Columbus McKinnon (NASDAQ:CMCO) reported stronger second-quarter fiscal 2027 results as demand for its intelligent motion products remained broad-based and the company continued integrating Kito Crosby, prompting management to raise its full-year outlook.
President and Chief Executive Officer David Wilson said orders exceeded $560 million for the second consecutive quarter, supported by demand across the company’s geographic markets and product portfolio. On a pro forma basis, which adjusts for the Kito Crosby acquisition and the divestiture of the company’s legacy U.S. power chain hoist and chain operations, orders increased 13% and sales rose 7%.
“Our confidence in our shareholder value creation potential continues to grow as we drive organic growth, expand margins, deliver increasing free cash flow, and delever the balance sheet,” Wilson said.
Orders, Sales and Market Demand
Chief Financial Officer John Linker said second-quarter orders totaled $562.6 million, up 122% from the prior year on a reported basis, largely reflecting the Kito Crosby acquisition. Pro forma order growth was approximately 13%.
Order strength was led by the Americas and included a significant contribution from Europe, the Middle East and Africa. EMEA orders included an approximately $23 million energy-related order in Saudi Arabia, most of which Columbus McKinnon expects to convert into revenue during fiscal 2028. Excluding that project, EMEA orders rose by high single digits, Linker said.
APAC orders declined moderately on a pro forma basis after customers pulled forward orders into the first quarter ahead of a July price increase. Management said its APAC forward-looking pipeline remained healthy.
Backlog ended the quarter at $556.2 million, up 2% sequentially, with a book-to-bill ratio of 1.0x. Current-quarter backlog was $264.9 million, an amount that typically represents about half of the following quarter’s revenue, according to Linker.
Reported sales increased 107% to $539.3 million. Pro forma sales growth was about 6.6%, including approximately 4 percentage points from pricing and 3 percentage points from volume, partly offset by unfavorable foreign currency translation.
Sales growth occurred in the Americas, EMEA and APAC. Linker said APAC posted the strongest growth, aided by recent pricing actions, the broader combined product portfolio and accelerated delivery of a project. The Americas saw strength in short-cycle and project businesses, while EMEA produced modest positive pro forma revenue growth as industrial activity improved, led by infrastructure, energy and defense investment.
Wilson said the company is benefiting from diversified end markets, including energy, defense, mobility, e-commerce and general industrial. He also cited data-center construction as a source of direct demand for lifting and securement hardware as well as permanently installed lifting systems, in addition to upstream demand from equipment production.
Margins Improve as Integration Advances
Adjusted EBITDA rose 177% year over year to $111.2 million, and adjusted EBITDA margin expanded 520 basis points to 20.6%. On a pro forma basis, adjusted EBITDA increased approximately 14% and margin expanded about 130 basis points.
Adjusted gross margin was 36.5%, up 120 basis points from the prior year, reflecting favorable price-cost dynamics and the accretive impact of the Kito Crosby acquisition. The company said it continued to face material-cost and diesel inflation but expects price-cost to remain favorable in the second half of fiscal 2027.
Management said it did not identify any material one-time item that meaningfully skewed second-quarter margins. Linker said strong September sales throughput generated operating leverage, while Wilson pointed to continuing synergy progress, short-cycle demand and accelerated project activity in Asia and Europe.
One approximately $5 million high-margin APAC project was pulled forward due to customer needs. Linker said that aside from that project, the company did not see significant sales pull-forward activity during the quarter.
Wilson said customer feedback following the Kito Crosby acquisition has been positive. The company is pursuing cross-selling opportunities in both directions—legacy Columbus McKinnon products through Kito Crosby channels and Kito Crosby products through legacy Columbus McKinnon channels—with early opportunities seen across all regions and somewhat more concentration initially in the Americas.
Cash Flow, Debt and Outlook
Columbus McKinnon reported a GAAP net loss attributable to the company of $25.5 million, or $0.76 per share. Adjusted net income was $31.1 million, or $0.61 per share, down $0.01 from the prior year, as higher operating profit was offset by greater interest expense and a higher share count.
Year-to-date free cash flow was $4.6 million. Linker said higher profits were partly offset by cash interest, taxes and working-capital investment needed to support sales growth. The company expects working capital to become a source of improved cash generation in the second half as accounts receivable and inventory convert to cash.
The company repriced its senior credit facilities during the quarter, reducing the applicable margin on both its term loan and revolving credit facility by 50 basis points. Management expects annualized savings of more than $7 million from the action.
Liquidity stood at $532 million at quarter-end, including $110.9 million in cash and cash equivalents and $421.1 million available under its revolving credit facility.
- Fiscal 2027 net sales guidance: $2.13 billion to $2.17 billion
- Fiscal 2027 adjusted EBITDA guidance: $425 million to $440 million
- Fiscal 2027 adjusted EPS guidance: $2.00 to $2.15
Management also lowered its capital-expenditure expectation to $45 million to $55 million, which Linker attributed to timing and lower spending so far amid a focus on integration activities rather than any change in underlying investment plans.
Looking beyond the current year, Linker reiterated Columbus McKinnon’s objective of reaching leverage of 4x by the end of fiscal 2028. He said the target will require both higher adjusted EBITDA from the core business and significant free-cash-flow generation, including improvement in working-capital metrics such as inventory turns, days sales outstanding and days payables outstanding.
About Columbus McKinnon (NASDAQ:CMCO)
Columbus McKinnon Corporation is a global manufacturer of intelligent motion solutions and lifting equipment. The company designs and supplies products used to move, lift, position and secure materials in industrial, commercial and infrastructure applications.
Its product portfolio includes electric and manual hoists, overhead cranes, winches, actuators, rigging equipment, load-positioning systems, crane controls and safety systems. Columbus McKinnon also offers automation technologies and software intended to improve the efficiency, safety and control of material-handling operations.
