Company Announcements

Columbus McKinnon Reports 16% Order Growth in Q2 FY25

CHARLOTTE, NC , Oct. 30, 2024 /PRNewswire/ -- Columbus McKinnon Corporation (Nasdaq: CMCO) ("Columbus McKinnon" or the "Company"), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2025 second quarter, which ended September 30, 2024

Second  Quarter 2025 Highlights (compared with prior-year period, except where otherwise noted)

  • Orders increased 16% with a book-to-bill ratio of 1.08x; Precision conveyance up 42%
  • Net sales decreased 6% to $242.3 million reflecting impacts related to Hurricane Helene, the ramp up of linear motion production in Monterrey, MX and project timing
  • Results included $17.5 million2 of non-cash pension settlement expense and $11.8 million2 for factory closure and start-up costs as we transitioned manufacturing to our Monterrey, MX facility
  • GAAP EPS of ($0.52) and Adjusted EPS1 of $0.70
  • Repaid $10 million of debt in Q2 FY25; Anticipate FY25 debt repayment of $60 million
  • Executed $4.9 million of share repurchases in Q2 FY25 and $5.0 million in early Q3 FY25

"Our commercial and operational initiatives are delivering wins with new and existing customers in attractive vertical markets and we delivered one of our highest order quarters in history with 16% order growth and a book-to-bill ratio of 1.08x in Q2." said David J. Wilson, President and Chief Executive Officer. "Order growth, with particular strength in precision conveyance, and an encouraging funnel of promising opportunities supports our fiscal 2025 guidance and positions us well for fiscal 2026."

"But for the impact of Hurricane Helene, we delivered on our guidance for the second quarter while transitioning our linear motion manufacturing activity to Monterrey," continued Wilson. "We remain confident in our long-term financial objectives and are advancing the strategic initiatives that will both grow our business and deliver targeted margin expansion over time."

Second Quarter Fiscal 2025 Sales

($ in millions)

Q2  FY25


Q2  FY24


Change


% Change

Net sales

$    242.3


$    258.4


$        (16.1)


(6.2) %

U.S. sales

$    132.3


$    145.2


$        (12.9)


(8.9) %

     % of total

55 %


56 %





Non-U.S. sales

$    110.0


$    113.2


$          (3.2)


(2.8) %

     % of total

45 %


44 %





For the quarter, net sales decreased $16.1 million, or 6.2%. In the U.S., sales were down $12.9 million, or 8.9%. Price improvement of $1.3 million helped to offset $14.2 million in lower volume. Sales outside the U.S. decreased $3.2 million, or 2.8%. Price improvement of $2.5 million helped to offset $6.0 million of lower volume. Favorable foreign currency translation was $0.3 million.

Second Quarter Fiscal 2025 Operating Results

($ in millions)

Q2 FY25


Q2 FY24


Change


% Change

Gross profit

$      74.7


$    100.0


$        (25.2)


(25.2) %

     Gross margin

30.9 %


38.7 %


(780) bps



Adjusted Gross Profit1

$      87.9


$    100.0


$        (12.0)


(12.0) %

     Adjusted Gross Margin1

36.3 %


38.7 %


(240) bps



Income from operations

$      10.8


$      33.4


$        (22.5)


(67.6) %

 Operating margin

4.5 %


12.9 %


(840) bps



Adjusted Operating Income1

$      27.0


$      34.1


$          (7.2)


(21.0) %

     Adjusted Operating Margin1

11.1 %


13.2 %


(210) bps



Net income (loss)

$     (15.0)


$      15.8


$        (30.9)


NM

     Net income (loss) margin

(6.2) %


6.1 %


(1,230) bps



GAAP EPS

$     (0.52)


$      0.55


$        (1.07)


NM

Adjusted EPS1

$      0.70


$      0.76


$        (0.06)


(7.9) %

Adjusted EBITDA1

$      39.2


$      45.7


$          (6.6)


(14.4) %

     Adjusted EBITDA Margin1

16.2 %


17.7 %


(150) bps



Adjusted EPS1 excludes, among other adjustments, amortization of intangible assets.  The Company believes this better represents its inherent earnings power and cash generation capability.

