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 33% Operating Income Growth on 10% Net Sales Growth for Third Quarter Fiscal Year 2024 By: Columbus McKinnon Corporation via Business Wire January 31, 2024 at 06:30 AM EST Strong orders in the quarter led by precision conveyance platform 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 2024 third quarter, which ended December 31, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition"). Third Quarter Highlights (compared with prior-year period, except where otherwise noted) Orders increased 8% demonstrating continued progress with growth initiatives and included a 23% increase in precision conveyance orders Net sales increased 10% to $254.1 million primarily driven by strength across all product platforms led by precision conveyance Gross margin expanded 130 basis points to 36.9%; Adjusted Gross Margin1 expanded 160 basis points to 37.2% Operating income increased 33% to $26.9 million, or 10.6% of net sales; Adjusted Operating Income1 was $29.7 million, or 11.7% of net sales Net cash provided by operating activities was $28.6 million in the first nine months of fiscal 2024, up 69% from the prior year period; continued accelerated debt repayment in the quarter Completed construction and took occupancy of a state-of-the-art manufacturing center of excellence in Mexico, which will provide significant growth capacity and cost savings over time “We are pleased with the strong orders, sales, operating income, and cash flow generation we delivered in the quarter. Our team continued to execute commercial and operational initiatives, improving productivity, reducing lead times, and enhancing our customer experience. Our top-line growth translated to expanded operating margin demonstrating the incremental leverage of our business as we continue to drive year-over-year improvements leveraging CMBS and the 80/20 process,” said David J. Wilson, President and Chief Executive Officer. “We have an encouraging funnel for both short cycle and large projects as we continue to execute on our strategy to become a leader in intelligent motion solutions. Our progress gives us confidence in our near- and long-term financial objectives, which we believe will drive meaningful shareholder value.” ___________________________ 1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income and Adjusted Operating Margin are non-GAAP financial measures. See accompanying discussion and reconciliation tables provided in this release for reconciliations of these non-GAAP financial measures to the closest corresponding GAAP financial measures. Third Quarter Fiscal 2024 Sales ($ in millions) Q3 FY 24 Q3 FY 23 Change % Change Net sales $ 254.1 $ 230.4 $ 23.7 10.3 % U.S. sales $ 138.5 $ 141.4 $ (2.9 ) (2.1 ) % % of total 55 % 61 % Non-U.S. sales $ 115.6 $ 89.0 $ 26.6 29.9 % % of total 45 % 39 % For the quarter, net sales increased $23.7 million, or 10.3%. The acquisition contributed $15.5 million, or 6.7%, of the increase. In the U.S., sales were down $2.9 million, or 2.1%. Price improvement of $2.2 million and $0.2 million of contribution from the acquisition helped to offset $5.4 million in lower volume. Sales outside the U.S. increased $26.6 million, or 29.9%, driven by $15.3 million of sales related to the acquisition, $4.3 million of price improvement and $3.0 million of higher volume. Favorable foreign currency translation was $4.1 million. Third Quarter Fiscal 2024 Operating Results ($ in millions) Q3 FY 24 Q3 FY 23 Change % Change Gross profit $ 93.9 $ 82.0 $ 11.9 14.4 % Gross margin 36.9 % 35.6 % % 130 bps Adjusted Gross Profit1 $ 94.5 $ 82.0 $ 12.4 15.2 % Adjusted Gross Margin1 37.2 % 35.6 % 160 bps Income from operations $ 26.9 $ 20.2 $ 6.7 33.4 % Operating margin 10.6 % 8.8 % 180 bps Adjusted Operating Income1 $ 29.7 $ 23.5 $ 6.3 26.8 % Adjusted Operating Margin1 11.7 % 10.2 % 150 bps Net income $ 9.7 $ 12.0 $ (2.3 ) (19.1 ) % Net income margin 3.8 % 5.2 % (140) bps Diluted EPS $ 0.34 $ 0.42 $ (0.08 ) (19.0 ) % Adjusted Diluted EPS1 $ 0.74 $ 0.72 $ 0.02 2.8 % Adjusted EBITDA1 $ 41.3 $ 34.0 $ 7.4 21.7 % Adjusted EBITDA Margin2 16.3 % 14.7 % 160 bps Adjusted Diluted EPS1 of $0.74 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability. Fourth Quarter Fiscal 2024 Guidance Columbus McKinnon expects net sales of approximately $260 million to $270 million at current exchange rates. This represents 4% growth year-over-year at the midpoint of the range. ______________________________ 1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted Diluted EPS, Adjusted EBITDA, and Adjusted EBITDA Margin 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. 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 201-493-6780. 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 412-317-6671 and enter the conference ID number 13743372 through Wednesday, February 7, 2024. 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 and our fourth quarter fiscal 2024 net sales; (ii) our operational and financial targets and capital distribution policy; (iii) general economic trend and trends in the industry and markets; (iv) the risk and costs associated with the integration of, and our ability to integrate acquisitions successfully to achieve synergies; (v) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; (vi) the effectiveness of our new facility in Monterrey, Mexico to provide cost savings and margin improvement 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, 2023 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. Financial tables follow. COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Three Months Ended December 31, 2023 December 31, 2022 Change Net sales $ 254,143 $ 230,370 10.3 % Cost of products sold 160,246 148,326 8.0 % Gross profit 93,897 82,044 14.4 % Gross profit margin 36.9 % 35.6 % Selling expenses 26,552 25,424 4.4 % % of net sales 10.4 % 11.0 % General and administrative expenses 26,255 25,143 4.4 % % of net sales 10.3 % 10.9 % Research and development expenses 6,692 4,839 38.3 % % of net sales 2.6 % 2.1 % Amortization of intangibles 7,486 6,459 15.9 % Income from operations 26,912 20,179 33.4 % Operating margin 10.6 % 8.8 % Interest and debt expense 9,952 7,303 36.3 % Investment (income) loss (758 ) (574 ) 32.1 % Foreign currency exchange (gain) loss (1,155 ) (3,359 ) (65.6 ) % Other (income) expense, net 5,234 79 6,525.3 % Income (loss) before income tax expense (benefit) 13,639 16,730 (18.5 ) % Income tax expense (benefit) 3,911 4,701 (16.8 ) % Net income (loss) $ 9,728 $ 12,029 (19.1 ) % Average basic shares outstanding 28,744 28,626 0.4 % Basic income (loss) per share $ 0.34 $ 0.42 (19.0 ) % Average diluted shares outstanding 28,991 28,778 0.7 % Diluted income (loss) per share $ 0.34 $ 0.42 (19.0 ) % 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) Nine Months Ended December 31, 2023 December 31, 2022 Change Net sales $ 748,036 $ 682,397 9.6 % Cost of products sold 467,513 431,516 8.3 % Gross profit 280,523 250,881 11.8 % Gross profit margin 37.5 % 36.8 % Selling expenses 78,400 77,197 1.6 % % of net sales 10.5 % 11.3 % General and administrative expenses 79,407 68,441 16.0 % % of net sales 10.6 % 10.0 % Research and development expenses 19,134 15,429 24.0 % % of net sales 2.6 % 2.3 % Amortization of intangibles 21,871 19,442 12.5 % Income from operations 81,711 70,372 16.1 % Operating margin 10.9 % 10.3 % Interest and debt expense 28,788 20,274 42.0 % Investment (income) loss (1,212 ) 168 NM Foreign currency exchange (gain) loss 1,074 (1,152 ) NM Other (income) expense, net 5,840 (1,999 ) NM Income (loss) before income tax expense (benefit) 47,221 53,081 (11.0 ) % Income tax expense (benefit) 12,405 18,547 (33.1 ) % Net income (loss) $ 34,816 $ 34,534 0.8 % Average basic shares outstanding 28,711 28,597 0.4 % Basic income (loss) per share $ 1.21 $ 1.21 — % Average diluted shares outstanding 28,979 28,767 0.7 % Diluted income (loss) per share $ 1.20 $ 1.20 — % Dividends declared per common share $ 0.14 $ 0.14 COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets (In thousands) December 31, 2023 March 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 102,945 $ 133,176 Trade accounts receivable $ 173,411 $ 151,451 Inventories $ 204,396 $ 179,359 Prepaid expenses and other $ 35,660 $ 32,254 Total current assets $ 516,412 $ 496,240 Property, plant, and equipment, net $ 102,729 $ 94,360 Goodwill $ 728,427 $ 644,629 Other intangibles, net $ 396,317 $ 362,537 Marketable securities $ 12,388 $ 10,368 Deferred taxes on income $ 1,990 $ 2,035 Other assets $ 99,047 $ 88,286 Total assets $ 1,857,310 $ 1,698,455 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 76,151 $ 76,736 Accrued liabilities $ 142,518 $ 124,317 Current portion of long-term debt and finance lease obligations $ 50,652 $ 40,604 Total current liabilities $ 269,321 $ 241,657 Term loan, AR securitization facility and finance lease obligations $ 499,388 $ 430,988 Other non current liabilities $ 210,164 $ 192,013 Total liabilities $ 978,873 $ 864,658 Shareholders’ equity: Common stock $ 288 $ 286 Treasury stock $ (1,001 ) $ (1,001 ) Additional paid in capital $ 522,587 $ 515,797 Retained earnings $ 387,550 $ 356,758 Accumulated other comprehensive loss $ (30,987 ) $ (38,043 ) Total shareholders’ equity $ 878,437 $ 833,797 Total liabilities and shareholders’ equity $ 1,857,310 $ 1,698,455 COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - UNAUDITED (In thousands) Nine Months Ended December 31, 2023 December 31, 2022 Operating activities: Net income (loss) $ 34,816 $ 34,534 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization $ 34,052 $ 31,380 Deferred income taxes and related valuation allowance $ (6,495 ) $ (783 ) Net loss (gain) on sale of real estate, investments and other $ (967 ) $ 347 Non-cash pension settlement $ 4,599 $ — Stock-based compensation $ 8,473 $ 7,039 Amortization of deferred financing costs $ 1,728 $ 1,291 Loss (gain) on hedging instruments $ 1,193 $ (598 ) Gain on sale of building $ — $ (232 ) Loss on retirement of fixed asset $ — $ 175 Non-cash lease expense $ 7,080 $ 5,814 Changes in operating assets and liabilities, net of effects of business acquisitions: Trade accounts receivable $ (14,911 ) $ (1,401 ) Inventories $ (17,764 ) $ (31,701 ) Prepaid expenses and other $ (2,897 ) $ 4,905 Other assets $ (859 ) $ (232 ) Trade accounts payable $ (1,387 ) $ (18,756 ) Accrued liabilities $ (7,236 ) $ (7,498 ) Non-current liabilities $ (10,834 ) $ (7,382 ) Net cash provided by (used for) operating activities $ 28,591 $ 16,902 Investing activities: Proceeds from sales of marketable securities $ 1,101 $ 2,650 Purchases of marketable securities $ (2,731 ) $ (3,121 ) Capital expenditures $ (16,334 ) $ (9,511 ) 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 $ (125,965 ) $ (10,912 ) Financing activities: Proceeds from the issuance of common stock $ 556 $ 704 Purchases of treasury stock $ — $ (1,001 ) Repayment of debt $ (40,447 ) $ (30,402 ) Proceeds from issuance of long-term debt $ 120,000 $ — Fees paid for borrowings on long-term debt $ (2,859 ) $ — Cash inflows from hedging activities $ 18,088 $ 18,422 Cash outflows from hedging activities $ (19,303 ) $ (17,958 ) Payment of dividends $ (6,027 ) $ (6,006 ) Other $ (2,237 ) $ (1,398 ) Net cash provided by (used for) financing activities $ 67,771 $ (37,639 ) Effect of exchange rate changes on cash $ (628 ) $ (2,221 ) Net change in cash and cash equivalents $ (30,231 ) $ (33,870 ) Cash, cash equivalents, and restricted cash at beginning of year $ 133,426 $ 115,640 Cash, cash equivalents, and restricted cash at end of period $ 103,195 $ 81,770 COLUMBUS McKINNON CORPORATION Q3 FY 2024 Sales Bridge Quarter Year To Date ($ in millions) $ Change % Change $ Change % Change Fiscal 2023 Sales $ 230.4 $ 682.4 Acquisition 15.5 6.7 % 27.7 4.1 % Pricing 6.5 2.8 % 28.1 4.1 % Volume (2.4 ) (1.0 ) % (0.2 ) — Foreign currency translation 4.1 1.8 % 10.0 1.4 % Total change $ 23.7 10.3 % $ 65.6 9.6 % Fiscal 2024 Sales $ 254.1 $ 748.0 COLUMBUS McKINNON CORPORATION Q3 FY 2024 Gross Profit Bridge ($ in millions) Quarter Year To Date Fiscal 2023 Gross Profit $ 82.0 $ 250.9 Acquisition 6.7 13.0 Price, net of manufacturing costs changes (incl. inflation) 4.6 15.8 Product liability 0.9 0.9 Current year business realignment costs (0.6 ) (0.8 ) Sales volume and mix (1.2 ) (2.7 ) Foreign currency translation 1.4 3.4 Total change 11.8 29.6 Fiscal 2024 Gross Profit $ 93.9 $ 280.5 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 Data1 (Unaudited) December 31, 2023 September 30, 2023 March 31, 2023 December 31, 2022 ($ in millions) Backlog $ 298.4 $ 317.7 $ 308.7 $ 329.1 Long-term backlog Expected to ship beyond 3 months $ 151.3 $ 148.3 $ 142.0 $ 164.7 Long-term backlog as % of total backlog 50.7 % 46.7 % 46.0 % 50.0 % Trade accounts receivable Days sales outstanding 62.1 days 58.6 days 54.3 days 58.0 days Inventory turns per year (based on cost of products sold) 3.1 turns 3.1 turns 3.6 turns 3.0 turns Days' inventory 117.7 days 117.7 days 101.4 days 121.0 days Trade accounts payable Days payables outstanding 50.1 days 48.3 days 53.3 days 52.6 days Working capital as a % of sales 2,3 20.6 % 21.8 % 17.3 % 22.1 % Net cash provided by (used for) operating activities $ 29.1 $ 16.7 $ 66.7 $ 10.8 Capital expenditures $ 6.0 $ 5.0 $ 3.1 $ 4.2 Free Cash Flow 4 $ 23.1 $ 11.7 $ 63.6 $ 6.5 Debt to total capitalization percentage 38.5 % 39.8 % 36.1 % 37.3 % Debt, net of cash, to net total capitalization 33.7 % 35.3 % 28.9 % 33.0 % 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 December 31, 2023 and September 30, 2023 exclude the impact of the acquisition of montratec GmbH. 3 December 31, 2022 figure excludes the impact of the acquisition of Garvey Corporation. 