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Columbus McKinnon Reports Financial Results for Third Quarter Fiscal Year 2021

01/28/2021

BUFFALO, N.Y.--(BUSINESS WIRE)-- Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion control products, technologies and services for material handling, today announced financial results for its fiscal year 2021 third quarter, which ended December 31, 2020.

Third Quarter Highlights

  • Evolution of strategy and Columbus McKinnon Business System (CMBS) delivered solid operating results
  • Revenue of $166.5 million was up 5.5% compared with the trailing second quarter
  • Operating income was $10.4 million with adjusted operating income1 of $11.2 million
  • Strong cash generation of $25.0 million provided by operating activities; Free cash flow of $21.9 million2
  • Backlog grew to $152.4 million, up 22% over prior-year period and 4% sequentially
  • Pivoting to growth with focus on organic initiatives and acquisition pipeline

David Wilson, President and CEO of Columbus McKinnon, commented, “We delivered solid results in adverse conditions with revenue exceeding our expectations. Of note, our ability to generate cash was demonstrated with free cash flow2 of $22 million. We are excited about what the future holds even as we continue to operate in a less than ideal external environment. We are optimistic that growth will accelerate in fiscal 2022 as demand improves and channel partners replenish inventories. Given current macroeconomic forecasts, we expect to return to more normalized revenue levels by this time next year. In the meantime, we are consistently strengthening our earnings power by driving operational excellence with tools such as 80/20. In fact, we have realized $9 million in contributions to operating income from these efforts this fiscal year.”

He continued, “Even as we have been navigating this complex environment, we are evolving our strategy, now defined as Blueprint for Growth 2.0. The Core Growth Framework we are creating is underpinned by the advancement of CMBS, which develops core competencies and enables us to scale. Our organic growth initiatives, which include improvements in customer experience, new product development, and channel expansion, are centered on our customers’ requirements for continuous improvement in productivity, safety and uptime. We are realizing success with our product launches and believe we are enhancing our competitive position in our markets. We are also actively working our acquisition pipeline and see the potential to expand our reach into growth markets by building on our expertise in intelligent motion for material handling.”

1 Adjusted operating income is a non-GAAP measure. See the accompanying discussion and reconciliation table in this release regarding adjusted operating income.
2 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.

Third Quarter Fiscal 2021 Sales

($ in millions)

Q3 FY 21

 

Q3 FY 20

 

Change

 

% Change

Net sales

$

166.5

 

 

$

199.4

 

 

$

(32.9)

 

 

(16.5)

%

U.S. sales

$

87.6

 

 

$

108.4

 

 

$

(20.8)

 

 

(19.2)

%

% of total

53

%

 

54

%

 

 

 

 

Non-U.S. sales

$

78.9

 

 

$

91.0

 

 

$

(12.1)

 

 

(13.3)

%

% of total

47

%

 

46

%

 

 

 

 

Compared with the prior-year period, lower volume reflects the global economic impact of the COVID-19 pandemic. A 0.8% price improvement in the U.S. modestly helped to offset volume declines. Outside the U.S., a $3.0 million, or 3.3%, positive impact from foreign currency translation and price improvement of 1.1% partially offset lower volumes.

Compared with the trailing second quarter, sales improved 5.5% with short cycle sales up 5.6% and project sales up 5.5%.

Third Quarter Fiscal 2021 Operating Results

($ in millions)

Q3 FY 21

 

Q3 FY 20

 

Change

 

% Change

Gross profit

$

55.3

 

 

$

67.9

 

 

$

(12.6)

 

 

(18.5)

%

Gross margin

33.2

%

 

34.0

%

 

(80) bps

 

 

Income from operations

$

10.4

 

 

$

20.9

 

 

$

(10.4)

 

 

(50.0)

%

Operating margin

6.3

%

 

10.5

%

 

(420) bps

 

 

Adjusted income from operations*

$

11.2

 

 

$

23.1

 

 

$

(12.0)

 

 

(51.8)

%

Adjusted operating margin*

6.7

%

 

11.6

%

 

(490) bps

 

 

Net income (loss)

$

6.6

 

