Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q3 FY2021 Earnings Presentation
28 slides from Columbus Mckinnon's earnings presentation, Jan 28, 2021
Slide 1: Q3 Fiscal Year 2021 Financial Results Conference Call
Q3 Fiscal Year 2021 Financial Results Conference Call January 28, 2021 David J. Wilson 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: Delivering Results in Tough Environment
Delivering Results in Tough Environment Evolution of strategy and Columbus McKinnon Business System (CMBS) delivered solid results • Sales of $166.5 million exceeded expectations reflecting organic growth initiatives and sequential recovery • Gross margin of 33.2% despite typical seasonal fixed cost
Slide 4: Blueprint for Growth 2.0
Blueprint for Growth 2.0 Pivot Columbus McKinnon toward growth: Organic and Inorganic Strategy to deliver growth, financial performance and shareholder value 4
Slide 5: CMBS Tools: 80/20
CMBS Tools: 80/20 Contributing to operating income even in low revenue environment ($ in millions) Q3 FY21 contributions to operating income: $3.5 million • Customer simplification FY 2019 $8.5 (strategic pricing) • Priority customer account program FY 2020 $20.4 (incremental volume from sharpened c
Slide 6: Sequential Results
Sequential Results Net Sales continue to recover, profitability impacted by return to work and growth investments ($ in millions) Net Sales Operating Income & Margin $166.5 $15.8 $157.8 $10.4 $139.1 $1.8 10.0% 6.3% 1.3% Q1 FY21 Q2 FY21 Q3 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Net sales increased $8.8 million
Slide 7: Net Sales
Net Sales ($ in millions) Q3 sales down 16.5% from prior-year period Q3 FY21 Sales Bridge due to COVID-19 pandemic • U.S.: Pricing of 0.8% partially offset 19.9% volume Quarter decline • Non-U.S: Pricing of 1.1% and 3.3% favorable FX Q3 FY20 Sales $ 199.4 partially offset 17.8% volume decline Volume
Slide 8: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge Quarter Q3 FY20 Gross Profit $ 67.9 $67.9 Pricing, net of material cost inflation 1.9 $66.2 Foreign currency translation 1.1 $56.0 $55.3 Factory closures 0.4 $44.8 $54.3 Tariffs 0.2 34.4% Product liability (0.1) Business realignment c
Slide 9: RSG&A
RSG&A ($ in millions) Y/Y decline represents structural reductions RSG&A as % of sales: 21.9% 24.4% 28.7% 23.5% 25.1% • Prior year included benefit of $2.0M stock comp adjustment from former CEO’s resignation $46.3 $43.8 • $0.6 million unfavorable FX $41.7 $39.9 $2.9 $37.0 $2.6 Sequential increase r
Slide 10: Operating Income
Operating Income ($ in millions) Operating Income & Margin Q3 FY21 operating income of $10.4 million $20.9 $16.7 • Adjusted operating income of $11.2 million $15.8 $10.4 Operating margin of 6.3%; Adjusted operating $1.8 margin of 6.7% 10.5% 8.8% 1.3% 10.0% 6.3% • Volume decline of 19.0% due to COVID
Slide 11: Earnings Per Share
Earnings Per Share GAAP Diluted EPS Net income: $0.63 • $6.6 million $0.39 $0.27 • $0.27 per diluted share ($0.12) ($0.17) Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Adjusted net income: Adjusted EPS • $6.2 million due to tax rate normalization $0.64 $0.58 • $0.26 per diluted share $0.34 $0.26 FY21 exp
Slide 12: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA Margin Solid adjusted EBITDA margin during challenging environment 15.7% 15.1% • Q3 FY2021 Adjusted EBITDA margin of 10.9% down 430 basis points from prior year on 19% lower volume 12.0% • Continuing to target 19% Adjusted EBITDA margin post COVID-19 recession
Slide 13: Cash Flow
Cash Flow Strong cash generation ($ in millions) Free Cash Flow(2) Three Months Ended YTD 12/31/20 12/31/19 12/31/20 Net cash provided by $25.0 $32.4 $71.9 $99.9 operating activities $97.4 CapEx (3.1) (1.9) (5.9) Free cash flow (FCF)2 $21.9 $30.5 $66.0 $67.2 Note: Components may not add to totals du
