Columbus McKinnon Corporation

Good day and welcome to the Columbus McKinnon Corporation first quarter fiscal year 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Deborah Pawlowski, Investor Relations for Columbus McKinnon. Please go ahead.

Thanks, Carrie, and good morning, everyone. We certainly appreciate your time today and your interest in Columbus McKinnon. Joining me are David Wilson, our President and CEO, and Greg Rustwitz, our Chief Financial Officer. You should have a copy of the first quarter fiscal 2022 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, columbusmckinnon.com. After our formal presentation, we will be opening the lines for Q&A. We kindly ask that you ask only one question with a follow-up question, and 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 you 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 in substitute for results prepared in accordance 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, and we'll turn it over to David to begin. David?

Thanks, Deb, and hello, everyone. We have a lot of good things to discuss today. We started fiscal 2022 on an exciting note with the closing of Dorner, the largest acquisition in the company's history. Our Blueprint for Growth 2.0 strategy has clearly defined our path forward, and the Columbus McKinnon Business System, or CMBS as we refer to it, is driving our execution. We delivered 24% organic growth in the quarter with record adjusted gross margin. And we ended the quarter with record backlog, as all of our markets are demonstrating strong demand. We acquired Dorner on April 7th, and its performance in the quarter exceeded our expectations. Dorner adds precision conveying systems, expanding our intelligent motion solutions for material handling. Additionally, it serves markets with secular trends that are demonstrating strength, such as e-commerce, food processing, and life sciences. We had sales of about 213 million in the quarter, including 34 million from Dorner. Lifting revenue, which represents our organic or legacy business, was 179 million, and we are trending toward our pre-pandemic quarterly sales levels of around 200 to 210 million. We are optimistic about current trends, customer demand, and our market position. Demand came from all markets, but was especially encouraging in the heavy industrial, offshore oil and gas production, e-commerce, and entertainment markets. We believe that we are gaining ground as these markets recover with our recently launched products, including our integrated crane kits, utility lever hoist, aqua guard, and edge roller technology conveyors, as well as the expansion of our Compass CPQ tool. I should note that our sales performance in the quarter would have been approximately 5 to 10 million better had it not been for challenges within the supply chain and labor shortages. It's been a constant battle to match available components, such as motors and electrical components, with production schedules to produce complete orders and service our ongoing demand. This has required us to juggle resources, balance loads, and manage our production lines with a high degree of agility. Fortunately, we're making progress with our recruiting efforts, and we are systematically building select inventory and committed supplier capacity to buffer further impacts in the supply chain. Despite these challenges, our first quarter margins improved nicely. Dorner's accretive margin profile elevated gross margins by 80 basis points to a record adjusted gross margin of 36.3%. Adjusted operating margin was 11.1%. a full point higher than the trailing fourth quarter. And adjusted EBITDA margin expanded 210 basis points to 16% compared with the fourth quarter. We have many initiatives underway to drive our 2.0 strategy and deliver outsized growth. To ensure that we execute successfully, we are enhancing CMBS, establishing enterprise-wide standards and discipline for processes, accountability, and scalability. Turning to slide four, I'm pleased to report that we published our inaugural corporate social responsibility report in June. This was an extensive enterprise initiative that prioritized the material factors that were most relevant to both our business and our stakeholders. We organized our report in compliance with GRI core standards and aligned our priorities with the relevant UN sustainable development goals. We have established metrics around several key factors such as employee health and safety, training and leadership development, and diversity and inclusion. We have also identified environmental sustainability targets around energy consumption, emissions, and waste reduction. We've established green teams at each global operation and are encouraged with the level of engagement within the organization. These initiatives and metrics are integrated into our business at every level. You can see our priorities by category on this slide, and I hope you take the time to review our report, which can be found on the homepage of our website. Turning to slide five, we announced earlier this week the launch of IntelliConnect Mobile Plus, which further advances our Intelli product offerings with even greater intelligence and information management for our customers. IntelliConnect Mobile Plus provides an intelligent solution that targets the secular drivers of automation, digitization, and the Internet of Things. A direct, secured Wi-Fi connection between your mobile device and our products provides access to the tracking and data feature sets that enable informed decision-making regarding production processes and maintenance requirements. This offering will increase our direct-to-end user access, improve the customer experience, and drive pull-through equipment and aftermarket revenue for Columbus McKinnon. The capabilities of our intelligent products for lifting also apply to conveying. We are sharing our technology, talents, and skills across the organization to identify further opportunities to create compelling offerings for our customers. Looking more broadly, new products introduced by Columbus McKinnon within the last three years, or our N-3 revenue for the quarter, grew 19%. year over year. With that, I'll hand it over to Greg.