Columbus McKinnon Corporation

Greetings and welcome to the Columbus McKinnon Corporation second quarter fiscal year 2021 financial results. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Deborah Pawlowski, Investor Relations for Columbus McKinnon. Thank you. You may begin.

Thanks, Daryl, and good morning, everyone. We certainly appreciate your time today and your interest in Columbus McKinnon. Joining me here are David Wilson, our President and CEO, and Greg Rustowitz, our Chief Financial Officer. You should have a copy of the second quarter fiscal 2021 financial results, which we released this morning before the markets. If not, you can access the release as well as the slides that will accompany our conversation today at our website, columbusmckinnon.com. After our formal presentation, we will be opening the line for Q&A. We kindly ask that you ask one question with a follow-up question and then get back in queue to allow for a 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 the course with GAAP. We have provided reconciliation of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and the slides for your information. So with that, if you will turn to slide three, I will turn it over to David to begin. David?

Thanks, Deb, and good morning, everyone. We built momentum on many fronts in the quarter. Sales came in at about $158 million, which was at the upper end of our expected range. Sequentially, we had a strong adjusted gross margin of 34.4%, which expanded 60 basis points and adjusted operating margin of 8.9%, which expanded 530 basis points. While the non-cash pension settlement charge of approximately $16 million impacted our gap earnings, On an adjusted basis, we had earnings per share of $0.34. Most notably, we had free cash flow of $36 million in the quarter, and we have reduced our net debt leverage ratio below one times trailing 12-month adjusted EBITDA. Importantly, we ended the quarter with substantial liquidity of approximately $245 million. We believe that our ability to deliver these improved results was driven by our improving organizational agility and performance-focused culture. We are making excellent progress identifying areas in which we can strengthen our business system, and we are developing plans that will evolve our strategy to the next level. On slide four, you can see the results of the quarter compared with the trailing first quarter of fiscal 2021. sales grew 13.5% sequentially, driven by a recovery in our short-cycle business, which was up 22%. As you will likely recall, our short-cycle business, which comprises about 50% of our total revenue, was severely impacted in our first quarter as governments globally responded to contain the COVID-19 virus. Our project business saw sales increase 5.5% sequentially, This growth rate was dampened by the timing related to project acceptance in our rail business due to travel restrictions. Also, you will remember that, from a comparative perspective, project activity was not as heavily impacted in the first quarter of this year as our short cycle business was. We had very strong adjusted operating leverage of 48 percent sequentially on higher sales volume and our 80-20 tools continue to create value for CMCO, contributing $1.3 million of operating income in the period. Adjusted EBITDA margin expanded 470 basis points sequentially, achieving 13.4% adjusted EBITDA margin on this level of sales reflects the decisive actions we took to reduce our cost structure during these unprecedented times. and validates the strengthening Columbus McKinnon business system. With that, let me turn it over to Greg.