CMCO - Earnings call transcript Q4 2020 | Columbus McKinnon Corporation

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Operator

Greetings. Welcome to Columbus McKinnon Corporation's Fourth Quarter Fiscal Year 2020 Financial Results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. will Columbus conference McKinnon. I Investor Deborah time, for Relations this turn over the Pawlowski, At Ms. Pawlowski may you now begin.

Deborah Pawlowski

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

Fleming, Rick our our Rustowicz, Officer. President are; me CEO-Elect, Financial with our and Wilson. and Chief today Interim us joining David Chairman Also and Greg CEO are Here

you After in release morning ask You be results which opening financial well that quarter the for fiscal before market. continuous queue www.columbusmckinnon.com. then slides adequate a the accompany kindly should the XXXX one we only that have the a and at our copy We of can with If to the as question allow conversation Q&A. formal not, our released as and ask followup flow our the presentation this back lines time. get access will fourth will we question website, for please today

review I to If Slide turn first you’ll Harbor the X deck, statement. will the in Safe

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

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

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

for with measures non-GAAP of and slides the tables today’s in reconciliation the GAAP comparable information. provided have your that accompany measures release We

Rick? it So to over to with turn will X, Slide begin. to turn that, would Rick I if you

Richard Fleming

Thank joining Deb. Thank Good you for you, of all you. today. us morning to

we As have Deb mentioned, a guest today. special

I and CEO with that this call During identify year. our you a hope new earnings to we last shared by June of hire

pleased candidate and So David COVID-XX to choice, of I Wilson. able our target hire achieve that the am challenges of this we even with extremely were

on As be us was and Pumps the where announced President May he Officer XX, we Flowserve our X, Division. the Corporation new will joins and of from on David company. President June Chief he Director Effective of a Executive the

session. open before You will Q&A the from hear David we

Now let's Slide to turn X.

to the and briefly discuss Columbus its COVID-XX McKinnon. we on Before results update the I'd like you quarter, impact on for

our a the core During March of remote communication our response process and safety, has family. COVID-XX with employees reduce keep we which a to been locations employees the informed. work these the primary unprecedented times customers guided continuity. spread and to our to health values the ensuring with In virus being employees, our over the implemented We our of force continuously to established rolled processes the this task business XXXX and transitioned safety goal a of out our stringent of pandemic early trust the seamlessly and their We of wellbeing values environment. health quickly by

protected supplier, our in a appropriate steps essential manufacturing environment while took processes serve employees. the being business we critical implemented also and could We customers necessary and that our safe so that

the government due our pleased Brighton, auto shutdown by been all closed Mexico to except report facilities actions, the Michigan with facility restrictions open, was of to recently manufacturing able to that which until all which our and I As impacted am these was have of industry. remain

significant us to required demand sudden swift this clear downturn that the and was action. products it in for continuity, business Regarding our

the of the given and that cash regarding knew pandemic. liquidity lack preservation would critical also be of generation deterioration We disability

short we necessary actions demand implemented the we layoffs took decline We So significant and operations to quickly weeks. the are furloughs, to experiencing. market align that work our in rapidly

we developed on for on-time consisted our importantly, and generation first year business reduce cash increases on also fiscal a Also ratio strong a leverage the with for us with strength. cash and merit Due by the generation debt We our XXXX provided Growth times. year, given plan E-PAS, to we $XXX fiscal suspended cash the execution inventories, us $XX during focused half remained of by of we system bonuses financial million crisis discipline XXXX. our million and March this record revolver. had Blueprint liquidity Further, hand $XX of performance. to our operating which X.X delivery significant but And the successful Strategy $XXX on we our almost strong available our to during allowed million of a just on of of down XX, million pay entered leaving

$X.X million will in we during and Given to pandemic. this preserve debt to minimum the we the COVID-XX of likely recession, QX of pay elected level the service remainder cash the only continue

initiatives these in Lastly, discussion slowdown. our following solid even selectively initiatives continue to financial position I Greg's enables of financial our will this growth during cover to results. us invest some of

Turning and to now will near-term discuss Slide X, long-term objectives. I our

positive flow For continue the are near-term generate and income. goals our to cash to operating

ability to Strategy Growth achieve our these is for Blueprint goals. Our to key

and continuing taken our we are reductions XX/XX on to address excellence. cost the to process COVID-XX the recession, addition operational In focus the

fact, the are In ahead closing Lisbon, we of Ohio of regarding facility. our schedule

completed savings. expect this annualized continue about have million We $X expect July to in and to by shutdown

Given this and our positive dividend our in our confidence strength, to we expect flow, financial during also our cash recession. maintain

