CMCO - Earnings call transcript Q3 2018 | Columbus McKinnon Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greeting and welcome to the Columbus McKinnon Corporation Third Quarter Fiscal Year 2018 Financial Results. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. I would now like to turn the call over to Deborah Pawlowski, Investor Relations for Columbus McKinnon. begin. may you you, Thank

Deborah Pawlowski

Thanks, Dena time certainly your everyone. good and your morning, today McKinnon. We interest appreciate and in Columbus

call Mark are and Chief with President Officer. the Financial CEO; our Greg Morelli, and Rustowicz, On our me

third our You financial fiscal website this And cmworks.com. results of can you earlier XXXX if released quarter not, should were access copy have morning. a our which it at

that website On will will slides accompany you the today's there, the find conversation. also

will slides two Safe of If review you I the statement. deck, turn to Harbor the

today. As Securities release formal as as actual These we Exchange are as apply and stated from uncertainties and subject uncertainties may to is with factors well results documents earnings session. or be differ during during you're are on make aware, and materially cause filed statements some provided and discussions the what well the statements documents as our forward-looking to These These as risks website that in found risks at the Commission. future other sec.gov. events as factors can other well to here could with Q&A that other

our these During will measures. believe some in also will performance. evaluating be non-GAAP today’s We useful financial discuss we call,

this not in substitute isolation for should accordance additional results with the You presentation or consider of prepared in information as a GAAP.

information. Mark? in We to and have your provided let to that to Mark that, tables the measures today's turn to the accompany and I’ll non-GAAP GAAP reconciliation over slide for With of me comparable it release slides, begin. measures three, turn

Mark Morelli

million. growth sales quarter $XXX We to you, had Deb. Thank solid XX% with another of

model our earnings was in on X.X% were business the of benefit our ahead tailwinds of growth, a building of benefit slightly of with our XXXX drivers better organic Blueprint which There stronger serve. power. and expectations fact Phase markets excludes the based foreign currency we internal of many strategic shipments. to the exchange up contributing In by on several supported timing of plan three We've executed the I performance focused STAHL

availability the to of products Phase position, direction successful better market of We an for approached industrial execution our that integrated better products strong have delivery that of developed our customers focused result they and One our customers have ensures new Our what U.S. market. need our I. improving relevancy is all supported strategy of the our are serving we want when it. the we

have taken when guarantee includes We the no and in-stock extended and a expansion which program approach, program. it need left of order behind terms you

we on inventory reduced improving in response and zeroing codes and [ph] times right to the have levels on-time for are are We deliveries customers. we

initiatives organic of these have to in past growth the of U.S. contributed our strong this All X% quarter.

growth. or the identify operating has and us the to about help we which deployment actions advantage for to deep business markets how spoken this E-PAS and quickly our maximize acceleration system take Our provide methodology stands for earnings take organization new power based on in system us metrics quicker In decision-making, to also key for opportunities. of risk past, favorable allows the

to of channel chain use. in zinc low partners easy, necessarily hoist to also with also are there capitalize automation as chain to but to projects direct looking market entertainment customers. are several our develop seems for such the resistant opportunities, we solutions. industry more and looking replace not black that control simple, are shiny corrosion We’re There working on the sometime for is in development solutions on are may the currently example, The important

anniversary We the first have just passed well. the acquisition. quarter They STAHL of delivered strong as year another

outside sales now stands geographic U.S. our half at of addition from coming the diversity With furthered the it our STAHL, we and

from is also backlog. can more custom-engineered shipping Although more and it as STAHL they've business, lumpier keep which have is that project-based, in been mind why

the is of cycle. in objective part to Our market outperform the any

are towards in continue we in demand. XXXX capacity trend driver of end both advantage expect sales U.S. the been has and through seen that of and and of the upward U.S. solid Europe industrial strong We’ve are calendar the Construction seeing We a taking several tailwinds. favorable XXXX. target verticals to

major have in in U.S., the being York New We pursued projects and California, Washington DC. construction Texas,

