Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Columbus McKinnon Reports Record Sales and Operating Income for Second Quarter Fiscal Year 2024 By: Columbus McKinnon Corporation via Business Wire November 01, 2023 at 06:10 AM EDT Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2024 second quarter, which ended September 30, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition"). Second Quarter Highlights (compared with prior-year period, except where otherwise noted) Growth strategy drives record sales of $258.4 million, up 12% over same period in the prior year CMBS enables record gross margin of 38.7%; 190 basis point margin expansion sequentially Record operating income of $33.4 million, up 22% over prior year Expanded financial flexibility while reducing debt; paid down $15 million in debt and increasing debt pay down plans by $10 million to $50 million in fiscal 2024 Expect to surpass $1 billion in revenue in fiscal 2024; advancing toward fiscal 2027 targets David J. Wilson, President and CEO, commented, “Our second quarter results reflect the meaningful progress we are making as our team executes toward our fiscal 2027 targets. We achieved several new milestones this quarter including record revenue, gross margin and operating income. Being customer led is a foundational component of the Columbus McKinnon Business System (“CMBS”) which drives continuous improvement, discipline, communication and accountability. We remain laser focused on improving our customers’ experience and our progress has been validated by recent improvements in our net promoter score. The 80/20 process is another key focus area of CMBS with our current priority being product line simplification. Beyond optimizing financial performance, this will lead to improved product offerings, stronger market positioning and the ability to simplify our factory footprint.” Mr. Wilson noted, “We are clearly building momentum within the organization and expect to surpass $1 billion in revenue in fiscal 2024. We also expect to deliver approximately 150 basis points of year-over-year gross margin expansion, exceeding our previous guidance. We are excited about the prospects for our precision conveyance platform including the recent addition of the montratec business. This, in combination with our organic growth initiatives, is driving the transformation of Columbus McKinnon to a less cyclical, higher growth and more profitable enterprise.” Second Quarter Fiscal 2024 Sales ($ in millions) Q2 FY 24 Q2 FY 23 Change % Change Net sales $ 258.4 $ 231.7 $ 26.7 11.5 % U.S. sales $ 145.2 $ 139.7 $ 5.5 3.9 % % of total 56 % 60 % Non-U.S. sales $ 113.2 $ 92.0 $ 21.2 23.0 % % of total 44 % 40 % For the quarter, net sales increased $26.7 million, or 11.5%. The acquisition contributed $9.5 million, or 4.1%, of the increase in sales. In the U.S., sales were up $5.5 million, or 3.9%, as a result of $4.9 million of price improvement, $0.4 million contribution from the acquisition and $0.2 million of higher volume. Sales outside the U.S. increased $21.2 million, or 23.0%, driven by $9.1 million of sales related to the acquisition, $5.7 million of price improvement and $0.8 million of higher volume. Favorable foreign currency translation was $5.6 million. Second Quarter Fiscal 2024 Operating Results ($ in millions) Q2 FY 24 Q2 FY 23 Change % Change Gross profit $ 100.0 $ 86.3 $ 13.7 15.8 % Gross margin 38.7 % 37.2 % 150 bps Adjusted gross profit* $ 100.0 $ 86.3 $ 13.7 15.8 % Adjusted gross margin* 38.7 % 37.2 % 150 bps Income from operations $ 33.4 $ 27.4 $ 6.0 21.8 % Operating margin 12.9 % 11.8 % 110 bps Adjusted income from operations* $ 34.1 $ 28.6 $ 5.5 19.2 % Adjusted operating margin* 13.2 % 12.4 % 80 bps Net income $ 15.8 $ 14.1 $ 1.7 12.0 % Net income margin 6.1 % 6.1 % 0 bps Diluted EPS $ 0.55 $ 0.49 $ 0.06 12.2 % Adjusted EPS* $ 0.76 $ 0.73 $ 0.03 4.1 % Adjusted EBITDA* $ 45.7 $ 39.0 $ 6.7 17.1 % Adjusted EBITDA margin* 17.7 % 16.8 % 90 bps *Adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted income from operations, adjusted operating margin, and adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA. Adjusted earnings per diluted share of $0.76 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability. Third Quarter Fiscal 2024 Outlook Columbus McKinnon expects third quarter fiscal 2024 sales of approximately $245 million to $255 million at current exchange rates. This represents 9% growth year-over-year at the midpoint of the range. Mr. Wilson concluded, “This quarter’s record financial performance provides additional proof points that demonstrate progress toward our fiscal 2027 targets. Given these results, we are accelerating debt repayment even as we invest in improving productivity and simplifying our footprint. We now expect our net leverage ratio to be approximately 2.3x1 by the end of fiscal 2024. As we execute our strategy, we are building an enterprise that can deliver stronger growth and increased profitability as we advance the transformation of Columbus McKinnon.” 1On a financial covenant basis per Amended and Restated Credit Agreement Teleconference/webcast Columbus McKinnon will host a conference call and live webcast today at 10:00 AM Eastern Time, at which management will review the Company’s financial results and strategy. The review will be accompanied by a slide presentation, which will be available on Columbus McKinnon’s website at investors.cmco.com/. A question-and-answer session will follow the formal discussion. The conference call can be accessed by dialing 201-493-6780. The listen-only audio webcast can be monitored at investors.cmco.com/. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Wednesday, November 8, 2023. To listen to the archived call, dial 412-317-6671 and enter the conference ID number 13741338. Alternatively, an archived webcast of the call can be found on the Company’s website and a transcript of the call will be posted there once available. 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 statements include, but are not limited to, statements concerning expected growth, future sales and future gross margin expansion, and future potential to deliver results; the execution of its strategy and further transformation of the Company with stronger growth, less cyclicality and higher margins, and achievement of the Company’s fiscal 2027 goals and certain other goals; and the amount and timing of future debt repayments by the Company. These statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including the impact of supply chain challenges and inflation, the ability of the Company to scale the organization, achieve its financial targets including as to revenue and gross margin, and to execute CMBS and the Core Growth Framework; global economic and business conditions affecting the industries served by the Company and its subsidiaries including COVID-19; the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the ability to expand into new markets and geographic regions, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded as current plans, estimates and beliefs. Except as required by applicable law, the Company assumes no obligation to update the forward-looking information contained in this release. Financial tables follow. COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Three Months Ended September 30, 2023 September 30, 2022 Change Net sales $ 258,400 $ 231,740 11.5 % Cost of products sold 158,424 145,430 8.9 % Gross profit 99,976 86,310 15.8 % Gross profit margin 38.7 % 37.2 % Selling