CMCO 8-K
Columbus Mckinnon Corp (CMCO)
8-K
2022-10-27
For: 2022-10-27
View Original
Added on
April 08, 2026
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 27, 2022
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
| (Commission File Number) | (IRS Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant's telephone number including area code: (716 ) 689-5400
_________________________________________________
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging Growth Company | |||||
| If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||
| Item 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. | ||||
On October 27, 2022 , the registrant issued a press release announcing its financial results for the second quarter, which ended September 30, 2022. The press release is annexed as Exhibit 99.1 to this Current Report on Form 8-K.
| Item 7.01 | REGULATION FD DISCLOSURE. | ||||
The slides used during the earnings call are annexed as Exhibit 99.2 to this Current Report on Form 8-K.
The information contained in this Form 8-K and the Exhibits annexed hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth in such filing.
| Item 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. | ||||
(d) Exhibits.
| EXHIBIT NUMBER | DESCRIPTION | |||||||
Press Release dated | ||||||||
Earnings call slides dated | ||||||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| COLUMBUS McKINNON CORPORATION | |||||
| By: | /s/ Gregory P. Rustowicz | ||||
| Name: | Gregory P. Rustowicz | ||||
| Title: | Executive Vice President - Finance and Chief Financial Officer | ||||
| (Principal Financial Officer) | |||||
Dated: October 27, 2022
EXHIBIT 99.1
News Release
205 Crosspoint Parkway
Buffalo, NY 14068
Immediate Release
Columbus McKinnon Reports Record Operating Income
for Second Quarter Fiscal Year 2023
BUFFALO, NY, October 27, 2022 - 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 2023 second quarter, which ended September 30, 2022. Results include the addition of Garvey Corporation, which was acquired on December 1, 2021.
Second Quarter Highlights (compared with prior year period)
•Delivered revenue of $232 million, up 8.5% on a constant currency basis
•Produced record operating income of $27.4 million as regional realignment initiative delivered lower costs and improved collaboration across product categories
•Realized earnings per diluted share of $0.49 and adjusted EPS* of $0.73
•Achieved record adjusted EBITDA* margin of 16.8%
•Demonstrated strength of cash generation capabilities with $17 million in cash from operations in the quarter
David Wilson, President and CEO of Columbus McKinnon, commented, “We produced another solid quarter as we execute our strategy to drive growth and improve our cost structure to deliver stronger earnings power and cash generation. We demonstrated progress toward our long-term objectives as we achieved record operating income and record adjusted EBITDA margin in the period. We had strong cash generation in the quarter as well, enabling us to continue to reduce debt and increase our financial flexibility. Importantly, we are leveraging secular tailwinds as our intelligent motion solutions address the trends in automation, productivity and supply chain regionalization.”
He added, “The expected benefits of our regional realignment are ahead of plan and visible on many fronts. The increased collaboration across product teams has resulted in new sales opportunities while the restructuring has also reduced costs. The interaction and engagement are especially important as we continue to address the challenges of supply chain shortages and the need for heightened communications with customers in these unusually unsettling times. Our focus is on execution, improving our customer experience and delivering results.”
*Adjusted EPS and adjusted EBITDA are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding the reconciliation of GAAP financials to non-GAAP measures.
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 2 of 13
October 27, 2022
Second Quarter Fiscal 2023 Sales
| ($ in millions) | Q2 FY 23 | Q2 FY 22 | Change | % Change | |||||||||||||||||||
| Net sales | $ | 231.7 | $ | 223.6 | $ | 8.1 | 3.6 | % | |||||||||||||||
| U.S. sales | $ | 139.7 | $ | 130.7 | $ | 9.0 | 6.9 | % | |||||||||||||||
| % of total | 60 | % | 58 | % | |||||||||||||||||||
| Non-U.S. sales | $ | 92.0 | $ | 92.9 | $ | (0.9) | (1.0) | % | |||||||||||||||
| % of total | 40 | % | 42 | % | |||||||||||||||||||
For the quarter, sales increased $8.1 million, or 3.6%. The acquisition contributed $9.0 million in sales which helped to offset unfavorable foreign currency translation of $11.0 million, or 4.9% of total sales. In the U.S., price improved $7.6 million, or 5.8%, which offset the $4.5 million, or 3.4% decline in volume. U.S. sales related to the acquisition were $5.9 million. Outside the U.S., increased volume of $3.6 million, or 3.8%, price improvement of $3.4 million, or 3.7%, and the $3.1 million of sales related to the acquisitions mostly offset unfavorable foreign currency translation.
Second Quarter Fiscal 2023 Operating Results
($ in millions) | Q2 FY 23 | Q2 FY 22 | Change | % Change | |||||||||||||||||||
| Gross profit | $ | 86.3 | $ | 81.1 | $ | 5.2 | 6.4 | % | |||||||||||||||
| Gross margin | 37.2 | % | 36.3 | % | 90 bps | ||||||||||||||||||
| Adjusted gross profit* | $ | 86.3 | $ | 82.0 | $ | 4.3 | 5.2 | % | |||||||||||||||
| Adjusted gross margin* | 37.2 | % | 36.7 | % | 50 bps | ||||||||||||||||||
| Income from operations | $ | 27.4 | $ | 23.7 | $ | 3.7 | 15.6 | % | |||||||||||||||
| Operating margin | 11.8 | % | 10.6 | % | 120 bps | ||||||||||||||||||
| Adjusted income from operations* | $ | 28.6 | $ | 25.5 | $ | 3.1 | 12.2 | % | |||||||||||||||
| Adjusted operating margin* | 12.4 | % | 11.4 | % | 100 bps | ||||||||||||||||||
| Net income (loss) | $ | 14.1 | $ | 15.2 | $ | (1.1) | (7.2) | % | |||||||||||||||
| Net income (loss) margin | 6.1 | % | 6.8 | % | (70) bps | ||||||||||||||||||
| Diluted EPS | $ | 0.49 | $ | 0.53 | $ | (0.04) | (7.5) | % | |||||||||||||||
| Adjusted EPS* | $ | 0.73 | $ | 0.74 | $ | (0.01) | (1.4) | % | |||||||||||||||
| Adjusted EBITDA* | $ | 39.0 | $ | 36.0 | $ | 3.0 | 8.3 | % | |||||||||||||||
| Adjusted EBITDA margin* | 16.8 | % | 16.1 | % | 70 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 operating income, adjusted operating margin, adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA.
Adjusted earnings per diluted share of $0.73 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 2023 Outlook
Columbus McKinnon expects third quarter fiscal 2023 sales of approximately $225 million to $235 million at current exchange rates.
Mr. Wilson concluded, “We are being very intentional in our strategy deployment process to advance toward our growth and profitability goals. We believe we are a better business than we were just two years ago with a stronger earnings profile, a better product and market mix and a streamlined team that is intensely focused on execution. Although the macro environment is unsettling, we are deliberate in our actions to create value for our customers, execute our plans and deliver on our goals.”
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 3 of 13
October 27, 2022
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.columbusmckinnon.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.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13733206. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, November 3, 2022. 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.columbusmckinnon.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 EBITDA margins, 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 certain goals. 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 revenue and adjusted EBITDA 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. The Company assumes no obligation to update the forward-looking information contained in this release.
