EXHIBIT 99.1
News Release
Buffalo, NY 14068
Immediate Release
Columbus McKinnon Reports Record Gross Margins for
Fourth Quarter and Fiscal Year 2018
BUFFALO, NY, May 30, 2018 - Columbus McKinnon Corporation (NASDAQ: CMCO), a leading designer, manufacturer and marketer of motion control products, technologies and services for material handling, today announced financial results for its fiscal year 2018 fourth quarter and full year, which ended March 31, 2018. Fiscal year 2018 fourth quarter and full year results include the January 31, 2017 acquisition of STAHL CraneSystems (“STAHL”).
Fourth Quarter and Fiscal Year Highlights (compared with prior-year period)
| |
| • | Sales for the quarter grew 16.6% to $214.1 million; organic sales increased 4.2% |
| |
| • | Achieved record gross margin of 34.8% in the quarter |
| |
| • | Fiscal year organic sales grew 6.8% with record gross margin of 33.9% |
| |
| • | Backlog expanded to $177.4 million and was up 16% over backlog at December 31, 2017 |
| |
| • | Strong cash from operations of $69.7 million in fiscal year |
| |
| • | Increasing STAHL synergies by $4 million to $15 million |
| |
| • | Paid down $60.1 million of debt in fiscal 2018, net leverage of 2.6x, ahead of target |
“We believe our strong financial results validate the effectiveness of our strategic plan, Blueprint 2021, to improve the earnings power of the Company as well as the execution driven focus provided by our operating system, E-PAS™ (Earnings Power Acceleration System). We had strong sales for the quarter and the year while achieving record gross margins for both periods,” commented Mark Morelli, President and CEO of Columbus McKinnon.
“Our focus in fiscal 2019 will be on Phase II of our strategic plan which will simplify the business, improve productivity, ramp our growth engine and further transform our culture. We expect this to translate into expanding operating margins as well as continuing to deliver exceptionally strong cash generation. We have a solid balance sheet and are creating significant financial flexibility for our future growth initiatives.”
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 2 of 14
May 30, 2018
Fourth Quarter Fiscal 2018 Sales
|
| | | | | | | | | | | | | | |
| ($ in millions) | Q4 FY 18 | | Q4 FY 17 | | Change | | % Change |
| Net sales | $ | 214.1 |
| | $ | 183.7 |
| | $ | 30.5 |
| | 16.6 | % |
| | | | | | | | |
| U.S. sales | $ | 111.8 |
| | $ | 104.2 |
| | $ | 7.6 |
| | 7.3 | % |
| % of total | 52 | % | | 57 | % | | | | |
| Non-U.S. sales | $ | 102.3 |
| | $ | 79.5 |
| | $ | 22.8 |
| | 28.7 | % |
| % of total | 48 | % | | 43 | % | | | | |
STAHL's January 2018 U.S. and non-U.S. sales were $1.4 million and $12.2 million, respectively. Volume drove growth in the U.S., EMEA region and Canada. Excluding the effect of foreign currency translation (“FX”) and the one month of STAHL, non-U.S. sales were up 2.0%.
Fourth Quarter Fiscal 2018 Operating Results
|
| | | | | | | | | | | | | | |
| ($ in millions) | Q4 FY 18 | | Q4 FY 17 | | Change | | % Change |
| Gross profit | $ | 74.6 |
| | $ | 50.3 |
| | $ | 24.3 |
| | 48.2 | % |
| Gross margin | 34.8 | % | | 27.4 | % | | 740 bps |
| | |
| Income (loss) from operations | $ | 16.3 |
| | $ | (3.2 | ) | | $ | 19.5 |
| | NM |
|
| Operating margin | 7.6 | % | | (1.7 | )% | | 930 bps |
| | |
| Net income (loss) | $ | 8.5 |
| | $ | (4.7 | ) | | $ | 13.2 |
| | NM |
|
| Diluted EPS | $ | 0.36 |
| | $ | (0.22 | ) | | $ | 0.58 |
| | NM |
|
| Adjusted EBITDA * | $ | 29.9 |
| | $ | 24.4 |
| | $ | 5.5 |
| | 22.4 | % |
| Adjusted EBITDA margin | 13.9 | % | | 13.3 | % | | 60 bps |
| | |
*A non-GAAP measure, Adjusted EBITDA is defined as adjusted operating income plus depreciation and amortization. Please see the attached tables for a reconciliation of adjusted EBITDA to GAAP net income.
