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Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020

05/27/2020

BUFFALO, N.Y.--(BUSINESS WIRE)-- Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of motion control products, technologies and services for material handling, today announced financial results for its fiscal year 2020 fourth quarter, which ended March 31, 2020.

Fourth Quarter Highlights (compared with prior-year period)

  • 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

Fiscal Year Highlights (compared with prior-year period)

  • Record annual gross margin was 35.0% despite 7.7% decline in sales
  • Operating income was $89.8 million, or 11.1% of sales; 80/20 process contributed $20.4 million
  • Net income was $59.7 million, or $2.50 per diluted share
  • Achieved 15.7% Adjusted EBITDA margin and ROIC of 11.5%
  • Strong working capital management and cash generation delivered record $106.8 million in cash from operations
  • Ended year with strong balance sheet that provides financial flexibility and significant liquidity

Richard Fleming, Chairman and Interim CEO of Columbus McKinnon, commented, “We demonstrated the power of our Blueprint for Growth strategy throughout fiscal 2020 with expanded margins despite slowing demand. However, in March the COVID-19 pandemic required us to rapidly implement actions to flex production levels and reduce costs to address the significant decline in demand we are now experiencing. Importantly, we have an excellent capital structure, strong cash generation and sufficient liquidity that will allow us to navigate these uncertain times while continuing to invest in select, strategic initiatives that we believe will enhance our competitive advantages and drive future growth.”

Fourth Quarter Fiscal 2020 Sales

($ in millions)

Q4 FY 20

 

Q4 FY 19

 

Change

 

% Change

Net sales

$

189.5

 

 

$

216.7

 

 

$

(27.2

)

 

(12.6

)%

 

 

 

 

 

 

 

 

U.S. sales

$

104.1

 

 

$

120.5

 

 

$

(16.4

)

 

(13.6

)%

% of total

55

%

 

56

%

 

 

 

 

Non-U.S. sales

$

85.4

 

 

$

96.2

 

 

$

(10.8

)

 

(11.2

)%

% of total

45

%

 

44

%

 

 

 

 

Sales declined primarily on lower volume as improved pricing more than offset the negative impact of changes in foreign currency translation. Sales in the U.S. were down $16.4 million, of which $2.4 million was related to divestitures in the prior-year period. Sales outside the U.S. were down $10.8 million, of which $2.4 million was related to divestitures in the prior-year period and $2.3 million was related to foreign currency translation.

Fourth Quarter Fiscal 2020 Operating Results

($ in millions)

Q4 FY 20

 

Q4 FY 19

 

Change

 

% Change

Gross profit

$

66.2

 

 

$

76.0

 

 

$

(9.8

)

 

(12.9

)%

Gross margin

34.9

%

 

35.1

%

 

(20) bps

 

 

 

Income from operations

$

16.7

 

 

$

24.5

 

 

$

(7.8

)

 

(31.9

)%

Operating margin

8.8

%

 

11.3

%

 

(250) bps

 

 

 

Net income

$

9.2

 

 

$

19.7

 

 

$

(10.5

)

 

(53.2

)%

Diluted EPS

$

0.39

 

 

$

0.83

 

 

$

(0.44

)

 

(53.0

)%

Adjusted EBITDA *

$

27.3

 

 

$

32.8

 

 

$

(5.5

)

 

(16.7

)%

Adjusted EBITDA margin

14.4

%

 

15.1

%

 

(70) bps

 

 

 

*A non-GAAP measure, Adjusted EBITDA is defined as adjusted operating income plus depreciation and amortization. Please see the attached tables for a reconciliation of adjusted EBITDA to GAAP net income (loss).

Adjusted income from operations was $20.2 million, down $4.7 million, or 18.9%, compared with the fourth quarter of fiscal 2019. Adjusted operating margin declined 80 basis points. (See the reconciliation of GAAP income from operations to adjusted income from operations on page 11 of this release.)

Adjusted EBITDA margin was 14.4% for the quarter, a decline of 70 basis points over the prior-year period. (See the reconciliation of GAAP net income to adjusted EBITDA on page 13 of this release.)

First Quarter Fiscal 2021 Outlook

Given the actions taken to reduce costs, the Company expects income from operations would be at breakeven levels if revenue were to decline by 35% from the fourth quarter fiscal 2020. Currently, Columbus McKinnon expects first quarter fiscal 2021 revenue to be approximately $130 million to $140 million at current exchange rates, which is above breakeven.

Mr. Fleming concluded, “We believe that Columbus McKinnon will come out of these unprecedented times a stronger company and are excited to welcome David Wilson to advance our Blueprint for Growth strategy and lead our future endeavors as our new CEO effective June 1, 2020.”

Teleconference/webcast

Columbus McKinnon will host a conference call and live webcast Wednesday, May 27, 2020 at 8:00 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 https://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 https://investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13700704. The telephonic replay will be available from 11:00 AM Eastern Time on the day of the call through Wednesday, June 3, 2020. Alternatively, an archived webcast of the call can be found on the Company’s website. In addition, a transcript of the call will be posted to the website once available.