expenses 26,867 25,617 4.9 % % of net sales 10.4 % 11.1 % General and administrative expenses 25,709 21,413 20.1 % % of net sales 9.9 % 9.2 % Research and development expenses 6,541 5,461 19.8 % % of net sales 2.5 % 2.4 % Amortization of intangibles 7,508 6,447 16.5 % Income from operations $ 33,351 $ 27,372 21.8 % Operating margin 12.9 % 11.8 % Interest and debt expense 10,211 6,768 50.9 % Investment (income) loss 88 312 (71.8 )% Foreign currency exchange (gain) loss 1,746 1,003 74.1 % Other (income) expense, net 393 222 77.0 % Income (loss) before income tax expense (benefit) $ 20,913 19,067 9.7 % Income tax expense (benefit) 5,100 4,953 3.0 % Net income (loss) $ 15,813 $ 14,114 12.0 % Average basic shares outstanding 28,725 28,619 0.4 % Basic income (loss) per share $ 0.55 $ 0.49 12.2 % Average diluted shares outstanding 29,001 28,748 0.9 % Diluted income (loss) per share $ 0.55 $ 0.49 12.2 % 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, 2023 September 30, 2022 Change Net sales $ 493,892 $ 452,027 9.3 % Cost of products sold 307,266 283,191 8.5 % Gross profit 186,626 168,836 10.5 % Gross profit margin 37.8 % 37.4 % Selling expenses 51,848 51,773 0.1 % % of net sales 10.5 % 11.5 % General and administrative expenses 53,152 43,299 22.8 % % of net sales 10.8 % 9.6 % Research and development expenses 12,442 10,591 17.5 % % of net sales 2.5 % 2.3 % Amortization of intangibles 14,385 12,982 10.8 % Income from operations 54,799 50,191 9.2 % Operating margin 11.1 % 11.1 % Interest and debt expense 18,836 12,971 45.2 % Investment (income) loss (454 ) 742 NM Foreign currency exchange (gain) loss 2,230 2,206 1.1 % Other (income) expense, net 605 (2,079 ) NM Income (loss) before income tax expense (benefit) 33,582 36,351 (7.6 )% Income tax expense (benefit) 8,494 13,846 (38.7 )% Net income (loss) 25,088 22,505 11.5 % Average basic shares outstanding 28,694 28,581 0.4 % Basic income (loss) per share $ 0.87 $ 0.79 10.1 % Average diluted shares outstanding 28,962 28,733 0.8 % Diluted income (loss) per share $ 0.87 $ 0.78 11.5 % Dividends declared per common share $ 0.07 $ 0.07 COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets (In thousands) September 30, 2023 March 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 99,058 $ 133,176 Trade accounts receivable $ 166,390 $ 151,451 Inventories $ 204,997 $ 179,359 Prepaid expenses and other $ 40,749 $ 32,254 Total current assets $ 511,194 $ 496,240 Property, plant, and equipment, net $ 100,602 $ 94,360 Goodwill $ 717,572 $ 644,629 Other intangibles, net $ 397,388 $ 362,537 Marketable securities $ 10,807 $ 10,368 Deferred taxes on income $ 2,206 $ 2,035 Other assets $ 87,632 $ 88,286 Total assets $ 1,827,401 $ 1,698,455 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 71,446 $ 76,736 Accrued liabilities $ 141,532 $ 124,317 Current portion of long-term debt and finance lease obligations $ 50,636 $ 40,604 Total current liabilities $ 263,614 $ 241,657 Term loan, AR securitization facility and finance lease obligations $ 514,205 $ 430,988 Other non current liabilities $ 195,584 $ 192,013 Total liabilities $ 973,403 $ 864,658 Shareholders’ equity: Common stock $ 287 $ 286 Treasury stock $ (1,001 ) $ (1,001 ) Additional paid in capital $ 519,593 $ 515,797 Retained earnings $ 379,834 $ 356,758 Accumulated other comprehensive loss $ (44,715 ) $ (38,043 ) Total shareholders’ equity $ 853,998 $ 833,797 Total liabilities and shareholders’ equity $ 1,827,401 $ 1,698,455 COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - UNAUDITED (In thousands) Six Months Ended September 30, 2023 September 30, 2022 Operating activities: Net income (loss) $ 25,088 $ 22,505 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization $ 22,482 $ 20,893 Deferred income taxes and related valuation allowance $ (6,097 ) $ (698 ) Net loss (gain) on sale of real estate, investments and other $ (302 ) $ 852 Stock-based compensation $ 5,264 $ 3,629 Amortization of deferred financing costs $ 1,106 $ 860 Loss (gain) on hedging instruments $ 554 $ (714 ) Gain on sale of building $ — $ (232 ) Loss on retirement of fixed asset $ — $ 175 Non-cash lease expense $ 4,684 $ 3,843 Changes in operating assets and liabilities, net of effects of business acquisitions: Trade accounts receivable $ (11,409 ) $ 381 Inventories $ (22,415 ) $ (30,754 ) Prepaid expenses and other $ (5,868 ) $ 2,321 Other assets $ 357 $ 24 Trade accounts payable $ (5,996 ) $ (11,267 ) Accrued liabilities $ (3,085 ) $ (3,124 ) Non-current liabilities $ (4,921 ) $ (2,545 ) Net cash provided by (used for) operating activities $ (558 ) $ 6,149 Investing activities: Proceeds from sales of marketable securities $ 1,100 $ 1,900 Purchases of marketable securities $ (1,809 ) $ (2,709 ) Capital expenditures $ (10,319 ) $ (5,288 ) Proceeds from sale of building, net of transaction costs $ — $ 373 Purchase of businesses, net of cash acquired $ (108,145 ) $ (1,616 ) Dividend received from equity method investment $ 144 $ 313 Net cash provided by (used for) investing activities $ (119,029 ) $ (7,027 ) Financing activities: Proceeds from the issuance of common stock $ 492 $ 621 Repayment of debt $ (25,294 ) $ (20,264 ) Proceeds from issuance of long-term debt $ 120,000 $ — Fees paid for borrowings on long-term debt $ (2,859 ) $ — Cash inflows from hedging activities $ 12,084 $ 12,306 Cash outflows from hedging activities $ (12,660 ) $ (11,689 ) Payment of dividends $ (4,015 ) $ (4,001 ) Other $ (1,954 ) $ (1,375 ) Net cash provided by (used for) financing activities $ 85,794 $ (24,402 ) Effect of exchange rate changes on cash $ (325 ) $ (1,245 ) Net change in cash and cash equivalents $ (34,118 ) $ (26,525 ) Cash, cash equivalents, and restricted cash at beginning of year $ 133,426 $ 115,640 Cash, cash equivalents, and restricted cash at end of period $ 99,308 $ 89,115 COLUMBUS McKINNON CORPORATION Q2 FY 2024 Sales Bridge Quarter Year To Date ($ in millions) $ Change % Change $ Change % Change Fiscal 2023 Sales $ 231.7 $ 452.0 Acquisition 9.5 4.1 % 12.2 2.7 % Volume 1.0 0.4 % 2.2 0.5 % Pricing 10.6 4.6 % 21.6 4.8 % Foreign currency translation 5.6 2.4 % 5.9 1.3 % Total change $ 26.7 11.5 % $ 41.9 9.3 % Fiscal 2024 Sales $ 258.4 $ 493.9 COLUMBUS McKINNON CORPORATION Q2 FY 2024 Gross Profit Bridge ($ in millions) Quarter Year To Date Fiscal 2023 Gross Profit $ 86.3 $ 168.8 Price, net of manufacturing costs changes (incl. inflation) 5.7 11.2 Sales volume and mix 0.6 (1.5 ) Acquisition 5.5 6.3 Current year business realignment costs — (0.2 ) Foreign currency translation 1.9 2.0 Total change 13.7 17.8 Fiscal 2024 Gross Profit $ 100.0 $ 186.6 U.S. Shipping Days by Quarter Q1 Q2 Q3 Q4 Total FY 24 63 62 61 62 248 FY 23 63 64 60 63 250 COLUMBUS McKINNON CORPORATION Additional Data(1) (Unaudited) September 30, 2023 June 30, 2023 March 31, 2023 September 30, 2022 ($ in millions) Backlog $ 317.7 $ 355.3 $ 308.7 $ 327.8 Long-term backlog Expected to ship beyond 3 months $ 148.3 $ 177.3 $ 142.0 $ 161.2 Long-term backlog as % of total backlog 46.7 % 49.9 % 46.0 % 49.2 % Trade accounts receivable Days sales outstanding(2) 58.6 days 62.9 days 54.3 days 55.1 days Inventory turns per year(2) (based on cost of products sold) 3.1 turns 2.9 turns 3.6 turns 3.0 turns Days' inventory 117.7 days 125.9 days 101.4 days 121.0 days Trade accounts payable Days payables outstanding(2) 48.3 days 53.3 days 53.3 days 59.4 days Working capital as a % of sales (3)(4) 21.8 % 21.4 % 17.3 % 20.8 % Net cash provided by (used for) operating activities $ 16.7 $ (17.2 ) $ 66.7 $ 17.3 Capital expenditures $ 5.0 $ 5.3 $ 3.1 $ 2.3 Free cash flow (5) $ 11.7 $ (22.5 ) $ 63.6 $ 15.0 Debt to total capitalization percentage 39.8 % 40.6 % 36.1 % 38.5 % Debt, net of cash, to net total capitalization 35.3 % 35.8 % 28.9 % 33.9 % (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. (2)June 30, 2023 figures exclude the impact of the acquisition. (3)June 30, 2023 and September 30, 2023 exclude the impact of the acquisition. (4)September 30, 2022 figure excludes the impact of the acquisition of Garvey Corporation. (5) Free cash flow is defined as net cash provided by (used for) operating activities less capital expenditures. Free cash flow is not a measure determined in accordance with GAAP, and may not be comparable with the measures as defined or used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as free cash flow, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s free cash flow to free cash flow for historical periods. Components may not add due to rounding. