CHARLOTTE, NC, February 10, 2025 - 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 third quarter, which ended December 31, 2024.
Third Quarter 2025 Highlights (compared with prior-year period, except where otherwise noted)
•Net sales of $234.1 million with 7.6% operating margin or 10.9% on an adjusted basis1
•Orders decreased 4% driven by a 6% decrease in short-cycle orders
◦EMEA orders increased 1% offset by a 5% decline in the Americas
◦Strength in Precision conveyance and linear motion orders, up 16% and 8% respectively
•Backlog of $296.5 million remains healthy and continues to normalize with improved service levels
•GAAP EPS of $0.14 and Adjusted EPS1 of $0.56 include $0.08 per share impact of unfavorable FX movements in the quarter and $0.11 per share versus the prior year
•Repaid $15 million of debt in Q3 FY25; Anticipate FY25 debt repayment of $60 million
“The second half of our third quarter saw a slowing of industry demand. This was driven by delayed customer decision-making related to U.S. policy uncertainty, including tariffs as well as continued weakening in the European economies," said David J. Wilson, President and Chief Executive Officer. “Our results reflect lower than expected short-cycle demand which we expect will also impact the fourth quarter. The strengthening of the U.S. dollar negatively impacted earnings per share by $0.11 versus the prior year as well. As the quarter evolved, we executed actions to reduce costs and align capacity with demand, which will remain a focus the fourth quarter."
“While our optimism about the business remains unchanged, in the near-term our revised guidance contemplates a cautious approach to the evolving policy environment and subdued demand in Europe,” continued Wilson. “We remain focused on what we can control, with strong operational execution while making progress on our long-term strategic plan, including executing of our footprint simplification initiatives. Last week we initiated a consolidation of two additional factories into existing manufacturing capacity as part of our ongoing 80/20 footprint simplification plan. We are delivering impactful improvements across the business and remain in early innings in terms of the value these initiatives will deliver.”
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
Third Quarter Fiscal 2025 Sales
($ in millions)
Q3 FY25
Q3 FY24
Change
% Change
Net sales
$
234.1
$
254.1
$
(20.0)
(7.9)
%
U.S. sales
$
129.5
$
138.5
$
(9.0)
(6.5)
%
% of total
55
%
55
%
Non-U.S. sales
$
104.6
$
115.6
$
(11.0)
(9.5)
%
% of total
45
%
45
%
For the quarter, net sales decreased $20.0 million, or 7.9%. In the U.S., sales were down $9.0 million, or 6.5%, driven by lower volume. Sales outside the U.S. decreased $11.0 million, or 9.5%. Price improvement of $2.3 million partially offset $12.3 million of lower volume and unfavorable foreign currency translation of $1.0 million.
Third Quarter Fiscal 2025 Operating Results
($ in millions)
Q3 FY25
Q3 FY24
Change
% Change
Gross profit
$
82.1
$
93.9
$
(11.8)
(12.6)
%
Gross margin
35.1
%
36.9
%
(180) bps
Adjusted Gross Profit1
$
86.2
$
94.5
$
(8.3)
(8.7)
%
Adjusted Gross Margin1
36.8
%
37.2
%
(40) bps
Income from operations
$
17.7
$
26.9
$
(9.2)
(34.3)
%
Operating margin
7.6
%
10.6
%
(300) bps
Adjusted Operating Income1
$
25.6
$
29.7
$
(4.2)
(14.0)
%
Adjusted Operating Margin1
10.9
%
11.7
%
(80) bps
Net income (loss)
$
4.0
$
9.7
$
(5.8)
(59.3)
%
Net income (loss) margin
1.7
%
3.8
%
(210) bps
GAAP EPS
$
0.14
$
0.34
$
(0.20)
(58.8)
%
Adjusted EPS1
$
0.56
$
0.74
$
(0.18)
(24.3)
%
Adjusted EBITDA1
$
37.8
$
41.3
$
(3.5)
(8.6)
%
Adjusted EBITDA Margin1
16.1
%
16.3
%
(20) 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.
