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Columbus McKinnon Reports 16% Order Growth in Q2 FY25

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CHARLOTTE, NC, Oct. 30, 2024 /PRNewswire/ — 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 second quarter, which ended September 30, 2024. 

Second Quarter 2025 Highlights (compared with prior-year period, except where otherwise noted)

Orders increased 16% with a book-to-bill ratio of 1.08x; Precision conveyance up 42%Net sales decreased 6% to $242.3 million reflecting impacts related to Hurricane Helene, the ramp up of linear motion production in Monterrey, MX and project timingResults included $17.5 million2 of non-cash pension settlement expense and $11.8 million2 for factory closure and start-up costs as we transitioned manufacturing to our Monterrey, MX facilityGAAP EPS of ($0.52) and Adjusted EPS1 of $0.70Repaid $10 million of debt in Q2 FY25; Anticipate FY25 debt repayment of $60 million Executed $4.9 million of share repurchases in Q2 FY25 and $5.0 million in early Q3 FY25

“Our commercial and operational initiatives are delivering wins with new and existing customers in attractive vertical markets and we delivered one of our highest order quarters in history with 16% order growth and a book-to-bill ratio of 1.08x in Q2.” said David J. Wilson, President and Chief Executive Officer. “Order growth, with particular strength in precision conveyance, and an encouraging funnel of promising opportunities supports our fiscal 2025 guidance and positions us well for fiscal 2026.”

“But for the impact of Hurricane Helene, we delivered on our guidance for the second quarter while transitioning our linear motion manufacturing activity to Monterrey,” continued Wilson. “We remain confident in our long-term financial objectives and are advancing the strategic initiatives that will both grow our business and deliver targeted margin expansion over time.”

Second Quarter Fiscal 2025 Sales

($ in millions)

Q2 FY25

Q2 FY24

Change

% Change

Net sales

$    242.3

$    258.4

$        (16.1)

(6.2) %

U.S. sales

$    132.3

$    145.2

$        (12.9)

(8.9) %

     % of total

55 %

56 %

Non-U.S. sales

$    110.0

$    113.2

$          (3.2)

(2.8) %

     % of total

45 %

44 %

For the quarter, net sales decreased $16.1 million, or 6.2%. In the U.S., sales were down $12.9 million, or 8.9%. Price improvement of $1.3 million helped to offset $14.2 million in lower volume. Sales outside the U.S. decreased $3.2 million, or 2.8%. Price improvement of $2.5 million helped to offset $6.0 million of lower volume. Favorable foreign currency translation was $0.3 million.

Second Quarter Fiscal 2025 Operating Results

($ in millions)

Q2 FY25

Q2 FY24

Change

% Change

Gross profit

$      74.7

$    100.0

$        (25.2)

(25.2) %

     Gross margin

30.9 %

38.7 %

(780) bps

Adjusted Gross Profit1

$      87.9

$    100.0

$        (12.0)

(12.0) %

     Adjusted Gross Margin1

36.3 %

38.7 %

(240) bps

Income from operations

$      10.8

$      33.4

$        (22.5)

(67.6) %

 Operating margin

4.5 %

12.9 %

(840) bps

Adjusted Operating Income1

$      27.0

$      34.1

$          (7.2)

(21.0) %

     Adjusted Operating Margin1

11.1 %

13.2 %

(210) bps

Net income (loss)

$     (15.0)

$      15.8

$        (30.9)

NM

     Net income (loss) margin

(6.2) %

6.1 %

(1,230) bps

GAAP EPS

$     (0.52)

$      0.55

$        (1.07)

NM

Adjusted EPS1

$      0.70

$      0.76

$        (0.06)

(7.9) %

Adjusted EBITDA1

$      39.2

$      45.7

$          (6.6)

(14.4) %

     Adjusted EBITDA Margin1

16.2 %

17.7 %

(150) 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.

Third Quarter Fiscal 2025 Guidance

The Company is issuing the following guidance for the third quarter of fiscal 2025, ending December 31, 2024:

Metric

Q3 FY25

Net sales

Flat year-over-year

Adjusted EPS3

Flat year-over-year

Third quarter 2025 guidance assumes approximately $8 million of interest expense, $8 million of amortization, an effective tax rate of 25% and 28.9 million diluted average shares outstanding.

