COLUMBUS MCKINNON CORP

Columbus McKinnon Corporation is a leading worldwide designer, manufacturer and marketer of intelligent motion solutions for material handling, with key products including hoists, crane components, precision conveyor systems, rigging tools, light rail workstations and digital power and motion control systems. The Company operates in a $35 billion Total Addressable Market and serves targeted market verticals such as manufacturing, transportation including electric vehicle production and aerospace, energy and utilities, process industries, industrial automation, construction and infrastructure, food and beverage, entertainment, life sciences, consumer packaged goods, e-commerce, supply chain and warehousing. The material handling and precision conveyance industries remain fragmented, and the Company faces competition from a wide range of regional, national, and international manufacturers globally, as well as individual operating units of larger, highly diversified companies.

The Company believes it is a leader in the United States for installed lifting solutions, lifting securement and consumables, material handling digital power control systems and precision conveyors, and has a strong market position with actuator products. In Europe, it is a leader for manual hoists and a leader in linear actuators used for heavy load, rail and niche custom applications for actuation. The Kito Crosby Acquisition expanded the business into Japan where the Company is a leader in providing precision engineered hoists, cranes, chains and accessories. Major competitors for hoists include Konecranes (and its subsidiaries Demag, R&M, Verlinde, SWF), Stuart Rush, GH, Detroit Hoists, ACE World Companies, Abus, Lifket/ChainMaster, Jet, AMH, Elephant, Ingersoll Rand, Tractel and Street. Major competitors for chain are Campbell Chain, Pewag Chain, Stuart Rush, Laclede Chain Manufacturing, and American Chain and Cable Company. Major competitors for digital power control systems include Konecranes, Power Electronics International, Inc., Cattron Holdings, Conductix-Wampfler, Control Techniques, OMRON Corporation, KEB GmbH, and Fujitec. Major competitors for lifting and securement consumables include Campbell Chain, Laclede Chain Manufacturing, Van Beest, Pewag, RUD, AMH Cartec, Yoke, Brewer Tichner Company and Chicago Hardware and Fixture Company. Major competitors for actuators and rotary unions are Deublin, Joyce-Dayton, and Nook Industries. Major competitors for precision conveyors and accumulators are FlexLink, Bosch Rexroth AG, MK North America, Inc., Duravant, Nercon Eng. & Mfg. Inc and Arrowhead Systems.

The Company generates revenue through the design, manufacture, and distribution of a broad range of material handling products for various applications, sold primarily through a variety of commercial distributors and, to a lesser extent, directly to end-users. Products include electric, air-powered, lever, and hand hoists, hoist trolleys, explosion-protected hoists, winches, aluminum work stations, alloy and carbon steel chain, forged attachments such as hooks, shackles, textile slings, clamps, and load binders, mechanical and electromechanical actuators and rotary unions, below-the-hook special purpose lifters, and power and motion control systems such as AC and DC drive systems, radio remote controls, push button pendant stations, brakes, and collision avoidance and power delivery subsystems. The Company's products are used for mission critical applications where it has established, trusted brands that are well known in the industry, and the business is sensitive to changes in general macro-economic conditions including changes in industrial capacity utilization, industrial production, and GDP growth.

Of fiscal 2026 sales, $668,333,000 ¹, or 56% ², were U.S. and $525,118,000 ³, or 44% ⁴, were non-U.S. Hoists represented 48% ⁵ of net sales in fiscal 2026, compared to 50% ⁶ in fiscal 2025. Lifting and securement hardware represented 13% ⁷ of net sales in fiscal 2026, compared to 8% ⁸ in fiscal 2025. High-precision conveying systems represented 12% ⁹ of net sales in fiscal 2026, compared to 16% ¹⁰ in fiscal 2025. Digital power control and delivery systems represented 10% ¹¹ of net sales in fiscal 2026, compared to 11% ¹² in fiscal 2025. Actuators and rotary unions represented 9% ¹³ of net sales in fiscal 2026, compared to 9% ¹⁴ in fiscal 2025. Industrial cranes represented 5% ¹⁵ of net sales in fiscal 2026, compared to 4% ¹⁶ in fiscal 2025. Technology & Specialty Solutions represented 2% ¹⁷ of net sales in fiscal 2026, compared to —% ¹⁸ in fiscal 2025. Elevator application drive systems represented 1% ¹⁹ of net sales in fiscal 2026, compared to 2% ²⁰ in fiscal 2025.