Strategy. Phase Growth for of for Strategy. retaining portfolio in David for and to and We controlled safe an our recognize optimization to our future become products in investment solutions enterprise time for objective new long-term, and talent drive Phase our our opportune Growth pool, our us M&A and For is growth requires and advancing technology that our joins continued III of building and motion at Blueprint the customers. III productive the still efforts market products, Blueprint leader the

results of demonstrated was quarter to March and fiscal X. throughout Please XXXX as fourth the year ended year turn XX. margins strategy now The of turn our the our we Slide expanded to achieved and Let's growth fall a many were the off the as half the we in margin had adjusted latter goals record even financial of XX.X% March, in demand industrial markets of QX. slowing. our of Despite success in

year invested nearly adjusted $XX million on the For income improved XX the Further, expanded net to margin was and basis to return EBITDA XX.X%. points capital XX.X%. our

was X, working XX.X%, capital record Slide on management, XXX see of as flow a ratio by quarter strong operations record can from fiscal performance third to point you free sales over in basis this our had cash flow This and we year facilitated working XXXX. by capital improvement of indicated fiscal cash As year.

progress operative we fiscal making to XXXX, X, did now we process. contribution income with updated we you year $XX also on million. update Turning million goal Not XX/XX I'll our original outperform exceeded of in $XX are our only to the our goal Slide of

As you can income the Most million was realized gross contribution see operating the profit this XX/XX $XX.X in to during of line. contributed year.

due occurred this of As previously at realized in COVID-XX. of noted, end saving million March reduction sales half we that Salem, We closure also in XXXX. $XX included fiscal the $X despite to the latter the the of performance achieved million from facility Ohio in the

were for the our we for pandemic. to not track fact, on it achieve guidance the previous were revenue In quarter,

fiscal now Greg? amounts it be to contributions We remains David's realize continue greater so the financial be XX/XX from a XXXX, these detail. in regarding turn quantify expect process visibility leadership. With that, have our the operating we although it will under over difficult will shape recovery. discipline XX/XX to until of The I'll element to to Greg our in and key of review continue to to results more

Gregory Rustowicz

half for were Clearly impact estimate the when second will fourth impacted We million COVID-XX business COVID-XX Good in are Thank the half occurring in everyone. the million. call, results quarter. March March. Rick. net morning sales that second decline today. tracking $XXX.X Slide we volumes quarter the XX on in were you, the all discuss topline lockdown. our but our short X, in in the further business negatively order of On began by saw countries were that cycle the impacted million towards our Rick $XXX of the about Later seeing rates quarter We

divestitures you which $X.X last quarter last declined fiscal Volumes million year. by completed three year by reduced compared approximately know, XX.X%. or sales this to we As million $XX

power our we this pricing evident was pricing saw y X.X%. initiatives. of as volume pricing strategic pricing by down, quarters three was year-over-year our result XX/XX improve was While of About the

reduced sales our Foreign as million. $X.X by a currency headwind also and continued

little a color by provide me on region. Let sales

adjusting in For X.X%. saw Sales partially for the effects U.S. increases we were sales U.S. divestitures. by down of the outside XX.X%. the quarter of volume X% of prices was fourth decline offset the This by

digits by COVID-XX. volume decline our all of price of volume a as X.X% down the result regions X%. Solid offset single in international was partially improvement of Sales mid-to-high

and similarly were year-over-year businesses based Turning orders to XX% currencies, short improve orders were impact for by and Adjusted and orders backlog, both both approximately short businesses. project in cycle project Sequentially by our foreign XX.X%. impacted cycle and did down see of divestitures the we COVID-XX. our based

note December. backlog grew are is a to from sense U.S. delayed that but levels, that million projects important being $XXX quoting continues million As in the end at especially our activity result, pre-COVID-XX X.X% at is the It of by to many $XXX

out the work the the back believe effects While recovery, globally. signs of and we that getting to uncertainty encouragingly are bottomed our on globally in partners April there channel and and is customers much of are there that COVID-XX have we shape

production all As today. our ready operating flex time. up to back an appropriate essential business, the We at factories are of stand volumes

brands in and Our us these. leading times like well, position strong continue market serve to especially

the of ever. the continue X, record this closure focus costs, will realignment XX.X% quarter a Slide on-time and an margin for gross to more we as achieved inventory customer effects factory be costs was and and gross important in responsiveness adjusted has the channel On XX.X%. quarter. business than levels adjusted eliminating on the of reducing basis, our margin We On delivery

sales fiscal drove $XX.X the strategic gross expansion a we million in more levels the Rick benefited of the divestitures, due lower to to profit pricing, earlier, undertaking indirect achieved lower certain through of accounts. targeted in year cash are the in significant conjunction drive the We fiscal $X.X of factories million which benefit GAAP impact we inventory XX/XX as offset our quarter clearly lower from For reductions, in free gross XX%. volumes year, This sales reductions record gains and and absorption the margin mentioned cost overhead with process fixed that flow. volume than our and at

product. gross Let's $X.X tariffs pricing from expansion the divestures. net million now of million compared profit Fourth We and inflation We for quarter the gross one-time not cost and material $X.X in adjusted $XX.X of Chinese prior China less the to this Ohio prior quarter's the impact prior imported profit incurred lower profit review million the year was profit year bridge. factory on was closures as see gross an down as the we which than year, for did did were bridge. the cost the gross of amount same have so

currency of to net changes About reduced profit other half this related Productivity $X.X costs translation negative negative in variance higher $XXX,XXX. claims. million. Compensation related by cost Worker's of quarter Foreign three to old gross incurred was the was