adjusted in and construction In in our recognize for importance quarter, when demand and and been quarter. improvement Canada, APAC This relative as X.X% improve Transportation was double is improving. market to X.X%. fourth mining the income for nicely natural from and just commercial of as projects On in million train presence are U.S. while in EPS EMEA major there the operating STAHL of Europe, led more did the well markets Adjusted addition, margin a strong permits global the still including small compared $X.XX operating basis, pro-forma STAHL aircraft in third future. and in operating with fiscal all million the note, maintenance. income XXXX solid are $X.XX in was the up saw $X.XX we construction the of adjusted to industrial $X.X has year has this and to than our accretion was OEMs period, this quarter. we or sales, as manufacturing the Of $XX.X resource construction prior equipment. provided U.S.,

unique operations, $XX of from the and the year. exceeded address, fiscal at $XX.X and will end. this fiscal typical, directly net in products our the culture, paid million With nearly adjusted to close time short generation and to of repayment team by of X on fiscal focus my cash Because customers. I debt the improved impact nine performance that, strategy our excited to about company. a anniversary technology build our year, The designed from We are X.X thank I January. And our This is ending to XXXX. value been as I'm day, EBITDA March at to we platform let month of over XXXX strategy original Columbus million debt our our great get is and embracing quarter in our and times progress of schedule. cash first industrial in Every is of strong the at goal, was $XX can XXst. relevance me strong propositions a in of profitability is dedication quarter we call to reduction, Greg. company. our period and the first the in in generated about months McKinnon to quarter in a make get stated the my our debt under performance, times million year a and an over making. create Blueprint the time. We nine turn first further see it's Greg the exciting we ahead generated solid excellent we progress We $XX well for months fact As how down million which introduced pivot

Greg Rustowicz

Good Mark. morning, you, Thank everyone.

to million third was sales $X.X by for XX.X%. of in strong slide sales the Turning quarter from adding timing four, STAHL contributor of decline to quarter consolidated prior million million year. $XX.X $XXX.X of their STAHL see the due XX.X% were projects. backlog the the the up did or

$X.X organically EMEA the regions quarter Asia-Pacific million Excluding growth and the $XXX,XXX points. was we basis a X.X%. the strength million the volume $X.X saw Overall, region FX, also or as U.S. or by grew in up showed up pricing or XX was solid and we X.X% improved. and Sales organic

translation of currency X.X%, in to and continued result weaker tailwind Foreign be by sales the stronger euro largely increased and a quarter the dollar. a U.S.

of year U.S. ago the with up the quarter, to international up $XX.X million our or $XX STAHL U.S. period. $XX.X U.S. sales were $X.X compared contributed XX.X% the million For Sales sales. our XX.X%. million contributed outside or to sales. STAHL million were

profit mid-single organic the growth and business these growth in or EMEA year. an XX%. XX.X% Adjusted off the slide small by increase increased million gross five, was $XX.X improved two saw our double-digit regions. saw $XX.X environment digit $XX.X of million versus as the a Asia-Pacific quarter profit organic prior third million, On in or base of quarter gross

was increase page of margin gross to compared gross an basis this adjusted prior XX.X%. in accretive margin XX.X%, found presentation. an on gross adjusted can gross XX.X% Our margin year, XXX adjusted for posting reconciliation was points. be of to The XX STAHL margin of the adjusted

profit the acquisition gross bridge. of volumes million The $X profit. contributed of now gross STAHL adjusted added Higher gross quarter's $XX.X million sales Let's review profit.

costs We also this ago. plans year for medical cost our would costs million, We changes these quarter net expect gross fourth profit. repeat other in of saw to to not of is in compensation increased the unusual $XXX,XXX positive workers partially and was lower benefit as compared comp same in favorable to quarter due all $X.X quarter. which productivity of This be for it costs these the to costs stock and one

profit included also $X profit Other by and the were by positive $X.X the impacted a items which currency foreign costs net added higher profit $XXX,XXX. raw material translation, lower gross pro-forma affecting liability Our negatively impacted product of of inflation, $XX,XXX integration gross positively by impact STAHL and item. year gross profit, is which prior cost gross of million. than pricing million

in STAHL quarter costs expense an costs G&A translation added million $XXX,XXX costs $X.X items, costs million. in the million consolidation increase million was prior slide of lawsuit STAHL to due this warehouse G&A legal $X.X year selling remaining G&A million on in $XXX,XXX. shown prior As in for added a by million to currency higher $X the costs. increased $X largely six, quarter. $X.X also included excluding selling foreign well insurance STAHL to recovery costs. selling Unfavorable cost third integration as the year, as integration expense U.S. expense The was by $X the than increased to related two pro-forma also the for

deal translation recorded prior a reminder foreign year. $XXX,XXX was for Unfavorable in $X.X added the we costs million year a last currency STAHL As that pro-forma to item also G&A.