 

$

15.3

 

 

$

(8.7)

 

 

(56.8)

%

Diluted EPS

$

0.27

 

 

$

0.63

 

 

$

(0.36)

 

 

(57.1)

%

Net income margin

4.0

%

 

7.6

%

 

(360) bps

 

 

Adjusted EBITDA*

$

18.1

 

 

$

30.4

 

 

$

(12.2)

 

 

(40.3)

%

Adjusted EBITDA margin*

10.9

%

 

15.2

%

 

(430) bps

 

 

*Adjusted operating income, adjusted operating margin as well as adjusted EBITDA and adjusted EBITDA marginare non-GAAP measures. Adjusted EBITDA is defined as adjusted operating income plus depreciation and amortization.See accompanying discussion and reconciliation tables in this release regarding adjusted operating income and adjusted operating margin as well as a reconciliation of adjusted EBITDA to GAAP net income (loss).

Fourth Quarter Fiscal 2021 Outlook

The Company expects fourth quarter fiscal 2021 sales to be within a range of approximately $175 million to $180 million at current exchange rates.

Mr. Wilson concluded, “We are encouraged by early indications of an improving landscape and energized with the evolution of our strategy. We have many strengths to leverage as we shift our strategic lens to be more outside-in focused. Importantly, we have identified that there is significant potential to strengthen, grow, expand and even to reimagine our core. We look forward to providing an update on Blueprint for Growth 2.0 in the first quarter of fiscal 2022.”

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 https://investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13714791. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, February 4, 2021. 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 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 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 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

 

 

 

 

December 31,
2020

 

December 31,
2019

 

Change

Net sales

 

$

166,547

 

 

$

199,355

 

 

(16.5)

%

Cost of products sold

 

111,232

 

 

131,483

 

 

(15.4)

%

Gross profit

 

55,315

 

 

67,872

 

 

(18.5)

%

Gross profit margin

 

33.2

%

 

34.0

%

 

 

Selling expenses

 

18,829

 

 

23,169

 

 

(18.7)

%

% of net sales

 

11.3

%

 

11.6

%

 

 

General and administrative expenses

 

19,859

 

 

17,960

 

 

10.6

%

% of net sales

 

11.9

%

 

9.0

%

 

 

Research and development expenses

 

3,038

 

 

2,628

 

 

15.6

%

% of net sales

 

1.8

%

 

1.3

%

 

 

Amortization of intangibles

 

3,142

 

 

3,229

 

 

(2.7)

%

Income from operations

 

10,447

 

 

20,886

 

 

(50.0)

%

Operating margin

 

6.3

%

 

10.5

%

 

 

Interest and debt expense

 

2,986

 

 

3,423

 

 

(12.8)

%

Investment (income) loss

 

(495)

 

 

(408)

 

 

21.3

%

Foreign currency exchange (gain) loss

 

602

 

 

188

 

 

220.2

%

Other (income) expense, net

 

144

 

 

199

 

 

(27.6)

%

Income (loss) before income tax expense (benefit)

 

7,210

 

 

17,484

 

 

(58.8)

%

Income tax expense (benefit)

 

616

 

 

2,234

 

 

(72.4)

%

Net income (loss)

 

$

6,594

 

 

$

15,250

 

 

(56.8)

%

 

 

 

 

 

 

 

Average basic shares outstanding

 

23,928

 

 

23,679

 

 

1.1

%

Basic income (loss) per share

 

$

0.28

 

 

$

0.64

 

 

(56.3)

%

 

 

 

 

 

 

 

Average diluted shares outstanding

 

24,201

 

 

24,031

 

 

0.7

%

Diluted income (loss) per share

 

$

0.27

 

 

$

0.63

 

 

(57.1)

%

 

 

 

 

 

 

 

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)

 

 

 

Nine Months Ended

 

 

 

 

December 31,
2020

 

December 31,
2019

 

Change

Net sales

 

$

463,407

 

 

$

619,676

 

 

(25.2)

%

Cost of products sold

 

307,270

 

 

402,699

 

 

(23.7)

%

Gross profit

 