Adjusted gross profit was $74.0 million, or 34.6% of sales. Adjustments included removing the $0.6 million benefit associated with insurance settlements. For more information on changes in gross profit, please see the attached tables.
Adjusted income from operations was $20.6 million, which was up $3.7 million from the prior year. Adjustments include $3.9 million in STAHL integration costs, $0.4 million in legal costs related to litigation against previous insurance carriers, and debt repricing fees of $0.6 million, partially offset by cash received from a partial insurance settlement of $0.6 million. Please see the attached tables for a reconciliation of GAAP income from operations to adjusted income from operations.
The effective tax rate for the quarter and full year were 23.5% and 55.6%, respectively.
Net income for the fourth quarter and full year were $8.5 million and $22.1 million, respectively. On an adjusted basis, net income for the fourth quarter and full year were $12.0 million and $46.8 million, which excludes STAHL integration costs, costs for a legal action against prior product liability insurance carriers, debt repricing fees, Magnetek litigation, and an insurance settlement received and includes a normalized tax rate. Please see the attached tables for a reconciliation of GAAP net income and earnings per share to adjusted net income and earnings per share.
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 3 of 14
May 30, 2018
Generating Cash and Reducing Debt
Cash generated from operating activities in the fourth quarter was $18.4 million. Working capital as a percentage of sales was down to 17.9% compared with 18.6% as of March 31, 2017. Capital expenditures for the fiscal year ended March 31, 2018 were $14.5 million. Please see the attached additional data table for further details.
Total debt was $363.3 million at March 31, 2018 compared with $421.3 million at March 31, 2017. Net debt to net total capitalization at March 31, 2018 was 42.4%, compared with 50.2% at March 31, 2017.
Fiscal Year 2019 Outlook
Backlog grew 16% to $177.4 million as of March 31, 2018 compared with $152.3 million at December 31, 2017 and was up 15% over backlog of $154.5 million at the end of fiscal 2017. Given the level of backlog and current market conditions, the Company expects revenue to grow 7% to 9% including the benefit of FX in the first quarter of fiscal 2019. Research, selling and general and administrative (RSG&A) expenses are expected to be approximately $48 million in the first quarter, excluding integration and realignment costs, with an additional $2 million in annualized RSG&A savings to be realized in the remainder of the year. U.S. GAAP pension accounting changes effective in fiscal 2019 will result in approximately $2 million of annual pension income being reported in other income and expense which will negatively impact income from operations on a comparative basis.
Mr. Morelli concluded, “The strong results for fiscal 2018 represent our team’s capability and the relevance of our Blueprint 2021 strategy. We executed well as our performance culture is taking hold. Our global leadership team and associates are pulling together to achieve our goals and I thank them for their efforts. As we further advance Phase II of our strategy supported by markets favorable for growth, I expect that we will build on our positive momentum. With the strength that we see in our markets, we anticipate solid performance in fiscal 2019 and earnings expansion that outpaces organic revenue growth.”
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 www.cmworks.com/investors. A question and answer session will follow the formal discussion.
The conference call can be accessed by dialing 201-493-6780 and asking for the “Columbus McKinnon conference call.” The webcast can be monitored at www.cmworks.com/investors. An audio recording will be available from 1:00 PM Eastern Time on the day of the call through Wednesday, June 6, 2018 by dialing 412-317-6671 and entering the passcode 13678787. Alternatively, an archived webcast of the call can be found on the Company’s website. In addition, a transcript of the call will be posted to the website once available.
About Columbus McKinnon
Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of motion control products, technologies, systems and services that efficiently and ergonomically move, lift, position and secure materials. Key products include hoists, cranes, actuators, rigging tools, light rail work stations 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 http://www.cmworks.com.
