Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Sidoti Virtual Investor Conference (June 2021)
37 slides from Columbus Mckinnon's conference presentation, Jun 23, 2021
Slide 1: Sidoti Virtual Investor Conference
Sidoti Virtual Investor Conference June 23, 2021 Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer 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: Who We Are: Columbus McKinnon
Who We Are: Columbus McKinnon LEADING WORLDWIDE SUPPLIER OF INTELLIGENT MOTION SOLUTIONS FOR MATERIAL HANDLING Market Capitalization $1.3 billion Average Volume (3 mo.) 179,440 Recent Price / 52-Week Range $45.98 / $28.98 - $57.06 Common Shares Outstanding 28.3 million • Headquartered in Buffalo, Ne
Slide 4: Blueprint for Growth 2.0
Blueprint for Growth 2.0 Pivot Columbus McKinnon toward growth: Organic and Inorganic Strategy to deliver growth, financial performance and shareholder value 4
Slide 5: Columbus McKinnon Business System
Columbus McKinnon Business System Strategic Framework and Core Competencies 1. People & Values 6. Commercial / Selling 7. Product Development 2. Strategic Planning 8. Operations 3. Marketing 9. Finance 4. Product Management 10. Data & Systems 5. M&A A connected Columbus McKinnon Business System (CMB
Slide 6: Our Growth Framework
Our Growth Framework Rethink current addressable markets and target further strategic expansion through innovative approaches Improve vertical market, channel and geographic access Take greater marker share through product localization, new product development and advancements in automation Strength
Slide 7: Business Model Evolution
Business Model Evolution Growth Strategy Substantially Advances Underlying Portfolio Revenue Pro forma Growth Rate with Dorner Lifting Solutions 85% Organic CMCO Industrial Products 42% Conveying Solutions 15% Crane Solutions 46% Engineered Products 12% EBITDA Multiple Strategy evolving Columbus McK
Slide 8: Lifting Solutions
Lifting Solutions Lifting Solutions 85% Crane Solutions, Industrial Products and Engineered Products Lifting capacity from 1/8 ton to ~140 tons Standard Products: #1 U.S. market position in hoists Reliable, high-quality products Engineered Solutions: Large tonnage projects Compass™ configure, price
Slide 9: New: Conveying Solutions
New: Conveying Solutions Conveying Solutions 15% High-Precision Conveying Systems for Attractive Growth Markets Specialty conveying platform for growth… ✓ $5B TAM growing at 6% to 8% CAGR ✓ Strong secular growth drivers • Supply chain automation • Acceleration of e-commerce adoption ✓ Fragmented mar
Slide 10: Acquired Conveying Solutions Platform April 2021
Acquired Conveying Solutions Platform April 2021 High-Precision Conveying Systems • Dorner Mfg. Corp.: headquartered in Hartland, WI; approximately 400 global employees Product & Customer Examples Flexible Chain Low Profile • 85% of revenue generated in North America • Differentiated solutions enhan
Slide 11: Acquisition Advances Intelligent Motion Strategy
Acquisition Advances Intelligent Motion Strategy Innovation and Differentiated Technology Provides Competitive Advantages Provides a platform to accelerate profitable growth… High- Replace- Platform Growing New product growth ment for further installed development end cycle M&A base markets ✓ Dorner
Slide 12: Conveying Systems Expand Reach in Industrial Automation
Conveying Systems Expand Reach in Industrial Automation Creates Multiple Pathways for Future Growth Servo Drive / Motor Overhead Lifting Auto. Storage & Retrieval Controls Robotics Actuators RFID/ Scanners Vision Systems Conveying Systems Sensors Precision conveying systems interface with nearly eve
Slide 13: Adds Scale and Enhanced Margins
