CMCO - Earnings call transcript Q1 2025 | Columbus McKinnon Corporation

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Operator

Good morning, and welcome to Columbus McKinnon First Quarter Fiscal 2025 Earnings Conference Call. My name is Renju, and I will be your conference operator today.

As a reminder, this call is being recorded. I would now like to turn the conference over to Kristy Moser, Vice President of Investor Relations.

Kristine Moser

Thank you. Good morning, and welcome, everyone, to Columbus McKinnon's First Quarter Fiscal '25 Earnings Conference Call. presentation at for investors.cmco.com. and Investor on release website Relations earnings are download available our The

Greg Financial On David and and and and operating Wilson, call Greg our our the with through the President Chief me will walk performance Executive our moment, for In a Officer. today you are Rustowicz, David Chief financial Officer; quarter.

please statement that we safe harbor on Before X. you we have remind begin let me our Slide remarks, our

in future statements to by call, statements a management are uncertainties may plans, and you financial During and our measures. subject risks results refer the other events results course materially beliefs forward-looking current of non-GAAP this to these are make not performance that that to to regards expectations. also These of certain differ guarantees contemplated number the forward-looking for and to like management cause and statements. I'd factors will remind actual and from events can and

financial directly remarks Please see the information. You can David. filings by call Exchange the Commission. and Securities Exchange find release GAAP at and turn and question-and-answer Relations prepared I'll followed with more reconciliations the most Commission that, Securities the its our Today's of comparable Investor website for will company's our measures be with filings and the a earnings on session. With to over

David Wilson

we record our McKinnon XX% was XXX quarter sales Areas healthy, sales range, solid precision quarter and second top digits. Adjusted of a hard are guidance delivered of guidance absorbed fiscal X,XXX remained by margin regional up conveyance execution results as X% of Columbus experiencing are quarterly and the and as year-over-year underpinned EPS a which and and the everyone. highest to our And improvement costs we the vertical as delivered McKinnon first members history of initiatives. These by we up and respectively. continued environment commercial achieving in advance by and was X%, a Short-cycle business in we megatrends. included remained growth, points partner million which strategic dynamic XX%, expanded the markets at focused Thank and $X.XX, of experience result related mid-single initiatives gross are launching $X.X Europe to Columbus you, XX/XX. work project in unique team and margin basis commercial with lifting, EBITDA which strength from were benefiting even aligned company customer that Americas our that at morning, range. the adjusted and leverage secular growth and to Kristy, adjusted macroeconomic the year, the of performance end conferences and on XX.X% good was navigate our to start midpoint

debt to and normal actions capacity adding in generating accelerating repayment. are are our seasonality cash reinvest We with growth framework. growing, These

wins X%, growth saw we year across in business, automation a we period. execute strong have a softness We position scale enhance our space. up and our delivered compounding lapping our solutions of offering advantage electrification by further over become We prior our most conveyance driven X. that and multiple increasing exception new with curated for Slide crane We scale believe the of Precision order the as with carefully customers. handling will where our motion for levers were orders in mid-single-digit leader as material are business, more areas to intelligent comparable to a drive time. Advancing strategy a customer

timing and from the experience quarter, orders project share funnel X% business, the order orders our of new our remains down double that business, the gains quarter, by up initiatives. healthy digits short-cycle project focus, the customer and across up at For diversification our both by categories resulting the On remains in week, the orders were in year-over-year Short-cycle our end in were project order remainder and just driven reflecting business. driven X% driven by initiatives, through in montratec. healthy, were recent strength particularly precision quarter-to-date last our crane channel engagements. softness market conveyance, efforts I growth customer-centric automation targeted customer funnel our a referenced. Overall, In basis

to be are and we to on interest our political including we macroeconomic impacts on of and U.S. can the driven prospects new not quarter financial While by and operational about year indecision for near-term phasing control, addition project remain evolving upcoming backlog cautiously our full to the the related this outlook. Backlog our current commercial, With immune our related what initiatives. we in landscape of focus, wins. the rapidly to and longer or optimistic continue election, the higher the X% we our conditions, to continue as executing long-term focused rates increased

and you X, backlog objectives. customers will behaviors. On continue important While as ordering improve our adjust us expect their to financial time priorities achieve a most current to not over Slide in and further execute that can our line, remain to consistent that as we initiatives straight we enable we normalize times the levels performance lead see on from growth

