COLUMBUS MCKINNON CORP

Previous wording

Our revenue base is geographically diverse with approximately 43% of net sales derived from customers outside the U.S. for the three months ended June 30, 2025. We believe this diversity balances the impact of changes that occur in local economies, as well as benefits the Company by providing access to growing emerging markets. We monitor both U.S. and Eurozone Industrial Capacity Utilization statistics as well as the ISM Production Index as indicators of anticipated demand for our products. In addition, we continue to monitor the potential impact of other global and U.S. trends including, industrial production, trade tariffs, raw material cost inflation, interest rates, foreign currency exchange rates, and activity of end-user markets around the globe.

Current wording

Our revenue base is geographically diverse with approximately 43% of net sales derived from customers outside the U.S. for the six months ended September 30, 2025. We believe this diversity balances the impact of changes that occur in local economies, as well as benefits the Company by providing access to growing emerging markets. We monitor both U.S. and Eurozone Industrial Capacity Utilization statistics as well as the ISM Production Index as indicators of anticipated demand for our products. In addition, we continue to monitor the potential impact of other global and U.S. trends including, industrial production, trade tariffs, raw material cost inflation, interest rates, foreign currency exchange rates, and activity of end-user markets around the globe.

Previous wording

Net sales in the three months ended June 30, 2025 were $235,920,000, a decrease of $3,806,000 or 1.6% from the three months ended June 30, 2024 net sales of $239,726,000. Net sales were positively impacted by $2,443,000 due to price increases, offset by $9,375,000 of unfavorable sales volume. Foreign currency translation favorably impacted sales by $3,126,000 for the three months ended June 30, 2025.

Current wording

Net sales in the three months ended September 30, 2025 were $261,047,000, an increase of $18,773,000 or 7.7% from the three months ended September 30, 2024 net sales of $242,274,000. Net sales were positively impacted by $9,033,000 of sales volume and $4,955,000 due to price increases. Foreign currency translation favorably impacted sales by $4,785,000 for the three months ended September 30, 2025.

Previous wording

Gross profit in the three months ended June 30, 2025 was $77,222,000, a decrease of $11,808,000 or 13.3% from the three months ended June 30, 2024 gross profit of $89,030,000. Gross profit margin was 32.7% in the fiscal 2026 first quarter compared to 37.1% in the fiscal 2025 first quarter. Lower sales volume and unfavorable mix reduced gross profit by $5,437,000. In addition, gross profit was reduced $993,000 by net business realignment costs, $425,000 by factory consolidation activities, and $276,000 due to an increase in start-up costs related to the Monterrey, Mexico facility. Material inflation and other manufacturing cost changes net of price increases further contributed to a reduction in gross profit of $5,709,000. The translation of foreign currencies had an favorable impact on gross profit of $1,032,000 during the three months ended June 30, 2025.

Current wording

Gross profit in the three months ended September 30, 2025 was $90,160,000, an increase of $15,417,000 or 20.6% from the three months ended September 30, 2024 gross profit of $74,743,000. Gross profit margin was 34.5% in the fiscal 2026 second quarter compared to 30.9% in the fiscal 2025 second quarter. Higher sales volume and favorable mix increased gross profit by $3,393,000. In addition, gross profit was increased by $10,480,000 due to net factory consolidation activities in the prior year, $655,000 due to a net start-up costs related to the Monterrey, Mexico facility, $171,000 due to Hurricane Helene's costs recognized in the prior year, and a $11,000 of net business realignment costs. Current year acquisition and integration costs reduced gross profit by $67,000 related to the pending acquisition of Kito Crosby. Material inflation and other manufacturing cost changes net of price increases contributed to a reduction in gross profit of $986,000. The translation of foreign currencies had a favorable impact on gross profit of $1,760,000 during the three months ended September 30, 2025.

Previous wording

Selling expenses were $28,531,000 and $27,770,000, or 12.1% and 11.6% of net sales, in the fiscal 2026 and 2025 first quarters, respectively. Foreign currency translation had a $607,000 unfavorable impact on selling expenses in the three months ended June 30, 2025.

