Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — Q1 2023 Earnings Presentation
29 slides from Columbus Mckinnon's earnings presentation, Jul 28, 2022
Slide 1: Q1 Fiscal Year 2023 Financial Results Conference Call
Q1 Fiscal Year 2023 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer July 28, 2022
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 expected g
Slide 3: Executing Plan: Capturing Price & Delivering Margins
Executing Plan: Capturing Price & Delivering Margins Transformation unlocking more potential for growth in face of macroeconomic conditions Delivered revenue of $220 million and record gross margin despite headwinds • Revenue increased 6.5% on a constant currency basis • Achieved record gross margin
Slide 4: Unlocking CMCO's Potential
Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO CMBS GROWTH FRAMEWORK TRANSFORMATION Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value 4 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 5: Operational Performance
Operational Performance TTM gross margin improved 30 bps due to strong Q1FY23 results ADJUSTED GROSS MARGIN PROGRESSION GROSS MARGIN LEVERS ~40% • Operational Excellence • 80/20 simplification 36.4% 36.1% • Volume/scale 35.4% 35.0% 34.1% • Pricing 33.7% • Accretive acquisitions FY18 FY19 FY20 FY21 F
Slide 6: Net Sales
Net Sales ($ in millions) Q1 sales up 6.5% on constant currency from prior-year Quarter Sales Bridge period driven by strategic pricing and acquisition • U.S.: 5.1% pricing and 0.1% volume increase Quarter • Non-U.S.: 3.6% pricing and 4.9% volume decrease Q1 FY22 Sales $ 213.5 Acquisitions 8.5 4.0%
Slide 7: Gross Profit & Margin
Gross Profit & Margin ($ in millions) Quarter Gross Profit Bridge $85.5 $81.1 $82.5 Quarter $74.1 $75.1 Q1 FY22 Gross Profit $ 74.1 37.5% Acquisition 3.1 36.7% 36.7% Price, net of material cost inflation 3.1 36.3% Prior year acq. inventory step-up expense 3.0 Sales volume and mix 1.0 Prior year acqu
Slide 8: RSG&A
RSG&A ($ in millions) Q1 FY23 RSG&A lower than guidance at $51.4 million excluding $1.7 million in business realignment costs RSG&A as 26.8% 22.9% 24.8% 21.6% 24.1% % of sales: • Reflected lower stock compensation expense of $1.6 million $57.2 Decrease from prior year period due to $8.7 million of $
Slide 9: Operating Income
Operating Income ($ in millions) Operating Income & Margin Q1 FY23 operating income of $22.8 million; operating margin of 10.4% $23.7 $24.1 $22.8 • Includes $1.7 million of business realignment costs $15.3 $10.7 • Prior year included acquisition related costs of $12.2 million 5.0% 10.6% 7.1% 9.5% 10
Slide 10: Earnings Per Share
Earnings Per Share GAAP Diluted EPS Q1 FY23 GAAP net income of $8.4 million $0.53 • Effective tax rate of 52% driven by discrete items $0.34 $0.41 $0.29 Adj. net income of $19.9 million in the quarter • $6.5 million of amortization of intangibles ($0.27) • $1.7 million of business realignment costs
Slide 11: Adjusted EBITDA & ROIC
Adjusted EBITDA & ROIC Adjusted EBITDA Margin Q1 FY23 adjusted EBITDA margin of 15.9% • 20 basis point contribution from acquisition 15.4% 15.4% • Targeting ~21% adjusted EBITDA margin in FY27 11.9% FY21 FY22 Q1 FY23 TTM Return on Invested Capital (ROIC)(1) Targeting ROIC in excess of WACC • TTM ROI
Slide 12: Cash Flow
Cash Flow ($ in millions) (2) Free Cash Flow & Conversion Three Months Ended 6/30/22 6/30/21 $97.4 Net cash provided by (used in) operating $86.6 activities $(11.2) $(7.4) CapEx (3.0) (3.6) Free cash flow (FCF) $(14.1) $(11.0) Note: Components may not add to totals due to rounding $35.8 $32.7 • Cash
Slide 13: Capital Structure
Capital Structure ($ in millions) CAPITALIZATION Pro-forma net debt leverage ratio of ~2.9x(1) June 30, March 31, • Net debt to net total capital: 34.9% 2022 2022 Reduced debt $10 million in the quarter Cash and cash equivalents $ 85.7 $ 115.4 Total debt 501.3 511.2 Expect to pay down $40 million in
Slide 14: Orders and Backlog
Orders and Backlog ($ in millions) Continued Strength in Orders Record backlog of $351.6 million • Up 7%; 11% on constant currency basis with double-digit growth in • Up 9% in short term backlog and up 20% in long term backlog (1), Americas and EMEA sequentially • Sequential average daily order rate