4 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. 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 Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Gross profit $ 93,897 $ 82,044 $ 280,523 $ 250,881 Add back (deduct): Business realignment costs 150 — 346 — Monterrey, MX new factory start-up costs 435 — 435 — Adjusted Gross Profit $ 94,482 $ 82,044 $ 281,304 $ 250,881 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Gross margin 36.9 % 35.6 % 37.5 % 36.8 % Adjusted Gross Margin 37.2 % 35.6 % 37.6 % 36.8 % Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Profit 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 Profit Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Profit 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 and current year's gross profit and gross profit margin to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit and gross profit margin to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of Income from Operations to Adjusted Operating Income ($ in thousands) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Income from operations $ 26,912 $ 20,179 $ 81,711 $ 70,372 Add back (deduct): Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Adjusted Operating Income $ 29,742 $ 23,463 $ 89,624 $ 76,652 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Operating margin 10.6 % 8.8 % 10.9 % 10.3 % Adjusted Operating Margin 11.7 % 10.2 % 12.0 % 11.2 % 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 and current year'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 Diluted Earnings per Share ($ in thousands, except per share data) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income $ 9,728 $ 12,029 $ 34,816 $ 34,534 Add back (deduct): Amortization of intangibles 7,486 6,459 21,871 19,442 Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Non-cash pension settlement expense 4,599 — 4,599 — Normalize tax rate 1 (3,227 ) (1,123 ) (7,996 ) 1,210 Adjusted Net Income $ 21,416 $ 20,649 $ 61,203 $ 61,466 Average diluted shares outstanding 28,991 28,778 28,979 28,767 Diluted income per share $ 0.34 $ 0.42 $ 1.20 $ 1.20 Adjusted Diluted EPS $ 0.74 $ 0.72 $ 2.11 $ 2.14 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 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, are 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 Net Income to Adjusted EBITDA ($ in thousands) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income $ 9,728 $ 12,029 $ 34,816 $ 34,534 Add back (deduct): Income tax expense (benefit) 3,911 4,701 12,405 18,547 Interest and debt expense 9,952 7,303 28,788 20,274 Investment (income) loss (758 ) (574 ) (1,212 ) 168 Foreign currency exchange (gain) loss (1,155 ) (3,359 ) 1,074 (1,152 ) Other (income) expense, net1 5,234 79 5,840 (1,999 ) Depreciation and amortization expense 11,570 10,487 34,052 31,380 Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Adjusted EBITDA $ 41,312 $ 33,950 $ 123,676 $ 108,032 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Net income margin 3.8 % 5.2 % 4.7 % 5.1 % Adjusted EBITDA Margin 16.3 % 14.7 % 16.5 % 15.8 % 1 During the quarter ending December 31, 2023, certain employees in one of the Company's U.S. pension plans accepted an offer to settle their pension obligation with a lump sum payment. These lump sum settlements are one of the steps the Company is taking to terminate the plan by transferring the liabilities to a third-party. As a result, the Company recorded a non-cash settlement charge in the amount $4,599,000. Adjusted EBITDA is defined as net income 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 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131450558/en/Contacts Gregory P. Rustowicz EVP Finance and CFO Columbus McKinnon Corporation 716-689-5442 greg.rustowicz@cmco.com Kristine Moser VP IR and Treasurer Columbus McKinnon Corporation 704-942-3253 kristy.moser@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 33% Operating Income Growth on 10% Net Sales Growth for Third Quarter Fiscal Year 2024 By: Columbus McKinnon Corporation via Business Wire January 31, 2024 at 06:30 AM EST Strong orders in the quarter led by precision conveyance platform 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 2024 third quarter, which ended December 31, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition"). Third Quarter Highlights (compared with prior-year period, except where otherwise noted) Orders increased 8% demonstrating continued progress with growth initiatives and included a 23% increase in precision conveyance orders Net sales increased 10% to $254.1 million primarily driven by strength across all product platforms led by precision conveyance Gross margin expanded 130 basis points to 36.9%; Adjusted Gross Margin1 expanded 160 basis points to 37.2% Operating income increased 33% to $26.9 million, or 10.6% of net sales; Adjusted Operating Income1 was $29.7 million, or 11.7% of net sales Net cash provided by operating activities was $28.6 million in the first nine months of fiscal 2024, up 69% from the prior year period; continued accelerated debt repayment in the quarter Completed construction and took occupancy of a state-of-the-art manufacturing center of excellence in Mexico, which will provide significant growth capacity and cost savings over time “We are pleased with the strong orders, sales, operating income, and cash flow generation we delivered in the quarter. Our team continued to execute commercial and operational initiatives, improving productivity, reducing lead times, and enhancing our customer experience. Our top-line growth translated to expanded operating margin demonstrating the incremental leverage of our business as we continue to drive year-over-year improvements leveraging CMBS and the 80/20 process,” said David J. Wilson, President and Chief Executive Officer. “We have an encouraging funnel for both short cycle and large projects as we continue to execute on our strategy to become a leader in intelligent motion solutions. Our progress gives us confidence in our near- and long-term financial objectives, which we believe will drive meaningful shareholder value.” ___________________________ 1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income