COLUMBUS MCKINNON CORP

Previous wording

The Company is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions, including motion control products, technologies, automated systems and services, that efficiently and ergonomically move, lift, position and secure materials. Our key products include hoists, crane components, precision conveyors, actuators, rigging tools, light rail workstations, and digital power and motion control systems. These are highly relevant, professional-grade solutions that solve customers’ critical material handling requirements.

Current wording

Columbus McKinnon Corporation ("Columbus McKinnon" or the "Company") is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions that move the world forward and improve lives by efficiently and ergonomically moving, lifting, positioning and securing materials. Key products include hoists, crane components, precision conveyor systems, rigging tools, light rail workstations and digital power and motion control systems. These are highly relevant, professional-grade solutions that solve our customers’ critical material handling requirements.

Previous wording

Founded in 1875, we have grown to our current size and leadership position through organic growth and acquisitions. We developed our leading market position over our 150-year history by emphasizing technological innovation, manufacturing excellence and superior customer service. In accordance with our strategic framework, we are building out our business system (CMBS) and growth framework to be market-led, customer-centric, and operationally excellent with our people and values at the core. We believe this will transform Columbus McKinnon into a top-tier Intelligent Motion Solutions company. We expect our strategy will enhance shareholder value by expanding EBITDA margins and return on invested capital ("ROIC").

Current wording

Founded in 1875, we have grown to our current size and leadership position through organic growth and acquisitions. We developed our leading market position over our 150-year history by emphasizing technological innovation, manufacturing excellence and superior customer service. In accordance with our strategic framework, we are building out our business system ("CMBS") and growth framework to be market-led, customer-centric, and operationally excellent with our people and values at the core. We believe this will transform Columbus McKinnon into a top-tier intelligent motion solutions company. We expect our strategy will enhance shareholder value by growing sales and expanding EBITDA margins.

Previous wording

Our revenue base is geographically diverse with approximately 43% of net sales derived from customers outside the U.S. for the nine months ended December 31, 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 45% derived from customers outside the U.S. for the three months ended June 30, 2026. 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

In fiscal 2024, the Company completed its acquisition of montratec GmbH ("montratec"), a leading automation solutions company that designs and develops intelligent automation and transport systems for interlinking industrial production and logistics processes. montratec product offerings compliment the previous acquisitions of both Dorner and Garvey, and these acquisitions are collectively expected to accelerate the Company’s shift to intelligent motion solutions and serve as a platform to expand capabilities in advanced, higher technology automation solutions.

Current wording

On May 31, 2023, the Company completed its acquisition of montratec GmbH ("montratec"), a leading automation solutions company that designs and develops intelligent automation and transport systems for interlinking industrial production and logistics processes. montratec product offerings complement the previous acquisitions of both Dorner and Garvey, and these acquisitions collectively helped to accelerate the Company’s shift to intelligent motion solutions and serve as a platform to expand capabilities in advanced, higher technology automation solutions.

Previous wording

On February 10, 2025, the Company announced that it had entered into a definitive agreement to acquire all of the issued and outstanding equity of Kito Crosby. The Kito Crosby Acquisition is expected to meaningfully improve the Company's scale, enhance our collective geographic reach, significantly expand our lifting securement and consumables portfolio and enhance our customer value proposition.

Current wording

On February 3, 2026, the Company completed its acquisition of Kito Crosby for $2,811,907,000, including acquired cash of $184,307,000. The Kito Crosby Acquisition has meaningfully improved the Company's scale, enhanced our collective geographic reach, significantly expanded our lifting securement and consumables portfolio and enhanced our customer value proposition.

Previous wording

Our principal raw materials and components purchases were approximately $375 million in fiscal 2025 (or 59% of Cost of products sold) and include steel, consisting of rod, wire, bar, structural, and other forms of steel; electric motors; bearings; gear reducers; castings; steel and aluminum enclosures and wire harnesses; electro-mechanical components; and standard variable drives and controls. These commodities are all available from multiple sources. We purchase most of these raw materials and components from a limited number of strategic and preferred suppliers under agreements which are negotiated on a company-wide basis through our global purchasing group. Currently, as a result of global inflation and tariffs, we are experiencing higher raw material costs and availability issues for select raw materials and components. To date, we have raised prices to our customers to cover these increased raw material costs and are working with our supply base to prioritize shipments and improve availability of key components.

