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Columbus McKinnon Reports Record Sales and Operating Income for Second Quarter Fiscal Year 2024

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 second quarter, which ended September 30, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition").

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

  • Growth strategy drives record sales of $258.4 million, up 12% over same period in the prior year
  • CMBS enables record gross margin of 38.7%; 190 basis point margin expansion sequentially
  • Record operating income of $33.4 million, up 22% over prior year
  • Expanded financial flexibility while reducing debt; paid down $15 million in debt and increasing debt pay down plans by $10 million to $50 million in fiscal 2024
  • Expect to surpass $1 billion in revenue in fiscal 2024; advancing toward fiscal 2027 targets

David J. Wilson, President and CEO, commented, “Our second quarter results reflect the meaningful progress we are making as our team executes toward our fiscal 2027 targets. We achieved several new milestones this quarter including record revenue, gross margin and operating income. Being customer led is a foundational component of the Columbus McKinnon Business System (“CMBS”) which drives continuous improvement, discipline, communication and accountability. We remain laser focused on improving our customers’ experience and our progress has been validated by recent improvements in our net promoter score. The 80/20 process is another key focus area of CMBS with our current priority being product line simplification. Beyond optimizing financial performance, this will lead to improved product offerings, stronger market positioning and the ability to simplify our factory footprint.”

Mr. Wilson noted, “We are clearly building momentum within the organization and expect to surpass $1 billion in revenue in fiscal 2024. We also expect to deliver approximately 150 basis points of year-over-year gross margin expansion, exceeding our previous guidance. We are excited about the prospects for our precision conveyance platform including the recent addition of the montratec business. This, in combination with our organic growth initiatives, is driving the transformation of Columbus McKinnon to a less cyclical, higher growth and more profitable enterprise.”

Second Quarter Fiscal 2024 Sales

($ in millions)

Q2 FY 24

 

Q2 FY 23

 

Change

 

% Change

Net sales

$

258.4

 

 

$

231.7

 

 

$

26.7

 

11.5

%

U.S. sales

$

145.2

 

 

$

139.7

 

 

$

5.5

 

3.9

%

% of total

 

56

%

 

 

60

%

 

 

 

 

Non-U.S. sales

$

113.2

 

 

$

92.0

 

 

$

21.2

 

23.0

%

% of total

 

44

%

 

 

40

%

 

 

 

 

For the quarter, net sales increased $26.7 million, or 11.5%. The acquisition contributed $9.5 million, or 4.1%, of the increase in sales. In the U.S., sales were up $5.5 million, or 3.9%, as a result of $4.9 million of price improvement, $0.4 million contribution from the acquisition and $0.2 million of higher volume. Sales outside the U.S. increased $21.2 million, or 23.0%, driven by $9.1 million of sales related to the acquisition, $5.7 million of price improvement and $0.8 million of higher volume. Favorable foreign currency translation was $5.6 million.

Second Quarter Fiscal 2024 Operating Results

($ in millions)

Q2 FY 24

 

Q2 FY 23

 

Change

 

% Change

Gross profit

$

100.0

 

 

$

86.3

 

 

$

13.7

 

15.8

%

Gross margin

 

38.7

%

 

 

37.2

%

 

150 bps

 

 

Adjusted gross profit*

$

100.0

 

 

$

86.3

 

 

$

13.7

 

15.8

%

Adjusted gross margin*

 

38.7

%

 

 

37.2

%

 

150 bps

 

 

Income from operations

$

33.4

 

 

$

27.4

 

 

$

6.0

 

21.8

%

Operating margin

 

12.9

%

 

 

11.8

%

 

110 bps

 

 

Adjusted income from operations*

$

34.1

 

 

$

28.6

 

 

$

5.5

 

19.2

%

Adjusted operating margin*

 

13.2

%

 

 

12.4

%

 

80 bps

 

 

Net income

$

15.8

 

 

$

14.1

 

 

$

1.7

 

12.0

%

Net income margin

 

6.1

%

 

 

6.1

%

 

0 bps

 

 

Diluted EPS

$

0.55

 

 

$

0.49

 

 

$

0.06

 

12.2

%

Adjusted EPS*

$

0.76

 

 

$

0.73

 

 

$

0.03

 

4.1

%

Adjusted EBITDA*

$

45.7

 

 

$

39.0

 

 

$

6.7

 

17.1

%

Adjusted EBITDA margin*

 

17.7

%

 

 

16.8

%

 

90 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 income from operations, adjusted operating margin, and adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA.

