Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
BUFFALO, NY, July 29, 2021 - Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2022 first quarter, which ended June 30, 2021. Results include the addition of Dorner Manufacturing Corporation, which was acquired on April 7, 2021.
First Quarter Highlights (compared with prior year period)
•Revenue of $213.5 million up 53%, supported by organic growth of 24%
•Gross margin expanded 250 bps to 34.7%; Achieved record adjusted gross margin of 36.3% with incremental 80 bps contribution from Dorner acquisition
•Operating margin expanded 370 bps to 5.0%; Adjusted operating margin expanded 750 bps to 11.1%
•Advancing Blueprint for Growth 2.0 strategy and focusing on growth initiatives
David Wilson, President and CEO of Columbus McKinnon, commented, “We had a very good start to fiscal 2022 delivering strong growth, expanding margins and achieving record backlog. We are encouraged by increasing demand in all markets. Importantly, we are also having success with our new products and customer solutions, as we continue to advance our Blueprint for Growth 2.0 strategy. Dorner, our new conveying solutions platform, is seeing strong demand and is outpacing expectations. We are working across the enterprise to drive growth initiatives as we pursue the many opportunities in front of us.”
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 2 of 12
July 29, 2021
First Quarter Fiscal 2022 Sales
($ in millions)
Q1 FY 22
Q1 FY 21
Change
% Change
Net sales
$
213.5
$
139.1
$
74.4
53.5
%
U.S. sales
$
124.5
$
74.7
$
49.8
66.7
%
% of total
58
%
54
%
Non-U.S. sales
$
89.0
$
64.4
$
24.6
38.2
%
% of total
42
%
46
%
For the quarter, sales increased $74.4 million, or 53.5%. The Dorner acquisition added $34.2 million in sales. In the U.S., volume improved $20.8 million, or 27.8%, and price improved $0.6 million, or 0.9%. U.S. sales related to the acquisition were $28.3 million. Outside the U.S., volume improved $10.5 million, or 16.4%, and price improved $1.3 million, or 2.0%. The Dorner acquisition added $5.9 million of sales outside the U.S. Foreign currency translation was favorable $6.9 million, or 5.0% of total sales.
First Quarter Fiscal 2022 Operating Results
($ in millions)
Q1 FY 22
Q1 FY 21
Change
% Change
Gross profit
$
74.1
$
44.8
$
29.3
65.3
%
Gross margin
34.7
%
32.2
%
250 bps
Income from operations
$
10.7
$
1.8
$
9.0
500.7
%
Operating margin
5.0
%
1.3
%
370 bps
Adjusted income from operations*
$
23.6
$
5.0
$
18.6
371.2
%
Adjusted operating margin*
11.1
%
3.6
%
750 bps
Net income (loss)
$
(7.3)
$
(3.0)
$
(4.3)
NM
Net income (loss) margin
(3.4)
%
(2.1)
%
(130) bps
Diluted EPS
$
(0.27)
$
(0.12)
$
(0.15)
NM
Adjusted EPS*
$
0.69
$
0.17
$
0.52
305.9
%
Adjusted EBITDA*
$
34.1
$
12.1
$
22.0
181.8
%
Adjusted EBITDA margin*
16.0
%
8.7
%
730 bps
*Adjusted operating income, adjusted operating margin, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted operating income, adjusted operating margin, adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA.
Dorner contributed $5.1 million in operating income excluding inventory step up expense of $3.0 million and acquisition deal costs of $1.0 million. Adjusted earnings per diluted share was $0.69 in the fiscal 2022 first quarter compared with $0.17 in the prior year. Adjusted EPS excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.
Second Quarter Fiscal 2022 Outlook
The Company expects second quarter fiscal 2022 sales to be within a range of approximately $225 million to $230 million at current exchange rates.
Mr. Wilson concluded, “We are excited about the progress we are making and are increasingly encouraged by our potential over the longer term. With record backlog and increasing order trends, we expect to deliver a solid year of recovery even as we navigate the dynamic landscape of supply chain and staffing challenges. More importantly, we are making the investments necessary to execute on our strategy and implement the Columbus McKinnon Business System (“CMBS”) to drive further growth, enable scalability, improve our earnings power and achieve our goal of 19% adjusted EBITDA margin in fiscal 2023.”
