Columbus McKinnon Corporation (Nasdaq: CMCO), a leading
designer, manufacturer and marketer of intelligent motion solutions
for material handling, today announced financial results for its
fiscal year 2024 first quarter, which ended June 30, 2023. Results
include the addition of montratec®, which was acquired on
May 31, 2023 (“the acquisition”).
First Quarter Highlights (compared with prior-year
period, except where otherwise noted)
- Strong orders in quarter of $257.0 million with book-to-bill
ratio of 1.1x
- Record backlog of $355.3 million includes $23.4 million from
the acquisition
- Sales of $235.5 million for first quarter fiscal 2024
increased 7%
- Gross margin expanded 90 basis points sequentially to
36.8%
- Paid down $10 million in debt; net debt leverage ratio at
2.9x1; plan to pay down $40 million in debt in fiscal 2024
- Expect to surpass $1 billion in revenue in fiscal 2024; on
track to achieve fiscal 2027 targets
David J. Wilson, President and CEO, commented, “Our first
quarter results further demonstrate the progress we are making with
the transformation of Columbus McKinnon into a higher growth,
stronger margin business. Sales grew 7%, driven by strength in EMEA
and APAC, and strong automation and linear motion sales in the
Americas. This growth more than offset year-over-year shifts in
e-commerce demand. We are encouraged by our end market activity and
the progress we are making as an organization. We are focusing
resources on end markets and opportunities with strong secular
tailwinds such as life sciences, EVs, and industrial automation.
Within this framework, we are driving to increase market share and
capitalize on these favorable megatrends. Additionally, our
continued efforts to simplify the business, manage costs and drive
efficiencies underpin our sequential gross margin improvement.”
He added, “In our first month of ownership, the montratec
acquisition contributed $2.7 million in sales. We are excited about
the technology and opportunities that montratec adds to our
precision conveying portfolio. We expect strong growth out of the
business and look to further its potential, especially as we
broaden exposure in the U.S. market. It is important to note that
we successfully completed the refinancing of our debt related to
the acquisition. This effort resulted in lower cost debt and
eliminated the need for testing compliance with our financial
covenant. Notably, with our debt reduction plans and growth for the
year, we expect to reduce our net debt leverage ratio to under
2.5x1 by the end of the fiscal year.”
_____________________________ 1 On a financial covenant basis
per Amended and Restated Credit Agreement
First Quarter Fiscal 2024
Sales
($ in millions)
Q1 FY 24
Q1 FY 23
Change
% Change
Net sales
$
235.5
$
220.3
$
15.2
6.9
%
U.S. sales
$
136.1
$
138.7
$
(2.6
)
(1.9
)%
% of total
58
%
63
%
Non-U.S. sales
$
99.4
$
81.6
$
17.8
21.8
%
% of total
42
%
37
%
For the quarter, sales increased $15.2 million, or 6.9%. The
acquisition contributed $2.7 million, or 1.2%, in sales. Sales
outside the U.S. were driven by increased volume of $13.5 million,
or 16.5%, price improvement of $1.4 million, or 1.7%, $2.6 million
of sales related to the acquisition, as well as favorable foreign
currency translation of $0.3M. In the U.S., price improved $7.1
million, or 5.1%, while volume decreased $9.8 million, or 7.1%.
First Quarter Fiscal 2024 Operating
Results
($ in millions)
Q1 FY 24
Q1 FY 23
Change
% Change
Gross profit
$
86.6
$
82.5
$
4.1
5.0
%
Gross margin
36.8
%
37.5
%
(70) bps
Adjusted gross profit*
$
86.8
$
82.5
$
4.3
5.2
%
Adjusted gross margin*
36.9
%
37.5
%
(60) bps
Income from operations
$
21.4
$
22.8
$
(1.4
)
(6.0
)%
Operating margin
9.1
%
10.4
%
(130 bps)
Adjusted income from operations*
$
25.8
$
24.6
$
1.2
4.9
%
Adjusted operating margin*
10.9
%
11.1
%
(20) bps
Net income (loss)
$
9.3
$
8.4
$
0.9
10.5
%
Net income (loss) margin
3.9
%
3.8
%
10 bps
Diluted EPS
$
0.32
$
0.29
$
0.03
10.3
%
Adjusted EPS*
$
0.62
$
0.69
$
(0.07
)
(10.1
)%
Adjusted EBITDA*
$
36.6
$
35.0
$
1.6
4.6
%
Adjusted EBITDA margin*
15.6
%
15.9
%
(30) 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 $0.62 excludes
amortization of intangible assets related to acquisitions. The
Company believes this better represents its inherent earnings power
and cash generation capability.
Second Quarter Fiscal 2024 Outlook
Columbus McKinnon expects second quarter fiscal 2024 sales of
approximately $250 million to $260 million at current exchange
rates.
