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Columbus McKinnon Reports Financial Results for Second Quarter Fiscal Year 2021

10/29/2020

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 2021 second quarter, which ended September 30, 2020.

Second Quarter Highlights

  • Strong sequential improvement demonstrates effectiveness of cost saving and self-help improvement measures
  • Revenue up 13.5% over trailing first fiscal quarter to $157.8 million; at high end of expected range
  • Operating income of $15.8 million or 10.0% of sales; Adjusted operating income* of $14.0 million, or 8.9% of sales
  • Cash from operations in the quarter was $37.4 million driven by a disciplined focus on reducing working capital requirements
  • Advancing product launches and broadening offerings in Compass™ configurator

David Wilson, President and CEO of Columbus McKinnon, commented, “We delivered solid results in the quarter achieving the higher end of our expected revenue range and demonstrated our capabilities to drive profitability and strong cash generation in a challenging environment. In fact, the 80/20 Process, a key tool in our business system, contributed $3.4 million in operating income during the quarter, helping to offset headwinds caused by the pandemic. Our strong cash flow and excellent liquidity position enabled our repayment of the $25 million Revolver borrowing in early October.

“We are building momentum as we strengthen our business operating system, evolve the Blueprint for Growth strategy and pivot to growth. Our focus is on identifying opportunities to both deepen our market penetration and expand our addressable markets. We have the financial strength to continue to invest in prioritized growth initiatives even as we carefully manage our operations and ensure the safety and well-being of the Columbus McKinnon team.”

*Adjusted operating income is a non-GAAP measure. See accompanying discussion and reconciliation table in this release regarding adjusted operating income.

Second Quarter Fiscal 2021 Sales

($ in millions)

Q2 FY 21

 

Q2 FY 20

 

Change

 

% Change

Net sales

$

157.8

 

 

$

207.6

 

 

$

(49.8)

 

 

(24.0)

%

U.S. sales

$

84.7

 

 

$

113.5

 

 

$

(28.8)

 

 

(25.4)

%

% of total

54

%

 

55

%

 

 

 

 

Non-U.S. sales

$

73.1

 

 

$

94.1

 

 

$

(21.0)

 

 

(22.3)

%

% of total

46

%

 

45

%

 

 

 

 

Compared with the prior-year period, lower volume was due to the global economic impact of the COVID-19 pandemic. Lower U.S. sales volume more than offset a 1.1% price improvement while lower volume outside the U.S. was somewhat offset by a $2.2 million, or 2.3%, positive impact from foreign currency translation and price improvement of 1.2%.

Compared with the trailing first quarter, sales improved 13.5% with short cycle sales up 22.2% and project sales up 5.5%.

Second Quarter Fiscal 2021 Operating Results

($ in millions)

Q2 FY 21

 

Q2 FY 20

 

Change

 

% Change

Gross profit

$

56.0

 

 

$

73.5

 

 

$

(17.5)

 

 

(23.8)

%

Gross margin

35.5

%

 

35.4

%

 

10 bps

 

 

Income from operations

$

15.8

 

 

$

25.2

 

 

$

(9.4)

 

 

(37.3)

%

Operating margin

10.0

%

 

12.2

%

 

(220) bps

 

Net income (loss)

$

(4.1)

 

 

$

16.6

 

 

$

(20.7)

 

 

NM

Diluted EPS

$

(0.17)

 

 

$

0.69

 

 

$

(0.86)

 

 

NM

Adjusted EBITDA *

$

21.1

 

 

$

33.7

 

 

$

(12.5)

 

 

(37.2)

%

Adjusted EBITDA margin

13.4

%

 

16.2

%

 

(280) 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 $14.0 million, or 8.9% of sales. Decremental adjusted operating income leverage from the prior-year period was 25% which continues to demonstrate better than historic decremental leverage. (See the reconciliation of GAAP income from operations to adjusted income from operations on the attached tables.) Net loss for the quarter was $4.1 million, which included a $16.3 million non-cash pension settlement charge related to the termination of a U.S. pension plan.

On a sequential basis, Adjusted EBITDA was up $9.1 million, or 74.9%, to $21.1 million on an $18.7 million increase in sales. Adjusted EBITDA margin expanded 470 basis points sequentially to 13.4% from the fiscal 2021 first quarter.

Third Quarter Fiscal 2021 Outlook

Orders were up nearly 26% compared with the trailing first quarter. Order growth was driven mostly by the recovery of the short cycle business, which improved 41% over the first quarter this fiscal year whereas the project business grew at a rate of 12%. Total backlog has recovered to pre-COVID levels and long-term backlog, which is expected to ship beyond the fiscal third quarter, grew to 41.5% of total backlog. As a result, the Company expects third quarter fiscal 2021 revenue to be within a range of approximately $150 million to $160 million at current exchange rates.