Third Quarter Fiscal 2025 Guidance

The Company is issuing the following guidance for the third quarter of fiscal 2025, ending December 31, 2024:

Metric

Q3 FY25

Net sales

Flat year-over-year

Adjusted EPS3

Flat year-over-year

Third quarter 2025 guidance assumes approximately $8 million of interest expense, $8 million of amortization, an effective tax rate of 25% and 28.9 million diluted average shares outstanding.

 

The Company is issuing the following guidance for the fiscal year 2025, ending March 31, 2025:

Metric

FY25

Net sales

Flat to low-single digit growth year-over-year

Adjusted EPS3

Mid-single digit growth year-over-year

Capital Expenditures

$20 million to $25 million

Net Leverage Ratio3

~2.3x

Fiscal 2025 guidance assumes approximately $32 million of interest expense, $30 million of amortization, an effective tax rate of 25% and 29.0 million diluted average shares outstanding.

 

Teleconference/Webcast

Columbus McKinnon will host a conference call today at 10:00 AM Eastern Time to discuss the Company's financial results and strategy.  The conference call will be accessible through live webcast and via phone by dialing 1-800-836-8184.  The webcast, earnings release and earnings presentation will be available at the Company's investor relations website at investors.cmco.com.  A replay of the webcast will also be archived on the Company's investor relations website and available via phone by dialing 1-888-660-6345 and enter the conference ID number 93312# through Wednesday, November 6, 2024.

______________________

1  

Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS are non-GAAP financial measures.  See accompanying discussion and reconciliation tables provided in this release for reconciliations of these non-GAAP financial measures to the closest corresponding GAAP financial measures.

2

Represents $23.2 million of non-cash pension settlement costs, $11.9 million of expense related to the closure of our Charlotte, NC factory and $3.8 million of Monterrey MX start-up costs, which are taxed at a 24.6% tax rate.

3  

The Company has not reconciled the Adjusted EPS and Net Leverage Ratio guidance to the most comparable GAAP financial measure outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide guidance for the comparable GAAP financial measures. Forward-looking guidance regarding Adjusted EPS and Net Leverage Ratio is made in a manner consistent with the relevant definitions and assumptions noted herein and in alignment with the Company's financial covenants per the Company's Amended and Restated Credit Agreement.

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.cmco.com

Safe Harbor Statement

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," "believe," "continue," "could," "estimate," "expect," "illustrative," "intend," "likely," "may," "opportunity," "plan," "possible," "potential," "predict," "project," "shall," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this document, including, but are not limited to, statements relating to: (i) our strategy, outlook and growth prospects, including our third quarter and fiscal year 2025 net sales and Adjusted EPS, and our fiscal year 2025 net leverage ratio and capital expenditure guidance; (ii) our operational and financial targets and capital allocation policy; (iii) general economic trend and trends in the industry and markets; (iv) the amount of debt to be paid down by the Company during fiscal year 2025; (v) the estimated costs and benefits related to the consolidation of the Company's North American linear motion operations in Charlotte, North Carolina to its manufacturing facility in Monterrey, Mexico (vi) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; and (vii) the competitive environment in which we operate; are forward looking statements.  Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made. Columbus McKinnon undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.

Contacts:



Gregory P. Rustowicz


Kristine Moser

EVP Finance and CFO


VP IR and Treasurer

Columbus McKinnon Corporation


Columbus McKinnon Corporation

716-689-5442


704-322-2488

greg.rustowicz@cmco.com 


kristy.moser@cmco.com 

 

Financial tables follow.

