CMCO Columbus McKinnon Corporation

Columbus McKinnon Corporation (Nasdaq: CMCO) ("Columbus McKinnon" or the "Company"), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2025 first quarter, which ended June 30, 2024.

First Quarter 2025 Highlights (compared with prior-year period, except where otherwise noted)

• Net sales increased 2% to $239.7 million with strength in precision conveyance
• Backlog increased 4% from the prior quarter with book-to-bill ratio of 1.05x
• Gross margin increased 30 bps to 37.1%; Adjusted Gross Margin1 increased 110 bps to 38.0%
• Net income of $8.6 million or 3.6% of sales including $2.6 million2 of costs for factory simplification as we transition manufacturing to our Monterrey, MX facility
• Adjusted EBITDA1 increased 2% to $37.5 million with Adjusted EBITDA Margin1 of 15.6%
• Net cash used for operating activities improved $6.5 million from the prior year
• Increased financial flexibility with Q1 FY25 debt repayment of $20 million; Expect FY25 debt repayment of $60 million

“We executed solidly in the first quarter delivering continued sales growth and gross margin expansion while advancing our longer-term strategic objectives,” said David J. Wilson, President and Chief Executive Officer. “Our commercial and operational initiatives are positively impacting the business enabling new customer wins, growth in attractive vertical markets and an encouraging funnel of promising business opportunities.”

“Earlier this month, we initiated the next phase of our footprint simplification plan and began consolidating an additional production facility into our Monterrey manufacturing center of excellence,” continued Wilson. “While the restructuring actions associated with this plan are expected to impact sales and margin in the second quarter, the impacts were contemplated in the full-year guidance we provided last quarter. Importantly, these actions will advance our operational and margin expansion efforts and enhance shareholder value over time.”

First Quarter Fiscal 2025 Sales

($ in millions)

Q1 FY25

 

Q1 FY24

 

Change

 

% Change

Net sales

$

239.7

 

 

$

235.5

 

 

$

4.2

 

1.8

%

U.S. sales

$

136.3

 

 

$

136.1

 

 

$

0.2

 

0.1

%

% of total

 

57

%

 

 

58

%

 

 

 

 

Non-U.S. sales

$

103.4

 

 

$

99.4

 

 

$

4.0

 

4.0

%

% of total

 

43

%

 

 

42

%

 

 

 

 

For the quarter, net sales increased $4.2 million, or 1.8%. montratec® contributed $2.7 million for the months of April and May 2024 as acquired revenue.3 In the U.S., sales were up $0.2 million, or 0.1%. Price improvement of $0.9 million and $0.2 million of contribution from the acquisition of montratec helped to offset $0.9 million in lower volume. Sales outside the U.S. increased $4.0 million, or 4.0%, driven by $2.5 million of sales related to the acquisition of montratec and $2.6 million of price improvement offset by $0.5 million of lower volume. Unfavorable foreign currency translation was $0.6 million.

First Quarter Fiscal 2025 Operating Results

($ in millions)

Q1 FY25

 

Q1 FY24

 

Change

 

% Change

Gross profit

$

89.0

 

 

$

86.6

 

 

$

2.4

 

 

2.7

%

Gross margin

 

37.1

%

 

 

36.8

%

 

30 bps

 

 

Adjusted Gross Profit1

$

91.0

 

 

$

86.8

 

 

$

4.2

 

 

4.8

%

Adjusted Gross Margin1

 

38.0

%

 

 

36.9

%

 

110 bps

 

 

Income from operations

$

21.1

 

 

$

21.4

 

 

$

(0.3

)

 

(1.4

)%

Operating margin

 

8.8

%

 

 

9.1

%

 

(30) bps

 

 

Adjusted Operating Income1

$

25.7

 

 

$

25.8

 

 

$

(0.1

)

 

(0.4

)%

Adjusted Operating Margin1

 

10.7

%

 

 

10.9

%

 

(20) bps

 

 

Net income

$

8.6

 