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP gross profit $ 99,976 $ 86,310 $ 186,626 $ 168,836 Add back (deduct): Business realignment costs — — 196 — Non-GAAP adjusted gross profit $ 99,976 $ 86,310 $ 186,822 $ 168,836 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Gross margin - GAAP 38.7 % 37.2 % 37.8 % 37.4 % Adjusted gross margin - Non-GAAP 38.7 % 37.2 % 37.8 % 37.4 % Adjusted gross profit is defined as gross profit as reported, adjusted for certain 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 be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted gross profit, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's gross profit to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP income from operations $ 33,351 $ 27,372 $ 54,799 $ 50,191 Add back (deduct): Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Non-GAAP adjusted income from operations $ 34,127 $ 28,624 $ 59,882 $ 53,186 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Operating margin - GAAP 12.9 % 11.8 % 11.1 % 11.1 % Adjusted operating margin - Non-GAAP 13.2 % 12.4 % 12.1 % 11.8 % Adjusted income from operations is defined as income from operations as reported, adjusted for certain items. Adjusted income from operations is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted income from operations, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's income from operations to the historical periods' income from operations, as well as facilitates a more meaningful comparison of the Company’s income from operations to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Net Income and Diluted Earnings per Share to Non-GAAP Adjusted Net Income and Diluted Earnings per Share ($ in thousands, except per share data) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP net income 15,813 14,114 25,088 22,505 Add back (deduct): Amortization of intangibles 7,508 6,447 14,385 12,982 Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Normalize tax rate (1) (2,199 ) (938 ) (4,768 ) 2,333 Non-GAAP adjusted net income 21,898 20,875 39,788 40,815 Average diluted shares outstanding 29,001 28,748 28,962 28,733 Diluted income per share - GAAP $ 0.55 $ 0.49 $ 0.87 $ 0.78 Adjusted diluted income per share - Non-GAAP $ 0.76 $ 0.73 $ 1.37 $ 1.42 (1) Applies a normalized tax rate of 25% in fiscal 2024 and 22% in 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 as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted net income and adjusted diluted EPS are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as 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 and adjusted diluted EPS, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's net income and diluted EPS to the historical periods' net income and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies. The Company believes that presenting adjusted diluted 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 GAAP Net Income to Non-GAAP Adjusted EBITDA ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP net income $ 15,813 $ 14,114 $ 25,088 $ 22,505 Add back (deduct): Income tax expense (benefit) 5,100 4,953 8,494 13,846 Interest and debt expense 10,211 6,768 18,836 12,971 Investment (income) loss 88 312 (454 ) 742 Foreign currency exchange (gain) loss 1,746 1,003 2,230 2,206 Other (income) expense, net 393 222 605 (2,079 ) Depreciation and amortization expense 11,592 10,424 22,482 20,893 Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Non-GAAP adjusted EBITDA $ 45,719 $ 39,048 $ 82,364 $ 74,079 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Net income margin - GAAP 6.1 % 6.1 % 5.1 % 5.0 % Adjusted EBITDA margin - Non-GAAP 17.7 % 16.8 % 16.7 % 16.4 % Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements. View source version on businesswire.com: https://www.businesswire.com/news/home/20231101132219/en/Contacts Gregory P. Rustowicz Executive Vice President Finance and Chief Financial Officer Columbus McKinnon Corporation 716-689-5442 greg.rustowicz@cmco.com Investor Relations: Deborah K. Pawlowski Kei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Columbus McKinnon Reports Record Sales and Operating Income for Second Quarter Fiscal Year 2024 By: Columbus McKinnon Corporation via Business Wire November 01, 2023 at 06:10 AM EDT Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2024 second quarter, which ended September 30, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition"). Second Quarter Highlights (compared with prior-year period, except where otherwise noted) Growth strategy drives record sales of $258.4 million, up 12% over same period in the prior year CMBS enables record gross margin of 38.7%; 190 basis point margin expansion sequentially Record operating income of $33.4 million, up 22% over prior year Expanded financial flexibility while reducing debt; paid down $15 million in debt and increasing debt pay down plans by $10 million to $50 million in fiscal 2024 Expect to surpass $1 billion in revenue in fiscal 2024; advancing toward fiscal 2027 targets David J. Wilson, President and CEO, commented, “Our second quarter results reflect the meaningful progress we are making as our team executes toward our fiscal 2027 targets. We achieved several new milestones this quarter including record revenue, gross margin and operating income. Being customer led is a foundational component of the Columbus McKinnon Business System (“CMBS”) which drives continuous improvement, discipline, communication and accountability. We remain laser focused on improving our customers’ experience and our progress has been validated by recent improvements in our net promoter score. The 80/20 process is another key focus area of CMBS with our current priority being product line simplification. Beyond optimizing financial performance, this will lead to improved product offerings, stronger market positioning and the ability to simplify our factory footprint.” Mr. Wilson noted, “We are clearly building momentum within the organization and expect to surpass $1 billion in revenue in fiscal 2024. We also expect to deliver approximately 150 basis points of year-over-year gross margin expansion, exceeding our previous guidance. We are excited about the prospects for our precision conveyance platform including the recent addition of the montratec business. This, in combination with our organic growth initiatives, is driving the transformation of Columbus McKinnon to a less cyclical, higher growth and more profitable enterprise.” Second Quarter Fiscal 2024 Sales ($ in millions) Q2 FY 24 Q2 FY 23 Change % Change Net