2
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
Fiscal 2025 Guidance
The Company is issuing the following guidance for the fiscal year 2025, ending March 31, 2025:
Metric
FY25
Net sales growth
Mid-single digit decrease year-over-year
Adjusted EPS2
Low-teens decrease year-over-year
Capital Expenditures
$18 million to $22 million
Net Leverage Ratio2
~3.0x
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 5:00 PM Eastern Time to discuss the Company's financial results and strategy. The conference call, earnings release and earnings presentation will be accessible through live webcast on 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 through Monday, February 24, 2025.
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.
______________________
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 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.
3
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
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 fiscal year 2025 net sales growth and Adjusted EPS guidance, 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 trends and trends in our industry and markets; (iv) the amount of debt to be paid down by the Company during fiscal year 2025; and (v) 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.
4
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
Three Months Ended
December 31, 2024
December 31, 2023
Change
Net sales
$
234,138
$
254,143
(7.9)
%
Cost of products sold
152,041
160,246
(5.1)
%
Gross profit
82,097
93,897
(12.6)
%
Gross profit margin
35.1
%
36.9
%
Selling expenses
27,348
26,552
3.0
%
% of net sales
11.7
%
10.4
%
General and administrative expenses
24,233
26,255
(7.7)
%
% of net sales
10.3
%
10.3
%
Research and development expenses
5,325
6,692
(20.4)
%
% of net sales
2.3
%
2.6
%
Amortization of intangibles
7,501
7,486
0.2
%
Income from operations
17,690
26,912
(34.3)
%
Operating margin
7.6
%
10.6
%
Interest and debt expense
7,698
9,952
(22.6)
%
Investment (income) loss
(54)
(758)
(92.9)
%
Foreign currency exchange (gain) loss
3,128
(1,155)
NM
Other (income) expense, net
1,029
5,234
(80.3)
%
Income (loss) before income tax expense (benefit)
5,889
13,639
(56.8)
%
Income tax expense (benefit)
1,929
3,911
(50.7)
%
Net income (loss)
$
3,960
$
9,728
(59.3)
%
Average basic shares outstanding
28,631
28,744
(0.4)
%
Basic income (loss) per share
$
0.14
$
0.34
(58.8)
%
Average diluted shares outstanding
28,888
28,991
(0.4)
%
Diluted income (loss) per share
$
0.14
$
0.34
(58.8)
%
Dividends declared per common share
$
0.07
$
0.07
5
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
Nine Months Ended
December 31, 2024
December 31, 2023
Change
Net sales
$
716,138
$
748,036
(4.3)
%
Cost of products sold
470,268
467,513
0.6
%
Gross profit
245,870
280,523
(12.4)
%
Gross profit margin
34.3
%
37.5
%
Selling expenses
82,044
78,400
4.6
%
% of net sales
11.5
%
10.5
%
General and administrative expenses
74,043
79,407
(6.8)
%
% of net sales
10.3
%
10.6
%
Research and development expenses
17,593
19,134
(8.1)
%
% of net sales
2.5
%
2.6
%
Amortization of intangibles
22,548
21,871
3.1
%
Income from operations
49,642
81,711
(39.2)
%
Operating margin
6.9
%
10.9
%
Interest and debt expense
24,285
28,788
(15.6)
%
Investment (income) loss
(873)
(1,212)
(28.0)
%
Foreign currency exchange (gain) loss
2,730
1,074
154.2
%
Other (income) expense, net
25,512
5,840
336.8
%
Income (loss) before income tax expense (benefit)
(2,012)
47,221
NM
Income tax expense (benefit)
442
12,405
(96.4)
%
Net income (loss)
$
(2,454)
$
34,816
NM