156,137

 

 

216,977

 

 

(28.0)

%

Gross profit margin

 

33.7

%

 

35.0

%

 

 

Selling expenses

 

56,087

 

 

68,801

 

 

(18.5)

%

% of net sales

 

12.1

%

 

11.1

%

 

 

General and administrative expenses

 

53,842

 

 

56,713

 

 

(5.1)

%

% of net sales

 

11.6

%

 

9.2

%

 

 

Research and development expenses

 

8,703

 

 

8,419

 

 

3.4

%

% of net sales

 

1.9

%

 

1.4

%

 

 

Loss on sales of businesses

 

 

 

176

 

 

NM

Amortization of intangibles

 

9,449

 

 

9,708

 

 

(2.7)

%

Income from operations

 

28,056

 

 

73,160

 

 

(61.7)

%

Operating margin

 

6.1

%

 

11.8

%

 

 

Interest and debt expense

 

9,192

 

 

11,034

 

 

(16.7)

%

Investment (income) loss

 

(1,429)

 

 

(939)

 

 

52.2

%

Foreign currency exchange (gain) loss

 

1,083

 

 

(518)

 

 

NM

Other (income) expense, net

 

20,081

 

 

618

 

 

3,149.4

%

Income (loss) before income tax expense (benefit)

 

(871)

 

 

62,965

 

 

NM

Income tax expense (benefit)

 

(392)

 

 

12,537

 

 

NM

Net income (loss)

 

$

(479)

 

 

$

50,428

 

 

NM

 

 

 

 

 

 

 

Average basic shares outstanding

 

23,871

 

 

23,581

 

 

1.2

%

Basic income (loss) per share

 

$

(0.02)

 

 

$

2.14

 

 

NM

 

 

 

 

 

 

 

Average diluted shares outstanding

 

23,871

 

 

23,925

 

 

(0.2)

%

Diluted income (loss) per share

 

$

(0.02)

 

 

$

2.11

 

 

NM

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.12

 

 

$

0.12

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

December 31, 2020

 

March 31, 2020

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

187,626

 

 

$

114,450

 

Trade accounts receivable

 

94,177

 

 

123,743

 

Inventories

 

113,446

 

 

127,373

 

Prepaid expenses and other

 

18,850

 

 

17,180

 

Total current assets

 

414,099

 

 

382,746

 

 

 

 

 

 

Property, plant, and equipment, net

 

72,304

 

 

79,473

 

Goodwill

 

338,995

 

 

319,679

 

Other intangibles, net

 

221,741

 

 

217,962

 

Marketable securities

 

7,925

 

 

7,322

 

Deferred taxes on income

 

27,777

 

 

26,281

 

Other assets

 

64,545

 

 

59,809

 

Total assets

 

$

1,147,386

 

 

$

1,093,272

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

49,576

 

 

$

57,289

 

Accrued liabilities

 

90,086

 

 

93,585

 

Current portion of long-term debt

 

4,450

 

 

4,450

 

Total current liabilities

 

144,112

 

 

155,324

 

 

 

 

 

 

Term loan and revolving credit facility

 

245,092

 

 

246,856

 

Other non-current liabilities

 

260,858

 

 

227,507

 

Total liabilities

 

650,062

 

 

629,687

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

240

 

 

238

 

Additional paid-in capital

 

293,869

 

 

287,256

 

Retained earnings

 

287,095

 

 

290,441

 

Accumulated other comprehensive loss

 

(83,880)

 

 

(114,350)

 

Total shareholders’ equity

 

497,324

 

 

463,585

 

Total liabilities and shareholders’ equity

 

$

1,147,386

 

 

$

1,093,272

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows – UNAUDITED

(In thousands)

 

 

 

Nine Months Ended

 

 

December 31,
2020

 

December 31,
2019

Operating activities:

 

 

 

 

Net income (loss)

 

$

(479)

 

 

$

50,428

 

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

 

 

 

 

Depreciation and amortization

 

21,203

 

 

21,991

 

Deferred income taxes and related valuation allowance

 

(7,344)

 

 

1,247

 

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

 

(1,262)