Contacts:
| Gregory P. Rustowicz | Investor Relations: | ||||
| Executive Vice President - Finance and Chief Financial Officer | Deborah K. Pawlowski | ||||
| Columbus McKinnon Corporation | Kei Advisors LLC | ||||
| 716-689-5442 | 716-843-3908 | ||||
| [email protected] | [email protected] | ||||
Financial tables follow.
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 4 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
| Three Months Ended | ||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | Change | ||||||||||||||||||
| Net sales | $ | 231,740 | $ | 223,635 | 3.6 | % | ||||||||||||||
| Cost of products sold | $ | 145,430 | $ | 142,500 | 2.1 | % | ||||||||||||||
| Gross profit | 86,310 | 81,135 | 6.4 | % | ||||||||||||||||
| Gross profit margin | 37.2 | % | 36.3 | % | ||||||||||||||||
| Selling expenses | 25,617 | $ | 24,157 | 6.0 | % | |||||||||||||||
| % of net sales | 11.1 | % | 10.8 | % | ||||||||||||||||
| General and administrative expenses | 21,413 | $ | 23,208 | (7.7) | % | |||||||||||||||
| % of net sales | 9.2 | % | 10.4 | % | ||||||||||||||||
| Research and development expenses | 5,461 | $ | 3,825 | 42.8 | % | |||||||||||||||
| % of net sales | 2.4 | % | 1.7 | % | ||||||||||||||||
| Amortization of intangibles | 6,447 | $ | 6,285 | 2.6 | % | |||||||||||||||
| Income from operations | $ | 27,372 | $ | 23,660 | 15.7 | % | ||||||||||||||
| Operating margin | 11.8 | % | 10.6 | % | ||||||||||||||||
| Interest and debt expense | 6,768 | $ | 4,587 | 47.5 | % | |||||||||||||||
| Investment (income) loss | 312 | $ | (115) | (371.3) | % | |||||||||||||||
| Foreign currency exchange (gain) loss | 1,003 | $ | 441 | 127.4 | % | |||||||||||||||
| Other (income) expense, net | 222 | $ | (539) | (141.2) | % | |||||||||||||||
| Income (loss) before income tax expense (benefit) | $ | 19,067 | $ | 19,286 | (1.1) | % | ||||||||||||||
| Income tax expense (benefit) | 4,953 | $ | 4,083 | 21.3 | % | |||||||||||||||
| Net income (loss) | $ | 14,114 | $ | 15,203 | (7.2) | % | ||||||||||||||
| Average basic shares outstanding | 28,619 | 28,418 | 0.7 | % | ||||||||||||||||
| Basic income (loss) per share | $ | 0.49 | $ | 0.53 | (7.5) | % | ||||||||||||||
| Average diluted shares outstanding | 28,748 | 28,756 | — | % | ||||||||||||||||
| Diluted income (loss) per share | $ | 0.49 | $ | 0.53 | (7.5) | % | ||||||||||||||
| Dividends declared per common share | $ | 0.07 | $ | 0.06 | ||||||||||||||||
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 5 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
| Six Months Ended | ||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | Change | ||||||||||||||||||
| Net sales | $ | 452,027 | $ | 437,099 | 3.4 | % | ||||||||||||||
| Cost of products sold | $ | 283,191 | $ | 281,901 | 0.5 | % | ||||||||||||||
| Gross profit | 168,836 | 155,198 | 8.8 | % | ||||||||||||||||
| Gross profit margin | 37.4 | % | 35.5 | % | ||||||||||||||||
| Selling expenses | 51,773 | 47,639 | 8.7 | % | ||||||||||||||||
| % of net sales | 11.5 | % | 10.9 | % | ||||||||||||||||
| General and administrative expenses | 43,299 | 53,351 | (18.8) | % | ||||||||||||||||
| % of net sales | 9.6 | % | 12.2 | % | ||||||||||||||||
| Research and development expenses | 10,591 | 7,408 | 43.0 | % | ||||||||||||||||
| % of net sales | 2.3 | % | 1.7 | % | ||||||||||||||||
| Amortization of intangibles | 12,982 | 12,394 | 4.7 | % | ||||||||||||||||
| Income from operations | 50,191 | 34,406 | 45.9 | % | ||||||||||||||||
| Operating margin | 11.1 | % | 7.9 | % | ||||||||||||||||
| Interest and debt expense | 12,971 | 10,399 | 24.7 | % | ||||||||||||||||
| Cost of debt refinancing | — | 14,803 | (100.0) | % | ||||||||||||||||
| Investment (income) loss | 742 | (548) | (235.4) | % | ||||||||||||||||
| Foreign currency exchange (gain) loss | 2,206 | 535 | 312.3 | % | ||||||||||||||||
| Other (income) expense, net | (2,079) | (289) | 619.4 | % | ||||||||||||||||
| Income (loss) before income tax expense (benefit) | 36,351 | 9,506 | 282.4 | % | ||||||||||||||||
| Income tax expense (benefit) | 13,846 | 1,566 | 784.2 | % | ||||||||||||||||
| Net income (loss) | 22,505 | 7,940 | 183.4 | % | ||||||||||||||||
| Average basic shares outstanding | 28,581 | 27,594 | 3.6 | % | ||||||||||||||||
| Basic income (loss) per share | $ | 0.79 | $ | 0.29 | 172.4 | % | ||||||||||||||
| Average diluted shares outstanding | 28,733 | 27,957 | 2.8 | % | ||||||||||||||||
| Diluted income (loss) per share | $ | 0.78 | $ | 0.28 | 178.6 | % | ||||||||||||||
| Dividends declared per common share | $ | 0.07 | $ | 0.06 | ||||||||||||||||
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 6 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
| September 30, 2022 | March 31, 2022 | |||||||||||||
| (unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 88,865 | $ | 115,390 | ||||||||||
| Trade accounts receivable | $ | 140,298 | $ | 147,515 | ||||||||||
| Inventories | $ | 192,789 | $ | 172,139 | ||||||||||
| Prepaid expenses and other | $ | 37,537 | $ | 31,545 | ||||||||||
| Total current assets | $ | 459,489 | $ | 466,589 | ||||||||||
| Property, plant, and equipment, net | $ | 92,617 | $ | 97,926 | ||||||||||
| Goodwill | $ | 627,850 | $ | 648,849 | ||||||||||
| Other intangibles, net | $ | 365,206 | $ | 390,788 | ||||||||||
| Marketable securities | $ | 10,183 | $ | 10,294 | ||||||||||
| Deferred taxes on income | $ | 2,265 | $ | 2,313 | ||||||||||
| Other assets | $ | 71,685 | $ | 68,948 | ||||||||||
| Total assets | $ | 1,629,295 | $ | 1,685,707 | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Trade accounts payable | $ | 76,584 | $ | 90,881 | ||||||||||
| Accrued liabilities | $ | 104,835 | $ | 118,187 | ||||||||||
| Current portion of long-term debt and finance lease obligations | $ | 40,580 | $ | 40,551 | ||||||||||
| Total current liabilities | $ | 221,999 | $ | 249,619 | ||||||||||
| Term loan and finance lease obligations | $ | 450,840 | $ | 470,675 | ||||||||||
| Other non-current liabilities | $ | 172,072 | $ | 192,610 | ||||||||||
| Total liabilities | $ | 844,911 | $ | 912,904 | ||||||||||
| Shareholders’ equity: | ||||||||||||||