 

$

9.3

 

 

$

(0.6

)

 

(7.0

)%

Net income margin

 

3.6

%

 

 

3.9

%

 

(30) bps

 

 

Diluted EPS

$

0.30

 

 

$

0.32

 

 

$

(0.02

)

 

(6.3

)%

Adjusted EPS1

$

0.62

 

 

$

0.62

 

 

$

—

 

 

—

%

Adjusted EBITDA1

$

37.5

 

 

$

36.6

 

 

$

0.9

 

 

2.3

%

Adjusted EBITDA Margin1

 

15.6

%

 

 

15.6

%

 

— bps

 

 

Adjusted EPS1 excludes, among other adjustments, amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.

Second Quarter Fiscal 2025 Guidance

The Company is issuing the following guidance for the second quarter of fiscal 2025, ending September 30, 2024:

Metric

Q2 FY25

Net sales

Down low to mid-single digits year-over-year

Adjusted EPS4

Down mid-single digits year-over-year

Second quarter 2025 guidance assumes approximately $9 million of interest expense, $8 million of amortization, an effective tax rate of 25% and 29.2 million diluted average shares outstanding. The Company’s second quarter fiscal 2025 guidance reflects the expected effect of the consolidation of North American linear motion production into the new Monterrey, MX manufacturing center of excellence.

The Company is reaffirming the following guidance for the fiscal year 2025, ending March 31, 2025:

Metric

FY25

Net sales

Low-single digit growth year-over-year

Adjusted EPS4

Mid to high-single digit growth year-over-year

Capital Expenditures

$20 million to $30 million

Net Leverage Ratio4

~2.0x

Fiscal 2025 guidance assumes approximately $33 million of interest expense, $30 million of amortization, an effective tax rate of 25% and 29.4 million diluted average shares outstanding.

Teleconference/Webcast

Columbus McKinnon will host a conference call today at 10:00 AM Eastern Time to discuss the Company's financial results and strategy. The conference call will be accessible through live webcast and via phone by dialing 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 13747096 through Wednesday, August 7, 2024.

______________________

1

Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS are non-GAAP financial measures. See accompanying discussion and reconciliation tables provided in this release for reconciliations of these non-GAAP financial measures to the closest corresponding GAAP financial measures.

2

Represents $3.6 million of costs related to factory simplification taxed at a 28.4% rate

3

montratec was acquired May 31, 2023.

4

The Company has not reconciled the Adjusted EPS and Net Leverage Ratio guidance to the most comparable GAAP financial measure outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide guidance for the comparable GAAP financial measures. Forward-looking guidance regarding Adjusted EPS and Net Leverage Ratio is made in a manner consistent with the relevant definitions and assumptions noted herein and in alignment with the Company's financial covenants per the Company's Amended and Restated Credit Agreement.

About Columbus McKinnon

Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions that move the world forward and improve lives by efficiently and ergonomically moving, lifting, positioning, and securing materials. Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations, and digital power and motion control systems. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available at www.cmco.com.

Safe Harbor Statement

This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," “believe,” “continue,” “could,” “estimate,” “expect,” “illustrative,” “intend,” “likely,” “may,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “shall,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this document, including, but are not limited to, statements relating to: (i) our strategy, outlook and growth prospects, including our second quarter and fiscal year 2025 net sales and Adjusted EPS, and our fiscal year 2025 net leverage ratio and capital expenditure guidance; (ii) our operational and financial targets and capital 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 amount of debt to be paid down by the Company during fiscal 2025 and the expected amount of interest expense savings from the March 2024 Term Loan B repricing; (vi) the estimated costs and benefits related to the consolidation of the Company’s North American linear motion operations in Charlotte, North Carolina to its manufacturing facility in Monterrey, Mexico (vii) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; and (viii) the competitive environment in which we operate; are forward looking statements. Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made. Columbus McKinnon undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.

Financial tables follow.

