Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — KeyBanc Industrials Conference 2017
28 slides from Columbus Mckinnon's conference presentation, Jun 1, 2017
Slide 1: KeyBanc Industrials Conference
1 1 Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer KeyBanc Industrials Conference June 1, 2017
Slide 2: Safe Harbor Statement
2 2 Safe Harbor Statement These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could caus
Slide 3: Columbus McKinnon Corporation
3 3 Columbus McKinnon Corporation Market Capitalization $552.5 million Annual Dividend $0.16 Recent Price $24.45 Dividend Yield 0.66% 52 Week High-Low $29.23 - $13.80 Institutional Ownership 94% Shares Outstanding 22.6 million Insider Ownership 6% Average Daily Volume (3 mos.) 109 thousand Employee
Slide 4: Near-term Priorities
4 4 Near-term Priorities Integrate STAHL Expect $5m in synergies in FY2018 Realizing growth opportunities Leverage Magnetek technology Cost effectively embedding digital controls in hoists Products will include information intelligence Strengthen the core Identifying actions to grow market
Slide 5: Broad Offerings & Diverse Markets
5 5 Broad Offerings & Diverse Markets Hoists 56% Chain & Rigging 11% Industrial Cranes 5% Actuators 11% Digital Power Control 12% Elevator 3% Other 2% Second largest global hoist company (Includes the impact of STAHL which was acquired on January 31, 2017) Product Offering Markets (pro forma with ST
Slide 6: From Lifting Products…
6 6 From Lifting Products… Powered Chain Hoists Powered Wire Rope Hoists ATEX Explosion Protected Hoists
Slide 7: ...to Solutions
...to Solutions COMERS MCENNON _ "Wer 4
Slide 8: International Market Penetration
8 8 International Market Penetration Reported Non-U.S. Sales FY 20171 $243.3 million U.S. 62% Europe, Middle East & Africa 26% Canada 4% Latin America 5% APAC 3% (1) FY 2017 includes two months with STAHL [CATEGORY NAME] [CATEGORY NAME] [CATEGORY NAME] 12-Month Pro Forma with STAHL
Slide 9: STAHL Acquisition
9 9 STAHL Acquisition Cash Purchase Price: ~$240 million; reduced by ~$1.3 million working capital adjustment Acquired: Closed January 31, 2017 Strong Value Proposition Superior product quality Premium brand; strong reputation Excellent cultural alignment; geographic complement Explosion-pro
Slide 10: Value Creation
10 10 Value Creation Costs Sourcing & logistics Sales office consolidation Product rationalization Lean processes Revenue Leverage global sales force Expand product offering Smart technology Intercompany Opportunities Low cost manufacturing Magnetek drives Chain and forgings Ji
Slide 11: Technology Driven Solutions
11 11 Technology Driven Solutions
Slide 12: Product Development
12 12 Product Development Market Needs Market Feedback Product Planning Product Development Recent Successes: Yale LodeKing LTTM Wire Rope Hoist Strategic Product Management Voice of Customer & Watch the Work Knowledge Based Engineering Metrics Market Performance Metrics Speed to Market Yale ERGO360
Slide 13: Key Vertical Markets
Key Vertical Markets Construction %, Power / Utilities a J —_— bas K. enienanmen Trait 4 . q Heavy Oil & Gas Equipment Mfg. fF on |
Slide 14: Net Sales and Quarter and Fiscal Year Bridge
14 14 $155.1 $149.0 $151.9 $152.5 $183.7 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Net Sales ($ in millions) $579.6 $597.1 $637.1 FY 2015 FY 2016 FY 2017 Quarter STAHL(1) added $24.7 million Organic growth: $3.9 million, or 2.5% Year Acquired revenue of $65.0 million Q4 FY17 FY 2017 Acquisitions $ 24.
