Columbus McKinnon Reports 16% Order Growth in Q2 FY25

About this update from Columbus Mckinnon Corporation

CHARLOTTE, NC , Oct. 30, 2024 /PRNewswire/ -- Columbus McKinnon Corporation (Nasdaq: CMCO) (" Columbus McKinnon " or the "Company"), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2025 second quarter, which ended September 30, 2024 . Second Quarter 2025 Highlights (compared with prior-year period, except where otherwise noted) Orders increased 16% with a book-to-bill ratio of 1.08x; Precision conveyance up 42% Net sales decreased 6% to $242.3 million reflecting impacts related to Hurricane Helene, the ramp up of linear motion production in Monterrey, MX and project timing Results included $17.5 million 2 of non-cash pension settlement expense and $11.8 million 2 for factory closure and start-up costs as we transitioned manufacturing to our Monterrey, MX facility GAAP EPS of ( $0.52 ) and Adjusted EPS1 of $0.70 Repaid $10 million of debt in Q2 FY25; Anticipate FY25 debt repayment of $60 million Executed $4.9 million of share repurchases in Q2 FY25 and $5.0 million in early Q3 FY25 "Our commercial and operational initiatives are delivering wins with new and existing customers in attractive vertical markets and we delivered one of our highest order quarters in history with 16% order growth and a book-to-bill ratio of 1.08x in Q2." said David J. Wilson, President and Chief Executive Officer. "Order growth, with particular strength in precision conveyance, and an encouraging funnel of promising opportunities supports our fiscal 2025 guidance and positions us well for fiscal 2026." "But for the impact of Hurricane Helene, we delivered on our guidance for the second quarter while transitioning our linear motion manufacturing activity to Monterrey," continued Wilson. "We remain confident in our long-term financial objectives and are advancing the strategic initiatives that will both grow our business and deliver targeted margin expansion over time." Second Quarter Fiscal 2025 Sales ($ in millions) Q2 FY25 Q2 FY24 Change % Change Net sales $ 242.3 $ 258.4 $ (16.1) (6.2) % U.S. sales $ 132.3 $ 145.2 $ (12.9) (8.9) % % of total 55 % 56 % Non- U.S. sales $ 110.0 $ 113.2 $ (3.2) (2.8) % % of total 45 % 44 % For the quarter, net sales decreased $16.1 million , or 6.2%. In the U.S. , sales were down $12.9 million , or 8.9%. Price improvement of $1.3 million helped to offset $14.2 million in lower volume. Sales outside the U.S. decreased $3.2 million , or 2.8%. Price improvement of $2.5 million helped to offset $6.0 million of lower volume. Favorable foreign currency translation was $0.3 million . Second Quarter Fiscal 2025 Operating Results ($ in millions) Q2 FY25 Q2 FY24 Change % Change Gross profit $ 74.7 $ 100.0 $ (25.2) (25.2) % Gross margin 30.9 % 38.7 % (780) bps Adjusted Gross Profit1 $ 87.9 $ 100.0 $ (12.0) (12.0) % Adjusted Gross Margin1 36.3 % 38.7 % (240) bps Income from operations $ 10.8 $ 33.4 $ (22.5) (67.6) % Operating margin 4.5 % 12.9 % (840) bps Adjusted Operating Income1 $ 27.0 $ 34.1 $ (7.2) (21.0) % Adjusted Operating Margin1 11.1 % 13.2 % (210) bps Net income (loss) $ (15.0) $ 15.8 $ (30.9) NM Net income (loss) margin (6.2) % 6.1 % (1,230) bps GAAP EPS $ (0.52) $ 0.55 $ (1.07) NM Adjusted EPS1 $ 0.70 $ 0.76 $ (0.06) (7.9) % Adjusted EBITDA1 $ 39.2 $ 45.7 $ (6.6) (14.4) % Adjusted EBITDA Margin1 16.2 % 17.7 % (150) bps Adjusted EPS1 excludes, among other adjustments, amortization of intangible assets. The Company believes this better represents its inherent earnings power and cash generation capability. Third Quarter Fiscal 2025 Guidance The Company is issuing the following guidance for the third quarter of fiscal 2025, ending December 31, 2024 : Metric Q3 FY25 Net sales Flat year-over-year Adjusted EPS3 Flat year-over-year Third quarter 2025 guidance assumes approximately $8 million of interest expense, $8 million of amortization, an effective tax rate of 25% and 28.9 million diluted average shares outstanding. The Company is issuing the following guidance for the fiscal year 2025, ending March 31, 2025 : Metric FY25 Net sales Flat to low-single digit growth year-over-year Adjusted EPS3 Mid-single digit growth year-over-year Capital Expenditures $20 million to $25 million Net Leverage Ratio3 ~2.3x Fiscal 2025 guidance assumes approximately $32 million of interest expense, $30 million