Columbus McKinnon Q4 2026 Earnings Report

Columbus McKinnon EPS Results

• Actual EPS: $0.24
• Consensus EPS: $0.36
• Beat/Miss: Missed by -$0.12
• One Year Ago EPS: $0.60

Columbus McKinnon Revenue Results

• Actual Revenue: $437.83 million
• Expected Revenue: $419.57 million
• Beat/Miss: Beat by +$18.26 million
• YoY Revenue Growth: +77.30%

Columbus McKinnon Announcement Details

• Quarter: Q4 2026
• Date: 6/4/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, June 4, 2026
• Conference Call Time: 10:00AM ET

Columbus McKinnon (NASDAQ:CMCO) 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. Its Motion Control product lines offer programmable logic controls, radio remote controls and variable frequency drives designed to enhance precision and efficiency in industrial operations. Rigging hardware and accessories from the company are engineered to meet stringent industry standards for load capacity and durability.

Tracing its roots to a machine shop founded in Columbus, Ohio, in 1875, Columbus McKinnon has expanded through strategic acquisitions and international distribution partnerships. The company maintains manufacturing and engineering facilities in North America, Europe and Asia Pacific, supported by a network of independent distributors and service centers. Over its history, Columbus McKinnon has combined organic innovation with targeted acquisitions to broaden its product offering and extend its geographic reach.

Under the leadership of President and Chief Executive Officer Mark A. Wolfe, Columbus McKinnon places emphasis on research and development, operational excellence and customer support. The company’s management team works to drive continuous improvement in safety performance and product quality while pursuing new market opportunities in smart manufacturing and infrastructure development. By aligning its engineering capabilities with customer needs, Columbus McKinnon aims to deliver reliable material handling solutions that address evolving industry challenges.

Columbus McKinnon Q4 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Columbus McKinnon said fiscal 2026 was a transformational year, with orders up 20%, net sales up 24%, and Adjusted EBITDA up 16%, driven by the Kito Crosby acquisition and solid underlying demand in the Americas.
• Positive Sentiment: Management said the Kito Crosby integration is off to a strong start and reaffirmed confidence in achieving the $70 million in annualized net cost synergies by year three, with early wins already coming from organizational realignment and third-party spend savings.
• Neutral Sentiment: For fiscal 2027, the company guided to $2.05 billion-$2.12 billion in sales, $390 million-$410 million in Adjusted EBITDA, and $1.70-$1.90 in Adjusted EPS, with growth expected to be back-half weighted as synergies build through the year.
• Positive Sentiment: Management expects to generate strong cash flow and use it primarily for debt reduction, targeting net leverage of 4x or below within two years as integration benefits and working-capital improvements come through.
• Negative Sentiment: Near-term profitability is still being pressured by tariffs, inflation, EMEA project delays, and geopolitical uncertainty in Europe and the Middle East, and the quarter also included a $200 million non-cash goodwill impairment charge tied to the company’s lower stock price.

Presentation

[Operator]

Good morning, and welcome to Columbus McKinnon's Fourth Quarter and Full Year Fiscal 2026 Earnings Conference Call. My name is Joanna, and I will be your conference operator today. As a reminder, this call is being recorded.

[Operator]

I would now like to turn the conference over to Kristy Moser, vice president of investor relations and treasurer. Please go ahead.

[Kristy Moser, VP of Investor Relations and Treasurer at Columbus McKinnon]

Thank you. Welcome everyone to our call. On today's call, we will be covering our full year and fourth quarter fiscal 2026 financial and operational results. As a reminder, our results reflect the completion of the Kito Crosby acquisition closed on February 3rd, 2026, and the divestiture of Columbus McKinnon's legacy U.S. power chain hoist and chain operations on March 4th, 2026. On the call with me today are David Wilson, our President and Chief Executive Officer, and Greg Rustowicz, our Chief Financial Officer. In a moment, David and Greg will walk you through our financial and operating performance for the quarter. The earnings release and presentation to supplement today's call are available for download on our investor relations website at investors.cmco.com. Before we begin our remarks, please let me remind you that we will have our safe harbor statement on slide two.

