Columbus McKinnon Blueprint for Growth Strategy Drove Sales Increases, Margin Expansion and Earnings Growth in Fourth Quarter and Fiscal Year 2019

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 2019 fourth quarter and full year, which ended March 31, 2019.

Fourth Quarter and Fiscal Year Highlights (compared with prior-year period)

• Fourth quarter sales increased 1.2% to $216.7 million; Sales grew 7.3% adjusted for divestitures and effect of foreign currency
• 80/20 Process and productivity expanded operating margin 390 basis points to 11.3% in fourth quarter
• Net income for the quarter of $19.7 million increased $11.3 million, or 133%; earnings per diluted share of $0.83 increased $0.47, or 131%
• Sales increased 4% to $876 million in fiscal 2019 with record gross margin of 34.8%
• Generated $79.5 million in cash from operating activities in fiscal year and paid down $65.1 million of debt; net leverage of 1.7x, better than target of 2.0x

Mark Morelli, President and CEO of Columbus McKinnon, commented, "We delivered another strong quarter and fiscal year, demonstrating the effectiveness of our Blueprint for Growth strategy and the value of E-PAS™("Earnings Power Acceleration System”), our business operating system. We are growing market share, expanding margins, generating cash and strengthening earnings power. Central to our operating system is the 80/20 Process, the key tool we have employed to simplify our business. 80/20 is enabling us to focus on areas of growth while reducing products and activities that dilute profits. As an example, we eliminated four facilities and measurably simplified our wire rope hoist product line, while improving customer satisfaction. For fiscal 2019, 80/20 contributed an incremental $8.5 million to operating income, well ahead of our plan, while our customer focus drove significant growth from several of our leading customers.”

He continued, "We will double down on Phase II of our strategy in fiscal 2020, furthering the 80/20 Process, Operational Excellence and Ramping the Growth Engine. In fact, our initial efforts in Ramping the Growth Engine are reaping benefits as we win new opportunities with engineered-to-order solutions and increase order flow through our digital platform. There is a long runway of significant opportunity for us to capture as we execute our Blueprint for Growth strategy. Our team is pulling together, stepping up to the challenge, and delivering outstanding results.”

Higher sales were driven by strong volume in the U.S. Divestitures impacted the year-over-year sales comparison by $6.0 million. Adjusted for the divestitures and the effect of foreign currency translation, sales increased 7.3%.

Gross profit and gross margin improvements were largely the result of higher volume and productivity improvements from operational efficiency. Pricing more than offset material cost inflation and tariffs. For more information on changes in gross profit, please see the table on page 8 of this release. Adjusted income from operations was $24.9 million, up $4.8 million, or 24%, over the fourth quarter of fiscal 2018. Adjusted operating margin expanded 210 basis points from the impact of the 80/20 Process and lower selling expenses. Please see the reconciliation of GAAP income from operations to adjusted income from operations on page 11 of this release.

Adjusted net income for the quarter was $16.4 million, or $0.69 per diluted share, compared with $12.0 million, or $0.51 per diluted share, in the prior-year period. Adjusted EBITDA margin was 15.1%. Please see the reconciliation of GAAP net income and earnings per share to adjusted net income and earnings per share on page 12 of this release.

First Quarter Fiscal 2020 Outlook
Adjusted for the divested businesses and the effect of foreign currency translation, orders in the fourth quarter grew 1%. The Company expects first quarter of fiscal 2020 sales to be in the range of $214 million to $216 million, an approximate 3% increase adjusting for an estimated 2% to 3% headwind from foreign currency translation and the $11.1 million impact to sales from divestitures.

Teleconference/webcast
Columbus McKinnon will host a conference call and live webcast Wednesday, May 29 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 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. The listen-only audio webcast can be monitored at www.cmworks.com/investors. To listen to the archived call, dial 412-317-6671 and enter the passcode 13689949. The telephonic replay will be available from 11:00 AM Eastern Time on the day of the call through Wednesday, June 5, 2019. 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 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 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 the 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 release.

Financial tables follow.

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.

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.

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.

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 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.

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