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Columbus McKinnon Reports Record Operating Income for Second Quarter Fiscal Year 2023

10/27/2022

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 2023 second quarter, which ended September 30, 2022. Results include the addition of Garvey Corporation, which was acquired on December 1, 2021.

Second Quarter Highlights (compared with prior year period)

  • Delivered revenue of $232 million, up 8.5% on a constant currency basis
  • Produced record operating income of $27.4 million as regional realignment initiative delivered lower costs and improved collaboration across product categories
  • Realized earnings per diluted share of $0.49 and adjusted EPS* of $0.73
  • Achieved record adjusted EBITDA* margin of 16.8%
  • Demonstrated strength of cash generation capabilities with $17 million in cash from operations in the quarter

David Wilson, President and CEO of Columbus McKinnon, commented, “We produced another solid quarter as we execute our strategy to drive growth and improve our cost structure to deliver stronger earnings power and cash generation. We demonstrated progress toward our long-term objectives as we achieved record operating income and record adjusted EBITDA margin in the period. We had strong cash generation in the quarter as well, enabling us to continue to reduce debt and increase our financial flexibility. Importantly, we are leveraging secular tailwinds as our intelligent motion solutions address the trends in automation, productivity and supply chain regionalization.”

He added, “The expected benefits of our regional realignment are ahead of plan and visible on many fronts. The increased collaboration across product teams has resulted in new sales opportunities while the restructuring has also reduced costs. The interaction and engagement are especially important as we continue to address the challenges of supply chain shortages and the need for heightened communications with customers in these unusually unsettling times. Our focus is on execution, improving our customer experience and delivering results.”

*Adjusted EPS and adjusted EBITDA are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding the reconciliation of GAAP financials to non-GAAP measures.

Second Quarter Fiscal 2023 Sales

($ in millions)

 

Q2 FY 23

 

Q2 FY 22

 

Change

 

% Change

Net sales

 

$

231.7

 

 

$

223.6

 

 

$

8.1

 

 

3.6

%

U.S. sales

 

$

139.7

 

 

$

130.7

 

 

$

9.0

 

 

6.9

%

% of total

 

 

60

%

 

 

58

%

 

 

 

 

Non-U.S. sales

 

$

92.0

 

 

$

92.9

 

 

$

(0.9

)

 

(1.0

) %

% of total

 

 

40

%

 

 

42

%

 

 

 

 

For the quarter, sales increased $8.1 million, or 3.6%. The acquisition contributed $9.0 million in sales which helped to offset unfavorable foreign currency translation of $11.0 million, or 4.9% of total sales. In the U.S., price improved $7.6 million, or 5.8%, which offset the $4.5 million, or 3.4% decline in volume. U.S. sales related to the acquisition were $5.9 million. Outside the U.S., increased volume of $3.6 million, or 3.8%, price improvement of $3.4 million, or 3.7%, and the $3.1 million of sales related to the acquisitions mostly offset unfavorable foreign currency translation.

Second Quarter Fiscal 2023 Operating Results

($ in millions)

 

Q2 FY 23

 

Q2 FY 22

 

Change

 

% Change

Gross profit

 

$

86.3

 

 

$

81.1

 

 

$

5.2

 

 

6.4

%

Gross margin

 

 

37.2

%

 

 

36.3

%

 

90 bps

 

 

Adjusted gross profit*

 

$

86.3

 

 

$

82.0

 

 

$

4.3

 

 

5.2

%

Adjusted gross margin*

 

 

37.2

%

 

 

36.7

%

 

50 bps

 

 

Income from operations

 

$

27.4

 

 

$

23.7

 

 

$

3.7

 

 

15.6

%

Operating margin

 

 

11.8

%

 

 

10.6

%

 

120 bps

 

 

Adjusted income from operations*

 

$

28.6

 

 

$

25.5

 

 

$

3.1

 

 

12.2

%

Adjusted operating margin*

 