Mr. Wilson concluded, “We had a solid start to the year with 5%
sequential order growth, 7% year-over-year sales growth and
sequential gross margin improvement that supports our objective to
expand gross margin by 50 to 100 basis points for the year. Demand
for our products and solutions combined with progress we are making
to improve our customers’ experience are reflected in the over $500
million of new business we have booked in the last six months.
This, along with the addition of montratec, drove record backlog of
$355 million, further reinforcing our expectation to exceed $1
billion in revenue in fiscal 2024. Fundamentally, we are gaining
more traction with our strategy to be the global leader of
intelligent motion solutions for material handling and believe our
results demonstrate this progress.”
Teleconference/webcast
Columbus McKinnon will host a conference call and live webcast
today at 10:00 AM Eastern Time, at which management will review the
Company’s financial results and strategy. The review will be
accompanied by a slide presentation, which will be available on
Columbus McKinnon’s website at investors.cmco.com/. A
question-and-answer session will follow the formal discussion.
The conference call can be accessed by dialing 412-317-6026. The
listen-only audio webcast can be monitored at investors.cmco.com/.
The telephonic replay will be available from 1:00 PM Eastern Time
on the day of the call through Wednesday, August 9, 2023. To listen
to the archived call, dial 412-317-6671 and enter the conference ID
number 10180167. Alternatively, an archived webcast of the call can
be found on the Company’s website and a transcript of the call will
be posted there once available.
About Columbus McKinnon
Columbus McKinnon is a leading worldwide designer, manufacturer
and marketer of intelligent motion solutions that move the world
forward and improve lives by efficiently and ergonomically moving,
lifting, positioning, and securing materials. Key products include
hoists, crane components, precision conveyor systems, rigging
tools, light rail workstations, and digital power and motion
control systems. The Company is focused on commercial and
industrial applications that require the safety and quality
provided by its superior design and engineering know-how.
Comprehensive information on Columbus McKinnon is available at
www.cmco.com.
Safe Harbor Statement
This news release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
concerning expected growth, future sales and 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.
Financial tables follow.
COLUMBUS McKINNON
CORPORATION
Condensed Consolidated Income
Statements - UNAUDITED
(In thousands, except per share
and percentage data)
Three Months Ended
June 30, 2023
June 30, 2022
Change
Net sales
$
235,492
$
220,287
6.9
%
Cost of products sold
148,843
137,768
8.0
%
Gross profit
86,649
82,519
5.0
%
Gross profit margin
36.8
%
37.5
%
Selling expenses
24,981
26,156
(4.5
)%
% of net sales
10.6
%
11.9
%
General and administrative expenses
27,443
21,881
25.4
%
% of net sales
11.7
%
9.9
%
Research and development expenses
5,900
5,130
15.0
%
% of net sales
2.5
%
2.3
%
Amortization of intangibles
6,877
6,535
5.2
%
Income from operations
$
21,448
$
22,817
(6.0
)%
Operating margin
9.1
%
10.4
%
Interest and debt expense
8,625
6,203
39.0
%
Investment (income) loss
(543
)
430
NM
Foreign currency exchange (gain) loss
483
1,203
(59.9
)%
Other (income) expense, net
214
(2,303
)
NM
Income (loss) before income tax expense
(benefit)
$
12,669
17,284
(26.7
)%
Income tax expense (benefit)
3,394
8,893
(61.8
)%
Net income (loss)
$
9,275
$
8,391
10.5
%
Average basic shares outstanding
28,662
28,544
0.4
%
Basic income (loss) per share
$
0.32
$
0.29
10.3
%
Average diluted shares outstanding
28,906
28,699
0.7
%
Diluted income (loss) per share
$
0.32
$
0.29
10.3
%
COLUMBUS McKINNON
CORPORATION
Condensed Consolidated Balance
Sheets
(In thousands)
June 30, 2023
March 31, 2023
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
106,994
$
133,176
Trade accounts receivable
$
165,050
$
151,451
Inventories
$
204,747
$
179,359
Prepaid expenses and other
$
37,435
$
32,254
Total current assets
$
514,226
$
496,240
Property, plant, and equipment, net
$
98,372
$
94,360
Goodwill
$
731,953
$
644,629
Other intangibles, net
$
409,541
$
362,537
Marketable securities
$
10,253
$
10,368
Deferred taxes on income
$
2,145
$
2,035
Other assets
$
93,019
$
88,286
Total assets
$
1,859,509
$
1,698,455
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Trade accounts payable
$
77,378
$
76,736
Accrued liabilities
$
145,927
$
124,317
Current portion of long-term debt and
finance lease obligations
$
40,619
$
40,604
Total current liabilities
$
263,924
