Summary of Columbus McKinnon Conference Call Company Overview - Columbus McKinnon is a global leader in intelligent motion solutions for material handling with over 150 years of history and public since 1996 [2][3] - The company generates approximately $1 billion in sales with a 16% EBITDA margin, with 60% of business in North America and 30% in EMEA [4] Business Segments - The company operates in four main platforms: - Lifting (60% of revenue) providing hoists and rigging materials [5] - Precision conveyance, enhanced through acquisitions like Dorner and Garvey [6] - Automation, stemming from the Magnetek acquisition [6] - Linear motion, representing 9% of the company [7] Growth Strategy - Columbus McKinnon is focused on growth and margin expansion through strategic acquisitions and entering secular growth categories [3][12] - Recent acquisitions include: - Keto Crosby for $2.7 billion, expected to close by the end of the calendar year [10][19] - Dorner Corporation for $485 million, enhancing precision conveyance capabilities [12] - Garvey Corporation and Montrotech, expanding automation and precision handling [16][18] Financial Performance and Projections - The acquisition of Keto Crosby is expected to double the company's size and triple EBITDA, with a projected EBITDA margin of 23% [27] - Anticipated net synergies of $70 million from the acquisition, with significant free cash flow generation expected [28][39] - The company aims to reduce net leverage to about 3x within two years [40] Market Dynamics - The company is experiencing strong demand in sectors such as battery production, e-commerce, life sciences, food and beverage, and aerospace [58][61][63] - Challenges include tariff impacts, with a potential $10 million headwind expected in the current fiscal year [43][45] - Short cycle orders have been weaker, but project business is growing, indicating a shift in demand profiles [50][54] Competitive Landscape - The industry has shown rational pricing behavior in response to inflation and tariffs, with Columbus McKinnon implementing pricing actions to mitigate tariff impacts [47][49] - The company is well-positioned to leverage its global presence and expertise in various markets, including defense and energy [68] Conclusion - The Keto Crosby acquisition is viewed as a transformative opportunity, enhancing scale and operational capabilities while allowing Columbus McKinnon to continue its strategic focus on intelligent motion solutions [70][71]

Core Insights - Columbus McKinnon Corporation will present at the 2025 Wells Fargo Industrials & Materials Conference on June 12, 2025, at approximately 1:45 p.m. Eastern Time [1] - A live audio webcast of the presentation will be available on the Columbus McKinnon Investor Relations webpage, with a replay accessible until June 26, 2025 [2] - Columbus McKinnon is a leading designer, manufacturer, and marketer of intelligent motion solutions, focusing on commercial and industrial applications [3] Company Overview - Columbus McKinnon specializes in moving, lifting, positioning, and securing materials through its key products, which include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations, and digital power and motion control systems [3] - The company emphasizes safety and quality through superior design and engineering know-how [3]

