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0001005229false00010052292023-08-022023-08-02

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 2, 2023

Columbus McKinnon Corporation
(Exact name of registrant as specified in its charter)

New York
(State or other jurisdiction of incorporation)
001-34362   16-0547600
(Commission File Number)   (IRS Employer Identification No.)
 
13320 Ballantyne Corporate Place, Suite D Charlotte NC 28277
(Address of principal executive offices) (Zip Code)

Registrant's telephone number including area code: (716) 689-5400

_________________________________________________


(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value per share CMCO Nasdaq Global Select Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company

If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 2, 2023, the registrant issued a press release announcing its financial results for the first quarter, which ended June 30, 2023. The press release is annexed as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 REGULATION FD DISCLOSURE.

The slides used during the earnings call are annexed as Exhibit 99.2 to this Current Report on Form 8-K.

The information contained in this Form 8-K and the Exhibits annexed hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth in such filing.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d)  Exhibits.
EXHIBIT
NUMBER
   DESCRIPTION
        
  
Press Release dated August 2, 2023
Earnings call slides dated August 2, 2023
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


COLUMBUS McKINNON CORPORATION
     
By: /s/ Gregory P. Rustowicz
Name: Gregory P. Rustowicz
Title: Executive Vice President - Finance and Chief Financial Officer
   (Principal Financial Officer)

Dated:  August 2, 2023

EX-99.1 2 exhibit991080224.htm EX-99.1 Document

 cmcointelligentmotionlogo-a.jpg    
                            EXHIBIT 99.1
News Release
13320 Ballantyne Corporate Place Suite D
Charlotte, NC 28277
Immediate Release

Columbus McKinnon Sales Increased 7%
for First Quarter Fiscal Year 2024

CHARLOTTE, NC, August 2, 2023 - 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 2024 first quarter, which ended June 30, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition").

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

•Strong orders in quarter of $257.0 million with book-to-bill ratio of 1.1x
•Record backlog of $355.3 million includes $23.4 million from the acquisition
•Sales of $235.5 million for first quarter fiscal 2024 increased 7%
•Gross margin expanded 90 basis points sequentially to 36.8%
•Paid down $10 million in debt; net debt leverage ratio at 2.9x1; plan to pay down $40 million in debt in fiscal 2024
•Expect to surpass $1 billion in revenue in fiscal 2024; on track to achieve fiscal 2027 targets

David J. Wilson, President and CEO, commented, “Our first quarter results further demonstrate the progress we are making with the transformation of Columbus McKinnon into a higher growth, stronger margin business. Sales grew 7%, driven by strength in EMEA and APAC, and strong automation and linear motion sales in the Americas. This growth more than offset year-over-year shifts in e-commerce demand. We are encouraged by our end market activity and the progress we are making as an organization. We are focusing resources on end markets and opportunities with strong secular tailwinds such as life sciences, EVs, and industrial automation. Within this framework, we are driving to increase market share and capitalize on these favorable megatrends. Additionally, our continued efforts to simplify the business, manage costs and drive efficiencies underpin our sequential gross margin improvement.”

He added, “In our first month of ownership, the montratec acquisition contributed $2.7 million in sales. We are excited about the technology and opportunities that montratec adds to our precision conveying portfolio. We expect strong growth out of the business and look to further its potential, especially as we broaden exposure in the U.S. market. It is important to note that we successfully completed the refinancing of our debt related to the acquisition. This effort resulted in lower cost debt and eliminated the need for testing compliance with our financial covenant. Notably, with our debt reduction plans and growth for the year, we expect to reduce our net debt leverage ratio to under 2.5x1 by the end of the fiscal year.”
1 On a financial covenant basis per Amended and Restated Credit Agreement

Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 2 of 12
August 2, 2023
First Quarter Fiscal 2024 Sales
($ in millions)
Q1 FY 24
Q1 FY 23
Change % Change
Net sales $ 235.5  $ 220.3  $ 15.2  6.9  %
U.S. sales $ 136.1  $ 138.7  $ (2.6) (1.9) %
     % of total 58  % 63  %
Non-U.S. sales $ 99.4  $ 81.6  $ 17.8  21.8  %
     % of total 42  % 37  %

For the quarter, sales increased $15.2 million, or 6.9%. The acquisition contributed $2.7 million, or 1.2%, in sales. Sales outside the U.S. were driven by increased volume of $13.5 million, or 16.5%, price improvement of $1.4 million, or 1.7%, $2.6 million of sales related to the acquisition, as well as favorable foreign currency translation of $0.3M. In the U.S., price improved $7.1 million, or 5.1%, while volume decreased $9.8 million, or 7.1%.

First Quarter Fiscal 2024 Operating Results
($ in millions)
Q1 FY 24 Q1 FY 23 Change % Change
Gross profit $ 86.6  $ 82.5  $ 4.1  5.0  %
     Gross margin 36.8  % 37.5  % (70) bps
Adjusted gross profit* $ 86.8  $ 82.5  $ 4.3  5.2  %
     Adjusted gross margin* 36.9  % 37.5  % (60) bps
Income from operations $ 21.4  $ 22.8  $ (1.4) (6.0) %
Operating margin 9.1  % 10.4  % (130 bps)
Adjusted income from operations* $ 25.8  $ 24.6  $ 1.2  4.9  %
     Adjusted operating margin* 10.9  % 11.1  % (20) bps
Net income (loss) $ 9.3  $ 8.4  $ 0.9  10.5  %
     Net income (loss) margin 3.9  % 3.8  % 10 bps
Diluted EPS $ 0.32  $ 0.29  $ 0.03  10.3  %
Adjusted EPS* $ 0.62  $ 0.69  $ (0.07) (10.1) %
Adjusted EBITDA* $ 36.6  $ 35.0  $ 1.6  4.6  %
     Adjusted EBITDA margin* 15.6  % 15.9  % (30) 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 $0.62 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.