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 4 of 14
May 30, 2018
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 future revenue and earnings, 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 general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting 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 effect of operating leverage, the pace of bookings relative to shipments, the ability to expand into new markets and geographic regions, the success in acquiring new business, the speed at which shipments improve, the effectiveness of new products and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to update the forward-looking information contained in this release.
Contacts: |
| |
| Gregory P. Rustowicz | Investor Relations: |
| Vice President - Finance and Chief Financial Officer | Deborah K. Pawlowski |
| Columbus McKinnon Corporation | Kei Advisors LLC |
| 716-689-5442 | 716-843-3908 |
| greg.rustowicz@cmworks.com | dpawlowski@keiadvisors.com |
Financial tables follow.
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 5 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
|
| | | | | | | | | | | |
|
| Three Months Ended |
|
|
| |
| March 31, 2018 |
| March 31, 2017 |
| Change |
| Net sales |
| $ | 214,140 |
|
| $ | 183,688 |
|
| 16.6 | % |
| Cost of products sold |
| 139,538 |
|
| 133,353 |
|
| 4.6 | % |
| Gross profit |
| 74,602 |
|
| 50,335 |
|
| 48.2 | % |
| Gross profit margin |
| 34.8 | % |
| 27.4 | % |
| |
|
| Selling expenses |
| 27,647 |
|
| 21,485 |
|
| 28.7 | % |
| % of net sales | | 12.9 | % | | 11.7 | % | | |
| General and administrative expenses |
| 22,947 |
|
| 25,108 |
|
| (8.6 | )% |
| % of net sales | | 10.7 | % | | 13.7 | % | | |
| Research and development expenses | | 3,679 |
| | 2,956 |
| | 24.5 | % |
| % of net sales | | 1.7 | % | | 1.6 | % | | |
| Impairment of intangible asset | | — |
| | 1,125 |
| | (100.0 | )% |
| Amortization of intangibles |
| 4,005 |
|
| 2,825 |
|
| 41.8 | % |
| Income (loss) from operations |
| 16,324 |
|
| (3,164 | ) |
| NM |
|
| Operating margin |
| 7.6 | % |
| (1.7 | )% |
| |
|
| Interest and debt expense |
| 4,661 |
|
| 3,568 |
|
| 30.6 | % |
| Cost of debt refinancing | | — |
| | 1,303 |
| | (100.0 | )% |
| Investment (income) loss, net |
| 4 |
|
| (96 | ) |
| NM |
|
| Foreign currency exchange loss (gain) |
| 834 |
|
| 342 |
|
| 143.9 | % |
| Other (income) expense, net |
| (239 | ) |
| 145 |
|
| NM |
|
| Income before income tax expense (benefit) |
| 11,064 |
|
| (8,426 | ) |
| NM |
|
| Income tax expense (benefit) |
| 2,598 |
|
| (3,688 | ) |
| NM |
|
| Net income (loss) |
| $ | 8,466 |
|
| $ | (4,738 | ) |
| NM |
|
|
|
|
|
|
|
|
|
|
|
| Average basic shares outstanding |
| 23,031 |
|
| 21,809 |
|
| 5.6 | % |
| Basic income (loss) per share |
| $ | 0.37 |
|
| $ | (0.22 | ) |
| NM |
|
|
|
|
|
|
|
|
|
|
|
| Average diluted shares outstanding |
| 23,628 |
|
| 21,809 |
|
| 8.3 | % |
| Diluted income (loss) per share |
| $ | 0.36 |
|
| $ | (0.22 | ) |
| NM |
|
| | | | | | | |
| Dividends declared per common share | | $ | 0.09 |
| | $ | 0.08 |
| | |
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 6 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
|
| | | | | | | | | | | |
| | | Year Ended | | |
| | | March 31, 2018 | | March 31, 2017 | | Change |