Current wording

Our principal raw materials and components purchases were approximately $428.2 million in fiscal 2026 (or 51% of Cost of products sold) and include steel, consisting of rod, wire, bar, structural, and other forms of steel; electric motors; bearings; gear reducers; castings; steel and aluminum enclosures and wire harnesses; electro-mechanical components; and standard variable drives and controls. These commodities are all available from multiple sources. We purchase most of these raw materials and components from a limited number of strategic and preferred suppliers under agreements which are negotiated on a Company-wide basis through our global purchasing group. Currently, as a result of global inflation and tariffs, we are experiencing higher raw material costs and availability issues for select raw materials and components. To date, we have raised prices to our customers to cover these increased raw material costs and are working with our supply base to prioritize shipments and improve availability of key components.

Previous wording

Net sales in the three months ended December 31, 2025 were $258,655,000, an increase of $24,517,000 or 10.5% from the three months ended December 31, 2024 net sales of $234,138,000. Net sales were positively impacted by $11,733,000 of sales volume and $6,076,000 due to price increases. Foreign currency translation favorably impacted sales by $6,708,000 for the three months ended December 31, 2025.

Current wording

Net sales in the three months ended June 30, 2026 were $531,461,000, an increase of $295,541,000 or 125.3% from the three months ended June 30, 2025 net sales of $235,920,000. Net sales were positively impacted by $304,764,000 related to the Kito Crosby acquisition as well as a $16,061,000 of favorable sales volumes offset by $34,848,000 of sales loss due to the divestiture of the U.S. Power Chain Hoist and Chain Manufacturing Operations. Foreign currency translation favorably impacted sales by $2,438,000 for the three months ended June 30, 2026.

Previous wording

Gross profit in the three months ended December 31, 2025 was $89,157,000, an increase of $7,060,000 or 8.6% from the three months ended December 31, 2024 gross profit of $82,097,000. Gross profit margin was 34.5% in the fiscal 2026 third quarter compared to 35.1% in the fiscal 2025 third quarter. Higher sales volume increased gross profit by $1,673,000. In addition, gross profit was increased compared to the prior year by $1,555,000 due to lower start-up costs related to the Monterrey, Mexico facility, $460,000 of lower business realignment costs, $409,000 of lower factory consolidation activities and by $261,000 of lower product liability expense in the quarter. Price increases net of material inflation and other manufacturing cost changes contributed to an increase in gross profit of $317,000. The translation of foreign currencies had a favorable impact on gross profit of $2,385,000 during the three months ended December 31, 2025.

Current wording

Gross profit in the three months ended June 30, 2026 was $146,269,000, an increase of $69,047,000 or 89.4% from the three months ended June 30, 2025 gross profit of $77,222,000. Gross profit margin was 27.5% in the fiscal 2027 first quarter compared to 32.7% in the fiscal 2026 first quarter. Gross profit increased due to $72,972,000 related to the Kito Crosby acquisition, inclusive of $55,198,000 in inventory step-up amortization expense, offset by $13,889,000 related to the divestiture of the U.S. Power Chain Hoist and Chain Manufacturing Operations. The Company additionally saw increases in gross profit driven by price increases, sales volume and other benefits to material costs specific to the quarter, partially offset by inflation in the cost of products sold. The translation of foreign currencies had a favorable impact on gross profit of $870,000 during the three months ended June 30, 2026.

Previous wording

Selling expenses were $86,430,000 and $82,044,000, or 11.4% and 11.5% of net sales, in the nine months ended December 31, 2025 and 2024, respectively. Foreign currency translation had a $2,278,000 unfavorable impact on selling expenses in the nine months ended December 31, 2025 with the remaining increase attributable to overall increase in sales during the period.

Current wording

Selling expenses were $54,689,000 and $28,531,000, or 10.3% and 12.1% of net sales, in the three months ended June 30, 2026 and June 30, 2025, respectively. Selling expenses increased in the period for $26,227,000 related to the Kito Crosby Acquisition. Foreign currency translation had a $445,000 unfavorable impact on selling expenses in the three months ended June 30, 2026.

Previous wording

General and administrative expenses were $99,277,000 and $74,043,000, or 13.1% and 10.3% of net sales, in the nine months ended December 31, 2025 and 2024, respectively. General and administrative expenses increased $24,373,000 as a result of the Kito Crosby Acquisition and higher employee related costs of $2,756,000. These increases were offset by $1,299,000 of expense to record a reserve against an accounts receivable balance for a customer who declared bankruptcy in January of 2025. Foreign currency translation had an unfavorable impact of $910,000 on general and administrative expenses in the nine months ended December 31, 2025.

