Columbus McKinnon. Sidoti & Company s 16 th Annual New York Investor Forum. Timothy T. Tevens President and Chief Executive Officer

Transcription

1 Columbus McKinnon Sidoti & Company s 16 th Annual New York Investor Forum March 20, 2012 Timothy T. Tevens President and Chief Executive Officer Gregory P. Rustowicz Vice President Finance and Chief Financial Officer NASDAQ: CMCO

2 Safe Harbor Statement These slides contain (and the accompanying oral discussion will contain) forwardlooking 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 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 LIFT Easily and Safely SECURE Founded: 1875 IPO: 1996 NASDAQ: CMCO Market Capitalization $335.7 million Book Value per Share $9.08 Recent Price $17.31 Institutional Ownership 91.6% 52 Week High-Low $ $9.84 Insider Ownership 2.3% Shares Outstanding 19.4 million Employee Count (approx.) 2,700 Average Daily Volume (3 mos.) 99,003 Fiscal Year End March 31 Market data as of 3/15/12; book value as of 12/31/11; employee count estimated for FY 2012; ownership as of most recent filing 3

4 Vision & Strategy Become THE Material Handling Champion of the World Grow Profitably International Markets Strategic Acquisitions and Alliances New Products & Targeted Markets Operational Excellence 4

5 Long-Term Objectives & Metrics of Success Growth Revenue: $1 billion Achieve 1/3 of revenue in developing markets and 2/3 in developed markets Organic growth: - US at GDP+ (on a trend line basis) - Non-US at 10%-11% (on a trend line basis) Efficiency & Productivity Operating Margin: 12% - 14% Working capital/revenue: 15% Inventory turns: 6x DSO: < 50 days Financial Flexibility Debt to Total Book Capitalization: 30% Flex to 50% for acquisitions Acquisitions: $200 - $300 million Global Resources in Place to Execute Plan New products: 20% of sales 5

6 Growth Strategy Grow in International Markets Invest in developing industrial markets APAC / China Latin America Eastern Europe Increase sales presence 9 sales offices in China Sales and distribution in Mexico and Brazil Sales and distribution in Poland and Russia New sales offices in Turkey and Morocco 6

7 Growth Strategy Acquisitions & Strategic Alliances Create strategic value Increase international presence Synergistic / bolt on Expand product breadth Expand sales presence 7

8 Growth Strategy New Products and Targeted Markets Enhance existing product lines Develop products designed for regional requirements Target key vertical markets Create end market pull through Capitalize on extensive distribution channels 8

9 Growth Strategy Operational Excellence Program CMCO Lean Business System based on associate involvement at every level and every location focused on continually improving every aspect of CMCO Value Stream Mapping Kaizens identification of areas for improvement Quality Management System Global Supply Chain GOAL: to create the safest and most productive workplaces in the industry 9

10 Competitive Advantages Leading U.S. Market Share 61% of net sales into markets where CMCO has #1 position Strong Brands Built on Quality and Reliability Large and growing installed base Broad Product Offering & Diverse End User Market One-stop shopping No SKU > 1% of sales As diverse as GDP Extensive Market Channels & Growing Global Presence 12 major manufacturing facilities in 7 countries 52 global warehouse, sales, service offices Efficient Operations with Low Cost Structure Driving Lean manufacturing culture 10

11 Competitive Advantage Leading U.S. Market Share 61% of net U.S. sales into markets where CMCO has a #1 position Largest installed base of hoists in North America In excess of 80% of sales from products priced under $5K: MROP 11

12 Competitive Advantage Strong Brands Built on Quality and Reliability

13 Competitive Advantage Broad Product Offering Q3 FY12 TTM Net Sales: $576.3 million Other 2% Hoists 58% Actuators/ Rotary Unions 15% Cranes 7% Rigging & Lifting Tools 18% One-Stop shop for distributors and customers No single product SKU comprises more than 1% of sales 13

14 Competitive Advantage Diverse End User Market General Manufacturing Marine Logging Agricultural Transportation Crane Building Mining Construction Largest customer ~ 3% of sales Entertainment Energy Power Generation, Distribution & Transmission Warehousing Logistics Food Processing 14

15 Competitive Advantage Extensive Market Channels Q3 FY12 TTM Net Sales: $576.3 million Hoist Repair Parts 6% OEM/Government 3% US General Line Distributors 30% Crane End Users 7% Pfaff International Direct 10% Specialty Distributors 8% International General Line Distributors 36% Extensive Distribution Channels 15,000 + distributors & end-user customers 15

16 Competitive Advantage Growing Global Presence Headquarters Manufacturing Facility (12 major facilities) Warehouse/Sales/Distribution Centers (52 total facilities) 16

17 Competitive Advantage Efficient Operations with Low Cost Structure Total Invested Facility Consolidation & Headcount Reduction FY Restructuring $21 - $23 MM Current Annualized Run-Rate Savings Est. Annualized Savings $8 MM $13 - $15 MM Chain and Hoist Complete Forge Progressing Facility Closure Timing: Chain Forge Hoist October 2009 December 2009 June 2010 Total Square Footage Reduced 500,000 (25%) Total Headcount Reduction FTE down 150 Challenges Forge Upgraded Management Focus on customer service Facility productivity 17

18 Competitive Advantage Managing Material Costs FY11 Cost of Sales: $398.0 million Steel Other Material Labor & Overhead 10% 40% 50% Purchasing Council manages major negotiations on pricing Generally annual price increases to remain margin neutral 18

19 International Market Penetration % of Sales by Region FY 2011 Non U.S. Sales ($ in millions) Asia Pacific 3% US 54% Latin America 6% Canada 5% International 46% Europe, Middle East & Africa 32% $188.3 $224.5 $210.7 $241.1 $272.3 FY08 FY09 FY10 FY11 Q3-FY12 TTM 30% of total 47% of sales total sales Note: Restated for Univeyor Discontinued Operations, divested July

20 ($ in millions) Well Positioned for Growth and Margin Expansion Net Sales Operating Income $593.8 $606.7 $576.3 $524.1 $ % $ % $ % 5.3% $20.7 $ % $40.5 FY08 FY09 FY10 FY11 Q3 FY12 TTM FY08 FY09 1 FY10 2 FY11 3 Q3 FY12 4 TTM Operating Margin Note: Restated for Univeyor Discontinued Operations, divested July margin dollars and percentages excludes $107.0 million goodwill impairment charge & $1.9 million in restructuring & other special charges margin dollars and percentages excludes $21.0 million restructuring-related costs and $3.5 million of other special charges margin dollars and percentages excludes $6.2 million restructuring-related costs and $2.9 million of unusual product liability claims 4 Q margin dollars and percentages excludes $1.2 million pension curtailment charge & Q margin excludes $1.5 million gain on the sale of a closed facility 20

21 Percent Percent Positioned for Sales Correlated to Industrial Capacity Utilization U.S. Capacity Utilization All Manufacturing December 1972 forward February 2012: 77.9% February 2011: 74.8% Eurozone Capacity Utilization All Manufacturing December 1985 forward Economic risk in Eurozone Source: The Federal Reserve Board Q4 2011: 79.7% Q4 2010: 78.1% Source: European Commission, December % is generally considered to be the point where total industrial capacity approaches a level of constraint. 21

22 operating leverage was 54.0% (defined as the year-over-year change in operating income divided by the year-over-year change in sales). Positioned for ($ in millions) FY2012 Third Quarter Results Net Sales Operating Income Operating Leverage* 54% $128.7 $142.8 $12.0 $ % 8.4%* % of Revenue FY11 FY2011 FY12 FY2012 FY11 FY2011 FY12 FY2012 * Excluding a gain on the sale of a closed facility, operating margin was 7.4% Operating leverage is defined as the year-over-year change in operating income divided by the year-over-year change in sales. 22

23 Emphasis on Productivity and Cash Sales per Employee ($ in thousands) Inventory Turnover $220 $210 $187 $207 $ FY08 FY09 FY10 FY11 Q3 FY12 TTM FY08 FY09 FY10 FY11 Q3 FY12 Working Capital as a Percent of Sales Receivable Days Outstanding 18.2% 18.8% 16.2% 16.9% 17.5% FY08 FY09 FY10 FY11 Q3-FY12 FY08 FY09 FY10 FY11 Q3-FY12 23

24 $159.4 Stable Debt Levels ($ in millions) $154.4 $153.7 $133.3 $137.9 $132.8 Net Debt $71.7 million $15.9 $13.6 $13.1 $13.2 $13.5 $14.3 FY2007 FY2008 FY2009 FY2010 FY2011 Q3 FY2012 Total debt TTM Interest expense Note: Restated for Univeyor Discontinued Operations, divested July

25 Financial Flexibility (in millions) at December 31, 2011 Cash Total Debt Shareholder Equity $ Credit Ratings (Corporate) S & P BB- Total Capitalization Net Debt $ $ Moody s Ba3 Total Debt / Total Capitalization 46.6% Net Debt / Net Total Capitalization* 28.9% Net Debt / TTM EBIT** 1.8x Goal: 30% * Net Total Capitalization = Total Capitalization minus Cash ** Excludes restructuring-related gain on sale of building of $1.5 million, other restructuring expenses of $2.3 million, pension curtailment charge of $1.2 million and gain on re-measurement of investment of $0.9 million 25

26 Operational Excellence People Excellence New Products & Services New Markets, Geographies, and Distribution Channels Positioned for Columbus McKinnon Become THE Material Handling Champion of the World Superior Customer Satisfaction Our Goal Our Initiatives We value our corporate health We value each other and our diverse backgrounds Our Values We value innovation, quality and craftsmanship in all aspects of performance We value helping our customers succeed 26

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28 Supplemental Information 2011 by Columbus McKinnon Corp. NASDAQ: CMCO

29 Leading U.S. Market Positions 61% of U.S. Sales are Products Where CMCO has #1 Market Position 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 12% Demag Cranes Forged Attachments 30% (1) #1 6% Crosby, Cooper Industries (BT) Lifting & Sling Chains 46% (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 1% Mac-Saturn Jib Cranes 25% (5) #1 1% Gorbel, Spanco, Demag Cranes Total 61% (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,