2020 investor presentation gregory p. rustowicz · 2020. 3. 26. · fy17 fy18 fy19 q3 fy20 ttm...
TRANSCRIPT
PARTNERS IN MOTION CONTROL
INVESTOR PRESENTATIONMarch
2020
Gregory P. Rustowicz
Vice President – Finance & Chief Financial Officer
2© 2020 Columbus McKinnon Corporation
SAFE HARBOR STATEMENT
These slides, and the accompanying oral discussion, contain “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 its
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 presentation.
Non-GAAP Financial Measures
This presentation will discuss some non-GAAP (“adjusted”) financial measures which we believe are useful in
evaluating our performance. You should not consider the presentation of this additional information in isolation or
as a substitute for results compared in accordance with GAAP. The non-GAAP (“adjusted”) measures are notated
and we have provided reconciliations of comparable GAAP to non-GAAP measures in tables found in the
Supplemental Information portion of this presentation.
Adoption of ASU No. 2017-07 and impact to historical information
In accordance with the ASU, historical cost of good sold and RSG&A have been adjusted for the adoption
and implementation on a retrospective basis of ASU No. 2017-07 “Improving the Presentation of Net
Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. All relevant financial data impacted by
the changes has been adjusted.
3© 2020 Columbus McKinnon Corporation
Market data as of 3/25/2020 (Source: S&P Capital IQ); Shares outstanding as of 1/31/2020; Institutional and insider ownership as of most recent filing
Leader in highly-engineered, professional grade, intelligent motion lifting solutions and explosion-protected products
Premium, well-respected global brands
World’s 2nd largest hoist company with leading share in U.S.
Blueprint for Growth Strategy:
Transform into a high-performing, industrial technology company
Increase earnings power with selective deployment of self-funded key initiatives
NASDAQ: CMCO
Leading global designer, manufacturer and
marketer of motion control products, technologies
and services for material handlingFounded: 1875
Market Capitalization $592.3 million Average Volume (3 mo.) 141,460
52-Week Price Range $19.20 - $43.09 Common Shares Outstanding 23.7 million
Recent Price $24.99 Ownership: Institutions 97%
Insiders 3%
4© 2020 Columbus McKinnon Corporation
VALUE PROPOSITION
Highly relevant, professional-grade solutions
for solving customers’ critical problems in safety & productivity
5© 2020 Columbus McKinnon Corporation
THREE DISTINCT PRODUCT CATEGORIES
Customer Driven Solutions
Industrial Products
Crane Solutions
~43% ~47%
~10%
Manual Chain Hoist
Electric Chain Hoist
Rigging / Clamps
Industrial Winches
Cranes, Wire Rope Hoists
Drives and Controls
Crane Kits & Components
Jibs, Workstations
Linear & Mechanical Actuators
Lifting Tables
Rail Systems
Actuation Systems
Engineered
Products
$831.5 MillionQ3 FY20 TTM Revenue
(excluding divestitures)
6© 2020 Columbus McKinnon Corporation
DEFINED CHANNELS TO MARKET
US General Line Distributors
International General Line Distributors
Specialty Distributors
EPC
OEM/Government
Pfaff International Direct
Crane Builders
~29%
~23%~12%
~10%
~10%
~11%
~5%
Market channels provide access to end users
$831.5 MillionQ3 FY20 TTM Revenue
(excluding divestitures)
7© 2020 Columbus McKinnon Corporation
END MARKET AND GEOGRAPHIC DIVERSIFICATION
General Industrial
Metals Processing /
Steel / Concrete
Oil & Gas
Energy/Utilities
Automotive
Rail / Aerospace / Transport
Construction
Pulp Paper/Chemical/
Pharma
Heavy OEM
Elevators
Entertainment
MiningGovernment / Others
~25%
~10%
~10%~10%
~10%
~10%
~5%
~5%
~5%
~3%~3%
~3%~3%
U.S.