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

Three Months Ended

 

 

 

 

June 30, 2024

 

June 30, 2023

 

Change

Net sales

 

$

239,726

 

 

$

235,492

 

 

1.8

%

Cost of products sold

 

 

150,696

 

 

 

148,843

 

 

1.2

%

Gross profit

 

 

89,030

 

 

 

86,649

 

 

2.7

%

Gross profit margin

 

 

37.1

%

 

 

36.8

%

 

 

Selling expenses

 

 

27,770

 

 

 

24,981

 

 

11.2

%

% of net sales

 

 

11.6

%

 

 

10.6

%

 

 

General and administrative expenses

 

 

26,447

 

 

 

27,443

 

 

(3.6

)%

% of net sales

 

 

11.0

%

 

 

11.7

%

 

 

Research and development expenses

 

 

6,166

 

 

 

5,900

 

 

4.5

%

% of net sales

 

 

2.6

%

 

 

2.5

%

 

 

Amortization of intangibles

 

 

7,500

 

 

 

6,877

 

 

9.1

%

Income from operations

 

 

21,147

 

 

 

21,448

 

 

(1.4

)%

Operating margin

 

 

8.8

%

 

 

9.1

%

 

 

Interest and debt expense

 

 

8,235

 

 

 

8,625

 

 

(4.5

)%

Investment (income) loss

 

 

(209

)

 

 

(543

)

 

(61.5

)%

Foreign currency exchange (gain) loss

 

 

395

 

 

 

483

 

 

(18.2

)%

Other (income) expense, net

 

 

676

 

 

 

214

 

 

215.9

%

Income (loss) before income tax expense (benefit)

 

 

12,050

 

 

 

12,669

 

 

(4.9

)%

Income tax expense (benefit)

 

 

3,421

 

 

 

3,394

 

 

0.8

%

Net income (loss)

 

$

8,629

 

 

$

9,275

 

 

(7.0

)%

 

 

 

 

 

 

 

Average basic shares outstanding

 

 

28,834

 

 

 

28,662

 

 

0.6

%

Basic income (loss) per share

 

$

0.30

 

 

$

0.32

 

 

(6.3

)%

 

 

 

 

 

 

 

Average diluted shares outstanding

 

 

29,127

 

 

 

28,906

 

 

0.8

%

Diluted income (loss) per share

 

$

0.30

 

 

$

0.32

 

 

(6.3

)%

 

 

 

 

 

 

 

Dividends declared per common share

 

$

—

 

 

$

—

 

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

June 30, 2024

 

March 31, 2024

 

 

(Unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

68,373

 

 

$

114,126

 

Trade accounts receivable

 

 

166,844

 

 

 

171,186

 

Inventories

 

 

200,894

 

 

 

186,091

 

Prepaid expenses and other

 

 

42,200

 

 

 

42,752

 

Total current assets

 

 

478,311

 

 

 

514,155

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

105,868

 

 

 

106,395

 

Goodwill

 

 

708,571

 

 

 

710,334

 

Other intangibles, net

 

 

377,551

 

 

 

385,634

 

Marketable securities

 

 

10,860

 

 

 

11,447

 

Deferred taxes on income

 

 

1,595

 

 

 

1,797

 

Other assets

 

 

98,901

 

 

 

96,183

 

Total assets

 

$

1,781,657

 

 

$

1,825,945

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

73,224

 

 

$

83,118

 

Accrued liabilities

 

 

107,594

 

 

 

127,973

 

Current portion of long-term debt and finance lease obligations

 

 

50,687

 

 

 

50,670

 

Total current liabilities

 

 

231,505

 

 

 

261,761

 

 

 

 

 

 

Term loan, AR securitization facility and finance lease obligations

 

 

459,743

 

 

 

479,566

 

Other non current liabilities

 

 

204,603

 

 

 

202,555

 

Total liabilities

 

 

895,851

 

 

 

943,882

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

 

289

 

 

 

288

 

Treasury stock

 

 

(1,001

)

 

 

(1,001

)