fiscal fiscal R&D investment $XXX,XXX have million, $X.X to as expense to million in added we prior the R&D X.X% $X.X in STAHL of this year and compared year. XXXX, XXXX planned annual Blueprint costs in addition, growing were compared we represents in strategy. see our costs R&D to higher the In outlined expense. sales incentive XXXX. coming

forecasted is expected excluding remains RSG&A fourth $XX quarter, the cost quarterly integration to million STAHL and approximate other unchanged items. Our and pro-forma in

Adjusted operating for margin XX.X%. margin was of STAHL This sales. the operating is current to XX income adjusted million of prior added represents income, STAHL compares Turning income or margin operating year. basis improved reconciliation this which of $X.X million operations at in rates. adjusted page adjusted be an can estimated prior The be found on X.X% adjusted operating presentation. points X.X% for year. of year million or adjusted $X.X the coming to over from million of XXX $X.X to the $XX.X slide operating seven, amortization exchange

are adjustments of has be $X.XX would the increase versus this share tax per added of third of be expense you tax XX% accretion share million. The amount As per in an prior Jobs to slide quarter $X.XX adjusted basis, can loss page expect X, in were quarter of $X.XX, of Act, and the tax expected of recorded. to to per was per impact share can to effected XXXX affected earnings what the share in EPS All XX%. per the our reconciliation Adjusted accretion. year-to-date we Tax to with of diluted loss the diluted GAAP earnings XXX%, our range. a see earnings $X.XX $X.XX current found for rate current and otherwise have we the the STAHL GAAP XX $XX.X or this of to $X.XX On The presentation. Jobs to normalized Tax tax on full impact period. added and share, per to the was at previous effective Of Act on now in the share cast rate contributed million XX%. which $X.XX be earnings due tax $X.X the the of were rate in Cuts compared tax quarter of adjusted Cuts GAAP year, approximately is quarter fiscal this XX% year a

rate tax slight While benefit we the normalize are XX% is to effected a rate through we to calculations, and are between XX%. which estimating in XX% of our fiscal of XXXX, XX% still working an

to decreased accruals. XXXX to our capital a September XX.X% a XXXX. percent prior from from of compared December and sales XX.X% at slide higher X.X largely DPOs XX, Turning as year working March as reflecting basis year and to Inventory to XXX from the higher liabilities, turns incentive points ago decreased Working comp levels. XX, of sales accrued due nine, capital were a quarter, down turns percent higher slightly and at XX.X%, unchanged

to levels activities to to quarter inventory On last from year. the was year-to-date less the decreases due was in program. operating $XX.X the our net which in flow inventory $XX.X was from flow our year timing this We pension cash quarter, XX, and as Guarantee are contributions intentionally improve increasing million, compared prior third increases In-Stock availability cash inventory part cash of year slide million $XX.X of was Free million. free the

XXXX, guidance lowered our capital been to for and fiscal million paying capital continue for as the for Our evaluate expenditures priorities to has use $XX debt. down we focus on of

Turning to XX, $XXX.X of as net debt total our debt slide acquisition, the and was of XXXX. million a $XXX.X STAHL result million December our as was XX,

debt We quarter. total debt capitalization XX.X%. was this $XX.X total net net to a million Our repaid of of

to demonstrate to continue our de-lever We very quickly. ability

to X million fiscal than debt $XX has at adjusted our less increased the been $XX total on LTM-adjusted net by end in from XXXX, STAHL. expect times EBITDA EBITDA We XX We currently of EBITDA an quarter times which our of original reflects XXXX, X.X achieved we of will as leveraged debt plan. target debt months of basis, that fiscal another bringing from which are in million fourth repayment repay we our

a As undrawn. as lite to loan is turn a we covenant term as revolver no Mark. covenant maintenance over the will has back it which B, have reminder, I leverage long