Adjusted earnings per diluted share of $0.76 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.

Third Quarter Fiscal 2024 Outlook

Columbus McKinnon expects third quarter fiscal 2024 sales of approximately $245 million to $255 million at current exchange rates. This represents 9% growth year-over-year at the midpoint of the range.

Mr. Wilson concluded, “This quarter’s record financial performance provides additional proof points that demonstrate progress toward our fiscal 2027 targets. Given these results, we are accelerating debt repayment even as we invest in improving productivity and simplifying our footprint. We now expect our net leverage ratio to be approximately 2.3x1 by the end of fiscal 2024. As we execute our strategy, we are building an enterprise that can deliver stronger growth and increased profitability as we advance the transformation of Columbus McKinnon.”

1On a financial covenant basis per Amended and Restated Credit Agreement

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 201-493-6780. 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, November 8, 2023. To listen to the archived call, dial 412-317-6671 and enter the conference ID number 13741338. 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 future gross margin expansion, 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 the Company’s fiscal 2027 goals and certain other goals; and the amount and timing of future debt repayments by the Company. 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 as to revenue and gross 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. Except as required by applicable law, the Company assumes no obligation to update the forward-looking information contained in this release.

Financial tables follow.

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

Three Months Ended

 

 

 

 

September 30,

2023

 

September 30,

2022

 

Change

Net sales

 

$

258,400

 

 

$

231,740

 

 

11.5

%

Cost of products sold

 

 

158,424

 

 

 

145,430

 

 

8.9

%

Gross profit

 

 

99,976

 

 

 

86,310

 

 

15.8

%

Gross profit margin

 

 

38.7

%

 

 

37.2

%

 

 

Selling expenses

 

 

26,867

 

 

 

25,617

 

 

4.9

%

% of net sales

 

 

10.4

%

 

 

11.1

%

 

 

General and administrative expenses

 

 

25,709

 

 

 

21,413

 

 

20.1

%

% of net sales

 

 

9.9

%

 

 

9.2

%

 

 

Research and development expenses

 

 

6,541

 

 

 

5,461

 

 

19.8

%

% of net sales

 

 

2.5

%

 

 

2.4

%

 

 

Amortization of intangibles

 

 

7,508

 

 

 

6,447

 

 

16.5

%

Income from operations

 

$

33,351

 

 

$

27,372

 

 

21.8

%

Operating margin

 

 

12.9

%

 

 

11.8

%

 

 

Interest and debt expense

 

 

10,211

 

 

 

6,768

 

 

50.9

%

Investment (income) loss

 

 

88

 

 

 

312

 

 

(71.8

)%

Foreign currency exchange (gain) loss

 

 

1,746

 

 

 

1,003

 

 

74.1

%

Other (income) expense, net

 

 

393

 

 

 

222

 

 

77.0

%

Income (loss) before income tax expense (benefit)

 

$

20,913

 

 

 

19,067

 

 

9.7

%

Income tax expense (benefit)

 

 

5,100

 

 

 

4,953

 

 

3.0

%

Net income (loss)

 

$

15,813

 

 

$

14,114

 

 

12.0

%

 

 

 

 

 

 

 

Average basic shares outstanding

 

 

28,725

 

 

 

28,619

 

 

0.4

%

Basic income (loss) per share

 

$

0.55

 

 

$

0.49

 

 

12.2

%

 

 

 

 

 

 

 

Average diluted shares outstanding

 

 

29,001

 

 

 

28,748

 

 

0.9

%

Diluted income (loss) per share

 

$

0.55

 

 

$

0.49

 

 

12.2

%

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.07

 

 

$

0.07

 

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

Six Months Ended

 

 

 

 

September 30,

2023

 

September 30,

2022

 

Change

Net sales

 

$

493,892

 

 

$

452,027

 

 

9.3

%

Cost of products sold

 

 

307,266

 

 

 

283,191

 

 

8.5

%

Gross profit

 

 

186,626

 

 

 

168,836

 

 

10.5

%

Gross profit margin

 

 

37.8

%

 

 

37.4

%

 

 

Selling expenses

 

 

51,848

 

 

 

51,773

 

 

0.1

%

% of net sales

 

 

10.5

%

 

 

11.5

%

 

 

General and administrative expenses

 

 

53,152

 

 

 

43,299

 