[Kristy Moser, VP of Investor Relations and Treasurer at Columbus McKinnon]

During the course of this call, management may make forward-looking statements in regards to our current plans, beliefs, and expectations. These statements are not guarantees of future performance and are subject to a number of risks and uncertainties and other factors that can cause actual results and events to differ materially from the results and events contemplated by these forward-looking statements. I'd also like to remind you that management will refer to certain non-GAAP financial measures. You can find reconciliations to the most directly comparable GAAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission. Please see our earnings release and our filings with the Securities and Exchange Commission for more information.

[Kristy Moser, VP of Investor Relations and Treasurer at Columbus McKinnon]

Today's prepared remarks will be followed by a question and answer session. We will respectfully ask that you limit yourself to one question and one follow-up question.

[Kristy Moser, VP of Investor Relations and Treasurer at Columbus McKinnon]

With that, I will turn the call over to David.

[David J. Wilson, President and CEO at Columbus McKinnon]

Thank you, Kristy. Good morning, everyone. Fiscal 2026 was a defining year for Columbus McKinnon, one marked by meaningful strategic progress and disciplined execution across our operational, commercial, and customer experience priorities. As we move further into the first full year as a combined company with Kito Crosby, we're even more optimistic about the future we are building together. Before I begin, I want to thank our more than 7,000 global team members. Their dedication and disciplined execution throughout this transformational period enabled us to deliver on several fiscal 2026 objectives while advancing two highly strategic transactions through closure in the early stages of integration, including synergy realization initiatives that will unlock substantial long-term value for customers and shareholders over time.

[David J. Wilson, President and CEO at Columbus McKinnon]

Throughout the year, we also expanded our two-way dialogue with investors around our long-term value creation priorities and incorporated insights from those discussions into our governance and strategic decision-making. This increased engagement has made us a stronger organization, more aligned with our shareholder interests. Our performance this year reflects the completion of both the acquisition and the divestiture in the fourth quarter and momentum that is building across the enterprise. In fiscal 2026, we delivered 20% order growth, 24% net sales growth, and 16% adjusted EBITDA growth year-over-year, demonstrating the early-stage value of our strategy and the hard work of our team. These results were supported by continued progress in operational excellence, commercial effectiveness, and customer experience initiatives that are improving our competitiveness and strengthening our foundation for sustainable growth.

[David J. Wilson, President and CEO at Columbus McKinnon]

Although Kito Crosby contributed only two months of results in the fiscal year, our combination has already begun to meaningfully enhance 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. We saw strong results across both short cycle and project-based business, with particular strength in short cycle demand, evidence of effective commercial execution and encouraging market conditions in the Americas. From a platform perspective, linear motion and automation delivered 25% and 8% sales growth respectively, reflecting both a recovery in demand and improved operational performance in linear motion following the successful transition of production to Monterrey as part of our footprint simplification strategy. Lifting also delivered solid growth supported by the acquisition, favorable foreign exchange, and tariff-related price increases.

[David J. Wilson, President and CEO at Columbus McKinnon]

In EMEA, demand remained more challenged given worsening geopolitical conditions and slowing order conversion, despite what remains a healthy pipeline. As we previously indicated, we delivered 20% order growth in fiscal 2026, largely driven by the acquisition. Removing the divestiture, legacy CMCO orders grew across both short cycle and project-related activity led by strength in automation and lifting. In the fourth quarter, orders increased 68%, largely driven by the acquisition and complemented by modest growth in legacy CMCO orders. Order activity in the quarter was affected by macro pressures in EMEA and temporary sales force distractions in the U.S. related to the divestiture. While the divestiture created some short-term headwinds, we believe the realignment has positioned us with the right structure and commercial talent to drive future growth.

[David J. Wilson, President and CEO at Columbus McKinnon]

Encouragingly, in the first two months of fiscal 2027, orders are up mid-single digits, supported by a strong pipeline and robust quotation activity. While we remain mindful of broader uncertainties, underlying demand signals, particularly in the U.S., are encouraging. We enter fiscal 2027 with a strong backlog position totaling $520 million, including approximately $320 million in legacy CMCO backlog and an additional $200 million from Kito Crosby. From a profitability standpoint, the year included several non-cash and transaction-related items that Greg will detail shortly. Excluding these impacts, Adjusted EBITDA increased 16% year-over-year, driven by the acquisition. Adjusted EBITDA margin declined primarily due to tariff-related impacts in the first three quarters and the impact of a challenging global macroeconomic and geopolitical environment. Importantly, we see a clear path to margin improvement over the course of the coming year, supported by pricing actions, operational execution, and synergy realization.