Average basic shares outstanding
28,778
28,711
0.2
%
Basic income (loss) per share
$
(0.09)
$
1.21
NM
Average diluted shares outstanding
28,778
28,979
(0.7)
%
Diluted income (loss) per share
$
(0.09)
$
1.20
NM
Dividends declared per common share
$
0.14
$
0.14
6
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
December 31, 2024
March 31, 2024
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
41,224
$
114,126
Trade accounts receivable
157,038
171,186
Inventories
200,687
186,091
Prepaid expenses and other
41,486
42,752
Total current assets
440,435
514,155
Property, plant, and equipment, net
105,637
106,395
Goodwill
700,550
710,334
Other intangibles, net
358,150
385,634
Marketable securities
10,565
11,447
Deferred taxes on income
1,515
1,797
Other assets
94,048
96,183
Total assets
$
1,710,900
$
1,825,945
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable
$
73,019
$
83,118
Accrued liabilities
93,595
127,973
Current portion of long-term debt and finance lease obligations
50,722
50,670
Total current liabilities
217,336
261,761
Term loan, AR securitization facility and finance lease obligations
435,075
479,566
Other non current liabilities
186,909
202,555
Total liabilities
$
839,320
$
943,882
Shareholders’ equity:
Common stock
286
288
Treasury stock
(10,945)
(1,001)
Additional paid in capital
532,271
527,125
Retained earnings
388,851
395,328
Accumulated other comprehensive loss
(38,883)
(39,677)
Total shareholders’ equity
$
871,580
$
882,063
Total liabilities and shareholders’ equity
$
1,710,900
$
1,825,945
7
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Statements of Cash Flows - UNAUDITED
(In thousands)
Nine Months Ended
December 31, 2024
December 31, 2023
Operating activities:
Net income (loss)
$
(2,454)
$
34,816
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization
36,230
34,052
Deferred income taxes and related valuation allowance
(15,089)
(6,495)
Net loss (gain) on sale of real estate, investments and other
(617)
(967)
Non-cash pension settlement
23,634
4,599
Stock-based compensation
6,677
8,473
Amortization of deferred financing costs
1,865
1,728
Impairment of operating lease
3,268
—
Loss (gain) on hedging instruments
(321)
1,193
Loss (gain) on disposal of Fixed Assets
394
—
Non-cash lease expense
7,657
7,080
Changes in operating assets and liabilities, net of effects of business acquisitions:
Trade accounts receivable
10,255
(14,911)
Inventories
(18,894)
(17,764)
Prepaid expenses and other
(14,565)
(2,897)
Other assets
486
(859)
Trade accounts payable
(8,061)
(1,387)
Accrued liabilities
(15,240)
(7,236)
Non-current liabilities
(5,225)
(10,834)
Net cash provided by (used for) operating activities
10,000
28,591
Investing activities:
Proceeds from sales of marketable securities
4,301
1,101
Purchases of marketable securities
(3,257)
(2,731)
Capital expenditures
(15,266)
(16,334)
Purchase of businesses, net of cash acquired
—
(108,145)
Dividend received from equity method investment
—
144
Net cash provided by (used for) investing activities
(14,222)
(125,965)
Financing activities:
Proceeds from the issuance of common stock
364
556
Purchases of treasury stock
(9,945)
—
Repayment of debt
(45,495)
(40,447)
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
17,753
18,088
Cash outflows from hedging activities
(17,360)
(19,303)
Payment of dividends
(6,039)
(6,027)
Other
(1,897)
(2,237)
Net cash provided by (used for) financing activities
(69,499)
67,771
Effect of exchange rate changes on cash
819
(628)
Net change in cash and cash equivalents
(72,902)
(30,231)
