Columbus McKinnon Blueprint for Growth Strategy Delivered Record Operating Income in First Quarter Fiscal Year 2020

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Columbus McKinnon Corporation 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 first quarter, which ended June 30, 2019.

First Quarter Highlights (compared with prior-year period)

  • Blueprint for Growth strategy delivering margin expansion and stronger earnings power
  • Gross margin reached record 35.5%, while strong operating leverage drove operating margin to 12.7%
  • Net income for the quarter increased 141% to $18.6 million; adjusted earnings per diluted share of $0.81 increased nearly 10%
  • Achieved record adjusted EBITDA margin of 16.7%, up 100 basis points from previous record set in fiscal 2019 first quarter
  • Return on invested capital (ROIC) expanded to 11.5%

Mark Morelli, President and CEO of Columbus McKinnon, commented, "Our Blueprint for Growth strategy continues to demonstrate value as we delivered stronger margins and growth in earnings on modest organic revenue growth of 2%. We had record gross margin of 35.5% and operating margin of 12.7%. In fact, our results are readily identifiable, as follows:

  • Our 80/20 Process of simplification provided approximately $3.4 million in operating profit and remains on track to deliver $10 million for fiscal 2020.
  • Also, the quarter benefited from our actions to simplify the business by divesting non-core businesses that diluted earnings. Operating income improved 30 basis points by divesting
    $11.1 million in low margin, non-core revenue.
  • Operational Excellence provided $0.5 million in savings from the consolidation of our Ohio facilities, as well.

These initiatives led to record adjusted EBITDA margin and improved ROIC. We believe this further validates that our strategy is the right one to create a better business model with improved earnings power and positions us for growth."

He concluded, "We are doubling down on Phase II of our strategy at Columbus McKinnon by advancing our 80/20 Process throughout the organization. This is the centerpiece of our operating system that eliminates "bleeders" and sharpens our focus on growth. We remain excited about our ability to continue to strengthen our financial performance as we further transform into an industrial technology company."

First Quarter Fiscal 2020 Sales

($ in millions)

Q1 FY 20

 

Q1 FY 19

 

Change

 

% Change

Net sales

$

 

 

212.7

 

 

$

 

 

225.0

 

 

$

 

 

(12.3

)

 

(5.5

)%

 

 

 

 

 

 

 

 

U.S. sales

$

 

 

116.7

 

 

$

 

 

119.8

 

 

$

 

 

(3.1

)

 

(2.6

)%

% of total

 

55

%

 

 

53

%

 

 

 

 

Non-U.S. sales

$

 

 

96.0

 

 

$

 

 

105.2

 

 

$

 

 

(9.2

)

 

(8.7

)%

% of total

 

45

%

 

 

47

%

 

 

 

 

 

Adjusting for $11.1 million of sales from divestitures from the prior-year period and the $5.1 million negative impact of foreign currency translation, price improvement and volume increases resulted in 1.8% growth in sales. U.S. sales, adjusted for divestitures, were up $2.8 million, or 2.5%, primarily from price improvement, while sales outside the U.S. also adjusted for foreign currency translation were up 1.1%.

First Quarter Fiscal 2020 Operating Results

($ in millions)

Q1 FY 20

 

Q1 FY 19

 

Change

 

% Change

Gross profit

$

 

75.6

 

 

$

 

79.6

 

 

$

 

(4.0

)

 

(5.1

)%

Gross margin

 

35.5

%

 

 

35.4

%

 

10 bps

 

 

Income from operations

$

 

27.0

 

 

$

 

13.5

 

 

$

 

13.5

 

 

100.3

%

Operating margin

 

12.7

%

 

 

6.0

%

 

670 bps

 

 

Net income

$

 

18.6

 

 

$

 

7.7

 

 

$

 

10.9

 

 

141.1

%

Diluted EPS

$

 

0.78

 

 

$

 

0.33

 

 

$

 

0.45

 

 

136.4

%

Adjusted EBITDA *

$

 

35.5

 

 

$

 

35.3

 

 

$

 

0.2

 

 

0.4

%

Adjusted EBITDA margin

 

16.7

%

 

 

15.7

%

 

100 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).