| Net sales | | $ | 839,419 |
| | $ | 637,123 |
| | 31.8 | % |
| Cost of products sold | | 554,845 |
| | 444,191 |
| | 24.9 | % |
| Gross profit | | 284,574 |
| | 192,932 |
| | 47.5 | % |
| Gross profit margin | | 33.9 | % | | 30.3 | % | | |
|
| Selling expenses | | 101,956 |
| | 77,319 |
| | 31.9 | % |
| % of net sales | | 12.1 | % | | 12.1 | % | | |
| General and administrative expenses | | 83,350 |
| | 69,928 |
| | 19.2 | % |
| % of net sales | | 9.9 | % | | 11.0 | % | | |
| Research and development expenses | | 13,617 |
| | 10,482 |
| | 29.9 | % |
| % of net sales | | 1.6 | % | | 1.6 | % | | |
| Impairment of intangible asset | | — |
| | 1,125 |
| | (100.0 | )% |
| Amortization of intangibles | | 15,552 |
| | 8,105 |
| | 91.9 | % |
| Income from operations | | 70,099 |
| | 25,973 |
| | 169.9 | % |
| Operating margin | | 8.4 | % | | 4.1 | % | | |
|
| Interest and debt expense | | 19,733 |
| | 10,966 |
| | 79.9 | % |
| Cost of debt refinancing | | — |
| | 1,303 |
| | (100.0 | )% |
| Investment (income) loss, net | | (157 | ) | | (462 | ) | | (66.0 | )% |
| Foreign currency exchange loss (gain) | | 1,539 |
| | 1,232 |
| | 24.9 | % |
| Other (income) expense, net | | (701 | ) | | (93 | ) | | 653.8 | % |
| Income before income tax expense | | 49,685 |
| | 13,027 |
| | 281.4 | % |
| Income tax expense | | 27,620 |
| | 4,043 |
| | 583.2 | % |
| Net income | | $ | 22,065 |
| | $ | 8,984 |
| | 145.6 | % |
| | | | | | | |
| Average basic shares outstanding | | 22,841 |
| | 20,591 |
| | 10.9 | % |
| Basic income per share | | $ | 0.97 |
| | $ | 0.44 |
| | 120.5 | % |
| | | | | | | |
| Average diluted shares outstanding | | 23,335 |
| | 20,888 |
| | 11.7 | % |
| Diluted income per share | | $ | 0.95 |
| | $ | 0.43 |
| | 120.9 | % |
| | | | | | | |
| Dividends declared per common share | | $ | 0.17 |
| | $ | 0.16 |
| | |
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 7 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
|
| | | | | | | | |
| | | March 31, 2018 | | March 31,
2017 |
| | | (unaudited) | | |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 63,021 |
| | $ | 77,591 |
|
| Trade accounts receivable | | 127,806 |
| | 111,569 |
|
| Inventories | | 152,886 |
| | 130,643 |
|
| Prepaid expenses and other | | 16,582 |
| | 21,147 |
|
| Total current assets | | 360,295 |
| | 340,950 |
|
| | | | | |
| Property, plant, and equipment, net | | 113,079 |
| | 113,028 |
|
| Goodwill | | 347,434 |
| | 319,299 |
|
| Other intangibles, net | | 263,764 |
| | 256,183 |
|
| Marketable securities | | 7,673 |
| | 7,686 |
|
| Deferred taxes on income | | 32,442 |
| | 61,857 |
|
| Other assets | | 17,759 |
| | 14,840 |
|
| Total assets | | $ | 1,142,446 |
| | $ | 1,113,843 |
|
| | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | |
| | |
|
| Current liabilities: | | |
| | |
|
| Trade accounts payable | | $ | 46,970 |
| | $ | 40,994 |
|
| Accrued liabilities | | 99,963 |
| | 97,397 |
|
| Current portion of long-term debt | | 60,064 |
| | 52,568 |
|
| Total current liabilities | | 206,997 |
| | 190,959 |
|
| | | | | |
| Senior debt, less current portion | | 33 |
| | 41 |
|
| Term loan and revolving credit facility | | 303,221 |
| | 368,710 |
|
| Other non-current liabilities | | 223,966 |
| | 212,783 |
|
| Total liabilities | | 734,217 |
