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Columbus McKinnon Reports Financial Results for Second Quarter Fiscal Year 2022

10/28/2021

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 2022 second quarter, which ended September 30, 2021. Results include the addition of Dorner Manufacturing Corporation, which was acquired on April 7, 2021.

Second Quarter Highlights (compared with prior year period)

  • 42% revenue growth driven by strong volume, contribution of acquisition and strategic pricing
  • CMBS enables continued margin expansion resulting in record gross margin of 36.3%, up 80 basis points; record adjusted gross margin of 36.7% expanded 230 basis points
  • Strategic pricing more than offset material cost inflation pressure
  • Achieved net income of $15.2 million, or $0.53 per diluted share; adjusted earnings per diluted share was $0.74
  • Adjusted EBITDA was $36.0 million, or 16.1% of revenue up 270 basis points
  • Generated $25.3 million in cash from operations or $22.2 million in free cash flow1

David Wilson, President and CEO of Columbus McKinnon, commented, “Demand for our products remains strong as we execute our Blueprint for Growth 2.0 strategy. Our team has worked tirelessly to address supply chain challenges with agility and has overcome the impacts of rapid inflation with additional price increases. We believe the Columbus McKinnon Business System (“CMBS”), which provides the framework to scale the organization, is becoming more robust and enabling improved results. Also of note, the Dorner acquisition has provided a foundation to evolve our business model into higher growth, less cyclical industries as we continue to expand in the Life Sciences, E-Commerce and Consumer Packaging markets. We expect to leverage this platform to further transform our Company into a high value, intelligent motion enterprise.”


1 Free cash flow is a non-GAAP measure defined as cash from operations less capital expenditures. See the accompanying discussion and reconciliation found in the Additional Data table in this release.

Second Quarter Fiscal 2022 Sales

($ in millions)

Q2 FY 22

 

Q2 FY 21

 

Change

 

% Change

Net sales

$

223.6

 

 

$

157.8

 

 

$

65.8

 

 

41.7

%

U.S. sales

$

130.7

 

 

$

84.7

 

 

$

46.0

 

 

54.3

%

% of total

58

%

 

54

%

 

 

 

 

Non-U.S. sales

$

92.9

 

 

$

73.1

 

 

$

19.8

 

 

27.1

%

% of total

42

%

 

46

%

 

 

 

 

For the quarter, sales increased $65.8 million, or 41.7%. The Dorner acquisition added $33.5 million in sales. In the U.S., volume improved $16.7 million, or 19.7%, and price improved $2.0 million, or 2.4%. U.S. sales related to the acquisition were $27.3 million. Outside the U.S., volume improved $9.7 million, or 13.3%, and price improved $2.0 million, or 2.7%. The Dorner acquisition added $6.3 million of sales outside the U.S. Foreign currency translation was favorable $1.9 million, or 1.2% of total sales.

Second Quarter Fiscal 2022 Operating Results

($ in millions)

Q2 FY 22

 

Q2 FY 21

 

Change

 

% Change

Gross profit

$

81.1

 

 

$

56.0

 

 

$

25.1

 

 

44.8

%

Gross margin

36.3

%

 

35.5

%

 

80 bps

 

 

Income from operations

$

23.7

 

 

$

15.8

 

 

$

7.8

 

 

49.6

%

Operating margin

10.6

%

 

10.0

%

 

60 bps

 

 

Adjusted income from operations*

$

25.5

 

 

$

14.0

 

 

$

11.5

 

 

81.9

%

Adjusted operating margin*

11.4

%

 

8.9

%

 

250 bps

 

 

Net income (loss)

$

15.2

 

 

$

(4.1)

 

 

$

19.3

 

 

NM

Net income (loss) margin

6.8

%

 

(2.6)

%

 

940 bps

 

 

Diluted EPS

$

0.53

 

 

$

(0.17)

 

 

$

0.70

 

 

NM

Adjusted EPS*

$

0.74

 

 

$

0.44

 

 

$

0.30

 

 

68.2

%

Adjusted EBITDA*

$

36.0

 

 

$

21.1

 

 

$

14.8

 

 

70.2

%

Adjusted EBITDA margin*

16.1

%

 

13.4

%

 

270 bps

 

 

*Adjusted operating income, 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.