Gross profit and gross margin reflect a shift in mix during the quarter, while pricing more than offset material cost inflation and tariffs. For more information on changes in gross profit, please see the table on page 7 of this release. Adjusted income from operations was $28.1 million, up $1.6 million, or 6.0%, over the first quarter of fiscal 2019. Adjusted operating margin expanded 140 basis points from the impact of the 80/20 Process and lower selling expenses. Please see the reconciliation of GAAP income from operations to adjusted income from operations on page 10 of this release.

Adjusted net income for the quarter was $19.3 million, or $0.81 per diluted share, compared with $17.5 million, or $0.74 per diluted share, in the prior-year period. Adjusted EBITDA margin was 16.7%. Please see the reconciliation of GAAP net income and earnings per share to adjusted net income and earnings per share on page 11 of this release.

Second Quarter Fiscal 2020 Outlook

While recent industrial market weakness is well reported, the Company believes that its Blueprint for Growth strategy is offsetting these headwinds. In addition, simplification and operational excellence are expected to drive margin expansion and operating leverage. The Company expects revenue in the second quarter of fiscal year 2020 to be unchanged to slightly improved over the prior-year period. Second quarter fiscal year 2019 revenue adjusted for divestitures and foreign currency translation at current rates was $206 million.

Teleconference/webcast

Columbus McKinnon will host a conference call and live webcast Tuesday, July 30 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 www.cmworks.com/investors. 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 www.cmworks.com/investors. To listen to the archived call, dial 412-317-6671 and enter the passcode 13692055. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Tuesday, August 6, 2019. 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 http://www.cmworks.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 effectiveness of the Company's 80/20 Process to simplify operations, the ability of the Company's Operational Excellence initiatives to drive profitability, the success of the Company's efforts to Ramp the Growth Engine, 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.

Financial tables follow.

 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Income Statements - UNAUDITED

(In thousands, except per share and percentage data)

 

 

 

Three Months Ended

 

 

 

 

June 30, 2019

 

June 30, 2018

 

Change

Net sales

 

$

 

212,712

 

 

$

 

224,992

 

 

(5.5

)%

Cost of products sold

 

 

137,100

 

 

 

145,345

 

 

(5.7

)%

Gross profit

 

 

75,612

 

 

 

79,647

 

 

(5.1

)%

Gross profit margin

 

 

35.5

%

 

 

35.4

%

 

 

Selling expenses

 

 

22,755

 

 

 

25,567

 

 

(11.0

)%

% of net sales

 

 

10.7

%

 

 

11.4

%

 

 

General and administrative expenses

 

 

19,600

 

 

 

21,826

 

 

(10.2

)%

% of net sales

 

 

9.2

%

 

 

9.7

%

 

 

Research and development expenses

 

 

2,792

 

 

 

3,748

 

 

(25.5

)%

% of net sales

 

 

1.3

%

 

 

1.7

%

 

 

Net loss on sales of businesses, including impairment

 

 

169

 

 

 

11,100

 

 

(98.5

)%

Amortization of intangibles

 

 

3,253

 

 

 

3,903

 

 

(16.7

)%

Income from operations

 

 

27,043

 

 

 

13,503

 

 

100.3

%

Operating margin

 

 

12.7

%

 

 

6.0

%

 

 

Interest and debt expense

 

 

3,852

 

 

 

4,607

 

 

(16.4

)%

Investment (income) loss, net

 

 

(302

)

 

 

(268

)

 

12.7

%

Foreign currency exchange (gain) loss

 

 

(410

)

 

 

(276

)

 

48.6

%

Other (income) expense, net

 

 

162

 

 

 

(40

)

 

NM

Income before income tax expense

 

 

23,741

 

 

 

9,480

 

 

150.4

%

Income tax expense

 

 

5,162

 

 

 

1,774

 

 

191.0

%

Net income

 

$

 

18,579

 

 

$

 

7,706

 

 

141.1

%

 

 

 

 

 

 

 

Average basic shares outstanding

 

 

23,431

 

 

 

23,115

 

 

1.4

%

Basic income per share

 

$

 

0.79

 

 

$

 

0.33

 

 

139.4

%

 

 

 

 

 

 

 

Average diluted shares outstanding

 

 

23,777

 

 

 

23,610

 

 