sales $ 258.4 $ 231.7 $ 26.7 11.5 % U.S. sales $ 145.2 $ 139.7 $ 5.5 3.9 % % of total 56 % 60 % Non-U.S. sales $ 113.2 $ 92.0 $ 21.2 23.0 % % of total 44 % 40 % For the quarter, net sales increased $26.7 million, or 11.5%. The acquisition contributed $9.5 million, or 4.1%, of the increase in sales. In the U.S., sales were up $5.5 million, or 3.9%, as a result of $4.9 million of price improvement, $0.4 million contribution from the acquisition and $0.2 million of higher volume. Sales outside the U.S. increased $21.2 million, or 23.0%, driven by $9.1 million of sales related to the acquisition, $5.7 million of price improvement and $0.8 million of higher volume. Favorable foreign currency translation was $5.6 million. Second Quarter Fiscal 2024 Operating Results ($ in millions) Q2 FY 24 Q2 FY 23 Change % Change Gross profit $ 100.0 $ 86.3 $ 13.7 15.8 % Gross margin 38.7 % 37.2 % 150 bps Adjusted gross profit* $ 100.0 $ 86.3 $ 13.7 15.8 % Adjusted gross margin* 38.7 % 37.2 % 150 bps Income from operations $ 33.4 $ 27.4 $ 6.0 21.8 % Operating margin 12.9 % 11.8 % 110 bps Adjusted income from operations* $ 34.1 $ 28.6 $ 5.5 19.2 % Adjusted operating margin* 13.2 % 12.4 % 80 bps Net income $ 15.8 $ 14.1 $ 1.7 12.0 % Net income margin 6.1 % 6.1 % 0 bps Diluted EPS $ 0.55 $ 0.49 $ 0.06 12.2 % Adjusted EPS* $ 0.76 $ 0.73 $ 0.03 4.1 % Adjusted EBITDA* $ 45.7 $ 39.0 $ 6.7 17.1 % Adjusted EBITDA margin* 17.7 % 16.8 % 90 bps *Adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted income from operations, adjusted operating margin, and adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA. Adjusted earnings per diluted share of $0.76 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability. Third Quarter Fiscal 2024 Outlook Columbus McKinnon expects third quarter fiscal 2024 sales of approximately $245 million to $255 million at current exchange rates. This represents 9% growth year-over-year at the midpoint of the range. Mr. Wilson concluded, “This quarter’s record financial performance provides additional proof points that demonstrate progress toward our fiscal 2027 targets. Given these results, we are accelerating debt repayment even as we invest in improving productivity and simplifying our footprint. We now expect our net leverage ratio to be approximately 2.3x1 by the end of fiscal 2024. As we execute our strategy, we are building an enterprise that can deliver stronger growth and increased profitability as we advance the transformation of Columbus McKinnon.” 1On a financial covenant basis per Amended and Restated Credit Agreement Teleconference/webcast Columbus McKinnon will host a conference call and live webcast today at 10:00 AM Eastern Time, at which management will review the Company’s financial results and strategy. The review will be accompanied by a slide presentation, which will be available on Columbus McKinnon’s website at investors.cmco.com/. A question-and-answer session will follow the formal discussion. The conference call can be accessed by dialing 201-493-6780. The listen-only audio webcast can be monitored at investors.cmco.com/. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Wednesday, November 8, 2023. To listen to the archived call, dial 412-317-6671 and enter the conference ID number 13741338. Alternatively, an archived webcast of the call can be found on the Company’s website and a transcript of the call will be posted there once available. 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 statements include, but are not limited to, statements concerning expected growth, future sales and future gross margin expansion, and future potential to deliver results; the execution of its strategy and further transformation of the Company with stronger growth, less cyclicality and higher margins, and achievement of the Company’s fiscal 2027 goals and certain other goals; and the amount and timing of future debt repayments by the Company. These statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including the impact of supply chain challenges and inflation, the ability of the Company to scale the organization, achieve its financial targets including as to revenue and gross margin, and to execute CMBS and the Core Growth Framework; global economic and business conditions affecting the industries served by the Company and its subsidiaries including COVID-19; the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the ability to expand into new markets and geographic regions, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded as current plans, estimates and beliefs. Except as required by applicable law, the Company assumes no obligation to update the forward-looking information contained in this release. Financial tables follow. COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Three Months Ended September 30, 2023 September 30, 2022 Change Net sales $ 258,400 $ 231,740 11.5 % Cost of products sold 158,424 145,430 8.9 % Gross profit 99,976 86,310 15.8 % Gross profit margin 38.7 % 37.2 % Selling expenses 26,867 25,617 4.9 % % of net sales 10.4 % 11.1 % General and administrative expenses 25,709 21,413 20.1 % % of net sales 9.9 % 9.2 % Research and development expenses 6,541 5,461 19.8 % % of net sales 2.5 % 2.4 % Amortization of intangibles 7,508 6,447 16.5 % Income from operations $ 33,351 $ 27,372 21.8 % Operating margin 12.9 % 11.8 % Interest and debt expense 10,211 6,768 50.9 % Investment (income) loss 88 312 (71.8 )% Foreign currency exchange (gain) loss 1,746 1,003 74.1 % Other (income) expense, net 393 222 77.0 % Income (loss) before income tax expense (benefit) $ 20,913 19,067 9.7 % Income tax expense (benefit) 5,100 4,953 3.0 % Net income (loss) $ 15,813 $ 14,114 12.0 % Average basic shares outstanding 28,725 28,619 0.4 % Basic income (loss) per share $ 0.55 $ 0.49 12.2 % Average diluted shares outstanding 29,001 28,748 0.9 % Diluted income (loss) per share $ 0.55 $ 0.49 12.2 % 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, 2023 September 30, 2022 Change Net sales $ 493,892 $ 452,027 9.3 % Cost of products sold 307,266 283,191 8.5 % Gross profit 186,626 168,836 10.5 % Gross profit margin 37.8 % 37.4 % Selling expenses 51,848 51,773 0.1 % % of net sales 10.5 % 11.5 % General and administrative expenses 53,152 43,299 22.8 % % of net sales 10.8 % 9.6 % Research and development expenses 12,442 10,591 17.5 % % of net sales 2.5 % 2.3 % Amortization of intangibles 14,385 12,982 10.8 % Income from operations 54,799 50,191 9.2 % Operating margin 11.1 % 11.1 % Interest and debt expense 18,836 12,971 45.2 % Investment (income) loss (454 ) 742 NM Foreign currency exchange (gain) loss 2,230 2,206 1.1 % Other (income) expense, net 605 (2,079 ) NM Income (loss) before income tax expense (benefit) 33,582 36,351 (7.6 )% Income tax expense (benefit) 8,494 13,846 (38.7 )% Net income (loss) 25,088 22,505 11.5 % Average basic shares outstanding 28,694 28,581 0.4 % Basic income (loss) per share $ 0.87 $ 0.79 10.1 % Average diluted shares outstanding 28,962 28,733 0.8 % Diluted income (loss) per share $ 0.87 $ 0.78 11.5 % Dividends declared per common share $ 0.07 $ 0.07 COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets (In thousands) September 30, 2023 March 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 99,058 $ 133,176 Trade accounts receivable $ 166,390 $ 151,451 Inventories $ 204,997 $ 179,359 Prepaid expenses and other $ 40,749 $ 32,254 Total current assets $ 511,194 $ 496,240 Property, plant, and equipment, net $ 100,602 $ 94,360 Goodwill $ 717,572 $ 644,629 Other intangibles, net $ 397,388 $ 362,537 Marketable securities $ 10,807 $ 10,368 Deferred taxes on income $ 2,206 $ 2,035 Other assets $ 87,632 $ 88,286 Total assets $ 1,827,401 $ 1,698,455 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 71,446 $ 76,736 Accrued liabilities $ 141,532 $ 124,317 Current portion of long-term debt and finance lease obligations $ 50,636 $ 40,604 Total current liabilities $ 263,614 $ 241,657 Term loan, AR securitization facility and finance lease obligations $ 514,205 $ 430,988 Other non current liabilities $ 195,584 $ 192,013 Total liabilities $ 973,403 $ 864,658 Shareholders’ equity: Common stock $ 287 $ 286 Treasury stock $ (1,001 ) $ (1,001 ) Additional paid in capital $ 519,593 $ 515,797 Retained earnings $ 379,834 $ 356,758 Accumulated other comprehensive loss $ (44,715 ) $ (38,043 ) Total shareholders’ equity $ 853,998 $ 833,797 Total liabilities and shareholders’ equity $ 1,827,401 $ 1,698,455 COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - UNAUDITED (In thousands) Six Months Ended September 30, 2023 September 30, 2022 Operating activities: Net income (loss) $ 25,088 $ 22,505 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization $ 22,482 $ 20,893 Deferred income taxes and related valuation allowance $ (6,097 ) $ (698 ) Net loss (gain) on sale of real estate, investments and other $ (302 ) $ 852 Stock-based compensation $ 5,264 $ 3,629 Amortization of deferred financing costs $ 1,106 $ 860 Loss (gain) on hedging instruments $ 554 $ (714 ) Gain on sale of building $ — $ (232 ) Loss on retirement of fixed asset $ — $ 175 Non-cash lease expense $ 4,684 $ 3,843 Changes in operating assets and liabilities, net of effects of business acquisitions: Trade accounts receivable $ (11,409 ) $ 381 Inventories $ (22,415 ) $ (30,754 ) Prepaid expenses and other $ (5,868 ) $ 2,321 Other assets $ 357 $ 24 Trade accounts payable $ (5,996 ) $ (11,267 ) Accrued liabilities $ (3,085 ) $ (3,124 ) Non-current liabilities $ (4,921 ) $ (2,545 ) Net cash provided by (used for) operating activities $ (558 ) $ 6,149 Investing activities: Proceeds from sales of marketable securities $ 1,100 $ 1,900 Purchases of marketable securities $ (1,809 ) $ (2,709 ) Capital expenditures $ (10,319 ) $ (5,288 ) Proceeds from sale of building, net of transaction costs $ — $ 373 Purchase of businesses, net of cash acquired $ (108,145 ) $ (1,616 ) Dividend received from equity method investment $ 144 $ 313 Net cash provided by (used for) investing activities $ (119,029 ) $ (7,027 ) Financing activities: Proceeds from the issuance of common stock $ 492 $ 621 Repayment of debt $ (25,294 ) $ (20,264 ) Proceeds from issuance of long-term debt $ 120,000 $ — Fees paid for borrowings on long-term debt $ (2,859 ) $ — Cash inflows from hedging activities $ 12,084 $ 12,306 Cash outflows from hedging activities $ (12,660 ) $ (11,689 ) Payment of dividends $ (4,015 ) $ (4,001 ) Other $ (1,954 ) $ (1,375 ) Net cash provided by (used for) financing activities $ 85,794 $ (24,402 ) Effect of exchange rate changes on cash $ (325 ) $ (1,245 ) Net change in cash and cash equivalents $ (34,118 ) $ (26,525 ) Cash, cash equivalents, and restricted cash at beginning of year $ 133,426 $ 115,640 Cash, cash equivalents, and restricted cash at end of period $ 99,308 $ 89,115 COLUMBUS McKINNON CORPORATION Q2 FY 2024 Sales Bridge Quarter Year To Date ($ in millions) $ Change % Change $ Change % Change Fiscal 2023 Sales $ 231.7 $ 452.0 Acquisition 9.5 4.1 % 12.2 2.7 % Volume 1.0 0.4 % 2.2 0.5 % Pricing 10.6 4.6 % 21.6 4.8 % Foreign currency translation 5.6 2.4 % 5.9 1.3 % Total change $ 26.7 11.5 % $ 41.9 9.3 % Fiscal 2024 Sales $ 258.4 $ 493.9 COLUMBUS McKINNON CORPORATION Q2 FY 2024 Gross Profit Bridge ($ in millions) Quarter Year To Date Fiscal 2023 Gross Profit $ 86.3 $ 168.8 Price, net of manufacturing costs changes (incl. inflation) 5.7 11.2 Sales volume and mix 0.6 (1.5 ) Acquisition 5.5 6.3 Current year business realignment costs — (0.2 ) Foreign currency translation 1.9 2.0 Total change 13.7 17.8 Fiscal 2024 Gross Profit $ 100.0 $ 186.6 U.S. Shipping Days by Quarter Q1 Q2 Q3 Q4 Total FY 24 63 62 61 62 248 FY 23 63 64 60 63 250 COLUMBUS McKINNON CORPORATION Additional Data(1) (Unaudited) September 30, 2023 June 30, 2023 March 31, 2023 September 30, 2022 ($ in millions) Backlog $ 317.7 $ 355.3 $ 308.7 $ 327.8 Long-term backlog Expected to ship beyond 3 months $ 148.3 $ 177.3 $ 142.0 $ 161.2 Long-term backlog as % of total backlog 46.7 % 49.9 % 46.0 % 49.2 % Trade accounts receivable Days sales outstanding(2) 58.6 days 62.9 days 54.3 days 55.1 days Inventory turns per year(2) (based on cost of products sold) 3.1 turns 2.9 turns 3.6 turns 3.0 turns Days' inventory 117.7 days 125.9 days 101.4 days 121.0 days Trade accounts payable Days payables outstanding(2) 48.3 days 53.3 days 53.3 days 59.4 days Working capital as a % of sales (3)(4) 21.8 % 21.4 % 17.3 % 20.8 % Net cash provided by (used for) operating activities $ 16.7 $ (17.2 ) $ 66.7 $ 17.3 Capital expenditures $ 5.0 $ 5.3 $ 3.1 $ 2.3 Free cash flow (5) $ 11.7 $ (22.5 ) $ 63.6 $ 15.0 Debt to total capitalization percentage 39.8 % 40.6 % 36.1 % 38.5 % Debt, net of cash, to net total capitalization 35.3 % 35.8 % 28.9 % 33.9 % (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. (2)June 30, 2023 figures exclude the impact of the acquisition. (3)June 30, 2023 and September 30, 2023 exclude the impact of the acquisition. (4)September 30, 2022 figure excludes the impact of the acquisition of Garvey Corporation. (5) Free cash flow is defined as net cash provided by (used for) operating activities less capital expenditures. Free cash flow is not a measure determined in accordance with GAAP, and may not be comparable with the measures as defined or used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as free cash flow, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s free cash flow to free cash flow for historical periods. Components may not add due to rounding. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP gross profit $ 99,976 $ 86,310 $ 186,626 $ 168,836 Add back (deduct): Business realignment costs — — 196 — Non-GAAP adjusted gross profit $ 99,976 $ 86,310 $ 186,822 $ 168,836 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Gross margin - GAAP 38.7 % 37.2 % 37.8 % 37.4 % Adjusted gross margin - Non-GAAP 38.7 % 37.2 % 37.8 % 37.4 % Adjusted gross profit is defined as gross profit as reported, adjusted for certain 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 be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted gross profit, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's gross profit to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP income from operations $ 33,351 $ 27,372 $ 54,799 $ 50,191 Add back (deduct): Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Non-GAAP adjusted income from operations $ 34,127 $ 28,624 $ 59,882 $ 53,186 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Operating margin - GAAP 12.9 % 11.8 % 11.1 % 11.1 % Adjusted operating margin - Non-GAAP 13.2 % 12.4 % 12.1 % 11.8 % Adjusted income from operations is defined as income from operations as reported, adjusted for certain items. Adjusted income from operations is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted income from operations, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's income from operations to the historical periods' income from operations, as well as facilitates a more meaningful comparison of the Company’s income from operations