| | 772,493 |
|
| | | | | |
| Shareholders’ equity: | | |
| | |
|
| Common stock | | 230 |
| | 226 |
|
| Additional paid-in capital | | 269,360 |
| | 258,853 |
|
| Retained earnings | | 197,897 |
| | 179,735 |
|
| Accumulated other comprehensive loss | | (59,258 | ) | | (97,464 | ) |
| Total shareholders’ equity | | 408,229 |
| | 341,350 |
|
| Total liabilities and shareholders’ equity | | $ | 1,142,446 |
| | $ | 1,113,843 |
|
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 8 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Statements of Cash Flows - UNAUDITED
(In thousands)
|
| | | | | | | | |
| | | Year Ended |
| | | March 31, 2018 | | March 31, 2017 |
| Operating activities: | | | | |
| Net income | | $ | 22,065 |
| | $ | 8,984 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| | |
|
| Depreciation and amortization | | 36,136 |
| | 25,162 |
|
| Deferred income taxes and related valuation allowance | | 19,968 |
| | 489 |
|
| Loss on sale of real estate, investments, and other | | 47 |
| | 14 |
|
| Cost of debt repricing/refinancing | | 619 |
| | 1,303 |
|
| Stock based compensation | | 5,586 |
| | 5,914 |
|
| Amortization of deferred financing costs and discount on debt | | 2,681 |
| | 1,015 |
|
| Net loss on foreign exchange option | | — |
| | 1,590 |
|
| Purchase accounting adjustment related to working capital amortization | | — |
| | 8,852 |
|
| Impairment of intangible asset | | — |
| | 1,125 |
|
| Changes in operating assets and liabilities, net of effects of business acquisitions: | | |
| | |
|
| Trade accounts receivable | | (9,308 | ) | | (785 | ) |
| Inventories | | (12,249 | ) | | 8,173 |
|
| Prepaid expenses and other | | 1,727 |
| | 6,121 |
|
| Other assets | | 3,338 |
| | (3,044 | ) |
| Trade accounts payable | | 3,833 |
| | 1,002 |
|
| Accrued liabilities | | 11,918 |
| | (2,380 | ) |
| Non-current liabilities | | (16,700 | ) | | (3,085 | ) |
| Net cash provided by operating activities | | 69,661 |
| | 60,450 |
|
| | | | | |
| Investing activities: | | |
| | |
|
| Proceeds from sales of marketable securities | | 653 |
| | 12,336 |
|
| Purchases of marketable securities | | (327 | ) | | (1,571 | ) |
| Capital expenditures | | (14,515 | ) | | (14,368 | ) |
| Purchase of business, net of cash acquired | | — |
| | (218,846 | ) |
| Net loss on foreign exchange option | | — |
| | (1,590 | ) |
| Net payment to former STAHL owner | | (14,750 | ) | | — |
|
| Cash paid for equity investment | | (3,359 | ) | | — |
|
| Net cash provided by (used for) investing activities | | (32,298 | ) | | (224,039 | ) |
| | | | | |
| Financing activities: | | |
| | |
|
| Proceeds from the issuance of common stock | | 6,332 |
| | 50,439 |
|
| Net borrowings (repayments) under lines of credit | | — |
| | (155,000 | ) |
| Repayment of debt | | (60,144 | ) | | (125,730 | ) |
| Proceeds from issuance of long-term debt | | — |
| | 445,000 |
|
| Fees related to debt repricing/refinancing and equity offerings | | (619 | ) | | (19,409 | ) |
| Restricted cash related to purchase of business | | — |
| | (588 | ) |
| Payment of dividends | | (3,658 | ) | | (3,326 | ) |
| Other | | (1,413 | ) | | (1,265 | ) |
| Net cash provided by (used for) financing activities | | (59,502 | ) | | 190,121 |
|
| | | | | |
| Effect of exchange rate changes on cash | | 7,569 |