 

 

(602)

 

Stock based compensation

 

5,840

 

 

3,510

 

Amortization of deferred financing costs

 

1,986

 

 

1,782

 

Loss on sales of businesses

 

 

 

176

 

Non-cash pension settlement expense

 

18,933

 

 

 

Gain on sale of building

 

(2,638)

 

 

 

Non-cash lease expense

 

5,721

 

 

6,136

 

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

 

 

 

 

Trade accounts receivable

 

34,254

 

 

3,989

 

Inventories

 

20,786

 

 

10,870

 

Prepaid expenses and other

 

(1,564)

 

 

(3,224)

 

Other assets

 

545

 

 

726

 

Trade accounts payable

 

(8,764)

 

 

(3,013)

 

Accrued liabilities

 

(9,922)

 

 

(11,458)

 

Non-current liabilities

 

(5,347)

 

 

(12,306)

 

Net cash provided by (used for) operating activities

 

71,948

 

 

70,252

 

 

 

 

 

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

4,231

 

 

4,908

 

Purchases of marketable securities

 

(4,067)

 

 

(4,961)

 

Capital expenditures

 

(5,904)

 

 

(6,761)

 

Proceeds from sale of building, net of transaction costs

 

5,453

 

 

 

Proceeds from insurance reimbursement

 

100

 

 

 

Dividend received from equity method investment

 

587

 

 

 

Proceeds from sale of fixed assets

 

446

 

 

51

 

Net (payments) proceeds from sales of businesses

 

 

 

(214)

 

Net cash provided by (used for) investing activities

 

846

 

 

(6,977)

 

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from issuance of common stock

 

1,828

 

 

4,457

 

Borrowings under line-of-credit agreements

 

25,000

 

 

 

Payments under line-of-credit agreements

 

(25,000)

 

 

 

Repayment of debt

 

(3,338)

 

 

(50,000)

 

Fees paid for revolver extension

 

(826)

 

 

 

Payment of dividends

 

(4,294)

 

 

(4,245)

 

Other

 

(1,050)

 

 

(643)

 

Net cash provided by (used for) financing activities

 

(7,680)

 

 

(50,431)

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

8,062

 

 

77

 

 

 

 

 

 

Net change in cash and cash equivalents

 

73,176

 

 

12,921

 

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

 

114,700

 

 

71,343

 

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

 

$

187,876

 

 

$

84,264

 

COLUMBUS McKINNON CORPORATION

Q3 FY 2021 Sales Bridge

 

 

 

Quarter

 

Year To Date

($ in millions)

 

$ Change

 

% Change

 

$ Change

 

% Change

Fiscal 2020 Sales

 

$

199.4

 

 

 

 

$

619.7

 

 

 

Volume

 

(37.8)

 

 

(19.0)

%

 

(166.3)

 

 

(26.8)

%

Pricing

 

1.9

 

 

1.0

%

 

6.7

 

 

1.1

%

Foreign currency translation

 

3.0

 

 

1.5

%

 

3.3

 

 

0.5

%

Total change

 

$

(32.9)

 

 

(16.5)

%

 

$

(156.3)

 

 

(25.2)

%

Fiscal 2021 Sales

 

$

166.5

 

 

 

 

$

463.4

 

 

 

COLUMBUS McKINNON CORPORATION

Q3 FY 2021 Gross Profit Bridge

   

($ in millions)

 

Quarter

 

Year To Date

Fiscal 2020 Gross Profit

 

$

67.9

 

 

$

217.0

 

Pricing, net of material cost inflation

 

1.9

 

 

6.6

 

Gain on sale of building

 

 

 

2.2

 

Tariffs

 

0.2

 

 

1.6

 

Foreign currency translation

 

1.1

 

 

1.3

 

Product liability

 

(0.1)

 

 

(0.1)

 

Business realignment costs

 

(0.1)

 

 

(0.3)

 

Insurance settlement

 

(0.1)

 

 

(0.4)

 

Factory closures

 

0.4

 

 

(1.2)

 

Productivity, net of other cost changes

 

(3.1)

 

 

(11.4)