 

12.4

%

 

 

11.4

%

 

100 bps

 

 

Net income (loss)

 

$

14.1

 

 

$

15.2

 

 

$

(1.1

)

 

(7.2

) %

Net income (loss) margin

 

 

6.1

%

 

 

6.8

%

 

(70) bps

 

 

Diluted EPS

 

$

0.49

 

 

$

0.53

 

 

$

(0.04

)

 

(7.5

) %

Adjusted EPS*

 

$

0.73

 

 

$

0.74

 

 

$

(0.01

)

 

(1.4

) %

Adjusted EBITDA*

 

$

39.0

 

 

$

36.0

 

 

$

3.0

 

 

8.3

%

Adjusted EBITDA margin*

 

 

16.8

%

 

 

16.1

%

 

70 bps

 

 

*Adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted operating income, adjusted operating margin, adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA.

Adjusted earnings per diluted share of $0.73 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 2023 Outlook

Columbus McKinnon expects third quarter fiscal 2023 sales of approximately $225 million to $235 million at current exchange rates.

Mr. Wilson concluded, “We are being very intentional in our strategy deployment process to advance toward our growth and profitability goals. We believe we are a better business than we were just two years ago with a stronger earnings profile, a better product and market mix and a streamlined team that is intensely focused on execution. Although the macro environment is unsettling, we are deliberate in our actions to create value for our customers, execute our plans and deliver on our goals.”

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 13733206. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, November 3, 2022. Alternatively, an archived webcast of the call can be found on the Company’s website and a transcript of the call will be posted there once available.

About Columbus McKinnon

Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions that move the world forward and improve lives by efficiently and ergonomically moving, lifting, positioning and securing materials. Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations and digital power and motion control systems. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available at www.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 expected growth, future sales and EBITDA margins, and future potential to deliver results; the execution of its strategy and further transformation of the Company with stronger growth, less cyclicality and higher margins, and achievement of certain goals. These statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including the impact of supply chain challenges and inflation, the ability of the Company to scale the organization, achieve its financial targets including revenue and adjusted EBITDA margin, and to execute CMBS and the Core Growth Framework; global economic and business conditions affecting the industries served by the Company and its subsidiaries including COVID-19; the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the ability to expand into new markets and geographic regions, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded as current plans, estimates and beliefs. The Company assumes no obligation to update the forward-looking information contained in this release.

Financial tables follow.

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

Three Months Ended

 

 

 

 

September 30,
2022

 

September 30,
2021

 

Change

Net sales

 

$

231,740

 

 

$

223,635

 

 

3.6

%

Cost of products sold

 

$

145,430

 

 

$

142,500

 

 

2.1

%

Gross profit

 

 

86,310

 

 

 

81,135

 

 

6.4

%

Gross profit margin

 

 

37.2

%

 

 

36.3

%

 

 

Selling expenses

 

 

25,617

 

 

$

24,157

 

 

6.0

%

% of net sales

 

 

11.1

%

 

 

10.8

%

 

 

General and administrative expenses

 

 

21,413

 

 

$

23,208

 

 

(7.7

) %

% of net sales

 

 

9.2

%

 

 

10.4

%

 

 

Research and development expenses

 

 

5,461

 

 

$

3,825

 

 

42.8

%

% of net sales

 

 

2.4

%

 

 

1.7

%

 

 

Amortization of intangibles

 

 

6,447

 

 

$

6,285

 

 

2.6

%

Income from operations

 

$

27,372

 

 

$

23,660

 

 

15.7

%

Operating margin

 

 

11.8

%

 

 

10.6

%

 

 

Interest and debt expense

 

 

6,768

 

 

$

4,587

 

 

47.5

%

Investment (income) loss

 

 

312

 

 

$

(115

)

 

(371.3

) %

Foreign currency exchange (gain) loss

 

 

1,003

 

 

$

441

 

 