0.7

%

Diluted income per share

 

$

 

0.78

 

 

$

 

0.33

 

 

136.4

%

 
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COLUMBUS McKINNON CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

June 30, 2019

 

March 31,
2019

 

 

(unaudited)

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

 

 

 

55,716

 

 

$

 

 

 

71,093

 

Trade accounts receivable

 

 

135,488

 

 

 

129,157

 

Inventories

 

 

150,968

 

 

 

146,263

 

Prepaid expenses and other

 

 

15,885

 

 

 

16,075

 

Total current assets

 

 

358,057

 

 

 

362,588

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

85,085

 

 

 

87,303

 

Goodwill

 

 

325,301

 

 

 

322,816

 

Other intangibles, net

 

 

231,510

 

 

 

232,940

 

Marketable securities

 

 

7,575

 

 

 

7,028

 

Deferred taxes on income

 

 

27,248

 

 

 

27,707

 

Other assets

 

 

55,696

 

 

 

21,189

 

Total assets

 

$

 

 

 

1,090,472

 

 

$

 

 

 

1,061,571

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

 

 

 

40,235

 

 

$

 

 

 

46,974

 

Accrued liabilities

 

 

99,752

 

 

 

99,304

 

Current portion of long-term debt

 

 

65,000

 

 

 

65,000

 

Total current liabilities

 

 

204,987

 

 

 

211,278

 

 

 

 

 

 

Term loan and revolving credit facility

 

 

225,844

 

 

 

235,320

 

Other non-current liabilities

 

 

207,348

 

 

 

183,814

 

Total liabilities

 

 

638,179

 

 

 

630,412

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

Common stock

 

 

235

 

 

 

234

 

Additional paid-in capital

 

 

279,534

 

 

 

277,518

 

Retained earnings

 

 

255,038

 

 

 

236,459

 

Accumulated other comprehensive loss

 

 

(82,514

)

 

 

(83,052

)

Total shareholders' equity

 

 

452,293

 

 

 

431,159

 

Total liabilities and shareholders' equity

 

$

 

 

 

1,090,472

 

 

$

 

 

 

1,061,571

 

 
 

COLUMBUS McKINNON CORPORATION

Condensed Consolidated Statements of Cash Flows - UNAUDITED

(In thousands)

 

 

Three Months Ended

 

 

June 30, 2019

 

June 30, 2018

Operating activities:

 

 

 

 

Net income

 

$

 

18,579

 

 

$

 

7,706

 

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

 

 

 

 

Depreciation and amortization

 

 

7,403

 

 

 

8,832

 

Deferred income taxes and related valuation allowance

 

 

415

 

 

 

(2,084

)

Net loss (gain) on sale of real estate, investments, and other

 

 

(268

)

 

 

(16

)

Stock based compensation

 

 

1,556

 

 

 

1,335

 

Amortization of deferred financing costs and discount on debt

 

 

665

 

 

 

665

 

Net loss on sales of businesses, including impairment

 

 

169

 

 

 

11,100

 

Non-cash lease expense

 

 

1,952

 

 

 

Changes in operating assets and liabilities, net of effects of business acquisitions and divestitures:

 

 

 

 

Trade accounts receivable

 

 

(5,827

)

 

 

(5,553

)

Inventories

 

 

(3,879

)

 

 

(8,088

)

Prepaid expenses and other

 

 

(1,755

)

 

 

(296

)

Other assets

 

 

107

 

 

 

374

 

Trade accounts payable

 

 

(6,800

)

 

 

(2,488

)

Accrued liabilities

 

 

(6,322

)

 

 

(2,684

)

Non-current liabilities

 

 

(8,155

)

 

 

(685

)

Net cash provided by (used for) operating activities

 

 

(2,160

)

 

 

8,118

 

Investing activities:

 

 

 

 

Proceeds from sales of marketable securities

 

 

636

 

 

 

260

 

Purchases of marketable securities

 

 

(1,039

)

 

 

(150

)

Capital expenditures

 

 

(1,854

)

 

 

(2,338

)

Proceeds from sale of equipment and real estate

 

 

51

 

 

 

176

 

Net payment related to the sales of businesses

 

 

(214

)

 

 

Net cash provided by (used for) investing activities

 

 