About Columbus McKinnon

Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of motion control products, technologies, systems and services that efficiently and ergonomically move, lift, position and secure materials. Key products include hoists, actuators, rigging tools, light rail work stations 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 future sales and earnings, 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 Covid-19 and the Company’s aggressive efforts to reduce costs, maintain liquidity and generate cash in the current pandemic, the effectiveness of the Company’s 80/20 Process to simplify operations, the ability of the Company’s Operational Excellence initiatives to drive profitability, global economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting 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. 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

 

 

 

 

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

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

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

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

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

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 

 

 

Year Ended

 

 

March 31, 2020

 

March 31, 2019

Operating activities:

 

 

 

 

Net income

 

$

59,672

 

 

$

42,577

 

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

 

 

 

 

Depreciation and amortization

 

29,126

 

 

32,675

 

Deferred income taxes and related valuation allowance

 

7,364

 

 

(958

)

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

 

(563

)

 

194

 

Stock based compensation

 

4,507

 

 

6,198

 

Amortization of deferred financing costs

 

2,655

 

 

2,655

 

Net loss on sales of businesses, including impairment

 

176

 

 

25,672

 

Non-cash lease expense

 

7,923

 

 

 

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

 

 

 

 

Trade accounts receivable

 

2,899

 

 

(11,328

)

Inventories

 

15,752

 

 

(15,411

)

Prepaid expenses and other

 

(3,857

)

 

(128

)

Other assets

 

724

 

 

231

 

Trade accounts payable

 

8,110

 

 

3,881

 

Accrued liabilities

 

(14,304

)

 

6,397

 

Non-current liabilities

 

(13,389

)

 

(13,156

)

Net cash provided by (used for) operating activities

 

106,795

 

 

79,499

 

 

 

 

 

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

5,380

 

 

3,266

 

Purchases of marketable securities

 

(5,747

)

 

(2,604

)

Capital expenditures

 

(9,432

)

 

(12,288

)

Proceeds from sale of equipment and real estate

 

51

 

 

176

 

Net (payments) proceeds from sales of businesses

 

(214

)

 

14,230

 

Payment of restricted cash to former owner

 

 

 

(294

)

Net cash provided by (used for) investing activities

 

(9,962

)

 

2,486

 

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from issuance of common stock

 

6,000

 

 

4,152

 

Repayment of debt

 

(51,113

)

 

(65,088

)

Payment of dividends

 

(5,670

)

 

(4,652

)

Other

 

(768

)

 

(2,190

)

Net cash provided by (used for) financing activities

 

(51,551

)

 

(67,778

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

(1,925

)

 

(6,429

)

 

 

 

 

 

Net change in cash and cash equivalents

 

43,357

 

 

7,778

 

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

 

71,343

 

 

63,565

 

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

 

$

114,700

 

 

$

71,343

 

COLUMBUS McKINNON CORPORATION

Q4 FY 2020 Sales Bridge

 

 

 

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

 

 

 

COLUMBUS McKINNON CORPORATION

Q4 FY 2020 Gross Profit Bridge

 

($ in millions)

Quarter

 

Year To Date

Fiscal 2019 Gross Profit

$

76.0

 

 

$

305.0

 

Divestitures

(0.9

)

 

(7.1

)

Fiscal 2019 Gross Profit adjusted for divestitures

75.1

 

 

297.9

 

Pricing, net of material cost inflation

2.5

 

 

10.3

 

Insurance settlement

 

 

0.4

 

Product liability

(0.3

)

 

(0.6

)

Business realignment costs

(0.8

)

 

(0.7

)

Tariffs

0.4

 

 

(0.8

)

Factory closures

 

 

(1.3

)

Productivity, net of other cost changes

(1.6

)

 

(3.4

)

Foreign currency translation

(0.8

)

 

(4.5

)

Sales volume and mix

(8.3

)

 

(14.1

)

Total change adjusted for divestitures

$

(8.9

)

 

$

(14.7

)

Fiscal 2020 Gross Profit

$

66.2

 

 

$

283.2

 

COLUMBUS McKINNON CORPORATION

Additional Data - UNAUDITED

 

 

 

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

 

%

(1) March 31, 2019 figures exclude the Tire Shredder business, which was divested on December 28, 2018, and Crane Equipment & Service, Inc. (CES) and Stahlhammer Bommern GmbH (STB), each of which were divested on February 28, 2019.

(2) December 31, 2019 figure excludes CES and STB.