 

The Company is issuing the following guidance for the fiscal year 2025, ending March 31, 2025:

Metric

FY25

Net sales

Flat to low-single digit growth year-over-year

Adjusted EPS3

Mid-single digit growth year-over-year

Capital Expenditures

$20 million to $25 million

Net Leverage Ratio3

~2.3x

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 10:00 AM Eastern Time to discuss the Company’s financial results and strategy.  The conference call will be accessible through live webcast and via phone by dialing 1-800-836-8184.  The webcast, earnings release and earnings presentation will be available at 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 and available via phone by dialing 1-888-660-6345 and enter the conference ID number 93312# through Wednesday, November 6, 2024.

______________________

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

Represents $23.2 million of non-cash pension settlement costs, $11.9 million of expense related to the closure of our Charlotte, NC factory and $3.8 million of Monterrey MX start-up costs, which are taxed at a 24.6% tax rate.

3 

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.

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 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 our third quarter and fiscal year 2025 net sales and Adjusted EPS, 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 trend and trends in the industry and markets; (iv) the amount of debt to be paid down by the Company during fiscal year 2025; (v) the estimated costs and benefits related to the consolidation of the Company’s North American linear motion operations in Charlotte, North Carolina to its manufacturing facility in Monterrey, Mexico (vi) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; and (vii) 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.

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements – UNAUDITED

(In thousands, except per share and percentage data)

 

Three Months Ended

September 30,
2024

September 30,
2023

Change

Net sales

$          242,274

$          258,400

(6.2) %

Cost of products sold

167,531

158,424

5.7 %

Gross profit

74,743

99,976

(25.2) %

Gross profit margin

30.9 %

38.7 %

Selling expenses

26,926

26,867

0.2 %

% of net sales

11.1 %

10.4 %

General and administrative expenses

23,363

25,709

(9.1) %

% of net sales

9.6 %

9.9 %

Research and development expenses

6,102

6,541

(6.7) %

% of net sales

2.5 %

2.5 %

Amortization of intangibles

7,547

7,508

0.5 %

Income from operations

10,805

33,351

(67.6) %

Operating margin

4.5 %

12.9 %

Interest and debt expense

8,352

10,211

(18.2) %

Investment (income) loss

(610)

88

NM

Foreign currency exchange (gain) loss

(792)

1,746

NM

Other (income) expense, net

23,806

393

5,957.5 %

Income (loss) before income tax expense (benefit)

(19,951)

20,913

NM

Income tax expense (benefit)

(4,908)

5,100

NM

Net income (loss)

$           (15,043)

$            15,813

NM

Average basic shares outstanding

28,869

28,725

0.5 %

Basic income (loss) per share

$              (0.52)

$                0.55

NM

Average diluted shares outstanding

28,869

29,001

(0.5) %

Diluted income (loss) per share

$              (0.52)

$                0.55

NM

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,
2024

September 30,
2023

Change

Net sales

$          482,000

$          493,892

(2.4) %

Cost of products sold

318,227

307,266

3.6 %

Gross profit

163,773

186,626

(12.2) %

Gross profit margin

34.0 %

37.8 %

Selling expenses

54,696

51,848

5.5 %

% of net sales

11.3 %

10.5 %

General and administrative expenses

49,810

53,152

(6.3) %

% of net sales

10.3 %

10.8 %

Research and development expenses

12,268

12,442

(1.4) %

% of net sales

2.5 %

2.5 %

Amortization of intangibles

15,047

14,385

4.6 %

Income from operations

31,952

54,799

(41.7) %

Operating margin

6.6 %

11.1 %

Interest and debt expense

16,587

18,836

(11.9) %

Investment (income) loss

(819)

(454)

80.4 %

Foreign currency exchange (gain) loss

(398)

2,230

NM

Other (income) expense, net

24,484

605

3,946.9 %

Income (loss) before income tax expense (benefit)

(7,902)

33,582

NM

Income tax expense (benefit)

(1,488)

8,494

NM

Net income (loss)

$            (6,414)

$            25,088

NM

Average basic shares outstanding

28,852

28,694

0.6 %

Basic income (loss) per share

$              (0.22)

$                0.87

NM

Average diluted shares outstanding

28,852

28,962

(0.4) %

Diluted income (loss) per share

$              (0.22)

