CMCO - Columbus McKinnon Reports Record Net Sales Gross Margin and Operating Income in Fiscal 2024

May, 29 2024 06:30 AM Columbus McKinnon Corporation

Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its full year and fourth quarter fiscal 2024, which ended March 31, 2024. Results include the addition of montratec ^® , which was acquired on May 31, 2023 ("the acquisition").

Fiscal Year 2024 Highlights (compared with prior year period)

Record net sales of $1.0 billion, up 8% driven by growth across all geographies including the acquisition of montratec
Gross margin up 50 basis points to 37.0%; Adjusted Gross Margin ¹ up 80 basis points to 37.3%
Net income of $46.6 million with a net margin of 4.6%; Adjusted EBITDA ¹ of $166.7 million, up 13% with Adjusted EBITDA Margin ¹ of 16.4%, up 60 basis points
Generated net cash provided by operating activities of $67.2 million and Free Cash Flow ¹ of $42.4 million with Free Cash Flow Conversion ¹ of 91%
Net Leverage Ratio ^1,2 decreased to 2.4x; Expect Net Leverage Ratio ^1,2 of ~2.0x target by end of year Fiscal 2025

Fourth Quarter 2024 Highlights (compared with prior year period)

Delivered $265.5 million of net sales demonstrating continued momentum, up 5% driven by growth across all geographies with strength in precision conveyance, up 23%
Orders increased 5% led by precision conveyance, up 25%
Net income of $11.8 million with a net margin of 4.4%; Adjusted EBITDA ¹ of $43.0 million, up 8% with Adjusted EBITDA Margin ¹ of 16.2%, up 50 basis points

“Our team delivered another record year of sales, gross margin, operating income, and Adjusted EBITDA Margin ¹ reflecting the solid progress we are making with our transformation. These results provide another proof point on the path to achieving our long-term financial objectives. Our team continues to execute on commercial and operational initiatives to improve productivity, reduce lead times, and enhance customer experience, which position us to scale our business and deliver top-tier financial results,” said David J. Wilson, President and Chief Executive Officer. “While we are taking a prudent view of our outlook for fiscal 2025, we remain cautiously optimistic given the solid momentum exiting fiscal 2024 and our encouraging pipeline of opportunities. We are focused on execution as we thoughtfully navigate this uncertain environment.”

Fourth Quarter Fiscal 2024 Sales

($ in millions)
Q4 FY 24

Q4 FY 23

Change

% Change
Net sales
$
265.5


$
253.8


$
11.7

4.6
%
U.S. sales
$
155.0


$
149.4


$
5.6

3.7
%
% of total

58
%


59
%




Non-U.S. sales
$
110.5


$
104.4


$
6.1

5.8
%
% of total

42
%


41
%

For the quarter, sales increased $11.7 million, or 4.6%. The acquisition contributed $4.9 million, or 1.9%. In the U.S., sales were up $5.6 million, or 3.7%, driven by favorable sales volume of $3.1 million, price improvement of $2.1 million and $0.4 million of contribution from the acquisition. Sales outside the U.S. increased $6.1 million, or 5.8%, driven by $4.5 million of sales related to the acquisition and $3.6 million of price improvement offset by $3.3 million of lower sales volume. Favorable foreign currency translation was $1.3 million.

Fourth Quarter Fiscal 2024 Operating Results

($ in millions)
Q4 FY 24

Q4 FY 23

Change


% Change
Gross profit
$
94.3


$
91.2


$
3.1


3.4
%
Gross margin

35.5
%


35.9
%

(40) bps



Adjusted Gross Profit ¹
$
97.1


$
91.2


$
5.9


6.5
%
Adjusted Gross Margin ¹

36.6
%


35.9
%

70 bps



Income from operations
$
25.4


$
27.5


$
(2.0
)

(7.4
)%
Operating margin

9.6
%


10.8
%

(120) bps



Adjusted Operating Income ¹
$
31.1


$
29.2


$
1.9


6.6
%
Adjusted Operating Margin ¹

11.7
%


11.5
%

20 bps



Net income
$
11.8


$
13.9


$
(2.1
)