$XXX,XXX. The shown due we Slide from Divestitures previous of RSG&A FX by than approximately quarter million and reduced RSG&A was in XX.X% translation of RSG&A factors. As was several to was on $X.X reduction RSG&A benefited million year. sales. XX, $XX.X lower or $XXXX the the in

million we debt million search, lowered cost addition was realignment $X.X the CEO accruals our costs. bad for partially business by higher $X.X and In additional cost offset RSG&A of which by

quarters. we With and the COVID-XX our taken actions RSG&A reduce to current have in quick costs coming the decisive pandemic

accruals, merit few. headcount reduced bonus have increases, reduced and travel name eliminated We to foregone a significantly

We the will we monitor resources right. market back will add demand timing is and when

discuss of We invest forecasting XXXX $XX all in growth into are we this RSG&A will select as however account, will Rick million. approximately of to QX initiatives FY continue Taking further.

in impact operating leverage the that Slide from driver sales, XX operating decline year. the in margin our was this decline an to is The quarter timeframe. income XX%, than what XX.X% Turning which was COVID-XX saw adjusted prior better volume. Decremental was significantly had $XX.X XX, negative sales point XXXX on was of of basis we million. the a the operating Adjusted

the represents $XX income For our XX margin adjusted circumstances. the of margin adjusted to of and points is $X operating This outstanding yet year XX.X%. expanded X% revenue considering lower operating million which decremental basis million, a performance declined

Our specifically operational XX/XX margin Blueprint initiatives to our this drive and excellence for Growth helped expansion. Strategy and process

in diluted on share As XX%. earnings decrease the you $X.XX. per with previous share of the XX can earnings see per was per compared Slide quarter year, Adjusted $X.XX $X.XX or $X.XX was for diluted GAAP about share a

share, year an EPS was the X.X%. per $X.XX increase of adjusted For full

approximately XX%. EBITDA tax On full continue to expect we Slide XX% be We XXXX's XX, margin. adjusted expand rate year fiscal our to to

adjusted For year. from an our XX points the last increase year XX.X%, EBITDA margin of was basis

on return solid year. invested Our last from increase a an of XX.X%, points capital was basis XX

for mid-teen Growth and Blueprint margin ROIC financial Our XX% remain goals unchanged. of EBITDA

However, the to curve determine these the when COVID-XX of achieve from we shape recovery able are will goals.

We efficiencies, so we to XX/XX process margin comes, growth to will that further drive the continue our our be and to our utilize able profile. strengthen when accelerate recovery

million was many operating generate increase XX, XX%. our that Corporation the cash $XX.X year-over-year throughout for activities hallmarks or ability Slide cash McKinnon to cycle. heard is $XX.X of Moving you of times quarter the million, one of me which to say have That was a from business its Columbus

capital took $XX.X rapid For in flow. capital cash. reducing pandemic. fiscal free the represents We the contributed heading ahead record as working a generate XX% needs flow. flow. cash actions curve which of clearly to This generated a cash million record to into We year cash of in percent preserve free our sales XX.X% our free of We a increase working XXXX, about to the were drove and we

Going levels inventory have believe we further. our to opportunities forward, we reduce still

to CapEx year on in the in reassess half the based In will economic of of year second our CapEx half addition, the current million $X and the manage conditions. we first we'll

and at debt was $XXX debt was the XX, million our million. $XXX quarter approximately net Slide to of Turning end total our the

financial of net the provides million XXXX. excellent EBITDA which to is delevering fiscal of minimum progress now required net repaid $X total times adjusted have debt pay We and weather the in We've to Our net capitalization XX%. ratio minimum the to plan debt pandemic. us debt flexibility to QX made achieved current debt leverage approximately the and in a X.X required

will covenant draw is a We our million we means our which have did have light, to a to on our Please and we led while covenant bank XX, supportive revolver to flexible capital against purposes, borrowings group structure XX of for March outstanding I liquidity turn if Slide turn which capital tested financial that a Subsequent and it by over is revolver. demonstrating Rick. working JPMorgan. we $XX have only back

Richard Fleming

that fund discuss some Greg. the this of strategic we to slowdown. are during I you, continuing now select initiatives Thank will even

requires Our visual invest a transformation we in continuing into platform to an this industrial and technology company strong area. are

underpinning Additional has for platform been our two and strategy. project underway the last years it is of a critical

at I If lately you’ve www.columbusmckinnon.com our not audience out. to for to and been you this encourage it website investors.columbusmckinnon.com check

a equipment the the platform further our from and of our comprehensive computer. to where shows of staff have seamless our an presentation our communicate and website experience home use they a controlling integrated from can all new it unified slide enables page Our operator digital depicts This configurator, support customers brands, our with appropriate provides products. digital the and buy

that have part digital that is also PIM critical our and website, of as Information configurator, our a a System The comprehensive transformation asset essential Management which known partners support developed our a the of which product e-commerce As is is will Compass Product into and catalog. single a this or effort industrial capabilities PIM, company. contains feeds an technology channel element we tool

are products, new XX, automation shown customers. in product customers, health solutions safety in for their create our for work development that simplification and solutions our the we're advancements making These environments transformation of on factor is continue protecting branded safer of critical crane to Another Slide employees. our and