$
241,657
Term loan, AR securitization facility and
finance lease obligations
$
539,150
$
430,988
Other non current liabilities
$
209,478
$
192,013
Total liabilities
$
1,012,552
$
864,658
Shareholders’ equity:
Common stock
$
287
$
286
Treasury stock
$
(1,001
)
$
(1,001
)
Additional paid in capital
$
516,197
$
515,797
Retained earnings
$
366,033
$
356,758
Accumulated other comprehensive loss
$
(34,559
)
$
(38,043
)
Total shareholders’ equity
$
846,957
$
833,797
Total liabilities and shareholders’
equity
$
1,859,509
$
1,698,455
COLUMBUS McKINNON
CORPORATION
Condensed Consolidated
Statements of Cash Flows - UNAUDITED
(In thousands)
Three Months Ended
June 30, 2023
June 30, 2022
Operating activities:
Net income (loss)
$
9,275
$
8,391
Adjustments to reconcile net income (loss)
to net cash provided by (used for) operating activities:
Depreciation and amortization
$
10,890
$
10,469
Deferred income taxes and related
valuation allowance
$
(1,825
)
$
1,272
Net loss (gain) on sale of real estate,
investments and other
$
(467
)
$
485
Stock-based compensation
$
1,981
$
751
Amortization of deferred financing
costs
$
483
$
430
Loss (gain) on hedging instruments
$
231
$
(192
)
Loss on retirement of fixed asset
$
—
$
173
Non-cash lease expense
$
2,389
$
2,139
Changes in operating assets and
liabilities, net of effects of business acquisitions:
Trade accounts receivable
$
(7,649
)
$
11,265
Inventories
$
(19,214
)
$
(21,467
)
Prepaid expenses and other
$
(2,800
)
$
359
Other assets
$
(636
)
$
(143
)
Trade accounts payable
$
1,718
$
(15,720
)
Accrued liabilities
$
(8,668
)
$
(6,938
)
Non-current liabilities
$
(2,955
)
$
(2,451
)
Net cash provided by (used for) operating
activities
$
(17,247
)
$
(11,177
)
Investing activities:
Proceeds from sales of marketable
securities
$
1,100
$
650
Purchases of marketable securities
$
(906
)
$
(1,226
)
Capital expenditures
$
(5,273
)
$
(2,953
)
Purchases of businesses, net of cash
acquired
$
(107,605
)
$
(1,616
)
Dividend received from equity method
investment
$
—
$
313
Net cash provided by (used for) investing
activities
$
(112,684
)
$
(4,832
)
Financing activities:
Proceeds from the issuance of common
stock
$
225
$
415
Repayment of debt
$
(10,143
)
$
(10,128
)
Proceeds from issuance of long-term
debt
$
120,000
$
—
Fees paid for borrowings on long-term
debt
$
(2,046
)
$
—
Cash inflows from hedging activities
$
6,053
$
6,163
Cash outflows from hedging activities
$
(6,298
)
$
(6,022
)
Payment of dividends
$
(2,004
)
$
(1,996
)
Other
$
(1,802
)
$
(1,313
)
Net cash provided by (used for) financing
activities
$
103,985
$
(12,881
)
Effect of exchange rate changes on
cash
$
(236
)
$
(840
)
Net change in cash and cash
equivalents
$
(26,182
)
$
(29,730
)
Cash, cash equivalents, and restricted
cash at beginning of year
$
133,426
$
115,640
Cash, cash equivalents, and restricted
cash at end of period
$
107,244
$
85,910
COLUMBUS McKINNON
CORPORATION
Q1 FY 2024 Sales
Bridge
Quarter
($ in millions)
$ Change
% Change
Fiscal 2023 Sales
$
220.3
Acquisition
2.7
1.2
%
Volume
3.7
1.7
%
Pricing
8.5
3.9
%
Foreign currency translation
0.3
0.1
%
Total change
$
15.2
6.9
%
Fiscal 2024 Sales
$
235.5
COLUMBUS McKINNON CORPORATION
Q1 FY 2024 Gross Profit Bridge
($ in millions)
Quarter
Fiscal 2023 Gross Profit
$
82.5
Price, net of material cost inflation
6.5
Sales volume and mix
(1.1
)
Acquisition
0.8
Current year business realignment
costs
(0.2
)
Productivity and other cost changes
(2.0
)
Foreign currency translation
0.1
Total change
4.1
Fiscal 2024 Gross Profit
$
86.6
U.S. Shipping Days by
Quarter
Q1
Q2
Q3
Q4
Total
FY 24
63
62
61
62
248
FY 23
63
64
60
63
250
COLUMBUS McKINNON
CORPORATION
Additional Data -
UNAUDITED
June 30, 2023
March 31, 2023
June 30, 2022
($ in millions)
Backlog
$
355.3
$
308.7
$
351.6
Long-term backlog
Expected to ship beyond 3 months
$
177.3
$
142.0
$
162.8
Long-term backlog as % of total
backlog
49.9
%
46.0
%
46.3
%
Trade accounts receivable
Days sales outstanding (2)
62.9
days
54.3
days
54.9
days
Inventory turns per year (2)
(based on cost of products sold)
2.9
turns
3.6
turns
2.9
turns
Days' inventory
125.9
days
101.4
days
125.4
days
Trade accounts payable
Days payables outstanding (2)
53.3
days
53.3
days
58.6
days
Working capital as a % of sales
(2)(3)
21.4
%
17.3
%
19.9
%
Net cash provided by (used for) operating
activities
$
(17.2
)
$
66.7
$
(11.2
)
Capital expenditures
$
5.3
$
3.1
$
3.0
Free cash flow (1)
$
(22.5
)
$
63.6
$
(14.1
)
Debt to total capitalization
percentage
40.6
%
36.1
%
39.3
%
Debt, net of cash, to net total
capitalization
35.8
%
28.9
%
34.9
%
(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)June 30, 2023, March 31, 2023, and June 30,
2022 figures exclude the impact of the acquisition of montratec.