Second Quarter Fiscal 2024 Outlook

Columbus McKinnon expects second quarter fiscal 2024 sales of approximately $250 million to $260 million at current exchange rates.

Mr. Wilson concluded, “We had a solid start to the year with 5% sequential order growth, 7% year-over-year sales growth and sequential gross margin improvement that supports our objective to expand gross margin by 50 to 100 basis points for the year. Demand for our products and solutions combined with progress we are making to improve our customers’ experience are reflected in the over $500 million of new business we have booked in the last six months. This, along with the addition of montratec, drove record backlog of $355 million, further reinforcing our expectation to exceed $1 billion in revenue in fiscal 2024. Fundamentally, we are gaining more traction with our strategy to be the global leader of intelligent motion solutions for material handling and believe our results demonstrate this progress.”


Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 3 of 12
August 2, 2023
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.cmco.com/. A question-and-answer session will follow the formal discussion.

The conference call can be accessed by dialing 412-317-6026. The listen-only audio webcast can be monitored at investors.cmco.com/. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Wednesday, August 9, 2023. To listen to the archived call, dial 412-317-6671 and enter the conference ID number 10180167. 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.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 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.

Contacts:
Gregory P. Rustowicz Investor Relations:
Executive Vice President - Finance and CFO Deborah K. Pawlowski
Columbus McKinnon Corporation Kei Advisors LLC
716-689-5442 716-843-3908
greg.rustowicz@cmworks.com dpawlowski@keiadvisors.com


Financial tables follow.


Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 4 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
 
Three Months Ended
  June 30,
2023
June 30,
2022
Change
Net sales $ 235,492  $ 220,287  6.9  %
Cost of products sold 148,843  137,768  8.0  %
Gross profit 86,649  82,519  5.0  %
Gross profit margin 36.8  % 37.5  %  
Selling expenses 24,981  26,156  (4.5) %
% of net sales 10.6  % 11.9  %
General and administrative expenses 27,443  21,881  25.4  %
% of net sales 11.7  % 9.9  %
Research and development expenses 5,900  5,130  15.0  %
% of net sales 2.5  % 2.3  %
Amortization of intangibles 6,877  6,535  5.2  %
Income from operations $ 21,448  $ 22,817  (6.0) %
Operating margin 9.1  % 10.4  %  
Interest and debt expense 8,625  6,203  39.0  %
Investment (income) loss (543) 430  NM
Foreign currency exchange (gain) loss 483  1,203  (59.9) %
Other (income) expense, net 214  (2,303) NM
Income (loss) before income tax expense (benefit) $ 12,669  17,284  (26.7) %
Income tax expense (benefit) 3,394  8,893  (61.8) %
Net income (loss) $ 9,275  $ 8,391  10.5  %
Average basic shares outstanding 28,662  28,544  0.4  %
Basic income (loss) per share $ 0.32  $ 0.29  10.3  %
Average diluted shares outstanding 28,906  28,699  0.7  %
Diluted income (loss) per share $ 0.32  $ 0.29  10.3  %
















Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 5 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
  June 30,
2023
March 31, 2023
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 106,994  $ 133,176 
Trade accounts receivable $ 165,050  $ 151,451 
Inventories $ 204,747  $ 179,359 
Prepaid expenses and other $ 37,435  $ 32,254 
Total current assets $ 514,226  $ 496,240 
Property, plant, and equipment, net $ 98,372  $ 94,360 
Goodwill $ 731,953  $ 644,629 
Other intangibles, net $ 409,541  $ 362,537 
Marketable securities $ 10,253  $ 10,368 
Deferred taxes on income $ 2,145  $ 2,035 
Other assets $ 93,019  $ 88,286 
Total assets $ 1,859,509  $ 1,698,455 
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current liabilities:    
Trade accounts payable $ 77,378  $ 76,736 
Accrued liabilities $ 145,927  $ 124,317 
Current portion of long-term debt and finance lease obligations $ 40,619  $ 40,604 
Total current liabilities $ 263,924  $ 241,657 
Term loan, AR securitization facility and finance lease obligations $ 539,150  $ 430,988 
Other non current liabilities $ 209,478  $ 192,013 
Total liabilities $ 1,012,552  $ 864,658 
Shareholders’ equity:    
Common stock $ 287  $ 286 
Treasury stock $ (1,001) $ (1,001)
Additional paid in capital $ 516,197  $ 515,797 
Retained earnings $ 366,033  $ 356,758 
Accumulated other comprehensive loss $ (34,559) $ (38,043)
Total shareholders’ equity $ 846,957  $ 833,797 
Total liabilities and shareholders’ equity $ 1,859,509  $ 1,698,455 



Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 6 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Statements of Cash Flows - UNAUDITED
(In thousands)
  Three Months Ended
  June 30,
2023
June 30,
2022
Operating activities:
Net income (loss) $ 9,275  $ 8,391 
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization $ 10,890  $ 10,469 
Deferred income taxes and related valuation allowance $ (1,825) $ 1,272 
Net loss (gain) on sale of real estate, investments and other $ (467) $ 485 
Stock-based compensation $ 1,981  $ 751 
Amortization of deferred financing costs $ 483  $ 430 
Loss (gain) on hedging instruments $ 231  $ (192)
Loss on retirement of fixed asset $ —  $ 173 
Non-cash lease expense $ 2,389  $ 2,139 
Changes in operating assets and liabilities, net of effects of business acquisitions:
Trade accounts receivable $ (7,649) $ 11,265 
Inventories $ (19,214) $ (21,467)
Prepaid expenses and other $ (2,800) $ 359 
Other assets $ (636) $ (143)
Trade accounts payable $ 1,718  $ (15,720)
Accrued liabilities $ (8,668) $ (6,938)
Non-current liabilities $ (2,955) $ (2,451)
Net cash provided by (used for) operating activities $ (17,247) $ (11,177)
Investing activities:    
Proceeds from sales of marketable securities $ 1,100  $ 650 
Purchases of marketable securities $ (906) $ (1,226)
Capital expenditures $ (5,273) $ (2,953)
Purchases of businesses, net of cash acquired $ (107,605) $ (1,616)
Dividend received from equity method investment $ —  $ 313 
Net cash provided by (used for) investing activities $ (112,684) $ (4,832)
Financing activities:  
Proceeds from the issuance of common stock $ 225  $ 415 
Repayment of debt $ (10,143) $ (10,128)
Proceeds from issuance of long-term debt $ 120,000  $ — 
Fees paid for borrowings on long-term debt $ (2,046) $ — 
Cash inflows from hedging activities $ 6,053  $ 6,163 
Cash outflows from hedging activities $ (6,298) $ (6,022)
Payment of dividends $ (2,004) $ (1,996)
Other $ (1,802) $ (1,313)
Net cash provided by (used for) financing activities $ 103,985  $ (12,881)
Effect of exchange rate changes on cash $ (236) $ (840)
Net change in cash and cash equivalents $ (26,182) $ (29,730)
Cash, cash equivalents, and restricted cash at beginning of year $ 133,426  $ 115,640 
Cash, cash equivalents, and restricted cash at end of period $ 107,244  $ 85,910 


Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 7 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Q1 FY 2024 Sales Bridge

Quarter
($ in millions) $ Change % Change
Fiscal 2023 Sales
$ 220.3 
Acquisition 2.7  1.2  %
Volume 3.7  1.7  %
Pricing 8.5  3.9  %
Foreign currency translation 0.3  0.1  %
Total change $ 15.2  6.9  %
Fiscal 2024 Sales
$ 235.5 


COLUMBUS McKINNON CORPORATION
Q1 FY 2024 Gross Profit Bridge

($ in millions) Quarter
Fiscal 2023 Gross Profit
$ 82.5 
Price, net of material cost inflation 6.5 
Sales volume and mix (1.1)
Acquisition 0.8 
Current year business realignment costs (0.2)
Productivity and other cost changes (2.0)
Foreign currency translation 0.1 
Total change 4.1 
Fiscal 2024 Gross Profit
$ 86.6 

U.S. Shipping Days by Quarter 
  Q1 Q2 Q3 Q4 Total
FY 24 63 62 61 62 248
FY 23 63 64 60 63 250




Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 8 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Additional Data - UNAUDITED

  June 30,
2023
March 31,
2023
June 30,
2022
($ in millions)
Backlog $ 355.3  $ 308.7    $ 351.6 
Long-term backlog
  Expected to ship beyond 3 months $ 177.3  $ 142.0  $ 162.8 
Long-term backlog as % of total backlog 49.9  % 46.0  % 46.3  %
Trade accounts receivable    
Days sales outstanding (2)
62.9  days 54.3  days 54.9  days
Inventory turns per year (2)
   
(based on cost of products sold) 2.9  turns 3.6  turns 2.9  turns
Days' inventory 125.9  days 101.4  days 125.4  days
Trade accounts payable    
Days payables outstanding (2)
53.3  days 53.3  days 58.6  days
Working capital as a % of sales (2)(3)
21.4  % 17.3  % 19.9  %
Net cash provided by (used for) operating activities $ (17.2) $ 66.7  $ (11.2)
Capital expenditures $ 5.3  $ 3.1  $ 3.0 
Free cash flow (1)
$ (22.5) $ 63.6  $ (14.1)
Debt to total capitalization percentage 40.6  % 36.1  % 39.3  %
Debt, net of cash, to net total capitalization 35.8  % 28.9  % 34.9  %

(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)June 30, 2023, March 31, 2023, and June 30, 2022 figures exclude the impact of the acquisition of montratec.
(3)June 30, 2022 figure excludes the impact of the acquisition of Garvey.



Columbus McKinnon Sales Increased 7% for First Quarter Fiscal Year 2024
Page 9 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit
($ in thousands)

Three Months Ended
June 30, 2023 June 30, 2022
GAAP gross profit $ 86,649  $ 82,519 
Add back (deduct):
Business realignment costs 196  — 
Non-GAAP adjusted gross profit $ 86,845  $ 82,519 
Sales $ 235,492  $ 220,287 
Gross margin - GAAP 36.8  % 37.5  %
Adjusted gross margin - Non-GAAP 36.9  % 37.5  %

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 Sales Increased 7% for First Quarter Fiscal Year 2024
Page 10 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations
($ in thousands)

Three Months Ended
June 30, 2023 June 30, 2022
GAAP income from operations $ 21,448  $ 22,817 
Add back (deduct):
Acquisition deal and integration costs 2,587  86 
Business realignment costs 375  1,657 
North American warehouse consolidation 117  — 
Headquarter relocation costs 1,228  — 
Non-GAAP adjusted income from operations $ 25,755  $ 24,560 
Sales $ 235,492  $ 220,287 
Operating margin - GAAP 9.1  % 10.4  %
Adjusted operating margin - Non-GAAP 10.9  % 11.1  %

