Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - COLUMBUS MCKINNON CORP | a20200527cmcoq4fy20telec.htm |
| 8-K - 8-K - COLUMBUS MCKINNON CORP | a8k05272020.htm |
EXHIBIT 99.1
News Release
Buffalo, NY 14068
Immediate Release
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
BUFFALO, NY, May 27, 2020 - Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of motion control products, technologies and services for material handling, today announced financial results for its fiscal year 2020 fourth quarter, which ended March 31, 2020.
Fourth Quarter Highlights (compared with prior-year period)
• | Core values guided agile response to impact of COVID-19 pandemic; Focused on safety of associates, business continuity and conserving cash while continuing to invest in strategic growth initiatives |
• | Success of Blueprint for Growth Strategy validated with 34.9% gross margin, and record 36.1% adjusted gross margin, despite 12.6% decline in sales |
• | 80/20 Process contributed $5.5 million in operating income in quarter helping to offset volume declines |
• | Net income was $9.2 million, or $0.39 per diluted share; Adjusted net income was $13.8 million, or $0.58 per diluted share |
• | Generated $36.5 million in cash from operations in the quarter |
Fiscal Year Highlights (compared with prior-year period)
• | Record annual gross margin was 35.0% despite 7.7% decline in sales |
• | Operating income was $89.8 million, or 11.1% of sales; 80/20 process contributed $20.4 million |
• | Net income was $59.7 million, or $2.50 per diluted share |
• | Achieved 15.7% Adjusted EBTIDA margin and ROIC of 11.5% |
• | Strong working capital management and cash generation delivered record $106.8 million in cash from operations |
• | Ended year with strong balance sheet that provides financial flexibility and significant liquidity |
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 2 of 13
May 27, 2020
Richard Fleming, Chairman and Interim CEO of Columbus McKinnon, commented, “We demonstrated the power of our Blueprint for Growth strategy throughout fiscal 2020 with expanded margins despite slowing demand. However, in March the COVID-19 pandemic required us to rapidly implement actions to flex production levels and reduce costs to address the significant decline in demand we are now experiencing. Importantly, we have an excellent capital structure, strong cash generation and sufficient liquidity that will allow us to navigate these uncertain times while continuing to invest in select, strategic initiatives that we believe will enhance our competitive advantages and drive future growth.”
Fourth Quarter Fiscal 2020 Sales
($ in millions) | Q4 FY 20 | Q4 FY 19 | Change | % Change | ||||||||||
Net sales | $ | 189.5 | $ | 216.7 | $ | (27.2 | ) | (12.6 | )% | |||||
U.S. sales | $ | 104.1 | $ | 120.5 | $ | (16.4 | ) | (13.6 | )% | |||||
% of total | 55 | % | 56 | % | ||||||||||
Non-U.S. sales | $ | 85.4 | $ | 96.2 | $ | (10.8 | ) | (11.2 | )% | |||||
% of total | 45 | % | 44 | % | ||||||||||
Sales declined primarily on lower volume as improved pricing more than offset the negative impact of changes in foreign currency translation. Sales in the U.S. were down $16.4 million, of which $2.4 million was related to divestitures in the prior-year period. Sales outside the U.S. were down $10.8 million, of which $2.4 million was related to divestitures in the prior-year period and $2.3 million was related to foreign currency translation.
