UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-27618 _________________ COLUMBUS McKINNON CORPORATION (Exact name of Registrant as specified in its charter) New York 16-0547600 (State of Incorporation) (I.R.S. Employ ...

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the company's unaudited condensed consolidated financial statements and detailed notes for periods ended December 31, 2019 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and equity | Metric | Dec 31, 2019 (in thousands) | Mar 31, 2019 (in thousands) | | :--------------------------- | :-------------------------- | :-------------------------- | | Total Assets | $1,079,859 | $1,061,571 | | Total Liabilities | $595,493 | $630,412 | | Total Shareholders' Equity | $484,366 | $431,159 | | Cash and Cash Equivalents | $84,014 | $71,093 | | Inventories | $135,449 | $146,263 | | Term Loan and Revolving Credit Facility | $186,893 | $235,320 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, costs, and profitability over specific reporting periods | Metric (in thousands) | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :--------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Sales | $199,355 | $217,415 | $619,676 | $659,549 | | Cost of products sold | $131,483 | $144,010 | $402,699 | $430,597 | | Gross Profit | $67,872 | $73,405 | $216,977 | $228,952 | | Income from operations | $20,886 | $6,646 | $73,160 | $44,974 | | Net income (loss) | $15,250 | $(782) | $50,428 | $22,836 | | Basic income (loss) per share | $0.64 | $(0.03) | $2.14 | $0.98 | | Diluted income (loss) per share | $0.63 | $(0.03) | $2.11 | $0.97 | | Dividends declared per common share | $0.06 | $0.05 | $0.12 | $0.10 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This section presents the company's net income adjusted for other comprehensive income or loss items | Metric (in thousands) | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) | $15,250 | $(782) | $50,428 | $22,836 | | Foreign currency translation adjustments | $5,479 | $(2,236) | $(1,596) | $(14,802) | | Change in derivatives qualifying as hedges, net of taxes | $862 | $89 | $(102) | $(619) | | Change in pension liability and postretirement obligation, net of taxes | $(193) | $86 | $(10) | $725 | | Total other comprehensive income (loss) | $6,148 | $(2,061) | $(1,708) | $(14,696) | | Comprehensive income (loss) | $21,398 | $(2,843) | $48,720 | $8,140 | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) This section outlines changes in the company's equity accounts, including net income, dividends, and stock-related transactions | Metric (in thousands) | Balance at Mar 31, 2019 | Balance at Dec 31, 2019 | | :-------------------------------- | :---------------------- | :---------------------- | | Total Shareholders' Equity | $431,159 | $484,366 | | Net income (9 months) | N/A | $50,428 | | Dividends declared (9 months) | N/A | $(4,245) | | Change in foreign currency translation adjustment (9 months) | N/A | $5,479 | | Stock options exercised (9 months) | N/A | $4,457 | | Stock compensation expense (9 months) | N/A | $3,510 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities | Metric (in thousands) | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :---------------------------------------- | :-------------------------- | :-------------------------- | | Net Cash Provided by Operating Activities | $70,252 | $53,796 | | Net Cash Used for Investing Activities | $(6,977) | $(1,848) | | Net Cash Used for Financing Activities | $(50,431) | $(51,768) | | Effect of exchange rate changes on cash | $77 | $(5,416) | | Net Change in Cash and Cash Equivalents | $12,921 | $(5,236) | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $84,264 | $58,329 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the accounting policies, significant transactions, and financial instrument details [1. Description of Business](index=10&type=section&id=1.%20Description%20of%20Business) This note describes the company's core business, products, and geographic sales distribution - The company is a leading global designer, manufacturer, and marketer of motion control products, technologies, systems, and services [25](index=25&type=chunk) - Key products include hoists, actuators, rigging tools, light rail work stations, and digital power and motion control systems for commercial and industrial applications [25](index=25&type=chunk) - Sales to US customers represented approximately **54%** and **55%** for the three and nine months ended December 31, 2019, respectively [26](index=26&type=chunk) [2. Disposals](index=10&type=section&id=2.%20Disposals) This note details the company's divestitures and facility consolidation plans as part of its growth strategy - As part of its 'Blueprint for Growth' strategy, the company sold its Tire Shredder business, Crane Equipment and Service Inc., and Stahlhammer Bommern GmbH in fiscal 2019 [27](index=27&type=chunk) - An impairment loss of **$27.75 million** was recorded on remaining held-for-sale businesses during the nine months ended December 31, 2018 [28](index=28&type=chunk) - The company completed the consolidation of its Salem, Ohio facility in Q1 fiscal 2020 and plans to consolidate two Hangzhou, China manufacturing facilities [30](index=30&type=chunk)[32](index=32&type=chunk) [3. Revenue Recognition](index=11&type=section&id=3.%20Revenue%20Recognition) This note explains the company's policies for recognizing revenue from standard and custom engineered products - Revenue from standard products is recognized upon shipment when legal title and significant risks and rewards transfer to the customer [34](index=34&type=chunk) - Revenue for custom engineered products is generally recognized upon project completion, or over time if an enforceable right to payment exists [35](index=35&type=chunk)[36](index=36&type=chunk) Customer Advances (contract liabilities) | Customer Advances (contract liabilities) (in thousands) | Dec 31, 2019 | Dec 31, 2018 | | :---------------------------------------------------- | :----------- | :----------- | | March 31, beginning balance | $11,501 | $15,909 | | Additional customer advances received | $26,745 | $32,552 | | Revenue recognized from customer advances | $(25,773) | $(36,024) | | December 31, ending balance | $12,500 | $11,356 | Net Sales by Grouping | Net Sales by Grouping (in thousands) | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Industrial Products | $84,067 | $91,720 | $267,459 | $288,239 | | Crane Solutions | $92,134 | $93,190 | $287,374 | $280,333 | | Engineered Products | $23,134 | $23,512 | $64,795 | $61,659 | | All other | $20 | $8,993 | $48 | $29,318 | | Total | $199,355 | $217,415 | $619,676 | $659,549 | [4. Fair Value Measurements](index=14&type=section&id=4.%20Fair%20Value%20Measurements) This note describes the company's fair value measurement hierarchy and the valuation of financial instruments - Fair value measurements are categorized into a three-level hierarchy based on input observability: Level 1 for quoted prices, Level 2 for observable inputs, and Level 3 for unobservable inputs [48](index=48&type=chunk)[49](index=49&type=chunk) - The company's derivatives and pension-related annuity contract are valued using **Level 2 inputs**, while marketable securities use **Level 1 inputs** [52](index=52&type=chunk)[55](index=55&type=chunk) Description | Description (in thousands) | Dec 31, 2019 Fair Value | Mar 31, 2019 Fair Value | Fair Value Hierarchy (Dec 31, 2019) | | :----------------------------------- | :---------------------- | :---------------------- | :---------------------------------- | | Marketable securities | $7,370 | $7,028 | Level 1 | | Annuity contract | $2,004 | $2,285 | Level 2 | | Foreign exchange contracts (net) | $(155) | $(70) | Level 2 | | Interest rate swap liability (asset) | $(1,258) | $1,213 | Level 2 | | Cross currency swap liability (net) | $(10,527) | $(13,708) | Level 2 | | Term loan (disclosed at fair value) | $(262,416) | $(310,463) | Level 2 | [5. Inventories](index=16&type=section&id=5.