Mark Morelli

Greg. Thanks,

low Let driven in in now orders double-digit double-digit of expectations remainder XXXX. me in growth America. expansion in EMEA our prior This for year. expansion compared the quarter, was the and the exceptional We third North fiscal high with by had review organic

Our up over to down the X% it seasonality. organic sequentially while is just is backlog XX% year, healthy, due prior

was STAHL project backlog end strong. organic to fact, of backlog the timing coding activity In up at due X.X% January. is lower was however sequentially

Our STAHL quarter. hot significantly offers pipeline the for increased through

year-over-year, QX trends grow Given start will believe in fiscal to put solid we organic which expect about XXXX. a a sales good X% a see solid for will We our these X% encouraging for us fiscal to XXXX. position

subject we operating stronger we for basis creates on to drivers performance. relative conditions were economic the that executing plan a While are internal

take Let earnings XXXX power. a to Blueprint review me few our drive moments plan greater to

a to oriented a is objective industrial pivot to technology stage company late growth Our from company. industrial

to in the are to and this build to growth. operational earnings continue power we upon phase, the we will on II which We focused I platforms. of Phase Phase issuances our gains plan, In and the is product advancing profitable expect structure drive and simplification business

is are customer more simplify quickly. an focused, deploying response We structure more that and organizational

product Our our offer. out of brands portfolio rationalization cases in effort reinforces range our key some the brings that we the best capabilities of our expands

tools hoist leverage We as innovation will select growth. with focus precision our lifting, This our system our profitable the and customers smart on efforts to business drive speed, investments these such automated includes to offerings applications which advancing variable and better by of solutions. aspect can

better and call model consistently Dena, we capitalized XX% deliver than questions. relevant Importantly, now a the we can are customer problems creates for automation margins. megatrend. This open providing business can upon solve intent value on solutions that high to the EBITDA

Operator

we Securities. session. Instructions] conducting question Shlisky comes line At first question-and-answer [Operator proceed be with this from Mike will Please your Seaport of a the Our from Global question. time

Deborah Pawlowski

are Mike, you there?

Operator

line your is Mike, live.

Michael Shlisky

about sorry I'm morning, that. Good guys. Hello,

Mark Morelli

Good Mike. morning,

Greg Rustowicz

morning, Mike. Good

Michael Shlisky

the user? far you getting freight get ahead to Can quarter I freight things about to end warehouse first, have quarter availability be any shipped here seeing here some budgets very and during there as might the calendar anything second the of issues the you either you or are saw ask Did might what that in availability? trucks encountered And you. the as with last of the you on strong

Mark Morelli

freight we're and as availability. Mike. not of lot of No, go been haven't some problem in question we've been But increasing us. have that signs And talking continuation that. the all we've had that’s arranging have and problems not may hurricane, roads but during a freight the see think on I really trucks, I significant lot about. for that see freight pretty a the amount we've I that significant our of think by the some do the Obviously you verticals of we isolated. We in of of of remember, problems was think you the with seeing you travel arranging we for our thanks amount is market had encouraged when smoothly obviously which gone problems we do very Yes, some but strength forward we did

Michael Shlisky

kind over kind STAHL the that I of or if next your any we if kind Okay. benefit STAHL next of mix -- growth not curious be one of ask I also is numbers want this you put is of this, that to either any should outlook I reset quarters. have the if the you see the company of couple quarter outpace and there behind sure missed going might in aware? am

Mark Morelli

project as to be different projects be Columbus is more seasonality temple the that a timing of the this business it the is sort associated historically look our The seasonality understand has core and the of things bit it it you back the down to really as orders McKinnon in it and the One no to tends with about flow it projects and that’s Columbus related more of and case, is core the have can we've of about and business QX. and XX% lumpy that’s STAHL it. see then of and you goes know and QX important from our STAHL and stronger ebb really has McKinnon a doesn't a business

I which think bit But the coming nicely. we're of And see continue want But markets our go the we we customers. we’re comments sort year, bit -- fiscal to a a to to into going orders where time there? be next we was through see we of period aid January you make we able a ahead, into however backlog increasing obviously of expect as Greg, favorable. demands into on So to little any to based the ship great.