127.4

%

Other (income) expense, net

 

 

222

 

 

$

(539

)

 

(141.2

) %

Income (loss) before income tax expense (benefit)

 

$

19,067

 

 

$

19,286

 

 

(1.1

) %

Income tax expense (benefit)

 

 

4,953

 

 

$

4,083

 

 

21.3

%

Net income (loss)

 

$

14,114

 

 

$

15,203

 

 

(7.2

) %

 

 

 

 

 

 

 

Average basic shares outstanding

 

 

28,619

 

 

 

28,418

 

 

0.7

%

Basic income (loss) per share

 

$

0.49

 

 

$

0.53

 

 

(7.5

) %

 

 

 

 

 

 

 

Average diluted shares outstanding

 

 

28,748

 

 

 

28,756

 

 

%

Diluted income (loss) per share

 

$

0.49

 

 

$

0.53

 

 

(7.5

) %

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.07

 

 

$

0.06

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

Six Months Ended

 

 

 

 

September 30,
2022

 

September 30,
2021

 

Change

Net sales

 

$

452,027

 

 

$

437,099

 

 

3.4

%

Cost of products sold

 

$

283,191

 

 

$

281,901

 

 

0.5

%

Gross profit

 

 

168,836

 

 

 

155,198

 

 

8.8

%

Gross profit margin

 

 

37.4

%

 

 

35.5

%

 

 

Selling expenses

 

 

51,773

 

 

 

47,639

 

 

8.7

%

% of net sales

 

 

11.5

%

 

 

10.9

%

 

 

General and administrative expenses

 

 

43,299

 

 

 

53,351

 

 

(18.8

) %

% of net sales

 

 

9.6

%

 

 

12.2

%

 

 

Research and development expenses

 

 

10,591

 

 

 

7,408

 

 

43.0

%

% of net sales

 

 

2.3

%

 

 

1.7

%

 

 

Amortization of intangibles

 

 

12,982

 

 

 

12,394

 

 

4.7

%

Income from operations

 

 

50,191

 

 

 

34,406

 

 

45.9

%

Operating margin

 

 

11.1

%

 

 

7.9

%

 

 

Interest and debt expense

 

 

12,971

 

 

 

10,399

 

 

24.7

%

Cost of debt refinancing

 

 

 

 

 

14,803

 

 

(100.0

) %

Investment (income) loss

 

 

742

 

 

 

(548

)

 

(235.4

) %

Foreign currency exchange (gain) loss

 

 

2,206

 

 

 

535

 

 

312.3

%

Other (income) expense, net

 

 

(2,079

)

 

 

(289

)

 

619.4

%

Income (loss) before income tax expense (benefit)

 

 

36,351

 

 

 

9,506

 

 

282.4

%

Income tax expense (benefit)

 

 

13,846

 

 

 

1,566

 

 

784.2

%

Net income (loss)

 

 

22,505

 

 

 

7,940

 

 

183.4

%

 

 

 

 

 

 

 

Average basic shares outstanding

 

 

28,581

 

 

 

27,594

 

 

3.6

%

Basic income (loss) per share

 

$

0.79

 

 

$

0.29

 

 

172.4

%

 

 

 

 

 

 

 

Average diluted shares outstanding

 

 

28,733

 

 

 

27,957

 

 

2.8

%

Diluted income (loss) per share

 

$

0.78

 

 

$

0.28

 

 

178.6

%

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.07

 

 

$

0.06

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30,
2022

 

March 31, 2022

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

88,865

 

 

$

115,390

 

Trade accounts receivable

 

$

140,298

 

 

$

147,515

 

Inventories

 

$

192,789

 

 

$

172,139

 

Prepaid expenses and other

 

$

37,537

 

 

$

31,545

 

Total current assets

 

$

459,489

 

 

$

466,589

 

 

 

 

 

 

Property, plant, and equipment, net

 

$

92,617

 

 

$

97,926

 