[David J. Wilson, President and CEO at Columbus McKinnon]

On the integration front, we're off to a strong start. On day one, we implemented a unified organizational structure that brings together the strengths, capabilities, and cultures of both companies. Our teams are executing with urgency together, capturing synergies, aligning systems and processes, and building a cohesive operational model that accelerates value creation. The combination of Kito Crosby and Columbus McKinnon is already enhancing our scale, expanding our global reach, strengthening our ability to deliver differentiated solutions for customers, enabling growth and unlocking synergies. Based on early progress, we remain highly confident in achieving our targeted $70 million in annualized net cost synergies in year three. We are seeing early wins from realigning the organization, along with third-party spend savings, including insurance consolidation and contract harmonization. This progress gives us confidence in our ability to deliver and potentially exceed our synergy commitments over time.

[David J. Wilson, President and CEO at Columbus McKinnon]

As we look through fiscal 2027, we expect to grow sales and deliver margin expansion supported by strong U.S. demand, continued operational improvements, and the benefits of our integration and portfolio actions. We also expect to generate healthy cash flow, which we will use to pay down debt and reduce leverage. While we remain mindful of factors that are outside of our control, we have significant opportunities within our control, notably related to improving operational performance, executing our integration priorities, and realizing synergies that give us confidence in our trajectory. The longer-term value creation potential of Columbus McKinnon is also clear. Global megatrends, including onshoring, scarcity of labor, and increased investment in infrastructure, automation, and defense, are expected to be tailwinds to our growth. In addition, we're entering a period of significant opportunity tied to our business combination with Kito Crosby.

[David J. Wilson, President and CEO at Columbus McKinnon]

The landscape ahead is rich in value creation potential that is within our control. Our combination enhances scale, expands global reach, strengthens our ability to deliver differentiated solutions to customers, enables growth, and unlocks synergies. Overall, we are encouraged by the progress we are making and believe our transformed portfolio positions us to accelerate growth over time. This is clearly an important moment in time for Columbus McKinnon. We are steadfastly focused on driving profitable growth, generating cash, accelerating debt reduction, advancing our strategy, and delivering compelling returns for our shareholders.

[David J. Wilson, President and CEO at Columbus McKinnon]

I'll now turn the call over to Greg to take us through our fourth quarter and full year financial results.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Thank you, David. Good morning, everyone. We're pleased to share our first set of results after closing the Kito Crosby acquisition on February 3 and the divestiture of the legacy Columbus McKinnon U.S. power chain hoist and chain operations on March 4. As such, our results for the fourth quarter reflect two months of Kito Crosby and exclude financial results for the divestiture for the month of March. In fiscal 2026, Columbus McKinnon delivered record net sales of $1.2 billion, up 24% year-over-year, driven by organic growth, including positive pricing and volume, favorable foreign exchange movements, and the addition of $188 million of revenue from the Kito Crosby acquisition. This was partially offset by a $14 million impact from the divestiture. For the year, sales grew in both short cycle and project sales, with growth led by our linear motion and automation product platforms.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Specific to the fourth quarter, net sales of $438 million increased 77% from the prior year, benefiting from pricing, favorable foreign exchange movements, and the Kito Crosby acquisition. This was partially offset by the impact of the divestiture. Encouragingly, short cycle sales in legacy Columbus McKinnon grew double digits in the quarter. From a profitability perspective, fourth quarter GAAP gross profit of $103 million increased 29%, driven by the addition of $67 million from the Kito Crosby acquisition. This was partially offset by the impact of a $37 million non-cash acquisition related inventory step-up expense, which will be fully amortized by the end of the current quarter. In addition, the change in gross profit from the prior year reflects a $7 million impact from the divestiture. On an adjusted basis in the fourth quarter, gross profit was $143 million, and adjusted gross margin was 32.7%.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Adjusted gross margin reflects the impact of the Kito Crosby acquisition, the impact of the divestiture, which was dilutive to margins, the impact of unfavorable volume and mix, as well as the dilutive effect of tariffs. SG&A expense of $134 million increased 98%, primarily due to $32 million of incremental deal-related costs, $31 million from the Kito Crosby acquisition, and $2 million of higher stock compensation expense. Recall that in the fourth quarter of fiscal 2025, stock compensation expense was unusually low, reflecting the stock price decline that occurred during that period. On an adjusted basis, SG&A expense was $91 million, an increase of 63%, driven by the Kito Crosby acquisition. Adjusted SG&A as a percentage of sales improved 180 basis points to 20.7%. In addition to the items I just covered, we had some additional items that affected GAAP net income and earnings per share.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