Dorner added $3.4 million in adjusted operating income. Adjusted earnings per diluted share was $0.74 in the fiscal 2022 second quarter compared with $0.44 in the prior year. Adjusted EPS excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.

Third Quarter Fiscal 2022 Outlook

Columbus McKinnon expects third quarter fiscal 2022 sales of approximately $215 million at current exchange rates. This outlook includes the expectation that supply chain constraints continue and reflects typical seasonality, given holidays and fewer shipping days.

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.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 investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13723730. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, November 4. 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 intelligent motion solutions that moves the world forward and improves 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.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 supply chain challenges and inflation, the ability of the Company to scale the organization, achieve its Blueprint for Growth 2.0 strategy and execute CMBS; and the Company’s ability to achieve revenue expectations, global economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, 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, 2021

 

September 30, 2020

 

Change

Net sales

 

$

223,635

 

 

$

157,790

 

 

41.7

%

Cost of products sold

 

142,500

 

 

101,765

 

 

40.0

%

Gross profit

 

81,135

 

 

56,025

 

 

44.8

%

Gross profit margin

 

36.3

%

 

35.5

%

 

 

Selling expenses

 

24,157

 

 

18,563

 

 

30.1

%

% of net sales

 

10.8

%

 

11.8

%

 

 

General and administrative expenses

 

23,208

 

 

15,554

 

 

49.2

%

% of net sales

 

10.4

%

 

9.9

%

 

 

Research and development expenses

 

3,825

 

 

2,896

 

 

32.1

%

% of net sales

 

1.7

%

 

1.8

%

 

 

Amortization of intangibles

 

6,285

 

 

3,192

 

 

96.9

%

Income from operations

 

23,660

 

 

15,820

 

 

49.6

%

Operating margin

 

10.6

%

 

10.0

%

 

 

Interest and debt expense

 

4,587

 

 

3,018

 

 

52.0

%

Investment (income) loss

 

(115)

 

 

(357)

 

 

(67.8)

%

Foreign currency exchange (gain) loss

 

441

 

 

397

 

 

11.1

%

Other (income) expense, net

 

(539)

 

 

16,911

 

 

NM

Income (loss) before income tax expense (benefit)

 

19,286

 

 

(4,149)

 

 

NM

Income tax expense (benefit)

 

4,083

 

 

(45)

 

 

NM

Net income (loss)

 

$

15,203

 

 

$

(4,104)

 

 

NM

 

 

 

 

 

 

 

Average basic shares outstanding

 

28,418

 

 

23,883

 

 

19.0

%

Basic income (loss) per share

 

$

0.53

 

 

$

(0.17)

 

 

NM

 

 

 

 

 

 

 

Average diluted shares outstanding

 

28,756

 

 

23,883

 

 

20.4

%

Diluted income (loss) per share

 

$

0.53

 

 

$

(0.17)

 

 

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, 2021

 

September 30, 2020

 

Change

Net sales

 

$

437,099

 

 

$

296,860

 

 

47.2

%

Cost of products sold

 

281,901

 

 

196,038

 

 

43.8

%

Gross profit

 

155,198

 

 

100,822

 

 

53.9

%

Gross profit margin

 

35.5

%

 

34.0

%

 

 

Selling expenses

 

47,639

 

 

37,258

 

 

27.9

%

% of net sales

 

10.9

%

 

12.6

%

 

 

General and administrative expenses

 

53,351

 

 

33,983

 

 

57.0

%

% of net sales

 

12.2

%

 

11.4

%

 

 

Research and development expenses

 

7,408

 

 

5,665

 

 

30.8

%

% of net sales

 

1.7

%

 

1.9

%

 

 

Amortization of intangibles

 

12,394

 

 

6,307

 

 

96.5

%

Income from operations

 

34,406

 

 

17,609

 

