CMCO - Earnings call transcript Q1 2021 | Columbus McKinnon Corporation

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Operator

Greetings, and welcome to the Columbus McKinnon Corporation First Quarter Fiscal Year 2021 Financial Results Conference Call. At this time, all participants are in 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 conference over to your host, Deborah Pawlowski, Investor Relations. ma’am. ahead, go Please

Deborah Pawlowski

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

are our me and with David President our Here and Greg Rustowicz, Chief Officer. Financial Wilson, CEO;

a have which slides not, that as results, you this XXXX released access the should for first release website, quarter copy our You the we be www.columbusmckinnon.com. After market. [Operator presentation, the the our turn fiscal before formal will morning can you’ll accompany financial will the line first deck, If well review in at of our opening the statement. we to the safe today Q&A. will X If Instructions] harbor conversation Slide I as

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

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

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

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

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

David Wilson

together. first call I’m at to weeks also now Buffalo. been McKinnon, and anticipate today of unprecedented It’s for eight completed quarantine state agility for I been what residents official journey me restriction that a exciting an the our Deb. to I’ve I’m during officially I join period, and busy very fast-paced responsiveness you and rewarding We’ve York Thanks, and team earnings happy report will my be the family Columbus finally. and these of management are my glad New with times. and impressed

commitment with operating to their operating our sustainable and team in processes and this not drive potential to been has our results members visit deal business the onboarding have team, Columbus to shareholders. we travel product continue locations of I potential challenge, enabled I interact to and can opportunity both system a and also McKinnon our number to of believe I strengthen marketing, development able While really been supporting Technology product person. organic me relationships and sites, as building growth corporate our our a has begin of been see improvement. the development. somewhat environment deliver have and meet person. actively meet with good a key team manufacturing in as well our and of to with great strategic I new where the see able advancing passion the by energy and customers driving I’ve in enjoyed I enterprise management, here. to

revenue even to past earnings, improvements have the quick model adapt generate over environment. demonstrated company’s quarter implemented as cash actions evolving effectiveness been and in the Our the goal our positive down a first operating taken business cash of income the generation, We also protect achieved rapidly and validated results year-over-year. was and XX% and years of the few to

had gross favorably achieved the In the XXXX business margins with the the fact, of this to gross is our we margin which prior XX.X% recession. compares believe peak quarter, trough,

million. million at were we and income $X.X GAAP with of of income $X level positive operating income operating the noted, adjusted As operating

the $X.X McKinnon amount Columbus million. We through of and cash McKinnon operating given free cash generated a Today, operations successfully Columbus cycles, million $X.X we of a system that flow has sheet in healthy had capital improved has And in cash capability. dry balance from our all has E-PAS, generated quarter. further business powder. prioritized While expenditures, fair

net ratio we our as offensive was times be Our debt over Blueprint Growth of of just have we and for recover $XXX our to on III positions us the and Phase X.X million. This strategy. advance leverage as liquidity well markets

progress I’ll to X, update system have business If turn leveraging you our will the by made we you to operating Slide on improve our performance.

actions COVID-XX E-PAS pandemic. related our the required needed and us to This to cadence visibility dramatic define provided and rigor in cash-generation positive the to income goals. enabled operating and address implement decline demand Our the the to achieve

In situation indirect accelerated and excellence reduce addition, the plans of on to we earnings operational and improve costs the overhead the capitalized structurally power organization.

and by XXXX, costs $XX of the Process annualized fiscal For expect reduce we facility this $X to consolidations. approximately to XX/XX million. is related About million

manufacturing to XX from years We ago. of facilities three down now just total are a XX

Our savings. overhead resulting actions factory $X structural million cost SG&A indirect our in also have and approximately created changes in

behind we proactively we While is to trough us, continue the believe costs. manage our

improved about XXX furloughed recalled quarter, throughout the associates. demand As we

were XXX at June. about still team there end of However, furloughed our the members of

more our now detail me turn over Greg Let financial it on to provide to results.