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 



Three Months Ended





September 30,
2024


September 30,
2023


Change

Net sales


$          242,274


$          258,400


(6.2) %

Cost of products sold


167,531


158,424


5.7 %

Gross profit


74,743


99,976


(25.2) %

Gross profit margin


30.9 %


38.7 %



Selling expenses


26,926


26,867


0.2 %

% of net sales


11.1 %


10.4 %



General and administrative expenses


23,363


25,709


(9.1) %

% of net sales


9.6 %


9.9 %



Research and development expenses


6,102


6,541


(6.7) %

% of net sales


2.5 %


2.5 %



Amortization of intangibles


7,547


7,508


0.5 %

Income from operations


10,805


33,351


(67.6) %

Operating margin


4.5 %


12.9 %



Interest and debt expense


8,352


10,211


(18.2) %

Investment (income) loss


(610)


88


NM

Foreign currency exchange (gain) loss


(792)


1,746


NM

Other (income) expense, net


23,806


393


5,957.5 %

Income (loss) before income tax expense (benefit)


(19,951)


20,913


NM

Income tax expense (benefit)


(4,908)


5,100


NM

Net income (loss)


$           (15,043)


$            15,813


NM








Average basic shares outstanding


28,869


28,725


0.5 %

Basic income (loss) per share


$              (0.52)


$                0.55


NM








Average diluted shares outstanding


28,869


29,001


(0.5) %

Diluted income (loss) per share


$              (0.52)


$                0.55


NM








Dividends declared per common share


$                0.07


$                0.07



 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 



Six Months Ended





September 30,
2024


September 30,
2023


Change

Net sales


$          482,000


$          493,892


(2.4) %

Cost of products sold


318,227


307,266


3.6 %

Gross profit


163,773


186,626


(12.2) %

Gross profit margin


34.0 %


37.8 %



Selling expenses


54,696


51,848


5.5 %

% of net sales


11.3 %


10.5 %



General and administrative expenses


49,810


53,152


(6.3) %

% of net sales


10.3 %


10.8 %



Research and development expenses


12,268


12,442


(1.4) %

% of net sales


2.5 %


2.5 %



Amortization of intangibles


15,047


14,385


4.6 %

Income from operations


31,952


54,799


(41.7) %

Operating margin


6.6 %


11.1 %



Interest and debt expense


16,587


18,836


(11.9) %

Investment (income) loss


(819)


(454)


80.4 %

Foreign currency exchange (gain) loss


(398)


2,230


NM

Other (income) expense, net


24,484


605


3,946.9 %

Income (loss) before income tax expense (benefit)


(7,902)


33,582


NM

Income tax expense (benefit)


(1,488)


8,494


NM

Net income (loss)


$            (6,414)


$            25,088


NM








Average basic shares outstanding


28,852


28,694


0.6 %

Basic income (loss) per share


$              (0.22)


$                0.87


NM








Average diluted shares outstanding


28,852


28,962


(0.4) %

Diluted income (loss) per share


$              (0.22)


$                0.87


NM








Dividends declared per common share


$                0.07


$                0.07



 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 



September 30,
2024


March 31, 2024



(Unaudited)



ASSETS





Current assets:





Cash and cash equivalents


$              55,683


$            114,126

Trade accounts receivable


170,669


171,186

Inventories


201,036


186,091

Prepaid expenses and other


40,357


42,752

Total current assets


467,745


514,155






Property, plant, and equipment, net


107,258


106,395

Goodwill


717,982


710,334

Other intangibles, net


375,598


385,634

Marketable securities


10,579


11,447

Deferred taxes on income


1,367


1,797

Other assets


96,355


96,183

Total assets


$          1,776,884


$          1,825,945






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities:





Trade accounts payable


$              72,106


$              83,118

Accrued liabilities


106,847


127,973

Current portion of long-term debt and finance lease obligations


50,704


50,670

Total current liabilities


229,657


261,761






Term loan, AR securitization facility and finance lease obligations


449,910


479,566

Other non current liabilities


201,187


202,555

Total liabilities


$            880,754


$            943,882






Shareholders' equity:





