Western New York Investors Conference

Transcription

1 NASDAQ: CMCO Western New York Investors Conference September 26, 2014 Timothy T. Tevens President & Chief Executive Officer Gregory P. Rustowicz Vice President Finance & Chief Financial Officer 2014 by Columbus McKinnon Corp.

2 Safe Harbor Statement These slides contain (and the accompanying oral discussion will contain) forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Such statements 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 integration of acquisitions and other factors disclosed in the Company s periodic reports filed with the Securities and Exchange Commission. Consequently such forward looking statements should be regarded as the Company s current plans, estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forwardlooking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 2

3 Columbus McKinnon Corporation LIFT SECURE Easily and Safely Founded: 1875 IPO: 1996 NASDAQ: CMCO Market Capitalization $480.1 million Annual Dividend $0.16 Recent Price $24.08 Dividend Yield 0.7% 52 Week High-Low $ $22.55 Institutional Ownership 92.1% Shares Outstanding 19.9 million Insider Ownership 5.8% Average Daily Volume (3 mos.) 69,721 Employee Count (approx.) 2,645 Book Value per Share $15.05 Fiscal Year End March 31 Market data as of 9/18/14 (Source: Bloomberg); shares outstanding as of 7/25/14; book value, employee count and ownership as of 6/30/14 3

4 Vision & Strategy Superior Customer Satisfaction Grow Profitably International Markets Acquisitions and Strategic Alliances New Products & Targeted Markets Operational Excellence Program 4

5 Metrics of Success $1B in Revenue Profitable & Efficient 1/3 of sales in developing markets and 2/3 in developed markets Organic growth (trend line): - U.S. & Western Europe at GDP+ - Emerging Markets at double digits Operating margin: 12% - 14% Working capital/sales: 17% Inventory turns: 6x DSO: < 50 days Acquisitions: $200 - $300 million Continued introduction of new products: > 20% of sales Strong Balance Sheet and Financial Flexibility to Execute Plans 5

6 Growth Strategy International Markets Targeting developing industrial markets APAC / China Latin America Eastern Europe Africa Middle East Accomplishments Nine sales offices in China Expanded sales and distribution in Mexico and Brazil Poland and Russia New sales offices in Turkey, Morocco and UAE Moving forward Established Columbus McKinnon Global Services business Offering complete solutions to global key end users 6

7 Growth Strategy Acquisitions Strategy Acquisitions start with strategy Increase international presence Expand product breadth Expand sales presence Synergistic Successes Unified Industries: Overhead light rail workstations Expanded product portfolio Bundled solutions opportunities Hebetechnik: Rigging channel partner in Austrian market Expand to other markets Achieve higher return than WACC Unified Industries Light Rail Workstation 7

8 Growth Strategy New Products Enhance and expand existing product offerings Develop products designed for regional requirements Target key vertical markets Create end market pull Capitalize on extensive distribution channels Currently ~24% of revenue from products developed within the last 3 years Yale Global King Explosion-Proof Wire Rope Hoist 8

9 Growth Strategy Target Markets Oil & Gas Transportation/ Aerospace Entertainment Power & Utilities Mining Automotive Construction Heavy OEM 9

10 Growth Strategy Operational Excellence Since 2001 Operational Excellence Improve Customer Service Improve On-Time Deliveries Reduce Defects Shorten Lead Times Reduce Warranty Costs Improve Productivity Improve Inventory Turns Improve Safety Lean Business System Quality Management System Lean Business System Based on associate involvement at every level and every location Focused on continually improving every aspect of our business Value Stream Mapping Kaizen action to remove waste or improve processes Quality Management System GOAL: To create the safest and most productive workplaces in the industry 10

11 Competitive Advantages Leading U.S. Market Share 74% of net sales are products for which CMCO has #1 position Strong Brands Built on Quality and Reliability Large and growing installed base Broad Product Offering & Focused Sales & Marketing Strategy One-stop shopping No SKU > 1% of sales Targeting key growth markets Largest Customer ~3% of sales Top 10 customers ~17% of sales Extensive Market Channels & Growing Global Presence 13 major manufacturing facilities in 7 countries 45 global warehouses, sales, service offices Efficient Operations with Low Cost Structure Driving Lean culture 11

12 Leading U.S. Market Share 74% of net U.S. sales are products for which CMCO has a #1 position Largest installed base of hoists in North America Nearly 80% of sales from products priced under $5K: MROP 12

13 Strong Brands Built on Quality and Reliability

14 Broad Product Offering Q1 FY2015 TTM Net Sales: $587.3 million Actuators 12% Cranes 3% Other 2% Rigging & Lifting Tools 12% Hoists 71% Manual Hoists Powered Hoists Trolleys From 1/8 ton to ~120 tons One-Stop shop for distributors and customers No single product SKU comprises more than 1% of sales 14

15 Extensive Market Channels Q1 FY2015 TTM Net Sales: $587.3 million Hoist Repair Parts 7% OEM/Government 3% US General Line Distributors 31% Crane End Users 3% Pfaff International Direct 9% Specialty Distributors 14% International General Line Distributors 33% Extensive Distribution Channels 15,000 + distributors & end-user customers 15

16 Focused Sales & Marketing Strategies Addressable Market (~$3.8 trillion) Warehousing 1% Other Durable Goods Manufacturing 20% Other Non- Durable Goods Manufacturing 20% Construction 16% Entertainment 4% Mining 4% Agriculture, Forestry, Fishing, and Hunting 5% Petroleum & Coal Products 5% Oil & Gas Extraction 7% Utilities 7% Transportation 11% Focus on vertical markets to create pull through demand Oil & gas Entertainment Mining Construction Training programs Safe lifting In-Stock Guarantee Program: 275 SKUs NOTE: Represents relevant industries in GDP 16