Financial Performance - In fiscal 2025, the company's sales were $537,549,000 (56%) from the U.S. and $425,478,000 (44%) from non-U.S. markets[33]. - The company's product sales breakdown for fiscal 2025 included 50% from hoists, 16% from high-precision conveying systems, and 11% from digital power control systems[33]. - The company's backlog of orders as of March 31, 2025, was approximately $322.5 million, an increase from $280.8 million on March 31, 2024, reflecting a growth of about 14.9% year-over-year[49]. - Raw material and component purchases totaled approximately $375 million in fiscal 2025, representing 59% of the cost of products sold[58]. - The overall safety incident rate for fiscal 2025 was 0.54, down from 0.71 in fiscal 2024, indicating improved workplace safety[59]. Market Position and Strategy - The company achieved a market leadership position in hoists, material handling digital power control systems, and precision conveyors in the U.S. and Europe[19]. - The precision conveyance acquisitions of Dorner, Garvey, and montratec expanded the company's product offerings and established a platform for growth in a highly fragmented industry[23][24]. - The Kito Acquisition is expected to close during fiscal 2026 and will enhance the company's geographic reach and expand its lifting securement and consumables portfolio[26]. - The company plans to fund the Kito Acquisition through $3,050,000,000 in committed debt financing and $800,000,000 of preferred equity investment[27]. - The company's Total Addressable Market (TAM) increased by approximately $5 billion with the acquisition of conveyor businesses, with the specialty conveying microsegment growing at an estimated 6% to 8% annually[22]. - The company is focused on expanding its market share through product localization, new product development, and advancements in automation[21]. - The company has a strategic growth framework that includes strengthening, growing, expanding, and reimagining its core business[21]. - The company is committed to maintaining positive perceptions of its brands and successfully integrating acquisitions to enhance its competitive position[13]. Global Operations - The company operates in 25 countries and had 3,478 employees globally as of March 31, 2025[55]. - In fiscal 2025, 44% of net sales were generated from foreign manufacturing plants and sales offices, indicating significant international exposure[207]. Risk Management - The company is exposed to market risks including commodity prices for raw materials and foreign currency exchange rates, which may impact financial performance[205]. - The company has a cross currency swap agreement with a notional amount of $72,040,000, maturing on March 31, 2028, to hedge against foreign exchange rate changes[208]. - The company has foreign currency forward agreements with a notional amount of $36,528,000 to hedge forecasted inventory purchases in foreign currencies[209]. - A 10% change in the value of the U.S. dollar against significant foreign currencies would impact income from operations by approximately $2,407,000[207]. - The company actively monitors trade tariffs and implements pricing strategies, including tariff surcharges, to mitigate their impact[206]. Financial Obligations - As of March 31, 2025, the company had $437.6 million outstanding under Term Loan B and $25.0 million under the AR Securitization Facility, both subject to variable interest rates[210]. - The company expects to reclassify approximately $376,000 from accumulated other comprehensive loss (AOCL) to interest expense over the next 12 months due to interest rate swaps[212]. - A 100 basis point increase in variable rates would increase annual cash interest by approximately $1.1 million[213]. - The company expects to reclassify approximately $36,000 from AOCL to foreign currency exchange loss (gain) in the next 12 months related to an intercompany loan[208]. Employee Engagement and Culture - The company emphasizes a people-first culture, focusing on employee engagement, training, and development opportunities to drive strategic progress[60]. - The principal competitive factors include customer service, product availability, and brand reputation, which are critical for maintaining market position[51]. - The company has established a network of 17 chain repair service stations and over 229 certified hoist service and repair stations globally to enhance service access[47].

Financial Data and Key Metrics Changes - Columbus McKinnon reported fiscal year 2025 net sales of $963 million, down 4% year over year on a constant currency basis, reflecting lower volume due to short cycle order softness [15] - In the fourth quarter, sales were $246.9 million, a decrease of 5% from the prior year on a constant currency basis, primarily due to a 9% decrease in short cycle sales [15] - Gross profit for the quarter was $79.8 million, down $14.5 million year over year, impacted by factory closure costs and lower sales volume [16] - Adjusted earnings per diluted share decreased by $0.15 versus the prior year, driven by lower volume and unfavorable mix [17] Business Line Data and Key Metrics Changes - Short cycle orders were flat on a constant currency basis in the quarter, but there was an improved comparison trend from the third quarter [6] - Precision conveyance orders grew by 19% year over year, indicating strong demand in this segment [36] - Backlog increased by 15% year over year to $322.5 million, reflecting strength in project-related orders, particularly in precision conveyance [15] Market Data and Key Metrics Changes - The company noted strength in vertical end markets such as battery production, life sciences, e-commerce, food and beverage, and aerospace [8] - Demand in industries impacted by tariffs, such as steel and heavy equipment, is expected to stabilize over time [8] - The company anticipates that macroeconomic uncertainty will continue to affect short cycle orders, which are sensitive to channel dynamics [7] Company Strategy and Development Direction - Columbus McKinnon is focused on operational execution, customer experience, and cost management while navigating an evolving macro environment [58] - The pending acquisition of Keto Crosby is expected to scale the business, expand customer capabilities, and enhance financial results [11] - The company aims to achieve tariff cost neutrality by the second half of fiscal 2026 and margin neutrality over time [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about order momentum and backlog as they enter fiscal 2026, despite ongoing macroeconomic uncertainties [58] - The company expects continued volatility related to evolving US policy landscape, impacting sales and margins in the first half of the year [9] - Management is encouraged by early order performance and quotation activity, indicating a healthy demand funnel [9] Other Important Information - The company paid down $60 million of debt in fiscal 2025, prioritizing debt repayment moving forward [18] - Adjusted EBITDA for the fourth quarter was $36.1 million, with an adjusted EBITDA margin of 14.6% [18] - The company expects a $40 million EBITDA impact from unmitigated tariff exposure in fiscal 2026 [19] Q&A Session Summary Question: What is the tariff rate embedded for China and EU for the $0.20 to $0.30 headwind in the first half of the year? - Management indicated a 14.5% tariff on China and 10% on EU tariffs are currently factored into the guidance [26] Question: Can you discuss the near-term outlook for short cycle orders? - Management noted that short cycle sales improved in the latter portion of Q4, with growth in order demand observed [28] Question: How much of the tariff impact is expected to come from pricing versus cost reductions? - Management stated that the demand environment remains uncertain, with pricing and surcharges expected to offset some tariff impacts, but volume reductions may occur due to price increases [33] Question: Can you elaborate on the strength in precision conveyance orders? - Management reported robust demand in precision conveyance, particularly from Montrotech and Dorner businesses, with strong performance in various end markets [36] Question: How will the tariff impacts carry over into the second half of the year? - Management expects to manage tariff impacts through pricing adjustments and surcharges, with a goal to cover tariff increases by the second half of the year [45]