 

95.4

%

Operating margin

 

7.9

%

 

5.9

%

 

 

Interest and debt expense

 

10,399

 

 

6,206

 

 

67.6

%

Cost of debt refinancing

 

14,803

 

 

 

 

NM

Investment (income) loss

 

(548)

 

 

(934)

 

 

(41.3)

%

Foreign currency exchange (gain) loss

 

535

 

 

481

 

 

11.2

%

Other (income) expense, net

 

(289)

 

 

19,937

 

 

NM

Income (loss) before income tax expense (benefit)

 

9,506

 

 

(8,081)

 

 

NM

Income tax expense (benefit)

 

1,566

 

 

(1,008)

 

 

NM

Net income (loss)

 

$

7,940

 

 

$

(7,073)

 

 

NM

 

 

 

 

 

 

 

Average basic shares outstanding

 

27,594

 

 

23,843

 

 

15.7

%

Basic income (loss) per share

 

$

0.29

 

 

$

(0.30)

 

 

NM

 

 

 

 

 

 

 

Average diluted shares outstanding

 

27,957

 

 

23,843

 

 

17.3

%

Diluted income (loss) per share

 

$

0.28

 

 

$

(0.30)

 

 

NM

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.06

 

 

$

0.06

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30, 2021

 

March 31, 2021

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

105,311

 

 

$

202,127

 

Trade accounts receivable

 

125,451

 

 

105,464

 

Inventories

 

147,925

 

 

111,488

 

Prepaid expenses and other

 

28,926

 

 

22,763

 

Total current assets

 

407,613

 

 

441,842

 

 

 

 

 

 

Property, plant, and equipment, net

 

97,117

 

 

74,753

 

Goodwill

 

615,329

 

 

331,176

 

Other intangibles, net

 

392,700

 

 

213,362

 

Marketable securities

 

10,072

 

 

7,968

 

Deferred taxes on income

 

1,960

 

 

20,080

 

Other assets

 

61,184

 

 

61,251

 

Total assets

 

$

1,585,975

 

 

$

1,150,432

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

71,458

 

 

$

68,593

 

Accrued liabilities

 

104,924

 

 

110,816

 

Current portion of long-term debt and finance lease obligations

 

60,515

 

 

4,450

 

Total current liabilities

 

236,897

 

 

183,859

 

 

 

 

 

 

Term loan and finance lease obligations

 

392,728

 

 

244,504

 

Other non-current liabilities

 

221,192

 

 

191,920

 

Total liabilities

 

850,817

 

 

620,283

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

284

 

 

240

 

Additional paid-in capital

 

499,758

 

 

296,093

 

Retained earnings

 

300,036

 

 

293,802

 

Accumulated other comprehensive loss

 

(64,920)

 

 

(59,986)

 

Total shareholders’ equity

 

735,158

 

 

530,149

 

Total liabilities and shareholders’ equity

 

$

1,585,975

 

 

$

1,150,432

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 

 

 

Six Months Ended

 

 

September 30, 2021

 

September 30, 2020

Operating activities:

 

 

 

 

Net income (loss)

 

$

7,940

 

 

$

(7,073)

 

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

 

 

 

 

Depreciation and amortization

 

20,969

 

 

14,210

 

Deferred income taxes and related valuation allowance

 

(1,235)

 

 

(6,745)

 

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

 

(462)

 

 

(557)

 

Stock based compensation

 

5,504

 

 

3,989

 

Amortization of deferred financing costs

 

867

 

 

1,327

 

Cost of debt refinancing

 

14,803

 

 

 

Loss (gain) on hedging instruments

 

672

 

 

 

Non-cash pension settlement expense

 

 

 

19,046

 

Gain on sale of building

 

(375)

 

 

(2,638)

 

Non-cash lease expense

 

3,939

 

 

3,785

 

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

 

 

 

 

Trade accounts receivable

 

(1,709)

 

 

33,594

 

Inventories

 

(21,959)

 

 

18,987

 

Prepaid expenses and other

 

(2,779)

 

 

