Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q3 2025 Earnings Presentation
38 slides from Columbus Mckinnon's earnings presentation, Feb 10, 2025
Slide 1: Q3 Fiscal 2025 Earnings & Kito Crosby Deal Announcement
February 10, 2025 Q3 Fiscal 2025 Earnings & Kito Crosby Deal Announcement David Wilson Gregory Rustowicz Kristine Moser President & Chief Executive Vice President Finance Vice President, Investor Relations Executive Officer & Chief Financial Officer & Treasurer
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation and the accompanying oral discussion contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward- looking statements are generally identified by the use of forward-looking terminology, includin
Slide 3: Q3 Fiscal 2025 Financial Results Conference Call
Q3 Fiscal 2025 Financial Results Conference Call
Slide 4: Q3 FY25 Quarterly Review
Q3 FY25 Quarterly Review Net sales of $234.1 million with 7.6% operating margin or 10.9% on an adjusted basis1 Orders decreased 4% versus the prior year driven by a 6% decrease in short-cycle orders • EMEA orders increased 1% driven by strength in montratec® • Strength in precision conveyance and li
Slide 5: Orders and Backlog
Orders and Backlog ($ in millions, $M) Orders $290.0 2.00x Mixed order performance; Book to bill of 0.95x 1.80x $258.1 $261.6 Orders down 4% Y/Y driven by 6% decline in short-cycle $252.6 $270.0 1.60x 1.40x $231.2 Strength in precision conveyance and linear motion, up 16% $250.0 $222.9 1.20x and
Slide 6: Net Sales
Net Sales ($ in millions, $M) Q3 FY25 Net Sales Bridge Q3 FY25 net sales decreased Y/Y due to: Short-cycle down 9% Y/Y impacted by U.S. policy uncertainty $254.1 $2.3 and lower demand in Europe $234.1 Timing of EMEA project phasing due to delays in receiving $(21.3) $(1.0) final design specifica
Slide 7: Gross Profit & Margin
Gross Profit & Margin ($ in millions, $M) Q3 FY25 Gross Profit Q3 FY25 gross margin of 35.1% $93.9 $3.9 $82.1 Gross profit of $82.1M impacted by: ($9.9) ($3.1) ($2.0) ($0.4) ($0.3) Sales volume & mix Factory consolidation and Monterrey, MX start-up costs Gross 36.9% 35.1% Margin Favorable pr
Slide 8: RSG&A
RSG&A ($ in millions, $M) Quarterly RSG&A Q3 FY25 RSG&A decreased $2.6M Y/Y R&D costs decreased $1.4M Y/Y as we benefit from our $59.5 $61.4 $60.4 $56.9 center of excellence strategy $7.1 $56.4 $6.7 $6.2 $5.3 R&D G&A cost decreased $2.0M Y/Y driven by: $6.1 Cost saving initiatives Lower ince
Slide 9: Operating Income
Operating Income ($ in millions, $M) Quarterly Operating Income Q3 FY25 operating income of $17.7M with operating margin of 7.6%, down Y/Y due to: $9.9M impact from lower sales volume and mix $31.1 $29.7 $3.2M of higher factory consolidation and Monterrey, MX start- $27.0 up costs $25.7 $25.6 $2
Slide 10: Earnings Per Share
Earnings Per Share Quarterly Diluted EPS Q3 FY25 net income of $4.0M, declined Y/Y due to: $6.6M impact from lower sales volume and mix $2.9M unfavorable FX $0.75 $2.1M Factory consolidation and Monterrey start-up costs $0.74 $0.70 $0.62 $1.3M for higher product liability costs due to favora
Slide 11: Adjusted EBITDA
Adjusted EBITDA ($ in millions, $M) Quarterly Adjusted EBITDA1 Q3 FY25 Adjusted EBITDA1 of $37.8M, decreased due to: $9.9M impact from lower sales volume and mix $43.0 $2.0M of higher product liability costs due to favorable adjustment in prior year $41.3 Partially offset by lower RSG&A costs
Slide 12: Cash Flow
Cash Flow ($ in millions, $M) Free Cash Flow1 & FCF Conversion1 Q3 FY25 net cash provided by operating activities of $11.4M and Free Cash Flow1 of $6.2M behind $86.6 prior year due to: $71.0 $11.3M higher inventory due to timing of large orders and higher materials stocking levels to facilitate th
Slide 13: FY2025 Guidance
FY2025 Guidance FY25 Net Sales Growth Mid-single digit decrease Y/Y Adjusted EPS1 Low-teens decrease Y/Y Capital Expenditures $18 to $22 million Net Leverage Ratio1 ~3.0x Guidance Assumptions: FY25: ~$32M of interest expense, ~$30M of amortization, an effective tax rate of ~25% and 29.0M diluted a
Slide 14: Columbus McKinnon to Acquire Kito Crosby