Mr. Wilson concluded, “I am really proud of the team and how we have executed in the first half of the fiscal year. Importantly, we are keeping our eye on the long term as we advance our strategic plan. In the second quarter, we launched several new products, expanded the capabilities of our Compass™ configurator and increased our focus on improving our customers’ experience. I am confident we will continue to execute well, and we will emerge from these challenging times a better company.”

Teleconference/webcast

Columbus McKinnon will host a conference call and live webcast Thursday, October 29, 2020 at 10:00 AM Eastern Time, at which management will review the Company’s financial results and strategy. The review will be accompanied by a slide presentation, which will be available on Columbus McKinnon’s website at investors.columbusmckinnon.com. A question and answer session will follow the formal discussion.

The conference call can be accessed by dialing 201-493-6780. The listen-only audio webcast can be monitored at https://investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13710950. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, November 5, 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 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, the Company’s ability to grow market share, the ability to achieve revenue expectations, 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

 

 

 

 

September 30,

2020

 

September 30,

2019

 

Change

Net sales

 

$

157,790

 

 

$

207,609

 

 

(24.0)

%

Cost of products sold

 

101,765

 

 

134,116

 

 

(24.1)

%

Gross profit

 

56,025

 

 

73,493

 

 

(23.8)

%

Gross profit margin

 

35.5

%

 

35.4

%

 

 

Selling expenses

 

18,563

 

 

22,877

 

 

(18.9)

%

% of net sales

 

11.8

%

 

11.0

%

 

 

General and administrative expenses

 

15,554

 

 

19,153

 

 

(18.8)

%

% of net sales

 

9.9

%

 

9.2

%

 

 

Research and development expenses

 

2,896

 

 

2,999

 

 

(3.4)

%

% of net sales

 

1.8

%

 

1.4

%

 

 

Loss on sales of businesses

 

 

 

7

 

 

NM

Amortization of intangibles

 

3,192

 

 

3,226

 

 

(1.1)

%

Income from operations

 

15,820

 

 

25,231

 

 

(37.3)

%

Operating margin

 

10.0

%

 

12.2

%

 

 

Interest and debt expense

 

3,018

 

 

3,759

 

 

(19.7)

%

Investment (income) loss

 

(357)

 

 

(229)

 

 

55.9

%

Foreign currency exchange (gain) loss

 

397

 

 

(296)

 

 

NM

Other (income) expense, net

 

16,911

 

 

257

 

 

6,480.2

%

Income (loss) before income tax expense (benefit)

 

(4,149)

 

 

21,740

 

 

NM

Income tax expense (benefit)

 

(45)

 

 

5,141

 

 

NM

Net income (loss)

 

$

(4,104)

 

 

$

16,599

 

 

NM

 

 

 

 

 

 

 

Average basic shares outstanding

 

23,883

 

 

23,631

 

 

1.1

%

Basic income (loss) per share

 

$

(0.17)

 

 

$

0.70

 

 

NM

 

 

 

 

 

 

 

Average diluted shares outstanding

 

23,883

 

 

23,926

 

 

(0.2)

%

Diluted income (loss) per share

 

$

(0.17)

 

 

$

0.69

 

 

NM

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.06

 

 

$

0.06

 

 

 

 
COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

Six Months Ended

 

 

 

 

September 30,

2020

 

September 30,

2019

 

Change

Net sales

 

$

296,860

 

 

$

420,321

 

 

(29.4)

%

Cost of products sold

 

196,038

 

 

271,216

 

 

(27.7)

%

Gross profit

 

100,822

 

 

149,105

 

 

(32.4)

%

Gross profit margin

 

34.0

%

 

35.5

%

 

 

Selling expenses

 

37,258

 

 

45,632

 

 

(18.4)

%

% of net sales

 

12.6

%

 

10.9

%

 

 

General and administrative expenses

 

33,983

 

 

38,753

 

 

(12.3)

%

% of net sales

 

11.4

%

 

9.2

%

 

 

Research and development expenses

 

5,665

 

 

5,791

 

 

(2.2)

%

% of net sales

 

1.9

%

 

1.4

%

 

 

Loss on sales of businesses

 

 

 

176

 

 

NM

Amortization of intangibles

 

6,307

 

 

6,479

 

 

(2.7)

%

Income from operations

 

17,609

 

 

52,274

 

 

(66.3)

%

Operating margin

 

5.9

%

 

12.4

%

 

 

Interest and debt expense

 

6,206

 