Additional paid in capital

 

 

526,574

 

 

 

527,125

 

Retained earnings

 

 

403,957

 

 

 

395,328

 

Accumulated other comprehensive loss

 

 

(44,013

)

 

 

(39,677

)

Total shareholders’ equity

 

$

885,806

 

 

$

882,063

 

Total liabilities and shareholders’ equity

 

$

1,781,657

 

 

$

1,825,945

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 

 

 

Three Months Ended

 

 

June 30, 2024

 

June 30, 2023

Operating activities:

 

 

 

 

Net income (loss)

 

$

8,629

 

 

$

9,275

 

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

Depreciation and amortization

 

 

11,840

 

 

 

10,890

 

Deferred income taxes and related valuation allowance

 

 

942

 

 

 

(1,825

)

Net loss (gain) on sale of real estate, investments and other

 

 

(124

)

 

 

(467

)

Stock-based compensation

 

 

1,101

 

 

 

1,981

 

Amortization of deferred financing costs

 

 

622

 

 

 

483

 

Loss (gain) on hedging instruments

 

 

(97

)

 

 

231

 

Non-cash lease expense

 

 

2,584

 

 

 

2,389

 

Changes in operating assets and liabilities, net of effects of business acquisitions:

Trade accounts receivable

 

 

3,346

 

 

 

(7,649

)

Inventories

 

 

(15,613

)

 

 

(19,214

)

Prepaid expenses and other

 

 

(2,222

)

 

 

(2,800

)

Other assets

 

 

(127

)

 

 

(636

)

Trade accounts payable

 

 

(8,640

)

 

 

1,718

 

Accrued liabilities

 

 

(11,600

)

 

 

(8,668

)

Non-current liabilities

 

 

(1,399

)

 

 

(2,955

)

Net cash provided by (used for) operating activities

 

 

(10,758

)

 

 

(17,247

)

 

 

 

 

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

 

1,500

 

 

 

1,100

 

Purchases of marketable securities

 

 

(912

)

 

 

(906

)

Capital expenditures

 

 

(4,629

)

 

 

(5,273

)

Purchase of businesses, net of cash acquired

 

 

—

 

 

 

(107,605

)

Net cash provided by (used for) investing activities

 

 

(4,041

)

 

 

(112,684

)

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from the issuance of common stock

 

 

64

 

 

 

225

 

Repayment of debt

 

 

(20,158

)

 

 

(10,143

)

Proceeds from issuance of long-term debt

 

 

—

 

 

 

120,000

 

Fees paid for borrowings on long-term debt

 

 

—

 

 

 

(2,046

)

Payment to former owners of montratec

 

 

(6,711

)

 

 

—

 

Fees paid for debt repricing

 

 

(169

)

 

 

—

 

Cash inflows from hedging activities

 

 

5,942

 

 

 

6,053

 

Cash outflows from hedging activities

 

 

(5,820

)

 

 

(6,298

)

Payment of dividends

 

 

(2,016

)

 

 

(2,004

)

Other

 

 

(1,715

)

 

 

(1,802

)

Net cash provided by (used for) financing activities

 

 

(30,583

)

 

 

103,985

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(371

)

 

 

(236

)

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(45,753

)

 

 

(26,182

)

Cash, cash equivalents, and restricted cash at beginning of year

 

$

114,376

 

 

$

133,426

 

Cash, cash equivalents, and restricted cash at end of period

 

$

68,623

 

 

$

107,244

 

 

COLUMBUS McKINNON CORPORATION

Q1 FY 2025 Net Sales Bridge

 

 

 

Quarter

($ in millions)

 

$ Change

 

% Change

Fiscal 2024 Net Sales

 

$

235.5

 

 

 

Acquisition

 

 

2.7

 

 

1.1

%

Pricing

 

 

3.5

 

 

1.5

%

Volume

 

 

(1.4

)

 

(0.6

)%

Foreign currency translation

 

 

(0.6

)

 

(0.2

)%

Total change

 