Greg Rustowicz

sorry. Joe, so Mike Yes, or

The as STAHL to in in expect third to as did quarter other would have comments thing well we comparable to our be we the fourth that mention the quarter. sales

Michael Shlisky

one Okay. for Last me.

or did did for are your as forward go down your you primary I -- so that fiscal am debt down as will see no pay I through curve year any other for have we curious So payments in fiscal pull here pay well? XXXX guys change you next have XXXX. of dollars you you

Mark Morelli

Mike but scheduled quarter. loan term is the Yes, the million to-date we it you’ve way works are and those that requirements year of with paid excess paid able a amortizations actually of what B top well so then have next there count actually -- are of we year. you're $X.X principal this to are requirements, on excess we’ve flow ahead any cash And for

million So I in $XX that's pay required. debt our of of next plans $XX million and to what's year to well think excess

that issues So no from perspective.

Michael Shlisky

so of what kind all on top then, so because along in pulled of planned XXXX to anything XXXX XXXX you've down Just from still clarify in forward you had is what you've not paid far done XXXX.

Mark Morelli

Correct. we're we And do might of that with examining utilizing to does process the which what not offshore that. cash, any reflect want in

coming free it's really cash So all from flow.

Michael Shlisky

I'll along. much. very pass Thanks it. Got it

Operator

from from comes the with Partners. of Our Matt Capital next your questions. ROTH proceed question line Please Koranda

Matt Koranda

Hey, guys. good morning

should same each backlog in next increase the prepared this based? I been Was the there should end dropping you've in organic what quarter in And fiscal about sort at STAHL all also so look one, larger wanted at million backlog that or project the order backlog expecting of off delivering January question, $X you the year. But on. rate been Is Just onetime like quarter it's we to over so? to be backlog your STAHL or a start then that January, in we gave remarks. for think of with

Mark Morelli

the order. project one backlog eaten so has specific been it's Yes, down, not

there. oil gas If you you itself, see look prominence do at the backlog in of and

bite of I on wouldn't I so there for not oil And recovering about size And definitely you there. our one. backlog the are one they are markets but gas, but specific say some been chunks for has know XX% that. are recovery strong, say sure As and markets the

also the you give we that, right to projects on bit now North little platforms. refurbishment and do and they new, us. in Nothing that's into offshore for projects have good Just there great backlog but when of there oil Sea Malaysia for are a business as they our on for equipment some refurbishment a color gas well. some for oil going have decent And

had probability the rate doubled really our backlog And something of we order is down working do So sort order hot that improving XX% And type through in we do as define hot forward see have these a we've is we're STAHL talking to sort And categories on of the these basis, offers in order did a about. projects. more go progress, quarter of the as definitely that we offers of just that steady see an uptick quarter. the uptake. kind see something that or we these of that

And the definitely so growing. is pipeline

on So the out articulate in little we see definitely the coming we been is shoot soft them in them building. comparative basis, I January it's a do think beginning, see of how but January a

the a now bit. Hopefully So pipeline has that it January. clarifies has order the growing. rate And I been following is activity the in good, been think code

Matt Koranda

core I should McKinnon significant given which And what that's I be it growth backlog. be next Columbus guess growth that solid -- and in the Mark. fiscal relatively in outlook, here, assume STAHL’s Yes, year is way Thank is does growth would XXXX? you. I from considering for just should helpful, the in we imply STAHL any mean, diverging

Mark Morelli

oriented pretty project the as business. some think that been really No, But McKinnon in think about there core divergence think Columbus similar. project is not really know a is vertical we've ebb and I and there, business is very talking are the there because it's these drivers a segments any of don't different of flow business I market you I more oriented

Columbus lumpy little but I short there -- since a be I you to for the by the to same that very and for different was I project and so be queues order as ebbs business core the cycle And we’re think well. going But it flows, a thing. STAHL know McKinnon see off take tend as more rate you the these we business is same which a overall business should seeing think,