 

7,611

 

 

(18.5)

%

Investment (income) loss

 

(934)

 

 

(531)

 

 

75.9

%

Foreign currency exchange (gain) loss

 

481

 

 

(706)

 

 

NM

Other (income) expense, net

 

19,937

 

 

419

 

 

4,658.2

%

Income (loss) before income tax expense (benefit)

 

(8,081)

 

 

45,481

 

 

NM

Income tax expense (benefit)

 

(1,008)

 

 

10,303

 

 

NM

Net income (loss)

 

$

(7,073)

 

 

$

35,178

 

 

NM

 

 

 

 

 

 

 

Average basic shares outstanding

 

23,843

 

 

23,532

 

 

1.3

%

Basic income (loss) per share

 

$

(0.30)

 

 

$

1.49

 

 

NM

 

 

 

 

 

 

 

Average diluted shares outstanding

 

23,843

 

 

23,832

 

 

%

Diluted income (loss) per share

 

$

(0.30)

 

 

$

1.48

 

 

NM

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.06

 

 

$

0.06

 

 

 

 
COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30, 2020

 

March 31, 2020

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

186,556

 

 

$

114,450

 

Trade accounts receivable

 

92,540

 

 

123,743

 

Inventories

 

112,095

 

 

127,373

 

Prepaid expenses and other

 

18,124

 

 

17,180

 

Total current assets

 

409,315

 

 

382,746

 

 

 

 

 

 

Property, plant, and equipment, net

 

72,782

 

 

79,473

 

Goodwill

 

330,859

 

 

319,679

 

Other intangibles, net

 

219,434

 

 

217,962

 

Marketable securities

 

8,534

 

 

7,322

 

Deferred taxes on income

 

27,798

 

 

26,281

 

Other assets

 

63,212

 

 

59,809

 

Total assets

 

$

1,131,934

 

 

$

1,093,272

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

37,724

 

 

$

57,289

 

Accrued liabilities

 

88,679

 

 

93,585

 

Current portion of long-term debt

 

29,450

 

 

4,450

 

Total current liabilities

 

155,853

 

 

155,324

 

 

 

 

 

 

Term loan and revolving credit facility

 

245,680

 

 

246,856

 

Other non-current liabilities

 

250,445

 

 

227,507

 

Total liabilities

 

651,978

 

 

629,687

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

239

 

 

238

 

Additional paid-in capital

 

290,690

 

 

287,256

 

Retained earnings

 

281,935

 

 

290,441

 

Accumulated other comprehensive loss

 

(92,908)

 

 

(114,350)

 

Total shareholders’ equity

 

479,956

 

 

463,585

 

Total liabilities and shareholders’ equity

 

$

1,131,934

 

 

$

1,093,272

 

 
COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 

 

 

Six Months Ended

 

 

September 30, 2020

 

September 30, 2019

Operating activities:

 

 

 

 

Net income (loss)

 

$

(7,073)

 

 

$

35,178

 

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

 

 

 

 

Depreciation and amortization

 

14,210

 

 

14,747

 

Deferred income taxes and related valuation allowance

 

(6,745)

 

 

748

 

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

 

(557)

 

 

(446)

 

Stock based compensation

 

3,989

 

 

3,511

 

Amortization of deferred financing costs

 

1,327

 

 

1,327

 

Loss on sales of businesses

 

 

 

176

 

Non-cash pension settlement expense

 

19,046

 

 

 

Gain on sale of building

 

(2,638)

 

 

 

Non-cash lease expense

 

3,785

 

 

4,223

 

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

 

 

 

 

Trade accounts receivable

 

33,594

 

 

(2,648)

 

Inventories

 

18,987

 

 

1,400

 

Prepaid expenses and other

 

(1,627)

 

 

(2,883)

 

Other assets

 

570

 

 

(171)

 

Trade accounts payable

 

(20,078)

 

 

332

 

Accrued liabilities

 

(7,895)

 

 

(8,230)

 

Non-current liabilities

 

(1,952)

 

 

(9,384)

 

Net cash provided by (used for) operating activities

 

46,943

 

 

37,880

 

 

 

 

 

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

1,034

 

 

1,928

 

Purchases of marketable securities

 

(1,759)

 

 

(2,581)

 

Capital expenditures

 

(2,779)

 

 

(4,843)

 

Proceeds from sale of building, net of transaction costs

 

5,453

 

 

 

Dividend received from equity method investment

 

587

 

 

 

Proceeds from sale of equipment

 

 

 

51

 

Net (payments) proceeds from sales of businesses

 

 

 

(214)

 

Net cash provided by (used for) investing activities

 

