Columbus McKinnon Reports 16% Order Growth in Q2 FY25
CHARLOTTE, NC, Oct. 30, 2024 /PRNewswire/ -- Columbus McKinnon Corporation (NASDAQ:CMCO) ("Columbus McKinnon" or the "Company"), a leading designer, manufacturer and marketer of intelligent motion solutions for material handling, today announced financial results for its fiscal year 2025 second quarter, which ended September 30, 2024.
Second Quarter 2025 Highlights (compared with prior-year period, except where otherwise noted)
Orders increased 16% with a book-to-bill ratio of 1.08x; Precision conveyance up 42%
Net sales decreased 6% to $242.3 million reflecting impacts related to Hurricane Helene, the ramp up of linear motion production in Monterrey, MX and project timing
Results included $17.5 million2 of non-cash pension settlement expense and $11.8 million2 for factory closure and start-up costs as we transitioned manufacturing to our Monterrey, MX facility
GAAP EPS of ($0.52) and Adjusted EPS1 of $0.70
Repaid $10 million of debt in Q2 FY25; Anticipate FY25 debt repayment of $60 million
Executed $4.9 million of share repurchases in Q2 FY25 and $5.0 million in early Q3 FY25
"Our commercial and operational initiatives are delivering wins with new and existing customers in attractive vertical markets and we delivered one of our highest order quarters in history with 16% order growth and a book-to-bill ratio of 1.08x in Q2." said David J. Wilson, President and Chief Executive Officer. "Order growth, with particular strength in precision conveyance, and an encouraging funnel of promising opportunities supports our fiscal 2025 guidance and positions us well for fiscal 2026."
"But for the impact of Hurricane Helene, we delivered on our guidance for the second quarter while transitioning our linear motion manufacturing activity to Monterrey," continued Wilson. "We remain confident in our long-term financial objectives and are advancing the strategic initiatives that will both grow our business and deliver targeted margin expansion over time."
Second Quarter Fiscal 2025 Sales
($ in millions)
Q2 FY25
Q2 FY24
Change
% Change
Net sales
$ 242.3
$ 258.4
$ (16.1)
(6.2) %
U.S. sales
$ 132.3
$ 145.2
$ (12.9)
(8.9) %
% of total
55 %
56 %
Non-U.S. sales
$ 110.0
$ 113.2
$ (3.2)
(2.8) %
% of total
45 %
44 %
For the quarter, net sales decreased $16.1 million, or 6.2%. In the U.S., sales were down $12.9 million, or 8.9%. Price improvement of $1.3 million helped to offset $14.2 million in lower volume. Sales outside the U.S. decreased $3.2 million, or 2.8%. Price improvement of $2.5 million helped to offset $6.0 million of lower volume. Favorable foreign currency translation was $0.3 million.
Second Quarter Fiscal 2025 Operating Results
($ in millions)
Q2 FY25
Q2 FY24
Change
% Change
Gross profit
$ 74.7
$ 100.0
$ (25.2)
(25.2) %
Gross margin
30.9 %
38.7 %
(780) bps
Adjusted Gross Profit1
$ 87.9
$ 100.0
$ (12.0)
(12.0) %
Adjusted Gross Margin1
36.3 %
38.7 %
(240) bps
Income from operations
$ 10.8
$ 33.4
$ (22.5)
(67.6) %
Operating margin
4.5 %
12.9 %
(840) bps
Adjusted Operating Income1
$ 27.0
$ 34.1
$ (7.2)
(21.0) %
Adjusted Operating Margin1
11.1 %
13.2 %
(210) bps
Net income (loss)
$ (15.0)
$ 15.8
$ (30.9)
NM
Net income (loss) margin
(6.2) %
6.1 %
(1,230) bps
GAAP EPS
$ (0.52)
$ 0.55
$ (1.07)
NM
Adjusted EPS1
$ 0.70
$ 0.76
$ (0.06)
(7.9) %
Adjusted EBITDA1
$ 39.2
$ 45.7
$ (6.6)
(14.4) %
Adjusted EBITDA Margin1
16.2 %
17.7 %
(150) bps
Adjusted EPS1 excludes, among other adjustments, amortization of intangible assets. The Company believes this better represents its inherent earnings power and cash generation capability.
Third Quarter Fiscal 2025 Guidance
The Company is issuing the following guidance for the third quarter of fiscal 2025, ending December 31, 2024:
Metric
Q3 FY25
Net sales
Flat year-over-year
Adjusted EPS3
Flat year-over-year
Third quarter 2025 guidance assumes approximately $8 million of interest expense, $8 million of amortization, an effective tax rate of 25% and 28.9 million diluted average shares outstanding.
The Company is issuing the following guidance for the fiscal year 2025, ending March 31, 2025:
Metric
FY25
Net sales
Flat to low-single digit growth year-over-year
Adjusted EPS3
Mid-single digit growth year-over-year
Capital Expenditures
$20 million to $25 million
Net Leverage Ratio3
~2.3x
Fiscal 2025 guidance assumes approximately $32 million of interest expense, $30 million of amortization, an effective tax rate of 25% and 29.0 million diluted average shares outstanding.
