Columbus McKinnon Corporation · NASDAQ:CMCO
Columbus McKinnon — Q3 FY2017 Earnings Presentation
18 slides from Columbus McKinnon's earnings presentation, Jan 26, 2017
Slide 1: Q3 Fiscal Year 2017 Earnings Conference Call
© 2015 Columbus McKinnon Corporation. All Rights Reserved. Confidential and Proprietary. NASDAQ: CMCO Timothy T. Tevens President & Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer Q3 Fiscal Year 2017 Earnings Conference Call January 26, 2017
Slide 2: Safe Harbor Statement
2 © 2017 Columbus McKinnon Corporation These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors th
Slide 3: Strong Balance Sheet and Financial Flexibility to Execute Plans
3 © 2017 Columbus McKinnon Corporation Strong Balance Sheet and Financial Flexibility to Execute Plans 1/3 of sales in developing markets and 2/3 in developed markets Organic growth (trend line): - U.S. & Western Europe at GDP+ - Emerging Markets at double digits Acquisitions: $200 - $300 mill
Slide 4: Q3 Fiscal 2017 Highlights
4 © 2017 Columbus McKinnon Corporation Sales were $152.5 million; $153.9 million excluding negative FX impact U.S. sales weaker than expected at $98.1 million; flat sequentially, but down 4.4% vs prior year. Magnetek off of prior year due to fewer large projects. Non-U.S. sales were $54.4 mill
Slide 5: U.S. Industrial Market Stabilizing
5 © 2017 Columbus McKinnon Corporation U.S. Industrial Market Stabilizing 77.5% 78.1% 78.6% 78.4% 78.6% 77.3% 76.4% 76.4% 75.4% 74.9% 75.4% 75.3% 75.5% 74.0% 75.0% 76.0% 77.0% 78.0% 79.0% 80.0% U.S. Total Industrial Capacity Utilization Source: U.S. Board of Governors of the Federal Reserve System (
Slide 6: Sales
6 © 2017 Columbus McKinnon Corporation Sales down 3.7%, or $5.8 million, excluding FX Up sequentially from Q2; Q3 is typically weaker given seasonality U.S. sales down 4.4% Fewer large projects, weaker December Non-U.S. sales down 2.3% excluding FX EMEA off low-single digits, S. Africa i
Slide 7: Gross Profit Impacted
7 © 2017 Columbus McKinnon Corporation Gross Profit Impacted Gross margin of 29.4% $1.0 million unfavorable product liability includes $0.5 million legal settlement and actuarial adjustment Productivity net of other cost changes includes $0.3 million of restructuring costs in EMEA Gross marg
Slide 8: SG&A Expense Impacted
8 © 2017 Columbus McKinnon Corporation $16. 0 $16. 7 [VAL UE] $3.1 Q3 FY16 Q3 FY17 $16.4 $19.8 $19. 3 $18. 0 Q3 FY16 Q3 FY17 SG&A Expense Impacted Selling expense down $1.3 million Down 30 basis points Selling costs reduced $1.2 million FX impact: $0.1 million less expense G&A expense up $
Slide 9: Income from Operations Impacted
9 © 2017 Columbus McKinnon Corporation Operating margin impacted by STAHL acquisition and atypical costs Positioned to Grow! Income from Operations Impacted Income from operations was $5.3 million, or 3.5% of sales Adjusted for STAHL acquisition deal costs, operating margin was 5.5% $3.1 milli
Slide 10: Earnings per Share
10 © 2017 Columbus McKinnon Corporation Diluted EPS Earnings per Share Net income was $0.5 million Non-GAAP adjusted net income(1) was $4.5 million excluding: STAHL acquisition costs of $3.1 million FX option revaluation loss to hedge STAHL purchase price of $1.8 million Adjusted to reflec
Slide 11: Working Capital Improvement
11 © 2017 Columbus McKinnon Corporation Driven by inventory turns improvement Working capital at 19.9% of sales Best result in two years Inventory turns step up to 3.9x Improved year-over-year and sequentially Ongoing focus: expecting 4.0x or higher in near term Further improvements ex
Slide 12: Strong Cash Flow
12 © 2017 Columbus McKinnon Corporation Strong operating free cash flow in quarter ($20 million) and year to date ($37 million) Year-to-date cash from operating activities increased over 45% Capital expenditures guidance unchanged Estimated at approximately $16 million in FY2017(1) Strong Ca
Slide 13: Flexible Capital Structure Supports Growth Strategy
13 © 2017 Columbus McKinnon Corporation Capital allocation priorities De-lever balance sheet Maintain dividend Flexible Capital Structure Supports Growth Strategy * Net total capitalization = total capitalization minus cash Net debt / net total capitalization* 38.4 % Debt / total capitalizatio
Slide 14: Outlook
14 © 2017 Columbus McKinnon Corporation Outlook STAHL acquisition creates increased shareholder value 2nd largest hoist manufacturer in world Strengthens position in EMEA with powered wire rope and electric chain hoists Product development opportunities; leverage Magnetek; “Smart Hoists” E
Slide 15: Conference Call Playback Info
15 © 2017 Columbus McKinnon Corporation Replay Number: 412-317-6671 passcode: 13652416 Telephone replay available through February 2, 2017 Webcast / PowerPoint / Replay available at www.cmworks.com/investors Transcript, when available, at www.cmworks.com/investors Conference Call Playback Info
Slide 16: Supplemental Information
© 2015 Columbus McKinnon Corporation. All Rights Reserved. Confidential and Proprietary. NASDAQ: CMCO Supplemental Information
Slide 17: Adj. Income from Operations Reconciliation
17 © 2017 Columbus McKinnon Corporation Adj. Income from Operations Reconciliation Adjusted operating income is defined as operating income as reported, adjusted for unusual items. Adjusted operating income is not a measure determined in accordance with generally accepted accounting principles in th
Slide 18: Adjusted Diluted EPS Reconciliation
18 © 2017 Columbus McKinnon Corporation Adjusted Diluted EPS Reconciliation Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items and to apply a normalized tax rate. Adjusted net income and diluted EPS are not measures determined in acc