Most switches offered easy no or solution, zones that by days. roughly be different to is and now single seven a this is eight is used tablets. to Intelli-Protect from a multi-zone solution, using evolution is Intelli-Protect a versus standardized that positioning. addresses of laptops, further app weeks product configuration that can zone zone using time For seven with an This our fly on example laser limit driven a and control its reduces programming is engineered lead cell-phones just importantly offering order and

kit, have both as that and to protections, features expand steel is we Another in safety covers product lifting solution enhance capacity explosion crane such continued automation stainless of and terms our panels. control and which productivity addresses and rain

Additionally product more fleets providing low that real complete offering. is and displays

crane to easier also wiring. have it crane the that we makes plug This Importantly, can assembly and play. enhanced to kit be during our occur install and the errors and and quicker eliminates

revenue product value We to solve all products opportunity during such our find grow as through we're this of even problems ways stream, are the high development. advancements with this continuing design excited we the making our downturn, to customers' about are that to and and

now XX, on XX% shutdown introduce details to some provide drop will then outlook in you orders a April in resulted and I of David. of If our the and Americas April to Europe turn year. Slide compared near in The last

since we May. during have will about demand bit a stabilized $XXX million orders quarter the revenue of $XXX However, now in be that range our and even first expect to At firmed these million. levels,

levels, even income low generating our revenue positive flow. and cash However, these at near of expect goal term to operating we achieve

As we minimum mentioned to make the conserve this payments cash downturn. debt only during required to plan

execute excellence to strategic financial and M&A measured million at our our we’ll financial research current to Strategy priorities, albeit focus flow reduced more to be the due outreach, strong III Growth that gives long-term in dividend should importantly, Blueprint and three pandemic. in ramping us confidence for continue invest maintain nearly generate on we’ll with at its our And this debt operational in growth and positive to our due the cash to last expect continue we to cash it our its However, by flexibility $XXX pace a over growth we ability Again, years and flexibility. the engine. Give select noted Phase other flow level. our this considerable our initiatives and

President to but will my is shortly. first us joining why we it turn David our over be call CEO-Elect, I pleasure to and are wanted excited Wilson, Now you so tell he that the to

capabilities, his because David and demonstrated search and has commercial and McKinnon, levels. leadership be for the that leadership candidate choice strong higher costs process proven that X. And with record track international delivering Wilson CEO, record he next centric even decided will be cultural Board of a unanimously proven the passion most He we he background, Columbus David development During his track of skills business J. delighted substantial results. driving fit performance growth. he are his and of operational for at became our has and and importantly, excellence a excellence, with President on success our Give June us skills customer should joining and

So I David. now David? will with welcome that,

David Wilson

onboard It's and at an Columbus today, occasion I'm before and you, pleasure address Thank morning Rick good honor have everyone. McKinnon. officially to a you the to even

July President our myself was many the At joining Combined, me years. finish management these at which industrial, food been opportunity allow has very SPX beverage President spin-off for was Corporation, into the and and Polaroid served joined size Corporation automotive in restructurings, spent the Since the in for control the of Pumps First, of was XXXX. of Industrial SPX product Columbus is responsible back Pumps career I as division Flowserve of from the I've June and Corporation I'm the to segment consolidated move the as and President formed leading part products simplification spun business that and XX XXXX. or company a international I of I as bit nearly working education originally in am for $X I I revenue. company development I billion the the responsibility and developing since experience as was similar I into Flowserve, as I to I've also implementing and why Buffalo. roles, be September my Asia a SPX divisions you with enthusiastic September introduce Flowserve an motion we will are of on their equipment to transformation, my businesses, fluid FLOW Flowserve of SPX undergoing of living My with wife. of at about an in control, by of CMCO. manufacturing the I roles. I In the the a both the it then, Engineer Europe. were processes in my tell quite transition XXXX. Xst in of I leading part Prior lead in a strategies. out been looking for approximately Electrical was sincerely I’ll then services after visions leadership decade effort advanced Division. the and having two acquisition and and for and am McKinnon. and family as have defining of of which initiatives, engineer began flow than larger and better businesses, to and to number well Northeast technology, abroad portfolio quickly strategic forward growth having

may McKinnon. attracted Columbus wondering opportunity You this me be at to what

First, I demonstrated well industry leadership. This clearly and Columbus brands McKinnon's impressed relationships. the strong is customer by with known company's was

addition, being In for has specialist. its smart on strategy movement with its growth a and McKinnon foundation lifting logical a focus Columbus

markets target grow McKinnon and acquisitions growth there Columbus motion opportunities to that addressable trends. technologies are believe control our – expand product advancing with by our I tremendous development Finally, new and

direction, For also also for for the improved forward advance defines the I'm these with power I'm this truly Strategy, I'm the and initiatives. III excellence to about strategy. Phase of XX/XX operational with of Columbus earnings Process clearly looking accountability was reasons the to McKinnon and team to excited provides company. to impressed working Growth drawn Blueprint which the opportunity. has I of the effectiveness

