COLUMBUS MCKINNON CORP

Previous 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.

Current wording

Our revenue base is geographically diverse with approximately 45% derived from customers outside the U.S. for the six months ended September 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

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.

Current wording

On February 3, 2026, the Company completed its acquisition of Kito Crosby for $2,821,907,000, 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 $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.

Current wording

Our principal raw materials and components purchases were approximately $428,000,000 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 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.

Current wording

Net sales in the three months ended September 30, 2026 were $539,285,000, an increase of $278,238,000 or 106.6% from the three months ended September 30, 2025 net sales of $261,047,000. Net sales were positively impacted by $300,205,000 related to the Kito Crosby Acquisition as well as $10,056,000 of price increases and $2,338,000 of favorable sales volumes offset by $33,902,000 of sales loss due to the divestiture of the U.S. Power Chain Hoist and Chain Manufacturing Operations. Foreign currency translation unfavorably impacted sales by $459,000 for the three months ended September 30, 2026.

Previous 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.

Current wording

Gross profit in the three months ended September 30, 2026 was $187,909,000, an increase of $97,749,000 or 108.4% from the three months ended September 30, 2025 gross profit of $90,160,000. Gross profit margin was 34.8% in the Fiscal 2027 second quarter compared to 34.5% in the Fiscal 2026 second quarter. Gross profit increased due to $105,524,000 related to the Kito Crosby Acquisition, which was inclusive of $7,445,000 in inventory step-up amortization expense, offset by $13,056,000 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, partially offset by mix and other cost changes. The translation of foreign currencies had an unfavorable impact on gross profit of $80,000 during the three months ended September 30, 2026.

Previous 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.

Current wording

Selling expenses were $52,375,000 and $29,122,000, or 9.7% and 11.2% of net sales, in the three months ended September 30, 2026 and September 30, 2025, respectively. Selling expenses increased in the period by $25,414,000 related to the Kito Crosby Acquisition. Foreign currency translation had a $39,000 favorable impact on selling expenses in the three months ended September 30, 2026.

Previous 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.

Current wording

General and administrative expenses were $61,749,000 and $36,386,000, or 11.5% and 13.9% of net sales, for the three months ended September 30, 2026 and September 30, 2025, respectively. General and administrative expenses increased by $23,956,000 as a result of the Kito Crosby Acquisition, in addition to higher stock based compensation 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 $21,000 on general and administrative expenses in the three months ended September 30, 2026.

Previous 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.

Current wording

Research and development expenses were $8,069,000 and $4,781,000, or 1.5% and 1.8% of net sales, for the three months ended September 30, 2026 and 2025, respectively. Kito Crosby contributed an additional $3,867,000 to research and development expenses.

Previous wording

Amortization of intangibles was $34,808,000 and $7,635,000 in the three months ended June 30, 2026 and June 30, 2025, respectively, with the increase related to amortization of new intangible assets acquired in the Kito Crosby Acquisition.

Current wording

Amortization of intangibles was $29,964,000 and $7,683,000 in the three months ended September 30, 2026 and 2025, respectively, with the increase related to amortization of new intangible assets acquired in the Kito Crosby Acquisition.

Previous wording

Interest and debt expense was $47,610,000 in the first quarter ended June 30, 2026 compared to $8,698,000 in the first quarter ended June 30, 2025. The increase is related to borrowings to finance the Kito Crosby Acquisition.

Current wording

Interest and debt expense was $48,050,000 in the second quarter ended September 30, 2026 compared to $8,747,000 in the second quarter ended September 30, 2025. The increase is related to borrowings to finance the Kito Crosby Acquisition.

Previous 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.

Current wording

Income tax expense as a percentage of the pre-tax income was (155)% and (46)% in the three months ended September 30, 2026 and September 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 an increase to the 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 deferred tax asset valuation allowances will unfavorably impact the tax rate by approximately 50 percentage points for the fiscal year ended March 31, 2027. The effective tax rate for the three months ended September 30, 2026, also reflects an unfavorable impact related to accrual for income and withholding taxes on the current year earnings of certain foreign subsidiaries that are not considered permanently reinvested. This does not reflect a change in management's assertion regarding the permanent reinvestment of foreign earnings.

Previous 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.

Current wording

Investment income was $1,563,000 in the six months ended September 30, 2026 compared to $1,570,000 in the six months ended September 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

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.

Current wording

Cash, cash equivalents, and restricted cash totaled $111,150,000 at September 30, 2026, an increase of $14,127,000 from the March 31, 2026 balance of $97,023,000.

Previous wording

We manage our funding and liquidity risk in an integrated manner in support of the current and future cash flow needs of our business. Our primary sources of liquidity are funds generated by operating activities, cash and cash equivalents, available capacity for borrowings on our 2026 Revolving Credit Facility and available capacity for borrowings on our AR Securitization Facility. Our ability to fund our operations, to make planned capital investments, to make scheduled debt payments and to repay or refinance indebtedness depends on our future operating performance and cash flows, which are subject to prevailing economic conditions and financial, business, and other factors, some of which are beyond our control.

