Q2 2025 Performance - Bookings increased by 7% to $269.4 million compared to $251.7 million in Q2 2024[11] - Revenue decreased by 7.1% to $255.3 million compared to $274.8 million in Q2 2024[11] - Net income decreased by 16.4% to $26.2 million compared to $31.3 million in Q2 2024[11] - Adjusted EBITDA decreased by 15.2% to $52.4 million compared to $61.8 million in Q2 2024[11] - Free cash flow increased by 58.1% to $36.5 million compared to $23.1 million in Q2 2024[11] Segment Performance - Flow Control revenue increased by 4% to $95.9 million, while bookings decreased by 1.1% to $93.1 million[15] - Industrial Processing revenue decreased by 16.4% to $95.9 million, but bookings increased by 9% to $105.4 million[20] - Material Handling revenue decreased by 6.4% to $63.4 million, but bookings increased by 16.5% to $70.9 million[25] Financial Position - Cash, cash equivalents, and restricted cash increased to $97.2 million[42] - Debt decreased to $247.2 million[42] Guidance - The company expects FY 2025 revenue of $1.020 to $1.040 billion[46]

Company Overview - Columbus McKinnon Corporation is a leading designer, manufacturer, and marketer of intelligent motion solutions for material handling [3] - The company focuses on commercial and industrial applications that require safety and quality through superior design and engineering [3] Upcoming Financial Results - Columbus McKinnon will release its first quarter fiscal 2026 results before the market opens on July 30, 2025 [1] - Management will host a conference call at 10:00 a.m. Eastern Time to review financial and operating results and discuss corporate strategy and outlook [2] Conference Call Details - The conference call will be available via live webcast on the company's Investor Relations webpage [2] - A replay of the call will be accessible approximately two hours after the call, available until August 13, 2025 [2]

Company Overview - Columbus McKinnon (CMCO) is a global leader in intelligent motion solutions for material handling, with a 150-year history[9] - The company estimates a total addressable market of $20 billion[9, 23] - CMCO's net sales are approximately $1 billion, with a 5-year sales growth CAGR of around 4%[9] - Adjusted EBITDA margin is approximately 16%, and free cash flow conversion is greater than 100%[9] - Revenue mix: Lifting Solutions accounts for 62%, Specialty Conveying 16%, Automation 13%, and Linear Motion 9%[7] Kito Crosby Acquisition - CMCO announced the acquisition of Kito Crosby for $2.7 billion[28] - Kito Crosby has approximately $1.1 billion in 2024 revenue, with a 7% revenue CAGR from 2021-2024[31] - Kito Crosby's revenue mix: Lifting & Securement Consumables 54%, Installed Lifting Solutions 32%, and Technology & Specialty Solutions 14%[34] - The acquisition is expected to more than double the size of the company, with a 23% Adjusted EBITDA Margin[43] - The company expects to close the acquisition in late 2025[45] Synergies and Financials - The company anticipates approximately $80 million in pre-tax run-rate cost synergies from the Kito Crosby acquisition[48] - The company expects to offset approximately $40 million EBITDA impact from tariffs through mitigation actions by H2 FY26[58]

Financial Data and Key Metrics Changes - Revenue in Q1 2025 declined by 4% compared to the same period last year, primarily due to weaker capital shipments in the Industrial Processing segment [10][20] - Free cash flow increased by 15% to $19 million in Q1 2025 compared to $16.6 million in Q1 2024 [21] - Adjusted EBITDA decreased by 8% to $48 million, with an adjusted EBITDA margin of 20%, down from 21% in the prior year [20][10] - GAAP EPS decreased by 3% to $2.04, while adjusted EPS decreased by 12% to $2.10, exceeding the high end of guidance by $0.05 [20][10] Business Line Data and Key Metrics Changes - In the Flow Control segment, bookings increased by 6% to $100 million, with Q1 revenue up 7% to $92 million, driven by strong demand for aftermarket parts [11] - The Industrial Processing segment saw a revenue decline of 15% to $90 million, primarily due to a significant drop in capital shipments, although aftermarket parts revenue made up a record 80% of total revenue in this segment [12][13] - The Material Handling segment experienced stable demand for aftermarket parts, with revenue slightly up to $57 million, while overall bookings remained flat [14][15] Market Data and Key Metrics Changes - Aftermarket parts bookings represented 74% of total bookings, reaching a record $190 million, benefiting from a large installed base [10] - The geopolitical climate and trade policy uncertainties have created a challenging environment, impacting customer decision-making and capital project timing [6][29] Company Strategy and Development Direction - The company is focused on adapting to changing economic circumstances and exploring alternative supply sources in response to tariffs [6][7] - Despite uncertainties, the company remains confident in its ability to deliver value and maintain strong free cash flow [16][17] - The revised guidance for 2025 reflects anticipated revenue of $1.02 billion to $1.04 billion, down from previous estimates due to tariff impacts and delayed capital orders [29][30] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is strong demand for aftermarket parts, the uncertainty surrounding tariffs has delayed capital equipment orders [9][28] - The company believes it is well-positioned to respond to changes in trade policy while continuing to support customers [7][16] - Management expressed confidence that the underlying fundamentals of the markets remain strong despite current challenges [16][17] Other Important Information - Gross margin in Q1 2025 was 46.1%, the highest since 2017, up 150 basis points from the previous year [18] - The effective tax rate for Q1 was 24.3%, including benefits from equity awards [20] - The company has a healthy balance sheet with $133 million of borrowing capacity available under its revolving credit facility [24] Q&A Session Summary Question: What is the outlook for deferred orders and project activity? - Management indicated that while there is a pause in project timing, discussions and activity levels remain strong, with no significant cancellations observed [35][37] Question: How are tariffs impacting capital projects? - Management noted that while tariffs have created uncertainty, they do not expect a large number of projects to be canceled, although some may be delayed [49][50] Question: What is the expected mix of parts versus capital sales? - The company anticipates a continued strong performance in parts and consumables, with expectations for capital revenues to improve in the second half of the year [66][67] Question: How is the company addressing tariff-related cost increases? - Management is implementing surcharges and exploring alternative suppliers to mitigate the impact of tariffs, aiming for cost neutrality by the end of the year [73][75]

