cmcoa26.jpg 
EXHIBIT 99.1
News Release
 
205 Crosspoint Parkway
Buffalo, NY 14068
Immediate Release     
Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
BUFFALO, NY, May 27, 2020 - 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 2020 fourth quarter, which ended March 31, 2020.
Fourth Quarter Highlights (compared with prior-year period)
•
Core values guided agile response to impact of COVID-19 pandemic; Focused on safety of associates, business continuity and conserving cash while continuing to invest in strategic growth initiatives
•
Success of Blueprint for Growth Strategy validated with 34.9% gross margin, and record 36.1% adjusted gross margin, despite 12.6% decline in sales
•
80/20 Process contributed $5.5 million in operating income in quarter helping to offset volume declines
•
Net income was $9.2 million, or $0.39 per diluted share; Adjusted net income was $13.8 million, or $0.58 per diluted share
•
Generated $36.5 million in cash from operations in the quarter
Fiscal Year Highlights (compared with prior-year period)
•
Record annual gross margin was 35.0% despite 7.7% decline in sales
•
Operating income was $89.8 million, or 11.1% of sales; 80/20 process contributed $20.4 million
•
Net income was $59.7 million, or $2.50 per diluted share
•
Achieved 15.7% Adjusted EBTIDA margin and ROIC of 11.5%
•
Strong working capital management and cash generation delivered record $106.8 million in cash from operations
•
Ended year with strong balance sheet that provides financial flexibility and significant liquidity


Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 2 of 13
May 27, 2020

Richard Fleming, Chairman and Interim CEO of Columbus McKinnon, commented, “We demonstrated the power of our Blueprint for Growth strategy throughout fiscal 2020 with expanded margins despite slowing demand. However, in March the COVID-19 pandemic required us to rapidly implement actions to flex production levels and reduce costs to address the significant decline in demand we are now experiencing. Importantly, we have an excellent capital structure, strong cash generation and sufficient liquidity that will allow us to navigate these uncertain times while continuing to invest in select, strategic initiatives that we believe will enhance our competitive advantages and drive future growth.”
Fourth Quarter Fiscal 2020 Sales
($ in millions)
Q4 FY 20
 
Q4 FY 19
 
Change
 
% Change
Net sales
$
189.5

 
$
216.7

 
$
(27.2
)
 
(12.6
)%
 
 
 
 
 
 
 
 
U.S. sales
$
104.1

 
$
120.5

 
$
(16.4
)
 
(13.6
)%
     % of total
55
%
 
56
%
 
 
 
 
Non-U.S. sales
$
85.4

 
$
96.2

 
$
(10.8
)
 
(11.2
)%
     % of total
45
%
 
44
%
 
 
 
 
Sales declined primarily on lower volume as improved pricing more than offset the negative impact of changes in foreign currency translation. Sales in the U.S. were down $16.4 million, of which $2.4 million was related to divestitures in the prior-year period. Sales outside the U.S. were down $10.8 million, of which $2.4 million was related to divestitures in the prior-year period and $2.3 million was related to foreign currency translation.
Fourth Quarter Fiscal 2020 Operating Results
($ in millions)
Q4 FY 20
 
Q4 FY 19
 
Change
 
% Change
Gross profit
$
66.2

 
$
76.0

 
$
(9.8
)
 
(12.9
)%
     Gross margin
34.9
%
 
35.1
%
 
(20) bps

 
 
Income from operations
$
16.7

 
$
24.5

 
$
(7.8
)
 
(31.9
)%
     Operating margin
8.8
%
 
11.3
%
 
(250) bps

 
 
Net income
$
9.2

 
$
19.7

 
$
(10.5
)
 
(53.2
)%
     Diluted EPS
$
0.39

 
$
0.83

 
$
(0.44
)
 
(53.0
)%
Adjusted EBITDA *
$
27.3

 
$
32.8

 
$
(5.5
)
 