$

4.2

 

 

1.8

%

Fiscal 2025 Net Sales

 

$

239.7

 

 

 

 

COLUMBUS McKINNON CORPORATION

Q1 FY 2025 Gross Profit Bridge

 

($ in millions)

Quarter

Fiscal 2024 Gross Profit

$

86.6

 

Acquisition

 

0.8

 

Price, net of manufacturing costs changes (incl. inflation)

 

3.4

 

Business realignment costs

 

(0.2

)

Monterrey, MX new factory start-up costs

 

(1.6

)

Sales volume and mix

 

0.2

 

Foreign currency translation

 

(0.2

)

Total change

 

2.4

 

Fiscal 2025 Gross Profit

$

89.0

 

U.S. Shipping Days by Quarter

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Total

FY25

 

64

 

63

 

60

 

62

 

249

 

 

 

 

 

 

 

 

 

 

 

FY24

 

63

 

62

 

61

 

62

 

248

 

COLUMBUS McKINNON CORPORATION

Additional Data1

(Unaudited)

 

 

 

Period Ended

 

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

($ in millions)

 

 

 

 

 

 

 

 

 

Backlog

 

$ 292.8

 

 

$ 280.8

 

 

$ 355.3

 

Long-term backlog

 

 

 

 

 

 

 

 

 

Expected to ship beyond 3 months

 

$ 156.0

 

 

$ 144.6

 

 

$ 177.3

 

Long-term backlog as % of total backlog

 

53.3

%

 

51.5

%

 

49.9

%

 

 

 

 

 

 

 

 

 

 

Debt to total capitalization percentage

 

36.6

%

 

37.5

%

 

40.6

%

 

 

 

 

 

 

 

 

 

 

Debt, net of cash, to net total capitalization

 

33.3

%

 

32.0

%

 

35.8

%

 

 

 

 

 

 

 

 

 

 

Working capital as a % of sales 2

 

22.5

%

 

19.1

%

 

21.4

%

 

 

 

Three Months Ended

 

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

($ in millions)

 

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

Days sales outstanding3

 

 

63.3

 

days

 

 

58.7

days

 

 

62.9

 

days

 

 

 

 

 

 

 

 

 

 

Inventory turns per year3

 

 

 

 

 

 

 

 

 

(based on cost of products sold)

 

 

3.0

 

turns

 

 

3.7

turns

 

 

2.9

 

turns

Days' inventory3

 

 

121.7

 

days

 

 

98.6

days

 

 

125.9

 

days

 

 

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

Days payables outstanding3

 

 

50.6

 

days

 

 

50.9

days

 

 

53.3

 

days

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

$

(10.8

)

 

 

$

38.6

 

 

$

(17.2

)

 

Capital expenditures

 

$

4.6

 

 

 

$

8.5

 

 

$

5.3

 

 

Free Cash Flow 4

 

$

(15.4

)

 

 

$

30.1

 

 

$

(22.5

)

 

______________________

1

Additional Data: This data is provided to help investors understand financial and operational metrics that management uses to measure the Company’s financial performance and identify trends affecting the business. These measures may not be comparable with or defined in the same manner as other companies. Components may not add due to rounding.

2

March 31, 2024 and June 30, 2023 exclude the impact of the acquisition of montratec.

3

Three months ended June 30, 2023 excludes the impact of the acquisition of montratec.

4

Free Cash Flow is a non-GAAP financial measure. Free Cash Flow is defined as GAAP net cash provided by (used for) operating activities less capital expenditures included in the investing activities section of the consolidated statement of cash flows. See the table above for the calculation of Free Cash Flow.

 

NON-GAAP FINANCIAL MEASURES

The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.

