Columbus McKinnon Corporation

Greetings and welcome to the Columbus McKinnon Corporation first quarter fiscal year 2021 financial results conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Deborah Pawlowski, Investor Relations. Please go ahead, ma'am.

Thanks, Jerry, and good morning, everyone. We certainly appreciate your time today and your interest in Columbus McKinnon. Here with me are David Wilson, our President and CEO, and Greg Rustowicz, our Chief Financial Officer. You should have a copy of the first quarter fiscal 2021 financial results, which we released this morning before the market. If not, you can access the release, as well as the slides that will accompany our conversation today at our website, www.columbusmckinnon.com. After our formal presentation, we will be opening the line for Q&A. We kindly ask that you ask only one question with a follow-up question and then please get back in queue to allow for continuous flow and adequate time. If you'll turn to slide two in the deck, I will first review the safe harbor statement. You should be aware that we may make some forward-looking statements during the formal discussions as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with Securities and Exchange Commission. These documents can be found on our website or at sec.gov. During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of additional information in isolation or as a substitute for results prepared in accordance with GATT. We have provided reconciliation of non-GATT measures with comparable GATT measures in the tables that accompany today's release and the slides for your information. So with that, if you would turn to slide three, I will turn it over to David to begin. David?

Thanks, Deb. I'm happy to join you today for my first official earnings call and what I anticipate will be an exciting and rewarding journey together. It's been a very busy and fast-paced eight weeks for me at Columbus McKinnon, and I'm glad to report that my family and I are now officially residents of Buffalo. We've also completed our New York State quarantine restriction period, finally. I've been impressed with the responsiveness and agility of the management team during these unprecedented times. While onboarding in this environment has been somewhat of a challenge, I have been able to visit key Columbus McKinnon enterprise locations and manufacturing sites. as well as meet with a good number of our team members in person. Technology has enabled me to actively interact with our team where I have not been able to travel and meet in person. I really enjoy the energy and the passion of our team, their commitment to driving results and the opportunity to begin building relationships with our customers and shareholders. I see a great deal of potential here. I believe we can strengthen our business operating system and continue to drive sustainable operating improvement. Thank you very much. Thank you for joining us. As noted, we were positive at the operating income level with GAAP operating income of $1.8 million and adjusted operating income of $5 million. While Columbus McKinnon has successfully generated cash through all cycles, EPAS, our business operating system has further improved that capability. We generated $9.5 million in cash from operations in the quarter, and given prioritized capital expenditures, we have free cash flow of $8.4 million. Today, Columbus McKinnon has a healthy balance sheet and a fair amount of dry powder. Our net debt leverage ratio is just 1.2 times and we have liquidity of over $210 million. This positions us well to be on the offensive as our markets recover and as we advance phase three of our blueprint for growth strategy. If you will turn to slide four, I'll update you on the progress we have made by leveraging our business operating system to improve our performance. Our EPAS cadence provided the visibility and rigor needed to define and implement the actions required to address the dramatic decline in demand related to the COVID-19 pandemic. This enabled us to achieve our positive operating income and cash generation goals. In addition, we capitalized on the situation and accelerated operational excellence plans to structurally reduce indirect overhead costs and improve the earnings power of the organization. For fiscal 2021, we expect to reduce annualized costs by approximately $11 million. About $6 million of this is related to the 80-20 process and facility consolidations. We are now down to a total of 15 manufacturing facilities from 22 just three years ago. Our actions have also created structural changes resulting in approximately $5 million in RSG&A and factory indirect overhead cost savings. While we believe the trough is behind us, we continue to proactively manage our costs. As demand improved throughout the quarter, we recalled about 130 furloughed associates. However, there were about 238 of our team members still furloughed at the end of June. Let me now turn it over to Greg to provide more detail on our financial results. Thank you, David.