of amortization, an effective tax rate of 25% and 29.0 million diluted average shares outstanding. Teleconference/Webcast Columbus McKinnon will host a conference call today at 10:00 AM Eastern Time to discuss the Company's financial results and strategy. The conference call will be accessible through live webcast and via phone by dialing 1-800-836-8184. The webcast, earnings release and earnings presentation will be available at the Company's investor relations website at investors.cmco.com . A replay of the webcast will also be archived on the Company's investor relations website and available via phone by dialing 1-888-660-6345 and enter the conference ID number 93312# through Wednesday, November 6, 2024 . ______________________ 1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS are non-GAAP financial measures. See accompanying discussion and reconciliation tables provided in this release for reconciliations of these non-GAAP financial measures to the closest corresponding GAAP financial measures. 2 Represents $23.2 million of non-cash pension settlement costs, $11.9 million of expense related to the closure of our Charlotte, NC factory and $3.8 million of Monterrey MX start-up costs, which are taxed at a 24.6% tax rate. 3 The Company has not reconciled the Adjusted EPS and Net Leverage Ratio guidance to the most comparable GAAP financial measure outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide guidance for the comparable GAAP financial measures. Forward-looking guidance regarding Adjusted EPS and Net Leverage Ratio is made in a manner consistent with the relevant definitions and assumptions noted herein and in alignment with the Company's financial covenants per the Company's Amended and Restated Credit Agreement. About Columbus McKinnon Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions that move the world forward and improve lives by efficiently and ergonomically moving, lifting, positioning, and securing materials. Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations, and digital power and motion control systems. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available at www.cmco.com . Safe Harbor Statement This news release 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 use of forward-looking terminology, including the terms "anticipate," "believe," "continue," "could," "estimate," "expect," "illustrative," "intend," "likely," "may," "opportunity," "plan," "possible," "potential," "predict," "project," "shall," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this document, including, but are not limited to, statements relating to: (i) our strategy, outlook and growth prospects, including our third quarter and fiscal year 2025 net sales and Adjusted EPS, and our fiscal year 2025 net leverage ratio and capital expenditure guidance; (ii) our operational and financial targets and capital allocation policy; (iii) general economic trend and trends in the industry and markets; (iv) the amount of debt to be paid down by the Company during fiscal year 2025; (v) the estimated costs and benefits related to the consolidation of the Company's North American linear motion operations in Charlotte, North Carolina to its manufacturing facility in Monterrey, Mexico (vi) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; and (vii) the competitive environment in which we operate; are forward looking statements. Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 as well as in our other filings with the Securities and Exchange Commission , which are available on its website at www.sec.gov . Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made. Columbus McKinnon undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority. Contacts: Gregory P. Rustowicz Kristine Moser EVP Finance and CFO VP IR and Treasurer Columbus McKinnon Corporation Columbus McKinnon Corporation 716-689-5442 704-322-2488 [email protected] [email protected] Financial tables follow. COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Three Months Ended September 30 , 2024 September 30 , 2023 Change Net sales $ 242,274 $ 258,400 (6.2) % Cost of products sold 167,531 158,424 5.7 % Gross profit 74,743 99,976 (25.2) % Gross profit margin 30.9 % 38.7 % Selling expenses 26,926 26,867 0.2 % % of net sales 11.1 % 10.4 % General and administrative expenses 23,363 25,709 (9.1) % % of net sales 9.6 % 