(16.7
)%
     Adjusted EBITDA margin
14.4
%
 
15.1
%
 
(70) 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 income from operations was $20.2 million, down $4.7 million, or 18.9%, compared with the fourth quarter of fiscal 2019. Adjusted operating margin declined 80 basis points. (See the reconciliation of GAAP income from operations to adjusted income from operations on page 11 of this release.)
Adjusted EBITDA margin was 14.4% for the quarter, a decline of 70 basis points over the prior-year period. (See the reconciliation of GAAP net income to adjusted EBITDA on page 13 of this release.)
First Quarter Fiscal 2021 Outlook
Given the actions taken to reduce costs, the Company expects income from operations would be at breakeven levels if revenue were to decline by 35% from the fourth quarter fiscal 2020. Currently, Columbus McKinnon expects first quarter fiscal 2021 revenue to be approximately $130 million to $140 million at current exchange rates, which is above breakeven.


Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 3 of 13
May 27, 2020

Mr. Fleming concluded, “We believe that Columbus McKinnon will come out of these unprecedented times a stronger company and are excited to welcome David Wilson to advance our Blueprint for Growth strategy and lead our future endeavors as our new CEO effective June 1, 2020.”
Teleconference/webcast
Columbus McKinnon will host a conference call and live webcast Wednesday, May 27, 2020 at 8:00 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 https://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 https://investors.columbusmckinnon.com. To listen to the archived call, dial 412-317-6671 and enter the passcode 13700704. The telephonic replay will be available from 11:00 AM Eastern Time on the day of the call through Wednesday, June 3, 2020. 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 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 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 impact of Covid-19 and the Company’s aggressive efforts to reduce costs, maintain liquidity and generate cash in the current pandemic, the effectiveness of the Company’s 80/20 Process to simplify operations, the ability of the Company’s Operational Excellence initiatives to drive profitability, 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.
Contacts:
Gregory P. Rustowicz
Investor Relations:
Vice President - Finance and Chief Financial Officer
Deborah K. Pawlowski
Columbus McKinnon Corporation
Kei Advisors LLC
716-689-5442
716-843-3908
greg.rustowicz@cmworks.com
dpawlowski@keiadvisors.com
Financial tables follow.


Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 4 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
 


Three Months Ended


 

March 31, 2020

March 31, 2019

Change
Net sales

$
189,486


$
216,733


(12.6
)%
Cost of products sold

123,277


140,688


(12.4
)%
Gross profit

66,209


76,045


(12.9
)%
Gross profit margin

34.9
%

35.1
%

 

Selling expenses

22,253


23,985


(7.2
)%
% of net sales
 
11.7
%
 
11.1
%
 
 
General and administrative expenses

21,167


21,674


(2.3
)%
% of net sales
 
11.2
%
 
10.0
%
 
 
Research and development expenses
 
2,891

 
3,354

 
(13.8
)%
% of net sales
 
1.5
%
 
1.5
%
 
 
Net loss (gain) on sales of businesses
 
—

 
(978
)
 
NM

Amortization of intangibles

3,234


3,542


(8.7
)%
Income from operations

16,664


24,468


(31.9
)%
Operating margin

8.8
%

11.3
%

 

Interest and debt expense

3,200


3,959


(19.2
)%
Investment (income) loss

48


(430
)

NM

Foreign currency exchange (gain) loss

(996
)

637


NM

Other (income) expense, net

221


(299
)

NM

Income before income tax expense

14,191


20,601


(31.1
)%
Income tax expense

4,947


860


475.2
 %
Net income

$
9,244


$
19,741


(53.2
)%










Average basic shares outstanding

23,735


23,368


1.6
 %
Basic income (loss) per share

$
0.39


$
0.84


(53.6
)%










Average diluted shares outstanding

23,938


23,714


0.9
 %
Diluted income (loss) per share

$
0.39


$
0.83


(53.0
)%
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.12

 
$
0.11

 
 



Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 5 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Condensed Consolidated Income Statements - UNAUDITED
(In thousands, except per share and percentage data)
 
 
 
Year Ended
 
 
 
 
March 31, 2020
 
March 31, 2019
 
Change
Net sales
 
$
809,162

 
$
876,282

 
(7.7
)%
Cost of products sold
 
525,976

 
571,285

 
(7.9
)%
Gross profit
 
283,186

 
304,997

 
(7.2
)%
Gross profit margin
 
35.0
%
 
34.8
%
 
 
Selling expenses
 
91,054

 
97,925

 
(7.0
)%
% of net sales
 
11.3
%
 
11.2
%
 
 
General and administrative expenses
 
77,880

 
83,567

 
(6.8
)%
% of net sales
 
9.6
%
 
9.5
%
 
 
Research and development expenses
 
11,310

 
13,491

 
(16.2
)%
% of net sales
 
1.4
%
 
1.5
%
 
 
Net loss on sales of businesses, including impairment
 
176

 
25,672

 
(99.3
)%
Amortization of intangibles
 
12,942

 
14,900

 
(13.1
)%
Income from operations
 
89,824

 
69,442

 
29.4
 %
Operating margin
 
11.1
%
 
7.9
%
 
 
Interest and debt expense
 
14,234

 
17,144

 
(17.0
)%
Investment (income) loss
 
(891
)
 
(727
)
 
22.6
 %
Foreign currency exchange (gain) loss
 
(1,514
)
 
843

 
NM

Other (income) expense, net
 
839

 
(716
)
 
NM

Income before income tax expense
 
77,156

 
52,898

 
45.9
 %
Income tax expense
 
17,484

 
10,321

 
69.4
 %
Net income
 
$
59,672

 
$
42,577

 
40.2
 %
 
 
 
 
 
 
 
Average basic shares outstanding
 
23,619

 
23,276

 
1.5
 %
Basic income per share
 
$
2.53

 
$
1.83

 
38.3
 %
 
 
 
 
 
 
 
Average diluted shares outstanding
 
23,855

 
23,660

 
0.8
 %
Diluted income per share
 
$
2.50

 
$
1.80

 
38.9
 %
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.24

 
$
0.21

 
 



Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 6 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
 
 
March 31, 2020
 
March 31, 2019
 
 
(unaudited)
 
 
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
114,450

 
$
71,093

Trade accounts receivable
 
123,743

 
129,157

Inventories
 
127,373

 
146,263

Prepaid expenses and other
 
17,180

 
16,075

Total current assets
 
382,746

 
362,588

 
 
 
 
 
Property, plant, and equipment, net
 
79,473

 
87,303

Goodwill
 
319,679

 
322,816

Other intangibles, net
 
217,962

 
232,940

Marketable securities
 
7,322

 
7,028

Deferred taxes on income
 
26,281

 
27,707

Other assets
 
59,809

 
21,189

Total assets
 
$
1,093,272

 
$
1,061,571

 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 

 
 

Current liabilities:
 
 

 
 

Trade accounts payable
 
$
57,289

 
$
46,974

Accrued liabilities
 
93,585

 
99,304

Current portion of long-term debt
 
4,450

 
65,000

Total current liabilities
 
155,324

 
211,278

 
 
 
 
 
Term loan and revolving credit facility
 
246,856

 
235,320

Other non-current liabilities
 
227,507

 
183,814

Total liabilities
 
629,687

 
630,412

 
 
 
 
 
Shareholders’ equity:
 
 

 
 

Common stock
 
238

 
234

Additional paid-in capital
 
287,256

 
277,518

Retained earnings
 
290,441

 
236,459

Accumulated other comprehensive loss
 
(114,350
)
 