 

22.8

%

% of net sales

 

 

10.8

%

 

 

9.6

%

 

 

Research and development expenses

 

 

12,442

 

 

 

10,591

 

 

17.5

%

% of net sales

 

 

2.5

%

 

 

2.3

%

 

 

Amortization of intangibles

 

 

14,385

 

 

 

12,982

 

 

10.8

%

Income from operations

 

 

54,799

 

 

 

50,191

 

 

9.2

%

Operating margin

 

 

11.1

%

 

 

11.1

%

 

 

Interest and debt expense

 

 

18,836

 

 

 

12,971

 

 

45.2

%

Investment (income) loss

 

 

(454

)

 

 

742

 

 

NM

Foreign currency exchange (gain) loss

 

 

2,230

 

 

 

2,206

 

 

1.1

%

Other (income) expense, net

 

 

605

 

 

 

(2,079

)

 

NM

Income (loss) before income tax expense (benefit)

 

 

33,582

 

 

 

36,351

 

 

(7.6

)%

Income tax expense (benefit)

 

 

8,494

 

 

 

13,846

 

 

(38.7

)%

Net income (loss)

 

 

25,088

 

 

 

22,505

 

 

11.5

%

 

 

 

 

 

 

 

Average basic shares outstanding

 

 

28,694

 

 

 

28,581

 

 

0.4

%

Basic income (loss) per share

 

$

0.87

 

 

$

0.79

 

 

10.1

%

 

 

 

 

 

 

 

Average diluted shares outstanding

 

 

28,962

 

 

 

28,733

 

 

0.8

%

Diluted income (loss) per share

 

$

0.87

 

 

$

0.78

 

 

11.5

%

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.07

 

 

$

0.07

 

 

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30,

2023

 

March 31,

2023

 

 

(Unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

99,058

 

 

$

133,176

 

Trade accounts receivable

 

$

166,390

 

 

$

151,451

 

Inventories

 

$

204,997

 

 

$

179,359

 

Prepaid expenses and other

 

$

40,749

 

 

$

32,254

 

Total current assets

 

$

511,194

 

 

$

496,240

 

 

 

 

 

 

Property, plant, and equipment, net

 

$

100,602

 

 

$

94,360

 

Goodwill

 

$

717,572

 

 

$

644,629

 

Other intangibles, net

 

$

397,388

 

 

$

362,537

 

Marketable securities

 

$

10,807

 

 

$

10,368

 

Deferred taxes on income

 

$

2,206

 

 

$

2,035

 

Other assets

 

$

87,632

 

 

$

88,286

 

Total assets

 

$

1,827,401

 

 

$

1,698,455

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

71,446

 

 

$

76,736

 

Accrued liabilities

 

$

141,532

 

 

$

124,317

 

Current portion of long-term debt and finance lease obligations

 

$

50,636

 

 

$

40,604

 

Total current liabilities

 

$

263,614

 

 

$

241,657

 

 

 

 

 

 

Term loan, AR securitization facility and finance lease obligations

 

$

514,205

 

 

$

430,988

 

Other non current liabilities

 

$

195,584

 

 

$

192,013

 

Total liabilities

 

$

973,403

 

 

$

864,658

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

Common stock

 

$

287

 

 

$

286

 

Treasury stock

 

$

(1,001

)

 

$

(1,001

)

Additional paid in capital

 

$

519,593

 

 

$

515,797

 

Retained earnings

 

$

379,834

 

 

$

356,758

 

Accumulated other comprehensive loss

 

$

(44,715

)

 

$

(38,043

)

Total shareholders’ equity

 

$

853,998

 

 

$

833,797

 

Total liabilities and shareholders’ equity

 

$

1,827,401

 

 

$

1,698,455

 

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 

 

 

Six Months Ended

 

 

September 30,

2023

 

September 30,

2022

Operating activities:

 

 

 

 

Net income (loss)

 

$

25,088

 

 

$

22,505

 

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

 

 

 

 

Depreciation and amortization

 

$

22,482

 

 

$

20,893

 

Deferred income taxes and related valuation allowance

 

$

(6,097

)

 

$

(698

)

Net loss (gain) on sale of real estate, investments and other

 

$

(302

)

 

$

852

 

Stock-based compensation

 

$

5,264

 

 

$

3,629

 

Amortization of deferred financing costs

 

$

1,106

 

 

$

860

 

Loss (gain) on hedging instruments

 

