Columbus McKinnon reports 7.9% net sales decline, announces acquisition
Columbus McKinnon Corp. reported net sales decreased $20.0 million, or 7.9% for its fiscal third quarter ended December 31.
In the U.S., sales were down $9.0 million, or 6.5%, driven by lower volume. Sales outside the U.S. decreased $11.0 million, or 9.5%. Price improvement of $2.3 million partially offset $12.3 million of lower volume and unfavorable foreign currency translation of $1.0 million.
"The second half of our third quarter saw a slowing of industry demand. This was driven by delayed customer decision-making related to U.S. policy uncertainty, including tariffs as well as continued weakening in the European economies," said President and CEO David J. Wilson. "Our results reflect lower than expected short-cycle demand which we expect will also impact the fourth quarter. The strengthening of the U.S. dollar negatively impacted earnings per share by $0.11 versus the prior year as well. As the quarter evolved, we executed actions to reduce costs and align capacity with demand, which will remain a focus the fourth quarter."
"While our optimism about the business remains unchanged, in the near-term our revised guidance contemplates a cautious approach to the evolving policy environment and subdued demand in Europe," continued Wilson. "We remain focused on what we can control, with strong operational execution while making progress on our long-term strategic plan, including executing of our footprint simplification initiatives. Last week we initiated a consolidation of two additional factories into existing manufacturing capacity as part of our ongoing 80/20 footprint simplification plan. We are delivering impactful improvements across the business and remain in early innings in terms of the value these initiatives will deliver."
Acquisition Announced
The company has separately announced a definitive agreement to acquire Kito Crosby Limited ("Kito Crosby") from funds managed by leading global investment firm KKR in an all-cash transaction valued at $2.7 billion. The deal is expected to close later this calendar year.
"This is an important next step in further strengthening Columbus McKinnon's position as a scaled, holistic provider of intelligent motion solutions in materials handling. We've long had a great respect for Kito Crosby's strong portfolio of offerings. The business that the Kito Crosby management team, led by Robert Desel and Yoshio Kito have built is exceptional, and we look forward to welcoming them to the Columbus McKinnon team," said Wilson. "Through this strategic combination, we're creating a company that is extremely well-positioned to deliver real-world solutions for customers, with favorable tailwinds from megatrends, including reshoring, infrastructure investment, modernization of aging industrial facilities, and rising automation needs due to labor shortages. This combination also unites two highly talented teams with deep technical expertise, customer-centric cultures and a shared vision for operational excellence focused on safety, productivity and uptime on behalf of our customers."
Kito Crosby is a global leader in lifting solutions with multiple manufacturing assembly plants and nearly 4,000 employees serving over 50 countries. KKR has owned Kito Crosby since 2013 and in the time had delivered significant value creation, more than doubling revenue, quadrupling the number of employees while reducing injury rates and expanding into new product categories, end markets and geographies. In 2024, Kito Crosby generated $1.1 billion in revenue through its extensive global channel partner network. Together the combined company will be a leader in material handling solutions with greater scale and a strong presence in attractive verticals and target geographies, delivering exceptional innovation and products to customers.
"We have long respected Columbus McKinnon. Our shared values of safety, quality, and a focus on our employees and customers will create value for all stakeholders," said Kito Crosby CEO Robert Desel. "This deal brings together highly complementary, industry-leading brands, products and competencies with strong recurring sales dynamics. With the benefit of additional scale, and shared best practices and technology, we will be better positioned to meet our customers' needs than ever before, simultaneously creating new opportunities for growth and development for our team members. We could not be more pleased to see these two great teams coming together."
INDUSTRIAL SUPPLY MAGAZINE
The January/February issue of Industrial Supply magazine features an in-depth cover story about MSC Industrial Supply. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
