Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Sidoti Small Cap Virtual Conference 2022
33 slides from Columbus Mckinnon's conference presentation, Mar 23, 2022
Slide 1: Sidoti Small Cap Virtual Conference
Sidoti Small Cap Virtual Conference March 23, 2022 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Senior Vice President Finance and Chief Financial Officer © 2022 COLUMBUS McKINNON CORPORATION 1
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: Intelligent Motion Solutions for Material Handling
Intelligent Motion Solutions for Material Handling (1) Columbus McKinnon (Nasdaq: CMCO) Financial & Market Data Transforming from a legacy cyclical industrial company to a top-tier, secular growth, intelligent motion solutions company $839M $1.2B Strategic priorities Revenue Market Cap. • Strengthen
Slide 4: Blueprint for Growth 2.0
Blueprint for Growth 2.0 Business System and Core Growth Framework Transform CMCO Strategy evolves Columbus McKinnon into a high value, intelligent motion enterprise © 2022 COLUMBUS McKINNON CORPORATION 4
Slide 5: Columbus McKinnon Business System
Columbus McKinnon Business System Core Competencies Defined To Drive Performance 1. People & Values 6. Commercial / Selling 7. Product Development 2. Strategic Planning 8. Operations 3. Marketing 9. Finance 4. Product Management 10. Digitization 5. M&A Columbus McKinnon Business System (CMBS) enable
Slide 6: CMBS Cascading Tiers
CMBS Cascading Tiers Playbook for Standard Work and Processes Level 1 Strategic Framework (4) Level 2 Core Competencies (10) Level 3 Key Processes (65) • Commercial / Selling Level 4 • Customer Experience Sub-Processes • Commercial 80/20 (270) • Selling Process • Aftermarket • Pipeline Management •
Slide 7: Our Core Growth Framework
Our Core Growth Framework Rethink current addressable markets and target further strategic expansion through innovative approaches Improve vertical market, channel and geographic access, expand technology and product offerings Take greater marker share through product localization, new product devel
Slide 8: Business Model Evolution
Business Model Evolution Growth strategy substantially advances underlying portfolio Revenue CMCO FY21 CMCO Q3 FY22 Growth Rate Recast for Growth Profile With Conveying Solutions Platform Lifting Solutions Lifting Solutions 73% 59% Conveying Solutions 17% Industrial Products 42% Linear Motion 12% Au
Slide 9: Increasing Presence in Secularly Driven Markets
Increasing Presence in Secularly Driven Markets Conveying Solutions Serves Less Cyclical Industries E-Commerce Life Sciences/Pharma Entertainment 3% 3% 2% Elevator Aerospace 3% & Government 5% General Industrial 20% Oil & Gas 5% Food, Beverage & Consumer Goods 6% Transportation 15% Construction 7% E
Slide 10: Columbus McKinnon Legacy Solutions
Columbus McKinnon Legacy Solutions Lifting, Linear Motion and Automation Solutions Standard Hoist & Rigging Products: #1 U.S. market position in hoists Lifting capacity from 1/8 ton to ~140 tons Reliable, high-quality products Engineered Crane Solutions: Large tonnage projects Compass™ configure, pr
Slide 11: Conveying Solutions Advances Intelligent Motion Strategy
Conveying Solutions Advances Intelligent Motion Strategy Developing Leading Platform for Growth Specialty conveying provides growth platform: ~$4B TAM growing at 6% to 8% CAGR Higher margin profile Strong secular growth drivers: Supply chain automation Acceleration of e-commerce adoption Fragmented
Slide 12: Acquired Garvey Corporation December 1, 2021
Acquired Garvey Corporation December 1, 2021 Leader in accumulation technology complements Dorner’s conveying solutions Provides unique, patented technologies in the design, Products application, manufacturing and integration of accumulation systems Accumulators 46% of Revenue Industries highest qua
Slide 13: Secular Growth Markets Provide Strong Tailwinds
Secular Growth Markets Provide Strong Tailwinds New platform adds attractive vertical markets with enduring tailwinds FOOD, BEVERAGE & LIFE SCIENCES / PHARMA E-COMMERCE CONSUMER GOODS Custom designed sanitary and easy to Customizable designs built for precision, Single piece picking, robotics integr
Slide 14: Driving Organic Growth with New Products
Driving Organic Growth with New Products Delivering Innovation LINEAR ACTUATOR WITH TANDEM HOIST PRECISION PALLET SYSTEM INTELLI-MOTION™ • Improved facility safety for large • Unique, beltless zone control for pallet • Provides enhanced control and complex loads and tray handling position feedback c
Slide 15: Driving Innovation Through Automation
Driving Innovation Through Automation Intelli-Crane™ Solutions INTELLI-PROTECT™ SYSTEM INTELLI-LIFT™ AUTO DETECTION INTELLI-CONNECT™+ MOBILE APP • Protection boundaries for improved • Visible and audible warnings when off- • Provides critical crane and hoist facility safety center pick is detected s
Slide 16: Strong Track Record of Creating Value Through M&A
Strong Track Record of Creating Value Through M&A September 2015 January 2017 April 2021 December 2021 Acquisition of STAHL Acquisition of Dorner for $485M Acquisition of Magnetek, Inc. CraneSystems from Konecranes advances Intelligent Motion Acquisition of Garvey for for ~$182M added for ~$218M str