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 Sales Increased 7% for First Quarter Fiscal Year 2024
Page 11 of 12
August 2, 2023
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
June 30, 2023 June 30, 2022
GAAP net income (loss) 9,275  8,391 
Add back (deduct):
Amortization of intangibles 6,877  6,535 
Acquisition deal and integration costs 2,587  86 
Business realignment costs 375  1,657 
North American warehouse consolidation 117  — 
Headquarter relocation costs 1,228  — 
     Normalize tax rate (1)
(2,569) 3,269 
Non-GAAP adjusted net income 17,890  19,938 
Average diluted shares outstanding 28,906  28,699 
Diluted income (loss) per share - GAAP $ 0.32  $ 0.29
Diluted income per share - Non-GAAP $ 0.62  $ 0.69

(1) Applies a normalized tax rate of 25% in fiscal 2024 and 22% in fiscal 2023 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 Sales Increased 7% for First Quarter Fiscal Year 2024
Page 12 of 12
August 2, 2023
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
($ in thousands)

Three Months Ended
June 30, 2023 June 30, 2022
GAAP net income (loss) $ 9,275  $ 8,391 
Add back (deduct):
Income tax expense (benefit) 3,394  8,893 
Interest and debt expense 8,625  6,203 
Investment (income) loss (543) 430 
Foreign currency exchange (gain) loss 483  1,203 
Other (income) expense, net 214  (2,303)
Depreciation and amortization expense
10,890  10,469 
Acquisition deal and integration costs 2,587  86 
Business realignment costs 375  1,657 
North American warehouse consolidation 117  — 
Headquarter relocation costs 1,228  — 
Non-GAAP adjusted EBITDA $ 36,645  $ 35,029 
Sales $ 235,492  $ 220,287 
Net income (loss) margin - GAAP 3.9  % 3.8  %
Adjusted EBITDA margin - Non-GAAP 15.6  % 15.9  %

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.

EX-99.2 3 a20230802cmcoq1fy24finan.htm EX-99.2 a20230802cmcoq1fy24finan
Q1 Fiscal Year 2024 Financial Results Conference Call President & Chief Executive Officer David J. Wilson August 2, 2023 Executive VP – Finance & Chief Financial Officer Gregory P. Rustowicz


 
© 2023 COLUMBUS MCKINNON CORPORATION These slides, and the accompanying oral discussion (together, this “presentation”), contain “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 including revenue guidance, gross margin improvements, and reduction of RSG&A as a percent of revenue; 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 presentation. Non-GAAP Financial Measures and Forward-looking Non-GAAP Measures This presentation will discuss some non-GAAP (“adjusted”) financial measures which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results compared in accordance with GAAP. The non-GAAP (“adjusted”) measures are noted and reconciliations of comparable GAAP with non-GAAP measures can be found in tables included in the Supplemental Information portion of this presentation. Safe Harbor Statement 2


 
© 2023 COLUMBUS MCKINNON CORPORATION 3 Continued Execution Delivers Results Solid start to Fiscal 2024 with strong sales and orders Sales increased 7% driven by 6% organic growth y/y from price and volume • Q1 FY24 sales of $235.5 million, up $15.2 million including $2.7 million from montratec® • EMEA/APAC had strength in all product lines; Americas strong in automation & linear motion • Achieved adjusted gross margin of 36.9%, a 100-bps improvement over trailing quarter Strong Orders and Solid Backlog Support FY24 Outlook • Orders up 5% sequentially compared with Q4 FY23 • Orders of $257.0 million results in book-to-bill ratio of 1.1x • Driving to take market share with focus on customer experience while capitalizing on megatrends Executing on Transformation Plan to Drive Growth and Stronger Earnings Power Successfully refinanced debt; paid down $10 million in quarter • Reduced cost of debt and eliminated need to test financial covenant • Net debt leverage ratio(1) 2.9x; expect to be less than 2.5x by end of fiscal year (1) On A financial covenant basis per Amended and Restated Credit Agreement


 
© 2023 COLUMBUS MCKINNON CORPORATION 4 Operational Performance Continued progress with 80/20 and gross margin expansion Solid Start to FY2024; Expect to Realize 50 to 100 bps Gross Margin Improvement Annually ADJUSTED GROSS MARGIN PROGRESSION Operating Initiatives • Operational Excellence • Volume/scale/pricing • Product line simplification Strategic Initiatives • Accretive acquisitions • Factory simplification GROSS MARGIN LEVERS 33.7% 35.0% 35.4% 34.1% 36.1% 36.5% 36.9% ~40% FY18 FY19 FY20 FY21 FY22 FY23 Q1 FY24 FY27E


 
© 2023 COLUMBUS MCKINNON CORPORATION Net Sales Strong Volume Growth in EMEA, APAC, Latin America and Canada Quarter Sales Bridge • U.S.: 5.1% pricing increase and 7.1% volume decrease • Non-U.S.: 1.7% pricing and 16.5% volume increase 5 Q1 sales up 6.7% on constant currency from prior-year $220.3 $231.7 $230.4 $253.8 $235.5 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 ($ in millions) Note: Components may not add to totals due to rounding Quarter ($ in millions) $ Change % Change Fiscal 2023 Sales $ 220.3 Pricing 8.5 3.9% Volume 3.7 1.7% Acquisition 2.7 1.2% Foreign currency translation 0.3 0.1% Total change $ 15.2 6.9% Fiscal 2024 Sales $ 235.5