Gregory Rustowicz

to million globally revenue. again. top-end to for approximately of U.S. finished quarter net expected many previous by monthly surprise were to a we severely This Slide Good morning, open in quarter, XXXX our as X, million, $XXX quarter million. throughout COVID-XX. at the impacted first guidance everyone. $XXX.X $XXX not up was the Demand fiscal was David. rates you, fourth us the improved Thank sales the On we as Order countries of began revenue and

by million, Looking or $XX volume sales at XX.X%. our bridge, declined

positive pricing we was All was X. as X.X%. April down, pricing year-over-year price did to realize volume by prior we implemented While improved saw improvement this

reduced a $X and currency by our million. Foreign was sales modest headwind

color me little region. Let sales on provide a by

down by partially offset in price was increases XX% For down was down XX%, Canada, XX% offset volume in sales was decline APAC and of volume increases partially by the U.S., the America, first was price quarter, of we U.S. X.X%. XX.X%. X.X%. Sales EMEA. which XX% in the Outside in by just Latin saw sales volume of XX% in This

Turning by order were short project-based pattern different to the of our overall, orders XX.X%. for year-over-year impact down and backlog, declines. Adjusted cycle and orders currency, businesses both foreign saw

Our business short XX%. was down cycle down business year-over-year almost sequentially, our and project and was XX%,

in Our percentages been the has have Order orders. May short and down, large that to rates high improve immediate as into quoted cycle an April July. from previously distribution continued business projects primarily and shutting sequentially degree turned countries This trend business began single-digit when saw accelerated states our a in many in sells and June were project through did orders whereas decline trough.

fiscal unchanged was quarter, our second into essentially million. about $XXX Going backlog at

effects going the we cautious there being and believe current recovery, of the and We forward. continually much that is and of the inventory for are While COVID-XX uncertainty orders indicators. we channel is we very will believe as see Yet, balanced the channel in globally sales the shape the macroeconomic monitor sequential demand on in we improvement follow levels.

are are improves. All factories of demand we our today, as production back up flexing operating and

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

than realignment in margin an adjusted and believe XXXX the into mentioned, adjusted as business more costs factory To of Great put costs, quarter gross for David our in we perspective, prior XX.X%. to XX.X%. of achieved was previously the peak quarter. gross effects focus our on margin X, an XX.X% and eliminating this responsiveness closure ever. gross was margin important and environment, basis, the On we customer to On continue will this Slide this in delivery, on-time We be the Recession

XX/XX our overhead strategic contributed We in closures. reductions mix benefited and indirect and initiatives. $X.X have excellence XX/XX of quarter through gross clearly factory improved and from The our of profit Process expansion have operational million pricing, businesses Process the

the Let’s now quarter’s gross review bridge. profit

one-time gross driven the impact the year. million million We inflation our square Besides of also for did prior in footprint million foot we finished less were was costs lower in the we consolidation material down facility profit at lower closures. from quarter product. factory as experienced in from a We Tariffs mentioned, than Ohio, volumes. Chinese compared France. quarter. $X.X we million $XX.X the see pricing, July, by gross in First sales as cost expansion was of footprint a and year incurred up no XX,XXX incremental $XX.X This completed profit prior imported previously which to $XX consolidation

$XXX,XXX. profit Foreign net other changes, negative by was reduced $X.X million. Productivity, gross translation of currency cost

we While demand, we took factory quarter. to significant costs fully action to our flex weren’t fixed able our all the in of absorb workforce meet to

as XX.X% $X.X million in several due previous $XX.X in was quarter, $X.X or factors. which partially accruals RSG&A to $X was sales. approximately headcount, by bonus David limited costs RSG&A well of the million to than offset no cost the X, the million RSG&A higher joining Slide in to our RSG&A related handful travel was This related lower million, additional reduction accounts. year. as lower was of debt bad accruals. The and lowered company, on specific $X.X of We shown million included As costs a by

benefited of approximately We translation $XXX,XXX. also FX from

COVID-XX our this quick taken quarter. as action we pandemic, current RSG&A the costs have decisive With reduce and to evidenced

million. all the monitor to are is continue Taking add implemented of QX fiscal cost structural of responsibly we right. forecasting back this account, some will XXXX these costs of FY changes $XX.X into We the levels including in RSG&A time when approximately demand and QX, will

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

XX/XX to Process recession. model strategy, enable and in operational Growth and better business perform initiatives, for specifically Blueprint our Our us excellence improved our a have and significant

non-cash plan to $XX this termination benefit expect to settlement that of a terminate strategy derisk million would like charge additional to I per year, will to This paid. pension pension surplus pension U.S. costs our EPS includes defined should quarter, be and of also of can for $X.XX current share recorded Slide per GAAP process earnings per $X.XX quarter impact share pension are to you share. share $X.XX. a we per factory closure the as $X.XX, impacted per in loss on $X.XX the terminating costs Adjusted of million, of of $X.X in during I position million $X.XX was we we a all This plans. part compared an for this final in $XX realignment was $X GAAP X, settlement is also plans. our million diluted after As or are million by $X plan. note expenses the of expense with one of note this to the our previous related decrease that about see diluted share. business