and Adjusted Operating Margin are non-GAAP financial measures. See accompanying discussion and reconciliation tables provided in this release for reconciliations of these non-GAAP financial measures to the closest corresponding GAAP financial measures. Third Quarter Fiscal 2024 Sales ($ in millions) Q3 FY 24 Q3 FY 23 Change % Change Net sales $ 254.1 $ 230.4 $ 23.7 10.3 % U.S. sales $ 138.5 $ 141.4 $ (2.9 ) (2.1 ) % % of total 55 % 61 % Non-U.S. sales $ 115.6 $ 89.0 $ 26.6 29.9 % % of total 45 % 39 % For the quarter, net sales increased $23.7 million, or 10.3%. The acquisition contributed $15.5 million, or 6.7%, of the increase. In the U.S., sales were down $2.9 million, or 2.1%. Price improvement of $2.2 million and $0.2 million of contribution from the acquisition helped to offset $5.4 million in lower volume. Sales outside the U.S. increased $26.6 million, or 29.9%, driven by $15.3 million of sales related to the acquisition, $4.3 million of price improvement and $3.0 million of higher volume. Favorable foreign currency translation was $4.1 million. Third Quarter Fiscal 2024 Operating Results ($ in millions) Q3 FY 24 Q3 FY 23 Change % Change Gross profit $ 93.9 $ 82.0 $ 11.9 14.4 % Gross margin 36.9 % 35.6 % % 130 bps Adjusted Gross Profit1 $ 94.5 $ 82.0 $ 12.4 15.2 % Adjusted Gross Margin1 37.2 % 35.6 % 160 bps Income from operations $ 26.9 $ 20.2 $ 6.7 33.4 % Operating margin 10.6 % 8.8 % 180 bps Adjusted Operating Income1 $ 29.7 $ 23.5 $ 6.3 26.8 % Adjusted Operating Margin1 11.7 % 10.2 % 150 bps Net income $ 9.7 $ 12.0 $ (2.3 ) (19.1 ) % Net income margin 3.8 % 5.2 % (140) bps Diluted EPS $ 0.34 $ 0.42 $ (0.08 ) (19.0 ) % Adjusted Diluted EPS1 $ 0.74 $ 0.72 $ 0.02 2.8 % Adjusted EBITDA1 $ 41.3 $ 34.0 $ 7.4 21.7 % Adjusted EBITDA Margin2 16.3 % 14.7 % 160 bps Adjusted Diluted EPS1 of $0.74 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability. Fourth Quarter Fiscal 2024 Guidance Columbus McKinnon expects net sales of approximately $260 million to $270 million at current exchange rates. This represents 4% growth year-over-year at the midpoint of the range. ______________________________ 1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted Diluted EPS, Adjusted EBITDA, and Adjusted EBITDA Margin 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. 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 201-493-6780. 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 412-317-6671 and enter the conference ID number 13743372 through Wednesday, February 7, 2024. 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 and our fourth quarter fiscal 2024 net sales; (ii) our operational and financial targets and capital distribution policy; (iii) general economic trend and trends in the industry and markets; (iv) the risk and costs associated with the integration of, and our ability to integrate acquisitions successfully to achieve synergies; (v) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; (vi) the effectiveness of our new facility in Monterrey, Mexico to provide cost savings and margin improvement 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, 2023 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. Financial tables follow. COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Three Months Ended December 31, 2023 December 31, 2022 Change Net sales $ 254,143 $ 230,370 10.3 % Cost of products sold 160,246 148,326 8.0 % Gross profit 93,897 82,044 14.4 % Gross profit margin 36.9 % 35.6 % Selling expenses 26,552 25,424 4.4 % % of net sales 10.4 % 11.0 % General and administrative expenses 26,255 25,143 4.4 % % of net sales 10.3 % 10.9 % Research and development expenses 6,692 4,839 38.3 % % of net sales 2.6 % 2.1 % Amortization of intangibles 7,486 6,459 15.9 % Income from operations 26,912 20,179 33.4 % Operating margin 10.6 % 8.8 % Interest and debt expense 9,952 7,303 36.3 % Investment (income) loss (758 ) (574 ) 32.1 % Foreign currency exchange (gain) loss (1,155 ) (3,359 ) (65.6 ) % Other (income) expense, net 5,234 79 6,525.3 % Income (loss) before income tax expense (benefit) 13,639 16,730 (18.5 ) % Income tax expense (benefit) 3,911 4,701 (16.8 ) % Net income (loss) $ 9,728 $ 12,029 (19.1 ) % Average basic shares outstanding 28,744 28,626 0.4 % Basic income (loss) per share $ 0.34 $ 0.42 (19.0 ) % Average diluted shares outstanding 28,991 28,778 0.7 % Diluted income (loss) per share $ 0.34 $ 0.42 (19.0 ) % 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) Nine Months Ended December 31, 2023 December 31, 2022 Change Net sales $ 748,036 $ 682,397 9.6 % Cost of products sold 467,513 431,516 8.3 % Gross profit 280,523 250,881 11.8 % Gross profit margin 37.5 % 36.8 % Selling expenses 78,400 77,197 1.6 % % of net sales 10.5 % 11.3 % General and administrative expenses 79,407 68,441 16.0 % % of net sales 10.6 % 10.0 % Research and development expenses 19,134 15,429 24.0 % % of net sales 2.6 % 2.3 % Amortization of intangibles 21,871 19,442 12.5 % Income from operations 81,711 70,372 16.1 % Operating margin 10.9 % 10.3 % Interest and debt expense 28,788 20,274 42.0 % Investment (income) loss (1,212 ) 168 NM Foreign currency exchange (gain) loss 1,074 (1,152 ) NM Other (income) expense, net 5,840 (1,999 ) NM Income (loss) before income tax expense (benefit) 47,221 53,081 (11.0 ) % Income tax expense (benefit) 12,405 18,547 (33.1 ) % Net income (loss) $ 34,816 $ 34,534 0.8 % Average basic shares outstanding 28,711 28,597 0.4 % Basic income (loss) per share $ 1.21 $ 1.21 — % Average diluted shares outstanding 28,979 28,767 0.7 % Diluted income (loss) per share $ 1.20 $ 1.20 — % Dividends declared per common share $ 0.14 $ 0.14 COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets (In thousands) December 31, 2023 March 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 102,945 $ 133,176 Trade accounts receivable $ 173,411 $ 151,451 Inventories $ 204,396 $ 179,359 Prepaid expenses and other $ 35,660 $ 32,254 Total current assets $ 516,412 $ 496,240 Property, plant, and equipment, net $ 102,729 $ 94,360 Goodwill $ 728,427 $ 644,629 Other intangibles, net $ 396,317 $ 362,537 Marketable securities $ 12,388 $ 10,368 Deferred taxes on income $ 1,990 $ 2,035 Other assets $ 99,047 $ 88,286 Total assets $ 1,857,310 $ 1,698,455 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 76,151 $ 76,736 Accrued liabilities $ 142,518 $ 124,317 Current portion of long-term debt and finance lease obligations $ 50,652 $ 40,604 Total current liabilities $ 269,321 $ 241,657 Term loan, AR securitization facility and finance lease obligations $ 499,388 $ 430,988 Other non current liabilities $ 210,164 $ 192,013 Total liabilities $ 978,873 $ 864,658 Shareholders’ equity: Common stock $ 288 $ 286 Treasury stock $ (1,001 ) $ (1,001 ) Additional paid in capital $ 522,587 $ 515,797 Retained earnings $ 387,550 $ 356,758 Accumulated other comprehensive loss $ (30,987 ) $ (38,043 ) Total shareholders’ equity $ 878,437 $ 833,797 Total liabilities and shareholders’ equity $ 1,857,310 $ 1,698,455 COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - UNAUDITED (In thousands) Nine Months Ended December 31, 2023 December 31, 2022 Operating activities: Net income (loss) $ 34,816 $ 34,534 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization $ 34,052 $ 31,380 Deferred income taxes and related valuation allowance $ (6,495 ) $ (783 ) Net loss (gain) on sale of real estate, investments and other $ (967 ) $ 347 Non-cash pension settlement $ 4,599 $ — Stock-based compensation $ 8,473 $ 7,039 Amortization of deferred financing costs $ 1,728 $ 1,291 Loss (gain) on hedging instruments $ 1,193 $ (598 ) Gain on sale of building $ — $ (232 ) Loss on retirement of fixed asset $ — $ 175 Non-cash lease expense $ 7,080 $ 5,814 Changes in operating assets and liabilities, net of effects of business acquisitions: Trade accounts receivable $ (14,911 ) $ (1,401 ) Inventories $ (17,764 ) $ (31,701 ) Prepaid expenses and other $ (2,897 ) $ 4,905 Other assets $ (859 ) $ (232 ) Trade accounts payable $ (1,387 ) $ (18,756 ) Accrued liabilities $ (7,236 ) $ (7,498 ) Non-current liabilities $ (10,834 ) $ (7,382 ) Net cash provided by (used for) operating activities $ 28,591 $ 16,902 Investing activities: Proceeds from sales of marketable securities $ 1,101 $ 2,650 Purchases of marketable securities $ (2,731 ) $ (3,121 ) Capital expenditures $ (16,334 ) $ (9,511 ) 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 $ (125,965 ) $ (10,912 ) Financing activities: Proceeds from the issuance of common stock $ 556 $ 704 Purchases of treasury stock $ — $ (1,001 ) Repayment of debt $ (40,447 ) $ (30,402 ) Proceeds from issuance of long-term debt $ 120,000 $ — Fees paid for borrowings on long-term debt $ (2,859 ) $ — Cash inflows from hedging activities $ 18,088 $ 18,422 Cash outflows from hedging activities $ (19,303 ) $ (17,958 ) Payment of dividends $ (6,027 ) $ (6,006 ) Other $ (2,237 ) $ (1,398 ) Net cash provided by (used for) financing activities $ 67,771 $ (37,639 ) Effect of exchange rate changes on cash $ (628 ) $ (2,221 ) Net change in cash and cash equivalents $ (30,231 ) $ (33,870 ) Cash, cash equivalents, and restricted cash at beginning of year $ 133,426 $ 115,640 Cash, cash equivalents, and restricted cash at end of period $ 103,195 $ 81,770 COLUMBUS McKINNON CORPORATION Q3 FY 2024 Sales Bridge Quarter Year To Date ($ in millions) $ Change % Change $ Change % Change Fiscal 2023 Sales $ 230.4 $ 682.4 Acquisition 15.5 6.7 % 27.7 4.1 % Pricing 6.5 2.8 % 28.1 4.1 % Volume (2.4 ) (1.0 ) % (0.2 ) — Foreign currency translation 4.1 1.8 % 10.0 1.4 % Total change $ 23.7 10.3 % $ 65.6 9.6 % Fiscal 2024 Sales $ 254.1 $ 748.0 COLUMBUS McKINNON CORPORATION Q3 FY 2024 Gross Profit Bridge ($ in millions) Quarter Year To Date Fiscal 2023 Gross Profit $ 82.0 $ 250.9 Acquisition 6.7 13.0 Price, net of manufacturing costs changes (incl. inflation) 4.6 15.8 Product liability 0.9 0.9 Current year business realignment costs (0.6 ) (0.8 ) Sales volume and mix (1.2 ) (2.7 ) Foreign currency translation 1.4 3.4 Total change 11.8 29.6 Fiscal 2024 Gross Profit $ 93.9 $ 280.5 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 Data1 (Unaudited) December 31, 2023 September 30, 2023 March 31, 2023 December 31, 2022 ($ in millions) Backlog $ 298.4 $ 317.7 $ 308.7 $ 329.1 Long-term backlog Expected to ship beyond 3 months $ 151.3 $ 148.3 $ 142.0 $ 164.7 Long-term backlog as % of total backlog 50.7 % 46.7 % 46.0 % 50.0 % Trade accounts receivable Days sales outstanding 62.1 days 58.6 days 54.3 days 58.0 days Inventory turns per year (based on cost of products sold) 3.1 turns 3.1 turns 3.6 turns 3.0 turns Days' inventory 117.7 days 117.7 days 101.4 days 121.0 days Trade accounts payable Days payables outstanding 50.1 days 48.3 days 53.3 days 52.6 days Working capital as a % of sales 2,3 20.6 % 21.8 % 17.3 % 22.1 % Net cash provided by (used for) operating activities $ 29.1 $ 16.7 $ 66.7 $ 10.8 Capital expenditures $ 6.0 $ 5.0 $ 3.1 $ 4.2 Free Cash Flow 4 $ 23.1 $ 11.7 $ 63.6 $ 6.5 Debt to total capitalization percentage 38.5 % 39.8 % 36.1 % 37.3 % Debt, net of cash, to net total capitalization 33.7 % 35.3 % 28.9 % 33.0 % 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 December 31, 2023 and September 30, 2023 exclude the impact of the acquisition of montratec GmbH. 3 December 31, 2022 figure excludes the impact of the acquisition of Garvey Corporation. 4 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. 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 Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Gross profit $ 93,897 $ 82,044 $ 280,523 $ 250,881 Add back (deduct): Business realignment costs 150 — 346 — Monterrey, MX new factory start-up costs 435 — 435 — Adjusted Gross Profit $ 94,482 $ 82,044 $ 281,304 $ 250,881 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Gross margin 36.9 % 35.6 % 37.5 % 36.8 % Adjusted Gross Margin 37.2 % 35.6 % 37.6 % 36.8 % Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Profit 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 Profit Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Profit 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 and current year's gross profit and gross profit margin to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit and gross profit margin to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of Income from Operations to Adjusted Operating Income ($ in thousands) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Income from operations $ 26,912 $ 20,179 $ 81,711 $ 70,372 Add back (deduct): Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Adjusted Operating Income $ 29,742 $ 23,463 $ 89,624 $ 76,652 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Operating margin 10.6 % 8.8 % 10.9 % 10.3 % Adjusted Operating Margin 11.7 % 10.2 % 12.0 % 11.2 % 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 and current year'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 Diluted Earnings per Share ($ in thousands, except per share data) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income $ 9,728 $ 12,029 $ 34,816 $ 34,534 Add back (deduct): Amortization of intangibles 7,486 6,459 21,871 19,442 Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Non-cash pension settlement expense 