2,536

 

 

(5,659)

 

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from issuance of common stock

 

429

 

 

3,784

 

Borrowings under line-of-credit agreements

 

25,000

 

 

 

Repayment of debt

 

(2,225)

 

 

(30,000)

 

Fees paid for revolver extension

 

(826)

 

 

 

Payment of dividends

 

(2,860)

 

 

(2,824)

 

Other

 

(982)

 

 

(544)

 

Net cash provided by (used for) financing activities

 

18,536

 

 

(29,584)

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

4,091

 

 

(1,751)

 

 

 

 

 

 

Net change in cash and cash equivalents

 

72,106

 

 

886

 

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

 

114,700

 

 

71,343

 

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

 

$

186,806

 

 

$

72,229

 

 
COLUMBUS McKINNON CORPORATION

Q2 FY 2021 Sales Bridge

 

 

 

Quarter

 

Year To Date

($ in millions)

 

$ Change

 

% Change

 

$ Change

 

% Change

Fiscal 2020 Sales

 

$

207.6

 

 

 

 

$

420.3

 

 

 

Volume

 

(54.3)

 

 

(26.2)

%

 

(128.4)

 

 

(30.5)

%

Pricing

 

2.3

 

 

1.1

%

 

4.8

 

 

1.1

%

Foreign currency translation

 

2.2

 

 

1.1

%

 

0.2

 

 

%

Total change

 

$

(49.8)

 

 

(24.0)

%

 

$

(123.4)

 

 

(29.4)

%

Fiscal 2021 Sales

 

$

157.8

 

 

 

 

$

296.9

 

 

 

 
COLUMBUS McKINNON CORPORATION

Q2 FY 2021 Gross Profit Bridge

 

($ in millions)

Quarter

 

Year To Date

Fiscal 2020 Gross Profit

$

73.5

 

 

$

149.1

 

Pricing, net of material cost inflation

2.3

 

 

4.7

 

Gain on sale of building

2.2

 

 

2.2

 

Tariffs

0.6

 

 

1.4

 

Foreign currency translation

0.8

 

 

0.2

 

Business realignment costs

0.1

 

 

(0.2

)

Insurance settlement

 

 

(0.3

)

Factory closures

(0.3

)

 

(1.6

)

Productivity, net of other cost changes

(3.8

)

 

(8.3

)

Sales volume and mix

(19.4

)

 

(46.4

)

Total change

$

(17.5

)

 

$

(48.3

)

Fiscal 2021 Gross Profit

$

56.0

 

 

$

100.8

 

 
COLUMBUS McKINNON CORPORATION

Additional Data – UNAUDITED

 

 

 

September 30,

2020

 

June 30,

2020

 

March 31,

2020

 

September 30,

2019

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Backlog

 

$

146.6

 

 

 

$

130.7

 

 

 

$

131.0

 

 

 

$

143.1

 

 

Long-term backlog

 

 

 

 

 

 

 

 

 

 

 

 

Expected to ship beyond 3 months

 

$

60.8

 

 

 

$

52.8

 

 

 

$

49.1

 

 

 

$

53.9

 

 

Long-term backlog as % of total backlog

 

41.5

 

%

 

40.4

 

%

 

37.5

 

%

 

37.7

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

 

 

 

Days sales outstanding

 

53.4

 

days

 

63.1

 

days

 

59.4

 

days

 

57.0

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory turns per year

 

 

 

 

 

 

 

 

 

 

 

 

(based on cost of products sold)

 

3.6

 

turns

 

3.0

 

turns

 

3.9

 

turns

 

3.8

 

turns

Days' inventory

 

100.5

 

days

 

120.6

 

days

 

94.3

 

days

 

96.9

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

 

Days payables outstanding

 

33.7

 

days

 

37.6

 

days

 

42.3

 

days

 

33.2

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Working capital as a % of sales (1)

 

14.1

 

%

 

14.9

 

%

 

14.5

 

%

 

17.2

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt to total capitalization percentage

 

36.4

 

%

 

37.1

 

%

 

35.2

 

%

 

36.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt, net of cash, to net total capitalization

 

15.6

 

%

 

20.9

 

%

 

22.8

 

%

 

30.1

 

%

(1)

September 30, 2019 figure excludes 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.