Cash, cash equivalents, and restricted cash at beginning of year
$
114,376
$
133,426
Cash, cash equivalents, and restricted cash at end of period
$
41,474
$
103,195
8
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Q3 FY 2025 Net Sales Bridge
Quarter
Year To Date
($ in millions)
$ Change
% Change
$ Change
% Change
Fiscal 2024 Net Sales
$
254.1
$
748.0
Acquisition
—
—
%
2.7
0.3
%
Pricing
2.3
0.9
%
9.6
1.3
%
Volume
(21.3)
(8.4)
%
(42.9)
(5.7)
%
Foreign currency translation
(1.0)
(0.4)
%
(1.3)
(0.2)
%
Total change
$
(20.0)
(7.9)
%
$
(31.9)
(4.3)
%
Fiscal 2025 Net Sales
$
234.1
$
716.1
COLUMBUS McKINNON CORPORATION
Q3 FY 2025 Gross Profit Bridge
($ in millions)
Quarter
Year To Date
Fiscal 2024 Gross Profit
$
93.9
$
280.5
Acquisition
—
0.8
Price, net of manufacturing costs changes (incl. inflation)
3.9
7.5
Product liability1
(2.0)
(2.0)
Monterrey, MX new factory start-up costs
(2.6)
(6.4)
Factory and warehouse consolidation costs
(0.5)
(11.3)
Sales volume and mix
(9.9)
(22.0)
Other
(0.4)
(0.8)
Foreign currency translation
(0.3)
(0.4)
Total change
(11.8)
(34.6)
Fiscal 2025 Gross Profit
$
82.1
$
245.9
U.S. Shipping Days by Quarter
Q1
Q2
Q3
Q4
Total
FY25
64
63
62
62
251
FY24
63
62
61
62
248
______________________
1 Product liability represents a year-over-year difference between the current year adjustment increasing the Company's product liability reserve and the prior year's adjustment decreasing the Company's product liability reserve. For more details please see the Company's 10-Q filed with the Securities and Exchange Commission
9
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Additional Data1
(Unaudited)
Period Ended
December 31, 2024
September 30, 2024
March 31, 2024
December 31, 2023
($ in millions)
Backlog
$
296.5
$
317.6
$
280.8
$
298.4
Long-term backlog
Expected to ship beyond 3 months
$
166.1
$
172.5
$
144.6
$
151.3
Long-term backlog as % of total backlog
56.0
%
54.3
%
51.5
%
50.7
%
Debt to total capitalization percentage
35.8
%
35.8
%
37.5
%
38.5
%
Debt, net of cash, to net total capitalization
33.8
%
33.2
%
32.0
%
33.7
%
Working capital as a % of sales 2
23.7
%
23.3
%
19.1
%
20.6
%
Three Months Ended
December 31, 2024
September 30, 2024
March 31, 2024
December 31, 2023
($ in millions)
Trade accounts receivable
Days sales outstanding
61.0
days
64.1
days
58.7
days
62.1
days
Inventory turns per year
(based on cost of products sold)
3.0
turns
3.3
turns
3.7
turns
3.1
turns
Days' inventory
121.7
days
110.6
days
98.6
days
117.7
days
Trade accounts payable
Days payables outstanding
50.5
days
46.3
days
50.9
days
50.1
days
Net cash provided by (used for) operating activities
$
11.4
$
9.4
$
38.6
$
29.1
Capital expenditures
$
5.2
$
5.4
$
8.5
$
6.0
Free Cash Flow 3
$
6.2
$
4.0
$
30.1
$
23.1
______________________
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 December 31, 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.
10
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
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
Nine Months Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Gross profit
$
82,097
$
93,897
$
245,870
$
280,523
Add back (deduct):
Business realignment costs
526
150
994
346
Hurricane Helene cost impact
—
—
171
—
Factory and warehouse consolidation costs
556
—
11,319
—
Monterrey, MX new factory start-up costs
3,038
435
6,848
435
Adjusted Gross Profit
$
86,217
$
94,482
$
265,202
$
281,304
Net sales
$
234,138
$
254,143
$
716,138
$
748,036
Gross margin
35.1
%
36.9
%
34.3
%
37.5
%
Adjusted Gross Margin
36.8
%
37.2
%
37.0
%
37.6
%
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.