 

COLUMBUS McKINNON CORPORATION

Reconciliation of Gross Profit to Adjusted Gross Profit

($ in thousands)

 

 

Three Months Ended

 

June 30, 2024

 

June 30, 2023

Gross profit

$

89,030

 

 

$

86,649

 

Add back (deduct):

 

 

 

Business realignment costs

 

392

 

 

 

196

 

Monterrey, MX new factory start-up costs

 

1,625

 

 

 

—

 

Adjusted Gross Profit

$

91,047

 

 

$

86,845

 

 

 

 

 

Net sales

$

239,726

 

 

$

235,492

 

 

 

 

 

Gross margin

 

37.1

%

 

 

36.8

%

Adjusted Gross Margin

 

38.0

%

 

 

36.9

%

Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net sales. Adjusted Gross Profit and Adjusted Gross Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Gross Profit and Adjusted Gross Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Margin, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s gross profit and gross 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

 

June 30, 2024

 

June 30, 2023

Income from operations

$

21,147

 

 

$

21,448

 

Add back (deduct):

 

 

 

Acquisition deal and integration costs

 

—

 

 

 

2,587

 

Business realignment costs

 

850

 

 

 

375

 

Factory and warehouse consolidation costs

 

—

 

 

 

117

 

Headquarter relocation costs

 

96

 

 

 

1,228

 

Monterrey, MX new factory start-up costs

 

3,566

 

 

 

—

 

Adjusted Operating Income

$

25,659

 

 

$

25,755

 

 

 

 

 

Net sales

$

239,726

 

 

$

235,492

 

 

 

 

 

Operating margin

 

8.8

%

 

 

9.1

%

Adjusted Operating Margin

 

10.7

%

 

 

10.9

%

Adjusted Operating Income is defined as income from operations as reported, adjusted for certain items. Adjusted Operating Margin is defined as Adjusted Operating Income divided by net sales. Adjusted Operating Income and Adjusted Operating Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Operating Income and Adjusted Operating Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Operating Income and Adjusted Operating Margin, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s income from operations to the historical periods' income from operations and operating margin, as well as facilitates a more meaningful comparison of the Company’s income from operations and operating margin to that of other companies.

 

COLUMBUS McKINNON CORPORATION

Reconciliation of Net Income and Diluted Earnings per Share to

Adjusted Net Income and Adjusted Earnings per Share

($ in thousands, except per share data)

 

 

Three Months Ended

 

June 30, 2024

 

June 30, 2023

Net income

$

8,629

 

 

$

9,275

 

Add back (deduct):

 

 

 

Amortization of intangibles

 

7,500

 

 

 

6,877

 

Acquisition deal and integration costs

 

—

 

 

 

2,587

 

Business realignment costs

 

850

 

 

 

375

 

Factory and warehouse consolidation costs

 

—

 

 

 

117

 

Headquarter relocation costs

 

96

 

 

 

1,228

 

Monterrey, MX new factory start-up costs

 

3,566

 

 

 

—

 

Normalize tax rate 1

 

(2,595

)

 

 

(2,569

)

Adjusted Net Income

$

18,046

 

 

$

17,890

 

 

 

 

 

Average diluted shares outstanding

 

29,127

 

 

 

28,906

 

 

 

 

 

Diluted income per share

$

0.30

 

 

$

0.32

 

 

 

 

 

Adjusted EPS

$

0.62

 

 

$

0.62

 

1

Applies a normalized tax rate of 25% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.

 

Adjusted Net Income and Adjusted 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 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 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 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 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

 

June 30, 2024

 

June 30, 2023

Net income

$

8,629

 

 

$

9,275

 

Add back (deduct):

 

 

 

Income tax expense (benefit)

 

3,421

 

 

 

3,394

 

Interest and debt expense

 

8,235

 

 

 

8,625

 

Investment (income) loss

 

(209

)

 

 

(543

)

Foreign currency exchange (gain) loss

 

395

 

 

 

483

 

Other (income) expense, net

 

676

 

 

 

214

 

Depreciation and amortization expense

 

11,840

 

 

 

10,890

 

Acquisition deal and integration costs

 

—

 

 

 

2,587

 

Business realignment costs

 

850

 

 

 

375

 

Factory and warehouse consolidation costs

 

—

 

 

 

117

 

Headquarter relocation costs

 

96

 

 

 

1,228

 

Monterrey, MX new factory start-up costs

 

3,566

 

 

 

—

 

Adjusted EBITDA

$

37,499

 

 

$

36,645

 

 

 

 

 

Net sales

$

239,726

 

 

$

235,492

 

 

 

 

 

Net income margin

 

3.6

%

 

 

3.9

%

Adjusted EBITDA Margin

 

15.6

%

 

 

15.6

%

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.