$                0.87

NM

Dividends declared per common share

$                0.07

$                0.07

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

September 30,
2024

March 31, 2024

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$              55,683

$            114,126

Trade accounts receivable

170,669

171,186

Inventories

201,036

186,091

Prepaid expenses and other

40,357

42,752

Total current assets

467,745

514,155

Property, plant, and equipment, net

107,258

106,395

Goodwill

717,982

710,334

Other intangibles, net

375,598

385,634

Marketable securities

10,579

11,447

Deferred taxes on income

1,367

1,797

Other assets

96,355

96,183

Total assets

$          1,776,884

$          1,825,945

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Trade accounts payable

$              72,106

$              83,118

Accrued liabilities

106,847

127,973

Current portion of long-term debt and finance lease obligations

50,704

50,670

Total current liabilities

229,657

261,761

Term loan, AR securitization facility and finance lease obligations

449,910

479,566

Other non current liabilities

201,187

202,555

Total liabilities

$            880,754

$            943,882

Shareholders’ equity:

Common stock

287

288

Treasury stock

(5,946)

(1,001)

Additional paid in capital

529,599

527,125

Retained earnings

386,892

395,328

Accumulated other comprehensive loss

(14,702)

(39,677)

Total shareholders’ equity

$            896,130

$            882,063

Total liabilities and shareholders’ equity

$          1,776,884

$          1,825,945

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows – UNAUDITED

(In thousands)

 

Six Months Ended

September 30,
2024

September 30,
2023

Operating activities:

Net income (loss)

$               (6,414)

$               25,088

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

Depreciation and amortization

24,028

22,482

Deferred income taxes and related valuation allowance

(13,662)

(6,097)

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

(650)

(302)

Non-cash pension settlement

23,201

Stock-based compensation

4,175

5,264

Amortization of deferred financing costs

1,244

1,106

Impairment of operating lease

3,268

Loss (gain) on hedging instruments

(2)

554

Loss (gain) on disposal of Fixed Assets

418

Non-cash lease expense

5,202

4,684

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

Trade accounts receivable

2,384

(11,409)

Inventories

(12,277)

(22,415)

Prepaid expenses and other

(11,714)

(5,868)

Other assets

183

357

Trade accounts payable

(10,711)

(5,996)

Accrued liabilities

(6,154)

(3,085)

Non-current liabilities

(3,889)

(4,921)

Net cash provided by (used for) operating activities

(1,370)

(558)

Investing activities:

Proceeds from sales of marketable securities

3,153

1,100

Purchases of marketable securities

(1,993)

(1,809)

Capital expenditures

(10,068)

(10,319)

Purchase of businesses, net of cash acquired

(108,145)

Dividend received from equity method investment

144

Net cash provided by (used for) investing activities

(8,908)

(119,029)

Financing activities:

Proceeds from the issuance of common stock

86

492

Purchases of treasury stock

(4,945)

Repayment of debt

(30,326)

(25,294)

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

11,862

12,084

Cash outflows from hedging activities

(11,809)

(12,660)

Payment of dividends

(4,038)

(4,015)

Other

(1,789)

(1,954)

Net cash provided by (used for) financing activities

(47,839)

85,794

Effect of exchange rate changes on cash

(326)

(325)

Net change in cash and cash equivalents

(58,443)

(34,118)

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

$            114,376

$            133,426

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

$               55,933

$               99,308

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2025 Net Sales Bridge

 

Quarter

Year To Date

($ in millions)

$ Change

% Change

$ Change

% Change

Fiscal 2024 Net Sales

$             258.4

$             493.9

Acquisition

— %

2.7

0.5 %

Pricing

3.8

1.5 %

7.3

1.5 %

Volume

(20.2)

(7.8) %

(21.6)

(4.4) %

Foreign currency translation

0.3

0.1 %

(0.3)

— %

Total change

$             (16.1)

(6.2) %

$             (11.9)

(2.4) %

Fiscal 2025 Net Sales

$             242.3

$             482.0

 

COLUMBUS McKINNON CORPORATION

Q2 FY 2025 Gross Profit Bridge

 

($ in millions)

Quarter

Year To Date

Fiscal 2024 Gross Profit

$                  100.0

$                  186.6

Acquisition

0.8

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

0.1

3.5

Monterrey, MX new factory start-up costs

(2.2)

(3.8)

Factory and warehouse consolidation costs

(10.8)

(10.8)

Sales volume and mix

(12.3)