9.9 % Research and development expenses 6,102 6,541 (6.7) % % of net sales 2.5 % 2.5 % Amortization of intangibles 7,547 7,508 0.5 % Income from operations 10,805 33,351 (67.6) % Operating margin 4.5 % 12.9 % Interest and debt expense 8,352 10,211 (18.2) % Investment (income) loss (610) 88 NM Foreign currency exchange (gain) loss (792) 1,746 NM Other (income) expense, net 23,806 393 5,957.5 % Income (loss) before income tax expense (benefit) (19,951) 20,913 NM Income tax expense (benefit) (4,908) 5,100 NM Net income (loss) $ (15,043) $ 15,813 NM Average basic shares outstanding 28,869 28,725 0.5 % Basic income (loss) per share $ (0.52) $ 0.55 NM Average diluted shares outstanding 28,869 29,001 (0.5) % Diluted income (loss) per share $ (0.52) $ 0.55 NM Dividends declared per common share $ 0.07 $ 0.07 COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Six Months Ended September 30 , 2024 September 30 , 2023 Change Net sales $ 482,000 $ 493,892 (2.4) % Cost of products sold 318,227 307,266 3.6 % Gross profit 163,773 186,626 (12.2) % Gross profit margin 34.0 % 37.8 % Selling expenses 54,696 51,848 5.5 % % of net sales 11.3 % 10.5 % General and administrative expenses 49,810 53,152 (6.3) % % of net sales 10.3 % 10.8 % Research and development expenses 12,268 12,442 (1.4) % % of net sales 2.5 % 2.5 % Amortization of intangibles 15,047 14,385 4.6 % Income from operations 31,952 54,799 (41.7) % Operating margin 6.6 % 11.1 % Interest and debt expense 16,587 18,836 (11.9) % Investment (income) loss (819) (454) 80.4 % Foreign currency exchange (gain) loss (398) 2,230 NM Other (income) expense, net 24,484 605 3,946.9 % Income (loss) before income tax expense (benefit) (7,902) 33,582 NM Income tax expense (benefit) (1,488) 8,494 NM Net income (loss) $ (6,414) $ 25,088 NM Average basic shares outstanding 28,852 28,694 0.6 % Basic income (loss) per share $ (0.22) $ 0.87 NM Average diluted shares outstanding 28,852 28,962 (0.4) % Diluted income (loss) per share $ (0.22) $ 0.87 NM Dividends declared per common share $ 0.07 $ 0.07 COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets (In thousands) September 30 , 2024 March 31, 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 55,683 $ 114,126 Trade accounts receivable 170,669 171,186 Inventories 201,036 186,091 Prepaid expenses and other 40,357 42,752 Total current assets 467,745 514,155 Property, plant, and equipment, net 107,258 106,395 Goodwill 717,982 710,334 Other intangibles, net 375,598 385,634 Marketable securities 10,579 11,447 Deferred taxes on income 1,367 1,797 Other assets 96,355 96,183 Total assets $ 1,776,884 $ 1,825,945 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 72,106 $ 83,118 Accrued liabilities 106,847 127,973 Current portion of long-term debt and finance lease obligations 50,704 50,670 Total current liabilities 229,657 261,761 Term loan, AR securitization facility and finance lease obligations 449,910 479,566 Other non current liabilities 201,187 202,555 Total liabilities $ 880,754 $ 943,882 Shareholders' equity: Common stock 287 288 Treasury stock (5,946) (1,001) Additional paid in capital 529,599 527,125 Retained earnings 386,892 395,328 Accumulated other comprehensive loss (14,702) (39,677) Total shareholders' equity $ 896,130 $ 882,063 Total liabilities and shareholders' equity $ 1,776,884 $ 1,825,945 COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - UNAUDITED (In thousands) Six Months Ended September 30 , 2024 September 30 , 2023 Operating activities: Net income (loss) $ (6,414) $ 25,088 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization 24,028 22,482 Deferred income taxes and related valuation allowance (13,662) (6,097) Net loss (gain) on sale of real estate, investments and other (650) (302) Non-cash pension settlement 23,201 — Stock-based compensation 4,175 5,264 Amortization of deferred financing costs 1,244 1,106 Impairment of operating lease 3,268 — Loss (gain) on hedging instruments (2) 554 Loss (gain) on disposal of Fixed Assets 418 — Non-cash lease expense 5,202 4,684 Changes in operating assets and liabilities, net of effects of business acquisitions: Trade accounts receivable 2,384 (11,409) Inventories (12,277) (22,415) Prepaid expenses and other (11,714) (5,868) Other assets 183 357 Trade accounts payable (10,711) (5,996) Accrued liabilities (6,154) (3,085) Non-current liabilities (3,889) (4,921) Net