$

554

 

 

$

(714

)

Gain on sale of building

 

$

 

 

$

(232

)

Loss on retirement of fixed asset

 

$

 

 

$

175

 

Non-cash lease expense

 

$

4,684

 

 

$

3,843

 

Changes in operating assets and liabilities, net of effects of business acquisitions:

 

 

 

 

Trade accounts receivable

 

$

(11,409

)

 

$

381

 

Inventories

 

$

(22,415

)

 

$

(30,754

)

Prepaid expenses and other

 

$

(5,868

)

 

$

2,321

 

Other assets

 

$

357

 

 

$

24

 

Trade accounts payable

 

$

(5,996

)

 

$

(11,267

)

Accrued liabilities

 

$

(3,085

)

 

$

(3,124

)

Non-current liabilities

 

$

(4,921

)

 

$

(2,545

)

Net cash provided by (used for) operating activities

 

$

(558

)

 

$

6,149

 

 

 

 

 

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

$

1,100

 

 

$

1,900

 

Purchases of marketable securities

 

$

(1,809

)

 

$

(2,709

)

Capital expenditures

 

$

(10,319

)

 

$

(5,288

)

Proceeds from sale of building, net of transaction costs

 

$

 

 

$

373

 

Purchase of businesses, net of cash acquired

 

$

(108,145

)

 

$

(1,616

)

Dividend received from equity method investment

 

$

144

 

 

$

313

 

Net cash provided by (used for) investing activities

 

$

(119,029

)

 

$

(7,027

)

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from the issuance of common stock

 

$

492

 

 

$

621

 

Repayment of debt

 

$

(25,294

)

 

$

(20,264

)

Proceeds from issuance of long-term debt

 

$

120,000

 

 

$

 

Fees paid for borrowings on long-term debt

 

$

(2,859

)

 

$

 

Cash inflows from hedging activities

 

$

12,084

 

 

$

12,306

 

Cash outflows from hedging activities

 

$

(12,660

)

 

$

(11,689

)

Payment of dividends

 

$

(4,015

)

 

$

(4,001

)

Other

 

$

(1,954

)

 

$

(1,375

)

Net cash provided by (used for) financing activities

 

$

85,794

 

 

$

(24,402

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

$

(325

)

 

$

(1,245

)

 

 

 

 

 

Net change in cash and cash equivalents

 

$

(34,118

)

 

$

(26,525

)

Cash, cash equivalents, and restricted cash at beginning of year

 

$

133,426

 

 

$

115,640

 

Cash, cash equivalents, and restricted cash at end of period

 

$

99,308

 

 

$

89,115

 

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2024 Sales Bridge

 

 

 

Quarter

 

Year To Date

($ in millions)

 

$ Change

 

% Change

 

$ Change

 

% Change

Fiscal 2023 Sales

 

$

231.7

 

 

 

$

452.0

 

 

Acquisition

 

 

9.5

 

4.1

%

 

 

12.2

 

2.7

%

Volume

 

 

1.0

 

0.4

%

 

 

2.2

 

0.5

%

Pricing

 

 

10.6

 

4.6

%

 

 

21.6

 

4.8

%

Foreign currency translation

 

 

5.6

 

2.4

%

 

 

5.9

 

1.3

%

Total change

 

$

26.7

 

11.5

%

 

$

41.9

 

9.3

%

Fiscal 2024 Sales

 

$

258.4

 

 

 

$

493.9

 

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2024 Gross Profit Bridge

 

($ in millions)

Quarter

 

Year To Date

Fiscal 2023 Gross Profit

$

86.3

 

$

168.8

 

Price, net of manufacturing costs changes (incl. inflation)

 

5.7

 

 

11.2

 

Sales volume and mix

 

0.6

 

 

(1.5

)

Acquisition

 

5.5

 

 

6.3

 

Current year business realignment costs

 

 

 

(0.2

)

Foreign currency translation

 

1.9

 

 

2.0

 

Total change

 

13.7

 

 

17.8

 

Fiscal 2024 Gross Profit

$

100.0

 

$

186.6

 

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 CORPORATION

Additional Data(1)

(Unaudited)

 

 

 

September 30,

2023

 

June 30,

2023

 

March 31,

2023

 

September 30,

2022

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Backlog

 

$

317.7

 

 

$

355.3

 

 

 

$

308.7

 

 

$

327.8

 

Long-term backlog

 