Matt Koranda

productivity platforms favorable look could I you for have highlighted margin thinking Got sort that gains help in I you highlighted out, guess, terms one executing to in could sort immediately of fiscal should that credit the And that know next on where if streamlining maybe you you outlook elements. least ask then or of be STAHL gross those XXXX, we the if of sort guys you that you you gross potentially. provided blended upside it. how sort shake line. on I And in this margins gross product incremental should about also factoring of at if guys but we then just margin sort But the seems XXXX tackle guys And you continue assume quarter with start obviously can gross things. accrues I us some synergies, give think of that, improvements of million mostly the $X and fiscal I margin and in which quarter, like some relatively

fiscal layer margin So XXXX? those we at do how improvement gross look in, in sort of as

Greg Rustowicz

Yes, it's hey Greg. Matt,

year these sold of at STAHL and the about of end XX% the SG&A XX% So of when you STAHL volume goods up area. synergies, synergies At cost sorts look in about the going in will pricing, would to improvement be year, perhaps is a some margins. inflation see this gross higher we continued it though is expect in to incremental little than with levels next bit

Matt Koranda

for offsetting then that terms of you material do of help And essentially think you understand okay. sort us does pricing where are that in essentially there? it, inflation, Got raw you,

Mark Morelli

then McKinnon answer material for and and price then it the through managing Yes, Greg, inflations a increases. and me pretty let process cost also well. it solid has mitigating both on that over Columbus the I’ll passing turn as

these. So have able really manage to historically, if well you they done been look

then in our since But improved, outlook have has quarter. comfortable this building pretty plans at some So that with right of I I far because as so what seen think sort we certainly we now, here, are the been cost. are some we increases anticipated something process point fourth in year. it’s the seeing we've you we are know And our as material

prominent that. want currently we going fiscal confident plans about fairly to... managed obviously how in pretty also it seeing terms as And next manage our and of we’re budgets increases our through how we we're you So what on I we think and feel and customers Greg effectively our well. do price to year this is for and past

Greg Rustowicz

we $XXX,XXX Yes, been so saw in the year-to-date about quarter inflation of $XXX,XXX. it's only about

couple So pricing fiscal going still a our of be process muted, to in of are the right but now regions our in relatively we determining what is for year XXXX.

it expect would we like historically So inflation our pricing to material raw exceed has.

Matt Koranda

topical of Mark, VSDs at to the some way just more in development, one the in the on identified going you hoist of cost-effective Maybe Lodestar guys. sort but some helpful market products it’s to out last one pipeline. take that although come the to update you bigger smart strategy VS a of embedding has for I today, time kind very know team address mentioned Okay, have hoist,

growth the in to that you wanted or side guess factoring get items your for would into to just gating the I I case hoist detail just demand you of a trying you bit little So of equation on there are guys three side production get development that's on more on the are from here and why the and take years equation the to conservative be outlook? smart out something

Mark Morelli

there, small fragmented when of is platforms volume platform one business, I effectively where we was one very started mix the are in against the And high product I worth of go in and first lot you there you controls. we Matt, to cost cost understanding things into justify factors the some need how am color volume low have you the deploy that where limiting controls ranges. the the to happy to of when a it's putting give works found we difficult that

key drive will platforming that rationalization the effectively is product we're some enable justify as into we we enablers about talking of platforms us cost of to one volumes it. simplify our more really So and that this those uncovered that greater

the or stuff. the by rationalization necessarily cycle development doing development, have not it's So frontload to time that we time for this also

we're So II start product the and is for Does Phase have lines. platforming the enable into drive XXXX, of that beginning our Blueprint will us, this rationalization as we know because of pervasively is of articulating by our us sense? simplification off I you why so to this that more make that important it smart at hoist

Matt Koranda

of lot And I'll Thanks sense. a there, lot. a leave it Makes guys.

Operator

Instructions]. [Operator

Our Mondillo the from Sidoti Company. Joe from question next & your line proceed with questions. of Please comes

Joe Mondillo

Good Greg. morning, Mark,

Mark Morelli

Hey, Joe.