(2,420

)

 

 

(2,052

)

Financing activities:

 

 

 

 

Proceeds from the issuance of common stock

 

 

980

 

 

 

3,641

 

Repayment of debt

 

 

(10,000

)

 

 

(10,000

)

Payment of dividends

 

 

(1,404

)

 

 

(1,153

)

Other

 

 

(518

)

 

 

(550

)

Net cash provided by (used for) financing activities

 

 

(10,942

)

 

 

(8,062

)

Effect of exchange rate changes on cash

 

 

145

 

 

 

(3,894

)

Net change in cash and cash equivalents

 

 

(15,377

)

 

 

(5,890

)

Cash, cash equivalents, and restricted cash at beginning of year

 

 

71,343

 

 

 

63,565

 

Cash, cash equivalents, and restricted cash at end of period

 

$

 

55,966

 

 

$

 

57,675

 

 

COLUMBUS McKINNON CORPORATION

Q1 FY 2020 Sales Bridge

 

 

Quarter

($ in millions)

 

$ Change

 

% Change

Fiscal 2019 Sales

 

$

 

225.0

 

 

 

Divestitures

 

 

(11.1

)

 

 

Fiscal 2019 Sales
adjusted for divestitures

 

$

 

213.9

 

 

 

 

 

 

 

 

Volume

 

 

0.1

 

 

0.1

%

Pricing

 

 

3.8

 

 

1.8

%

Foreign currency translation

 

 

(5.1

)

 

(2.4

)%

Total change adjusted for
divestitures

 

$

 

(1.2

)

 

(0.5

)%

Fiscal 2020 Sales

 

$

 

212.7

 

 

 

 

COLUMBUS McKINNON CORPORATION

Q1 FY 2020 Gross Profit Bridge

($ in millions)

Quarter

Fiscal 2019 Gross Profit

$

79.6

 

Pricing, net of material cost inflation

2.5

 

Insurance settlement

0.3

 

Prior year STAHL integration costs

0.3

 

Productivity, net of other cost changes

0.2

 

Ohio plant closure

(0.5

)

Tariffs

(0.6

)

Foreign currency translation

(1.6

)

Divestitures

(1.8

)

Sales volume and mix

(2.8

)

Total change

$

(4.0

)

Fiscal 2020 Gross Profit

$

75.6

 

 

COLUMBUS McKINNON CORPORATION

Additional Data - UNAUDITED

 

 

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

($ in millions)

 

 

 

 

 

 

 

 

 

Backlog

 

$

 

148.2

 

 

 

$

 

161.5

 

 

 

$

 

163.9

 

 

Backlog excluding divestitures

 

$

 

148.2

 

 

 

$

 

161.5

 

 

 

$

 

156.3

 

 

Long-term backlog (expected to ship beyond 3
months)

 

$

 

53.9

 

 

 

$

 

61.7

 

 

 

$

 

54.2

 

 

Long-term backlog as % of total backlog

 

 

36.4

 

%

 

 

38.2

 

%

 

 

33.1

 

%

 

 

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

 

 

 

 

 

 

 

Days sales outstanding (1)

 

 

58.0

 

days

 

 

55.5

 

days

 

 

52.5

 

days

 

 

 

 

 

 

 

 

 

 

Inventory turns per year (1)

 

 

 

 

 

 

 

 

 

(based on cost of products sold)

 

 

3.6

 

turns

 

 

3.7

 

turns

 

 

3.7

 

turns

Days' inventory (1)

 

 

100.6

 

days

 

 

97.6

 

days

 

 

98.6

 

days

 

 

 

 

 

 

 

 

 

 

Trade accounts payable

 

 

 

 

 

 

 

 

 

Days payables outstanding (1)

 

 

26.7

 

days

 

 

31.3

 

days

 

 

27.2

 

days

 

 

 

 

 

 

 

 

 

 

Working capital as a % of sales (1), (2)

 

 

19.3

 

%

 

 

17.2

 

%

 

 

19.4

 

%

 

 

 

 

 

 

 

 

 

 

Debt to total capitalization percentage

 

 

39.1

 

%

 

 

41.1

 

%

 

 

46.3

 

%

 

 

 

 

 

 

 

 

 

 

Debt, net of cash, to net total capitalization

 

 

34.2

 

%

 

 

34.7

 

%

 

 

42.0

 

%

(1) March 31, 2019 figures exclude the Tire Shredder business, which was divested on December 28, 2018, and Crane Equipment & Service, Inc. and Stahlhammer Bommern GmbH, each of which were divested on February 28, 2019.

