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CM

COLUMBUS MCKINNON CORP (CMCO)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 net sales were $261.0M, Adjusted EPS was $0.62, and Adjusted EBITDA was $37.4M; revenue and Adjusted EPS both beat S&P Global consensus, with revenue at $240.6M* and EPS at $0.53*; EBITDA also exceeded consensus ($33.65M*) though definitions differ. Backlog rose 11% to $351.6M and orders were $253.7M (down 3% YoY) as U.S. demand strengthened and EMEA weakened .
  • Guidance: Net sales outlook raised to up low-to-mid single digits, while Adjusted EPS remained flat to slightly up; tariff headwind of ~$0.25–$0.30 per share expected in FY26 with cost neutrality targeted by year-end FY26 .
  • Tariffs and FX pressures persisted but were partially offset by pricing, mix, and lower factory consolidation/start-up costs; free cash flow improved to $15.1M in Q2 FY26 .
  • Potential stock reaction catalysts: top-line beat, raised revenue outlook, tariff mitigation progress, and pending Kito Crosby acquisition closing by fiscal year-end .

What Went Well and What Went Wrong

What Went Well

  • Pricing, volume, and FX drove 8% net sales growth; short-cycle recovered (+7%) and project-related sales rose (+8%), with particular strength in Lifting and Linear Motion .
  • U.S. orders grew 11% amid stabilization and price increases; backlog increased 11% to $351.6M, supported by healthy quotation activity .
  • Management highlighted tariff mitigation traction: “We are pleased with our tariff mitigation actions to date… expect to achieve tariff cost neutrality by the end of the current fiscal year” (CEO David Wilson) .

What Went Wrong

  • Orders -3% YoY on tough prior-year project comps and weaker macro in EMEA/APAC; conversion slowed for project orders in Europe .
  • Adjusted gross margin contracted 100 bps YoY (to 35.3%) due to tariffs and mix; Adjusted operating margin fell 140 bps YoY to 9.7% .
  • Residual tariff cost impacts will flow into Q3, and seasonal effects imply softer sales and margins in Q3 due to fewer work days and lower absorption .

Financial Results

Quarterly Performance vs prior periods

MetricQ4 FY25Q1 FY26Q2 FY26
Revenue ($USD Millions)$246.9 $235.9 $261.0
GAAP EPS ($)$(0.09) $(0.07) $0.16
Adjusted EPS ($)$0.60 $0.50 $0.62
Gross Margin (%)32.3% 32.7% 34.5%
Adjusted Gross Margin (%)35.2% 34.3% 35.3%
Operating Margin (%)2.0% 2.3% 4.7%
Adjusted Operating Margin (%)9.8% 7.8% 9.7%
Adjusted EBITDA ($USD Millions)$36.1 $30.8 $37.4
Adjusted EBITDA Margin (%)14.6% 13.0% 14.3%
Free Cash Flow ($USD Millions)$29.5 $(21.4) $15.1

YoY Q2 comparison and vs S&P Global consensus

MetricQ2 FY25Q2 FY26 ActualS&P Global Consensus*Surprise
Revenue ($USD Millions)$242.3 $261.0 $240.6*Beat
Adjusted EPS ($)$0.70 $0.62 $0.53*Beat
Adjusted EBITDA ($USD Millions)$39.2 $37.4 $33.65*Beat

Values retrieved from S&P Global*. Note: Company reports Adjusted EBITDA; S&P Global EBITDA consensus may reflect differing definitions.

Regional Sales Mix (Q2)

RegionQ2 FY25 ($USD Millions)Q2 FY26 ($USD Millions)
U.S. Sales$132.3 $147.5
Non-U.S. Sales$110.0 $113.5
% of Total (U.S.)55% 57%
% of Total (Non-U.S.)45% 43%

Net Sales Bridge (Q2 FY25 → Q2 FY26)

ComponentChange ($USD Millions)% Change
Pricing$4.9 2.0%
Volume$9.0 3.7%
FX$4.8 2.0%
Total$18.7 7.7%

