Investor Presentation June 2010

Transcription

1 Investor Presentation June 2010 Timothy T. Tevens President & Chief Executive Officer Karen L. Howard Vice President - Finance & Chief Financial Officer

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 ti and other factors thatt 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 forward-looking 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 Founded 1875 Publicly traded 1996 Ticker Market Capitalization Shares outstanding NASDAQ: CMCO $301 million 19.1 million 52 week high-low $ $11.36 Recent Price $15.74 Average Daily Volume (TTM) 124, Book Value per share $9.83 Institutional Ownership 92.7% Insider Ownership 5.5% Fiscal Year End March 31 Market data as of 6/2/10; book value as of 03/31/10; ownership as of most recent filing 3

4 CMCO: A Compelling Investment Opportunity Profitable Growth Grow Core Business Grow in International Markets Increase Manufacturing Productivity Pursue Strategic Acquisitions and Alliances 4

5 Strong Brand Recognition 5

6 Company Overview Leading U.S. Market Share 64% of net U.S. sales into markets where CMCO has a #1 position Largest installed base of hoists in North America Approx. 75% of sales from products priced under $5K: MROP 6

7 Company Overview Most Comprehensive Product Offering One-stop shopping No SKU > 1% of sales Efficient Operations With Low Cost Structure Broad And Growing Global Presence In Sales and Operations Developed Markets Emerging Markets China, Latin America, Eastern Europe 7

8 Long-Term Growth Drivers Competitive Pressures to Maximize Productivity & Efficiency Quick & easy Loads lifted and placed efficiently Fewer people required Growing Global Focus on Worker Safety Promote safety and reduce risk of personal injury Reduction of workers compensation expenses 8

9 Broad Product Offering March 31, 2010 Net Sales: $476.2 million Shredders & Light Rail 3% Hoists 53% Actuators/ Rotary Unions 14% Cranes 9% Rigging & Lifting Tools (Chain & Attachments) 21% One-Stop shop for distributors and customers No single product SKU comprises more than 1% of sales 9

10 Extensive Distribution Channels March 31, 2010 Net Sales: $476.2 million Other Consumer 2% 1% US General Line Distributors Hoist Repair Parts 30% 4% OEM/Government 4% Crane End Users 9% Pfaff International Direct 13% Specialty Distributors 6% International General Line Distributors 31% Extensive Distribution Channels 15,000 + distributors & end-user customers 10

11 Worldwide Operations 22 manufacturing facilities in 7 countries 34 stand-alone sales/service offices in 19 countries 9 stand-alone warehouse facilities in 4 countries 10-15% manufacturing from low cost operations Headquarters Manufacturing Facility Warehouse/Sales/Service Office 11

12 Diversified End User Markets Largest customer ~ 4% of sales General Manufacturing Marine Logging Agricultural Transportation ti Warehousing Logistics Crane Building Mining Construction Entertainment Energy Power Generation, Distribution & Transmission Food Processing 12

13 Leading U.S. Market Positions 64% of U.S. Sales are Products Where CMCO Is #1 Supplier U.S. MARKET SHARE MARKET KEY POSITION % OF U.S. SALES (6) COMPETITORS Powered Hoists 45% (1) #1 22% Kito Harrington, Konecranes, Manual Hoists & Trolleys 55% (1) #1 13% Demag Cranes Forged Attachments t 35% (1) #1 7% Crosby, Cooper Industries (BT) Lifting & Sling Chains 49% (1) #1 4% Peerless Chain, Cooper Industries (Campbell Chain) Hoist Parts 50% (2) #1 10% Kito Harrington, Konecranes, Demag Cranes Mechanical Actuators 43% (3) #1 5% Joyce Dayton, Nook Tire Shredders 80% (4) #1 2% Mac-Saturn Jib Cranes 25% (5) #1 1% Gorbel, Spanco, Demag Cranes Total 64% (1) Estimates derived from industry association data. (2) Estimates based on hoist estimates derived from industry association data. (3) Estimates based on comparison of our sales to that of competitors sales and estimates of total market from trade associations. (4) Estimates based on the number of our tire shredders in use and their capacity and the total number of tires shredded as published by a trade association. (5) Estimates based on the number of bids won as a percent of the total projects for bids submitted and from estimates of our competitors positions. (6) As of December 31,

14 Columbus McKinnon VISION Become THE Material Handling Champion of the World Superior Customer Excellence Superior Customer Satisfaction Our Goal Operatio onal Excellenc ce Peopl le Excellence New Prod ducts & Servic ces hies, nels kets, Geograph ibution Chann New Mark and Distri Our Initiatives We value our corporate health We value each other and our diverse backgrounds We value innovation, quality and craftsmanship in all aspects of performance We value helping our customers succeed Our Values 14

15 Growth Strategy Grow Core Business New Products Distribution Channels and Vertical Markets Broaden Product Offering 15

16 Growth Strategy Grow International Markets Invest in growing industrial markets China Eastern Europe Latin America 16

17 Growth Strategy Increase Manufacturing Productivity LEAN Quality Global Supply Chain 17

18 Growth Strategy Acquisitions Strategic Value Creation International growth Synergistic Product expansion Small,, bolt on 18