Fourth Quarter Fiscal 2020 Operating Results
($ in millions) | Q4 FY 20 | Q4 FY 19 | Change | % Change | ||||||||||
Gross profit | $ | 66.2 | $ | 76.0 | $ | (9.8 | ) | (12.9 | )% | |||||
Gross margin | 34.9 | % | 35.1 | % | (20) bps | |||||||||
Income from operations | $ | 16.7 | $ | 24.5 | $ | (7.8 | ) | (31.9 | )% | |||||
Operating margin | 8.8 | % | 11.3 | % | (250) bps | |||||||||
Net income | $ | 9.2 | $ | 19.7 | $ | (10.5 | ) | (53.2 | )% | |||||
Diluted EPS | $ | 0.39 | $ | 0.83 | $ | (0.44 | ) | (53.0 | )% | |||||
Adjusted EBITDA * | $ | 27.3 | $ | 32.8 | $ | (5.5 | ) | (16.7 | )% | |||||
Adjusted EBITDA margin | 14.4 | % | 15.1 | % | (70) bps | |||||||||
*A non-GAAP measure, Adjusted EBITDA is defined as adjusted operating income plus depreciation and amortization. Please see the attached tables for a reconciliation of adjusted EBITDA to GAAP net income (loss).
Adjusted income from operations was $20.2 million, down $4.7 million, or 18.9%, compared with the fourth quarter of fiscal 2019. Adjusted operating margin declined 80 basis points. (See the reconciliation of GAAP income from operations to adjusted income from operations on page 11 of this release.)
Adjusted EBITDA margin was 14.4% for the quarter, a decline of 70 basis points over the prior-year period. (See the reconciliation of GAAP net income to adjusted EBITDA on page 13 of this release.)
First Quarter Fiscal 2021 Outlook
Given the actions taken to reduce costs, the Company expects income from operations would be at breakeven levels if revenue were to decline by 35% from the fourth quarter fiscal 2020. Currently, Columbus McKinnon expects first quarter fiscal 2021 revenue to be approximately $130 million to $140 million at current exchange rates, which is above breakeven.
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 3 of 13
May 27, 2020
Mr. Fleming concluded, “We believe that Columbus McKinnon will come out of these unprecedented times a stronger company and are excited to welcome David Wilson to advance our Blueprint for Growth strategy and lead our future endeavors as our new CEO effective June 1, 2020.”
Teleconference/webcast
Columbus McKinnon will host a conference call and live webcast Wednesday, May 27, 2020 at 8:00 AM Eastern Time, at which management will review the Company’s financial results and strategy. The review will be accompanied by a slide presentation, which will be available on Columbus McKinnon’s website at https://investors.columbusmckinnon.com. A question and answer session will follow the formal discussion.
The conference call can be accessed by dialing 201-493-6780. The listen-only audio webcast can be monitored at https://investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13700704. The telephonic replay will be available from 11:00 AM Eastern Time on the day of the call through Wednesday, June 3, 2020. Alternatively, an archived webcast of the call can be found on the Company’s website. In addition, a transcript of the call will be posted to the website once available.
About Columbus McKinnon
Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of motion control products, technologies, systems and services that efficiently and ergonomically move, lift, position and secure materials. Key products include hoists, actuators, rigging tools, light rail work stations and digital power and motion control systems. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available at www.columbusmckinnon.com.
Safe Harbor Statement
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning future sales and earnings, involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including the impact of Covid-19 and the Company’s aggressive efforts to reduce costs, maintain liquidity and generate cash in the current pandemic, the effectiveness of the Company’s 80/20 Process to simplify operations, the ability of the Company’s Operational Excellence initiatives to drive profitability, global economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting the Company's customers and suppliers, competitor responses to the Company's products and services, the overall market acceptance of such products and services, the ability to expand into new markets and geographic regions, and other factors disclosed in the Company's periodic reports filed with the Securities and Exchange Commission. The Company assumes no obligation to update the forward-looking information contained in this release.
Contacts:
Gregory P. Rustowicz | Investor Relations: |
Vice President - Finance and Chief Financial Officer | Deborah K. Pawlowski |
Columbus McKinnon Corporation | Kei Advisors LLC |
716-689-5442 | 716-843-3908 |
greg.rustowicz@cmworks.com | dpawlowski@keiadvisors.com |
Financial tables follow.