 
© 2023 COLUMBUS MCKINNON CORPORATION 6 Gross Profit & Margin Quarter Gross Profit Bridge Continued Sequential Improvement in Margin; Prior Year Benefitted from Inventory Revaluation $82.5 $86.3 $82.0 $91.2 $86.6 37.5% 37.2% 35.6% 35.9% 36.8% 37.5% 37.2% 35.6% 35.9% 36.9% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Adjusted Gross Margin ($ in millions) Note: Components may not add to totals due to rounding ($ in millions) Quarter Fiscal 2023 Gross Profit $ 82.5 Price, net of material cost inflation 6.5 Acquisition 0.8 Foreign currency translation 0.1 Current year business realignment costs (0.2) Sales volume and mix (1.1) Productivity and other cost changes (2.0) Total change 4.1 Fiscal 2024 Gross Profit $ 86.6


 
© 2023 COLUMBUS MCKINNON CORPORATION 7 RSG&A $26.2 $25.6 $25.4 $25.3 $25.0 $21.9 $21.4 $25.1 $26.4 $27.4 $5.1 $5.5 $4.8 $5.5 $5.9 $53.2 $52.5 $55.4 $57.2 $58.3 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Selling G&A R&D Q/Q Comparison: • Additional $0.8 million from montratec acquisition Y/Y Comparison: • Incremental $2.5 million of acquisition costs • HQ relocation expenses of $1.2 million • Higher stock compensation costs of $1.3 million • Higher R&D costs of $0.8 million • Offset by lower business realignment costs of $1.5 million Expect Q2 FY24 RSG&A of approximately $58 million including full quarter of montratec On track to deliver ~50 bps improvement annually (1)RSG&A guidance provided August 2, 2023. Excludes business realignment, integration, acquisitions and other one-time costs, unless otherwise noted. Note: Components may not add to totals due to rounding RSG&A as % of sales: 24.8% Excluding $4.1 Million of Non-Operating Costs RSG&A was 23% of Sales ($ in millions) 24.1% 24.1% 22.5%22.7%


 
© 2023 COLUMBUS MCKINNON CORPORATION 8 Operating Income Y/Y operating income and margin impacted by net non-operating adjustments of $2.6 million • Acquisition deal & integration costs of $2.5 million • HQ relocation of $1.2 million • NA warehouse consolidation $0.1 million • Business realignment costs of ($1.3) million Y/Y adjusted operating income increased $1.2 million • Higher gross profit from higher sales added $4.3 million operating income • Partially offset by higher G&A costs • Prior year benefited 100 bps from inventory revaluation Expect Q2 FY24 amortization expense of approximately $7.5 million including montratec(1) Delivered Adjusted Operating Income Growth of 5% Y/Y Operating Income & Margin Adjusted Operating Income & Margin $24.6 $28.6 $23.5 $29.2 $25.8 11.1% 12.4% 10.2% 11.5% 10.9% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 $22.8 $27.4 $20.2 $27.5 $21.4 10.4% 11.8% 8.8% 10.8% 9.1% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 ($ in millions) (1)Guidance on amortization expense provided on August 2, 2023


 
© 2023 COLUMBUS MCKINNON CORPORATION $0.29 $0.49 $0.42 $0.48 $0.32 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 9 Earnings Per Share Adjusted EPS GAAP Diluted EPS $0.69 $0.73 $0.72 $0.80 $0.62 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY24 net income increased 10.5% to $9.3 million, up $0.03 per diluted share y/y • Prior-year quarter impacted by Investment and FX losses as well as discrete items in tax expense Adj. net income of $17.9 million in the quarter Add backs (pre-tax): • $6.9 million of amortization of intangibles • $2.6 million acquisition deal & integration costs • $1.6 million of business realignment & HQ move costs • $0.1 million NA warehouse consolidation Guidance: • FY24 non-GAAP adjusted tax rate: 25%(1) • Q2 FY24 interest expense: ~$10.0 million(1) • Q2 FY24 diluted shares outstanding: ~29.0 million(1) (1)Guidance on tax rate, interest expense, FX and investment losses and number of diluted shares outstanding provided on August 2, 2023 Executing to Deliver Operating Leverage that Offsets Higher Interest and Tax Expense


 
© 2023 COLUMBUS MCKINNON CORPORATION $140.1 $147.8 $149.4 15.4% 15.8% 15.7% FY22 FY23 Q1 FY24 TTM 10 Adjusted EBITDA & ROIC Return on Invested Capital (ROIC)(1) Adjusted EBITDA and Margin 7.2% 6.7% 6.6% FY22 FY23 Q1 FY24 TTM Targeting Double Digit ROIC Over Time (1)ROIC is a non-GAAP measure defined as adjusted income from operations, net of taxes at a 25% normalized rate, for the trailing four quarters divided by the average of debt plus equity less cash (average capital) for the trailing five quarters. Prior year periods have been adjusted to the 25% tax rate. Targeting 21% EBITDA margin in FY2027 • Expect 80/20 initiatives, factory simplification, and operating leverage on increased scale to drive margin expansion Transforming business with strategic investments • ROIC is key metric for LTIP compensation of executives • TTM ROIC reflects higher average capital base driven by timing of acquisitions • Strategy expected to deliver improved earnings power and ROIC over time


 
© 2023 COLUMBUS MCKINNON CORPORATION $86.6 $35.8 $71.0 $62.6 951% 121% 147% 127% FY21 FY22 FY23 Q1 FY24 TTM 11 Free Cash Flow & Conversion (2) Cash Flow Note: Components may not add to totals due to rounding Three Months Ended 6/30/23 6/30/22 Net cash provided by (used for) operating activities $ (17.2) $ (11.2) CapEx 5.3 3.0 Free cash flow (FCF) $ (22.5) $ (14.1) (1)Capital expenditure guidance provided August 2, 2023. (2)See Supplemental Slides for the definition of free cash flow, free cash flow conversion reconciliation and other disclaimers regarding non-GAAP information. First quarter cash from operations impacted by increase in working capital • Working capital usage included inventory investments, accounts receivable timing and annual bonus payments FY24 CapEx expected to be $30 million to $40 million (1) • Investments enable factory simplification, productivity and lower cost center of excellence Expect FCF Conversion of Approximately 90% to 100% in FY2024 ($ in millions)


