Columbus McKinnon Gross Profit Increased 7% on 4% Revenue Growth in Third Quarter 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 third quarter, which ended December 31, 2018.

Third Quarter Highlights (compared with prior-year period)

• Blueprint for Growth strategy working: 80/20 process delivered cost savings and improved earnings power
• Strong cash generation: Paid down more than $50 million in debt year-to-date; net leverage ratio now less than 2x
• Market share gains support revenue growth of 4%; adjusted for FX, revenue grew more than 6%
• Gross margin was 33.8%, up 90 bps; delivered 7^th consecutive quarter of year-over-year expansion

Mark Morelli, President and CEO of Columbus McKinnon, commented, "Our financial results are demonstrating that our Blueprint for Growth strategy is working. We have rapidly deployed our 80/20 process through approximately half of Columbus McKinnon and as a result are improving customer response time, reducing costs and streamlining processes. Our strong performance reflects our success in simplifying the business, improving operational efficiencies, ramping our growth engine and strengthening earnings power.”

The net loss on held for sale businesses of $15.6 million includes the gain on the sale of the Tire Shredder business and an additional impairment on the remaining businesses held for sale, reflecting management’s estimate of their fair market value.

Third Quarter Fiscal 2019 Sales

Higher sales were driven by strong volume in the U.S. and Canada and pricing in EMEA. Excluding the effect of foreign currency translation, sales increased 6.1%.

Third Quarter Fiscal 2019 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 (loss).

Gross profit and gross margin improvement were largely the result of higher volume and productivity improvements from operational excellence measures and lower medical costs. Pricing more than offset material cost inflation. For more information on changes in gross profit, please see the table on page 8 of this release. Adjusted income from operations was $22.9 million, up $5.1 million, or 28.9%, over the third quarter of fiscal 2018. Adjusted operating margin expanded 200 basis points from the effects of 80/20 simplification 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 $14.5 million, or $0.61 per diluted share, compared with $10.4 million, or $0.44 per diluted share, in the prior-year period. Adjusted EBITDA margin was 14.2%. 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.

Fourth Quarter Fiscal 2019 Outlook

Excluding the businesses expected to be divested, orders in the third quarter grew more than 5% and backlog increased at a similar rate. With the continued strength, the Company expects year-over-year sales growth in the fourth quarter of fiscal 2019 to be approximately 4% to 5%, excluding an approximate 3% to 4% anticipated headwind from foreign currency translation, the impact of the divestiture of the Tire Shredder business and the timing of remaining divestitures. Last year’s fiscal fourth quarter included $3.3 million in revenue related to the Tire Shredder business, which was divested December 28, 2018. The sale of Crane Equipment & Service, Inc. is expected to close by the end of February 2019. That business had $1.5 million in revenue in the month of March 2018. The sales process is ongoing for Stahlhammer Bommern GmbH.

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. 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 13686186. The telephonic replay will be available from 1:00 PM Eastern Time on the day of the call through Thursday, February 7, 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 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 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 new products to enhance revenue, the timing and success of the divestitures, 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.

(1) December 31, 2017 figure excludes the impact of the acquisition of STAHL.

(2) December 31, 2018 figures exclude the Tire Shredder business, which was divested on December 28, 2018.

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.

(1) Applies a normalized tax rate of 22% 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 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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