Columbus McKinnon Corporation

Greetings and welcome to Columbus McKinnon Corporation Third Quarter Fiscal Year 2022 Financial Results Conference Call. At this time, all participants are in a 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, Debra Polosky. Over to you, Debra.

Thank you, Peter, 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 Rustowitz, our Chief Financial Officer. We released our third quarter fiscal 2022 financial results this morning before the market opened. You can access that release as well as the slides that will accompany our conversation today at our website, www.columbusmckinnon.com. After David and Greg's formal discussion this morning, we will open 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 continuous flow and adequate time. If you'll turn to slide two in the deck, I will first review the Safe Harbor Statement. As you know, 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 at our website or at sec.gov. During today's call, we will also discuss some non-GAAP financial measures, which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We've provided the reconciliation of non-GAAP measures with comparable GAAP measures in the tables in 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?

Thank you, Deb, and good morning, everyone. Our team is executing well in a challenging environment, and once again, we delivered a very strong quarter. Sales were up 30% despite leaving approximately 20 million of planned shipments unshipped in the quarter due to pandemic-related supply chain constraints. This reflects strong contributions from our conveyor solutions acquisitions, solid organic growth, and the impact of our pricing power. We achieved adjusted gross margin of 36.7%, which tied the previous record set just last quarter. This is especially noteworthy as it demonstrates the effectiveness of our strategy to drive stronger margin performance through operational improvements and acquisitions. Additionally, it is set against the backdrop of our seasonally weakest quarter. We are continuing to make good progress on driving margin expansion, and in the last two quarters have delivered the highest adjusted gross margins in Columbus McKinnon's history. Strong margins, cost discipline, and two great acquisitions drove our bottom line growth. Adjusted EPS was 60 cents, a 67% increase over the prior year period. 80-20 continues to provide benefits, and year-to-date has contributed $2.6 million to operating income. Adjusted EBITDA margin has expanded to 15.4% year-to-date, even as sales for our organic businesses remain below pre-COVID volumes by approximately 11%. Our new precision conveyance platform is advancing Columbus McKinnon's Intelligent Motion Solutions transformation. The Garvey acquisition, which we completed in December, is an excellent example of the potential we have to continue to build out this platform where we are providing unique, high-value solutions to markets with strong secular growth drivers. Acquisitions provided 17 percent of our revenue in the third quarter and 33 percent of our adjusted operating income. We continue to be encouraged with the strength of demand across our targeted markets, but remain impacted by persistent global capacity and supply chain challenges. Our conveying solutions platform is expanding our presence in life sciences, e-commerce, and the food and beverage markets. We are also active in many areas where the pandemic is driving increased demand, whether it's the production and distribution of vaccines or rapid COVID tests, or just the increased use of online ordering that is driving e-commerce and parcel distribution systems. We ended the quarter with a record backlog of 295 million, of which approximately 178 million is shippable in the fourth quarter. Please turn to slide four. We've been very pleased with the addition of Garvey, the acquisition we just completed in December. It's an excellent enhancement to our precision conveyance solutions offering. With the acquisition of Dorner last April, and now with the addition of Garvey, Our higher growth, higher margin businesses are becoming more relevant within our portfolio mix. Combined with our linear motion and automation solutions, over 40% of our business now has a stronger growth profile and higher earnings potential. Let me review the Garvey acquisition in a little more detail on slide five. Garvey was already on Dorner's target list when we acquired them. They bring a market-leading position for accumulation solutions in food and beverage and life sciences. Briefly, accumulation is the buffering science in a conveying system. It balances volume between processes that operate at different speeds. For example, in a pharmaceutical production process, you can imagine there would be vial unloading, filling, labeling, sealing, and packaging processes. Not all of the machines in this process operate at the same rate. Garvey's patented and advanced accumulation solutions are enhancements to continuous flow production lines such as this and increase efficiency and productivity by balancing the flow between machines. Their solutions store and reintroduce product as needed to transform batch production from one machine into single piece flow for the next machine in a production process. Founded in 1926 and highly regarded for its engineering expertise to design systems that can handle a large variety of product shapes and sizes, Garvey's solutions convey, accumulate, and combine and align products rapidly. They offer a broad product offering across both modular standard and highly engineered accumulation solutions. In fact, they are a leader in bottling operations that range from small vaccine vials to reverse tapered wine bottles and more. With approximately $30 million in annual revenue when we acquired them, their gross margin was approximately 40% and EBITDA margin was 30%. We are truly excited about the combination of this business with Dorner in our precision conveyance platform. In just our first month together, we were successful in creating sales synergies, winning a $700,000 combined solutions project for a ready-to-eat packaged food products company. Our combined solution manages the product throughout the process from assembly to packaging through metal detection and bulk packaging. We expect $0.05 in EPS accretion from the acquisition in fiscal 23. I'll now turn the call over to Greg, and he will cover the details of the quarter. Greg?