Adds Scale and Enhanced Margins ($ in millions) TTM 3/31 REVENUE AND ADJUSTED EBITDA Additional platform of precision conveying solutions to drive greater scale $114 Provides higher margin profile $650 $763 $5 million of annualized cost synergies expected over two years CMCO Dorner Pro forma • Suppl
Slide 14: A Conveying Solutions Leader in Secular Growth Markets
A Conveying Solutions Leader in Secular Growth Markets New platform adds attractive vertical markets with enduring tailwinds FOOD PROCESSING 20% OF SALES* LIFE SCIENCES 17% OF SALES* E-COMMERCE 11% OF SALES* Custom designed sanitary and easy to Customizable designs built for precision, Single piece
Slide 15: Driving Organic Growth with New Products
Driving Organic Growth with New Products Delivering Innovation TANDEM HOIST UTILITY LEVER HOIST TECHNOLOGY CONVEYOR • Improved facility safety for large • Safety brake prevents unexpected • Unique, beltless zone control for pallet complex loads load release and tray handling • Available in Compass™
Slide 16: Driving Innovation Through Automation
Driving Innovation Through Automation Intelli-Crane™ Solutions INTELLI-GUIDE™ SYSTEM INTELLI-PROTECT™ SYSTEM INTELLI-LIFT™ AUTO DETECTION INTELLI-CONNECT™ MOBILE APP • Maximized productivity through • Protection boundaries for • Visible and audible warnings • Provides critical crane and hoist automa
Slide 17: Strong Track Record of Creating Value Through M&A
Strong Track Record of Creating Value Through M&A September 2015 January 2017 April 2021 Acquisition of STAHL CraneSystems from Konecranes for ~$218M Acquisition of Dorner for $485M Acquisition of Magnetek, Inc. for strengthens leading global position in advances Intelligent Motion strategy and ~$18
Slide 18: Solid Financial Performance Despite Global Pandemic
Solid Financial Performance Despite Global Pandemic NET SALES OPERATING INCOME & MARGIN $876.3 $89.8 $839.4 $809.2 $68.3 $69.4 $637.1 $649.6 $42.3 $23.7 $601.1 $801.1 $842.1 $809.2 $649.6 3.7% 8.1% 7.9% 11.1% 6.5% 9.4% 11.4% 12.1% 9.1% FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Sales Divestit
Slide 19: Continue to Drive Margin Expansion
Continue to Drive 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 25% to Down
Slide 20: EPS and Adjusted EBITDA
EPS and Adjusted EBITDA EARNINGS PER SHARE Solid adjusted EBITDA margin during $2.74 $2.78 challenging environment $2.01 • Continuing to target 19% Adjusted EBITDA margin post $1.47 COVID-19 recession $1.16 • Expect to achieve target during FY 2023 $0.43 $0.95 $1.80 $2.50 $0.38 FY17 FY18 FY19 FY20 F
Slide 21: Cash Flow
Cash Flow Strong cash generation ($ in millions) Free Cash Flow(2) FY18 FY19 FY20 FY21 3/31/18 3/31/19 3/31/20 12/31/20 Net cash provided $97.4 by operating $69.7 $79.5 $106.8 $98.9 activities $86.6 CapEx (14.5) (12.3) (9.4) (12.3) $67.2 Free cash flow $55.1 $67.2 $97.4 $86.6 $55.1 (FCF)(2) Note: Co
Slide 22: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Successfully financed acquisition with equity and debt March 31, March 31, Pro forma • Initial bridge loan of $650 million to fund acquisition March 31, 2021 2020 2021 • Issued equity to de-lever balance sheet Cash and cash equivalents $ 202.1 $ 114.5
Slide 23: ESG Priorities
ESG Priorities Aligning stakeholder priorities and what’s critical to CMCO • CLIMATE CHANGE AND • EMPLOYEE HEALTH & • ETHICS & COMPLIANCE ENVIRONMENTAL STEWARDSHIP GOVERNANCE & ETHICS SOCIAL RESPONSIBILITY ENERGY MANAGEMENT SAFETY • ENTERPRISE RISK • WASTE MANAGEMENT & • TALENT MANAGEMENT MANAGEMENT
Slide 24: Outlook and Perspective
