Columbus McKinnon (CMCO -3.96%), a provider of material handling equipment and intelligent motion solutions, released its fiscal first quarter 2026 results on July 30, 2025. The earnings announcement revealed that revenue (GAAP) and adjusted earnings per share (non-GAAP) fell short of analyst expectations, with revenue (GAAP) reported at $235.9 million against estimates of $245.8 million and non-GAAP EPS at $0.50 compared to an estimated $0.68. Management attributed the shortfall to the impact of tariffs, acquisition-related expenses, lower volumes, and a less favorable product mix. The results reflected margin pressure and negative free cash flow. Overall, the quarter showed continued demand, but significant near-term profitability and cash flow risks lingered.
| Metric | Q1 FY26(ended June 30, 2025) | Q1 Estimate* | Q1 FY25(ended June 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.50 | $0.68 | $0.62 | (19.4%) |
| Revenue (GAAP) | $235.9 million | $245.8 million | $239.7 million | -1.6% |
| Adjusted EBITDA | $30.8 million | $37.5 million | (17.9%) | |
| Adjusted Operating Margin | 7.8% | 10.7% | (2.9 pp) | |
| Free Cash Flow | $(21.4) million | $(15.4) million | NM |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.
About the Business and Key Success Factors
Columbus McKinnon specializes in products and solutions that help companies move, lift, and control materials safely and efficiently. Its range includes products like hoists, crane components, rigging tools, precision conveyor systems, and digital motion control systems. Columbus McKinnon's products are used across sectors such as manufacturing, e-commerce, life sciences, and food processing, where moving materials efficiently and safely is crucial.
Recent years have seen Columbus McKinnon focus on strategic growth through acquisitions and by building a platform in intelligent motion solutions. It has broadened its footprint with deals like Dorner, montratec, and is now working to close the acquisition of Kito Crosby Limited. Growth depends on the success of these integrations, expanding the product offering, driving innovation, and staying ahead with automation technologies. Operational excellence and managing the business mix are also central to its long-term strategy.
Quarter in Detail: Sales, Margins, and Strategic Updates
During the quarter, revenue (GAAP) came in below analyst estimates and declined from the prior year. U.S. sales made up 57% of the total and slipped 0.7%, while non-U.S. sales, accounting for 43%, fell 2.7%. Adjusted operating margin dropped to 7.8%, reflecting the combined effect of lower production volumes, higher tariffs, and one-time acquisition costs—$8.1 million from the ongoing Kito Crosby deal, $4.2 million from tariffs, and $2.5 million from business realignment. The company posted a net loss for the period, with negative free cash flow (non-GAAP) indicating ongoing working capital and inventory pressures.
The cost headwinds stemmed from tariffs, acquisition-related expenses, and business realignment costs. Management flagged about $10 million in tariff impacts expected over the first half of FY2026, primarily due to changing U.S. and international trade policies. The company is working to offset these through price increases, surcharges, and supply chain adjustments, but these measures take time to positively affect financials.
Despite these pressures, Columbus McKinnon demonstrated robust underlying demand. Orders reached $258.6 million, a 2% increase, with project-related orders up 8% in FY2025. Its book-to-bill ratio, which compares incoming orders to completed sales, stood at 1.1x. and the backlog rose to $360.1 million—a jump of 23% from the prior year period. This sustained order activity was especially strong in the precision conveyance segment, which features high-precision conveyor systems used in automation, battery production, e-commerce, and aerospace. Management noted that while precision conveyance orders outpaced sales in Q4 FY2025, much of the associated backlog will convert to revenue later in the fiscal year.
The acquisition of Kito Crosby Limited is a major strategic step. The deal, expected to close by the end of the calendar year, is intended to boost the company's global scale, expand its product reach, and create operating synergies. By the Q4 FY2025 earnings update, management had already secured most regulatory approvals. Cash outflows connected with the deal and broader investment in inventory affected the company’s cash position, with cash balances (GAAP) dropping by $25 million. Debt repayments remain a focus, and leverage ratios have improved.
Looking Ahead: Guidance and Key Watch Items
Management reaffirmed its guidance for fiscal 2026, projecting that full-year sales and adjusted EPS (non-GAAP) will be flat to slightly up from the prior year, excluding any impact from the Kito Crosby acquisition. No specific cash flow or free cash flow targets were provided. The forecast factors in a $10 million headwind from tariffs in the first half of FY2026, with expectations for cost neutrality by the second half of FY2026 as mitigation actions take hold.
Backlog stood at $322.5 million as of Q4 FY2025. Investors should monitor progress on the Kito Crosby integration and free cash flow trends, given recent outflows.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