global and discussed. the the segmentation, of has our for current and now. upon customers currently In to them next other pandemic, more and that to big to acquisitions. add as development established build has take the team partnering Rick Board to Rick. to and growth this to Columbus product plan also meet interactions the collectively. solid to to be closing, select that out like and you a get I'm if the note, adjust know much sustainable have that of the process. have Columbus I’ll pursuing this environment team how team member to forward enjoyed I and Board team level. truly that to through opportunity that only of I'm extend the now Then individually impressed to virtually you it that Rick the given as Directors. strategic like times Board the around period McKinnon turn even to of acted I ready I'd I've restrictions a by for them initiatives I'm are working intelligent, platform we're Initially unprecedented with very thoughtful my market and this to the leading McKinnon in recruiting seen of with throughout I'd to I’ll in the of to foundation with they you navigate to of aligned back midst while is thank engaged opportunity. how members looking a On While the some the look the development stronger the I quickly hope cadence. market all and getting lift, operating centered innovative meet forward each

Richard Fleming

can open questions. for Thanks David. Operator, the we call now

Operator

[Operator you. Thank Instructions] you. Thank

your proceed with Please Our of first Howe the Barrington. question question. is with from line Chris

Chris Howe

look too congratulations not I the and First distant you future. in forward meeting off, to David

David Wilson

Chris. you, Thank

Chris Howe

balance timing with Phase optics there as in, that big combination times we X.X liquidity we about on the still some Perhaps understanding times at off, sit starting the currently the should and which position we're look X.X current one delay we overall in of in? picture, your looking this has given position that might ratio can initiatives sheet environment think II Phase then horizon the on follow-up. impact that leverage the how combination uncertain the with have you and Just current of comment and in III I on is your be

Gregory Rustowicz

it’s hi how you? Chris, Greg, Yes are

Chris Howe

Good.

Gregory Rustowicz

know, the well as covenant follow, and times. to our So, into our only again three test shape And revolver. to we're and capital comes if perspective in that draw you structure off as play a from you just great you below of remind level we were covenant

timeframe get to I as to II still but doing continue III, better until makes ready business, for we to understand just responsible to help the in Phase XX/XX. lot And regarding with So forward Phase operational and it of And the company. to the that we're board I know excellence pursue think the time direction also things current we've a think acquisitions. have going potential get this learn and David stabilized as think to got on that, items move I be well and we're gives this pre-work set sense strategic for it

Chris Howe

pandemic backlog of out viable that in And as far as come seeing the companies to Great that's and opportunities environment? stressed helpful. has what then that, be III time size your during would or following they up change shift material for this as as are on similar there this Phase been you're smaller any of

Richard Fleming

parties had of and III, at on The our it. particularly us have the as a of as will continue I are course research. And lifting heavy measured seen have We've mean, that through analysis. working on David pandemic pandemic. change we would lot outreach consider Phase not Chris, this as because is do kind us of a albeit still some the I our kind strategy and to-date assure helps through indicated joins you continued pace strategic more we and of us initiatives. that fresh in of people strategic major simply But have Rick. minds any wanted I say in work I is that we their to

to right market such that mind and does So with of the some I this constraints certainly diligence now. think due top in as us, don’t it's provide want travel but you pandemic not

Chris Howe

hop thank Okay, in my you back questions. taking queue. I’ll for

Operator

Thank you.

Our next line Company. Mondillo from question. your question Joe of and the is with Sidoti proceed with Please

Joseph Mondillo

Hi well. everyone all you're morning, hope good doing

that sales related just RSG&A I you're sort guidance XX%, the decline. surprised is provided for you just question, calling guidance is first about to given year-over-year. know guidance RSG&A year-over-year just quarter. was around you a that for XX% The down First revenue the XX% of little

the curious decline a more that given little just of guide? I'm revenue would So why not

Gregory Rustowicz

I think, so Yes, Joe Greg. this is

nature in going So might a clearly taken in RSG&A more and line variable. that selling piece have it our the of fixed particular. area. And amount But there's – in it the G&A mostly area in a or it's in cost then by costs gross the are see its have manufacturing significant the clause profit truly we to out selling you is of

headcount So - and work. as taken short also implemented substantial we reductions company overall have made we've a

forgone and aggressive bit we've all just think its increases, going taken As Professional cut costs limited to nature structure proportion SG&A first protect for eliminated, so to half profitability by most have reducing we the it. mentioned the year, of virtually and at travel zero. our higher approach Rick as an I to is bonuses part of look little company. in liquidity have the cost we’ve fixed been costs to merit the services a But in of

Joseph Mondillo

you calling out facility et of million, calls, $XX of one million I see further could provide $XX terms this were cetera? terms and the point and look update visibility XX/XX sort us followup you an of sort closures for on would believe your you for Okay on prior my in what of in cuts, on you update be, fiscal cost a about cost what XXXX? savings could just at you - foresee

