Columbus McKinnon Corporation · NASDAQ:CMCO
Columbus McKinnon — Investor Presentation (January 2017)
48 slides from Columbus McKinnon's investor presentation, Jan 9, 2017
Slide 1: Investor Presentation January 2017
© 2015 Columbus McKinnon Corporation. All Rights Reserved. Confidential and Proprietary.NASDAQ: CMCO Investor Presentation January 2017 Timothy T. Tevens President & Chief Executive Officer Gregory P. Rustowicz Vice President – Finance & Chief Financial Officer
Slide 2: Forward-looking statements
2 © 2017 Columbus McKinnon Corporation This presentation 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 revenue and earnings, involve known and unknown ris
Slide 3: Columbus McKinnon Corporation
3 © 2017 Columbus McKinnon Corporation Columbus McKinnon Corporation SECURELIFT Safely and Productively Market Capitalization $544.7 million Annual Dividend $0.16 Recent Price $26.92 Dividend Yield 0.6% 52 Week High-Low $28.12 - $12.62 Institutional Ownership 91.3% Shares Outstanding 20.2 million In
Slide 4: Strong Balance Sheet and Financial Flexibility to Execute Plans
4 © 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 5: Customer Intimacy Model
5 © 2017 Columbus McKinnon Corporation Customer Intimacy Model Operational excellence Customer Intimacy Strong, highly recognized & respected brands Superior Customer experience Broad product offering
Slide 6: Strategic Initiatives
6 © 2017 Columbus McKinnon Corporation Superior Customer Satisfaction Acquisitions Geographic Market Expansion Global Product Development and Key Vertical Markets Operational Excellence Grow Profitably Strategic Initiatives
Slide 7: Acquisitive
7 © 2017 Columbus McKinnon Corporation Acquisitive Add $200 to $300 million in revenue New technologies/expand product portfolio Geographic markets Key vertical markets
Slide 8: Recent Acquisition (Expected to close on or about January 31, 2017)
8 © 2017 Columbus McKinnon Corporation Recent Acquisition (Expected to close on, or about, January 31, 2017)
Slide 9: Ideal Strategic Combination
9 © 2017 Columbus McKinnon Corporation Ideal Strategic Combination Strong Value Proposition Ideal complement to Columbus McKinnon’s global presence Strong wire rope and electric chain hoist position in EMEA complements Columbus McKinnon manual hoist leadership Explosion-protected products (ATE
Slide 10: Strong Financial Performance
10 © 2017 Columbus McKinnon Corporation Strong Financial Performance Consistent best-in-class profitability September 30, 2016 TTM financial results: Revenue: ~$164 million (€155 million) EBITDA: ~$31 million (€29 million) EBITDA Margin: ~19% Strong cash conversion rate All manufacturi
Slide 11: Established Global Presence
11 © 2017 Columbus McKinnon Corporation EMEA, 71% Americas, 16% APAC, 13% Established Global Presence Superior product quality Premium brand; strong reputation Long-standing customer relationships Large installed base; strong spare parts business Explosion-protected hoist leader Revenue by
Slide 12: Synergy-Driven Value Creation
12 © 2017 Columbus McKinnon Corporation Synergy-Driven Value Creation Costs Sourcing & logistics Sales office consolidation Product rationalization Lean processes Revenue Leverage global sales force Expand product offering Smart technology Intercompany Opportunities Low cost country
Slide 13: Pro forma sales and EBITDA