| | (544 | ) |
| | | | | |
| Net change in cash and cash equivalents | | (14,570 | ) | | 25,988 |
|
| Cash and cash equivalents at beginning of year | | 77,591 |
| | 51,603 |
|
| Cash and cash equivalents at end of period | | $ | 63,021 |
| | $ | 77,591 |
|
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 9 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Q4 FY 2018 Sales Bridge
|
| | | | | | | | | | | | | | |
| | | Fourth Quarter | | Fiscal Year |
| ($ in millions) | | $ Change | | % Change | | $ Change | | % Change |
| Fiscal 2017 Sales | | $ | 183.7 |
| | | | $ | 637.1 |
| | |
| STAHL acquisition | | 13.6 |
| | 7.4 | % | | 144.7 |
| | 22.7 | % |
| Volume | | 7.0 |
| | 3.8 | % | | 41.0 |
| | 6.5 | % |
| Pricing | | 0.7 |
| | 0.4 | % | | 2.5 |
| | 0.4 | % |
| Foreign currency translation | | 9.1 |
| | 5.0 | % | | 14.1 |
| | 2.2 | % |
| Total change | | $ | 30.4 |
| | 16.6 | % | | $ | 202.3 |
| | 31.8 | % |
| Fiscal 2018 Sales | | $ | 214.1 |
| |
|
| | $ | 839.4 |
| | |
COLUMBUS McKINNON CORPORATION
Q4 FY 2018 Gross Profit Bridge
|
| | | | | | | |
| ($ in millions) | Fourth Quarter | | Fiscal Year |
| Fiscal 2017 Gross Profit | $ | 50.3 |
| | $ | 192.9 |
|
| STAHL acquisition | 5.6 |
| | 53.8 |
|
| Sales volume and mix | 2.7 |
| | 13.1 |
|
| Prior year inventory step-up expense | 8.9 |
| | 8.9 |
|
| Productivity, net of other cost changes | 3.2 |
| | 4.8 |
|
| Foreign currency translation | 3.2 |
| | 4.6 |
|
| Product liability | (0.1 | ) | | 3.0 |
|
| Insurance settlement | 0.6 |
| | 2.4 |
|
| Pricing, net of material cost inflation | 0.2 |
| | 1.4 |
|
| STAHL integration costs | — |
| | (0.3 | ) |
| Total change | $ | 24.3 |
| | $ | 91.7 |
|
| Fiscal 2018 Gross Profit | $ | 74.6 |
| | $ | 284.6 |
|
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 10 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Additional Data - UNAUDITED
|
| | | | | | | | | | | | | | | |
| | | March 31, 2018 | | December 31, 2017 | | March 31,
2017 |
| ($ in millions) | | | | | | | | | |
| Backlog | | $ | 177.4 |
| | | $ | 152.3 |
| | | $ | 154.5 |
| |
Long-term backlog (expected to ship beyond 3 months) | | $ | 59.5 |
| | | $ | 50.9 |
| | | $ | 53.5 |
| |
| Long-term backlog as % of total backlog | | 33.5 |
| % | | 33.4 |
| % | | 34.6 |
| % |
| | | | | | | | | | |
| Trade accounts receivable (2) | | |
| | | |
| | | |
| |
| Days sales outstanding | | 54.3 |
| days | | 53.8 |
| days | | 46.2 |
| days |
| | | | | | | | | | |
| Inventory turns per year (2) | | |
| | | |
| | | |
| |
| (based on cost of products sold) | | 3.7 |
| turns | | 3.9 |
| turns | | 4.1 |
| turns |
| Days' inventory (2) | | 100.0 |
| days | | 93.6 |
| days | | 89.0 |
| days |
| | | | | | | | | | |
| Trade accounts payable | | |
| | | |
| | | |
| |
| Days payables outstanding (2) | | 30.6 |
| days | | 28.0 |
| days | | 28.3 |
| days |
| | | | | | | | | | |
| Working capital as a % of sales (1) (2) | | 17.9 |
| % | | 17.4 |
| % | | 18.6 |
| % |
| | | | | | | | | | |
| Debt to total capitalization percentage | | 47.1 |
| % | | 49.6 |
| % | | 55.2 |
| % |
| | | | | | | | | | |
| Debt, net of cash, to net total capitalization | | 42.4 |
| % | | 44.9 |
| % | | 50.2 |
| % |
(1) December 31, 2017 and March 31, 2017 figures exclude the impact of the acquisition of STAHL.