 
© 2023 COLUMBUS MCKINNON CORPORATION 12 Capital Structure Net debt leverage ratio of ~2.9x(1) • Plan to continue to pay down debt and grow EBITDA • Expect net leverage of <2.5x by end of fiscal year Paid down $10 million in debt in Q1 FY24 • Expect to pay down a total of $40 million in FY24 Refinanced Debt: Lower cost and improved flexibility • Increased Term Loan B by $75 million; matures May 2028 • Added ABL with accounts receivable that matures June 2026; up to $55 million capacity • ~65% of Term Loan B debt is currently hedged at 3-month SOFR swap rate of ~2.8% including credit spread adjustment Financial flexibility with $267 million of liquidity Capital Priorities are Focused on Organic Growth and Debt Reduction CAPITALIZATION June 30, 2023 March 31, 2023 Cash and cash equivalents $ 107.0 $ 133.2 Total debt 579.8 471.6 Total net debt 472.8 338.4 Shareholders’ equity 847.0 833.8 Total capitalization $ 1,426.7 $ 1,305.4 Debt/total capitalization 40.6% 36.1% Net debt/net total capitalization 35.8% 28.9% ($ in millions) Note: Components may not add to totals due to rounding (1)On a financial covenant basis per Amended and Restated Credit Agreement


 
© 2023 COLUMBUS MCKINNON CORPORATION 13 Strong Sequential Order Growth Record Backlog of $355.3 million Orders and Backlog • Orders up 5% sequentially with strong demand in North America • Excluding montratec, precision conveyance orders grew 28% sequentially • Industrial automation megatrend driving demand • Prior-year period benefitted from timing of distributors’ pre-purchases • Strong pipeline of quotation activity $267.1 $222.1 $215.0 $246.0 $257.0 1.21x 0.96x 0.93x 0.97x 1.09x Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Orders Book:Bill (1)Long term backlog is expected to ship beyond three months $162.8 $161.2 $164.7 $142.0 $177.3 $188.8 $166.6 $164.4 $166.7 $178.0 $351.6 $327.8 $329.1 $308.7 $355.3 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Long Term Backlog Short Term Backlog (1) ($ in millions) Order Strength Over Last Six Months and Strong Backlog Support Growth Plans for FY2024 • Short term backlog grew 7% sequentially • Long-term backlog grew 25% sequentially • montratec added $23.4 million to backlog • Excluding montratec, precision conveyance backlog up 31% vs Q4


 
© 2023 COLUMBUS MCKINNON CORPORATION 14Executing Strategy to Create a Scalable Enterprise with Top Tier Margin Performance Executing to Deliver Strategic Plan Growth Objectives (1) Revenue guidance provided August 2, 2023, based on current exchange rates Outlook is encouraging • Expect Q2 FY24 net sales of approximately $250 million to $260 million (1) including montratec • FY24 organic growth in low-to-mid single digits; expect to surpass $1 billion in revenue • Executing targeted commercial and customer centric product initiatives • On track for gross margin improvement of 50 bps to 100 bps Advancing 80/20 Product Line Simplification while introducing advancements in offerings • Wire Rope Hoist Generation 2.0 offers precise load control, increased duty cycles, easy trouble shooting and extended component service life • Platforming electric chain and wire rope hoist offering to simplify supply chain and take out costs while providing more features and options for customers to expand addressable market, improve competitiveness and grow sales Focused on execution and transformation strategy • montratec addition a growth catalyst that enhances technology and product offerings in precision conveyance • Expect to achieve FY27 strategic plan objectives with measurable progress in FY24


 
Q1 Fiscal Year 2024 Financial Results Conference Call President & Chief Executive Officer David J. Wilson August 2, 2023 Executive VP – Finance & Chief Financial Officer Gregory P. Rustowicz


 
Supplemental Information


 
© 2023 COLUMBUS MCKINNON CORPORATION 17 Conference Call Playback Info Replay Number: 412-317-6671 passcode: 10180167 Telephone replay available through August 9, 2023 Webcast / PowerPoint / Replay available at investors.cmco.com Transcript, when available, at investors.cmco.com


 
© 2023 COLUMBUS MCKINNON CORPORATION 18 Adjusted Gross Profit Reconciliation 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. ($ in thousands) Quarter Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 GAAP gross profit $ 82,519 $ 86,310 $ 82,044 91,218 86,649 Add back (deduct): Business realignment costs — — — — 196 Non-GAAP adjusted gross profit $ 82,519 $ 86,310 $ 82,044 $ 91,218 $ 86,845 Sales $ 220,287 $ 231,740 $ 230,370 $ 253,843 $ 235,492 Gross margin – GAAP 37.5% 37.2% 35.6% 35.9% 36.8% Adjusted gross margin – Non-GAAP 37.5% 37.2% 35.6% 35.9% 36.9%


