Columbus Mckinnon ((CMCO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Columbus McKinnon’s recent earnings call painted a picture of robust growth tempered by some ongoing challenges. The company reported strong sales growth and a record backlog, signaling positive momentum. However, the impact of tariffs and slower order conversions in certain regions remain hurdles. Despite these challenges, the company’s strategic initiatives and operational improvements suggest a positive outlook moving forward.
Record Backlog and Sales Growth
Columbus McKinnon reported an 8% year-over-year increase in net sales, reaching $261 million. This growth was driven by all product platforms and accelerated deliveries, contributing to a healthy backlog of $352 million, up 11% from the previous year.
Improved Adjusted EPS
The company’s adjusted EPS showed a sequential improvement of $0.12, reaching $0.62 in the second quarter. This improvement was attributed to higher sales, margin expansion, and effective cost management.
Operational Improvement and Tariff Mitigation
Columbus McKinnon made significant strides in operational improvement and tariff mitigation. While tariffs continue to pose challenges, some impacts are beginning to moderate, thanks to the company’s initiatives.
Strong U.S. Order Growth
The U.S. market showed strong order growth of 11%, with notable performance in both project-related and short-cycle categories, underscoring the company’s robust domestic market presence.
Pending Kito Crosby Acquisition
Progress has been made towards integrating Kito Crosby, with expectations to close the acquisition by the end of the fiscal year. This move is anticipated to scale the business and achieve strategic synergy objectives.
Tariff Impact and Challenges
Tariffs remain a significant challenge, with an estimated $10 million headwind to operating profit expected for the fiscal year. The impact of tariffs is anticipated to continue into the next quarter.
Year-over-Year Order Decline
Orders were reported at $254 million, down 3% year-over-year, primarily due to the previous year’s significant project orders.
Slower Conversion in EMEA and APAC
The economic landscape in EMEA and APAC is contributing to slower conversion for project orders, reflecting a weaker macroeconomic environment in these regions.
Guidance and Forward-Looking Statements
Columbus McKinnon updated its full-year guidance, expecting low to mid-single-digit sales growth and reaffirmed adjusted EPS guidance of flat to slightly up year-over-year. The company aims to achieve tariff cost neutrality by the end of fiscal 2026 and margin neutrality by fiscal 2027. The pending acquisition of Kito Crosby is anticipated to close by the fiscal year’s end, with integration plans in place to achieve synergy objectives.
In summary, Columbus McKinnon’s earnings call reflected a strong performance with a positive outlook, despite some challenges. The company’s strategic initiatives and operational improvements are expected to drive future growth, with the pending Kito Crosby acquisition poised to enhance their market position.