Columbus McKinnon(US:CMCO)2025-10-30 10:51Financial Performance - Net sales for Q2 FY26 reached $261.0 million, an increase of 8% compared to the prior year, driven by growth across all platforms, particularly in lifting and linear motion [3]. - U.S. sales grew by 11.5% to $147.5 million, while non-U.S. sales increased by 3.2% to $113.5 million, impacted by a weaker macroeconomic landscape in EMEA [4]. - Net income for the quarter was $4.6 million, with a net income margin of 1.8%, a significant recovery from a net loss of $15.0 million in the prior year [5]. - Adjusted EBITDA rose to $37.4 million, a 22% sequential increase, with an adjusted EBITDA margin of 14.3% [3]. - Net sales for the six months ended September 30, 2025, were $496.967 million, representing a 3.1% increase from $482.0 million in the same period of 2024 [17]. - Gross profit for the same period was $167.382 million, with a gross profit margin of 33.7%, down from 34.0% in the prior year [17]. - Net income for the six months was $2.697 million, a turnaround from a loss of $6.414 million in the same period last year [17]. - Gross profit for Q3 2025 was $90,160,000, compared to $74,743,000 in Q3 2024, representing a 20.5% increase [33]. - Net sales for Q3 2025 reached $261,047,000, up from $242,274,000 in Q3 2024, indicating a growth of 7.7% [33]. - Net income for Q3 2025 was $4,595,000, a significant recovery from a net loss of $15,043,000 in Q3 2024 [38]. Backlog and Future Outlook - The backlog increased by 11% to $351.6 million, indicating a healthy opportunity funnel [3]. - The company reported a backlog of $351.6 million as of September 30, 2025, with long-term backlog representing 60.4% of total backlog [28]. - Fiscal Year 2026 guidance includes an increase in net sales outlook to low-to-mid single digits and adjusted EPS expected to be flat to slightly up [7]. Costs and Expenses - Research and development expenses decreased by 21.6% to $4.8 million, representing 1.8% of net sales [15]. - Research and development expenses decreased by 21.7% to $9.602 million, accounting for 1.9% of net sales [17]. - Income from operations fell significantly by 44.7% to $17.680 million, resulting in an operating margin of 3.6% compared to 6.6% in the previous year [17]. - The company incurred $9,996,000 in acquisition deal and integration costs during Q3 2025 [35]. - Business realignment costs for Q3 2025 totaled $1,131,000, compared to $281,000 in Q3 2024 [35]. Capital Allocation and Cash Flow - Capital allocation priorities focus on debt repayment and consistent dividend payments, with expectations of significant free cash flow generation [6]. - Cash and cash equivalents decreased to $28.039 million from $53.683 million at the beginning of the year [19]. - Capital expenditures for the period were $6.523 million, down from $10.068 million in the previous year [21]. - The company declared dividends of $0.07 per common share, consistent with the previous year [17]. Operational Developments - The company is preparing for the acquisition of Kito Crosby, with integration readiness and synergy achievement plans in progress [2]. - The company is focused on expanding its operations, including the start-up costs for a new factory in Monterrey, MX, amounting to $1,530,000 in Q3 2025 [40]. Efficiency Metrics - Days sales outstanding improved to 62.5 days from 64.1 days year-over-year, indicating better collection efficiency [28]. - Adjusted Gross Profit for Q3 2025 was $92,106,000, with an Adjusted Gross Margin of 35.3%, compared to 36.3% in Q3 2024 [33]. - Adjusted Operating Income for Q3 2025 was $25,214,000, with an Adjusted Operating Margin of 9.7%, compared to 11.1% in Q3 2024 [35]. - Adjusted Net Income for Q3 2025 was $17,894,000, with Adjusted EPS of $0.62, compared to $0.70 in Q3 2024 [38]. - Adjusted EBITDA for Q3 2025 was $37,433,000, with an Adjusted EBITDA Margin of 14.3%, compared to 13.0% in Q3 2024 [40].