In the fourth quarter, we recorded a $200 million non-cash goodwill impairment charge due to the sustained reduction in our stock price over the past year, $24 million in debt extinguishment costs, and $27 million of higher interest expense due to the acquisition. These items were partially offset by $103 million gain on the sale of the divested business. All of this together resulted in a net loss attributable to the company of $238 million on a GAAP basis and adjusted net income of $10.4 million in the fourth quarter. GAAP loss per common share was $5.78 in the quarter and $7.40 for the full year, including the non-cash goodwill impairment, non-cash inventory step-up amortization expense, acquisition-related expenses, and higher interest expense.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Adjusted EPS was $0.24 in the quarter and $1.87 for the year, reflecting the impacts from the acquisition and divestiture, as well as higher interest expense, negative tariff-related impacts, and a higher share count due to the inclusion of common shares issuable upon the conversion of the preferred shares owned by CD&R. Adjusted EBITDA was $69 million, an increase of 93% in the fourth quarter. Adjusted EBITDA margin of 15.7% expanded 130 basis points driven by the accretive Kito Crosby acquisition and increased leverage on fixed costs as we begin to realize the benefits of scale through our newly combined company. Year to date, net cash used for operating activities was $146 million, which included $205 million of Kito Crosby acquisition-related cash payments and $27 million in divestiture-related tax and transaction cash payments.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Free cash flow, excluding acquisitions and divestiture-related cash costs, was $68 million, up $43 million year-over-year, which reflects our strong cash flow generation capability. Our credit agreement net leverage ratio was 5.1x. As we have previously stated, our capital allocation priority is debt reduction. As a larger business post-acquisition, we increased our total liquidity by $321 million to $561 million. Our liquidity is comprised of $97 million of cash and cash equivalents and $459 million of capacity from our revolving credit facility, as well as $6 million of availability on our AR securitization facility. Let me wrap up my prepared remarks with our new guidance for fiscal year 2027, which reflects the full year impact of both the acquisition and the divestiture.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

We are excited by the opportunities ahead as we integrate Kito Crosby, deliver on our growth initiatives, and synergy realization target of $14 million for fiscal 2027 as shared previously. Our guidance for fiscal 2027 is as follows. Net sales of $2.05 billion to $2.12 billion. Adjusted EBITDA of $390 million to $410 million, including $14 million of in-year cost synergies related to our integration of the Kito Crosby acquisition. Adjusted EPS of $1.70 to $1.90 per share. This guidance assumes $185 million-$190 million of interest expense, $135 million-$140 million of amortization expense, $75 million-$80 million of depreciation expense, an effective tax rate of 25%, and 52 million of adjusted diluted shares outstanding, reflecting our expectation to pay in kind the preferred share dividend in fiscal year 2027.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

In combination with Kito Crosby and in line with historical seasonality, our business is anticipated to be back half weighted as we realize synergies and accelerate growth initiatives. I'm encouraged by the work our combined teams have already done and believe in our ability to deliver shareholder value as a scaled provider of intelligent motion solutions. Our strategy will unlock multiple avenues of growth, improve our margin profile, and generate significant free cash flow, which will allow us to de-lever the balance sheet rapidly.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

With that, operator, we are ready for questions.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two, and if you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from James Kirby with JPMorgan. Please go ahead.

[James Kirby, VP of Equity Research at JPMorgan]

Hey, good morning, guys. Thanks for the time. First question, just on the sales guidance. I'm kind of trying to back into it on an apples-to-apples basis and getting somewhere around mid-single digit growth. I'm just wondering what the drivers behind there are. Is there a macro assumption driving that? Just to be clear, there's no revenue synergies on that front.