We expect as of fiscal be our COVID-XX. XXXX’s full-year to to result XX%. on EBITDA XX% On trailing XX-month to XX, basis a Slide adjusted approximately XX.X% tax rate margin declined a

return X.X%. on invested declined to capital Our also

We recovery shape of timing to from XX% continuing this ROIC margins are for by objective the impacted will the target the mid-teens, be of the achievement but EBITDA in and COVID-XX. the curve

XX, million. throughout cash the business me times McKinnon We one Slide the increase which many year-over-year rapid for $X.X was Columbus to say activities to a to is actions of heard its cycle. of and was cash. Net $XX.X that operating you cash Moving hallmarks from generate ability the have took quarter million, of preserve generate

contributed capital improvement. working cash XX.X%, was sales which free of as percent to Our flow a our

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

maintaining are our CapEx guidance year the at year spend of conditions. will economic reassess based and first-half million the the CapEx the second-half We for of on for $X our

Slide to XX. Turning

debt end million. approximately net approximately quarter debt the was total our the $XXX $XXX was million, of Our at and

for of net to pay QX We principal minimum amount debt total fiscal quarterly repaid in same of now $X.X and remainder XX%. net the plan XXXX. Our approximately payments the million is capitalization required to the

the have and excellent net pandemic. X.X flexibility which have delevering provides to of to achieved leverage progress debt made current We us weather times, adjusted ratio financial EBITDA the sufficient

against borrowings is which our is means We financial revolver. a structure, covenant-light, if covenant tested we have flexible only our capital outstanding have which

$XX in quarter, expect the on October. early working for we repay purposes to million and in capital While our draw did liquidity revolver this we borrowing

and XX, David. liquidity at it to will over back remains to Finally, over million. turn Slide strong $XXX Please turn I

David Wilson

improved but Thanks, quarter Greg. through XX% XX% and in Orders quarter first the year-over-year July. encouragingly dropped sequentially, into the

through In by projects were July business. our fact, Friday, XX% in driven up orders last

Our in monthly up orders cycle short mid-teens. were the

remain quarter second about second flow revenue environment. XX% would quarter of quarter. million XX% from on our be focused down and We trailing from the this this to expectation cash the up At Our about the is $XXX income last and the for generating range year’s operating first to in $XXX depressed positive for be about midpoint year million. guidance, in of revenue

respond Importantly, sequentially say at end positively both to customers we’re though, there would while I is improvement cautious. to this prepared and conditions, market negatively. remain our time, markets, in

moving running less me is full status American in in between We our additional as the markets. the Let North at than order automotive Coast help improved, projects but on region workstations market few capacity. within life. utility demand. sufficient opportunities market manufacturers to components provide back in to lifting see look of system, is with ways still came as ProPath hurricane has employees. The capacity should for Gulf touch season at also Southeast this to market a The and provide improving distance The

workstation across solution a be the that and pandemic attract industries. could in to the multiple In stem elimination by a environments crowds efforts impacted spread. heavily fact, large its variety of of ProPath and venues our remains Entertainment great

fixed pick installation Projects in about have to oil expected gas postponed. While Asia we trade projects of To with to our Middle vertical advancing, been the during X% this East concerts and market encouraged and our have and business seen context, conditions. some venue this construction represents quarter, and things up continuing Commercial normal traveling, in shows activity. keep are forward. is move we’re

fiscal the you well. solid in But first conditions, As increase in were million activity business despite orders $X to orders. remained know, quarter, quarter nearly be up an Quote lumpy. XX% as orders over the COVID-XX rail tend XXXX’s

restrictions, given sum, in to we closings, of Although In and impacted due sales have installations. we several markets are preventing border seeing travel been improvements deliveries the serve.

our sheet earlier, noted balance As is strong.