| Common stock | $ | 286 | $ | 285 | ||||||||||
| Additional paid-in capital | $ | 508,948 | $ | 506,074 | ||||||||||
| Retained earnings | $ | 336,844 | $ | 316,343 | ||||||||||
| Accumulated other comprehensive loss | $ | (61,694) | $ | (49,899) | ||||||||||
| Total shareholders’ equity | $ | 784,384 | $ | 772,803 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 1,629,295 | $ | 1,685,707 | ||||||||||
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 7 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Statements of Cash Flows - UNAUDITED
(In thousands)
| Six Months Ended | ||||||||||||||
| September 30, 2022 | September 30, 2021 | |||||||||||||
| Operating activities: | ||||||||||||||
| Net income (loss) | $ | 22,505 | $ | 7,940 | ||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||||||||||||||
| Depreciation and amortization | $ | 20,893 | $ | 20,969 | ||||||||||
| Deferred income taxes and related valuation allowance | $ | (698) | $ | (1,235) | ||||||||||
| Net loss (gain) on sale of real estate, investments, and other | $ | 852 | $ | (462) | ||||||||||
| Stock-based compensation | $ | 3,629 | $ | 5,504 | ||||||||||
| Amortization of deferred financing costs | $ | 860 | $ | 867 | ||||||||||
| Cost of debt refinancing | $ | — | $ | 14,803 | ||||||||||
| Loss (gain) on hedging instruments | $ | (714) | $ | 672 | ||||||||||
| Gain on sale of building | $ | (232) | $ | (375) | ||||||||||
| Loss on retirement of fixed asset | $ | 175 | $ | — | ||||||||||
| Non-cash lease expense | $ | 3,843 | $ | 3,939 | ||||||||||
| Changes in operating assets and liabilities, net of effects of business acquisitions: | ||||||||||||||
| Trade accounts receivable | $ | 381 | $ | (1,709) | ||||||||||
| Inventories | $ | (30,754) | $ | (21,959) | ||||||||||
| Prepaid expenses and other | $ | 2,321 | $ | (2,779) | ||||||||||
| Other assets | $ | 24 | $ | 42 | ||||||||||
| Trade accounts payable | $ | (11,267) | $ | (6,274) | ||||||||||
| Accrued liabilities | $ | (3,124) | $ | 1,908 | ||||||||||
| Non-current liabilities | $ | (2,545) | $ | (3,909) | ||||||||||
| Net cash provided by (used for) operating activities | $ | 6,149 | $ | 17,942 | ||||||||||
| Investing activities: | ||||||||||||||
| Proceeds from sales of marketable securities | $ | 1,900 | $ | 2,734 | ||||||||||
| Purchases of marketable securities | $ | (2,709) | $ | (4,768) | ||||||||||
| Capital expenditures | $ | (5,288) | $ | (6,752) | ||||||||||
| Proceeds from sale of building, net of transaction costs | $ | 373 | $ | 461 | ||||||||||
| Proceeds from insurance reimbursement | $ | — | $ | 482 | ||||||||||
| Purchases of businesses, net of cash acquired | $ | (1,616) | $ | (472,954) | ||||||||||
| Dividend received from equity method investment | $ | 313 | $ | — | ||||||||||
| Net cash provided by (used for) investing activities | $ | (7,027) | $ | (480,797) | ||||||||||
| Financing activities: | ||||||||||||||
| Proceeds from issuance of common stock | $ | 621 | $ | 1,412 | ||||||||||
| Repayment of debt | $ | (20,264) | $ | (461,286) | ||||||||||
| Proceeds from issuance of long-term debt | $ | — | $ | 650,000 | ||||||||||
| Proceeds from equity offering | $ | — | $ | 207,000 | ||||||||||
| Fees related to debt and equity offering | $ | — | $ | (25,292) | ||||||||||
| Cash inflows from hedging activities | $ | 12,306 | $ | 7,007 | ||||||||||
| Cash outflows from hedging activities | $ | (11,689) | $ | (6,927) | ||||||||||
| Payment of dividends | $ | (4,001) | $ | (3,145) | ||||||||||
| Other | $ | (1,375) | $ | (1,909) | ||||||||||
| Net cash provided by (used for) financing activities | $ | (24,402) | $ | 366,860 | ||||||||||
| Effect of exchange rate changes on cash | $ | (1,245) | $ | (821) | ||||||||||
| Net change in cash and cash equivalents | $ | (26,525) | $ | (96,816) | ||||||||||
| Cash, cash equivalents, and restricted cash at beginning of year | $ | 115,640 | $ | 202,377 | ||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 89,115 | $ | 105,561 | ||||||||||
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 8 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Q2 FY 2023 Sales Bridge
| Quarter To Date | Year To Date | |||||||||||||||||||||||||
| ($ in millions) | $ Change | % Change | $ Change | % Change | ||||||||||||||||||||||
| Fiscal 2022 Sales | $ | 223.6 | $ | 437.1 | ||||||||||||||||||||||
| Acquisition | 9.0 | 4.0 | % | 17.5 | 4.0 | % | ||||||||||||||||||||
| Volume | (0.9) | (0.4) | % | (5.2) | (1.2) | % | ||||||||||||||||||||
| Pricing | 11.0 | 4.9 | % | 20.6 | 4.7 | % | ||||||||||||||||||||
| Foreign currency translation | (11.0) | (4.9) | % | (18.0) | (4.1) | % | ||||||||||||||||||||
| Total change | $ | 8.1 | 3.6 | % | $ | 14.9 | 3.4 | % | ||||||||||||||||||
| Fiscal 2023 Sales | $ | 231.7 | $ | 452.0 | ||||||||||||||||||||||
COLUMBUS McKINNON CORPORATION
Q2 FY 2023 Gross Profit Bridge
| ($ in millions) | Quarter To Date | Year To Date | |||||||||
| Fiscal 2022 Gross Profit | $ | 81.1 | $ | 155.2 | |||||||
| Acquisition | 4.5 | 7.6 | |||||||||
| Price, net of material cost inflation | 4.4 | 7.5 | |||||||||
| Prior year acquisition inventory step-up expense | — | 3.0 | |||||||||
| Sales volume and mix | 0.5 | 1.5 | |||||||||
| Prior year business realignment costs | 0.9 | 0.9 | |||||||||
| Prior year acquisition integration costs | — | 0.5 | |||||||||
| Productivity, net of other cost changes | (0.3) | 0.4 | |||||||||
| Tariffs | (0.7) | (1.2) | |||||||||
| Foreign currency translation | (4.1) | (6.6) | |||||||||
| Total change | 5.2 | 13.6 | |||||||||
| Fiscal 2023 Gross Profit | $ | 86.3 | $ | 168.8 | |||||||
| U.S. Shipping Days by Quarter | ||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Total | ||||||||||||||||||||||||||||
| FY 23 | 63 | 64 | 60 | 63 | 250 | |||||||||||||||||||||||||||
| FY 22 | 63 | 64 | 61 | 63 | 251 | |||||||||||||||||||||||||||
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 9 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Additional Data - UNAUDITED
| September 30, 2022 | June 30, 2022 | March 31, 2022 | September 30, 2021 | |||||||||||||||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||||||||||||||