%20Inventories) This note provides a breakdown of inventory components and changes over the reporting period Inventory Component | Inventory Component (in thousands) | Dec 31, 2019 | Mar 31, 2019 | | :--------------------------------- | :----------- | :----------- | | Raw materials | $93,778 | $88,786 | | Work-in-process | $24,819 | $32,547 | | Finished goods | $35,204 | $40,523 | | Total at cost - FIFO basis | $153,801 | $161,856 | | LIFO cost less than FIFO cost | $(18,352) | $(15,593) | | Net inventories | $135,449 | $146,263 | - Net inventories decreased by **$10.81 million** from March 31, 2019, to December 31, 2019, primarily due to reductions in work-in-process and finished goods [60](index=60&type=chunk) [6. Marketable Securities and Other Investments](index=16&type=section&id=6.%20Marketable%20Securities%20and%20Other%20Investments) This note details the company's marketable securities and equity method investments, including their valuation and impact on earnings - Marketable securities are recorded at fair value through earnings and held as long-term assets for settling general and product liability insurance claims [61](index=61&type=chunk)[63](index=63&type=chunk) Unrealized Gains/Losses on Marketable Securities | Unrealized Gains/Losses on Marketable Securities (in thousands) | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :-------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Impact on earnings (gain/loss) | $67 | $(422) | $232 | $(317) | - The company holds a **49%** equity method investment in Eastern Morris Cranes Company Limited (EMC), with a carrying value of **$3.45 million** at December 31, 2019 [64](index=64&type=chunk) [7. Goodwill and Intangible Assets](index=17&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) This note provides information on the company's goodwill and identifiable intangible assets, including their carrying values and amortization - Goodwill totaled **$322.77 million** at December 31, 2019, with no impairment indicators identified during the quarter [66](index=66&type=chunk)[68](index=68&type=chunk) Identifiable Intangible Assets | Identifiable Intangible Assets (in thousands) | Dec 31, 2019 Net | Mar 31, 2019 Net | | :-------------------------------------------- | :--------------- | :--------------- | | Trademark | $1,873 | $2,074 | | Indefinite lived trademark | $46,971 | $46,981 | | Customer relationships | $139,718 | $146,984 | | Acquired technology | $34,123 | $36,303 | | Other | $521 | $598 | | Total | $223,206 | $232,940 | Amortization Expense | Amortization Expense (in thousands) | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :---------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Amortization Expense | $3,229 | $3,701 | $9,708 | $11,358 | [8. Derivative Instruments](index=18&type=section&id=8.%20Derivative%20Instruments) This note describes the company's use of derivative instruments to manage foreign currency and interest rate exposures - The company uses derivative instruments, including cross currency swaps, foreign currency forwards, and interest rate swaps, to manage foreign currency and interest rate exposures, not for speculative trading [72](index=72&type=chunk) - Cross currency swap agreements, with a notional amount of **$185.61 million**, are designated as cash flow hedges for intercompany loans related to the STAHL acquisition, maturing by January 31, 2022 [75](index=75&type=chunk) - Interest rate swap agreements, with a total notional amount of **$173.56 million**, are designated as cash flow hedges for variable interest rate changes on the senior secured term loan, maturing by December 31, 2023 [78](index=78&type=chunk) [9. Debt](index=20&type=section&id=9.%20Debt) This note outlines the company's debt facilities, including the revolving facility and term loan, and repayment activities - The company's debt facilities include a **$100 million** Revolving Facility and a **$445 million** 1st Lien Term Loan, established for the STAHL acquisition [83](index=83&type=chunk) - The outstanding principal balance of the Term Loan was **$260.46 million** as of December 31, 2019 [84](index=84&type=chunk) - The company repaid **$50 million** on the Term Loan during the nine months ended December 31, 2019, and plans to pay down **$65 million** in total over the next 12 months [84](index=84&type=chunk) [10. Net Periodic Benefit Cost](index=21&type=section&id=10.%20Net%20Periodic%20Benefit%20Cost) This note details the components of the company's net periodic pension cost and planned contributions Net Periodic Pension Cost | Net Periodic Pension Cost (in thousands) | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Service costs | $269 | $255 | $784 | $791 | | Interest cost | $3,701 | $3,864 | $11,077 | $11,629 | | Expected return on plan assets | $(3,971) | $(4,594) | $(11,917) | $(13,836) | | Net amortization | $573 | $572 | $1,714 | $1,750 | | Net periodic pension (benefit) cost | $572 | $97 | $1,658 | $334 | - The company plans to contribute approximately **$11.09 million** to its pension plans in fiscal 2020 [92](index=92&type=chunk) [11. Earnings Per Share](index=21&type=section&id=11.%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share and related adjustments EPS | EPS (in thousands, except per share data) | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :---------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $15,250 | $(782) | $50,428 | $22,836 | | Weighted-average common stock outstanding – basic | 23,679 | 23,348 | 23,581 | 23,245 | | Basic income (loss) per share | $0.64 | $(0.03) | $2.14 | $0.98 | | Diluted income (loss) per share | $0.63 | $(0.03) | $2.11 | $0.97 | - Stock options, restricted stock units, and performance shares for **234,000** common shares were antidilutive and excluded from diluted EPS computation for the three and nine months ended December 31, 2019 [93](index=93&type=chunk) - The company reversed **$1.98 million** in stock compensation expense due to the CEO's resignation and forfeiture of shares in the quarter ended December 31, 2019 [96](index=96&type=chunk) [12. Loss Contingencies](index=23&type=section&id=12.%20Loss%20Contingencies) This note details the company's accrued liabilities for general, product, asbestos, and environmental loss contingencies - Accrued general and product liability costs totaled **$11.78 million** as of December 31, 2019, with **$8.24 million** in non-current liabilities and **$3.54 million** in accrued liabilities [100](index=100&type=chunk) - The estimated asbestos-related aggregate liability, including legal costs, is approximately **$4.86 million** as of December 31, 2019, with **$2 million** expected over the next 12 months [106](index=106&type=chunk) - The estimated product-related aggregate liability is approximately **$6.03 million** as of December 31, 2019 [108](index=108&type=chunk) - Total liabilities for all environmental matters related to Magnetek were **$532 thousand** as of December 31, 2019 [121](index=121&type=chunk) [13. Income Taxes](index=26&type=section&id=13.