Europe, Middle East & Africa
Canada
Latin America
APAC
31%
55%
4%4%
6%
$831.5 MillionQ3 FY20 TTM Revenue
(excluding divestitures)
8© 2020 Columbus McKinnon Corporation
TARGET MARKETS
INFRASTRUCTURE
ENTERTAINMENT OIL & GAS/
PETROCHEMICAL
WASTEWATER
TREATMENT
AEROSPACE &
DEFENSE
AUTOMATION METALS
PROCESSING
Targeting market segments with better than GDP growth
ALTERNATIVE
ENERGY
9© 2020 Columbus McKinnon Corporation
Today Future
Phase IGet control
Achieve results• New organization
• Operating system
Phase IISimplify the business
Drive profitable growth
• 80/20 Process
• Operational Excellence
• Ramp the Growth Engine
Further pivot to growth oriented Industrial Technology company
Phase IIIEvolve business model
• Portfolio optimization
• Mergers & acquisitions
Cyclical
Industrial
Growth-oriented
Industrial
Technology
Today
BLUEPRINT FOR GROWTH STRATEGY
10© 2020 Columbus McKinnon Corporation
E-PAS™: EARNINGS POWER ACCELERATION SYSTEM
Business operating system sustainable across the organization and driving results
Key
Performance
Indicators
(KPIs)
Strategy
Deployment
Monthly
Operating
Reviews
(MORs)
Risk &
Opportunity
(R&Os)
Raising
Expectations
80 / 20
Process
Inspired to
Lead™
M&A
Process
Lean
Tools
Developed
Under development
Business Operating System
11© 2020 Columbus McKinnon Corporation
$0.43
$0.95
$1.80
($0.05)
FY17 FY18 FY19 Q3 FY20TTM
Non-GAAP EPS Adjustments
GAAP Diluted EPS
FY17 FY18 FY19 Q3 FY20TTM
11.4%
13.7%15.1%
15.8%
Adjusted EBITDA Margin
FY17 FY18 FY19 Q3 FY20TTM
5.6%
8.7%
11.2%11.9%
Return on Invested Capital
STRATEGY DRIVES PERFORMANCE
($ in millions)
Transformation more than
doubles ROIC(1)…
Strategy creates stronger
earnings power…
Almost three years of execution delivers stronger earnings power
$2.94
$2.74
$2.01
$1.47
Making significant progress towards
19% EBITDA margin goal…
(1) ROIC is defined as adjusted income from operations, net of taxes, for the trailing 12 months divided by the average of debt plus equity less cash
(average capital) for the trailing 13 months. A 30% tax rate was used for fiscal year 2017, and 22% for fiscal years 2018, 2019 & 2020.
12© 2020 Columbus McKinnon Corporation
PHASE II SIMPLIFY THE BUSINESS: 80/20 PROCESS
80/20 Process: Centerpiece of the operating system…
eliminates bleeders and sharpens focus on growth
80 / 20 Process
Product
SKUs~50,000
Purchased
parts~400,000
Simplify the Business:Eliminate bleeders… focus on areas of growth
Improve profitability
• Reduce overhead
• Strategic pricing
Profitable revenue growth
ROIC improvement
• Inventory reduction
• Footprint reduction
13© 2020 Columbus McKinnon Corporation
Electric Chain Hoists
Eliminated:
~2,500 SKUs
(40%)
Significant reduction in business complexity…more to come
80/20: PRODUCT LINE & CUSTOMER LIST SIMPLIFICATION
Hoist and Rigging SKU Rationalization
Remaining:
~3,700 SKUs
(60%)
Eliminated:
~500 accounts
(27%)
Remaining:
~1,400 accounts
(73%)
Started: ~1,900 Active Customers
Targeted benefits:
Overhead reduction
Strategic pricing
North American Industrial Products
Started: ~6,200 SKUs
14© 2020 Columbus McKinnon Corporation
Meet customer expectations and optimize productivity
Actions
Consolidate Three
Facilities
Improvement of On-Time-
Delivery
Building Team Performance
Culture
Enable Customer
ExperienceImprove Cost
Structure
Optimize
Working Capital
Path to Top Tier Operational Performance
Material
Productivity
Footprint
Optimization
Overhead Cost
Reduction
