Columbus McKinnon estimates YoY dips in order value, backlog in preliminary Q3 results
Columbus McKinnon Corp., a designer, manufacturer, and marketer of intelligent motion solutions for material handling, announced Jan. 14 select estimated preliminary unaudited financial results as of and for its third quarter, which ended December 31, 2025.
The company currently expects net sales to range between $250 million to $260 million for the three months ended December 31, 2025 and between $747 million to $757 million for the nine months ended December 31, 2025.
In addition, the company estimates, based upon information currently available to it, that orders received during the three months ended December 31, 2025 will range between $245 million and $250 million. This compares with orders of $253.7 million in the second quarter of fiscal 2026.
They're estimating backlog will range between $335 million and $345 million as of December 31, 2025, down 3% at the midpoint from backlog of $351.6 million in the second quarter of fiscal 2026 and up 5% at the midpoint from backlog of $322.5 million at the end of fiscal 2025.
Company Reiterates Expected Closing of Kito Crosby Acquisition, Announces Divestiture of Certain Product Lines
Columbus McKinnon Corp. also announced Wednesday it has entered into a definitive agreement to sell its U.S. power chain hoist and chain manufacturing operations based out of its Damascus, Virginia and Lexington, Tennessee, facilities to an affiliate of Pacific Avenue Capital Partners, LLC for $210 million with a potential earn out of $25 million. The transaction is expected to close within the first quarter of calendar year 2026.
Following the close of the divestiture, cash proceeds of approximately $160 million, excluding approximately $50 million of expected taxes and transaction-related costs, are expected to be used to reduce the debt incurred to finance the previously announced acquisition of Kito Crosby Limited. Additional earn out proceeds from the divestiture, if any, are expected to be used to further reduce debt incurred to finance the Acquisition in line with the Company's primary capital allocation priority of debt reduction and deleveraging.
"We believe that the divestiture simplifies the portfolio, reduces debt and will expedite progress towards the closing of the Acquisition," said President and CEO David Wilson. "While these product lines, the Damascus and Lexington facilities, and the teams that will be transitioning have been core to our legacy business, we believe the pro forma combined business inclusive of Kito Crosby will enable an even more compelling customer value proposition over time. We continue to advance towards the closing of the Acquisition, bringing together two industry-leading teams, with greater scale and combined capabilities that we believe will drive value for all our stakeholders."
Kito Crosby Acquisition Update
On February 10, 2025, the company announced its plans to acquire Kito Crosby, a combination the comany believes will bring together the significant capabilities of both businesses to deliver value for all stakeholders.
Key strategic and financial benefits of the pro forma business after the completion of the Acquisition and Divestiture remain:
- Improved scale that not only doubles the size of our business, giving Columbus McKinnon broader global reach with an expanded product portfolio, but also combines the significant capabilities of both businesses to deliver an enhanced value proposition for our customers.
- Attractive financial profile with mid-20% Adjusted EBITDA margin1 on a synergy-adjusted basis, consisting of $70 million of expected annual net run rate cost synergies, that the Company expects will be more resilient though cycles given its product mix, larger scale and greater diversification.
- Value creation driven by $70 million of expected annual net run rate cost synergies with upside opportunity for potential revenue synergies, as the combined Company will have an expanded presence in the fast-growing APAC region and the opportunity to expand Kito Crosby's presence and offerings in EMEA and Latin America.
- Combined cash flow generation of the Company expected to grow over time as synergies are achieved, which the Company plans to use to pay down debt over the next few years and position the Company to reinvest in growth with attractive cash-on-cash returns after achieving its leverage targets.
The company is working expeditiously with the Antitrust Division of the U.S. Department of Justice as part of the Hart-Scott-Rodino regulatory review process to close the acquisition. The Company continues to expect the Acquisition to close in the first quarter of calendar year 2026.
Financial Outlook
Inclusive of both the acquisition and the divestiture, $70 million of annual net run rate cost synergies, and assuming that each of these transactions closed on April 1, 2025, Columbus McKinnon would have expected, on a pro forma basis, to deliver approximately $2.00 billion to $2.05 billion in net sales and between $440 million and $460 million of Adjusted EBITDA1 for fiscal 2026
As the exact timing of the transaction closings for both the acquisition and the divestiture remains uncertain, the company said impact to its fiscal fourth quarter 2026 net sales and Adjusted EBITDA1 results remains uncertain.
Given that the transaction expenses, purchase accounting adjustments and early integration costs are expected to be recorded in the fiscal fourth quarter of 2026, the impact of the acquisition is expected to be dilutive to GAAP earnings per share in the fourth quarter and for the full fiscal year of 2026
Following the closing of the transactions, the company's primary allocation of capital is expected to be debt reduction.
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