Common stock


287


288

Treasury stock


(5,946)


(1,001)

Additional paid in capital


529,599


527,125

Retained earnings


386,892


395,328

Accumulated other comprehensive loss


(14,702)


(39,677)

Total shareholders' equity


$            896,130


$            882,063

Total liabilities and shareholders' equity


$          1,776,884


$          1,825,945








COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 



Six Months Ended



September 30,
2024


September 30,
2023

Operating activities:





Net income (loss)


$               (6,414)


$               25,088

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

Depreciation and amortization


24,028


22,482

Deferred income taxes and related valuation allowance


(13,662)


(6,097)

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


(650)


(302)

Non-cash pension settlement


23,201


Stock-based compensation


4,175


5,264

Amortization of deferred financing costs


1,244


1,106

Impairment of operating lease


3,268


Loss (gain) on hedging instruments


(2)


554

Loss (gain) on disposal of Fixed Assets


418


Non-cash lease expense


5,202


4,684

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

Trade accounts receivable


2,384


(11,409)

Inventories


(12,277)


(22,415)

Prepaid expenses and other


(11,714)


(5,868)

Other assets


183


357

Trade accounts payable


(10,711)


(5,996)

Accrued liabilities


(6,154)


(3,085)

Non-current liabilities


(3,889)


(4,921)

Net cash provided by (used for) operating activities


(1,370)


(558)






Investing activities:





Proceeds from sales of marketable securities


3,153


1,100

Purchases of marketable securities


(1,993)


(1,809)

Capital expenditures


(10,068)


(10,319)

Purchase of businesses, net of cash acquired



(108,145)

Dividend received from equity method investment



144

Net cash provided by (used for) investing activities


(8,908)


(119,029)






Financing activities:





Proceeds from the issuance of common stock


86


492

Purchases of treasury stock


(4,945)


Repayment of debt


(30,326)


(25,294)

Proceeds from issuance of long-term debt



120,000

Fees paid for borrowings on long-term debt



(2,859)

Payment to former owners of montratec


(6,711)


Fees paid for debt repricing


(169)


Cash inflows from hedging activities


11,862


12,084

Cash outflows from hedging activities


(11,809)


(12,660)

Payment of dividends


(4,038)


(4,015)

Other


(1,789)


(1,954)

Net cash provided by (used for) financing activities


(47,839)


85,794






Effect of exchange rate changes on cash


(326)


(325)






Net change in cash and cash equivalents


(58,443)


(34,118)

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


$            114,376


$            133,426

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


$               55,933


$               99,308

 

COLUMBUS McKINNON CORPORATION

Q2  FY 2025 Net Sales Bridge

 



Quarter


Year To Date

($ in millions)


$ Change


% Change


$ Change


% Change

Fiscal 2024 Net Sales


$             258.4




$             493.9



Acquisition



— %


2.7


0.5 %

Pricing


3.8


1.5 %


7.3


1.5 %

Volume


(20.2)


(7.8) %


(21.6)


(4.4) %

Foreign currency translation


0.3


0.1 %


(0.3)


— %

Total change


$             (16.1)


(6.2) %


$             (11.9)


(2.4) %

Fiscal 2025 Net Sales


$             242.3




$             482.0



 

COLUMBUS McKINNON CORPORATION

Q2  FY 2025 Gross Profit Bridge

 

($ in millions)

Quarter


Year To Date

Fiscal 2024 Gross Profit

$                  100.0


$                  186.6

Acquisition


0.8

Price, net of manufacturing costs changes (incl. inflation)

0.1


3.5

Monterrey, MX new factory start-up costs

(2.2)


(3.8)

Factory and warehouse consolidation costs

(10.8)


(10.8)

Sales volume and mix

(12.3)


(12.1)

Other

(0.3)


(0.5)

Foreign currency translation

0.2


0.1

Total change

(25.3)


(22.8)

Fiscal 2025 Gross Profit

$                    74.7


$                  163.8

 

