Columbus McKinnon(US:CMCO)2026-01-14 14:20Financial Performance - Net sales for the three months ended September 30, 2025, increased to $278.7 million, up 6.7% from $261.7 million in the same period of 2024[8] - Gross profit for the nine months ended September 30, 2025, was $321.1 million, slightly up from $319.9 million in 2024, indicating a stable gross margin[8] - Operating income for the three months ended September 30, 2025, was $38.5 million, a decrease of 4.9% compared to $40.5 million in 2024[8] - Net income attributable to shareholders for the three months ended September 30, 2025, was $14.8 million, significantly higher than $4.8 million in the same period of 2024, reflecting a 208.3% increase[8] Assets and Liabilities - Total assets as of September 30, 2025, amounted to $1,471.2 million, an increase from $1,420.6 million as of December 31, 2024[5] - Current liabilities increased slightly to $233.3 million as of September 30, 2025, compared to $230.5 million at the end of 2024[5] - Cash and cash equivalents decreased to $177.3 million from $178.5 million at the end of 2024, indicating a slight reduction in liquidity[5] - Total equity increased to $149.4 million as of September 30, 2025, compared to $94.4 million at the end of 2024, reflecting improved financial health[5] Cash Flow and Expenses - The company reported a net cash provided by operating activities of $18.1 million for the nine months ended September 30, 2025, down from $39.0 million in 2024[10] - The company incurred interest expense of $50.9 million for the nine months ended September 30, 2025, down from $75.2 million in the same period of 2024, indicating reduced borrowing costs[8] Equity and Deficits - The total accumulated deficit as of September 30, 2024, was $677.2 million, reflecting a decrease from $694.8 million as of March 31, 2024[14] - The company’s total equity as of September 30, 2024, was $128.8 million, an increase from $100.7 million at the end of June 2024[14] Acquisitions and Market Expansion - The company has expanded its global operations through strategic acquisitions, enhancing its portfolio with innovative solutions for lifting and rigging[16] - Recent acquisitions include Gunnebo Industries and Verton Technologies, which introduced advanced products that enhance safety and efficiency in lifting operations[16] - The company serves a wide array of end markets including oil & gas, industrial, construction, infrastructure, and mining, with a geographical reach spanning North America, Europe, the Middle East, Asia, and Latin America[17] Revenue Recognition and Credit Management - The company recognizes revenue under ASC 606, with the majority generated from the sale of standard products, recognized at the point of shipment or delivery[26][27] - The company’s allowance for current expected credit losses has historically not been significant, indicating effective credit risk management[34] Assets and Liabilities Management - The Company utilizes the "last-in, first-out" (LIFO) method for inventory accounting at certain U.S. locations, while the "first-in, first-out" (FIFO) method is used for all other locations[36] - The estimated useful lives for property, plant, and equipment range from 3 to 50 years, depending on the asset class[38] - The Company recognizes lease liabilities at the present value of remaining lease payments for leases with terms greater than twelve months[41] - Goodwill and other indefinite-lived intangible assets are tested annually for impairment, with no impairment losses recognized as of the latest reporting dates[46] - Acquired customer-relationship and patents intangible assets are amortized over useful lives ranging from 7 to 12 years[47] Unrealized Losses and Fair Value - The Company reported an unrealized loss of $0.2 million for the three months ended September 30, 2025, compared to $6.9 million for the same period in 2024, indicating a significant reduction in losses[57] - The fair value of cash and cash equivalents, accounts receivable, and accounts payable approximated their carrying amounts as of September 30, 2025, and December 31, 2024[67] Environmental and Tax Liabilities - The Company recognizes liabilities for environmental remediation costs when the loss is probable and can be reasonably estimated, reflecting a proactive approach to environmental obligations[49] - The Company assesses deferred tax assets and liabilities based on enacted tax laws and rates applicable to future taxable income, ensuring compliance with tax regulations[61] Debt and Financing - As of September 30, 2025, the Company's term-loan borrowings had a carrying amount of $982.6 million, which approximates its fair value[68] - The Company's total goodwill carrying value is approximately $133.2 million as of September 30, 2025, down from $140.4 million as of December 31, 2024[79] - Long-term debt at September 30, 2025, consisted of a First Lien Term Loan of $982.6 million with an interest rate of 7.8%[86] - The total debt, net of unamortized discounts and issuance costs, was $970.1 million as of September 30, 2025[86] - The Company completed a Joinder Agreement on November 2, 2023, allowing for additional borrowings of $205.0 million, which were used to retire the Second Lien Term Loan[83] - The Company has available borrowing capacity under the revolving credit facility of $117.6 million as of September 30, 2025[85] Accounting Standards and Tax Positions - The Company is evaluating the impact of new accounting standards, including ASU 2024-03, which requires additional disclosures about income statement expenses, effective after December 15, 2026[73] - The cumulative impairment losses of trademarks were $115.0 million as of September 30, 2025[80] - The First Lien Term Loan amortizes in equal quarterly installments of 0.25% of the first lien balance, with the remaining balance due in August 2029[88] - As of September 30, 2025, total accounts receivable amounted to $191.0 million, a slight decrease from $192.9 million as of December 31, 2024[94] - Total inventories increased to $366.6 million as of September 30, 2025, compared to $322.6 million as of December 31, 2024, reflecting a growth of approximately 13.6%[95] - Property, plant, and equipment, net, was reported at $270.7 million as of September 30, 2025, down from $276.0 million as of December 31, 2024[95] - The total accrued expenses and other current liabilities rose to $123.2 million as of September 30, 2025, compared to $107.5 million as of December 31, 2024, indicating an increase of about 14.0%[97] - The estimated asbestos liability was $15.1 million as of September 30, 2025, slightly down from $15.5 million as of December 31, 2024[101] - The company recorded a net periodic pension benefit of $0.5 million for the three months ended September 30, 2025, consistent with the same period in 2024[108] - The company has a deferred financing cost that is being amortized to interest expense over the term of the associated credit facilities[93] - The interest rate margin applicable to RCF borrowings ranges from 0.25% to 0.50%, based on the Leverage Ratio[92] - The company has recognized a liability of approximately $4.2 million for additional remediation responsibilities over the next five years related to environmental obligations[100] - The total other non-current assets increased to $68.6 million as of September 30, 2025, from $64.0 million as of December 31, 2024[97] Tax Expenses and Benefits - The tax expense for the nine months ended September 30, 2025, is $18.8 million with an effective tax rate of 32.4%[9] - The unrecognized tax benefit as of September 30, 2025, is $2.1 million, which could affect the effective tax rate if recognized[116] - The Company has a deferred tax liability of $8.8 million associated with foreign withholding taxes as of September 30, 2025[119] - The Company has outstanding standby letters of credit and guarantees totaling $2.4 million as of September 30, 2025[125] - The Company signed a definitive agreement to acquire Kito Crosby Ltd for $2.7 billion, expected to close in 2025[126] - Unpaid advisory fees to KKR amount to $0.3 million and $0.4 million as of September 30, 2025, and December 31, 2024, respectively[122] - The Company has a note receivable from Ascend Investments S.a.r.l. of $1.1 million as of September 30, 2025[123] - The effective tax rate for the three months ended September 30, 2025, is 17.0%[9] - The Company believes it is adequately reserved for its uncertain tax positions as of September 30, 2025[118] - The enactment of the "One Big Beautiful Bill Act" is not expected to materially impact the Company's estimated annual effective tax rate in 2025[121]