(2) March 31, 2017 figures exclude the impact of the acquisition of STAHL.
|
| | | | | | | | | | |
| U.S. Shipping Days by Quarter |
| | | Q1 | | Q2 | | Q3 | | Q4 | | Total |
| FY 19 | | 64 | | 63 | | 60 | | 63 | | 250 |
| | | | | | | | | | | |
| FY 18 | | 63 | | 62 | | 60 | | 63 | | 248 |
| | | | | | | | | | | |
| FY 17 | | 64 | | 63 | | 60 | | 64 | | 251 |
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 11 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Gross Profit to Non-GAAP Adjusted Gross Profit and Margin
($ in thousands)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | Year Ended March 31, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| Gross profit | $ | 74,602 |
| | $ | 50,335 |
| | $ | 284,574 |
| | $ | 192,932 |
|
| Add back (deduct): | | | | | | | |
| Acquisition inventory step-up expense | | | 8,852 |
| | | | 8,852 |
|
| Insurance settlement | (621 | ) | | — |
| | (2,362 | ) | | — |
|
| STAHL integration costs | 36 |
| | — |
| | 307 |
| | — |
|
| Non-GAAP adjusted gross profit | $ | 74,017 |
| | $ | 59,187 |
| | $ | 282,519 |
| | $ | 201,784 |
|
| | | | | | | | |
| Sales | $ | 214,140 |
| | $ | 183,688 |
| | $ | 839,419 |
| | $ | 637,123 |
|
| Adjusted gross margin | 34.6 | % | | 32.2 | % | | 33.7 | % | | 31.7 | % |
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 measure as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information 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 gross profit to the historical period’s gross profit, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies.
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 12 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Income from Operations to
Non-GAAP Adjusted Income from Operations and Adjusted Operating Margin
($ in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | Year Ended March 31, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| Income (loss) from operations | $ | 16,324 |
| | $ | (3,164 | ) | | $ | 70,099 |
| | $ | 25,973 |
|
| Add back (deduct): | | | | | | | |
| Acquisition deal, integration, and severance costs | 3,917 |
| | 5,675 |
| | 8,763 |
| | 8,815 |
|
| Insurance recovery legal costs | 356 |
| | 1,359 |
| | 2,948 |
| | 1,359 |
|
| Debt repricing fees | 619 |
| | — |
| | 619 |
| | — |
|
| Magnetek litigation | — |
| | — |
| | 400 |
| | — |
|
| Insurance settlement | (621 | ) | | — |
| | (2,362 | ) | | — |
|
| Acquisition inventory step-up expense | — |
| | 8,852 |
| | — |
| | 8,852 |
|
| CEO retirement pay and search costs | — |
| | 3,085 |
| | — |
| | 3,085 |
|
| Impairment of intangible asset | — |
| | 1,125 |
| | — |
| | 1,125 |
|
| Canadian pension lump sum settlements | — |
| | — |
| | — |
| | 247 |
|
| Non-GAAP adjusted income from operations | $ | 20,595 |
| | $ | 16,932 |
| | $ | 80,467 |
| | $ | 49,456 |
|
| | | | | | | | |
| Sales | $ | 214,140 |
| | $ | 183,688 |
| | $ | 839,419 |
| | $ | 637,123 |
|
| Adjusted operating margin | 9.6 | % | | 9.2 | % | | 9.6 | % | | 7.8 | % |
Adjusted income from operations is defined as income from operations as reported, adjusted for certain items and to apply a normalized tax rate. 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 information, 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 net income and diluted EPS to that of other companies.