to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Net Income and Diluted Earnings per Share to Non-GAAP Adjusted Net Income and Diluted Earnings per Share ($ in thousands, except per share data) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP net income 15,813 14,114 25,088 22,505 Add back (deduct): Amortization of intangibles 7,508 6,447 14,385 12,982 Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Normalize tax rate (1) (2,199 ) (938 ) (4,768 ) 2,333 Non-GAAP adjusted net income 21,898 20,875 39,788 40,815 Average diluted shares outstanding 29,001 28,748 28,962 28,733 Diluted income per share - GAAP $ 0.55 $ 0.49 $ 0.87 $ 0.78 Adjusted diluted income per share - Non-GAAP $ 0.76 $ 0.73 $ 1.37 $ 1.42 (1) Applies a normalized tax rate of 25% in fiscal 2024 and 22% in 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 as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted net income and adjusted diluted EPS are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as 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 and adjusted diluted EPS, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's net income and diluted EPS to the historical periods' net income and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies. The Company believes that presenting adjusted diluted 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 GAAP Net Income to Non-GAAP Adjusted EBITDA ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP net income $ 15,813 $ 14,114 $ 25,088 $ 22,505 Add back (deduct): Income tax expense (benefit) 5,100 4,953 8,494 13,846 Interest and debt expense 10,211 6,768 18,836 12,971 Investment (income) loss 88 312 (454 ) 742 Foreign currency exchange (gain) loss 1,746 1,003 2,230 2,206 Other (income) expense, net 393 222 605 (2,079 ) Depreciation and amortization expense 11,592 10,424 22,482 20,893 Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Non-GAAP adjusted EBITDA $ 45,719 $ 39,048 $ 82,364 $ 74,079 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Net income margin - GAAP 6.1 % 6.1 % 5.1 % 5.0 % Adjusted EBITDA margin - Non-GAAP 17.7 % 16.8 % 16.7 % 16.4 % Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements. View source version on businesswire.com: https://www.businesswire.com/news/home/20231101132219/en/Contacts Gregory P. Rustowicz Executive Vice President Finance and Chief Financial Officer Columbus McKinnon Corporation 716-689-5442 greg.rustowicz@cmco.com Investor Relations: Deborah K. Pawlowski Kei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com
Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2024 second quarter, which ended September 30, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition"). Second Quarter Highlights (compared with prior-year period, except where otherwise noted) Growth strategy drives record sales of $258.4 million, up 12% over same period in the prior year CMBS enables record gross margin of 38.7%; 190 basis point margin expansion sequentially Record operating income of $33.4 million, up 22% over prior year Expanded financial flexibility while reducing debt; paid down $15 million in debt and increasing debt pay down plans by $10 million to $50 million in fiscal 2024 Expect to surpass $1 billion in revenue in fiscal 2024; advancing toward fiscal 2027 targets David J. Wilson, President and CEO, commented, “Our second quarter results reflect the meaningful progress we are making as our team executes toward our fiscal 2027 targets. We achieved several new milestones this quarter including record revenue, gross margin and operating income. Being customer led is a foundational component of the Columbus McKinnon Business System (“CMBS”) which drives continuous improvement, discipline, communication and accountability. We remain laser focused on improving our customers’ experience and our progress has been validated by recent improvements in our net promoter score. The 80/20 process is another key focus area of CMBS with our current priority being product line simplification. Beyond optimizing financial performance, this will lead to improved product offerings, stronger market positioning and the ability to simplify our factory footprint.” Mr. Wilson noted, “We are clearly building momentum within the organization and expect to surpass $1 billion in revenue in fiscal 2024. We also expect to deliver approximately 150 basis points of year-over-year gross margin expansion, exceeding our previous guidance. We are excited about the prospects for our precision conveyance platform including the recent addition of the montratec business. This, in combination with our organic growth initiatives, is driving the transformation of Columbus McKinnon to a less cyclical, higher growth and more profitable enterprise.” Second Quarter Fiscal 2024 Sales ($ in millions) Q2 FY 24 Q2 FY 23 Change % Change Net sales $ 258.4 $ 231.7 $ 26.7 11.5 % U.S. sales $ 145.2 $ 139.7 $ 5.5 3.9 % % of total 56 % 60 % Non-U.S. sales $ 113.2 $ 92.0 $ 21.2 23.0 % % of total 44 % 40 % For the quarter, net sales increased $26.7 million, or 11.5%. The acquisition contributed $9.5 million, or 4.1%, of the increase in sales. In the U.S., sales were up $5.5 million, or 3.9%, as a result of $4.9 million of price improvement, $0.4 million contribution from the acquisition and $0.2 million of higher volume. Sales outside the U.S. increased $21.2 million, or 23.0%, driven by $9.1 million of sales related to the acquisition, $5.7 million of price improvement and $0.8 million of higher volume. Favorable foreign currency translation was $5.6 million. Second Quarter Fiscal 2024 Operating Results ($ in millions) Q2 FY 24 Q2 FY 23 Change % Change Gross profit $ 100.0 $ 86.3 $ 13.7 15.8 % Gross margin 38.7 % 37.2 % 150 bps Adjusted gross profit* $ 100.0 $ 86.3 $ 13.7 15.8 % Adjusted gross margin* 38.7 % 37.2 % 150 bps Income from operations $ 33.4 $ 27.4 $ 6.0 21.8 % Operating margin 12.9 % 11.8 % 110 bps Adjusted income from operations* $ 34.1 $ 28.6 $ 5.5 19.2 % Adjusted operating margin* 13.2 % 12.4 % 80 bps Net income $ 15.8 $ 14.1 $ 1.7 12.0 % Net income margin 6.1 % 6.1 % 0 bps Diluted EPS $ 0.55 $ 0.49 $ 0.06 12.2 % Adjusted EPS* $ 0.76 $ 0.73 $ 0.03 4.1 % Adjusted EBITDA* $ 45.7 $ 39.0 $ 6.7 17.1 % Adjusted EBITDA margin* 17.7 % 16.8 % 90 bps *Adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted income from operations, adjusted operating margin, and adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA. Adjusted earnings per diluted share of $0.76 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability. Third Quarter Fiscal 2024 Outlook Columbus McKinnon expects third quarter fiscal 2024 sales of approximately $245 million to $255 million at current exchange rates. This represents 9% growth year-over-year at the midpoint of the range. Mr. Wilson concluded, “This quarter’s record financial performance provides additional proof points that demonstrate progress toward our fiscal 2027 targets. Given these results, we are accelerating debt repayment even as we invest in improving productivity and simplifying our footprint. We now expect our net leverage ratio to be approximately 2.3x1 by the end of fiscal 2024. As we execute our strategy, we are building an enterprise that can deliver stronger growth and increased profitability as we advance the transformation of Columbus McKinnon.” 