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

 
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

September 30,

 

Six Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Gross profit

$

56,025

 

 

$

73,493

 

 

$

100,822

 

 

$

149,105

 

Add back (deduct):

 

 

 

 

 

 

 

Factory closures

493

 

 

249

 

 

2,421

 

 

755

 

Business realignment costs

 

 

140

 

 

329

 

 

140

 

Insurance settlement

 

 

 

 

 

 

(290)

 

Gain on sale of building

(2,189)

 

 

 

 

(2,189)

 

 

 

Non-GAAP adjusted gross profit

$

54,329

 

 

$

73,882

 

 

$

101,383

 

 

$

149,710

 

 

 

 

 

 

 

 

 

Sales

$

157,790

 

 

$

207,609

 

 

$

296,860

 

 

$

420,321

 

Adjusted gross margin

34.4

%

 

35.6

%

 

34.2

%

 

35.6

%

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

September 30,

 

Six Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Income from operations

$

15,820

 

 

$

25,231

 

 

$

17,609

 

 

$

52,274

 

Add back (deduct):

 

 

 

 

 

 

 

Factory closures

747

 

 

470

 

 

3,003

 

 

1,497

 

Business realignment costs

 

 

413

 

 

821

 

 

413

 

Insurance recovery legal costs

88

 

 

220

 

 

229

 

 

359

 

Loss on sales of businesses

 

 

7

 

 

 

 

176

 

Insurance settlement

 

 

 

 

 

 

(290)

 

Gain on sale of building

(2,638)

 

 

 

 

(2,638)

 

 

 

Non-GAAP adjusted income from operations

$

14,017

 

 

$

26,341

 

 

$

19,024

 

 

$

54,429

 

 

 

 

 

 

 

 

 

Sales

$

157,790

 

 

$

207,609

 

 

$

296,860

 

 

$

420,321

 

Adjusted operating margin

8.9

%

 

12.7

%

 

6.4

%

 

12.9

%

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

September 30,

 

Six Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Net income (loss)

$

(4,104)

 

 

$

16,599

 

 

$

(7,073)

 

 

$

35,178

 

Add back (deduct):

 

 

 

 

 

 

 

Non-cash pension settlement expense

16,324

 

 

 

 

19,046

 

 

 

Factory closures

747

 

 

470

 

 

3,003

 

 

1,497

 

Business realignment costs

 

 

413

 

 

821

 

 

413

 

Insurance recovery legal costs

88

 

 

220

 

 

229

 

 

359

 

Loss on sales of businesses

 

 

7

 

 

 

 

176

 

Insurance settlement

 

 

 

 

 

 

(290)

 

Gain on sale of building

(2,638)

 

 

 

 

(2,638)

 

 

 

Normalize tax rate to 22% (1)

(2,327)

 

 

114

 

 

(3,732)

 

 

(177)

 

Non-GAAP adjusted net income

$

8,090

 

 

$

17,823

 

 

$

9,656

 

 

$

37,156

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

24,123

 

 

23,926

 

 

24,030

 

 

23,832

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share - GAAP

$

(0.17)

 

 

$

0.69

 

 

$

(0.30)

 

 

$

1.48

 

 

 

 

 

 

 

 

 

Diluted income per share - Non-GAAP

$

0.34

 

 

$

0.74

 

 

$

0.40

 

 

$

1.56

 

(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

September 30,

 

Six Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Net income (loss)

$

(4,104)

 

 

$

16,599

 

 

$

(7,073)

 

 

$

35,178

 

Add back (deduct):

 

 

 

 

 

 

 

Income tax expense (benefit)

(45)

 

 

5,141

 

 

(1,008)

 

 

10,303

 

Interest and debt expense

3,018

 

 

3,759

 

 

6,206

 

 

7,611

 

Investment (income) loss

(357)

 

 

(229)

 

 

(934)

 

 

(531)

 

Foreign currency exchange (gain) loss

397

 

 

(296)

 

 

481

 

 

(706)

 

Other (income) expense, net

16,911

 

 

257

 

 

19,937

 

 

419

 

Depreciation and amortization expense

7,129

 

 

7,344

 

 

14,210

 

 

14,747

 

Factory closures

747

 

 

470

 

 

3,003

 

 

1,497

 

Business realignment costs

 

 

413

 

 

821

 

 

413

 

Insurance recovery legal costs

88

 

 

220

 

 

229

 

 

359

 

Loss on sales of businesses

 

 

7

 

 

 

 

176

 

Insurance settlement

 

 

 

 

 

 

(290)

 

Gain on sale of building

(2,638)

 

 

 

 

(2,638)

 

 

 

Non-GAAP adjusted EBITDA

$

21,146

 

 

$

33,685

 

 

$

33,234

 

 

$

69,176

 

 

 

 

 

 

 

 

 

Sales

$

157,790

 

 

$

207,609

 

 

$

296,860

 

 

$

420,321

 

Adjusted EBITDA margin

13.4

%

 

16.2

%

 

11.2

%

 

16.5

%

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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