Slide 1: Q2 Fiscal Year 2023 Financial Results Conference Call
Q2 Fiscal Year 2023 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer October 27, 2022
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 expected g
Slide 3: Executing Strategy: Earnings Power & Cash Generation
Executing Strategy: Earnings Power & Cash Generation Transformation driving growth, improving cost structure and leveraging market position Achieved record operating income and adjusted EBITDA margin • Revenue increased 8.5% on a constant currency basis • Record operating income of $27.4 million dem
Slide 4: Unlocking Potential: Key Strategic Objectives Dashboard
Unlocking Potential Key Strategic Objectives Dashboard STRENGTHEN, GROW, EXPAND AND REIMAGINE CMCO Integrated regional teams to simplify, collaborate and deliver on Intelligent Motion Solutions for material handling Delivered 7.5% YTD growth (constant currency) driven by focus on higher growth, secu
Slide 5: Operational Performance
Operational Performance YTD gross margin improved 90 bps ADJUSTED GROSS MARGIN PROGRESSION GROSS MARGIN LEVERS ~40% • Operational Excellence 37.4% • 80/20 simplification 36.5% 36.1% 35.4% • Volume/scale 35.0% 33.7% 34.1% • Pricing • Accretive acquisitions FY18 FY19 FY20 FY21 FY22 Q2 FY23 H1 FY27E TT
Slide 6: Business Model Transformation
Business Model Transformation Growth strategy substantially advances underlying portfolio FUTURE Revenue Growth Rate Specialty FY23 YTD Conveying Linear Motion Linear Automation Motion 13% 9% Automation Specialty Conveying 18% FY21 Lifting Solutions Linear Motion Lifting Solutions & Automation 60% L
Slide 7: Net Sales
Net Sales ($ in millions) Q2 sales up 8.5% on constant currency from prior-year Quarter Sales Bridge period driven by deliberate price actions and acquisition • U.S.: 5.8% pricing increase and 3.4% volume decrease Quarter • Non-U.S.: 3.7% pricing and 3.8% volume increase Q2 FY22 Sales $ 223.6 Acquis
Slide 8: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge $86.3 Quarter $85.5 $81.1 $82.5 Q2 FY22 Gross Profit $ 81.1 $75.1 Acquisition 4.5 37.5% 37.2% Price, net of material cost inflation 4.4 36.7% 36.7% Prior year business realignment costs 0.9 Sales volume and mix 0.5 Productivity, net o
Slide 9: RSG&A
RSG&A ($ in millions) Q2 FY23 RSG&A $0.7 million lower than trailing Q1 FY23 RSG&A as % of sales: 22.9% 24.8% 21.6% 24.1% 22.7% • Lower Selling costs reflects benefits of business realignment $54.8 and FX $53.5 $53.2 $52.5 $51.2 RSG&A increased $1.3 million y/y $3.9 $4.1 $3.8 $5.1 • Reflects $1.2 mi
Slide 10: Operating Income
Operating Income ($ in millions) Operating Income & Margin Record Q2 FY23 operating income of $27.4 million; operating margin of 11.8% $27.4 $23.7 $24.1 $22.8 • Reflects benefit of acquisition and pricing power which $15.3 offset $1.6 million negative impact from FX Adjusted operating income of $28.