Current wording

General and administrative expenses were $65,362,000 and $30,743,000, or 12.3% and 13.0% of net sales, for the three months ended June 30, 2026 and June 30, 2025, respectively. General and administrative expenses increased $23,580,000 as a result of the Kito Crosby Acquisition, higher net integration and acquisition costs and an increase in the Company's incentive compensation, partially offset by acquisition related cost saving synergies. Foreign currency translation had an unfavorable impact of $224,000 on general and administrative expenses in the three months ended June 30, 2026.

Previous wording

Research and development expenses were $4,442,000 and $5,325,000, or 1.7% and 2.3% of net sales, in both the fiscal 2026 and 2025 third quarter, respectively. The reduction in research and development expenses is primarily related to reduced labor and benefit costs.

Current wording

Research and development expenses were $8,541,000 and $4,821,000, or 1.6% and 2.0% of net sales, in both the fiscal 2027 and 2026 first quarter, respectively. Kito Crosby contributed an additional $3,853,000 to research and development expenses.

Previous wording

Investment income was $395,000 in the third quarter ended December 31, 2025 compared to $54,000 in the third quarter ended December 31, 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 $1,692,000 in the first quarter ended June 30, 2026 compared to $1,049,000 in the first quarter ended June 30, 2025. 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 income was 23% was 33% in the three months ended December 31, 2025 and December 31, 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.

Current wording

Income tax expense as a percentage of the pre-tax income was (31)% and (16)% in the three months ended June 30, 2026 and June 30, 2025, respectively. Typically, these percentages vary from the U.S. statutory rate of 21%. For the current quarter, the rate was primarily impacted by the establishment of a deferred tax asset valuation allowance related to interest expense carryforwards which the Company does not expect to be able to recognize. The realization of these tax benefits depends on the Company's ability to generate sufficient taxable income, of the appropriate character and jurisdiction, in future periods. Because the Company is in a cumulative loss position for the most recent three year period, the Company has concluded that it is appropriate to record a valuation allowance for these tax benefits until additional positive evidence of future period earnings, in the relevant jurisdictions, is available. The Company estimates these valuation allowances will unfavorably impact the tax rate by approximately 40% to 50% for the fiscal year ended in 2027.

Previous wording

Cash, cash equivalents, and restricted cash totaled $35,734,000 at December 31, 2025, a decrease of $18,199,000 from the March 31, 2025 balance of $53,933,000.

Current wording

Cash, cash equivalents, and restricted cash totaled $98,866,000 at June 30, 2026, an increase of $1,843,000 from the March 31, 2026 balance of $97,023,000.

Previous wording

Net cash provided by operating activities was $20,595,000 for the nine months ended December 31, 2025 compared to net cash provided by operating activities of $10,000,000 for the nine months ended December 31, 2024. Net income of $8,695,000 along with non-cash adjustments of $40,858,000 contributed to cash inflows from operations. The non-cash adjustments included $36,620,000 of depreciation and amortization, $7,779,000 of stock-based compensation and $7,321,000 of non-cash lease expense offset by $11,472,000 of deferred income taxes and related valuation allowances. Changes in working capital which reduced cash from operations by $22,686,000 as a result of an increase of $15,997,000 in inventories, a decrease of $3,616,000 in trade payables, an increase in trade accounts receivable of $3,480,000, and an increase in prepaid expenses and other current assets of $403,000, offset by an increase in accrued expenses of $810,000. The increase in inventories relates to purchases made in advance of expected future demand. Cash provided for operations was also reduced by a decrease of $8,875,000 in other non-current liabilities primarily due to lease payments for the nine months ended December 31, 2025.