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 4 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
Three Months Ended | |||||||||||
March 31, 2020 | March 31, 2019 | Change | |||||||||
Net sales | $ | 189,486 | $ | 216,733 | (12.6 | )% | |||||
Cost of products sold | 123,277 | 140,688 | (12.4 | )% | |||||||
Gross profit | 66,209 | 76,045 | (12.9 | )% | |||||||
Gross profit margin | 34.9 | % | 35.1 | % | |||||||
Selling expenses | 22,253 | 23,985 | (7.2 | )% | |||||||
% of net sales | 11.7 | % | 11.1 | % | |||||||
General and administrative expenses | 21,167 | 21,674 | (2.3 | )% | |||||||
% of net sales | 11.2 | % | 10.0 | % | |||||||
Research and development expenses | 2,891 | 3,354 | (13.8 | )% | |||||||
% of net sales | 1.5 | % | 1.5 | % | |||||||
Net loss (gain) on sales of businesses | — | (978 | ) | NM | |||||||
Amortization of intangibles | 3,234 | 3,542 | (8.7 | )% | |||||||
Income from operations | 16,664 | 24,468 | (31.9 | )% | |||||||
Operating margin | 8.8 | % | 11.3 | % | |||||||
Interest and debt expense | 3,200 | 3,959 | (19.2 | )% | |||||||
Investment (income) loss | 48 | (430 | ) | NM | |||||||
Foreign currency exchange (gain) loss | (996 | ) | 637 | NM | |||||||
Other (income) expense, net | 221 | (299 | ) | NM | |||||||
Income before income tax expense | 14,191 | 20,601 | (31.1 | )% | |||||||
Income tax expense | 4,947 | 860 | 475.2 | % | |||||||
Net income | $ | 9,244 | $ | 19,741 | (53.2 | )% | |||||
Average basic shares outstanding | 23,735 | 23,368 | 1.6 | % | |||||||
Basic income (loss) per share | $ | 0.39 | $ | 0.84 | (53.6 | )% | |||||
Average diluted shares outstanding | 23,938 | 23,714 | 0.9 | % | |||||||
Diluted income (loss) per share | $ | 0.39 | $ | 0.83 | (53.0 | )% | |||||
Dividends declared per common share | $ | 0.12 | $ | 0.11 | |||||||
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 5 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
Year Ended | |||||||||||
March 31, 2020 | March 31, 2019 | Change | |||||||||
Net sales | $ | 809,162 | $ | 876,282 | (7.7 | )% | |||||
Cost of products sold | 525,976 | 571,285 | (7.9 | )% | |||||||
Gross profit | 283,186 | 304,997 | (7.2 | )% | |||||||
Gross profit margin | 35.0 | % | 34.8 | % | |||||||
Selling expenses | 91,054 | 97,925 | (7.0 | )% | |||||||
% of net sales | 11.3 | % | 11.2 | % | |||||||
General and administrative expenses | 77,880 | 83,567 | (6.8 | )% | |||||||
% of net sales | 9.6 | % | 9.5 | % | |||||||
Research and development expenses | 11,310 | 13,491 | (16.2 | )% | |||||||
% of net sales | 1.4 | % | 1.5 | % | |||||||
Net loss on sales of businesses, including impairment | 176 | 25,672 | (99.3 | )% | |||||||
Amortization of intangibles | 12,942 | 14,900 | (13.1 | )% | |||||||
Income from operations | 89,824 | 69,442 | 29.4 | % | |||||||
Operating margin | 11.1 | % | 7.9 | % | |||||||
Interest and debt expense | 14,234 | 17,144 | (17.0 | )% | |||||||
Investment (income) loss | (891 | ) | (727 | ) | 22.6 | % | |||||
Foreign currency exchange (gain) loss | (1,514 | ) | 843 | NM | |||||||
Other (income) expense, net | 839 | (716 | ) | NM | |||||||
Income before income tax expense | 77,156 | 52,898 | 45.9 | % | |||||||
Income tax expense | 17,484 | 10,321 | 69.4 | % | |||||||
Net income | $ | 59,672 | $ | 42,577 | 40.2 | % | |||||
Average basic shares outstanding | 23,619 | 23,276 | 1.5 | % | |||||||
Basic income per share | $ | 2.53 | $ | 1.83 | 38.3 | % | |||||
Average diluted shares outstanding | 23,855 | 23,660 | 0.8 | % | |||||||
