Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q2 FY2022 Earnings Presentation
29 slides from Columbus Mckinnon's earnings presentation, Oct 28, 2021
Slide 1: Q2 Fiscal Year 2022 Financial Results Conference Call
Q2 Fiscal Year 2022 Financial Results Conference Call October 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 (together, this “presentation”), 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 sa
Slide 3: Executing Blueprint for Growth 2.0 Strategy
Executing Blueprint for Growth 2.0 Strategy Capturing strong demand across all markets Driving growth and margin expansion • Strong results despite supply chain challenges; offset inflationary pressures with strategic pricing • Sales of $223.6 million increased 41.7% over prior-year period including
Slide 4: Business Model Evolution
Business Model Evolution Growth strategy substantially advances underlying portfolio Revenue CMCO FY21 CMCO Q2 FY22 Growth Rate Recast for Growth Profile With Conveying Solutions Platform Lifting Solutions Lifting Solutions 73% 62% Conveying Solutions 15% Industrial Products 42% Linear Motion 12% Au
Slide 5: Linear Actuator with Intelli-Motion
Linear Actuator with Intelli-Motion™ Combining intelligent controls with high-quality linear actuators Expands family of automation solutions and enables precision motion control Provides enhanced control and position feedback capabilities Extends the length of time the actuator is operational and i
Slide 6: Net Sales
Net Sales ($ in millions) Q2 sales up 41.7% from prior-year period due to Q2 FY22 Sales Bridge strong demand, Dorner acquisition and strategic pricing Quarter • U.S. (excl. Dorner): 19.7% volume and 2.4% pricing increase Q2 FY21 Sales $ 157.8 • Non-U.S (excl. Dorner): 13.3% volume and 2.7% pricing A
Slide 7: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge Quarter Q2 FY21 Gross Profit $ 56.0 $81.1 Acquisition 13.3 $74.1 Sales volume and mix 8.2 $64.1 Productivity, net of other cost changes 5.5 $56.0 $55.3 Pricing, net of material cost inflation 0.9 Foreign currency translation 0.6 Prior
Slide 8: RSG&A
RSG&A ($ in millions) RSG&A as % of sales: 23.5% 25.1% 25.1% 26.8% 22.9% Q2 FY22 RSG&A slightly lower than guidance • Includes $0.9 million of business realignment costs $57.2 $51.2 • Incremental $7.0 million of RSG&A from Dorner $46.7 $3.6 $41.7 $3.8 $37.0 $3.7 $3.0 Q3 FY22 RSG&A estimate of approx
Slide 9: Operating Income
Operating Income ($ in millions) Operating Income & Margin Q2 FY22 operating income of $23.7 million $23.7 • Adjusted operating income of $25.5 million $15.8 $14.2 $10.4 $10.7 Operating margin of 10.6%; Adjusted operating margin of 11.4% 10.0% 6.3% 7.6% 5.0% 10.6% • Margin expansion driven by operat
Slide 10: Earnings Per Share
Earnings Per Share GAAP Diluted EPS Q2 FY22 net income of $15.2 million $0.53 Adj. net income of $21.4 million in the quarter $0.39 $0.27 • $6.3 million of amortization of intangibles • $1.2 million of business realignment costs • $0.6 million of acquisition deal and integration costs ($0.17) ($0.27
Slide 11: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA Margin Adjusted EBITDA margin continues to recover from FY21 15.7% • Q2 FY22 Adjusted EBITDA margin of 16.1% up 270 basis 14.4% points from prior year 11.9% • 100 basis points contribution from the addition of Dorner • Targeting 19% Adjusted EBITDA margin in FY
Slide 12: Cash Flow
Cash Flow ($ in millions) (2) Three Months Ended YTD Free Cash Flow 9/30/21 9/30/20 9/30/21 Net cash provided by $97.4 operating activities $25.3 $37.4 $17.9 $86.6 CapEx (3.1) (1.7) (6.8) $67.2 Free cash flow (FCF) $22.2 $35.7 $11.2 $53.6 Note: Components may not add to totals due to rounding • Stro
Slide 13: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Financial flexibility Sept. 30, March 31, • ~$188 million of liquidity 2021 2021 Cash and cash equivalents $ 105.3 $ 202.1 Pro-forma net debt leverage ratio of ~2.64x(1) Total debt 453.2 249.0 • Net debt to net total capital: 32.1% Total net debt 347.