U.S. Shipping Days by Quarter

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Total

FY 21

 

63

 

64

 

61

 

63

 

251

 

 

 

 

 

 

 

 

 

 

 

FY 20

 

63

 

63

 

61

 

64

 

251

 

 

 

 

 

 

 

 

 

 

 

FY 19

 

64

 

63

 

60

 

63

 

250

COLUMBUS McKINNON CORPORATION

Reconciliation of GAAP Gross Profit to

Non-GAAP Adjusted Gross Profit and Adjusted Gross Margin

($ in thousands, except per share data)

 

 

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

%

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 and Adjusted Operating Margin

($ in thousands, except per share data)

 

 

Three Months Ended
March 31,

 

Year Ended
March 31,

 

2020

 

2019

 

2020

 

2019

Income from operations

$

16,664

 

 

$

24,468

 

 

$

89,824

 

 

$

69,442

 

Add back (deduct):

 

 

 

 

 

 

 

Factory closures

1,621

 

 

1,273

 

 

4,709

 

 

1,473

 

Business realignment costs

1,755

 

 

 

 

2,831

 

 

1,906

 

Insurance recovery legal costs

160

 

 

132

 

 

585

 

 

1,282

 

Net loss (gain) on sales of businesses, including impairment

 

 

(978

)

 

176

 

 

25,672

 

Insurance settlement

(15

)

 

 

 

(382

)

 

 

Non-GAAP adjusted income from operations

$

20,185

 

 

$

24,895

 

 

$

97,743

 

 

$

99,775

 

 

 

 

 

 

 

 

 

Sales

$

189,486

 

 

$

216,733

 

 

$

809,162

 

 

$

876,282

 

Adjusted operating margin

10.7

%

 

11.5

%

 

12.1

%

 

11.4

%

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
March 31,

 

Year Ended
March 31,

 

2020

 

2019

 

2020

 

2019

Net income

$

9,244

 

 

$

19,741

 

 

$

59,672

 

 

$

42,577

 

Add back (deduct):

 

 

 

 

 

 

 

Factory closures

1,621

 

 

1,273

 

 

4,709

 

 

1,473

 

Business realignment costs

1,755

 

 

 

 

2,831

 

 

1,906

 

Insurance recovery legal costs

160

 

 

132

 

 

585

 

 

1,282

 

Net loss (gain) on sales of businesses, including impairment

 

 

(978

)

 

176

 

 

25,672

 

Insurance settlement

(15

)

 

 

 

(382

)

 

 

Normalize tax rate to 22% (1)

1,050

 

 

(3,766

)

 

(1,232)

 

 

(7,990

)

Non-GAAP adjusted net income

$

13,815

 

 

$

16,402

 

 

$

66,359

 

 

$

64,920

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

23,938

 

 

23,714

 

 

23,855

 

 

23,660

 

 

 

 

 

 

 

 

 

Diluted income per share - GAAP

$

0.39

 

 

$

0.83

 

 

$

2.50

 

 

$

1.80

 

 

 

 

 

 

 

 

 

Diluted income per share - Non-GAAP

$

0.58

 

 

$

0.69

 

 

$

2.78

 

 

$

2.74

 

(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 and at 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 to the measures as 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.

COLUMBUS McKINNON CORPORATION

Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA

($ in thousands)

 

 

Three Months Ended
March 31,

 

Year Ended
March 31,

 

2020

 

2019

 

2020

 

2019

Net income

$

9,244

 

 

$

19,741

 

 

$

59,672

 

 

$

42,577

 

Add back (deduct):

 

 

 

 

 

 

 

Income tax expense

4,947

 

 

860

 

 

17,484

 

 

10,321

 

Interest and debt expense

3,200

 

 

3,959

 

 

14,234

 

 

17,144

 

Investment (income) loss

48

 

 

(430

)

 

(891

)

 

(727

)

Foreign currency exchange (gain) loss

(996

)

 

637

 

 

(1,514

)

 

843

 

Other (income) expense, net

221

 

 

(299

)

 

839

 

 

(716

)

Depreciation and amortization expense

7,135

 

 

7,912

 

 

29,126

 

 

32,675

 

Factory closures

1,621

 

 

1,273

 

 

4,709

 

 

1,473

 

Business realignment costs

1,755

 

 

 

 

2,831

 

 

1,906

 

Insurance recovery legal costs

160

 

 

132

 

 

585

 

 

1,282

 

Net loss (gain) on sales of businesses, including impairment

 

 

(978

)

 

176

 

 

25,672

 

Insurance settlement

(15

)

 

 

 

(382

)

 

 

Non-GAAP adjusted EBITDA

$

27,320

 

 

$

32,807

 

 

$

126,869

 

 

$

132,450

 

 

 

 

 

 

 

 

 

Sales

$

189,486

 

 

$

216,733

 

 

$

809,162

 

 

$

876,282

 

Adjusted EBITDA margin

14.4

%

 

15.1

%

 

15.7

%

 

15.1

%

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.

Gregory P. Rustowicz
Vice President - Finance and Chief Financial Officer
Columbus McKinnon Corporation
716-689-5442
greg.rustowicz@cmworks.com

Investor Relations:
Deborah K. Pawlowski
Kei Advisors LLC
716-843-3908
dpawlowski@keiadvisors.com

Source: Columbus McKinnon Corporation

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