(2) June 30, 2019 and March 31, 2019 figures exclude the Tire Shredder business, which was divested on December 28, 2018, and Crane Equipment & Service, Inc. and Stahlhammer Bommern GmbH, each of which were divested on February 28, 2019.

U.S. Shipping Days by Quarter

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Total

FY 20

 

63

 

63

 

61

 

64

 

251

 

 

 

 

 

 

 

 

 

 

 

FY 19

 

64

 

63

 

60

 

63

 

250

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
June 30,

 

2019

 

2018

Gross profit

$

 

75,612

 

 

$

 

79,647

 

Add back (deduct):

 

 

 

Ohio plant closure

 

506

 

 

 

China plant closure

 

 

 

STAHL integration costs

 

 

 

286

 

Insurance settlement

 

(290

)

 

 

Non-GAAP adjusted gross profit

$

 

75,828

 

 

$

 

79,933

 

 

 

 

 

Sales

$

 

212,712

 

 

$

 

224,992

 

Adjusted gross margin

 

35.6

%

 

 

35.5

%

 

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 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
June 30,

 

2019

 

2018

Income from operations

$

27,043

 

 

$

13,503

 

Add back (deduct):

 

 

 

China plant closure

521

 

 

 

Ohio plant closure

506

 

 

 

Net loss on sales of businesses, including impairment

169

 

 

11,100

 

Insurance recovery legal costs

139

 

 

 

Insurance settlement

(290

)

 

 

STAHL integration costs

 

 

1,906

 

Non-GAAP adjusted income from operations

$

28,088

 

 

$

26,509

 

 

 

 

 

Sales

$

212,712

 

 

$

224,992

 

Adjusted operating margin

13.2

%

 

11.8

%

 

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 CORPORATION

Reconciliation of GAAP Net Income (Loss) 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
June 30,

 

2019

 

2018

Net income

$

 

18,579

 

 

$

 

7,706

 

Add back (deduct):

 

 

 

China plant closure

 

521

 

 

 

Ohio plant closure

 

506

 

 

 

Net loss on sales of businesses, including impairment

 

169

 

 

 

11,100

 

Insurance recovery legal costs

 

139

 

 

 

Insurance settlement

 

(290

)

 

 

STAHL integration costs

 

 

 

1,906

 

Normalize tax rate to 22% (1)

 

(291

)

 

 

(3,173

)

Non-GAAP adjusted net income

$

 

19,333

 

 

$

 

17,539

 

 

 

 

 

Average diluted shares outstanding

 

23,777

 

 

 

23,610

 

 

 

 

 

Diluted income per share - GAAP

$

 

0.78

 

 

$

 

0.33

 

 

 

 

 

Diluted income per share - Non-GAAP

$

 

0.81

 

 

$

 

0.74

 

(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 CORPORATION

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA

($ in thousands)

 

Three Months Ended
June 30,

 

2019

 

2018

Net income

$

18,579

 

 

$

7,706

 

Add back (deduct):

 

 

 

Income tax expense

5,162

 

 

1,774

 

Interest and debt expense

3,852

 

 

4,607

 

Investment loss (income)

(302

)

 

(268

)

Foreign currency exchange (gain) loss

(410

)

 

(276

)

Other (income) expense, net

162

 

 

(40

)

Depreciation and amortization expense

7,403

 

 

8,832

 

China plant closure

521

 

 

 

Ohio plant closure

506

 

 

 

Net loss on sales of businesses, including impairment

169

 

 

11,100

 

Insurance recovery legal costs

139

 

 

 

Insurance settlement

(290

)

 

 

STAHL integration costs

 

 

1,906

 

Non-GAAP adjusted EBITDA

$

35,491

 

 

$

35,341

 

 

 

 

 

Sales

$

212,712

 

 

$

224,992

 

Adjusted EBITDA margin

16.7

%

 

15.7

%

 

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 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.

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