What Management Said
Read the full Q1 2027 transcript ↗The earnings release and presentation to supplement today's call are available for download on our investor relations website at investors.cmco.com. Please see our earnings release and our filings with the Securities and Exchange Commission for more information. Also on today's call, we will make references to pro forma metrics, which adjust for both the Kito Crosby acquisition and the divestiture of the legacy Columbus McKinnon U.S. Q1 was our first full quarter operating as a combined company following the Kito Crosby acquisition, the team delivered a solid performance across orders, sales, profitability, and cash flow.
We continue to advance our strategic priorities, operational excellence, commercial effectiveness, and customer experience, these initiatives are improving our competitiveness and strengthening our foundation for sustainable growth. Automotive demand has been spotty general industrial demand in pockets of EMEA remains soft as previously shared. This growth is also supported by ongoing commercial initiatives early revenue synergy wins. Adjusted EBITDA of $111.5 Million increased 242% with adjusted EBITDA margin of 21%.
When normalizing for the impacts of the acquisition and divestiture in the prior year period, Q1 adjusted EBITDA margins expanded approximately 300 basis points. Adjusted EPS grew $0.11 to $0.61 from the prior year period on an as-reported basis. These results exceeded our expectations, driven by strong execution, favorable demand dynamics, some cost benefits specific to the quarter. Given our strong start to the year, today we are raising our sales, adjusted EBITDA, adjusted EPS outlooks for fiscal 2027.
- In its first full quarter as a combined company, Columbus McKinnon delivered pro forma sales growth of 10% with broad-based strength across all platforms; reported net sales rose 125% to $531.5 million and orders grew 120% to $568.1 million (pro forma +9%), with a healthy 1.1x book-to-bill.
- Adjusted EBITDA surged 242% to $111.5 million at a 21.0% margin (up 720 basis points year over year, roughly +300 bps on a pro forma basis), and adjusted EPS grew $0.11 to $0.61; adjusted gross margin improved 380 basis points to 38.1%.
- The company generated positive first-quarter free cash flow for the first time in six years – $32.4 million, up $49.7 million year over year – bucking its usual seasonal Q1 cash outflow.
- Debt reduction advanced with $18.4 million paid down in the quarter, cutting credit-agreement net leverage 0.2x to 4.9x, while total liquidity stayed strong at $567.1 million.
- Given the strong start, management raised its full-year fiscal 2027 outlook for sales, adjusted EBITDA and adjusted EPS, and reported early synergy realization flowing through the P&L (mostly in SG&A), reinforcing confidence to potentially exceed the $70 million net run-rate cost-synergy target.
- The quarter posted a GAAP net loss of $88.4 million ($2.05 loss per share), primarily due to a $55.2 million non-cash inventory step-up amortization, higher interest expense and integration costs.
- A meaningful portion of the margin beat was non-recurring – roughly 200 of the ~300 basis points of pro forma EBITDA-margin expansion came from quarter-specific material-cost benefits (including late-quarter IEEPA tariff refunds) that management does not expect to repeat.
- EMEA orders declined year over year on geopolitical/macro uncertainty and a tough prior-year rail comp, and management expects EMEA sales softness in Q2 to create a de-leveraging, unabsorbed-overhead margin headwind.
- Management guided Q2 to be the low point for gross margin for the year, and flagged roughly 30 basis points per quarter of incremental FX margin headwind versus the prior outlook for the rest of the year.
- The implied rest-of-year adjusted EBITDA margin (~18.9% versus 21% in Q1) sits below the strong Q1 print, reflecting the fading one-time benefits, FX and EMEA pressure, with the full-year midpoint around 19.5%.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Net sales | FY2027 | Raised |
| Adjusted EBITDA | FY2027 | Raised (full-year margin ~19.5% at midpoint; ~18.9% implied for the rest of the year) |
| Adjusted EPS | FY2027 | Raised |
| Pricing | FY2027 | ~1–2% total price for the year, ramping in the second half |
| Net leverage | By FY2028 | Reaffirmed below 4x by fiscal 2028 |
| Cost synergies | FY2027 / long-term | $70M net run-rate reaffirmed with potential upside; FY2027 synergies weighted to SG&A, guidance not yet raised for synergies |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Net sales | +125% to $531.5M (pro forma +10%) | Kito Crosby acquisition, volume, pricing and favorable FX, net of the divestiture; low-teens legacy CMCO growth and high-single-digit legacy Kito growth. |
| Orders | +120% to $568.1M (pro forma +9%) | Acquisition plus broad-based Americas/APAC strength; EMEA down on macro and a tough rail comp; 1.1x book-to-bill. |
| Adjusted EBITDA | $111.5M (+242%); 21.0% margin (+720 bps) | Acquisition, scale, synergies and quarter-specific material-cost benefits; ~+300 bps pro forma, ~+100 bps excluding one-time items. |
| Adjusted EPS | $0.61 (+$0.11) | Higher operating profit, partly offset by higher interest expense and a larger preferred-converted share count. |
| GAAP net loss / LPS | $(88.4)M; $(2.05) | $55.2M non-cash inventory step-up amortization, interest expense and integration costs. |
| Adjusted gross margin | 38.1% (+380 bps) | Acquisition, pricing, volume and quarter-specific material-cost benefits, net of COGS inflation and divestiture impact. |
| Free cash flow (ex deal costs) | $32.4M (+$49.7M) | Higher operating profit and ~$20M better working-capital use than the prior-year Q1 – the first positive Q1 FCF in six years. |
| Net leverage | 4.9x (-0.2x sequentially) | $18.4M of debt paydown in the quarter; debt reduction remains the capital-allocation priority. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| First full combined quarter | Two months of Kito Crosby in Q4 FY2026 | A clean first full quarter as one company delivered 10% pro forma sales growth, 21% adjusted EBITDA margin and the first positive Q1 free cash flow in six years, exceeding expectations. | — |
| Synergy realization in the P&L | Actions taken, not yet measured | For the first time, synergy benefits are flowing through the P&L (mostly SG&A, ~220 bps improvement as a percent of sales), with COGS synergies expected to build later; confidence to potentially outpace the $70M target. | — |
| One-time cost benefits | — | Late-quarter IEEPA tariff refunds and other net material-cost benefits contributed ~200 bps of the ~300 bps pro forma margin expansion and are not expected to recur, so the underlying core improvement was ~100 bps. | — |
| Regional demand and Middle East | U.S. strong, EMEA soft | Americas and APAC volumes building on defense, infrastructure, energy, e-commerce, data center and pharma; a temporary opening of the Strait of Hormuz boosted Middle East shipments, while EMEA stayed soft and is expected to pressure Q2. | — |
| Leadership transition | Greg Rustowicz as CFO | John Linker joined as Chief Financial Officer during the quarter and participated in his first earnings call, reaffirming the strategy, disciplined operating approach and debt-reduction priority. | — |
| Margin cadence for the year | Back-half weighted | Q2 is expected to be the low point for gross margin, with a ramp through the back half from synergies, pricing and operational execution, tempered by ~30 bps/quarter of FX headwind and EMEA de-leveraging. | — |
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