Current wording

Selling expenses were $29,122,000 and $26,926,000, or 11.2% and 11.1% of net sales, in the fiscal 2026 and 2025 second quarters, respectively. Foreign currency translation had a $715,000 unfavorable impact on selling expenses in the three months ended September 30, 2025 with the remaining increase attributable to overall increase in sales during the period.

Previous wording

Research and development expenses were $4,821,000 and $6,166,000, or 2.0% and 2.6% of net sales, in both the fiscal 2026 and 2025 first quarter, respectively. The reduction in researching and development expenses is primarily related to reduced labor and benefit costs.

Current wording

Research and development expenses were $4,781,000 and $6,102,000, or 1.8% and 2.5% of net sales, in both the fiscal 2026 and 2025 second quarter, respectively. The reduction in research and development expenses is primarily related to reduced labor and benefit costs.

Previous wording

Amortization of intangibles was $7,635,000 and $7,500,000 in the fiscal 2026 and 2025 first quarters, respectively, with the fluctuations related to foreign currency during the respective periods.

Current wording

Amortization of intangibles was $7,683,000 and $7,547,000 in the fiscal 2026 and 2025 second quarters, respectively, with the fluctuations related to foreign currency during the respective periods.

Previous wording

Interest and debt expense was $8,698,000 in the first quarter ended June 30, 2025 compared to $8,235,000 in the first quarter ended June 30, 2024. The increase is the result of increasing variable interest rates year over year due to the expiration of a favorable interest rate swap that expired in February 2025.

Current wording

Interest and debt expense was $8,747,000 in the second quarter ended September 30, 2025 compared to $8,352,000 in the second quarter ended September 30, 2024. The increase is the result of increasing variable interest rates year over year due to the expiration of a favorable interest rate swap in February 2025.

Previous wording

Investment income was $1,049,000 in the third quarter ended June 30, 2025 compared to $209,000 in the first quarter ended and June 30, 2024. Investment income relates to the mark-to-market adjustments on the marketable securities held in the Company’s wholly owned captive insurance subsidiary and the Company's equity method investment in EMC, described in Note 6 of the financial statements.

Current wording

Investment income was $521,000 in the second quarter ended September 30, 2025 compared to $610,000 in the second quarter ended and September 30, 2024. Investment income relates to the mark-to-market adjustments on the marketable securities held in the Company’s wholly owned captive insurance subsidiary and the Company's equity method investment in EMC, described in Note 6 of the financial statements.

Previous wording

Income tax expense as a percentage of the pre-tax loss was 16% and income tax as a percentage of the pre-tax income was 28% in the first quarters ended June 30, 2025 and June 30, 2024, respectively. Typically, these percentages vary from the U.S. statutory rate of 21% primarily due to varying statutory tax rates at the Company's foreign subsidiaries, and the jurisdictional mix of income for these subsidiaries. During the three months ended June 30, 2025, the impact of equity compensation increased income tax expense.

Current wording

Income tax benefit as a percentage of the pre-tax income was (46)% and income tax benefit as a percentage of the pre-tax loss was 25% in the second quarters ended September 30, 2025 and September 30, 2024, respectively. Typically, these percentages vary from the U.S. statutory rate of 21% primarily due to varying statutory tax rates at the Company's foreign subsidiaries, and the jurisdictional mix of income for these subsidiaries.

Previous wording

General and administrative expenses were $30,743,000 and $26,447,000, or 13.0% and 11.0% of net sales, in both the three months ended June 30, 2025 and June 30, 2024, respectively. General and administrative expenses increased $8,103,000 as a result of Kito Acquisition related expenses offset by lower employee salary and benefit costs of $2,900,000. Foreign currency translation had a unfavorable impact of $189,000 on general and administrative expenses in the three months ended June 30, 2025.