Financial Data and Key Metrics Changes - Columbus McKinnon reported fiscal year 2025 net sales of $963 million, down 4% year over year on a constant currency basis, reflecting lower volume due to short cycle order softness [14] - In the fourth quarter, sales were $246.9 million, a decrease of 5% from the prior year on a constant currency basis, primarily due to a 9% decrease in short cycle sales [14] - Gross profit for the quarter was $79.8 million, down $14.5 million year over year, impacted by factory closure costs and lower sales volume [15] - Adjusted earnings per diluted share decreased by $0.15 versus the prior year, driven by lower volume and unfavorable mix [16] Business Line Data and Key Metrics Changes - Record orders increased by 4% year over year on a constant currency basis, driven by 8% growth in project-related orders and strength in precision conveyance [5] - Short cycle orders were flat on a constant currency basis in the quarter, with improved comparison trends from the third quarter [6] - Backlog increased by 15% year over year to $322.5 million, reflecting strength in project-related orders, particularly in precision conveyance [14] Market Data and Key Metrics Changes - Demand remains strong in vertical end markets such as battery production, life sciences, e-commerce, food and beverage, and aerospace [8] - The company is seeing potential early benefits from industries impacted by tariffs, particularly in steel and heavy equipment [9] - Order activity through mid-May remains encouraging, with orders up year over year and continued overperformance in precision conveyance [8] Company Strategy and Development Direction - The company is focused on operational execution, managing costs, and executing its strategic plan while navigating a challenging macroeconomic environment [12] - Columbus McKinnon is excited about the pending acquisition of Keto Crosby, which is expected to scale the business and enhance customer capabilities [11] - The company aims to achieve tariff cost neutrality by the second half of fiscal 2026 and margin neutrality over time, likely in fiscal 2027 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about order performance and quotation activity despite macro uncertainty [9] - The company anticipates that the current project versus short cycle mix dynamics will continue to impact sales and margins in the first quarter [9] - Management remains focused on meeting customer needs and delivering long-term value to shareholders despite geopolitical and trade policy uncertainties [56] Other Important Information - The company paid down $60 million of debt in fiscal 2025, including $15 million in the fourth quarter, and continues to prioritize debt repayment [17] - Adjusted EBITDA for the fourth quarter was $36.1 million, with an adjusted EBITDA margin of 14.6% [17] - The company expects a $40 million EBITDA impact from unmitigated tariff exposure based on current knowledge [18] Q&A Session Summary Question: What is the tariff rate embedded for China and EU for the $0.20 to $0.30 headwind in the first half of the year? - The company is factoring in 14.5% on China tariffs and 10% on EU tariffs [25] Question: Can you discuss the near-term outlook and how short cycle sales have trended? - Short cycle sales improved in the latter portion of Q4, with flat year-over-year performance, and growth in order demand is expected [27] Question: Can you elaborate on the tariff situation and the expected net mitigation? - The company anticipates that demand remains uncertain, with potential positive impacts from surcharges and tariffs, but volume reductions may occur due to price increases [32] Question: Where is the strength in precision conveyance orders coming from? - Precision conveyance orders have seen robust demand, particularly from Montrotech and Dorner businesses, with strength in end markets like battery production and e-commerce [35] Question: How does the mix impact margins given the strong precision conveyance orders? - While precision conveyance orders were up, sales were down, leading to a negative impact on margins due to lower volume and mix [41]