(15.0
)%
Net income margin

4.4
%


5.5
%

(110) bps



Diluted EPS
$
0.41


$
0.48


$
(0.07
)

(14.6
)%
Adjusted EPS ¹
$
0.75


$
0.80


$
(0.05
)

(6.3
)%
Adjusted EBITDA ¹
$
43.0


$
39.7


$
3.2


8.2
%
Adjusted EBITDA margin ¹

16.2
%


15.7
%

50 bps

Adjusted EPS ¹ excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.

Full Year and First Quarter Fiscal 2025 Guidance

The Company is issuing the following guidance for the first quarter of fiscal 2025, ending June 30, 2024:

Metric

Q1 FY25

Net sales

Low-single digit growth year-over-year

Adjusted EPS ³

Flat to slightly down year-over-year

First quarter 2025 guidance assumes approximately $9 million of interest expense, $8 million of amortization, an effective tax rate of 25% and 29.2 million diluted average shares outstanding.

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

Metric

FY25

Net sales

Low-single digit growth year-over-year

Adjusted EPS ³

Mid to high-single digit growth year-over-year

Capital Expenditures

$20 million to $30 million

Net Leverage Ratio ³

~2.0x

Fiscal 2025 guidance assumes approximately $33 million of interest expense, $30 million of amortization, an effective tax rate of 25% and 29.4 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 201-493-6780. 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 412-317-6671 and enter conference ID number 13746170 through June 5, 2024.

______________________
¹ Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Conversion and Net Leverage Ratio 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 On a financial covenant basis per the Company’s Amended and Restated Credit Agreement
³ The Company has not reconciled the Adjusted EPS and Net Leverage Ratio guidance to the most comparable GAAP 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 are made in a manner consistent with the relevant definitions and assumptions noted herein.

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 release, including, but are not limited to, statements relating to: (i) our strategy, outlook and growth prospects and our full year and first quarter fiscal 2025 guidance; (ii) our operational and financial targets and capital distribution policy; (iii) general economic trend and trends in the industry and markets; (iv) the risk and costs associated with the integration of, and our ability to integrate acquisitions successfully to achieve synergies; (v) the effectiveness of our new facility in Monterrey, Mexico to provide cost savings and margin improvement (vi) the amount of debt to be paid down by the Company during fiscal 2025; 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, 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.

Financial tables follow.

COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - Unaudited (In thousands, except per share and percentage data)







Three Months Ended




March 31, 2024

March 31, 2023

Change
Net sales

$
265,504


$
253,843


4.6
%
Cost of products sold


171,189



162,625


5.3
%
Gross profit


94,315



91,218


3.4
%
Gross profit margin


35.5
%


35.9
%


Selling expenses


26,941



25,331


6.4
%
% of net sales


10.1
%


10.0
%


General and administrative expenses


27,353



26,353


3.8
%
% of net sales


10.3
%


10.4
%


Research and development expenses


7,059



5,506


28.2
%
% of net sales


2.7
%


2.2
%


Amortization of intangibles


7,525



6,559


14.7
%
Income from operations


25,437



27,469


(7.4
)%
Operating margin


9.6
%


10.8
%


Interest and debt expense


9,169



7,668


19.6
%
Investment (income) loss, net


(547
)


(483
)

13.3
%
Foreign currency exchange loss (gain), net


752



(1,037
)

NM

Other (income) expense, net


1,757



(73
)

NM

Income before income tax expense


14,306



21,394


(33.1
)%
Income tax expense


2,497



7,499


(66.7
)%
Net income

$
11,809


$
13,895


(15.0
)%







Average basic shares outstanding


28,780



28,609


0.6
%
Basic income per share

$
0.41


$
0.49


(16.3
)%







Average diluted shares outstanding


29,129



28,869


0.9
%
Diluted income per share

$
0.41


$
0.48


(14.6
)%







Dividends declared per common share

$
0.14


$
0.14

COLUMBUS McKINNON CORPORATION Condensed Consolidated Income Statements - Unaudited (In thousands, except per share and percentage data)