Goodwill

 

$

627,850

 

 

$

648,849

 

Other intangibles, net

 

$

365,206

 

 

$

390,788

 

Marketable securities

 

$

10,183

 

 

$

10,294

 

Deferred taxes on income

 

$

2,265

 

 

$

2,313

 

Other assets

 

$

71,685

 

 

$

68,948

 

Total assets

 

$

1,629,295

 

 

$

1,685,707

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

76,584

 

 

$

90,881

 

Accrued liabilities

 

$

104,835

 

 

$

118,187

 

Current portion of long-term debt and finance lease obligations

 

$

40,580

 

 

$

40,551

 

Total current liabilities

 

$

221,999

 

 

$

249,619

 

 

 

 

 

 

Term loan and finance lease obligations

 

$

450,840

 

 

$

470,675

 

Other non-current liabilities

 

$

172,072

 

 

$

192,610

 

Total liabilities

 

$

844,911

 

 

$

912,904

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

$

286

 

 

$

285

 

Additional paid-in capital

 

$

508,948

 

 

$

506,074

 

Retained earnings

 

$

336,844

 

 

$

316,343

 

Accumulated other comprehensive loss

 

$

(61,694

)

 

$

(49,899

)

Total shareholders’ equity

 

$

784,384

 

 

$

772,803

 

Total liabilities and shareholders’ equity

 

$

1,629,295

 

 

$

1,685,707

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 

 

 

Six Months Ended

 

 

September 30,
2022

 

September 30,
2021

Operating activities:

 

 

 

 

Net income (loss)

 

$

22,505

 

 

$

7,940

 

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

 

 

 

 

Depreciation and amortization

 

$

20,893

 

 

$

20,969

 

Deferred income taxes and related valuation allowance

 

$

(698

)

 

$

(1,235

)

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

 

$

852

 

 

$

(462

)

Stock-based compensation

 

$

3,629

 

 

$

5,504

 

Amortization of deferred financing costs

 

$

860

 

 

$

867

 

Cost of debt refinancing

 

$

 

 

$

14,803

 

Loss (gain) on hedging instruments

 

$

(714

)

 

$

672

 

Gain on sale of building

 

$

(232

)

 

$

(375

)

Loss on retirement of fixed asset

 

$

175

 

 

$

 

Non-cash lease expense

 

$

3,843

 

 

$

3,939

 

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

 

 

 

 

Trade accounts receivable

 

$

381

 

 

$

(1,709

)

Inventories

 

$

(30,754

)

 

$

(21,959

)

Prepaid expenses and other

 

$

2,321

 

 

$

(2,779

)

Other assets

 

$

24

 

 

$

42

 

Trade accounts payable

 

$

(11,267

)

 

$

(6,274

)

Accrued liabilities

 

$

(3,124

)

 

$

1,908

 

Non-current liabilities

 

$

(2,545

)

 

$

(3,909

)

Net cash provided by (used for) operating activities

 

$

6,149

 

 

$

17,942

 

 

 

 

 

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

$

1,900

 

 

$

2,734

 

Purchases of marketable securities

 

$

(2,709

)

 

$

(4,768

)

Capital expenditures

 

$

(5,288

)

 

$

(6,752

)

Proceeds from sale of building, net of transaction costs

 

$

373

 

 

$

461

 

Proceeds from insurance reimbursement

 

$

 

 

$

482

 

Purchases of businesses, net of cash acquired

 

$

(1,616

)

 

$

(472,954

)

Dividend received from equity method investment

 

$

313

 

 

$

 

Net cash provided by (used for) investing activities

 

$

(7,027

)

 

$

(480,797

)

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from issuance of common stock

 

$

621

 

 

$

1,412

 

Repayment of debt

 

$

(20,264

)

 

$

(461,286

)

Proceeds from issuance of long-term debt

 

$

 

 

$

650,000

 

Proceeds from equity offering

 

$

 

 