and our and excited current that the levels. among are at The we we the for Blueprint the must has developing processes, We of and strategy continue includes applications others. a strategy. refinements focusing of maintaining tools I’m strategy effective lean Growth with on This our XX/XX, growth fortify operating established development E-PAS. for capital foundation are our business to dividend advancements the system, about manufacturing

to We innovation. also our encourage drive need organization and talent develop within to

opportunities growth Beyond strengths position, these reinforcements the our competitive improve need our customers advance capture to our market we Phase and capabilities understand and with we in III that will can clear our advantages. provide where

believe business not yet will with focused on a uncover operationally a and we more are purpose-driven We culture. becoming I potential market-led, customer-centric have excellent this realized.

you all of I the We questions. look forward greater future. are fronts, open with can progressing updating specificity Operator, in on and for to now these we the line

Operator

session. this Thank question-and-answer question you. time, first [Operator Please The is At Howe, conducting we Chris ahead, sir. Instructions] be from go Research. will a Barrington

Chris Howe

Greg Deb. Good David, morning, and

David Wilson

Chris, Hey, good morning.

Gregory Rustowicz

Chris. Hi,

Chris Howe

Hi.

the seeing You you’re some and as we single-digit May, in high look they’re there. And how trending mentioned into July, June. growth orders

margin quarter? you a On the comment gross looked monthly in gross can on the sequentially basis line, how margin on

David Wilson

better. say would leverage that ask response? specific slightly I’ll Chris, general he we comments my that that’s don’t he’d to But margin anticipate increase, we would generally we I but comment would if performance. add, to has as like start on gross volumes Greg

Gregory Rustowicz

And there made that get on certain quarter. are only Yes. the adjustments

mean gross on which normally take what will you month-by-month So that levels the a had. further, at little basis. tricky to production it’s to down from the in more expecting going the will benefit would plant are footprint look we margin on our consolidations, less forward, be a consolidations But we contrary, than But we inventory expect. would that improvement there

we slight expect, to in some margins. improvement I net-net, guess, forward So would see gross going marginal,

Chris Howe

Great. follow-up question. And my one

II upside that the perhaps could backlog fiscal this in million opportunities bit. in demand realized the little a The or potential XXXX, more further comment opportunities of it you in some for savings continues, fiscal maybe the on out normalizes? be as environment some year year on additional are savings or can XXXX touched Phase $XX earlier perhaps You as innings

David Wilson

Chris. Sure,

need II cost on me for product do we further And can And to will, opportunities XX/XX. initiatives, of and we’re as overhead Blueprint Greg through well believe and comment you our in Let to our operating at further. improvements we so our work plant ask rates start if really as there’s innings, line we look I’ll Phase then forth. as We mid realize indirect the structure, that of Growth. rationalization rationalization,

to year terms now So see. advance over us to for this has I if further improvement remainder and early there’s do comments what into both, is able he in Greg believe I’m views there ask I’ll make? year. been continue like you’d that I’ve room that of And of And the next to to encouraged by

Gregory Rustowicz

Yes.

we was million and specifically X, which So, Chris, year it to to consolidation. the footprint this million $X of Slide related in represents some consolidations, expect the $X-plus QX, Chinese specific our factory so realized of

that slightly So going lot forecast next It’s because is the a benefit $X-plus volume quarters, to over million three to of $X in XX/XX that’s cases. difficult and of very what for be the is million. it dependent

volumes back, expect into $X that on basis. what So to rate in the the see number obviously will we would The is to extent, play. plus million a run come come

If you on what run to basis rate that’s the next will we three by over see divide expect that four, a quarters.

David Wilson

our I Chris, is David add at time just the would previously the remain last again. during targets add year. the – communicated levels And established I performance just would we Investor that EBITDA over Day we for this

operating or to margins the better. and So we’re Growth system achieve of still will outcome. is us that elements believe that the targeting for Blueprint And business we given XX% impacted although timing enable execution EBITDA our COVID-XX, our

Chris Howe

very hop queue. helpful. everyone. now. in have That’s Great. Thanks, back the for That’s all I’ll I

David Wilson

Great. you, Chris. Thank

Operator

Mike is go Please sir. ahead, Colliers The next question Securities. Shlisky, from

Michael Shlisky

Good morning, everybody.

David Wilson

Good morning, Mike.

Gregory Rustowicz

Good morning.