(83,052
)
Total shareholders’ equity
 
463,585

 
431,159

Total liabilities and shareholders’ equity
 
$
1,093,272

 
$
1,061,571




Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 7 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Condensed Consolidated Statements of Cash Flows - UNAUDITED
(In thousands)
 
 
Year Ended
 
 
March 31, 2020
 
March 31, 2019
Operating activities:
 
 
 
 
Net income
 
$
59,672

 
$
42,577

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

 
 

Depreciation and amortization
 
29,126

 
32,675

Deferred income taxes and related valuation allowance
 
7,364

 
(958
)
Net loss (gain) on sale of real estate, investments, and other
 
(563
)
 
194

Stock based compensation
 
4,507

 
6,198

Amortization of deferred financing costs
 
2,655

 
2,655

Net loss on sales of businesses, including impairment
 
176

 
25,672

Non-cash lease expense
 
7,923

 
—

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

Trade accounts receivable
 
2,899

 
(11,328
)
Inventories
 
15,752

 
(15,411
)
Prepaid expenses and other
 
(3,857
)
 
(128
)
Other assets
 
724

 
231

Trade accounts payable
 
8,110

 
3,881

Accrued liabilities
 
(14,304
)
 
6,397

Non-current liabilities
 
(13,389
)
 
(13,156
)
Net cash provided by (used for) operating activities
 
106,795

 
79,499

 
 
 
 
 
Investing activities:
 
 

 
 

Proceeds from sales of marketable securities
 
5,380

 
3,266

Purchases of marketable securities
 
(5,747
)
 
(2,604
)
Capital expenditures
 
(9,432
)
 
(12,288
)
Proceeds from sale of equipment and real estate
 
51

 
176

Net (payments) proceeds from sales of businesses
 
(214
)
 
14,230

Payment of restricted cash to former owner
 
—

 
(294
)
Net cash provided by (used for) investing activities
 
(9,962
)
 
2,486

 
 
 
 
 
Financing activities:
 
 

 
 

Proceeds from issuance of common stock
 
6,000

 
4,152

Repayment of debt
 
(51,113
)
 
(65,088
)
Payment of dividends
 
(5,670
)
 
(4,652
)
Other
 
(768
)
 
(2,190
)
Net cash provided by (used for) financing activities
 
(51,551
)
 
(67,778
)
 
 
 
 
 
Effect of exchange rate changes on cash
 
(1,925
)
 
(6,429
)
 
 
 
 
 
Net change in cash and cash equivalents
 
43,357

 
7,778

Cash, cash equivalents, and restricted cash at beginning of year
 
71,343

 
63,565

Cash, cash equivalents, and restricted cash at end of period
 
$
114,700

 
$
71,343




Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 8 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Q4 FY 2020 Sales Bridge
 
 
Quarter
 
Year To Date
($ in millions)
 
$ Change
 
% Change
 
$ Change
 
% Change
Fiscal 2019 Sales
 
$
216.7

 
 
 
$
876.3

 
 
Divestitures
 
(4.8
)
 
 
 
(34.2
)
 
 
Fiscal 2019 Sales adjusted for divestitures
 
$
211.9

 
 
 
$
842.1

 
 
 
 
 
 
 
 
 
 
 
Volume
 
(22.9
)
 
(10.8
)%
 
(33.0
)
 
(3.9
)%
Pricing
 
2.8

 
1.3
 %
 
13.2

 
1.6
 %
Foreign currency translation
 
(2.3
)
 
(1.1
)%
 
(13.1
)
 
(1.6
)%
Total change adjusted for divestitures
 
$
(22.4
)
 
(10.6
)%
 
$
(32.9
)
 
(3.9
)%
Fiscal 2020 Sales
 
$
189.5

 


 
$
809.2

 
 


COLUMBUS McKINNON CORPORATION
Q4 FY 2020 Gross Profit Bridge
($ in millions)
Quarter
 
Year To Date
Fiscal 2019 Gross Profit
$
76.0

 
$
305.0

Divestitures
(0.9
)
 