on focused operational experience facilitate meaningful expansion. Specifically, footprint margin proposition, simplification we enhancing value on and customer further driving excellence through remain business and gross plans the our differentiating executing that

of to third down improvement end the excellence commercial growth, in fiscal initiatives to enable square the our motion that advantaged year facility's by to with by American strategically end basis points manufacturing our next as and we we end important techniques focused facility gross Monterrey to this us quarter linear These footprint deliver fact, this use 'XX. center our production. the to we second is at expected Mexico. of markets. and completely of margin This we combination the just simplification improved an lean wind facility manufacturing priorities Monterrey, the consolidating utilized strategic of square action quarter. Through foot expect ramp XX% operations have earlier cease of along XX/XX XXX,XXX deliver technologies, are feet manufacturing of announced is profitable our XX% step XXX following on This path our in In North into week, XXX,XXX

megatrends positioning are to such vertical ourselves from to defense growth particular increasing spending or and benefit in to production, e-commerce, markets. XX% and include near-shoring, targeted investing in recent growing a expected that addition Two which is of to In leader become areas focus we at a success in is battery electrification billion and north market of a hit CAGR $XXX XXXX. is as

planned in capacity In storage to mobility, XXX are X battery more. fact, to over the years constructed next electrical support be factories and

we montratec's from runway asynchronous a the million $X factory that production a motion we in battery attractive others solutions automation customer as Volkswagen-backed for quickly reputation a they for the conveyance of over for are production a fit-for-purpose needs. leader We a invest see by is for and can in time solutions intelligent producers. order as PowerCo advantaged solutions our space as solutions this providing We battery team leadership long building establishing most position gigafactory solutions deliver recently, And in their and electrification precision and for conveyance markets. won

life Another area the vertical. of focus is sciences

COVID-XX great done meet demand. pandemic production global Here, success the and notably pharmaceutical was most ramp to companies manufacturers quickly enabling as vaccines. during rapidly launched This pharmaceutical growing we have had

we related making and Looking that injectables growth. Overall, ahead, in advance the including weight we're are with business positioned struggling we're there prioritized progress our on and encouraged to demand loss this of are participate are our several well products growing areas, the demand, by as rapidly up keep strategy to rapidly we our and and growing execute potential initiatives.

performance. and terms innings improvements business over remain solutions intelligent in confident value the impactful of our the position increase we early over to scale, our us market-leading compound to and in the delivering deliver motion Greg turn and delivering call ability our are time. With a over We outcomes handling, growth are initiatives improving take attractive strategy and through will shareholder provider for I'll deliver financial by material as that, the results. to in across value these We of the remain time. Powered financial

Gregory Rustowicz

Good you, Thank everyone. David. morning,

X. offsetting $X.X was sales and of We in we delivered or from organic million prior million, more We realized quarter to the provided X.X% quarter the single-digit revenue of or slight net up X.X% of line contributed period. decline. Montratec delivered April pricing with than guidance $XXX.X Turning of a first low to This last in sales X% growth. the gains year increase. $X.X May million growth with volume Slide

June, the May in XX, included As no revenue. their beginning are results acquired date acquisition as longer was

a As reminder, the variability given period to period montratec from revenue of the has nature project business.

quarter precision the unfavorable quarter Sales in was was by conveyance, from up driven $XXX,XXX prior year. translation XX% was growth currency Foreign largely or by the X.X%. this which

we as precision discussed, have significant with both of David well we platform for our as U.S. opportunities pipeline with horizon on business conveyance the montratec. opportunities as this our encouraged As are

and and basis, montratec-acquired versus orders up X% quarter volume the backlog in sales branded absorbed first was revenue XX.X% in the Offsetting the growth XX montratec-acquired the and share. In points out oil growth lower margin we basis initiatives adjusted basis. sales gross of slightly with year year-over-year. primarily growth, benefited sales quarter as driven million even sales to up the currency market I We was prior into product X, versus constant U.S., profit up would with respectively. On prior the favorable mix contributed up U.S., Our the sales was gross pricing, short-cycle a On X% it captured this the reduction. business year. strength Outside the prior offsetting driven in recorded our organic project sales result business and profit X% that million costs. of advanced growth, gross gross costs which points on STAHL X% year, Mexico customer as increased margin were of X%, vertical. by gas Monterrey, from an also primarily quarter, although contributed X.X% or quarter point This in XX%, we as realignment by $X.X in start-up $X.X the by as experience down a were Slide which business, increased X%, in short-cycle basis and price the of up XXX our of was and was we