| Backlog | $ | 327.8 | $ | 351.6 | $ | 309.1 | $ | 255.6 | ||||||||||||||||||||||||||||||
| Long-term backlog | ||||||||||||||||||||||||||||||||||||||
| Expected to ship beyond 3 months | $ | 161.2 | $ | 162.8 | $ | 135.2 | $ | 110.5 | ||||||||||||||||||||||||||||||
| Long-term backlog as % of total backlog | 49.2 | % | 46.3 | % | 43.7 | % | 43.2 | % | ||||||||||||||||||||||||||||||
| Trade accounts receivable | ||||||||||||||||||||||||||||||||||||||
| Days sales outstanding | 55.1 | days | 54.9 | days | 53.0 | days | 51.0 | days | ||||||||||||||||||||||||||||||
| Inventory turns per year | ||||||||||||||||||||||||||||||||||||||
| (based on cost of products sold) | 3.0 | turns | 2.9 | turns | 3.9 | turns | 3.9 | turns | ||||||||||||||||||||||||||||||
| Days' inventory | 121.0 | days | 125.4 | days | 93.6 | days | 94.7 | days | ||||||||||||||||||||||||||||||
| Trade accounts payable | ||||||||||||||||||||||||||||||||||||||
| Days payables outstanding | 59.4 | days | 58.6 | days | 58.7 | days | 54.3 | days | ||||||||||||||||||||||||||||||
Working capital as a % of sales (2) | 20.8 | % | 19.9 | % | 15.5 | % | 14.4 | % | ||||||||||||||||||||||||||||||
| Net cash provided by (used for) operating activities | $ | 17.3 | $ | (11.2) | $ | 25.2 | $ | 25.3 | ||||||||||||||||||||||||||||||
| Capital expenditures | $ | 2.3 | $ | 3.0 | $ | 3.6 | $ | 3.1 | ||||||||||||||||||||||||||||||
Free cash flow (1) | $ | 15.0 | $ | (14.1) | $ | 21.6 | $ | 22.2 | ||||||||||||||||||||||||||||||
| Debt to total capitalization percentage | 38.5 | % | 39.3 | % | 39.8 | % | 38.1 | % | ||||||||||||||||||||||||||||||
| Debt, net of cash, to net total capitalization | 33.9 | % | 34.9 | % | 33.9 | % | 32.1 | % | ||||||||||||||||||||||||||||||
(1) Free cash flow is defined as cash from operations less capital expenditures. Free cash flow 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 information, such as free cash flow, is important for investors and other readers of the Company’s financial statements.
Components may not add due to rounding.
(2) September 30, 2022, June 30, 2022, and March 31, 2022 figures exclude the impact of the acquisition of Garvey. September 30, 2021 figure excludes the impact of the acquisition of Dorner.
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 10 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit
($ in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| GAAP gross profit | $ | 86,310 | $ | 81,135 | $ | 168,836 | $ | 155,198 | |||||||||||||||
| Add back (deduct): | |||||||||||||||||||||||
| Business realignment costs | — | 914 | — | 914 | |||||||||||||||||||
| Acquisition inventory step-up expense | — | — | — | 2,981 | |||||||||||||||||||
| Acquisition integration costs | — | — | — | 521 | |||||||||||||||||||
| Non-GAAP adjusted gross profit | 86,310 | 82,049 | 168,836 | 159,614 | |||||||||||||||||||
| Sales | $ | 231,740 | $ | 223,635 | $ | 452,027 | $ | 437,099 | |||||||||||||||
| Gross margin - GAAP | 37.2 | % | 36.3 | % | 37.4 | % | 35.5 | % | |||||||||||||||
| Adjusted gross margin - Non-GAAP | 37.2 | % | 36.7 | % | 37.4 | % | 36.5 | % | |||||||||||||||
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 information, 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 Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 11 of 13
October 27, 2022
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, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| GAAP income from operations | $ | 27,372 | $ | 23,660 | $ | 50,191 | $ | 34,406 | |||||||||||||||
| Add back (deduct): | |||||||||||||||||||||||
| Business realignment costs | 1,233 | 1,200 | 2,890 | 1,823 | |||||||||||||||||||
| Acquisition deal and integration costs | 19 | 632 | 105 | 9,874 | |||||||||||||||||||
| Acquisition inventory step-up expense | — | — | — | 2,981 | |||||||||||||||||||
| Non-GAAP adjusted income from operations | $ | 28,624 | $ | 25,492 | $ | 53,186 | $ | 49,084 | |||||||||||||||
| Sales | $ | 231,740 | $ | 223,635 | $ | 452,027 | $ | 437,099 | |||||||||||||||
| Operating margin - GAAP | 11.8 | % | 10.6 | % | 11.1 | % | 7.9 | % | |||||||||||||||
| Adjusted operating margin - Non-GAAP | 12.4 | % | 11.4 | % | 11.8 | % | 11.2 | % | |||||||||||||||
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 information, 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 Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 12 of 13
October 27, 2022
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, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| GAAP net income (loss) | 14,114 | 15,203 | 22,505 | 7,940 | |||||||||||||||||||
| Add back (deduct): | |||||||||||||||||||||||
| Amortization of intangibles | 6,447 | 6,285 | 12,982 | 12,394 | |||||||||||||||||||
| Business realignment costs | 1,233 | 1,200 | 2,890 | 1,823 | |||||||||||||||||||
| Acquisition deal and integration costs | 19 | 632 | 105 | 9,874 | |||||||||||||||||||
| Cost of debt refinancing | — | — | — | 14,803 | |||||||||||||||||||
| Acquisition inventory step-up expense | — | — | — | 2,981 | |||||||||||||||||||
Normalize tax rate to 22% (1) | (938) | (1,946) | 2,333 | (9,738) | |||||||||||||||||||
| Non-GAAP adjusted net income | 20,875 | 21,374 | 40,815 | 40,077 | |||||||||||||||||||
| Average diluted shares outstanding | 28,748 | 28,756 | 28,733 | 27,957 | |||||||||||||||||||
| Diluted income (loss) per share - GAAP | $ | 0.49 | $ | 0.53 | $ | 0.78 | $ | 0.28 | |||||||||||||||
| Diluted income per share - Non-GAAP | $ | 0.73 | $ | 0.74 | $ | 1.42 | $ | 1.43 | |||||||||||||||
(1) Applies a normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.
Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items, including amortization of intangible assets, and also adjusted for a normalized tax rate. Adjusted net income and 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 information, such as adjusted net income and 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 representing adjusted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company’s strategy to grow through acquisitions as well as organically.
Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023
Page 13 of 13
October 27, 2022
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
($ in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| GAAP net income (loss) | $ | 14,114 | $ | 15,203 | $ | 22,505 | $ | 7,940 | |||||||||||||||
| Add back (deduct): | |||||||||||||||||||||||
| Income tax expense (benefit) | $ | 4,953 | $ | 4,083 | $ | 13,846 | $ | 1,566 | |||||||||||||||
| Interest and debt expense | $ | 6,768 | $ | 4,587 | $ | 12,971 | $ | 10,399 | |||||||||||||||
| Investment (income) loss | $ | 312 | $ | (115) | $ | 742 | $ | (548) | |||||||||||||||
| Foreign currency exchange (gain) loss | $ | 1,003 | $ | 441 | $ | 2,206 | $ | 535 | |||||||||||||||
| Other (income) expense, net | $ | 222 | $ | (539) | $ | (2,079) | $ | (289) | |||||||||||||||
| Depreciation and amortization expense | $ | 10,424 | $ | 10,502 | $ | 20,893 | $ | 20,969 | |||||||||||||||
| Business realignment costs | $ | 1,233 | $ | 1,200 | $ | 2,890 | $ | 1,823 | |||||||||||||||
| Acquisition deal and integration costs | $ | 19 | $ | 632 | $ | 105 | $ | 9,874 | |||||||||||||||
| Cost of debt refinancing | $ | — | $ | — | $ | — | $ | 14,803 | |||||||||||||||
| Acquisition inventory step-up expense | $ | — | $ | — | $ | — | $ | 2,981 | |||||||||||||||
| Non-GAAP adjusted EBITDA | $ | 39,048 | $ | 35,994 | $ | 74,079 | $ | 70,053 | |||||||||||||||
| Sales | $ | 231,740 | $ | 223,635 | $ | 452,027 | $ | 437,099 | |||||||||||||||
| Net income (loss) margin - GAAP | 6.1 | % | 6.8 | % | 5.0 | % | 1.8 | % | |||||||||||||||
| Adjusted EBITDA margin - Non-GAAP | 16.8 | % | 16.1 | % | 16.4 | % | 16.0 | % | |||||||||||||||
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 information, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements.
Q2 Fiscal Year 2023 Financial Results Conference Call President & Chief Executive Officer David J. Wilson October 27, 2022 Executive VP – Finance & Chief Financial Officer Gregory P. Rustowicz
© 2022 COLUMBUS MCKINNON CORPORATION These slides, and the accompanying oral discussion (together, this “presentation”), contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning expected growth, future sales and EBITDA margins, 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 certain goals. 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 revenue and adjusted EBITDA 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. The Company assumes no obligation to update the forward-looking information contained in this presentation. Non-GAAP Financial Measures and Forward-looking Non-GAAP Measures This presentation will discuss some non-GAAP (“adjusted”) financial measures which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results compared in accordance with GAAP. The non-GAAP (“adjusted”) measures are noted and reconciliations of comparable GAAP with non-GAAP measures can be found in tables included in the Supplemental Information portion of this presentation. Safe Harbor Statement 2
© 2022 COLUMBUS MCKINNON CORPORATION 3 Executing Strategy: Earnings Power & Cash Generation Transformation driving growth, improving cost structure and leveraging market position Achieved record operating income and adjusted EBITDA margin • Revenue increased 8.5% on a constant currency basis • Record operating income of $27.4 million demonstrating strong operating leverage and benefit of realignment initiative • Record adjusted EBITDA margin of 16.8% • Cash from operations in the quarter of $17.3 million Regional structure enables collaborative selling of Intelligent Motion Solutions • New structure driving collaboration across product teams generating new sales, lower costs and enhanced service • Orders were $222.1 million and ending backlog was $327.8 million; quotation levels remain strong • Order level impacted by customer pre-buys ahead of June price increases and longer project conversion cycles • Focusing on markets with tailwinds while protecting earnings and cash flow Regional Realignment and Increased Collaboration Driving Results
© 2022 COLUMBUS MCKINNON CORPORATION 4 Unlocking Potential Key Strategic Objectives Dashboard Delivering on Transformation Strategy STRENGTHEN, GROW, EXPAND AND REIMAGINE CMCO Integrated regional teams to simplify, collaborate and deliver on Intelligent Motion Solutions for material handling Delivered 7.5% YTD growth (constant currency) driven by focus on higher growth, secular driven markets Grew NPD N-3 to 5% of revenue YTD, up from 2.6% in FY19 and less than 1% in FY17 Customer experience remains a top priority; initiated first enterprise-wide net promoter score (NPS) survey DRIVE MARGIN EXPANSION AND CASH GENERATION Improved gross margin to 36.5% TTM, a record twelve-month gross margin level Business realignment reduces cost structure by ~$6.8 million on an annualized basis Achieved record operating income and adjusted EBITDA margin in the second quarter FY23 Generated $15 million in FCF in the second quarter FY23; expect to improve working capital as a % of sales
© 2022 COLUMBUS MCKINNON CORPORATION 5 Operational Performance YTD gross margin improved 90 bps Making Solid Progress Along Path to Top-tier Margin Profile ADJUSTED GROSS MARGIN PROGRESSION • Operational Excellence • 80/20 simplification • Volume/scale • Pricing • Accretive acquisitions GROSS MARGIN LEVERS 33.7% 35.0% 35.4% 34.1% 36.1% 36.5% 37.4% ~40% FY18 FY19 FY20 FY21 FY22 Q2 FY23 TTM H1 FY23 FY27E
© 2022 COLUMBUS MCKINNON CORPORATION 6 Business Model Transformation Growth strategy substantially advances underlying portfolio Targeting $1.5 Billion In Revenue In Fiscal 2027 And ~21% EBITDA Margin Revenue Growth Rate EBITDA Margin Lifting Solutions 60% Specialty Conveying 18% Linear Motion 9% Automation 13% Lifting Solutions FY21 Lifting Solutions Specialty Conveying Linear Motion Automation Linear Motion & Automation FUTURE FY23 YTD
© 2022 COLUMBUS MCKINNON CORPORATION Net Sales Foreign Currency Translation Negatively Impacted Sales by 4.9% Quarter Sales Bridge • U.S.: 5.8% pricing increase and 3.4% volume decrease • Non-U.S.: 3.7% pricing and 3.8% volume increase 7 Quarter Q2 FY22 Sales $ 223.6 Acquisition 9.0 4.0% Volume (0.9) (0.4)% Pricing 11.0 4.9% Foreign currency translation (11.0) (4.9)% Total change $ 8.1 3.6% Q2 FY23 Sales $ 231.7 Q2 sales up 8.5% on constant currency from prior-year period driven by deliberate price actions and acquisition $223.6 $216.1 $253.4 $220.3 $231.7 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 ($ in millions) Note: Components may not add to totals due to rounding
© 2022 COLUMBUS MCKINNON CORPORATION 8 Gross Profit & Margin Quarter Gross Profit Bridge Quarter Q2 FY22 Gross Profit $ 81.1 Acquisition 4.5 Price, net of material cost inflation 4.4 Prior year business realignment costs 0.9 Sales volume and mix 0.5 Productivity, net of other cost changes (0.3) Tariffs (0.7) Foreign currency translation (4.1) Total Change $ 5.2 Q2 FY23 Gross Profit $ 86.3 Adjusted Gross Margin Driven by Accretive Acquisition and Price $81.1 $75.1 $85.5 $82.5 $86.3 36.3% 34.7% 33.7% 37.5% 37.2% 36.7% 36.7% 34.8% 37.5% 37.2% Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Adjusted Gross Margin ($ in millions) Note: Components may not add to totals due to rounding