Current wording

We manage our funding and liquidity risk in an integrated manner in support of the current and future cash flow needs of our business. Our primary sources of liquidity are funds generated by operating activities, cash and cash equivalents, available capacity for borrowings on the First Amendment to the Credit Agreement and available capacity for borrowings on our AR Securitization Facility. Our ability to fund our operations, to make planned capital investments, to make scheduled debt payments and to repay or refinance indebtedness depends on our future operating performance and cash flows, which are subject to prevailing economic conditions and financial, business, and other factors, some of which are beyond our control.

Previous wording

Our liquidity as of June 30, 2026 was $567,148,000 comprised of cash and cash equivalents of $98,410,000 and $468,738,000 of availability on the 2026 Revolving Credit Facility. There was no additional capacity under the AR Securitization Facility. Our liquidity as of March 31, 2026 was $561,216,000 comprised of cash and cash equivalents of $96,562,000, $458,933,000 of availability on the 2026 Revolving Credit Facility and $5,721,000 of availability on the AR Securitization Facility.

Current wording

Our liquidity as of September 30, 2026 was $531,980,000 comprised of cash and cash equivalents of $110,900,000 and $421,080,000 of availability on the 2026 Revolving Credit Facility. There was no additional capacity under the AR Securitization Facility. Our liquidity as of March 31, 2026 was $561,216,000 comprised of cash and cash equivalents of $96,562,000, $458,933,000 of availability on the 2026 Revolving Credit Facility and $5,721,000 of availability on the AR Securitization Facility.

Previous wording

We believe that our current resources, together with anticipated cash flows from operations and borrowing capacity under the 2026 Revolving Credit Facility and AR Securitization facilities, will be sufficient to finance our operations, meet our current cash requirements, and fund anticipated capital investments for at least the next 12 months. We may, however, seek additional financing to fund future growth or refinance our existing indebtedness through the debt capital markets, but we cannot be assured that such financing will be available on favorable terms, or at all.

Current wording

We believe that our current resources, together with anticipated cash flows from operations and borrowing capacity under the First Amendment to the Credit Agreement and AR Securitization facilities, will be sufficient to finance our operations, meet our current cash requirements, and fund anticipated capital investments for at least the next 12 months. We may, however, seek additional financing to fund future growth or refinance our existing indebtedness through the debt capital markets, but we cannot be assured that such financing will be available on favorable terms, or at all.

Previous 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.

Current wording

Net cash provided by operating activities was $21,065,000 and $248,000 for the six months ended September 30, 2026 and September 30, 2025, respectively. The net loss of $114,262,000 was offset by $128,940,000 of adjustments primarily consisting of $104,138,000 of depreciation and amortization, $8,867,000 of non-cash lease expense, $8,447,000 of stock-based compensation, $5,048,000 of amortization of deferred financing costs, $1,724,000 of deferred income taxes and related valuation allowances and $1,056,000 of cost of debt repricing. Changes in working capital decreased cash from operations by $55,036,000, excluding the acquisition-related inventory step-up amortization of $62,643,000. This decrease was primarily driven by an $18,251,000 decrease in trade payables, a $17,268,000 increase in inventory, net of acquisition-related step-up amortization, and an $8,185,000 increase in prepaid expenses and other current assets. Cash provided by operating activities was also reduced by a decrease of $10,524,000 in other non-current liabilities primarily due to lease payments.

Previous 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.

Current wording

Net cash used for investing activities was $16,066,000 for the six months ended September 30, 2026 compared to $6,345,000 for the six months ended September 30, 2025. The use of cash for the six months ended September 30, 2026 primarily consisted of $16,464,000 in capital expenditures.

Previous 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.

Current wording

Net cash provided by financing activities was $8,967,000 and net cash used for financing activities was $18,722,000 for the six months ended September 30, 2026 and September 30, 2025, respectively. The most significant source of cash was $15,443,000 of borrowings during the year, offset by $4,036,000 of dividend payments. Cash flows from hedging activities related to the Company's cross currency swap are classified as financing activities in the Condensed Consolidated Statements of Cash Flows which resulted in a net cash outflow of $513,000 during the six months ended September 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 June 30, 2026, $92,794,000 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 2026 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, 2026, $108,440,000 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 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.

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, 2026 and September 30, 2025 were $16,464,000 and $6,523,000, respectively. We expect capital expenditure spending in fiscal 2027 to range from $45,000,000 to $55,000,000 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 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.

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 the Kito Crosby reporting unit which have goodwill totaling $9,699,000, $262,135,000, $201,354,000, and $904,938,000, respectively, as of September 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.