 

COLUMBUS McKINNON CORPORATION

Reconciliation of Net Leverage Ratio

($ in thousands)

 

 

 

Twelve Months Ended

 

 

June 30, 2024

 

June 30, 2023

Net income (loss)

 

$

45,978

 

 

$

49,313

 

Add back (deduct):

 

 

 

 

Annualize EBITDA for the montratec acquisition1

 

 

—

 

 

 

7,994

 

Annualize synergies for the montratec acquisition1

 

 

—

 

 

 

401

 

Income tax expense (benefit)

 

 

14,929

 

 

 

20,547

 

Interest and debt expense

 

 

37,567

 

 

 

30,364

 

Non-Cash Pension Settlement

 

 

4,984

 

 

 

—

 

Amortization of deferred financing costs

 

 

2,488

 

 

 

1,774

 

Stock Compensation Expense

 

 

11,159

 

 

 

11,655

 

Depreciation and amortization expense

 

 

46,895

 

 

 

42,368

 

Cost of debt refinancing

 

 

1,190

 

 

 

—

 

Acquisition deal and integration costs

 

 

624

 

 

 

3,117

 

Excluded acquisition deal and integration costs2

 

 

—

 

 

 

(529

)

Business realignment costs

 

 

2,341

 

 

 

3,857

 

Excluded business realignment costs2

 

 

—

 

 

 

(3,482

)

Factory and warehouse consolidation costs

 

 

627

 

 

 

117

 

Garvey contingent consideration

 

 

—

 

 

 

1,230

 

Headquarter relocation costs

 

 

927

 

 

 

2,224

 

Monterrey, MX new factory start-up costs

 

 

8,055

 

 

 

—

 

Non-Cash loss related to asset retirement

 

 

—

 

 

 

2

 

Gain on sale of Facility

 

 

—

 

 

 

(232

)

Credit Agreement Trailing Twelve Month Adjusted EBITDA

 

$

177,764

 

 

$

170,720

 

 

 

 

 

 

Current portion of long-term debt and finance lease obligations

 

$

50,687

 

 

$

40,619

 

Term loan, AR securitization facility and finance lease obligations

 

 

459,743

 

 

 

539,150

 

Total debt

 

$

510,430

 

 

$

579,769

 

Standby Letters of Credit

 

 

15,630

 

 

 

15,364

 

Cash and cash equivalents

 

 

(68,373

)

 

 

(106,994

)

Net Debt

 

$

457,687

 

 

$

488,139

 

 

 

 

 

 

Net Leverage Ratio

 

2.57x

 

2.86x

1

EBITDA is normalized to include a full year of the acquired entity and assumes all cost synergies are achieved in TTM Q1 FY24.

2

The Company's credit agreement definition of Adjusted EBITDA excludes certain acquisition deal and integration costs and business realignment costs that are incurred beyond one year after the close of an acquisition.

Net Debt is defined in the credit agreement as total debt plus standby letters of credit, net of cash and cash equivalents. Net Leverage Ratio is defined as Net Debt divided by the Credit Agreement Trailing Twelve Month Adjusted EBITDA. Credit Agreement Trailing Twelve Month Adjusted EBITDA is defined as net income adjusted for interest expense, income taxes, depreciation, amortization, and other adjustments. Net Debt, Net Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Net Debt, Net Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are important for investors and other readers of the Company’s financial statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731372041/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 704-322-2488 kristy.moser@cmco.com