19 Sales Correlated to Industrial Capacity Utilization Percent Dec-72 Dec-78 Dec-84 Dec-90 Dec-96 Dec-02 Dec-08 Source: The Federal Reserve Board U.S. Capacity Utilization All Manufacturing December 1972 forward Apr. 2010: 71.3% June 2009: 65.2% Eurozone Capacity Utilization All Manufacturing Q forward Percent Q1 2010: 75.5% Q2 2009: 69.6% Mar 85 Mar 87 Mar 89 Mar 91 Mar 93 Mar 95 Mar 97 Mar 99 Mar 01 Mar 03 Mar 05 Mar 07 Mar 09 Source: European Commission 19

20 FY 2010: Abrupt Change in Outlook ($ in millions) $471.7 Recession Hits Global Economy and CMCO $593.8 $606.7 $550.5 $ % 13.6% 11.1% 10.3% $ % 4.3% * 2010** Net Sales Operating Margin Note: Restated for Univeyor Discontinued Operations, divested July 2008 * 2009 margin excludes $107.0 million goodwill impairment charge and $1.9 million in restructuring and other special charges ** 2010 margin excludes $21.0 million restructuring-related costs and $3.5 million of other special charges 20

21 FY10 FY11: Restructuring for the Future $20 - $23 MM Estimated Annualized Savings Headcount Reduction Completed 7/09 Total Restructuring Cost (FY10) $5.8 MM FY10 Savings $5 - $6 MM Est. Annualized Savings $7 - $8 MM Facility Consolidation o Completion: Chain Mfg. Facility Forge Facility Hoist Mfg. Facility FY10 Restructuringrelated Costs Est. Total Restructuring- related Costs 10/09 12/09 6/10 $15.2 MM $18 - $19 MM FY10 Savings Est. Annualized Savings $2.2 MM $13 - $15 MM 21

22 Strategic Focus: International Market Penetration ($ in millions) International sales comprised 44% of total revenue in FY2010 up from 38% in FY2009 $188.3 $224.5 $210.7 $155.6 $ Note: Restated for Univeyor Discontinued Operations, divested July

23 Expanding International Presence Driving Growth US 69% US 56% Asia Pacific 2% Latin America 4% Canada 9% Europe, Middle East & Africa 16% Asia Pacific 2% Latin America 5% Canada 5% Europe, Middle East & Africa 32% International 31% International 44% Sales FY05: $ million Sales FY10: $476.2 million Note: Restated for Univeyor Discontinued Operations, divested July

24 Emphasis on Productivity and Cash (in thousands) Sales per Employee Inventory Turnover (in thousands) LEAN $164 $204 $205 $220 $214 $217 LEAN FY01 FY06 FY07 FY08 FY09 FY10 FY01 FY06 FY07 FY08 FY09 FY10 30% 20% 10% Working Capital as a Percent of Sales % 17.1% 1% 19.5% 18.2% 18.8% 16.2% FY01 FY06 FY07 FY08 FY09 FY Receivables Days Sales Outstanding FY01 FY06 FY07 FY08 FY09 FY10 24

25 Managing Material Costs Cost of Sales FY 2010 $360.2 million Materials ~ 50% of COGS 50% Steel ~ 10% of COGS 40% Purchasing council manages major negotiations on pricing 10% Challenging suppliers and service providers Labor & Overhead Other Material Steel 25

26 Reduced Debt Levels Lowest Level Since CMCO Went Public in 1996 ($ in millions) Total debt & interest expense reduced by approximately two-thirds thirds since FY01 LEAN began Net debt $68.8 million FY 2001 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Total debt Interest expense Note: Restated for Univeyor Discontinued Operations, divested July

27 Strong Balance Sheet - Financial Flexibility Ratios at March 31, 2010 Goal is Total Debt / Total Capitalization 30% 41.5% Net Debt / Total Capitalization 26.9% Total Debt / FY10 EBIT* 6.4x Net Debt / FY10 EBIT* 3.3x Credit Ratings Agency Rating Corporate S&P BB- Corporate Moody s Ba3 * Excludes $21.0 million restructuring-related costs and $3.5 million of other special charges 27

28 Financial Flexibility (in millions) Mar. 31, 2010 Cash $ 64.0 Senior Debt Revolving Credit Facility $ - $85 million commitment; plus $65 million accordion LIBOR plus bps, Due 2013 Other Senior Debt 8.0 Senior Subordinated Notes (B1/B) % interest, due 2013 Callable November 1, Callable November 1, Total Debt Shareholders' Equity $ Net Debt $

29 FY 2010 Fourth Quarter Results $135,788 Revenue (in thousands) $606,708 $122,970 Gross Profit (in thousands) $34,813 $31, % 25.7% Operating Income (in thousands) $7,155* $5,733** % 5.3% 47% 4.7% * 2009 excludes $107.0 million goodwill impairment charge and $1.9 million in restructuring and other special charges ** 2010 excludes $21.0 million restructuring-related costs and $3.5 million of other special charges 29

30 Long-Term Goals Revenue: $1 billion 50/50 International / US Organic growth: US at GDP + International at 10%-11% Acquisitions: $100 - $200 million New products: 20% of sales Operating Margin: 12% - 14% Working Capital / Revenue: 15% Inventory turns: 6x 7x DSO: < 60 days Debt to Total Capitalization at 30%, flex to 50% with acquisitions Global resources in place to execute plan 30

31 FY11 Focus Leveraging Facilities Complete North American facility consolidation Realize benefits of FY10 investments Prudent Investing New market expansion, especially APAC New product development Strategic acquisitions 31

32 by Columbus McKinnon Corp.