KPIs and Operating Metrics

KPIQ4 FY25Q1 FY26Q2 FY26
Orders ($USD Millions)N/A$258.6 $253.7
Book-to-Bill (x)N/A1.10x 1.00x
Backlog ($USD Millions)$322.5 $360.1 $351.6
Long-term backlog ($USD Millions)$190.3 $223.4 $212.4
DSO (days)61.0 69.5 62.5
Days’ Inventory (days)107.4 125.9 117.7
Days Payables Outstanding (days)54.9 56.1 58.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net salesFY26Flat to slightly up Up low-to-mid single digits Raised
Adjusted EPSFY26Flat to slightly up Flat to slightly up Maintained
Tariff headwind to Adjusted EPSFY26/H1 FY26$0.20–$0.30/share headwind in H1 FY26 ~$0.25–$0.30/share headwind in FY26; neutrality by end FY26 Updated timeline/level
Interest expenseFY26~$35M ~$35M Maintained
AmortizationFY26~$30M ~$30M Maintained
Effective tax rateFY26~25% ~25% Maintained
Diluted average sharesFY26~29.0M ~29.0M Maintained
Kito Crosby impactFY26Excluded Excluded; expected to close by FY year-end Clarified timing
DividendQ2 FY26$0.07 declared in prior quarters $0.07 per share declared on Oct 20, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25, Q1 FY26)Current Period (Q2 FY26)Trend
Tariffs/macroFY26 guide assumed tariff headwinds; HSR second request; strong backlog entering FY26 ~$10M full-year tariff headwind; Q3 residual cost impacts; cost neutrality by end FY26; margin neutrality FY27 Improving mitigation; neutrality nearing
U.S. short-cycleShort-cycle softness exiting FY25; Q1 short-cycle orders -4% Short-cycle sales +7%; U.S. orders +11% Rebounding
Project pipeline/backlogBacklog up 23% YoY in Q1; 70–80% actionable in FY26 Backlog +11% YoY to $351.6M; conversion slower in EMEA/APAC Healthy but EMEA slower
Pricing actionsPrice increases implemented July 10; more to ramp Pricing contributed $4.9M to sales; further realization expected Ongoing benefit
FXTailwind ~$3M in Q1 Top-line FX tailwind; limited bottom-line leverage Neutral to modest
Kito Crosby integrationPending closure late CY25; IMO setup, financing lined up Expect close by FY year-end; synergy plans; deleveraging post-close Advancing readiness
End-market demandStrength in automation, precision conveyance; defense, battery, e-commerce Robust in heavy equipment, steel, aerospace, DoD, auto; EMEA macro weaker Mixed by region

Management Commentary

  • “Our team delivered a solid second quarter as the U.S. short-cycle market recovered and we executed on our record backlog… We remain focused on our mitigation actions and expect to achieve tariff cost neutrality by the end of the current fiscal year” – David J. Wilson, President & CEO .
  • “Adjusted EPS improved $0.12 sequentially to $0.62… Margins improved sequentially, driven by improved absorption on higher volumes and the early translation of tariff mitigation actions” – Prepared remarks (CEO) .
  • “We are increasing our expectations for net sales… reaffirming our adjusted EPS guidance… Q3 will see residual tariff impacts” – Greg Rustowicz, CFO .
  • “Following integration, we’ll be over $2B in sales, delivering top tier industrial margins and strong cash flow performance that enables reinvestment” – CEO on Kito Crosby .

Q&A Highlights

  • Earnings cadence: Management cited pull-forward of Q3 revenue into Q2, residual tariff impacts in Q3, and typical seasonal softness with fewer work days, explaining why EPS guidance was not raised despite higher sales .
  • Gross margin outlook: Approximate full-year gross margin impact from tariffs ~100 bps; mix effects from ramping Linear Motion in Mexico and crane-related solutions also affect margins .
  • U.S. demand and competition: Strength across heavy equipment, steel, aerospace, DoD, and auto; peers taking similar tariff mitigation actions as CMCO .
  • Kito Crosby timing and leverage: DOJ second request substantially complied; closing expected by FY year-end; post-close leverage roughly “high fours” to ~5x depending on timing and tariff effects .
  • CapEx and cash flow: FY CapEx ~$15–$20M; strong Q2 free cash flow; working capital improvement expected in 2H .

Estimates Context

  • Q2 FY26 outcomes vs S&P Global consensus: Revenue $261.0M vs $240.6M*, Adjusted EPS $0.62 vs $0.53*, Adjusted EBITDA $37.4M vs $33.65M* – all beats. Company’s GAAP EPS was $0.16, but consensus “Primary EPS” appears aligned with adjusted/normalized EPS; definition differences exist for EBITDA .
  • Forward consensus context*: Q3 FY26 EPS $0.57*, revenue $241.6M*; Q4 FY26 EPS $0.79*, revenue $258.47M*. Target price consensus mean $27.75*; number of estimates: EPS (Q2: 4), revenue (Q2: 4) .
    Values retrieved from S&P Global    .

Key Takeaways for Investors

  • Strong top-line momentum with 8% sales growth and broad-based platform strength; U.S. short-cycle recovery is a key driver .
  • Beat vs consensus on revenue and Adjusted EPS, coupled with raised sales outlook, suggests near-term estimate revisions upward for top-line; watch Q3 seasonal softness and residual tariffs .
  • Tariff mitigation is progressing; management targets profit neutrality by end FY26 and margin neutrality in FY27, reducing a key overhang .
  • Free cash flow inflected positively in Q2; debt reduction remains a capital allocation priority, with integration readiness for Kito Crosby advancing (potential scale, synergies, deleveraging post-close) .
  • Regional divergence persists: U.S. strong; EMEA/APAC conversions slower; backlog remains healthy but quarterly phasing and mix will matter for margin .
  • Near-term trading: Expect Q3 seasonal/mix headwinds; medium-term thesis: automation, reshoring, defense and industrial tailwinds plus Kito Crosby synergies support margin and cash flow expansion .