(1,627)

 

Other assets

 

42

 

 

570

 

Trade accounts payable

 

(6,274)

 

 

(20,078)

 

Accrued liabilities

 

1,908

 

 

(7,895)

 

Non-current liabilities

 

(3,909)

 

 

(1,952)

 

Net cash provided by (used for) operating activities

 

17,942

 

 

46,943

 

 

 

 

 

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

2,734

 

 

1,034

 

Purchases of marketable securities

 

(4,768)

 

 

(1,759)

 

Capital expenditures

 

(6,752)

 

 

(2,779)

 

Proceeds from sale of building, net of transaction costs

 

461

 

 

5,453

 

Proceeds from insurance reimbursement

 

482

 

 

 

Purchase of business, net of cash acquired

 

(472,954)

 

 

 

Dividend received from equity method investment

 

 

 

587

 

Net cash provided by (used for) investing activities

 

(480,797)

 

 

2,536

 

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from issuance of common stock

 

1,412

 

 

429

 

Borrowings under line-of-credit agreements

 

 

 

25,000

 

Repayment of debt

 

(461,286)

 

 

(2,225)

 

Proceeds from issuance of long-term debt

 

650,000

 

 

 

Proceeds from equity offering

 

207,000

 

 

 

Fees related to debt and equity offering

 

(25,292)

 

 

(826)

 

Cash inflows from hedging activities

 

7,007

 

 

 

Cash outflows from hedging activities

 

(6,927)

 

 

 

Payment of dividends

 

(3,145)

 

 

(2,860)

 

Other

 

(1,909)

 

 

(982)

 

Net cash provided by (used for) financing activities

 

366,860

 

 

18,536

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

(821)

 

 

4,091

 

 

 

 

 

 

Net change in cash and cash equivalents

 

(96,816)

 

 

72,106

 

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

 

202,377

 

 

114,700

 

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

 

$

105,561

 

 

$

186,806

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2022 Sales Bridge

 

 

 

Quarter

 

Year To Date

($ in millions)

 

$ Change

 

% Change

 

$ Change

 

% Change

Fiscal 2021 Sales

 

$

157.8

 

 

 

 

$

296.9

 

 

 

Acquisitions

 

33.5

 

 

21.3

%

 

67.7

 

 

22.8

%

Volume

 

26.4

 

 

16.7

%

 

57.7

 

 

19.4

%

Pricing

 

4.0

 

 

2.5

%

 

6.0

 

 

2.0

%

Foreign currency translation

 

1.9

 

 

1.2

%

 

8.8

 

 

3.0

%

Total change

 

$

65.8

 

 

41.7

%

 

$

140.2

 

 

47.2

%

Fiscal 2022 Sales

 

$

223.6

 

 

 

 

$

437.1

 

 

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2022 Gross Profit Bridge

 

($ in millions)

Quarter

 

Year To Date

Fiscal 2021 Gross Profit

$

56.0

 

 

$

100.8

 

Acquisition

13.3

 

 

27.3

 

Sales volume and mix

8.2

 

 

19.9

 

Productivity, net of other cost changes

5.5

 

 

8.2

 

Foreign currency translation

0.6

 

 

3.0

 

Prior year factory closure costs

0.5

 

 

2.4

 

Pricing, net of material cost inflation

0.9

 

 

1.6

 

Prior year business realignment costs

 

 

0.3

 

Acquisition integration costs

 

 

(0.5)

 

Business realignment costs

(0.9)

 

 

(0.9)

 

Tariffs

(0.8)

 

 

(1.7)

 

Prior year gain on sale of building

(2.2)

 

 

(2.2)

 

Acquisition inventory step-up expense

 

 

(3.0)

 

Total change

25.1

 

 

54.4

 

Fiscal 2022 Gross Profit

$

81.1

 

 

$

155.2

 

U.S. Shipping Days by Quarter

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Total

FY 22

 

63

 

64

 

61

 

63

 

251

 

 

 

 

 

 

 

 

 

 

 

FY 21

 

63

 

64

 

61

 

