Columbus mckinnon reports record gross margins for fourth quarter and
fiscal year 2018
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 2018 fourth quarter and full year, which ended march 31, 2018. fiscal year 2018 fourth quarter and full year results include the january 31, 2017 acquisition of stahl cranesystems (“stahl”). fourth quarter and fiscal year highlights (compared with prior-year period) sales for the quarter grew 16.6% to $214.1 million; organic sales increased 4.2% achieved record gross margin of 34.8% in the quarter fiscal year organic sales grew 6.8% with record gross margin of 33.9% backlog expanded to $177.4 million and was up 16% over backlog at december 31, 2017 strong cash from operations of $69.7 million in fiscal year increasing stahl synergies by $4 million to $15 million paid down $60.1 million of debt in fiscal 2018, net leverage of 2.6x, ahead of target “we believe our strong financial results validate the effectiveness of our strategic plan, blueprint 2021, to improve the earnings power of the company as well as the execution driven focus provided by our operating system, e-pas™ (earnings power acceleration system). we had strong sales for the quarter and the year while achieving record gross margins for both periods,” commented mark morelli, president and ceo of columbus mckinnon. “our focus in fiscal 2019 will be on phase ii of our strategic plan which will simplify the business, improve productivity, ramp our growth engine and further transform our culture. we expect this to translate into expanding operating margins as well as continuing to deliver exceptionally strong cash generation. we have a solid balance sheet and are creating significant financial flexibility for our future growth initiatives.” fourth quarter fiscal 2018 sales stahl's january 2018 u.s. and non-u.s. sales were $1.4 million and $12.2 million, respectively. volume drove growth in the u.s., emea region and canada. excluding the effect of foreign currency translation (“fx”) and the one month of stahl, non-u.s. sales were up 2.0%. fourth quarter fiscal 2018 operating results *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. adjusted gross profit was $74.0 million, or 34.6% of sales. adjustments included removing the $0.6 million benefit associated with insurance settlements. for more information on changes in gross profit, please see the attached tables. adjusted income from operations was $20.6 million, which was up $3.7 million from the prior year. adjustments include $3.9 million in stahl integration costs, $0.4 million in legal costs related to litigation against previous insurance carriers, and debt repricing fees of $0.6 million, partially offset by cash received from a partial insurance settlement of $0.6 million. please see the attached tables for a reconciliation of gaap income from operations to adjusted income from operations. the effective tax rate for the quarter and full year were 23.5% and 55.6%, respectively. net income for the fourth quarter and full year were $8.5 million and $22.1 million, respectively. on an adjusted basis, net income for the fourth quarter and full year were $12.0 million and $46.8 million, which excludes stahl integration costs, costs for a legal action against prior product liability insurance carriers, debt repricing fees, magnetek litigation, and an insurance settlement received and includes a normalized tax rate. please see the attached tables for a reconciliation of gaap net income and earnings per share to adjusted net income and earnings per share. generating cash and reducing debt cash generated from operating activities in the fourth quarter was $18.4 million. working capital as a percentage of sales was down to 17.9% compared with 18.6% as of march 31, 2017. capital expenditures for the fiscal year ended march 31, 2018 were $14.5 million. please see the attached additional data table for further details. total debt was $363.3 million at march 31, 2018 compared with $421.3 million at march 31, 2017. net debt to net total capitalization at march 31, 2018 was 42.4%, compared with 50.2% at march 31, 2017. fiscal year 2019 outlook backlog grew 16% to $177.4 million as of march 31, 2018 compared with $152.3 million at december 31, 2017 and was up 15% over backlog of $154.5 million at the end of fiscal 2017. given the level of backlog and current market conditions, the company expects revenue to grow 7% to 9% including the benefit of fx in the first quarter of fiscal 2019. research, selling and general and administrative (rsg&a) expenses are expected to be approximately $48 million in the first quarter, excluding integration and realignment costs, with an additional $2 million in annualized rsg&a savings to be realized in the remainder of the year. u.s. gaap pension accounting changes effective in fiscal 2019 will result in approximately $2 million of annual pension income being reported in other income and expense which will negatively impact income from operations on a comparative basis. mr. morelli concluded, “the strong results for fiscal 2018 represent our team’s capability and the relevance of our blueprint 2021 strategy. we executed well as our performance culture is taking hold. our global leadership team and associates are pulling together to achieve our goals and i thank them for their efforts. as we further advance phase ii of our strategy supported by markets favorable for growth, i expect that we will build on our positive momentum. with the strength that we see in our markets, we anticipate solid performance in fiscal 2019 and earnings expansion that outpaces organic revenue growth.” 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 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 and asking for the “columbus mckinnon conference call.” the webcast can be monitored at www.cmworks.com/investors. an audio recording will be available from 1:00 pm eastern time on the day of the call through wednesday, june 6, 2018 by dialing 412-317-6671 and entering the passcode 13678787. 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, cranes, 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 revenue 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 general 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 effect of operating leverage, the pace of bookings relative to shipments, the ability to expand into new markets and geographic regions, the success in acquiring new business, the speed at which shipments improve, the effectiveness of new products 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 corporationcondensed consolidated income statements - unaudited(in thousands, except per share and percentage data) columbus mckinnon corporationcondensed consolidated income statements - unaudited(in thousands, except per share and percentage data) columbus mckinnon corporation condensed consolidated balance sheets (in thousands) march 31,2018 columbus mckinnon corporationcondensed consolidated statements of cash flows - unaudited(in thousands) columbus mckinnon corporationq4 fy 2018 sales bridge columbus mckinnon corporationq4 fy 2018 gross profit bridge columbus mckinnon corporationadditional data - unaudited march 31,2018 december 31,2017 columbus mckinnon corporationreconciliation of gaap gross profit to non-gaap adjusted gross profit and margin($ in thousands) three months endedmarch 31, 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 measure 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 gross profit to the historical period’s gross profit, as well as facilitates a more meaningful comparison of the company’s net income and diluted eps to that of other companies. columbus mckinnon corporationreconciliation of gaap income from operations tonon-gaap adjusted income from operations and adjusted operating margin($ in thousands, except per share data) three months endedmarch 31, adjusted income from operations is defined as income from operations as reported, adjusted for certain items and to apply a normalized tax rate. 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 net income and diluted eps to that of other companies. columbus mckinnon corporation reconciliation of gaap net income and diluted earnings per share tonon-gaap adjusted net income and diluted earnings per share($ in thousands, except per share data) three months endedmarch 31, adjusted net income and diluted eps are defined as net income and diluted eps as reported, adjusted for certain items and to apply 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 corporationreconciliation of gaap net income to non-gaap adjusted ebitda($ in thousands) three months endedmarch 31, year ended march 31, adjusted ebitda is defined as adjusted operating income plus depreciation and amortization. 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 income from operations to the historical periods' income from operations, as well as facilitates a more meaningful comparison of the company’s net income and diluted eps to that of other companies.