cash provided by (used for) operating activities (1,370) (558) Investing activities: Proceeds from sales of marketable securities 3,153 1,100 Purchases of marketable securities (1,993) (1,809) Capital expenditures (10,068) (10,319) Purchase of businesses, net of cash acquired — (108,145) Dividend received from equity method investment — 144 Net cash provided by (used for) investing activities (8,908) (119,029) Financing activities: Proceeds from the issuance of common stock 86 492 Purchases of treasury stock (4,945) — Repayment of debt (30,326) (25,294) Proceeds from issuance of long-term debt — 120,000 Fees paid for borrowings on long-term debt — (2,859) Payment to former owners of montratec (6,711) — Fees paid for debt repricing (169) — Cash inflows from hedging activities 11,862 12,084 Cash outflows from hedging activities (11,809) (12,660) Payment of dividends (4,038) (4,015) Other (1,789) (1,954) Net cash provided by (used for) financing activities (47,839) 85,794 Effect of exchange rate changes on cash (326) (325) Net change in cash and cash equivalents (58,443) (34,118) Cash, cash equivalents, and restricted cash at beginning of year $ 114,376 $ 133,426 Cash, cash equivalents, and restricted cash at end of period $ 55,933 $ 99,308 COLUMBUS McKINNON CORPORATION Q2 FY 2025 Net Sales Bridge Quarter Year To Date ($ in millions) $ Change % Change $ Change % Change Fiscal 2024 Net Sales $ 258.4 $ 493.9 Acquisition — — % 2.7 0.5 % Pricing 3.8 1.5 % 7.3 1.5 % Volume (20.2) (7.8) % (21.6) (4.4) % Foreign currency translation 0.3 0.1 % (0.3) — % Total change $ (16.1) (6.2) % $ (11.9) (2.4) % Fiscal 2025 Net Sales $ 242.3 $ 482.0 COLUMBUS McKINNON CORPORATION Q2 FY 2025 Gross Profit Bridge ($ in millions) Quarter Year To Date Fiscal 2024 Gross Profit $ 100.0 $ 186.6 Acquisition — 0.8 Price, net of manufacturing costs changes (incl. inflation) 0.1 3.5 Monterrey, MX new factory start-up costs (2.2) (3.8) Factory and warehouse consolidation costs (10.8) (10.8) Sales volume and mix (12.3) (12.1) Other (0.3) (0.5) Foreign currency translation 0.2 0.1 Total change (25.3) (22.8) Fiscal 2025 Gross Profit $ 74.7 $ 163.8 U.S. Shipping Days by Quarter Q1 Q2 Q3 Q4 Total FY25 64 63 60 62 249 FY24 63 62 61 62 248 COLUMBUS McKINNON CORPORATION Additional Data 1 (Unaudited) Period Ended September 30 , 2024 June 30 , 2024 March 31 , 2024 September 30 , 2023 ($ in millions) Backlog $ 317.6 $ 292.8 $ 280.8 $ 317.7 Long-term backlog Expected to ship beyond 3 months $ 172.5 $ 156.0 $ 144.6 $ 148.3 Long-term backlog as % of total backlog 54.3 % 53.3 % 51.5 % 46.7 % Debt to total capitalization percentage 35.8 % 36.6 % 37.5 % 39.8 % Debt, net of cash, to net total capitalization 33.2 % 33.3 % 32.0 % 35.3 % Working capital as a % of sales 2 23.3 % 22.5 % 19.1 % 21.8 % Three Months Ended September 30 , 2024 June 30 , 2024 March 31 , 2024 September 30 , 2023 ($ in millions) Trade accounts receivable Days sales outstanding 64.1 days 63.3 days 58.7 days 58.6 days Inventory turns per year (based on cost of products sold) 3.3 turns 3.0 turns 3.7 turns 3.1 turns Days' inventory 110.6 days 121.7 days 98.6 days 117.7 days Trade accounts payable Days payables outstanding 46.3 days 50.6 days 50.9 days 48.3 days Net cash provided by (used for) operating activities $ 9.4 $ (10.8) $ 38.6 $ 16.7 Capital expenditures $ 5.4 $ 4.6 $ 8.5 $ 5.0 Free Cash Flow 3 $ 4.0 $ (15.4) $ 30.1 $ 11.7 ______________________ 1 Additional Data: This data is provided to help investors understand financial and operational metrics that management uses to measure the Company's financial performance and identify trends affecting the business. These measures may not be comparable with or defined in the same manner as other companies. Components may not add due to rounding. 2 March 31, 2024 and September 30, 2023 exclude the impact of the acquisition of montratec®. 