Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q3 FY2022 Earnings Presentation
28 slides from Columbus Mckinnon's earnings presentation, Jan 27, 2022
Slide 1: Q3 Fiscal Year 2022 Financial Results Conference Call
Q3 Fiscal Year 2022 Financial Results Conference Call January 27, 2022 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Senior Vice President – Finance & Chief Financial Officer
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: Delivered Strong Results in Q3 FY22
Delivered Strong Results in Q3 FY22 Demonstrating success of Blueprint for Growth 2.0 strategy 30% Increase in Sales to $216 million • Strong results driven by acquisitions, solid organic volume and pricing power • Gross margin of 34.7%; Adjusted gross margin matched previous record of 36.7% set in
Slide 4: Business Model Evolution
Business Model Evolution Growth strategy substantially advances underlying portfolio Revenue CMCO FY21 CMCO Q3 FY22 Growth Rate Recast for Growth Profile With Conveying Solutions Platform Lifting Solutions Lifting Solutions 73% 59% Conveying Solutions 17% Industrial Products 42% Linear Motion 12% Au
Slide 5: Acquired Garvey Corporation December 1, 2021
Acquired Garvey Corporation December 1, 2021 Leader in accumulation technology complements Dorner’s conveying solutions Provides unique, patented technologies in the design, Products application, manufacturing and integration of accumulation systems Accumulators 46% of Revenue Industries highest qua
Slide 6: Net Sales
Net Sales ($ in millions) Q3 sales up 29.7% from prior-year period due to Q3 FY22 Sales Bridge acquisitions, strong demand and strategic pricing Quarter • U.S.: 7.5% volume and 3.6% pricing increase • Non-U.S.: 3.1% volume and 3.1% pricing increase Q3 FY21 Sales $ 166.5 Acquisitions 36.4 21.8% Volum
Slide 7: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge Quarter Q3 FY21 Gross Profit $ 55.3 $81.1 Acquisitions 16.7 $74.1 $75.1 Productivity, net of other cost changes 3.6 $64.1 Sales volume and mix 3.2 $55.3 Pricing, net of material cost inflation 1.4 36.7% 36.7% Prior year factory closur
Slide 8: RSG&A
RSG&A ($ in millions) RSG&A as % of sales: 25.1% 25.1% 26.8% 22.9% 24.8% Q3 FY22 RSG&A slightly higher than guidance due to Garvey acquisition $57.2 • Approximately $0.5 million in incremental RSG&A and $53.5 $0.4 million in deal costs $51.2 $46.7 $3.6 $41.7 $3.9 YOY increase due to acquisitions and
Slide 9: Operating Income
Operating Income ($ in millions) Operating Income & Margin Q3 FY22 operating income of $15.3 million $23.7 • Adjusted operating income of $20.5 million $14.2 $15.3 • Sequential decline reflects seasonality $10.4 $10.7 6.3% 7.6% 5.0% 10.6% Operating margin of 7.1%; Adjusted operating 7.1% margin of 9
Slide 10: Earnings Per Share
Earnings Per Share GAAP Diluted EPS Q3 FY22 net income of $9.9 million $0.53 Adj. net income of $17.4 million in the quarter $0.39 $0.34 $0.27 • $6.3 million of amortization of intangibles • $2.9 million of product liability settlement • $1.0 million of business realignment costs ($0.27) • $1.3 mill
Slide 11: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA Margin Adjusted EBITDA margin benefits from accretive acquisitions and economic recovery 15.7% 15.4% • Q3 FY22 Adjusted EBITDA margin of 14.2% up 330 basis points from prior year 11.9% • 200 basis point contribution from acquisitions YTD • Targeting 19% Adjuste
Slide 12: Cash Flow
Cash Flow ($ in millions) (2) Three Months Ended YTD Free Cash Flow 12/31/21 12/31/20 12/31/21 Net cash provided by $97.4 operating activities $5.8 $25.0 $23.7 $86.6 CapEx (2.8) (3.1) (9.5) $67.2 Free cash flow (FCF) $3.0 $21.9 $14.2 Note: Components may not add to totals due to rounding $34.8 • Pos
Slide 13: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Financial flexibility Dec. 31, March 31 • ~$190 million of liquidity 2021 2021 Cash and cash equivalents $ 106.7 $ 202.1 Pro-forma net debt leverage ratio of ~2.9x(1) Total debt • Net debt to net total capital: 35.7% 521.1 249.0 Total net debt 414.4 4