The Company's product lines include hoists manufactured under brands such as Harrington, Kito, CM, Little Mule, Pfaff, Shaw-Box, STAHL, Yale, Acco and others, with load capacities ranging from one-eighth of a ton to nearly 275 tons. Lifting and securement consumables include alloy and carbon steel chain, forged attachments such as hooks, shackles, Hammerloks and master links, and carbon steel forged and stamped products such as load binders and logging tools. High-precision conveying systems from the Dorner and Garvey acquisitions range from build-to-order modular standard systems to highly engineered custom solutions. Digital power control and delivery systems through the Magnetek brand include AC and DC drive systems, radio remote controls, push-button pendant stations, brakes and collision avoidance and power delivery subsystems, and the Company is a leading independent supplier of AC and DC digital motion control systems for underground coal mining equipment. Actuators and rotary unions through the Duff-Norton and Pfaff brands include mechanical and electromechanical actuators and rotary unions used in industries such as transportation, paper, steel, energy, and aerospace. Industrial cranes include overhead aluminum light rail workstations under the Unified Industries brand and crane components and crane kits through STAHL branded products. Technology & Specialty Solutions from the Kito Crosby Acquisition include digital load cells, crane camera systems and wind tools from brands such as Crosby BlokCam, Crosby Airpes and Crosby Straightpoint. Elevator application drive systems through the Magnetek brand include DC high-performance elevator drives and AC drives used with low- and high-performance traction elevators.

On February 3, 2026 ²¹, the Company closed the Kito Crosby Limited acquisition. The Kito Crosby Acquisition was financed in part through the issuance of 800,000 ²² Series A Cumulative Convertible Participating Preferred Shares, par value $1.00 per share, to CD&R XII Keystone Holdings, L.P. The Company entered into a New Credit Agreement providing for a Revolving Credit Facility in an aggregate amount of $500,000,000 ²³ and a Term Loan B Facility in an aggregate amount of $1,650,000,000 ²⁴, and issued $900,000,000 ²⁵ in aggregate principal amount of its 7.125% Senior Secured Notes due 2033. The Company also borrowed an additional $53,400,000 ²⁶ under a credit agreement secured by the Company's U.S. accounts receivable balances. As of March 31, 2026, the outstanding principal balance of the New Term Loan B facility was $1,456,990,000 ²⁷. The Company had $458,933,000 ²⁸ available for borrowing under the New Revolving Facility after deducting approximately $16,067,000 ²⁹ of letters of credit outstanding and $25,000,000 ³⁰ of outstanding borrowings. The Company recorded a partial impairment charge of the goodwill for the Precision Conveyance reporting unit in fiscal 2026 in the amount of $200,000,000 ³¹. The Company also divested its U.S. power chain hoist and chain manufacturing operations to gain regulatory approval for the Kito Crosby Acquisition.

In fiscal 2026, total net sales were $1,193,451,000 ³² compared to $1,010,139,000 ³³ in fiscal 2025. Net income was $10,254,000 ³⁴ in fiscal 2026 compared to $63,826,000 ³⁵ in fiscal 2025. Diluted earnings per share was $0.35 ³⁶ in fiscal 2026 compared to $2.21 ³⁷ in fiscal 2025. The increase in net sales was primarily driven by the Kito Crosby Acquisition, while net income was negatively impacted by the $200,000,000 ³⁸ goodwill impairment charge and increased interest expense from the financing of the acquisition.

The Kito Crosby Acquisition is a strategic move that aligns with the Company's long-standing strategy to Expand, Grow and Strengthen its core business, providing enhanced scale through the acquisition of a company with a top-tier financial profile. By integrating Kito Crosby's product portfolio with its own, the Company has created a valuable portfolio that will enable it to deliver superior offerings and position it to capture a broader share of customers and their material handling solutions spend, supported by Kito Crosby's safety-critical, consumable oriented products that drive non-discretionary replacement demand and recurring revenue. The Company expects to meaningfully advance its growth Framework through this complementary combination, Growing and Strengthening its core initially and expanding its core with anticipated revenue synergies.

The Company's Core Growth Framework defines four parallel paths for growth: Strengthening the Core, which focuses on initiatives to strengthen competencies and improve competitive position within the existing share of the Serviceable Addressable Market, including further developing commercial and product management competencies and improving digital tools; Growing the Core, which focuses on increasing market share both organically and through acquisitions within the SAM, with progress on product localization, new product development and advancements in automation and after market support; Expanding the Core, which focuses on improved channel access and geographic expansion beyond the SAM into the broader $35 billion ³⁹ Total Addressable Market, building out presence geographically and in new verticals with expanded offerings; and Reimagining the Core, a more transformational path that targets strategic expansion beyond the existing TAM, rethinking material handling and increasing trends in intelligent motion.

The filing does not contain specific margin or cost outlook figures for the upcoming period.

The Company's principal raw material and component purchases (excluding the Kito Crosby Acquisition) aggregated to approximately $428,173,000 ⁴⁰ in fiscal 2026, or 51% ⁴¹ of Cost of products sold in fiscal 2026, and included steel, electric motors, bearings, gear reducers, castings, steel and aluminum enclosures and wire harnesses, electro-mechanical components, and standard variable drives. The Company purchases most of these raw materials and components from a limited number of strategic and preferred suppliers under agreements negotiated on a Company-wide basis through its global purchasing group. Generally, as the Company experiences fluctuations in its costs, it is able to reflect these increases in costs with additional price increases to its customers with the goal of being margin neutral. Where appropriate and possible, the Company negotiates fixed rates for raw materials and component purchases for a fixed period, generally one year.

