Columbus McKinnon(CMCO) - 2026 Q1 - Quarterly Results

Executive Summary & Q1 FY26 Highlights This section provides an overview of Columbus McKinnon's first quarter fiscal year 2026 performance, including key financial highlights and CEO commentary on strategic direction First Quarter 2026 Highlights Columbus McKinnon reported its Q1 FY26 results, with orders increasing 2% driven by project-related growth, leading to a 23% year-over-year increase in backlog and a book-to-bill ratio of 1.1x. Despite a net loss, adjusted EBITDA and adjusted EPS were positive, though impacted by tariffs and acquisition-related expenses Q1 FY26 Value | Metric | Q1 FY26 Value | | :-------------------------------- | :------------ | | Orders | $258.6 million (↑ 2%) | | Backlog | $360.1 million (↑ 23% YoY) | | Book-to-Bill Ratio | 1.1x | | Net Sales | $235.9 million | | Operating Margin | 2.3% (Adjusted: 7.8%) | | Net Loss | $1.9 million | | Net Loss Margin | (0.8%) | | Adjusted EBITDA | $30.8 million | | Adjusted EBITDA Margin | 13.0% | | GAAP EPS | ($0.07) | | Adjusted EPS | $0.50 | - Net loss includes $8.1 million of Kito Crosby acquisition-related expenses, $4.2 million tariff impact, and $2.5 million of business realignment costs on a pre-tax basis. Adjusted EPS includes an $0.11 per share unfavorable tariff impact[3] CEO Commentary CEO David J. Wilson noted that Q1 FY26 results were largely as expected, with sustained order growth despite global tariff policies pressuring near-term results. He reaffirmed optimism for the business, highlighted a healthy demand environment, and emphasized strategic execution, cost management, and progress towards the Kito Crosby acquisition - Anticipates approximately $10 million of net tariff impact in the first half of fiscal 2026, consistent with prior guidance[2] - Demand environment remains healthy, underscored by a 1.1x book-to-bill ratio and a 23% increase in backlog year-over-year[2] - Progressing towards the closing of the Kito Crosby acquisition, expecting benefits of scale, improved solutions, synergies, and strong free cash flow to drive profitable growth and long-term shareholder value[2] Financial Results - Q1 FY26 This section details Columbus McKinnon's financial performance for the first quarter of fiscal year 2026, covering sales, operating results, and condensed GAAP financial statements First Quarter Fiscal 2026 Sales Net sales for Q1 FY26 decreased by 1.6% year-over-year to $235.9 million, primarily due to lower volume, partially offset by price improvements and favorable foreign currency translation. Both U.S. and non-U.S. sales experienced declines Q1 FY26 Net Sales Performance | Metric | Q1 FY26 ($ in millions) | Q1 FY25 ($ in millions) | Change ($ in millions) | Change (%) | | :---------------- | :---------------------- | :---------------------- | :--------------------- | :--------- | | Net sales | $235.9 | $239.7 | $(3.8) | (1.6)% | | U.S. sales | $135.3 | $136.3 | $(1.0) | (0.7)% | | Non-U.S. sales | $100.6 | $103.4 | $(2.8) | (2.7)% | - The decrease in net sales was driven by $7.9 million of lower volume, partially offset by $2.0 million in price improvement and $3.1 million from favorable foreign currency translation[4] Q1 FY26 Net Sales Bridge | Component | $ Change (in millions) | % Change | | :------------------------ | :--------------------- | :------- | | Fiscal 2025 Net Sales | $239.7 | | | Pricing | $2.4 | 1.0% | | Volume | $(9.4) | (3.9)% | | Foreign currency translation | $3.1 | 1.3% | | Total change | $(3.8) | (1.6)% | | Fiscal 2026 Net Sales | $235.9 | | First Quarter Fiscal 2026 Operating Results Operating results for Q1 FY26 showed significant declines across profitability metrics. Gross profit decreased by 13.3%, and income from operations fell by 74.0%. Net income turned into a loss, and both GAAP and Adjusted EPS decreased, largely due to lower volume, tariff impacts, and acquisition-related costs Q1 FY26 Operating Results Summary | Metric | Q1 FY26 | Q1 FY25 | Change ($ in millions) | % Change | | :-------------------------- | :------ | :------ | :--------------------- | :--------- | | Gross profit | $77.2 | $89.0 | $(11.8) | (13.3)% | | Gross margin | 32.7% | 37.1% | (440) bps | | | Adjusted Gross Profit | $80.9 | $91.0 | $(10.1) | (11.1)% | | Adjusted Gross Margin | 34.3% | 38.0% | (370) bps | | | Income from operations | $5.5 | $21.1 | $(15.7) | (74.0)% | | Operating margin | 2.3% | 8.8% | (650) bps | | | Adjusted Operating Income | $18.5 | $25.7 | $(7.2) | (27.9)% | | Adjusted Operating Margin | 7.8% | 10.7% | (290) bps | | | Net income (loss) | $(1.9) | $8.6 | $(10.5) | NM | | Net income (loss) margin | (0.8)% | 3.6% | (440) bps | | | GAAP