Columbus McKinnon Q4 Earnings Call Highlights

Columbus McKinnon (NASDAQ:CMCO) reported what management described as a “defining year” in fiscal 2026, highlighted by the completion of its Kito Crosby acquisition and the divestiture of its legacy U.S. power chain hoist and chain operations.

On the company’s fourth-quarter and full-year earnings call, President and Chief Executive Officer David Wilson said the fiscal year reflected “meaningful strategic progress and disciplined execution” as Columbus McKinnon began operating as a larger combined company. The Kito Crosby acquisition closed on Feb. 3, 2026, while the divestiture closed on March 4, 2026, affecting fourth-quarter comparability.

Wilson said fiscal 2026 orders increased 20%, net sales rose 24% and adjusted EBITDA grew 16% year over year. Kito Crosby contributed only two months of results during the fiscal year, but Wilson said the combination has already begun to improve performance.

“Removing the divestiture in both periods, our legacy CMCO business grew net sales 7%, and on a pro forma basis, the newly combined company grew 6% for the full year,” Wilson said.

Sales Rise on Organic Growth and Kito Crosby Contribution

Chief Financial Officer Greg Rustowicz said Columbus McKinnon delivered record fiscal 2026 net sales of $1.2 billion, up 24% from the prior year. He attributed the increase to organic growth, positive pricing and volume, favorable foreign exchange and $188 million of revenue from the Kito Crosby acquisition. Those gains were partially offset by a $14 million impact from the divestiture.

For the fourth quarter, net sales were $438 million, up 77% from the prior year. Rustowicz said the quarter benefited from pricing, favorable foreign exchange and the Kito Crosby acquisition, partially offset by the divested business. He added that short-cycle sales in legacy Columbus McKinnon grew by double digits in the quarter.

Wilson said full-year growth was supported by strength across both short-cycle and project-based business, particularly in the Americas. Linear motion and automation sales increased 25% and 8%, respectively. Wilson said linear motion benefited from a recovery in demand and improved operational performance following the transition of production to Monterrey as part of the company’s footprint simplification strategy.

In EMEA, however, management said demand remained more challenged because of geopolitical conditions and slower project order conversion, despite what Wilson described as a healthy pipeline.

Fourth-Quarter Loss Reflects Impairment, Deal Costs

Rustowicz said fourth-quarter GAAP gross profit was $103 million, up 29%, driven by $67 million from Kito Crosby. The quarter included a $37 million non-cash acquisition-related inventory step-up expense, which he said would be fully amortized by the end of the current quarter.

Adjusted gross profit was $143 million, and adjusted gross margin was 32.7%. Rustowicz said the adjusted gross margin reflected the acquisition, the divestiture, unfavorable volume and mix, and the dilutive effect of tariffs.

Columbus McKinnon recorded several items that weighed on GAAP results, including a $200 million non-cash goodwill impairment charge tied to the sustained reduction in the company’s stock price over the past year, $24 million in debt extinguishment costs and $27 million of higher interest expense related to the acquisition. These were partially offset by a $103 million gain on the sale of the divested business.

The company reported a fourth-quarter GAAP net loss attributable to the company of $238 million, or $5.78 per common share. For the full year, GAAP loss per common share was $7.40. Adjusted net income was $10.4 million in the fourth quarter, while adjusted EPS was $0.24 in the quarter and $1.87 for the year.

Fourth-quarter adjusted EBITDA was $69 million, up 93%, and adjusted EBITDA margin expanded 130 basis points to 15.7%. Rustowicz said the margin improvement was driven by the accretive Kito Crosby acquisition and increased leverage on fixed costs as the combined company began realizing benefits of scale.

Integration and Synergy Targets Remain a Focus

Wilson said the integration of Kito Crosby is “off to a strong start,” with a unified organizational structure implemented on day one. He said the company is capturing synergies, aligning systems and processes and building a cohesive operating model.

Management reiterated its confidence in achieving $70 million in annualized net cost synergies by year three. Wilson cited early wins from organizational realignment and third-party spend savings, including insurance consolidation and contract harmonization.

For fiscal 2027, Rustowicz said the company expects $14 million of in-year cost synergies related to the Kito Crosby integration.

Fiscal 2027 Guidance Calls for Higher Sales and EBITDA

Columbus McKinnon issued fiscal 2027 guidance reflecting the full-year impact of both the Kito Crosby acquisition and the divestiture. The company expects:

• Net sales of $2.05 billion to $2.12 billion;
• Adjusted EBITDA of $390 million to $410 million;
• Adjusted EPS of $1.70 to $1.90.

The guidance assumes $185 million to $190 million of interest expense, $135 million to $140 million of amortization expense, $75 million to $80 million of depreciation expense, a 25% effective tax rate and 52 million adjusted diluted shares outstanding. Rustowicz said the share count reflects the company’s expectation to pay in kind the preferred share dividend in fiscal 2027.

In response to an analyst question, Wilson said the fiscal 2027 sales guidance implies 1% to 4% pro forma growth and does not assume revenue synergies. He said the company sees strong U.S. demand, particularly in short-cycle activity, while remaining mindful of uncertainty in Europe, the Middle East and potential downstream effects from prolonged conflict in Iran.

Rustowicz said pricing is expected to account for a little more than half of the organic growth assumption, given inflationary pressures. Management said cost pressures are appearing across metals, transportation and oil-derived components, and the company is using pricing actions, surcharges and supplier negotiations to offset inflation where possible.

Debt Reduction Is Top Capital Allocation Priority

Rustowicz said year-to-date net cash used for operating activities was $146 million, including $205 million of Kito Crosby acquisition-related cash payments and $27 million of divestiture-related tax and transaction cash payments. Free cash flow excluding acquisition and divestiture-related cash costs was $68 million, up $43 million from the prior year.

The company’s credit agreement net leverage ratio was 5.1 times. Rustowicz said debt reduction is the company’s capital allocation priority, and management said Columbus McKinnon believes it can reduce net leverage to 4 times or below within two years.

Wilson closed the call by saying the company enters fiscal 2027 as a “stronger, more strategically focused company” following the acquisition and divestiture. He said management remains focused on profitable growth, cash generation, debt reduction and delivery of integration and synergy objectives.

About Columbus McKinnon (NASDAQ:CMCO)

Columbus McKinnon Corporation is a global designer, manufacturer and marketer of material handling systems and solutions. The company's product portfolio spans electric and manual hoists, motorized and manual chain and wire rope hoists, end-of-arm tooling, rigging hardware, trolleys and controls. Through its brands, Columbus McKinnon serves customers across a wide range of end markets including manufacturing, warehousing, construction, and energy, providing equipment for lifting, positioning and flow control applications.

With a focus on safety and productivity, Columbus McKinnon integrates advanced technologies such as automation controls, digital load monitoring and Internet-of-Things connectivity into its hoist and crane systems.

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