The filing does not contain specific R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy figures for the upcoming period.

The Company faces structural headwinds from industrial economic and macroeconomic conditions, as many end-users of its products are in industries affected by changes in such conditions, including manufacturing, power generation and distribution, commercial construction, oil and gas exploration and refining, transportation, agriculture, logging, and mining. Higher interest rates have in the past, and could in the future, result in decreased demand for products from end-users and concurrently result in higher interest expense related to borrowings under credit facilities. Inflation can also result in higher interest rates and negatively impact results of operation, and during an inflationary period, the cost of capital will often increase and the purchasing power of end users' cash resources will decline, which can negatively affect demand. The Company also faces risks from price fluctuations and trade tariffs on steel, aluminum, and other raw materials, with the United States having maintained tariffs on certain imported steel, aluminum and items originating from China, and substantial legal and regulatory uncertainty existing regarding international trade relations and trade policy. Throughout 2025, the U.S. government implemented multiple new tariff measures under various authorities including the International Emergency Economic Powers Act, and on February 20, 2026 ⁴², the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the IEEPA, after which the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries.

The Company's operations outside the U.S. pose certain risks, with approximately 44% ⁴³ of net sales in fiscal 2026 derived from non-U.S. markets. These operations are subject to risks including differing protections of intellectual property, trade barriers, labor unrest, geopolitical conflicts, exchange controls, regional economic uncertainty, differing labor regulation, risk of governmental expropriation, U.S. and foreign customs, quotas and duties, and tariffs, particularly the tariffs implemented and additional tariffs proposed on goods imported into the U.S. from Mexico and other countries where the Company has manufacturing operations. The Company also faces risks from currency fluctuations, with approximately $525,118,000 ⁴⁴ in fiscal 2026 revenues generated in foreign currencies including principally the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the South African Rand, the Brazilian Real, the Mexican Peso, and the Chinese Yuan.

The Company's indebtedness increased significantly in connection with the Kito Crosby Acquisition, with the New Term Loan B Facility having an outstanding principal balance of $1,456,990,000 ⁴⁵ as of March 31, 2026, and the Company having issued $900,000,000 ⁴⁶ in aggregate principal amount of 7.125% Senior Secured Notes due 2033. This degree of leverage could limit cash flow available for operations, require a substantial portion of cash flow to be dedicated to debt service, and impair the ability to obtain additional financing. The Company recorded a $200,000,000 ⁴⁷ goodwill impairment charge for the Precision Conveyance reporting unit in fiscal 2026, and as of March 31, 2026, goodwill and identified intangible assets represented approximately 29.4% ⁴⁸ of total assets, with the risk of future impairment if the related business does not perform as projected or market assumptions deteriorate. The Company faces material risks from price fluctuations and trade tariffs on steel, aluminum, and other raw materials, with the U.S. government having implemented multiple new tariff measures throughout 2025 under various authorities, and the U.S. Supreme Court issuing a ruling on February 20, 2026 ⁴⁹ striking down certain tariffs previously imposed under the IEEPA, creating substantial uncertainty regarding the duration and levels of tariffs. The Company's operations outside the U.S., which generated approximately 44% ⁵⁰ of net sales in fiscal 2026, are subject to risks including trade barriers, tariffs, geopolitical conflicts, and currency fluctuations, with approximately $525,118,000 ⁵¹ in revenues generated in foreign currencies. The Company also faces product liability risks, with a jury verdict in April 2024 demanding payment of approximately $3,000,000 ⁵² in damages, though the Company won the appeal in April 2026 and payment was not accrued as a liability.

Management's message emphasizes the transformative nature of the Kito Crosby Acquisition, which closed on February 3, 2026 ⁵³, and its alignment with the Company's long-standing strategy to Expand, Grow and Strengthen the core business. The Company's business is being transformed by the Columbus McKinnon Business System and its growth framework, which seeks to be market-led, customer-centric and operationally excellent with people and values at the core. Management highlights that the Kito Crosby Acquisition has meaningfully improved the Company's scale, enhanced collective geographic reach, significantly expanded the lifting and securement consumables portfolio while enhancing the customer value proposition, and that the Company expects to meaningfully advance its growth Framework through this complementary combination, Growing and Strengthening its core initially and expanding its core with anticipated revenue synergies. The strategic priorities emphasized for the period ahead include successfully integrating Kito Crosby, executing the Core Growth Framework across its four parallel paths, and continuing to advance ESG initiatives with plans for fiscal 2027 and beyond to collect and analyze data to set realistic, yet challenging goals and be transparent about progress against commitments.