Year Ended




March 31, 2024

March 31, 2023

Change
Net sales

$
1,013,540


$
936,240


8.3
%
Cost of products sold


638,702



594,141


7.5
%
Gross profit


374,838



342,099


9.6
%
Gross profit margin


37.0
%


36.5
%


Selling expenses


105,341



102,528


2.7
%
% of net sales


10.4
%


11.0
%


General and administrative expenses


106,760



94,794


12.6
%
% of net sales


10.5
%


10.1
%


Research and development expenses


26,193



20,935


25.1
%
% of net sales


2.6
%


2.2
%


Amortization of intangibles


29,396



26,001


13.1
%
Income from operations


107,148



97,841


9.5
%
Operating margin


10.6
%


10.5
%


Interest and debt expense


37,957



27,942


35.8
%
Investment (income) loss, net


(1,759
)


(315
)

458.4
%
Foreign currency exchange loss (gain), net


1,826



(2,189
)

NM

Other (income) expense, net


7,597



(2,072
)

NM

Income before income tax expense


61,527



74,475


(17.4
)%
Income tax expense


14,902



26,046


(42.8
)%
Net income

$
46,625


$
48,429


(3.7
)%







Average basic shares outstanding


28,728



28,600


0.4
%
Basic income per share

$
1.62


$
1.69


(4.1
)%







Average diluted shares outstanding


29,026



28,818


0.7
%
Diluted income per share

$
1.61


$
1.68


(4.2
)%







Dividends declared per common share

$
0.28


$
0.28

COLUMBUS McKINNON CORPORATION Condensed Consolidated Balance Sheets - Unaudited (In thousands)







March 31, 2024

March 31, 2023
ASSETS




Current assets:




Cash and cash equivalents

$
114,126


$
133,176

Trade accounts receivable


171,186



151,451

Inventories


186,091



179,359

Prepaid expenses and other


42,752



32,254

Total current assets


514,155



496,240






Net property, plant, and equipment


106,395



94,360

Goodwill


710,334



644,629

Other intangibles, net


385,634



362,537

Marketable securities


11,447



10,368

Deferred taxes on income


1,797



2,035

Other assets


96,183



88,286

Total assets

$
1,825,945


$
1,698,455






LIABILITIES AND SHAREHOLDERS’ EQUITY




Current liabilities:




Trade accounts payable

$
83,118


$
76,736

Accrued liabilities


127,973



124,317

Current portion of long-term debt and finance lease obligations


50,670



40,604

Total current liabilities


261,761



241,657






Term loan, AR securitization facility and finance lease obligations


479,566



430,988

Other non-current liabilities


202,555



192,013

Total liabilities


943,882



864,658






Shareholders’ equity:




Common stock


288



286

Treasury Stock


(1,001
)


(1,001
)
Additional paid-in capital


527,125



515,797

Retained earnings


395,328



356,758

Accumulated other comprehensive loss


(39,677
)


(38,043
)
Total shareholders’ equity


882,063



833,797

Total liabilities and shareholders’ equity

$
1,825,945


$
1,698,455

COLUMBUS McKINNON CORPORATION Condensed Consolidated Statements of Cash Flows - Unaudited (In thousands)





Year Ended


March 31, 2024

March 31, 2023
Operating activities:




Net income

$
46,625


$
48,429

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




Depreciation and amortization


45,945



41,947

Deferred income taxes and related valuation allowance


(15,786
)


(300
)
Net loss (gain) on sale of real estate, investments and other


(1,431
)


(54
)
Stock-based compensation


12,039



10,425

Amortization of deferred financing costs


2,349



1,721

Loss (gain) on hedging instruments


(1,366
)