Slide 11: Earnings Per Share
Earnings Per Share GAAP Diluted EPS Q2 FY23 GAAP net income of $14.1 million • Interest expense was $6.8 million, up $2.2 million, $0.53 negatively impacting EPS by $0.06 per diluted share y/y $0.49 $0.41 $0.34 • FX and investment losses had an approximate $0.04 per $0.29 diluted share negative impa
Slide 12: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA Margin Q2 FY23 record adjusted EBITDA margin of 16.8% • 80 bps contribution from acquisition 15.4% 15.6% • Progressing toward target of ~21% adjusted EBITDA margin in FY27 11.9% FY21 FY22 Q2 FY23 TTM Return on Invested Capital (ROIC)(1) Targeting ROIC in excess
Slide 13: Cash Flow
Cash Flow ($ in millions) (2) Free Cash Flow & Conversion Three Months Ended YTD 9/30/22 9/30/21 9/30/22 $97.4 Net cash provided by operating activities $17.3 $25.3 $6.1 $86.6 CapEx (2.3) (3.1) (5.3) Free cash flow (FCF) $15.0 $22.2 $0.8 Note: Components may not add to totals due to rounding $35.8 •
Slide 14: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Pro-forma net debt leverage ratio of ~2.8x(1) September 30, June 30, • Improved 10 bps 2022 2022 • Net debt to net total capital improved 100 bps y/y to 33.9% Cash and cash equivalents $ 88.9 $ 85.7 Reduced debt $10 million in the quarter and Total de
Slide 15: Orders and Backlog
Orders and Backlog ($ in millions) Orders Reflect Demand Cycle Due to Price Action Solid Backlog at $327.8 million • Declined 4% y/y on constant currency basis • Backlog down 7% sequentially includes reduction in past due • Declined sequentially 16.8% including approximately 700 bps orders impact du
Slide 16: On Track to Deliver to Plan
On Track to Deliver to Plan Q3 FY2023 outlook • Expect Q3 FY23 net sales of approximately $225 million to $235 million,(1) based on current exchange rates. Demonstrating success with innovation and collaboration Focused on improving customer experience Continued strength in F&B, Automotive/EV, Heavy
Slide 17: Beyond the Blueprint
Beyond the Blueprint Strategic Plan to Transform Columbus McKinnon into a Global Intelligent Motion Enterprise ✓ Advances CMCO to achieve target ~$1.5 billion in revenue and ~21% EBITDA margin in FY27 ✓ Evolves the enterprise from cyclical industrial to top-tier, secular growth, intelligent motion s
Slide 18: Q2 Fiscal Year 2023 Financial Results Conference Call
Q2 Fiscal Year 2023 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer October 27, 2022
Slide 19: Supplemental Information
OW Supplemental Information INTELLIGENT MOTION PURPOSE IN MOTION
Slide 20: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13733206 Telephone replay available through November 3, 2022 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com 20 © 2022 COLUMBUS MCKINNON CORPORA
Slide 21: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 GAAP gross profit $ 81,135 $ 75,057 $ 85,475 $ 82,519 $ 86,310 Add back (deduct): Acquisition inventory step-up expense — 515 1,546 — — Product liability settlement — 2,850 — — — Acquisition amortiz
Slide 22: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Fiscal Year TTM 2018 2019 2020 2021 2022 Q2 FY23 GAAP gross profit $ 285,061 $ 304,997 $ 283,186 $ 220,225 $ 315,730 $ 329,361 Add back (deduct): Product liability settlement — — — — 2,850 2,850 Acquisition amortization of backlog — — — — 2,100 2
Slide 23: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Fiscal Year Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 2021 2022 GAAP income from operations $ 23,660 $ 15,316 $ 24,059 $ 22,817 $ 27,372 $ 42,255 $ 73,781 Add back (deduct): Acquisition deal and integration costs 632 370 229 86 19
Slide 24: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 FY 2021 FY 2022 GAAP net income (loss) $ 15,203 $ 9,894 $ 11,826 $ 8,391 $ 14,114 $ 9,106 $ 29,660 Add back (deduct): Amortization of intangibles 6,285 6,254 6,635 6
Slide 25: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year TTM Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 2021 2022 Q2 FY23 GAAP net income (loss) $ 15,203 $ 9,894 $ 11,826 $ 8,391 $ 14,114 $ 9,106 $ 29,660 $ 44,225 Add back (deduct): Income tax expense (benefit) 4,083 1,066 6,154 8,893 4,953
Slide 26: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in thousands) TTM Fiscal Year Q2 FY23 2021 2022 GAAP income from operations $ 89,564 $ 42,255 $ 73,781 Add back (deduct): Acquisition deal and integration costs 704 3,951 10,473 Acquisition inventory step-up expense 2,061 — 5,042 Product liability
Slide 27: Free Cash Flow & Free Cash Flow Conversion Reconciliation
Free Cash Flow & Free Cash Flow Conversion Reconciliation ($ in thousands) TTM Fiscal Year Q2 FY23 2020 2021 2022 Cash from operations $ 37,088 $ 106,795 $ 98,890 $ 48,881 Capital expenditures (11,640) (9,432) (12,300) (13,104) Free cash flow (FCF) $ 25,448 $ 97,363 $ 86,590 $ 35,777 GAAP net income
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% 80.0% (Manufacturing) 82.4% 81% 80.3% (Total) Q3 2022 75% Sept 2022(1) 79% 77% 70% 75% 73% 71% 65% 69% 67% 60% 65% Series1 Series2 (1) Num
Slide 29: ISM Production Index
ISM Production Index Source: Institute for Supply Chain Management 70% 65% 60% 55% 50% 50.6% September 2022 45% 40% 35% 30% 25% 29 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 30: Unlocking CMCO's Potential
Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO CMBS GROWTH FRAMEWORK TRANSFORMATION Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value 30 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 31: Q2 Fiscal Year 2023 Financial Results Conference Call
Q2 Fiscal Year 2023 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer October 28, 2022