Joe Mondillo

question first was to related STAHL well. My as

could quarter for anyways on profitability I thought of relative the that little quarters quarter weak the going would Just the it little accretion lower of little a the been two would and me. provide have color especially costs how have you forward? sort in year, to wondering of you're another higher low with a at looking seems rates. When in was the the at it first synergies, more why you a look interest

at mix how going that a issue forward? that is look you So do and

Mark Morelli

that too, and through walk have it as a the came we let Yes, let I'll answer down, Obviously level so me high revenue well. at Greg issue.

times which is we shutdown. maybe in that the while on down we mind And We than in a don't are working differences Germany, obviously vacation do And some mixed the around margin. mixed full STAHL there. focus other which projects issues a then fully year obviously there some pipeline shut also shutdown, basis we too were of impacts the in is facility we're the in keep of some different

that. by we're particularly mean, more to you But I add some Greg, want surprised color? do So

Greg Rustowicz

if a the Yes, look saw QX at about so based QX, a on bit. We I sales when provide that we sequentially data down SG&A we're down little about gross and you $X.X drop to from million million. is margin $X.X compare actually perspective

hoist, of STAHL a combination sales using a kind margin it's Middle the of So but crane a business, it's just is heavier than mix quarter more proof the the top-line East of really was overall and it business. is issue of of a which our lower building business bit a explosion for a projects

the Joe, of perspective Now quarter STAHL about realized has the synergy million $X.X from a or in company synergies.

But had of and exceeding up other $X slightly we shows the beginning outlined Columbus the STAHL's is half and million McKinnon. towards actually XXXX. about tracking books year at fiscal for that of the Legacy that on maybe the half So in

Joe Mondillo

of In synergies Does terms $X.XX that sort just business? are synergies, of direct of account or all talking that the of accretion. those you're about for hitting of STAHL the when synergies the $X.XX accretion and

Mark Morelli

the It's synergies. all actually of

that to EPS is, So basis, essentially shares pipe if well. that would relative impact the takes is the Columbus here account what be on we an our it takes the we're and and had, have interest didn’t as expense in account into what issued what So adjusted were STAHL we would on into saying, incremental it McKinnon delta? dilution as it

Joe Mondillo

quarter. saw the to just in great. declining would the why how basis? there this starting looking that normalized going think when do be seems talking really regarding part backlog we you're you Thanks. and it business Okay. on expect what much this nicely any you orders to then should Are were sort comments strong third starting come really the like Mark the so business the indicating January? we And sort earlier current in relative forward, that Or of then confidence back of And gives recover of business at mix quarter and there we of

Mark Morelli

looking rates first. if guides the want appropriately We're we here a last to more question might all me it’s plan. obviously time let we that going the well. don’t short so the up And we with sure market as obviously aggressively than we order start Yes, of want that make at part the

in slow, a started little the very And of towards year. we intake to was built year encouraged bit what January. the things backlog. bit in into coming last actually were of there a but are backlog very saw this But in November probably the happened what calendar down if in way guess calendar We -- January slowed by January pretty and movements set off of nicely things quite December, order some strong and beginning coming it modestly I the the spring up the say level there the out a our and through

mix we continue first are cycle. of do were long nice and very to some now going as the rate But So, as can fairly it short forward. they obviously things be can we is be particularly the orders, that, working how play and through some all part see to of sort this your cycle how the fairly and of this goes in back obviously uptick order question out what of

go we kind And about are us, that -- a is is but coding a in doesn’t are trying strong see market outs think strong I see think is now we this into -- to as to have the here that orders. it’s for plays activity we’ve do were order mix that activity converts that we we’ll as general how only possibly coding there right can. but we for very about as and and continuing STAHL, guiding further of So, backdrop

Joe Mondillo

of in end within provide say fiscal start changes seeing but back an and of the maybe of don’t just us have one thing. really can last see wondering in just loaded, And the to to am sort of maybe then in for kind accountability could then or business sort just per your timing really we I also seems some part just benefits little the going And want terms more to expectation you of we this strategy, question if when and benefits COO wondering if estimation like sort XXXX a XXXX here me, not be a on large great. update sort wondering so Okay, two the se, of you it that regarding are part search. could maybe

Mark Morelli

Sure.