U.S. Shipping Days by Quarter 



     Q1     


     Q2     


     Q3     


     Q4     


     Total     

FY25               


64


63


60


62


249












FY24


63


62


61


62


248

 

COLUMBUS McKINNON CORPORATION

Additional Data1

(Unaudited)



Period Ended



September 30,

 2024


June 30,
2024


March 31,
2024


September 30,

 2023

($ in millions)













Backlog


$       317.6



$       292.8



$       280.8



$       317.7


Long-term backlog













  Expected to ship beyond 3 months


$       172.5



$       156.0



$       144.6



$       148.3


Long-term backlog as % of total backlog


54.3

%


53.3

%


51.5

%


46.7

%














Debt to total capitalization percentage


35.8

%


36.6

%


37.5

%


39.8

%














Debt, net of cash, to net total capitalization


33.2

%


33.3

%


32.0

%


35.3

%














Working capital as a % of sales 2


23.3

%


22.5

%


19.1

%


21.8

%

 



Three Months Ended



September 30,

2024


June 30,
2024


March 31,
2024


September 30,

2023

($ in millions)













Trade accounts receivable













Days sales outstanding


64.1

days


63.3

days


58.7

days


58.6

days














Inventory turns per year













(based on cost of products sold)


3.3

turns


3.0

turns


3.7

turns


3.1

turns

Days' inventory


110.6

days


121.7

days


98.6

days


117.7

days














Trade accounts payable













Days payables outstanding


46.3

days


50.6

days


50.9

days


48.3

days














Net cash provided by (used for) operating activities


$         9.4



$     (10.8)



$       38.6



$       16.7


Capital expenditures


$         5.4



$         4.6



$         8.5



$         5.0


Free Cash Flow 3


$         4.0



$     (15.4)



$       30.1



$       11.7


______________________



1

Additional Data: This data is provided to help investors understand financial and operational metrics that management uses to measure the Company's financial performance and identify trends affecting the business. These measures may not be comparable with or defined in the same manner as other companies. Components may not add due to rounding.

2  

March 31, 2024 and September 30, 2023 exclude the impact of the acquisition of montratec®.

3  

Free Cash Flow is a non-GAAP financial measure.  Free Cash Flow is defined as GAAP net cash provided by (used for) operating activities less capital expenditures included in the investing activities section of the consolidated statement of cash flows.  See the table above for the calculation of Free Cash Flow.

NON-GAAP FINANCIAL MEASURES

The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.

COLUMBUS McKINNON CORPORATION

Reconciliation of Gross Profit to Adjusted Gross Profit

($ in thousands)

 


Three Months Ended


Six Months Ended


September 30,

2024


September 30,

2023


September 30,

2024


September 30,

2023

Gross profit

$   74,743


$   99,976


$ 163,773


$ 186,626

Add back (deduct):








Business realignment costs

76



468


196

Hurricane Helene cost impact

171



171


Factory and warehouse consolidation costs

10,763



10,763


Monterrey, MX new factory start-up costs

2,185



3,810


Adjusted Gross Profit

$   87,938


$   99,976


$ 178,985


$ 186,822









Net sales

$ 242,274


$ 258,400


$ 482,000


$ 493,892









Gross margin

30.9 %


38.7 %


34.0 %


37.8 %

Adjusted Gross Margin

36.3 %


38.7 %


37.1 %


37.8 %

Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items.  Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net sales.  Adjusted Gross Profit and Adjusted Gross Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Gross Profit and Adjusted Gross Margin as used by other companies.  Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Margin, are important for investors and other readers of the Company's financial statements and assists in understanding the comparison of the current quarter's gross profit and gross margin to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company's gross profit and gross margin to that of other companies.

