Columbus mckinnon reports fourth quarter fiscal year 2017 financial
results
Amherst, n.y.--(business wire)--columbus mckinnon corporation (nasdaq: cmco), a leading designer, manufacturer and marketer of material handling products, technologies and services, today announced financial results for its fiscal year 2017 fourth quarter, which ended march 31, 2017. fiscal year 2017 fourth quarter and full year results include the january 31, 2017 acquisition of stahl cranesystems (“stahl”). fourth quarter and fiscal year highlights sales for the quarter were $183.7 million, up 18.4%; excluding acquisitions, organic revenue was up 2.5% generated $60.5 million in cash from operations in the year; paid down $12.8 million in borrowings during the quarter stahl integration on track to deliver $5 million in synergies in fiscal 2018 plan to reduce debt by $45 million to $50 million in fiscal 2018 to achieve net debt to ebitda ratio of 3x by end of fiscal 2018 net loss was $4.7 million, or a loss of $0.22 per diluted share; adjusted net income was $8.9 million, or $0.40 per diluted share mark d. morelli, president and ceo of columbus mckinnon, commented, “i joined the company at the end of february and i am encouraged that we ended our fiscal year on a strong note. we had volume growth and demonstrated our consistent ability to generate cash. we will utilize our future cash generation for debt reduction and growth initiatives. the recent acquisition of stahl is strategically significant for us and the integration is progressing according to plan. stahl is already proving to be an excellent addition, as it allows us to expand our business in europe and add a leading global explosion-protected hoist product line.” he continued, “in addition to the integration of stahl, our priorities in fiscal 2018 are to strengthen our core business to drive profitable growth, further leverage magnetek technology for better top-line growth, and reduce our debt.” fourth quarter review fourth quarter summary (compared with prior-year period, unless otherwise noted) sales excluding acquisitions increased $3.9 million, or 2.5% gross profit was $50.3 million, or 27.4% of sales; adjusted gross margin was 32.2% operating loss impacted by acquisition related inventory step-up expense of $8.9 million, acquisition deal costs of $5.7 million, and expenses related to the chief executive officer change of $3.1 million net loss was $4.7 million, or $0.22 loss per diluted share; adjusted net income was $8.9 million, or $0.40 per diluted share sales stahl's u.s. and non-u.s. sales were $1.5 million and $23.2 million, respectively. volume improvement was realized in the u.s., latin america, and the asia pacific region. sales in europe, excluding stahl, were down slightly as a result of approximately $1.0 million in customer-related delays for a project in africa. operating results stahl contributed $8.3 million to gross profit, which was offset by $8.9 million in acquisition related inventory step-up expense. last year’s fourth quarter gross profit had approximately $1.5 million of adverse adjustments that did not recur in the current period. on an adjusted basis, gross margin was 32.2%, which is unchanged from the prior-year period. for more information on changes in gross profit, please see the attached tables. please see the attached tables for a reconciliation of gaap gross profit to adjusted gross profit. income from operations was a loss of $3.2 million. adjusted income from operations was $16.9 million, which was up $2.7 million from the prior year. excluding acquisition related inventory step-up expense, stahl contributed $2.8 million to income from operations. 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 was 43.8%, which resulted in an income tax benefit of $3.7 million that reduced the loss in the quarter. the high rate in the quarter was due to the reversal of a valuation allowance on deferred tax assets in certain foreign subsidiaries, which more than offset the negative impact of non-deductible deal costs related to the stahl acquisition. the full year tax rate was 31.0%. given the geographic change in the mix of sales and income, the company expects the effective tax rate for fiscal 2018 to be in the 21% to 25% range, excluding any changes to current tax regulations. net loss was $4.7 million. adjusted net income was $8.9 million, which excludes the stahl inventory step-up expense, stahl deal and integration costs, ceo retirement pay and search costs, costs for a legal action against our prior product liability insurance carriers, the impairment of an intangible asset, and the loss on the extinguishment of debt. please see the attached tables for a reconciliation of gaap net income and earnings per share to adjusted net income and earnings per share. fiscal 2017 summary (compared with prior year, unless otherwise noted) sales increased 6.7%, or $40.0 million, to $637.1 million; $65.0 million in acquired revenue partially offset by $20.6 million decline in volume gross profit was up $5.7 million to $192.9 million, or 30.3% of sales; adjusted gross margin was 31.7% of sales net income was $9.0 million; adjusted net income was $27.6 million, or $1.32 per diluted share; excludes net negative effect of $18.6 million, or $0.89 per diluted share, of unusual items, including acquisition related costs generating cash, reducing working capital requirements and reducing debt cash generated from operating activities in the fourth quarter was $11.9 million. inventory turns improved to 4.1 times and working capital as a percentage of sales was down to 18.6% compared with 21.5% a year earlier. please see the attached table on page 10 of this release for further details. total debt was $421.3 million at march 31, 2017. net debt to net total capitalization at march 31, 2017 was 50.2%. gregory p. rustowicz, vice president - finance and chief financial officer noted, “during the quarter, we paid down $12.8 million of borrowings. we are on track to generate sufficient cash to further reduce debt by $45 million to $50 million during fiscal 2018, while sufficiently funding operations and our dividend. this will allow us to achieve our targeted three times net debt to ebitda ratio by fiscal 2018 year end.” capital expenditures for the year ended march 31, 2017 were $14.4 million. capital investments for the year were primarily related to productivity enhancements, maintenance and the erp system implementation. the company expects capital expenditures in fiscal 2018 to be in the range of $20 million to $24 million. fiscal year 2018 outlook mr. morelli concluded, “we are encouraged by the recent uptick in demand and we expect to make progress on further leveraging magnetek and strengthening our core business. in addition, the stahl acquisition provides an exciting opportunity to leverage our presence globally, especially in emea and in the explosion protected and highly engineered hoist category. our focus remains on driving revenue and earnings from this acquisition.” teleconference/webcast columbus mckinnon will host a conference call and live webcast today at 10:00 am eastern time, at which mark d. morelli, president and chief executive officer, and gregory p. rustowicz, vice president - finance and chief financial officer, 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 7, 2017 by dialing 412-317-6671 and entering the passcode 13659715. 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 material handling products, technologies, systems and services, which 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 corporation condensed consolidated income statements - unaudited (in thousands, except per share and percentage data) march 31, 2017 march 31, 2016 )% columbus mckinnon corporation condensed consolidated income statements - unaudited (in thousands, except per share and percentage data) march 31, 2017 march 31, 2016 columbus mckinnon corporation condensed consolidated balance sheets (in thousands) march 31, 2017 march 31, 2016 columbus mckinnon corporation condensed consolidated statements of cash flows - unaudited (in thousands) columbus mckinnon corporation q4 and full year fy 2017 sales bridge columbus mckinnon corporation q4 and full year fy 2017 gross profit bridge fourth quarter columbus mckinnon corporation additional data - unaudited march 31, 2017 december 31, 2016 march 31, 2016 49.2 30.8 columbus mckinnon corporation reconciliation of gaap gross profit to non-gaap adjusted gross profit and margin ($ in thousands) three months ended march 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 to 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 gross profit to that of other companies. columbus mckinnon corporation reconciliation of gaap income from operations to non-gaap adjusted income from operations and operating margin ($ in thousands, except per share data) three months ended march 31, year 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 to 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 and diluted earnings per share to non-gaap adjusted net income and diluted earnings per share ($ in thousands, except per share data) (1) applies a normalized tax rate of 30% 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 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.