EPS | $(0.07) | $0.30 | $(0.37) | NM | | Adjusted EPS | $0.50 | $0.62 | $(0.12) | (19.4)% | | Adjusted EBITDA | $30.8 | $37.5 | $(6.7) | (17.9)% | | Adjusted EBITDA Margin | 13.0% | 15.6% | (260) bps | | Q1 FY26 Gross Profit Bridge | Component | Quarter ($ in millions) | | :------------------------------------------ | :---------------------- | | Fiscal 2025 Gross Profit | $89.0 | | Price, net of manufacturing costs changes (incl. inflation) | $(5.7) | | Monterrey, MX new factory start-up costs | $(0.3) | | Factory and warehouse consolidation costs | $(0.4) | | Sales volume and mix | $(5.4) | | Other | $(1.0) | | Foreign currency translation | $1.0 | | Total change | $(11.8) | | Fiscal 2026 Gross Profit | $77.2 | Condensed Consolidated Income Statements (GAAP) The condensed consolidated income statement for Q1 FY26 shows a net loss of $1.9 million, a significant decline from a net income of $8.6 million in the prior-year period. This was primarily driven by a decrease in gross profit and a substantial reduction in income from operations, alongside increased general and administrative expenses Condensed Consolidated Income Statements (Unaudited) - Three Months Ended June 30 | (In thousands, except per share and percentage data) | June 30, 2025 | June 30, 2024 | Change % | | :-------------------------------------------------- | :------------ | :------------ | :------- | | Net sales | $235,920 | $239,726 | (1.6)% | | Cost of products sold | 158,698 | 150,696 | 5.3 % | | Gross profit | 77,222 | 89,030 | (13.3)% | | Gross profit margin | 32.7 % | 37.1 % | | | Selling expenses | 28,531 | 27,770 | 2.7 % | | General and administrative expenses | 30,743 | 26,447 | 16.2 % | | Research and development expenses | 4,821 | 6,166 | (21.8)% | | Amortization of intangibles | 7,635 | 7,500 | 1.8 % | | Income from operations | 5,492 | 21,147 | (74.0)% | | Operating margin | 2.3 % | 8.8 % | | | Interest and debt expense | 8,698 | 8,235 | 5.6 % | | Investment (income) loss | (1,049) | (209) | 401.9 % | | Foreign currency exchange (gain) loss | (342) | 395 | NM | | Other (income) expense, net | (177) | 676 | NM | | Income (loss) before income tax expense (benefit) | (1,638) | 12,050 | NM | | Income tax expense (benefit) | 260 | 3,421 | (92.4)% | | Net income (loss) | $(1,898) | $8,629 | NM | | Basic income (loss) per share | $(0.07) | $0.30 | NM | | Diluted income (loss) per share | $(0.07) | $0.30 | NM | Condensed Consolidated Balance Sheets (GAAP) As of June 30, 2025, total assets increased to $1,779.2 million from $1,738.8 million at March 31, 2025, primarily driven by increases in trade accounts receivable, inventories, goodwill, and other intangibles. Total liabilities also increased, while total shareholders' equity saw a modest rise Condensed Consolidated Balance Sheets (Unaudited) - As of June 30, 2025 vs. March 31, 2025 | (In thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------------------ | :------------ | :------------- | | ASSETS | | | | Total current assets | $478,476 | $465,769 | | Property, plant, and equipment, net | 106,735 | 106,164 | | Goodwill | 732,413 | 710,807 | | Other intangibles, net | 360,986 | 356,562 | | Total assets | $1,779,192 | $1,738,788 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Total current liabilities | $259,239 | $257,919 | | Term loan, AR securitization facility and finance lease obligations | 422,795 | 420,236 | | Other non current liabilities | 186,275 | 178,538 | | Total liabilities | $868,309 | $856,693 | | Total shareholders' equity | $910,883 | $882,095 | | Total liabilities and shareholders' equity | $1,779,192 | $1,738,788 | Condensed Consolidated Statements of Cash Flows (GAAP) For the three months ended June 30, 2025, net cash used for operating activities increased to $18.2 million from $10.8 million in the prior year, primarily due to the net loss and changes in working capital. Investing activities also used cash, while financing activities saw a reduced outflow compared to the prior year Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended June 30 | (In thousands) | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Net cash provided by (used for) operating activities | $(18,153) | $(10,758) | | Net cash provided by (used for) investing activities | $(3,217) | $(4,041) | | Net cash provided by (used for) financing activities | $(977) | $(30,583) | | Effect of exchange rate changes on cash | $(2,614) | $(371) | | Net change in cash and cash equivalents | $(24,961) | $(45,753) | | Cash, cash equivalents, and restricted cash at end of period | $28,972 | $68,623 | - Operating cash flow was negatively impacted by increases in trade accounts receivable