Current wording

General and administrative expenses were $67,129,000 and $49,810,000, or 13.5% and 10.3% of net sales, in the six months ended September 30, 2025 and 2024, respectively. General and administrative expenses increased $18,032,000 as a result of Kito Acquisition related expenses offset by lower employee salary and benefit costs of $432,000. Foreign currency translation had an unfavorable impact of $503,000 on general and administrative expenses in the six months ended September 30, 2025.

Previous wording

Cash, cash equivalents, and restricted cash totaled $28,972,000 at June 30, 2025, a decrease of $24,961,000 from the March 31, 2025 balance of $53,933,000.

Current wording

Cash, cash equivalents, and restricted cash totaled $28,289,000 at September 30, 2025, a decrease of $25,644,000 from the March 31, 2025 balance of $53,933,000.

Previous wording

Net cash used for operating activities was $18,153,000 for the three months ended June 30, 2025 compared to $10,758,000 for the three months ended June 30, 2024. Net loss of $1,898,000 offset by non-cash adjustments of $12,103,000 contributed to cash inflows from operations. The non-cash adjustments included $12,266,000 of depreciation and amortization, $4,669,000 of a deferred tax benefit, $2,412,000 of non-cash lease expense, and $1,842,000 of stock-based compensation. These inflows were offset by changes in working capital which reduced cash from operations by $26,703,000 as a result of an increase of $9,661,000 in inventories, an increase in prepaid expenses and other current assets of $3,015,000, a decrease of $8,203,000 in trade payables, and an increase in trade accounts receivable of $8,726,000, offset by an increase in accrued expenses of $2,902,000. The increase in inventories relates to purchases made in advance of future tariffs. Cash used for operations also included a decrease of $2,413,000 in other non-current liabilities primarily due to lease payments for the three months ended June 30, 2025.

Current wording

Net cash provided by operating activities was $248,000 for the six months ended September 30, 2025 compared to net cash used for operating activities of $1,370,000 for the six months ended September 30, 2024. Net income of $2,697,000 along with non-cash adjustments of $27,094,000 contributed to cash inflows from operations. The non-cash adjustments included $24,485,000 of depreciation and amortization, $4,820,000 of non-cash lease expense, and $4,626,000 of stock-based compensation offset by $7,940,000 of deferred income taxes and related valuation allowances. Changes in working capital which reduced cash from operations by $24,615,000 as a result of an increase of $11,256,000 in inventories, an increase in trade accounts receivable of $8,570,000, an increase in prepaid expenses and other current assets of $6,077,000, and a decrease in accrued expenses of $127,000, offset by an increase of $1,415,000 in trade payables. The increase in inventories relates to purchases made in advance of future tariffs. Cash provided for operations was also reduced by a decrease of $6,359,000 in other non-current liabilities primarily due to lease payments for the six months ended September 30, 2025.

Previous wording

Net cash used for investing activities was $3,217,000 for the three months ended June 30, 2025 compared to $4,041,000 for the three months ended June 30, 2024. The use of cash for the three months ended June 30, 2025 primarily consisted of $3,202,000 in capital expenditures.

Current wording

Net cash used for investing activities was $6,345,000 for the six months ended September 30, 2025 compared to $8,908,000 for the six months ended September 30, 2024. The use of cash for the six months ended September 30, 2025 primarily consisted of $6,523,000 in capital expenditures.

Previous wording

Net cash used for financing activities was $977,000 and $30,583,000 for the three months ended June 30, 2025 and June 30, 2024, respectively. The most significant use of cash in fiscal 2026 was for $2,003,000 in dividend payments. Cash flows from hedging activities related to the Company's cross currency swap are classified as financing activities in the Statement of Cash Flows which resulted in a net cash outflow of $443,000 during the three months ended June 30, 2025. These outflows were offset by additional borrowing on debt of $2,225,000.