Slide 14: Capital Structure
Capital Structure ($ in millions) Significant financial flexibility in uncertain CAPITALIZATION macroeconomic environment Dec. 31, March 31, Net debt leverage ratio below target of 2.0x 2020 2020 Cash and cash equivalents $ 187.6 $ 114.5 • Net debt leverage ratio(1) of 0.79x Total debt • Net debt to
Slide 15: Orders and Backlog
Orders and Backlog ($ in millions) Orders of $168.7 million in the quarter Backlog of $152.4 million, up 22% y/y • 2.3% sequential decline due to typical seasonality • Year-over-year increase of total backlog driven by (3 less working days) and impact of COVID-19 both project business and short-cycl
Slide 16: Outlook and Perspective
Outlook and Perspective Q4 FY2021 outlook • Expect Q4 FY21 net sales of $175 million to $180 million Strategy evolving into Blueprint for Growth 2.0 • Strengthening CMBS to enable scale Driving progress toward organic and inorganic growth • Targeted organic growth initiatives • Actively working the
Slide 17: Q3 Fiscal Year 2021 Financial Results Conference Call
Q3 Fiscal Year 2021 Financial Results Conference Call January 28, 2021 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer
Slide 18: Supplemental Information
CN Supplemental Information COLUMBUS McKINNON
Slide 19: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13714791 Telephone replay available through February 4, 2021 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com 19
Slide 20: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 GAAP gross profit $ 67,872 $ 66,209 $ 44,797 $ 56,025 $ 55,315 Add back (deduct): Factory closures 696 1,349 1,928 493 250 Business realignment costs 123 774 329 — 237 Insurance settlement (77) (15)
Slide 21: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 GAAP income from operations $ 20,886 $ 16,664 $ 1,789 $ 15,820 $ 10,447 Add back (deduct): Factory closures 1,592 1,621 2,256 747 469 Business realignment costs 662 1,755 821 — 237 Insuran
Slide 22: Decremental Adjusted Operating Leverage
Decremental Adjusted Operating Leverage ($ in thousands) Quarter YTD Q3 FY21 Q3 FY20 Change Q3 FY21 Q3 FY20 Change GAAP income from operations $ 10,447 $ 20,886 $ (10,439) $ 28,056 $ 73,160 $ (45,104) Add back (deduct): Factory closures 469 1,592 (1,123) 3,472 3,089 383 Business realignment costs 23
Slide 23: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 GAAP net income (loss) $ 15,250 $ 9,244 $ (2,969) $ (4,104) $ 6,594 Add back (deduct): Non-cash pension settlement expense — — 2,722 16,324 — Factory closures 1,592 1,621 2,256
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 2020 2019 GAAP net income (loss) $ 15,250 $ 9,244 $ (2,969) $ (4,104) $ 6,594 $ 59,672 $ 42,577 Add back (deduct): Income tax expense (benefit) 2,234 4,947 (963) (45) 616 17,484 10,321 Interes
Slide 25: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in thousands) Fiscal Year TTM 2019 2020 Q3 FY21 GAAP income from operations $ 69,442 $ 89,824 $ 44,720 Add back (deduct): Factory closures 1,473 4,709 5,093 Business realignment costs 1,906 2,831 2,813 Insurance recovery legal costs 1,282 585 389 L
Slide 26: 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% 76.3% 75% 79% Q4 2020 77% 70% 75% 73.4% (Manufacturing) & 73% 74.5% (Total) December 2020(1) 71% 65% 69% 67% 60% 65% Manufacturing Tot
Slide 27: ISM Production Index
ISM Production Index Source: Institute of Supply Chain Management 70% 64.8% Dec. 2020 65% 60% 55% 50% 45% 40% 35% 30% 25% 27
Slide 28: Q3 Fiscal Year 2021 Financial Results Conference Call
Q3 Fiscal Year 2021 Financial Results Conference Call January 28, 2021