[David J. Wilson, President and CEO at Columbus McKinnon]

Right. Yeah, James, good morning. This is David. You're correct. There are no revenue synergies assumed in that number. We do have the divestiture excluded clearly and the acquisition fully added. From a pro forma basis, our guidance range is between 1% and 4% growth, and we're confident that we're in a position to execute and deliver at that level. We do have some assumptions around price to offset some inflationary pressures that are coming in, and execution according to the way that we're seeing the markets develop. We see strong demand in the U.S., and short cycle demand notably has been quite strong in the U.S. However, we're mindful of the uncertainties tied into the markets, and mostly in Europe and in the Middle East, and some of the downstream effects of a prolonged conflict in Iran.

[James Kirby, VP of Equity Research at JPMorgan]

Got it. Thanks. You mentioned the Middle East. I know it's a small part of the business, but I'm just trying to gauge the secondary impacts on the business if this does continue, whether it be from higher oil or input costs.

[David J. Wilson, President and CEO at Columbus McKinnon]

From an input cost perspective, we're confident in our ability to pass on increased costs that might be tied to inflationary pressures there. I think what we're anticipating is what we've seen so far in the market, and that is that there's just continued delays in larger project decision-making. Although we see healthy pipelines for activity, notably in Europe, the decision-making around awarding projects has been slower to evolve. Our direct business into the Middle East approximates $50 million. We see roughly $4 million of exposure from a direct delivery perspective, and roughly 50% of that has been challenging in terms of our ability to get that delivered into the market. There's probably around a $20 million, $24 million kind of run rate impact in terms of just disruption if things were to continue at current rates.

[James Kirby, VP of Equity Research at JPMorgan]

That's really helpful. Thanks, David.

[David J. Wilson, President and CEO at Columbus McKinnon]

You bet.

[Operator]

Thank you. The next question comes from Steve Ferazani with Sidoti. Please go ahead.

[Steve Ferazani, Senior Equity Analyst at Sidoti]

Morning, David. Morning, Greg. Wanted to follow up the conversation around guidance. Can you give a sense of how you think this will convert to free cash flow? Any change to your leverage targets?

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Yeah. Good morning. From a free cash flow perspective, we believe that we're going to be able to generate substantial free cash flow, and we're going to be putting the bulk of it to debt repayment. We don't give specifically guidance to free cash flow, Steve, but we give you enough of the data with where we expect CapEx, where we expect EBITDA and some of the other changes. I know in the past we've been public about the fact that we do expect to be able to improve working capital levels, and that's part of the equation.

[Steve Ferazani, Senior Equity Analyst at Sidoti]

Okay.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

In total, we believe we can get to the 4x or inside of 4x net leverage within two years. Does that answer your question?

[Steve Ferazani, Senior Equity Analyst at Sidoti]

Yep. It's helpful. Thanks. Thanks, Greg.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Yeah. [crosstalk]

[Steve Ferazani, Senior Equity Analyst at Sidoti]

David, you were talking about early signs are, and you don't want to say so yet, but that you could even exceed synergy realization targets. Can you talk a little bit about the actions you've completed so far and what you can do in the first 12 months?

[David J. Wilson, President and CEO at Columbus McKinnon]

Actions have been focused on really realignment of the organization and synergies that are realized and tied to that. Benefits that are tied to third-party spend, where we've been able to harmonize contracts and negotiate better positions in multiple areas across the business. We feel like we've gotten off to a good start. We're really confident in the progress that we're making and the plans that we have as we execute through the year. We're reiterating our earlier guidance around synergy realization, expect to remain on that track, and see an accelerated realization of synergies as we move throughout the year.

[Steve Ferazani, Senior Equity Analyst at Sidoti]

Got it. Thank you. You talked about, and typically we've seen this through your history, is that you are able to pass through the higher costs, but sometimes there can be a lag. With the current inflationary pressures you're already seeing, are you adding surcharges or are you more thinking about lagging price increases where we might see some impact in the first half of the fiscal year?

[David J. Wilson, President and CEO at Columbus McKinnon]

Yeah. We've actually acted on both fronts and would anticipate that those ultimately all convert into price increases.

[Steve Ferazani, Senior Equity Analyst at Sidoti]

Okay. Any difference first half to second half to what you're thinking if the environment remains challenged?