Columbus McKinnon to Acquire Kito Crosby Business Combination Delivers Compelling Value Creation
Slide 15: Highly Compelling Combination for All Stakeholders
Highly Compelling Combination for All Stakeholders + Holistic Provider of Intelligent Motion Solutions in Materials Handling $2B+ >30% 23% >100% ~8x Revenue Of Sales from Pro Forma Adjusted Pro Forma Free Cash TTM Adjusted EBITDA Consumables EBITDA Margin1,2 Flow Conversion1,3 Multiple Net of Synerg
Slide 16: Delivering Value Creation for Shareholders
Delivering Value Creation for Shareholders + PRO FORMA INCLUDING SYNERGIES2 $1.0B $2.1B >30% 40% Hardware and Adjusted Revenue Revenue Consumables Sales Gross Margin1 $153M $486M $70M >100% Run-rate Pre-Tax Free Cash Adjusted EBITDA1 Adjusted EBITDA2 Net Cost Synergies Flow Conversion1,3 16% 23% ~70
Slide 17: Kito Crosby At-a-Glance
Kito Crosby At-a-Glance KITO CROSBY BY THE NUMBERS KEY INDUSTRY BRANDS KEY PRODUCTS DIVERSIFIED END MARKETS IN KEY VERTICALS1 2 Other Chains & Food 10% 6% Manufacturing Fittings Power & 32% 4,000 600K+ Renewables 7% Channel End-Users Non-Res REVENUE Partners Trained Shackles Construction 7% Energy I
Slide 18: Significant Strategic and Financial Benefits
Significant Strategic and Financial Benefits 1 Enhances scale and strengthens competitive position 2 Growth supported by tailwinds from industry megatrends 3 Highly attractive financial profile 4 Value creation with significant synergies 5 Strong cash flow enables de-leveraging and capacity to reinv
Slide 19: Enhances Scale and Strengthens Competitive Position Across Products and Markets
1 Enhances Scale and Strengthens Competitive Position Across Products and Markets Increased End Market and Geographic Diversity Tethered to Markets With Strong Tailwinds VERTICAL END MARKETS1: GEOGRAPHIES1: PRODUCT PLATFORMS1: Precision Other 2 Aerospace & 9% LATAM Conveyance Government APAC 4% Auto
Slide 20: Enhances Scale Delivering on Our Growth Framework
1 Enhances Scale Delivering on Our Growth Framework Positioning the Company for the Next RE-IMAGINE CORE Phase of its Value Creation Journey • Geographic expansion: CMCO to expand across APAC and Kito Crosby to expand across LATAM and EMEA EXPAND • Cash flow generation enables reinvestment CORE in t
Slide 21: Enhances Scale Delivering Commercial and Operational Excellence
1 Enhances Scale Delivering Commercial and Operational Excellence SIGNIFICANT BENEFITS TO SCALE Application of CMBS drives commercial and operational excellence Enhanced breadth and depth of product offering with best-in-class customer service Broad market presence across key vertical markets and ge
Slide 22: Growth Supported with Tailwinds from Industry Megatrends
2 Growth Supported with Tailwinds from Industry Megatrends Growth Supported by Exposure to Secular Mega Trends Across the Full Portfolio Nearshoring & Supply Chain Resilience Lifting Automation • Broad increased global • Key enabler of productivity Labor Shortages demand for lifting solutions and sa
Slide 23: Highly Attractive Financial Profile Through Strategic Combination
3 Highly Attractive Financial Profile Through Strategic Combination Key Highlights: + FY2025E Pro Forma1,2 Significantly improved scale, with revenue of $2B+ Revenue ($M) $1.0B $1.1B $2.1B Improved profitability and cash flow with synergies Adjusted Gross Margin1 (%) 37% 39% 40% More geographi
Slide 24: Financial Profile Accelerates Realization of Investor Day Targets
3 Highly Attractive Financial Profile Accelerates the Realization of Investor Day Targets Adjusted Gross Adjusted EBITDA Sales Margin1 Margin1 $1.5B 40% 21% 2022 Investor Day FY 2027 E Pro Forma $2.1B 40% 23% (Including Synergies) Achieved Investor Day Targets Ahead of Target 1 Adjusted Gross Margin
Slide 25: Value Creation with Significant Synergies
4 Value Creation with Significant Synergies Strong Track Record of Successful Integrations and Cost Synergy Realization Net Cost Synergies of ~$70M Annually Additional Upside from Revenue Synergies 100% Increase breadth and depth of product offerings to existing customers Geographic expansion op
Slide 26: Value Creation with Significant Synergies Enabled by CMBS