(3)June 30, 2022 figure excludes the impact of the acquisition of
Garvey.
COLUMBUS McKINNON
CORPORATION
Reconciliation of GAAP Gross
Profit to Non-GAAP Adjusted Gross Profit
($ in thousands)
Three Months Ended
June 30, 2023
June 30, 2022
GAAP gross profit
$
86,649
$
82,519
Add back (deduct):
Business realignment costs
196
—
Non-GAAP adjusted gross profit
$
86,845
$
82,519
Sales
$
235,492
$
220,287
Gross margin - GAAP
36.8
%
37.5
%
Adjusted gross margin - Non-GAAP
36.9
%
37.5
%
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
CORPORATION
Reconciliation of GAAP Income
from Operations to Non-GAAP Adjusted Income from Operations
($ in thousands)
Three Months Ended
June 30, 2023
June 30, 2022
GAAP income from operations
$
21,448
$
22,817
Add back (deduct):
Acquisition deal and integration costs
2,587
86
Business realignment costs
375
1,657
North American warehouse consolidation
117
—
Headquarter relocation costs
1,228
—
Non-GAAP adjusted income from
operations
$
25,755
$
24,560
Sales
$
235,492
$
220,287
Operating margin - GAAP
9.1
%
10.4
%
Adjusted operating margin - Non-GAAP
10.9
%
11.1
%
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
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
June 30, 2023
June 30, 2022
GAAP net income (loss)
9,275
8,391
Add back (deduct):
Amortization of intangibles
6,877
6,535
Acquisition deal and integration costs
2,587
86
Business realignment costs
375
1,657
North American warehouse consolidation
117
—
Headquarter relocation costs
1,228
—
Normalize tax rate (1)
(2,569
)
3,269
Non-GAAP adjusted net income
17,890
19,938
Average diluted shares outstanding
28,906
28,699
Diluted income (loss) per share - GAAP
$
0.32
$
0.29
Diluted income per share - Non-GAAP
$
0.62
$
0.69
(1) Applies a normalized tax rate of 25% in fiscal 2024 and 22% in
fiscal 2023 to GAAP pre-tax income and non-GAAP adjustments above,
which are each pre-tax.
Adjusted net income and 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
CORPORATION
Reconciliation of GAAP Net
Income to Non-GAAP Adjusted EBITDA
($ in thousands)
Three Months Ended
June 30, 2023
June 30, 2022
GAAP net income (loss)
$
9,275
$
8,391
Add back (deduct):
Income tax expense (benefit)
3,394
8,893
Interest and debt expense
8,625
6,203
Investment (income) loss
(543
)
430
Foreign currency exchange (gain) loss
483
1,203
Other (income) expense, net
214
(2,303
)
Depreciation and amortization expense
10,890
10,469
Acquisition deal and integration costs
2,587
86
Business realignment costs
375
1,657
North American warehouse consolidation
117
—
Headquarter relocation costs
1,228
—
Non-GAAP adjusted EBITDA
$
36,645
$
35,029
Sales
$
235,492
$
220,287
Net income (loss) margin - GAAP
3.9
%
3.8
%
Adjusted EBITDA margin - Non-GAAP
15.6
%
15.9
%
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230802982869/en/
Gregory P. Rustowicz Executive Vice President - Finance and CFO
Columbus McKinnon Corporation 716-689-5442
greg.rustowicz@cmworks.com Investor Relations: Deborah K. Pawlowski
Kei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com
Columbus McKinnon (NASDAQ:CMCO)
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