[David J. Wilson, President and CEO at Columbus McKinnon]

I would expect that we would see a continued margin expansion as we move throughout the year, given both the synergy realization actions that we're taking as well as the realization of price. I would expect that in the first half, there's some notification periods that need to be covered as it relates to price increase communications to tie back to inflationary pressures.

[Steve Ferazani, Senior Equity Analyst at Sidoti]

Got it. Thanks, David. Thanks, Greg.

[David J. Wilson, President and CEO at Columbus McKinnon]

Thanks, Steve.

[Operator]

Thank you. Our next question comes from Matt Summerville with D.A. Davidson. Please go ahead.

[Matt Summerville, Managing Director and Senior Research Analyst at D.A. Davidson]

Thanks. Greg, in your prepared remarks, you commented on a handful of things that drove adjusted gross margin down to the 32.7%. I was hoping you could maybe parse through the impact of the acquisition, divestiture, mix volume, tariff, all that sort of stuff, if you're able to give a little bit of granularity.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Yeah. Clearly, the acquisition was accretive to our adjusted gross margins, roughly couple of basis points. We had a negative impact from the divestiture, which was roughly 50 basis points of the reduction. When you look at it, excluding the acquisition of divestiture, essentially, the headwinds were split between some delayed shipments in EMEA related to some backlog that we have for a large customer that is basically reassessing their construction schedule, the macroeconomic conditions there. That was a pretty sizable impact. Tariffs, while we've covered the cost of tariffs, we did have a dilutive impact to tariffs from a margin perspective, which is roughly 50 basis points. We also had an unfavorable mix impact in the Americas, roughly 75 basis points. It's kind of a good news, bad news story.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

We've improved our operations substantially, and we were able to deliver on past due backlog that was at lower prices because of just the fact that tariffs and material inflation had increased substantially over the time frame. These are much longer delivery items. That was a higher proportion of our total revenue relative to parts, which has very high margins for us. Lastly, it's one that's a little more tricky to explain, but we did feel that we had some distractions with the sales force in the U.S. related to the divestiture in terms of there was a lot going on in the quarter, and it had an impact, I think, on how our team was able to deliver.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Looking forward, we're confident we've got the right sales teams, we're happy with the operational footprint that we've got, and we expect to improve gross margins going forward. That's a lot there, Matt, but hopefully that answers a lot of your questions. The short answer is it's a bit of an anomaly. We would expect gross margins to normalize going forward.

[Matt Summerville, Managing Director and Senior Research Analyst at D.A. Davidson]

To that end, as you think about SG&A, how ultimately should we be thinking about adjusted EPS and adjusted EBITDA cadence implied at the $1.80 and $400 million midpoints, respectively?

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

From an EBITDA perspective, the range we gave lines up with the EPS numbers that we've given you. There are some items below that would have to be taken into account. Depreciation, for example, which you'd have to take out. Remember, we add back amortization into our adjusted EPS calculation, so that's a non-factor. We are going to have higher interest expense. We've given you guidance on what that's expected to be. The share count is changing substantially. It's going to be roughly 52 million shares on a diluted basis when we include the converted number of shares from the PIPE. That's how I would think about it from that perspective in terms of gross margin and as a percent of sales or adjusted gross margin, SG&A as percent of sales. We don't give guidance anymore on those items.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

It's really all about the EBITDA margin, and I think at the levels we've given with the sales levels, it's roughly in the 19% or a little over 19% of EBITDA. as we drive synergies, that number is going to get much larger.

[Matt Summerville, Managing Director and Senior Research Analyst at D.A. Davidson]

Thanks, Greg.

[Operator]

Thank you. Our last question will be from Jon Tanwanteng with CJS Securities. Please go ahead.

[Jon Tanwanteng, Managing Director at CJS Securities]

Hi. Good morning. Thank you for taking my question. My first one is if you could, just what is the volume versus price expectation, the revenue guidance this year? Is it mostly price and kind of flattish volumes, or is it some other mix in there? As a second piece of that, what is the underlying expectation of increase in COGS this year due to inflation? Thank you.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Yeah. On the first part of the question, Jon, it's really we said 1%-4% organic growth. Largely, I would think about it pricing is probably a little more than half of it, given the inflationary environment that we're in. While we are expecting to drive volume, and once again, as David mentioned, we don't have any revenue synergies baked into our guidance. That's upside. There is the concerns about Europe. If the European situation improves, then I think we will certainly be higher in that range or even be extending the range of revenue.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

Right now, with what we see in the world we're living in, we think we've got an appropriate range. What was the second part of your question?