Financial Data and Key Metrics Changes - Revenue in Q1 2025 declined by 4% compared to the same period last year, primarily due to weaker capital shipments in the Industrial Processing segment [11][18] - Adjusted EBITDA decreased by 8% to $48 million, with an adjusted EBITDA margin decline of 100 basis points compared to the prior year [11][20] - Free cash flow increased by 15% to $19 million in Q1 2025 compared to $16.6 million in Q1 2024 [21] Performance by Business Segment - **Flow Control Segment**: Bookings increased by 6% to $100 million, with Q1 revenue up 7% to $92 million, driven by strong demand for aftermarket parts [12][13] - **Industrial Processing Segment**: Q1 revenue declined by 15% to $90 million, largely due to a significant drop in capital shipments, although aftermarket parts revenue made up a record 80% of total revenue in this segment [14][15] - **Material Handling Segment**: Revenue was slightly up to $57 million, with aftermarket parts comprising 65% of Q1 revenue, despite a decline in capital equipment demand [15][16] Market Data and Key Metrics Changes - Aftermarket parts bookings represented 74% of total bookings, reaching a record $190 million in Q1 2025 [11] - The company noted that the geopolitical climate and trade policy uncertainties have introduced transitory headwinds, particularly affecting capital project timing [12][16] Company Strategy and Industry Competition - The company is exploring alternative supply sources to mitigate the impact of tariffs and is well-positioned to respond to changes in trade policy [6][7] - Management emphasized the importance of maintaining high levels of customer support while navigating the challenges posed by tariffs and geopolitical uncertainties [7][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver value despite ongoing uncertainties, highlighting strong fundamentals in the markets served [16][17] - The company anticipates that the second half of 2025 will be significantly stronger than the first half, with expectations for improved capital order activity [30][31] Other Important Information - The effective tax rate for Q1 was 24.3%, influenced by tax benefits related to equity awards [20] - The company revised its full-year 2025 revenue guidance to $1.02 billion to $1.04 billion, down from previous estimates due to tariff impacts and delays in capital orders [29][30] Q&A Session Summary Question: What is the outlook for deferred orders and project activity? - Management indicated that while there is a pause in project activity due to tariffs, discussions and quote activity remain strong, with no significant project cancellations observed [36][40] Question: How does the company view the impact of tariffs on capital projects? - Management noted that while tariffs have caused delays, they do not expect a significant number of projects to be canceled, emphasizing the need for customers to eventually invest in new equipment [52][56] Question: What is the expected mix of parts versus capital sales for the year? - The company anticipates a parts and consumables revenue percentage of around 69% for the year, with expectations for improved capital revenues in the second half [67][69]

