Columbus McKinnon Corporation

Greetings and welcome to Columbus McKinnon's second quarter fiscal year 2024 financial results. 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. It is now my pleasure to introduce Deborah Pulaski, Investor Relations. Thank you. You may be good.

Thank you, Doug, and good morning, everyone. We certainly appreciate your time today and your interest in Columbus McKinnon. Joining me here for our financial results conference call are David Wilson, our president and CEO, and Greg Rustowitz, our chief financial officer. You should have a copy of our second quarter fiscal year 2024 financial results, which we released earlier this morning. There are also slides that will accompany our conversation today. Both the slides and the release are available on our website at investors.cmco.com. David and Greg are going to provide their formal remarks, after which we will open the line for questions. But right now, if you'll just turn to slide two in the deck, I will review the Safe Harbor Statement. You should be aware that we may make some forward-looking statements during the formal discussion, 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 by the company with the Securities and Exchange Commission. You can find these 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 will turn the call over to David to begin.

David? Thank you, Deb, and good morning, everyone. Our second quarter results are a testament to the progress our team is making as an organization as we transform Columbus McKinnon into a higher growth, less cyclical enterprise with stronger earnings power. Together, we took a meaningful step forward in terms of performance in the quarter, establishing several new records. While we are pleased with the results we are delivering, we are more encouraged with the progress we're making and by the potential of our business as we advance the strategic transformation of Columbus McKinnon. Team remains highly focused on executing our strategic plan and achieving the objectives we have established for the business. Sales in Q2 were 258 million and at the high end of our guidance. This included 9.5 million for Montrotech. We are very pleased with the early performance of our Montrotech acquisition and the broader momentum that we are building within our precision conveyance platform. We also achieved record gross margin in the quarter. Our 38.7% represents a 120 basis point improvement over our previous record, which was established in the first quarter of last year. Our revenue and gross margin performance in the quarter translated to record operating income and adjusted EBITDA. Our adjusted EBITDA of 17.7% represents a 90 basis point improvement over our previous record, which was established in the same period last year. We also remain focused on reducing our interest rate exposure and our accelerating debt repayment. Greg will speak to this further, but we have upped our plans to reduce debt by an additional $10 million within the year, bringing our total debt reduction to $50 million in fiscal 2024. Year to date, we've paid down $25 million, and our net debt leverage ratio now sits at 2.7 times and we see it dropping to approximately 2.3 times by the fiscal year end. If you'll turn to slide four, you'll see the progress we're making toward our gross margin expectations and the effectiveness of the work we're doing within the company to enable stronger earnings power. We believe the performance we achieved in the quarter is underpinned by sustainable improvements and reflects the effectiveness of our strategy as we advance the operating and strategic initiatives referenced on this page. We remain highly focused on improving our customers' experience, and our progress has been validated by recent improvements in our Net Promoter Score. Being customer-led is a foundational component of the Columbus McKinnon Business System, or CMBS, which is driving continuous improvement, discipline, communication, and accountability within our business. 80-20 analysis, decision-making, and actions are unlocking further value within our CMBS framework, and we are currently focused on product line simplification. Beyond optimizing financial performance, this will result in improved product offerings, stronger market positioning, and the further simplification of our factory footprint. In the period, we saw improvements in capacity planning, material costs, direct labor productivity, factory overhead rates, and pricing. The acquisition of Mantra Tech served as a strategic lever for gross margin performance as well and added 70 basis points in the quarter. We are energized by the momentum we're building within the organization and are highly encouraged with the pipeline of opportunities we are seeing in a variety of end markets. Given our progress, we now expect gross margin to expand approximately 150 basis points year over year. This is up from our previous expectation of 50 to 100 basis points of improvement in fiscal 24. I'll now turn the presentation over to Greg to review our results in greater detail.