and inventories, and a decrease in trade accounts payable[20] Strategic Outlook & Operational Data This section outlines Columbus McKinnon's capital allocation priorities, fiscal year 2026 guidance, and additional operational metrics for the quarter Capital Allocation Priorities The Company's near-term capital allocation strategy focuses on debt reduction to deleverage the balance sheet while maintaining a consistent dividend payment. Long-term, Columbus McKinnon aims to utilize significant free cash flow generation to advance its Intelligent Motion strategy - Near-term priority: Allocate capital to pay down debt for deleveraging[6] - Commitment to consistent dividend payment[6] - Long-term goal: Utilize significant free cash flow to advance the Intelligent Motion strategy across the fragmented marketplace[6] Fiscal Year 2026 Guidance Columbus McKinnon reaffirmed its fiscal year 2026 guidance, projecting net sales and adjusted EPS to be flat to slightly up. This guidance excludes the impact of the pending Kito Crosby acquisition and assumes tariffs will be a headwind in the first half, with neutrality expected by the second half FY26 Guidance | Metric | FY26 Outlook | | :-------- | :----------- | | Net sales | Flat to slightly up | | Adjusted EPS | Flat to slightly up | - Guidance does not contemplate the impact of the pending Kito Crosby acquisition[7] - Assumes approximately $35 million of interest expense, $30 million of amortization, an effective tax rate of 25%, and 29.0 million diluted average shares outstanding[8] - Tariffs are expected to be a headwind to Adjusted EPS in the first half of fiscal 2026 due to timing of supply chain adjustments, pricing increases, and surcharge implementation lagging tariff costs, with tariff cost neutrality expected by the second half[7] Additional Operational Data Key operational metrics for Q1 FY26 show a significant increase in backlog, with long-term backlog growing as a percentage of total. Debt to total capitalization slightly improved, while working capital as a percentage of sales increased. Days sales outstanding and days' inventory also increased, and free cash flow was negative Key Operational Metrics | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :------------ | | Backlog | $360.1 million | $322.5 million | $292.8 million | | Long-term backlog (beyond 3 months) | $223.4 million | $190.3 million | $156.0 million | | Long-term backlog as % of total backlog | 62.0 % | 59.0 % | 53.3 % | | Debt to total capitalization percentage | 34.2 % | 34.8 % | 36.6 % | | Debt, net of cash, to net total capitalization | 32.8 % | 32.1 % | 33.3 % | | Working capital as a % of sales | 25.2 % | 21.3 % | 22.5 % | | Days sales outstanding | 69.5 days | 61.0 days | 63.3 days | | Inventory turns per year | 2.9 turns | 3.4 turns | 3.0 turns | | Days' inventory | 125.9 days | 107.4 days | 121.7 days | | Days payables outstanding | 56.1 days | 54.9 days | 50.6 days | | Net cash provided by (used for) operating activities | $(18.2) million | $35.6 million | $(10.8) million | | Capital expenditures | $3.2 million | $6.1 million | $4.6 million | | Free Cash Flow | $(21.4) million | $29.5 million | $(15.4) million | Company Information & Non-GAAP Reconciliations This section provides background on Columbus McKinnon, a safe harbor statement, and detailed reconciliations of non-GAAP financial measures to their GAAP equivalents About Columbus McKinnon Columbus McKinnon Corporation is a global designer, manufacturer, and marketer of intelligent motion solutions for material handling, focusing on safety and quality in commercial and industrial applications. Their product portfolio includes hoists, crane components, conveyor systems, rigging tools, and digital control systems - Leading worldwide designer, manufacturer, and marketer of intelligent motion solutions for material handling[12] - Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations, and digital power and motion control systems[12] - Focuses on commercial and industrial applications requiring superior design, engineering, safety, and quality[12] Safe Harbor Statement This section outlines the Company's safe harbor statement regarding forward-looking statements, emphasizing that such statements are based on current expectations and assumptions, involve known and unknown risks and uncertainties, and are subject to change. Investors are cautioned not to place undue reliance on these statements, which speak only as of their date - Contains forward-looking statements regarding strategy, outlook, growth prospects, financial targets, capital allocation, economic trends, Kito Crosby acquisition benefits, debt repayment