%20Income%20Taxes) This note discusses the company's income tax expense, effective tax rate, and the impact of foreign tax credits Income Tax Expense as % of Income from Continuing Operations Before Tax | Income Tax Expense as % of Income from Continuing Operations Before Tax | 3 Months Ended Dec 31, 2019 | 3 Months Ended Dec 31, 2018 | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :-------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Income Tax Expense % | 13% | 134% | 20% | 29% | - Income tax expense as a percentage of income from continuing operations decreased by **11 percentage points** for the three months ended December 31, 2019, due to foreign tax credit utilization, resulting in a **$1.91 million** tax benefit [127](index=127&type=chunk)[129](index=129&type=chunk) - The estimated effective tax rate for continuing operations is approximately **21% to 22%** for fiscal 2020 [131](index=131&type=chunk) [14. Changes in Accumulated Other Comprehensive Loss](index=27&type=section&id=14.%20Changes%20in%20Accumulated%20Other%20Comprehensive%20Loss) This note outlines the changes in accumulated other comprehensive loss components, including retirement obligations and foreign currency adjustments AOCL Component | AOCL Component (in thousands) | Beginning Balance (Q3 2019) | Ending Balance (Dec 31, 2019) | | :---------------------------- | :-------------------------- | :---------------------------- | | Retirement Obligations | $(54,962) | $(55,155) | | Foreign Currency | $(32,430) | $(26,951) | | Change in Derivatives | $(3,516) | $(2,654) | | Total AOCL | $(90,908) | $(84,760) | - Net current period other comprehensive income for the three months ended December 31, 2019, was **$6.15 million**, primarily driven by foreign currency translation adjustments (**$5.48 million**) and changes in derivatives qualifying as hedges (**$862 thousand**) [133](index=133&type=chunk) [15. Leases](index=28&type=section&id=15.%20Leases) This note details the company's adoption of new lease accounting standards and the impact on its financial statements - The company adopted ASU No. 2016-02, 'Leases (Topic 842),' effective April 1, 2019, using the modified retrospective method and electing practical expedients [136](index=136&type=chunk)[160](index=160&type=chunk) - Upon adoption, the company recognized initial operating lease ROU assets and corresponding lease liabilities of **$35.55 million** [139](index=139&type=chunk) Lease Metric | Lease Metric (in thousands) | Dec 31, 2019 | | :-------------------------------------- | :----------- | | ROU Assets (Other assets) | $37,729 | | Current Lease Liabilities (Accrued liabilities) | $7,098 | | Non-current Lease Liabilities (Other non current liabilities) | $30,823 | | Total Lease Liabilities | $37,921 | | Weighted-average remaining lease term | 7.05 years | | Weighted-average discount rate | 4.13% | | Operating lease expense (9 months) | $6,833 | [16. Effects of New Accounting Pronouncements](index=31&type=section&id=16.%20Effects%20of%20New%20Accounting%20Pronouncements) This note discusses the company's evaluation and adoption of recent accounting pronouncements and their financial impact - The company is evaluating ASU 2019-12 (Simplifying Income Taxes) and ASU 2016-13 (Credit Losses), effective for fiscal years beginning after December 15, 2020, and December 15, 2019, respectively [150](index=150&type=chunk)[154](index=154&type=chunk) - Several ASUs related to leases and share-based payments were adopted in fiscal 2020, with no material impact on the financial statements [156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk) [Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION](index=34&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20RESULTS%20OF%20OPERATIONS%20AND%20FINANCIAL%20CONDITION) This section provides an executive overview, detailed financial performance analysis, and discussions on liquidity, capital resources, and market conditions [EXECUTIVE OVERVIEW](index=34&type=section&id=EXECUTIVE%20OVERVIEW) This section introduces the company's business, strategic initiatives, and global revenue distribution - Columbus McKinnon Corporation is a leading global designer, manufacturer, and marketer of motion control products, technologies, systems, and services [168](index=168&type=chunk) - The 'Blueprint for Growth Strategy' focuses on business simplification, operational excellence, and profitable growth through new product development and a digital platform [169](index=169&type=chunk) - Approximately **45%** of the company's revenue for the nine months ended December 31, 2019, is from customers outside the US, enhanced by the STAHL acquisition [170](index=170&type=chunk) [Results of Operations (Three Months Ended December 31, 2019 and December 31, 2018)](index=35&type=section&id=Results%20of%20Operations%20%28Three%20Months%20Ended%20December%2031%2C%202019%20and%20December%2031%2C%202018%29) This section analyzes the company's financial performance for the three months ended December 31, 2019, compared to the prior year - Net sales decreased by **8.3%** to **$199.36 million**, primarily due to decreased sales volume (**$10.63 million**) and divested businesses (**$8.98 million**), partially offset by price increases (**$3.25 million**) [176](index=176&type=chunk) - Gross profit decreased by **7.5%** to **$67.87 million**, but the gross profit margin slightly improved to **34.0%** from **33.8%** [177](index=177&type=chunk) - General and administrative expenses decreased by **$2.42 million**, largely due to lower incentive compensation and a **$1.98 million** reversal of stock compensation expense related to the CEO's resignation [179](index=179&type=chunk) - Income from operations increased significantly to **$20.89 million** from **$6.65 million** in the prior year, and net income was **$15.25 million** compared to a loss of **$782 thousand** [13](index=13&type=chunk) [Results of Operations (Nine Months Ended December 31, 2019 and December 31, 2018)](index=36&type=section&id=Results%20of%20Operations%20%28Nine%20Months%20Ended%20December%2031%2C%202019%20and%20December%2031%2C%202018%29) This section analyzes the company's financial performance for the nine months ended December 31, 2019, compared to the prior year - Net sales decreased by **6.0%** to **$619.68 million**, primarily due to sales from divested businesses (**$29.32 million**) and decreased sales volume (**$10.04 million**), partially offset by price increases (**$10.34 million**) [188](index=188&type=chunk) - Gross profit decreased by **5.2%** to **$216.98 million**, but the gross profit margin slightly improved to **35.0%** from **34.7%** [189](index=189&type=chunk) - General and administrative expenses decreased by **$5.18 million**, driven by lower incentive compensation and a **$1.98 million** reversal of stock compensation expense related to the CEO's resignation [191](index=191&type=chunk) - Income from operations increased to **$73.16 million** from **$44.97 million** in the prior year, and net income was **$50.43 million** compared to **$22.84 