© 2022 COLUMBUS MCKINNON CORPORATION 9 RSG&A $24.2 $24.5 $27.1 $26.2 $25.6 $23.2 $25.1 $23.6 $21.9 $21.4 $3.8 $3.9 $4.1 $5.1 $5.5 $51.2 $53.5 $54.8 $53.2 $52.5 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Selling G&A R&D Q2 FY23 RSG&A $0.7 million lower than trailing Q1 FY23 • Lower Selling costs reflects benefits of business realignment and FX RSG&A increased $1.3 million y/y • Reflects $1.2 million in incremental RSG&A related to acquisition and ~$1.5 million in merit increases • $0.9 million of incremental business realignment expenses • Increment R&D investments of $1.6 million to drive innovation • Offset by ~ $1 million in cost reductions from realignment and $2.3 million of FX benefit Expect RSG&A of approximately $54 million in Q3 FY23(1) (1)RSG&A guidance provided October 27, 2022. Excludes business realignment, integration, acquisitions and other one-time costs Note: Components may not add to totals due to rounding RSG&A as % of sales: 24.8% 24.1% 22.7%22.9% Executing on Cost Reduction Initiatives While Investing in Organic Growth ($ in millions) 21.6%
© 2022 COLUMBUS MCKINNON CORPORATION 10 Operating Income Record Q2 FY23 operating income of $27.4 million; operating margin of 11.8% • Reflects benefit of acquisition and pricing power which offset $1.6 million negative impact from FX Adjusted operating income of $28.6 million; adjusted operating margin of 12.4% • 38.6% operating leverage in the quarter • Acquisition added 80 basis points to adjusted operating margin in quarter Q2 FY23 amortization expense expected to be approximately $6.5 million at current FX rates Achieved Record Operating Income in Increasingly Challenging Economic Environment Operating Income & Margin Adjusted Operating Income & Margin $25.5 $20.5 $28.6 $24.6 $28.6 11.4% 9.5% 11.2% 11.1% 12.4% Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 $23.7 $15.3 $24.1 $22.8 $27.4 10.6% 7.1% 9.5% 10.4% 11.8% Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 ($ in millions) (1)Guidance on amortization expense provided on October 27, 2022
© 2022 COLUMBUS MCKINNON CORPORATION $0.53 $0.34 $0.41 $0.29 $0.49 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 11 Earnings Per Share Adjusted EPS GAAP Diluted EPS $0.74 $0.60 $0.79 $0.69 $0.73 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q2 FY23 GAAP net income of $14.1 million • Interest expense was $6.8 million, up $2.2 million, negatively impacting EPS by $0.06 per diluted share y/y • FX and investment losses had an approximate $0.04 per diluted share negative impact to earnings y/y Adj. net income of $20.9 million in the quarter Add backs (pre-tax): • $6.4 million of amortization of intangibles • $1.2 million of business realignment costs Guidance: • FY23 non-GAAP adjusted tax rate: 22%(1) • Q3 FY23 interest expense of ~$7.2 million(1) • Q3 FY23 FX and investment losses of ~$1.0 million(1) • Q3 FY23 diluted shares outstanding: ~29.0 million(1) (1)Guidance on tax rate, interest expense, FX and investment losses and number of diluted shares outstanding provided on October 27, 2022 Driving Earnings Power Through Transformation Strategy
© 2022 COLUMBUS MCKINNON CORPORATION 12 Adjusted EBITDA Margin Q2 FY23 record adjusted EBITDA margin of 16.8% Adjusted EBITDA & ROIC Return on Invested Capital (ROIC)(1) 11.9% 15.4% 15.6% FY21 FY22 Q2 FY23 TTM 6.6% 7.5% 6.9% FY21 FY22 Q2 FY23 TTM (1)ROIC is a non-GAAP measure defined as adjusted income from operations, net of taxes at a 22% normalized rate, for the trailing four quarters divided by the average of debt plus equity less cash (average capital) for the trailing five quarters. • 80 bps contribution from acquisition • Progressing toward target of ~21% adjusted EBITDA margin in FY27 Targeting ROIC in excess of WACC • TTM ROIC reflects higher average capital base driven by timing of acquisitions • Strategy expected to deliver improved earnings power and ROIC over time Strategy Execution Delivering Adjusted EBITDA Margin Expansion
© 2022 COLUMBUS MCKINNON CORPORATION $97.4 $86.6 $35.8 $25.4 163% 951% 121% 58% FY20 FY21 FY22 Q2 FY23 TTM 13 Free Cash Flow & Conversion (2) Cash Flow Note: Components may not add to totals due to rounding Three Months Ended YTD 9/30/22 9/30/21 9/30/22 Net cash provided by operating activities $17.3 $25.3 $6.1 CapEx (2.3) (3.1) (5.3) Free cash flow (FCF) $15.0 $22.2 $0.8 (1)Capital expenditure guidance provided October 27, 2022. (2)See Supplemental Slides for the definition of free cash flow, free cash flow conversion reconciliation and other disclaimers regarding non-GAAP information. • Improved cash generation expected to continue through remainder of FY23 • Q2 cash flow negatively impacted by $6.6 million in higher cash interest and cash taxes • Inventory peaked in August and has begun to decline; expected to continue downward trend through the rest of the year • FY23 CapEx expectation lowered to range of ~$12 to $15 million (1) • Includes investments in productivity and centers of excellence Balancing Inventory Stocking Levels with Customer Requirements ($ in millions)
© 2022 COLUMBUS MCKINNON CORPORATION 14 Capital Structure Pro-forma net debt leverage ratio of ~2.8x(1) • Improved 10 bps • Net debt to net total capital improved 100 bps y/y to 33.9% Reduced debt $10 million in the quarter and $20 million YTD • Expect to pay down $40 million in FY23 • ~60% of Term Loan B debt is hedged Financial flexibility • ~$173 million of liquidity • Financial strength and cash generation capability enables execution of strategy including bolt-on acquisitions, without over leveraging balance sheet Flexible Capital Structure and Solid Balance Sheet Supports Strategy in All Market Conditions CAPITALIZATION September 30, 2022 June 30, 2022 Cash and cash equivalents $ 88.9 $ 85.7 Total debt 491.4 501.3 Total net debt 402.6 415.7 Shareholders’ equity 784.4 775.2 Total capitalization $ 1,275.8 $ 1,276.5 Debt/total capitalization 38.5% 39.3% Net debt/net total capitalization 33.9% 34.9% (1)Pro-forma net debt leverage ratio is defined as Net Debt / TTM Adjusted EBITDA including acquisitions ($ in millions) Note: Components may not add to totals due to rounding
© 2022 COLUMBUS MCKINNON CORPORATION 15 Orders Reflect Demand Cycle Due to Price Action Solid Backlog at $327.8 million Orders and Backlog • Declined 4% y/y on constant currency basis • Declined sequentially 16.8% including approximately 700 bps impact due to customers buying in advance of Q2 price increase • Solid quotation activity; customer orders slowed due to supply chain driven project delays • Backlog down 7% sequentially includes reduction in past due orders • Short term backlog represents 72% of Q3 FY23 revenue guidance at mid-point of range Focused Efforts to Improve Lead Times and Customer Experience $238.3 $230.5 $269.8 $267.1 $222.1 1.07x 1.07x 1.06x 1.21x 0.96x Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Orders Book:Bill (1)Long term backlog is expected to ship beyond three months $110.5 $116.3 $135.2 $162.8 $161.2 $145.1 $178.4 $173.9 $188.8 $166.6 $255.6 $294.7 $309.1 $351.6 $327.8 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Long Term Backlog Short Term Backlog (1) ($ in millions)
© 2022 COLUMBUS MCKINNON CORPORATION 16Executing Strategy to Create a Scalable Enterprise with Greater Earnings Power On Track to Deliver to Plan (1) Revenue guidance provided October 27, 2022 Q3 FY2023 outlook • Expect Q3 FY23 net sales of approximately $225 million to $235 million, (1) based on current exchange rates. Demonstrating success with innovation and collaboration Focused on improving customer experience Continued strength in F&B, Automotive/EV, Heavy OEM and Metals Processing • Encouraged with quote rates which remain elevated Focused on execution of transformation strategy • Prioritizing operational improvement; increasingly selective with acquisition opportunities