PHASE II: OPERATIONAL EXCELLENCE
15© 2020 Columbus McKinnon Corporation
80/20 Process: ~$5.7 million contribution to operating income in Q3 FY20
80/20 Process more than offsets current headwinds:
Industrial market macroeconomic weakness
Increased medical costs
Continued investment in product development, marketing and digital initiatives
BLUEPRINT STRATEGY PHASE II DELIVERING RESULTS
Strong performance with 80/20 Process
($, in millions contribution to operating income)
Customer simplification (strategic pricing)
Priority customer account program(incremental volume from sharpened customer focus)
Product simplification (indirect overhead reduction and material productivity)
Closures: Salem (OH), Lisbon (OH), and China
~$14.8
$8.5
FY 2020 Estimate
FY 2019 Actual
Q3 FY2020 YTD FY19 Actual & FY20 Revised Goal
$18
$12 Original Goal^
16© 2020 Columbus McKinnon Corporation
PHASE II: RAMPING THE GROWTH ENGINE
($ in millions)
Self-funding new product development
FY17A FY18A FY19A FY20E Future
New Product
Development
Engineered to
Order
Sustaining
Engineering
R&D
73%
R&D
80%
R&D
60%
R&D
70%
~$21 ~$22~$22
~$29
Have increased R&D investment on steady spend… While improving returns*
49%
87%
127%
0% 20% 40% 60% 80% 100% 120% 140%
LowPerformers
MediumPerformers
TopPerformers
*Returns on R&D spend calculation:
GM from New Product Development
R&D Cost
94%
56%
114%
FY18A
FY19F
FY20P
Investing in Organic Growth and Improved Returns
*Deloitte, Global Benchmarking of Product Development
R&D
60%
~$16
17© 2020 Columbus McKinnon Corporation
INTELLIGENT MOTION
Starts with Identifying Customers “High-Value” Problems
Significant growth opportunity at +40% gross margins
Total Addressable
Lifting Automation Market
~$500 Million
Current Market
Expanded Market
Opportunity
~$300 Million
18© 2020 Columbus McKinnon Corporation
RAMPING THE GROWTH ENGINE
Created Automation Division Center of Excellence
Integrating Lifting Specialist with Smart Movement
Intelli-Crane™ Systems improve safety & productivity
Utility lever hoist detects accidental release of loads
Innovation expands addressable markets
19© 2020 Columbus McKinnon Corporation
PHASE III: PORTFOLIO OPTIMIZATION
Selective Investment
Selective Investment
Selective Investment
Fix / Exit
Fix / ExitExit
Invest / Grow
Invest / Grow
Scale-Up Portfolio Assessment Criteria:
Business model
Profitability
Market position
Industry growth
Risk assessment
Indust.
Tech
New
Size = $ EBITDA
Based on business: Small to ~$200 million
EBITDA based on type business and maturity
20© 2020 Columbus McKinnon Corporation
Industrial Products
38%Crane
Solutions40%
Engineered Products
9%
Aftermarket13%
Industrial67%
Industrial Technology
20%
Aftermarket13%
Industrial Products 84%
Crane Solutions
10%
Engineered Products
6%Aftermarket
4%
FY2020 YTD, ~20% of CMCO business is comprised of industrial technology
Acquired:
Divested:
FY2015 Now
Business Composition Evolves with the Strategy
~
~~
EVOLUTION OF THE BUSINESS MODEL
21© 2020 Columbus McKinnon Corporation
Opportunity to leverage core competencies in growing markets
Automation
Energy Demand
Population
Dropping cost of sensors
Rising wages of qualified labor
~80M people/year
Increase demand for food and
clean water
Wind Energy ~13% CAGR
Aging Infrastructure (~$94T) Oil & Gas / LNG
Utilities
Chemicals
Processing
Aerospace
Steel & Metals
Food & Beverage
~4%
~5%
~4%
~5%
~6%
~3%
Vertical Markets CAGR
MEGATRENDS RELEVANT TO CMCO