 

 

 

 

 

 

 

 

 

 

 

Expected to ship beyond 3 months

 

$

148.3

 

 

$

177.3

 

 

 

$

142.0

 

 

$

161.2

 

Long-term backlog as % of total backlog

 

 

46.7

%

 

 

49.9

 

%

 

 

46.0

%

 

 

49.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

 

 

 

Days sales outstanding(2)

 

 

58.6

days

 

 

62.9

 

days

 

 

54.3

days

 

 

55.1

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory turns per year(2)

 

 

 

 

 

 

 

 

 

 

 

 

(based on cost of products sold)

 

 

3.1

turns

 

 

2.9

 

turns

 

 

3.6

turns

 

 

3.0

turns

Days' inventory

 

 

117.7

days

 

 

125.9

 

days

 

 

101.4

days

 

 

121.0

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

 

 

 

Days payables outstanding(2)

 

 

48.3

days

 

 

53.3

 

days

 

 

53.3

days

 

 

59.4

days

 

 

 

 

 

 

 

 

 

 

 

 

 

Working capital as a % of sales (3)(4)

 

 

21.8

%

 

 

21.4

 

%

 

 

17.3

%

 

 

20.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used for) operating activities

 

$

16.7

 

 

$

(17.2

)

 

 

$

66.7

 

 

$

17.3

 

Capital expenditures

 

$

5.0

 

 

$

5.3

 

 

 

$

3.1

 

 

$

2.3

 

Free cash flow (5)

 

$

11.7

 

 

$

(22.5

)

 

 

$

63.6

 

 

$

15.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt to total capitalization percentage

 

 

39.8

%

 

 

40.6

 

%

 

 

36.1

%

 

 

38.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt, net of cash, to net total capitalization

 

 

35.3

%

 

 

35.8

 

%

 

 

28.9

%

 

 

33.9

%

(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.

(2)June 30, 2023 figures exclude the impact of the acquisition.

(3)June 30, 2023 and September 30, 2023 exclude the impact of the acquisition.

(4)September 30, 2022 figure excludes the impact of the acquisition of Garvey Corporation.

(5) Free cash flow is defined as net cash provided by (used for) operating activities less capital expenditures. Free cash flow is not a measure determined in accordance with GAAP, and may not be comparable with the measures as defined or used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as free cash flow, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s free cash flow to free cash flow for historical periods.

Components may not add due to rounding.

COLUMBUS McKINNON CORPORATION

Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit

($ in thousands)

 

 

Three Months Ended

 

Six Months Ended

 

September 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

GAAP gross profit

$

99,976

 

 

$

86,310

 

 

$

186,626

 

 

$

168,836

 

Add back (deduct):

 

 

 

 

 

 

 

Business realignment costs

 

 

 

 

 

 

 

196

 

 

 

 

Non-GAAP adjusted gross profit

$

99,976

 

 

$

86,310

 

 

$

186,822

 

 

$

168,836

 

 

 

 

 

 

 

 

 

Net sales

$

258,400

 

 

$

231,740

 

 

$

493,892

 

 

$

452,027

 

 

 

 

 

 

 

 

 

Gross margin - GAAP

 

38.7

%

 

 

37.2

%

 

 

37.8

%

 

 

37.4

%

Adjusted gross margin - Non-GAAP

 

38.7

%

 

 

37.2

%

 

 

37.8

%

 

 

37.4

%

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 financial measures, 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 CORPORATION

Reconciliation of GAAP Income from Operations to Non-GAAP Adjusted Income from Operations

($ in thousands)

 

 

Three Months Ended

 

Six Months Ended

 

September 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

GAAP income from operations

$

33,351

 

 

$

27,372

 

 

$

54,799

 

 

$

50,191

 

Add back (deduct):

 

 

 

 

 

 

 

Acquisition deal and integration costs

 

508

 

 

 

19

 

 

 

3,095

 

 

 

105

 

Business realignment costs

 

40

 

 

 

1,233

 

 

 

415

 

 

 

2,890

 

North American warehouse consolidation

 

82

 

 

 

 

 

 

199

 

 

 

 

Headquarter relocation costs

 

146

 

 

 

 

 

 

1,374

 

 

 

 

Non-GAAP adjusted income from operations

$

34,127

 

 

$

28,624

 

 

$

59,882

 

 

$

53,186

 

 

 

 

 

 

 

 

 

Net sales

$

258,400

 

