Columbus Mckinnon Corp 8-K, filed May 27, 2020

Columbus Mckinnon Corp (CMCO)

8-K 2020-05-27 For: 2020-05-27

Added on April 08, 2026

About this 8-K

Columbus Mckinnon Corp filed this 8-K on May 27, 2020.



0-27618		16-0547600
(Commission File Number)		(IRS Employer Identification No.)



205 Crosspoint Parkway	Getzville	NY	14068
(Address of principal executive offices)			(Zip Code)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	CMCO	NASDAQ Global Select Market



EXHIBIT NUMBER		DESCRIPTION

99.1		Press Release dated May 27, 2020
99.2		Earnings call slides dated May 27, 2020
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)



COLUMBUS McKINNON CORPORATION

By:	/s/ Gregory P. Rustowicz
Name:	Gregory P. Rustowicz
Title:	Vice President and Chief
	Financial Officer (Principal Financial Officer)



☐	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))



☐	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.


•	Core values guided agile response to impact of COVID-19 pandemic; Focused on safety of associates, business continuity and conserving cash while continuing to invest in strategic growth initiatives


•	Success of Blueprint for Growth Strategy validated with 34.9% gross margin, and record 36.1% adjusted gross margin, despite 12.6% decline in sales


•	80/20 Process contributed $5.5 million in operating income in quarter helping to offset volume declines


•	Net income was $9.2 million, or $0.39 per diluted share; Adjusted net income was $13.8 million, or $0.58 per diluted share


•	Generated $36.5 million in cash from operations in the quarter


•	Record annual gross margin was 35.0% despite 7.7% decline in sales



Item 2.02	RESULTS OF OPERATIONS AND FINANCIAL CONDITION



Item 9.01	FINANCIAL STATEMENTS AND EXHIBITS.


•	Achieved 15.7% Adjusted EBTIDA margin and ROIC of 11.5%


•	Ended year with strong balance sheet that provides financial flexibility and significant liquidity


•	Operating income was $89.8 million, or 11.1% of sales; 80/20 process contributed $20.4 million


•	Strong working capital management and cash generation delivered record $106.8 million in cash from operations



Gregory P. Rustowicz	Investor Relations:
Vice President - Finance and Chief Financial Officer	Deborah K. Pawlowski
Columbus McKinnon Corporation	Kei Advisors LLC
716-689-5442	716-843-3908
greg.rustowicz@cmworks.com	dpawlowski@keiadvisors.com



	Three Months Ended
	March 31, 2020			March 31, 2019			Change
Net sales	$	189,486		$	216,733		(12.6	)%
Cost of products sold	123,277			140,688			(12.4	)%
Gross profit	66,209			76,045			(12.9	)%
Gross profit margin	34.9		%	35.1		%
Selling expenses	22,253			23,985			(7.2	)%
% of net sales	11.7		%	11.1		%
General and administrative expenses	21,167			21,674			(2.3	)%
% of net sales	11.2		%	10.0		%
Research and development expenses	2,891			3,354			(13.8	)%
% of net sales	1.5		%	1.5		%
Net loss (gain) on sales of businesses	—			(978		)	NM
Amortization of intangibles	3,234			3,542			(8.7	)%
Income from operations	16,664			24,468			(31.9	)%
Operating margin	8.8		%	11.3		%
Interest and debt expense	3,200			3,959			(19.2	)%
Investment (income) loss	48			(430		)	NM
Foreign currency exchange (gain) loss	(996		)	637			NM
Other (income) expense, net	221			(299		)	NM
Income before income tax expense	14,191			20,601			(31.1	)%
Income tax expense	4,947			860			475.2	%
Net income	$	9,244		$	19,741		(53.2	)%

Average basic shares outstanding	23,735			23,368			1.6	%
Basic income (loss) per share	$	0.39		$	0.84		(53.6	)%

Average diluted shares outstanding	23,938			23,714			0.9	%
Diluted income (loss) per share	$	0.39		$	0.83		(53.0	)%

