Columbus McKinnon: That Escalated Quickly; FY1Q27 Earnings Takeaways

Research evidence excerpt

Columbus McKinnon: That Escalated Quickly; FY1Q27 Earnings Takeaways

tively. Sales drove most

of the beat - besting our estimate by nearly 7% with PF net sales growth of Style Exposure

10.1%. CMCO’s Legacy business grew net sales 12.7% YoY and our math for

KITO works out to around ~8%. Adj GM of 38.1% compared favorably against

our 35.4%, and against CMCO stand-alone of 34.3% YoY. Adjusted EBITDA

margins were 21%, or roughly 300bp expansion YoY. Importantly,

management noted that results benefitted from one-time cost items that newly

minted CFO Linker quantified as roughly 200bps of the 300bps - implying core

growth of 100bps. Orders grew 9% on a PF basis, for a book-to-bill of 1.1x (flat

sequentially). Management noted Legacy CMCO orders grew in the low-

teens, driven by robust short cycle demand, with strength in Automation,

Lifting, and Precision Conveyance with EMEA remaining soft. Project-related

sales grew 12% PF, while short cycle sales grew 9%.

• A welcomed beat and raise. CMCO raised its sales and adj. EBITDA guidance

to $2,090-$2,150mm and $405-$420mm, respectively. This works out, at the

respective midpoints, to an EBITDA margin of 19.5% - a 0.5pt improvement

from the previous guidance. We assume this guide still embeds $14mm of the

targeted $70mm of announced synergies, which management expects to

mostly hit the SG&A line in 2H of the fiscal year. For the remainder of the year,

management expects FY2Q to be a low point for both sales and EBITDA as

synergies ramp up in 2H. We modestly boost our 4Q, while step slightly on our

2Q numbers - essentially cancelling each other out, moving our FY27 EPS to

$2.04 - slightly ahead of the midpoint of management’s raised range of $1.90-

$2.10. Taken all together, we believe management is appropriately messaging