Columbus McKinnon Corporation

Good morning and welcome to Columbus McKinnon First Quarter Fiscal 2025 Earnings Conference Call. My name is Ranju and I will be your conference operator today. As a reminder, this call is being recorded. I would now like to turn the conference over to Christy Moser, Vice President of Investor Relations.

Thank you. Good morning and welcome everyone to Columbus McKinnon's First Quarter fiscal 25 earnings conference call. The earnings release and presentation are available for download on our investor relations website at investors.cmto.com. On the call with me today are David Wilson, our president and chief executive officer, and Greg Rustowitz, our chief financial officer. In a moment, David and Greg will walk you through our financial and operating performance for the quarter. Before we begin our remarks, please let me remind you that we have our safe harbor statement on slide two. During the course of this call, management may make forward-looking statements in regards to our current plans, beliefs, and expectations. These statements are not guarantees for future performance and are subject to a number of risks and uncertainties and other factors that can cause actual results and events to differ materially from the results and events contemplated by these forward-looking statements. I'd also like to remind you that management will refer to certain non-GAAP financial measures. You can find reconciliations of the most directly comparable GAAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission. Please see our earnings release and our filings with the Securities and Exchange Commission for more information. Today's prepared remarks will be followed by a question and answer session. With that, I'll turn the call over to David.

Thank you, Christy, and good morning, everyone. Columbus McKinnon delivered a solid quarter to start the fiscal year, achieving 2% sales growth, which was at the midpoint of our guidance range, and adjusted EPS of 62 cents, which was at the top end of our guidance range. Areas of strength included precision conveyance and lifting, which were up 10% and 3%, respectively. Short cycle sales remained healthy, and the project business was up mid-single digits. Adjusted gross margin expanded by 110 basis points year-over-year to 38%, a record first quarter and the second highest quarterly result in company history, as we remained focused on performance improvement and 80-20. And we delivered adjusted EBITDA margin of 15.6%, even as we absorbed 1.2 million of unique costs related to launching regional strategic partner conferences in Europe and the Americas, that are aligned with our commercial and customer experience initiatives. These results are underpinned by the hard work and continued execution by our 3,600 Columbus McKinnon team members as we navigate a dynamic macroeconomic environment and leverage commercial initiatives to advance in vertical markets that are experiencing secular growth and benefiting from megatrends. We are growing, generating cash with normal seasonality, and accelerating debt repayment. These actions are adding capacity to reinvest in our growth framework. We have multiple levers to drive more scale and further enhance our position as a leader in intelligent motion solutions for material handling with a carefully curated offering for our customers. We believe that increasing scale will become a compounding advantage as we execute our strategy over time. Advancing to slide four, we delivered mid-single digit order growth across most areas of our business. with the exception of our crane automation business, where we saw softness and are lapping a strong prior year comparable period. Precision conveyance orders were up 5% driven by new customer wins in the electrification space. For the remainder of our business, our order funnel remains healthy across both the short cycle categories and our project business. Short cycle orders were up 3% in the quarter driven by share gains resulting from our customer experience initiatives. In the project business, orders were down 5% in the quarter, driven by order timing and the softness in crane automation that I just referenced. Overall, our project funnel remains healthy, reflecting our customer-centric focus, targeted end market growth initiatives, channel diversification efforts, and recent new customer engagements. On a quarter-to-date basis through last week, orders were up double digits year over year, driven by strength and precision conveyance, particularly at Montrotech. While we are not immune to the impacts related to current macroeconomic conditions, including higher for longer interest rates or indecision related to the rapidly evolving political landscape and the upcoming U.S. election, we continue to remain focused on what we can control, executing on our commercial, operational, and financial initiatives. With this as our focus, we continue to be cautiously optimistic about our near-term prospects and our full-year outlook. Backlog in the quarter increased 4% driven by the phasing of our long-term backlog and the addition of new project wins. While not in a straight line, we continue to expect backlog to further normalize from current levels over time as we improve lead times and customers adjust their ordering behaviors. On slide five, you can see that our priorities remain consistent as we execute on the most important initiatives that will enable us to achieve our growth and financial performance objectives. Specifically, we remain focused on enhancing customer experience and further differentiating our value proposition, driving operational excellence through the business, and executing on footprint simplification plans that facilitate meaningful gross margin expansion. In fact, earlier this week, we announced that we are consolidating our North American linear motion facility into our manufacturing center of excellence in Monterey, Mexico. This 146,000-square-foot facility is expected to cease operations at the end of the second quarter and completely wind down by the end of the third quarter. Through lean manufacturing techniques, and the use of improved manufacturing technologies, we expect to have utilized just 50% to 60% of our Monterey facility's 165,000 square feet following this action as we ramp production. This is an important next step along our 80-20 footprint simplification path to deliver 200 basis points of gross margin improvement by fiscal year 2017. These strategic initiatives in combination with our commercial priorities enable us to deliver profitable growth focused on strategically advantaged end markets. In addition to positioning ourselves to benefit from megatrends such as nearshoring, increasing defense spending, and growth in e-commerce, we are investing to become a leader in targeted vertical markets. Two particular areas of focus and recent success include electrification or battery production, which is a market growing at a CAGR that is north of 30% and is expected to hit $550 billion in 2030. In fact, over 200 battery factories are planned to be constructed in the next six years to support mobility, electrical capacity storage, and more. We are establishing a leadership position in this space by providing fit-for-purpose, advantaged solutions for battery producers, and most recently, we won a $9 million order from EntreTech's asynchronous conveyance solutions from Volkswagen-backed PowerCo as they invest in factory automation solutions for their Gigafactory production needs. We see a long and attractive runway of solutions that we can deliver for this customer and others over time as our precision conveyance team is quickly building a reputation as a leader in intelligent motion solutions for the electrification and battery production markets. Another area of focus is the life sciences vertical. Here we have had great success enabling pharmaceutical manufacturers to quickly ramp production and meet rapidly growing demand. This was done most notably during the pandemic as global pharmaceutical companies launched COVID-19 vaccines. Looking ahead, There are several rapidly growing demand areas, including weight loss injectables and related products, that are struggling to keep up with rapidly growing demand, and we are well positioned to participate in this growth. Overall, we're encouraged by the progress we're making and the potential of our business as we advance our strategy and execute on our prioritized initiatives. We are delivering impactful improvements across the business and remain in the early innings in terms of the value these initiatives will deliver over time. Powered by our strategy and our position as a market-leading provider of intelligent motion solutions for material handling, we are delivering attractive outcomes and improving financial performance. We remain confident in our ability to increase scale, compound growth, and deliver shareholder value over time. With that, I'll turn the call over to Greg to take us through the financial results.