BUFFALO, N.Y.--(BUSINESS WIRE)--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 2021 first quarter, which ended June 30, 2020.
First Quarter Highlights (compared with prior-year period)
- Achieved positive operating income and cash generation despite 35% decline in revenue
- Delivered $1.8 million in operating income in quarter even as end markets were severely challenged due to COVID-19 pandemic; Adjusted operating income* was $5.0 million
- Generated $9.5 million in cash from operations and $8.4 million in free cash flow*
- Significant liquidity and low net debt leverage position Columbus McKinnon for Phase III of strategy as markets improve
David Wilson, President and CEO of Columbus McKinnon, commented, “I have been pleased with the performance of our leadership team and the effectiveness of the Blueprint for Growth strategy during these extraordinary times resulting from the global pandemic. The rapid actions taken to preserve liquidity, protect the enterprise and continue to make select investments in growth enabled respectable financial results despite the dramatic drop in demand. Even as volume measurably declined, we achieved gross margin of 32% given strategic pricing initiatives, footprint consolidations and overhead cost reductions. We were encouraged to see markets improve monthly from the trough in April through June and now into July, as order activity has increased.”
He added, “In this challenging environment, there are factors that we can control. We will continue to drive cost performance and improve our competitive positioning by advancing Phases II and III of the Blueprint for Growth strategy. We are prioritizing our efforts on a select set of initiatives to deliver organic growth and strategic development while advancing our 80/20 Process and operational excellence plans. In fact, even with the downturn in the first quarter, we realized $1.9 million in contribution to operating income from the 80/20 Process.”
*Adjusted operating income and free cash flow are non-GAAP measures. See accompanying discussion and reconciliation tables in this release regarding adjusted operating income. Free cash flow is defined as cash from operations minus capital expenditures.
First Quarter Fiscal 2021 Sales
| ($ in millions) | Q1 FY 21 | Q1 FY 20 | Change | % Change | |||||||
| Net sales | $ | 139.1 | $ | 212.7 | $ | (73.6) | (34.6) | % | |||
| U.S. sales | $ | 74.7 | $ | 116.7 | $ | (42.0) | (36.0) | % | |||
| % of total | 54 | % | 55 | % | |||||||
| Non-U.S. sales | $ | 64.4 | $ | 96.0 | $ | (31.6) | (32.9) | % | |||
| % of total | 46 | % | 45 | % | |||||||
| ($ in millions) | Q1 FY 21 | Q1 FY 20 | Change | % Change | |||||||
| Gross profit | $ | 44.8 | $ | 75.6 | $ | (30.8 | ) | (40.8 | )% | ||
| Gross margin | 32.2 | % | 35.5 | % | (330) bps | ||||||
| Income from operations | $ | 1.8 | $ | 27.0 | $ | (25.3 | ) | (93.4 | )% | ||
| Operating margin | 1.3 | % | 12.7 | % | (1,140) bps | ||||||
| Net income (loss) | $ | (3.0 | ) | $ | 18.6 | $ | (21.5 | ) | NM | ||
| Diluted EPS | $ | (0.12 | ) | $ | 0.78 | $ | (0.90 | ) | NM | ||
| Adjusted EBITDA* | $ | 12.1 | $ | 35.5 | $ | (23.4 | ) | (65.9 | )% | ||
| Adjusted EBITDA margin | 8.7 | % | 16.7 | % | (800) 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 for the impacts of factory closures and business realignment costs, income from operations was $5.0 million, or 3.6% of sales. Decremental adjusted operating income leverage was just 31%, improved over historic decremental leverage during dramatic recessionary environments. (See the reconciliation of GAAP income from operations to adjusted income from operations on page 10 of this release.) Net loss for the quarter was $3.0 million which included a $2.7 million non-cash pension settlement charge related to the termination of a U.S. pension plan.
Adjusted EBITDA margin was 8.7% for the quarter reflecting the benefits of the Company’s self-help improvement efforts in austere market conditions. (See the reconciliation of GAAP net income to adjusted EBITDA on page 12 of this release.)
Second Quarter Fiscal 2021 Outlook
Mr. Wilson concluded, “We are executing efficiently as we ramp up to meet improving demand, notably in the U.S. and Europe, our largest geographic markets. While order rates have been growing, we are carefully monitoring our customer landscape and will take additional actions if necessary to achieve our objectives.”
Currently, Columbus McKinnon expects second quarter fiscal 2021 revenue to improve sequentially to a range of approximately $150 million to $160 million at current exchange rates and to continue to generate positive operating income and free cash flow.
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.
