Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q3 FY2024 Earnings Presentation
27 slides from Columbus Mckinnon's earnings presentation, Jan 31, 2024
Slide 1: Q3 Fiscal Year 2024 Financial Results Conference Call
Q3 Fiscal Year 2024 Financial Results Conference Call Vice President, Investor Relations & Treasurer Kristine Moser Executive Vice President Finance & Chief Financial Officer Gregory P. Rustowicz January 31, 2024 President & Chief Executive Officer David J. Wilson
Slide 2: Forward-Looking Statements
© 2023 COLUMBUS MCKINNON CORPORATION These slides, and the accompanying oral discussion (together, this “presentation”), 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 u
Slide 3: Third Quarter FY24 Key Takeaways
© 2023 COLUMBUS MCKINNON CORPORATION 3 Third Quarter FY24 Key Takeaways • Achieved over $1.0 billion net sales over the last year, including a 10% increase in net sales in Q3 driven by strength across all product platforms led by precision conveyance • Continued progress on gross margin expansion, u
Slide 4: Continued Orders Growth and Encouraging Pipeline
© 2023 COLUMBUS MCKINNON CORPORATION 4 Continued Orders Growth and Encouraging Pipeline Operational Improvements Enabled Backlog Conversion Orders and Backlog $215.0 $246.0 $257.0 $226.5 $231.2 0.93x 0.97x 1.09x 0.88x 0.91x Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Orders Book:Bill 1Long term backlog
Slide 5: Continued Progress on Footprint Simplification
© 2023 COLUMBUS MCKINNON CORPORATION 5 Continued Progress on Footprint Simplification Aligned with Footprint Simplification Strategy… Drives Cost Savings Over Time and Supports Projected Growth State-of-the-Art Facility to Support Growth: • Strategically located in Monterrey, MX • North American Man
Slide 6: Unlocking CMCO's Potential
© 2023 COLUMBUS MCKINNON CORPORATION 6 Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value GROWTH FRAMEWORKCMBS TRANSFORMATION
Slide 7: Net Sales
© 2023 COLUMBUS MCKINNON CORPORATION Net Sales Delivered Double-Digit Sales Increase Inclusive of montratec Acquisition • Sales outside of the U.S. increased 30% o montratec contributed 17% growth o Price and volume contributed 8% growth • Partially offset by U.S. decrease of 2% due to lower volume
Slide 8: Gross Profit & Margin
© 2023 COLUMBUS MCKINNON CORPORATION 8 Gross Profit & Margin Gross Profit Bridge Gross Margin Increased 130 bps Y/Y; Adjusted Gross Margin1 Increased 160 bps Y/Y $82.0 $91.2 $86.6 $100.0 $93.9 35.6% 35.9% 36.8% 38.7% 36.9% 35.6% 35.9% 36.9% 38.7% 37.2% Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Adjuste
Slide 9: RSG&A
© 2023 COLUMBUS MCKINNON CORPORATION 9 RSG&A $25.4 $25.3 $25.0 $26.9 $26.6 $25.1 $26.4 $27.4 $25.7 $26.3 $4.8 $5.5 $5.9 $6.5 $6.7 $55.4 $57.2 $58.3 $59.1 $59.5 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Selling G&A R&D RSG&A increased $4.1 million Y/Y to $59.5 million • $3.4 million from montratec • $1
Slide 10: Operating Income
© 2023 COLUMBUS MCKINNON CORPORATION 10 Operating Income Operating income of $26.9 million, up 33% Y/Y • Operating income grew $6.7 million • Operating margin of 10.6% expanded 180 bps Adjusted Operating Income1 of $29.7 million, up 27% Y/Y • Adjusted Operating Income1 increased $6.3 million • Adjus
Slide 11: Earnings Per Share
© 2023 COLUMBUS MCKINNON CORPORATION $0.42 $0.48 $0.32 $0.55 $0.34 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 11 Earnings Per Share Adjusted Diluted EPS1 GAAP Diluted EPS $0.72 $0.80 $0.62 $0.76 $0.74 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Net income of $9.7 million in the quarter • $6.7 million incre
Slide 12: Adjusted EBITDA & ROIC
© 2023 COLUMBUS MCKINNON CORPORATION $140.1 $147.8 $163.4 15.4% 15.8% 16.3% FY22 FY23 Q3 FY24 TTM 12 Adjusted EBITDA & ROIC Return on Invested Capital (ROIC)1 Adjusted EBITDA1 and Margin1 7.2% 6.7% 7.0% FY22 FY23 Q3 FY24 TTM Continued Progress on ROIC1 Improvement in the Quarter; Targeting Low Doubl
Slide 13: Free Cash Flow & Conversion
© 2023 COLUMBUS MCKINNON CORPORATION $86.6 $35.8 $71.0 $75.9 951% 121% 147% 156% FY21 FY22 FY23 Q3 FY24 TTM 13 Free Cash Flow1 & Conversion 1 Cash Flow Note: Components may not sum due to rounding Year-to-DateThree Months Ended 12/31/2212/31/2312/31/2212/31/23 $ 16.9$ 28.6$ 10.8$ 29.1 Net cash provi