(7.1
)
Fiscal 2019 Gross Profit adjusted for divestitures
75.1

 
297.9

Pricing, net of material cost inflation
2.5

 
10.3

Insurance settlement
—

 
0.4

Product liability
(0.3
)
 
(0.6
)
Business realignment costs
(0.8
)
 
(0.7
)
Tariffs
0.4

 
(0.8
)
Factory closures
—

 
(1.3
)
Productivity, net of other cost changes
(1.6
)
 
(3.4
)
Foreign currency translation
(0.8
)
 
(4.5
)
Sales volume and mix
(8.3
)
 
(14.1
)
Total change adjusted for divestitures
$
(8.9
)
 
$
(14.7
)
Fiscal 2020 Gross Profit
$
66.2

 
$
283.2







Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 9 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Additional Data - UNAUDITED
 
 
March 31, 2020
 
December 31, 2019
 
March 31, 2019
($ in millions)
 
 
 
 
 
 
 
 
 
Backlog
 
$
131.0

 
 
$
125.3

 
 
$
161.5

 
Long-term backlog
 
 
 
 
 
 
 
 
 
  Expected to ship beyond 3 months
 
$
49.1

 
 
$
51.3

 
 
$
61.7

 
Long-term backlog as % of total backlog
 
37.5

%
 
40.9

%
 
38.2

%
 
 
 
 
 
 
 
 
 
 
Trade accounts receivable
 
 

 
 
 

 
 
 

      
Days sales outstanding (1)
 
59.4

days
 
57.2

days
 
55.5

days
 
 
 
 
 
 
 
 
 
 
Inventory turns per year (1)
 
 

 
 
 

 
 
 

      
(based on cost of products sold)
 
3.9

turns
 
3.9

turns
 
3.7

turns
Days' inventory (1)
 
94.3

days
 
94.0

days
 
97.6

days
 
 
 
 
 
 
 
 
 
 
Trade accounts payable
 
 

 
 
 

 
 
 

      
Days payables outstanding (1)
 
42.3

days
 
32.1

days
 
31.3

days
 
 
 
 
 
 
 
 
 
 
Working capital as a % of sales (1), (2)
 
14.5

%
 
16.5

%
 
17.2

%
 
 
 
 
 
 
 
 
 
 
Debt to total capitalization percentage
 
35.2

%
 
34.2

%
 
41.1

%
 
 
 
 
 
 
 
 
 
 
Debt, net of cash, to net total capitalization
 
22.8

%
 
25.7

%
 
34.7

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

U.S. Shipping Days by Quarter 
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Total
FY 21
 
63
 
64
 
61
 
63
 
251
 
 
 
 
 
 
 
 
 
 
 
FY 20
 
63
 
63
 
61
 
64
 
251
 
 
 
 
 
 
 
 
 
 
 
FY 19
 
64
 
63
 
60
 
63
 
250




Columbus McKinnon Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 10 of 13
May 27, 2020

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 March 31,
 
Year Ended March 31,
 
2020
 
2019
 
2020
 
2019
Gross profit
$
66,209

 
$
76,045

 
$
283,186

 
$
304,997

Add back (deduct):
 
 
 
 
 
 
 
Factory closures
1,349

 
1,273

 
2,800

 
1,473

Business realignment costs
774

 
—

 
1,037

 
286

     Insurance settlement
(15
)
 
—

 
(382
)
 
—

Non-GAAP adjusted gross profit
$
68,317

 
$
77,318

 
$
286,641

 
$
306,756

 
 
 
 
 
 
 
 
Sales
$
189,486

 
$
216,733

 
$
809,162

 
$
876,282

Adjusted gross margin
36.1
%
 
35.7
%
 
35.4
%
 
35.0
%

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 Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 11 of 13
May 27, 2020