(438
)
Cost of debt repricing


958



—

Loss on retirement of fixed asset


—



175

Non-cash pension settlement


4,984



—

Gain on sale of building


—



(232
)
Non-cash lease expense


9,735



7,867

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




Trade accounts receivable


(14,428
)


(4,858
)
Inventories


(1,314
)


(9,087
)
Prepaid expenses and other


(8,555
)


6,667

Other assets


537



(123
)
Trade accounts payable


4,748



(13,964
)
Accrued liabilities


(9,583
)


9,150

Non-current liabilities


(8,259
)


(13,689
)
Net cash provided by (used for) operating activities


67,198



83,636






Investing activities:




Proceeds from sales of marketable securities


3,526



3,651

Purchases of marketable securities


(4,076
)


(4,021
)
Capital expenditures


(24,813
)


(12,632
)
Proceeds from sale of building, net of transaction costs


—



373

Purchases 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


(133,364
)


(13,932
)





Financing activities:




Proceeds from issuance of common stock


1,600



713

Purchases of treasury stock


—



(1,001
)
Fees paid for debt repricing


(958
)


—

Repayment of debt


(60,604
)


(40,550
)
Proceeds from issuance of long-term debt


120,000



—

Cash inflows from hedging activities


24,057



24,495

Cash outflows from hedging activities


(22,687
)


(24,221
)
Fees paid for borrowing on long-term debt


(2,859
)


—

Payment of dividends


(8,044
)


(8,008
)
Other


(2,304
)


(1,415
)
Net cash provided by (used for) financing activities


48,201



(49,987
)





Effect of exchange rate changes on cash


(1,085
)


(1,931
)





Net change in cash and cash equivalents


(19,050
)


17,786

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


133,426



115,640

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

$
114,376


$
133,426

COLUMBUS McKINNON CORPORATION Q4 FY 2024 Sales Bridge







Quarter

Year
($ in millions)

$ Change

% Change

$ Change

% Change
Fiscal 2023 Sales

$
253.8




$
936.2



Acquisition


4.9


1.9
%


32.6


3.5
%
Volume


(0.2
)

(0.1
)%


(0.4
)

—
%
Pricing


5.7


2.3
%


33.8


3.6
%
Foreign currency translation


1.3


0.5
%


11.3


1.2
%
Total change

$
11.7


4.6
%

$
77.3


8.3
%
Fiscal 2024 Sales

$
265.5




$
1,013.5

COLUMBUS McKINNON CORPORATION Q4 FY 2024 Gross Profit Bridge




($ in millions)
Quarter

Year
Fiscal 2023 Gross Profit
$
91.2


$
342.1

Acquisition

0.8



13.8

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

1.0



16.9

Foreign currency translation

0.4



3.8

Current year business realignment costs

—



(0.4
)
Monterrey, MX new factory start-up costs

(2.6
)


(3.0
)
Factory and warehouse consolidation costs

(0.2
)


(0.2
)
Sales volume & mix

3.7



0.9

Product liability

—



0.9

Total change

3.1



32.7

Fiscal 2024 Gross Profit
$
94.3


$
374.8

U.S. Shipping Days by Quarter


Q1

Q2

Q3

Q4

Total
FY 25

64

63

60

62

249











FY 24

63

62

61

62

248











FY 23

63

64

60

63

250

COLUMBUS McKINNON CORPORATION Additional Data ¹ (Unaudited)













Period Ended


March 31, 2024

December 31, 2023


March 31, 2023
($ in millions)










Backlog

$
280.8


$
298.4



$
308.7

Long-term backlog










Expected to ship beyond 3 months

$
144.6


$
151.3



$
142.0

Long-term backlog as % of total backlog


51.5
%


50.7
%



46.0
%











Debt to total capitalization percentage


37.5
%


38.5
%



36.1
%











Debt, net of cash, to net total capitalization


32.0
%


33.7
%



28.9
%











Working capital as a % of sales ²


19.1
%


20.6
%



17.3
%



Three Months Ended


March 31, 2024

December 31, 2023

March 31, 2023
($ in millions)









