businesses — 11,100 — 15,550 (
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 2019 2018 Net income (loss) $ 8,466 $ 7,706 $ 15,912 $ (782) $ 19,741 $ 42,577 $ 22,065 Add back (deduct): Income tax expense 2,598 1,774 4,576 3,111 860 10,321 27,620 Interest and debt expens
Slide 22: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 82% 85% 76.2% (Manufacturing) & 81% 78.5% (Total) 84% 80% March 2019 79% 83% 83.6% 78% March 2019 82% 77% 76% 81% 75% 80% 74% 73% 79% Manufacturing To
Slide 23: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13689949 Telephone replay available through June 5, 2019 Webcast / PowerPoint / Replay available at www.cmworks.com/investors Transcript, when available, at www.cmworks.com/investors © 2019 Columbus McKinnon Corporation 23