$

207,000

 

Fees related to debt and equity offering

 

$

 

 

$

(25,292

)

Cash inflows from hedging activities

 

$

12,306

 

 

$

7,007

 

Cash outflows from hedging activities

 

$

(11,689

)

 

$

(6,927

)

Payment of dividends

 

$

(4,001

)

 

$

(3,145

)

Other

 

$

(1,375

)

 

$

(1,909

)

Net cash provided by (used for) financing activities

 

$

(24,402

)

 

$

366,860

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

$

(1,245

)

 

$

(821

)

 

 

 

 

 

Net change in cash and cash equivalents

 

$

(26,525

)

 

$

(96,816

)

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

 

$

115,640

 

 

$

202,377

 

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

 

$

89,115

 

 

$

105,561

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2023 Sales Bridge

 

 

 

Quarter To Date

 

Year To Date

($ in millions)

 

$ Change

 

% Change

 

$ Change

 

% Change

Fiscal 2022 Sales

 

$

223.6

 

 

 

 

$

437.1

 

 

 

Acquisition

 

 

9.0

 

 

4.0

%

 

 

17.5

 

 

4.0

%

Volume

 

 

(0.9

)

 

(0.4

) %

 

 

(5.2

)

 

(1.2

) %

Pricing

 

 

11.0

 

 

4.9

%

 

 

20.6

 

 

4.7

%

Foreign currency translation

 

 

(11.0

)

 

(4.9

) %

 

 

(18.0

)

 

(4.1

) %

Total change

 

$

8.1

 

 

3.6

%

 

$

14.9

 

 

3.4

%

Fiscal 2023 Sales

 

$

231.7

 

 

 

 

$

452.0

 

 

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2023 Gross Profit Bridge

 

($ in millions)

Quarter To Date

 

Year To Date

Fiscal 2022 Gross Profit

$

81.1

 

 

$

155.2

 

Acquisition

 

4.5

 

 

 

7.6

 

Price, net of material cost inflation

 

4.4

 

 

 

7.5

 

Prior year acquisition inventory step-up expense

 

 

 

 

3.0

 

Sales volume and mix

 

0.5

 

 

 

1.5

 

Prior year business realignment costs

 

0.9

 

 

 

0.9

 

Prior year acquisition integration costs

 

 

 

 

0.5

 

Productivity, net of other cost changes

 

(0.3

)

 

 

0.4

 

Tariffs

 

(0.7

)

 

 

(1.2

)

Foreign currency translation

 

(4.1

)

 

 

(6.6

)

Total change

 

5.2

 

 

 

13.6

 

Fiscal 2023 Gross Profit

$

86.3

 

 

$

168.8

 

U.S. Shipping Days by Quarter

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Total

FY 23

 

63

 

64

 

60

 

63

 

250

 

 

 

 

 

 

 

 

 

 

 

FY 22

 

63

 

64

 

61

 

63

 

251

COLUMBUS McKINNON CORPORATION

Additional Data - UNAUDITED

 

 

 

September 30,
2022

 

June 30, 2022

 

March 31, 2022

 

September 30,
2021

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Backlog

 

$

327.8

 

 

$

351.6

 

 

 

$

309.1

 

 

$

255.6

 

Long-term backlog

 

 

 

 

 

 

 

 

 

 

 

 

Expected to ship beyond 3 months

 

$

161.2

 

 

$

162.8

 

 

 

$

135.2

 

 

$

110.5

 

Long-term backlog as % of total backlog

 

 

49.2

%

 

 

46.3

 

%

 

 

43.7

%

 

 

43.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

 

 

 

Days sales outstanding

 

 

55.1

days

 

 

54.9

 

days

 

 

53.0

days

 

 

51.0

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory turns per year

 

 

 

 

 

 

 

 

 

 

 

 

(based on cost of products sold)

 

 

3.0

turns

 

 

2.9

 

turns

 

 

3.9

turns

 

