Motion control and material handling products maker Columbus McKinnon reported its 2020 second quarter financial results on Thursday, and like many other industrial suppliers, the figures were led by continued sizable year-over-year declines alongside solid sequential gains.
The Buffalo, NY-based company posted total sales of $158 million for the July-September quarter, down 24.0 percent year-over-year (YoY) but up 13.5 percent from Q1. In the United States, sales of $85 million were down 25.4 percent YoY but improved 13.3 percent from Q1.
The sales figures were a considerable sequential improvement from Q1 (April-June), when CM's total sales of $139 million were down 34.6 percent YoY and down 26.6 percent from Q4 2019, while US sales of $75 were down 36 percent YoY and down 32.9 percent from Q4.
CM said Q2 orders were up nearly 26 percent compared with Q1, driven mostly by the recovery of the short cycle business, which improved 41 percent over Q1 while project orders grew 12 percent. "Total backlog has recovered to pre-COVID levels and long-term backlog, which is expected to ship beyond the fiscal third quarter, grew to 41.5 percent of total backlog," the company said.
The company said that sequentially, short cycle sales were up 22.2 percent and project sales were up 5.5 percent.
CM's Q2 gross profit of $56 million fell 23.8 percent YoY, but improved 24.4 percent from Q1, while gross margin of 35.5 percent improved 10 basis points YoY and 330 basis points from Q1. Q2 operating profit of $15.8 million was down the $25.2 million it had a year earlier, but dwarfed Q1's $1.8 million as Q2 operating margin of 10.0 percent was down 220 basis points YoY but up from Q1's 1.3 percent.
CM took a net loss of $4.1 million in Q2, compared to a $16.6 million profit a year earlier and a $3.0 million loss in Q1.
"We delivered solid results in the quarter achieving the higher end of our expected revenue range and demonstrated our capabilities to drive profitability and strong cash generation in a challenging environment," said David Wilson, CM president and CEO. "In fact, the 80/20 Process, a key tool in our business system, contributed $3.4 million in operating income during the quarter, helping to offset headwinds caused by the pandemic."