(12.1)

Other

(0.3)

(0.5)

Foreign currency translation

0.2

0.1

Total change

(25.3)

(22.8)

Fiscal 2025 Gross Profit

$                    74.7

$                  163.8

 

U.S. Shipping Days by Quarter 

     Q1     

     Q2     

     Q3     

     Q4     

     Total     

FY25               

64

63

60

62

249

FY24

63

62

61

62

248

 

COLUMBUS McKINNON CORPORATION

Additional Data1

(Unaudited)

Period Ended

September 30,

 2024

June 30,
2024

March 31,
2024

September 30,

 2023

($ in millions)

Backlog

$       317.6

$       292.8

$       280.8

$       317.7

Long-term backlog

  Expected to ship beyond 3 months

$       172.5

$       156.0

$       144.6

$       148.3

Long-term backlog as % of total backlog

54.3

%

53.3

%

51.5

%

46.7

%

Debt to total capitalization percentage

35.8

%

36.6

%

37.5

%

39.8

%

Debt, net of cash, to net total capitalization

33.2

%

33.3

%

32.0

%

35.3

%

Working capital as a % of sales 2

23.3

%

22.5

%

19.1

%

21.8

%

 

Three Months Ended

September 30,

2024

June 30,
2024

March 31,
2024

September 30,

2023

($ in millions)

Trade accounts receivable

Days sales outstanding

64.1

days

63.3

days

58.7

days

58.6

days

Inventory turns per year

(based on cost of products sold)

3.3

turns

3.0

turns

3.7

turns

3.1

turns

Days’ inventory

110.6

days

121.7

days

98.6

days

117.7

days

Trade accounts payable

Days payables outstanding

46.3

days

50.6

days

50.9

days

48.3

days

Net cash provided by (used for) operating activities

$         9.4

$     (10.8)

$       38.6

$       16.7

Capital expenditures

$         5.4

$         4.6

$         8.5

$         5.0

Free Cash Flow 3

$         4.0

$     (15.4)

$       30.1

$       11.7

______________________

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 September 30, 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.

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

Six Months Ended

September 30,

2024

September 30,

2023

September 30,

2024

September 30,

2023

Gross profit

$   74,743

$   99,976

$ 163,773

$ 186,626

Add back (deduct):

Business realignment costs

76

468

196

Hurricane Helene cost impact

171

171

Factory and warehouse consolidation costs

10,763

10,763

Monterrey, MX new factory start-up costs

2,185

3,810

Adjusted Gross Profit

$   87,938

$   99,976

$ 178,985

$ 186,822

Net sales

$ 242,274

$ 258,400

$ 482,000

$ 493,892

Gross margin

30.9 %

38.7 %

34.0 %

37.8 %

Adjusted Gross Margin

36.3 %

38.7 %

37.1 %

37.8 %

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.

COLUMBUS McKINNON CORPORATION

Reconciliation of Income from Operations to Adjusted Operating Income

($ in thousands)

 

Three Months Ended

Six Months Ended

September 30,

 2024

September 30,

 2023

September 30,

 2024

September 30,

 2023

Income from operations

$      10,805

$      33,351

$     31,952

$      54,799

Add back (deduct):

Acquisition deal and integration costs

508

3,095

Business realignment costs

281

40

1,131

415

Factory and warehouse consolidation costs

11,904

82

11,904

199

Headquarter relocation costs

51

146

147

1,374

Hurricane Helene cost impact

171

171

Monterrey, MX new factory start-up costs

3,751

7,317

Adjusted Operating Income

$      26,963

$      34,127

$     52,622

$      59,882

Net sales

$    242,274

$    258,400

$   482,000

$    493,892

Operating margin

4.5 %

12.9 %

6.6 %

11.1 %

Adjusted Operating Margin

11.1 %

13.2 %

10.9 %

12.1 %

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.