13 © 2017 Columbus McKinnon Corporation Pro forma TTM 9/30/16 sales Pro forma TTM 9/30/16 EBITDA(1) $616 164.0 $164 $780 CMCO STAHL Pro forma $75 $31 $11 $116 CMCO STAHL Synergies Pro forma Note: Stahl financials converted from EUR to USD at rate of 1.0588 as of 11/18/16 (1) EBITDA is a non-GAAP fin
Slide 14: Transaction Overview
14 © 2017 Columbus McKinnon Corporation Purchase Price €224 million ($237 million); €230 million ($244 million) with earn-out Transaction Costs Fiscal 2017: $8 million - $9 million Restructuring Costs Fiscal 2018: Approximately $6 million Pension Liability $79 million unfunded planAnnual contributio
Slide 15: Pro Forma Capitalization and Sources & Uses
15 © 2017 Columbus McKinnon Corporation Expected rate of debt reduction $45 million - $50 million in FY18 Ramping to $50 million - $55 million in FY19 Targeting 3x Net Debt/EBITDA by end of FY18 Covenant-lite No leverage maintenance covenant Pro Forma Capitalization 9/30/2016 Reported 9/30/2016
Slide 16: Recent Acquisition (Acquired September 2, 2015)
16 © 2017 Columbus McKinnon Corporation Recent Acquisition (Acquired September 2, 2015)
Slide 17: CMCO + Magnetek Leader in Intelligent Lifting
17 © 2017 Columbus McKinnon Corporation CMCO + Magnetek Leader in Intelligent Lifting Acquired America’s largest supplier of digital power and motion control systems for industrial cranes and hoists Strengthened value proposition Industry leading power electronics technology with industry leading
Slide 18: Technology Driven Solutions
18 © 2017 Columbus McKinnon Corporation Technology Driven Solutions BLACK MAX® & BLUE MAX® Inverter-duty motors ELECTROMOTIVE® Festoon electrification systems LASERGUARD®/ReFLX ® Distance-detection & collision avoidance sensors ELECTROBAR® Conductor bar electrification products SBN/SBP2 Pendants ENR
Slide 19: Strategic Initiatives
19 © 2017 Columbus McKinnon Corporation Strategic Initiatives
Slide 20: Geographic Expansion
20 © 2017 Columbus McKinnon Corporation Geographic Expansion APAC Latin America EMEA From strength in China From strength in Mexico and Brazil From strength in Europe and S. Africa Leverage Existing Footprint
Slide 21: International Market Penetration
21 © 2017 Columbus McKinnon Corporation ($ in millions) Non U.S. Sales(1)Q2 FY2017 TTM Reported International Market Penetration $268.7 $253.3 $251.9 $244.0 $223.3 $219.4 $13.8 $13.2 $26.1 $55.4 $58.1 FY12 FY13 FY14 FY15 FY16 Q2 FY17 TTM As Reported FX Adjustment U.S. 64% Europe, Middle East & Afric
Slide 22: Product Development
22 © 2017 Columbus McKinnon Corporation Product Development Market Needs Market Feedback Product Planning Product Development Recent Successes: Yale LodeKing LTTM Wire Rope Hoist Strategic Product Management Voice of Customer & Watch the Work Knowledge Based Engineering Metrics Market Performance Me
Slide 23: Key Vertical Markets
23 © 2017 Columbus McKinnon Corporation Key Vertical Markets
Slide 24: Operational Excellence
24 © 2017 Columbus McKinnon Corporation Objectives FY16 Actual World Class Customer Satisfaction - Total 4.2 2.5 Internal Defect Rate 0.83% 0.75% Inventory Turns 3.6 6.0 On-time Deliveries 92.6% 98.0% Warranty Costs 0.48% 0.35% - 0.30% Productivity 32% +10% - +15% Safety RW/LT 1.89 0.50 CM Lean Busi
Slide 25: Global ERP System rollout