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 13 of 14
May 30, 2018
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 March 31, | | Year Ended March 31, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| Net income (loss) | $ | 8,466 |
| | $ | (4,738 | ) | | $ | 22,065 |
| | $ | 8,984 |
|
| Add back (deduct): | | | | | | | |
| Acquisition deal, integration, and severance costs | 3,917 |
| | 5,675 |
| | 8,763 |
| | 8,815 |
|
| Insurance recovery legal costs | 356 |
| | 1,359 |
| | 2,948 |
| | 1,359 |
|
| Debt repricing fees | 619 |
| | — |
| | 619 |
| | — |
|
| Magnetek litigation | — |
| | — |
| | 400 |
| | — |
|
| Insurance settlement | (621 | ) | | — |
| | (2,362 | ) | | — |
|
| Acquisition inventory step-up expense | — |
| | 8,852 |
| | — |
| | 8,852 |
|
| CEO retirement pay and search costs | — |
| | 3,085 |
| | — |
| | 3,085 |
|
| Impairment of intangible asset | — |
| | 1,125 |
| | — |
| | 1,125 |
|
| Canadian pension lump sum settlements | — |
| | — |
| | — |
| | 247 |
|
| (Gain) loss on foreign exchange option for acquisition | — |
| | (236 | ) | | — |
| | 1,590 |
|
| Loss on extinguishment of debt | — |
| | 1,303 |
| | — |
| | 1,303 |
|
| Normalize tax rate to 22% (1) | (776 | ) | | (6,490 | ) | | 14,408 |
| | (4,626 | ) |
| Non-GAAP adjusted net income | $ | 11,961 |
| | $ | 9,935 |
| | $ | 46,841 |
| | $ | 30,734 |
|
| | | | | | | | |
| Average diluted shares outstanding | 23,628 |
| | 22,201 |
| | 23,335 |
| | 20,888 |
|
| | | | | | | | |
| Diluted income (loss) per share - GAAP | $ | 0.36 |
| | $ | (0.22 | ) | | $ | 0.95 |
| | $ | 0.43 |
|
| | | | | | | | |
| Diluted income per share - Non-GAAP | $ | 0.51 |
| | $ | 0.45 |
| | $ | 2.01 |
| | $ | 1.47 |
|
(1) Applies a normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.
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 accordance with generally accepted accounting principles in the United States, commonly known as GAAP and may not be comparable to the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted net income and 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.
Columbus McKinnon Reports Record Gross Margins for Fourth Quarter and Fiscal Year 2018
Page 14 of 14
May 30, 2018
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
($ in thousands)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | Year Ended March 31, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| Net income (loss) | $ | 8,466 |
| | $ | (4,738 | ) | | $ | 22,065 |
| | $ | 8,984 |
|
| Add back (deduct): | | | | | | | |
| Income tax expense (benefit) | 2,598 |
| | (3,688 | ) | | 27,620 |
| | 4,043 |
|
| Interest and debt expense | 4,661 |
| | 3,568 |
| | 19,733 |
| | 10,966 |
|
| Cost of debt refinancing | — |
| | 1,303 |
| | — |
| | 1,303 |
|
| Investment income | 4 |
| | (96 | ) | | (157 | ) | | (462 | ) |
| Foreign currency exchange loss | 834 |
| | 342 |
| | 1,539 |
| | 1,232 |
|
| Other (income) expense, net | (239 | ) | | 145 |
| | (701 | ) | | (93 | ) |
| Depreciation and amortization expense | 9,263 |
| | 7,467 |
| | 36,136 |
| | 25,162 |
|
| Acquisition deal, integration, and severance costs | 3,917 |
| | 5,675 |
| | 8,763 |
| | 8,815 |
|
| Insurance recovery legal costs | 356 |
| | 1,359 |
| | 2,948 |
| | 1,359 |
|
| Debt repricing fees | 619 |
| | — |
| | 619 |
| | — |
|
| Magnetek litigation | — |
| | — |
| | 400 |
| | — |
|
| Insurance settlement | (621 | ) | | — |
| | (2,362 | ) | | — |
|
| Acquisition inventory step-up expense | — |
| | 8,852 |
| | — |
| | 8,852 |
|
| CEO retirement pay and search costs | — |
| | 3,085 |
| | — |
| | 3,085 |
|
| Impairment of intangible asset | — |
| | 1,125 |
| | — |
| | 1,125 |
|
| Canadian pension lump sum settlements | — |
| | — |
| | — |
| | 247 |
|
| Non-GAAP adjusted EBITDA | $ | 29,858 |
| | $ | 24,399 |
| | $ | 116,603 |
| | $ | 74,618 |
|
| | | | | | | | |
| Sales | $ | 214,140 |
| | $ | 183,688 |
| | $ | 839,419 |
| | $ | 637,123 |
|
| Adjusted EBITDA margin | 13.9 | % | | 13.3 | % | | 13.9 | % | | 11.7 | % |
Adjusted EBITDA is defined as adjusted operating income plus depreciation and amortization. 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 information, such as adjusted EBITDA, 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 net income and diluted EPS to that of other companies.