Gregory Rustowicz

to the volume so we $XX taken, an to that annualized on cost, and And Yes, items say actions it's up are I of I return. million basis start that going of would though we've before. about flex when mentioned does terms that's all in

our as base cost running entire it call, but Rick million be is it's at the rate. XX/XX, really at million we down completely about be the look down quarter going year, $XX facility wouldn't that by I as for on to shut the And July. Ohio So do $X will regarding mentioned Lisbon, have a

that, annualized benefit we'll of of So three is million quarters which get benefit. the $X a

little $X.XX have about is consolidation from in bit which our We a carryover million. a China of

$X total see from in So we should consolidations. about factory million

this at a but travel plans right point as develop the announce time now to restrictions consolidations, We well. we're for consolidations bit ready further hard any are continuing further not and little to with it's

Joseph Mondillo

And if been you've already just The I the we're so $XX That's of incremental up follow of really taken quarter you per million, just out don't sort business? that's correct? million to want clear. realized mind, $X what quick, not

Gregory Rustowicz

No, in the actions. additional incremental quarter, that's

the of yes million just part that's typical So to realistic a clear, and $XX is RSG&A run – about rate. so be our

direct and So that million. costs $X It's cost goods XX million $X sold. down is and the of and quarter more then $X the or in million other indirect dropping the be would in less line of to

Joseph Mondillo

Okay Thanks got my for taking questions. it.

Operator

from Mike is Next of your with Company. the Dougherty question line Shlisky proceed with question. & Please

Mike Shlisky

David to Good morning you. everybody and welcome

David Wilson

Thank you, Mike.

Mike Shlisky

reopen of machines as of designed for at kind lot companies for these a of customers they hearing not were the companies been [indiscernible] of I've these and there. So are of shutdown some least finding out a kind lot

So broken, corroded timeframe. were after some machines out otherwise service that or of

of equipment it's just kind some some is of yours they and and first and seen you customers calls saying or calling that early, day not that phone so working them? some know are repair can here on just in are have which are any but the in a things – their made have I just now back, you for they them And it's fix stopped new just curious, I of come suppliers one. coming was send their you first happen,

Richard Fleming

activity. showing But is it this We're quoting seeing we back Rick in Clearly say [indiscernible] actual a more more Mike, good are right shipments in fairness come is up as yet. Yes. orders. example, isn’t necessarily I'd now Fleming. companies all seeing

that than it is in the as move certainly like And and yet best fact is But it. still way than hasn’t that trying it opens The good, anecdotal characterized other more as up stabilizing bottom to looks in days I of line we’re shown stabilize will terms I a activity. say May me that firm better it's way for quote things is the June were put to we're activity, the more and getting have it. up April up. lot level a to evidence higher trying the but Although early economy

We've may a yet. projects number we going CapEx. that little degree They canceled interesting that area. that note not The of to had in good industries a also to is Steel be many projects, kind bit other surprised are and a thing example being is were for committed is, seeing we a delayed. like we're cancellations outright they're that gas seem alone, forward. were high haven't But committed seen

right we're but a starting don't I bit overstate now. get to better, So are feeling want that things it little to

Mike Shlisky

can business, be a of the lot kind that term? followup planning your given as near some was could thoughts outlook. term of part you're my be a view near but to pricing environment, us kind give what it outlook for on guess, imagine pricing of I the just your chase on of what pricing on I short it's And your not are somewhat outlook the downturn, this in Okay. worth

Richard Fleming

Yes pull increases so, a that We the bit. in timeframe. do in the we up price little announce did typically U.S. March

not right expect will that we would we would quarters. all enterprise expect an upcoming market but the as see that right positive So price nonetheless - now increases, you're is in to the price I receptive increases

we're I around we the still which pricing might thing, seeing think that incremental there be but declines, seen price year, we that a good should level not be So It some is remain which this to X.X%, is positive it and year-over-year. past have should see. not

Mike Shlisky

it, the Got I'll okay. Thank you. line. pass

Operator

is your Please question. question of line Tanwanteng from CJS. Jon proceed next Our with with the

Jon Tanwanteng

post of opportunity need little still looking as appointment. on more for with at most congrats you the you, know coming hood. we the take to immediate I the for and bit under as David, out But guys. one morning what's sort prepare or a good eyes, it's world? first fresh Hey, early pandemic maybe My jumping to board personally challenge on time for peek you

David Wilson

the have the for with has that the to team made in progress industry and Blueprint McKinnon I Strategy. and the and values establishing years, a to the I'm to significant including lower discipline the has operating risk I initiatives implemented just Thanks has with implemented mission XX/XX the leader mean, a business The about II set of question an gross expansion vision cite driven performance then as few implementation company progress for Columbus known resulting examples, opportunity and system few margin you customer which relationships. its the of company pretty on excited and culture. the levels over you. and returns Growth brands a I past to appreciate that the rigor deliver process seen strong is the they've and profile. the And Phase enabled the Phase global reduced executing and debt fact I well talk with guess,

team about rapidly be first first, this the But and environment, has transformational company's to must focus agile local that I'm stages federal, the I'm And new and the is so, a company. I We lie can excited the us ability I'm through of performance and believe and that significant in for we're confident becoming adjusting truly in agenda. demonstrated leading the that unprecedented levels. enabled opportunities are and energized market Strategy Growth industrial by Clearly, CDC, we early and to advance pandemic to towards Columbus true And be on complying a technology McKinnon things respond state truly excellence in and avenues this both Blueprint need attractive acquisitive. there get many we need we their believe in requirements, parallel for differentiation and I to And pursue. employees, advance will and organic to growth, safeguarding pivot through operational ahead. with hard global times