plans, and competitive environment[13] - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially[13] - Columbus McKinnon undertakes no duty to update publicly any such forward-looking statement, except as required by applicable law[13] Non-GAAP Financial Measures & Reconciliations This section provides definitions and reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. The Company uses these non-GAAP metrics, such as Adjusted Gross Profit, Adjusted Operating Income, Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA, to provide supplemental information for investors to better understand financial performance, historical comparisons, and industry comparisons, despite not being GAAP-compliant - Non-GAAP financial measures are provided as supplemental information and should not be considered superior to, a substitute for, or an alternative to GAAP measures[30] - The Company believes these non-GAAP measures assist investors in understanding current and historical financial performance and facilitate comparisons with other companies[32][35][38][40] Adjusted Gross Profit Reconciliation This reconciliation details the adjustments made to GAAP gross profit to arrive at the non-GAAP adjusted gross profit for the quarter Reconciliation of Gross Profit to Adjusted Gross Profit (Three Months Ended June 30) | ($ in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Gross profit | $77,222 | $89,030 | | Add back (deduct): | | | | Business realignment costs | 1,385 | 392 | | Factory and warehouse consolidation costs | 425 | — | | Monterrey, MX new factory start-up costs | 1,901 | 1,625 | | Adjusted Gross Profit | $80,933 | $91,047 | | Gross margin | 32.7 % | 37.1 % | | Adjusted Gross Margin | 34.3 % | 38.0 % | Adjusted Operating Income Reconciliation This reconciliation details the adjustments made to GAAP income from operations to arrive at the non-GAAP adjusted operating income for the quarter Reconciliation of Income from Operations to Adjusted Operating Income (Three Months Ended June 30) | ($ in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Income from operations | $5,492 | $21,147 | | Add back (deduct): | | | | Acquisition deal and integration costs | 8,103 | — | | Business realignment costs | 2,525 | 850 | | Factory and warehouse consolidation costs | 482 | — | | Headquarter relocation costs | — | 96 | | Monterrey, MX new factory start-up costs | 1,901 | 3,566 | | Adjusted Operating Income | $18,503 | $25,659 | | Operating margin | 2.3 % | 8.8 % | | Adjusted Operating Margin | 7.8 % | 10.7 % | Adjusted Net Income & EPS Reconciliation This reconciliation details the adjustments made to GAAP net income and diluted EPS to arrive at the non-GAAP adjusted net income and adjusted EPS for the quarter Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted EPS (Three Months Ended June 30) | ($ in thousands, except per share data) | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Net income (loss) | $(1,898) | $8,629 | | Add back (deduct): | | | | Amortization of intangibles | 7,635 | 7,500 | | Acquisition deal and integration costs | 8,103 | — | | Business realignment costs | 2,525 | 850 | | Factory and warehouse consolidation costs | 482 | — | | Headquarter relocation costs | — | 96 | | Monterrey, MX new factory start-up costs | 1,901 | 3,566 | | Normalize tax rate | (4,492) | (2,595) | | Adjusted Net Income | $14,256 | $18,046 | | GAAP average diluted shares outstanding | 28,658 | 29,127 | | Add back: Effect of dilutive share-based awards | 120 | — | | Adjusted Diluted Shares Outstanding | $28,778 | $29,127 | | GAAP EPS | $(0.07) | $0.30 | | Adjusted EPS | $0.50 | $0.62 | Adjusted EBITDA Reconciliation This reconciliation details the adjustments made to GAAP net income to arrive at the non-GAAP adjusted EBITDA for the quarter Reconciliation of Net Income to Adjusted EBITDA (Three Months Ended June 30) | ($ in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Net income (loss) | $(1,898) | $8,629 | | Add back (deduct): | | | | Income tax expense (benefit) | 260 | 3,421 | | Interest and debt expense | 8,698 | 8,235 | | Investment (income) loss | (1,049) | (209) | | Foreign currency exchange (gain) loss | (342) | 395 | | Other (income) expense, net | (177) | 676 | | Depreciation and amortization expense | 12,266 | 11,840 | | Acquisition deal and integration costs | 8,103 | — | | Business realignment costs | 2,525 | 850 | | Factory and warehouse consolidation costs | 482 | — | | Headquarter relocation costs | — | 96 | | Monterrey, MX new factory start-up costs | 1,901 | 3,566 | | Adjusted EBITDA | $30,769 | $37,499 | | Net income margin | (0.8)% | 3.6 % | | Adjusted EBITDA Margin | 13.0 % | 15.6 % |