Company Performance - Columbus McKinnon (CMCO) reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.58 per share, but down from $0.75 per share a year ago [1] - The earnings surprise for this quarter was 3.45%, while the previous quarter saw a negative surprise of -24.32% with actual earnings of $0.56 compared to an expected $0.74 [2] - The company posted revenues of $246.89 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.15% and down from $265.5 million year-over-year [3] Stock Performance - Columbus McKinnon shares have declined approximately 52.3% since the beginning of the year, contrasting with the S&P 500's gain of 0.7% [4] - The current Zacks Rank for Columbus McKinnon is 4 (Sell), indicating expectations of underperformance in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.59 on revenues of $237.3 million, and for the current fiscal year, it is $2.66 on revenues of $973.64 million [8] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6][7] Industry Context - Columbus McKinnon operates within the Manufacturing - Material Handling industry, which is currently ranked in the bottom 17% of over 250 Zacks industries [9]

May 28, 2025 Q4 and Fiscal Year 2025 Financial Results Conference Call David Wilson President & Chief Executive Officer Gregory Rustowicz Executive Vice President Finance & Chief Financial Officer Kristine Moser Vice President, Investor Relations & Treasurer Safe Harbor Statement This presentation and the accompanying oral discussion contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward- looking statements are generally identified by t ...

Financial Performance - Net sales totaled $963.0 million, down 5%, impacted by short cycle order softness and longer delivery times for project-related orders [3]. - Net loss of $5.1 million with a net margin of (0.5%), including $22.1 million in non-cash pension settlement costs and $10.3 million related to the pending acquisition of Kito Crosby [3]. - Adjusted EPS for Q4 FY 25 was $0.60, down 20% from the previous year [5]. - Net sales for the year ended March 31, 2025, decreased by 5.0% to $963.0 million from $1,013.5 million in the previous year [18]. - Gross profit margin declined to 33.8% from 37.0%, with gross profit falling by 13.1% to $325.7 million [18]. - Income from operations dropped significantly by 49.1% to $54.6 million, resulting in an operating margin of 5.7% compared to 10.6% in the prior year [18]. - Net loss for the year was $5.1 million, a stark contrast to the net income of $46.6 million reported for the previous year [18]. - For the three months ended March 31, 2025, net sales were $246.9 million, down 7.0% from $265.5 million in the same period last year [20]. - The company reported a significant decline in income from operations for the quarter, down 80.6% to $4.9 million, with an operating margin of 2.0% [20]. - Average basic shares outstanding remained relatively stable at 28.7 million, with basic loss per share reported at $(0.09) compared to earnings of $0.41 in the prior year [20]. - Net income for the three months ended March 31, 2025, was $(2.684) million, compared to $11.809 million for the same period in 2024, indicating a significant decline [44]. - Adjusted EBITDA for the three months ended March 31, 2025, was $36.069 million, down from $42.977 million in the prior year, reflecting a decrease of approximately 16.5% [44]. - Net sales for the three months ended March 31, 2025, were $246.889 million, a decrease of 7% from $265.504 million in the same period of 2024 [44]. - The net income margin for Q1 2025 was (1.1)%, compared to a positive margin of 4.4% in Q1 2024, highlighting a shift to a loss position [44]. - Adjusted EBITDA margin for Q1 2025 was 14.6%, down from 16.2% in Q1 2024, indicating a decline in operational efficiency [44]. Orders and Backlog - Record orders reached $1.0 billion, an increase of 3%, with an 8% growth in project-related business and a 19% increase in precision conveyance [3]. - Backlog increased to $322.5 million, up $41.7 million or 15% [3]. - Backlog increased to $322.5 million as of March 31, 2025, up from $296.5 million at December 31, 2024, representing an increase of 8.4% [31]. - Long-term backlog as a percentage of total backlog rose to 59.0% from 56.0% year-over-year [31]. Cash Flow and Assets - Net cash provided by operating activities was $35.6 million for the three months ended March 31, 2025, compared to $11.4 million in the previous quarter [31]. - Free Cash Flow for the three months ended March 31, 2025, was $29.5 million, significantly higher than $6.2 million in the previous quarter [31]. - Total assets decreased to $1.74 billion from $1.83 billion, while total liabilities also declined to $856.7 million from $943.9 million [22][23]. Expenses and Costs - Research and development expenses decreased by 8.9% to $23.9 million, representing 2.5% of net sales [18]. - Acquisition deal and integration costs amounted to $11.014 million for the three months ended March 31, 2025, compared to only $3,000 in the same period last year [44]. - The company incurred $3.161 million in costs related to the startup of a new factory in Monterrey, MX, for the three months ended March 31, 2025 [44]. - Interest and debt expense for Q1 2025 was $8.141 million, slightly down from $9.169 million in Q1 2024 [44]. Strategic Initiatives - The acquisition of Kito Crosby is anticipated to enhance the company's product offerings and geographic reach, with closing expected later in the calendar year [6][7]. - The company plans to allocate capital to pay down debt while maintaining consistent dividend payments [8]. - The company is actively working to mitigate tariff impacts through supply chain adjustments and pricing strategies [2]. Dividends - The company declared dividends of $0.28 per common share, consistent with the previous year [18].