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 3 of 12
July 29, 2021
Teleconference/webcast
Columbus McKinnon will host a conference call and live webcast today at 10:00 AM Eastern Time, at which management will review the Company’s financial results and strategy. The review will be accompanied by a slide presentation, which will be available on Columbus McKinnon’s website at investors.columbusmckinnon.com. A question and answer session will follow the formal discussion.
The conference call can be accessed by dialing 412-317-6026. The listen-only audio webcast can be monitored at investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 10158268. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, August 5, 2021. Alternatively, an archived webcast of the call can be found on the Company’s website. In addition, a transcript of the call will be posted to the website once available.
About Columbus McKinnon
Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions that efficiently and ergonomically move, lift, position and secure materials. Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations and digital power and motion control systems. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available at www.columbusmckinnon.com.
Safe Harbor Statement
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning future sales and earnings, involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including the ability of the Company to integrate Dorner, the impact of supply chain and staffing challenges, the ability of the Company to achieve its Blueprint for Growth 2.0 strategy and execute CMBS; and the amount of integration costs and the Company’s efforts to reduce costs, maintain liquidity and generate cash, the Company’s ability to grow market share, the ability to achieve revenue expectations, global economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the ability to expand into new markets and geographic regions, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to update the forward-looking information contained in this release.
Contacts:
Gregory P. Rustowicz
Investor Relations:
Vice President - Finance and Chief Financial Officer
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 Reports Financial Results for First Quarter Fiscal Year 2022
Page 4 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
Three Months Ended
June 30, 2021
June 30, 2020
Change
Net sales
$
213,464
$
139,070
53.5
%
Cost of products sold
139,401
94,273
47.9
%
Gross profit
74,063
44,797
65.3
%
Gross profit margin
34.7
%
32.2
%
Selling expenses
23,482
18,695
25.6
%
% of net sales
11.0
%
13.4
%
General and administrative expenses
30,143
18,429
63.6
%
% of net sales
14.1
%
13.3
%
Research and development expenses
3,583
2,769
29.4
%
% of net sales
1.7
%
2.0
%
Amortization of intangibles
6,109
3,115
96.1
%
Income from operations
10,746
1,789
500.7
%
Operating margin
5.0
%
1.3
%
Interest and debt expense
5,812
3,188
82.3
%
Cost of debt refinancing
14,803
—
NM
Investment (income) loss
(433)
(577)
(25.0)
%
Foreign currency exchange (gain) loss
94
84
11.9
%
Other (income) expense, net
250
3,026
(91.7)
%
Income (loss) before income tax expense (benefit)
(9,780)
(3,932)
NM
Income tax expense (benefit)
(2,517)
(963)
NM
Net income (loss)
$
(7,263)
$
(2,969)
NM
Average basic shares outstanding
26,762
23,802
12.4
%
Basic income (loss) per share
$
(0.27)
$
(0.12)
NM
Average diluted shares outstanding
26,762
23,802
12.4
%
Diluted income (loss) per share
$
(0.27)
$
(0.12)
NM
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 5 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
June 30, 2021
March 31, 2021
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
88,654
$
202,127
Trade accounts receivable
123,168
105,464
Inventories
138,658
111,488
Prepaid expenses and other
31,696
22,763
Total current assets
382,176
441,842
Property, plant, and equipment, net
99,597
74,753
Goodwill
621,939
331,176
Other intangibles, net
401,859
213,362
Marketable securities
10,072
7,968
Deferred taxes on income
1,160
20,080
Other assets
63,827
61,251
Total assets
$
1,580,630
$
1,150,432
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable
$
71,570
$
68,593
Accrued liabilities
113,143
110,816
Current portion of long-term debt and finance lease obligations
60,501
4,450
Total current liabilities
245,214
183,859
Term loan and finance lease obligations
398,795
244,504
Other non-current liabilities
212,168
191,920
Total liabilities
856,177