Slide 17: Strong Demand Driving Recovery
Strong Demand Driving Recovery ($ in millions) NET SALES Strong demand for intelligent motion material handling solutions driving recovery $809.2 $223.6 • Volume increased $9.1 million over Q3 FY21 $213.5 $216.1 $186.2 Acquisitions contribution to net sales: $649.6 $166.5 • Q1 FY22: $34.2 million •
Slide 18: Converting Revenue to Earnings
Converting Revenue to Earnings ADJUSTED EARNINGS PER SHARE Adjusted EBITDA margin benefits from accretive acquisitions and economic recovery $3.20 $0.69 $0.74 • 200 basis points contribution from acquisitions YTD $0.60 $0.60 $0.36 $1.57 $0.39 $0.53 $0.34 • Continue to target 19% Adjusted EBITDA marg
Slide 19: CMBS to Deliver Margin Expansion
CMBS to Deliver Margin Expansion 80/20 Critical Business Tool 80/20 Embedded in CMBS Focus Area: Product Line Simplification Product Line Simplification Raving fans and priority account program Customer list simplification Purchased parts Product SKUs Business Segmentation, Reduced by 33% to Down to
Slide 20: Cash Flow
Cash Flow ($ in millions) (2) Three Months Ended YTD Free Cash Flow 12/31/21 12/31/20 12/31/21 Net cash provided by $97.4 operating activities $5.8 $25.0 $23.7 $86.6 CapEx (2.8) (3.1) (9.5) $67.2 Free cash flow (FCF) $3.0 $21.9 $14.2 Note: Components may not add to totals due to rounding $34.8 • Pos
Slide 21: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Financial flexibility Dec. 31, March 31 • ~$190 million of liquidity 2021 2021 Cash and cash equivalents $ 106.7 $ 202.1 Pro-forma net debt leverage ratio of ~2.9x(1) Total debt • Net debt to net total capital: 35.7% 521.1 249.0 Total net debt 414.4 4
Slide 22: Orders and Backlog
Orders and Backlog ($ in millions) Continued Strength in Orders Record backlog of $294.7 million • 37% year-over-year increase driven by short cycle demand, • Up 12% in short-cycle and 2% projects businesses, sequentially project business and acquisitions • Dorner backlog up 8%, sequentially • Avg d
Slide 23: Q4 FY22 Outlook and Perspective
Q4 FY22 Outlook and Perspective Q4 FY2022 outlook • Expect Q4 FY22 net sales of approximately $235 million(1) Robust pipeline of opportunities • Strength in e-commerce, food & beverage, life sciences, aerospace and automotive • Process industries such as metals and paper remain strong • Internationa
Slide 24: Key Takeaways
Key Takeaways Transforming to a Top-tier, Secular Growth, Intelligent Motion Solutions Enterprise EVOLVED STRATEGY BLUEPRINT FOR GROWTH 2.0 DEFINES GROWTH FRAMEWORK COLUMBUS MCKINNON BUSINESS SYSTEM – CMBS – ENABLES SCALABILITY CONVEYING SOLUTIONS ADDS GROWTH CATALYST IN ATTRACTIVE MARKETS OPERATION
Slide 25: Sidoti Small Cap Virtual Conference
Sidoti Small Cap Virtual Conference March 2022 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Senior Vice President Finance and Chief Financial Officer © 2022 COLUMBUS McKINNON CORPORATION 25
Slide 26: Supplemental Information
Supplemental Information © 2022 COLUMBUS McKINNON CORPORATION 26
Slide 27: Launched Inaugural CSR Report
Launched Inaugural CSR Report ENVIRONMENTAL STEWARDSHIP CLIMATE CHANGE & ENERGY MANAGEMENT WASTE MANAGEMENT & RECYCLING SOCIAL RESPONSIBILITY EMPLOYEE HEALTH & SAFETY TALENT MANAGEMENT DEI PRODUCT QUALITY & INNOVATION PURPOSE, MISSION, VISION, VALUES COMMUNITY INVOLVEMENT Strategic Initiatives CUSTO
Slide 28: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 83% 81% 82.1% 75% 79% Q4 2021 77% 77.0% (Manufacturing) & 75% 70% 76.5% (Total) December 2021(1) 73% 71% 65% 69% 67% 60% 65% Manufacturing Tot
Slide 29: ISM Production Index
ISM Production Index Source: Institute for Supply Chain Management 70% 65% 60% 55% 59.2% December 2021 50% 45% 40% 35% 30% 25% © 2022 COLUMBUS McKINNON CORPORATION 29
Slide 30: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Year Quarter FY 2020 FY 2021 Q3 FY22 TTM Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 GAAP net income (loss) $ 59,672 $ 9,106 $ 27,419 $ 6,594 $ 9,585 $ (7,263) $ 15,203 $ 9,894 Add back: Amortization of intangibles 12,942 12,623
Slide 31: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Fiscal Year Quarter 2020 2021 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 GAAP net income (loss) $ 59,672 $ 9,106 $ 6,594 $ 9,585 $ (7,263) $ 15,203 $ 9,894 Add back (deduct): Income tax expense (benefit) 17,484 970 616 1,362 (2,517) 4,083 1,066 Interest a
Slide 32: Free Cash Flow & Free Cash Flow Conversion Reconciliation
Free Cash Flow & Free Cash Flow Conversion Reconciliation ($ in thousands, except per share data) Fiscal Year TTM 2019 2020 2021 Q3 FY 2022 Cash from operations $ 79,499 $ 106,795 $ 98,890 $ 50,669 Capital expenditures (12,288) (9,432) (12,300) (15,902) Free cash flow (FCF) $ 67,211 $ 97,363 $ 86,59
Slide 33: Global Enterprise
Global Enterprise AMERICAS EMEA APAC ~67% OF REVENUE ~28% OF REVENUE ~5% OF REVENUE Buffalo, NY Headquarters Milwaukee, WI Brighton, MI Chester, UK Power Control Workstations Hoist, Plate Clamps Conveying Solutions Hammonton, NJ Conveying Solutions Hangzhou, CN Damascus, VA Wuppertal and Hoist Julic
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