Core Insights - Columbus McKinnon Corporation reported a decrease in net sales for both the fourth quarter and the full fiscal year 2025, with a net loss attributed to various non-cash costs and operational challenges [1][5][10]. Fiscal Year 2025 Highlights - Net sales for fiscal year 2025 were $963.0 million, down 5% from $1,013.5 million in fiscal year 2024 [5][16]. - The company experienced a net loss of $5.1 million for the year, which included significant non-cash pension settlement costs and factory consolidation costs [5][16]. - Adjusted EBITDA for the year was $150.5 million, with an adjusted EBITDA margin of 15.6% [5]. Fourth Quarter 2025 Highlights - Fourth quarter net sales were $246.9 million, a decrease of 7% compared to $265.5 million in the same quarter of the previous year [3][17]. - U.S. sales fell by 10.1%, while non-U.S. sales decreased by 2.7% [3][4]. - Gross profit for the fourth quarter was $79.8 million, down 15.4% from $94.3 million in the prior year, resulting in a gross margin of 32.3% [4][17]. Orders and Backlog - The company reported record orders of $1.0 billion, up 3%, driven by growth in project-related business and precision conveyance [5][26]. - The backlog increased to $322.5 million, reflecting a 15% rise compared to the previous year [5][26]. Kito Crosby Acquisition - Columbus McKinnon is progressing towards the acquisition of Kito Crosby, which is expected to enhance its product offerings and geographic reach [7][8]. - The acquisition is subject to regulatory clearance and is anticipated to close later in the calendar year [8]. Fiscal Year 2026 Guidance - The company expects net sales and adjusted EPS to be flat to slightly up for fiscal 2026, not accounting for the Kito Crosby acquisition [10][11]. - The guidance reflects ongoing challenges from tariff policies impacting supply chain costs [10][11]. Capital Allocation - Columbus McKinnon plans to prioritize debt repayment to strengthen its balance sheet while maintaining consistent dividend payments [9].

Group 1 - Columbus McKinnon Corporation will release its fourth quarter and full year fiscal 2025 results on May 28, 2025, before the market opens [1] - A conference call will be held on the same day at 10:00 a.m. Eastern Time to discuss the financial and operating results, as well as corporate strategy and outlook [2] - The conference call will be available via live webcast and a replay will be accessible for two weeks after the call [2] Group 2 - Columbus McKinnon is a leading designer, manufacturer, and marketer of intelligent motion solutions for material handling, focusing on commercial and industrial applications [3] - Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations, and digital power and motion control systems [3] - The company emphasizes safety and quality through superior design and engineering know-how [3]