Outlook and Perspective Q1 FY2022 outlook • Expect Q1 FY22 net sales in range of $212 million to $217 million with Dorner Dorner entering fiscal 2022 with strong backlog • Strong bookings trend in e-warehousing, life sciences and food processing • Confident in growth and profit potential Addressing
Slide 25: Orders and Backlog
Orders and Backlog Outstanding orders of $208.8 million Backlog of $171.7 million, up 31% • 24% sequential and 6% year-over-year increases • Year-over-year increase of total backlog driven by both project and short-cycle businesses • Up 32% in project business and 16% short cycle, sequentially • Bac
Slide 26: Key Takeaways
Key Takeaways Expanding and Reimagining our Core EVOLVED STRATEGY BLUEPRINT FOR GROWTH 2.0 DEFINES GROWTH FRAMEWORK COLUMBUS MCKINNON BUSINESS SYSTEM – CMBS – ENABLES SCALABILITY CONVEYING SOLUTIONS ADDS GROWTH CATALYST IN ATTRACTIVE MARKETS OPERATIONAL EXCELLENCE DRIVES STRONGER MARGIN PROFILE AS E
Slide 27: Sidoti Virtual Investor Conference
Sidoti Virtual Investor Conference June 23, 2021 27
Slide 28: Supplemental Information
Supplemental Information 28
Slide 29: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 82.5% 83% Q2 2021 81% 75% 79% 77% 70% 75% 75.6% (Manufacturing) & 73% 75.2% (Total) May 2021(1) 71% 65% 69% 67% 60% 65% Manufacturing Total (1
Slide 30: ISM Production Index
ISM Production Index Source: Institute of Supply Chain Management 70% 65% 60% 58.5% May 2021 55% 50% 45% 40% 35% 30% 25% 30
Slide 31: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Fiscal Year FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 GAAP income from operations $ 23,725 $ 68,331 $ 69,442 $ 89,824 $ 42,255 Add back (deduct): Factory closures — — 1,473 4,709 3,778 Business realignment costs — — 1,906 2,831 1,470 Insu
Slide 32: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Fiscal Year FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Net income (loss) $ 8,984 $ 22,065 $ 42,577 $ 59,672 $ 9,106 Add back: Non-cash pension settlement expense — — — — 19,046 Factory closures — — 1,473 4,709 3,778 Business rea
Slide 33: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Fiscal Year FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 GAAP net income $ 8,984 $ 22,065 $ 42,577 $ 59,672 $ 9,106 Add back (deduct): Income tax expense (benefit) 4,043 27,620 10,321 17,484 970 Interest and debt expense 10,966 19,733 17,144 14,234 12,081 C
Slide 34: Pro-Forma Adjusted EBITDA Reconciliation
Pro-Forma Adjusted EBITDA Reconciliation ($ in thousands) Trailing twelve months ended 3/31/21 Adjusted EBITDA is defined as net income before interest Dorner CMCO Pro-forma expense, income taxes, depreciation, amortization, and GAAP net income (loss) $ 1,139 $ 9,106 $ 10,245 other adjustments. Adju
Slide 35: Transaction Overview
Transaction Overview PURCHASE PRICE $485 million plus cash minus debt with working capital adjustment TRANSACTION COSTS Approximately $11 million excluding financing fees (majority at close) COST SYNERGIES Approximately $5 million in annual cost synergies by end of FY 2023 ONE-TIME COSTS Approximate
Slide 36: Attractive and Diverse End Markets
Attractive and Diverse End Markets Energy/Utilities Mobile Industries Construction Food Processing Other Life Sciences Consumer Packaged Goods Entertainment Process Industries Industrial Automation Industrial E-Commerce/Supply Chain ~22% ~17% ~17% ~17% ~6% ~5% ~5% ~3% ~3% ~2% ~2% ~1% Enduring tailwi
Slide 37: Global Enterprise
Global Enterprise AMERICAS EMEA APAC ~64% OF REVENUE ~30% OF REVENUE ~6% OF REVENUE Buffalo, NY Headquarters Milwaukee, WI Brighton, MI Chester, UK Power Control Workstations Hoist, Plate Clamps Conveyor Systems Hangzhou, CN Damascus, VA Wuppertal and Hoist Julich , DE Kunzelsau, DE Hoist Lexington,
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