Jon Tanwanteng

for it Greg, calendar are for about third in a up would it Got to quarter the as about what it’s they different that? now. such or you What maybe you it, you scenario may are quarter, end a trying planning stands you trough the are up way was the clients that at your cards sense for second back get just all of I that thank planning for maybe which do being you in and that's a is steady case? ramp tell

Gregory Rustowicz

expect Rick the in Yes, firming to manufacturers U.S., back up. are countries things working work for mentioned, getting opening so automotive up states would we Germany as back are now clearly the example, in May all in and with

company as said fiscal quarter is will improve, Rick was really ask the year which to that, things going going see from and it's be to Maybe personal So would comment outstanding like is to I a there's Rick And before that sense normal. things they comment this you’d well, be on to us. perspective. not vaccine growth are I’ll well? should that But that my a we that this our personal current year for having returning quarter until for to start be to we year my to going year-over-year while a as an see first us toughest about expect belief

Richard Fleming

Yes, thanks Greg.

the bit me some flavor and one automation regarding starting rail Chevron project. on for surprised I in, But can XXX,XXX then see and books of obviously given a at the Let about index. table the order outlook. trends way you we've for you lot numbers, just set the aggregate and but XXX,XXX for little to we like that Army April, recently we to from much pretty chain you've business drop period May a you the March that may was look is of had give just said on short trends to the talk XX% We have we and and bit a be is closed for gives business indexes having radio April has of came for degree statistics in it May, up yet But we cycle controls mirrored XX% interesting of February we're and large dramatic March, it in a which that, the firmed some Engineers. division had. our sense a that a the sequentially then that industrial at seen of orders March order Corps And high orders. the but came supply We're basically the even a haven't

as seem the business as active. I And come project see continues to sections now of the to, we're to to mentioned Greg So alluded starting economy back. be

least Las Our radio entertainment to come vertical you the and hearing has back. silence are since at now Vegas pandemic talk really been starting of

I our point, think really will to back. low To signs Greg’s some could you've fiscal better. things prepared to that environment I So first think be of that get the this year going we're at the have quarter and But come earnings be be tell early to we're definitely there point nimble. you I are hopeful to do that in got of kind

if of with lot so, so doesn't it to scenario we we a is the to working hopefully And action that have view our whatever of and kind unfolds a planning, recovery. it necessary on be deal of comes kind But we're toward prepared a take way. will

So wetted be actions have got go lot been a you thinking two will us that that. level we the to. actions you've got them helping and They're David obviously about pretty the have and can we with all base we've say But you've this. case, that I'd hoping and we another out we're hoping cash come But implement layer of and if that we the seen earnings start we're that necessary. of actions to can worst

also it Greg summarized think I well.

get or vaccine. shape not is behind we We going have that pandemic be collective a until view in this us anyway a form

of as helpful. we So that's recovery I of have be hope some to and it's type U any to to V. although might going recovery going sort probably opposed elongated be it’s sluggish

Jon Tanwanteng

so thank you to one point. on is, It touch more I wanted much.

the does breakeven at off, then temporary am doing, [indiscernible] maybe of level your to true in cost mentioned after lower of release. that or the does worst be reductions the is cost kind stuff I press that in of wondering they're level nets expect more even trough what revenue even You usually breakeven where you're and the that step? you and become that the include terms reductions, do more

Gregory Rustowicz

I’ll. So

Richard Fleming

Go ahead, Greg.

Gregory Rustowicz

has taken, that so, felt me magnitude savings that that's we've understand let the so was implemented level to breakeven the one of we've cost Yes, that everything with important date. actions this the people been so yes take that

more if And be take. they orders current are, They were could we are take we would painful but what that for decline do. would you know for actions another example, very from levels, certainly we so, to there sure,

do expense. but given do I have take given guidance positive of to that and operating to have expect with remember $X we revenue that carry is the would is, thing breakeven you we income, about the So we've the think one away interest that million what is

looking with we a we've that's net from to factored at got or actions date be again current the once breakeven So into on perspective But at level million believe taken would you're the it. calculus more your if to we income slightly $XXX last it income taken. operating we've benefits have be there that taken we But better of the an adjusted if year, would perspective. the Lisbon XX/XX takes from the into And done that account actions need the all all additional be be. consolidation,

Jon Tanwanteng

you. Thank

Operator

line Walter Seaport Please Global. is the of next proceed with Our Liptak question with from your question.