 

Sales volume and mix

 

(12.8)

 

 

(59.2)

 

Total change

 

$

(12.6)

 

 

$

(60.9)

 

Fiscal 2021 Gross Profit

 

$

55.3

 

 

$

156.1

 

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

Additional Data – UNAUDITED

 

 

 

December 31,
2020

 

September 30,
2020

 

March 31,
2020

 

December 31,
2019

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Backlog

 

$

152.4

 

 

 

$

146.6

 

 

 

$

131.0

 

 

 

$

125.3

 

 

Long-term backlog

 

 

 

 

 

 

 

 

 

 

 

 

Expected to ship beyond 3 months

 

$

62.1

 

 

 

$

60.8

 

 

 

$

49.1

 

 

 

$

51.3

 

 

Long-term backlog as % of total backlog

 

40.7

 

%

 

41.5

 

%

 

37.5

 

%

 

40.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

 

 

 

Days sales outstanding

 

51.5

 

days

 

53.4

 

days

 

59.4

 

days

 

57.2

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory turns per year

 

 

 

 

 

 

 

 

 

 

 

 

(based on cost of products sold)

 

3.9

 

turns

 

3.6

 

turns

 

3.9

 

turns

 

3.9

 

turns

Days' inventory

 

93.1

 

days

 

100.5

 

days

 

94.3

 

days

 

94.0

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

 

Days payables outstanding

 

40.6

 

days

 

33.7

 

days

 

42.3

 

days

 

32.1

 

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Working capital as a % of sales (1)

 

13.3

 

%

 

14.1

 

%

 

14.5

 

%

 

16.5

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

$

25.0

 

 

 

$

37.4

 

 

 

$

36.5

 

 

 

$

32.4

 

 

Capital expenditures

 

$

3.1

 

 

 

$

1.7

 

 

 

$

2.7

 

 

 

$

1.9

 

 

Free cash flow (2)

 

$

21.9

 

 

 

$

35.7

 

 

 

$

33.9

 

 

 

$

30.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt to total capitalization percentage

 

33.4

 

%

 

36.4

 

%

 

35.2

 

%

 

34.2

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt, net of cash, to net total capitalization

 

11.1

 

%

 

15.6

 

%

 

22.8

 

%

 

25.7

 

%

(1) December 31, 2019 figure excludes Crane Equipment & Service, Inc. (CES) and Stahlhammer Bommern GmbH (STB), each of which were divested on February 28, 2019.

(2) 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
December 31,

 

Nine Months Ended
December 31,

 

2020

 

2019

 

2020

 

2019

GAAP gross profit

$

55,315

 

 

$

67,872

 

 

$

156,137

 

 

$

216,977

 

Add back (deduct):

 

 

 

 

 

 

 

Factory closures

250

 

 

696

 

 

2,671

 

 

1,451

 

Business realignment costs

237

 

 

123

 

 

566

 

 

263

 

Insurance settlement

 

 

(77)

 

 

 

 

(367)

 

Gain on sale of building

 

 

 

 

(2,189)

 

 

 

Non-GAAP adjusted gross profit

$

55,802

 

 

$

68,614

 

 

$

157,185

 

 

$

218,324

 

 

 

 

 

 

 

 

 

Sales

$

166,547

 

 

$

199,355

 

 

$

463,407

 

 

$

619,676

 

Gross margin - GAAP

33.2

%

 

34.0

%

 

33.7

%

 

35.0

%

Adjusted gross margin - Non-GAAP

33.5

%

 

34.4

%

 

33.9

%

 

35.2

%

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
December 31,

 

Nine Months Ended
December 31,

 

2020

 

2019

 

2020

 

2019

GAAP income from operations

$

10,447

 

 

$

20,886

 

 

$

28,056

 

 

$

73,160

 

Add back (deduct):

 

 

 

 

 

 

 

Factory closures

469

 

 

1,592

 

 

3,472

 

 

3,089

 

Business realignment costs

237

 

 

662

 

 

1,058

 

 

1,075

 

Insurance recovery legal costs

 

 

66

 

 

229

 

 

425

 