million** [13](index=13&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, operating cash flows, and sufficiency of funds for future operations and obligations - Cash, cash equivalents, and restricted cash increased by **$12.92 million** to **$84.26 million** at December 31, 2019 [201](index=201&type=chunk) - Net cash provided by operating activities was **$70.25 million** for the nine months ended December 31, 2019, an increase from **$53.80 million** in the prior year [202](index=202&type=chunk) - The company believes its cash on hand, cash flows, and borrowing capacity are sufficient to fund ongoing operations, debt obligations, and capital expenditures for at least the next twelve months [208](index=208&type=chunk) [Capital Expenditures](index=39&type=section&id=Capital%20Expenditures) This section provides details on the company's capital expenditures for the reporting period and future expectations Capital Expenditures | Capital Expenditures (in thousands) | 9 Months Ended Dec 31, 2019 | 9 Months Ended Dec 31, 2018 | | :---------------------------------- | :-------------------------- | :-------------------------- | | Consolidated Capital Expenditures | $6,761 | $7,236 | - The company expects capital expenditures for fiscal 2020 to range from approximately **$10 million to $12 million**, excluding acquisitions and strategic alliances [216](index=216&type=chunk) [Inflation and Other Market Conditions](index=39&type=section&id=Inflation%20and%20Other%20Market%20Conditions) This section discusses the impact of inflation and trade tariffs on the company's costs and operations - The company's costs are affected by inflation, particularly in employee benefits and steel prices, though general inflation has not had a material effect due to the ability to pass on costs through price increases [217](index=217&type=chunk) - The estimated fiscal 2020 exposure for trade tariffs is approximately **$2.5 million**, which will increase the cost of products sold [173](index=173&type=chunk) [Goodwill Impairment Testing](index=39&type=section&id=Goodwill%20Impairment%20Testing) This section describes the company's annual goodwill impairment testing process and current assessment - Goodwill is tested for impairment at least annually at the reporting unit level, one level below the operating segment [218](index=218&type=chunk)[219](index=219&type=chunk) - The company has two reporting units: Duff-Norton (**$9.61 million** goodwill) and Rest of Products (**$313.16 million** goodwill) as of December 31, 2019 [219](index=219&type=chunk) - As of December 31, 2019, the company does not believe any significant impairment indicators exist or that any reporting units are at risk of failing the goodwill impairment test [220](index=220&type=chunk) [Seasonality and Quarterly Results](index=39&type=section&id=Seasonality%20and%20Quarterly%20Results) This section highlights factors that can materially affect quarterly results and emphasizes that past performance is not indicative of future results - Quarterly results can be materially affected by factors such as large customer orders, vacation/holiday concentrations, legal settlements, market gains/losses on securities, restructuring charges, foreign currency translation, and divestitures/acquisitions [222](index=222&type=chunk) - Operating results for any particular fiscal quarter are not necessarily indicative of results for any subsequent fiscal quarter or for the full fiscal year [222](index=222&type=chunk) [Effects of New Accounting Pronouncements](index=39&type=section&id=Effects%20of%20New%20Accounting%20Pronouncements) This section refers to Note 16 for information regarding the effects of new accounting pronouncements - Information regarding the effects of new accounting pronouncements is included in Note 16 to the accompanying consolidated financial statements [223](index=223&type=chunk) [Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995](index=40&type=section&id=Safe%20Harbor%20Statement%20under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) This section includes forward-looking statements subject to risks and uncertainties, with no obligation to update revisions - This report includes 'forward-looking statements' subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially [225](index=225&type=chunk) - The company disclaims any obligation to publicly release the results of any revisions to these forward-looking statements to reflect future events or circumstances [225](index=225&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section reports no material changes in the company's market risks since the end of fiscal 2019 - There have been no material changes in the company's market risks since the end of fiscal 2019 [227](index=227&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2019, with no material changes in internal control - The company's disclosure controls and procedures were evaluated and concluded to be effective as of December 31, 2019 [228](index=228&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the most recent quarter [229](index=229&type=chunk) [Part II. Other Information](index=42&type=section&id=Part%20II.%20Other%20Information) This section provides additional information on legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings – none.](index=42&type=section&id=Item%201.%20Legal%20Proceedings%20%E2%80%93%20none.) This section reports no legal proceedings under this item - No legal proceedings are reported under this item [231](index=231&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section reports no material changes to risk factors from the 2019 10-K, except for a new risk related to LIBOR phase-out - No material changes from the risk factors previously disclosed in the company's 2019 10-K, other than a new risk regarding LIBOR [232](index=232&type=chunk) - Changes in the method of determining LIBOR, or its replacement, may adversely affect interest rates on the company's Term Loan and Revolver [233](index=233&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – none.](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%20%E2%80%93%20none.) This section reports no unregistered sales of equity securities or use of proceeds - No unregistered sales of equity securities and use of proceeds are reported under this item [234](index=234&type=chunk) [Item 3. Defaults upon Senior Securities – none.](index=42&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities%20%E2%80%93%20none.) This section reports no defaults upon senior securities - No defaults upon senior securities are reported under this item [235](index=235&type=chunk) [Item 4. Mine Safety Disclosures.](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This section indicates that Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable to the company [236](index=236&type=chunk) [Item 5. Other Information – none.](index=42&type=section&id=Item%205.%20Other%20Information%20%E2%80%93%20none.) This section reports no other information - No other information is reported under this item [236](index=236&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q report, including officer certifications and iXBRL financial statements - Exhibits include certifications from the Chief Executive Officer (Exhibit 31.1) and Chief Financial Officer (Exhibit 31.2) pursuant to the Securities Exchange Act of 1934 [238](index=238&type=chunk) - Exhibit 32 is a certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 [238](index=238&type=chunk) - Exhibit 101 includes the financial statements from the Quarterly Report on Form 10-Q formatted in iXBRL [238](index=238&type=chunk) [SIGNATURES](index=44&type=section&id=SIGNATURES) This section contains the official signatures for the report [Signature](index=44&type=section&id=Signature) The report is signed by Gregory P. Rustowicz, Vice President Finance and Chief Financial Officer, on February 4, 2020 - The report was signed by Gregory P. Rustowicz, Vice President Finance and Chief Financial Officer, on February 4, 2020 [240](index=240&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 For the quarterly period ended September 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission File Number: 0-27618 Columbus McKinnon Corporation (Address of principal executive offices) (Zip code) (716) 689-5400 (Registrant's telephone number, in ...

