Columbus McKinnon : Fourth Quarter 2024 Presentation

Published: 2024-05-29 06:50:20 ET CMCO

Q4 and Fiscal Year 2024

Financial Results Conference Call

David J. Wilson

President & Chief Executive Officer

Gregory P. Rustowicz

Executive Vice President Finance & Chief Financial Officer

Kristine Moser

Vice President, Investor Relations & Treasurer

May 29, 2024

Safe Harbor Statement

These slides, and the accompanying oral discussion (together, this "presentation"), 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, our full year and first quarter fiscal 2025 guidance and our fiscal 2027 targets and goals; (ii) our operational and financial targets and capital distribution policy; (iii) general economic trend and trends in the industry and markets; (iv) the amount of debt to be paid down by the Company during fiscal 2025 and the first quarter of fiscal 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, 2023 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.

Non-GAAP Financial Measures and Forward-lookingNon-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 prepared in accordance with GAAP. The non-GAAP financial measures are noted and reconciliations of comparable GAAP measures with non-GAAP financial measures can be found in tables included in the Supplemental Information portion of this presentation.

FY24 Year End Review

Net income of $46.6M and Adjusted EBITDA1 of $166.7M, up 13%. Expanded Adjusted EBITDA Margin1 by 60 bps to 16.4%

• Strong cash generation with cash from operations of $67.2M and Free Cash Flow1 conversion of 91%

Net Leverage Ratio1,2 decreased to 2.4x; Expect Net Leverage Ratio1,2 of ~2.0x by EOY FY25

Record Sales, Gross Profit and Operating Income Demonstrate our Progress with our Transformation

Non-GAAP financial measure; see definition and reconciliation at the end of this Presentation. On a financial covenant basis per the Company's Amended and Restated Credit Agreement

Orders and Backlog

($ in millions, $M)

Orders

$246.0 $254.1 $226.5 $231.2 $258.1

0.97x

1.08x

0.88x

0.91x

0.97x

Q4 FY23

Q1 FY24

Q2 FY24

Q3 FY24

Q4 FY24

Backlog

$308.7

$355.3

$317.7

$298.4

$280.8

$166.7

$178.0

$169.4

$147.1

$136.2

$142.0

$177.3

$148.3

$151.3

$144.6

Q4 FY23

Q1 FY24

Q2 FY24

Q3 FY24

Q4 FY24

Continued Orders Growth and Encouraging Pipeline

• Orders up 5% Y/Y and 12% sequentially

• Demand grew across the Americas and EMEA & APAC

• Precision conveying up 25% Y/Y and 13% excluding montratec

• Lifting up 6% Y/Y with strength in North America

Book:Bill

Operational Improvements Enabled Backlog

Conversion

• Past due backlog reduced by 37% from Q3 FY24

Short Term • Lead times improved and remain an important focus

• Expect backlog to further normalize from elevated levels

Long Term1

Strong Order Growth and an Encouraging Funnel… Past Due Backlog Normalized

1Long term backlog is expected to ship beyond three months

Unlocking CMCO's Potential

CMBS

GROWTH FRAMEWORK

TRANSFORMATION

Framework to Deliver Differentiated Growth, Financial Performance and Shareholder Value

Executing Plan and Delivering Results

($ in millions, $M)

Net Sales

Adjusted Gross Margin1

Adjusted EBITDA Margin1

~$1,500

~40%

~21%

$907

$936

$1,014

36.1% 36.5%

37.3%

15.4%

15.8%

16.4%

11.9%

$650

34.1%

FY21

FY22

FY23

FY24

FY27E

FY21

FY22

FY23

FY24

FY27E 2

FY21

FY22

FY23

FY24

FY27E 2

GROWTH DRIVERS

Organic growth

M&A growth

Operating initiatives

RSG&A leverage on organic and M&A

• Operational excellence/VAVE

related growth

•

Pricing in excess of material inflation

Gross margin expansion

•

Product line simplification

•

Factory simplification

Margin accretive M&A

Execution of Strategy Delivers Record Performance on Key Metrics in FY24

Non-GAAP financial measure; see definition and reconciliation at the end of this Presentation

Adjusted Gross Margin and Adjusted EBITDA Margin are non-GAAP financial measures. See supplemental information for additional information on non-GAAP financial measures and a reconciliation to the most

comparable GAAP financial measures. Forward-looking estimates of Adjusted Gross Margin and Adjusted EBITDA Margin are made in a manner consistent with the relevant definitions and assumptions noted

herein, but reconciliations are not available on a forward-looking basis without unreasonable effort.

Key Operational Initiatives in FY25

Profitable Growth

Customer Experience

Deliver on commercial initiatives and drive margin expansion

Improve performance and customer intimacy

Factory Performance

Improve operational KPIs

Footprint Simplification

Execute footprint simplification plan

Focused on Delivering Profitable Growth and Margin Expansion

Net Sales

($ in millions, $M)

Q4 FY24 sales, up 5% Y/Y or 4% excluding FX

Delivered Q4 FY24 double-digit growth Y/Y in precision conveyance

FY24 sales, up 8% Y/Y or 7% excluding FX

Delivered Record Sales in Q4 FY24 and FY24 with 5% and 8% Growth Y/Y, Respectively

Gross Profit & Margin

($ in millions, $M)

Q4 FY24 Gross Profit

Q4 FY24 Gross Margin of 35.5% and Adjusted Gross Margin1 of 36.6%

$91.2

$0.8

$1.0

$3.7

$0.4

$94.3

($2.8)

Q4 FY23

Acquisition Pricing, Net of

Sales

FX Impact

Monterrey &

Q4 FY24

Mfg Cost

Volume &

Consolidation

Changes

Mix

Costs

FY24 Gross Profit

$16.9 $0.9 $3.8$0.5 $374.8

$13.8

($3.2)

$342.1

FY23

Acquisition Pricing, Net

Sales Volume FX Impact

Monterrey &

Other

FY24

of Mfg Cost

& Mix

Consolidation

Changes

Costs

FY24 Gross Margin of 37.0% and Adjusted Gross Margin1 of 37.3%

Full Year Adjusted Gross Margin1 of 37.3%... On Track Toward Long-Term Objective

1 Non-GAAP financial measure; see definition and reconciliation at the end of this Presentation.

RSG&A

($ in millions, $M)

Quarterly RSG&A

$57.2

$58.3

$59.1

$59.5

$61.4

R&D

$7.1

$5.5

$5.9

$6.5

$6.7

$26.4

$27.4

$25.7

$26.3

$27.4

G&A

$25.3

$25.0

$26.9

$26.6

$26.9

Selling

RSG&A as a

Q4 FY23

Q1 FY24

Q2 FY24

Q3 FY24

Q4 FY24

22.5%

24.8%

22.9%

23.4%

23.1%

% of Sales

Annual RSG&A

216.7

218.3

238.3

R&D

$26.2

165.3

$15.4

$20.9

$102.1

$94.8

$106.8

G&A

$12.4

$76.0

$76.9

$99.2

$102.5

$105.3

Selling

RSG&A as a

FY21

FY22

FY23

FY24

25.4%

23.9%

23.3%

23.5%

% of Sales

Q4 FY24 RSG&A increased $4.2M Y/Y

FY24 RSG&A increased $20.0M Y/Y

Y/Y Increase Reflects Acquisition and R&D Investments… Disciplined Cost Management

Note: Components may not add to totals due to rounding

Disclaimer

Columbus McKinnon Corporation published this content on 29 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 May 2024 10:49:01 UTC.