25 © 2017 Columbus McKinnon Corporation D u f f N o r t o n , C M E P , C M I P , U K , N e t h e r l a n d s , D u b a i , B r a z i l , F r a n c e , I t a l y , S w i t z e r l a n d N.A. Hoist & Rigging Global Master Data Governance & Clean Up FY 2017 FY 2018 FY 2019 48% Global Revenue Complete:
Slide 26: Business Overview
26 © 2017 Columbus McKinnon Corporation Business Overview
Slide 27: Broad Product Offering
27 © 2017 Columbus McKinnon Corporation Net Sales: Q2 FY2017 TTM U.S. market leader in hoists and controls Leader in explosion-protected hoists with STAHL Leader in drives and controls with Magnetek Broad Product Offering Hoists 48% Spare Parts 6% Rigging & Lifting Tools 12% Cranes 5% Acutators
Slide 28: From Lifting Products to Solutions
28 © 2017 Columbus McKinnon Corporation From Lifting Products to Solutions Powered Chain Hoists Powered Wire Rope Hoists ATEX Explosion Protected Hoists
Slide 29: Extensive Distribution Channels
29 © 2017 Columbus McKinnon Corporation Q2 FY2017 TTM Net Sales: $ 615.8 million Extensive Distribution Channels 15,000 + distributors & end-user customers Extensive Market Channels US General Line Distributors 36% International General Line Distributors 29% Specialty Distributors 13% Pfaff Internat
Slide 30: Revenue Growth at Constant Currency
30 © 2017 Columbus McKinnon Corporation $572.8 $604.9 $596.5 $605.7 $652.5 $673.9 $500 $550 $600 $650 $700 FY12 FY13 FY14 FY15 FY16 Q2 FY17 TTM Revenue Growth at Constant Currency ($ in millions) Net Sales Excluding FX Impact(1) (1) FY13 – Q2 FY17 TTM amounts are presented using FY12 FX rates. Pleas
Slide 31: Financial Overview
31 © 2017 Columbus McKinnon Corporation Financial Overview
Slide 32: Adjusted Gross Profit and Income from Operations
32 © 2017 Columbus McKinnon Corporation $174.2 $181.0 $181.6 $187.3 $194.5 FY13 FY14 FY15 FY16 Q2 FY17 TTM Adjusted Gross Profit & Margin(1) Gross Margin Expansion Adjusted Income from Operations & Margin(1) $54.4 $54.4 $54.6 $40.6 $46.6 FY13 FY14 FY15 FY16 Q2 FY17 TTM (1) Adjusted gross profit & ma
Slide 33: Strong Cash Generation
33 © 2017 Columbus McKinnon Corporation $48.0 $22.6 $(9.3) $9.8 $27.5 $8.7 $21.0 $30.3 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 (1) Operating free cash flow is defined as cash provided by operating activities minus capital expenditures (2) Fiscal 2010 and fiscal 2011 include $10.8 million and $4.5 mi
Slide 34: Low CapEx Requirements
34 © 2017 Columbus McKinnon Corporation $14.9 $20.8 $17.2 $22.3 $8.5 FY13 FY14 FY15 FY16 FY17E Low CapEx Requirements Capital allocation priorities: De-lever balance sheet Strategic growth Dividends Base capital expenditure ~$13 million to $15 million Investments in productivity and ca
Slide 35: Working Capital and Inventory Turns
35 © 2017 Columbus McKinnon Corporation 18.3% 21.7% 20.8% 21.5% 21.2% FY13 FY14 FY15 FY16 Q2 FY17 TTM 50.5 52.9 49.2 49.2 48.1 FY13 FY14 FY15 FY16 Q2 FY17 TTM Working Capital as a Percent of Sales Days Sales Outstanding (1) Figure excludes the impact of the acquisition of Magnetek Focused on Improvi
Slide 36: Investing for Growth
36 © 2017 Columbus McKinnon Corporation $39.2 $152.7 $112.4 $77.9 17.4 (117.3) (228.6) (8.0) $45.7 Cash 3/31/09 Net Income D&A Borrowings Net of Payments & Financing Costs Working Capital Change & Other, Net Capital Expenditures Acquisitions Dividends Cash 9/30/16 Investing for Growth ($ in millions
Slide 37: ROIC and ROIC/WACC
