Columbus McKinnon (NASDAQ:CMCO) CFO John Linker said the company is focused on executing its integration of Kito Crosby, delivering planned cost synergies and reducing debt following the transformative acquisition.
Linker, who joined the company July 1, told Sidoti conference attendees that the Kito Crosby transaction approximately doubled Columbus McKinnon’s pro forma revenue to about $2 billion. The combined company supplies intelligent motion solutions for material handling, including lifting, motion-control and conveyance products used across industrial and manufacturing environments.
Integration priorities include revenue and cost synergies
Columbus McKinnon has publicly committed to achieving $70 million in cost synergies from the Kito Crosby acquisition over three years. The company expects to realize 20% of that target during fiscal 2027 and said it was on track to meet or potentially exceed the first-year objective.
Linker said early synergy actions have primarily involved selling, general and administrative savings, including lower headcount and the elimination of redundant vendor contracts. Larger savings opportunities tied to consolidating facilities, vendors, freight arrangements and material costs will require more time to flow through results, he said.
The company also sees potential revenue synergies because the two businesses have limited customer overlap. Columbus McKinnon plans to cross-sell products across their respective customer bases, combine sales and service organizations, harmonize sales incentives, improve digital go-to-market tools and invest in product innovation.
Linker said revenue synergies were not a significant part of the company’s outlook for the current year or of Wall Street consensus expectations. Demonstrated progress in that area could become a future growth and deleveraging catalyst, he said.
Americas demand remains stronger than EMEA
During the company’s fiscal first quarter, consolidated orders increased, led by low-teens growth in the Americas. Linker said fiscal second-quarter orders were pacing toward year-over-year growth as the quarter neared completion, although at a slower pace than the first quarter.
In Europe, the Middle East and Africa, first-quarter orders declined slightly from a year earlier amid softer economic conditions in Germany and geopolitical uncertainty in the Middle East. Linker said the company was seeing improvement during the second quarter and hoped the region would return to year-over-year order growth.
Within the Americas, the company cited demand from defense customers, e-commerce and distribution operations, pharmaceutical activity associated with GLP-1 drugs, data centers and battery production. Consumer packaging represented an area of relative weakness, Linker said. In EMEA, electric-vehicle production capacity investments have become quieter after an earlier period of expansion, while oil-and-gas investment has been positive.
Columbus McKinnon has become more exposed to shorter-cycle business through the Kito Crosby acquisition, which Linker said has been beneficial in the current environment. The company has seen some hesitation in longer-cycle, capital-expenditure-related projects as customers respond to higher interest rates, though Linker characterized those decisions largely as delays rather than structural changes.
He added that consumable products such as hooks, shackles and chain account for roughly 30% to 35% of pro forma sales. These products require replenishment because of wear and safety requirements, creating a more recurring source of revenue, he said.
Debt reduction remains the capital-allocation priority
Linker said Columbus McKinnon’s capital-allocation priorities are centered on debt repayment and free-cash-flow generation. The company has targeted leverage below 4 times by fiscal 2028 and reported early progress through cash generation and deleveraging in its most recent quarters.
The CFO said the company has a $1.4 billion term loan without call protection that would prevent prepayment. It also has $900 million of fixed-rate bonds carrying a 7.125% rate. Columbus McKinnon recently negotiated a 50-basis-point reduction in the spread on its term loan, which Linker said should save approximately $7 million annually.
About $1 billion of the term loan has interest-rate hedges in place, with SOFR locked at approximately 3.7%, according to Linker. The company is also examining working-capital opportunities, particularly involving payables and inventory, as a potential way to accelerate cash generation and deleveraging.
Linker said the company currently likes the portfolio created by the acquisition and did not identify a material divestiture candidate. However, he said management would continue to evaluate potential catalysts for faster debt reduction, including divestitures, sale-leasebacks and working-capital improvements.
On inflation, Linker said Columbus McKinnon implemented a significant price increase during the summer of calendar 2025 and has since added more targeted increases by region and product line. The company reported favorable price realization in the first quarter and said it had not encountered material component shortages that would affect financial performance this year.
About Columbus McKinnon (NASDAQ:CMCO)
Columbus McKinnon Corporation is an industrial technology company that designs, manufactures and distributes products and systems used to move, lift, position and control materials. Its solutions support material handling, automation and motion-control applications across a range of industrial and commercial markets.
The company’s product portfolio includes electric and manual hoists, cranes and crane components, lifting equipment, actuators, gear reducers, conveyors, precision positioning systems and related controls.