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarter ended June 30, 2019 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (June 30, 2019 vs. March 31, 2019) | Metric | June 30, 2019 (in thousands) | March 31, 2019 (in thousands) | | :--- | :--- | :--- | | Total Assets | $1,090,472 | $1,061,571 | | Total Liabilities | $638,179 | $630,412 | | Total Shareholders' Equity | $452,293 | $431,159 | | Cash and Cash Equivalents | $55,716 | $71,093 | | Trade Accounts Receivable | $135,488 | $129,157 | | Inventories | $150,968 | $146,263 | | Current Portion of Long Term Debt | $65,000 | $65,000 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (Three Months Ended June 30, 2019 vs. 2018) | Metric | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Net Sales | $212,712 | $224,992 | | Gross Profit | $75,612 | $79,647 | | Income from Operations | $27,043 | $13,503 | | Net Income | $18,579 | $7,706 | | Basic Income Per Share | $0.79 | $0.33 | | Diluted Income Per Share | $0.78 | $0.33 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30, 2019 vs. 2018) | Metric | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Net Income (Loss) | $18,579 | $7,706 | | Foreign Currency Translation Adjustments| $1,395 | $(11,246) | | Change in Derivatives Qualifying as Hedges | $(758) | $(164) | | Change in Pension Liability and Postretirement Obligation | $(99) | $608 | | Total Other Comprehensive Income (Loss) | $538 | $(10,802) | | Comprehensive Income (Loss) | $19,117 | $(3,096) | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Changes in Shareholders' Equity (Three Months Ended June 30, 2019) | Item | Amount (in thousands) | | :--- | :--- | | Balance at March 31, 2019 | $431,159 | | Net Income | $18,579 | | Change in foreign currency translation adjustment | $1,395 | | Change in derivatives qualifying as hedges | $(758) | | Change in pension liability and postretirement obligations | $(99) | | Stock options exercised | $980 | | Stock compensation expense | $1,556 | | Restricted stock units released | $(519) | | Balance at June 30, 2019 | $452,293 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Three Months Ended June 30, 2019 vs. 2018) | Activity | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities| $(2,160) | $8,118 | | Net Cash from Investing Activities| $(2,420) | $(2,052) | | Net Cash from Financing Activities| $(10,942) | $(8,062) | | Net Change in Cash and Cash Equivalents | $(15,377) | $(5,890) | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $55,966 | $57,675 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20condensed%20consolidated%20financial%20statements) [1. Description of Business](index=10&type=section&id=1.%20Description%20of%20Business) - Columbus McKinnon Corporation is a global designer, manufacturer, and marketer of material handling products, systems, and services, including hoists, rigging tools, actuators, and digital power control systems, primarily serving commercial and industrial applications[24](index=24&type=chunk) - Approximately **55% of sales** for the three months ended June 30, 2019, were to customers in the United States, with products sold globally through third-party distributors, crane builders, and directly to end-users[25](index=25&type=chunk) [2. Acquisitions and Disposals](index=10&type=section&id=2.%20Acquisitions%20and%20Disposals) - As part of its 'Blueprint for Growth' strategy, the Company initiated the sale of its Tire Shredder business, Crane Equipment and Service Inc, and Stahlhammer Bommern GmbH in fiscal 2019, completing the sales by February 28, 2019, as these were no longer considered core businesses[26](index=26&type=chunk) Financial Impact of Disposals | Item | Three Months Ended June 30, 2019 (in thousands) | Three Months Ended June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Net Loss on Sales of Businesses, including impairment | $169 | $11,100 | | Net Sales for Sold Businesses (2018) | N/A | $11,104 | | Pre-tax Income for Sold Businesses (2018) | N/A | $660 | [3. Revenue Recognition](index=10&type=section&id=3.%20Revenue%20Recognition) - Revenue from standard products is recognized at the time of shipment when control transfers to the customer, with variable consideration reducing revenue based on the most likely amount expected[30](index=30&type=chunk)[31](index=31&type=chunk) - Revenue for custom engineered products and services is generally recognized at a point in time upon project completion, as performance obligations are highly interrelated and do not meet over-time recognition criteria[32](index=32&type=chunk) Disaggregated Revenue by Product Grouping (Three Months Ended June 30, 2019 vs. 2018) | Product Grouping | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Industrial Products | $92,019 | $98,535 | | Crane Solutions | $100,113 | $97,502 | | Engineered Products | $20,561 | $17,683 | | All Other | $19 | $11,272 | | Total Net Sales | $212,712 | $224,992 | [4. Fair Value Measurements](index=12&type=section&id=4.%20Fair%20Value%20Measurements) - The Company uses a fair value hierarchy (Level 1, 2, 3) to categorize inputs for measuring fair value, prioritizing observable inputs[45](index=45&type=chunk)[46](index=46&type=chunk) - Derivative portfolios and annuity contracts are primarily valued using Level 2 inputs, while marketable securities are valued using Level 1 inputs[50](index=50&type=chunk)[52](index=52&type=chunk) Fair Value Measurements (June 30, 2019) | Description (Assets/(Liabilities)) | Fair Value (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Marketable securities | $7,575 | $7,575 | — | — | | Annuity contract | $2,340 | — | $2,340 | — | | Foreign exchange contracts | $(32) | — | $(32) | — | | Interest rate swap liability | $(972) | — | $(972) | — | | Cross currency swap liability | $(17,049) | — | $(17,049) | — | | Cross currency swap asset | $2,005 | — | $2,005 | — | | Term loan (disclosed) | $(300,463) | — | $(300,463) | — | [5. Inventories](index=14&type=section&id=5.%20Inventories) - Interim LIFO calculations are based on management's estimates of year-end inventory levels and costs, which are subject to change[57](index=57&type=chunk) Inventories (June 30, 2019 vs. March 31, 2019) | Inventory Component | June 30, 2019 (in thousands) | March 31, 2019 (in thousands) | | :--- | :--- | :--- | | Raw Materials | $97,546 | $88,786 | | Work-in-Process | $30,978 | $32,547 | | Finished Goods | $39,961 | $40,523 | | Total at Cost - FIFO Basis | $168,485 | $161,856 | | LIFO Cost Less Than FIFO Cost | $(17,517) | $(15,593) | | Net Inventories | $150,968 | $146,263 | [6. Marketable Securities and Other Investments](index=16&type=section&id=6.