Dividends declared per common share	$	0.12		$	0.11



	Year Ended
	March 31, 2020			March 31, 2019			Change
Net sales	$	809,162		$	876,282		(7.7	)%
Cost of products sold	525,976			571,285			(7.9	)%
Gross profit	283,186			304,997			(7.2	)%
Gross profit margin	35.0		%	34.8		%
Selling expenses	91,054			97,925			(7.0	)%
% of net sales	11.3		%	11.2		%
General and administrative expenses	77,880			83,567			(6.8	)%
% of net sales	9.6		%	9.5		%
Research and development expenses	11,310			13,491			(16.2	)%
% of net sales	1.4		%	1.5		%
Net loss on sales of businesses, including impairment	176			25,672			(99.3	)%
Amortization of intangibles	12,942			14,900			(13.1	)%
Income from operations	89,824			69,442			29.4	%
Operating margin	11.1		%	7.9		%
Interest and debt expense	14,234			17,144			(17.0	)%
Investment (income) loss	(891		)	(727		)	22.6	%
Foreign currency exchange (gain) loss	(1,514		)	843			NM
Other (income) expense, net	839			(716		)	NM
Income before income tax expense	77,156			52,898			45.9	%
Income tax expense	17,484			10,321			69.4	%
Net income	$	59,672		$	42,577		40.2	%

Average basic shares outstanding	23,619			23,276			1.5	%
Basic income per share	$	2.53		$	1.83		38.3	%

Average diluted shares outstanding	23,855			23,660			0.8	%
Diluted income per share	$	2.50		$	1.80		38.9	%

Dividends declared per common share	$	0.24		$	0.21



	March 31, 2020			March 31, 2019
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	114,450		$	71,093
Trade accounts receivable	123,743			129,157
Inventories	127,373			146,263
Prepaid expenses and other	17,180			16,075
Total current assets	382,746			362,588

Property, plant, and equipment, net	79,473			87,303
Goodwill	319,679			322,816
Other intangibles, net	217,962			232,940
Marketable securities	7,322			7,028
Deferred taxes on income	26,281			27,707
Other assets	59,809			21,189
Total assets	$	1,093,272		$	1,061,571

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	57,289		$	46,974
Accrued liabilities	93,585			99,304
Current portion of long-term debt	4,450			65,000
Total current liabilities	155,324			211,278

Term loan and revolving credit facility	246,856			235,320
Other non-current liabilities	227,507			183,814
Total liabilities	629,687			630,412

Shareholders’ equity:
Common stock	238			234
Additional paid-in capital	287,256			277,518
Retained earnings	290,441			236,459
Accumulated other comprehensive loss	(114,350		)	(83,052		)
Total shareholders’ equity	463,585			431,159
Total liabilities and shareholders’ equity	$	1,093,272		$	1,061,571



	Quarter					Year To Date
($ in millions)	$ Change			% Change		$ Change			% Change
Fiscal 2019 Sales	$	216.7				$	876.3
Divestitures	(4.8		)			(34.2		)
Fiscal 2019 Sales adjusted for divestitures	$	211.9				$	842.1

Volume	(22.9		)	(10.8	)%	(33.0		)	(3.9	)%
Pricing	2.8			1.3	%	13.2			1.6	%
Foreign currency translation	(2.3		)	(1.1	)%	(13.1		)	(1.6	)%
Total change adjusted for divestitures	$	(22.4	)	(10.6	)%	$	(32.9	)	(3.9	)%
Fiscal 2020 Sales	$	189.5				$	809.2



	March 31, 2020			December 31, 2019			March 31, 2019
($ in millions)
Backlog	$	131.0		$	125.3		$	161.5
Long-term backlog
Expected to ship beyond 3 months	$	49.1		$	51.3		$	61.7
Long-term backlog as % of total backlog	37.5		%	40.9		%	38.2		%

Trade accounts receivable
Days sales outstanding (1)	59.4		days	57.2		days	55.5		days

Inventory turns per year (1)
(based on cost of products sold)	3.9		turns	3.9		turns	3.7		turns
Days' inventory (1)	94.3		days	94.0		days	97.6		days

Trade accounts payable
Days payables outstanding (1)	42.3		days	32.1		days	31.3		days

Working capital as a % of sales (1), (2)	14.5		%	16.5		%	17.2		%

Debt to total capitalization percentage	35.2		%	34.2		%	41.1		%

Debt, net of cash, to net total capitalization	22.8		%	25.7		%	34.7		%



	Three Months Ended March 31,						Year Ended March 31,
	2020			2019			2020			2019
Gross profit	$	66,209		$	76,045		$	283,186		$	304,997
Add back (deduct):
Factory closures	1,349			1,273			2,800			1,473
Business realignment costs	774			—			1,037			286
Insurance settlement	(15		)	—			(382		)	—
Non-GAAP adjusted gross profit	$	68,317		$	77,318		$	286,641		$	306,756

Sales	$	189,486		$	216,733		$	809,162		$	876,282
Adjusted gross margin	36.1		%	35.7		%	35.4		%	35.0		%