17 17 Growing Global Presence

18 Efficient Operations 2002 Q1 FY2015 TTM Sales $480 million $587 million + 21% Major Manufacturing Facilities % Manufacturing--Square Feet 2,691,200 1,526,000-44% Number of FTE 2,716 2,645-3% FY2014 Productivity Gains: Lean Activities: ERP System: Localizing Products in China: $3.2 million 107 active projects on-going globally 30% complete on November 1, 2014 Drive ease of commerce Transferred western designed products Expanded capacity in China by ~40% Reduced product costs 18

19 Managing Material Costs Q1 FY2015 TTM Cost of Sales: $404.2 million Steel Other Material Labor & Overhead 10% 40% 50% Commodity management teams manage major negotiations on pricing Generally annual price increases to remain margin neutral 19

20 International Market Penetration % of Sales by Region Q1 FY2015 TTM Non U.S. Sales ($ in millions) US 56% Europe, Middle East & Africa 29% Latin America and Asia Pacific 10% Canada 5% $241.1 $268.7 $253.3 $251.9 $256.1 FY11 FY12 FY13 FY14 Q1 FY15 TTM 20

21 Well Positioned for Growth & Margin Expansion ($ in millions) Net Sales Operating Income $591.9 $597.3 $583.3 $ % 7.6% 9.1% 9.3% 9.2% $524.1 $45.1 $54.4 $54.4 $53.9 $27.7 FY11 FY12 FY13 FY14 Q1 FY15 TTM (1) FY11 FY12 FY13 FY14 Q1 FY15 TTM Operating Margin margin dollars and percentages excludes $6.2 million restructuring-related costs and $2.9 million of unusual product liability claims 21

22 FY2015 First Quarter Results ($ in millions) Net Sales Operating Income $138.9 $142.9 $13.4 $ % 9.1% % of sales Q1 FY14 Q1 FY15 Q1 FY14 Q1 FY15 22

23 Emphasis on Productivity and Working Capital Sales per Employee ($ in thousands) Inventory Turns $207 $232 $232 $222 $ FY11 FY12 FY13 FY14 Q1 FY15 TTM Working Capital as a Percent of Sales FY11 FY12 FY13 FY14 Q1 FY15 TTM Receivable Days Outstanding 21.7% 22.4% 16.9% 17.6% 18.3% FY11 FY12 FY13 FY14 Q1 FY15 TTM FY11 FY12 FY13 FY14 Q1 FY15 TTM 23

24 Strong Cash Generation ($ in millions) Operating Free Cash Flow (1) Cumulative Operating Free Cash Flow (1) $48.0 $98.6 $107.3 $22.6 $27.5 $48.0 $70.6 $61.3 $71.1 $9.8 $8.7 (2) -$9.3 (2) FY09 FY10 FY11 FY12 FY13 FY14 FY09 FY10 FY11 FY12 FY13 FY14 1 Operating free cash flow is defined as cash provided by operating activities minus capital expenditures 2 Fiscal 2010 and fiscal 2011 include $10.8 million and $4.5 million of cash payments related to restructuring charges, respectively Note: Operating free cash flow is a non-gaap measure. See supplemental slides for operating free cash flow reconciliation and other important disclaimers regarding operating free cash flow Note: Cumulative operating free cash flow uses FY 2009 as a starting point Note: Figures for individual years may not add up to cumulative totals due to rounding 24

25 Strong Balance Sheet ($ in millions) Cash and Cash Equivalents $121.7 $112.3 $114.1 Total Debt $154.4 $153.1 $152.1 $152.3 $152.0 $80.1 $89.5 $14.2 $13.5 $13.8 $13.5 $13.5 FY11 FY12 FY13 FY14 Q1 FY15 TTM FY11 FY12 FY13 FY14 Q1 FY15 TTM $12.5 Capital Expenditures Initiated $0.04 regular quarterly dividend in May 2014 $13.8 $14.9 $20.8 $20.0* $4.6 FY11 FY12 FY13 FY14 FY15E * Guidance provided on July 31, 2014 Q1 FY15 Capital Expenditures Net debt at June 30, 2014 was $37.9 million $150 million in 7 7/8% notes callable Feb 2015 at ~104% $4.4 million for Chinese plant expansion project in FY 2014; $2.0 million in FY

26 Columbus McKinnon Material Handling Easily & Safely 26

27 27 Material Handling - Easily and Safely

28 28 Supplemental Information

29 Sales Correlated to Industrial Capacity Utilization U.S. Capacity Utilization All Manufacturing Source: The Federal Reserve Board Eurozone Capacity Utilization All Manufacturing Source: European Commission 86% 86% 82% 78.0% 82% 79.5% 78% 78% 74% 74% 70% 70% 66% 66% 62% 62% 29

30 Operating Free Cash Flow Reconciliation ($ in millions) Cash provided by operating activities FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 $60.2 $29.9 $3.3 $23.6 $42.4 $ Capital expenditures $12.2 $7.2 $12.5 $13.8 $14.9 $20.8 Operating free cash flow $48.0 $22.6 ($9.3) $9.8 $27.5 $8.7 Operating free cash flow is defined as cash provided by operating activities minus capital expenditures Columbus McKinnon believes that when used in conjunction with GAAP measures, operating free cash flow, which is a non-gaap measure, assists in the understanding of Columbus McKinnon s operating performance. NOTE: Components may not add up to totals due to rounding 30