clear is have the manage more is excellence be Xth, one discussed the as this January two I’ll side. of we operational search on to is positions So, us some Operations and help things open development Vice we really in outgoing the of product there on for other President a

not near-term we an here going happy announcements product order, seeing some make I short on pretty really to the we’re candidates, operation so that. great we’re think that close as search great, are is are one, we search. which The on So development the but we think pretty about in much

successes in how we’ll we as progress where, should see see of you the posted the new a think a edges with really starts Phase So little could and strength. because articulated and it things I as in terms pulled But too, and the bit II organization you will I the I that think, out clearly stay if in is helps that announcement. we big we keep building now, on as on about timing been the we great in us some we are are sometimes progress And before some II its things play we these we feel tuned as roll strength trigger to issue our on in but of that strengths and build rationalization the of we takes it progress simplify, bottom-line takes we those that just but structure in Phase I, Phase and out. you’ve takes out Phase you also through kind focused top-line. of off -- this takes gain that off on on costs here, And will it also our top-line know improvements

year are to to bottom-line operations on the of not growth a more EBITDA. looking do So revenue Greg, at that and for stab big as the margins through the take total fiscal in our well. EBITDA drop we and want you

Greg Rustowicz

Mark, new on us will lot with operational perspective. XXXX Joe from a worked an of in having agree I a help fiscal of Operations sure, will excellence VP activities be there that, Yes, in being

EBITDA what a Blueprint consistent XXXX So the on north achieving we in basis. was of XX% a margin articulated

will will I have actions to towards but we achieving incurred will get number to be in and that and see that, is but that we fiscal think of see think in progress I to activities progress there I think a costs XXXX. that

Joe Mondillo

I Okay. and one a will it hand one, just had final I over. And

sheet? terms update even the that all leverage you terms -- us on of you are in your target flow what the to of where be within more be in Just to balance at generating feel probably cash could comfortable or going with of you sort to and at not And cash point point. few a you close be close flow to that generating are going to if that going that that quarters

how you allocation where balance shareholders? think gets little delevered sheet the So, -- more for a Thanks. about do once capital

Greg Rustowicz

Okay.

there take capital part the is so and that the and allocation. first let a So I'll Mark in lot about talk

flow the great. which at used cash per amount LTM of currently to year, tremendous been it net all a is -- of free we're or of times has business balance beat sheet. about been has the and most We X.X to So debt The for cash target share that has EBITDA. our delever generated

look that level debt to at a capital you be times want been X before you by debt that we're going that We basis the X.X to expect -- X we I'm times EBITDA and to or one about ideally and a to if leverage puts either X.X to question, a of the ratio we and March I be end between and of X.X similar at level have on when asked XX% net spoke it total that way. want

right months, we of have where the another sheet it. kind would that debt, of we exactly expect down rapid we'll nine are six you with the So balance pay to want

Mark Morelli

because the dividends concerned where that at we question, that it delever the a on return as Board this the sure prominent But capital. leverage were at capital obviously our can we do think we a are and but And we're our a margins to happy when a balance in leverage these Phase would same work we ourselves point less look we about more here focus of for continuing have subject. as we doing problems. get anticipated sheet, back we to want think do And point of we what for growth. mean we as will I going themes industrial as the where M&A now be start around that acquired Blueprint invested we in discussing call the meaning, the technology what we're market be to a questions fact preferences management will path customer John, as we're doing more we'll to forward conversations think We'll we really deploying market we for I in side on more activity also because on XXXX, III to with we deleverage. we’ve STAHL our the from outsized and way means coming and team some in our we get we that doesn't board apply STAHL to solving the good every acquisition got delevered think can is

Joe Mondillo

it. Okay, a lot. Appreciate Thanks great.

Mark Morelli

you. Thank

Operator

have gentlemen turn closing the to Mark reached and the over for remarks. end we session. Ladies to I'd any question-and-answer like call back Morelli of the now

Mark Morelli

today's thank we'll our interest I for Have appreciate Columbus on day. excited and about really through you. creating call. a very in be McKinnon. our I'm path XXXX value joining your you good folks. Blueprint strategy. Thank Well, more

Operator

This concludes today's conference.

your may this time. disconnect participations. for as You your Thank you lines

Columbus McKinnon (CMCO) 6 Feb 182018 Q3 Earnings call transcript