Diluted income per share | $ | 2.50 | $ | 1.80 | 38.9 | % | |||||
Dividends declared per common share | $ | 0.24 | $ | 0.21 | |||||||
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 6 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
March 31, 2020 | March 31, 2019 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 114,450 | $ | 71,093 | ||||
Trade accounts receivable | 123,743 | 129,157 | ||||||
Inventories | 127,373 | 146,263 | ||||||
Prepaid expenses and other | 17,180 | 16,075 | ||||||
Total current assets | 382,746 | 362,588 | ||||||
Property, plant, and equipment, net | 79,473 | 87,303 | ||||||
Goodwill | 319,679 | 322,816 | ||||||
Other intangibles, net | 217,962 | 232,940 | ||||||
Marketable securities | 7,322 | 7,028 | ||||||
Deferred taxes on income | 26,281 | 27,707 | ||||||
Other assets | 59,809 | 21,189 | ||||||
Total assets | $ | 1,093,272 | $ | 1,061,571 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 57,289 | $ | 46,974 | ||||
Accrued liabilities | 93,585 | 99,304 | ||||||
Current portion of long-term debt | 4,450 | 65,000 | ||||||
Total current liabilities | 155,324 | 211,278 | ||||||
Term loan and revolving credit facility | 246,856 | 235,320 | ||||||
Other non-current liabilities | 227,507 | 183,814 | ||||||
Total liabilities | 629,687 | 630,412 | ||||||
Shareholders’ equity: | ||||||||
Common stock | 238 | 234 | ||||||
Additional paid-in capital | 287,256 | 277,518 | ||||||
Retained earnings | 290,441 | 236,459 | ||||||
Accumulated other comprehensive loss | (114,350 | ) | (83,052 | ) | ||||
Total shareholders’ equity | 463,585 | 431,159 | ||||||
Total liabilities and shareholders’ equity | $ | 1,093,272 | $ | 1,061,571 | ||||
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 7 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Statements of Cash Flows - UNAUDITED
(In thousands)
Year Ended | ||||||||
March 31, 2020 | March 31, 2019 | |||||||
Operating activities: | ||||||||
Net income | $ | 59,672 | $ | 42,577 | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||
Depreciation and amortization | 29,126 | 32,675 | ||||||
Deferred income taxes and related valuation allowance | 7,364 | (958 | ) | |||||
Net loss (gain) on sale of real estate, investments, and other | (563 | ) | 194 | |||||
Stock based compensation | 4,507 | 6,198 | ||||||
Amortization of deferred financing costs | 2,655 | 2,655 | ||||||
Net loss on sales of businesses, including impairment | 176 | 25,672 | ||||||
Non-cash lease expense | 7,923 | — | ||||||
Changes in operating assets and liabilities, net of effects of business acquisitions and divestitures: | ||||||||
Trade accounts receivable | 2,899 | (11,328 | ) | |||||
Inventories | 15,752 | (15,411 | ) | |||||
Prepaid expenses and other | (3,857 | ) | (128 | ) | ||||
Other assets | 724 | 231 | ||||||
Trade accounts payable | 8,110 | 3,881 | ||||||
Accrued liabilities | (14,304 | ) | 6,397 | |||||
Non-current liabilities | (13,389 | ) | (13,156 | ) | ||||
Net cash provided by (used for) operating activities | 106,795 | 79,499 | ||||||
Investing activities: | ||||||||
Proceeds from sales of marketable securities | 5,380 | 3,266 | ||||||
Purchases of marketable securities | (5,747 | ) | (2,604 | ) | ||||
Capital expenditures | (9,432 | ) | (12,288 | ) | ||||
Proceeds from sale of equipment and real estate | 51 | 176 | ||||||
Net (payments) proceeds from sales of businesses | (214 | ) | 14,230 | |||||