4,599 — 4,599 — Normalize tax rate 1 (3,227 ) (1,123 ) (7,996 ) 1,210 Adjusted Net Income $ 21,416 $ 20,649 $ 61,203 $ 61,466 Average diluted shares outstanding 28,991 28,778 28,979 28,767 Diluted income per share $ 0.34 $ 0.42 $ 1.20 $ 1.20 Adjusted Diluted EPS $ 0.74 $ 0.72 $ 2.11 $ 2.14 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 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, are 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 Net Income to Adjusted EBITDA ($ in thousands) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income $ 9,728 $ 12,029 $ 34,816 $ 34,534 Add back (deduct): Income tax expense (benefit) 3,911 4,701 12,405 18,547 Interest and debt expense 9,952 7,303 28,788 20,274 Investment (income) loss (758 ) (574 ) (1,212 ) 168 Foreign currency exchange (gain) loss (1,155 ) (3,359 ) 1,074 (1,152 ) Other (income) expense, net1 5,234 79 5,840 (1,999 ) Depreciation and amortization expense 11,570 10,487 34,052 31,380 Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Adjusted EBITDA $ 41,312 $ 33,950 $ 123,676 $ 108,032 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Net income margin 3.8 % 5.2 % 4.7 % 5.1 % Adjusted EBITDA Margin 16.3 % 14.7 % 16.5 % 15.8 % 1 During the quarter ending December 31, 2023, certain employees in one of the Company's U.S. pension plans accepted an offer to settle their pension obligation with a lump sum payment. These lump sum settlements are one of the steps the Company is taking to terminate the plan by transferring the liabilities to a third-party. As a result, the Company recorded a non-cash settlement charge in the amount $4,599,000. Adjusted EBITDA is defined as net income 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 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131450558/en/Contacts Gregory P. Rustowicz EVP Finance and CFO Columbus McKinnon Corporation 716-689-5442 greg.rustowicz@cmco.com Kristine Moser VP IR and Treasurer Columbus McKinnon Corporation 704-942-3253 kristy.moser@cmco.com Investor Relations: Deborah K. Pawlowski Kei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com
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 2024 third quarter, which ended December 31, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition"). Third Quarter Highlights (compared with prior-year period, except where otherwise noted) Orders increased 8% demonstrating continued progress with growth initiatives and included a 23% increase in precision conveyance orders Net sales increased 10% to $254.1 million primarily driven by strength across all product platforms led by precision conveyance Gross margin expanded 130 basis points to 36.9%; Adjusted Gross Margin1 expanded 160 basis points to 37.2% Operating income increased 33% to $26.9 million, or 10.6% of net sales; Adjusted Operating Income1 was $29.7 million, or 11.7% of net sales Net cash provided by operating activities was $28.6 million in the first nine months of fiscal 2024, up 69% from the prior year period; continued accelerated debt repayment in the quarter Completed construction and took occupancy of a state-of-the-art manufacturing center of excellence in Mexico, which will provide significant growth capacity and cost savings over time “We are pleased with the strong orders, sales, operating income, and cash flow generation we delivered in the quarter. Our team continued to execute commercial and operational initiatives, improving productivity, reducing lead times, and enhancing our customer experience. Our top-line growth translated to expanded operating margin demonstrating the incremental leverage of our business as we continue to drive year-over-year improvements leveraging CMBS and the 80/20 process,” said David J. Wilson, President and Chief Executive Officer. “We have an encouraging funnel for both short cycle and large projects as we continue to execute on our strategy to become a leader in intelligent motion solutions. Our progress gives us confidence in our near- and long-term financial objectives, which we believe will drive meaningful shareholder value.” ___________________________ 1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income and Adjusted Operating Margin are non-GAAP financial measures. See accompanying discussion and reconciliation tables provided in this release for reconciliations of these non-GAAP financial measures to the closest corresponding GAAP financial measures. Third Quarter Fiscal 2024 Sales ($ in millions) Q3 FY 24 Q3 FY 23 Change % Change Net sales $ 254.1 $ 230.4 $ 23.7 10.3 % U.S. sales $ 138.5 $ 141.4 $ (2.9 ) (2.1 ) % % of total 55 % 61 % Non-U.S. sales $ 115.6 $ 89.0 $ 26.6 29.9 % % of total 45 % 39 % For the quarter, net sales increased $23.7 million, or 10.3%. The acquisition contributed $15.5 million, or 6.7%, of the increase. In the U.S., sales were down $2.9 million, or 2.1%. Price improvement of $2.2 million and $0.2 million of contribution from the acquisition helped to offset $5.4 million in lower volume. Sales outside the U.S. increased $26.6 million, or 29.9%, driven by $15.3 million of sales related to the acquisition, $4.3 million of price improvement and $3.0 million of higher volume. Favorable foreign currency translation was $4.1 million. Third Quarter Fiscal 2024 Operating Results ($ in millions) Q3 FY 24 Q3 FY 23 Change % Change Gross profit $ 93.9 $ 82.0 $ 11.9 14.4 % Gross margin 36.9 % 35.6 % % 130 bps Adjusted Gross Profit1 $ 94.5 $ 82.0 $ 12.4 15.2 % Adjusted Gross Margin1 37.2 % 35.6 % 160 bps Income from operations $ 26.9 $ 20.2 $ 6.7 33.4 % Operating margin 10.6 % 8.8 % 180 bps Adjusted Operating Income1 $ 29.7 $ 23.5 $ 6.3 26.8 % Adjusted Operating Margin1 11.7 % 10.2 % 150 bps Net income $ 9.7 $ 12.0 $ (2.3 ) (19.1 ) % Net income margin 3.8 % 5.2 % (140) bps Diluted EPS $ 0.34 $ 0.42 $ (0.08 ) (19.0 ) % Adjusted Diluted EPS1 $ 0.74 $ 0.72 $ 0.02 2.8 % Adjusted EBITDA1 $ 41.3 $ 34.0 $ 7.4 21.7 % Adjusted EBITDA Margin2 16.3 % 14.7 % 160 bps Adjusted Diluted EPS1 of $0.74 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability. Fourth Quarter Fiscal 2024 Guidance Columbus McKinnon expects net sales of approximately $260 million to $270 million at current exchange rates. This represents 4% growth year-over-year at the midpoint of the range. ______________________________ 1 Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted Diluted EPS, Adjusted EBITDA, and Adjusted EBITDA Margin 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. 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 201-493-6780. 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 412-317-6671 and enter the conference ID number 13743372 through Wednesday, February 7, 2024. 