Trade accounts receivable









Days sales outstanding


58.7
days


62.1
days


54.3
days










Inventory turns per year









(based on cost of products sold)


3.7
turns


3.1
turns


3.6
turns
Days' inventory


98.6
days


117.7
days


101.4
days










Trade accounts payable









Days payables outstanding


50.9
days


50.1
days


53.3
days










Net cash provided by (used for) operating activities

$
38.6


$
29.1


$
66.7

Capital expenditures

$
8.5


$
6.0


$
3.1

Free Cash Flow ³

$
30.1


$
23.1


$
63.6

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 December 31, 2023 exclude the impact of the acquisition of montratec.
³ Free Cash Flow is a 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.

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 March 31,

Year Ended March 31,


2024



2023



2024



2023

GAAP gross profit
$
94,315


$
91,218


$
374,838


$
342,099

Add back (deduct):







Business realignment costs

—



—



346



—

Monterrey, MX new factory start-up costs

2,552



—



2,987



—

Factory and warehouse consolidation costs

262



—



262



—

Non-GAAP adjusted gross profit
$
97,129


$
91,218


$
378,433


$
342,099









Net Sales
$
265,504


$
253,843


$
1,013,540


$
936,240









Gross margin

35.5
%


35.9
%


37.0
%


36.5
%
Adjusted Gross Margin

36.6
%


35.9
%


37.3
%


36.5
%

Adjusted Gross Profit is defined as gross profit as reported, adjusted for certain items. Adjusted Gross Profit 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 Profit Margin as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Gross Profit 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 and current year's gross profit and gross profit margin to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit and gross profit margin to that of other companies.

COLUMBUS McKINNON CORPORATION Reconciliation of Income from Operations to Adjusted Operating Income ($ in thousands)





Three Months Ended March 31,

Year Ended March 31,


2024



2023



2024



2023

Income from operations
$
25,437


$
27,469


$
107,148


$
97,841

Add back (deduct):







Acquisition deal and integration costs

3



173



3,211



616

Business realignment costs

—



848



1,867



5,140

Factory and warehouse consolidation costs

545



—



744



—

Garvey contingent consideration

—



—



—



1,230

Headquarter relocation costs

175



681



2,059



996

Monterrey, MX new factory start-up costs

3,734



—



4,489



—

Cost of debt repricing

1,190



—



1,190



—

Adjusted Operating Income
$
31,084


$
29,171


$
120,708


$
105,823









Net Sales
$
265,504


$
253,843


$
1,013,540


$
936,240









Operating margin

9.6
%


10.8
%


10.6
%


10.5
%
Adjusted Operating Margin

11.7
%


11.5
%


11.9
%


11.3
%

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 and current year'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 Diluted Share ($ in thousands, except per share data)





Three Months Ended March 31,

Year Ended March 31,


2024



2023


2024



2023
Net income
$
11,809


$
13,895

$
46,625


$
48,429
Add back (deduct):







Amortization of intangibles

7,525



6,559


29,396



26,001
Acquisition deal and integration costs

3



173


3,211



616
Business realignment costs

—



848


1,867



5,140
Factory and warehouse consolidation costs

545



—


744



—
Garvey contingent consideration

—



—


—



1,230
Headquarter relocation costs

175



681


2,059



996
Monterrey, MX new factory start-up costs

3,734



—


4,489



—
Cost of debt repricing

1,190



—


1,190



—
Non-cash pension settlement expense

385



—


4,984



—
Tax indemnification payment owed ¹

1,192



—


1,192



—
Normalize tax rate ²

(4,767
)


975


(12,763
)


2,185
Adjusted Net Income
$
21,791


$
23,131

$
82,994


$
84,597








Average diluted shares outstanding

29,129



28,869


29,026



28,818








Diluted income per share
$
0.41


$
0.48

$
1.61


$
1.68








Adjusted EPS per diluted share
$
0.75


$
0.80

$
2.86


$
2.94

¹ Represents tax indemnification payment owed to the former owner of STAHL for a tax refund received by CMCO in the quarter ended March 31, 2024 for periods prior to the acquisition of STAHL by CMCO.
² 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 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, are 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 Net Income to Adjusted EBITDA ($ in thousands)