63

 

251

COLUMBUS McKINNON CORPORATION

Additional Data - UNAUDITED

 

 

 

September 30, 2021

 

June 30, 2021

 

March 31, 2021

 

September 30, 2020

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Backlog

 

$

255.6

 

 

 

$

247.4

 

 

 

$

171.7

 

 

 

$

146.6

 

 

Long-term backlog

 

 

 

 

 

 

 

 

 

 

 

 

Expected to ship beyond 3 months

 

$

110.5

 

 

 

$

107.3

 

 

 

$

68.0

 

 

 

$

60.8

 

 

Long-term backlog as % of total backlog

 

43.2

 

%

 

43.4

 

%

 

39.6

 

%

 

41.5

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

 

 

 

Days sales outstanding

 

51.0

 

days

 

52.5

 

days

 

51.5

 

days

 

53.4

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory turns per year

 

 

 

 

 

 

 

 

 

 

 

 

(based on cost of products sold)

 

3.9

 

turns

 

4.0

 

turns

 

4.4

 

turns

 

3.6

 

turns

Days' inventory

 

94.7

 

days

 

90.8

 

days

 

83.3

 

days

 

100.5

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

 

Days payables outstanding

 

54.3

 

days

 

52.4

 

days

 

58.7

 

days

 

41.0

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Working capital as a % of sales

 

14.4

 

%

 

12.5

 

%

 

9.3

 

%

 

14.1

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

$

25.3

 

 

 

$

(7.4)

 

 

 

$

26.9

 

 

 

$

37.4

 

 

Capital expenditures

 

$

3.1

 

 

 

$

3.6

 

 

 

$

6.4

 

 

 

$

1.7

 

 

Free cash flow (1)

 

$

22.2

 

 

 

$

(11.0)

 

 

 

$

20.5

 

 

 

$

35.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt to total capitalization percentage

 

38.1

 

%

 

38.8

 

%

 

32.0

 

%

 

36.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt, net of cash, to net total capitalization

 

32.1

 

%

 

33.8

 

%

 

8.1

 

%

 

15.6

 

%

(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.

COLUMBUS McKINNON CORPORATION

Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit

($ in thousands, except per share data)

 

 

Three Months Ended September 30,

 

Six Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

GAAP gross profit

$

81,135

 

 

$

56,025

 

 

$

155,198

 

 

$

100,822

 

Add back (deduct):

 

 

 

 

 

 

 

Acquisition inventory step-up expense

 

 

 

 

2,981

 

 

 

Business realignment costs

914

 

 

 

 

914

 

 

329

 

Acquisition integration costs

 

 

 

 

521

 

 

 

Factory closures

 

 

493

 

 

 

 

2,421

 

Gain on sale of building

 

 

(2,189)

 

 

 

 

(2,189)

 

Non-GAAP adjusted gross profit

$

82,049

 

 

$

54,329

 

 

$

159,614

 

 

$

101,383

 

 

 

 

 

 

 

 

 

Sales

$

223,635

 

 

$

157,790

 

 

$

437,099

 

 

$

296,860

 

Gross margin - GAAP

36.3

%

 

35.5

%

 

35.5

%

 

34.0

%

Adjusted gross margin - Non-GAAP

36.7

%

 

34.4

%

 

36.5

%

 

34.2

%

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, except per share data)

 

 

Three Months Ended September 30,

 

Six Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

GAAP income from operations

$

23,660

 

 

$

15,820

 

 

$

34,406

 

 

$

17,609

 

Add back (deduct):

 

 

 

 

 

 

 

Acquisition deal and integration costs

632

 

 

 

 

9,874

 

 

 

Acquisition inventory step-up expense

 

 

 

 

2,981

 

 

 

Business realignment costs

1,200

 

 

 

 

1,823

 

 

821

 

Factory closures

 

 

747

 

 

 

 

3,003

 

Insurance recovery legal costs

 

 

88

 

 

 

 

229

 

Gain on sale of building

 

 

(2,638)

 

 

 

 

(2,638)

 