Payment of restricted cash to former owner | — | (294 | ) | |||||
Net cash provided by (used for) investing activities | (9,962 | ) | 2,486 | |||||
Financing activities: | ||||||||
Proceeds from issuance of common stock | 6,000 | 4,152 | ||||||
Repayment of debt | (51,113 | ) | (65,088 | ) | ||||
Payment of dividends | (5,670 | ) | (4,652 | ) | ||||
Other | (768 | ) | (2,190 | ) | ||||
Net cash provided by (used for) financing activities | (51,551 | ) | (67,778 | ) | ||||
Effect of exchange rate changes on cash | (1,925 | ) | (6,429 | ) | ||||
Net change in cash and cash equivalents | 43,357 | 7,778 | ||||||
Cash, cash equivalents, and restricted cash at beginning of year | 71,343 | 63,565 | ||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 114,700 | $ | 71,343 | ||||
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 8 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Q4 FY 2020 Sales Bridge
Quarter | Year To Date | |||||||||||||
($ in millions) | $ Change | % Change | $ Change | % Change | ||||||||||
Fiscal 2019 Sales | $ | 216.7 | $ | 876.3 | ||||||||||
Divestitures | (4.8 | ) | (34.2 | ) | ||||||||||
Fiscal 2019 Sales adjusted for divestitures | $ | 211.9 | $ | 842.1 | ||||||||||
Volume | (22.9 | ) | (10.8 | )% | (33.0 | ) | (3.9 | )% | ||||||
Pricing | 2.8 | 1.3 | % | 13.2 | 1.6 | % | ||||||||
Foreign currency translation | (2.3 | ) | (1.1 | )% | (13.1 | ) | (1.6 | )% | ||||||
Total change adjusted for divestitures | $ | (22.4 | ) | (10.6 | )% | $ | (32.9 | ) | (3.9 | )% | ||||
Fiscal 2020 Sales | $ | 189.5 | $ | 809.2 | ||||||||||
COLUMBUS McKINNON CORPORATION
Q4 FY 2020 Gross Profit Bridge
($ in millions) | Quarter | Year To Date | |||||
Fiscal 2019 Gross Profit | $ | 76.0 | $ | 305.0 | |||
Divestitures | (0.9 | ) | (7.1 | ) | |||
Fiscal 2019 Gross Profit adjusted for divestitures | 75.1 | 297.9 | |||||
Pricing, net of material cost inflation | 2.5 | 10.3 | |||||
Insurance settlement | — | 0.4 | |||||
Product liability | (0.3 | ) | (0.6 | ) | |||
Business realignment costs | (0.8 | ) | (0.7 | ) | |||
Tariffs | 0.4 | (0.8 | ) | ||||
Factory closures | — | (1.3 | ) | ||||
Productivity, net of other cost changes | (1.6 | ) | (3.4 | ) | |||
Foreign currency translation | (0.8 | ) | (4.5 | ) | |||
Sales volume and mix | (8.3 | ) | (14.1 | ) | |||
Total change adjusted for divestitures | $ | (8.9 | ) | $ | (14.7 | ) | |
Fiscal 2020 Gross Profit | $ | 66.2 | $ | 283.2 | |||
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 9 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Additional Data - UNAUDITED
March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||||||||
($ in millions) | |||||||||||||||
Backlog | $ | 131.0 | $ | 125.3 | $ | 161.5 | |||||||||
Long-term backlog | |||||||||||||||
Expected to ship beyond 3 months | $ | 49.1 | $ | 51.3 | $ | 61.7 | |||||||||
Long-term backlog as % of total backlog | 37.5 | % | 40.9 | % | 38.2 | % | |||||||||
Trade accounts receivable | |||||||||||||||
Days sales outstanding (1) | 59.4 | days | 57.2 | days | 55.5 | days | |||||||||
Inventory turns per year (1) | |||||||||||||||
(based on cost of products sold) | 3.9 | turns | 3.9 | turns | 3.7 | turns | |||||||||
Days' inventory (1) | 94.3 | days | 94.0 | days | 97.6 | days | |||||||||
Trade accounts payable | |||||||||||||||
Days payables outstanding (1) | 42.3 | days | 32.1 | days | 31.3 | days | |||||||||
Working capital as a % of sales (1), (2) | 14.5 | % | 16.5 | % | 17.2 | % | |||||||||