 

$

231,740

 

 

$

493,892

 

 

$

452,027

 

 

 

 

 

 

 

 

 

Operating margin - GAAP

 

12.9

%

 

 

11.8

%

 

 

11.1

%

 

 

11.1

%

Adjusted operating margin - Non-GAAP

 

13.2

%

 

 

12.4

%

 

 

12.1

%

 

 

11.8

%

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 financial measures, 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 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

 

Six Months Ended

 

September 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

GAAP net income

 

15,813

 

 

 

14,114

 

 

 

25,088

 

 

 

22,505

Add back (deduct):

 

 

 

 

 

 

 

Amortization of intangibles

 

7,508

 

 

 

6,447

 

 

 

14,385

 

 

 

12,982

Acquisition deal and integration costs

 

508

 

 

 

19

 

 

 

3,095

 

 

 

105

Business realignment costs

 

40

 

 

 

1,233

 

 

 

415

 

 

 

2,890

North American warehouse consolidation

 

82

 

 

 

 

 

 

199

 

 

 

Headquarter relocation costs

 

146

 

 

 

 

 

 

1,374

 

 

 

Normalize tax rate (1)

 

(2,199

)

 

 

(938

)

 

 

(4,768

)

 

 

2,333

Non-GAAP adjusted net income

 

21,898

 

 

 

20,875

 

 

 

39,788

 

 

 

40,815

 

 

 

 

 

 

 

 

Average diluted shares outstanding

 

29,001

 

 

 

28,748

 

 

 

28,962

 

 

 

28,733

 

 

 

 

 

 

 

 

Diluted income per share - GAAP

$

0.55

 

 

$

0.49

 

 

$

0.87

 

 

$

0.78

 

 

 

 

 

 

 

 

Adjusted diluted income per share - Non-GAAP

$

0.76

 

 

$

0.73

 

 

$

1.37

 

 

$

1.42

(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 adjusted diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted net income and adjusted 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 financial measures, such as adjusted net income and adjusted 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 presenting adjusted diluted 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 CORPORATION

Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA

($ in thousands)

 

 

Three Months Ended

 

Six Months Ended

 

September 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

GAAP net income

$

15,813

 

 

$

14,114

 

 

$

25,088

 

 

$

22,505

 

Add back (deduct):

 

 

 

 

 

 

 

Income tax expense (benefit)

 

5,100

 

 

 

4,953

 

 

 

8,494

 

 

 

13,846

 

Interest and debt expense

 

10,211

 

 

 

6,768

 

 

 

18,836

 

 

 

12,971

 

Investment (income) loss

 

88

 

 

 

312

 

 

 

(454

)

 

 

742

 

Foreign currency exchange (gain) loss

 

1,746

 

 

 

1,003

 

 

 

2,230

 

 

 

2,206

 

Other (income) expense, net

 

393

 

 

 

222

 

 

 

605

 

 

 

(2,079

)

Depreciation and amortization expense

 

11,592

 

 

 

10,424

 

 

 

22,482

 

 

 

20,893

 

Acquisition deal and integration costs

 

508

 

 

 

19

 

 

 

3,095

 

 

 

105

 

Business realignment costs

 

40

 

 

 

1,233

 

 

 

415

 

 

 

2,890

 

North American warehouse consolidation

 

82

 

 

 

 

 

 

199

 

 

 

 

Headquarter relocation costs

 

146

 

 

 

 

 

 

1,374

 

 

 

 

Non-GAAP adjusted EBITDA

$

45,719

 

 

$

39,048

 

 

$

82,364

 

 

$

74,079

 

 

 

 

 

 

 

 

 

Net sales

$

258,400

 

 

$

231,740

 

 

$

493,892

 

 

$

452,027

 

 

 

 

 

 

 

 

 

Net income margin - GAAP

 

6.1

%

 

 

6.1

%

 

 

5.1

%

 

 

5.0

%

Adjusted EBITDA margin - Non-GAAP

 

17.7

%

 

 

16.8

%

 

 

16.7

%

 

 

16.4

%

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 financial measures, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements.

Contacts

Gregory P. Rustowicz

Executive Vice President Finance and Chief Financial Officer

Columbus McKinnon Corporation

716-689-5442

greg.rustowicz@cmco.com

Investor Relations:

Deborah K. Pawlowski

Kei Advisors LLC

716-843-3908

dpawlowski@keiadvisors.com

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