4 Value Creation with Significant Synergies Enabled by CMBS Framework To Deliver Value to Customers and Shareholders COLUMBUS MCKINNON BUSINESS SYSTEM CMBS ENHANCED BY COLLECTIVE STRENGTHS: Best practices in standard work, including fulfilment, delivery and operational execution Excellent custom
Slide 27: Strong Cash Flow Enables De-leveraging and Capacity to Reinvest
5 Strong Cash Flow Enables De-leveraging and Capacity to Reinvest Demonstrated History of Net Leverage Ratio Reduction Following Acquisitions PRO FORMA NET LEVERAGE RATIO1,2,3 NET LEVERAGE RATIO1,2,3 CAPITAL ALLOCATION PRIORITIES 4.8x4 Primary allocation strategy for significant Free Debt Cash Flo
Slide 28: Supporting CMCO on its Transformation Journey
Supporting CMCO on its Transformation Journey Long-Term, Value-Added Partner with Significant Experience in the Public Markets PRO FORMA NET LEVERAGE RATIO1,2,3 CD&R Highlights Distinctive Operating Model Singular Focus on Private Equity 47 120+ Trusted and Reliable Partner 80% Fund Value Creati
Slide 29: Transaction Overview
Transaction Overview CONSIDERATION CMCO to acquire 100% of Kito Crosby in an all-cash transaction at an estimated value of $2.7B & VALUATION Represents ~8x Trailing-Twelve Month Adjusted EBITDA1 inclusive of synergies J.P. Morgan Securities provided a committed bridge financing package of $3.1
Slide 30: Significant Strategic and Financial Benefits
Significant Strategic and Financial Benefits 1 Enhances scale and strengthens competitive position 2 Growth supported by tailwinds from industry megatrends 3 Highly attractive financial profile 4 Value creation with significant synergies 5 Strong cash flow enables de-leveraging and capacity to reinv
Slide 31: Supplement
Supplement
Slide 32: Non-GAAP Measures
Non-GAAP Measures The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this presentation to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The C
Slide 33: Non-GAAP Measures: Adjusted Gross Profit and Adjusted Gross Margin
Non-GAAP Measures: Adjusted Gross Profit and Adjusted Gross Margin ($ in thousands) Quarter Q3 FY24 Q3 FY25 Gross profit $ 93,897 $ 82,097 Add back (deduct): Business realignment costs 150 526 Factory and warehouse consolidation costs — 556 Monterrey, MX new factory start-up costs 435 3,038 Adjusted
Slide 34: Non-GAAP Measures: Adjusted Operating Income and Adjusted Operating Margin
Non-GAAP Measures: Adjusted Operating Income and Adjusted Operating Margin ($ in thousands) Quarter Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Income from operations $ 26,912 $ 25,437 $ 21,147 $ 10,805 $ 17,690 Add back (deduct): Acquisition deal and integration costs 113 3 — — — Business realignment c
Slide 35: Non-GAAP Measures: Adjusted Net Income and Adjusted EPS
Non-GAAP Measures: Adjusted Net Income and Adjusted EPS ($ in thousands, except per share data) Quarter Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Net income $ 9,728 $ 11,809 $ 8,629 $ (15,043) $ 3,960 Add back (deduct): Amortization of intangibles 7,486 7,525 7,500 7,547 7,501 Acquisition deal and int
Slide 36: Non-GAAP Measures: Adjusted EBITDA and Adjusted EBITDA Margin
Non-GAAP Measures: Adjusted EBITDA and Adjusted EBITDA Margin ($ in thousands) Quarter Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 Net income $ 9,728 $ 11,809 $ 8,629 $ (15,043) $ 3,960 Add back (deduct): Income tax expense (benefit) 3,911 2,497 3,421 (4,908) 1,929 Interest and debt expense 9,952 9,169
Slide 37: Non-GAAP Measures: Free Cash Flow and Free Cash Flow Conversion
Non-GAAP Measures: Free Cash Flow (FCF) and Free Cash Flow Conversion ($ in thousands) Year-to-Date Quarter Fiscal Year TTM Q3 FY24 Q3 FY25 Q3 FY24 Q3 FY25 2021 2022 2023 2024 Q3 FY25 Net cash provided by (used for) $ 28,591 $ 10,000 $ 29,149 $ 11,370 $ 98,890 $ 48,881 $ 83,636 $ 67,198 $ 48,607 ope
Slide 38: Non-GAAP Measures: Net Debt and Net Leverage Ratio
Non-GAAP Measures: Net Debt and Net Leverage Ratio ($ in thousands) Trailing Twelve Month Net Debt is defined in the credit agreement as total debt plus standby letters of credit, net of cash and cash equivalents. Net Q3 FY24 Q3 FY25 $ 48,711 Leverage Ratio is defined as Net Debt divided by the Cred