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 March 31,
 
Year Ended March 31,
 
2020
 
2019
 
2020
 
2019
Income from operations
$
16,664

 
$
24,468

 
$
89,824

 
$
69,442

Add back (deduct):
 
 
 
 
 
 
 
Factory closures
1,621

 
1,273

 
4,709

 
1,473

Business realignment costs
1,755

 
—

 
2,831

 
1,906

Insurance recovery legal costs
160

 
132

 
585

 
1,282

Net loss (gain) on sales of businesses, including impairment
—

 
(978
)
 
176

 
25,672

Insurance settlement
(15
)
 
—

 
(382
)
 
—

Non-GAAP adjusted income from operations
$
20,185

 
$
24,895

 
$
97,743

 
$
99,775

 
 
 
 
 
 
 
 
Sales
$
189,486

 
$
216,733

 
$
809,162

 
$
876,282

Adjusted operating margin
10.7
%
 
11.5
%
 
12.1
%
 
11.4
%

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 Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 12 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income 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 March 31,
 
Year Ended March 31,
 
2020
 
2019
 
2020
 
2019
Net income
$
9,244

 
$
19,741

 
$
59,672

 
$
42,577

Add back (deduct):
 
 
 
 
 
 
 
Factory closures
1,621

 
1,273

 
4,709

 
1,473

Business realignment costs
1,755

 
—

 
2,831

 
1,906

Insurance recovery legal costs
160

 
132

 
585

 
1,282

Net loss (gain) on sales of businesses, including impairment
—

 
(978
)
 
176

 
25,672

Insurance settlement
(15
)
 
—

 
(382
)
 
—

     Normalize tax rate to 22% (1)
1,050

 
(3,766
)
 
(1,232
)
 
(7,990
)
Non-GAAP adjusted net income
$
13,815

 
$
16,402

 
$
66,359

 
$
64,920

 
 
 
 
 
 
 
 
Average diluted shares outstanding
23,938

 
23,714

 
23,855

 
23,660

 
 
 
 
 
 
 
 
Diluted income per share - GAAP
$
0.39

 
$
0.83

 
$
2.50

 
$
1.80

 
 
 
 
 
 
 
 
Diluted income per share - Non-GAAP
$
0.58

 
$
0.69

 
$
2.78

 
$
2.74

(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 Announces Financial Results for Fourth Quarter and Fiscal Year 2020
Page 13 of 13
May 27, 2020

COLUMBUS McKINNON CORPORATION
Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
($ in thousands)

 
Three Months Ended March 31,
 
Year Ended March 31,
 
2020
 
2019
 
2020
 
2019
Net income
$
9,244

 
$
19,741

 
$
59,672

 
$
42,577

Add back (deduct):
 
 
 
 
 
 
 
     Income tax expense
4,947

 
860

 
17,484

 
10,321

     Interest and debt expense
3,200

 
3,959

 
14,234

 
17,144

Investment (income) loss
48

 
(430
)
 
(891
)
 
(727
)
Foreign currency exchange (gain) loss
(996
)
 
637

 
(1,514
)
 
843

Other (income) expense, net
221

 
(299
)
 
839

 
(716
)
Depreciation and amortization expense
7,135

 
7,912

 
29,126

 
32,675

Factory closures
1,621

 
1,273

 
4,709

 
1,473

Business realignment costs
1,755

 
—

 
2,831

 
1,906

Insurance recovery legal costs
160

 
132

 
585

 
1,282

Net loss (gain) on sales of businesses, including impairment
—

 
(978
)
 
176

 
25,672

Insurance settlement
(15
)
 
—

 
(382
)
 
—

Non-GAAP adjusted EBITDA
$
27,320

 
$
32,807

 
$
126,869

 
$
132,450

 
 
 
 
 
 
 
 
Sales
$
189,486

 
$
216,733

 
$
809,162

 
$
876,282

Adjusted EBITDA margin
14.4
%
 
15.1
%
 
15.7
%
 
15.1
%

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.