22© 2020 Columbus McKinnon Corporation
• Leverages engineering & production knowhow
• Leverages channels, valuable brand
• Fragmented industry with niche market opportunities
• Solutions for specialty applications
• Leverages installed base & “reason to be”
• Addresses customer high-value problems
• Software engineering focus
• Greater potential for recurring revenue
• Megatrends drive higher growth
Phase III: M&A
Lifting Specialist Smart Movement
Builds on core competencies, optimizes customer experience
Shift to Intelligent Motion enables CMCO to leverage capabilities and optimize growth
23© 2020 Columbus McKinnon Corporation
$192.9
$285.1 $305.0
$293.0
FY17 FY18 FY19 Q3 FY20 TTM
$601.1
$801.1 $842.1 $831.5
-100.0
100.0
300.0
500.0
700.0
900.0
1100.0
FY17 FY18 FY19 Q3 FY20 TTM
Adjusted Sales Sales from divested businesses
Customer and operational focus enhancing strong market positions and margin
Sales
($ in millions)
FINANCIAL PERFORMANCE
Blueprint for Growth strategy
helps offset headwinds
Q3 FY20 margins remained strong,
despite industrial market headwinds
• 80/20 strategic pricing initiatives
driving margins
• Achieved 11th consecutive quarter of
y/y/ gross margin expansion to 34.0%
on lower volume in Q3 FY20
$637.1
$839.4 $876.3 $836.4
30.3% 34.0% 34.8%
Gross Profit & Gross Margin
35.0%
24© 2020 Columbus McKinnon Corporation
$23.7
$68.3 $69.4
$97.6
$47.2
$78.7
$99.8 $102.5
FY17 FY18 FY19 Q3 FY20 TTM
Non-GAAP Adjustments Income from Operations
FINANCIAL PERFORMANCE
Net Income & Adjusted Net Income
Operating Income & Adjusted OI Margin
($ in millions)
Blueprint for Growth strategy driving increased earnings power
7.4% 9.4% 11.4% 12.2%
$9.0 $22.1
$42.6
$70.2
$30.7
$46.8
$64.9 $68.9
FY17 FY18 FY19 Q3 FY20 TTM
Non-GAAP Adjustments Net Income
Improving earnings power
Q3 FY20 operating income of
$20.9 million
• Adjusted operating income grew 1.1%,
or 5.7% normalized for divestitures
Margins increasing with 80/20 Process
and cost discipline
• Adjusted operating margin of 11.6%
expanded 110 bps in Q3 FY20
Q3 FY20 net income of $15.3 million or
$0.63 per diluted share
• Adjusted net income up 6.2% to
$15.4 million
25© 2020 Columbus McKinnon Corporation
Capital expenditure guidance provided February 4, 2020(1)Free cash flow is defined as cash provided by operating activities minus capital expenditures
Year-to-date FCF up 36% year-over-year
Raised FCF expectation for FY20 to
$75 million to $80 million
FY20 expected CapEx: approximately $10 million
to $12 million
CASH FLOW
Outstanding free cash flow generation
($ in millions)
$46.1
$55.1
$67.2
FY17 FY18 FY19 FY20E FY21E FY22E
$75 - $80$80 - $85
Free Cash Flow(1)
FY21E to FY22E Assumptions:
Annual CapEx of ~$20 million
Annual pension contribution of ~$12 million
Three Months Ended YTD
12/31/19 12/31/18 12/31/19
Net cash
provided by
operating
activities
$32.4 $26.2 $70.3
CapEx (1.9) (2.4) (6.8)
Free cash flow
(FCF)$30.5 $23.8 $63.5
$90 - $95
Note: Components may not add to totals due to rounding
26© 2020 Columbus McKinnon Corporation
STRONG BALANCE SHEET
Plan to pay down $65 million of debt in FY2020
Paid down $125 million of debt in FY18
& FY19
Debt leverage ratio(1) of 1.3x
• Paid down $50 million of debt
FY20 YTD
• Net debt to net total capital 25.7%
Strong financial flexibility enables
Phase III of Blueprint for Growth
strategy
($ in millions)
DE-LEVERING BALANCE SHEET
(1)Debt leverage ratio is defined as Net Debt / Adjusted TTM EBITDA