%20Marketable%20Securities%20and%20Other%20Investments) - Marketable securities are recorded at fair value through earnings, with a **gain of $137,000** from unrealized changes in market value for the three months ended June 30, 2019[59](index=59&type=chunk) - These securities are held as long-term assets to settle liability insurance claims through CM Insurance Company, Inc and are not available for general working capital[61](index=61&type=chunk) - The Company holds a **49% equity interest** in Eastern Morris Cranes Company Limited, valued at **$3,776,000** as of June 30, 2019, with investment income of **$110,000** recognized for the quarter[62](index=62&type=chunk) [7. Goodwill and Intangible Assets](index=16&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) - Goodwill and indefinite-lived trademarks are not amortized but are tested for impairment at least annually across two reporting units: Duff-Norton and Rest of Products[63](index=63&type=chunk) - Total amortization expense for identifiable intangible assets was **$3,253,000** for the three months ended June 30, 2019, with an estimated annual expense of approximately **$13,000,000** for fiscal years 2020-2024[69](index=69&type=chunk) Goodwill Balance (June 30, 2019) | Reporting Unit | Goodwill (in thousands) | | :--- | :--- | | Duff-Norton | $9,626 | | Rest of Products | $315,675 | | Total Goodwill | $325,301 | Identifiable Intangible Assets (June 30, 2019) | Asset Type | Gross Carrying Amount (in thousands) | Accumulated Amortization (in thousands) | Net (in thousands) | | :--- | :--- | :--- | :--- | | Trademark | $6,289 | $(4,254) | $2,035 | | Indefinite Lived Trademark | $47,239 | — | $47,239 | | Customer Relationships | $184,208 | $(38,307) | $145,901 | | Acquired Technology | $46,753 | $(11,144) | $35,609 | | Other | $3,470 | $(2,744) | $726 | | Total | $287,959 | $(56,449) | $231,510 | [8. Derivative Instruments](index=17&type=section&id=8.%20Derivative%20Instruments) - The Company uses derivative instruments to manage foreign currency and interest rate exposures, not for speculative trading[70](index=70&type=chunk) - Cross currency swap agreements, designated as cash flow hedges, hedge intercompany loans related to the STAHL acquisition, with a notional amount of **$194,043,000** maturing by January 31, 2022[73](index=73&type=chunk) - Interest rate swap agreements, also cash flow hedges, manage variable interest rate exposure on the senior secured term loan, with a total notional amount of **$189,293,000** maturing by December 31, 2023[77](index=77&type=chunk) Effect of Derivative Instruments on Statements of Operations (Three Months Ended June 30, 2019) | Type of Instrument | Location of Gain or (Loss) Recognized in Income | Amount of Gain or (Loss) Reclassified from AOCL into Income (in thousands) | | :--- | :--- | :--- | | Foreign exchange contracts | Cost of products sold | $0 | | Interest rate swaps | Interest expense | $(1,413) | | Cross currency swaps | Foreign currency exchange loss (gain) | $(1,001) | [9. Debt](index=19&type=section&id=9.%20Debt) - The Company's debt facilities include a **$100,000,000** Revolving Facility (maturing 2022) and a **$445,000,000** 1st Lien Term Loan (maturing 2024)[82](index=82&type=chunk) - The outstanding principal balance of the Term Loan was **$300,463,000** as of June 30, 2019, after repaying **$10,000,000** during the quarter[83](index=83&type=chunk) - As of June 30, 2019, there were **no outstanding borrowings** on the Revolver, but **$16,325,000** in outstanding letters of credit were issued against it[84](index=84&type=chunk) - Unsecured and uncommitted lines of credit totaling approximately **$2,501,000** were available to non-U.S subsidiaries, with no amounts drawn as of June 30, 2019[87](index=87&type=chunk) [10. Net Periodic Benefit Cost](index=19&type=section&id=10.%20Net%20Periodic%20Benefit%20Cost) - The Company plans to contribute approximately **$11,142,000** to its pension plans in fiscal 2020[91](index=91&type=chunk) Net Periodic Pension Cost (Three Months Ended June 30, 2019 vs. 2018) | Component | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Service Costs | $267 | $269 | | Interest Cost | $3,699 | $3,884 | | Expected Return on Plan Assets | $(3,973) | $(4,637) | | Net Amortization | $569 | $589 | | Net Periodic Pension (Benefit) Cost | $562 | $105 | Net Periodic Postretirement Benefit Cost (Three Months Ended June 30, 2019 vs. 2018) | Component | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Interest Cost | $20 | $29 | | Amortization of Plan Net Losses | $(40) | $(12) | | Net Periodic Postretirement (Benefit) Cost | $(20) | $17 | [11. Earnings Per Share](index=20&type=section&id=11.%20Earnings%20Per%20Share) - Stock options, restricted stock units, and performance shares totaling **292,000 common shares** were excluded from diluted EPS computation for the three months ended June 30, 2019, as they were antidilutive[93](index=93&type=chunk) - On July 22, 2019, the Board declared a dividend of **$0.06 per common share**, expected to be approximately **$1,425,000**[97](index=97&type=chunk) Earnings Per Share Computation (Three Months Ended June 30, 2019 vs. 2018) | Metric | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Net Income | $18,579 | $7,706 | | Weighted-Average Common Stock Outstanding (Basic) | 23,431 | 23,115 | | Effect of Dilutive Employee Stock Options and Other Share-Based Awards | 346 | 495 | | Adjusted Weighted-Average Common Stock Outstanding (Diluted) | 23,777 | 23,610 | | Basic EPS | $0.79 | $0.33 | | Diluted EPS | $0.78 | $0.33 | [12. Loss Contingencies](index=21&type=section&id=12.%20Loss%20Contingencies) - Accrued general and product liability costs totaled **$12,660,000** as of June 30, 2019[99](index=99&type=chunk) - The Company has accrued **$881,000** for environmental matters as of June 30, 2019, and does not anticipate a material adverse effect from environmental expenditures in fiscal 2020[102](index=102&type=chunk) - The estimated asbestos-related aggregate liability ranges between **$4,100,000 and $8,000,000**, with a recorded liability of approximately **$5,417,000** as of June 30, 2019[104](index=104&type=chunk)[106](index=106&type=chunk) - Magnetek, a subsidiary, faces asbestos-related lawsuits with an estimated liability of **$864,000** and an Italian tax matter with a potential liability of approximately **$10,800,000**[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Magnetek is also involved in a dispute with Monsanto regarding PCB-related liabilities, which it is vigorously defending[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [13. Income Taxes](index=24&type=section&id=13.%20Income%20Taxes) - The Company estimates the effective tax rate for continuing operations to be approximately **22% to 23%** for fiscal 2020, varying from the U.S statutory rate due to foreign subsidiary tax rates and jurisdictional mix of taxable income[123](index=123&type=chunk)[124](index=124&type=chunk) Income Tax Expense as Percentage of Income from Continuing Operations | Period | Percentage | | :--- | :--- | | Three Months Ended June 30, 2019 | 22% | | Three Months Ended June 30, 2018 | 19% | [14. Changes in Accumulated Other Comprehensive Loss](index=25&type=section&id=14.