620,283
Shareholders’ equity:
Common stock
284
240
Additional paid-in capital
495,541
296,093
Retained earnings
286,539
293,802
Accumulated other comprehensive loss
(57,911)
(59,986)
Total shareholders’ equity
724,453
530,149
Total liabilities and shareholders’ equity
$
1,580,630
$
1,150,432
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 6 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Statements of Cash Flows - UNAUDITED
(In thousands)
Three Months Ended
June 30, 2021
June 30, 2020
Operating activities:
Net income (loss)
$
(7,263)
$
(2,969)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization
10,467
7,081
Deferred income taxes and related valuation allowance
(245)
(1,500)
Net loss (gain) on sale of real estate, investments, and other
(391)
(494)
Stock based compensation
2,262
2,071
Amortization of deferred financing costs
471
665
Cost of debt refinancing
14,803
—
Non-cash pension settlement expense
—
2,722
Non-cash lease expense
1,989
1,876
Changes in operating assets and liabilities, net of effects of business acquisitions and divestitures:
Trade accounts receivable
2,043
27,955
Inventories
(10,802)
3,924
Prepaid expenses and other
(5,714)
(2,766)
Other assets
35
(39)
Trade accounts payable
(5,879)
(18,248)
Accrued liabilities
(5,945)
(7,926)
Non-current liabilities
(3,227)
(2,836)
Net cash provided by (used for) operating activities
(7,396)
9,516
Investing activities:
Proceeds from sales of marketable securities
2,181
1,034
Purchases of marketable securities
(4,137)
(880)
Capital expenditures
(3,648)
(1,088)
Proceeds from sale of building, net of transaction costs
—
6,363
Proceeds from insurance reimbursement
482
—
Purchase of business, net of cash acquired
(475,311)
—
Net cash provided by (used for) investing activities
(480,433)
5,429
Financing activities:
Proceeds from issuance of common stock
290
185
Borrowings under line-of-credit agreements
—
25,000
Repayment of debt
(455,040)
(1,112)
Proceeds from issuance of long-term debt
650,000
—
Proceeds from equity offering
207,000
—
Fees related to debt and equity offering
(25,292)
—
Payment of dividends
(1,439)
(1,427)
Other
(1,764)
(927)
Net cash provided by (used for) financing activities
373,755
21,719
Effect of exchange rate changes on cash
601
1,122
Net change in cash and cash equivalents
(113,473)
37,786
Cash, cash equivalents, and restricted cash at beginning of year
202,377
114,700
Cash, cash equivalents, and restricted cash at end of period
$
88,904
$
152,486
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 7 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Q1 FY 2022 Sales Bridge
Quarter
($ in millions)
$ Change
% Change
Fiscal 2021 Sales
$
139.1
Acquisitions
34.2
24.6
%
Volume
31.3
22.5
%
Pricing
2.0
1.4
%
Foreign currency translation
6.9
5.0
%
Total change
$
74.4
53.5
%
Fiscal 2022 Sales
$
213.5
COLUMBUS McKINNON CORPORATION
Q1 FY 2022 Gross Profit Bridge
($ in millions)
Quarter
Fiscal 2021 Gross Profit
$
44.8
Acquisition
14.0
Sales volume and mix
11.6
Productivity, net of other cost changes
2.9
Foreign currency translation
2.4
Prior year factory closure costs
1.9
Pricing, net of material cost inflation
0.7
Prior year business realignment costs
0.3
Acquisition integration costs
(0.5)
Tariffs
(1.0)
Acquisition inventory step-up expense
(3.0)
Total change
29.3
Fiscal 2022 Gross Profit
$
74.1
U.S. Shipping Days by Quarter
Q1
Q2
Q3
Q4
Total
FY 22
63
64
61
63
251
FY 21
63
64
61
63
251
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 8 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Additional Data - UNAUDITED
June 30, 2021
March 31, 2021
June 30, 2020
($ in millions)
Backlog
$
247.4
$
171.7
$
130.7
Long-term backlog
Expected to ship beyond 3 months
$
107.3
$
68.0
$
52.8
Long-term backlog as % of total backlog
43.4
%
39.6
%
40.4
%
Trade accounts receivable
Days sales outstanding
52.5
days
51.5
days
63.1
days
Inventory turns per year
(based on cost of products sold)
4.0
turns
4.4
turns
3.0
turns
Days' inventory
90.8
days
83.3
days
120.6
days
Trade accounts payable
Days payables outstanding
52.4
days
58.7
days
44.4
days
Working capital as a % of sales
12.5
%
9.3
%
14.9
%
Net cash provided by (used for) operating activities
$
(7.4)
$
26.9
$
9.5
Capital expenditures
$
3.6
$
6.4
$
1.1
Free cash flow (1)
$
(11.0)
$
20.5
$
8.4
Debt to total capitalization percentage
38.8
%
32.0
%
37.1
%
Debt, net of cash, to net total capitalization
33.8
%
8.1
%
20.9
%
(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.