Michael Shlisky

guess, to, the there, during pandemic? deals of M&A think view you touched and given come there relatively and in And give the is as think are kind out the M&A of off two B, know you that to want what form of on to been a sense a a lot of somewhat low belt there months asking to comments. I us do A, right past. under deal I you that on based get during targets your that – on maybe your some here? with in valuation near-term I you you any And the a the good the about I are you can about had reasonable So now start briefly available leverage lot even know, is done you’ve

David Wilson

Thank that, to evaluate say what – move that continuing Yes, companies is our we sure, you. I Mike. are would I through funnel.

good deal deals source stream corporate is markets fiscal have down a evaluating actively second calendar first We and are our first to developing. how and know process quarter quarter. volume and value to the function – a – We development we in and the have paying first that’s attention calendar –

disciplined we that the we’ll We in opportunities are continue we options evaluate as being evaluate going be to at look way and disciplined forward. and those

also that that relates both strategy now leadership making target, and actions M&A. and We’re through on areas a process we making through our as attractive we’re further strategic to are of strategy. focused like sure that that the team right to areas sure to going going us most a we’re refining specific really it our we’re as And clarify organically

we’re continue evaluate have opportunities encouraged that to the positioned environment for very And might also specifics that funnel, that. valuations there well we’re be sheet, healthy in will we’re as that and do so But we attractive. you prepared more I even attractive we’re about a talk encouraged where more believe to to and and we’ll an balance us, be we’ll

Michael Shlisky

about be the or a little termination are from Is cash previous to of pension even color. Or costs to perspective to a volatile also great U.S. about forward? something you That’s going great. cost the the the wanted plan, less equal pension accruals old plan. Okay, there of ask separately the somewhat I a maybe everything time? contributions and costs make that or over think

Gregory Rustowicz

Yes.

are pension rates. in plans to clearly, changes subject So interest highly

plan, one pension and plans, of it’s position. we’re in So U.S. in X particular an this overfunded

moved perspective assets overfunded a So strategy, termination cash of the couple of cash most position. it given the with the prior LDI from into we haven’t to And funding its years. our been for been have last

I off plans, largest So other net table takes it. to on German to think should terminate in immaterial But the and risk income with this have being pension income pension Stahl. it unfunded a very when the going be go-forward and for And about coming basis. purposes we do and one from clearly, the have plans two we at came back U.S. it that some our to us able plans, three cash impact result on will also it’s will company leave operating the that a utilize

Michael Shlisky

so a to going quarter-by-quarter basis, Okay. be size of just But not plant? the change from perspective, cost on the given – like a much there’s

David Wilson

Correct.

Michael Shlisky

Okay, in so back great. Ill Greg, guys. much. Thanks hoop queue.

Gregory Rustowicz

Perfect. Mike. Thanks,

Operator

Walter Please Liptak, Seaport. ahead, We have a question go sir. from

Walter Liptak

guys. …yes wanted ask from the… here. about Thanks. Hi, I to

David Wilson

Hi.

Walter Liptak

July Hi. to July. single thought the ask you heard I I comments high about or mid-teens, about wanted up was that digit? I say was it

Gregory Rustowicz

Yes.

majority So are order June. the of projects sequentially up XX% projects July number. total, in rates that drove includes total that But from in that’s and overall

cycle sequentially, short June through that XX% rates are last order versus was Our Friday. and up

Walter Liptak

thanks color on Greg. Okay, for Yes, the that.

you – $XXX Because are you the rate you so $XXX run $XXX the take million, high-end? would million $XXX to million looks the closer high-end, and million, right what’s the low-end to difference the now. the like the where might the range it between So

question, So should in seasonality August? is I there? Europe some thinking the What quarter we maybe the guess, be in in there about

Gregory Rustowicz

Yes.

it’s I think Walt, – Greg.

thinking about it you’re right. exactly So

to doing then to to related in that It’s part? is what too, right. factor, August this beaches, off big But are typical expect to the is where August for August. exactly unknown going the or the going off to see Europe. in the of you’re in a and most So August, other not – to is to going businesses vacation open also So are be going slower are Europe on where And remain we different somewhat are sort to of clearly, the a people projects. people off be really

especially it oil July, But gas our and been in over in project projects, so far business Stahl lumpy in XX% or to far it’s has up business had that’s sector. the again, a And we’ve so strong business once close XX% So far with the we’ve and very of July. that of on $XX backlog, And current at And our about we the backlog million that’s shipping. with when a quarter. are got is business, delivery available for when lot look depends – also quotes received. project beyond for you

the got about at half the covered. we’ve So quarter of – high-end,

Walter Liptak

cycle Okay. Got up Europe, it. the mid In too? in short digits, business that single was

Gregory Rustowicz

overall Yes, it cycle to was Yes. comparable short the numbers that David quoted.