%20Changes%20in%20Accumulated%20Other%20Comprehensive%20Loss) Changes in AOCL by Component (Three Months Ended June 30, 2019) | Component | Beginning Balance (in thousands) | Other Comprehensive Income (Loss) before Reclassification (in thousands) | Amounts Reclassified from AOCL (in thousands) | Ending Balance (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Retirement Obligations | $(55,145) | $(494) | $395 | $(55,244) | | Foreign Currency | $(25,355) | $1,395 | — | $(23,960) | | Change in Derivatives Qualifying Hedges | $(2,552) | $(2,414) | $1,656 | $(3,310) | | Total | $(83,052) | $(1,513) | $2,051 | $(82,514) | Details of Amounts Reclassified out of AOCL (Three Months Ended June 30, 2019) | AOCL Component | Amount Reclassified from AOCL (before tax, in thousands) | Affected Line Item on Condensed Consolidated Statement of Operations | | :--- | :--- | :--- | | Net amortization of prior service cost and pension settlement | $529 | Included in net periodic pension cost | | Change in derivatives qualifying as hedges | $(1) | Cost of products sold | | Change in derivatives qualifying as hedges | $(329) | Interest expense | | Change in derivatives qualifying as hedges | $2,537 | Foreign currency | [15. Leases](index=25&type=section&id=15.%20Leases) - The Company adopted ASU No 2016-02, 'Leases (Topic 842),' effective April 1, 2019, resulting in an initial recognition of operating lease Right-of-Use (ROU) assets and lease liabilities of **$35,553,000**[129](index=129&type=chunk)[132](index=132&type=chunk) - Leases are classified as operating leases for facilities, vehicles, and equipment, with terms ranging from 1 to 15 years; leases of twelve months or less are not recorded on the balance sheet[133](index=133&type=chunk)[134](index=134&type=chunk) Lease-Related Financial Information (June 30, 2019) | Metric | Amount (in thousands) | | :--- | :--- | | Operating Lease ROU Assets | $34,311 | | Current Lease Liabilities | $7,542 | | Non-Current Lease Liabilities | $26,835 | | Total Lease Liabilities | $34,377 | | Operating Lease Expense (3 months ended) | $2,313 | | Weighted-Average Remaining Lease Term | 6.14 years | | Weighted-Average Discount Rate | 4.22% | [16. Effects of New Accounting Pronouncements](index=28&type=section&id=16.%20Effects%20of%20New%20Accounting%20Pronouncements) - The Company has not yet adopted ASU 2016-13, 'Financial Instruments - Credit Losses (Topic 326),' which changes the methodology for measuring credit losses[145](index=145&type=chunk) - ASU 2016-02, 'Leases (Topic 842),' and related amendments were adopted effective April 1, 2019, requiring recognition of ROU assets and lease liabilities for operating leases[151](index=151&type=chunk) - Other standards adopted in fiscal 2020 did not have a material impact on the financial statements for the three months ended June 30, 2019[152](index=152&type=chunk)[154](index=154&type=chunk) [Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Results%20of%20Operations%20and%20Financial%20Condition) This section provides management's perspective on financial performance, condition, liquidity, and capital resources [Executive Overview](index=30&type=section&id=EXECUTIVE%20OVERVIEW) - Columbus McKinnon is a global leader in motion control products, systems, and services for material handling, focusing on safety and productivity[156](index=156&type=chunk) - The Company's 'Blueprint for Growth Strategy' aims to simplify the business, improve operational excellence, and drive profitable growth through new product development and a digital platform[157](index=157&type=chunk) - Revenue is geographically diverse, with approximately **45% from outside the U.S.** for the quarter, and the Company monitors global economic trends[158](index=158&type=chunk) - The Company anticipates a fiscal 2020 exposure of approximately **$3,000,000** from trade tariffs with China, which it is actively mitigating through productivity and pricing strategies[161](index=161&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) - Net sales decreased by **$12,280,000 (5.5%)** due to sold businesses and unfavorable foreign currency translation, partially offset by price increases and increased sales volume[164](index=164&type=chunk) - Gross profit decreased by **$4,035,000 (5.1%)**, but gross profit margin slightly increased to **35.5%**, driven by price increases net of material inflation and insurance settlements[165](index=165&type=chunk) - Selling, General and Administrative (G&A), and Research and Development (R&D) expenses all decreased, primarily due to lower incentive compensation and reductions from sold businesses[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) Key Financial Performance (Three Months Ended June 30, 2019 vs. 2018) | Metric | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $212,712 | $224,992 | -5.5% | | Gross Profit | $75,612 | $79,647 | -5.1% | | Gross Profit Margin | 35.5% | 35.4% | +0.1 pp | | Selling Expenses | $22,755 | $25,567 | -11.0% | | General & Administrative Expenses | $19,600 | $21,826 | -10.2% | | Research & Development Expenses | $2,792 | $3,748 | -25.4% | | Net Loss on Sales of Businesses, including impairment | $169 | $11,100 | -98.5% | | Amortization of Intangibles | $3,253 | $3,903 | -16.7% | | Interest and Debt Expense | $3,852 | $4,607 | -16.4% | | Investment Income | $302 | $268 | +12.7% | | Income Tax Expense % | 22% | 19% | +3 pp | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash used by operating activities was **$2,160,000**, a significant decrease from **$8,118,000** provided in the prior year, primarily due to changes in working capital[177](index=177&type=chunk) - Net cash used for financing activities increased to **$10,942,000**, mainly driven by **$10,000,000** in Term Loan repayments and **$1,404,000** in dividend payments[180](index=180&type=chunk) - The outstanding principal balance of the Term Loan was **$300,463,000** as of June 30, 2019, with the Company planning to pay down **$65,000,000** in total over the next 12 months[184](index=184&type=chunk)[185](index=185&type=chunk) - Capital expenditures for the quarter were **$1,854,000**, and are projected to be approximately **$20,000,000** for fiscal 2020[189](index=189&type=chunk) Cash Flow Summary (Three Months Ended June 30, 2019 vs. 2018) | Activity | June 30, 2019 (in thousands) | June 30, 2018 (in thousands) | | :--- | :--- | :--- | | Cash, Cash Equivalents, and Restricted Cash (End of Period) | $55,966 | $57,675 | | Net Cash Used by Operating Activities | $(2,160) | $8,118 | | Net Cash Used for Investing Activities | $(2,420) | $(2,052) | | Net Cash Used for Financing Activities | $(10,942) | $(8,062) | [Goodwill Impairment Testing](index=33&type=section&id=Goodwill%20Impairment%20Testing) - Goodwill is tested for impairment at least annually at the reporting unit level (Duff Norton and Rest of Products)[191](index=191&type=chunk)[192](index=192&type=chunk) - As of June 30, 2019, the Company does not believe it is more likely than not that the fair value of its reporting units is less than their carrying value[193](index=193&type=chunk) [Seasonality and Quarterly Results](index=34&type=section&id=Seasonality%20and%20Quarterly%20Results) - Quarterly results can be materially affected by factors such as the timing of large customer orders, vacation concentrations, legal