Current wording

Net cash used for financing activities was $18,722,000 and $47,839,000 for the six months ended September 30, 2025 and September 30, 2024, respectively. The most significant uses of cash in fiscal 2026 were for $12,482,000 of debt repayments and $4,014,000 of dividend payments. Cash flows from hedging activities related to the Company's cross currency swap are classified as financing activities in the Statement of Cash Flows which resulted in a net cash outflow of $866,000 during the six months ended September 30, 2025.

Previous wording

We believe that our cash on hand, cash flows, and borrowing capacity under our Amended and Restated Revolving Credit Facility will be sufficient to fund our ongoing operations and debt obligations, and capital expenditures for at least the next twelve months. This belief is dependent upon successful execution of our current business plan and effective working capital utilization. No material restrictions exist in accessing cash held by our non-U.S. subsidiaries. We expect to meet our funding needs with cash provided by our U.S. operations, as well as by repatriating non-U.S. cash. We do not expect to incur significant incremental U.S. taxes as we repatriate funds. As of June 30, 2025, $26,517,000 of cash and cash equivalents were held by foreign subsidiaries.

Current wording

We believe that our cash on hand, cash flows, and borrowing capacity under our Revolving Credit Facility will be sufficient to fund our ongoing operations and debt obligations, and capital expenditures for at least the next twelve months. This belief is dependent upon successful execution of our current business plan and effective working capital utilization. No material restrictions exist in accessing cash held by our non-U.S. subsidiaries. We expect to meet our funding needs with cash provided by our U.S. operations, as well as by repatriating non-U.S. cash. We do not expect to incur significant incremental U.S. taxes as we repatriate funds. As of September 30, 2025, $24,798,000 of cash and cash equivalents were held by foreign subsidiaries.

Previous wording

Refer to Note 9 for further discussion of the Company's long-term debt and financing costs.

Current wording

Refer to Note 9 of the financial statements for further discussion of the Company's long-term debt and financing costs.

Previous wording

In addition to keeping our current equipment and plants properly maintained, we are committed to replacing, enhancing and upgrading our property, plant and equipment to support new product development, improve productivity and customer responsiveness, reduce production costs, increase flexibility to respond effectively to market fluctuations and changes, meet environmental requirements, enhance safety and promote ergonomically correct work stations. Consolidated capital expenditures for the three months ended June 30, 2025 and June 30, 2024 were $3,202,000 and $4,629,000, respectively. We expect capital expenditure spending in fiscal 2026 to range from $20,000,000 to $25,000,000.

Current wording

In addition to keeping our current equipment and plants properly maintained, we are committed to replacing, enhancing and upgrading our property, plant and equipment to support new product development, improve productivity and customer responsiveness, reduce production costs, increase flexibility to respond effectively to market fluctuations and changes, meet environmental requirements, enhance safety and promote ergonomically correct work stations. Consolidated capital expenditures for the six months ended September 30, 2025 and September 30, 2024 were $6,523,000 and $10,068,000, respectively. We expect capital expenditure spending in fiscal 2026 to range from $15,000,000 to $20,000,000.

Previous wording

We test goodwill at the reporting unit level, which is one level below our operating segment. We identify our reporting units by assessing whether the components of our operating segment constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. We also aggregate components that have similar economic characteristics into single reporting units (for example, similar products and / or services, similar long-term financial results, product processes, classes of customers, etc.). We have three reporting units: the Linear Motion Products reporting unit, the Rest of Products reporting unit, and the Precision Conveyance reporting unit, which have goodwill totaling $9,699,000, $320,697,000, and $402,017,000, respectively, as of June 30, 2025.

Current wording

We test goodwill at the reporting unit level, which is one level below our operating segment. We identify our reporting units by assessing whether the components of our operating segment constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. We also aggregate components that have similar economic characteristics into single reporting units (for example, similar products and / or services, similar long-term financial results, product processes, classes of customers, etc.). We have three reporting units: the Linear Motion Products reporting unit, the Rest of Products reporting unit, and the Precision Conveyance reporting unit, which have goodwill totaling $9,699,000, $319,838,000, and $401,681,000, respectively, as of September 30, 2025.