Loss on sales of businesses

 

 

 

 

 

 

176

 

Insurance settlement

 

 

(77)

 

 

 

 

(367)

 

Gain on sale of building

 

 

 

 

(2,638)

 

 

 

Non-GAAP adjusted income from operations

$

11,153

 

 

$

23,129

 

 

$

30,177

 

 

$

77,558

 

 

 

 

 

 

 

 

 

Sales

$

166,547

 

 

$

199,355

 

 

$

463,407

 

 

$

619,676

 

Operating margin - GAAP

6.3

%

 

10.5

%

 

6.1

%

 

11.8

%

Adjusted operating margin - Non-GAAP

6.7

%

 

11.6

%

 

6.5

%

 

12.5

%

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
December 31,

 

Nine Months Ended
December 31,

 

2020

 

2019

 

2020

 

2019

GAAP net income (loss)

$

6,594

 

 

$

15,250

 

 

$

(479)

 

 

$

50,428

 

Add back (deduct):

 

 

 

 

 

 

 

Non-cash pension settlement expense

 

 

 

 

19,046

 

 

 

Factory closures

469

 

 

1,592

 

 

3,472

 

 

3,089

 

Business realignment costs

237

 

 

662

 

 

1,058

 

 

1,075

 

Insurance recovery legal costs

 

 

66

 

 

229

 

 

425

 

Loss on sales of businesses

 

 

 

 

 

 

176

 

Insurance settlement

 

 

(77)

 

 

 

 

(367)

 

Gain on sale of building

 

 

 

 

(2,638)

 

 

 

Normalize tax rate to 22% (1)

(1,126)

 

 

(2,106)

 

 

(4,857)

 

 

(2,283)

 

Non-GAAP adjusted net income

$

6,174

 

 

$

15,387

 

 

$

15,831

 

 

$

52,543

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

24,201

 

 

24,031

 

 

24,088

 

 

23,925

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share - GAAP

$

0.27

 

 

$

0.63

 

 

$

(0.02)

 

 

$

2.11

 

 

 

 

 

 

 

 

 

Diluted income per share - Non-GAAP

$

0.26

 

 

$

0.64

 

 

$

0.66

 

 

$

2.20

 

(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
December 31,

 

Nine Months Ended
December 31,

 

2020

 

2019

 

2020

 

2019

GAAP net income (loss)

$

6,594

 

 

$

15,250

 

 

$

(479)

 

 

$

50,428

 

Add back (deduct):

 

 

 

 

 

 

 

Income tax expense (benefit)

616

 

 

2,234

 

 

(392)

 

 

12,537

 

Interest and debt expense

2,986

 

 

3,423

 

 

9,192

 

 

11,034

 

Investment (income) loss

(495)

 

 

(408)

 

 

(1,429)

 

 

(939)

 

Foreign currency exchange (gain) loss

602

 

 

188

 

 

1,083

 

 

(518)

 

Other (income) expense, net

144

 

 

199

 

 

20,081

 

 

618

 

Depreciation and amortization expense

6,993

 

 

7,244

 

 

21,203

 

 

21,991

 

Factory closures

469

 

 

1,592

 

 

3,472

 

 

3,089

 

Business realignment costs

237

 

 

662

 

 

1,058

 

 

1,075

 

Insurance recovery legal costs

 

 

66

 

 

229

 

 

425

 

Loss on sales of businesses

 

 

 

 

 

 

176

 

Insurance settlement

 

 

(77)

 

 

 

 

(367)

 

Gain on sale of building

 

 

 

 

(2,638)

 

 

 

Non-GAAP adjusted EBITDA

$

18,146

 

 

$

30,373

 

 

$

51,380

 

 

$

99,549

 

 

 

 

 

 

 

 

 

Sales

$

166,547

 

 

$

199,355

 

 

$

463,407

 

 

$

619,676

 

Net income (loss) margin - GAAP

4.0

%

 

7.6

%

 

(0.1)

%

 

8.1

%

Adjusted EBITDA margin - Non-GAAP

10.9

%

 

15.2

%

 

11.1

%

 

16.1

%

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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