Debt to total capitalization percentage | 35.2 | % | 34.2 | % | 41.1 | % | |||||||||
Debt, net of cash, to net total capitalization | 22.8 | % | 25.7 | % | 34.7 | % | |||||||||
(1) March 31, 2019 figures exclude the Tire Shredder business, which was divested on December 28, 2018, and Crane Equipment & Service, Inc. (CES) and Stahlhammer Bommern GmbH (STB), each of which were divested on February 28, 2019.
(2) December 31, 2019 figure excludes CES) and STB.
U.S. Shipping Days by Quarter | ||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||
FY 21 | 63 | 64 | 61 | 63 | 251 | |||||
FY 20 | 63 | 63 | 61 | 64 | 251 | |||||
FY 19 | 64 | 63 | 60 | 63 | 250 | |||||
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 10 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Gross Profit to
Non-GAAP Adjusted Gross Profit and Adjusted Gross Margin
($ in thousands, except per share data)
Three Months Ended March 31, | Year Ended March 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Gross profit | $ | 66,209 | $ | 76,045 | $ | 283,186 | $ | 304,997 | |||||||
Add back (deduct): | |||||||||||||||
Factory closures | 1,349 | 1,273 | 2,800 | 1,473 | |||||||||||
Business realignment costs | 774 | — | 1,037 | 286 | |||||||||||
Insurance settlement | (15 | ) | — | (382 | ) | — | |||||||||
Non-GAAP adjusted gross profit | $ | 68,317 | $ | 77,318 | $ | 286,641 | $ | 306,756 | |||||||
Sales | $ | 189,486 | $ | 216,733 | $ | 809,162 | $ | 876,282 | |||||||
Adjusted gross margin | 36.1 | % | 35.7 | % | 35.4 | % | 35.0 | % | |||||||
Adjusted gross profit is defined as gross profit as reported, adjusted for certain items. Adjusted gross profit is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted gross profit, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's gross profit to the historical periods' gross profit, as well as facilitates a more meaningful comparison of the Company’s gross profit to that of other companies.
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 11 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Income from Operations to
Non-GAAP Adjusted Income from Operations and Adjusted Operating Margin
($ in thousands, except per share data)
Three Months Ended March 31, | Year Ended March 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Income from operations | $ | 16,664 | $ | 24,468 | $ | 89,824 | $ | 69,442 | |||||||
Add back (deduct): | |||||||||||||||
Factory closures | 1,621 | 1,273 | 4,709 | 1,473 | |||||||||||
Business realignment costs | 1,755 | — | 2,831 | 1,906 | |||||||||||
Insurance recovery legal costs | 160 | 132 | 585 | 1,282 | |||||||||||
Net loss (gain) on sales of businesses, including impairment | — | (978 | ) | 176 | 25,672 | ||||||||||
Insurance settlement | (15 | ) | — | (382 | ) | — | |||||||||
Non-GAAP adjusted income from operations | $ | 20,185 | $ | 24,895 | $ | 97,743 | $ | 99,775 | |||||||
Sales | $ | 189,486 | $ | 216,733 | $ | 809,162 | $ | 876,282 | |||||||
Adjusted operating margin | 10.7 | % | 11.5 | % | 12.1 | % | 11.4 | % | |||||||
Adjusted income from operations is defined as income from operations as reported, adjusted for certain items. Adjusted income from operations is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted income from operations, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's income from operations to the historical periods' income from operations, as well as facilitates a more meaningful comparison of the Company’s income from operations to that of other companies.