settlements, and foreign currency translation[197](index=197&type=chunk) [Effects of New Accounting Pronouncements](index=34&type=section&id=Effects%20of%20New%20Accounting%20Pronouncements) - Information regarding the effects of new accounting pronouncements is detailed in Note 16 to the condensed consolidated financial statements[198](index=198&type=chunk) [Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995](index=34&type=section&id=Safe%20Harbor%20Statement%20under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) - This report contains forward-looking statements subject to known and unknown risks that could cause actual results to differ materially from those expressed or implied[199](index=199&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in the Company's market risks since the end of fiscal 2019 - There have been no material changes in the Company's market risks since the end of fiscal 2019[201](index=201&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were effective as of June 30, 2019 - The Company's management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective** as of June 30, 2019[202](index=202&type=chunk) - There have been **no material changes** in the Company's internal control over financial reporting during the most recent quarter[203](index=203&type=chunk) [Part II. Other Information](index=36&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section states that there are no material legal proceedings - No material legal proceedings are reported[205](index=205&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section indicates no material changes to previously disclosed risk factors - No material changes from the risk factors previously disclosed in the Company's 2019 10-K[206](index=206&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds - No unregistered sales of equity securities and use of proceeds[207](index=207&type=chunk) [Item 3. Defaults upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section confirms there were no defaults upon senior securities - No defaults upon senior securities[208](index=208&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable - Mine Safety Disclosures are not applicable[209](index=209&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) This section indicates there is no other information to report - No other information to report[209](index=209&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer pursuant to the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002[211](index=211&type=chunk) - The financial statements from the Quarterly Report on Form 10-Q for the three months ended June 30, 2019, are provided in iXBRL format as an exhibit[211](index=211&type=chunk)

Financial Performance - Fiscal 2019 sales were $876.3 million, an increase of 4.4% compared to $839.4 million in fiscal 2018, driven by increased sales volume and price increases [151]. - Gross profit for fiscal 2019 was $305.0 million, representing 34.8% of net sales, up from $285.0 million or 34.0% in fiscal 2018, reflecting a 7.0% increase [152]. - Net income for fiscal 2019 was $42.6 million, compared to $22.1 million in fiscal 2018, reflecting a significant improvement in profitability [135]. - Net income increased significantly to $42.577 million in 2019, up from $22.065 million in 2018, marking an increase of approximately 93.5% [247]. - Basic income per share rose to $1.83 in 2019, compared to $0.97 in 2018, indicating a substantial increase of 88.7% [247]. Expenses and Costs - Selling expenses decreased to $97.9 million in fiscal 2019, accounting for 11.2% of net sales, down from 12.1% in fiscal 2018 [153]. - General and administrative expenses decreased to $83,567,000 in fiscal 2019 from $85,605,000 in fiscal 2018, representing 9.5% of net sales compared to 10.2% [154]. - Research and development expenses were $13,491,000 in fiscal 2019, down from $13,617,000 in fiscal 2018, accounting for 1.5% of consolidated net sales versus 1.6% [155]. - Interest and debt expense decreased to $17,144,000 in fiscal 2019 from $19,733,000 in fiscal 2018, primarily due to lower average borrowings [157]. - The company incurred approximately $1.7 million in increased tariffs, impacting overall costs [148]. Assets and Liabilities - Total assets at the end of the period were $1,061.6 million, down from $1,142.4 million in the previous year [135]. - Total debt decreased to $300.3 million from $363.3 million, indicating improved financial leverage [135]. - Total liabilities were $630.412 million in 2019, down from $734.217 million in 2018, representing a reduction of approximately 14.2% [244]. - Shareholders' equity increased to $431.159 million in 2019, compared to $408.229 million in 2018, an increase of about 5.6% [244]. Cash Flow - Cash flow from operating activities increased to $79,499,000 in fiscal 2019 from $69,661,000 in fiscal 2018, driven by net income and non-cash adjustments [179]. - Net cash used by investing activities was $2,486,000 in fiscal 2019, a significant improvement from $(32,592,000) in fiscal 2018 [181]. - Net cash used by financing activities was $(67,778,000) in fiscal 2019, compared to $(59,502,000) in fiscal 2018, primarily due to repayments on the Term Loan [183]. - Cash and cash equivalents at the end of the year were $71,343,000, up from $63,565,000 at the beginning of the year, indicating an increase of 12.8% [257]. Market and Geographic Diversity - Approximately 46% of revenue was derived from customers outside the U.S., highlighting the company's geographic diversity [145]. - The company’s sales in the United States accounted for approximately 54% of total sales during fiscal 2019 [260]. Strategic Focus and Investments - The company is focused on expanding its market share in North America and emerging markets through strategic investments and acquisitions [146]. - The Company expects capital expenditures for fiscal 2020 to be approximately $20,000,000, an increase from $12,288,000 in fiscal 2019 [201]. Revenue Recognition and Accounting Practices - The company adopted ASU No. 2014-09 for revenue recognition effective April 1, 2018, impacting financial reporting practices [238]. - Revenue from standard products is recognized at the time of shipment, while custom engineered products are recognized upon project completion [309][310]. - The Company recognizes revenue when control of goods or services is transferred to customers, following a five-step process outlined in ASC 606 [302][307]. Tariffs and Foreign Operations - The Company has estimated its exposure related to tariffs to be approximately $1,700,000, which will result in increased cost of products sold [223]. - In fiscal 2019, 46% of net sales were from manufacturing plants and sales offices in foreign jurisdictions [224]. Financial Instruments and Hedging - The notional amount of cross currency swap agreements designated as cash flow hedges is $198,260,000 [225]. - The notional amount of foreign currency forward agreements designated as cash flow hedges for forecasted inventory purchases is $11,185,000 [227].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 For the quarterly period ended December 31, 2018 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission File Number: 0-27618 | --- | --- | |-------------------------------------------------------------------------------------|------------------------------- ...