 
© 2023 COLUMBUS MCKINNON CORPORATION 19 Adjusted Gross Profit Reconciliation 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. ($ in thousands) Fiscal Year TTM 2019 2020 2021 2022 2023 Q1 FY24 GAAP gross profit $ 304,997 $ 283,186 $ 220,225 $ 315,730 $ 342,099 $ 346,221 Add back (deduct): Product liability settlement — — — 2,850 — — Acquisition amortization of backlog — — — 2,100 — — Acquisition inventory step-up expense — — — 5,042 — — Business realignment costs 286 1,037 830 1,606 — 196 Acquisition deal and integration costs — — — 521 — — Factory closures 1,473 2,800 2,671 — — — Insurance settlement — (382) — — — — Gain on sale of building — — (2,189) — — — Non-GAAP adjusted gross profit $ 306,756 $ 286,641 $ 221,537 $ 327,849 $ 342,099 $ 346,417 Sales $ 876,282 $ 809,162 $ 649,642 $ 906,555 $ 936,240 $ 951,445 Add back: Acquisition amortization of backlog — — — 2,100 — — Non-GAAP sales $ 876,282 $ 809,162 $ 649,642 $ 908,655 $ 936,240 $ 951,445 Gross margin – GAAP 34.8% 35.0% 33.9% 34.8% 36.5% 36.4% Adjusted gross margin – Non-GAAP 35.0% 35.4% 34.1% 36.1% 36.5% 36.4%


 
© 2023 COLUMBUS MCKINNON CORPORATION 20 Adjusted Income from Operations Reconciliation 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. ($ in thousands) Quarter Fiscal Year Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 2022 2023 GAAP income from operations $ 22,817 $ 27,372 $ 20,179 $ 27,469 $ 21,448 $ 73,781 $ 97,841 Add back (deduct): Acquisition deal and integration costs 86 19 338 173 2,587 10,473 616 Acquisition inventory step-up expense — — — — — 5,042 — Business realignment costs 1,657 1,233 1,401 848 375 3,902 5,140 Garvey contingent consideration — — 1,230 — — — 1,230 Product liability settlement — — — — — 2,850 — Headquarter relocation costs — — 315 681 1,228 — 996 Acquisition amortization of backlog — — — — — 2,100 — North American warehouse consolidation — — — — 117 — — Non-GAAP adjusted income from operations $ 24,560 $ 28,624 $ 23,463 $ 29,171 $ 25,755 $ 98,148 $ 105,823 Sales $ 220,287 $ 231,740 $ 230,370 $ 253,843 $ 235,492 $ 906,555 $ 936,240 Add back: Acquisition amortization of backlog — — — — — 2,100 — Non-GAAP sales $ 220,287 $ 231,740 $ 230,370 $ 253,843 $ 235,492 $ 908,655 $ 936,240 Operating margin – GAAP 10.4% 11.8% 8.8% 10.8% 9.1% 8.1% 10.5% Adjusted operating margin – Non-GAAP 11.1% 12.4% 10.2% 11.5% 10.9% 10.8% 11.3%


 
© 2023 COLUMBUS MCKINNON CORPORATION 21 Adjusted Net Income Reconciliation (1)Applies normalized tax rate of 25% (22% prior to Q1 FY24) to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax. Adjusted net income and diluted EPS are defined as GAAP net income/(loss) 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/(loss) and diluted EPS to the historical periods' net income/(loss) and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income/(loss) 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. ($ in thousands, except per share data) Quarter Fiscal Year Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 FY 2022 FY 2023 GAAP net income (loss) $ 8,391 $ 14,114 $ 12,029 $ 13,895 $ 9,275 $ 29,660 $ 48,429 Add back (deduct): Amortization of intangibles 6,535 6,447 6,459 6,559 6,877 25,283 26,001 Cost of debt refinancing — — — — — 14,803 — Acquisition deal and integration costs 86 19 338 173 2,587 10,473 616 Acquisition inventory step-up expense — — — — — 5,042 — Business realignment costs 1,657 1,233 1,401 848 375 3,902 5,140 Product liability settlement — — — — — 2,850 — Garvey contingent consideration — — 1,230 — — — 1,230 Headquarter relocation costs — — 315 681 1,228 — 996 Acquisition amortization of backlog — — — — — 2,100 — North American warehouse consolidation — — — — 117 — — Normalize tax rate to 25%(1) 3,269 (938) (1,123) 975 (2,569) (13,852) 2,185 Non-GAAP adjusted net income $ 19,938 $ 20,875 $ 20,649 $ 23,131 $ 17,890 $ 80,261 $ 84,597 Average diluted shares outstanding 28,699 28,748 28,778 28,869 28,906 28,401 28,818 Diluted income (loss) per share – GAAP $ 0.29 $ 0.49 $ 0.42 $ 0.48 $ 0.32 $ 1.04 $ 1.68 Diluted income per share – Non-GAAP $ 0.69 $ 0.73 $ 0.72 $ 0.80 $ 0.62 $ 2.83 $ 2.94