3 Free Cash Flow is a non-GAAP financial measure. Free Cash Flow is defined as GAAP net cash provided by (used for) operating activities less capital expenditures included in the investing activities section of the consolidated statement of cash flows. See the table above for the calculation of Free Cash Flow. NON-GAAP FINANCIAL MEASURES The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies. COLUMBUS McKINNON CORPORATION Reconciliation of Gross Profit to Adjusted Gross Profit ($ in thousands) Three Months Ended Six Months Ended September 30 , 2024 September 30 , 2023 September 30 , 2024 September 30 , 2023 Gross profit $ 74,743 $ 99,976 $ 163,773 $ 186,626 Add back (deduct): Business realignment costs 76 — 468 196 Hurricane Helene cost impact 171 — 171 — Factory and warehouse consolidation costs 10,763 — 10,763 — Monterrey, MX new factory start-up costs 2,185 — 3,810 — Adjusted Gross Profit $ 87,938 $ 99,976 $ 178,985 $ 186,822 Net sales $ 242,274 $ 258,400 $ 482,000 $ 493,892 Gross margin 30.9 % 38.7 % 34.0 % 37.8 % Adjusted Gross Margin 36.3 % 38.7 % 37.1 % 37.8 % Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net sales. Adjusted Gross Profit and Adjusted Gross Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Gross Profit and Adjusted Gross Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Margin, are important for investors and other readers of the Company's financial statements and assists in understanding the comparison of the current quarter's gross profit and gross margin to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company's gross profit and gross margin to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of Income from Operations to Adjusted Operating Income ($ in thousands) Three Months Ended Six Months Ended September 30 , 2024 September 30 , 2023 September 30 , 2024 September 30 , 2023 Income from operations $ 10,805 $ 33,351 $ 31,952 $ 54,799 Add back (deduct): Acquisition deal and integration costs — 508 — 3,095 Business realignment costs 281 40 1,131 415 Factory and warehouse consolidation costs 11,904 82 11,904 199 Headquarter relocation costs 51 146 147 1,374 Hurricane Helene cost impact 171 — 171 — Monterrey, MX new factory start-up costs 3,751 — 7,317 — Adjusted Operating Income $ 26,963 $ 34,127 $ 52,622 $ 59,882 Net sales $ 242,274 $ 258,400 $ 482,000 $ 493,892 Operating margin 4.5 % 12.9 % 6.6 % 11.1 % Adjusted Operating Margin 11.1 % 13.2 % 10.9 % 12.1 % 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 measures determined in accordance with GAAP and may not be comparable with Adjusted Operating Income and Adjusted Operating Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Operating Income and Adjusted Operating Margin, are important for investors and other readers of the Company's financial statements and assists in understanding the comparison of the current quarter's income from operations to the historical periods' income from operations and operating margin, as well as facilitates a more meaningful comparison of the Company's income from operations and operating margin to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of Net Income and Diluted Earnings per Share to Adjusted Net Income and Adjusted Earnings per Share ($ in thousands, except per share data) Three Months Ended Six Months Ended September 30 , 2024 September 30 , 2023 September 30 , 2024 September 30 , 2023 Net income (loss) $ (15,043) $ 15,813 $ (6,414) $ 25,088 Add back (deduct): Amortization of intangibles 7,547 7,508 15,047 14,385 Acquisition deal and integration costs — 508 — 3,095 Business realignment costs 281 40 1,131 415 Factory and warehouse consolidation costs 11,904 82 11,904 199 Headquarter relocation costs 51 146 147 1,374 Hurricane Helene cost impact 171 — 171 — Monterrey, MX new factory start-up costs 3,751 — 7,317 — Non-cash pension settlement expense 23,201 — 23,201 — Normalize tax rate 1 (11,647) (2,199) (14,242) (4,768) Adjusted Net Income $ 20,216 $ 21,898 $ 38,262 $ 39,788 GAAP average diluted shares outstanding 28,869 29,001 28,852 28,962 Add back: Effect of dilutive share-based awards 205 — 253 — Adjusted Diluted Shares Outstanding $ 29,074 $ 29,001 $ 29,105 $ 28,962 GAAP EPS $ (0.52) $ 0.55 $ (0.22) $ 0.87 Adjusted EPS $ 0.70 $ 0.76 $ 1.31 $ 1.37 1 Applies a normalized tax rate of 25% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax. Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS are defined as net income (loss) and GAAP EPS as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS are not measures determined in accordance with GAAP and may not be comparable with the measures used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS, are important for investors and other readers of the Company's financial statements and assists in understanding the comparison of current periods' net income (loss), average diluted shares outstanding and GAAP EPS to the historical periods' net income (loss), average diluted shares outstanding and GAAP EPS, as well as facilitates a more meaningful comparison of the Company's net income (loss) and GAAP EPS to that of other companies. The Company believes that presenting Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company's strategy to grow through acquisitions as well as organically. COLUMBUS McKINNON CORPORATION Reconciliation of Net Income to Adjusted EBITDA ($ in thousands) Three Months Ended Six Months Ended September 30 , 2024 September 30 , 2023 September 30 , 2024 September 30 , 2023 Net income (loss) $ (15,043) $ 15,813 $ (6,414) $ 25,088 Add back (deduct): Income tax expense (benefit) (4,908) 5,100 (1,488) 8,494 Interest and debt expense 8,352 10,211 16,587 18,836 Investment (income) loss (610) 88 (819) (454) Foreign currency exchange (gain) loss (792) 1,746 (398) 2,230 Other (income) expense, net 23,806 393 24,484 605 Depreciation and amortization expense 12,188 11,592 24,028 22,482 Acquisition deal and integration costs — 508 — 3,095 Business realignment costs 281 40 1,131 415 Factory and warehouse consolidation costs 11,904 82 11,904 199 Headquarter relocation costs 51 146 147 1,374 Hurricane Helene cost impact 171 — 171 — Monterrey, MX new factory start-up costs 3,751 — 7,317 — Adjusted EBITDA $ 39,151 $ 45,719 $ 76,650 $ 82,364 Net sales $ 242,274 $ 258,400 $ 482,000 $ 493,892 Net income margin (6.2) % 6.1 % (1.3) % 5.1 % Adjusted EBITDA Margin 16.2 % 17.7 % 15.9 % 16.7 % Adjusted EBITDA is defined as net income (loss) 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 a measures determined in accordance with GAAP and may not be comparable with Adjusted EBITDA and Adjusted EBITDA Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, are important for investors and other readers of the Company's financial statements. COLUMBUS McKINNON CORPORATION Reconciliation of Net Leverage Ratio ($ in thousands) Twelve Months Ended September 30 , 2024 September 30 , 2023 Net income (loss) $ 15,123 $ 51,012 Add back (deduct): Annualize EBITDA for the montratec acquisition1 — 5,410 Annualize synergies for the montratec acquisition1 — 293 Income tax expense (benefit) 4,920 20,694 Interest and debt expense 35,708 33,807 Non-cash pension settlement 28,185 — Amortization of deferred financing costs 2,487 1,967 Stock Compensation Expense 10,950 12,060 Depreciation and amortization expense 47,491 43,536 Cost of debt refinancing 1,190 — Acquisition deal and integration costs 116 3,606 Excluded acquisition deal and integration costs2 — (510) Business realignment costs 2,583 2,664 Excluded business realignment costs2 — (2,249) Factory and warehouse consolidation costs 12,449 199 Garvey contingent consideration — 1,230 Headquarter relocation costs 832 2,370 Monterrey, MX new factory start-up costs 11,806 — Excluded Monterrey, MX new factory start-up costs3 (3,664) — Credit Agreement Trailing Twelve Month Adjusted EBITDA $ 170,176 $ 176,089 Current portion of long-term debt and finance lease obligations $ 50,704 $ 50,636 Term loan, AR securitization facility and finance lease obligations 449,910 514,205 Total debt $ 500,614 $ 564,841 Standby Letters of Credit 15,692 15,525 Cash and cash equivalents (55,683) (99,058) Net Debt $ 460,623 $ 481,308 Net Leverage Ratio 2.71x 2.73x 1 EBITDA is normalized to include a full year of the acquired entity and assumes all cost synergies are achieved in TTM Q2 FY24. 2 The Company's credit agreement definition of Adjusted EBITDA excludes certain acquisition deal and integration costs and business realignment costs that are incurred beyond one year after the close of an acquisition. 3 The Company's credit agreement definition of Adjusted EBITDA excludes certain Monterrey, MX factory start-up costs. 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 Net Debt divided by the Credit Agreement Trailing Twelve Month Adjusted EBITDA. Credit Agreement Trailing Twelve Month Adjusted EBITDA is defined as net income adjusted for interest expense, income taxes, depreciation, amortization, and other adjustments. Net Debt, Net Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Net Debt, Net Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are important for investors and other readers of the Company's financial statements. 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