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 9 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit
($ in thousands, except per share data)
Three Months Ended June 30,
2021
2020
GAAP gross profit
$
74,063
$
44,797
Add back (deduct):
Acquisition inventory step-up expense
2,981
—
Acquisition integration costs
521
—
Factory closures
—
1,928
Business realignment costs
—
329
Non-GAAP adjusted gross profit
$
77,565
$
47,054
Sales
$
213,464
$
139,070
Gross margin - GAAP
34.7
%
32.2
%
Adjusted gross margin - Non-GAAP
36.3
%
33.8
%
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 Reports Financial Results for First Quarter Fiscal Year 2022
Page 10 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations
($ in thousands, except per share data)
Three Months Ended June 30,
2021
2020
GAAP income from operations
$
10,746
$
1,789
Add back (deduct):
Acquisition deal and integration costs
9,242
—
Acquisition inventory step-up expense
2,981
—
Business realignment costs
623
821
Factory closures
—
2,256
Insurance recovery legal costs
—
141
Non-GAAP adjusted income from operations
$
23,592
$
5,007
Sales
$
213,464
$
139,070
Operating margin - GAAP
5.0
%
1.3
%
Adjusted operating margin - Non-GAAP
11.1
%
3.6
%
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 Reports Financial Results for First Quarter Fiscal Year 2022
Page 11 of 12
July 29, 2021
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,
2021
2020
GAAP net income (loss)
$
(7,263)
$
(2,969)
Add back (deduct):
Amortization of intangibles
6,109
3,115
Cost of debt refinancing
14,803
—
Acquisition deal and integration costs
9,242
—
Acquisition inventory step-up expense
2,981
—
Business realignment costs
623
821
Non-cash pension settlement expense
—
2,722
Factory closures
—
2,256
Insurance recovery legal costs
—
141
Normalize tax rate to 22% (1)
(7,792)
(2,090)
Non-GAAP adjusted net income
$
18,703
$
3,996
Average diluted shares outstanding
27,159
23,922
Diluted income (loss) per share - GAAP
$
(0.27)
$
(0.12)
Diluted income per share - Non-GAAP
$
0.69
$
0.17
(1) Applies a normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.
Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items, including amortization of intangible assets, and also adjusted for a normalized tax rate. Adjusted net income and diluted EPS are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted net income and diluted EPS, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's net income and diluted EPS to the historical periods' net income and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies. The Company believes that representing adjusted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company’s strategy to grow through acquisitions as well as organically.
Columbus McKinnon Reports Financial Results for First Quarter Fiscal Year 2022
Page 12 of 12
July 29, 2021
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
($ in thousands)
Three Months Ended June 30,
2021
2020
GAAP net income (loss)
$
(7,263)
$
(2,969)
Add back (deduct):
Income tax expense (benefit)
(2,517)
(963)
Interest and debt expense
5,812
3,188
Investment (income) loss
(433)
(577)
Foreign currency exchange (gain) loss
94
84
Other (income) expense, net
250
3,026
Depreciation and amortization expense
10,467
7,081
Cost of debt refinancing
14,803
—
Acquisition deal and integration costs
9,242
—
Acquisition inventory step-up expense
2,981
—
Business realignment costs
623
821
Factory closures
—
2,256
Insurance recovery legal costs
—
141
Non-GAAP adjusted EBITDA
$
34,059
$
12,088
Sales
$
213,464
$
139,070
Net income (loss) margin - GAAP
(3.4)
%
(2.1)
%
Adjusted EBITDA margin - Non-GAAP
16.0
%
8.7
%
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.
