BUFFALO, N.Y.--(BUSINESS WIRE)-- Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of motion control products, technologies and services for material handling, today announced financial results for its fiscal year 2021 first quarter, which ended June 30, 2020.

First Quarter Highlights (compared with prior-year period)

• Achieved positive operating income and cash generation despite 35% decline in revenue
• Delivered $1.8 million in operating income in quarter even as end markets were severely challenged due to COVID-19 pandemic; Adjusted operating income* was $5.0 million
• Generated $9.5 million in cash from operations and $8.4 million in free cash flow*
• Significant liquidity and low net debt leverage position Columbus McKinnon for Phase III of strategy as markets improve

David Wilson, President and CEO of Columbus McKinnon, commented, “I have been pleased with the performance of our leadership team and the effectiveness of the Blueprint for Growth strategy during these extraordinary times resulting from the global pandemic. The rapid actions taken to preserve liquidity, protect the enterprise and continue to make select investments in growth enabled respectable financial results despite the dramatic drop in demand. Even as volume measurably declined, we achieved gross margin of 32% given strategic pricing initiatives, footprint consolidations and overhead cost reductions. We were encouraged to see markets improve monthly from the trough in April through June and now into July, as order activity has increased.”

He added, “In this challenging environment, there are factors that we can control. We will continue to drive cost performance and improve our competitive positioning by advancing Phases II and III of the Blueprint for Growth strategy. We are prioritizing our efforts on a select set of initiatives to deliver organic growth and strategic development while advancing our 80/20 Process and operational excellence plans. In fact, even with the downturn in the first quarter, we realized $1.9 million in contribution to operating income from the 80/20 Process.”

*Adjusted operating income and free cash flow are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted operating income. Free cash flow is defined as cash from operations minus capital expenditures.

First Quarter Fiscal 2021 Sales

The decline in sales for the quarter was the result of lower volume due to the global economic impact of the COVID-19 pandemic which more than offset a 1.1% price improvement. U.S. sales volume declines more than offset a 1.2% price improvement. Sales outside the U.S. were down on volume and a $2.0 million, or 2.0%, negative impact from foreign currency translation, which offset a 1.1% price improvement.

First Quarter Fiscal 2021 Operating Results

Adjusted for the impacts of factory closures and business realignment costs, income from operations was $5.0 million, or 3.6% of sales. Decremental adjusted operating income leverage was just 31%, improved over historic decremental leverage during dramatic recessionary environments. (See the reconciliation of GAAP income from operations to adjusted income from operations on page 10 of this release.) Net loss for the quarter was $3.0 million which included a $2.7 million non-cash pension settlement charge related to the termination of a U.S. pension plan.

Adjusted EBITDA margin was 8.7% for the quarter reflecting the benefits of the Company’s self-help improvement efforts in austere market conditions. (See the reconciliation of GAAP net income to adjusted EBITDA on page 12 of this release.)

Second Quarter Fiscal 2021 Outlook

Mr. Wilson concluded, “We are executing efficiently as we ramp up to meet improving demand, notably in the U.S. and Europe, our largest geographic markets. While order rates have been growing, we are carefully monitoring our customer landscape and will take additional actions if necessary to achieve our objectives.”

Currently, Columbus McKinnon expects second quarter fiscal 2021 revenue to improve sequentially to a range of approximately $150 million to $160 million at current exchange rates and to continue to generate positive operating income and free cash flow.

Teleconference/webcast

Columbus McKinnon will host a conference call and live webcast Thursday, July 30, 2020 at 10:00 AM Eastern Time, at which management will review the Company’s financial results and strategy. The review will be accompanied by a slide presentation, which will be available on Columbus McKinnon’s website at investors.columbusmckinnon.com. A question and answer session will follow the formal discussion.

The conference call can be accessed by dialing 201-493-6780. The listen-only audio webcast can be monitored at https://investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13705871. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, August 6, 2020. 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 motion control products, technologies, systems and services that efficiently and ergonomically move, lift, position and secure materials. Key products include hoists, actuators, rigging tools, light rail work stations 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 impact of Covid-19 and the Company’s efforts to reduce costs, maintain liquidity and generate cash in the current pandemic, the effectiveness of the Company’s 80/20 Process to simplify operations, the ability of the Company’s Operational Excellence initiatives to drive profitability, 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, conditions affecting 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.

Financial tables follow.

(1) June 30, 2019 figure excludes the Tire Shredder business, which was divested on December 28, 2018, and Crane Equipment & Service, Inc. (CES) and Stahlhammer Bommern GmbH (STB), each of which were divested on February 28, 2019.

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.

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.

(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 and at 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 to the measures as 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.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200730005286/en/

Gregory P. Rustowicz Vice President - Finance and Chief Financial Officer Columbus McKinnon Corporation 716-689-5442 greg.rustowicz@cmworks.com

Investor Relations: Deborah K. PawlowskiKei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com

Source: Columbus McKinnon Corporation