Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q3 FY2019 Earnings Presentation
22 slides from Columbus Mckinnon's earnings presentation, Jan 31, 2019
Slide 1: Q3 Fiscal Year 2019 Investor Presentation: Financial Results Conference Call
Q3 Fiscal Year 2019 JanuarySept 31, Investor Presentation 20192017 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 revenue and earnings, involve known
Slide 3: Q3 FY2019 Results
Q3 FY2019 Results Blueprint for Growth strategy delivering earnings power Market share gains support revenue growth of 4%; excluding FX, sales up 6% Gross margin expanded 90 basis points to 33.8% Diluted EPS was a loss of $0.03, and adjusted EPS was $0.61, up 39% Adjusted EBITDA margin(1) was 14.2%,
Slide 4: Tracking Blueprint Phase II Progress
Tracking Blueprint Phase II Progress Simplify the Business 80/20 process driving results • Expect ~$7 million savings in FY2019; $4.1 million savings year-to-date Tire Shredder business sold in December Crane Equipment & Service, Inc. (CES) purchase agreement signed January 30, 2019 Improve Producti
Slide 5: Net Sales
Net Sales ($ in millions) Revenue up 6% excluding FX Sales up 4% U.S. sales up 7.3% Y/Y Non-U.S. up 4.8%, excluding FX $225.0 $217.1 $217.4 $214.1 Sales Bridge Q3 $208.7 Q3 FY2018 net sales $ 208.7 Volume 9.9 4.8% Pricing 2.8 1.3% Q3 Q4 Q1 Q2 Q3 Foreign currency translation (4.0) (1.9)% FY18 FY18 FY
Slide 6: Gross Profit & Gross Margin
(1) Gross Profit & Gross Margin ($ in millions) Quarter Gross Margin Bridge Gross margin Q3 up 90 bps Q3 FY2018 Gross Profit $ 68.7 Sales volume and mix 2.0 $79.6 Productivity, net of other cost changes 1.6 $74.2 $75.9 $73.4 $68.7 Pricing, net of material cost inflation 1.6 Product liability 0.6 Pri
Slide 7: RSG&A
(1) RSG&A ($ in millions) RSG&A at 21.9% of sales, 260 bps improvement Selling expenses decreased $54.4 $51.1 $51.1 $1.6 million, or 6.3% $3.7 $47.3 $47.5 $3.7 $3.3 $3.1 $3.3 G&A decreased $1.9 million, or 8.7% $23.1 $22.3 $21.8 $19.7 $20.4 R&D flat RSG&A fourth quarter fiscal 2019 $25.5 $27.6 $25.6
Slide 8: Operating Income & Non-GAAP Margin
(1)(2) Operating Income & Non-GAAP Margin ($ in millions) Q3 FY19 adjusted operating income grew 29% Y/Y $26.5 $25.5 $22.9 Adjusted operating margin of 10.5% $20.1 $17.8 Net loss on held for sale businesses: 11.8% 11.7% 10.5% $15.6 million 8.5% 9.4% Phase I and II savings of $5.5 million $13.7 $15.8
Slide 9: Quarterly Earnings Per Share
Quarterly Earnings Per Share ($ in millions) GAAP Diluted EPS Net loss: $0.67 $(0.8) million, or $(0.03) per diluted share $0.36 $0.33 Non-GAAP adjusted net income(1): $14.5 million, 39% increase Y/Y ($0.03) ($0.46) $0.61 per diluted share, up 39% Y/Y Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Fiscal 2
Slide 10: EBITDA & ROIC
EBITDA & ROIC Adjusted EBITDA Margin(1) Expanding Adjusted EBITDA(1) margins 13.7% 15.1% 11.7% 15.1% YTD, expanded 140 bps over Q3 FY18 YTD Adjusted ROIC net of cash expands FY17 FY18 Q3 FY19 to 10.5% YTD Return on Invested Capital (ROIC)(2) 10.5% 8.7% 6.4% FY17 FY18 Q3 FY19 TTM GOAL: Adjusted EBITD
Slide 11: Working Capital
Working Capital Working Capital Working capital as a percent of as a Percent of Sales sales improved 180 bps from 19.4% 19.7% trailing quarter to 17.9% 17.9% 17.9% Comparison with prior year impacted 17.4% by STAHL acquisition 12/31/17 (1) 3/31/18 (1) 6/31/18 9/30/18 12/31/18 Inventory Turns Invento
Slide 12: Cash Flow
Cash Flow Three Months Ended Note: Components may not add to totals due to rounding December 31, 2018 2017 Net cash provided by operating activities $ 26.2 $ 16.5 Capital expenditures (CapEx) (2.4) (3.3) Operating free cash flow $ 23.8 $ 13.2 Generated $46.6 million in operating free cash flow (FCF)
Slide 13: De-levering Balance Sheet
De-levering Balance Sheet CAPITALIZATION Debt reduction continues Dec 31, March 31, Paid down $25 million in debt in 2018 2018 quarter; $50 million year-to-date Cash and cash equivalents $ 58.1 $ 63.0 Net Debt / Adjusted TTM EBITDA(1) Total debt 314.8 363.3 • Reduced to 1.99x and achieved target Exp
Slide 14: Outlook
Outlook Near-Term Outlook: Blueprint for Growth strategy and E-PAS™ operating system demonstrating traction Expect 4% to 5% organic growth in Q4 FY19, excluding: • Headwind from FX expected to be approximately 3% to 4% • Divestitures: • $3.3 million revenue in Q4 FY18 related to the Tire Shredder bu
Slide 15: Save the Date: Investor & Analyst Briefing
Save the Date Investor & Analyst Briefing Thursday, June 13, 2019 8:00am to 1:00pm Management team update on Blueprint for Growth strategy Convene at 810 Seventh Avenue New York, New York © 2019 Columbus McKinnon Corporation 15
Slide 16: Supplemental Information
Supplemental Information © 2019 Columbus McKinnon Corporation 16
Slide 17: Businesses Held for Sale / Sold
Businesses Held for Sale / Sold ($ in thousands) Q1 Q2 Q3 Q3 FY19 FY19 FY19 FY19 YTD Sales 11,104 9,233 8,983 29,320 Income from operations 665 1,461 1,007 3,133 1. The Tire Shredder business was divested December 28, 2018. 2. Crane Equipment & Service, Inc. is expected to be divested February 28, 2
Slide 18: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Income from operations $ 13,710 $ 15,807 $ 13,503 $ 24,825 $ 6,646 Add back (deduct): Impairment on held for sale business — — 11,100 — 16,653 Gain on sale of business — — — — (1,103) Acqu
Slide 19: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Net income (loss) $ (10,565) $ 8,466 $ 7,706 $ 15,912 $ (782) Add back (deduct): Impairment on held for sale business — — 11,100 — 16,653 Gain on sale of business — — — — (1,103
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Net income (loss) $ (10,565) $ 8,466 $ 7,706 $ 15,912 $ (782) Add back (deduct): Income tax expense 19,877 2,598 1,774 4,576 3,111 Interest and debt expense 4,864 4,661 4,607 4,248 4,330 Investment (incom
Slide 21: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 80% 85% 76.6% (Manufacturing) & 79% 78.7% (Total) December 2018 84% 83.9% December 2018 78% 83% 77% 82% 76% 81% 75% 80% 74% 79% Manufacturing Total ©
Slide 22: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13686186 Telephone replay available through February 7, 2019 Webcast / PowerPoint / Replay available at www.cmworks.com/investors Transcript, when available, at www.cmworks.com/investors © 2019 Columbus McKinnon Corporation 22