Slide 14: Orders and Backlog
Orders and Backlog ($ in millions) Continued Strength in Orders Record backlog of $255.6 million • 38% year-over-year increase driven by short cycle demand, project • Up 7% in short-cycle business and 2% project, sequentially business and acquisition • Dorner backlog up 2%, sequentially • Conveying
Slide 15: Outlook and Perspective
Outlook and Perspective Q3 FY2022 outlook • Expect Q3 FY22 net sales of approximately $215 million(1) Addressing supply chain and staffing challenges • Expect to stay ahead of inflation with strategic pricing • Actively managing suppliers Continued strong demand across markets • Strength in aerospac
Slide 16: Q2 Fiscal Year 2022 Financial Results Conference Call
Q2 Fiscal Year 2022 Financial Results Conference Call October 28, 2021 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer
Slide 17: Supplemental Information
CN Supplemental Information COLUMBUS McKINNON
Slide 18: Blueprint for Growth 2.0
Blueprint for Growth 2.0 Pivot Columbus McKinnon toward growth: Organic and Inorganic Strategy to deliver growth, financial performance and shareholder value 18
Slide 19: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13723730 Telephone replay available through November 4, 2021 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com 19
Slide 20: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 GAAP gross profit $ 56,025 $ 55,315 $ 64,088 $ 74,063 $ 81,135 Add back (deduct): Acquisition inventory step-up expense — — — 2,981 — Acquisition integration costs — — — 521 — Factory closures 493 2
Slide 21: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 GAAP income from operations $ 15,820 $ 10,447 $ 14,199 $ 10,746 $ 23,660 Add back (deduct): Acquisition deal and integration costs — — 3,951 9,242 632 Acquisition inventory step-up expense
Slide 22: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 GAAP net income (loss) $ (4,104) $ 6,594 $ 9,585 $ (7,263) $ 15,203 Add back (deduct): Amortization of intangibles 3,192 3,142 3,174 6,109 6,285 Cost of debt refinancing — — — 1
Slide 23: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Fiscal Year FY 2019 FY 2020 FY 2021 Q2 FY22 TTM GAAP net income $ 42,577 $ 59,672 $ 9,106 $ 24,119 Add back (deduct): Amortization of intangibles 14,900 12,942 12,623 18,710 Cost of debt refinancing — — — 14,803 Non-cash pens
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 2021 2020 GAAP net income (loss) $ (4,104) $ 6,594 $ 9,585 $ (7,263) $ 15,203 $ 9,106 $ 59,672 Add back (deduct): Income tax expense (benefit) (45) 616 1,362 (2,517) 4,083 970 17,484 Interest
Slide 25: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in thousands) Fiscal Year TTM 2020 2021 Q2 FY22 GAAP income from operations $ 89,824 $ 42,255 $ 59,052 Add back (deduct): Acquisition deal and integration costs — 3,951 13,825 Acquisition inventory step-up expense — — 2,981 Factory closures 4,709 3
Slide 26: Free Cash Flow & Free Cash Flow Conversion Reconciliation
Free Cash Flow & Free Cash Flow Conversion Reconciliation ($ in thousands) Fiscal Year FY 2019 FY 2020 FY 2021 Q2 FY 2022 TTM Cash from operations $ 79,499 $ 106,795 $ 98,890 $ 69,889 Capital expenditures (12,288) (9,432) (12,300) (16,273) Free cash flow (FCF) $ 67,211 $ 97,363 $ 86,590 $ 53,616 Non
Slide 27: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 82.9% 83% Q3 2021 81% 75% 79% 77% 70% 75% 75.9% (Manufacturing) & 73% 75.2% (Total) September 2021(1) 71% 65% 69% 67% 60% 65% Manufacturing To
Slide 28: ISM Production Index
ISM Production Index Source: Institute of Supply Chain Management 70% 65% 60% 55% 59.4% September 2021 50% 45% 40% 35% 30% 25% 28
Slide 29: Q2 Fiscal Year 2022 Financial Results Conference Call
Q2 Fiscal Year 2022 Financial Results Conference Call October 28, 2021