Teleconference/Webcast
Columbus McKinnon will host a conference call today at 10:00 AM Eastern Time to discuss the Company's financial results and strategy. The conference call will be accessible through live webcast and via phone by dialing 1-800-836-8184. The webcast, earnings release and earnings presentation will be available at the Company's investor relations website at investors.cmco.com. A replay of the webcast will also be archived on the Company's investor relations website and available via phone by dialing 1-888-660-6345 and enter the conference ID number 93312# through Wednesday, November 6, 2024.
______________________
1
Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Operating Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS are non-GAAP financial measures. See accompanying discussion and reconciliation tables provided in this release for reconciliations of these non-GAAP financial measures to the closest corresponding GAAP financial measures.
2
Represents $23.2 million of non-cash pension settlement costs, $11.9 million of expense related to the closure of our Charlotte, NC factory and $3.8 million of Monterrey MX start-up costs, which are taxed at a 24.6% tax rate.
3
The Company has not reconciled the Adjusted EPS and Net Leverage Ratio guidance to the most comparable GAAP financial measure outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide guidance for the comparable GAAP financial measures. Forward-looking guidance regarding Adjusted EPS and Net Leverage Ratio is made in a manner consistent with the relevant definitions and assumptions noted herein and in alignment with the Company's financial covenants per the Company's Amended and Restated Credit Agreement.
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 forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," "believe," "continue," "could," "estimate," "expect," "illustrative," "intend," "likely," "may," "opportunity," "plan," "possible," "potential," "predict," "project," "shall," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this document, including, but are not limited to, statements relating to: (i) our strategy, outlook and growth prospects, including our third quarter and fiscal year 2025 net sales and Adjusted EPS, and our fiscal year 2025 net leverage ratio and capital expenditure guidance; (ii) our operational and financial targets and capital allocation policy; (iii) general economic trend and trends in the industry and markets; (iv) the amount of debt to be paid down by the Company during fiscal year 2025; (v) the estimated costs and benefits related to the consolidation of the Company's North American linear motion operations in Charlotte, North Carolina to its manufacturing facility in Monterrey, Mexico (vi) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates and judgements; and (vii) the competitive environment in which we operate; are forward looking statements. Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made. Columbus McKinnon undertakes no duty to update publicly any such forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law, regulation or other competent legal authority.
Contacts:
Gregory P. Rustowicz
Kristine Moser
EVP Finance and CFO
VP IR and Treasurer
Columbus McKinnon Corporation
Columbus McKinnon Corporation
716-689-5442
704-322-2488
Financial tables follow.
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
Three Months Ended
September 30,2024
September 30,2023
Change
Net sales
$ 242,274
$ 258,400
(6.2) %
Cost of products sold
167,531
158,424
5.7 %
Gross profit
74,743
99,976
(25.2) %
Gross profit margin
30.9 %
38.7 %
Selling expenses
26,926
26,867
0.2 %
% of net sales
11.1 %
10.4 %
General and administrative expenses
23,363
25,709
(9.1) %
% of net sales
9.6 %
9.9 %
Research and development expenses
6,102
6,541
(6.7) %
% of net sales
2.5 %
2.5 %
Amortization of intangibles
7,547
7,508
0.5 %
Income from operations
10,805
33,351
(67.6) %
Operating margin
4.5 %
12.9 %
Interest and debt expense
8,352
10,211
(18.2) %
Investment (income) loss
(610)
88
NM
Foreign currency exchange (gain) loss
(792)
1,746
NM
Other (income) expense, net
23,806
393
5,957.5 %
Income (loss) before income tax expense (benefit)
(19,951)
20,913
NM
Income tax expense (benefit)
(4,908)
5,100
NM
Net income (loss)
$ (15,043)
$ 15,813
NM
Average basic shares outstanding
28,869
28,725
0.5 %
Basic income (loss) per share
$ (0.52)
$ 0.55
NM
Average diluted shares outstanding
28,869
29,001
(0.5) %
Diluted income (loss) per share
$ (0.52)
$ 0.55
NM
Dividends declared per common share
$ 0.07
$ 0.07
COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
Six Months Ended
September 30,2024
September 30,2023
Change
Net sales
$ 482,000
$ 493,892
(2.4) %
Cost of products sold
318,227
307,266
3.6 %
Gross profit
163,773
186,626
(12.2) %
Gross profit margin
34.0 %
37.8 %
Selling expenses
54,696
51,848
5.5 %
% of net sales
11.3 %
10.5 %
General and administrative expenses
49,810
53,152
(6.3) %
% of net sales
10.3 %
10.8 %
Research and development expenses
12,268
12,442
(1.4) %
% of net sales
2.5 %
2.5 %
Amortization of intangibles
15,047
14,385
4.6 %
Income from operations
31,952
54,799
(41.7) %
Operating margin
6.6 %
11.1 %
Interest and debt expense
16,587
18,836
(11.9) %
Investment (income) loss
(819)
(454)
80.4 %
Foreign currency exchange (gain) loss
(398)
2,230
NM
Other (income) expense, net
24,484
605
3,946.9 %
Income (loss) before income tax expense (benefit)
(7,902)
33,582
NM
Income tax expense (benefit)
(1,488)
8,494
NM
Net income (loss)
$ (6,414)
$ 25,088
NM
Average basic shares outstanding
28,852
28,694
0.6 %
Basic income (loss) per share
$ (0.22)
$ 0.87
NM
Average diluted shares outstanding
28,852
28,962
(0.4) %
Diluted income (loss) per share
$ (0.22)