Slide 15: Gross Profit & Adjusted Gross Margin
15 15 $48.4 $48.0 $49.7 $44.8 $1.5 [CELLREF] [CELLRE F] [CELLRE F] $8.9 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 $181.6 [CELLRE F] [CELLRE F] $1.7 [CELLREF] [CELLRE F] FY 2015 FY 2016 FY 2017 $187.3 $3.9 $192.9 $8.9 Gross Profit & Adjusted Gross Margin1 Non-GAAP Adjustments Gross Profit * Adjusted gr
Slide 16: Operating Income & Non-GAAP Margin
16 16 [VALUE] [CELLRE F] $12.6 [CELLRE F] [VALUE] [CELLREF] [CELLRE F] [CELLRE F] [VALUE] Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 $3.1 $0.2 $11.2 $12.6 $5.3 Operating Income & Non-GAAP Margin(1) Non-GAAP Adjustments Income from Operations Quarter STAHL: $2.8 million incremental operating income
Slide 17: Adjustments in FY 2017 & Q4 FY17
17 17 Adjustments in FY 2017 & Q4 FY17 ($ in millions) $8.9 [VALUE] $3.1 $1.4 $1.3 $1.1 [VALUE] [CELLREF] Purchase Accounting Inventory / Backlog Step-up STAHL Costs (Deal & Integration) CEO Retirement Costs Insurance Recovery Legal Costs Debt Extinguishment Trademark Impairment FX Option Gain Canad
Slide 18: Annual Earnings Per Share
18 18 Annual Earnings Per Share $1.34 [CELLRE F] [CELLRE F] [CELLREF] [CELLREF] [CELLRE F] FY 2015 FY 2016 FY 2017 $0.43 (1) Adjusted net income and diluted earnings per share (EPS) are non-GAAP financial measures. Please see supplemental slides for a reconciliation from GAAP net income and diluted
Slide 19: Cash Flow
19 19 Strong operating cash flow despite ~$8 million of cash consumed for unusual items Managing CapEx: working to improve return on invested capital FY 2018 expected CapEx: ~$20 to $24 million(1) Cash Flow Note: Components may not add to totals due to rounding Three Months Ended March 31, Year Ende
Slide 20: Working Capital and Inventory Turns
20 20 21.5% 22.4% 21.2% 19.9% 18.6% 3/31/16 6/30/16 9/30/16 12/31/16 3/31/17 Working Capital 3.6x 3.4x 3.5x 3.9x 4.1x 3/31/16 6/30/16 9/30/16 12/31/16 3/31/17 Working Capital as a Percent of Sales Inventory Turns (1) Excludes the impact of Magnetek, which was acquired on September 2, 2015 (2) Exclud
Slide 21: Capitalization
21 21 Capitalization March 31, 2017 March 31, 2016 Cash and cash equivalents $ 77.6 $ 51.6 Total debt 421.3 267.6 Total net debt 343.7 216.0 Shareholders’ equity 341.4 286.3 Total capitalization $ 762.7 $ 553.9 Debt/total capitalization 55.2% 48.3% Net debt/net total capitalization 50.2% 43.0% De-le
Slide 22: Key Takeaways
22 22 Key Takeaways Leading US market share, strong brands, key vertical markets Magnetek and STAHL strengthen value proposition Broad products offering focused on safety and productivity Extensive market channels & growing global presence Improving margins & strong cash flow
Slide 23: Supplemental Information
23 23 Supplemental Information
Slide 24: Adjusted Gross Profit Reconciliation
24 24 Adjusted Gross Profit Reconciliation Adjusted gross profit is defined as gross profit as reported, adjusted for unusual items. Adjusted gross profit is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not
Slide 25: Adjusted Income from Operations Reconciliation
25 25 Adjusted Income from Operations Reconciliation Adjusted income from operations is defined as income from operations as reported, adjusted for certain items and to apply a normalized tax rate. Adjusted income from operations is not a measure determined in accordance with generally accepted acco
Slide 26: Adjusted Diluted EPS Reconciliation
26 26 Adjusted Diluted EPS Reconciliation Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items and to apply a normalized tax rate. Adjusted net income and diluted EPS are not measures determined in accordance with generally accepted ac
Slide 27: Industrial Capacity Utilization
27 27 77% 78% 79% 80% 81% 82% 83% 74% 75% 76% 77% 78% 79% 80% All Manufacturing Total Source: The Federal Reserve Board Eurozone Capacity Utilization U.S. Capacity Utilization Source: European Commission 82.5% March 2017 75.9% (Manufacturing) & 76.7% (Total) April 2017(1) Industrial Capacity Utiliza
Slide 28: Established Global Presence
28 28 Established Global Presence
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