Non-GAAP adjusted income from operations

$

25,492

 

 

$

14,017

 

 

$

49,084

 

 

$

19,024

 

 

 

 

 

 

 

 

 

Sales

$

223,635

 

 

$

157,790

 

 

$

437,099

 

 

$

296,860

 

Operating margin - GAAP

10.6

%

 

10.0

%

 

7.9

%

 

5.9

%

Adjusted operating margin - Non-GAAP

11.4

%

 

8.9

%

 

11.2

%

 

6.4

%

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 September 30,

 

Six Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

GAAP net income (loss)

$

15,203

 

 

$

(4,104)

 

 

$

7,940

 

 

$

(7,073)

 

Add back (deduct):

 

 

 

 

 

 

 

Amortization of intangibles

6,285

 

 

3,192

 

 

12,394

 

 

6,307

 

Cost of debt refinancing

 

 

 

 

14,803

 

 

 

Acquisition deal and integration costs

632

 

 

 

 

9,874

 

 

 

Acquisition inventory step-up expense

 

 

 

 

2,981

 

 

 

Business realignment costs

1,200

 

 

 

 

1,823

 

 

821

 

Non-cash pension settlement expense

 

 

16,324

 

 

 

 

19,046

 

Factory closures

 

 

747

 

 

 

 

3,003

 

Insurance recovery legal costs

 

 

88

 

 

 

 

229

 

Gain on sale of building

 

 

(2,638)

 

 

 

 

(2,638)

 

Normalize tax rate to 22% (1)

(1,946)

 

 

(3,029)

 

 

(9,738)

 

 

(5,119)

 

Non-GAAP adjusted net income

$

21,374

 

 

$

10,580

 

 

$

40,077

 

 

$

14,576

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

28,756

 

 

24,123

 

 

27,957

 

 

24,030

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share - GAAP

$

0.53

 

 

$

(0.17)

 

 

$

0.28

 

 

$

(0.30)

 

 

 

 

 

 

 

 

 

Diluted income per share - Non-GAAP

$

0.74

 

 

$

0.44

 

 

$

1.43

 

 

$

0.61

 

(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, 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 September 30,

 

Six Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

GAAP net income (loss)

$

15,203

 

 

$

(4,104)

 

 

$

7,940

 

 

$

(7,073)

 

Add back (deduct):

 

 

 

 

 

 

 

Income tax expense (benefit)

4,083

 

 

(45)

 

 

1,566

 

 

(1,008)

 

Interest and debt expense

4,587

 

 

3,018

 

 

10,399

 

 

6,206

 

Investment (income) loss

(115)

 

 

(357)

 

 

(548)

 

 

(934)

 

Foreign currency exchange (gain) loss

441

 

 

397

 

 

535

 

 

481

 

Other (income) expense, net

(539)

 

 

16,911

 

 

(289)

 

 

19,937

 

Depreciation and amortization expense

10,502

 

 

7,129

 

 

20,969

 

 

14,210

 

Cost of debt refinancing

 

 

 

 

14,803

 

 

 

Acquisition deal and integration costs

632

 

 

 

 

9,874

 

 

 

Acquisition inventory step-up expense

 

 

 

 

2,981

 

 

 

Business realignment costs

1,200

 

 

 

 

1,823

 

 

821

 

Factory closures

 

 

747

 

 

 

 

3,003

 

Insurance recovery legal costs

 

 

88

 

 

 

 

229

 

Gain on sale of building

 

 

(2,638)

 

 

 

 

(2,638)

 

Non-GAAP adjusted EBITDA

$

35,994

 

 

$

21,146

 

 

$

70,053

 

 

$

33,234

 

 

 

 

 

 

 

 

 

Sales

$

223,635

 

 

$

157,790

 

 

$

437,099

 

 

$

296,860

 

Net income (loss) margin - GAAP

6.8

%

 

(2.6)

%

 

1.8

%

 

(2.4)

%

Adjusted EBITDA margin - Non-GAAP

16.1

%

 

13.4

%

 

16.0

%

 

11.2

%

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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