11
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Reconciliation of Income from Operations to Adjusted Operating Income
($ in thousands)
Three Months Ended
Nine Months Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Income from operations
$
17,690
$
26,912
$
49,642
$
81,711
Add back (deduct):
Acquisition deal and integration costs
—
113
—
3,208
Business realignment costs
987
1,452
2,118
1,867
Factory and warehouse consolidation costs
653
—
12,557
199
Headquarter relocation costs
175
510
322
1,884
Hurricane Helene cost impact
—
—
171
—
Mexico customs duty assessment
1,500
—
1,500
—
Customer bad debt 1
1,299
—
1,299
—
Monterrey, MX new factory start-up costs
3,270
755
10,587
755
Adjusted Operating Income
$
25,574
$
29,742
$
78,196
$
89,624
Net sales
$
234,138
$
254,143
$
716,138
$
748,036
Operating margin
7.6
%
10.6
%
6.9
%
10.9
%
Adjusted Operating Margin
10.9
%
11.7
%
10.9
%
12.0
%
1 Customer bad debt represents a reserve of $1,299,000 against an accounts receivable balance for a customer who declared bankruptcy in January of 2025
Adjusted Operating Income is defined as income from operations as reported, adjusted for certain items. Adjusted Operating Margin is defined as Adjusted Operating Income divided by net sales. Adjusted Operating Income and Adjusted Operating Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Operating Income and Adjusted Operating Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Operating Income and Adjusted Operating Margin, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s income from operations to the historical periods' income from operations and operating margin, as well as facilitates a more meaningful comparison of the Company’s income from operations and operating margin to that of other companies.
12
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Reconciliation of Net Income and Diluted Earnings per Share to
Adjusted Net Income and Adjusted Earnings per Share
($ in thousands, except per share data)
Three Months Ended
Nine Months Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Net income (loss)
$
3,960
$
9,728
$
(2,454)
$
34,816
Add back (deduct):
Amortization of intangibles
7,501
7,486
22,548
21,871
Acquisition deal and integration costs
—
113
—
3,208
Business realignment costs
987
1,452
2,118
1,867
Factory and warehouse consolidation costs
653
—
12,557
199
Headquarter relocation costs
175
510
322
1,884
Hurricane Helene cost impact
—
—
171
—
Mexico customs duty assessment
1,500
—
1,500
—
Customer bad debt1
1,299
—
1,299
—
Monterrey, MX new factory start-up costs
3,270
755
10,587
755
Non-cash pension settlement expense
433
4,599
23,634
4,599
Normalize tax rate2
(3,498)
(3,227)
(17,739)
(7,996)
Adjusted Net Income
$
16,280
$
21,416
$
54,543
$
61,203
GAAP average diluted shares outstanding
28,888
28,991
28,778
28,979
Add back:
Effect of dilutive share-based awards
—
—
268
—
Adjusted Diluted Shares Outstanding
$
28,888
$
28,991
$
29,046
$
28,979
GAAP EPS
$
0.14
$
0.34
$
(0.09)
$
1.20
Adjusted EPS
$
0.56
$
0.74
$
1.88
$
2.11
1 Customer bad debt represents a reserve of $1,299,000 against an accounts receivable balance for a customer who declared bankruptcy in January of 2025
2 Applies a normalized tax rate of 25% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.
Adjusted Net Income is defined as net income (loss) and GAAP EPS as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted Diluted Shares Outstanding is defined as average diluted shares outstanding adjusted for the effect of dilutive share-based awards. Adjusted EPS is defined as Adjusted Net income per Adjusted Diluted Shares Outstanding. Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS are not measures determined in accordance with GAAP and may not be comparable with the measures used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of current periods' net income (loss), average diluted shares outstanding and GAAP EPS to the historical periods' net income (loss), average diluted shares outstanding and GAAP EPS, as well as facilitates a more meaningful comparison of the Company’s net income (loss) and GAAP EPS to that of other companies. The Company believes that presenting Adjusted Net Income, Adjusted Diluted Shares Outstanding and Adjusted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company’s strategy to grow through acquisitions as well as organically.