CAPITALIZATION
Dec. 31,
2019
March 31,
2019
Cash and cash equivalents $ 84.0 $ 71.1
Total debt 251.9 300.3
Total net debt 167.9 229.2
Shareholders’ equity 484.4 431.2
Total capitalization $ 736.3 $ 731.5
Debt/total capitalization 34.2% 41.1%
Net debt/net total
capitalization25.7% 34.7%
27© 2020 Columbus McKinnon Corporation
CAPITAL DEPLOYMENT PRIORITIES
Capital deployment priorities remain unchanged
Decre
asin
g P
riority
Organic Growth
In-organic Growth
Return of Capital
De-lever the balance sheet
New product development
and CapEx
M&A
Regular dividend
Share repurchase
Achieved net leverage target
Investing in growth initiatives
Fund M&A
Adhere to dividend policy
Consider opportunistically
28© 2020 Columbus McKinnon Corporation
ROADMAP TO ACHIEVING EBITDA MARGIN TARGET
Adjusted EBITDA margin expansion driven by Blueprint for Growth strategy
11.4% 11.4%13.5%
15.5% 15.1% 15.1% 15.1%
20.5%19.0% 19.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
FY17 StahlSynergies
80/20 & OpsExcellence
Divestitures Inflation &Other
FY19 80/20 & OpsExcellence
Ramp theGrowth Engine
Inflation &Other
FY22E
+210
+200
+140 -180
+540+50 -200
(+/- in basis points)
29© 2020 Columbus McKinnon Corporation
~10%
~13%
~16%
~27%
4th
3rd
2nd
1st
~7.3x
~9.8x
~13.5x
~18.9x
4th
3rd
2nd
1st
~9%
~11%
~14%
~18%
4th
3rd
2nd
1st
EV/EBITDA TTM ROICYTD EBITDA %
~19% Mid-teens
6.4%
11.7%
4.7x 52 Week Low 3/18/20
11.9%
16.1%
7.9xas of 2/19/20
Valuation not reflecting earnings power potential…
Objective: Achieve Top Quartile Performance Target
FY17
Q3 FY20
CMCO
9.4x 52 Week Hi 7/24/19
VALUE CREATION VS. PEERS
-Peer quartiles as of 6/30/19
30© 2020 Columbus McKinnon Corporation
WHY COLUMBUS MCKINNON?
Blueprint for Growth strategy is driving change
Building stronger earnings power - creating value
Strong management team executing well
Strategy expected to outperform in recession
Delivering returns with lower risk profile
PARTNERS IN MOTION CONTROL
SUPPLEMENTAL SLIDES
32© 2020 Columbus McKinnon Corporation
($ in thousands) FY17 FY18Q1
FY19
Q2
FY19
Q3
FY19
Q4
FY19FY19
Sales 36,055 38,299 11,104 9,233 8,983 4,875 34,195
Income (loss)
from operations(1,158) 985 665 1,461 1,007 532 3,665
BUSINESSES SOLD
1. The Tire Shredder business was divested December 28, 2018.
2. Crane Equipment & Service, Inc. was divested February 28, 2019.
3. Stahlhammer Bommern GmbH was divested February 28, 2019.
33© 2020 Columbus McKinnon Corporation
ADJUSTED INCOME FROM OPERATIONS RECONCILIATION
($ in thousands) Fiscal Year TTM
FY 2017 FY 2018 FY 2019 Q3 FY20
Income from operations $ 23,725 $ 68,331 $ 69,442 $ 97,628
Add back (deduct):
Factory closures — — 1,473 4,362
Business realignment costs — — — 1,075
Insurance recovery legal costs 1,359 2,948 1,282 557
Net (gain) loss on sales of businesses — — 25,672 (802)
Insurance settlement — (2,362) — (367)
Acquisition deal, integration, and severance costs 8,815 8,763 1,906 —
Debt repricing fees — 619 — —
Magnetek litigation — 400 — —
Acquisition inventory step-up expense 8,852 — — —
CEO retirement pay and search costs 3,085 — — —
Impairment of intangible asset 1,125 — — —
Canadian pension lump sum settlements 247 — — —
Non-GAAP adjusted income from operations $ 47,208 $ 78,699 $ 99,775 $ 102,453
Sales $ 637,123 $ 839,419 $ 876,282 $ 836,409
Adjusted operating margin 7.4% 9.4% 11.4% 12.2%
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 assis ts 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..