Financial Data and Key Metrics Changes - Fourth quarter net sales were $203.9 million, an increase of 6.7% year-over-year [30] - Adjusted gross margin increased by 210 basis points to 32.2% [32] - Adjusted EBITDA was up 26.2%, with an adjusted EBITDA margin of 13.5% compared to 11.4% last year [33] - Diluted adjusted earnings per share was $0.19 compared to $0.29 in 2023, primarily due to increased interest expense [33] Business Line Data and Key Metrics Changes - Material Handling segment net sales increased by 20.3%, driven by the Signature acquisition and strong Scepter military and fuel can sales [34] - Distribution segment net sales decreased by 20.2% due to lower volume and pricing [36] - Adjusted EBITDA for Material Handling increased by 22.3% to $34.7 million, with a margin increase to 22.7% [35] Market Data and Key Metrics Changes - Fourth quarter sales growth of 33% in the consumer end market and 13% growth in the industrial end market [31] - E-commerce channel sales reached $36 million, growing 12% [39] - The vehicle end market showed signs of stabilization, with growth in marine sales [35] Company Strategy and Development Direction - The company is launching a "Focused Transformation" program aimed at improving financial performance and accountability [17][18] - Plans include a $20 million annualized cost reduction primarily in SG&A by the end of 2025 [46] - A new $10 million share repurchase authorization was announced, reflecting confidence in the business [24] Management's Comments on Operating Environment and Future Outlook - Management is encouraged by the overall sales trajectory and confident in margin improvement for 2025 [27] - The company is temporarily suspending formal annual guidance to complete its action plan [26] - Tariffs are expected to have some impact, but the overall macroeconomic impact remains uncertain [47] Other Important Information - The company reduced total debt by $26 million since March 31, 2024 [40] - Cash on hand at the end of 2024 was $32.2 million, providing flexibility for capital allocation [41] Q&A Session Summary Question: Overview of the overall portfolio and actions to take - Management noted some businesses are performing well while others are underperforming, with plans to reinforce strong businesses and address weaknesses [55][56] Question: Organic sales deceleration in Material Handling - Management indicated that outside of Buckhorn and Distribution, other business units performed well, with plans to offset declines in seed box sales [60][61] Question: Impact of tariffs on material costs - Management stated that exposure to tariffs is limited, with about 10% of material costs potentially affected [65] Question: Signature integration progress - Integration has been smooth, with cultural alignment and financial performance on track with projections [73][74] Question: Distribution business challenges - Management acknowledged a mix of end market issues and internal mistakes, with plans to address these through management changes and structural adjustments [78][79] Question: Competitors' susceptibility to tariffs - Management believes Myers is in a good position compared to competitors, largely due to its U.S.-based operations [84][85] Question: RV and marine market outlook - Management sees potential growth in the RV and marine markets, with some signs of stabilization [88][89]

Financial Data and Key Metrics Changes - For the full year 2024, total revenue remained steady at approximately $1.9 billion, indicating resilience in the dealership model despite market challenges [10] - In Q4 2024, revenue declined 4.5% year-over-year to $498.1 million, but showed sequential growth compared to Q3, suggesting a post-election rebound [11][31] - Adjusted EBITDA for 2024 reached $168.3 million, down from $201 million in 2023, reflecting a $33 million gap primarily due to reduced equipment sales and margin compression [36][37] Business Segment Data and Key Metrics Changes - In the construction equipment segment, new and used equipment sales saw a 10.2% organic decline, while organic product support revenues increased by 3.7% year-over-year [15] - The material handling segment's revenue remained stable at $687.4 million for the year, a 0.9% increase from 2023, supported by product support growth [19] - The electric vehicle segment continues to see steady momentum, particularly in hydrogen-powered fleets, despite challenges in charging infrastructure [22] Market Data and Key Metrics Changes - The construction equipment sector faced challenges due to oversupply and tightening credit conditions, with significant regional variations in sales performance [13][14] - The North American lift truck market experienced a decline in new order bookings, impacting future sales velocity [18] - The backlog of federal infrastructure spending under the IIJA program remains a long-term catalyst for growth [15] Company Strategy and Development Direction - The company is focused on operational efficiency, disciplined capital allocation, and strategic growth through M&A, prioritizing high-margin recurring business lines [24][26] - The rent-to-sell strategy is emphasized as a critical tool for optimizing fleet utilization and balance sheet efficiency [17] - The company aims to enhance profitability through cost optimization and improving fleet utilization [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a complex macroeconomic environment in 2024 but expressed confidence in the company's diversified business model to navigate market volatility [8][10] - The outlook for 2025 includes expectations for improved EBITDA driven by better volumes in material handling and product support revenues [40][42] - Management remains cautious about the impact of macroeconomic factors on future performance, particularly regarding inflation and interest rates [44] Other Important Information - The company successfully raised $500 million in senior second lien bonds to refinance senior debt and extend maturities to 2029, enhancing liquidity [12] - The company ended 2024 with approximately $330 million in cash and availability on a revolving line of credit, providing a comfortable liquidity position [38] Q&A Session Summary Question: What are the underlying assumptions for equipment sales volume in the guidance? - Management indicated that the guidance does not assume aggressive growth in equipment sales, particularly in the construction segment, but expects to regain market share as supply overhang diminishes [60][62] Question: How should immediate actions be prioritized to lower balance sheet leverage? - Management plans to use cash flows to pay down debt and does not intend to grow the fleet in the near term, which should help improve the leverage ratio [66][68] Question: What efficiency measures have been implemented in product support operating expenses? - Management noted that initial cost-cutting measures have been completed, with further efficiency gains expected from technician productivity improvements in 2025 [74][76] Question: What is the outlook for the warehouse solutions business? - Management expressed optimism about returning to previous peak levels within the next 12 months, driven by organic growth and market trends favoring automation [80][82]