 

3.9

turns

Days' inventory

 

 

121.0

days

 

 

125.4

 

days

 

 

93.6

days

 

 

94.7

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

 

Days payables outstanding

 

 

59.4

days

 

 

58.6

 

days

 

 

58.7

days

 

 

54.3

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Working capital as a % of sales (2)

 

 

20.8

%

 

 

19.9

 

%

 

 

15.5

%

 

 

14.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

$

17.3

 

 

$

(11.2

)

 

 

$

25.2

 

 

$

25.3

 

Capital expenditures

 

$

2.3

 

 

$

3.0

 

 

 

$

3.6

 

 

$

3.1

 

Free cash flow (1)

 

$

15.0

 

 

$

(14.1

)

 

 

$

21.6

 

 

$

22.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt to total capitalization percentage

 

 

38.5

%

 

 

39.3

 

%

 

 

39.8

%

 

 

38.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt, net of cash, to net total capitalization

 

 

33.9

%

 

 

34.9

 

%

 

 

33.9

%

 

 

32.1

%

(1) Free cash flow is defined as cash from operations less capital expenditures. Free cash flow is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as free cash flow, is important for investors and other readers of the Company’s financial statements.
Components may not add due to rounding.
(2) September 30, 2022, June 30, 2022, and March 31, 2022 figures exclude the impact of the acquisition of Garvey. September 30, 2021 figure excludes the impact of the acquisition of Dorner.

COLUMBUS McKINNON CORPORATION

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

($ in thousands)

 

 

Three Months Ended

 

Six Months Ended

 

September
30, 2022

 

September
30, 2021

 

September
30, 2022

 

September
30, 2021

GAAP gross profit

$

86,310

 

 

$

81,135

 

 

$

168,836

 

 

$

155,198

 

Add back (deduct):

 

 

 

 

 

 

 

Business realignment costs

 

 

 

 

914

 

 

 

 

 

 

914

 

Acquisition inventory step-up expense

 

 

 

 

 

 

 

 

 

 

2,981

 

Acquisition integration costs

 

 

 

 

 

 

 

 

 

 

521

 

Non-GAAP adjusted gross profit

 

86,310

 

 

 

82,049

 

 

 

168,836

 

 

 

159,614

 

 

 

 

 

 

 

 

 

Sales

$

231,740

 

 

$

223,635

 

 

$

452,027

 

 

$

437,099

 

 

 

 

 

 

 

 

 

Gross margin - GAAP

 

37.2

%

 

 

36.3

%

 

 

37.4

%

 

 

35.5

%

Adjusted gross margin - Non-GAAP

 

37.2

%

 

 

36.7

%

 

 

37.4

%

 

 

36.5

%

Adjusted gross profit is defined as gross profit as reported, adjusted for certain items. Adjusted gross profit is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted gross profit, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's gross profit to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit to that of other companies.

COLUMBUS McKINNON CORPORATION

Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations

($ in thousands)

 

 

Three Months Ended

 

Six Months Ended

 

September
30, 2022

 

September
30, 2021

 

September
30, 2022

 

September
30, 2021

GAAP income from operations

$

27,372

 

 

$

23,660

 

 

$

50,191

 

 

$

34,406

 

Add back (deduct):

 

 

 

 

 

 

 

Business realignment costs

 

1,233

 

 

 

1,200

 

 

 

2,890

 

 

 

1,823

 

Acquisition deal and integration costs

 

19

 

 

 

632

 

 

 

105

 

 

 

9,874

 

Acquisition inventory step-up expense

 

 

 

 

 

 

 

 

 

 

2,981

 

Non-GAAP adjusted income from operations

$

28,624

 

 

$

25,492

 

 

$

53,186

 

 

$

49,084

 

 

 

 

 

 

 

 

 

Sales

$

231,740

 

 

$

223,635

 

 

$

452,027

 

 

$

437,099

 

 

 

 

