Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q1 FY2020 Earnings Presentation
20 slides from Columbus Mckinnon's earnings presentation, Jul 30, 2019
Slide 1: Q1 Fiscal Year 2020 Investor Presentation Financial Results Conference Call
July Sept 30, Q1 Fiscal Year 2020 Investor Presentation 2019 2017 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, 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: Margin Expansion & Strong Earnings
Margin Expansion & Strong Earnings Blueprint for Growth strategy driving earnings power Net income up 141%; adjusted EPS up nearly 10% Margin expansion: record adjusted EBITDA margin of 16.7% • Up 100 bps from previous record set in Q1 FY19 ROIC expanded to 11.5% Record gross margin of 35.5% • $0.5
Slide 4: Blueprint Phase II Delivering Results
Blueprint Phase II Delivering Results Simplify the Business 80/20 Process driving results • Contributed $3.4 million to operating income in quarter Streamlined organization delivered $1 million of RSG&A savings Divestitures accretive 30 bps to operating margin Operational Excellence Better cost disc
Slide 5: Net Sales
Net Sales ($ in millions) Q1 sales up 1.8% (adjusted for divestitures and FX) U.S. sales up 2.5%, adjusted for divestitures Quarter Sales Bridge $225.0 $217.1 $217.4 $216.7 $212.7 Quarter $11.1 $9.2 $9.0 Q1 FY19 Sales $ 225.0 $4.9 Divestitures (11.1) Q1 FY19 Sales adjusted for divestitures $ 213.9 V
Slide 6: Gross Profit & Gross Margin
Gross Profit & Gross Margin ($ in millions) Quarter Gross Profit Bridge Quarter Q1 FY2019 Gross Profit $ 79.6 Pricing, net of material cost inflation 2.5 Insurance Settlement 0.3 $79.6 $75.9 $76.0 $73.4 $75.6 Prior year STAHL integration costs 0.3 Productivity, net of other cost changes 0.2 Ohio pla
Slide 7: RSG&A
RSG&A ($ in millions) RSG&A at 21.2% of sales, 150 bps improvement Reorganization and cost discipline $51.1 reduces RSG&A by ~$2 million $47.3 $47.5 $49.0 $45.1 $3.7 $3.1 $3.3 $3.4 $2.8 Divestitures, prior year pro-forma $21.8 items and FX reduce RSG&A by $19.7 $20.4 $21.7 $19.6 $3.8 million $25.6 $
Slide 8: Operating Income & Adjusted OI Margin
Operating Income & Adjusted OI Margin ($ in millions) Q1 FY20 operating income increased $13.5 million, or 100% Divestitures reduced operating income $26.5 $28.1 $0.7 million $25.5 $24.9 $22.9 $27.0 Adjusted operating income grew 6.0%, or $24.8 $24.5 8.7% normalized for divestitures $13.5 Adjusted o
Slide 9: Quarterly Earnings Per Share
Quarterly Earnings Per Share GAAP Diluted EPS Net income: $0.83 $0.78 $18.6 million, 141% increase Y/Y $0.67 $0.33 $0.78 per diluted share, up 136% Y/Y ($0.03) Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Adjusted net income: Adjusted EPS $19.3 million, 10% increase Y/Y $0.81 per diluted share, up 9% Y/Y
Slide 10: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA Margin Achieved record adjusted EBITDA margin 15.1% 16.7% 16.7% in Q1 FY20, expanded 100 bps Y/Y 13.7% FY18 FY19 Q1 FY20 Adjusted ROIC net of cash increased (1) Return on Invested Capital (ROIC) 11.5% in Q1 FY20, expanded 210 bps Y/Y 11.2% 11.5% 8.7% FY18 FY19
Slide 11: Cash Flow
Cash Flow ($ in millions) Three Months Ended Note: Components may not add to totals due to rounding June 30, 2019 2018 Net cash provided by operating activities $(2.2) $8.1 Capital expenditures (CapEx) (1.9) (2.3) Operating free cash flow $(4.0) $5.8 Used $4.0 million in operating free cash flow (FC
Slide 12: Strong Balance Sheet
Strong Balance Sheet ($ in millions) Paid down $10 million of debt in CAPITALIZATION Q1 FY20 June 30, March 31, 2019 2019 Net debt to net total capital below 35% Cash and cash equivalents $ 55.7 $ 71.1 Net Debt / Adjusted TTM EBITDA Total debt 290.8 300.3 • 1.77x and better than target of 2.0x Total
Slide 13: Outlook
Outlook Q2 FY20 Outlook: Soft patch in short cycle industrial markets, but confident in our strategy Expect Q2 FY20 sales to be unchanged to slightly improved from Q2 FY19, which was approximately $206 million, adjusted for divestitures and FX at current rates • Headwind from FX expected to be appro
Slide 14: Supplemental Information
Supplemental Information © 2019 Columbus McKinnon Corporation 14
Slide 15: Businesses Sold
Businesses Sold Q1 Q2 Q3 Q4 ($ in thousands) FY19 FY19 FY19 FY19 FY19 Sales 11,104 9,233 8,983 4,875 34,195 Income from operations 665 1,461 1,007 532 3,665 1. The Tire Shredder business was divested December 28, 2018. 2. Crane Equipment & Service, Inc. was divested February 28, 2019. 3. Stahlhammer
Slide 16: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Income from operations $ 13,503 $ 24,825 $ 6,646 $ 24,468 $ 27,043 Add back (deduct): China plant closure — — — — 521 Ohio plant closure — — 200 1,273 506 Net (gain) loss on sales of busin
Slide 17: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Net income (loss) $ 7,706 $ 15,912 $ (782) $ 19,741 $ 18,579 Add back (deduct): China plant closure — — — — 521 Ohio plant closure — — 200 1,273 506 Net (gain) loss on sales of
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Net income (loss) $ 7,706 $ 15,912 $ (782) $ 19,741 $ 18,579 Add back (deduct): Income tax expense 1,774 4,576 3,111 860 5,162 Interest and debt expense 4,607 4,248 4,330 3,959 3,852 Investment (income) l
Slide 19: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 82% 85% 75.9% (Manufacturing) & 81% 77.9% (Total) 84% 80% June 2019(1) 79% 83% 82.8% 78% June 2019 82% 77% 76% 81% 75% 80% 74% 73% 79% Manufacturing T
Slide 20: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13692055 Telephone replay available through August 6, 2019 Webcast / PowerPoint / Replay available at www.cmworks.com/investors Transcript, when available, at www.cmworks.com/investors © 2019 Columbus McKinnon Corporation 20