 
© 2023 COLUMBUS MCKINNON CORPORATION 22 Adjusted EBITDA Reconciliation 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. ($ in thousands) Quarter Fiscal Year TTM Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 2022 2023 Q1 FY24 GAAP net income (loss) $ 8,391 $ 14,114 $ 12,029 $ 13,895 $ 9,275 $ 29,660 $ 48,429 $ 49,313 Add back (deduct): Income tax expense (benefit) 8,893 4,953 4,701 7,499 3,394 8,786 26,046 20,547 Interest and debt expense 6,203 6,768 7,303 7,668 8,625 20,126 27,942 30,364 Investment (income) loss 430 312 (574) (483) (543) (46) (315) (1,288) Foreign currency exchange (gain) loss 1,203 1,003 (3,359) (1,037) 483 1,574 (2,189) (2,910) Other (income) expense, net (2,303) 222 79 (73) 214 (1,122) (2,072) 442 Depreciation and amortization expense 10,469 10,424 10,487 10,567 10,890 41,924 41,947 42,368 Cost of debt refinancing — — — — — 14,803 — — Acquisition deal and integration costs 86 19 338 173 2,587 10,473 616 3,117 Acquisition inventory step-up expense — — — — — 5,042 — — Product liability settlement — — — — — 2,850 — — Business realignment costs 1,657 1,233 1,401 848 375 3,902 5,140 3,857 Acquisition amortization of backlog — — — — — 2,100 — — North American warehouse consolidation — — — — 117 — — 117 Garvey contingent consideration — — 1,230 — — — 1,230 1,230 Headquarter relocation costs — — 315 681 1,228 — 996 2,224 Non-GAAP adjusted EBITDA $ 35,029 $ 39,048 $ 33,950 $ 39,738 $ 36,645 $ 140,072 $ 147,770 $ 149,381 Sales $ 220,287 $ 231,740 $ 230,370 $ 253,843 $ 235,492 $ 906,555 $ 936,240 $ 951,445 Add back: Acquisition amortization of backlog — — — — — 2,100 - - Non-GAAP sales $ 220,287 $ 231,740 $ 230,370 $ 253,843 $ 235,492 $ 908,655 $ 936,240 $ 951,445 Net income (loss) margin – GAAP 3.8% 6.1% 5.2% 5.5% 3.9% 3.3% 5.2% 5.2% Adjusted EBITDA margin – Non-GAAP 15.9% 16.8% 14.7% 15.7% 15.6% 15.4% 15.8% 15.7%


 
© 2023 COLUMBUS MCKINNON CORPORATION 23 Return on Invested Capital (ROIC) Reconciliation ROIC is defined as adjusted income from operations, net of taxes at a 25% (22% prior to FY24) normalized rate, for the trailing four quarters divided by the average of debt plus equity less cash (average capital) for the trailing five quarters. ROIC 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 ROIC, is important for investors and other readers of the Company’s financial statements. ($ in thousands) Fiscal Year TTM 2022 2023 Q1 FY24 GAAP income from operations $ 73,781 $ 97,841 $ 96,468 Add back (deduct): Acquisition deal and integration costs 10,473 616 3,117 Acquisition inventory step-up expense 5,042 — — Product liability settlement 2,850 — — Acquisition amortization of backlog 2,100 — — Business realignment costs 3,902 5,140 3,857 Garvey contingent consideration — 1,230 1,230 Headquarter relocation costs — 996 2,224 North American warehouse consolidation — — 117 Non-GAAP adjusted income from operations $ 98,148 $ 105,823 $ 107,013 Non-GAAP adjusted income from operations, net of normalized tax rate of 25% (22% prior to FY24) $ 76,555 $ 82,542 $ 80,259 Trailing five quarter averages: Total debt 438,768 491,410 505,120 Total shareholders’ equity 701,640 795,410 810,241 Cash and cash equivalents 123,636 100,922 99,243 Net total capitalization $ 1,016,772 $ 1,185,898 $ 1,216,118 Return on invested capital (ROIC) – Non-GAAP 7.5% 7.0% 6.6%


 
© 2023 COLUMBUS MCKINNON CORPORATION Free Cash Flow (FCF) & FCF Conversion Reconciliation Free cash flow is defined as cash from operations minus capital expenditures. Free cash flow conversion is defined as free cash flow divided by net income. Free cash flow and free cash flow conversion 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 as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as free cash flow and free cash flow conversion, 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 cash flow to the historical periods’ cash flow, as well as facilitates a more meaningful comparison of the Company’s cash flow to that of other companies. 24 ($ in thousands) Fiscal Year TTM 2022 2023 Q1 FY24 Cash from operations $ 48,881 $ 83,636 $ 77,566 Capital expenditures (13,104) (12,632) (14,952) Free cash flow (FCF) $ 35,777 $ 71,004 $ 62,614 GAAP net income $ 29,660 $ 48,429 $ 49,313 Free cash flow conversion 121% 147% 127%


 
© 2023 COLUMBUS MCKINNON CORPORATION 25 U.S. Capacity Utilization Eurozone Capacity Utilization Industrial Capacity Utilization Source: The Federal Reserve Board Source: European Commission 60% 65% 70% 75% 80% Manufacturing Total 78.0% (Manufacturing) 78.9% (Total) Jun 2023(1) 65% 67% 69% 71% 73% 75% 77% 79% 81% 83% 85% 81.2% Q2 2023 (1) Numbers are preliminary


 
© 2023 COLUMBUS MCKINNON CORPORATION 26 ISM Production Index Source: Institute for Supply Chain Management 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 46.7% June 2023


 
© 2023 COLUMBUS MCKINNON CORPORATION 27 Business Model Transformation Innovation drives strategy and portfolio transformation Targeting $1.5 Billion In Revenue In Fiscal 2027 And ~21% EBITDA Margin Revenue Growth Rate EBITDA Margin Lifting Solutions 60% Specialty Conveying 16% Linear Motion 10% Automation 14% Lifting Solutions FY21 Lifting Solutions Specialty Conveying Linear Motion Automation Linear Motion & Automation FUTURE FY23


 
© 2023 COLUMBUS MCKINNON CORPORATION 28 Unlocking CMCO’s Potential Business System and Core Growth Framework to Transform CMCO Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value GROWTH FRAMEWORKCMBS TRANSFORMATION


 
Q1 Fiscal Year 2024 Financial Results Conference Call President & Chief Executive Officer David J. Wilson August 2, 2023 Executive VP – Finance & Chief Financial Officer Gregory P. Rustowicz