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 12 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income and Diluted Earnings per Share to
Non-GAAP Adjusted Net Income and Diluted Earnings per Share
($ in thousands, except per share data)
Three Months Ended March 31, | Year Ended March 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income | $ | 9,244 | $ | 19,741 | $ | 59,672 | $ | 42,577 | |||||||
Add back (deduct): | |||||||||||||||
Factory closures | 1,621 | 1,273 | 4,709 | 1,473 | |||||||||||
Business realignment costs | 1,755 | — | 2,831 | 1,906 | |||||||||||
Insurance recovery legal costs | 160 | 132 | 585 | 1,282 | |||||||||||
Net loss (gain) on sales of businesses, including impairment | — | (978 | ) | 176 | 25,672 | ||||||||||
Insurance settlement | (15 | ) | — | (382 | ) | — | |||||||||
Normalize tax rate to 22% (1) | 1,050 | (3,766 | ) | (1,232 | ) | (7,990 | ) | ||||||||
Non-GAAP adjusted net income | $ | 13,815 | $ | 16,402 | $ | 66,359 | $ | 64,920 | |||||||
Average diluted shares outstanding | 23,938 | 23,714 | 23,855 | 23,660 | |||||||||||
Diluted income per share - GAAP | $ | 0.39 | $ | 0.83 | $ | 2.50 | $ | 1.80 | |||||||
Diluted income per share - Non-GAAP | $ | 0.58 | $ | 0.69 | $ | 2.78 | $ | 2.74 | |||||||
(1) Applies a normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.
Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items and at a normalized tax rate. Adjusted net income and diluted EPS are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable to the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted net income and diluted EPS, is important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s and current year's net income and diluted EPS to the historical periods' net income and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies.
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 13 of 13
May 27, 2020
COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
($ in thousands)
Three Months Ended March 31, | Year Ended March 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income | $ | 9,244 | $ | 19,741 | $ | 59,672 | $ | 42,577 | |||||||
Add back (deduct): | |||||||||||||||
Income tax expense | 4,947 | 860 | 17,484 | 10,321 | |||||||||||
Interest and debt expense | 3,200 | 3,959 | 14,234 | 17,144 | |||||||||||
Investment (income) loss | 48 | (430 | ) | (891 | ) | (727 | ) | ||||||||
Foreign currency exchange (gain) loss | (996 | ) | 637 | (1,514 | ) | 843 | |||||||||
Other (income) expense, net | 221 | (299 | ) | 839 | (716 | ) | |||||||||
Depreciation and amortization expense | 7,135 | 7,912 | 29,126 | 32,675 | |||||||||||
Factory closures | 1,621 | 1,273 | 4,709 | 1,473 | |||||||||||
Business realignment costs | 1,755 | — | 2,831 | 1,906 | |||||||||||
Insurance recovery legal costs | 160 | 132 | 585 | 1,282 | |||||||||||
Net loss (gain) on sales of businesses, including impairment | — | (978 | ) | 176 | 25,672 | ||||||||||
Insurance settlement | (15 | ) | — | (382 | ) | — | |||||||||
Non-GAAP adjusted EBITDA | $ | 27,320 | $ | 32,807 | $ | 126,869 | $ | 132,450 | |||||||
Sales | $ | 189,486 | $ | 216,733 | $ | 809,162 | $ | 876,282 | |||||||
Adjusted EBITDA margin | 14.4 | % | 15.1 | % | 15.7 | % | 15.1 | % | |||||||
Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements.