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

BUFFALO, N.Y.–(BUSINESS WIRE)–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.

Contacts

Gregory P. Rustowicz
Vice President – Finance and Chief Financial
Officer
Columbus McKinnon Corporation
716-689-5442
[email protected]

Investor Relations:
Deborah K. Pawlowski
Kei Advisors
LLC
716-843-3908
[email protected]