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 and our fourth quarter fiscal 2024 net sales; (ii) our operational and financial targets and capital distribution policy; (iii) general economic trend and trends in the industry and markets; (iv) the risk and costs associated with the integration of, and our ability to integrate acquisitions successfully to achieve synergies; (v) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; (vi) the effectiveness of our new facility in Monterrey, Mexico to provide cost savings and margin improvement 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, 2023 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. Financial tables follow. COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - UNAUDITED (In thousands, except per share and percentage data) Three Months Ended December 31, 2023 December 31, 2022 Change Net sales $ 254,143 $ 230,370 10.3 % Cost of products sold 160,246 148,326 8.0 % Gross profit 93,897 82,044 14.4 % Gross profit margin 36.9 % 35.6 % Selling expenses 26,552 25,424 4.4 % % of net sales 10.4 % 11.0 % General and administrative expenses 26,255 25,143 4.4 % % of net sales 10.3 % 10.9 % Research and development expenses 6,692 4,839 38.3 % % of net sales 2.6 % 2.1 % Amortization of intangibles 7,486 6,459 15.9 % Income from operations 26,912 20,179 33.4 % Operating margin 10.6 % 8.8 % Interest and debt expense 9,952 7,303 36.3 % Investment (income) loss (758 ) (574 ) 32.1 % Foreign currency exchange (gain) loss (1,155 ) (3,359 ) (65.6 ) % Other (income) expense, net 5,234 79 6,525.3 % Income (loss) before income tax expense (benefit) 13,639 16,730 (18.5 ) % Income tax expense (benefit) 3,911 4,701 (16.8 ) % Net income (loss) $ 9,728 $ 12,029 (19.1 ) % Average basic shares outstanding 28,744 28,626 0.4 % Basic income (loss) per share $ 0.34 $ 0.42 (19.0 ) % Average diluted shares outstanding 28,991 28,778 0.7 % Diluted income (loss) per share $ 0.34 $ 0.42 (19.0 ) % 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) Nine Months Ended December 31, 2023 December 31, 2022 Change Net sales $ 748,036 $ 682,397 9.6 % Cost of products sold 467,513 431,516 8.3 % Gross profit 280,523 250,881 11.8 % Gross profit margin 37.5 % 36.8 % Selling expenses 78,400 77,197 1.6 % % of net sales 10.5 % 11.3 % General and administrative expenses 79,407 68,441 16.0 % % of net sales 10.6 % 10.0 % Research and development expenses 19,134 15,429 24.0 % % of net sales 2.6 % 2.3 % Amortization of intangibles 21,871 19,442 12.5 % Income from operations 81,711 70,372 16.1 % Operating margin 10.9 % 10.3 % Interest and debt expense 28,788 20,274 42.0 % Investment (income) loss (1,212 ) 168 NM Foreign currency exchange (gain) loss 1,074 (1,152 ) NM Other (income) expense, net 5,840 (1,999 ) NM Income (loss) before income tax expense (benefit) 47,221 53,081 (11.0 ) % Income tax expense (benefit) 12,405 18,547 (33.1 ) % Net income (loss) $ 34,816 $ 34,534 0.8 % Average basic shares outstanding 28,711 28,597 0.4 % Basic income (loss) per share $ 1.21 $ 1.21 — % Average diluted shares outstanding 28,979 28,767 0.7 % Diluted income (loss) per share $ 1.20 $ 1.20 — % Dividends declared per common share $ 0.14 $ 0.14 COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets (In thousands) December 31, 2023 March 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 102,945 $ 133,176 Trade accounts receivable $ 173,411 $ 151,451 Inventories $ 204,396 $ 179,359 Prepaid expenses and other $ 35,660 $ 32,254 Total current assets $ 516,412 $ 496,240 Property, plant, and equipment, net $ 102,729 $ 94,360 Goodwill $ 728,427 $ 644,629 Other intangibles, net $ 396,317 $ 362,537 Marketable securities $ 12,388 $ 10,368 Deferred taxes on income $ 1,990 $ 2,035 Other assets $ 99,047 $ 88,286 Total assets $ 1,857,310 $ 1,698,455 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Trade accounts payable $ 76,151 $ 76,736 Accrued liabilities $ 142,518 $ 124,317 Current portion of long-term debt and finance lease obligations $ 50,652 $ 40,604 Total current liabilities $ 269,321 $ 241,657 Term loan, AR securitization facility and finance lease obligations $ 499,388 $ 430,988 Other non current liabilities $ 210,164 $ 192,013 Total liabilities $ 978,873 $ 864,658 Shareholders’ equity: Common stock $ 288 $ 286 Treasury stock $ (1,001 ) $ (1,001 ) Additional paid in capital $ 522,587 $ 515,797 Retained earnings $ 387,550 $ 356,758 Accumulated other comprehensive loss $ (30,987 ) $ (38,043 ) Total shareholders’ equity $ 878,437 $ 833,797 Total liabilities and shareholders’ equity $ 1,857,310 $ 1,698,455 COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - UNAUDITED (In thousands) Nine Months Ended December 31, 2023 December 31, 2022 Operating activities: Net income (loss) $ 34,816 $ 34,534 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization $ 34,052 $ 31,380 Deferred income taxes and related valuation allowance $ (6,495 ) $ (783 ) Net loss (gain) on sale of real estate, investments and other $ (967 ) $ 347 Non-cash pension settlement $ 4,599 $ — Stock-based compensation $ 8,473 $ 7,039 Amortization of deferred financing costs $ 1,728 $ 1,291 Loss (gain) on hedging instruments $ 1,193 $ (598 ) Gain on sale of building $ — $ (232 ) Loss on retirement of fixed asset $ — $ 175 Non-cash lease expense $ 7,080 $ 5,814 Changes in operating assets and liabilities, net of effects of business acquisitions: Trade accounts receivable $ (14,911 ) $ (1,401 ) Inventories $ (17,764 ) $ (31,701 ) Prepaid expenses and other $ (2,897 ) $ 4,905 Other assets $ (859 ) $ (232 ) Trade accounts payable $ (1,387 ) $ (18,756 ) Accrued liabilities $ (7,236 ) $ (7,498 ) Non-current liabilities $ (10,834 ) $ (7,382 ) Net cash provided by (used for) operating activities $ 28,591 $ 16,902 Investing activities: Proceeds from sales of marketable securities $ 1,101 $ 2,650 Purchases of marketable securities $ (2,731 ) $ (3,121 ) Capital expenditures $ (16,334 ) $ (9,511 ) 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 $ (125,965 ) $ (10,912 ) Financing activities: Proceeds from the issuance of common stock $ 556 $ 704 Purchases of treasury stock $ — $ (1,001 ) Repayment of debt $ (40,447 ) $ (30,402 ) Proceeds from issuance of long-term debt $ 120,000 $ — Fees paid for borrowings on long-term debt $ (2,859 ) $ — Cash inflows from hedging activities $ 18,088 $ 18,422 Cash outflows from hedging activities $ (19,303 ) $ (17,958 ) Payment of dividends $ (6,027 ) $ (6,006 ) Other $ (2,237 ) $ (1,398 ) Net cash provided by (used for) financing activities $ 67,771 $ (37,639 ) Effect of exchange rate changes on cash $ (628 ) $ (2,221 ) Net change in cash and cash equivalents $ (30,231 ) $ (33,870 ) Cash, cash equivalents, and restricted cash at beginning of year $ 133,426 $ 115,640 Cash, cash equivalents, and restricted cash at end of period $ 103,195 $ 81,770 COLUMBUS McKINNON CORPORATION Q3 FY 2024 Sales Bridge Quarter Year To Date ($ in millions) $ Change % Change $ Change % Change Fiscal 2023 Sales $ 230.4 $ 682.4 Acquisition 15.5 6.7 % 27.7 4.1 % Pricing 6.5 2.8 % 28.1 4.1 % Volume (2.4 ) (1.0 ) % (0.2 ) — Foreign currency translation 4.1 1.8 % 10.0 1.4 % Total change $ 23.7 10.3 % $ 65.6 9.6 % Fiscal 2024 Sales $ 254.1 $ 748.0 COLUMBUS McKINNON CORPORATION Q3 FY 2024 Gross Profit Bridge ($ in millions) Quarter Year To Date Fiscal 2023 Gross Profit $ 82.0 $ 250.9 Acquisition 6.7 13.0 Price, net of manufacturing costs changes (incl. inflation) 4.6 15.8 Product liability 0.9 0.9 Current year business realignment costs (0.6 ) (0.8 ) Sales volume and mix (1.2 ) (2.7 ) Foreign currency translation 1.4 3.4 Total change 11.8 29.6 Fiscal 2024 Gross Profit $ 93.9 $ 280.5 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 Data1 (Unaudited) December 31, 2023 September 30, 2023 March 31, 2023 December 31, 2022 ($ in millions) Backlog $ 298.4 $ 317.7 $ 308.7 $ 329.1 Long-term backlog Expected to ship beyond 3 months $ 151.3 $ 148.3 $ 142.0 $ 164.7 Long-term backlog as % of total backlog 50.7 % 46.7 % 46.0 % 50.0 % Trade accounts receivable Days sales outstanding 62.1 days 58.6 days 54.3 days 58.0 days Inventory turns per year (based on cost of products sold) 3.1 turns 3.1 turns 3.6 turns 3.0 turns Days' inventory 117.7 days 117.7 days 101.4 days 121.0 days Trade accounts payable Days payables outstanding 50.1 days 48.3 days 53.3 days 52.6 days Working capital as a % of sales 2,3 20.6 % 21.8 % 17.3 % 22.1 % Net cash provided by (used for) operating activities $ 29.1 $ 16.7 $ 66.7 $ 10.8 Capital expenditures $ 6.0 $ 5.0 $ 3.1 $ 4.2 Free Cash Flow 4 $ 23.1 $ 11.7 $ 63.6 $ 6.5 Debt to total capitalization percentage 38.5 % 39.8 % 36.1 % 37.3 % Debt, net of cash, to net total capitalization 33.7 % 35.3 % 28.9 % 33.0 % 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 December 31, 2023 and September 30, 2023 exclude the impact of the acquisition of montratec GmbH. 3 December 31, 2022 figure excludes the impact of the acquisition of Garvey Corporation. 4 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. 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 Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Gross profit $ 93,897 $ 82,044 $ 280,523 $ 250,881 Add back (deduct): Business realignment costs 150 — 346 — Monterrey, MX new factory start-up costs 435 — 435 — Adjusted Gross Profit $ 94,482 $ 82,044 $ 281,304 $ 250,881 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Gross margin 36.9 % 35.6 % 37.5 % 36.8 % Adjusted Gross Margin 37.2 % 35.6 % 37.6 % 36.8 % Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Profit 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 Profit Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Profit 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 and current year's gross profit and gross profit margin to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit and gross profit margin to that of other companies. COLUMBUS McKINNON CORPORATION Reconciliation of Income from Operations to Adjusted Operating Income ($ in thousands) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Income from operations $ 26,912 $ 20,179 $ 81,711 $ 70,372 Add back (deduct): Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Adjusted Operating Income $ 29,742 $ 23,463 $ 89,624 $ 76,652 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Operating margin 10.6 % 8.8 % 10.9 % 10.3 % Adjusted Operating Margin 11.7 % 10.2 % 12.0 % 11.2 % 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 and current year'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 Diluted Earnings per Share ($ in thousands, except per share data) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income $ 9,728 $ 12,029 $ 34,816 $ 34,534 Add back (deduct): Amortization of intangibles 7,486 6,459 21,871 19,442 Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Non-cash pension settlement expense 4,599 — 4,599 — Normalize tax rate 1 (3,227 ) (1,123 ) (7,996 ) 1,210 Adjusted Net Income $ 21,416 $ 20,649 $ 61,203 $ 61,466 Average diluted shares outstanding 28,991 28,778 28,979 28,767 Diluted income per share $ 0.34 $ 0.42 $ 1.20 $ 1.20 Adjusted Diluted EPS $ 0.74 $ 0.72 $ 2.11 $ 2.14 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 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, are 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 Net Income to Adjusted EBITDA ($ in thousands) Three Months Ended Nine Months Ended December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income $ 9,728 $ 12,029 $ 34,816 $ 34,534 Add back (deduct): Income tax expense (benefit) 3,911 4,701 12,405 18,547 Interest and debt expense 9,952 7,303 28,788 20,274 Investment (income) loss (758 ) (574 ) (1,212 ) 168 Foreign currency exchange (gain) loss (1,155 ) (3,359 ) 1,074 (1,152 ) Other (income) expense, net1 5,234 79 5,840 (1,999 ) Depreciation and amortization expense 11,570 10,487 34,052 31,380 Acquisition deal and integration costs 113 338 3,208 443 Business realignment costs 1,452 1,401 1,867 4,292 North American warehouse consolidation — — 199 — Headquarter relocation costs 510 315 1,884 315 Garvey contingent consideration — 1,230 — 1,230 Monterrey, MX new factory start-up costs 755 — 755 — Adjusted EBITDA $ 41,312 $ 33,950 $ 123,676 $ 108,032 Net sales $ 254,143 $ 230,370 $ 748,036 $ 682,397 Net income margin 3.8 % 5.2 % 4.7 % 5.1 % Adjusted EBITDA Margin 16.3 % 14.7 % 16.5 % 15.8 % 1 During the quarter ending December 31, 2023, certain employees in one of the Company's U.S. pension plans accepted an offer to settle their pension obligation with a lump sum payment. These lump sum settlements are one of the steps the Company is taking to terminate the plan by transferring the liabilities to a third-party. As a result, the Company recorded a non-cash settlement charge in the amount $4,599,000. Adjusted EBITDA is defined as net income 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 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131450558/en/
Gregory P. Rustowicz EVP Finance and CFO Columbus McKinnon Corporation 716-689-5442 greg.rustowicz@cmco.com Kristine Moser VP IR and Treasurer Columbus McKinnon Corporation 704-942-3253 kristy.moser@cmco.com Investor Relations: Deborah K. Pawlowski Kei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com