COLUMBUS McKINNON CORPORATION

Reconciliation of Income from Operations to Adjusted Operating Income

($ in thousands)

 


Three Months Ended


Six Months Ended


September 30,

 2024


September 30,

 2023


September 30,

 2024


September 30,

 2023

Income from operations

$      10,805


$      33,351


$     31,952


$      54,799

Add back (deduct):








Acquisition deal and integration costs


508



3,095

Business realignment costs

281


40


1,131


415

Factory and warehouse consolidation costs

11,904


82


11,904


199

Headquarter relocation costs

51


146


147


1,374

Hurricane Helene cost impact

171



171


Monterrey, MX new factory start-up costs

3,751



7,317


Adjusted Operating Income

$      26,963


$      34,127


$     52,622


$      59,882









Net sales

$    242,274


$    258,400


$   482,000


$    493,892









Operating margin

4.5 %


12.9 %


6.6 %


11.1 %

Adjusted Operating Margin

11.1 %


13.2 %


10.9 %


12.1 %

Adjusted Operating Income is defined as income from operations as reported, adjusted for certain items.  Adjusted Operating Margin is defined as Adjusted Operating Income divided by net sales.  Adjusted Operating Income and Adjusted Operating Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Operating Income and Adjusted Operating Margin as used by other companies.  Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Operating Income and Adjusted Operating Margin, are important for investors and other readers of the Company's financial statements and assists in understanding the comparison of the current quarter's income from operations to the historical periods' income from operations and operating margin, as well as facilitates a more meaningful comparison of the Company's income from operations and operating margin to that of other companies.

COLUMBUS McKINNON CORPORATION

Reconciliation of Net Income and Diluted Earnings per Share to

Adjusted Net Income and Adjusted Earnings per Share

($ in thousands, except per share data)

 


Three Months Ended


Six Months Ended


September 30,

2024


September 30,

2023


September 30,

2024


September 30,

2023

Net income (loss)

$    (15,043)


$     15,813


$      (6,414)


$     25,088

Add back (deduct):








Amortization of intangibles

7,547


7,508


15,047


14,385

Acquisition deal and integration costs


508



3,095

Business realignment costs

281


40


1,131


415

Factory and warehouse consolidation costs

11,904


82


11,904


199

Headquarter relocation costs

51


146


147


1,374

Hurricane Helene cost impact

171



171


Monterrey, MX new factory start-up costs

3,751



7,317


Non-cash pension settlement expense

23,201



23,201


     Normalize tax rate 1

(11,647)


(2,199)


(14,242)


(4,768)

Adjusted Net Income

$     20,216


$     21,898


$     38,262


$     39,788









GAAP average diluted shares outstanding

28,869


29,001


28,852


28,962

Add back:








Effect of dilutive share-based awards

205



253


Adjusted Diluted Shares Outstanding

$     29,074


$     29,001


$     29,105


$     28,962









GAAP EPS

$       (0.52)


$        0.55


$       (0.22)


$        0.87









Adjusted EPS

$         0.70


$        0.76


$         1.31


$        1.37



1

Applies a normalized tax rate of 25% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.

Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS are defined as net income (loss) and GAAP EPS as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS are not measures determined in accordance with GAAP and may not be comparable with the measures used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS, are important for investors and other readers of the Company's financial statements and assists in understanding the comparison of current periods' net income (loss), average diluted shares outstanding and GAAP EPS to the historical periods' net income (loss), average diluted shares outstanding and GAAP EPS, as well as facilitates a more meaningful comparison of the Company's net income (loss) and GAAP EPS to that of other companies.  The Company believes that presenting Adjusted Net Income, Adjusted Diluted Shares Outstanding and 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 Net Income to Adjusted EBITDA

($ in thousands)

 


Three Months Ended


Six Months Ended


September 30,

2024


September 30,

2023


September 30,

2024


September 30,

2023

Net income (loss)

$    (15,043)


$     15,813


$     (6,414)


$       25,088

Add back (deduct):








Income tax expense (benefit)

(4,908)


5,100


(1,488)


8,494

Interest and debt expense

8,352


10,211


16,587


18,836

Investment (income) loss

(610)