Slide 15: Strong Start to FY23
Strong Start to FY23 Q2 FY2023 outlook • Expect Q2 FY23 net sales of approximately $230 million to $240 million(1), up mid-to-high single digits sequentially • Executing plan and addressing supply chain bottlenecks Driving growth initiatives with Core Growth Framework • Near record orders in Q1 of $
Slide 16: Beyond the Blueprint
Beyond the Blueprint STRATEGIC PLAN TO TRANSFORM COLUMBUS MCKINNON INTO A GLOBAL INTELLIGENT MOTION ENTERPRISE Advances CMCO to achieve target ~$1.5 billion in revenue and ~21% EBITDA margin in FY27 Evolves the enterprise from cyclical industrial to top-tier, secular growth, intelligent motion s
Slide 17: Q1 Fiscal Year 2023 Financial Results Conference Call
Q1 Fiscal Year 2023 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer July 28, 2022
Slide 18: Supplemental Information
OW Supplemental Information INTELLIGENT MOTION PURPOSE IN MOTION
Slide 19: Conference Call Playback Info
Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13730934 Telephone replay available through August 4, 2022 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com 19 © 2022 COLUMBUS MCKINNON CORPORATI
Slide 20: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Quarter Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 GAAP gross profit $ 74,063 $ 81,135 $ 75,057 $ 85,475 $ 82,519 Add back (deduct): Acquisition inventory step-up expense 2,981 — 515 1,546 — Product liability settlement — — 2,850 — — Acquisition amo
Slide 21: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation ($ in thousands) Fiscal Year TTM 2018 2019 2020 2021 2022 Q1 FY23 GAAP gross profit $ 285,061 $ 304,997 $ 283,186 $ 220,225 $ 315,730 $ 324,186 Add back (deduct): Product liability settlement — — — — 2,850 2,850 Acquisition amortization of backlog — — — — 2,100 2
Slide 22: Adjusted Income from Operations Reconciliation
Adjusted Income from Operations Reconciliation ($ in thousands) Quarter Fiscal Year Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 2021 2022 GAAP income from operations $ 10,746 $ 23,660 $ 15,316 $ 24,059 $ 22,817 $ 42,255 $ 73,781 Add back (deduct): Acquisition deal and integration costs 9,242 632 370 229
Slide 23: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 FY 2021 FY 2022 GAAP net income (loss) $ (7,263) $ 15,203 $ 9,894 $ 11,826 $ 8,391 $ 9,106 $ 29,660 Add back (deduct): Amortization of intangibles 6,109 6,285 6,254
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in thousands) Quarter Fiscal Year TTM Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 2021 2022 Q1 FY23 GAAP net income (loss) $ (7,263) $ 15,203 $ 9,894 $ 11,826 $ 8,391 $ 9,106 $ 29,660 $ 45,314 Add back (deduct): Income tax expense (benefit) (2,517) 4,083 1,066 6,154 8,8
Slide 25: Return on Invested Capital (ROIC) Reconciliation
Return on Invested Capital (ROIC) Reconciliation ($ in thousands) TTM Fiscal Year Q1 FY23 2021 2022 GAAP income from operations $ 85,852 $ 42,255 $ 73,781 Add back (deduct): Acquisition deal and integration costs 1,317 3,951 10,473 Acquisition inventory step-up expense 2,061 — 5,042 Product liabilit
Slide 26: Free Cash Flow & Free Cash Flow Conversion Reconciliation
Free Cash Flow & Free Cash Flow Conversion Reconciliation ($ in thousands) TTM Fiscal Year Q1 FY23 2020 2021 2022 Cash from operations $ 45,100 $ 106,795 $ 98,890 $ 48,881 Capital expenditures (12,409) (9,432) (12,300) (13,104) Free cash flow (FCF) $ 32,691 $ 97,363 $ 86,590 $ 35,777 GAAP net income
Slide 27: Industrial Capacity Utilization
Industrial Capacity Utilization U.S. Capacity Utilization Eurozone Capacity Utilization Source: The Federal Reserve Board Source: European Commission 85% 80% 83% 79.3% (Manufacturing) 82.6% 81% 80.0% (Total) Q2 2022 75% June 2022(1) 79% 77% 70% 75% 73% 71% 65% 69% 67% 60% 65% Manufacturing Total (1)
Slide 28: ISM Production Index
ISM Production Index Source: Institute for Supply Chain Management 70% 65% 60% 55% 54.9% June 2022 50% 45% 40% 35% 30% 25% 28 © 2022 COLUMBUS MCKINNON CORPORATION
Slide 29: Q1 Fiscal Year 2023 Financial Results Conference Call
Q1 Fiscal Year 2023 Financial Results Conference Call David J. Wilson President & Chief Executive Officer Gregory P. Rustowicz Executive VP – Finance & Chief Financial Officer July 28, 2022