Slide 14: Orders and Backlog
Orders and Backlog ($ in millions) Continued Strength in Orders Record backlog of $294.7 million • 37% year-over-year increase driven by short cycle demand, • Up 12% in short-cycle and 2% projects businesses, sequentially project business and acquisitions • Dorner backlog up 8%, sequentially • Avg d
Slide 15: Outlook and Perspective
Outlook and Perspective Q4 FY2022 outlook • Expect Q4 FY22 net sales of approximately $235 million(1) Robust pipeline of opportunities • Strength in e-commerce, food & beverage, life sciences, aerospace and automotive • Process industries such as metals and paper remain strong • International energy
Slide 16: Q3 Fiscal Year 2022 Financial Results Conference Call
Purpose in Motion: Together we create intelligent motion solutions that move the world forward and improve lives. Q3 Fiscal Year 2022 Financial Results Conference Call January 27, 2022 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Senior Vice President – Finance & Chief
Slide 17: Supplemental Information
CN Supplemental Information COLUMBUS McKINNON
Slide 18: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13725924 Telephone replay available through February 3, 2022 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com © 2022 COLUMBUS McKINNON CORPORATIO
Slide 19: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 GAAP gross profit $ 55,315 $ 64,088 $ 74,063 $ 81,135 $ 75,057 Add back (deduct): Acquisition inventory step-up expense — — 2,981 — 515 Product liability settlement — — — — 2,850 Business realignmen
Slide 20: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 GAAP income from operations $ 10,447 $ 14,199 $ 10,746 $ 23,660 $ 15,316 Add back (deduct): Acquisition deal and integration costs — 3,951 9,242 632 370 Acquisition inventory step-up expen
Slide 21: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 GAAP net income (loss) $ 6,594 $ 9,585 $ (7,263) $ 15,203 $ 9,894 Add back (deduct): Amortization of intangibles 3,142 3,174 6,109 6,285 6,254 Cost of debt refinancing — — 14,80
Slide 22: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Fiscal Year FY 2019 FY 2020 FY 2021 Q3 FY22 TTM GAAP net income $ 42,577 $ 59,672 $ 9,106 $ 27,419 Add back (deduct): Amortization of intangibles 14,900 12,942 12,623 21,822 Cost of debt refinancing — — — 14,803 Acquisition d
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year FY 2022 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 2020 2021 Q3 YTD GAAP net income (loss) $ 6,594 $ 9,585 $ (7,263) $ 15,203 $ 9,894 $ 59,672 $ 9,106 $ 17,834 Add back (deduct): Income tax expense (benefit) 616 1,362 (2,517) 4,083 1,0
Slide 24: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in thousands) Fiscal Year TTM 2020 2021 Q3 FY22 GAAP income from operations $ 89,824 $ 42,255 $ 63,921 Add back (deduct): Acquisition deal and integration costs — 3,951 14,195 Acquisition inventory step-up expense — — 3,496 Product liability settle
Slide 25: Free Cash Flow & Free Cash Flow Conversion Reconciliation
Free Cash Flow & Free Cash Flow Conversion Reconciliation ($ in thousands) Fiscal Year FY 2019 FY 2020 FY 2021 Q3 FY 2022 TTM Cash from operations $ 79,499 $ 106,795 $ 98,890 $ 50,669 Capital expenditures (12,288) (9,432) (12,300) (15,902) Free cash flow (FCF) $ 67,211 $ 97,363 $ 86,590 $ 34,767 Non
Slide 26: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 83% 81% 82.1% 75% 79% Q4 2021 77% 77.0% (Manufacturing) & 75% 70% 76.5% (Total) December 2021(1) 73% 71% 65% 69% 67% 60% 65% Manufacturing Tot
Slide 27: ISM Production Index
ISM Production Index Source: Institute for Supply Chain Management 70% 65% 60% 55% 59.2% December 2021 50% 45% 40% 35% 30% 25% © 2022 COLUMBUS McKINNON CORPORATION 27
Slide 28: Q3 Fiscal Year 2022 Financial Results Conference Call
Q3 Fiscal Year 2022 Financial Results Conference Call January 27, 2022