Walter Liptak

David Hi, the job. and congratulations good new morning on

David Wilson

Walter. Thank you,

Walter Liptak

the about question revenue to My it the XXX midpoint looks of is down me XXX XXX, like guidance, the XX%. to is about

And so, I just idea. wanted to better a get

of May a couple compare in you you're going can get the of firming weeks now of seeing that's does that couple kind level the first down of weeks basis firming what weeks the last up of what May mean we've about and now and if about stable a first what or taken of better on? we're to a talked step a to and like idea couple week at on means, like You kind few week times that the

Gregory Rustowicz

well levels slightly with clearly that better. have let that Yes, we so Rick means or me seen said, they May start are which firm and as so equal to

average But a they month whole part look what they like orders in account. better April. and the at are have Friday when do to taken the has of of to for rates we day Now of order variability through than day were so I in last be slightly week, that's

Walter Liptak

could was business, come percentage point? distribution help how distribution on that number that a like some could you trends And at there bit, a sounds guess now are the little I us a end your some think as be if because the that of And going projects you should versus if I about and there in an revenue? little it about skewing that Okay. wonder bit was big talk projects, if might to destocking is

Gregory Rustowicz

not in getting at quite as Rick €X.X do, We large April the look business we over are just projects our XX% in large won projects. as a We when cycle range. impacted which Saudi down short so almost maybe project said, probably more XX%, Yes, is still we Arabia orders we over bad in million. were

we'll able a that's and nice fill half latter get the the to that in So year. order of be

of say And double what I very your And XX% short terms goes not projects quite our distribution. they've - the part on very, roughly and digits, and that's their doing is about of distributors down So distribution, would the MRO in business. the inventory products question which a and activity are the customers. that they're lot they're to in well fastenols specialty as channel channel pieces through of being extent we're adding really of about the to different careful open maybe where it MRO the the are MSCs seeing lots one got same or supplying still cycle and

So that channel seems to be more active for us.

Walter Liptak

be great. me maybe Okay And from last geographic. one just would

have is guys then and of like Asia any am out some the by opening for Europe is, it the lot there's about any are seeing Europe, wonder in a followed be China, curve a with business later, back business. U.S. I seems and trends You ahead of or Asia up may I thinking think if down trends geographically? on third, got business I of what there And there? you've going

Richard Fleming

I am The business come little we're and near. starting back. Rick, this is surprised bit is Yes, in even is back to China. entertainment yes coming a not China

a as small relates area, but not so the flavor the in from same up. more standstill. have a Commerce - to coming open it just orders starting Greg move is near recovery. just it’s starting right horizon region trying Germany, now, have The the in relatively to around to positive countries give right of to back. ahead are trends as now in fact We're factories Japan as time to that for it's the but In that mentioned company, less a seeing are part we So you all are activity.

just Latin right area and now, part totally are so that So improving Mexico now. barely and would then be that back to coming shutdown I world the nothing seems Brazil down as of just on going in well. say in that America And right

So it's vary Europe is and situation probably China. are where a right really of that areas it one to the little a addition and in region does active more by the U.S. now

Operator

from with Palm your Greg is the with question. proceed question of next Our Craig-Hallum. line Please

Unidentified Analyst

[indiscernible] Greg David. Palm. guys. This Danny Hi is welcome to for and Congratulations

David Wilson

you, Thank Danny.

Unidentified Analyst

looking or opening you getting Yes, the on or kind the are seeing seeing economy up we're that? for technologies pandemic, this smart back interest start I at anything any planning or guess of and as of like past sensor automation increased

Richard Fleming

our automation $X We Right that new that been interest. division million division booking until area we we in the are about with for about month a we've up excited very now new the lately are seeing prospects and formed.

to pretty a that about So good the trends going COVID new automation the particularly area. opportunities warehouse feel and economy be the post fact probably in mega we in particularly the

as well products. new good as pretty want that consider to area some see as we for to So growth future reasons our

yes. considerations A of safety that is by is of answer the safety. health health the toward So making area sure adds automation that a and lot lot way and and the [indiscernible] in facilities to

Unidentified Analyst

one, unusual kind this any competitive a of lot landscape update then in market? I just and makes guess of given Yes on the the time sense.

Gregory Rustowicz

take I'll that Yes, so one Danny.

the in I actions where They they clearly you a and know large So and companies. the both by in things. very public dramatic COVID, websites a have Finland have both weeks where have main taken off. has at have different force work short of competition our people international take our Konecranes both work look we move been they case to can but affected competitors, of they're lay

their and the say probably their So but I more think to everybody information. levels, that get sizing we websites a could take look right on volume I is businesses would

Unidentified Analyst

me, Right, thanks that's from it guys.

Richard Fleming

Danny. Thanks

Operator

floor for Thank comments. Instructions] I closing you you. [Operator will Thank turn this the time, you. back At to any

Richard Fleming

Thank that meantime we us forward We fiscal for the our quarter we year In you. thank that look and first reporting have and to and be at clarity safe XXXX outlook stay time. the you. greater hope economic thank well in regarding you today. of Well July joining

Operator

you This conclude will conference. everyone. Thank today's

lines You at may your your participation. you time. disconnect Thank for this

Columbus McKinnon (CMCO) 27 May 202020 Q4 Earnings call transcript