1On a financial covenant basis per Amended and Restated Credit Agreement Teleconference/webcast Columbus McKinnon will host a conference call and live webcast today at 10:00 AM Eastern Time, at which management will review the Company’s financial results and strategy. The review will be accompanied by a slide presentation, which will be available on Columbus McKinnon’s website at investors.cmco.com/. A question-and-answer session will follow the formal discussion. The conference call can be accessed by dialing 201-493-6780. The listen-only audio webcast can be monitored at investors.cmco.com/. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Wednesday, November 8, 2023. To listen to the archived call, dial 412-317-6671 and enter the conference ID number 13741338. Alternatively, an archived webcast of the call can be found on the Company’s website and a transcript of the call will be posted there once available. 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 statements include, but are not limited to, statements concerning expected growth, future sales and future gross margin expansion, and future potential to deliver results; the execution of its strategy and further transformation of the Company with stronger growth, less cyclicality and higher margins, and achievement of the Company’s fiscal 2027 goals and certain other goals; and the amount and timing of future debt repayments by the Company. These statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including the impact of supply chain challenges and inflation, the ability of the Company to scale the organization, achieve its financial targets including as to revenue and gross margin, and to execute CMBS and the Core Growth Framework; global economic and business conditions affecting the industries served by the Company and its subsidiaries including COVID-19; the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the ability to expand into new markets and geographic regions, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded as current plans, estimates and beliefs. Except as required by applicable law, the Company assumes no obligation to update the forward-looking information contained in this release. Financial tables follow. COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Three Months Ended September 30, 2023 September 30, 2022 Change Net sales $ 258,400 $ 231,740 11.5 % Cost of products sold 158,424 145,430 8.9 % Gross profit 99,976 86,310 15.8 % Gross profit margin 38.7 % 37.2 % Selling expenses 26,867 25,617 4.9 % % of net sales 10.4 % 11.1 % General and administrative expenses 25,709 21,413 20.1 % % of net sales 9.9 % 9.2 % Research and development expenses 6,541 5,461 19.8 % % of net sales 2.5 % 2.4 % Amortization of intangibles 7,508 6,447 16.5 % Income from operations $ 33,351 $ 27,372 21.8 % Operating margin 12.9 % 11.8 % Interest and debt expense 10,211 6,768 50.9 % Investment (income) loss 88 312 (71.8 )% Foreign currency exchange (gain) loss 1,746 1,003 74.1 % Other (income) expense, net 393 222 77.0 % Income (loss) before income tax expense (benefit) $ 20,913 19,067 9.7 % Income tax expense (benefit) 5,100 4,953 3.0 % Net income (loss) $ 15,813 $ 14,114 12.0 % Average basic shares outstanding 28,725 28,619 0.4 % Basic income (loss) per share $ 0.55 $ 0.49 12.2 % Average diluted shares outstanding 29,001 28,748 0.9 % Diluted income (loss) per share $ 0.55 $ 0.49 12.2 % 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, 2023 September 30, 2022 Change Net sales $ 493,892 $ 452,027 9.3 % Cost of products sold 307,266 283,191 8.5 % Gross profit 186,626 168,836 10.5 % Gross profit margin 37.8 % 37.4 % Selling expenses 51,848 51,773 0.1 % % of net sales 10.5 % 11.5 % General and administrative expenses 53,152 43,299 22.8 % % of net sales 10.8 % 9.6 % Research and development expenses 12,442 10,591 17.5 % % of net sales 2.5 % 2.3 % Amortization of intangibles 14,385 12,982 10.8 % Income from operations 54,799 50,191 9.2 % Operating margin 11.1 % 11.1 % Interest and debt expense 18,836 12,971 45.2 % Investment (income) loss (454 ) 742 NM Foreign currency exchange (gain) loss 2,230 2,206 1.1 % Other (income) expense, net 605 (2,079 ) NM Income (loss) before income tax expense (benefit) 33,582 36,351 (7.6 )% Income tax expense (benefit) 8,494 13,846 (38.7 )% Net income (loss) 25,088 22,505 11.5 % Average basic shares outstanding 28,694 28,581 0.4 % Basic income (loss) per share $ 0.87 $ 0.79 10.1 % Average diluted shares outstanding 28,962 28,733 0.8 % Diluted income (loss) per share $ 0.87 $ 0.78 11.5 % Dividends declared per common share $ 0.07 $ 0.07 COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets (In thousands) September 30, 2023 March 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 99,058 $ 133,176 Trade accounts receivable $ 166,390 $ 151,451 Inventories $ 204,997 $ 179,359 Prepaid expenses and other $ 40,749 $ 32,254 Total current assets $ 511,194 $ 496,240 Property, plant, and equipment, net $ 100,602 $ 94,360 Goodwill $ 717,572 $ 644,629 Other intangibles, net $ 397,388 $ 362,537 Marketable securities $ 10,807 $ 10,368 Deferred taxes on income $ 2,206 $ 2,035 Other assets $ 87,632 $ 88,286 Total assets $ 1,827,401 $ 1,698,455 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 71,446 $ 76,736 Accrued liabilities $ 141,532 $ 124,317 Current portion of long-term debt and finance lease obligations $ 50,636 $ 40,604 Total current liabilities $ 263,614 $ 241,657 Term loan, AR securitization facility and finance lease obligations $ 514,205 $ 430,988 Other non current liabilities $ 195,584 $ 192,013 Total liabilities $ 973,403 $ 864,658 Shareholders’ equity: Common stock $ 287 $ 286 Treasury stock $ (1,001 ) $ (1,001 ) Additional paid in capital $ 519,593 $ 515,797 Retained earnings $ 379,834 $ 356,758 Accumulated other comprehensive loss $ (44,715 ) $ (38,043 ) Total shareholders’ equity $ 853,998 $ 833,797 Total liabilities and shareholders’ equity $ 1,827,401 $ 1,698,455 COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - UNAUDITED (In thousands) Six Months Ended September 30, 2023 September 30, 2022 Operating activities: Net income (loss) $ 25,088 $ 22,505 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization $ 22,482 $ 20,893 Deferred income taxes and related valuation allowance $ (6,097 ) $ (698 ) Net loss (gain) on sale of real estate, investments and other $ (302 ) $ 852 Stock-based compensation $ 5,264 $ 3,629 Amortization of deferred financing costs $ 1,106 $ 860 Loss (gain) on hedging instruments $ 554 $ (714 ) Gain on sale of building $ — $ (232 ) Loss on retirement of fixed asset $ — $ 175 Non-cash lease expense $ 4,684 $ 3,843 Changes in operating assets and liabilities, net of effects of business acquisitions: Trade accounts receivable $ (11,409 ) $ 381 Inventories $ (22,415 ) $ (30,754 ) Prepaid expenses and other $ (5,868 ) $ 2,321 Other assets $ 357 $ 24 Trade accounts payable $ (5,996 ) $ (11,267 ) Accrued liabilities $ (3,085 ) $ (3,124 ) Non-current liabilities $ (4,921 ) $ (2,545 ) Net cash provided by (used for) operating activities $ (558 ) $ 6,149 Investing activities: Proceeds from sales of marketable securities $ 1,100 $ 1,900 Purchases of marketable securities $ (1,809 ) $ (2,709 ) Capital expenditures $ (10,319 ) $ (5,288 ) Proceeds from sale of building, net of transaction costs $ — $ 373 Purchase of businesses, net of cash acquired $ (108,145 ) $ (1,616 ) Dividend received from equity method investment $ 144 $ 313 Net cash provided by (used for) investing activities $ (119,029 ) $ (7,027 ) Financing activities: Proceeds from the issuance of common stock $ 492 $ 621 Repayment of debt $ (25,294 ) $ (20,264 ) Proceeds from issuance of long-term debt $ 120,000 $ — Fees paid for borrowings