34© 2020 Columbus McKinnon Corporation
ADJUSTED NET INCOME RECONCILIATION
($ in thousands, except per share data) Fiscal Year TTM
FY 2017 FY 2018 FY 2019 Q3 FY20
Net income $ 8,984 $ 22,065 $ 42,577 $ 70,169
Add back:
Factory closures — — 1,473 4,362
Business realignment costs — — — 1,075
Insurance recovery legal costs 1,359 2,948 1.282 557
Net (gain) loss on sales of businesses — — 25,672 (802)
Insurance settlement — (2,362) — (367)
Acquisition deal, integration, and severance costs 8,815 8,763 1,906 —
Debt refinancing costs — 619 — —
Magnetek litigation — 400 — —
Acquisition inventory step-up expense 8,852 — — —
CEO retirement pay and search costs 3,085 — — —
Loss on foreign exchange option for acquisition 1,590 — — —
Loss on extinguishment of debt 1,303 — — —
Impairment of intangible asset 1,125 — — —
Canadian pension lump sum settlements 247 — — —
Normalize tax rate (1) (4,626) 14,408 (7,990) (6,049)
Non-GAAP adjusted net income $ 30,734 $ 46,841 $ 64,920 68,945
Average diluted shares outstanding 20,888 23,335 23,660 23,862
Diluted income per share - GAAP $0.43 $0.95 $1.80 $2.94
Diluted income per share - Non-GAAP $1.47 $2.01 $2.74 $2.89
Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items and at a normalized tax rate. Adjusted
net income and diluted EPS are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known
as GAAP, and may not be comparable to the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP
information, such as adjusted net income and diluted EPS, is important for investors and other readers of the Company’s financial statements and assists in
understanding the comparison of the current quarter’s and current year's net income and diluted EPS to the historical periods ' net income and diluted EPS, as
well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies.
(1) Applies normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax.
35© 2020 Columbus McKinnon Corporation
ADJUSTED EBITDA RECONCILIATION
Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not
a measure determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP, and may not be
comparable with the measures as used by other companies. Nevertheless, Columbus McKinnon believes that providing non-GAAP information, such as
adjusted EBITDA, is important for investors and other readers of the Company’s financial statements and assists in understand ing the comparison of the
current quarter’s and current year's net income and diluted EPS to the historical periods' net income and diluted EPS, as wel l as facilitates a more meaningful
comparison of the Company’s net income and diluted EPS to that of other companies.
($ in thousands) Fiscal Year Quarter TTM
FY 2017 FY 2018 FY 2019 Q3 FY20 Q3 FY20
Net income $ 8,984 $ 22,065 $ 42,577 $ 15,250 $ 70,169
Add back (deduct):
Income tax expense 4,043 27,620 10,321 2,234 13,397
Interest and debt expense 10,966 19,733 17,144 3,423 14,993
Cost of debt refinancing 1,303 — — — —
Investment (income) loss (462) (157) (727) (408) (1,369)
Foreign currency exchange (gain) loss 1,232 1,539 843 (188) 119
Other (income) expense, net (2,341) (2,469) (716) 199 319
Depreciation and amortization expense 25,162 36,136 32,675 7,244 29,903
Factory closures — — 1,473 1,592 4,362
Business realignment costs — — — 662 1,075
Net (gain) loss on sales of businesses — — 25,672 — (802)
Insurance recovery legal costs 1,359 2,948 1,282 66 557
Insurance settlement — (2,362) — (77) (367)
Acquisition deal, integration, and severance costs 8,815 8,763 1,906 — —
Debt repricing fees — 619 — — —
Magnetek litigation — 400 — — —
Acquisition inventory step-up expense 8,852 — — — —
CEO retirement pay and search costs 3,085 — — — —
Impairment of intangible asset 1,125 — — — —
Canadian pension lump sum settlements 247 — — — —
Non-GAAP adjusted EBITDA $ 72,370 $ 114,835 $ 132,450 $ 30,373 $ 132,356
Sales $ 637,123 $ 839,419 $ 876,282 $ 199,355 $ 836,409
Adjusted EBITDA margin 11.4% 13.7% 15.1% 15.2% 15.8%
36© 2020 Columbus McKinnon Corporation
INDUSTRIAL CAPACITY UTILIZATION
Source: The Federal Reserve Board
U.S. Capacity Utilization Eurozone Capacity Utilization
Source: European Commission
73%
74%
75%
76%
77%
78%
79%
80%
81%
82%
Manufacturing Total
75.0% (Manufacturing) &
77.0% (Total)
February 2020(1)
79%
80%
81%
82%
83%
84%
85%
80.9%
February 2020
(1)February 2020 numbers are preliminary
37© 2020 Columbus McKinnon Corporation
ISM PURCHASING MANAGERS INDEX
Source: Institute of Supply Chain Management
45%
50%
55%
60%
65%
50.1%
February 2020
PMI Manufacturing Index
PARTNERS IN MOTION CONTROL
INVESTOR PRESENTATIONMarch
2020