Three Months Ended March 31,

Year Ended March 31,


2024



2023



2024



2023

Net income
$
11,809


$
13,895


$
46,625


$
48,429

Add back (deduct):







Income tax expense

2,497



7,499



14,902



26,046

Interest and debt expense

9,169



7,668



37,957



27,942

Investment (income) loss, net

(547
)


(483
)


(1,759
)


(315
)
Foreign currency exchange loss (gain), net

752



(1,037
)


1,826



(2,189
)
Other (income) expense, net

1,757



(73
)


7,597



(2,072
)
Depreciation and amortization expense

11,893



10,567



45,945



41,947

Acquisition deal and integration costs

3



173



3,211



616

Business realignment costs

—



848



1,867



5,140

Factory and warehouse consolidation costs

545



—



744



—

Garvey contingent consideration

—



—



—



1,230

Headquarter relocation costs

175



681



2,059



996

Monterrey, MX new factory start-up costs

3,734



—



4,489



—

Cost of debt repricing

1,190



—



1,190



—

Adjusted EBITDA
$
42,977


$
39,738


$
166,653


$
147,770









Net Sales
$
265,504


$
253,843


$
1,013,540


$
936,240









Net income margin

4.4
%


5.5
%


4.6
%


5.2
%
Adjusted EBITDA Margin

16.2
%


15.7
%


16.4
%


15.8
%

Adjusted EBITDA is defined as net income 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 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)





Year Ended March 31,



2024



2023

Net income

$
46,625


$
48,429

Add back (deduct):




Annualize EBITDA for the montratec acquisition ¹


1,331



Annualize synergies for the montratec acquisition ¹


73



Income tax expense


14,902



26,046

Interest and debt expense


37,957



27,942

Non-Cash Pension Settlement ²


4,984



—

Amortization of deferred financing costs


2,349



1,721

Stock Compensation Expense


12,039



10,425

Depreciation and amortization expense


45,945



41,947

Acquisition deal and integration costs


3,211



616

Business realignment costs


1,867



5,140

Factory and warehouse consolidation costs


744



—

Garvey contingent consideration


—



1,230

Headquarter relocation costs


2,059



996

Monterrey, MX new factory start-up costs


4,489



—

Cost of debt repricing


1,190



—

Non-Cash loss related to asset retirement


—



175

Gain on Sale of Facility


—



(232
)
Credit Agreement Trailing Twelve Month Adjusted EBITDA

$
179,765


$
164,435






Current portion of long-term debt and finance lease obligations

$
50,670


$
40,604

Term loan, AR securitization facility and finance lease obligations


479,566



430,988

Total debt

$
530,236


$
471,592

Standby Letters of Credit


15,368



14,921

Cash and cash equivalents


(114,126
)


(133,176
)
Net Debt

$
431,478


$
353,337






Net Leverage Ratio

2.40x

2.15x

¹ EBITDA is normalized to include a full year of the acquired entity and assuming that deal related synergies are achieved for montratec in fiscal year 2024 and Dorner and Garvey in fiscal year 2023.
² During the quarter ending December 31, 2023, certain employees in one of the Company's U.S. pension plans accepted an offer to settle their pension obligation with a lump sum payment. These lump sum settlements are one of the steps the Company is taking to terminate the plan by transferring the liabilities to a third-party.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240529085281/en/

Gregory P. Rustowicz
EVP Finance and CFO
Columbus McKinnon Corporation
716-689-5442
greg.rustowicz@cmco.com

Kristine Moser
VP IR and Treasurer
Columbus McKinnon Corporation
704-322-2488
kristy.moser@cmco.com

Company Name:	Columbus McKinnon Corporation
Stock Symbol:	CMCO
Market:	NASDAQ
Website:	columbusmckinnon.com

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