Slide X. Moving to

Our increased $X.X $XX.X to the quarter was which quarter. added SG&A million million. driven acquired million This the $X.X by acquisition, expense in costs primarily the of in

included and realignment costs factory of start-up $X.X costs. million SG&A Mexico also Monterrey, Our of $XXX,XXX expense business

U.S. the Europe, conferences both related held We to also in prior not incurred costs $X.X partner were of the which and strategic our in year. million

in business realignment was $X.XX impacted Slide was interest just a earnings with generated X% X. costs. quarter, adjusted the share first below-the-line costs by X% prior by share. and XX, Monterrey, the in year. included our to year, Adjusted million mentioned. diluted expense, operating conference the quarter, in prior and with the Together, line that strategic versus operating previously costs, prior costs realignment GAAP adjusted $X.XX business prior year-over-year and diluted conferences, basis EPS start-up to flat increased Slide $X.XX, to per $X.XX roughly year. impact GAAP I prior impacted XX, EBITDA year, factory and share partner XX We the new the $XX.X was these million, down income the lower of the items. On other income down in GAAP factory amortization start-up margin strategic of items Turning of add-back for mentioned the impacted the EBITDA margin costs higher offsetting the by were earnings per recorded Slide points. year. On expense Impacting flat Mexico XX.X% the $XX.X per we EBITDA quarter our of EPS of partner which This to Adjusted the

CapEx $X.X was was Slide from seasonality the conversion quarter flow year. to first normal XX-month strong Free quarter free a XXX%. basis quarter of trailing the with in million Free the improved working flow prior cash the year. cash approximately for cash reflected in million capital Negative the on $X business. comparable million, in Moving flow our XX. a $XX.X prior

to Slide XX. Turning

to fiscal total from was We from the debt and March million X% are down in repayment XX of down paid million. $XX $XX debt 'XX Our increasing in quarter $XX debt expected million levels. our

ratio we expect net basis, ratio leverage and approximately net financial leverage X.Xx on to year Xx. X.Xx fiscal our at was end down of current covenant a Our year-over-year,

As our Term of cost debt. a our reminder, March, we Loan B repriced in lowering

fiscal in fiscal We to provides quarter. savings 'XX. Slide guidance 'XX our expect for million generate the expense XX second this approximately $X.X interest of year and year

driving solid business, macroeconomic the the our and improvements a we our into throughout Our are the first visibility the despite funnel performance quarter softer in guidance backdrop. considers

low our down second into the quarter, following to quarter, mid-single prior that our to linear in expected year, growth growth In to built forecast the have of sales down our adjusted We center are the digits mind, production second we consolidating be motion American also in year-over-year. guidance. issuing North expect mid-single of and for digits the into be the Monterrey, impact we excellence Mexico. With from EPS

closure, an of related anticipating consolidation. points by onetime step related $X our with overall to plan deliver $X are is This XXX and We including expected important 'XX. $X to several million the also noncash margin costs expected restructuring on improvement the of cash factory to million million costs to XX/XX costs gross asset of $X million footprint our basis to simplification journey fiscal impairment

we Xx. Operator, expect questions. now For million the growth net our our $XX leverage which $XX a EPS, our are growth end reaffirming year, ratio to related in million includes $X ready million, 'XX single-digit fiscal and year-over-year, initiative, take of simplification to approximately we high adjusted to fiscal low full to CapEx sales are at footprint mid- guidance we to range XXXX in single-digit of

Operator

[Operator James Chase. Kirby line from JPMorgan Instructions] with The first of the question comes

James Kirby

start year of to wanted the tell the holds? safe the say Is quarter year? in it too of Or to second the it the second of guidance that is kind be to Just the context half back with the lowest what quarter point early guidance. will full

David Wilson

James. we expect, No, that's what

James Kirby

gives Got benefit is of to XQ, half I strength? assume might question, pricing off next maybe same take the year? you second moderating in the half but the we year return the a guess, back down quarter I in that in pricing. anything confidence the embedded it. is of What And step there mentioned another the you that from