© 2022 COLUMBUS MCKINNON CORPORATION Targeting Top-tier Performance Over the Strategic Planning Period Increases digital capabilities with technology enablers that support growth and cost optimization Incorporates factory simplification to drive earnings power Elevates competitive advantage via deployment of Columbus McKinnon’s Business System (CMBS) Strengthens talent processes, improves organizational structure and advances succession Strategic Plan to Transform Columbus McKinnon into a Global Intelligent Motion Enterprise ✓ Advances CMCO to achieve target ~$1.5 billion in revenue and ~21% EBITDA margin in FY27 ✓ Evolves the enterprise from cyclical industrial to top-tier, secular growth, intelligent motion solutions ✓Delivers ~$250 million of organic initiative growth and ~$325 million of M&A growth(1) Beyond the Blueprint 17 (1)M&A includes ~$250 million of acquired revenue and ~$75 million of growth from acquired businesses
Q2 Fiscal Year 2023 Financial Results Conference Call President & Chief Executive Officer David J. Wilson October 27, 2022 Executive VP – Finance & Chief Financial Officer Gregory P. Rustowicz
Supplemental Information
© 2022 COLUMBUS MCKINNON CORPORATION 20 Conference Call Playback Info Replay Number: 412-317-6671 passcode: 13733206 Telephone replay available through November 3, 2022 Webcast / PowerPoint / Replay available at investors.columbusmckinnon.com Transcript, when available, at investors.columbusmckinnon.com
© 2022 COLUMBUS MCKINNON CORPORATION 21 Adjusted Gross Profit Reconciliation Adjusted gross profit is defined as gross profit as reported, adjusted for certain items. Adjusted gross profit is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted gross profit, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's gross profit to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit to that of other companies. ($ in thousands) Quarter Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 GAAP gross profit $ 81,135 $ 75,057 $ 85,475 $ 82,519 $ 86,310 Add back (deduct): Acquisition inventory step-up expense — 515 1,546 — — Product liability settlement — 2,850 — — — Acquisition amortization of backlog — 450 1,650 — — Business realignment costs 914 692 — — — Non-GAAP adjusted gross profit $ 82,049 $ 79,564 $ 88,671 $ 82,519 $ 86,310 Sales 223,635 216,088 253,368 220,287 231,740 Add back: Acquisition amortization of backlog — 450 1,650 — — Non-GAAP sales $ 223,635 $ 216,538 $ 255,018 $ 220,287 $ 231,740 Gross margin – GAAP 36.3% 34.7% 33.7% 37.5% 37.2% Adjusted gross margin – Non-GAAP 36.7% 36.7% 34.8% 37.5% 37.2%
© 2022 COLUMBUS MCKINNON CORPORATION 22 Adjusted Gross Profit Reconciliation 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 information, 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. ($ in thousands) Fiscal Year TTM 2018 2019 2020 2021 2022 Q2 FY23 GAAP gross profit $ 285,061 $ 304,997 $ 283,186 $ 220,225 $ 315,730 $ 329,361 Add back (deduct): Product liability settlement — — — — 2,850 2,850 Acquisition amortization of backlog — — — — 2,100 2,100 Acquisition inventory step-up expense — — — — 5,042 2,061 Business realignment costs — 286 1,037 830 1,606 692 Acquisition deal and integration costs 307 — — — 521 — Factory closures — 1,473 2,800 2,671 — — Insurance settlement (2,362) — (382) — — — Gain on sale of building — — — (2,189) — — Non-GAAP adjusted gross profit $ 283,006 $ 306,756 $ 286,641 $ 221,537 $ 327,849 $ 337,064 Sales 839,419 876,282 809,162 649,642 906,555 921,483 Add back: Acquisition amortization of backlog — — — — 2,100 2,100 Non-GAAP sales $ 839,419 $ 876,282 $ 809,162 $ 649,642 $ 908,655 $ 923,583 Gross margin – GAAP 34.0% 34.8% 35.0% 33.9% 34.8% 35.7% Adjusted gross margin – Non-GAAP 33.7% 35.0% 35.4% 34.1% 36.1% 36.5%
© 2022 COLUMBUS MCKINNON CORPORATION 23 Adjusted Income from Operations Reconciliation 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 information, 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. ($ in thousands) Quarter Fiscal Year Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 2021 2022 GAAP income from operations $ 23,660 $ 15,316 $ 24,059 $ 22,817 $ 27,372 $ 42,255 $ 73,781 Add back (deduct): Acquisition deal and integration costs 632 370 229 86 19 3,951 10,473 Acquisition inventory step-up expense — 515 1,546 — — — 5,042 Business realignment costs 1,200 964 1,115 1,657 1,233 1,470 3,902 Product liability settlement — 2,850 — — — — 2,850 Acquisition amortization of backlog — 450 1,650 — — — 2,100 Factory closures — — — — — 3,778 — Insurance recovery legal costs — — — — — 229 — Gain on sale of building — — — — — (2,638) — Non-GAAP adjusted income from operations $ 25,492 $ 20,465 $ 28,599 $ 24,560 $ 28,624 $ 49,045 $ 98,148 Sales 223,635 216,088 253,368 220,287 231,740 649,642 906,555 Add back: Acquisition amortization of backlog — 450 1,650 — — — 2,100 Non-GAAP sales $ 223,635 $ 216,538 $ 255,018 $ 220,287 $ 231,740 $ 649,642 $ 908,655 Operating margin – GAAP 10.6% 7.1% 9.5% 10.4% 11.8% 6.5% 8.1% Adjusted operating margin – Non-GAAP 11.4% 9.5% 11.2% 11.1% 12.4% 7.5% 10.8%
© 2022 COLUMBUS MCKINNON CORPORATION 24 Adjusted Net Income Reconciliation ($ in thousands, except per share data) Quarter Fiscal Year Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 FY 2021 FY 2022 GAAP net income (loss) $ 15,203 $ 9,894 $ 11,826 $ 8,391 $ 14,114 $ 9,106 $ 29,660 Add back (deduct): Amortization of intangibles 6,285 6,254 6,635 6,535 6,447 12,623 25,283 Cost of debt refinancing — — — — — — 14,803 Acquisition deal and integration costs 632 370 229 86 19 3,951 10,473 Acquisition inventory step-up expense — 515 1,546 — — — 5,042 Business realignment costs 1,200 964 1,115 1,657 1,233 1,470 3,902 Product liability settlement — 2,850 — — — — 2,850 Acquisition amortization of backlog — 450 1,650 — — — 2,100 Non-cash pension settlement expense — — — — — 19,046 — Factory closures — — — — — 3,778 — Insurance recovery legal costs — — — — — 229 — Gain on sale of building — — — — — (2,638) — Normalize tax rate to 22%(1) (1,946) (3,854) (260) 3,269 (938) (9,708) (13,852) Non-GAAP adjusted net income $ 21,374 $ 17,443 $ 22,741 $ 19,938 $ 20,875 $ 37,857 $ 80,261 Average diluted shares outstanding 28,756 28,840 28,845 28,699 28,748 24,173 28,401 Diluted income (loss) per share – GAAP $0.53 $0.34 $0.41 $0.29 $0.49 $0.38 $1.04 Diluted income per share – Non-GAAP $0.74 $0.60 $0.79 $0.69 $0.73 $1.57 $2.83 (1)Applies normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax. Adjusted net income and diluted EPS are defined as GAAP net income/(loss) and diluted EPS as reported, adjusted for certain items, including amortization of intangible assets, and also adjusted for a normalized tax rate. Adjusted net income and diluted EPS are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted net income and diluted EPS, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's net income/(loss) and diluted EPS to the historical periods' net income/(loss) and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income/(loss) and diluted EPS to that of other companies. The Company believes that representing adjusted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company’s strategy to grow through acquisitions as well as organically.
© 2022 COLUMBUS MCKINNON CORPORATION 25 Adjusted EBITDA Reconciliation Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements. ($ in thousands) Quarter Fiscal Year TTM Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 2021 2022 Q2 FY23 GAAP net income (loss) $ 15,203 $ 9,894 $ 11,826 $ 8,391 $ 14,114 $ 9,106 $ 29,660 $ 44,225 Add back (deduct): Income tax expense (benefit) 4,083 1,066 6,154 8,893 4,953 970 8,786 21,066 Interest and debt expense 4,587 4,375 5,352 6,203 6,768 12,081 20,126 22,698 Investment (income) loss (115) (76) 578 430 312 (1,693) (46) 1,244 Foreign currency exchange (gain) loss 441 512 527 1,203 1,003 941 1,574 3,245 Other (income) expense, net (539) (455) (378) (2,303) 222 20,850 (1,122) (2,914) Depreciation and amortization expense 10,502 10,276 10,679 10,469 10,424 28,153 41,924 41,848 Cost of debt refinancing — — — — — — 14,803 — Acquisition deal and integration costs 632 370 229 86 19 3,951 10,473 704 Acquisition inventory step-up expense — 515 1,546 — — — 5,042 2,061 Product liability settlement — 2,850 — — — — 2,850 2,850 Business realignment costs 1,200 964 1,115 1,657 1,233 1,470 3,902 4,969 Acquisition amortization of backlog — 450 1,650 — — — 2,100 2,100 Factory closures — — — — — 3,778 — — Insurance recovery legal costs — — — — — 229 — — Gain on sale of building — — — — — (2,638) — — Non-GAAP adjusted EBITDA $ 35,994 $ 30,741 $ 39,278 $ 35,029 $ 39,048 $ 77,198 $ 140,072 $ 144,096 Sales $ 223,635 $ 216,088 $ 253,368 $ 220,287 $ 231,740 $ 649,642 $ 906,555 $ 921,483 Add back: Acquisition amortization of backlog — 450 1,650 — — — 2,100 2,100 Non-GAAP sales $ 223,635 $ 216,538 $ 255,018 $ 220,287 $ 231,740 $ 649,642 $ 908,655 $ 923,583 Net income (loss) margin – GAAP 6.8% 4.6% 4.7% 3.8% 6.1% 1.4% 3.3% 4.8% Adjusted EBITDA margin – Non-GAAP 16.1% 14.2% 15.4% 15.9% 16.8% 11.9% 15.4% 15.6%
© 2022 COLUMBUS MCKINNON CORPORATION 26 Return on Invested Capital (ROIC) Reconciliation ROIC is defined as adjusted income from operations, net of taxes at a 22% normalized rate, for the trailing four quarters divided by the average of debt plus equity less cash (average capital) for the trailing five quarters. ROIC 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 information, such as ROIC, is important for investors and other readers of the Company’s financial statements. ($ in thousands) TTM Fiscal Year Q2 FY23 2021 2022 GAAP income from operations $ 89,564 $ 42,255 $ 73,781 Add back (deduct): Acquisition deal and integration costs 704 3,951 10,473 Acquisition inventory step-up expense 2,061 — 5,042 Product liability settlement 2,850 — 2,850 Acquisition amortization of backlog 2,100 — 2,100 Factory closures — 3,778 — Business realignment costs 4,969 1,470 3,902 Insurance recovery legal costs — 229 — Gain on sale of building — (2,638) — Non-GAAP adjusted income from operations $ 102,248 $ 49,045 $ 98,148 Non-GAAP adjusted income from operations, net of normalized tax rate of 22% $ 79,753 $ 38,255 $ 76,555 Trailing five quarter averages: Total debt 495,663 260,130 438,768 Total shareholders’ equity 762,633 487,523 701,640 Cash and cash equivalents 100,385 168,599 123,636 Net total capitalization $ 1,157,911 $ 579,054 $ 1,016,772 Return on invested capital (ROIC) – Non-GAAP 6.9% 6.6% 7.5%
© 2022 COLUMBUS MCKINNON CORPORATION Free Cash Flow & Free Cash Flow Conversion Reconciliation ($ in thousands) TTM Fiscal Year Q2 FY23 2020 2021 2022 Cash from operations $ 37,088 $ 106,795 $ 98,890 $ 48,881 Capital expenditures (11,640) (9,432) (12,300) (13,104) Free cash flow (FCF) $ 25,448 $ 97,363 $ 86,590 $ 35,777 GAAP net income 44,225 59,672 9,106 29,660 Free cash flow conversion 58% 163% 951% 121% Free cash flow is defined as cash from operations minus capital expenditures. Free cash flow conversion is defined as free cash flow divided by net income. Free cash flow and free cash flow conversion 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 as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as free cash flow and free cash flow conversion, 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 cash flow to the historical periods’ cash flow, as well as facilitates a more meaningful comparison of the Company’s cash flow to that of other companies. 27
© 2022 COLUMBUS MCKINNON CORPORATION 28 U.S. Capacity Utilization Eurozone Capacity Utilization Industrial Capacity Utilization Source: The Federal Reserve Board Source: European Commission 60% 65% 70% 75% 80% Series1 Series2 80.0% (Manufacturing) 80.3% (Total) Sept 2022(1) 65% 67% 69% 71% 73% 75% 77% 79% 81% 83% 85% 82.4% Q3 2022 (1) Numbers are preliminary
© 2022 COLUMBUS MCKINNON CORPORATION 29 ISM Production Index Source: Institute for Supply Chain Management 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 50.6% September 2022
© 2022 COLUMBUS MCKINNON CORPORATION 30 Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value GROWTH FRAMEWORKCMBS TRANSFORMATION
Q2 Fiscal Year 2023 Financial Results Conference Call President & Chief Executive Officer David J. Wilson October 28, 2022 Executive VP – Finance & Chief Financial Officer Gregory P. Rustowicz