Columbus McKinnon Corporation (Nasdaq: CMCO), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2024 second quarter, which ended September 30, 2023. Results include the addition of montratec®, which was acquired on May 31, 2023 ("the acquisition").

Second Quarter Highlights (compared with prior-year period, except where otherwise noted)

• Growth strategy drives record sales of $258.4 million, up 12% over same period in the prior year
• CMBS enables record gross margin of 38.7%; 190 basis point margin expansion sequentially
• Record operating income of $33.4 million, up 22% over prior year
• Expanded financial flexibility while reducing debt; paid down $15 million in debt and increasing debt pay down plans by $10 million to $50 million in fiscal 2024
• Expect to surpass $1 billion in revenue in fiscal 2024; advancing toward fiscal 2027 targets

David J. Wilson, President and CEO, commented, “Our second quarter results reflect the meaningful progress we are making as our team executes toward our fiscal 2027 targets. We achieved several new milestones this quarter including record revenue, gross margin and operating income. Being customer led is a foundational component of the Columbus McKinnon Business System (“CMBS”) which drives continuous improvement, discipline, communication and accountability. We remain laser focused on improving our customers’ experience and our progress has been validated by recent improvements in our net promoter score. The 80/20 process is another key focus area of CMBS with our current priority being product line simplification. Beyond optimizing financial performance, this will lead to improved product offerings, stronger market positioning and the ability to simplify our factory footprint.”

Mr. Wilson noted, “We are clearly building momentum within the organization and expect to surpass $1 billion in revenue in fiscal 2024. We also expect to deliver approximately 150 basis points of year-over-year gross margin expansion, exceeding our previous guidance. We are excited about the prospects for our precision conveyance platform including the recent addition of the montratec business. This, in combination with our organic growth initiatives, is driving the transformation of Columbus McKinnon to a less cyclical, higher growth and more profitable enterprise.”

Second Quarter Fiscal 2024 Sales

For the quarter, net sales increased $26.7 million, or 11.5%. The acquisition contributed $9.5 million, or 4.1%, of the increase in sales. In the U.S., sales were up $5.5 million, or 3.9%, as a result of $4.9 million of price improvement, $0.4 million contribution from the acquisition and $0.2 million of higher volume. Sales outside the U.S. increased $21.2 million, or 23.0%, driven by $9.1 million of sales related to the acquisition, $5.7 million of price improvement and $0.8 million of higher volume. Favorable foreign currency translation was $5.6 million.

Second Quarter Fiscal 2024 Operating Results

Adjusted earnings per diluted share of $0.76 excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.

Third Quarter Fiscal 2024 Outlook

Columbus McKinnon expects third quarter fiscal 2024 sales of approximately $245 million to $255 million at current exchange rates. This represents 9% growth year-over-year at the midpoint of the range.

Mr. Wilson concluded, “This quarter’s record financial performance provides additional proof points that demonstrate progress toward our fiscal 2027 targets. Given these results, we are accelerating debt repayment even as we invest in improving productivity and simplifying our footprint. We now expect our net leverage ratio to be approximately 2.3x¹ by the end of fiscal 2024. As we execute our strategy, we are building an enterprise that can deliver stronger growth and increased profitability as we advance the transformation of Columbus McKinnon.”

Teleconference/webcast

Columbus McKinnon will host a conference call and live webcast today at 10:00 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 investors.cmco.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 investors.cmco.com/. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Wednesday, November 8, 2023. To listen to the archived call, dial 412-317-6671 and enter the conference ID number 13741338. Alternatively, an archived webcast of the call can be found on the Company’s website and a transcript of the call will be posted there once available.

About Columbus McKinnon

Columbus McKinnon is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions that move the world forward and improve lives by efficiently and ergonomically moving, lifting, positioning, and securing materials. Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations, 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.cmco.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 expected growth, future sales and future gross margin expansion, and future potential to deliver results; the execution of its strategy and further transformation of the Company with stronger growth, less cyclicality and higher margins, and achievement of the Company’s fiscal 2027 goals and certain other goals; and the amount and timing of future debt repayments by the Company. These statements 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 supply chain challenges and inflation, the ability of the Company to scale the organization, achieve its financial targets including as to revenue and gross margin, and to execute CMBS and the Core Growth Framework; global economic and business conditions affecting the industries served by the Company and its subsidiaries including COVID-19; 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. Consequently, such forward-looking statements should be regarded as current plans, estimates and beliefs. Except as required by applicable law, the Company assumes no obligation to update the forward-looking information contained in this release.

Financial tables follow.

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 financial measures, 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.

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 financial measures, 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.

Adjusted net income and adjusted diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted net income and adjusted 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 with the measures used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP financial measures, such as adjusted net income and adjusted 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. The Company believes that presenting adjusted diluted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company’s strategy to grow through acquisitions as well as organically.

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 financial measures, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements.

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