David Wilson

I James, and inflationary of adjustments. with as typically we to position a say, it that pricing price costs we strength do would have outpace relates our

pricing. moderated environment to of inflationary that the relative just impact in. that And we're that to so lower a terms I I in has don't in of pricing relative believe point think making is position we're weakness the the we're the

that don't a outpacing year, we of be the any while pricing the that impact impact do would to it so I expect on we the have believe And of half see. material second pressures inflationary will

Gregory Rustowicz

would I June. the add our Yes. just took lifting in our James, month business, in increases And of that North price effect American

at backlog pricing. so old And there's still priced

year. the moderate X% alluded to X% at end we we to range as for do pricing, expect down, the we has inflation expect So be it but would to to of as fourth come that quarter, the in

take So increases modestly as higher going we forward would see price it the effect.

Operator

Matt Next D.A. Summerville question comes Davidson. from the line of with

Matt Summerville

Yes. of questions. A couple

that to guess, second quarter dynamic, So guess, But sure I XX I which the not front and a uncharacteristically and move? days get you quarter guess, of I of little be was in then air weren't an similarly, the articulate first, -- to maybe with year. that on bit the kind the second a when happen this why out second of going is ago. implies going big big And pocket half pretty quarter

guide So on is full us year the that comfortable the achievable. still line help get bottom

David Wilson

the business. timing, in Yes, we're managing Fair the terms And Matt. of enough. absolutely,

employees to. communication articulate to that do we has we're WARN We get and to related sensitive can't filings. of that need detail that the other It with Act have be notifications we on that and ready relative Obviously, make until we out ahead that implications need to it. to

plan So fact that we're multi-action points that when so. We've to we're clear a we of XXX towards very communicate in marching basis results ready expansion. the that about been do

that have, has order And a to with what outcome. think the obviously a modest within elevated indicated backlog growth our think first expansion. now rates year but we as the we it's discussions, that we we will It's half, well the of half in a and support gross second achievable. of the X% so an And ramp margin is previous relative range

backlog of expect the rates the we normalize balance execute as to the plan and moderate our so we that be year to that referenced in or on we'll rest the of think for order we over year. prepared that the earlier, positioned And remarks

Gregory Rustowicz

we've interest fourth We expense aggressive savings And should margin Matt, been debt. an so incremental with feel the I'll March, paying to guidance that from benefit we've repriced we expect very would from facility confident we And We down just Loan benefit also expansion. announced to and Term we in add start -- perspective, B our the back will our as we expect that on consolidation in by overall. today. EPS quarter, do gross from very

Matt Summerville

on generically the in the sort I you from with -- of out and will. second Can generally to can the the to disruption, the about non-GAAP quarter, quarter stuff you there think impact financial this? parse it is -- As just if just the articulate maybe you top a line I'm move? call impact, P&L going can't you associated this what bottom out way

Gregory Rustowicz

Yes.

be that going an delivery try our better just maintain and here, will really on we're would out it's a line all some in and Matt, moving end it's duplicate to cost, and there laid line where really of to cost, filed the for on do I that as with was prudent notified obviously asset have and so their on our we and we're those a issue recently of the performance. And impairments, amount top guess going facility that, X-K Those cost, to we've being were people out very disruption a going that's those all to us, with jobs impact typical the ability this number from to disruption. impact is cost, just -- a morning. a restructuring from So idea expect, of from are productivity it's that potentially going top get but adjusted to

Operator

Next question & Steve with Company. line from of Sidoti Ferazani the comes

Kyle May

Steve. Kyle is This May for on

you on markets? montratec cross-selling previous updates outside of core its traction could Just wondering if and any new if the of you for about found talk acquisitions

David Wilson

Yes, absolutely.

our precision as we've broader good expect the nice the morning. at geographies world portfolio, business of around that represent pipeline We've forward. to So conveyance a beyond training we to success serviced as had that, as been building we Kyle, workforce well good has and opportunities go

was we've funnel line. We number prescription in it's that of last so million several the included order could that nice for one you time. gave got the that not large over an a $X now with are that U.S. product that in service just that of communicated come come and are did around active And opportunities fulfillment and provider quarter. we opportunity a is quoted that could I That that right a close

we're from they've to perspective into to beyond specific the market and with able go is so areas a recently, perspective application related really advantages broadening most reach excited market And we're we've that play. And footprint demonstrate about that their montratec. production our begun to where battery been really what

to led we expansion And order prepared that so there's a runway time that they'll that that very investments the in making for to well attractive others as nice referenced related the market. of opportunity as those PowerCo end And remarks. be over

Kyle May

Got maintain cash XXX% XXX%? last or it. next question, above Is at the conversions can quarters. That's something And helpful. that that topped for you my X

Gregory Rustowicz

think can, And XXX% Kyle. XXX%. -- cash we with capability generation be north of should just of We we are because it's a company. the we CapEx-light company, and And the we

Operator

comes Jon Next with the Securities. from Tanwanteng question CJS line of

Jonathan Tanwanteng

at what and is as be out think anticipated is normalized revenue move? QX. to pushing I go more to trying could was Also much the pull-ins QX the little wondering in if get rate a beyond? things were impact from move you the to is the Greg, expected planned? run there any to I specificity assuming do extent in what you give bit guess the And you QX as the I'm how to

Gregory Rustowicz

Yes.

of of nonetheless, we to that It's we would going for couple lot there planning be would a of million there we is do will be in this. disruption. expect order Jon, think impact. the probably But a magnitude some put effort some into expect. of So We've dollars

Jonathan Tanwanteng

I And to served go does do to if that quickly? provider it? guess, pent-up you Or different they customer be Okay. pretty I a expect that demand, can't get QX away, guess, in

David Wilson

are changes expect back to is we've in that that And about prudent be to in could QX our the from and and confident both customers with we right work that in No, there's think moves. in these them the and and a for close the Jon, based communicating fact but disruption on in year. at could come plan in the to case level that of ensuring the is profile our all these related timing quarter maintaining with preplanning We'd the David. there sensitive we're we to in as the orders and or came made have proximity done, existing be period. And worst phasing second that then that QX the the executing, this facility. This come have the obviously quarter. we at we revenue We're service kind levels Mexico that and of backlog plan a obviously, impacts be the some order first in, impact of rates that of to the up

And in has so the phasing on top an through as our quarter second we're the this line backlog project well impact quarter. advancing as

Jonathan Tanwanteng

just -- it. talked previously X your to about had year. be second question, book-to-bill below the That's for My helpful. I think likely Got you

backlog, and Just be revenue burned to as quarter. date above above the to It looks you orders it's QX was being better. the X with going in like down this X it off

and beyond the from about expected. that's what thinking you're how there's wondering rest that, of different you year the if Just anything

David Wilson

of obviously I encouraged control. realistic are We we're the said with that on on. funnel focus, think prepared to what remain as in we managing maintaining opportunities for we the can a really us that We're remarks, my and activity close

those. at we to ability that on I on executing some our achieve We remain customer resulting optimistic opportunities. And We cautiously initiatives. attractive the a far, said encouraged, of the with feel that. had maintaining success we've year. that set but thus as level guidance we're So is and we of we're like earlier, And beginning initiatives remain in our experience the commercial our

Operator

to would I Ladies closing the Mr. you. question-and-answer Thank end gentlemen, Wilson to comments. and have now we turn session. over for like floor reached of the

David Wilson

for today. joining us everyone, you, Thank

our and begin like with significant enabled plan accelerated customer with make gross our fiscal relentless I'd our simplification wins, repayment. year-over-year Our experience growth, initiatives. team debt thanks sales team personal improve and to secured strategic strong progress their dedication execution our in excess execute to my quarter, on book-to-bill for entire and our to customers' extend 'XX the we margin, and ratio us to results. In of increased first delivered backlog that expanded X new a continues

also center continuation along simplification footprint year the our of North gross to of motion of facility of announced by manufacturing American margin journey fiscal This is Monterrey, We the plan excellence. points Mexico our consolidation and into our linear an 'XX. basis step XXX our important deliver expansion next

the Finally, full about focused of optimistic team performance your growth year investing initiatives remains our prospects are our we prioritized continue achieve guidance. Thanks our will our and We're by to be on funnel, see our us in opportunities financial to and the objectives. encouraged that us with for enable reiterating today. pipeline time

As any always, out have to Kristy, reach questions. you if please

Operator

concludes teleconference. This today's you. Thank

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

Columbus McKinnon (CMCO) 31 Jul 242025 Q1 Earnings call transcript