88


(819)


(454)

Foreign currency exchange (gain) loss

(792)


1,746


(398)


2,230

Other (income) expense, net

23,806


393


24,484


605

Depreciation and amortization expense

12,188


11,592


24,028


22,482

Acquisition deal and integration costs


508



3,095

Business realignment costs

281


40


1,131


415

Factory and warehouse consolidation costs

11,904


82


11,904


199

Headquarter relocation costs

51


146


147


1,374

Hurricane Helene cost impact

171



171


Monterrey, MX new factory start-up costs

3,751



7,317


Adjusted EBITDA

$      39,151


$     45,719


$     76,650


$       82,364









Net sales

$    242,274


$   258,400


$   482,000


$     493,892









Net income margin

(6.2) %


6.1 %


(1.3) %


5.1 %

Adjusted EBITDA Margin

16.2 %


17.7 %


15.9 %


16.7 %

Adjusted EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation, amortization, and other adjustments.  Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales.  Adjusted EBITDA and Adjusted EBITDA Margin are not a measures determined in accordance with GAAP and may not be comparable with Adjusted EBITDA and Adjusted EBITDA Margin as used by other companies.  Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, are important for investors and other readers of the Company's financial statements.

 

COLUMBUS McKINNON CORPORATION

Reconciliation of Net Leverage Ratio

($ in thousands)

 



Twelve Months Ended



September 30,

 2024


September 30,

 2023

Net income (loss)


$           15,123


$           51,012

Add back (deduct):





Annualize EBITDA for the montratec acquisition1



5,410

Annualize synergies for the montratec acquisition1



293

Income tax expense (benefit)


4,920


20,694

Interest and debt expense


35,708


33,807

Non-cash pension settlement


28,185


Amortization of deferred financing costs


2,487


1,967

Stock Compensation Expense


10,950


12,060

Depreciation and amortization expense


47,491


43,536

Cost of debt refinancing


1,190


Acquisition deal and integration costs


116


3,606

Excluded acquisition deal and integration costs2



(510)

Business realignment costs


2,583


2,664

Excluded business realignment costs2



(2,249)

Factory and warehouse consolidation costs


12,449


199

Garvey contingent consideration



1,230

Headquarter relocation costs


832


2,370

Monterrey, MX new factory start-up costs


11,806


Excluded Monterrey, MX new factory start-up costs3


(3,664)


Credit Agreement Trailing Twelve Month Adjusted EBITDA


$         170,176


$         176,089






Current portion of long-term debt and finance lease obligations


$           50,704


$           50,636

Term loan, AR securitization facility and finance lease obligations


449,910


514,205

Total debt


$         500,614


$         564,841

Standby Letters of Credit


15,692


15,525

Cash and cash equivalents


(55,683)


(99,058)

Net Debt


$         460,623


$         481,308






Net Leverage Ratio


2.71x 


2.73x 



1  

EBITDA is normalized to include a full year of the acquired entity and assumes all cost synergies are achieved in TTM Q2 FY24.

2  

The Company's credit agreement definition of Adjusted EBITDA excludes certain acquisition deal and integration costs and business realignment costs that are incurred beyond one year after the close of an acquisition.

3  

The Company's credit agreement definition of Adjusted EBITDA excludes certain Monterrey, MX factory start-up costs.

Net Debt is defined in the credit agreement as total debt plus standby letters of credit, net of cash and cash equivalents.  Net Leverage Ratio is defined as Net Debt divided by the Credit Agreement Trailing Twelve Month Adjusted EBITDA. Credit Agreement Trailing Twelve Month Adjusted EBITDA is defined as net income adjusted for interest expense, income taxes, depreciation, amortization, and other adjustments. Net Debt, Net Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies.  Nevertheless, the Company believes that providing non-GAAP financial measures, such as Net Debt, Net Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are important for investors and other readers of the Company's financial statements.

 

 

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SOURCE Columbus McKinnon Corporation