[Jon Tanwanteng, Managing Director at CJS Securities]

What's your expectation for increase in COGS this year from inflation?

[David J. Wilson, President and CEO at Columbus McKinnon]

Yeah. I would say, Jon, that we're seeing significant inflationary pressure across the full landscape. When you think about what's happening with metals prices, transportation costs, oil derivative components, there are a lot of increases that we have been seeing in the data. While we negotiate long-term contracts wherever possible to make sure that we can stabilize our cost inputs, we are seeing some pressure there, and I'm anticipating that we're going to see inflation at a rate that probably is at least parallel to what we talked about in terms of price increases in the guidance that we provided, and potentially higher, in which case we would be adjusting our pricing in concert with that.

[Greg Rustowicz, EVP and CFO at Columbus McKinnon]

On the upside, Jon, though, with the company essentially doubling in size or more than doubling in size, we are putting from a spend perspective together both companies' spend, and we're trying to leverage our vendors with our higher spend to get the best possible pricing and terms we can get.

[David J. Wilson, President and CEO at Columbus McKinnon]

Yeah. We're finding that we're being effective there in certain spots, and so we're doing a lot of work to offset cost input increases and negotiate, as we talked about, longer-term, more stable contracts where possible. It's a very active area of focus right now, but I think the transparent answer is that we have an expectation that it's going to be probably equal to the midpoint of our guidance or higher in terms of the pricing impact. When we talk about maybe 2% price increase and then that offsetting cost increases, we'll probably see it at that level or higher from a cost input perspective, and then we'll adjust accordingly.

[Jon Tanwanteng, Managing Director at CJS Securities]

Got it. That's helpful. As we head into Q1, you mentioned some headwinds to the margin from Q4, whether that's mix, maybe some of these inflation things. Are we going to see a full quarter of those headwinds, or do you think some of those reverse out, like mix? Just how should we think of the margin progression in Q1?

[David J. Wilson, President and CEO at Columbus McKinnon]

Yeah, I would anticipate that the majority of the items, as Greg alluded to, are transient and we move past them as we execute through Q1. I would argue that some of them, given the extended conflict in the Middle East and some of the downstream effects of that on order demand as well as the mix of business that's coming in through the factories, the past-due items that are shipping at an accelerated pace as we continue to improve our operational performance. Some of that has a tail on it that will continue for a short time. that's why, as I said earlier, I expect that margins will expand as we move throughout the year.

[Jon Tanwanteng, Managing Director at CJS Securities]

Got it. Thank you very much.

[David J. Wilson, President and CEO at Columbus McKinnon]

Thanks, Jon.

[Operator]

Thank you. That concludes the Q&A section of the earnings call. I will now turn the call back over to Mr. Wilson for closing remarks.

[David J. Wilson, President and CEO at Columbus McKinnon]

Thank you, Joanna, and thank you to all in attendance for joining us today. Last year, we took an important step in becoming a more scaled global provider of intelligent motion solutions for material handling. As we enter fiscal 2027, we are a stronger, more strategically focused company, and we believe our transformed portfolio positions us to accelerate growth over time. We are steadfastly focused on delivering profitable growth, generating cash, accelerating debt reduction, and delivering compelling returns for our shareholders. Our team is encouraged by the progress we are making and confident in achieving our integration, synergy capture, growth, and long-term shareholder value creation objectives.

[David J. Wilson, President and CEO at Columbus McKinnon]

Thank you again for your time and interest in Columbus McKinnon. As always, please reach out to Kristy with any questions.

[Operator]

This concludes today's conference call. You may now disconnect.

Participants

Executives

• David J. Wilson, President and CEO
• Greg Rustowicz, EVP and CFO
• Kristy Moser, VP of Investor Relations and Treasurer

Analysts

• James Kirby, VP of Equity Research at JPMorgan
• Jon Tanwanteng, Managing Director at CJS Securities
• Matt Summerville, Managing Director and Senior Research Analyst at D.A. Davidson
• Steve Ferazani, Senior Equity Analyst at Sidoti