Current wording

Net cash provided by operating activities was $25,624,000 for the three months ended June 30, 2026 compared to net cash used for operating activities of $18,153,000 for the three months ended June 30, 2025. The net loss of $88,729,000 was offset by adjustments of $63,779,000 which contributed to cash inflows from operations. The non-cash adjustments included $53,201,000 of depreciation and amortization, $4,056,000 of non-cash lease expense, $2,696,000 of stock-based compensation, $2,501,000 of amortization of deferred financing costs and discounts of debt and $2,026,000 of deferred income taxes and related valuation allowances. Changes in working capital decreased cash from operations by $6,387,000, excluding the acquisition-related inventory step-up amortization of $55,198,000. This was the result of increases in accrued expenses of $6,174,000 and a decrease in trade accounts receivable of $5,508,000, offset by a decrease of $7,954,000 in trade payables, an increase in inventory net of acquisition-related step-up amortization of $7,532,000 and an increase in prepaid expenses and other current assets of $2,583,000. Cash provided for operations was also reduced by a decrease of $2,890,000 in other non-current liabilities primarily due to lease payments for the three months ended June 30, 2026.

Previous wording

Net cash used for investing activities was $6,830,000 for the nine months ended December 31, 2025 compared to $14,222,000 for the nine months ended December 31, 2024. The use of cash for the nine months ended December 31, 2025 primarily consisted of $10,347,000 in capital expenditures offset by $3,257,000 of proceeds received from sale of two previously closed manufacturing facilities.

Current wording

Net cash used for investing activities was $5,352,000 for the three months ended June 30, 2026 compared to $3,217,000 for the three months ended June 30, 2025. The use of cash for the three months ended June 30, 2026 primarily consisted of $5,668,000 in capital expenditures.

Previous wording

Net cash used for financing activities was $30,520,000 and $69,499,000 for the nine months ended December 31, 2025 and December 31, 2024, respectively. The most significant uses of cash in fiscal 2026 were for $21,821,000 of debt repayments and $6,025,000 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 $1,301,000 during the nine months ended December 31, 2025.

Current wording

Net cash used for financing activities was $21,225,000 and $977,000 for the three months ended June 30, 2026 and June 30, 2025, respectively. The most significant uses of cash in fiscal 2026 were for $18,368,000 of debt repayments and $2,016,000 of dividend payments. Cash flows from hedging activities related to the Company's cross currency swap are classified as financing activities in the Statements of Cash Flows which resulted in a net cash outflow of $274,000 during the three months ended June 30, 2026.

Previous 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 December 31, 2025, $34,314,000 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 June 30, 2026, $92,794,000 of cash and cash equivalents were held by foreign subsidiaries.

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 nine months ended December 31, 2025 and December 31, 2024 were $10,347,000 and $15,266,000, respectively. We expect capital expenditure spending in fiscal 2026 to range from $12,000,000 to $16,000,000.

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 three months ended June 30, 2026 and June 30, 2025 were $5,668,000 and $3,202,000, respectively. We expect capital expenditure spending in fiscal 2027 to range from $50,000,000 to $60,000,000 inclusive of the Kito Crosby business.

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, $320,083,000, and $401,764,000, respectively, as of December 31, 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 four reporting units: the Linear Motion Products reporting unit, the Rest of Products reporting unit, the Precision Conveyance reporting unit and Kito Crosby reporting unit which have goodwill totaling $9,699,000, $263,398,000, $201,357,000, and $946,098,000, respectively, as of June 30, 2026. In February 2026, the Company completed its acquisition of Kito Crosby as described in Note 2. Given its proximity to the Company's goodwill in the prior year, in fiscal 2027 the Company is reassessing its reporting units as the integration of Kito Crosby progresses.

Previous wording

We currently do not believe that it is more likely than not that the fair value of any of our reporting units is less than its applicable carrying value. Additionally, we currently do not believe that we have any significant impairment indicators. However, if the projected long-term revenue growth rates, profit margins, or terminal growth rates are significantly lower, and /or the estimated weighted-average cost of capital is higher, future testing may indicate impairment of one or more of the Company’s reporting units and, as a result, the related goodwill may be impaired.

Current wording

We currently do not believe that it is more likely than not that the fair value of any of our reporting units is less than its applicable carrying value. Additionally, we currently do not believe that we have any impairment indicators that could materially impact the financial statements. However, if the projected long-term revenue growth rates, profit margins, or terminal growth rates are significantly lower, and /or the estimated weighted-average cost of capital is higher, future testing may indicate impairment of one or more of the Company’s reporting units and, as a result, the related goodwill may be impaired.

Previous wording

Information regarding the effects of new accounting pronouncements is included in Note 17 to the accompanying consolidated financial statements included in this Quarterly Report on Form 10-Q.

Current wording

Information regarding the effects of new accounting pronouncements is included in Note 17 to the accompanying condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.