on long-term debt $ (2,859 ) $ — Cash inflows from hedging activities $ 12,084 $ 12,306 Cash outflows from hedging activities $ (12,660 ) $ (11,689 ) Payment of dividends $ (4,015 ) $ (4,001 ) Other $ (1,954 ) $ (1,375 ) Net cash provided by (used for) financing activities $ 85,794 $ (24,402 ) Effect of exchange rate changes on cash $ (325 ) $ (1,245 ) Net change in cash and cash equivalents $ (34,118 ) $ (26,525 ) Cash, cash equivalents, and restricted cash at beginning of year $ 133,426 $ 115,640 Cash, cash equivalents, and restricted cash at end of period $ 99,308 $ 89,115 COLUMBUS McKINNON CORPORATION Q2 FY 2024 Sales Bridge Quarter Year To Date ($ in millions) $ Change % Change $ Change % Change Fiscal 2023 Sales $ 231.7 $ 452.0 Acquisition 9.5 4.1 % 12.2 2.7 % Volume 1.0 0.4 % 2.2 0.5 % Pricing 10.6 4.6 % 21.6 4.8 % Foreign currency translation 5.6 2.4 % 5.9 1.3 % Total change $ 26.7 11.5 % $ 41.9 9.3 % Fiscal 2024 Sales $ 258.4 $ 493.9 COLUMBUS McKINNON CORPORATION Q2 FY 2024 Gross Profit Bridge ($ in millions) Quarter Year To Date Fiscal 2023 Gross Profit $ 86.3 $ 168.8 Price, net of manufacturing costs changes (incl. inflation) 5.7 11.2 Sales volume and mix 0.6 (1.5 ) Acquisition 5.5 6.3 Current year business realignment costs — (0.2 ) Foreign currency translation 1.9 2.0 Total change 13.7 17.8 Fiscal 2024 Gross Profit $ 100.0 $ 186.6 U.S. Shipping Days by Quarter Q1 Q2 Q3 Q4 Total FY 24 63 62 61 62 248 FY 23 63 64 60 63 250 COLUMBUS McKINNON CORPORATION Additional Data(1) (Unaudited) September 30, 2023 June 30, 2023 March 31, 2023 September 30, 2022 ($ in millions) Backlog $ 317.7 $ 355.3 $ 308.7 $ 327.8 Long-term backlog Expected to ship beyond 3 months $ 148.3 $ 177.3 $ 142.0 $ 161.2 Long-term backlog as % of total backlog 46.7 % 49.9 % 46.0 % 49.2 % Trade accounts receivable Days sales outstanding(2) 58.6 days 62.9 days 54.3 days 55.1 days Inventory turns per year(2) (based on cost of products sold) 3.1 turns 2.9 turns 3.6 turns 3.0 turns Days' inventory 117.7 days 125.9 days 101.4 days 121.0 days Trade accounts payable Days payables outstanding(2) 48.3 days 53.3 days 53.3 days 59.4 days Working capital as a % of sales (3)(4) 21.8 % 21.4 % 17.3 % 20.8 % Net cash provided by (used for) operating activities $ 16.7 $ (17.2 ) $ 66.7 $ 17.3 Capital expenditures $ 5.0 $ 5.3 $ 3.1 $ 2.3 Free cash flow (5) $ 11.7 $ (22.5 ) $ 63.6 $ 15.0 Debt to total capitalization percentage 39.8 % 40.6 % 36.1 % 38.5 % Debt, net of cash, to net total capitalization 35.3 % 35.8 % 28.9 % 33.9 % (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. (2)June 30, 2023 figures exclude the impact of the acquisition. (3)June 30, 2023 and September 30, 2023 exclude the impact of the acquisition. (4)September 30, 2022 figure excludes the impact of the acquisition of Garvey Corporation. (5) Free cash flow is defined as net cash provided by (used for) operating activities less capital expenditures. Free cash flow is not a measure determined in accordance with GAAP, and may not be comparable with the measures as defined or used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as free cash flow, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s free cash flow to free cash flow for historical periods. Components may not add due to rounding. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP gross profit $ 99,976 $ 86,310 $ 186,626 $ 168,836 Add back (deduct): Business realignment costs — — 196 — Non-GAAP adjusted gross profit $ 99,976 $ 86,310 $ 186,822 $ 168,836 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Gross margin - GAAP 38.7 % 37.2 % 37.8 % 37.4 % Adjusted gross margin - Non-GAAP 38.7 % 37.2 % 37.8 % 37.4 % Adjusted gross profit is defined as gross profit as reported, adjusted for certain 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 be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted gross profit, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's gross profit to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP income from operations $ 33,351 $ 27,372 $ 54,799 $ 50,191 Add back (deduct): Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Non-GAAP adjusted income from operations $ 34,127 $ 28,624 $ 59,882 $ 53,186 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Operating margin - GAAP 12.9 % 11.8 % 11.1 % 11.1 % Adjusted operating margin - Non-GAAP 13.2 % 12.4 % 12.1 % 11.8 % Adjusted income from operations is defined as income from operations as reported, adjusted for certain items. Adjusted income from operations is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted income from operations, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's income from operations to the historical periods' income from operations, as well as facilitates a more meaningful comparison of the Company’s income from operations to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of GAAP Net Income and Diluted Earnings per Share to Non-GAAP Adjusted Net Income and Diluted Earnings per Share ($ in thousands, except per share data) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP net income 15,813 14,114 25,088 22,505 Add back (deduct): Amortization of intangibles 7,508 6,447 14,385 12,982 Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Normalize tax rate (1) (2,199 ) (938 ) (4,768 ) 2,333 Non-GAAP adjusted net income 21,898 20,875 39,788 40,815 Average diluted shares outstanding 29,001 28,748 28,962 28,733 Diluted income per share - GAAP $ 0.55 $ 0.49 $ 0.87 $ 0.78 Adjusted diluted income per share - Non-GAAP $ 0.76 $ 0.73 $ 1.37 $ 1.42 (1) Applies a normalized tax rate of 25% in fiscal 2024 and 22% in 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 as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted net income and adjusted diluted EPS are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as 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 and adjusted diluted EPS, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's net income and diluted EPS to the historical periods' net income and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies. The Company believes that presenting adjusted diluted 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 GAAP Net Income to Non-GAAP Adjusted EBITDA ($ in thousands) Three Months Ended Six Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 GAAP net income $ 15,813 $ 14,114 $ 25,088 $ 22,505 Add back (deduct): Income tax expense (benefit) 5,100 4,953 8,494 13,846 Interest and debt expense 10,211 6,768 18,836 12,971 Investment (income) loss 88 312 (454 ) 742 Foreign currency exchange (gain) loss 1,746 1,003 2,230 2,206 Other (income) expense, net 393 222 605 (2,079 ) Depreciation and amortization expense 11,592 10,424 22,482 20,893 Acquisition deal and integration costs 508 19 3,095 105 Business realignment costs 40 1,233 415 2,890 North American warehouse consolidation 82 — 199 — Headquarter relocation costs 146 — 1,374 — Non-GAAP adjusted EBITDA $ 45,719 $ 39,048 $ 82,364 $ 74,079 Net sales $ 258,400 $ 231,740 $ 493,892 $ 452,027 Net income margin - GAAP 6.1 % 6.1 % 5.1 % 5.0 % Adjusted EBITDA margin - Non-GAAP 17.7 % 16.8 % 16.7 % 16.4 % Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements. View source version on businesswire.com: https://www.businesswire.com/news/home/20231101132219/en/
Gregory P. Rustowicz Executive Vice President Finance and Chief Financial Officer Columbus McKinnon Corporation 716-689-5442 greg.rustowicz@cmco.com Investor Relations: Deborah K. Pawlowski Kei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com