Columbus McKinnon Corporation

Greetings and welcome to Columbus McKinnon Corp's first quarter fiscal year 2023 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 and zero on your telephone keypad. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Deborah Pawlowski. Please proceed.

Thank you, Claudia, 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 first quarter fiscal 23 financial results which we released this morning. And if not, you can access the release as well as the slides that will accompany our conversation today on our website at columbusmckinnon.com. After our formal presentation, we will open the line for Q&A. If you'll turn to slide two in the deck, I'll 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. So you can find those documents 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. However, you should not consider the presentation of this additional information in isolation or as a 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 slides. So with that, please advance to slide three, and I'll turn the call over to David to begin. David?

Thank you, Deb, and good morning, everyone. We continue to execute our strategy to drive growth and stronger earnings power. and have started fiscal 23 delivering on each of these objectives. The team is executing well and driving improvements in the business despite the challenges presented in this hyperinflationary environment that also continues to be plagued by ongoing supply chain constraints. Sales grew 6.5% to $220 million on a constant currency basis, and we achieved record gross margin in the quarter of 37.5%, both on a GAAP and a non-GAAP basis. At our Investor Day in June, we discussed that we recently realigned our business under two leaders that have geographic oversight. Terry Shatterberg now leads the Americas, and Apal Chintipalli now leads EMEA and APAC. This realignment has created go-to-market and cost synergies for CMCO and is strengthening collaboration within our businesses and with our customers while delivering productivity benefits. This approach, while only launched in May, contributed to this quarter's adjusted EBITDA of 15.9%. Demand remains strong in the Americas and across EMEA, driving orders to $267 million in the quarter. Notably, this was an increase over Q4's record level on a constant currency basis, and has orders running at over a billion dollar annualized rate. This is another indication of the early successes that are resulting from our business realignment. Strong demand and continued vendor capacity constraints led to a book-to-bill ratio of greater than 1.2 in the quarter, and we ended Q1 with a very robust $352 million in backlog, another record. We continue to control what we can control and are making good progress with our transformation. At this stage, we are delivering results that are in line with the trajectory we would expect to be on, given the broader macro environment. Our confidence in our strategy and ability to achieve our long-term financial targets remains high. Please turn to slide four. I want to remind you that we are executing a strategic plan that unlocks CMCO's potential through a structured, disciplined business system and a core growth framework that drives market leadership. We expect this combination to produce a transformed enterprise that delivers growth with top-tier financial performance, which we believe will result in outsized shareholder value creation. Turning to slide five, I'll highlight our efforts to bridge to our targeted adjusted gross margin of approximately 40%. As I pointed out, gross margin this quarter reached 37.5%, a new record for Columbus McKinnon. And we achieved that while implementing a new ERP system in our largest manufacturing facility, while also continuing to address significant supply chain constraints. We're executing on plans that will reduce overhead through factory simplification and provide both material and labor productivity enhancements. These include sizable gains from 80-20 simplification, both at the factory footprint and product line levels, as well as from value-added engineering. We're also delivering growth through the strategic initiatives we have defined within our core growth framework. This growth enables CMCO to scale and better leverage fixed factory costs. In addition, we're increasing our competency within our pricing disciplines. and our pricing for the value we deliver to customers. This can be seen in our recent results. Finally, our acquisition strategy is expected to be accretive to margins. If you'll please advance to slide five, I'll turn the call over to Greg to review our financial performance in the quarter. Greg? Thank you, David.