Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q2 FY2021 Earnings Presentation
25 slides from Columbus Mckinnon's earnings presentation, Oct 29, 2020
Slide 1: Q2 Fiscal Year 2021 Financial Results Conference Call
Q2 Fiscal Year 2021 Financial Results Conference Call October 29, 2020 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: Building Momentum
Building Momentum Solid recovery from trailing first quarter; effect of Blueprint for Growth strategy demonstrated in margin improvement • Sales were $157.8 million, at upper end of expected range • Strong gross margin of 35.5% positively impacted by the $2.2 million gain on sale of a facility in Ch
Slide 4: Sequential Improvement
Sequential Improvement Q2 FY2021 vs Q1 FY2021: Results demonstrate improvement from Q1 FY2021 trough ($ in millions) Net Sales Adjusted Operating Income & Margin $157.8 $14.0 $139.1 $15.8 $5.0 3.6% $1.8 8.9% Q1 FY21 Q2 FY21 Q1 FY21 Q2 FY21 Income from Operations Non-GAAP Adjustments Positive sequent
Slide 5: Net Sales
Net Sales ($ in millions) Q2 sales down 24.0%, or $49.8 million Q2 FY21 Sales Bridge • U.S.: Pricing of 1.1% partially offset 26.4% volume Quarter decline • Non-U.S: Pricing of 1.2% and 2.3% favorable FX Q2 FY20 Sales $ 207.6 partially offset 25.8% volume decline Volume (54.3) (26.2)% Pricing 2.3 1.
Slide 6: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge Quarter $73.5 Q2 FY20 Gross Profit $ 73.5 $67.9 $66.2 Pricing, net of material cost inflation 2.3 $56.0 Gain on sale of building 2.2 $54.3 Foreign currency translation 0.8 $44.8 34.4% Tariffs 0.6 Business realignment costs 0.1 Factory
Slide 7: RSG&A
RSG&A ($ in millions) RSG&A at 23.5% of sales RSG&A as % of sales: 21.7% 21.9% 24.4% 28.7% 23.5% Reduced Y/Y by: $45.0 $46.3 • $7.2 million of net cost reductions $43.8 $2.9 $39.9 • $0.9 million less bad debt expense $3.0 $37.0 $2.6 $2.8 • $0.4 million for gain on sale of building $2.9 Increased Y/Y
Slide 8: Operating Income & Adjusted OI Margin
Operating Income & Adjusted OI Margin ($ in millions) Q2 FY21 operating income of $15.8 million • $2.6 million favorable impact from gain on sale of building $26.3 • Adjusted operating income of $14.0 million $23.1 $25.2 $20.2 Adjusted operating margin of 8.9% $20.9 $14.0 • Volume decline of 26.2% d
Slide 9: Earnings Per Share
Earnings Per Share GAAP Diluted EPS Net income impacted by: $0.69 $0.63 • $16.3 million pension settlement expense related to $0.39 termination of U.S. pension plan • Factory closure costs of $0.7 million ($0.12) • Favorable impact of $2.6 million from gain on sale of facility ($0.17) Q2 FY20 Q3 FY2
Slide 10: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA Margin Solid adjusted EBITDA margin during challenging environment 15.7% 15.1% • Adjusted EBITDA margin in Q2 FY2021 improved to 13.4% from 8.7% in trailing first quarter 13.3% • Continuing to target 19% Adjusted EBITDA margin post COVID-19 recession FY19 FY20
Slide 11: Cash Flow
Cash Flow Outstanding cash generation ($ in millions) Free Cash Flow(1) Three Months Ended YTD 9/30/20 9/30/19 9/30/20 Net cash provided by $108.5 $37.4 $40.0 $46.9 operating activities $97.4 CapEx (1.7) (3.0) (2.8) Free cash flow (FCF) $35.7 $37.1 $44.2 $67.2 Note: Components may not add to totals
Slide 12: Capital Structure
Capital Structure ($ in millions) Significant financial flexibility in uncertain CAPITALIZATION macroeconomic environment Sept. 30, March 31, Net debt leverage ratio below target of 2.0x 2020 2020 • Net debt leverage ratio(1) of 0.97x Cash and cash equivalents $ 186.6 $ 114.5 • Net debt to net total
Slide 13: Orders and Backlog
Orders and Backlog ($ in millions) Solid orders of $172.7 million in the quarter Backlog of $146.6 million up 2% year over year • Recovery of short-cycle businesses drove • Long-term backlog expanded to 41.5% of total backlog 26% sequential order increase • 12% sequential increase of total backlog d
Slide 14: Driving Innovation
Driving Innovation Creating competitive advantages Product Launch Update Tandem Hoist Intelli-Lift™ Auto Detection Utility Lever Hoist • Improved facility safety for large • Visible and audible warnings when • Safety brake prevents unexpected complex loads off-center pick is detected load release •
Slide 15: Outlook and Perspective
Outlook and Perspective Q3 FY2021 outlook • Expect Q3 FY21 net sales of $150 million to $160 million despite fewer shipping days Blueprint for Growth strategy is evolving • Strengthening our business system • Advancing our growth framework Consistent capital allocation priorities • Investing interna
Slide 16: Q2 Fiscal Year 2021 Financial Results Conference Call
Q2 Fiscal Year 2021 Financial Results Conference Call October 29, 2020 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer
Slide 17: Supplemental Information
Supplemental Information 17
Slide 18: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13710950 Telephone replay available through November 5, 2020 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com 18
Slide 19: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Gross profit $ 73,493 $ 67,872 $ 66,209 $ 44,797 $ 56,025 Add back (deduct): Factory closures 249 696 1,349 1,928 493 Business realignment costs 140 123 774 329 — Insurance settlement — (77) (15) —
Slide 20: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Income from operations $ 25,231 $ 20,886 $ 16,664 $ 1,789 $ 15.820 Add back (deduct): Factory closures 470 1,592 1,621 2,256 747 Business realignment costs 413 662 1,755 821 — Insurance re
Slide 21: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Net income (loss) $ 16,599 $ 15,250 $ 9,244 $ (2,969) $ (4,104) Add back (deduct): Non-cash pension settlement expense — — — 2,722 16,324 Factory closures 470 1,592 1,621 2,256
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 2020 2019 Net income (loss) $ 16,599 $ 15,250 $ 9,244 $ (2,969) $ (4,104) $ 59,672 $ 42,577 Add back (deduct): Income tax expense (benefit) 5,141 2,234 4,947 (963) (45) 17,484 10,321 Interest
Slide 23: 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% 75% 79% 77% 70% 75% 70.5% (Manufacturing) & 72.1% 73% 71.5% (Total) Q3 2020 September 2020(1) 71% 65% 69% 67% 60% 65% Manufacturing To
Slide 24: ISM Production Index
ISM Production Index Source: Institute of Supply Chain Management 70% 61.0% 65% Sept. 2020 60% 55% 50% 45% 40% 35% 30% 25% 24
Slide 25: Q2 Fiscal Year 2021 Financial Results Conference Call
Q2 Fiscal Year 2021 Financial Results Conference Call October 29, 2020 25