13
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Reconciliation of Net Income to Adjusted EBITDA
($ in thousands)
Three Months Ended
Nine Months Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Net income (loss)
$
3,960
$
9,728
$
(2,454)
$
34,816
Add back (deduct):
Income tax expense (benefit)
1,929
3,911
442
12,405
Interest and debt expense
7,698
9,952
24,285
28,788
Investment (income) loss
(54)
(758)
(873)
(1,212)
Foreign currency exchange (gain) loss
3,128
(1,155)
2,730
1,074
Other (income) expense, net
1,029
5,234
25,512
5,840
Depreciation and amortization expense
12,202
11,570
36,230
34,052
Acquisition deal and integration costs
—
113
—
3,208
Business realignment costs
987
1,452
2,118
1,867
Factory and warehouse consolidation costs
653
—
12,557
199
Headquarter relocation costs
175
510
322
1,884
Hurricane Helene cost impact
—
—
171
—
Mexico customs duty assessment
1,500
—
1,500
—
Customer bad debt1
1,299
—
1,299
—
Monterrey, MX new factory start-up costs
3,270
755
10,587
755
Adjusted EBITDA
$
37,776
$
41,312
$
114,426
$
123,676
Net sales
$
234,138
$
254,143
$
716,138
$
748,036
Net income margin
1.7
%
3.8
%
(0.3)
%
4.7
%
Adjusted EBITDA Margin
16.1
%
16.3
%
16.0
%
16.5
%
1 Customer bad debt represents a reserve of $1,299,000 against an accounts receivable balance for a customer who declared bankruptcy in January of 2025
Adjusted EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not a measures determined in accordance with GAAP and may not be comparable with Adjusted EBITDA and Adjusted EBITDA Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, are important for investors and other readers of the Company’s financial statements.
14
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
COLUMBUS McKINNON CORPORATION
Reconciliation of Net Leverage Ratio
($ in thousands)
Twelve Months Ended
December 31, 2024
December 31, 2023
Net income (loss)
$
9,355
$
48,711
Add back (deduct):
Annualize EBITDA for the montratec acquisition1
—
2,131
Annualize synergies for the montratec acquisition1
—
184
Income tax expense (benefit)
2,939
19,904
Interest and debt expense
33,454
36,456
Non-cash pension settlement
24,019
4,599
Amortization of deferred financing costs
2,486
2,158
Stock Compensation Expense
10,243
11,859
Depreciation and amortization expense
48,124
44,619
Cost of debt refinancing
1,190
—
Acquisition deal and integration costs
3
3,381
Excluded acquisition deal and integration costs2
—
(172)
Acquisition inventory step-up expense
—
—
Business realignment costs
2,118
2,715
Monterrey, MX new factory start up costs
14,321
755
Excluded Monterrey, MX new factory start-up costs3
Current portion of long-term debt and finance lease obligations
$
50,722
$
50,652
Term loan, AR securitization facility and finance lease obligations
435,075
499,388
Total debt
$
485,797
$
550,040
Standby Letters of Credit
15,440
15,740
Cash and cash equivalents
(41,224)
(102,945)
Net Debt
$
460,013
$
462,835
Net Leverage Ratio
3.00x
2.58x
1 EBITDA is normalized to include a full year of the acquired entity and assumes all cost synergies are achieved in TTM Q3 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 any cash restructuring costs in excess of $10 million per fiscal year
4 Customer bad debt represents a reserve of $1,299,000 against an accounts receivable balance for a customer who declared bankruptcy in January of 2025
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 in the Company's credit agreement 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
15
Columbus McKinnon Reports Q3 FY25 Results
February 10, 2025
Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are important for investors and other readers of the Company’s financial statements.
