Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q4 FY2018 Earnings Presentation
20 slides from Columbus Mckinnon's earnings presentation, May 30, 2018
Slide 1: Q4 Fiscal Year 2018 Financial Results Conference Call
Q4 Fiscal Year 2018 MaySept 30, Investor Presentation 20182017 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 contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause th
Slide 3: Notable Growth in Quarter and Fiscal Year
Notable Growth in Quarter and Fiscal Year Sales grew 16.6% in quarter to $214.1 million Organic sales growth was 4.2%; continued strength in all markets Execution driven focus provided by E-PAS™ operating system Achieved record gross margin of 34.8% in the quarter Influenced by favorable proje
Slide 4: Blueprint 2021 Phase I Accomplishments
Blueprint 2021 Phase I Accomplishments STAHL value creation Achieved $6 million of synergies in the year, ahead of $5 million target Now expecting $15 million in total savings Leverage Magnetek technology Set path for Smart Hoist: Launched Shopstar VS and Prostar VS Recently launched full-fe
Slide 5: Net Sales
Net Sales ($ in millions) Y/Y + 16.6% Growth driven by organic volume and STAHL acquisition $212.8 $214.1 $208.7 $203.7 4.2% Q4 organic growth (FX adjusted) $183.7 Strong organic growth in U.S.: 5.9% • Vertical markets remain strong Non-U.S. organic growth of 2.0%: Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY1
Slide 6: Gross Profit & Adjusted Gross Margin
Gross Profit & Adjusted Gross Margin (1) ($ in millions) Record gross margins in Quarter and Fiscal Year Bridge quarter and year Q4 FY FY18 2018 $74.0 $69.5 $69.9 $69.1 Fiscal 2017 Gross Profit $ 50.3 $ 192.9 $59.2 $0.2 $0.1 STAHL acquisition 5.6 53.8 $8.9 Sales volume and mix 2.7 13.1 $50.3 $69.3 $
Slide 7: RSG&A
RSG&A ($ in millions) Q4 FY 2018: Pro-forma items affect RSG&A Pro-forma items: $4.9 million, includes integration, debt $54.3 $49.5 $48.1 $51.0 repricing and legal costs for insurance recovery $45.6 $3.8 $2.9 $3.3 $2.9 $3.7 Excluding pro-forma adjustments, RSG&A was $19.4 $22.2 $22.9 $25.1 $18.9 $4
Slide 8: Operating Income & Non-GAAP Margin
(1) Operating Income & Non-GAAP Margin ($ in millions) Q4 FY18 adjusted operating income up 22% over prior year $21.4 $16.9 $20.2 $20.6 $18.2 $1.4 $0.7 $4.3 Adjusted operating margin improved 40 basis $4.0 points $20.1 $20.0 $19.6 $16.3 $14.2 STAHL synergies of $6 million achieved in 9.6%* 9.2%* 1
Slide 9: Quarterly Earnings Per Share
Quarterly Earnings Per Share ($ in millions) Net income: GAAP Diluted EPS $8.5 million or $0.36 per diluted share $0.54 $0.51 Tax rate for quarter was 23.5% $0.36 Non-GAAP adjusted net income (1) : ($0.22) $12.0 million ($0.46) 20% increase over Q4’17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 $0.5
Slide 10: FY 2018 Earnings Per Share
FY 2018 Earnings Per Share ($ in millions) Net income was $22.1 million (1) GAAP and Non-GAAP 1 Adjusted EPS Non-GAAP adjusted net income was $46.8 million Adjusted EBITDA 3 margin was 13.9% $2.01 vs. 11.7% in prior year $1.47 ROIC improved to 8.9% from 6.4% Full year tax rate was 55.6% $0.95 $0.43
Slide 11: Working Capital
Working Capital Working capital as % of sales Working Capital decreased 70 bps from prior year period as a Percent of Sales to 17.9% DPO increased 2.3 days 19.0% 18.6% 18.5% 17.9% Higher accrued liabilities favorably impacted 17.4% working capital/sales by 2.5% (1) (1) (1) (1) Driven by higher
Slide 12: Strong Cash Flow
Strong Cash Flow Year Ended Note: Components may not add to totals due to rounding March 31, 2018 2017 Net cash provided by operating activities $ 69.7 $ 60.5 Capital expenditures (CapEx) (14.5) (14.4) Operating free cash flow $ 55.1 $ 46.1 Strong operating free cash flow $55.1 million in operatin
Slide 13: De-levering Balance Sheet
De-levering Balance Sheet Debt reduction in FY 2018 Achieved increased target of debt CAPITALIZATION pay down of $60 million in FY18 March 31, March 31, 2018 2017 Surpassed target of <3x Net Debt/ Adjusted EBITDA (1) Cash and cash equivalents $ 63.0 $ 77.6 Currently at 2.6x Total debt 363.3 42
Slide 14: Advancing Blueprint 2021
Advancing Blueprint 2021 Strategic goals: Further pivot from late stage industrial to industrial technology company Expand EBITDA margin: >15% through cycle Improve ROIC: >10% ROIC Advancing Phase II: Four areas of focus Simplify the business Improve productivity Ramp the growth engine
Slide 15: Supplemental Information
Supplemental Information © 2018 Columbus McKinnon Corporation 15
Slide 16: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13678787 Telephone replay available through June 6, 2018 Webcast / PowerPoint / Replay available at www.cmworks.com/investors Transcript, when available, at www.cmworks.com/investors © 2018 Columbus McKinnon Corporation 16
Slide 17: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Fiscal Year Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 FY 2017 FY 2018 Gross Profit $ 50,335 $ 69,308 $ 71,619 $ 69,045 $ 74,602 $ 192,932 $ 284,574 Add back (deduct): Acquisition inventory step-up expense 8,852 — — — — 8,852 — STAHL integra
Slide 18: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Fiscal Year Q4 Q1 Q2 Q3 Q4 FY 2017 FY 2018 FY17 FY18 FY18 FY18 FY18 Income (loss) from operations $(3,164) $20,015 $19,587 $14,173 $16,324 $25,973 $70,099 Add back (deduct): Acquisition inventory step-up expense 8,852 — — — — 8,
Slide 19: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 FY 2017 FY 2018 Net income (loss) $ (4,738) $ 11,656 $ 12,508 $(10,565) $ 8,466 $ 8,984 $ 22,065 Add back (deduct): Acquisition inventory step-up expense 8,852 — — —
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year Q4 FY17 Q4 FY18 FY 2017 FY 2018 Net income (loss) $ (4,738) $ 8,466 $ 8,984 $ 22,065 Add back (deduct): Income tax expense/benefit (3,688) 2,598 4,043 27,620 Interest and debt expense 3,568 4,661 10,966 19,733 Cost of debt refinanci