Slide 14: Capital Structure
© 2023 COLUMBUS MCKINNON CORPORATION 14 Capital Structure Net Leverage Ratio1 of 2.6x • $15 million debt reduction in the quarter • Expect additional $15 million paydown in Q4 FY24 totaling $55 million paydown in FY24 Refinanced debt with montratec acquisition: Lower cost and improved flexibility •
Slide 15: Q4 FY2024 Guidance
© 2023 COLUMBUS MCKINNON CORPORATION 15 Q4 FY2024 Guidance Expect Strong Growth and Margin Expansion for FY24; Remain Confident in Long-Term Objectives 1 Free Cash Flow Conversion and Net Leverage Ratio are non-GAAP financial measures. See supplemental information for additional information on non-G
Slide 16: Q3 Fiscal Year 2024 Financial Results Conference Call
Q3 Fiscal Year 2024 Financial Results Conference Call Vice President, Investor Relations & Treasurer Kristine Moser Executive Vice President Finance & Chief Financial Officer Gregory P. Rustowicz January 31, 2024 President & Chief Executive Officer David J. Wilson
Slide 17: Supplemental Information
OND Supplemental Information INTELLIGENT MOTION PURPOSE IN MOTION
Slide 18: Conference Call Playback Info
© 2023 COLUMBUS MCKINNON CORPORATION 18 Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13743372 Telephone replay available through February 7, 2024 Webcast / PowerPoint / Replay available at investors.cmco.com Transcript, when available, at investors.cmco.com
Slide 19: Adjusted Gross Margin Trajectory
© 2023 COLUMBUS MCKINNON CORPORATION 19 Adjusted Gross Margin Trajectory ADJUSTED GROSS MARGIN1 PROGRESSION Operating Initiatives • Operational Excellence • Volume/scale/pricing • Product line simplification Strategic Initiatives • Accretive acquisitions • Factory simplification 33.7% 35.0% 35.4% 34
Slide 20: Non-GAAP Financial Measures Definitions
© 2023 COLUMBUS MCKINNON CORPORATION 20 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 pr
Slide 21: Non-GAAP Measures: Adjusted Gross Profit and Adjusted Gross Margin
© 2023 COLUMBUS MCKINNON CORPORATION 21 Non-GAAP Measures: Adjusted Gross Profit and Adjusted Gross Margin Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Profit Margin is defined as Adjusted Gross Profit divided by net sales. Adjusted Gross P
Slide 22: Adjusted Operating Income and Adjusted Operating Margin
© 2023 COLUMBUS MCKINNON CORPORATION 22 Adjusted Operating Income is defined as income from operations as reported, adjusted for certain items. Adjusted Operating Margin is defined as Adjusted Operating Income divided by net sales. Adjusted Operating Income and Adjusted Operating Margin are not meas
Slide 23: Adjusted Net Income and Adjusted Diluted EPS
© 2023 COLUMBUS MCKINNON CORPORATION 23 1 Applies a normalized tax rate of 25% in fiscal 2024 and 22% in fiscal 2022 and fiscal 2023 to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax. Adjusted Net Income and Adjusted Diluted EPS are defined as net income and diluted EPS a
Slide 24: Adjusted EBITDA and Adjusted EBITDA Margin
© 2023 COLUMBUS MCKINNON CORPORATION 24Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not meas
Slide 25: Return on Invested Capital (ROIC)
© 2023 COLUMBUS MCKINNON CORPORATION 25 ROIC is defined as Adjusted Operating Income, net of taxes at a 25% normalized rate (2022 and 2023 restated with a 25% normalized tax rate versus the 22% tax rate previously reported), for the trailing twelve months divided by the average of debt plus sharehol
Slide 26: Free Cash Flow and Free Cash Flow Conversion
© 2023 COLUMBUS MCKINNON CORPORATION Free Cash Flow is defined as net cash provided by (used for) operating activities less capital expenditures. Free Cash Flow Conversion is defined as Free Cash Flow divided by net income. Free Cash Flow and Free Cash Flow Conversion are not measures determined in
Slide 27: Non-GAAP Measures: Net Debt and Net Leverage Ratio
© 2023 COLUMBUS MCKINNON CORPORATION 27 Credit Agreement Net Debt is defined in the credit agreement as total debt plus standby letters of credit, net of cash and cash equivalents. Net Leverage Ratio is defined as Credit Agreement Net Debt divided by the Credit Agreement Trailing Twelve Month Adjust