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

Six Months Ended

September 30,

2024

September 30,

2023

September 30,

2024

September 30,

2023

Net income (loss)

$    (15,043)

$     15,813

$      (6,414)

$     25,088

Add back (deduct):

Amortization of intangibles

7,547

7,508

15,047

14,385

Acquisition deal and integration costs

508

3,095

Business realignment costs

281

40

1,131

415

Factory and warehouse consolidation costs

11,904

82

11,904

199

Headquarter relocation costs

51

146

147

1,374

Hurricane Helene cost impact

171

171

Monterrey, MX new factory start-up costs

3,751

7,317

Non-cash pension settlement expense

23,201

23,201

     Normalize tax rate 1

(11,647)

(2,199)

(14,242)

(4,768)

Adjusted Net Income

$     20,216

$     21,898

$     38,262

$     39,788

GAAP average diluted shares outstanding

28,869

29,001

28,852

28,962

Add back:

Effect of dilutive share-based awards

205

253

Adjusted Diluted Shares Outstanding

$     29,074

$     29,001

$     29,105

$     28,962

GAAP EPS

$       (0.52)

$        0.55

$       (0.22)

$        0.87

Adjusted EPS

$         0.70

$        0.76

$         1.31

$        1.37

1

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, Adjusted Diluted Shares Outstanding and Adjusted EPS are 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 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.

 

COLUMBUS McKINNON CORPORATION

Reconciliation of Net Income to Adjusted EBITDA

($ in thousands)

 

Three Months Ended

Six Months Ended

September 30,

2024

September 30,

2023

September 30,

2024

September 30,

2023

Net income (loss)

$    (15,043)

$     15,813

$     (6,414)

$       25,088

Add back (deduct):

Income tax expense (benefit)

(4,908)

5,100

(1,488)

8,494

Interest and debt expense

8,352

10,211

16,587

18,836

Investment (income) loss

(610)

88

(819)

(454)

Foreign currency exchange (gain) loss

(792)

1,746

(398)

2,230

Other (income) expense, net

23,806

393

24,484

605

Depreciation and amortization expense

12,188

11,592

24,028

22,482

Acquisition deal and integration costs

508

3,095

Business realignment costs

281

40

1,131

415

Factory and warehouse consolidation costs

11,904

82

11,904

199

Headquarter relocation costs

51

146

147

1,374

Hurricane Helene cost impact

171

171

Monterrey, MX new factory start-up costs

3,751

7,317

Adjusted EBITDA

$      39,151

$     45,719

$     76,650

$       82,364

Net sales

$    242,274

$   258,400

$   482,000

$     493,892

Net income margin

(6.2) %

6.1 %

(1.3) %

5.1 %

Adjusted EBITDA Margin

16.2 %

17.7 %

15.9 %

16.7 %

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.

 

COLUMBUS McKINNON CORPORATION

Reconciliation of Net Leverage Ratio

($ in thousands)

 

Twelve Months Ended

September 30,

 2024

September 30,

 2023

Net income (loss)

$           15,123

$           51,012

Add back (deduct):

Annualize EBITDA for the montratec acquisition1

5,410

Annualize synergies for the montratec acquisition1

293

Income tax expense (benefit)

4,920

20,694

Interest and debt expense

35,708

33,807

Non-cash pension settlement

28,185

Amortization of deferred financing costs

2,487

1,967

Stock Compensation Expense

10,950

12,060

Depreciation and amortization expense

47,491

43,536

Cost of debt refinancing

1,190

Acquisition deal and integration costs

116

3,606

Excluded acquisition deal and integration costs2

(510)

Business realignment costs

2,583

2,664

Excluded business realignment costs2

(2,249)

Factory and warehouse consolidation costs

12,449

199

Garvey contingent consideration

1,230

Headquarter relocation costs

832

2,370

Monterrey, MX new factory start-up costs

11,806

Excluded Monterrey, MX new factory start-up costs3

(3,664)

Credit Agreement Trailing Twelve Month Adjusted EBITDA

$         170,176

$         176,089

Current portion of long-term debt and finance lease obligations

$           50,704

$           50,636

Term loan, AR securitization facility and finance lease obligations

449,910

514,205

Total debt

$         500,614

$         564,841

Standby Letters of Credit

15,692

15,525

Cash and cash equivalents

(55,683)

(99,058)

Net Debt

$         460,623

$         481,308

Net Leverage Ratio

2.71x 

2.73x 

1 

EBITDA is normalized to include a full year of the acquired entity and assumes all cost synergies are achieved in TTM Q2 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 certain Monterrey, MX factory start-up costs.

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 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 Leverage Ratio and Credit Agreement Trailing Twelve Month Adjusted EBITDA are important for investors and other readers of the Company’s financial statements.

 

 

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SOURCE Columbus McKinnon Corporation

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