37 © 2017 Columbus McKinnon Corporation 13.1% 12.4% 11.0% 8.2% 6.9% FY13 FY14 FY15 FY16 Q2 FY17 TTM 1.2x 1.3x 1.1x 1.0x 0.8x FY13 FY14 FY15 FY16 Q2 FY17 TTM ROIC/WACC (1) ROIC is defined as income from operations, net of 34% tax rate, for the trailing 12 months divided by the average of debt plus eq
Slide 38: Flexible Capital Structure
38 © 2017 Columbus McKinnon Corporation $152.3 $126.7 $267.6 $239.8 $445.0 FY14 FY15 FY16 9/30/2016 Pro forma W/STAHL $13.5 $12.4 $7.9 $10.2 Flexible Capital Structure ($ in millions) Cash and Cash Equivalents Total Debt Interest Expense $112.3 $63.1 $51.6 $45.7 $29.1 FY14 FY15 FY16 9/30/2016 Pro fo
Slide 39: Key Takeaways
39 © 2017 Columbus McKinnon Corporation Key Takeaways Leading US market share, strong brands, key vertical markets Magnetek and STAHL strengthen value proposition Broad products offering focused on safety and productivity Extensive market channels & growing global presence Improving margins & strong
Slide 40: Material Handling - Safely and Productively
40 © 2017 Columbus McKinnon Corporation Material Handling - Safely and Productively
Slide 41: Supplemental Information
© 2015 Columbus McKinnon Corporation. All Rights Reserved. Confidential and Proprietary.NASDAQ: CMCO Supplemental Information
Slide 42: Non-GAAP Reconciliations
42 © 2017 Columbus McKinnon Corporation $ in millions FY2012 FY2013 FY2014 FY2015 FY2016 Q2 FY17 TTM Sales $ 591.9 $ 597.3 $ 583.3 $ 579.6 $ 597.1 $ 615.8 Less sales from divested business (19.1) (6.2) - - - - Constant currency adjustment (using FY12 FX rates) - 13.8 13.2 26.1 55.4 58.1 Constant cur
Slide 43: Adjusted Gross Profit Reconciliation
43 © 2017 Columbus McKinnon Corporation $ in thousands FY2013 FY2014 FY2015 FY2016 Q2 FY17 TTM Gross Profit $ 174,231 $ 181,048 $ 181,607 $ 187,263 $ 194,510 Add back: European facility consolidation costs and reduction-in-force - - 1,176 346 - Acquisition inventory step-up expense - - 543 1,446 521
Slide 44: Adjusted Income from Operations Reconciliation
44 © 2017 Columbus McKinnon Corporation $ in thousands FY2013 FY2014 FY2015 FY2016 Q2 FY17 TTM Income from operations $ 54,371 $ 54,350 $ 54,648 $ 40,570 $ 46,587 Add back: Acquisition deal costs - 1,657 - 5,746 414 European facility consolidation costs - - 1,726 585 - Acquisition related severance
Slide 45: Debt / EBITDA Reconciliation
45 © 2017 Columbus McKinnon Corporation $ in thousands 9/30/15 TTM 9/30/16 TTM Operating income $ 43,311 $ 46,587 Add back: Canadian pension lump sum settlements - 247 Acquisition deal costs 5,332 414 European facility consolidation costs 2,311 - Acquisition related severance costs 2,300 - Acquisiti
Slide 46: Pro Forma Combined EBITDA Reconciliation
46 © 2017 Columbus McKinnon Corporation Pro Forma Combined EBITDA Reconciliation $ in thousands 9/30/16 TTM CMCO Net income: $ 26,333 Add back: Interest expense 10,215 Investment income (597) Foreign currency exchange gain/loss 158 Other income, net (392) Income tax expense 10,870 Depreciation & amo
Slide 47: Industrial Capacity Utilization
47 © 2017 Columbus McKinnon Corporation 77% 78% 79% 80% 81% 82% 83% 74% 75% 76% 77% 78% 79% 80% All Manufacturing Total Source: The Federal Reserve Board Eurozone Capacity UtilizationU.S. Capacity Utilization Source: European Commission 82.3% in Q3 FY2017 75.4% (Manufacturing) & 75.0% (Total) in Nov
Slide 48: Established Global Presence
48 © 2017 Columbus McKinnon Corporation Established Global Presence
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