 

 

 

 

 

Operating margin - GAAP

 

11.8

%

 

 

10.6

%

 

 

11.1

%

 

 

7.9

%

Adjusted operating margin - Non-GAAP

 

12.4

%

 

 

11.4

%

 

 

11.8

%

 

 

11.2

%

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

 

Six Months Ended

 

September
30, 2022

 

September
30, 2021

 

September
30, 2022

 

September
30, 2021

GAAP net income (loss)

 

14,114

 

 

 

15,203

 

 

 

22,505

 

 

7,940

 

Add back (deduct):

 

 

 

 

 

 

 

Amortization of intangibles

 

6,447

 

 

 

6,285

 

 

 

12,982

 

 

12,394

 

Business realignment costs

 

1,233

 

 

 

1,200

 

 

 

2,890

 

 

1,823

 

Acquisition deal and integration costs

 

19

 

 

 

632

 

 

 

105

 

 

9,874

 

Cost of debt refinancing

 

 

 

 

 

 

 

 

 

14,803

 

Acquisition inventory step-up expense

 

 

 

 

 

 

 

 

 

2,981

 

Normalize tax rate to 22% (1)

 

(938

)

 

 

(1,946

)

 

 

2,333

 

 

(9,738

)

Non-GAAP adjusted net income

 

20,875

 

 

 

21,374

 

 

 

40,815

 

 

40,077

 

 

 

 

 

 

 

 

 

Average diluted shares outstanding

 

28,748

 

 

 

28,756

 

 

 

28,733

 

 

27,957

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share - GAAP

$

0.49

 

 

$

0.53

 

 

$

0.78

 

$

0.28

 

 

 

 

 

 

 

 

 

Diluted income per share - Non-GAAP

$

0.73

 

 

$

0.74

 

 

$

1.42

 

$

1.43

 

(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

 

Six Months Ended

 

September 30,
2022

 

September 30,
2021

 

September 30,
2022

 

September 30,
2021

GAAP net income (loss)

$

14,114

 

 

$

15,203

 

 

$

22,505

 

 

$

7,940

 

Add back (deduct):

 

 

 

 

 

 

 

Income tax expense (benefit)

$

4,953

 

 

$

4,083

 

 

$

13,846

 

 

$

1,566

 

Interest and debt expense

$

6,768

 

 

$

4,587

 

 

$

12,971

 

 

$

10,399

 

Investment (income) loss

$

312

 

 

$

(115

)

 

$

742

 

 

$

(548

)

Foreign currency exchange (gain) loss

$

1,003

 

 

$

441

 

 

$

2,206

 

 

$

535

 

Other (income) expense, net

$

222

 

 

$

(539

)

 

$

(2,079

)

 

$

(289

)

Depreciation and amortization expense

$

10,424

 

 

$

10,502

 

 

$

20,893

 

 

$

20,969

 

Business realignment costs

$

1,233

 

 

$

1,200

 

 

$

2,890

 

 

$

1,823

 

Acquisition deal and integration costs

$

19

 

 

$

632

 

 

$

105

 

 

$

9,874

 

Cost of debt refinancing

$

 

 

$

 

 

$

 

 

$

14,803

 

Acquisition inventory step-up expense

$

 

 

$

 

 

$

 

 

$

2,981

 

Non-GAAP adjusted EBITDA

$

39,048

 

 

$

35,994

 

 

$

74,079

 

 

$

70,053

 

 

 

 

 

 

 

 

 

Sales

$

231,740

 

 

$

223,635

 

 

$

452,027

 

 

$

437,099

 

 

 

 

 

 

 

 

 

Net income (loss) margin - GAAP

 

6.1

%

 

 

6.8

%

 

 

5.0

%

 

 

1.8

%

Adjusted EBITDA margin - Non-GAAP

 

16.8

%

 

 

16.1

%

 

 

16.4

%

 

 

16.0

%

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
Executive 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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