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 2023 fourth quarter, which ended March 31, 2023.

Fiscal Year and Fourth Quarter 2023 Highlights (compared with prior year periods)

• Set records in fiscal 2023 for sales, gross margin and operating income
• Strong execution resulted in record fiscal 2023 sales of $936.2 million and record fourth quarter sales of $253.8 million; FX negatively impacted revenue by $30.6 million for the year
• Achieved record annual gross margin of 36.5%, a 170 basis point improvement; fourth quarter gross margin expanded 220 basis points to 35.9%
• Operational leverage drove operating income records of $97.8 million for the year and
  
  $27.5 million for the quarter
• Generated $83.6 million in cash from operations for the year; delivered $66.7 million in cash from operations in the quarter, strongest quarter on record
• Reduced net debt leverage ratio to 2.2x¹ providing ample flexibility for montratec^® acquisition expected to close by May 31^st
• Continue to expect low-to-mid single digit revenue growth in fiscal 2024 plus additional benefits of montratec acquisition

David J. Wilson, President and CEO, commented, “We delivered record sales, gross margin, and operating income for fiscal 2023 as the team successfully executes our strategy to transform Columbus McKinnon into a higher growth, less cyclical business with stronger earnings power. We are driving improvements through the discipline of CMBS which includes our 80/20 process and investments in robust digital tools and processes to improve our customers’ experience. Our fiscal year and fourth quarter results demonstrate another proof point along our path toward our fiscal 2027 financial goals of $1.5 billion in revenue with adjusted EBITDA margin of approximately 21%.”

He continued, “We are thrilled to add montratec^® to the portfolio as we enter fiscal 2024. montratec brings advanced automation technology to our precision conveying platform. With its rapid growth and attractive margin profile, montratec further propels our transformation. Importantly, our strong cash generation provides the financial flexibility to complete the acquisition and advance our strategy. We expect to close the deal in the next week.

“We are making substantial progress advancing our strategy and are executing to plan. I am excited about where we are headed as an enterprise.”

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¹ On a financial covenant basis per Amended and Restated Credit Agreement

Fourth Quarter Fiscal 2023 Sales

For the quarter, sales increased $0.4 million, or 0.2%. Excluding a $4.2 million, or 1.7%, impact of foreign currency exchange, sales on a constant currency basis increased 1.8%. In the U.S., price improved $9.3 million, or 6.3%, which was partially offset by declining volume of $8.9 million, or 6.0%. Outside the U.S., price improved $5.1 million, or 4.9%, partially offset by declining volume of $0.9 million, or 0.8%.

Fourth Quarter Fiscal 2023 Operating Results

*Adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted operating income, adjusted operating margin, adjusted EPS, and the reconciliation of GAAP net income (loss) to adjusted EBITDA.

Adjusted earnings per diluted share were $0.80 in the fiscal 2023 fourth quarter compared with $0.79 in the prior year. Adjusted EPS excludes amortization of intangible assets related to acquisitions. The Company believes this better represents its inherent earnings power and cash generation capability.

First Quarter Fiscal 2024 Outlook

Columbus McKinnon expects first quarter fiscal 2024 sales at current exchange rates to be in the range of

$235 million to $240 million including the first month of montratec, implying high-single digit growth at the mid-point of the range.

Mr. Wilson concluded, “We are encouraged by the opportunities we are identifying to grow our business at better than market rates. We are utilizing direct customer feedback to inform our actions, enhance customer experience and unlock the potential to earn greater market share. We are deepening our reach in more secular markets with enduring tailwinds and advancing our capabilities to sustain our leadership position in intelligent motion for material handling. We believe we are on track to deliver low-to-mid single digit revenue growth and further margin expansion in fiscal 2024.”

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.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 investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13738230. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, June 1, 2023. 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 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.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 expected growth, future sales and EBITDA margins, 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 certain goals. 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 revenue and adjusted EBITDA 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. 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 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.

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.

Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items, including amortization of intangible assets, and also adjusted for 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 with the measures 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. The Company believes that representing adjusted 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 information, such as adjusted EBITDA, is important for investors and other readers of the Company’s financial statements.

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