Walter Liptak

Okay. just first Great, about in get incremental a recovery to we to getting leverage your and thanks once guess, talk of for take it the to the next margins do you the markets, do the think kind quarter. you’ll business? step, I in what start

Gregory Rustowicz

Yes.

we which operational considered. about extremely same, think XX/XX, had in positive fiscal excellence implemented our all operating things the as revenue, year, extremely in And the had income side XXXX, I and typically was we on a leverage positive initiatives, last in So decline we’ve strong. actually

couple changes of would have other in the significantly higher some I but made with improve front it’s the years, business, the me, normally, So say, But I last level. XX% to the and XX% have we numbers changes been don’t the of level. the than of consolidation in with footprint

Walter Liptak

Okay.

David Wilson

through look Blueprint. we advance to and going position as to our activities opportunities the realize associated can continue, with at mentioned, II We’re benefits we cost Phase to

to continue as volume and our assets. I structure to leverage going attractive, highlighted, comes think, we’re look Greg opportunities should our as the at So better incrementals back to be and

Walter Liptak

Okay.

guys. thanks, Okay,

Operator

Palm, is from Greg Please ahead, question Craig-Hallum. next sir. go The

Gregory Palm

mean business, this know, guess, mean, at how there’s commentary earlier sort just Yes. some don’t to have you XX% Thanks. piggyback guess, Good levels involved think of relates any June. sort in orders restocking I increase inventory channel? demand – I morning. that? I do you I sense of to since some are the And real in I levels. about whether inventory I or in short said cycle that’s whether the of, some whether

David Wilson

Yes.

the our partners, we’ve there think a destocking conversations stock say, some right I with reductions fiscal now. of and in had beginning Greg, we last our based or channel last calendar channel that even into on year of that balanced some maybe it’s of year this know I’d year levels in was pretty occurred quarter quarter the first and quarter the fourth third year.

subsequent we In think conversations talk that some balanced. or this back to earlier that as given that a a stocking But with there few stock relatively COVID then And related conversations level potentially of are weeks. resurgence caution orders. of was so levels it suggested increasing to level customers, and of a dates follow-up

Greg there’s And seeing think position so, I And balanced. think levels we’re stocking where in that. we demand, are the that I’ll that and to relatively we’re wants real add a ask if anything he to

Gregory Rustowicz

No.

well. I way answered the I would as it have think, David, answered it

Gregory Palm

prioritizing launch? level Okay, on automation, going investments the at you light interest guess, good. in now And to right are everything And started what’s the the you’ve how some given of everything going moment, for I of newer on? solutions either or introduced

David Wilson

Yes.

portion focused our automation on the business. very We’re of developing

We some have introduced nice products. new

you I probably product. relative to saw release our the think Intelli-Lift

bring in relative the our very markets to We can interest seeing space. to are active bear we in what

that So of rapidly. portion customers seeing business grow we’re a the having conversations with active number and of we’re

focused it future of also on our development. strategic as We’re very part

So it’s think an We are area that there attracted macro that to. of the we’re developments megatrends business around space. or that

COVID-XX Given think workstation ProPath our between activity around pretty the are that and areas going cranes business for more could to with work need we addition workers, be separation in could forward. attractive that the do for we

Gregory Palm

all for Thanks forward. color. the going luck of Best Okay.

David Wilson

my sorry, Oh, Paul. Thanks, apologies. appreciated. Much Greg,

Operator

go Sidoti. Mondillo, from is The ahead, next Joe sir. question Please

Joseph Mondillo

I believe, lot a lot – including of portion of the Hi, temporary the question guys, wondering cost already morning. been curious been not tied that year, back how I’m permanent COVID the little asked. you’ve – to if a a good through in companies, of call. temporary ask shutdown structural went if to in on you addition revenue. of But I that that’s what a I relatively maybe on there’s part apologize I And missed about cuts related sort yourself, that was later second any costs fixed cost come the quarter. think in cuts economy reduced focusing the were I to

that curious how affects Just on margins?

David Wilson

sure. Yes,

to to I’ll we will, Let the at it’s were had #X, then if And furloughed. of cost our peak, some of savings and And the a period. activity well. slide XXX the actions, period had that quarter, estimates had some deck that that you the we on XXX were me We, people then in we and you back we And Greg slide severance full-year in that recalled that finish. of a XXX quarter, furloughed, people XXX start, had at also we see of that the called And the ask at we what in those. of highlights spoke as remainder of that And then $XX can approximately end is on the XXX highlighted had furlough Slide annualized million. severances. end the our

the And bring those adjusting it come volumes being to indirect manufacturing initiatives excellence And those have as we And need we’ll so back opportunity we’re we overhead. areas, we’re for back. in that based level to as and to opportunities be operational more on in resources accelerating But the adjusting levels. and ramp be volumes. up, mindful of with relates also very we our particularly our efficient place

We’ve that to travel back. think and speaks costs very, about very come also we areas I that have may spending. where been some So other diligent

returns. is, to invest performance, level develop to I most we And been higher a of as we’d all to return on spend, see get where say so focused discretionary and of would levels. can more that we responsible starting areas we and we’ve in money really And markets to what good reduced look things

see And further. that some so to to start I’ll ask And Greg I of comment back. think come you’ll

Gregory Rustowicz

last on generate and call, earnings about about that earnings services, million management cost basically we annually recall XXX(k) things reductions, or $X quarter. bonus reduction other million of professional protect might flow. lowering included talked $XX our a you the initiatives Joe, the base T&E, about cost by like free to and Sure. accruals a cadre headcount team, matches for cash That

that had highlighted we back structurally out those the new road. on will So highlighting $X what that was down that’s not the reductions of I the we get is added that X. we’ve that the hubs back time, that at cost Slide million in back, we timeframe get of said David May taken cost and will But most update added think –

Joseph Mondillo

Okay, do I calling expect – effect over last if – that perfect. that fall. dollar, is think, continues the you any maybe the drastic months, to And would several movement And remind can how material, to us U.S. benefit people material been are affected? pretty it’s and there a business you because the then your in

affects so how I’m business? And wondering your just that

Gregory Rustowicz

Sure.

currency largest Canadian the know, we’re we you exposure have the as our single and and sensitive probably So the to sterling That’s that highly then dollar. to secondarily euro.

positive with $XXX so And $XXX of today, that’s million million, revenue year-over-year expect a on $X.X current currency million to of we about rates QX. in our a as will guidance of tailwind be foreign basis, that embedded in and

Joseph Mondillo

you right? And a exports, that do at to is if dollars don’t possibility would point some – any decline? And the continues be there

Gregory Rustowicz

Yes.

product of over million ship I in a $XX in year we, total, So mean, times. normal intercompany,

to Europe, China to So that’s China to U.S. from Mexico China, U.S., to product Europe. the going

I seeing any waves of your lastly, with clearly, these our regarding to we’re to Q Okay. with of flows. your stronger, we company effect – we are any certainly with continue much chain? continue makes specifically more that So – material that this supply competitive. different some any to But waves, And Or to business Mondillo] COVID or mean if euro have - anything get international then effect and outbreaks, Joseph I an these just mean, Mexico second some you U.S.-manufactured were regard lots product maybe in and the COVID? have of and to were of

David Wilson

Yes.

do are currently the taking And total all remains business we around totaling top operating the of tools of tied then have relates employees We’re world associates global tracing would our And report to the can. our addition affected happy six are requirements. we’re monitor locations had be as essential of really we that’s priority. been we eight positive and and as businesses we and approach today. six closely to to safety cases in to X,XXX and and those I’m able all our the obviously population adjust And the a have within have systems pleased that. the that of it quickly we’ve quarantined of of And where as been employees. been to have associates tracing any to contact that respond And then as that accordingly. continuing developments contact operating that with our

Joseph Mondillo

Okay. supply issues that you’re chain And any are seeing? at material all that

David Wilson

as we monitor planning, work been delivery any And sourcing, of as we issues to that able cetera. Yes, Sure. impactful that encountered through or et alternative chain supply closely haven’t via careful we right well. very haven’t now,

Gregory Rustowicz

logistics Yes. And either. from no that perspective a also include would logistics, issues

Joseph Mondillo

Okay.

David Wilson

try Yes. answer. where fortunate very in anything now. and to And we to as the have current can. right actively impactful don’t that that And in that’s be But we’ve obviously, as we been be we position we’re responsive a that’s monitor

Joseph Mondillo

I appreciate That’s right. a lot. it All Thanks me. it. Thanks. from

David Wilson

you. Thanks, Joe. Great. Thank

Operator

a CJS question Tanwanteng, have Jon We Securities. from

Jonathan Tanwanteng

nice a guys. Hey, good quarter. morning, Congrats on

First question from me.

the XX/XX going And already. have innings how of terms gas in David, a you you were in much of But of know really low-hanging from moderate forward that lot left still we made savings of a I realized is think, recovery forward, a comment, Process. that just also plan much in wondering I You’ve the look you cost more assuming the tank? middle the some is I there obviously how cost in more fruit as savings? volume-dependent. was

David Wilson

And we’re the a address, low-hanging I addressed more much to and Yes. bit the I more has say little fruit that say into been but wouldn’t I that’s challenging would complex. mean, work a little refined. of

on. we’re looking at accelerating And progress So hard product that it’s for working an and something the towards line remains business. opportunity simplification

of and have little In look Asia. addition, think, rationalization far, I those a U.S. in efforts been bit our as concentrated at you most the in thus

review logically, opportunities there footprint. to And further to that would entire global be our so as relates it

those the taken. little next And So been work that’s there have actions we more the as phase of I that moving And some early-stage we’re I is, into look a think – opportunities. but of indicated, believe middle innings. we’re continue in runway. to I at that more sophisticated than

Jonathan Tanwanteng

you’ve question And taking a basis? a most your negative? surprises now. going Okay. Got of what’s seen for time [indiscernible] positive you, the it. day-to-day What’s a and of the couple guess, And I for biggest strategically into then just on months high-level

David Wilson

as been to really really then then and Yes. we’re making of I as key getting mean, is the curve. working you safety that not towards to is the do so cost, focus imagine, our focused now priorities period, we to to we’re to as what trying cash around the because with people and really of priorities to really my execute our advancing, on as the know are then what focused imagine, And relative as on business, actions prioritizing beginning focusing we’re have going right team can well next. to we that climb much do execution going to solidly. And what what’s on versus And you’d sure turn do. learning

what be strategic our – plan strategic second specific our quarter the in second So focusing that the quarter. finalize as and our work elements of on plan will we fiscal

on emphasis our along and of And obviously, employees, lot the our way, working a building with shareholders on our Board. building relationships that. our with putting with I’m customers, So with relationships,

like all plan I’ve progress fronts. together that, doing say XXX-day able I we’re with feel work we’re I’m as now. we’re make good to been as with halfway happy put to making what on and that that about the pleased a I’m so And progress through

leadership we that I’d performance marketplace. our the as we both a I have the I’m the opportunities pleased we enterprise. as in that standpoint, from we work that lot can have a pursue within we as control well think internally, a And of improvement opportunities self-help and on, that’s have the can within surprises, I’m So, just that team. capabilities organization pleased an that terms the with say in and with

pretty excited in had prepared work strategic on of phase as round for next III the very we’re our and that we Blueprint that So about focused activity strategy. Growth advance to I’m

terms engaged. yet. very that’s been travel would that mean, nothing and has out around very to of see note. disappointed In haven’t technology surprises, in to able team our supportive just that been I and But highly of I’m I I everything COVID-XX, get location constraints has the negative given every speak portfolio to to been just

as and I’m So I it’s – my looking a been opening eight. comments, forward next in really busy eight said the weeks to a

Jonathan Tanwanteng

Got it. Thanks, Dave.

David Wilson

Jon. Thanks,

Operator

end and Ladies reached remarks. I’d we’ve call to for go turn the the ahead, of question-and-answer David to Wilson over And Please closing back session. the like gentlemen, sir.

David Wilson

I very these we calls organization to they’ve forward want and to my the thank strategy. of Chairman, today. Fleming, CEO the onset first my moment unprecedented advance a supported at us for me also interim Thank their leadership our McKinnon are as closing, transition. you, resilience crisis look be our In throughout Rick led and for updating McKinnon, to quarter. making future the Great. much. most COVID-XX to here the entire you we everyone, like Columbus I’d Thank through take who progress at and I’m excited joining recognize through times and acknowledge Columbus of regarding brief the I to organization you the and team on as

Operator

This concludes today’s conference.

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

Columbus McKinnon (CMCO) 1 Aug 202021 Q1 Earnings call transcript